Byline: ERIC PETERSON
On the Internet, the early attitude mimicked that famous line from the Kevin Costner flick Field of Dreams: "If you build it, they will come." (Okay, so it's "he will come" in the movie - bear with me.) Build a website, do a bit of homework on search engines and voila! The traffic starts rolling in, placing order after order after order.
Nearly a decade later - in the real world - another old saying seems more fitting: "You get what you pay for."
With so many pages on the Internet (somewhere around 10 billion), it's quite easy to get lost in the shuffle. If you're the 1,000th PPD to put up a website in your state, then it's unlikely many buyers will stumble upon your site through a search on Yahoo! or Google, considering they might have to scan through 999 competitors before they arrive at your doorstep.
Based on the fact that so many businesses quickly came to rely on search engines for their traffic, it didn't take long for the suits (or T-shirts?) at the search engines to realize that there was some serious revenue potential. The concept: Sell off search terms to the highest bidder and guarantee a link when someone is searching for those particular terms.
Overture was the company that came up with this business model, way back in 1998 (when it was known as GoTo), and the concept has picked up steam ever since. In 2002, just about every search engine out there will sell you a spot in their search results, not surprising in light of the implosion of the Internet advertising market in the past few years.
How it works
On Overture (www.overture.com), companies bid against one another for specific terms, like 'promotional products' or 'corporate wearables.' The highest bidder is guaranteed placement in the results of Overture's affiliates - a group that includes Yahoo!, MSN, AltaVista, and Lycos - and only pays when someone actually clicks through to their sites.
For the record, Overture touts the average price per click at 30 cents. Scanning through their site, I found that the top bid on 'promotional products' was $5 per click and 'promotional wearables' 10 cents per click. However, there were no bids for 'promotional products Kentucky,' 'promotional products Dallas,' or even 'promotional products California,' meaning paid placement for these targeted terms could cost as little as 5 cents a click - as cheap of a lead as you'll find anywhere.
Google AdWords (www.adwords.google.com) is another paid-placement option, rising in popularity alongside its parent engine. Besides Google, paid-placement customers also get their site in the results at AOL and Earthlink. However, the minimum cost per click is 60 cents per term, and the inner workings of the system are not as easy to grasp as those of the auction-based Overture.
Big upside for small biz
Danny Sullivan, the U.K.-based editor for SearchEngineWatch.com, has been following paid search tools since the beginning, and he sees a big upside for the small business. Paid placement "is absolutely worthwhile," he writes via e-mail. "You can get a guaranteed listing for precisely targeted terms and only pay if you actually get leads, sometimes for only a few cents per lead. If you monitor your clicks, you should be able to quickly tell if the advertising is working."
Sullivan recommends small businesses try Overture first and Google AdWords second, because the latter is - you guessed it - "a little harder to understand."
It is important to understand the distinction between paid placement and paid inclusion, Sullivan adds. With paid placement, "you are guaranteed to show up for a particular term," he explains. "Paid inclusion just guarantees to include you in listings, but not for any particular term. You pay less under paid inclusion, because of the uncertainty."
Melinda Powelson, president of the o2 Group (www.o2group.com), a Denver-based web development shop, prefers the Overture system.
"What I like about it is you only pay when someone clicks through on your search term," Powelson says. Google AdWords "is more random. They put you in [their search results] a lot, and sometimes you show up on the first page and sometimes you don't. I haven't had as good as results as I have with Overture." Regardless, she adds, "If you have a business that depends on traffic from search engines, you need to do both."
Powelson offers a tip for the paid-placement neophyte: "The key in it is to pick search terms that are very relevant but not very competitive."
Which comes back to the fact that the 'promotional products [insert your city or state here]' terms have not been auctioned through the roof at Overture. Businesses looking for a local PPD are probably going to search with a city or state in mind to narrow down their list. If you're hoping to jump-start traffic to your site without a major investment - and only pay for results - this might just be the best available option.
Eric Peterson is a Contributing Editor to this magazine, and our regular E-Merging E-Commerce columnist.
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