The Power of eMarketing Conference Todd Daum Vice President, Marketing September 5, 2002

1. The Power of eMarketing Conference Todd Daum Vice President, Marketing September 5, 2002

2. Agenda The Power of Search Succeeding with Search and your Available Options Managing Paid Placement Campaigns Paid Placement Case Study and Conversion Tips Q & A

3. Search is Powerful Marketing • 60-70 Million “commercially-oriented” searches each day in the U.S. • Customers report the majority of their online purchases are from sites they found through search results. • Customers pre-qualify themselves by actively searching for products/services. • Pre-qualified leads result in higher conversion rates. Source: Overture Estimates and NPD Branding Study (February 2001)

4. The Power of Search: Unique Value Search allows for active user participation and a high level of targeting. Catalog Mail Trade Magazines Opt-in E-mail Direct Mail Internet Search High Level of Targeting Network TV Radio Billboards Low Passive Active User’s Participation

5. The Power of Search: Untapped Potential Yellow Pages Direct Mail Search 30-40 million references/day 10.7 million pieces read/day 180-200 million searches/day Usage 25-35 million phone calls/day 1.7 million responses/day 90-100 million leads/day Leads Generated Market Size $12 Billion $44 Billion $1 Billion Years in Existence 95 Years 96 Years 4 Years Source: YPPA, DMA and Overture Estimates

6. The Power of Search: Volume and Diversity Search delivers volumes of leads to the most popular commerce industries on the Web. Monthly traffic in major search engine categories (in millions). Source: Overture home page and affiliate partner statistics, July 2002

7. Search Engine – product, brand or store name Straight to store – type in URL Search Engine – use shopping channel Email from store or company Click on Internet Ads Use a shopping bot Site with suggestions/reviews of web stores Other The Power of Search: User’s Preferred Method When searching for products online to buy, what is the most common way you find online vendors or stores? Source: Jupiter Media Metrix “Paid Search Placement” Report, July 2001

8. Succeeding With Search 1. Appear on major search engines The top 10 sites all of which have search engines reach over 90% of all active Internet users. 2. Get listed at the top of the search results Research shows that the top 3 search listings receive over 70% of all clicks. 3. Find the most time effective submission option Appearing in multiple search engines ensures maximum reach but can be a time-consuming process. 4. Control costs Controlling the cost per lead allows businesses to achieve ROI objectives.

9. Search Engine Submission Options • 1. Search Engine Marketers (SEMs) • Business hires a “specialist” to get their site listed with multiple search engines, including algorithmic. • Paid Inclusion • Business pay search engine directly to be included in their results or reviewed by Webcrawler more frequently. 3.Paid Placement Business submits site to one search engine which distributes its results to other sites.

10. Appearing on Major Search Engines Appearing on Major Search Engines Results mayappear in selected search engine Search Engine Marketers Results mayappear in selected search engine Paid Inclusion Results listed across a network of search sites Paid Placement

11. Getting Listed at the Top Appearing on Major Search Engines Getting Listed at the Top Results mayappear in selected search engine Search Engine Marketers No control Results mayappear in selected search engine Paid Inclusion No control Results listed across a network of search sites Complete control over position Paid Placement

12. Time Effective Submission Appearing on Major Search Engines Getting Listed at the Top Time Effective Submission Results mayappear in selected search engine Search Engine Marketers Multiple distribution achieved with one buy No control Results mayappear in selected search engine Paid Inclusion Can be time intensive No control Results listed across a network of search sites Multiple distribution achieved with one buy Complete control over position Paid Placement

13. Controlling Costs Appearing on Major Search Engines Getting Listed at the Top Time Effective Submission Controlling Costs Recurring costs based on inclusion, not performance Results mayappear in selected search engine Search Engine Marketers Multiple distribution achieved with one buy No control Results mayappear in selected search engine Cost based on inclusion, not performance Paid Inclusion Can be time intensive No control Results listed across a network of search sites Multiple distribution achieved with one buy Cost based on performance (cost per click) Complete control over position Paid Placement

14. 1. Search engine positions listings according to an algorithmic formula. 2. SEMs attempt to improve ranking of results 3. Listings may Appear within other search results SEM/Algorithmic Search Example

15. 1. Business sets up account, submits listings and pays inclusion fee. 2. Listings may appear within other search results Paid Inclusion Example

