Paid Placement...A Primer

Why should you bother with a pay-for-placement search program for your client and how do you get one started? Long gone are the days when a client’s search result marketing strategy consisted exclusively of Search Engine Optimization, where you would submit your site to a bunch of search engines, sit back, and hope your link showed up in search results. The only avenues for getting listed in these "editorial" search result listings were search sites that used robots to generate their listings or actual human beings who reviewed and placed listings in a directory. Search Engine Optimization companies handled all of the details in this arena, a process that could take months before any results could be seen. Occasionally, you’d have to fight off a company that purported to have a "special technology" that could outwit a search engine and garner better positioning. Circumventing the search sites in this way had little chance of generating results since most of them became aware of these little tricks. Most interactive agencies would shy away from this red-haired stepchild, and advertisers complained that the process was too slow and offered no guarantees of positioning or results.

Now there is paid placement, as it has come to be known, often compared to phone book advertising, which means it’s likewise bound to be as effective as it is misunderstood. So what exactly is it? It is the process of getting your client’s site listed in the "advertiser links" section of most search sites’ results pages, beyond editorial results. The more important question is why should you bother with a pay-for-placement search program for your client and how to go about getting one started.

The first part is fairly easy. Pay-for-placement search is a means of delivering an appropriate, timely message about your client's site, knowing exactly what each user visit costs. It offers the flexibility of banner creative messaging without the production issues. It also offers almost immediate, measurable results. The only X factor that remains is whether your client can initiate a paid placement program in lieu of traditional Search Engine Optimization.

A recent Nielsen survey reported that 74% of users online conducted searches and 55% of those users clicked on paid search results. The U.S. Department of Commence says that product/service information search is the top online activity for 67% of online Americans, second only to email at 87%. Moreover, Jupiter Media Metrix and Harris Interactive recently surveyed 2,000 U.S. online advertisers about their satisfaction with online advertising effectiveness and paid search and found that out of five ad formats (two types of banners, opt-in email, paid inclusion, and pay-for-placement), pay-for-placement came out on top in four out of five satisfaction categories including overall satisfaction and satisfaction with average ROI.

The paid placement industry has shaped itself into a microcosm, but there are scores of other neat ways to help your clients buy their way into visible search results.

Most media buyers consider the process of securing keyword banners academic at this point — it is simply a matter of site selection, available inventory, and buying structure. This means of appearing in search results can arguably provide the most creative positioning for a brand outside of editorial search results.

Content promotion can be quite effective at promoting specific site content in some areas on some sites (yes, it’s vague), and its cousins, paid inclusion and paid submission, have a definite place in the grand scheme of search results, but advertisers demand immediate quantifiable results for their online advertising investment. Since there are no certainties to be had here, a site typically will not guarantee placement, and it is difficult to measure results, much less shift messaging elements to accommodate ever-changing content areas.

Then there is also predictive modeling-based search buying — a scientific approach to understanding the user before serving him with search results, which, in the most perfect of worlds, would mean that the user would have a much higher probability of acting upon the listing or creative. Look for more of this after you buy your first flying car. So where do you start? The process begins with selecting search terms that are most appropriate for your client's site content. "Originally, we were looking for an alternative to traditional search engine optimization because we wanted a more efficient and timely campaign," says Jeff Ferguson, interactive media manager for Kimberly Clark's consumer brands. "We began with a list of keywords related to the brands’ content areas, where we wanted to drive consumer traffic. After that, we used another online tool to help us find keywords and phrases beyond our original list. This not only expanded our reach, but also found areas that, while still quite popular, would be lower in cost per click because of fewer competitive placements." At first, the keyword or phrase selection process can seem like searching for your inner child in a fast-food restaurant. For example, your client’s site offers multiple product or service lines that must be represented by unique, specific messaging elements. There are a few online tools for selecting the right keywords for your program. Probably the widest known and most popular is Overture's Match Driver. Since Overture is a major player in the pay-for-placement industry, it has developed a tool that, among other things, helps you match search terms to common misspellings and determine which words and phrases to select on the Overture site. Another avenue for assistance in the keyword selection process is the U.K.-based Wordtracker.com, which compiles a database of terms and provides information on the sites where they are searched.

Once you have identified content areas and the related keywords, you can project costs. A key element here is knowing exactly what a click or user is worth to you and setting your limits accordingly. "The trial plan was to analyze and refine our results, ultimately focusing on the most effective performing keywords," Ferguson says. "It is a process that is in a constant state of change; as areas of importance are added or removed, our strategy is refined."

Since costs fluctuate based on the number of searches (and position costs), an effective guiding principle is to set a budget according to the amount of anticipated paid traffic based on a test period for your listings. This is not an exact science, nor does it require a doctorate in comminatory mathematics — you simply estimate your costs and set the budget.

