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Introduction

Thinking of hiring a vendor to help your firm with search marketing? This essay offers some suggestions on deciding which services you may need and which firm might best provide them to you.

Accompanying this essay is a Survey for Evaluating Potential Search Vendors. This essay explains that survey, so it’s helpful to read them together.

Before diving into the survey, let’s start with a quick overview of search marketing, ask if search marketing makes sense for your firm, and consider the in-house versus out-sourcing decision.

What Is Search Marketing?

Search marketing is a diverse collection of online marketing techniques with the goal of bringing qualified visitors to your website at a reasonable cost.

We’ll divide search marketing into three broad areas: natural search optimization, paid keyword search, and search feeds.

Natural Search Optimization (NSO)

Natural search optimization (NSO) goes by many names and acronyms: “search engine optimization” (SEO), “natural search,” “unpaid search,” “free search,” and “organic optimization.”

NSO consists of making sure the search engine “spiders” find your site, visit all your pages, and then present your site prominently when search engine users search for products, services, or information your site provides. (“Spiders” is a nickname for the search engines’ automated web-page retrieval programs, also known as “crawlers,” “robots,” and “bots.”)

NSO: Also known as Free, Unpaid, or Organic Search Marketing

NSO is sometimes called “free” or “unpaid” search because you don’t pay a per-visit charge to the search engines for the subsequent traffic. The “free” label is a little misleading, as some firms find it quite profitable to invest some time and money into NSO efforts. It is like public relations—while the subsequent media attention comes at no charge, some firms choose to invest time and money in PR campaigns, either using in-house resources or using an agency.

The key aspect of natural search to keep in mind is that while you may need to do some work (and perhaps incur some expense) up front to get your site in shape, thereafter there are no ongoing per-click fees.

Paid Keyword Search

Paid keyword search consists of paying the search engines to show advertisements for your site when search engine users make relevant queries.

The two dominant search engines in paid search today are Google and Overture. There are many other engines, but they are all small at the time of writing. Microsoft is soon to enter the game, and is widely expected to become an important third major engine.

Paid keyword search traffic is typically bought via a pay-per-click (PPC) arrangement. Google and Overture use real-time auctions to sell clicks, so advertisers can choose to bid more per click to drive more traffic to their site for a given keyword or search phrase. Other keyword search providers sell clicks for fixed PPC rates. Click fees range from a few pennies per click to many dollars per click, depending on the competition for that traffic. The current industry average charge is around $0.40 per click.

The key aspects of keyword search to keep in mind are that you’re tying ads for your site to words in searchers’ queries, and you’re buying clicks through a competitive auction.

Search Feeds: Paid Inclusion

Search feeds consists of sending data to search engines and product comparison sites which describe the pages on your web site. (“Feed” is short for “data feed.”)

One class of feeds is called paid inclusion, in which you pay to ensure that the pages of your site are included in a search engine’s index. Overture/Yahoo SiteMatch Exchange (formerly Inktomi) is an example of a paid inclusion marketing product. Search engines typically charge for paid inclusion on a per-click or per-URL basis.

Search Feeds: Shopping Comparison Engines

Another class of feeds is shopping comparison engines, in which retailers provide SKU-level product information to shopping comparison sites such as Shopping.com or PriceGrabber. The shopping sites use these data to help their users find products, and typically charge retailers a per-click fee for the resulting traffic. Pricing and pricing models vary widely across the industry. For example, Google’s Froogle is free to retailers, with no click charges, whereas Amazon takes the sale for the retailer on their site and typically charges a revenue-share fee.

Key aspects of search feeds to keep in mind are that you’re advertising URLs (not phrases), and you usually pay a fixed per-click charge.

Is Search Marketing Right For My Company?

Natural search optimization, in some form or another, makes sense for just about every firm with a public web site. (If you didn’t want folks to visit, why put up a web site at all?) Increasing site traffic is important to direct marketers, store retailers, manufacturers, service providers, information services, government agencies, and non-profits.

Indeed, for many types of businesses, NSO may be the only wise search marketing investment.

