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Search Engine Marketing, Inc.: Part 2 of 4, Developments in Search Marketing (Audio Podcast Transcript)

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Mike Moran, Bill Hunt & Heather Lloyd-Martin discuss recent developments in Search Marketing. Learn tips from the new second edition of Search Engine Marketing, Inc. Topics include paid search, global search marketing, and organic search.
This is a transcript of an audio podcast available in InformIT's OnBiztech channel. This channel is also available on iTunes.

Editor's Note: This is episode 2 of 4. If you are just jumping in, you might want to start with the transcript of episode 1.

Heather Lloyd Martin: Hello, everyone. Welcome to part two of this IBM Press Podcast Series featuring Bill Hunt and Mike Moran, co-authors of Search Engine Marketing, Inc. Their book is now available in the second edition; it’s been updated throughout and even includes two new chapters and a companion DVD. I am Heather Lloyd Martin, President and CEO of Success Works, Search Copywriting Consultancy and author of the book Successful Search Engine Copywriting. In this Podcast, I’ll talk to Mike and Bill about what changed in search marketing since they published the first edition of their best selling book way back in 2005.

HLM: Let's start with a question for Mike. Mike, can you explain how paid search auctions once were based solely on high bids and also how they work now?

Mike Moran: Sure, Heather. Paid search was initiated by a company that at that time was called GoTo. They later changed their name to Overture and were eventually purchased by Yahoo. They came up with this idea — I was one of the people who said, “Boy, this is never going to work,” and their idea was really simple — which was to allow advertisers to pay a certain amount per every click on their ad. So the idea was that you could make a decision to say, “Well, it's worth this much money for me to have someone click through to my website, so that's how much I’ll bid.” Each of those bids were looked at by the paid search engine, in this case it was GoTo, and whoever bid the highest was the number one result. I didn't think this was going to work very well, but they had an idea that I had not thought of which is that they were going to syndicate those paid search ads on the right side of the screens of organic search results. They went and made deals with Microsoft and Yahoo and a lot of the other search companies back then to put those advertisements up there. I’m sure it's a very simple system, but part of the simplicity made it actually more complicated. The fact that system was simple made it a little harder for search marketers to work with because there ended up being all these tricks that people played because they knew that directly changing their bid was going to affect where they were ranked. So they had all sorts of things like “gap surfing” they called it; they had all sorts of different names for these things, but what they are really doing was trying to figure out how to optimize their bid so they get a high position, but at the lowest possible bid rate. They also did things like “bid jamming” where they would intentionally raise their bid just to make things difficult for their competition.

There were all sorts of tricks that were being played, and Google looked at all these things going on and said, “That's not what we want; so we definitely want to get into the paid search business, but we don't want to do with such a simple system.” So what Google decided was that they were going to have a hybrid auction. So it wasn't a simple auction based on just what's your bid was instead it was an auction that combined two factors: one factor was your bid for how much you paid per click, but the other factor was your click-through rate and so the ads that have the highest click-through actually would rank higher than ads that had the same bid with a lower click-through. This did a couple of things. The first thing it did was it made the paid search ads that showed up at the top of the list more relevant. So the chances are that an ad that you see at the top of the page search results is one that more people are clicking on. The other thing it did is it said that more relevant ads actually are charged lower prices. You could have an ad where you’re bidding less than the number two ad and you could have the number one ad because so many more people click on it. That really helps to get searchers to pay more attention to the paid search ads because the paid search results were actually pretty good; that caused more people to start clicking on page search ads that in the past wouldn't do that. So that was very good as well.

The other thing that this hybrid auction does for the search engine company, like Google, is it actually maximizes their income. So if you think about it, the search company does not get paid more because somebody has a higher bid; they only get paid more if somebody has a higher bid and the ad gets clicked on. By optimizing for the click-through rate times the bid, and making that the ranking, then that helped Google to maximize how much money it was making. These ads that were actually making the most money were the ones that were at the top. The other thing it did was to put to an end all these games of “bid jamming” and “gap surfing” and all the little techniques that people had done based around simple bid auctions. The reason it did that is because now changing a bid did not necessarily change where you are ranked, and so a lot of the gamesmanship went away. That actually made things simpler for search marketers. So Google pioneered this, and it was a breakthrough because the Google paid search experience was something that the searchers liked better and the advertisers liked better. So in the last couple of years, Yahoo, Microsoft, and all the other search engines have now changed the way they work to be much more similar to how Google pioneered that.

