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Organic Search Engine Marketing Strategies on the Rise with the Star of Online Advertising

Stephen Turcotte
Backbone Media

November 2, 2004

Online advertisers are going beyond pay per click advertising and into editorial search engine marketing strategies.

The recent buzz surrounding Google’s IPO and its surging stock price has brought attention back to a very hot sector of online advertising, search engine marketing. As a company that focuses its services on search engine marketing strategies, we are feeling the increasing effect of the boom with 100% overall revenue growth for 2004. We attribute our dramatic growth to new awareness among advertisers that they can get more bang for their buck from organic search engine marketing strategies.

To advertisers, paid search engine advertising in Google or Overture represents the red of a bull’s eye. It enables them to target the search audience with precision. As witnessed in 2002 and 2003, paid search pulled major advertisers into the realm of search engine marketing with its ease of use, tracking capabilities and overall effectiveness at targeting consumers and generating conversions. The substantial budgets of the larger advertisers fueled aggressive bidding, which has driven up the average CPC (Cost Per Click). A July 2004 report by JupiterResearch confirms, "The average cost of paid search will raise by 24% in 2004 alone”. I think this figure is low considering that some key phrases have climbed into the $10 - $20 CPC range. The escalating prices are a testament to the effectiveness of search but they are prompting advertisers to look beyond the red of the bull’s eye and into the yellow.

The yellow is organic search engine marketing. I know the awareness is there because our customers are asking for it by name. A common theme with our new customers is that their paid campaigns are working but they want to put a cap on search ad spending and gain more traffic through editorial search listings. Editorial listings are achieved with relevant content and link popularity. This is accomplished with good old-fashioned search engine optimization techniques such as website optimization, content optimization and newer techniques like PR optimization, white paper distribution and blogging. As search engine marketers, we advocate an integrated strategy that centers on making the website more relevant and open to search engines, thus helping our clients less reliant on escalating paid search traffic. Effective implementation of these tactics helps increase editorial search traffic, allowing the company to decrease its paid search spending.

New Advertiser Awareness leads to further growth of Online Advertising

The boom of search advertising started in the post 9/11 economy when mainstream advertisers were forced to stretch their online advertising dollars and look for better ways of targeting Internet users. At the same time, Google and Overture were perfecting their search advertising systems, and more companies were utilizing the online capabilities to track visitors and leads. This innovation enabled analytic advertisers to draw a direct line between searches and sales leads. Search was delivering far better response and conversion rates than banner ads.

Advertiser awareness grew. By 2003, most mainstream advertisers had read the Internet marketing reports like the one by Piper Jaffray that placed "Search” as having the lowest cost per acquisition of any advertising vehicle. Or the 2002 Cross Media Study by DoubleClick that used Neilson/Net Ratings and MRI to estimate that "41 percent of U.S. consumers used search engines to research a purchase,” compared to 10 and 9 percent using a print and a TV ad respectively.

This new awareness encouraged online advertising agencies to move away from poor performing banners and embrace search as additional media for online advertising. Together agencies and advertisers became more comfortable with the less glitzy yet effective advertising medium. This is witnessed in 2003 by the declining cost of banner ads (CPMs), which can be linked to decreasing click rates and increased inventory.

The new awareness is not a fluke either. According to a 2004 Online Advertising report by JupiterResearch, paid search was the only bright spot in online advertising from 2001 to 2003, and the market will continue to grow by 34% to reach $2.6 billion in 2004 and $4.4 billion by 2007. The success of search is also playing out in the public markets as seen by the soaring stock prices of the big players in search. Google’s stock is up 75% since its debut on August 19. Yahoo’s stock price has increased by 92% in the last year.

Search Engine Marketing is an Essential Component for any Company's Online Advertising Mix

As many companies have already realized, search engine optimization has become an essential component in fulfilling their online marketing needs. The search engines have become a way of life. According to a study by Fittkau & Maab, 95% of Internet users use search engines – 2/3 of them on a regular basis – no wonder Google has created such a tremendous sensation after a mere 6 years in business.

Stephen Turcotte is Founder and President of Backbone Media, Inc. Founded in 1996,Backbone Mediacreates a custom content-based search engine marketing strategy for each client. Their process involves in-depth keyword research, content development, website optimization and ROI tracking.

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