Platt Perspective on Business and Technology

Online store, online market space – part 7 and search engine marketing your new online store – 1

Posted in startups, strategy and planning by Timothy Platt on June 16, 2010

When I wrote Part 6 and Marketing Your New Online Store in this series, I said that I was going to cover issues related to search engine marketing separately and as its own posting. That is the topic I will focus on here, and I want to start by highlighting what could be called the huckster factor in this, and certainly where search engine marketing’s best known approach comes in: pay per click advertising.

I received an email through an online group I belong to, from a colleague who has recently set up an online store with her husband as a family business. They met with a salesperson from an online marketing business that specializes in pay per click, and they signed up with a list of search terms they would bid on, with this marketing firm managing their bids and how much they were willing to pay for any given term or search phrase in their portfolio. And they waited and nothing happened, with no sales coming from this effort and expense. Pay per click does work and when you do this for a business with multiple and even large number multiple terms that are important to you, it can be very helpful to utilize the services of a business that has specialized expertise and tools for managing your pay per click marketing campaigns. But this is definitely an area where you want to do things right, and that means going back to the fundamentals to make sure your efforts really connect into and support your business.

For orientation purposes, I want to organize my discussion as paralleling what could be seen as an analogous purchasing problem that most all of us have encountered – purchasing a new computer. When you go into a store that offers these products, chances are a salesperson will walk up to you and start showing you their selection. And they will put all of their emphasis on the hardware and its features, with the built-in graphics card and Wi-Fi capability, and with enumeration of storage capacity and amount of memory. They may proceed to tell you about the dual or quad-core CPU that the computer in front of them holds, and even its clock rate and other technical specifications. Their focus will be on the machine, and if they mention software it will be to tell you that they have the latest operating system version and that some application software is bundled in (and for some as short term trial versions that you would have to pay extra for, to use longer term.) The only problem here is that this approach means making your selection and purchasing decisions backwards.

When you focus on your needs and on cost-effectively meeting them, you start out by asking what you what to use this new computer to do – and adding in the possibility of expanding your usage requirements from your current ones to include a few extra functions you have not been doing but that look really interesting. Then you ask what software would be needed to do all of this, and with the usage add-ons for a high end of range cost determination there. Then and only then do you turn to the hardware, and here it is with a focus on finding the equipment that will effectively support the software that you would need to support your usage requirements. And double the amount of memory that current software would require as the one thing you can always count on is that no matter what you want to do with this machine, your memory requirements will keep going up as new software updates are released.

The marketing salespeople who reach out to pitch their pay per click services are in effect doing the same thing as those computer hardware salespeople as they pitch their products – offering what they have but not according to a decision process that would help you most effectively meet your needs. My goal here is to outline a basis for your making search engine marketing decisions that would effectively support your needs and those of your new business. And as indicated above, that starts with the fundamentals, and here that means starting with your tripod. But even before I get to that, I want to offer some background information on what pay per click is and at least as importantly, what it is not. I will then go on to the tripod and on determining how many search terms and phrases you may wish to bid on, and in what ways.

This posting will focus on offering background on what pay per click is and on how it fits into search engine marketing as a whole.

Pay per click – the basic paradigm

The fundamental problem that users have always faced on the World Wide Web has been one of navigating your way around this universe of resources, and finding the right ones to meet your specific needs now. This problem actually goes back to before there was a World Wide Web or web browsers and the core problem was in finding useful, relevant, reliable sources for obtaining documents through file transfer protocol (FTP). Search engines and their alternative of directory sites started out as simple tools for searching the web for specific relevant content, and while there are still a few directory sites out there, it is the search engine with its scalability and automation that has come to dominate for finding information and resources online.

Initially, all search engine based search was algorithm driven, and based on computer models that would search the web for web pages and catalog them for content and for relevance to possible user searches. This organic search approach, as it is called, would then match user search queries to the database of identified web sites and pages, and their classified and prioritized content to present lists of potentially relevant sites and with high relevance options listed higher on the page. And the search engine providers served a vital function in developing the web and in making it possible for this global resource to grow in scale, but they did not make a lot of money from providing organic search results. Then someone realized that it might be possible to set up a for-fee option and have that work as a revenue stream for the search engine provider if this was kept separate from organic search results to as to avoid conflict that might reduce their credibility. And the non-organic search option of pay per click was born.

