American Meadows Are Leaders In PPC Advertising

Finding the Right Keywords

By: Ellen Neuborne

You might call Mark Kini a victim of his own success. The general manager of Boston Chauffeur was looking for a cheaper, more effective way to market his 18-person limousine service. So about a year ago, he began purchasing keywords and placement on search engines like Google and Yahoo. Anyone who typed a phrase like "Boston limo service" into the search field would get, along with the results, a clickable ad for Kini's business. The tactic delivered, helping Kini snag major clients like Pfizer and ExxonMobil. "Search is a great tool," Kini says. "How else could a Fortune 500 company find me?"

The problem: Not only has corporate America discovered small companies like Boston Chauffeur, it's discovered search marketing itself--which has made the process far more complicated and costly. Last year, Kini spent about $60,000 on the tactic. This year's estimate: $100,000. What's more, Kini now spends an hour a day at his computer comparing the results of his keywords to those of his rivals.

Commercial searching is probably the most dynamic, fastest-growing thing on the Web, a $2 billion business that is expected to hit some $5 billion by 2006. Everyone from soccer moms to purchasing managers now starts the shopping process by logging on and hitting the search engines. That helps explain the flurry of activity in the sector, such as Yahoo's recent $1.6 billion purchase of online ad provider Overture Services Inc.

But just because the rules have changed and the process has gotten pricier, it doesn't mean you can ignore the search engines. "It's where the buyers are," says Sharron Senter, a marketing consultant based in Merrimac, Mass., who specializes in small firms. With that in mind, here's what you need to know when negotiating the new search-engine marketplace.

Be Keyword Savvy: Now that major companies have discovered search, the cost of keywords has soared. At Overture, the average cost per click-through rose from 30¢ in 2002 to 40¢ this year, and many words fetch $10 or more. The best thing a small company can do is avoid getting into a bidding war over popular terms, says Charlene Li, an analyst with Forrester Research. "If you're a small bicycle shop, you don't want to duke it out with REI Sports for the word 'bicycle,'" she says.

Instead, look for less obvious keywords, like "racing bike" or specific brand names. Ask your customers or vendors what words they'd use to describe your business or service. That might help you come up with some creative keywords. Many search veterans recommend investing in software such as WordTracker, which collects data on most-searched words and phrases.

Invest in Analytics: Far too many firms take a set-it-and-forget-it attitude to search. A study by WebTrends found that while 77% of respondents used search engines, only 11% bothered to conduct a detailed ROI analysis. That may not have been a problem in the past. But these days, it's a fast way to lose money, says Ray Allen, president of American Meadows, a Williston, Vt., seller of wildflower seeds. Allen pays for 275 keywords on Google and 217 on Overture, and he invests both time and money in measuring their performance, with tools such as Conversion Ruler ROI software. "I am analyzing the traffic and the resulting sales all the time," Allen says. "That's the key." Many search-engine sites offer free analytic tools of their own.

Don't Forget Free Search: Paid search may be all the rage. But you can still get loads of traffic from free, so-called "organic" searches--that is, by tweaking your website so that the various search engines find it and place it high on the list of results. Seattle-based Express Metrix uses search marketing to hawk its IT management software. But marketing manager Jenna Sytman says that only 25% of the company's traffic can be traced back to a keyword it actually paid for. The majority comes from people searching terms like "tracking software" and following the results to Express Metrix's site.

Sytman now spends more time trying to attract free searchers than she does measuring and selecting paid keywords. That's a smart move, says Jill Whalen, owner of HighRankings.com, a search optimization firm. "It should be part of the marketing budget, as much as paid search," she says. "It's all about ways to bring your customer in."