by Peter Christothoulou, Chief Strategy Officer, Marchex, Inc.
One of the major factors driving the ‘comeback’ of Internet advertising is the accelerating interest by companies and the broader advertising industry in search engine marketing services, such as paid inclusion. Recent statistics from the Internet Advertising Bureau bear this out, indicating that search engine marketing, as a total percentage of online advertising expenditures, made up more than 30% of overall online ad spending for the second quarter of 2003: Up from just nine percent only one year ago.
Many different forms of search engine marketing exist, with paid inclusion being perhaps the most frequently misunderstood component of this rapidly growing category. Even those who work every day in the Internet industry regularly interchange and confuse paid inclusion with pay-per-click (PPC) advertising. And when paid inclusion has been brought up in media circles, ranging from the New York Times to Business Week, it has often been in a critical context, due to a misperception that paid inclusion somehow detracts from the relevance of search results.
In reality, relevance is the single greatest attribute of effective paid inclusion. If executed properly, paid inclusion can greatly improve the relevance and reach of search (whether it be algorithmic search like Ask Jeeves, or a search service that is primarily driven by paid listings), delivering a better experience for users and a greater return on investment for participating businesses. One needs only to consider how paid inclusion works to see how it improves the relevance of search.
HOW PAID INCLUSION WORKS
Paid inclusion is a great service for advertisers *and* users. What other advertising service can say that? For advertisers with hundreds or thousands of products in their respective databases, paid inclusion offers a way to deliver all of their products, product information, and pricing in a reasonable way to the major search services. For users, paid inclusion increases the quality of their search on MSN, Yahoo, Lycos and others because they get access to all of the products and updated pricing from large, product-rich companies like Office Depot, REI or Nordstrom, instead of just their top 100 products.
Technically, paid inclusion complements the algorithmic search technologies that power and determine the ranking of search results from nearly all of the Internet’s major search engines. Under the paid inclusion model, merchant advertisers provide companies that deliver paid inclusion services, such as TrafficLeader, with direct access to their internal product databases, which on their own would be largely inaccessible to algorithmic search technologies – thus making them inaccessible to the search engines themselves.
Paid inclusion technology crawls and extracts relevant product data and content from advertisers’ Web sites and product databases, creating highly-relevant URL strings and keyword listings. Once a paid inclusion provider’s technology has crawled, extracted, optimized (in some cases, with human editorial support) and refined the advertiser URL strings and keyword listings, they are automatically tagged and placed into the indexes of search partners and product shopping engines, where they are ordered based on relevance to the user search query. This process expands the scope of what searching can cover, including the dynamic updating of more products, services, prices, information and Web pages. And the very direct relevancy facilitated by paid inclusion translates into a better search experience for the user — allowing them to find targeted results in response to their search queries; and better return-on-investment for advertisers — as higher relevance typically leads to increased click-through and customer acquisition rates.
For example, if a parent types in a specific search query for “kids’ sport watches,” on MSN.com, a paid inclusion result will provide direct access to the product page on REI’s Web site where the kids’ sport watches are available. Paid inclusion’s technologies access REI’s product databases, then work in concert with the search engine to include a highly relevant result listing as part of the results to the query. In this particular example, the REI result is listed first, as it is highly relevant.
What most people do not realize is that without a quality paid inclusion service, those hard-to-find products in the REI database would not appear within search engine results. Algorithmic search engines have improved search, but still do not effectively crawl the product and service databases of most businesses, while paid inclusion technologies were made to do precisely that. The indexing and subsequent listing of Web pages, products, and services made possible by paid inclusion companies enhances the reach and relevancy of the search engines with which the paid inclusion companies partner.
At this stage, paid inclusion serves as an important medium for advertisers that have large product databases, want to increase their online sales, and want to achieve targeted return-on-investment metrics. As the complexity of online product databases and Web sites continues to rise, and given the challenges of algorithmic search in indexing such sites, the importance of paid inclusion will grow with it.
DIFFERENCES BETWEEN PAID INCLUSION AND PPC ADVERTISING
From an advertiser’s perspective, both paid inclusion and PPC advertising are important avenues to get products in front of consumers. And both of these methods play significant, yet unique, roles in adding quality to the search experience from a user perspective.
Companies like Overture and Google have done a remarkable job of building quality programs and leadership in the PPC sector, an industry in which advertisers bid for guaranteed placement in major search engine results. A key factor in PPC listings is that payment by a merchant advertiser influences the ranking of its listings within the applicable search results. In the paid inclusion model, merchant advertisers pay for their Web pages and product databases to be crawled, or searched, and included in an index within search engine results — driven by relevancy to the topic being searched, as payment does not affect the order of placement in search results. In short, PPC pricing and rankings are driven by the advertiser, while in paid inclusion, rankings are driven by relevancy.
Additionally, paid inclusion results are typically delivered in a completely different section of search results than the PPC results. PPC results are usually listed and ranked in a designated ‘sponsored’ area, while paid inclusion results are listed in the main, or editorial portion of search results, with placement tied to relevancy rather than the price set by the advertiser.
COMPLEMENTING RELEVANCE WITH A RETURN-ON-INVESTMENT
Today´s Internet advertiser is increasingly concerned with return on investment, and so PPC services, as well as paid inclusion services, offer a variety of tools for advertisers to track the success of their campaigns. On the PPC side, Overture just announced plans to launch ‘Marketing Console,’ a set of ROI tools for advertisers to track the effectiveness of their online campaigns. On the paid inclusion side, TrafficLeader and others offer conversion tracking, which can monitor the number of transactions generated by an advertiser´s campaign.
In addition to enhancing the relevance of search for participating merchants and consumers, paid inclusion offers effective ways for companies and advertisers to monitor and measure their ROI, including:
Conversion Tracking and Analysis: Through paid inclusion conversion tracking and analysis, advertisers can examine which URL strings are converting to sales and which are not; and identify future opportunities based on this data.
Search Engine Optimization: These programs enable online merchants and advertisers to better organize and design their Web sites, so their listings are optimized on algorithmic search engines, such as AltaVista, AskJeeves (Teoma), MSN and Yahoo! (Inktomi and FAST), Looksmart (WiseNut) and Google.
Distribution: To be effective on a meaningful scale, paid inclusion providers should have relationships in place with meaningful distribution partners, so that they can deliver their advertisers´ listings to the Internet’s largest and most popular search engines and product shopping engines.
Paid inclusion will continue to emerge as an important component of search, particularly as the number and complexity of Web-based product databases increases. When in top form, search should enable Internet users to find highly relevant results at lightning speed. As we move toward the future, faster and faster access is a given, so the differentiator for search engines will be relevancy, and paid inclusion services will be one of the primary enablers of the relevancy that users demand. [24×7]
Editor’s Note: Puget Sound companies offering Paid Inclusion Search Marketing services include Idea Bank Interactive and SuccessWorks.
Peter Christothoulou is Chief Strategy Officer of Seattle-based Marchex, Inc. (www.marchex.com), which recently acquired TrafficLeader (www.trafficleader.com). TrafficLeader® offers proven search marketing services that drive qualified visitors to business Websites. The company’s proprietary client acquisition solutions, combined with robust conversion tracking, enhance on-line performance from Search to SalesSM.
TrafficLeader extracts relevant data from Web sites, creates optimized XML feeds, guarantees inclusion into major search indexes, offers site optimization services, and provides ROI tracking. Respect for relevancy, and the ability to achieve top-ranked listings for the world’s most successful companies, are why major engines select TrafficLeader as their inaugural paid inclusion partner.