Search Engine Marketing: Part I

By James Maguire | Posted February 11, 2005

Buying keyword search terms on popular search engines like Google and Yahoo has become an important part — perhaps the most critical part — of the marketing strategy of today's e-tailers. This common practice, in which merchants pay search engines to present a link to their site to users who search for a given term, is a hugely successful sales driver.

Yet for many e-tailers, learning the most effective methods for purchasing search terms is an expensive trial and error proposition. What are the best techniques? Which engines should I favor? What pitfalls should I avoid? These are all frequently asked questions, along with the big one: how do I get the most bang for my buck?

To shed light on the all-important task of navigating search engine buys, E-Commerce Guide spoke with Brad Fallon, who runs InstantSEOexpert author of a primer on search engine optimization, and Brad Fallon, who writes a well-trafficked blog about search engine marketing (SEM). Additionally, Fallon owns and operates MyWeddingFavors, which enables him to hone his SEM techniques using a real (and thriving) online store.

Step One: Choose Your Words
Planning your search term buy requires a bit of research. What terms are the most advantageous for you to spend your ad dollars on?

To find the best keywords for your business, look in your log files to see what search terms shoppers are already using to find you. But you should also go beyond this list in choosing your terms. "The great thing about paid search is that you can draw people to your site who haven't found your site in the natural [unpaid] search results," Fallon notes.

To find additional words to buy, look in Word Tracker and Overture Keyword Selector.

The Overture tool is a favorite among merchants. If there's a word or phrase you think shoppers might use to search for your product, enter it on the Overture Keyword Selector front page. The results will tell you how that word has been used in popular searches. If you enter "toys," it will come back with a long list: "dinosaur toys," "educational toys," "electronic toys" and so forth.

However, Fallon notes, don't search for the broad, high profile words that relate to your site. If you sell clothing, forget about buying "clothing" — such a popular term will be wildly expensive. The Overture tool indicates that there were 302,691 searches for "clothing" in December 2004. In contrast, Overture reveals that there were only 9,904 searches for "western clothing" and just 7,874 searches for "infant clothing." These more specific terms will be far less expensive per click than "clothing" — and are also far more effective at attracting the customers you want.

"The best way to get the best deals is to bid as exact matches on the most specific, esoteric keywords, because those will be the cheapest," Fallon says.

Step Two: The Need-to-Know Formula
Once you have your keywords chosen, you need to bid for them on Google, Yahoo or other search engines. How much should you offer to pay? There's a formula to help with this decision.

"If you consider that a standard e-commerce store converts one percent of visitors into sales, and if you bid 10 cents a click, then the one percent conversion rate means you're paying $10 per sale," Fallon explains. In other words, if a merchant is making more than $10 on each purchase, they can safely bid 10 cents a click. If they're making more, they can bid correspondingly higher.

"One of the things that's been proven over and over is that people are more likely to click on ads that contain the keywords that they just typed in."