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Search and Your Marketing Mix

Now that you know a little bit about Web search, let’s see why it should be part of your Web marketing mix—the advertising and other expenditures that your business allocates in its marketing budget. When we use the term marketing mix, we want you to think broadly—beyond what folks traditionally consider marketing. If your Web site is part of a for-profit business, then selling products is exactly what you do, but even nonprofit businesses have some kind of marketing mix—a budget that is allocated in various ways to attract visitors to the site to do something. If it is not to buy a product, it might be to donate money, or vote for your candidate. Whatever your Web site’s purpose, search marketing should be part of the budget for attracting visitors to your site.

Your competitor’s marketing mix might already include paid search; after all, the share of advertisers’ budgets devoted to search marketing increases each year. Some businesses fund organic efforts from marketing budgets, too (whereas others use technology budgets for organic search). U.S. paid placement is expected to continue growing faster than any other sector of online advertising, at 17 percent a year, as it rises from an estimated $2.4 billion in 2004 to nearly $5 billion in 2009 (as shown in Figure 1-13).

Figure 1.13

Figure 1-13 U.S. paid placement spending. Paid placement continues to grow, albeit more slowly than in years past.
Source: JupiterMedia (July 2004)

But the rise of search marketing is not just a U.S. phenomenon; it is a worldwide trend. European marketers already spend 13 percent of their online ad budget on paid search and expect it to increase to 15 percent by 2005. The picture in Asia is also striking; for example, China’s paid placement spending is expected to increase fivefold by 2006 and Japan’s by 560 percent by 2008. Around the world, search marketing expenditures have grown dramatically in recent years. Let’s look at why.

Prospective Customers Use Search

One of the most basic reasons to spend your scarce marketing budget on search is that searchers buy products: Of all searchers, 33 percent are shopping, and 41 percent of Web users use search to find Web sites to research a purchase. Lest you think that not enough people are online for search marketing to be worth your while, note that total Web users passed the 300 million mark worldwide in 2004. As simple as it sounds, your customers are on the Web, and they use search to buy. Your site must be found by these searchers who are ready to buy.

Think about the new way that people purchase products. They no longer call your company to have you mail them a brochure. They "Google" your offering ("verizon wireless"). Or maybe they look for your competitor’s ("sprint"). Or they search for its generic name ("cell phone service").

If your company’s Web site is not listed in the first few search results for these searches, you’re out! You are out of the customer’s consideration set—the group of companies that will be considered for the customer’s purchase. If you are not in the customer’s consideration set, you have no chance to make the sale to that customer.

Even if the goal of your Web is not online purchase, your customers must find you to learn about your offerings, download information, or find the location of a retail store. Searchers are far more qualified visitors to your site than someone who clicks a banner ad, for example, so attracting search visitors is just good business.

The main reason to make search part of your marketing mix is that that’s where your customers are, but there are other reasons.

Search Marketing Is Cost-Effective

Beyond your customers’ use of search, the case for including search in your marketing mix is compelling for another reason: Search marketing expenditures are a good value.

European marketers report that they pay approximately €2 (euros) each time a searcher clicks their paid listings, and 55 percent regard that cost as "relatively cheap." Seventy-six percent of marketers believe paid search is better than banner ads for achieving their business goals, and 80 percent of businesses surveyed are satisfied with the return on investment for search marketing expenditures—35 percent are very satisfied. In fact, search marketing has the lowest cost per lead of any market method, as shown in Figure 1-14.

Figure 1.14

Figure 1-14 Comparing advertising value. Search is the leader in return on advertising investment.
Source: Piper, Jaffray & Co. (March 2003)

Why is this important? Because if you want to start spending money on search, you need to stop spending on something else. When you understand that search is the most effective way to spend your scarce marketing dollars, you should be able to easily make the tradeoffs required to reduce some existing budgets (direct mail, perhaps?) to find the money for your new search expenditures.

Search Marketing Is Big Business

You can tell a new marketing technique is taking off by noticing the number of consultants that hang out their shingles to help you do it! Several kinds of firms are involved in search marketing:

  • Search consultants. A brand new kind of consultancy has sprung up in the past several years, variously known as SEO consultants or SEM consultants. These new firms, led by iProspect, Fathom Online, and Global Strategies International, handle search marketing and nothing else.

  • Traditional advertising agencies. At the other end of the spectrum are the old-line advertising agencies that have been around for years. Just as firms such as Young & Rubicam and Ogilvy & Mather handle TV, radio, and print advertising, in recent years they have taken on Web advertising. Starting with banner ads, they have now moved into search marketing, too. Some ad agencies handle paid search only, whereas others offer SEO consulting for organic search, too.

  • Interactive advertising agencies. In between the two extremes, interactive agencies handle anything online, ranging from search marketing to banner ads to e-mail campaigns. Sometimes these agencies are subsidiaries of the traditional ad agencies, such as OgilvyInteractive, whereas others, such as Avenue A | Razorfish, are smaller, independent firms.

All of these firms are competing for your growing interactive marketing budget—almost 3 percent of all advertising spending in 2003. Your organization might already work with one of these companies, or might be looking for a search marketing partner. What is most important at this point is your interest in allocating part of your marketing budget to search, because you will soon see that achieving success is rather challenging.

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