Companies find payoff in paid searches
A Google search of “BP,” “gulf spill” or “oil spill” pulls up stories and pictures of the disaster in the Gulf of Mexico. But atop the results page is a paid-for link, “BP.com/GulfOfMexicoResponse” that the sullied oil company established to show how it is addressing the crisis.
The page is a high-profile example of how companies use paid online search advertising — a mainstay of marketing in the last few years — to not only sell products but also manage their messages.
Paid search advertising, in which companies pay for a premium spot on the results list, has gained momentum and the trend is expected to continue.
Several Atlanta-based companies including SunTrust Banks, Equifax and Delta Air Lines, spend for premium placement when certain terms of searched, saying it raises their online profile with potential customers.
The terms are usually related to the firm’s basic services or some current aspect it wants to draw attention to. Payment to Google is typically based on how many people click on the link.
“More than 80 percent of the online population is on Google and they’re raising their hands asking for your product,” said Maureen Schumacher, Google sales director in Atlanta. “A company is able to place their ad right at the time that their interest is highest.”
Google is the largest but not the only player in the paid advertising search business, with Yahoo, and Microsoft’s Bing also vying for their share of paid search dollars.
Internet research firm eMarketer estimates paid search in the United States alone will grow to $12.3 billion this year from $10.6 billion a year ago. This year’s projected amount is about 50 percent of the estimated $25 billion marketers will spend this year on all forms of online advertising, which includes banner ads, video and e-mail.
Spending on online video ads is expected to grow at a faster clip, from a projected $1.5 billion this year to $5.5 billion in 2014, eMarketer said in study released last month. But paid search ads will remain the dominant channel in 2014, rising to $16.7 billion against total projected online ad spending of $36.3 billion.
Some companies have shifted away from traditional advertising to spend more on paid search.
Delta, for example, is doing fewer television spots in favor of online channels, said Bub Kupbens, the Atlanta carrier’s vice president of e-commerce.
The thinking: It makes more sense to target ads to a consumer who is actively researching information.
“You as a user, you are in control,” Kupbens said. “You’re going out and seeking out the information versus having to passively react to an ad.”
The airline bids on more than 1 million keywords spread across some 200 marketing campaigns.
So if someone types “cheap airfare,” “flights to Europe” or even “Delta” specifically, any promotions related to those terms or the carrier’s Web site would pop up in the paid search results to the right or in a shaded box at the top of the results page.
Multiple companies can bid on the same paid search terms. Where they fall in the search results column depends on how much they pay Google.
Unlike traditional advertising, corporate marketing executives say paid searches allow them to see what kind of return they get in real-time because payment to Google depends on how many people click through to the company’s site.
“SunTrust finds it valuable not simply for brand awareness, but like most marketing communications, it’s about gaining the potential client’s interest and attention when they’re thinking about buying a potential product and service,” said Broud Kuhn, the bank’s group vice president of digital and direct marketing.
“We do it because it works. It generates profitable relationships.”
Free or “natural” results — the links that appear down the center of the page — would likely bring up some of the same links, but not as reliably or as prominently.
“With natural search you’re going to get there, but you may not always rise to the top where you want to be,” said Helen Wanamaker, marketing vice president for Equifax’s personal information solutions business. “We can see what we can optimize against and what consumers are searching for.”
Because customer clicks are measured in real time, companies can drop a term or make changes if results aren’t as expected.
“We measure and monitor a wide range of metrics but to take an example, we would look at what the cost is to generate a click, and adjust our bids on those terms up or down accordingly,” SunTrust’s Kuhn said.
Advertisers are likely to continue to use paid search marketing, even as they consider newer marketing venues like smart phones and other mobile devices, said Chris Lemley, a marketing professor at Georgia State University.
“We’ve gone from the days of broadcasting to narrowcasting,” Lemley said.
It’s also a way to get ahead of rivals — literally.
“If I see your information first you set the expectations in my mind for others and I judge everything else against that,” Lemley said. “I want to be in a good position to capture your eyeballs simply before other people do.”
