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Video: "Search Advertising: Dr. Hal Varian - Google" (The University of California at Berkeley has launched a "channel" on YouTube about search engines, where this talk on search engine advertising, given by Dr. Hal Varian of Google, is posted.) ============================ Background Search Engine Advertising is a key topic in Internet Marketing. In it's simplest form, Search Engine Advertising is the act of paying money to a crawler-based search engine and/or a human-edited directory in order to enhance the chances of your site being found by Web searchers when they perform specific search queries and/or visit specific information categories on that search engine or directory (see the "Search Engine Optimization" page for a list of the major engines and directories). Major Search Engine Advertising Categories include: One of the first forms of Search Engine Advertising was the familiar top-of-the-page banner ad. This type of ad is "served" to the visitor in one of several ways. The most common form is to serve the ad whenever a specific category is clicked on by the visitor/searcher. This technique works best in the "directory" portion of the major search engines and directories where the information is divided into increasingly more specific sub-categories. The ad could also be linked to specific words or phrases which, when searched for on that engine or directory, would also return the banner ad at the top of the results page. In either case, clicking on that banner ad would take the visitor to the advertiser's Web site, either to the home page or to a specific page designed to receive visitors from that ad. The advertiser paid a flat rate for the display of their ad in a cost per impression-based arrangement, typically in 1,000 impression increments called a "CPM (cost per thousand impressions) rate". The actual rate charged depended on the popularity of the category or search phrase - the more popular it was, the more the engine or directory charged the advertiser for each thousand ad impressions served. The underlying logic is simple, and embodies the basic concept for all Search Engine Advertising, regardless of the specific technique used - it's all about relevance. For example, if your site deals with golden retriever dog training, then you would want to have your banner ad served whenever a visitor went to that specific category in a directory, or to the closest category match in that directory if that specific category did not exist. In other words, the goal is to present your ad to the visitors most likely to be interested in your product or service based on the specific category they visit and/or the phrase they search on. Though not as popular as it once was, this type of ad is still very much in use today. I think one of the reasons this type of advertising became less popular is that it tended to break the Search Engine Advertising golden rule - it has to be relevant. That is, advertisers, in their zeal for product exposure and branding opportunities, used this system to present essentially irrelevant ads to search engine and directory users. For example, an online credit card company might buy ALL of the ad inventory from Yahoo or AltaVista for 1 day or for X million impressions in order to present it's latest credit card offer to the most potential customers in the least amount of time. Although it could be argued that almost all of the searchers on Yahoo or AltaVista have credit cards and want to pay the lowest fee possible, it is probably NOT what they were searching for on that directory or search engine at that specific time. So the credit card banner ad was not only irrelevant, it was seen as annoying - a distraction from the true mission the searcher was on. Latest Search Engine Advertising Techniques A number of interesting alternatives to the basic Search Engine Advertising banner ad technique described above have recently become available. These new techniques are available for a number of reasons that I will touch on in the discussion of each technique below. Several of them are also covered in detail in the Search Engine Optimization Existing and New Site To Do List sections. The bottom line is that you, the Web site owner and/or marketer, now have a number of paid alternatives to pursue that will either get you more visibility with the correct audience for your goods or services and/or will get you that exposure sooner. Detailed instructions on how to do these submissions, particularly for Pay for Consideration and Pay for Inclusion, are detailed in the Search Engine Optimization To Do Lists for Existing and New Web Sites (see step #14, Manual Submission, in each To Do List).
