- Category: November 2010
Search, which has been around for more than a decade, is still a very vibrant marketing channel, giving us another reason to continue the series on Search Marketing with Ms. Margaret Chang, General Manager of Search Marketing for Yahoo! Southeast Asia.
This time Asian e-Marketing intends to shed light on paid search marketing that, although it offers new ways for marketers to be found, continues to evolve in ways that present ongoing challenges for marketers as well.
According to Margaret, paid search marketing is one of the most effective ways for a company to become more visible to potential customers, as by bidding on specific keywords related to the company or its product/service, a higher placement on search engine results pages can be achieved. Paid search is usually displayed as “Sponsor Results” or “Sponsored Links” on a results page and placed in a section of the page that is made to stand out with either different colors or enhanced text. When a user clicks on the ad, the marketers get charged a nominal fee for the referral, priced on an average of around $0.40 per click. “Of course this can sum up to a substantial amount, but it is the extra mile you have to go sometimes to push yourself ahead of your competitors. If you sell a popular product, it can be pretty tough to be among the top results listed when online shoppers start browsing on search engines”, she explains.
Studies do indeed prove that people hardly ever go beyond the top 30 results listed from a search. In fact, the top 30 results get over 90% of search traffic and the top 10 results receive nearly 80% more traffic than those in positions 11-30 achieve. This clearly demonstrates the importance of being highly visible when web users are searching for your type of product or service. “Paid searches can be a powerful, effective way for SMEs to generate more traffic to their websites, helping them to increase their online presence in a relatively short amount of time”, Margaret affirmed.
Bidding on keywords is one of the most important steps in the paid search process as it determines an advertisement’s positioning in search results. Margaret explained: “The advertisements co-exist with the rest of the search results, which are relevant to your query. However, from the advertiser’s point of view, they fit keywords relevant to their service or product and they decide the budget. It can be for instance a monthly budget, but they can even tighten it to a daily budget. They can give each keyword a maximum bid price, which is whatever price that was agreed to, and Yahoo! can usually calculate the conversion as they know how many clicks will turn into a real transaction.”
Yahoo! Sponsor Results are listings displayed in Yahoo! Search results that link to advertisements or websites for products or services. The words entered in the search box determine which listings are displayed. For example, if you search for florist, you will see Yahoo! Sponsored Results for websites that sell or provide information about flowers. Yahoo! determines which listings to display based on which are most relevant to your search and which are of most interest to people who have performed similar searches, while the marketer only pays after the appropriate ad/website is clicked. “That’s the way the model works. We act like a matchmaking platform; on one side is the user who is searching for something to buy or to find information on, and on the other side is the advertiser who provides the service or product - we just match make the marketplace. Advertisers set the pricing, how much they want to pay, themselves, which should be based on their profit margin. That is the first generation of the model”, Margaret revealed.
She continued: “The second generation of the model is in a way a little bit unfair, because big advertisers can always afford to spend more money and the paid search networks ranking system is based on how much the advertiser pays. Of course this is not in the users’ best interest because they always see these few ads and therefore another factor is relevance. Regarded as more relevant are ads that get clicked more often, which gives smaller advertisers a chance as well to achieve a higher ranking. So it is a combination of different factors which decide where your ranking is at. It is for the benefit of users as well as Yahoo!, as it wants to provide the most relevant search results to its users. And due to the fact that Yahoo! always supplies them with the most relevant search results they want, users don’t see it as ads. That is the reason why this model is always so successful: it is part of the content users ask for and it works for us because when they find the search engine is good, they will keep coming back. Only if these two things work, it makes sense for advertisers to place their budget with us. It’s a win-win situation and relevance is of vital importance.”
Compared to other forms of advertising, the return on investment is really high, the whole business model is very economical, and the marketing cycle is very efficient for advertisers, as they pay for performance only. Margaret states: “We feel that if you operate this marketing tool properly it’s more of a sales force to advertisers rather than a marketing tool, because in the end the traffic will turn into closed deals on your web site.”
Margaret even reported that some of her clients received such an overwhelming response that they stopped their campaign because of too many orders which they couldn’t process due to a lack of manpower. “I have seen with my own eyes that clients, who almost decided to close their business down, turned their business into three branch stores after a campaign with us. We saved them.” Margaret said.
So if you want your ad to be displayed when someone searches for your product, you should be willing to pay every time someone clicks on your ad. It is as easy as that. Margaret is dealing with a lot of small business owners, who are probably the most difficult to please as each penny spent on advertising is coming out of their own pocket. They have to see results to be satisfied. It’s not like dealing with a marketing team of a big MNC that is spending just a part of their department’s huge marketing budget. 20,000 contented customers are certainly convincing evidence of Yahoo! Search Marketing’s effectiveness, so please do feel free to test their service as well.
By Daniela La Marca