Consider a management consulting firm selling substantial long-term consulting engagements to C-level executives. No CEO would choose a consulting firm for a six or seven figure engagement following a 35 cent paid keyword Google click. However, a solid NSO project could prove effective.

Suppose this management consulting firm placed large amounts of well-written, authoritative, relevant content on their site. Suppose also that the firm made sure the engines could find and understand that content. It is entirely plausible that a CEO could stumble onto those pages via natural search, like what he or she read, then pick up the phone to call the firm about a project.

Is Search Marketing Right For My Company?

Once you start paying to drive visits to your site, however, you need to show benefits to justify that expense. Large companies accustomed to brand marketing often find paid keyword search marketing so inexpensive, compared to their national television and print budgets, that very little justification is necessary.

For smaller firms, paid keyword search makes sense when there is a clear, trackable, and direct-response mechanism on the website. If your web site takes orders or generates leads, you can then quantify the value of that revenue or those leads, and thus determine the amount you could pay in advertising to generate them and still meet your profit goal.

Paid keyword search works particularly well if you sell products that customers already know they want. Because the user drives the process by seeking information of interest to them, paid keyword search can be less effective launching products and promoting novel products. Paid keyword search is particularly effective is you sell well-known products, products with unique names, and products made by well-known brands.

In-house Versus Outsource

Some firms generally prefer to do as much work themselves as they can, while other firms prefer to outsource functions outside their core competency. Some aspects of search marketing can be done effectively in-house, while other aspects may require working with vendors.

If you write and host your own website, it makes sense to train your internal writers and programmers on NSO best practices. It is easier to build your website, or at least build additional pages going forward, to be search-engine friendly, rather than have to retrofit it later. To this end, it often pays to hire a reputable search marketing firm to evaluate your current website, suggest improvements, and train your staff. This work could occur as a short-term project, or could involve an ongoing retainer relationship.

If you are running small paid keyword search programs – that is, programs with a small number of terms, limited ad expense, limited complexity, and infrequent changes – you should consider running these programs in-house.

Is Outsourcing Right For You?

Many retailers start out with these small paid keyword search programs, but at some point, paid keyword search programs may reach a scale where outsourcing makes good sense. Here are some approximate guidelines. If one or more of the following is true, outsourcing could make sense for your company:

• Your monthly paid keyword search advertising expense exceeds $10,000; or
• Your term list exceeds 2000 terms; or
• You are in a highly competitive market, with an average cost-per-click above 60 cents; or
• Your internal staff spends more than 20 hours week managing your programs; or
• You change ad copy frequently, with more than 20% of your ads changing copy each month; or
• Your term list changes frequently, with more than 20% of your phrases changing each quarter; or
• You wish to run head-to-head tests of copy and landing pages on a monthly basis; or
• You are frustrated with your in-house reporting system, as reports take great effort to build, or are insufficiently accurate, or insufficiently informative; or
• You are frustrated with your in-house systems for determining appropriate bids; or
• You are frustrated with your in-house systems for changing bids frequently, either daily or more frequently; or
• Your in-house staff lacks the time, expertise, technology, or interest in managing paid keyword search in-house.

Search Feed Programs

While some advertisers run their search feeds programs in-house, more tend to outsource this function. There are a various reasons for this, including:

• Some feed search venues only accept direct feeds from certified vendors.
• Advertisers may lack the IT resources to create, maintain, test, and optimize feeds.
• Advertisers may lack the specific marketing expertise needed to tune search feed campaigns.

The Survey

If you are still reading this far, then you are probably interested in hiring a search management firm to help with some or all of your search marketing work. Now let’s dive into the survey which accompanies this essay.

We will walk through the survey, discussing some of the less obvious questions and explaining what different answers may mean.

The survey has three sections. The sections cover paid keyword search, search feeds, and natural search optimization. Some of the questions repeat across the sections. When we discuss a question which repeats, we do so only once, the first time it appears.

While you can use this survey to evaluate any potential search marketing firm, you can find this information already collected by MarketingProfs for many leading vendors here.

