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E-business Briefing: June 2006

http://www.e-consultancy.com/news-blog/newsletter/2715/search-marketing-and-the-long--tail.html

E-business Briefing from E-consultancy features insight and opinions from top e-business consultants, CEOs and senior management on the issues they are facing as well as selected e-business white papers.

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Search Marketing and the Long-Tail      
 
In this issue:
1. Search Marketing and the Long-Tail
2. The Watercooler ... what we've been writing about this week
3. NEW! Site Search Buyer's Guide 2006
4. JOBS: Internet and e-commerce jobs
5. Top forum post: Mobile & usability testing - why it matters
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1. Search Marketing and the Long-Tail

Martin Dinham is Business Development Manager at Neutralize, one of the UK's leading full service search engine marketing agencies. Neutralize works with organisations such as Mamas and Papas, Black and Decker, Messagelabs and the London Stock Exchange, and is a founder member of the Search Marketing Association UK. It is also a Google Qualified Company.

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1. In a nutshell, what are the respective benefits of Paid Search (PPC) and Search Engine Optimisation?

Search engines should be the primary method of attracting targeted traffic for any website owner given that up to 70% of first time site visitors are driven by search engines. At Neutralize we firmly believe that both paid search and natural search have a place in any search marketing strategy. 

The majority of search traffic (up to 75% on Google) is delivered by natural listings, so clearly for long term success SEO is absolutely vital. PPC though gives you that tactical flexibility for campaigns, promotions etc. Of course, it’s also useful for any organisation which, for example, has a new website and hasn't yet made any headway in natural listings. By getting out the cheque book, they can buy their way into search results! 

PPC also has the advantage of being perfectly transparent, so any organisation which wants to measure ROI from search in the most granular manner is well matched with PPC.

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2. Looking at SEO firstly, is there still plenty of low-hanging fruit for organisations who are looking to improve their organic visibility, or have most companies now got on top of the basics?

We believe that the vast majority of organisations can still make significant improvements to their sites in terms of natural SEO. Interestingly, we find that as a rule of thumb, the bigger the brand, the worse they are positioned from a natural search perspective. 

In most markets, the smaller, more flexible online-only operators are the ones that have cracked natural search and the big brands now have to catch up.

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3. Are companies getting better at measuring the success of search engine optimisation? How is technology helping to compare this channel to others?

Yes, one of the advances in the SEO market in the past year or so has been its move from a “website” activity to a core marketing activity. With this has come the mindset that the results have to be measurable. The technology to measure increases in traffic from natural search has always been there in most organisations (web stats packages), but the trend seems to be increasingly towards using this to measure SEO project success. 

This has been of assistance both in terms of results transparency, but also in allowing clients and SEO agencies to agree true performance driven contracts.

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4. More than two thirds of searches are carried out on Google. Is it worth bothering with any other engines?

I think the key factor here is to know your market. Certainly the general search engine user market is heavily skewed towards Google, but it does vary from sector to sector. 

For example, we do lots of work in the IT market with companies like Computacenter and Messagelabs. For these companies there is minimal traffic worth acquiring outside of Google. However, if you’re targeting an older audience you might want to look at MSN, or for young women, Ask. 

It’s also important to consider local search engine usage in your target territories. Google tends to get less dominant as you move east across the globe. So, you might want to pay more attention and assign more effort to Yahoo for example in a campaign targeted at Australasia than you would in a UK-only campaign.

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5. How important is it to be on the first page for search engine results? Is it worth the effort if the best you can hope for is page 2 or page 3?

It’s vitally important. 92% of search engine users don’t bother going beyond the second page of results and even the last position on Page 1 of Google will only attract approximately 25% of the clickthroughs of number one. If you are in a competitive sector and budgets preclude you practically hitting Page 1 positions (on either PPC or SEO), my advice would be to mine some “tier 2” keywords that may have less volume against them, but for which you can achieve useful positions.

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6. So are Page 1 listings for important keywords an unrealistic objective for all but the biggest players in a particular space?

I believe that if you are, for example, in the mortgages market, you have to cut your cloth according to the realistic budgets available. Sadly, in this case it does mean that search engines are no longer a place where the high street mortgage broker can compete with the big boys on equal terms. 

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7. I saw a presentation of yours recently in which you said that it was becoming more expensive for paid search advertisers to monetise the Long Tail. What is the Long Tail and why is it becoming less cheap to ‘mine’ it?

The concept of the “long tail” has, until recently, been essential to running PPC campaigns in the most ROI efficient way possible. It refers to the extensive mining of a high volume of low volume, low cost keyphrases that when used in significant numbers enable a far more cost efficient campaign than simply using the high value, high volume phrases alone. 

At Neutralize we have invested significantly in developing technology that enables us to identify potentially hundreds of thousands of low cost keyphrases for campaigns, giving us access to the search “tail”. 

However, we have found recently that Google is preventing advertisers from loading up these types of keyphrases at minimum bids, even when they are, in theory, unbidded. Their “recommended pricing” model is forcing advertisers to pay as much as £2.75 for uncompetitive terms, effectively removing the “tail” from advertisers. 

 
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Our PPC team view this as a serious issue for Google Adwords users as it is effectively increasing the budgets required to run campaigns and reducing the scope for improvement that effective management can deliver. It also gives us the potential situation where SEO and natural listings are the only way to access the long tail type search terms in Google

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8. If the Long Tail route becomes less viable, then what can advertisers do to get a similarly good return on investment?

