Show Wrap-Up Report for Search Engine Strategies: Portrait of an Industry Under Tremendous Strain

Although search marketing's been around for 10 years now, it only hit the marketing mainstream in 2003, and heated up to the boiling point over the past few months.

As we learned at the Search Engine Strategies convention attended by several thousand marketers and vendors in San Jose last week, the industry is definitely feeling the strain in three ways:

- Increased competition

Space on that first critical page of results is limited, and for every popular search term there are probably dozens if not hundreds of marketers all convinced their site belongs at the top.

Kevin Lee CEO paid search agency did-it.com told us, "The Google IPO is causing more people to jump in, and that puts more pressure on our clients. The marketplace is getting more crowded and more expensive; it's suffering from its own success. We're starting to see Darwinian competition. It's a zero-sum game."

Solution? Technology to manage your bids and get deep into multi-word search terms is needed. Vaughn Smith, eBay's Senior Director Internet Marketing told us, "The technology wherewithal exists, but now search engine marketers must be more efficient with how they use it."

But, if there's one thing we know about marketers, it's that many are tech-phobic creative types.

- Watch out for Microsoft

Although more than a quarter of a million marketers are investing in search campaigns for a significant portion of site traffic, their success is utterly dependent on a handful of key search engine players... such as Google. Right now the one most are watching/fearing is MSN Search.

Jason Fischel VP CNET Networks explained to us, "The entire industry is waiting for Microsoft, the 800lb gorilla, to come into the search engine market. Search engine firms are holding their breath. Imagine how Microsoft's branding clout can affect things..."

- Money madness

Unlike previous years when the show focused on helping search agencies and consultants learning tactics, this year the vendor track was almost entirely dedicated to handling the cash and client influx.

How do you set your company's valuation when investors knock at the door? How do you cash out of your business? How do you deal with insane growth?

"2004 is swimming with VC sharks," noted Noel McMichael President MarketLeap. "Venture capitalists keep calling me all the time. They're looking to invest serious money. They don't know me, or the industry, but they sure thought they could help, and all they wanted in return was 75% of my business."

He decided to just say no, "Raising money and IPOs becomes the end game, and it ruins the company." The temptations are enormous though. (Think dot-com-land 1999)

Most vendors have more prospective clients coming at them then they probably can handle well at their current level of staffing. But it's nearly impossible to staff up, because the few experienced search marketers out there are so heavily headhunted by both vendor and client-side.

As a client, you need to be aware that your vendor is under incredible pressure right now to handle growth gracefully, to decide about VC money, and to take on more clients than they can really handle.

Many of these guys are in business because they are great at geeky stuff such as algorithms... not the high-pressure business world itself. As one SEO president told us, "I got into this five years ago because I like to work from home in my PJs." We expect a bumpy flight ahead for the next year or two as the industry transitions to big business.

Click fraud, search engine spam, trademark fears

Although click fraud was barely mentioned at SES's Toronto show earlier this summer, San Jose was a buzzing over it. Dana Todd, principal, SiteLab, gave everyone a reality check, "Click fraud of 5-15% occurs."

Joe Doyle, VP at Realtytrac.com agreed, "Click fraud is a very serous problem for our site. Overall I build into my overhead an additional 10% just to account for the cost of click fraud."

To ameliorate the problem, Doyle's tech team runs regular click log reports. "On some days clicks from Google will suddenly double from 3,000 to 6,000. It's obvious fraud."

(Side note: Unexpected clicks aren't always related to fraud. Check Yahoo's Buzz Index http://buzz.yahoo.com for other reasons for unusual traffic surges.)

Although with regularly scheduled click log reports, you should also routinely run trademark violation reports. Even if your competitors are scrupulous to avoid trademark violations, chances are their affiliates or other marketing partners may not be.

Matt Naeger VP IMPAQT told us, "Put a cease and desist policy in place; and, publish that policy on your Web site. Send cease and desist letters to each violator. Search history can be used against you if you bring a trademark case to court and the history shows you didn't do anything for a while. If you didn't protect it, it's not in your favor in the court's eyes."