HLM: Mike, it's really interesting that you mentioned GoTo, way back in the day, because I remember watching that business modeling and thinking, “I wonder how that's going to work out.” Look at it now; it got very big, very quickly. We’ve also got Bill Hunt here, and Bill is an expert in global search marketing and he’s head of Ogilvy’s Global Strategies International team. So, Bill, what’s the biggest change that you've seen in global search marketing in the last three years?

Bill Hunt: I think the biggest is just getting it done. That's what we see across the board is — how do you pull this off? You know none of the engines have mastered a centralized approach. It's very, very difficult to go to Google or Yahoo or MSN and say, “Hey, I have ten thousand dollars or I have then million dollars and I want it to be spread across the world effectively. You could dump that into one campaign and it can run globally, but segmenting it like we commonly do across 20-30 countries is still very difficult because many of the engines are still very siloed with their own P&Ls and their sales teams are compensated based on their local revenue, so they’re still fairly challenged to be able to do that. It requires still a lot of interaction with on-the-ground people in different countries. So unless you’re a big company, or you’ve got a lot of money to sort of fund big agencies to do it, there are definitely, I think, some scale problems and issues with trying to do it.

Probably the next biggest problem is getting the content for the ads. You know it's tough to find people that can truly write this. I still see almost every day where people are using Google translator or one of the other translator tools to translate their paid search ads into other languages which is clearly a problem.

The third one is getting better. We actually wrote a spec that was adopted by Google about four years ago. It’s sort of the geographical designator now — where it became really an epidemic problem for large companies especially that had websites that were using say the .com. Eighty-seven percent of the fortune 100 or the global 1000 used .com/ and then a two letter country code to designate their international content. What the engines had been doing is over the past three to six months, they’ve changed their filter mechanism. So while most of the people who search go to a Google version and do a query in sort of the world wide version, (not, let’s say, UK only) the engines have added that level of filtering looking at their IP address and then trying to serve them local content. If you did not meet the filtering criteria, you weren't using .co.uk, or the content wasn't hosted in local market, you probably weren't going to be seen even though you could be the largest company in that country doing it. So Google rolled out — and the other engines have started to look at it — the ability to go and say that everything after the .com/uk is actually UK content. We’ve had a lot of success using that on big companies and small companies, and once they do that it's the equivalent in the search engine's eyes of having that UK type content. I think that those are the three biggies that the people face.

A fourth one — just to throw it in there — is just trying to wrangle the beast. Mike and I, talk about that in the book where — how do you organize your team? We get requests all the time: how do we manage 30 countries, 27 languages, 14 million words; do we do it centrally, do we do it distributed? That's a big organizational change we are seeing more and more especially since the majority of the clicks and queries now in the engines are coming from outside the US.

HLM: That's a really good point of wrangling the team together and making sure that everyone is on the right page, and they know how to proceed, and they don't get overwhelmed by the massive amounts of data and things that they need to do in order to run a global campaign. That's a really excellent point.

So, Mike, you’ve recently retired from IBM and you just took a role with Conveseon which is the social media marketing agency based in New York City. So why did you choose this opportunity instead of something solely on search marketing?

MM: Well, if you think about the approach that Bill and I have always taken on search marketing, it’s been kind of business-first approach where, I think, when our first addition came out in 2005, we were probably the first book to really talk about metrics in conjunction with search marketing that weren’t just matrix that showed where you ranked, or how many people click on you, but metrics that talked about how much money you are making, and how you know that you’re improving, how you know how to optimize your bidding, and those types of things. I think that when you take that kind of business-first approach and that kind of holistic approach like Bill was referring to when he was talking about how you get an entire team to work together, when you take those kinds of approaches, it's kind of limiting to try and draw stark white lines around search marketing and say, “This is it; this is all that you need to work on.” Because what's really changed, in the last three years, is that search marketing is far more of a part of your overall marketing. It used to be kind of a specialty and I think what's happening is that as search marketing has become more and more important to a company’s overall marketing mix. They’re starting to treat their entire marketing campaigns more holistically than ever before. When you look at something emerging like social media marketing, it's hard for you to just look at that and say, “Okay, we were going to have a social media team over here; we’re going to go have the search marketing team over here; we’re going to have these other people over here that are doing reputation monitoring, and they’re going to like to tell us what people are saying about us.” If you try and really split those up and really slice and dice them up and specialize everything, I think you will lose a lot of the synergy that would really benefit everybody to have those things treated as one. So that's what really attracted me to Converseon; that they start out by trying to help you understand what the conversation is about; that you can look at social media marketing as a way of being part of that conversation, and then you can look at search marketing as yet another way to bring people to your site. So there are a lot of ways that you can bring people to your site that are fairly inexpensive and very cost effective, and, to me, social media is just part of the same kind of thing the search marketing was.

