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Internet Marketing: Engines & Media


In 2009 Halyard Consulting took on Sean Walsh as an intern for an independent study during his senior year of undergraduate at Fairleigh Dickinson University. Sean then worked for us for a little while before deciding to pursue a Master’s Degree. As part of his independent study he was required to write several reports. When he left he provided us with the reports to do as I saw fit. He put a tremendous amount of time and effort into these documents and I thought I would share his knowledge with the readers of this blog.

Getting Ahead in Search

Internet Marketing is a general term that describes all marketing and promotional activities realized via the online digital medium.  While Internet Marketing is itself a very new field, several specifically concentrated Internet marketing methodologies have gained traction recently.  These fields are developing and changing rapidly as new business models materialize to capitalize on these emergent markets.  Two of the more promising internet marketing models that are organizing themselves into powerhouse marketing techniques are Search Engine Marketing and Social Media Marketing.  Both of these forms are refining their business models as they become legitimate means to cheaply and effectively target advertising toward potential customers.

Mike Moran of Search Engine Marketing Inc asserts that marketers must augment the 4P’s of Product, Price, Placement, and Promotion with the 3R’s of being Real, Relevant, and Responsive in order to survive in today’s digital landscape.  Delta Air Lines realizes the importance of the 3R’s and uses web analytic tools to track and compare their customers’ sites.  Delta then extends their analysis to include the way in which traffic is driven through the various marketing channels. Furthermore, Delta  makes adjustments to their internet marketing strategy by refocusing on different keywords or reacting to current trends.  Understanding the tools available and their uses is essential to any business wishing to compete in the information age.

Search Engine Marketing

Search Engine Marketing (SEM) is an internet marketing tactic which focuses advertisements at customers based on the search terms they enter into a search engine.  These advertisements appear in the Search Engine Results Pages (SERPS) – usually within a specific section labeled as Ads or Sponsored Links.  The advantage to marketing in this way is that the advertisers can target specific ads based upon keyword searches and therefore to people who have already shown interest in a topic. Such a tactic allows the marketer to be relevant to the consumer.

While I will be speaking broadly about the Search Engine Marketing industry, my more in-depth analysis will be primarily concerned with Google AdWords.  AdWords is not to be confused with Google AdSense – a similarly keyword driven advertising program where webmasters can sell advertising space on their web pages for a percentage of the revenue generated.

The History of Search

 

a chart to describe the search engine market

Image via Wikipedia

Search Engines emerged to fulfill peoples’ needs to manage the infinitely vast amount of information available via the internet and produce meaningful results from that data.  Search Engine Marketing was one of the more successful business models search engines developed to finance their operations.  A Pay Per Click program was first offered in 1996 by Open Text.  As of 2007 pay per click forms of SEM were the primary revenue generators for the search engine industry.  Today, the largest Search Engine Marketing channel is Google AdWords with approximately 72% market share followed by Yahoo! Search Marketing (20% market share) and Microsoft adCenter (8% market share).

 

Pay-Per-Click

Pay Per Click advertising (PPC) is a model where advertisers develop an ad – usually including a catchy title, some information, and a hyperlinked URL – and target that ad toward a specific keyword.  The ad will only be displayed when the targeted keywords are searched for; the advertiser only pays when the ad’s hyperlink is clicked on.  The ratio of number of times the ad is clicked on divided by the number of times the ad is shown is known as Click Through Rate (CTR).  CTR is one metric that helps determine the effectiveness of an advertising campaign.  Other forms of SEM include Pay-Per-Action models where expenditures are based upon actions such as completions of a survey or Pay-Per-Call where the amount of telephone calls is the determining factor.

Most of SEM efforts focus on delivering the maximum Return on Investment per marketing dollar possible.  The digital nature of SEM incorporates the collection of extensive amounts of data allowing for accurate tracking of expenditure and customer behavior.  Search Engine Marketing achieves PPC efficiencies through several methods including keyword optimization, local geographic targeting, language targeting, and cost managing bidding strategies.

Here is Google’s example from their AdWords Beginners Guide of what a PPC ad will look like:

Advertise with Google
Want fast results?
Create your ad campaign today!
www.adwords.google.com

google adwords user interface design

Image by IvanWalsh.com via Flickr

Bidding & Expense Control

Pay Per Click advertising slots are most often determined through a keyword bidding function where advertisers choose the price they are willing to pay for each click on their advertisement.  The amount paid for each click on the advertisement in known as Cost-Per-Click (CPC).  The advertiser can set a maximum CPC for the keywords that will invoke the ad and the PPC provider will award the top spots to the highest bidders.  In addition to setting max CPC amounts for each keyword, the advertiser can set a period budget so that advertising expenses are predictable and controllable.