The basic idea is very simple. You own a business and you want to be found online and on the major search engines when people search using terms and search phrases relevant to what you offer and do. Search engines that support pay per click give you the option to bid on these terms and phrases and if your bid is higher, your URL link and accompanying tagging copy will show higher in the search results in the pay per click sections of the search engine web page. This much is well known, but there are some implications that may not be as fully understood that can have tremendous impact on the effectiveness and cost-effectiveness of pay per click.

I will discuss alignment with the tripod in a next section, but want to start simply looking at pay per click per se as a marketing and sales approach. You select a group of words and phrases to bid on, and this set is your portfolio. You may in fact divide the complete pool of search terms you plan to bid on into a set of portfolios, each organized in support of a separate set of marketing campaigns. But for purpose of this discussion I will simply use the word portfolio as a singular term. And this is where pay per click gets complex.

If you underbid on a term you will pay that amount of money for any page hits you do get coming in through the pay per click section of that search engine. But your link and identifying information will appear at a lower position and possibly not even on the screen without the search engine user having to click in deeper. This means you will not get all that many hits from this if any. If, on the other hand, you bid too high, you will get top position on the pay per click listings for that search term, but every time you get a page hit from it you will have paid more than your really needed to in order to get that top of screen positioning and priority. And the more search terms you want to have in play in support of your marketing and your business, the more difficult it is to coordinately manage your portfolio, and both in managing your per click bids for individual terms, and in managing your overall portfolio.

This really does call for expertise and for specialized and usually at least significantly proprietary software and that creates the business niche that pay per click service providers work in. I add in this context that online department stores and other operations with complex, large inventories can find themselves needing to manage portfolios that total hundreds of thousands and even millions of search terms and phrases – an impossibility for direct manual management and a business proposition that requires virtually complete end to end automation to maintain and monitor.

And this brings me to one final piece to the pay per click puzzle. Portfolios are usually monitored on a budget, and with a business agreeing to expend up to some maximum amount of cash per month on page hits coming in from this service across all terms and phrases in their portfolio. Here I stress you only pay when someone actually finds and clicks to one of your pay per click links. But not all search terms and phrases are created equal. And that is where short and long tail search comes in. My next posting in this series will start with a brief focused discussion of short and long tail terms and then connect all this to your tripod and to supporting your business.

3 Responses

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  1. Online Store said, on June 16, 2010 at 3:38 pm

    Hardly surprising when as much as 80 per cent of the traffic web sites receive still comes from search engines. Online Store

  2. Timothy Platt said, on June 16, 2010 at 5:54 pm

    I do not have the exact numbers to verify this but my guess is that your 80% figure underestimates if anything the role of search in online marketing, and certainly for people who have not already developed enough of a relationship with a marketing business to have gotten on a (preferably opt-in) emailing list for them. And as unsolicited marketing email tends to be viewed as spam, it is probably mostly the opt-in that would count here for email’s share of whatever that search engines do not account for, that email does. That just makes it all that more important to get the search engine marketing right, and for your business. That is what I seek to cover here and it is precisely what my next posting in this series will look into.

    And to round out my response – of course there are tweets, etc but these are still just establishing themselves as online marketing tools and venues and for most demographics. These more Web 2.0 oriented approaches can and will chip away at the search engine share of impact in online marketing and definitely where handhelds and GPS/local marketing counts, but search will remain the dominant player and for a long time to come, and certainly when measured by computer technology and internet generation lengths.

    (Having said that, Twitter and other handheld/GPS driven local marketing is a not-always-search-engine area worth developing for – thinking ahead. I am planning on posting on this in this series too.)

    Thanks for your comment,

    Tim Platt

  3. […] Posted in startups, strategy and planning by Timothy Platt on June 21, 2010 At the end of Online Store, Online Market Space – part 7 and search engine marketing your new online store – 1 I said I was going to complete my general discussion of search engine marketing, at least for this […]

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