Don’t Underestimate Search Advertising

    March 4, 2004

During this week’s Search Engine Strategies conference it was stated that search engine marketers currently make up 22% of the people buying online advertisements, often bidding on thousands of search terms with million dollar budgets.

It was also stated that 75% of the primary goal for search engine marketers is online media sales.

Don’t underestimate search advertising. The online inventory is growing and there’s more to be bought and sold. To give people an idea of how quickly the market can grow, Jupiter Research Analyst Niki Scevak said that Google advertisement spending in the United States currently equals one half of all direct mail spending in France. I found that very thought-provoking.

He believes expectations for contextual advertisements are too high. This kind of online media is very effective, he said, but it’s different from paid search. Furthermore, half of big budget marketers currently see no benefit from contextual advertising.

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Carolyn Griffin, Director of Search Engine Marketing, Carat Interactive, brought up the great point that search engines are a global channel. However, it’s important to realize that as a global channel they don’t necessarily fit all markets. Search might not necessarily work for insurance companies and real estate, for example.

Google’s National Sales Director Christina Elwell said sometimes low traffic words can be the best converters because they’re the most targeted. Her advice is to think like a direct marketer. Make sure any ad copy appearing in the search engine is very well written. I’ve heard this several times at this conference. Also, don’t just dump people directly onto a homepage. Have your advertisements link directly to a specific page so people don’t get lost or frustrated trying to find what they’re looking for on your site.

Where is the traffic coming from? Despite the recent popularity of paid inclusion, Scevak said that approximately 5/6 of commercial referrals are still organic.

Overture’s Dan Boberg said it’s possible to predict the future of marketing judging from the past twelve months. Many experts agree prices will continue to increase and Scevak said 50-60% of marketers plan to increase their budgets this year. Boberg has the following advice to offer marketers: “If you do a great job of optimizing you may keep your CPC steady.”

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