John Ozimek, associate director at Mi liberty

John Ozimek, associate director at Mi liberty


Did you hear the one about Facebook taking on the might of Google in a battle over advertising revenues? That’s because not many newspapers went with that headline; they seemed to prefer the more factual ‘Facebook acquires FriendFeed’. Oh well. Whatever the headline, the deal by Facebook is an interesting one, as it shows just how seriously it sees the growing market for search marketing.

Google dominates the search landscape through its ability to intelligently index the billions of web pages out there and deliver relevant results in a

matter of seconds. Google is so good at this that close to 90% of consumers in the UK use Google for all their internet searches. Trying to influence those searches – either through clever optimisation of web pages or the use of keywords and sponsored links – has become a massive industry in its own right.


Clever lolly

Because it’s a members-only site, Facebook’s pages can’t be indexed by Google. So the more time Facebook users spend on the site, the more opportunities Facebook gets to deliver advertising, and the fewer eyeballs there are checking out Google search results. Borrell Associates think that Facebook will make $229 million in advertising this year, out of a total projected income of $310 million. That makes advertising by far the largest contributor to Facebook’s cashflow.

The same is true of Google; since it introduced various ways to make money out of the searches its users make every day, it’s become one of the most valuable companies in the world. Its most recent financial results show that it made more than $5 billion revenue in just one quarter. So search marketing may not be especially sexy or cool but, done well, it can be very effective.


Click that link

In fact, search is the single largest portion of online marketing spend globally. Companies like it because you only pay when someone clicks on a link, so measurement is speedy, simple and direct. And anybody can do it; because the majority of search marketing is based on either a keyword auction (the more popular the keyword, the more it costs) or CPM rates (cost per thousand views), it’s actually a very transparent process.

Because of this ability to very clearly see the ROI of a campaign, companies are actually increasing their search marketing budgets, even in the current economic climate. Spend on search marketing increased by 14% in the last three months of 2008 in the run up to the busiest time of year for retail. Despite the recession starting to bite, the effectiveness and reach of search marketing made it a key tool.

US website eMarketer puts the UK spend on search marketing at more than £2 billion this year. That’s from a total online spend of £3.3 billion, by far the largest chunk. By comparison, display marketing like banners and interstitials only accounts for £600 million of the annual spend. A report from PricewaterhouseCoopers at the end of last year put the total European spend on search marketing at 5.6 billion euro, up 25% from 2007.


Clear lessons

The lessons from this are clear. As more consumers spend more time online, marketing budgets will continue to shift emphasis away from print and physical media and onto online. In Europe, online marketing accounts for about 9% of total marketing spend. Research firm Forrester estimates this will increase to 18% of total spend over the next two to three years; that’s double the existing spend.

The increase in online marketing spend is linked to broadband speeds, as consumers with faster connections tend to spend more time online, which is where marketers need to reach them.

The big losers in all this will be TV and print, two industries that have already been suffering from an advertising slump. More than a third of consumers that have always-on internet connections say they watch less TV as a result; more than a quarter of them say they also read fewer magazines.

These days there’s seldom a media campaign planned by Mi liberty’s marketing division that doesn’t include some degree of search marketing and optimisation. The web has become so crowded that companies will spend a significant amount to get high search engine rankings because, quite simply, it gets results.


Collect the loot

There are a few simple tools out there that will let you play around and understand search marketing. There’s a nice tool called WordTracker that shows how many searches are made using specific search terms, and how many results Google would display; this is a great way to plan keyworddriven campaigns. To check how highly Google ranks a web page there is a free web browser plug-in called SEO Quake.

Of course, as with most things in life there is a downside. Search marketing doesn’t quite conjure the glitz and the glamour of marketing in quite the same way as swanky parties and million-dollar TV campaigns. But even if it’s the ‘plain Jane’ of online campaigns, it gets results, and that’s the most important thing.

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