The 2 most famous search engines/directories in this category are the Yahoo and LookSmart directories. Yahoo Directory Submit - Yahoo charges an annual fee of $299.00 per Web page URL for a business site (adult content sites are charged $600.00) to be considered for inclusion in the (human edited) directory, typically within 5-7 business days. There is no guaranty that your site will be included in their directory, only that it will be reviewed within a set, short period of time by one of their editors. LookSmart had a very similar approach to Yahoo's until May 2002. At that time, LookSmart initiated a one-time submittal/review fee ($49.00) combined with a "cost-per-click" program ($0.15 per click-thru with a $15.00 per month minimum). The most outrageous part of this change was that they made it retroactive which, in my opinion, was a huge mistake. (My bottom line on LookSmart - if you can afford a listing there given the new charge structure, do it - otherwise, put it at the bottom of your Search Engine Advertising list.) How can these 2 directories get away with this? Quite simply, businesses have been begging for a faster way to get their sites listed in the appropriate category in each directory, especially in Yahoo, for years. Before these Business Express (Yahoo) and Express Submit (LookSmart) paid services were available, it could take MONTHS for a business site to get reviewed and placed in the directory. If you're serious about being found in the major search engines and directories, take advantage of these 2 services, especially Yahoo's. At the end of the day, it really is a bargain. Paid inclusion means just what it says - you pay a search engine a fee and they will guaranty to place the specified (and paid for) number of page addresses (URL's) in their index for a stated period of time. Why is this important? Because URL's have a nasty habit of first being accepted, and then being dropped just as quickly from a search engine's index. This can lead to frustration and a waste of your time constantly checking to make sure that the pages are still in the engine's index. The best pages to pay for inclusion are your Home Page, your Information Pages (see the Search Engine Optimization page for explanation), and your Site Map page. Why? Because you want to ensure that your most highly optimized pages are the ones that get into the search engine index as early as possible so you can start taking advantage of the optimization you've done to them. I am NOT a fan of Paid Inclusion, especially for small businesses. I think a MUCH better use of a small business's limited search advertising budget is to pay the annual fee charged by Yahoo for their "Directory Submit" option (see a description/explanation in the "Pay for Consideration/Paid Submission" section above). Not only does this action get your Web site Home Page into the Yahoo Directory, but because the Yahoo directory is human-reviewed, it is considered a trusted source for new Web sites by crawler-based (non-human edited) search engines, thereby all but guarantying the crawling and inclusion of your Home Page (and other Web site pages) in the Yahoo crawler-based search index as well as the Google search index. And once you're in these indices, other crawler-based engines (MSN, Ask, etc.) will be sure to follow. Paid Placement is, as the name implies, an advertising technique for placing your ad in the very best position possible on a search engine results page by paying for that placement. The underlying assumption with this search engine advertising technique is that the ads appear on a search engine results page that is displaying search results AND ads that are relevant to the keyword phrase being searched. Once that level of relevance is established, the bid-for-placement portion of the formula is then implemented. Each time a searcher clicks on the link in one of these "bid-for" search results, the searcher is taken to the advertiser's own "landing page", and the advertiser is charged the bid amount. This payment model is usually known as "cost-per-click" (CPC) or "pay per click" (PPC). I believe that the 2 Paid Placement ad types I discuss below are the most popular ones offered at the moment and, therefore, should deliver the most effective results for your site. Google AdWords Program THE Paid Placement ad model available on the Web today is offered by Google - the Google AdWords ("Sponsored Links") Program. To see all of the AdWord options on one screen, go to Google.com and search on the word "flowers" (without the quotes). You'll see the maximum number of ads that can be displayed on a single search results page - 3 "Sponsored Links" along the top of the page and up to 8 "Sponsored Links" along the right side of the page. This model has only one payment method - CPC ("cost per click"), also known as "pay per click" (PPC). In a cost per click model, the advertiser pays only if the ad is clicked on by a Google searcher, BUT the price the advertiser pays for each click is based on an ever-changing bid system similar to Yahoo Sponsored Search. Also, these ads are being syndicated out to "Google Partners" in a similar fashion to Yahoo/Overture (see below). The great advantage to a new site, or to an existing site that has not yet achieved a good ranking in the Google index, is that their business can get excellent visibility for their key words or phrases on Google for a very low cost. Finally, these ads are monitored by Google for relevancy (their engine's hallmark), so the ads are generally as relevant to the searcher as the results returned from Google's search index. Relevancy AND bid price BOTH drive final ranking/positioning of the displayed ads. To take a test drive of the Google AdWords ad program, go to Google.com, click on the "Advertising Programs" link