Plus, as everyone surely knows by now, the search engines and PPC ad networks are not going to protect your trademark for you. It's not their job -- it's yours.

The reason behind increased trademark violations is that trademarked brand names get clicks that tend to convert extremely well. With many marketers whipped up in a competing frenzy in a limited search term pool, violations are going to happen.

So will search engine spam....

Search marketing vendors are under so much pressure to get clients into highly competitive rankings quickly that some will try tactics they know you could be banned for. If you discover the problem, they may not care because they've made a quick buck from your account and moved on. There are plenty more fish leaping into their net from the client sea.

Matthew Bailey, Web Marketing Director the Karcher, warned, "Be very careful about whom you are working with. Conduct due diligence. There are companies that still sell automated optimization software that's been detected and penalized by engines."

"Run for the hills when a vendor makes hyperbolic promises, such as we'll guarantee you placement in search engines," said Anne Kennedy, Managing Partner, Beyond Ink.

Red flags include the spam standards that anyone who's been in search for more than a few months knows very well -- including many types of doorway pages, mirror pages, satellite sites, automated submissions, and cross-linking between unrelated sites. Kennedy advised, "Look for anti-spam clauses in contracts; search for the vendor on Google [to see if they are being penalized with a low ranking for their name]; and check for links [from unrelated sites] back to their site."

Site design mistakes: search-centric and search-ignorant site design

As Shari Thurow Marketing Director GrantasticDesigns.com said, "Search engines won't spend money on your products and services."

However, search-obsessed marketers often make the mistake of designing sites almost exclusively to impress engines. (Pages with loads of static text-links dominate.)

On the other hand, search newbies are still making giant mistakes... such as putting a Flash-based splash page in front of their home page, or relying 100% on dynamically-created pages instead of some static HTML pages for search-term heavy content.

Another popular mistake is the ever-popular brochure shovel ware page. (A page that pretty-much replicates the copy and the graphics of your print materials.)

Matching offline creative is "inane" said Bryan Eisenberg, Principal Future Now Inc. Visitors aren't interested in your brand messaging, or in your wide range of offerings, but in the specific relevance you have to whatever they were searching for. So don't waste landing page space and eyeball time on a big logo or slogan.

What should you put on a landing page? Highly relevant copy, trust-building elements (a privacy policy note, testimonials, whatever), and a big fat button to where you want them to go next should be included.

In other words, your landing page declares: "Yes, you are at exactly the right place. It's a safe trustworthy place, here's what to do next."

Obviously this isn't your generic home page. "I frankly think home pages are a terrible invention," said Michael Sack, Chief Product Officer Inceptor. "People bottleneck at that page and struggle to find the right links. Home pages need to evolve into entry points into the site that seek to seamlessly guide visitors to what they are looking for with great ease and reduced confusion."

Maybe someday, but in the meantime, as Eisenberg said, "60% of search-driven visitors drop off after the first page." If that first page is your generic home page, you're probably losing more than that.

IBM's in-house Search Effectiveness Team Leader Bill Hunt said that they focus on "improving page quality for popular queries each and every month." It's an ongoing process worth investing in.

Measuring results beyond clicks

"We call it 'dolphing'," Jeff Ramminger, EVP KnowledgeStorm, told us. "The user dives in, doesn't find what he or she wants, dives out, and dives back in again, like a dolphin." Gord Hotchkiss, President Enquiro, agreed, "Most searches aren't a one-shot deal; they involve going back and forth to the results page at least a couple of times in a search session. As marketers we tend to market in a linear fashion, but search is not. Actual searches are complex and dynamic. The search is a funnel. You must figure out how to intersect the visitors within the funnel. They can get interested in a brand they never knew existed, but there may not have been an actual conversion. By conventional tracking methods, it was a failure."

This so-called failed search campaign may have raised brand awareness enough that the consumer later bought offline or online (aka click latency).

If you're measuring immediate clicks to conversions, you're missing the brand marketing power of search results, as well as delayed or offline purchases.

