Psst: Your Competition is ignoring Internet Search Marketing, are you?

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The inside scoop on how you can get a competitive advantage by including organic search engine visibility in your marketing mix.

One of the primary goals of traditional advertising is to create demand for a product or service. An advertisement awakens latent demand by bringing attention to the product or service, or strives to create demand by informing us of a need or problem we weren’t yet aware of having.

By advertising in a mix of traditional media (television, radio, cinema, billboards, magazines and newspapers), companies aim to increase their sales. The process is rather hit or miss: a return on investment (ROI) only occurs when a person, sufficiently motivated, passes through a shop’s checkout or orders a service. This ROI is notoriously hard to measure. John Wanamaker summed it up best when he wryly noted,

“Half the money I spend on advertising is wasted; the trouble is I don’t know which half”¹.

Yet despite advertising’s uncertainties, companies continue to invest. In Italy alone, advertisers spent €10,308 million in 2007, according to Utenti Pubblicità Associati (UPA)².

What if you could target your advertising investments to cultivating people who are already looking for products or services similar to yours? Or specify your products by name? People who tell us in two or three words their exact state of mind? People we can track, right through the “checkout” or other commitment action? What would that be worth?

Apparently not very much, at least in Italy. Iab Italia report that €282 million³ was spent on Internet advertising in 2007. Considering a more optimistic estimate of €520 million reported by the UPA, spending on Internet advertising is just ~3 – 5% of the total overall advertising spend.

While UPA doesn’t break down Internet spending, the Osservatorio FCP/IAB/Assointernet consider 6 Internet specific categories (ad banners, e-mail/newsletter, keywords, SMS, sponsorships and buttons and other types). Search Marketing expenditure is the total of keyword spending, known also as Pay-per-click (PPC), and natural Search Engine Optimization (SEO) investments. The FCP/IAB report that sponsored PPC is getting only about 10% of the already small amount of the advertising budget allocated to the Internet. While they don’t yet track investments in Search Engine Optimization, SEO spending in North America during 2006-7 was around 16% of total PPC spending⁴. Organic SEO remains a strategic investment utilized by a few enlightened companies.

If Search Engine Marketing (SEO and PPC) offers such great potential to precisely target and track potential customers, why aren’t advertisers dedicating greater resources to it?

The most likely reasons are that:

• companies are generally unaware of how search marketing compares to traditional mass marketing;
• search engine marketing requires new skills and thinking;
• companies and their media agencies often don’t have search marketing capabilities in house, giving them a strong incentive to maintain the current marketing mix;
• like most young industries, the search marketing industry hasn’t yet consolidated on a single pricing model, making vendor comparison difficult;
• old habits die hard

In a companion article I look at how companies can insure a successful SEO project.

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