on their Home Page, and then on the "Google Adwords" link. Yahoo Sponsored Search The bid-for-placement model started by Overture (formerly GoTo.com) in the early 1990's has come into great favor with both online advertisers, and with other search engines! In this model, a Yahoo "advertiser" is given the opportunity to bid for the #1 (or #2, #3, etc.) search result position for specific key words and/or key phrases. The original Overture search results page did not distinguish between paid-for (winning bid) results and organic (or editorial) search results provided in the early 90's by Inktomi. The present Yahoo model clearly distinguishes between paid-for ("Sponsor Results") and organic search results. Also, in the original Overture.com paid placement search model, the winning bid was actually displayed next to each search result that was bid on. Again, this is no longer the case with Yahoo Sponsored search. Also, the present upgraded Yahoo model has adopted the Google Adwords PPC model in how it rank orders the ads. In other words, BOTH relevancy AND bid price drive final ranking/positioning of the displayed ads. The real genius in the original Overture search model was that Overture formed a number of revenue-sharing partnerships with some of the Web's largest search engines and directories at the time, all of which were fairly desperate for new revenue in the post "dot com" era. Examples included AOL (switched to Google Adwords program in 2002), AltaVista, Lycos, MSN and Netscape. For a share of the bid revenue, these major engines/directories displayed the top 2-5 Overture search results in very visible, top-of-the-page locations on their own search results page, giving them even greater value to the advertisers bidding on them. As importantly, search result relevance is maintained. It would be foolish for advertisers to bid on and pay for the delivery of inappropriately matched searchers to their sites. Therefore, advertisers will typically bid on only those words and phrases that are very focused on the goods and services they are selling, thereby insuring the return of very relevant matches in the top ranked results on Overture (now Yahoo) and on their partner sites. Let's start this section with a nice, concise definition of Contextual Advertising from Webopedia: Contextual Advertising is "advertising on a Web site that is targeted to the specific individual who is visiting the Web site. A contextual ad system scans the text of a Web site for keywords and returns ads to the Web page based on what the user is viewing, either through ads placed on the page or pop-up ads. For example, if the user is viewing a site about sports, and the site uses contextual advertising, the user might see ads for sports-related companies, such as memorabilia dealers or ticket sellers. Contextual advertising also is used by search engines to display ads on their search results pages based on what word(s) the users has searched for." So, how do contextual ads look "in real life"? Take a look at the Google ads ("Ads by Google") being served along the right hand side of this page (and every page on the Internet Marketing Course Web site) toward the top of the page. These ads are contextual ads served via the Google AdSense system. Google AdSense is an iteration of Google AdWords in which Web publishers can serve relevant Google AdWords to their visitors/readers. How does this work? Again, let's use this Web site as an example. I, as the Web publisher of Internet Marketing Course (IMC), applied to Google AdSense to become part of the Google AdSense Network. A human at Google looked at the Internet Marketing Course Web site, determined that it contained interesting, original content, and approved my application. Google then crawled the Internet Marketing Course Web site again just as it normally does, but this time it added the relevant keyword phrases it determined for each IMC Web page to the Google AdSense index. Google AdWords advertisers are given the choice to have their ads served only on Google search results pages, or they can choose to also have their ads served on third party Web pages (like those on the Internet Marketing Course site, for example) that contain content that is relevant to the products/services they are advertising. Compensation to the Publishers comes from Google splitting the commission they receive from the Advertisers whenever the ad is clicked on by a visitor/reader on the Publisher's Web site. The advantage to Advertisers in using systems like Google AdSense is that they get a broader, yet still relevant, reach for their ads. The advantage for Publishers, especially small/medium size publishers, is that they now have a new source of revenue, while still presenting relevant content to their readers. The advantage to Search Engines like Google is that they have increased the overall ad impressions being served and, if their relevancy algorithms are working, the number of (paid-for) click-thru's the ads receive, so the overall revenue Google is able to generate from the original AdWords ad increases. To learn more about the Google AdSense ad program, go to Google.com and click on the "Advertising Programs" link on their Home Page. Printer-Friendly Version of this Page Search Engine Marketing - Return to SEM Start Page ======================== For a great concise overview of the status of each of these options on the major search engines and directories including a nicely done chart, be sure to read Danny Sullivan's "Buying Your Way In To Search Engines" on Search Engine Watch. He also has a wealth of search engine-specific information on this subject that you can explore in his "Pay for Placement?" section. Internet Marketing Course - Return to Home Page 
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