Monday, July 10, 2006

Search-engine advertising - benefits and drawbacks

The Wall Street Journal article (linked above) outlines well the opportunities and challenges of marketing using search-engine advertising. Here is a summary of my thoughts on search-engine advertising. In a future post, I'll talk specifically about the challenges of doing B2B advertising on the search engines.

Top 5 benefits of search-engine advertising:

1. Many people who use search engines do so because they are looking for something to buy (a far larger percentage compared to those who read newspapers). Therefore, they are very open to relevant advertising.

2. Search-engine advertising, properly constructed, is highly focused and targeted toward people who use your service.

3. You only pay when people click through to your web page.

4. You can set a monthly budget and review detailed statistics of how your ads are working.

5. It's inherently regionless; customers from anywhere can find you.

Top 5 drawbacks

1. You need a very good web presence to take advantage of those who click through. Your web page is your storefront and needs to be tended carefully.

2. If you have the wrong keywords (too limited or too broad) you won't have enough clickthroughs to make it worthwhile.

3. There is a certain amount of click fraud (i.e., sites who click through with no intention to buy, either to increase their statistics or to cost you money). As such, you need to monitor the reports carefully to ensure that your clickthroughs are turning into sales.

4. Your keywords need to be very well constructed, and monitored regularly, to ensure you are not wasting money on useless clickthroughs. A good keyword should have at least 1% clickthrough.

5. It's inherently regionless. If someone searches on your keyword, they can find you, no matter where they are. If your business services a limited region, basic search-engine advertising could bring you lots of prospects you can't service. Local advertising is emerging and will be a big help to those businesses.

Google has a nice FAQ page for those with more questions on search-engine advertising.

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