Sem Company Experience

How many years has your company been providing search marketing services?

The search marketing field is young and rapidly evolving. Some of the leading search marketing management firms are less than 5 years old. Google itself turns 7 in September ‘05. Given the newness of this channel, a reputable firm with a solid track record of two or more years and positive references is certainly credible.

Paid Search Specialization

What percentage of your revenue is from providing search marketing services?

Many full-service advertising agencies offer some elements of search marketing services. Given the relative newness and the rapid change in this advertising sector, there are fewer people with deep knowledge of search marketing than other forms of advertising. Doing paid keyword search and managing search feeds well also require special technology. Due to this, you may get better results working with a firm specializing in search than with a general agency. Some of these general agencies farm out their search marketing work to a vendor that specializes in online search. If this is the case, you should be sure to evaluate the ultimate vendor who will be doing the work for your firm.

The Industry

Industry Participation and Leadership

The search marketing field is young, surprisingly friendly, and relatively open about sharing ideas. Industry thought-leaders regularly speak at conferences and publish articles. While these thought-leaders do not reveal every ingredient of their firm’s “secret sauce” in public, you can learn a great deal of useful information by listening and reading. Beyond factual tips, a firm’s public record offers a strong sense of their style and approach. Beware of firms that cloud their methods in secrecy.

Client Services

About Your Clients

You want to determine if a vendor has experience serving companies like your own. There are different skills involved in search marketing for business-to-consumer retail sales, versus business-to-business sales or lead generation. Scale is also important: you want to make sure a potential vendor has handled other accounts of your size.

What percentage of your active paying clients have been clients for more than X years?

Client retention is the most important indication that a vendor provides good services at a fair price to their clients. Beware vendors with high client turn-over, or vendors lacking long-term clients willing to provide positive references.

Account Management

Do you provide your clients with an account manager to provide guidance and strategy on their paid search advertising strategy?

Some paid search management firms specialize in “do-it-yourself” relationships, renting their technology to advertisers who wish to manage their campaigns themselves. Other management firms operate in a “do-it-for-me” or a “do-it-with-me” style, providing account management staff to run your campaigns for you. Some firms offer both models, while still others offer hybrid arrangements. Some firms provide dedicated account managers, where your account is handled by a specific person or persons. Other firms use teams or pools of account managers to handle accounts.

There are lots of options and no single best choice. The right choice for your company depends on your preferences, requirements, and budget.

How many clients does each account manager manage?

If your advertising campaigns are handled by an account manager, the amount of time you and your firm will receive critically depends on how many other clients that person also serves. Make sure to ask a potential management firm for their ratio of clients to staff directly serving those clients.

Methods And Technology

What method do you use to develop search terms, ad copy, and destination URLS?

Success in paid keyword search often involves large search term lists. It also involves matching each phrase with a relevant snippet of advertising copy and with a relevant landing page URL.

“Relevance” is the critical concept here: getting the copy and the landing page right can increase the economic efficiency of your campaigns by 10% or more.

Building solid term lists and assigning good ads and URLs to each term is a critically important process. Ask a potential vendor how they handle these important and laborious tasks.

Search Term Lists And Ad Copy: An Example

Here’s an example of assigning good ads and URLs.

Suppose your site, “widgetworld.com”, sells three classes of products: widgets, whatzits, and whozits, and each product class consisted of a large selection of SKUs and related accessories.

Here’s a sample generic ad for your site:

Widgets, Whatzits, Whozits
Huge selection of leading brands
and accessories. Free shipping.
www.WidgetWorld.com
(http://www.widgetworld.com/index.html)

This generic ad is appropriate for searches on your brand: “widgetworld”, “widget world”, “Widjet world” (a common misspelling, perhaps), and so on.

This ad would likely prove less effective for a more specific search phrase like “widget” or “titanium whatzit”.