Eisenberg suggested, try dividing your search term results into categories roughly by possible intent. Would someone using a term be likely to be doing initial category research, or is it a term only used by consumers with immediate purchase intent?

Dan Thies President SEO Research Labs advised, "Beware of free keyword research offers from PPC engines. Their goal is to increase your spending and overall competition, not your profit."

That said, several speakers mentioned case studies in which a client had increased the number of targeted keywords dramatically and seen leaps in results (probably because when you get ultra-granular, conversions nearly always rise).

Thies also warned against lumping all of your organic traffic into one pot when buying SEO services. "Use a weighted popularity formula, i.e. number of searches multiplied by relevance equals weighted popularity. 100 searches a day, that are 50% relevant, may be only worth 50 searches to you."

Laura Thieme, Bizresearch, also warned against making snap judgments based on immediate campaign results, "Compare two months of data and averages before removing keywords. One month may look very different from another."

Factors as disparate as click latency, seasonality, competitors' campaigns, and whatever's being mentioned in the news that day can all affect your results.

Contextual Ads versus Online PR

Contextual ads were around long before Google and Overture started offering them as a way to extend their reach into advertisers' pockets with more offerings. However, they were never red hot as they were before.

In fact, many show speakers and attendees questioned whether contextual ad sales should be growing as quickly as they are.

Let's face it, contextual ads are only related to "search" because search-related companies are selling them. But in the rush to get into the search bandwagon, many clients close their eyes to this fact. You bought it via Google, so it's a search click, right?

In fact show host Danny Sullivan named the whole discussion of contextual advertising, "contextual pollution" and ranted from the podium, "There's nothing wrong with contextual ads, but it's not search. Lumping the two together pollutes the data. Are you a performance marketer or a search marketer? You can be both, but understand you must measure each differently."

Net users viewing your contextual ads are *not* in search mode. By definition they are surfing the Web outside of search engines. They're less likely to be shopping, less likely to be researching a specific purchase or likely to make one.

They are simply viewing content that has a strong (but not nearly guaranteed) possibility of being in some way related to the keyword term you're targeting. You can't pick specific sites so you have zero control over demographics, frequency, level of purchase intent, or brand-relationship.

If you are investing in contextual ads with that full knowledge (and separate measurement systems), that's fine.

You probably should be testing different ad copy and landing pages than you would for search, because these ad viewers are in a different part of the sales cycle. Also, compare these ad results to your regular online ad results (such as banner campaigns) instead of to search clicks. You may find banners (or text ads) on hand-chosen vertical sites do much better for you in that arena.

However, if you are investing in contextual ads sold by folks like Overture and Google because you want more search engine visibility than their paid search ads can give you, you're making a mistake.

As multiple speakers and attendees pointed out, if you've bought all the paid slots you can, the only thing left in search is more optimization. Aside from optimizing your own site, consider getting your optimized message onto other sites as well...

Articles, columns, product reviews, and news releases -- all of that classic online PR stuff also plays directly into search optimization. Even if your site doesn't come up for a search term, perhaps a press release or content page from another site will.

Greg Jarboe President SEO-PR noted that 73% of journalists go online to sites such as Google News, Yahoo News, and now MSN's Newsbot where they surf press releases along with related news links.

"But PR people don't fully recognize yet that they're not pitching to a human editor anymore; they're pitching to an algorithm." You have to optimize releases just as you would any web page: pick a keyword phrase and use it several times in the release.

We foresee a boom in the press release distribution world when (ok, if) the PR world catches onto this. Why? Just like a Web page, a release should only be optimized for a term or two. If you want to catch more results, you need more pages, or releases.

So instead of sending one mega-release to cover all the bases, smart marketers will get search news site traffic by sending out a bunch of releases for each single topic, each written differently to target a different search term.

And then post your releases using a non-dynamic content management system on your own site as well.

But, maybe we're dreaming of a perfect world in which mainstream marketers and PR folks are truly educated about what they are doing with search marketing -- instead of just jumping on the "what's hot now" bandwagon.

Maybe in another 10 years or so.