Like the US ad industry in general, much of online advertising is still straining to dig out from the 2001 and 2002 spending freefall. Search engine marketing, however, represents one clear exception to that trend, with nearly steady spending increases since early 2000. Compared to typically less targeted methods of online advertising, such as the still popular banner ad, search engine advertising appears only when the user has indicated an interest in the area by making a search. And in nearly every survey eMarketer has found, searching for information is the second-most popular online activity, trailing only e-mail.
Search engine marketing comes in three basic forms, two of which are pure ad vehicles.
- Paid placement. Also called pay-per-click (PPC) search or keyword search. With this ad model, companies bid to show up high on the list of search results, and the highest bidder gets the top slot. The companies also write their own ad listings, which can be seen as the online equivalent of yellow pages advertising.
- Paid inclusion. Also called keyword search. With this ad model, companies pay a search engine to visit their sites more frequently and dig deeper into their content, enhancing the odds that their companies will get listed properly. Unlike paid placement, inclusion does not guarantee companies particular positions in the main search results.
- Search engine optimization (SEO). With this marketing model, companies make “detailed modifications to a site’s contents and technical architecture in order to enable it to rank higher in the search results for a given set of keywords,” according to avant|marketer. When companies make use of SEO, they pay nothing to search sites; but they typically engage marketing firms to perform this ongoing operation.
The full extent of the search advertising market is open to debate. “The search market remains one of the fastest-growing segments of the Internet and is clearly the most vibrant area. However, the market is still small at under $1.5 billion,” according to US Bancorp Piper Jaffray. At $301.9 million for 2001, the Interactive Advertising Bureau and PricewaterhouseCoopers submit a figure that’s only 20% of the Piper Jaffray estimate.
By David Hallerman