A lot of the things that you do to get attracted in social media are also the same things you do in search. It's important that you have good titles, good copy. It's important that you know where you are targeting people. It's important that you know what kind of language they use. A lot of the same of kinds of things that make for good search marketing also make for good social media. The other thing that’s true is that all the metrics are also similar. You want to use that same business-first approach with social media that you do with search marketing. So for all those reasons, I wanted to take an opportunity that kind of looked across all the different ways that you do marketing, and that's why in the second edition of our book, we actually have a new chapter that we’ve added on social media marketing. I think the next Podcast part three we’re going to be talking about that with Bill and with David Newman Scott.

HLM: That's really exciting because, again back in the day, search engine marketing was something that was definitely siloed out from the rest of the different types of marketing initiatives, and it’s been very interesting to watch how all of that has been brought together now, and it’s part of the marketing mix — not considered some separate part of that is not necessarily integrated with the rest of the campaign. So, Bill, one of the big changes in organic search marketing — and this one is near and dear to my heart — in the last two years is the ability to get more and more pages indexed. Can you tell us more about the advances the search engines are making in indexing new types of content and how search marketers can help with the search engines with things like site maps.

BH: Yeah, it's a great, great question. We use them pretty intensely. So I’ll give you two quick examples. One is with one of our clients who has about 250,000 SKUs of products and they implemented a flex front end which basically made it un-penetrable by the search engine. They were using cool stuff that Mike has deployed at IBM in the past like faceted browse and different types of look up schemes to find these because they had so many products that there was no other way to display that. Because we understood the URL structures and how they would be combined, we actually used the database to replicate that off line and then submitted that through the site map protocol. I think that site map protocol is commonly referred to as the Google site map. It's one of the two occasions over the past couple of years where the engines have gotten together, and actually I was on the part of the original consortium of people (representing IBM at that time) that put that together that ultimately launched out that you can submit to Yahoo and MSN and AskJeeves. What this does for us is it has no impact at all on ranking and that's a common misperception. A lot of people think it's just like using a form of paid inclusion, but it's nothing more than a list of pages and the engines really take notice of it. We're actually launching a site for a client tomorrow and it's all teed up, ready to go; once the site is uploaded and unblocked tonight, that sitemap is ready to go. We’ve historically seen that within12 to 24 hours that new content is very quickly in the engine. So it's a great way to prime it.

A third example is actually at IBM where we had about 2.2 million support pages (Mike and I have talked about this at conferences) that we couldn’t get in, so basically we used a treed version of the XML site map protocol to create a series (I think there were 57 individual site maps that represented that) and it allowed all that content to get in. What's happened is when people search for these error codes they go to Google, they find it, they come to the website, and we have seen not only in this case, but in many other cases that it's really upped the customer support or the customer satisfaction. So if you don't have one of these and you want to know how to use it simply the best way, honestly, is either search for site map protocol or go to the Google webmaster tools, create your account, and get it going. It gives you some really great data. Once you’ve created that account, then you can set things like preferred domains which get rid of some of the problems you have with using index HTML versus on your home page and then other things like the geographical designator, but it's been huge.

The second part of that is in addition to this, the engines I think are much better with being able to crawl different types of content. Before, we could immediately look at the site and say, “Oh, it's got a question mark in it; you’re dead in the water; we’ve got to use redirection schemas or re-write maps.” The engines are very good. We’ve not found many things at a URL level that really does it. Another thing we’re seeing now is using it for deep linking for flash content. So the engines between their ability to get in the content better along with giving us this phenomenal protocol to be able to tell them what to come index, has been a huge change over the past couple of years.

HLM: Yeah, you are right, and those are very, very excellent tips of how people can work with it. So one of the things that’s always very interesting — I’m going to throw this question to Mike — is everybody talks about how quickly search marketing has changed and all the different things that have switched since even a year ago or six months ago. So the question for you, Mike, is with all the focus on the changes in search marketing last year, tell me about the things that have not changed.

MM: Well, I think that a lot of the basics haven't changed. I think one of the things that's challenging when you write a book about something that does change as quickly as search marketing is that you need to really focus on the big themes so that people understand how to think about search marketing. Even as some of the details change, they will still be tending to do the right thing.

