Web Search & Marketing Newsletter - July 2007

Welcome to the July edition of our monthly newsletter, covering current web search and marketing issues that can have an impact on business websites.

In this issue we review several pieces of recent research. The first looks at the effectiveness of search marketing and how important brand recognition can be in completing the sale. We also report on the latest quarterly spend figures for Internet advertising in Australia, which show further substantial growth compared to the previous year. This issue also looks at the latest developments with the Ask search engine as it improves its results pages in an attempt to grow its share of the search market.

Read more about these stories below, or you can also browse through previous editions of the newsletter, either by month or by subjects covered.

On to this month's edition...

How effective is search advertising?

A recent piece of research published in the US has questioned whether search advertising gets too much credit for converting online sales at the expense of other forms of brand building advertising.

The findings are based on a study by Atlas (part to aQuantive in the US), that tracked online user behaviour and sales conversion by using cookies for almost 5 billion adverts and 1.7 million online sales transactions. The conclusion was that, although search advertising displays a high sales conversion rate from users clicking through from ads which lead to a sale, around two-thirds of these customers who took an action had actually previously reached the websites 2 or more times via ads on several sites.

These results indicate that awareness plays a more important role in driving that final sale than some may think. What this also indicates is that search is still the primary method of driving the eventual sales when users are looking to buy a product or service online. However, in all forms of marketing, brand awareness can also be a strong factor in deciding a sale and one has to question the target sample and the motivation for publishing this data. A previous Atlas study showed that brand awareness can lead to a 22% higher chance of a sales conversion and this latest research perhaps also indicates that many large brand organisations are also now embracing search marketing as part of their advertising mix.

In the data-heavy world on Internet marketing, this latest research provides an interesting slant on the way that PPC advertising works, based on a significant base of data. It also gives some additional measurement to the impact of brand advertising, the effect of which is often difficult to quantify, whether online or offline. What's more, this trend will also build pressure on smaller advertisers who are using PPC as an effective marketing method, but who are facing increasing cost pressures from bigger companies who are using their purchasing power to bid high as a brand-building exercise as well as a direct sales tool.

For more information on how search advertising could drive your business, please contact us for details.

A new look for Ask

The Ask search engine has taken on a new look in the past month with some interesting features in its search results, as it makes a further attempt to attract more user traffic away from the 'big 3' of Google, Yahoo! and MSN.

Ask was previously the Ask Jeeves search engine and, despite the rebranding and big advertising campaigns in the US and UK, still struggles to build any significant market share in the search market. With its new look, the initial clean search page (which offers different 'skins' for added personalisation) contains 5 main search options - web, images, city (business finder), news and blogs - with some added options through an additional drop-down menu.

Once you complete a search the results page offers three columns, with the main results list bordered by options to narrow or expand the search to the left, and alternative results to the right, which for a general web search generates some images, news, possibly video and dictionary links if appropriate. Ask have explained that they are trying to move away from search as a simple linear process of moving from one stage to another, and instead want to make it more iterative so that the users has options and can develop their search results into the relevant outcome.

Ask are re-emphasising their 'pure-play' search model which, they claim, offers the best alternative to Google, rather than on MSN and Yahoo! where search is one part of the overall portal offering. The new look is also a move towards the 'universal search' style of results that Google is offering and it makes for an interesting search experience.

However, the key issue will remain the question of what is actually 'under the hood' of Ask. How relevant are the results compared to Google and what will the overall search experience be like for the average user? Will they find too much going on here so that choice becomes a barrier to finding the right information? And will Ask's search quality match Google's - we still find that Ask's results can be hopelessly outdated and the spider activity is wanting so that recency remains a real problem with this tool.

Ask have supported their changes with a big brand building campaign in the US, but it's going to be word-of-mouth that's going to help them make any inroads into the current search market. We'd like to see Ask become a bigger player again, but Google will remain a hard nut to crack for some time yet

If you'd like to find out more about using Ask, or how to develop your search techniques, please contact us for more information.

Internet advertising in Australia sees further growth

New figures released for the first quarter of 2007 show that the online advertising market in Australia continues to grow rapidly, with spend reaching $294 million, up 50% on the same period in 2006.

Spend was, however, down 7% on the previous quarter, although this would be expected following the pre-Christmas peak and the January holiday period. Search engines and directories continue to be the biggest and fastest-growing sector, up 85% year-on-year to $139.5 million and comprising nearly half of the online advertising market. Display advertising and classifieds saw increases of around 30% year-on-year and held a similar share of the remaining spend within the total sector.

These latest figures have been published by the Internet Advertising Bureau and mark the first report compiled by PricewaterhouseCoopers since they took over the contract from ABVS at the end of last year. Some of the data collection methods have changed and PWC do indicate that some figures could be conservative compared to previous reports. In addition, the Search and Directories spend sector continues to be an estimated figure, since Google doesn't disclose its figures, even though they are likely to account for 70%+ of this market.

Either way, the message is coming across strongly that there continues to be healthy growth in the online advertising sector in Australia and that this is likely to continue in the foreseeable future as more companies realise the benefits of this activity, particularly in search advertising.

If you’d like to know more about this research and how your business can benefit from Internet marketing, please contact us for details.

Recent articles from The Marketing Workbench

The Marketing Workbench is our regular blog covering news and comment on Internet marketing events and trends. If you want to keep track of current stories you can visit this section of our website on a regular basis, or set up an RSS feed. These are just some of the items posted over the past month:

• How online video advertising works
• Google launches Pay-Per-Action beta
• Management changes at Yahoo!
• Google launches AdWords Business Pages

We hope you've found this month's newsletter useful. Please contact us if you need any more information on the items covered, or our advice on any aspect of your website's performance. Also, if there are any issues you would like to see in future editions of this newsletter, please submit your suggestions to us.