“Search engine marketing (SEM)”:http://en.wikipedia.org/wiki/Search_engine_marketing is a fairly recent phenomenon which took off in the US in the mid to late ’90s with “Open Text Corporation, Canada”:http://en.wikipedia.org/wiki/Open_Text_Corporation offering “pay per click”:http://en.wikipedia.org/wiki/Pay_per_click programs in 1996 followed by Goto.com in 1998. Goto.com later changed its name to Overture in 2001, and was purchased by Yahoo! in 2003, and now offers paid search opportunities for advertisers through Yahoo! Google also began to offer advertisements on search results pages in 2000 through the Google AdWords program. By 2007 pay-per-click programs proved to be primary money-makers for search engines. This article focuses on the benefits of search engine marketing.
According to the “State of Search Engine Marketing” survey conducted by the Search Engine Marketing Professional Organization (SEMPO), North American advertisers spent “$9.4 billion on search engine marketing in 2006,”:http://searchengineland.com/070208-095009.php a 62% increase over 2005 spending.
In September 2006 the Internet and Mobile Association of India in collaboration with Pinstorm came out with a similar “survey for India.”:http://www.iamai.in/iamai_rep_060926_final_for_web02.pdf
According to the survey, the Indian search engine marketing industry has grown from nowhere to having over 40,000 advertisers today targeting Indian consumers. Interestingly, that figure is probably more than the number of advertisers that are there on all TV channels in India which itself is reason enough to sit up and take notice of this segment of media marketing.
Today online surfers make more than 1 billion searches a month, over 300 million of them have ads on the results pages and surfers make almost 5 million clicks on ads every month. Total ad spend on SEM was over Rs 230 crore in 2006 of which about a third, over Rs 90 crore was spent by Indian companies alone. According to media watchers, the ad spend on SEM is slated to grow 10 times to over Rs 2500 crore during the next two years. In short, marketers can no more ignore search engine marketing in India!
Search engine marketing is almost like a dream come true for marketers. The biggest problem of marketers is targeting: getting the right audience at the right time. Most marketers have a well-defined target group. Media planners work out a media plan that would ensure that a marketer’s communications to customers best reaches this target group. But due to the fragmented nature of mass media no plan can address this group fully so that every plan results in two inefficiencies:
* Not reaching a part of the target group a marketer wants to reach
* Reaching an audience that the marketer did not want to reach.
This type of wastage may be called “reach wastage”. SEM makes its first impact here.
Every search by an Internet surfer is an aspect of his/her demand. So when ads appear as per his/her demand marketers can ensure that there is no reach wastage at all – ads reach only those who are looking for those products or services.
The second type of wastage may be called frequency wastage. For example, a marketer may be interested in selling a particular brand of cars. The marketer is not interested in reaching someone who has just recently bought that same brand or some other competing brand and is not in the market for new cars now. Unfortunately, newspapers or TV have no way of knowing whether all the people they are reaching are in the market for a new product or not. The marketer’s message reaches all readers/viewers of newspapers or TV channels in which he or she has advertised irrespective of where in the buying cycle these readers/viewers are. Thus, this leads to reaching the right people at the wrong time.
Search makes a huge difference here. First, the ads are targeted only through the words the users are searching for and the marketer can choose the exact set of search words for which the advertisement will appear. So there is little or no reach wastage.
Second, the advertisement is shown right at the moment and on the page that the user is making the search so there is no frequency wastage either.
To advertisers, search comes closest to delivering the holy grail of targeting: getting only the exact target audience as determined by their search and demand patterns and getting them only at the time they’re looking for information and choices to make a buying decision.
This is one reason why search has outstripped every other advertising medium in human history. And why it continues to grow at 35% a year. The only problem is reach – as long as Internet and mobile reach remains below that of mass media (print and TV), advertisers will have to rely on the mass media for their advertising. But once Internet and mobile reach crosses mass media reach, and by all indications that day is not too far off, search engine marketing will be the marketers’ medium of choice for advertising. Mass media advertising will then become a supplementary channel instead of being the primary vehicle for transmission of marketing communication.