The mystery of a fairly new marketing approach - paying search engines for Web placement - was demystified for about 50 executives at last week's breakfast meeting of The Circuit, Cincinnati's top high-tech professional association.
David Heilmann, founder of Stage2 Technologies of Mount Auburn, offered an hour's worth of how-to for companies interested in reaching more consumers, clients and potential customers who search the Web for services or products.
Known as pay-for-placement, Heilmann said few advertising approaches could bring a return on investment that will be as cost effective as paying for a top position on a search result from Google or Yahoo.
In many cases, new customers, who might bring hundreds of dollars in revenues, can be reached for as little as a dime per prospect.
For many businesses, the alternative is to spend hundreds or thousands of dollars on ads on the radio, a message stretched across interstate billboards or a block of copy in a magazine or newspaper.
The key to paid placement is to figure out how much it costs to lock in placement by seeing what others are bidding for a link whenever key search terms are used, he said.
"Overture.com - if you take nothing else away from this program, remember the tools area at Overture.com," he said.
Overture, owned by Yahoo! Inc., is one of the Web firms that enables placement in search listings by allowing companies to bid on words that in turn lead to click-through.
Unlike most advertising - there is truth in the lament "I know half my advertising is wasted, just tell me which half" - companies that embrace pay-for-placement usually get individuals who have a real interest in a product or service.
Most of the Web searchers are probably on the brink of buying when they initiate a search, making them perfect prospects. "You're hitting them right at the right time. They're sent to the right place. It's probably about as targeted as you can get," he said.
A Web approach also means no postage and no brochure costs, and unlike banner ads, companies do not pay for "click-through" from people who may merely be curious.
He also suggested:
Executives bring a narrow focus to figure out which of a handful of terms apply to your business.
Companies measure cost of pay-for-placement against revenues generated. Change terms if necessary. Put a price into the advertisement to discourage a click from a surfer who is just killing time.
Paying for the top placement is likely to bring twice as many prospects as the second or third rank.
"Any business can do this," Heilmann said.
"It applies to any business whether it's a one-person consulting firm or a P&G division."
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