Entries posted in March, 2006

Rising PPC cost per click prices due to aggressive competitive bidding on high volume keyword phrases took two major retailers by surprise during the last holiday season. Florist FTD Group Inc. and online jeweler Blue Nile Inc. both bailed out of paid search advertising at the Yahoo Search and Google Adwords PPC ad networks because they felt they could not longer return a positive ROI. As a result both companies reported Q4 2005 online sales results that were below expectations.

Many online retailers and other online businesses have taken the easy way out when paid search keywords were affordable and they have become too reliant on their paid search campaigns for a large part of their revenue. That has worked well over the last three years when it was still relatively easy the squeeze a good ROI out of a paid search campaign. But with more and more advertisers and brand marketers getting into the market and with campaign management getting more complex and more challenging there is increasingly a need to build a more diversified marketing port folio and implement broadened and ordinated marketing plans spanning offline and online advertising tactics.

As web usability guru Jakob Nielsen recently pointed out, the ranking algorithms for paid search ads are working only in favor of the search engines and they will continue to drive up the search ad prices. Mr. Nielsen suggests that web site liberate themselves from paid search engines advertising and predicts that this will be one of the biggest strategy issues for web sites in the coming years.

Paid search advertising remains an extremely effective online marketing channel when managed correctly with the right strategy. Too many search advertisers limit their keyword portfolios to a small number of high volume keyword phrases and ignore the tail end of their keywords base. Tail end keywords are highly specific, low volume keywords that convert to sales at a higher rate and can be bought at lower bid prices.

It is clear that web site operators and search marketers have become too reliant on paid search advertising through ad networks like Google AdWords and Yahoo Search. They need to find new ways to attract new customers. Here are some ideas:

- Direct navigation. Buy keyword domain names for high to medium volume keywords in your area of business, if they are still available.

- Implement natural search engine optimization if your business operates in a relative niche area. This may require a substantial investment if you site does not have lots of related content and is not built with search engine crawling in mind.

- Broadcast at regular time intervals, e.g. bi-monthly a newsletter with good content or a valuable offer.

- Boost web traffic and sales by adding a blog to your web site. This boosts your word of mouth marketing and complements your sites with related content.

- Create good content and distribute this through podcasts and RSS feeds with links back to your web site. This can be helpful in raising your site's rankings in the organic search results of search engines.

- Implement an affiliate marketing program. Some sites generate up to 20 percent of total online sales from their affiliate marketing program.

- Placement of fixed placement advertising (text links and banners) on niche web sites or portals that are related to your industry. Contracts typically are fixed for a certain time period, which allows you to better control your budget.