Trends in Search Engine Marketing (SEM)

1. Presented by Rob Laporte, CEO, DISC www.2disc.com-rob@2disc.com - 413-584-6500 Presented as part of “Marketing Your Business on the Internet Today: Strengths, Weaknesses, Opportunities, Threats” HiddenTec Annual Marketing Showcase Tuesday, October 28, Springfield, MA Technology Park Trends in Search Engine Marketing (SEM)

2. There are only 50 copies here, but this presentation and all handouts are posted on DISC’s server atwww.2disc.com/newsletter.html Handout includes: Print-out of this power point presentation Rob Laporte’s article published at the Search Engine Marketing Professionals Organization (SEMPO.org): “SEM: In-house vs. Outsourced,” which outlines the time, money and skills needed to perform successful SEM, whether by an SEM vendor or by an in-house employee. Abstract of Jupiter Research’s July 2003 study, “Search Powers Online Ad Revival” Handouts & this Presentation on the Web

3. About DISC and Rob Laporte Audience’s Background (Questions) A One Minute History of SEM SEM = SEO, PPC, Paid Placement PPC: Hype and Reality SEO: Immediate Results, Long-Term Investment Predicting and Tracking Results Choosing or Hiring an SEM Expert The Future of SEM This 15 minute Presentation’s Outline

4. About DISC and Rob Laporte • Rob Laporte: Traditional Marketing (1985 – 1990), Shakespeare Scholar (1991-1997), Owner of DISC (1995-present) • DISC: All Web Marketing and Site Development, Specializing in SEM

5. Audience Background • By show of hands, how many of you have done or contracted for paid placement or pay-per-click SEM? • How many have done or contracted for search engine optimization (SEO) or “organic SEO”? • How many have heard of the software, “Maestro”? • How many have heard of the SEM software, “IGAAMI”? • How many plan to do some web marketing within the next 6 months? • How many find SEM to be a baffling field?

6. One Minute History of SEM • 1995-1998: Text-rich, often ugly sites got lucky with good SE position • 1997 – 1999: A plague of spam tactics, most of which will now get you banished or demoted • 2000 – 2001: failing web design firms scramble willy-nilly into SEM; illegitimate tactics and pricing confuses buyers and poisons the SEM well. • 2001 – Now: SEM moves firmly into mainstream business, with major corporate attendance at the Search Engine Strategies conference series, and with a major shift of corporate marketing budgets into SEM.

7. One Minute History of SEM (Cont.) • Unlike other web marketing channels, there is a lot of published statistics about the growth and viability of SEM. • Recent moves by Microsoft and Yahoo, for example, attest to present and future importance of SEM.

8. SEM = SEO, PPC, Paid Placement • SEM = Search Engine Marketing (Some now say “Inquiry Marketing” is more apt) • SEO = Search Engine Optimization, also called Organic or Natural SEO/SEM • PPC = Pay-Per-Click (e.g., Overture, Google AdWords) • Paid Placement includes PPC plus any way by which you pay to get into the search engines, e.g., Trusted Feed, Yahoo Directory.

9. SEM: It’s Hot • Paid search listings will total $1.6 billion by the end of 2003, making up 25 percent of total online advertising spending. Two years ago, it made up only 10 percent of spending. -- Jupiter Research, July 2003 • 13 percent of traffic to web sites came from search engines, up from 8 percent the year before. -StatMarket, Feb. 2003 (StatMarket’s methods grossly under-report SE referrals, but even so . . .) • Jupiter Research pegs the paid search market as worth $1.6 billion this year, after growing at a 48 percent clip. Over the next five years, the researcher expects spending on search to increase by a compound annual rate of more than 20 percent. -- Jupiter Research, July 2003 • Please see the handout, “Search Powers Online Ad Revival.“

10. SEM: A Highly Disciplined Field • If there were a cheap (under $2000) or easy (under 20 hours) solution, tons of businesses would do it, thus nullifying the competitive advantage of the solution. • To better understand the skills and labor time needed in SEM, please see my article, “SEM: In-House vs. Outsourced,” at the Search Engine Marketing Professionals Organization (SEMPO), www.sempo.org/sem-article-sem-in-house-vs-outsourced.php • That article is crucial for deciding not only whether you should try SEM in-house, but also for evaluating a prospective SEM vendor.

11. Pay-Per-Click (PPC): What It Is • PPC marketing is a method of advertising on search engines like Overture and Google and their many affiliated search engines. Companies pay to be listed in search results. Often but not always, the higher a company's bid for a particular search term, the higher its listing in the SE.

12. PPC: Hype and Reality • There’s been a lot of media hype over PPC, because: • It has proven the best revenue source for the SEs, who thus promote it heavily. • The media fastens onto “The Next Great Thing.” • Many SEM vendors hype PPC, because, compared to SEO, it is easier to do (but not easier to do well) and is easier to hire for. In PPC it is also easier to guarantee placement (though not ROI).

13. PPC: Hype and Reality (cont.) • Reality: It is a lot more difficult to get positive ROI than you might think – see my SEMPO.org article. • Reality: Tons of people over-bid and don’t know it -- or don’t care because they have a marketing budget to spend and the boss can see the placements in the SEs. • Reality: Click charges can bleed you to death slowly, and when you stop paying, your site vanishes from the SEs. • Reality: Tracking ROI and adjusting your PPC campaign accordingly can take a lot continuous time.

