14.02.2007

This is where the customer is picking his advertisement

Interactive trends

Tim Ringel
This is where the customer is picking his advertisement

Tim Ringel is managing partner of the Search Engine Marketing agency metapeople. He founded his first internet company in 1999 while studying East Asian economies. In 2001 metapeople was set up and in 2004 metaapes, which is a special agency for affiliate marketing. 29-year old Tim Ringel is head of the German branch of the international Search Engine Marketing Professional Organization, SEMPO, and was director of the work group "Search Engine Marketing" (SEM) in the German Bundesverband Digitale Wirktschaft (BVDW; federal association for digital economy).

Due to the internet the field of marketing has changed generally. Instead of imprecise result data, complex target group analyses and high wastages, sales messages can be placed specifically and success can be evaluated in real time. The new trend is called Search Engine Marketing, or short: SEM. Unique advantage: The potential customer picks his advertisement himself. Market leading search engines such as Google, Yahoo and MSN act as intermediaries.

From desire to product
According to current studies more than 90 percent of all searches in the internet start with search engines. In order to start a search for specific websites or products, the user must inquire the search engine’s data base, by entering one or more words or even complete sentences into the interface. In classical marketing we probably wouldn’t know anything about this user and the needs and desires he has. At best, you could determine interests and create profiles which could suggest a desire for a certain product, using selective and expensive market studies. Now, since the user expressed his desire, you can easily offer a selection of matching products or services.

Field of results
Basing on the inquiry of the user, the search engine’s data base displays those results which match the inquiry. These results are usually segmented in two domains: Sponsored links and organic results. Sponsored links are booked advertising messages, which were activated by the inquiry’s search terms, so-called keywords. Organic results are characterised by the fact that keywords occur in the content of a website and can’t be booked. For example, if a user looks for the generic term "mobile phone" he will be provided with both advertising messages (sponsored links) from mobile phone providers and topically fitting websites (organic results) that deal with the subject of mobile phones.

Clicking adverts
After expressing a desire precisely and being provided with matching offers, both organic and sponsored results, the user will most likely click one or more links. By clicking the ad he will be lead to the advertised products directly, where he can check whether they suit him or not. Unbeatable advantage of this marketing method: The advertiser only pays a fee whenever the user actually clicks his ad. You do not pay for the display of your ad - a concept oriented towards success and definitely worth the while. The click price depends on the number of competitors who rival for the best positions. The positions are kind of auctioneered, but there are also other aspects that affect the actual position. The more special a search query is and the more fitting your booked key words are the cheaper click prices can usually become.

Organic results
Organic results are regarded more relevant by some users, since they offer an independent recommendation character. You can use these results for SEM as well and influence them by website optimisation (Search Engine Optimisation, SEO). Many websites cannot be read properly by search engines or Google and other important search engines classify them as irrelevant. Some sites remain completely undiscovered. SEO agencies are specialised in optimising contents of a website in such a way that they are most comfortable to read for both the user and search engines. When choosing an agency one should act with caution because pretty often so-called spammers will be banished from the search engine’s indices - thus the website will not be displayed in the future anymore, no matter the keyword.

Achievable objectives
SEM offers a suitable platform for numerous marketing objectives. You can effectuate classical sales just as well as an increase in the numbers of your website’s visitors, the generation of newsletter subscribers or the request for informative literature. The desire of your potential customer should always be the centre of attention. A target group specific display of ads, for example women aged 25 to 29 only, is not possible. However, that is not necessary for success oriented concepts. For this reason, it is mainly sales budget which is used for SEM. Branding plays yet an important role, because more and more of the large companies begin to understand that a brand which is leading in classical communication must be well positioned in search engines, too.

Control and optimisation
In search engine marketing user actions can always be related to an investment explicitly. Besides maximum cost per sale or the corresponding sales volumes, figures such as Customer Lifetime and Cross Sales are included.

Regional adjustment
For small and medium-sized enterprises there are often only few possibilities to advertise in the Internet purposeful. With only small budgets you should advertise as efficiently as possible, and additionally always keep an eye on the total costs. For this situation SEM is the proper solution, since adverts can be focused regionally. If a regional campaign is started the advertisement is displayed only for those users who reside in the targeted area. Most effective in this case is the optimisation of your website for search engines. Thus the advertiser can win customers from organic results.