As I alluded to above, if Google continue this policy of “chopping off the tail”, then really effective SEO is the only way of accessing these types of search terms within Google. 

So, as a simple example, if you’re an e-commerce site with 10,000 products, you really need to ensure that your product catalogue can be indexed by - and achieve rankings - in Google.

Other than this, there are of course the other PPC engines, principally Yahoo! and soon to be MSN. 

The key, as always, is to ensure that you have a view of ROI on each keyword on each search engine, so that you or your agency can make informed decisions about where to focus spend in the future.

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9. While the PPC cost of less common terms is going up, research suggests that inflation for generic terms has stopped and that prices are, in fact, in decline. True? Why is that?

I think it’s certainly true that in certain markets that cost for major search terms have settled down. At the end of the day, PPC is a market and a market will always find its own level. 

I think any discussion about PPC will always return to the same point – it’s about ROI and the keywords that your campaign focuses on should always be driven by this.

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10. There’s a lot of research which shows that users prefer natural listings to sponsored listings. If this is the case, why should advertisers waste their cash on PPC?

It is indeed the case that, on Google, the vast majority of users prefer the natural listings. However, that definitely doesn’t mean that PPC is redundant. For a start, if you’ve got a new website PPC is often the only way to rapidly achieve top listings in search engines. Also, if your business includes dealing with time-dependant events, for example price changes, promotions, sales etc, then PPC is the only way of reflecting these events in search engines. 

As I mentioned above as well, PPC has the advantage, if it’s correctly managed, of being completely transparent in terms of results, so it's easy to see whether a campaign is delivering positive ROI or not. 

It’s also important to think about how users of “other” search engines behave and the listings that they prefer. For example, while approximately 70% of Google users prefer natural listings, the pattern is almost completely inverted for MSN where studies show that the vast majority of users prefer the paid results. 

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11. Is it over-egging the search engine pudding by investing in maximum search engine visibility on important keywords for both for SEO and for sponsored listings? Can you quantify the benefits of monopolising search engine ‘real estate’?

There’s a fair bit of debate around the benefits of continuing PPC advertising for terms for which you also have good natural listings and clearly one school of thought is that, if you have a natural listing, it enables you to pull back on the PPC spend against this term. 

However our experience as an agency is that the presence of a natural listing alongside a PPC ad can significantly increase the clickthrough rates on that ad. We run campaigns where this has doubled the clickthrough rate on the PPC ad, so this scenario is an excellent example of how SEO and PPC are complimentary.

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12. Where should people be looking for good, practical advice about SEO and PPC (apart from our very own SEO Best Practice Guide of course)?

Well, clearly I was about to recommend your own, rather wonderful, guide, but as you’ve already beaten me to this one I’ll resort to a bit of shameless self promotion – take a look at the Neutralize corporate blog, run by Technical Director Edward Cowell for news in the world of search engine marketing. 

Also, anyone interested in anything to do with search engine marketing in any form should have Danny Sullivan’s site right at the top of their favourites, probably next to the blog of Google’s own Matt Cutts

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13. Who would you say are the leading thinkers in Search Engine Marketing?

I think that anyone from a leading search engine marketing agency asked this question would like to think that their own campaign teams fall into this category, and I’m certainly no different. On a wider basis we would say that many of the leading thinkers are those who have a low profile and work on projects, rather than the people more visible on some of the SEO forums and the like. 

On a search engine front, despite the inevitable profile that Google has, I believe that some of the genuinely innovative thinking and development is coming out of Yahoo!

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14. Any final tips for those who want to improve their search marketing strategy?

I’ve got two tips that might both seem simplistic but will give you the foundations of effective search engine marketing if you stick to them. Where PPC is concerned, make sure that everything you do can be measured. Ensure that your campaign is fully tracked on a per-keyword, per-search engine basis all the way through to point of sale / action so that you can instantly see true ROI for each keyphrase you’re running.

On the SEO front, aside from avoiding things like frames when building your site, the best advice I can give is concentrate on building a site that gives the end user really easily accessible relevant, valuable content on your subject matter. 

Search engines aren’t that different to people – they pay most attention to sites that are relevant, interesting authorities in their field.

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Martin was interviewed by Linus Gregoriadis. Comments? Take them to the forum !

 
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2. The Watercooler ... what we've been writing about this week

“One Word Equity” – what is Saatchi on about?
IAB's new research initiative misses the point
Is Fjax the best use of Flash ever?
The business case for site search
MetaWeather aims to build a better forecast
Cyworld's 22bn page impressions to grow
London marketing students launch 1000wordpage.com
New Google Sitemaps tools launched
Web 2.0 is changing the content battlefield
Using Digg for web PR is dangerous
Google launches Cost-Per-Action adverts
Is the end of marketing really nigh?
Wetpaint social wiki’s launch - user generated content silver bullet?
Web 2.0 startups in the UK – questions to consider

 
3. NEW! Site Search Buyer's Guide 2006
If you're selling online and you haven't seriously looked at site search then here's an opportunity to redeem yourself. This report contains market trends, issues, SWOT analysis, the business case for site search, and profiles of the top vendors in this market. Get it today.
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5. Top forum post: Mobile & usability testing - why it matters
Webcredible's Tim Fidgeon argues that "mobile and handheld usability testing could be even more important than computer-based usability testing", then spells out the reasons why...
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