Why Search Marketing Works MMHK May

Now, more than ever, online search marketing should be at the top of every CEO's strategy for the flexibility, targeting and measurable cost-effectiveness that it gives to business.

By removing the guesswork and replacing it with actual numbers, search marketing puts the advertiser in control. It enables them to target precisely, pay only for results and stay firmly in charge of costs. It turns advertising from an art into a science.

First, there are no big upfront costs when advertising online. There are no expensive TV commercials to film or poster sites to rent across the country. Search advertisers need only draft three lines of ad text and bid for keywords they'd like their ads to appear against - words that users looking for their products are most likely to type into the Google search box.

Second, advertisers connect with potential customers at a time when they are searching for information - which makes it far more likely that this potential will turn into new sales. Instead of taking a scatter-gun approach, search marketing enables advertisers to target warm leads.

Third, it is payment by results. Advertisers only pay if a potential customer makes the decision to click on their ad. As this is an active, deliberate decision, it's far more likely to be rewarding for the advertiser. What's more, the cost is in the hands of each and every advertiser. It is entirely up to them how much they are willing to pay every time a consumer clicks on their ad.

Fourth, the internet allows advertisers to root out waste and target their potential customers by geography and time. Advertisers can target a continent, a country, region or even a square-mile radius if it suits them. So, a travel company offering special last-minute weekend fares out of Hong Kong can ensure its ads only appear to those searching from the city on Friday, Saturday or Sunday.

But, the key factor is the return on investment. Search marketing deals in cold, hard numbers: advertisers know their cost per customer acquisition down to the very last penny. In fact, Google provides free tools to advertisers which enable them to see how many times their ad are being seen, how often they are being clicked on, how many users are entering and leaving their web sites, average cost per click, and even the advertising cost per purchase.

It's the sort of information which the most expensive market survey could only hint at without any hope of achieving the same level of accuracy. It enables advertisers to make accurate decisions on the cost and benefit of their campaigns.

In the past, the underlying principle of mass-market advertising was to shout it loud and shout it wide. Or, to put it bluntly: send out your relatively undifferentiated message in the face of thousands in order to reach the hundred or so for whom it's relevant. But, this has become more difficult and less measurable with media fragmentation and the growth in TV channels, radio stations and magazine titles.

Online search has changed the dynamics of marketing, allowing firms to target very accurately consumers who are actively searching for products or services they are interested in. If a user types in the term ‘credit card' in the search box, it's because they are interested in purchasing a credit card. This is known as Pull marketing as they users are specifically requesting information on the product or service you sell.

It also serves better the needs of consumers who are today, suffering the same pressures as businesses. Having less money in their pockets, they are more determined than ever to spend wisely and are more likely to take the time necessary to ensure they do.

CEOs also need to take heed of internet trends. According to Research and Market, there are now an estimated 580 million people online in Asia, all connecting, creating, sharing and communicating. And according to a United Nations report, broadband subscribers in Asia Pacific has grown five-fold in the last five years, from 27 million at the beginning of 2003 to 133 million at the start of 2008, and are spending an average of 20 hours per week online.

With the cost of internet access falling and the speed of broadband accelerating, the web is going to become an increasingly powerful tool in the hands of consumers searching for what's on offer and comparing prices. CEOs need to make sure they are following consumer trends.

Google is confident in the continuing appeal of search marketing in tougher times. Companies increasingly appreciate the control that search marketing gives them - which is all the more important when money is tight. If search marketing can tell you exactly where every penny has been spent and only gets spent when someone shows a deliberate interest in your product, then it should be a business necessity. It's why the predictions of the doom merchants on web advertising have proved so wide of the mark.

Stella Cheung
account director
Google in Hong Kong