Paid Search Handbook (Part I)

By Tessa Wegert | Posted June 27, 2003

The evolving world of paid search advertising — a.k.a., pay-per-click search, pay per search, pay-for-performance search, and search engine marketing — can be quite confusing. Given the growing popularity of search engine marketing among small- and mid-sized businesses, a primer seems in order.

As the general manager at Sprinks once said, "Pay-for-performance is hot." Advertisers are flocking to paid search programs and search engine marketing (SEM) opportunities with visions of increased site traffic, sales, and online exposure. A 2002 survey conducted by Search123 (which was recently acquired by ValueClick) found 34 percent of businesses surveyed allocate "at least 75 percent of their online advertising budgets for pay-per-click (PPC) search engines," while another 21 percent give it half to three-quarters of their budgets.

Much of the popularity of programs like these can be attributed to the pricing models behind them. Pay-for-performance advertising allows marketers to dole out ad dollars based on their desired response level and decide, in monetary terms, exactly what each potential lead is worth to them. Additionally, it can be done without costly ad creative. In many cases campaigns can be monitored and optimized without the assistance of an account manager.

The advantages of such a program are manifold. Before you run out and start your own SEM campaign, however, take heed. As my colleague Rebecca Lieb warns, "Search may be interactive marketing's best bang for the buck, but it's not a be-all, end-all." For now, let's focus on where it begins.

Based on what I've been hearing from other interactive marketers, one of the initial problems media buyers face is determining which of the industry's dozens of paid search listing providers to partner with. If asked to name a few paid search engines, most marketers will cite the big guns such as Overture and Google that receive so much press coverage they can hardly be ignored. But what of the other paid search providers you may have heard mentioned in passing? Many of them have been around for years and can offer comparable capabilities. Are they worth dedicating your budget to? Below, a look at some of the major players and highlights on what they can offer.

Ah-ha.com
Founded in 1999, performance-based search engine ah-ha.com only adopted a PPC pricing model in 2000, after having initially charged advertisers a flat fee based on number of impressions. Ah-ha paid search results appear on around 200 partner sites, including myGeek.com and Dogpile. Although there's no minimum campaign spend, there is a $49.95 activation fee, most of which ultimately goes toward the advertiser's campaign.

What makes this engine stand out is for a nominal fee, advertisers can include their logos in listings appearing on some of ah-ha's partner sites (an appealing option for those who still maintain branding is best done via visuals). The minimum bid for each keyword, whether the description includes a logo or not, is $0.01.

Kanoodle
Paid search engine Kanoodle has a campaign deposit minimum of $50, and the minimum bid is $0.05 per keyword. According to the company's Web site, its paid search listings appear on over 10,000 search-enabled sites, including Hotbar, CNET, and Galaxy. As of mid-June 2003, InfoSpace, WebCrawler, Dogpile, and MetaCrawler will be added to that list.

Kanoodle also offers a nifty site tool that allows marketers to chat with customer service reps in real time about their accounts. Gone are the days of waiting on account managers to address your e-mail or return your call while your campaign hangs in the balance.

Mamma.com
Mamma.com's paid search results program, Mamma Classifieds, doesn't pit marketers against each other in bidding wars. Advertisers pay a flat cost per keyword depending on the business category into which their keywords fall (e.g., Travel and Transportation goes for $0.23; Casino — surprise, surprise — is a whopping $1.00). Without individual keyword prices to supervise, this system makes managing campaign a breeze.

With Mamma, your search results will appear on partner sites such as AskJeeves, Copernic, Hotbar, and internet.com (this site is part of internet.com's network). There is no minimum monthly spend, and campaigns can be launched and managed entirely online.

Next time, I'll look at the rest of the players and talk about some additional issues to consider when launching a paid search campaign. Until then, I'd like to hear about your own paid search experiences. What portion of your overall marketing budget do you dedicate to paid search? Which engines do you regularly employ? E-mail me and let me know.

Adapted from ClickZ.com.

Tessa Wegert plans and implements online advertising strategies and promotional campaigns as media manager at BAM Strategy, a Montreal-based interactive marketing agency. With a background in print advertising, consumer marketing, and copy editing, she also freelances as a technology and e-marketing writer, online and off.

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