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Promoting Your Business Through Search Engines

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                   SoHo NEWS & TIPS
Helping You Make the Most of Your Small Office/Home Office
        SoHoTIPS.com
------------------------------------------------------------

Greetings,

Search engines can be a great way to promote your business. 
Today's issue will help you learn how to use a search 
engine to the benefit of your business. 

Best,
Mandi

Be sure to visit the SoHo News and Tips blog!
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- Hooter's Chairman Brooks found dead in his home. 
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- Petco agrees to be acquired by two private equity 
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- The CEOs of GM and Nissan/Renault agree to a 90 
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Promoting Your Business Through Search Engines 
By KEVIN J. DELANEY
Staff Reporter of The Wall Street Journal. 

Businesses of all sizes have found that advert-
ising on Web search engines provides a powerful 
boost to their sales. They're also discovering 
that it can require more of their time and savvy 
than traditional marketing outlets like the Yellow 
Pages.

Mark Williams has spent nearly all of his market-
ing dollars advertising on Web search engines 
including Google Inc. and Yahoo Inc. since start-
ing ShavingCream.com two and a half years ago. 
Mr. Williams credits search ads, one of the 
fastest-growing forms of advertising in the U.S., 
with helping build his online retail business to 
a projected $200,000 in revenue this year. "It 
has fostered super-healthy growth," says Mr. 
Williams, 49 years old.

But managing search ads for the Menlo Park, Calif., 
retailer of men's grooming products online also 
eats up about 30 hours of his staff's time each 
month. And rivals recently began driving up the 
price Mr. Williams has to pay each time a consumer 
clicks on one of his search ads, causing him to 
consider tapping other types of online advertise-
ment. "It's a demanding game to play to stay on 
top of it," he says.

Search advertising exceeded $5.1 billion in the 
U.S. last year and represented the largest 
category of Internet ads, according to the Inter-
active Advertising Bureau trade group and consult-
ing firm PricewaterhouseCoopers. Big blue-chip 
companies such as General Motors Corp. continue 
to increase their spending on search ads, while 
smaller organizations such as Wentworth Military 
Academy and Junior College in Lexington, Mo., have 
also come to see search engines as a key way to 
reach consumers.

But because consumer search patterns change and 
competing businesses can jump in and out of the 
search ad market at any minute, advertisers say 
they have to stay on top of it to get the most for 
their money. Changes to the search companies' ad 
systems make it even more dynamic. Google and 
others sometimes add new variables or weight 
existing ones differently when determining which 
ads are displayed most prominently or what the 
advertiser pays per click. They also regularly 
roll out new features, such as letting advertisers 
restrict display of their ads to specific times 
of the day or only to people in specific geograph-
ic locations.

Changes Every Day

Search advertisers bid in an online auction system 
to have their ads displayed each time a consumer 
searches for a specific keyword or keyword phrase, 
such as "mortgage" or "Nantucket bed and breakfast." 
The advertisers pay only when a consumer clicks on 
their ads, forking over roughly 50 cents per click 
on average, according to analyst estimates. Related 
"contextual" ads are displayed when the advertisers' 
chosen keywords appear in articles or other content 
that a consumer is reading on a Web site.

The automated online systems operated by Google, 
Yahoo, Microsoft Corp. and others let companies 
start advertising almost immediately, committing to 
spend as little as $5 in some cases. To simplify 
search advertising, particularly for small 
businesses, Google's AdWords Starter Edition only
requires advertisers to fill out a one-page online 
form, for example, before their ads start running. 
BellSouth Corp.'s combined Yellow Pages and online-
directory unit offers search-related advertising 
as part of a flat-rate monthly package.

Many businesses say they're very satisfied with 
the results they get from search ads. Wyndham 
Hotels & Resorts, a unit of New York-based Cendant 
Corp., calculates that it generates $14 in revenue 
for every $1 it spends on search advertising. 
Encouraged by such returns, the hotel company has 
increased its search ad spending by 500% since 
2001. Roughly two-thirds of its online ad budget, 
and close to 15% of its overall marketing budget, 
goes to search ads pegged to keywords such as 
"Bahamas hotel" and "Phoenix golf." 

"Search marketing is a basic foundation -- you have 
to have it," says Kevin Rupert, vice president of 
marketing and strategy at Wyndham.