Search Term Lists And Ad Copy: An Example

The person who types “widget” into a search box is, to state the obvious, most likely seeking information on widgets, and thus in many cases doesn’t care about your broad selections of whatzits and whozits. It makes sense to use your limited ad space accordingly. Here’s a possible ad for a search on “widget”:

Widgets at WidgetWorld
Type 1, 2 & 3 widgets in all sizes.
Wires and shipping free with order.
www.WidgetWorld.com
(http://www.widgetworld.com/store/widgethome.asp)

Search Term Lists And Ad Copy: An Example

More specific searches give you more specific information on what the potential visitor wants. Using this information can help increase the efficiency of your advertising. Here’s a possible ad for “titanium whatzit”:

New Titanium Whatzits
Titanium whatzits and accessories.
Free bracket and wire with order.
www.WidgetWorld.com
(http://www.widgetworld.com/store/prodcat.asp?c=w6&m=24)

Increase Your Advertising Efficiency

The goal of better copy and URLs is increasing the efficiency of your advertising.

The person searching who sees your advertising copy should know exactly what they can expect to see when they click on your ad: hopefully, they should reach the exact product they are seeking.

Note your goal is to maximize your selected economic success metric – be that advertising-to-sales ratio, cost-per-order, cost-per-lead, etc. This is likely not the same as increasing the click-through rate of your ad: your ultimate goal is profitable sales, not numerous clicks.

Search Term Lists And Ad Copy: An Example

Let us continue with our Widgets example to show importance of maximizing your economic success metric.

Suppose Widget World sells merchandise at full manufacturer suggested retail price, and competes against unauthorized “gray market” dealers who sell below MSRP.

Consider an ad like this:

Free Widgets And More
Priced so low it hurts. Free wire,
bolts, shipping & gift. 45% off now.
www.WidgetWorld.com
(http://www.widgetworld.com/we_never_discount.html)

While this ad might achieve a high click-through rate, if it doesn’t appropriately describe the landing page and site the visitor will reach, it will bring large numbers of unqualified visitors to the Widget World site, increasing costs without increasing benefit, and thus torpedo ad efficiency.

Again, seek a vendor who will write ads which maximize your economics, not necessarily your click volume.

Search Term Management

What is the median number/largest number of search terms you manage for each client?

What experience does your potential paid keyword search vendor have with campaigns of different sizes, as measured by the number of search terms? Ask the potential vendor about their client portfolio by term list size: small search term lists (under 1k terms); medium lists (1k to 5k terms), large lists (5k to 50k terms), and very large lists (over 50k terms).

The “right” number of phrases for your firm depends on your site and your products. As a very rough rule of thumb, the size of your active term list divided by the number of pages on your website should probably fall somewhere between 1 and 5. As another rough rule of thumb, if you are doing sufficient testing, the number of total terms tested divided by total active terms should exceed 2.

Make sure a potential vendor has shown prior success handling campaigns of your size, be they small or large.

Advertising Expenses

What is the median monthly search advertising spend of your clients?
What is the monthly search advertising expense of your largest client?

What experience does your potential paid keyword search vendor have with campaigns of different sizes, as measured by monthly spend? Ask the potential vendor about their client portfolio by monthly ad budget: small (under $2k); medium ($2k to $20k), large ($20k to $100k), and very large (over $100k).

The “right” monthly ad budget for your firm depends the available inventory of search traffic related to your offerings, the average price of those clicks, your site conversion rate, your site average order value, and your target ROI metric. For seasonal businesses, a well-tuned budget will soar in your peak months as traffic and conversion increase. For example, a retailer selling holiday gift products might correctly spend over 40% of their annual paid keyword search budget during November and December.

Make sure a potential vendor has shown prior success handling a budget of your size, be it small or large.

Choosing An SEM Company: Tracking Tools

What tracking tool to do you use to count clicks, cost, and conversions?
What tool do you use for bid management?
What tool do you use for reporting? Are these proprietary tools, or those of a third party?

Strong tracking, bid management, and reporting are essential to paid keyword search marketing success. Some search management firms have built their own proprietary technology platforms for these activities, while other firms employ platforms rented from other firms.

