Why Should Your Business Use Search Advertising

1
Why Should Your Business Use Search Advertising?

• Nichole Becker
• Senior Manager, Global Market Research
• Yahoo! Search Marketing
• January 11, 2006

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Agenda

• Who is Using the Internet?
• How Are Consumers Using Search Engines?
• What Are the Trends in Online Advertising?
• Why Use Search Advertising?
• Best Practices for Search Advertising
• Recent Studies from Yahoo! Search Marketing
• Resources to Help You Get Started

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Who is Using the Internet?
Source Pew Internet American Life Project,
September 2005
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How Are They Using the Internet?
of Internet Users Who Engaged in Activity in
Prior Month
Significantly lower engagement for activities
outside of email search
Source Pew Internet American Life Project,
September 2005
5
How Are Consumers Using Search Engines?

• 61 of consumers use a search engine on a daily
  basis search engines second most frequent means
  of leading consumers to shopping sites.

How Consumers Located Online Store Where Made
Most Recent Purchase
Source Jupiter Research, US Paid Search
Forecast, 2005 to 2010 (September 2005)
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Consumers Use More Than One Search Engine

• Minority of searchers exclusively use one of top
  three search engines (Google, Yahoo! and MSN)
  49 in total use multiple search engines.

Used Google Yahoo! 26 Used Google MSN
19 Used All 3 SE 14
Used Yahoo! Google 39 Used Yahoo! MSN
11 Used All 3 SE 21
Used MSN Google 33 Used MSN Yahoo!
13 Used All 3 SE 24
Source Nielsen//NetRatings, Majority Of Online
Searchers Use Multiple Search Engines (February
2005)
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Indicating Loyalty to Any Search Engine is Low

• Even the Home Page setting on a consumers web
  browser does not create loyalty to a particular
  search engine (or vice versa).

Source Forrester Research, Search Loyalty Is
Hard To Find (December 2005)
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Billions and Billions of Searches
5.1 billion searches in October 2005

• Searches related to geographically distinct
  places involve search terms such as ZIP code,
  telephone number and street address (sounds like)

Top 10 Search Sites Unique Visitors (MM)
10 Local Search
Source PEW/comScore Media Metrix, Search Engine
Use (November 2005)
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Sounds likethe Yellow Pages White Pages

• 54 of search engine users let their fingers do
  the walking on the Internet rather than through
  a phone book.

When Im Using the Internet Instead of the Phone
Book Im Usually
Source iCrossing/Harris Interactive, How
America Searches (June 2005)
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What Are the Trends in Online Advertising?

• Online advertising is driving the growth in Total
  Advertising spend.

Internet Ad Growth
Total Ad Growth
Source eMarketer, Ad Spending Trends The
Internet and Other Media (October 2005)
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What is Driving the Growth of Online Advertising?

• Consumers
• Forrester Research believes change in consumer
  behavior will drive online advertising growth
  over next 5 years
• Consumers spend 34 of their media time online,
  comparable to TV media time.
• Consumers spending more of their shopping dollars
  online (7 in 2004) with increase to 12 by 2009.
• Consumers now use the Internet to gather info on
  products/services before purchase engage in this
  behavior even if ultimately the product/service
  is purchased offline.
• Consumers say they want to block unwanted
  adsonline and offlineprimarily because
  advertising is too ubiquitous, too interruptive,
  and not relevant to them.
• Businesses
• eMarketer points to change in advertising
  strategies
• Larger ad budgets overall
• Shifts in ad budgets from other media to Internet
  media
• More companies including the Internet as part of
  their ad campaigns
• Increased prices for all types of online ads

Source Forrester Research, US Online Marketing
Forecast 2005 to 2010 (March 2005) Source
eMarketer, Ad Spending Trends The Internet and
Other Media (October 2005)
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Paid Search Taking Lions Share of Online Spend

• Paid Search Rich Media only online media
  expected to grow as of total online advertising
  spend.

Allocation of Online Spend By Media Type Total
Online Advertising Spend
Source eMarketer, Ad Spending Trends The
Internet and Other Media (October 2005)
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And Nowthe 64,000 Question
Why Use Search Advertising?
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Search Advertising Accommodates All Budgets

• Search advertising probably most level playing
  field among all media types because small
  businesses with small budgets can reach mass
  audiences.
• Only pay when consumers click on search ad.
• Can set spend limitsbudget not eaten up in one
  day.
• Consumers see search ad even if they dont click
  on it.

