Search Overview

With the Web now a major hub for shopping online, savvy marketers are turning to Internet search to tap the purchasing power of more than 200 million online consumers. The ability to reach interested consumers who pre-qualify themselves by actively looking for specific products or services is a key advantage that helps companies market in a cost-effective manner and increase their return on investment (ROI).

Far more effective than flashy banners that spanned the Internet in its earliest stages, search has become one of the hottest sectors within the online advertising industry, marked by rising consumer and advertiser adoption, technological advancement, and sizeable growth potential.

Now, a $1.4 billion market, Internet search and related services is expected to climb to $2.6 billion in 2004, with 20-percent plus annual growth through 2008, according to Salomon Smith Barney. Indeed, no other online advertising category is growing as fast.

Search Industry and Competition
To meet growing demand from cost-conscious advertisers in a tight economy, different forms of Internet search are available, including editorial and algorithmic, as well as paid placement and paid inclusion. Providers of these search services are looking to connect with about 60 million households, or 90 percent of the Internet population, that use " Web search services monthly.¹

Internet search has not only advanced the way companies are marketing products and services, but also fostered innovation with respect to how providers are capitalizing on the market opportunity. Some have created technology in-house to address search needs, while others have aligned with partners to tackle key objectives such as returning quality, up-to-date search results. Here's a look at today's search landscape:

In editorial search, providers such as MSN will present listings that are handpicked by their editorial staff. Editors' picks are driven primarily by the quality of individual sites, so businesses are growing more focused on making sure the content is current and engaging.

Algorithmic search engines, meanwhile, use "crawling" technology to create an index of Web pages. This index is searched when a user enters a query that, in turn, generates search results. Algorithms, including Google, FAST and Inktomi, are primarily based on keyword matching and link popularity. In recent years, search engine optimizers, or SEOs, also have emerged to help marketers optimize their Web pages and increase their chances of being included in search results.

To help businesses boost visibility with consumers, paid search channels are becoming an increasingly attractive option for many advertisers seeking more control over their spending per lead, as well as the placement of each listing.

Under the paid inclusion model, advertisers set up an account, submit listings and pay a fee to be reviewed by the algorithm. However, there is no guarantee the listings will always be included in the search results, or where they might be ranked on a given page. Still, paid inclusion helps increase relevance of results by allowing search engines to crawl deeper into businesses' Web sites and onto areas previously indexed only via spam techniques. As a result, individual Internet users are given access to better quality search listings.

In paid placement, advertisers pay to receive premium placement within the search results listings. For example, at Overture, advertisers bid for placement in its search results and only pay the company when a consumer clicks on the advertiser's listing. Following a rigorous screening for relevance by Overture's editorial team, the company then distributes its search results to thousands of Web sites across the Internet, including popular destinations such as MSN, Yahoo! and Lycos.

Rapid success of the paid placement search model pioneered by Overture has lent itself to increased progress -- and competition. The push to provide marketing services comes as more advertisers embrace the medium and seek a greater stake of e-commerce territory, both in the U.S. and overseas. The paid placement search market is expected to grow to $3 billion by 2004 and $6 to $8 billion by 2007/2008, up from $1 billion in 2001, according to Overture estimates.

Overall, as the Internet search sector expands, most search engines and portals are employing a mix of editorial, paid inclusion and algorithmic methods to meet diverse needs of their users and better monetize search pages. For example, portals such as Yahoo! and MSN provide a composite search page by combining various search options.

Search and Direct Marketing
As a direct-response channel, Internet search comes with many built-in benefits that provide online marketers an attractive mix of message control, consumer targeting and conversion-tracking capabilities. In general, search comes with four distinct advantages over traditional direct mail that marketers find hard to resist.

First, a tremendous effort goes into defining the target audience and mailing lists when launching a direct-mail campaign. Search, however, reverses this process as the consumer finds the marketer by actively looking for his or her specific product or service, thereby creating a pre-qualified lead.

Second, in terms of creative, design and messaging, direct marketers must continuously spawn breakthrough packaging and copy for each mailing. In search, marketers simply identify keywords relevant to their businesses and create descriptions for their product and service offering.

A third advantage is that marketers can track success rates in real-time with Web-based tools; whereas in direct mail, performance is often hindered by traditional phone and "snail-mail" tracking.

A final point of differentiation is pricing and cost control. With direct mail, costs are incurred before a single lead is generated. In many forms of search, however, a marketer only pays after a consumer clicks through to their Web site at a price the marketer decides the lead is worth.

While search can be a powerful, stand-alone marketing tool, it is best used as a compliment to an advertisers other direct marketing programs - both online and off.


(Source: Overture.com)