I’ve talked here before about a shift of offline budget to online in a tough economy and justified (or at least attempted to justify) why I believe that this will happen. If you take a look at overall marketing budgets, most research suggests that online advertising budgets represent less than 10% of total marketing dollars being spent. And while it’s been said that lower traditional media prices may keep the ad dollars in traditional media, and a prediction by J.P. Morgan showed a slowdown in display advertising, I’m sticking with my initial stance: online budgets and specifically search and display will be the last to go when channels start getting trimmed.

This isn’t the 2001 recession. Online media isn’t a fad. Online media isn’t optional. It’s an absolute must. I can understand experimental media budgets getting the axe. I can also understand sticking to the basics in traditional media and doing what has always worked. This isn’t a time to be guessing with ad dollars. That’s why the strategy I find quite funny is that advertisers are currently pumping more dollars into paid search and cutting budgets in display media. eMarketer has recently published what we’ve been seeing for a long time: display boosts search performance. The spikes and dips in performance driven marketing channels such as search often times are directly related to display advertising efforts. To cut out branding online is essentially to stop creating demand, and at the very least to cease creating awareness. Search is there to harvest it, but without informing customers in the first place where will the demand come from?

Try a paid search only strategy while playing in an industry, say auto insurance, where competitors are active in display advertising and see how your paid search ad click through rates fare against the competition. It’s not pretty. On the other hand, when fairly significant display advertising campaigns are running for clients we usually see a lift in both traffic levels and in conversion in other online marketing channels, particularly search.

So while budgets get tighter and advertisers continue to inspect the ROI on their display advertising buys, the CPM model is going to be increasingly harder to justify on its own. You’ll need to take a holistic approach to looking at the situation in order to find that display advertising plays an important role even in ROI focused advertising efforts. Of course it’s all a matter of how it’s being measured and priced, but that’s for another post.

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Todays Relevancy

Today, Paid search is responsible for more than half of the overall traffic from search engines. In a 2008 study by Engine Ready Software, Paid search (PPC) listings outperformed organic search. Paid search ads prequalify traffic with brand and direct response ad copy.

Visitors who clicked on paid search (PPC) ads were 17 percent more likely to buy. Plus, paid search (PPC) average order value was about 18 percent higher.

How Paid Search Can Support Your Goals

Paid search is quick and effective. With today’s interfaces it is possible to be up and running in the same day. This means instant traffic to your product. Paid search can be used to ensure 100% visibility in the search results, often playing a large part in support cases like product launches in the media and other media mentions. Paid search can be directed toward specific pages and products within your website allowing you to channel traffic exactly where you want users to go. Finally, paid search can be used to drive strategies in other marketing channels, answering the question, “Where and why are people looking for us?” In the case of a geographic campaign, using location based keywords can drive offline media spends like DRTV as well as marketing messaging by replicating the Paid search ad copy messaging in other channels.

How Paid Search Can Support Your Audience

Being active in paid search ensures that your business is available when your customers want to find you. Unlike natural search results where your company may appear somewhere deep within the results, paid search let’s you have control of your placement. In addition, by synching messaging across channels, paid search can be used to support DRTV and other offline media by referencing special offers seen elsewhere and providing ongoing experience management with drive to online based campaigns.

When and How to Get Started

There is never a wrong time to get started in paid search. Even if your website already has quality natural rankings, studies have shown that having listings in both paid and natural search at the same time can significantly increase the site’s overall performance. “When appearing in both natural and paid search for the same keyword impression, clicks lifted 92 percent, actions lifted 45 percent, orders lifted 45 percent, page views lifted 44 percent, visitors increased by 41 percent, and time on site increased by 40 percent.” Mediapost’s Search Insider – March 28, 2007

How to Get Started

A correct approach to paid search starts with a clear understanding of the campaign goals. The goals should define the landing page message, the ad copy, and the keyword buildout. Keywords should be chosen carefully based on their ability to not only drive clicks and visits, but also to drive conversion if that is the goal of the campaign. Conversion can mean anything from completing and application, signing up for a newsletter or making a shopping cart purchase on an e-commerce website. Once the account structure and goals are laid out, you can begin to create the structure in the search engine interface. As the campaign begins, careful attention should be paid to the quality of the traffic being generated by each keyword and ad copy recommendation. If the goals are not being met both keywords and ad copy should be altered within the search engines, and the landing page messaging and layout should be improved as well.

General Best Practices

Measure everything back to the keyword level. That is, make sure the tracking in place is capable of tying back actions on the site back to the keyword that activated the paid search ad that was clicked on in the first place.

Make use of negatives. Search engines allow you to specify keywords that you do not want to show ads for. This way if you sell cars in every color but red, you will want to use red as a negative so that you will never serve an ad for a ‘red car’ search query. This will cut down on unwanted clicks and overall cost.

Make sure that the messaging matches. If your ad copy says you have widgets for $29, make sure the landing page and shopping cart are also showing that $29.

Measure everything. There is nothing worse than flying blind in paid search. You created the account for a reason, and that was more than likely to drive some sort of acquisition. Paid search has the unique ability to provide you with instant feedback on your offering, so make the most of your click cost and track everything about it.

Be cognizant of your geographies. If you’re offering something nationwide, remember that most people will still search for local offerings. Qualifying keywords with local geographies will make them feel as if they are dealing locally and also cost you less for that click through.

More Best Practices

Get as local and granular as possible. In paid search it is the generic terms that cost the most per click. Instead of trying to attract business on a generic term like car insurance rates which will cost upwards of $20 per click, create campaigns around qualifying terms like car insurance rates in Miami, FL or BMW 3 series car insurance rates in Miami, FL. Remember that most people are using the search engines knowing that it may take a few tries to find what they’re looking for, and because of this they tend to over qualify their search queries in order to cut through the junk. Because of this, we can also qualify our search terms to match their queries on as many keywords as possible. The general rule of thumb is the more you can match on a query the less you’re going to pay for that click because there will be less competition and your match will appear to be very relevant to the query involved. It also gives you a great opportunity to serve up very targeted ad copy and landing page content since you know so much about the specific things the customer is looking for.

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