 

Quality Score

In addition to the bid amount, Google AdWords takes the quality of the advertisements into account.  Google’s rationale behind this is to ensure a good user experience and to keep the advertisers honest.  Having a high Quality Score will give keyword bidding a boost to win at lower cost.  Quality Score is determined by how highly targeted the keywords, ad text and campaigns are as well as by advertiser history and ratings.

 

Keywords

The first step in developing such a pay per click ad campaign is to decide which keywords to target.  An ad may be targeted at several keywords or keyword phrases.  It is important that these keywords are relevant to the content behind the ad.  Targeting irrelevant keywords will waste advertising dollars on searchers not interested in the offered products or services.  Conversely, highly focused keywords will result in displaying the ads to customers who are actively seeking such a product or service.

Chris Anderson uses the phrase ‘long-tail’, a statistical term describing a particular distribution curve, to describe the way in which the economic demand curve is switching from mass produced popular hit products to niche market economics.  The long tail theory applies directly to developing keywords for a pay per click advertisement.  Advertising for generic keyword terms (i.e. Cars) produce less return on investment than long tail style niche terms (i.e. 2010 Toyota Prius IV), because long tail keywords are both lower cost and higher converting terms.

Negative keyword terms may also be used to add further precision to ad targeting.   A negative keyword assures that a search for a particular keyword will not return the advertisement.  The classic example is to negate the word ‘free’ so that searchers who are not interested in purchasing will not be shown the ad.

The keyword phrase can be further focused by including relevant geographic terms.  For instance, a search for “2010 Toyota Prius IV Morris County NJ” is much more likely to represent a serious sales lead for the Toyota Dealership in Morris County than the search for “cars”.

Geo-Targeting

One of the more recent features of many PPC Ad providers is a Geo-targeting tool which allows the advertiser to limit the physical locality in which their ads are displayed and, thus, more efficiently target their potential customers.  The use of geographic targeting and geographic keywords can produce similar results; however, the Geo-targeting tool is both more precise and more flexible, as the ad will only by shown within the designated localities and the searcher need not enter the geographic descriptor.

Social Media Marketing

Social Media Marketing is newer, less well defined, and less structured in comparison to Search Engine Marketing.  However, this digital environment is being utilized by creative marketers and emerging entrepreneurs alike to great success.  These platforms can be invaluable for performing the value added tasks of networking, disseminating information, and following industry updates and news.  Additionally these platforms a unique ability to actively manage reputation and enhance brand recognition as well as generate marketing research including candid feedback from the target audience.  Social media marketing has potential to benefit any type of company if appropriately utilized.

 

HubSpot Leads Automatically Get Social Media I...

Image by HubSpot via Flickr

Social Influencers & Authorities

One advantage is that the members of a social media group are self-selected they often align themselves according to interests, professions, and other characteristics that lump them into targeted audiences.  This makes it easy to reach concentrated niche audiences who would otherwise be highly dispersed.  In the Blogosphere related blogs tend to link to one another.  People tend to reinforce their social networks on Facebook.  Like-minded people find and follow one another on Twitter.  Social Media Marketing involves becoming an influencer within a social sphere.  Many of those most successful at Social Media Marketing have positioned themselves as authorities within their communities. To become an authority usually requires a lot of time and effort put into the online community.

Twitter & Bit.ly

Twitter is a micro-blogging site where users are limited to 140 character messages.  The need to share messages within this restrain led to the creation of URL shorteners like Bit.ly.  Bit.ly offers a service where anyone can enter and shrink any URL into a manageable twenty five character string.  In addition, the service installs tracking software on each short URL.  This can produce statistics concerning the number of click-thrus from the original post link, the number of clicks from successive re-postings of that link, and the geographic locations these clicks are coming from.  Using Bit.ly in conjunction with Twitter allows the social media marketer to communicate with a massive audience and trace the effectiveness of marketing campaigns in real time.

Interactivity & Internet Marketing Control

Because of the nature of the medium Social Media Marketing lends itself well to alternative marketing practices.  A key difference between that and more traditional marketing outlets is the high level of interaction with the audience.  Such a high level of interaction comes at the cost of losing control over the discussion.

A great example of an interactive social media campaign was when the Chevy Tahoe advertising team decided to pursue an interactive online marketing campaign.  Contestants where challenged to create the best TV ad for the new model Tahoe.  Chevy provided the video clips, music and editing tools.  Of the 30,000 submissions many ads attacked the Tahoe on grounds of social irresponsibility; contributing to global warming and the war in Iraq.  These attack ads generated far more views on YouTube than the positive ads did on Chevy’s own site.  However, if Chevy did take those ads down they would have forfeited their credibility in the community.  Regardless of Chevy’s perceived image crisis Tahoe sales rose dramatically and the campaign was incredibly successful.  This example negates the “central tenet of ‘golden age’ mass-media marketing: that by controlling the ad message, Madison Avenue can control perception of the product” (Chris Anderson – The Long Tail).  Bad press must be expected and even embraced rather than shunted or shouted down.  Now participation is valued over control.

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