So some of the things that have not changed are: you still need to start with what the searchers are looking for; you need to understand what language they use when they construct their searches; you need to then use that language to try and make sure that you have a message that the search engines are going to find. But beyond that, you need to have a message that’s persuasive to the person who is searching; it needs to be something that really meets them at their point of need, and it has to be something that’s going to then cause them to move deeper into the buying cycle. So whatever it is you are trying to sell, you need to make sure that you are providing information that lets them go step-by-step. It could be multiple searches where they start out searching for a problem, and then they start to understand what kinds of solutions there are, and then they start searching for solution words. You need to be able to have content all along that continuum so that as people progress through the purchase cycle they’re going to be able to find your information all along the way.

So as Bill was pointing out before, it's really important that your pages be in the search index and that hasn’t changed. The big things that you need to know are what people are thinking about; you need to make sure that your content is in the search engine and it's using the words that are going to cause the search engine to bring your content up in response to what searchers type in. Then if you go further than that, you need to realize that just being ranked number one isn't really the most important thing; it's important, but if people come to your page and then faint dead away, you’re not really going to get anywhere. What you really need is to have not only something that appeals to search engines, but most importantly appeals to the searchers themselves so that it persuades them to do what you need them to do whether it's buy something from you, whether it's to contact you off line whatever those things are.

The other things that have not changed are: you still need to be able to measure how you’re doing in those areas; you need to be able to count how many times people are coming to your site; need to be able to count how many times they actually follow through the action that you want them to do. You need to know how much that's worth to you, and so all those kinds of things are pretty standard. Those are the things that we wrote about in the first addition; those are things that we only had to make some changes to in the second edition around all the other changes that are going on, so a lot of the basics are still true. Search marketing is one of the few areas where people come to you and have to find you. You need to make sure that what you’re doing is appealing to them, and the fact that you have to have some technical knowledge to understand how the search engines work, that isn't really different from any other kind of marketing where if you understand how to do a good TV commercial, you still have to understand some techniques. Right? You have to understand how you film things; you have to understand how you buy time on the television stations; there are all sorts of technical things that you need to do in order to get your message out there and search marketing is not any different from that. It’s just because it's a fast changing situation that some of these techniques change over time as to what's exactly the best way to do it. But as I am saying, a lot of these things don't change. You still have to understand how you’re going to be delivering a message that people want to hear. The people are actually going to decide that they’re interested and that's very different from most other forms of advertising.

HLM: And that's really a good point, too, because there are lot of folks who get hung up and sort of get into a learned helplessness with search engine marketing figuring that even the basics, the foundations, are shifting so quickly that they’ll never be able to get a handle on it. It's really good feedback for people to know that a lot of the basics have stayed the same and from there you just learn how to tweak what you do and grow your search marketing campaign to take advantage of the opportunities that are coming down the pike now. That is really, really a good point.

So, Bill, those of us in the US, we watched Google's market share rise steadily over the last three years to the point where people don't basically even talk about Yahoo or the other search engines all that much anymore now. Have you seen the same thing happening in other countries?

BH: I have. Google has actually become sort of the Marsha Brady of search. You go to a conference and people are tired of hearing about Google, but they are the big guy in the room and they do command the market share, but the other engines do have a place, especially, we're finding, in the consumer market and in many countries they’re not the number one. In Russia for example, they’re actually number three. You’ve got Rambler and Yandex, which are local Russian sites that beat them. InKorea, Naver is definitely the dominate engine; I have seen Baidu in china; all these have little caveats like everybody immediately jumps on Baidu as being “the big one.” But I’m in China at least once or twice a quarter and we see it on client sites that while Baidu, if you’ve got a customer or a consumer centric or a lifestyle centric type site, Baidu is obviously a big one. When we find a more affluent, educated, or more of a B2B type query specifically in China, Google again just blows it away because of the sophistication.

The other thing we're finding is that the second-tier (and I say that very lovingly to them), but this idea of second-tier or other than Google, many of them are adopting things from a usability standpoint that are very smart. Most places where input is difficult to do, China, Thailand, and in some cases Russia, but definitely many of the Asian languages where they’re using a Western or Roman base keyboard, pull downs are very common. So as you start to (and we have seen this in Google suggest, and I know Yahoo has tried to do it) but in many of those markets they’ve got this pull down where it's very easy for someone to start a query and just click their way into the result. Because they’re local and they understand the language, that's the big thing I am seeing in Russia. I’m actually in Russia next week talking to people there and working on those projects. The big reason that these Russian centric engines are more popular is their handling of the Russian language. These are markets that historically have not been big markets, so there are geopolitical issues and the engineering teams have not had a chance to focus on it.