There are several advantages to working with a firm that runs their own proprietary technology platform. First, if a vendor has a developed their platform internally, they should understand their platform thoroughly, and hopefully be able to use that expert knowledge to gain better results for you. Second, when a vendor runs on their own platform, it removes a whole set of relationships that could possibly go awry and harm your campaigns. For example, a technology glitch at the platform company could negatively impact the service you receive from your vendor, and your vendor would have little control over the situation. Your service could also be negatively impacted if your vendor got into a contract or billing dispute with their platform provider. Third, the wholesale prices that platform providers charge search management agencies to use their technology are material, possibly leading to higher pricing for you.

There is one potential disadvantage to working with a firm that runs their own proprietary technology platform: that platform might not be very good!

Whether you select a vendor with a proprietary or rented paid search technology platform, make sure you understand who really owns the platform. The following section explains how to ask the right questions to determine and understand the platform’s strengths and weaknesses.

Choosing An SEM Company: Tracking Platform Support

What changes must clients make to their site to support your tracking platform?
How long does it take a typical client to implement these changes?

At its essence, optimizing your paid search campaigns comes down to matching costs to resulting benefits, then doing more of what works well and less of what works poorly.

Here, “costs” consist of advertising fees paid to the engines and management fees paid to your vendor. The most common “benefit” is sales, but other important benefits include leads, catalog requests, email addresses, and signups. Some advertisers choose a hybrid benefit metric combining several of these.

To report on the performance of your paid keyword search campaigns, and to subsequently use those report data to improve on that performance, the tracking platform needs to know the exact benefits (typically, sales) which came as a result of paid search clicks.

Choosing An SEM Company: Tracking Tags

There are several ways to send these data into a tracking platform. The most common method is placing a “tracking tag” (also known as “tracking beacon,” “tracking bug,” “tracking pixel,” or “tracking gif”) on your site. With some implementations, you place this tag on every page on your site. On others, you place the tag only on “success” pages (also known as your “order confirmation” or “thank-you” page). In some implementations, the tag is a small piece of java script. In others, the tag is tiny image, such as a 1×1 pixel transparent gif.

One advantage to using tracking tags is that benefit data (sales, leads, etc.) is sent immediately to the tracking platform. As a result, your paid search technology platform can update performance reports and re-compute bids with little delay. Another advantage is that the data are sent automatically—once the programming for the tag is in place, no further changes should be necessary.

Choosing An SEM Company: Disadvantages Of Tracking Tags

There a few minor disadvantages of tracking tags. Adding a tracking tag or tags to your site requires making a change to your website; and any web site change involves some degree of time, cost, and business risk. Depending on their specific implementation, tracking tags can be skewed by various factors, including framed sites, users disabling cookies, users disabling Javascript, and users visiting your site via proxy-servers.

Ask a potential vendor about the difficulty of adding their tracking system to your website. Make sure your IT staff reviews the vendor’s technical implementation spec and asks hard questions. Depending on your site and on the vendor’s technology, adding tags could be very simple or very complex.

Choosing An SEM Company: Web Analytics Support

Can you tag inbound traffic to a client’s site to support web analytics packages? If so, which packages?

Advertisers use a variety of software tools to understand the activity on their websites. These tools range from basic log analysis scripts (for example, free tools like AWstats, Analog, Webalizer, etc.) to full-blown web site analytic platforms (for example, CoreMetrics, WebSideStory, Urchin, Omniture, etc.)

Make sure a potential search marketing vendor can support your analytics package, if relevant. While the vendor should be able to track and manage your campaigns without you having to have such a package, if you are running such software, the vendor should be able to help you feed relevant data into the system.

Bid Management

What tool do you use for bid management?
What is the theoretical basis of your bidding approach?
Does your bidding tool automatically seek to optimize a client’s success metric?

Your potential vendor’s bidding algorithm for paid keyword search will play a critical part in the ultimate efficiency of your campaigns. These algorithms are complex and are easy to get wrong, but they are remarkably powerful when done correctly. In short, bid algorithms matter.