All the same, competition to buy ads linked to 
certain keywords and other factors means that 
Wyndham and Range Online Media, a Fort Worth, 
Texas, search-marketing specialist firm that the 
hotel company works with, need to keep a close 
eye on the search ads. Wyndham stopped bidding on 
"Disney hotel" and "Orlando resorts," for example, 
because other travel companies bid the per-click 
price high enough that it was no longer worth it 
for Wyndham.

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Many big companies have created staff positions 
for search experts to handle such issues. Even 
online advertising specialists say search market-
ing demands lots of attention. "Every single day 
there's a new change, a new iteration," says Curt 
Hecht, chief digital officer at GM Planworks, a 
unit of Paris-based Publicis Groupe SA's Starcom
MediaVest Group that handles all buying and plan-
ning for the estimated $3.2 billion General Motors 
advertising account. "The agency that falls asleep 
at the switch on search is not the best for their 
client," says Mr. Hecht. General Motors bids to 
have its ads displayed alongside roughly 750,000 
to one million keywords, including "GM," "Chevy" 
and "Buick."

Some entrepreneurs have built businesses almost 
entirely thanks to search engines, even spending 
only minimal dollar amounts or nothing on search 
ads. At the same time, they can be puzzled and 
frustrated by search changes that affect their 
firms.

Tricky Parts

James Krzeminski of Fernandina Beach, Fla., last 
year created one site to sell outdoor accessories 
such as patio heaters and a second one offering 
pig chef figurines for sale. Without buying any 
Google ads, he generated a steady stream of visit-
ors who had found his sites through the regular 
search results offered by Google. By March, the 
two sites were bringing in revenue of $800 to 
$1,000 per day on average.

But, around that time, his sites started dropping 
much lower in Google search results, Mr. Krzeminski 
says. Fewer users found his sites, and his average 
daily sales on the sites fell to about $100. Mr. 
Krzeminski blames one of the regular changes Google 
makes to how it orders its search results. "It has 
made it extremely difficult," says the former soft-
ware developer and accountant. Google occasionally 
alters how it weighs different factors in deter-
mining which search results are the most relevant 
for any given query, which can shuffle the results 
and thus affect businesses that relied on being in 
the top links listed.

Other small businesses say they wrestle with 
issues such as click fraud, which occurs when 
someone clicks on one of their search ads with ill 
intent. In some cases, business rivals click on a 
competitor's ads repetitively to drain the company's
search ad budget and gain better ad placement them-
selves. The search companies say they police for 
click fraud and either don't charge advertisers or 
issue refunds in cases where it slips through. But 
some business owners complain that it still occurs,
and that it takes time and money to monitor for 
fraud themselves.

Experts for Hire

In the face of such complexity, advertisers often 
hire experts to manage their search-engine market-
ing. So-called search-engine optimizers try to 
help clients get their sites to rank higher in the 
normal results search engines provide by employing 
a variety of techniques, such as changing the 
structure of the sites to be more easily indexed by 
search engines. Search-engine marketers help 
clients manage the search advertisements they buy.

Wentworth Military Academy and Junior College, for 
example, two years ago hired the search-marketing-
and-optimization firm MoreVisibility of Boca Raton, 
Fla., and now spends about $10,000 annually through 
the firm. MoreVisibility earns a commission and 
spends the rest on search advertising and other 
services from the search engines, such as guarantees 
that Wentworth's site will be listed in indexes. 
Retired Lt. Col. Robert Hill, vice president of 
enrollment management and marketing at the private 
school, says it's worth the money, given that "the 
number of inquiries coming through the Internet has 
steadily increased since we started doing this."

At ShavingCream.com, Mr. Williams largely taught 
himself how to get the most out of his search ads. 
Today he advertises alongside about 250 keywords 
through Yahoo and about 1,500 with Google. Mr. 
Williams regularly changes the text of his ads in 
response to the changing market, strategies of 
rivals and new products, and adjusts his bids and 
overall ad budgets to anticipate seasonal increases
and decreases in consumer traffic.

Over roughly the past six months, aggressive 
competitors have driven up what he has to pay for 
search ads through online auctions, he says. 
Whereas it might have cost as little as 35 cents 
for each click linked to specialty men's shaving-
product terms last year, today they can cost upward 
of a dollar. Mr. Williams is considering other 
types of online ads as a result, and plans this 
month to open a retail store in the San Francisco 
Bay area in the hopes of increasing sales.

Search is "a great environment to build your 
business, there's no question," says Mr. Williams. 
"But it's an ever-changing environment and it 
demands appropriate attention."


So what did you think about this issue? Drop me a line and let 
me know at mailto:mandi@gophercentral.com 

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