I think it's coming around, but all of them, any engine, again as Mike said very well, “What's not changed?” Well, it's proper business planning. You got to understand what it is you are trying to get: do you research. The keyword research that we describe in the book, most of these engines do have tools available primarily for page search, but you can sort of use them to understand the demand and see which is bigger than the other. If you’re a tech a B2B, it's really hard not to put a lot of emphasis on Google, but try them; that's the best thing about paid search and search in general. From an organic stand point, it’s still true; if you solve for Google, you get most of the others. You know Google solves the more sophisticated algorithm bringing in the sort of contextual and sort of votes of confidence from linking, but the fundamentals are still relatively true. That's another thing were starting to see some people, especially as Mike indicated, social media everything you created in social media ends up in search engines, and so we are seeing more of that.

We are seeing a more of a segmentation as well where sites in Japan’s Mixi as their big social media site, and one thing that's happening there as we starting to see with the young people with Facebook in the US or Myspace that's becoming their version of outlook; that's becoming their e-mail clients. So as these tools become available and as people start to adopt them, we’re seeing a shift from Yahoo Mail or Google Mail and these are things that have commonly helped build those search engine basis. I think a social media and people start communicating through these platforms, it's going to be very important to take a look at what's going on locally. Just don't open up your Google account, throw in a bunch of money, set it for global, and hope that it's going to work. Take a look at some of these local engines. There are some problems specifically; let’s take Japan. Mike mentioned how GoTo became Overture became Yahoo; in Japan, it's still Overture and very restrictive to be able to be in there. You have to deal with them in Japanese, if you try to pay anything other than sort of wire transfer, there is a premium on that. It’s still very much the wild west in many, many countries — trying to do this and especially with these local engines. That's why companies are starting to emerge, and as I said, you need to look at agencies that are able to search you whether it's locally or just find a good rep in that particular market. Those are the big things I see, and I think that we often see each others in conferences all around the world. So let's ask you a question, Heather; what are seeing as some of the biggest changes in the past few years?

HLM: That's a good question, and whereI’ve seen some of the changes have come from how clients are looking at their campaign. So even though those of us in search marketing we’re sort of on the leading edge of what's going on, the clients are the ones that are trying to wrap their heads around it. Even three years ago, there was a really huge emphasis on ranking — Mike had brought it up earlier there in the Podcast — and people were very, very interested on where they were within the rankings — are they going to get that number one — but they didn't focus too much on what happened when somebody actually went to their site. They were all tied up in what would be a top ranking, but when I got to the actual conversion whether or not that the text or the site itself met the prospects needs; they weren't so focused about that, and a lot of companies felt burnt because they were seeing pretty good rankings, but not necessarily seeing the conversions.

In the last three years especially around the content development, I’ve seen that shift really dramatically from top fortune 500 companies all the way down into small and mid size businesses where people are realizing that it's not just enough to get that top ranking; they also want to be able to convert that prospect once they come to that site. They want to be able to engage them in conversation whether that means that they encourage them to have product reviews and to submit their thoughts or it's the case of blogs where they are creating content, and they want to have people involved in the conversation and get to know and trust the company rather than just slapping up some brochureware website up and calling it good. So the emphasis in conversion — although those of us in search might have been thinking about this little bit further back — has really started to hit home with the end client. I am hearing more and more clients say, “We do care about getting good ranking; that's important to us, but what we care about more is connecting with our customers. What we care about more is being able to service them and see the conversions happen on the site whether that's purchase or whether that just means that somebody is commenting or somebody is taking the time to download a white paper.”

BH: Now that sounds like search is grown up and it’s actually being considered a proper marketing tactic now.

HLM: Exactly, it's wonderful; it's wonderful that we’re no longer looking at one data point as the measure for success. We’re looking at it as Mike had brought up earlier, a complete holistic campaign and how it's working with other types of marketing, and how it's working with the people that are coming to the site making sure that it’s inclusive rather than just a brochureware website where we want people to buy and that's all we want them to do.

Actually that's all the time we have for part two of this IBM Press Podcast Series featuring the authors of Search Engine Marketing, Inc., Mike Moran and Bill Hunt. The book is now available in the second edition; you can find out more at mikemoran.com and globalstrategies.com, the websites of our two authors. I want to thank Bill and Mike for their time today. I hope you’ll come back for part three of our series when we discuss another new trend in social media marketing with Bill, Mike, and our special guest, best- selling author, David Meerman Scott. See you then.

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