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Cant Afford Not to Use Search Advertising!

• TV advertising 20th century
• 72 of US adults 18 years old are online (and
  Internet!)
• 34 of media time spent online
• 90 of Internet users use search engines monthly
• 54 turn to search engine instead of phone book
• Search engines like Consumer Reports and Blue
  Book of 21st century

Internet advertising 21st century
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Best Practices Keywords Relevant to Customers

• Start with a keyword selector tool for ideas on
  whats hot.
• Select a range of keywords rather than a narrow
  focus think like a customer.
• Include modifiers describing unique aspects of
  business, e.g. online, wholesale, next day.
• Capture all variations of your company/brand name
  and URL.
• Review performance of keywords over time expand
  on themes performing well and de-emphasize less
  effective themes.

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Best Practices Titles Descriptions That Make
Sense and Include Your Keywords

• Discounts on Name-Brand Women's Clothing
• Save when you shop for name-brand women's
  clothing with online coupons from
  CouponClothes.com. Be sure to always check our
  site for coupons before you shop online.
• www.couponclothes.com
• Samsung STR451 at OneParts
• Buy your Samsung SRT451 at OneParts.com, an
  authorized dealer for Samsung products, parts and
  repairs.
• www.oneparts.com
• Flowers Fresh from the Grower
• Summer weddings. Specializing in roses. One dozen
  red or mixed roses 27.95 - with free vase. Full
  online flower shop. Same-day delivery, secure
  online shopping, 100 freshness guaranteed.
• www.weshiproses4u.com

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Best Practices Track Performance ROI

• One of the greatest benefits of search
  advertising is the ability to track results.
• Do you know how many people used your Yellow
  Pages ad last year?
• Can you calculate a Return on Investment (ROI)
  that tells you how many leads per dollar spent?
  Or how many sales per dollar spent?
• Most Likely Not!
• Jupiter Research recommends calculating the
  following for keywords (or keyword groups).
• Revenue/sales (or leads generated)
• Impressions served and number of clicks
• Conversions (i.e., number of sales or number of
  leads generated)
• Ratio of clicks to impressions
• Ratio of conversions to clicks
• Ratio of search ad cost to 1) clicks and 2)
  conversions
• Ratio of revenue/sales/leads to 1) impressions,
  2) clicks and 3) conversions

Source Jupiter Research, Search Marketing
Measurement Evidence of Maturation in a Rapidly
Evolving Market (July 2005)
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Best Practices Integrate With Other Marketing

• Integrate online and offline advertising into a
  single marketing strategy. Determine purpose of
  each type of advertising (e.g., brand awareness,
  lead generation, drive traffic to walk-in store,
  etc.) and implement accordingly.
• If your business is local/regional, then use
  Yahoo! Local Sponsored Search or similar
  geo-targeting service. Captures customers who
  research online but purchase locally or research
  online and buy offline.
• Consider paid inclusion services offered by
  search engines, such as Yahoo! Search Submit.
  Gives you additional coverage by providing
  inclusion in organic search listings.
• Consider adding online transaction capabilities
  to your website. Can be done cost effectively
  using Yahoo! Small Business or dedicated web
  hosting service. Service usually provides
  everything neededbuying a domain, building a
  website, implementing online transactions, etc.

Source eMarketer, Ad Spending Trends The
Internet and Other Media (October 2005)
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Recent Studies from Yahoo! Search Marketing

• Consumer search behavior by product/service
  category
• Automotive, Consumer Electronics and Computers,
  Finance, Retail Apparel, Travel, Wireless, Voice
  Over Internet (VOIP)
• Consumer search behavior at key life stages
• New Parents (Finance)
• Going to College (Autos, Car Insurance,
• Cell Phones, Local Entertainment and Services,
• Retail, Travel)

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Resources to Help You Get Started

• Jupiter Research (www.jupiterresearch.com)
• Effective SEM Strategies for Targeting Small
  Businesses (December 2005)
• Marketing Sherpa (www.marketingsherpa.com)
• The Search Engine Marketing Kit How-To Binder
  CD
• Buyer's Guides to SEO Firms Paid Search
  Agencies Bundle 2005-2006
• Buyer's Guide to Paid Search Advertising (PPC)
  Agencies 2005-2006
• SEMPO (www.sempo.com)
• Yahoo! Small Business (http//smallbusiness.yahoo.
  com)
• Yahoo! Search Marketing (http//searchmarketing.ya
  hoo.com)