Companies eager to attract the right customers online are increasingly turning to search engine marketing. As a result, SEM is growing and becoming a mainstream marketing strategy. In fact, according to SEMPO's sixth annual "State of Search Engine Marketing" report released in March, the North American SEM industry will grow 14 percent this year, from $14.6 billion in 2009 to $16.6 billion by the end of 2010. And the Search Engine Marketing Professional Organization expects the market to hit $26 billion by 2013.
Justin Gray, CEO of MaaS Impact, says he sees SEM as a current hot-button issue. "Pretty much every company in the world is doing pay per click," he says. In fact, many companies are moving portions of their traditional marketing budgets over to SEM. The "State of Search Engine Marketing" reports that 49 percent of respondents are reallocating budgets to SEM, moving spend from print advertising. In addition, a May 2010 Internet Retailer SEM survey of 102 Web-only retailers, catalogers, and consumer brand manufacturers, reveals that 44.6 percent of respondents increased their paid search budgets over the past year and 49 percent say they will increase their budgets in the year ahead.
According to Gray, SEM today is about more than just driving Web traffic; it's about analyzing how customers behave before and after they arrive at a site and correlating those behaviors to the original landing page they came to. "It's about, 'How am I monetizing those clicks after they leave the site?' Companies that have an SEO presence are looking at that and saying, 'It's not enough for every keyword to hit the home page.' They're focusing on landing pages, conversion, AB testing, and which messages are working," Gray says.
Andrew C. Frank, a research vice president at Gartner Media Industry Advisory Services, says SEM is moving from an isolated, stovepipe marketing activity to being more integrated with the general marketing mix. Recent Gartner research suggests that by year-end 2010, more than 30 percent of the 100 most popular websites will use search technology or content analytics to target content at site visitors. "We're seeing companies increasingly using search in more creative ways and aligning it with other marketing communications efforts," Frank says.
Allstate, for example, uses SEM to serve targeted content and imagery on its main website, as well as on hundreds of its Allstate marketing micro-sites. Charlie Breit, associate marketing manager at Allstate, says his team focuses on entry points into Allstate.com. "A lot of times people come to the page with a mission in mind," Breit says.
He and his team partner with Autonomy to analyze which keywords and imagery are effective at attracting visitors to the site. They combine those findings with the demographic data of the people who click through to the site to determine which groups have higher conversions based on what they responded to in search.
When tracking the behavior of Spanish language-speaking people to Spanish language micro-sites, for example, he layers those results with demographic information like age and geography and finds which imagery prompts higher conversion for certain groups. Breit also determines what people responded to when they hit the landing page.
So far this exercise has taught him that his team was overloading different groups with too much messaging. Now they present one product instead of several on certain landing pages. Breit says that Allstate has achieved about a 10 percent lift in online quotes and the online channel has seen a 4 percent lift in sales.
Despite recent success like Allstate's, challenges still plague the SEM space. MaaS Impact's Gray says companies that continue to rely on a one-size-fits-all approach-essentially using search engine optimization on words that haven't been optimized-will struggle. "The days of having 100 keywords linked to your site are over," Gray says. "Choose your keywords wisely and make sure messaging is relevant to the keywords." He says to focus on three or four words and to put a clear message behind them.
Gartner's Frank adds that organizations still lack clarity on the best practices for getting higher rankings in organic search listings because the algorithms are constantly changing. Also, bidding against other divisions in an organization for keywords is a common challenge, as is determining the best way to optimize bidding strategies. "Search is a complicated thing to stay on top of," Frank says.
His advice? Ensure that search is part of a roster of media spending at the highest level. Search, like social advertising, needs to be considered as an integrated marketing discipline along with other marketing communications. "[SEM] shouldn't be walled off from other forms of marketing," Frank says.
Frank cites an example of one company that learned a valuable lesson when it failed to buy keywords mentioned in its TV commercial. When e-Trade debuted its now popular commercial with the baby and the golfer, the company failed to buy the word "Shankapotomus"-the term that baby calls the golfer-on any search engine. Frank actually bought the word and he landed at the top of the organic listings.
During this year's Super Bowl, e-Trade launched a new commercial and this time purchased keywords mentioned in it. The company successfully generated traffic to its site, where it could have a dialog with the customers about the services it offers.
Ultimately, companies will optimize SEM when they fully integrate it into the marketing mix. "Create a synergy with other types of marketing that can generate search traffic," Frank says, "and buy keywords that aren't as obvious or expansive that describe that category."