May 2, 2005, 12:00 AM

SPONSORED SUPPLEMENT: Search Engine Marketing

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Furthermore, Yahoo! is offering services to make search marketing easier. For instance, its Search Optimized product allows retailers to establish goals for search programs, then optimize keyword management to meet those goals. Once the program proves it can meet the goals, retailers can turn on the automated bid feature to ensure that the retailer can continue to take advantage of keyword opportunities. "Simplicity is important," Rinaldo says. "This is a complex business, but our goal is to make it easier and more effective."

The importance of simplicity

Search companies are offering additional services and tactics beyond technology. Zunch, for instance, offers a full line of public relations services. While that may seem to be far afield from search marketing, it`s actually integral to showing up high in search results. One of the major ways in which Google determines search result rankings is by examining links to a site. The more links, Google reasons, the more important the site. Thus Zunch offers clients press releases that are search engine optimized and works with journalists to generate stories that search engines will find online. "Link structure is very important to Google," Wright says.

Zunch`s offering grows in part out of Wright`s background, which includes a stint running the interactive pr division of Weber Shandwick, one of the largest pr agencies in the country. He joined Zunch a year ago. "50% of what ranks you at Google is who links to you," he says. "If you deal only with what`s on the page, you`re missing half the battle. Interactive pr is a pull method of marketing; it creates things that people will want to link to."

Another area where Zunch is gearing up is in international. About the middle of last year, it began hiring staff with foreign language skills and expertise in international search engines. Today it has experts in Chinese, German and Hispanic markets and languages. "Next year as China opens up, there will be a huge untapped market there," Wright says. "And right now the Hispanic market is huge." He cites the case of a law firm client that optimized its web site for Spanish-language search and the next day experienced an increase in the number of Spanish-speaking consumers seeking legal services.

The importance of ROI

At the same time, local search is becoming more important as well. Marckini notes a study that shows that while a large number of consumers conduct online research into consumer electronics, only 8% of purchases take place online. One client who measured search marketing spending against both online and offline sales found an ROI "that went through the roof," Marckini says. "A best practice is for retailers with an offline component to interview in-store buyers to determine what percent researched their purchase online."

The importance of combining online results with offline results also underscores another major development in search engine marketing: Combining online campaigns with offline campaigns. "Marketers should be looking at cross-media efforts," Holoubek says. "Make sure you`re visible in search engines for whatever you`re doing in other media." That may sound obvious, experts note, but many companies are organized into separate online and offline marketing teams, with each guarding its turf and believing that marketing spend in one area diminishes the marketing spend in another.

As more marketers discover the benefits of search engine marketing, it`s inevitable that others will find ways to take advantage of the medium`s popularity. In fact, search engine click fraud is becoming a problem. Click fraud occurs when a user clicks on links in paid search results with no interest in a product or intention to buy. Each link generates a charge to the marketer. Fraudulent click-throughs are the result of either a competitor trying to deplete a marketer`s search engine budget for the month, thus forcing the victim out of the market, or an unscrupulous affiliate trying to generate clicks to fill its own coffers.

Providing the right information

So, of course, vendors are devising ways to combat such fraud. Oneupweb has just released its click fraud detection tool. It monitors repeated clicks from an identifiable host and measures the length of time the clicker spends on a page. The shorter the time, the greater the likelihood of fraud. While the search engines acknowledge the existence of click fraud--Google even going so far as to mention it in its IPO as a source of risk--the retailer is responsible for identifying that it is happening. "The onus is on the retailer to provide exactly the information that Google and Overture need to investigate click fraud," Wehr says.

No one knows for sure the extent of click fraud, but Wehr estimates it at 15-20%. At that rate, a marketer who spends $10,000 on search engine activity will be wasting $1,500-$2,000 a month. As in other areas of search engine marketing, automation is key to combating click fraud. "If you have 5,000 keywords and 1,000 pieces of creative to support them, there`s no human way to monitor fraud," Wehr says.

But it`s important to track and document fraud, because Google and Yahoo/Overture will give refunds to marketers who can prove fraud. "They`ve got to pay attention this because if retailers` conversion rates drop, Google and Overture will lose advertisers," Wehr says.

As search engine marketing becomes ever more sophisticated, experts believe that more marketers will turn to third-party marketing companies. That potential, however, remains largely untapped, meaning that search companies have huge opportunity ahead of them. The Internet Retailer search engine marketing survey shows that only a third of the market uses outside services, and that 69% rely totally on in-house resources to manage search engine marketing. 17% rely totally on marketing companies and 15% use both. "You can`t get by doing everything you need to do manually," Marckini says.

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