Noteworthy in this course of action is the much-debated subject of relevancy. Sites in the pay-for-performance industry jealously protect the relevancy of their search results. The FTC recently sent a letter to search sites strongly recommending that search listings be clearly represented to consumers as advertisements. Maintaining the integrity of the search results in order to make certain that search results are also accurately represented to consumers is a no-brainer for paid listing sites. Though most of these sites had already complied with demands for relevancy, the lesson here is clear: Include only terms that are closely related to the site's content and are represented by messaging elements free of superlatives, as you would in any ad message in any medium.

Who are the players? Overture, Google, Sprinks, FindWhat, and Search123 represent the bulk of the pay-for-placement sites. These key players syndicate their listing content across many of the highest-trafficked search sites on the Web.

Each site has different character requirements for messaging elements as well as methods of estimating costs and providing positioning. Overture is a straight-forward bid-against-your-competitor process. Google allows you to purchase (based on an established bid) the entire "inventory" of searches or a portion thereof. Since clients like to know exactly where their listings will appear, the answer to this question has to be better than "your guess is as good as mine" or "the big sites." Tracking where each provider’s listing data appears can be a difficult task. And since this industry is still in its adolescence, partner sites change often. Earlier this year, AOL used Overture’s services for providing its visitors with search results; now Google has that honor. If you want to know exactly where your ads will appear on any given day, simply ask your provider for a list.

The question of overall site coverage needs to be addressed here. In a perfect world, you make certain that the client’s URL listings are placed in top positions to maintain a presence in every major site’s search results. Unfortunately, this presupposes you have done your homework in the buying efficiencies end of the business. The two are closely related in this instance. Case in point (all demographic reach considerations equal): Your client sells left-handed smoke shifters on its site and can only generate a positive revenue flow with a maximum click cost of $1.20. Hypothetically speaking, the top performing smoke shifter phrase has 500 searches a week on Provider A, but it’s crowded with advertisers, so the phrase will cost about $2 a click. Provider B has only 100 searches/week but the results are less populated, with a click cost of $.75. The wisest solution is to sacrifice coverage to maintain ROI integrity. Sometimes you can accept a lower position (at a lower click cost) since you might not need the highest position, but that is a question that can be answered only with results measurement.

Measuring Results Clearly, pay-for-placement is not an area where you will spend an inordinate amount of time calculating possible awareness lift. Paid placement programs are for immediate-gratification junkies. The sites will provide you with click traffic and, if you ask nicely, impression data so that you can calculate click-through ratios. Beyond that, third-party serving of the URLs is another great option. Not only does it provide an extra dimension of reporting, the added benefit of tracking the user's behavior is undeniably valuable.

Sophie Tan, interactive media supervisor at 10th Degree, says, "Using a third party to track the text links allows us to compare results from multiple network providers. We have the ability to compare specific keyword and phrase performance across each vendor’s network down to the actual revenue generated." The remaining dilemma is that these listings are labeled as ads, and since editorial search results might be perceived as an unbiased information resource, users could stop clicking on paid placements. A recent study completed by Princeton Survey Research Associates for Consumer WebWatch suggests that this will not be the case. When consumers were questioned about the likelihood of using a search engine if they knew some sites paid to be displayed more prominently, 66% responded with either a "more likely" or "no difference" answer. A significant 30% responded with the "less likely" response. The assumption here is that consumers will readily identify paid results. Bear in mind that a large group of consumers think "competing" truck brands (more or less identical) owned by the same company produce magnificently unique vehicles and contend that one is light-years ahead of the other.

Where is all of this going? The future of the pay-for-placement industry is still undetermined. A possible answer might be found in an observation of the evolution of Internet Yellow Pages (IYPs) on the Web. Once largely ignored by some sites, IYPs have emerged with renewed vigor as both AOL and Yahoo! focus on Internet Yellow Pages as ad-revenue-generating content areas. An examination of category killers "Insurance" or "Movers" on Yahoo! today illustrates multiple advertising opportunities, while AOL has developed its own ad units (a space that was previously populated with Verizon’s SuperPages.com), which can be purchased directly. Sound decisions on both sites, which would lead us to believe that if a media model is popular and generates revenue, why share?

Rumors abound in the industry about sites’ dispatching partners in favor of generating proprietary paid positioning models. And while the "where will I buy this in the next year?" question remains unanswered, one thing is certain at this point: Paid search may not be very sexy, but it is effective, essential, and most definitely here to stay.

Kevin M. Ryan is Western U.S. Manager of Wahlstrom Interactive. Email him at KeRyan@wahlstrom.com.

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