16. 3. User submits a search query. 4. Listings dynamically ordered by level of bid. 1. Advertisers set up account & submits listings: Keywords, titles, descriptions & bids. 2. Overture’s 100+ editors screen for relevance. 5. Listings distributed across network of search sites. 6. User clicks, advertiser pays for qualified lead. Paid Placement Example

17. Overture’s Premium Listings Overture’s Premium Listings Paid Placement Example

18. Pay-for-Performance Search = Positive ROI What do you think is the return on investment for each of the online advertising mediums that were used last quarter? PFP Search ROI rated higher than other online Ad Tools • Source: Jupiter Online Advertising Effectiveness Study 9/01

19. Managing Paid Placement Campaigns • Case Study: eBags • Select relevant keywords • Write clear, factual titles and descriptions • Determine listing position • Track your results

20. Case Study: eBags Company Background and Situation • eBags is a leading online provider of bags, accessories and travel-related products • Has thousands of listings • Wanted to understand its conversion rate and ROI to optimize their account

21. Keywords, Titles and Descriptions Choose relevant search terms Write clear, factual titles and descriptions • Backpacks • Handbags • Samsonite luggage 1. Find Great Backpacks at eBags.com eBags brings you a large selection of backpacks to make shopping online easy and enjoyable. Great discounts, consumer reviews and always 100% satisfaction. www.ebags.com • Include the keyword in both your title and description. • Direct URLs to pages with keyword related content. • Result: • Consumers find precisely what they’re looking for. • Increased sales conversion rates.

22. Determine Listing Position Search Listing Bid Amount Your Position • $0.50 • $0.46 • $0.40 • $0.37 $0.50 1. Find Great Backpacks at eBags.com eBags brings you a large selection of backpacks to make shopping online easy and enjoyable. Great discounts, consumer reviews and always 100% satisfaction. www.ebags.com (Advertisers Max Bid: $0.50) • Bid amounts should be set to maximize your return on investment. • (Dependent upon the conversion rate and your profitability.) • Overture’s Premium Listings (top 3 positions) reach • more than 80% of active U.S. Internet users.1 • Branding: 33% of consumers believed seeing a company within the • opening lines of search results made them a top company in its field.2 1. Nielsen/NetRatings, July 2002 2. iProspect user survey, July 30, 2002

23. $0.47 Determine Listing Position “Auto-Bidding” Search Listing Max Bid Cost • $0.50 • $0.46 • $0.40 • $0.37 1. Find Great Backpacks at eBags.com eBags brings you a large selection of backpacks to make shopping online easy and enjoyable. Great discounts, consumer reviews and always 100% satisfaction. $0.41 $0.38 www.ebags.com (Advertisers Max Bid: $0.50) $0.05 • Listing position is determined by advertiser’s Max Bid. • Auto-bidding ensures the advertiser only pays $0.01 above the next • advertiser’s Max Bid, “bubble-popping” any gaps in the bid pricing. • Simplifies campaign management, allowing advertisers to concentrate on • their core business rather than their marketing efforts.

24. Track your Results Understanding how to track your visitors is the key to optimizing your paid placement search results. • Following the traffic through the steps that lead to a sale will enable you to: • Track conversion by keyword. • Effectively manage your most important keywords. • Set your bids to maximize your return on investment. • Maximize your sales. • Result: • The most cost-effective way to spend your • marketing budget.

25. Track your Results Backpacks Find Great Backpacks at eBags.com $0.50 eBags brings you a large selection of backpacks to make shopping online easy and enjoyable. Great discounts, consumer reviews and always 100% satisfaction. www.ebags.com/backpacks ?source=overture&kw=backpacks Add tracking URL here

26. What they did Result • Added tracking URLs, tracked visitors and sales • Allowed them to understand the number of visitors and the source of its sales • Determined their ROI • Allowed them to understand the effectiveness of its Overture keywords • Optimized their account • Added additional relevant terms • Wrote clear titles and descriptions • Moved some terms into Premium Listings • Optimized bids • Tripled its traffic • Increased its conversion rate by nearly 10% • Increased overall profits • Maximized its ROI Case Study: eBags

27. Paid Placement Conversion Tips • Select “portfolio” of relevant product/service keywords – general to specific. • Use clear and factual titles/descriptions, including keywords in both areas. • Send the user directly to the specific product/service page. • Use tracking URLs at the keyword level to determine the “best” performing terms and optimize campaign accordingly. • 5. Position your search listings as high as your cost structure allows (i.e., gain maximum exposure, while maximizing your ROI). • 6. Develop new terms around your best searched terms.

28. Questions?