14. PPC: Hype and Reality (cont.) • SEM professionals concur that, while SEO earns better ROI than PPC, PPC is still worth doing, especially if you use PPC management software, like BidRank, Did-It’s Maestro, GoToast.com, or several others that improve on the bid management tools built into Overture, AdWords, FindWhat and the other PPC SE’s. • The key is predicting, tracking and adjusting ROI: (Clicks to your web site x conversions x gross profit or value of a lead) – costs (in labor, software, and click charges) • Your SEM vendor or marketing manager should work out with you in detail the ROI formulas specific to your business by which to determine the optimum amount of your PPC expenditures.

15. SEO: What It Is • SEO matches the language of your web site (every keystroke, not merely copy writing) to the language used in search engine queries by your prospects. • Copy writing, html titles, navigation links, all file and folder names, and (least effectively) keyword meta-tags and alt tags – all words count. • But what frequency, density and distribution of key phrases should you use in each page? This question is one major reason SEM professionals exist. The best SEM firms reverse engineer the SE algorithms.

16. SEO: Immediate Results & Long-Term Investment • Done right, SEO brings in a larger quantity of targeted traffic than does PPC, without click charges. • Contrary to what some SEM firms (who want retainer fees) say, SEO, properly done, does not require frequent tweaking or re-submitting. • DISC SEO’d client sites in 1998 and 1999 that are still prevailing in the SEs, with no changes to SEO tactics.

17. Is Your Site Ready for SEO? • Unlike PPC, SEO almost always requires some site redesign or at least re-coding of the current design. • Most sites have been and are being built by webmasters who know little or nothing about SEO architecture. • If you are planning to build or re-build your site, consult with an SEM expert or online resource before even taking a crayon to paper. Even if you don’t do SEO, you want your site to be open to the SE spiders.

18. SEO, Dynamic Sites, Shopping Carts, & E-catalogs • Opening non-static sites to the SE spiders is a major trend now. • I do not have time even to summarize this field. • Flash only sites can’t be read by the SE spiders. Use Flash sparingly. • Mod_rewrite for Apache and its Windows equivalents alone are NOT a solution.

19. Predicting and Tracking SEM Results • In most cases you can predict and track the site traffic and revenues and resulting Return On Investment (ROI) of both PPC and SEO. • Improvements in software for predicting and tracking comprise a major trend in SEM today. • I highly recommend that you use an experienced SEM person to predict SEM ROI before beginning SEM, so that you can allocate resources and measure results.

20. Predicting and Tracking SEM Results (Cont.) • WordTracker, Overture’s Term Suggestion Tool, WebPosition™ reports, and server statistics (WebTrends, Webalizer, Hitbox.com, WebStat.com) showing SE referrals to a site are industry standards for predicting and tracking SEM results. • Many other excellent tracking tools are available: ClickTracks.com, ConversionRuler.com, TrafficROI.com – see the resources section of www.SEMPO.org and www.SearchEngineWatch.com. • Improvements in and wider use of such tools are a major trend in SEM today.

21. Choosing or Hiring an SEM Expert • See my article in the resources section of SEMPO.org: www.sempo.org/search-engine-marketing-resources.php. • Ask for proof of past successes in the form of WebPosition™ reports and server stats. Ideally, a vendor’s web site would display some of this proof. • Get names and numbers of past clients with whom you can speak.

22. The Future of SEM: The Vision Thing • The web is above all a linguistic phenomenon. The top search engines constitute the nexus, the spider, at the center of this web of words. This will always remain the case.

23. The Future of SEM: Automatic, ROI-Based Adjustments of Your Positioning • During the coming months and years, tools for predicting and tracking will automatically, daily adjust your PPC position and other ad spends in accordance with resulting profit. • See www.2disc.com/pay_per_click.htm and clickz.com/author/index.php/60853_all to learn more about this trend.

24. The Future of SEM: Optimizing Site Conversion Rates • When most businesses deploy automatic optimization of PPC web marketing, your competitive advantage will come from superior SEO and from optimization of the conversion rates of your web site. The latter will require superb usability and navigation design, and testing of multiple landing pages. This trend is in full swing now. • www.useit.com – Jakob Nielsen is the Guru of site usability and navigation – His books are required reading for webmasters and web marketers.

25. The Future of SEM: Localization • Localization and regionalization of the SEs: bye-bye Yellow Pages (both print and online). • Localization of SE queries, a trend that is happening as we speak, means that smaller budget businesses will be able to earn good ROI from SEM.

26. The Future of SEM: SEO Prevails • More screen real estate will be taken by paid listings as opposed to the free “editorial” listings in which only SEO can positions you. • However, SEO will remain the most cost-effective web marketing channel. The SEs can’t sell all or even most of their screen space, because if they do, another Google will emerge to convince people that it has great “objective,” non-paid listings.

27. SEM Resources: A Few Good Links • www.SearchEngineWatch.com – The best, but you could spend months reading it all • www.SEMPO.com – Second best, and more condensed. SEM vendors here should become members. • www.clickz.com – The single best source for all things web marketing. • www.WilsonWeb.com – Enormous, well selected array of web marketing articles. • www.bruceclay.com/searchenginechart.pdf - shows affiliate relationships among the top SEs. • www.alchemistmedia.com - A good how-to primer, by DISC’s former employee and current luminary in the SEM field. • www.useit.com – The Guru of site usability and navigation – His books are required reading for webmasters and web marketers. • www.cyberatlas.com – tons of great web marketing statistics.

28. Trends in Search Engine Marketing (SEM) By Rob Laporte, CEO, DISC Attendees get a free 15 minute consultation from me www.2disc.com- rob@2disc.com- 413-584-6500 HiddenTec Annual Marketing Showcase Tuesday, October 28, Springfield, MA Technology Park Thank You For Attending