A “bidding algorithm” is a simply set of calculations which determine the correct bid for each of your paid keyword search ads. Here, “correct” means the bid that maximizes your economic success metric.

Bid Management: An Example

To make this more concrete, we’ll pause for an extended example. We return to our discussion of how to evaluate bid management algorithms below.

For this example, let us suppose your goal is to maximize sales while maintaining a 3:1 sales-to-advertising ratio. That is, you demand that each dollar in advertising returns three dollars in resulting sales. Suppose you are (or rather, your vendor’s bid management platform working on your behalf is) considering raising the bid on a certain ad from 40 cents to 45 cents per click.

What might be the result of this increase?

One possible outcome is that absolutely nothing happens. Suppose this ad involved a highly competitive phrase, where your competitors are paying several dollars per click. If your ad was buried three pages back, that extra nickel per click may have negligible impact on your clicks, costs, conversions, and sales.

Alternatively, suppose you already controlled the top spot for this phrase. If your competition did not respond to your increase in your maximum bid, there may be no change in your clicks, costs, conversions, and sales.

On the other hand, if you already commanded the top spot, and if you faced stiff competition for these clicks, your competitors could follow suit on the nickel increase, inflating the bid landscape around this phrase. This would drive up costs for you and your competitors, with little or no increase in sales for anyone.

Bid Management: Another Example

Here’s another scenario, this time with numbers.

Suppose before increasing your bid, your $0.40 ad sat in 4th position generating 100 clicks per day at $1.20 in sales-per-click. Doing the math, we see that before the change, the ad consumes $40 in ad expense and generates $120 in resulting sales on average each day. Note that the ad is generating a 3:1 sales-to-advertising ratio, exactly as you wished.

Now suppose the $0.05 increase takes the ad from position 4 up to position 2, sales-per-click increases from $1.20 to $1.25, and daily clicks jump from 100 to 200.

A digression: it isn’t always true that that sales-per-click increases linearly when an ad moves up the page. There are no fundamental laws true across all advertisers regarding the relationship between sales-per-click and position, particularly near the top of the page. Your best bet for determining this relationship for your ads is an empirical approach, using controlled testing.

And another digression: it is generally true that daily clicks do increase meaningfully with higher position on the page, but there are exceptions. Again, your best bet for determining this relationship for your ads is empirically, via testing.

Bidding Mathematics

Let us run the math again, before and after the nickel increase:

Before 100 clicks per day $0.40 cost-per-click $40 ad expense $1.20 sales-per-click $120 tracked sales 3:1 sales-to-advertising ratio 33% advertising-to-sales ratio

After 200 clicks per day $0.45 cost-per-click $90 ad expense $1.25 sales-per-click $250 tracked sales 2:77:1 sales-to-advertising ratio 36% advertising-to-sales ratio

Was this bid increase a good move?

On the benefit side of the ledger, this bid increase bumped revenue dollars from this single ad by 108%. Assuming no seasonality, an extra $130 in daily sales works out to an extra $47K annually. On the cost side of the ledger, this increase increased cost dollars by 125%. Assuming no seasonality, an extra $50 in daily cost works out to an extra $18K annually.

Is Paid Search Worth It?

Annualized, is an extra $47K in sales worth an extra $18K in expense?

Each retailer will give their own answer, but recall that in this example our goal was a 3:1 sales-to-advertising ratio. The incremental sales and costs from this move – up $47K in sales and up $18K in costs – comprise a 2.6 sales-to-advertising ratio. Thus, these incremental sales come in below our target economic efficiency, and so to dilute the total performance of the ad, efficiency drops from 3:1 down to 2.77:1. If your primary goal was maintaining 3:1 advertising efficiency, then no, this nickel increase is not a good move for this ad.

Without belaboring the numbers again, note that if sales-per-click had moved instead to $1.35 versus $1.25, then in such a case, yes, this nickel increase would have been a good move.

Bidding Complexity

Actual bid management platforms are far more complicated than this simple example. First, instead of doing this math for one ad, the platform must do the math for many thousands of ads. More challenging, the platform does not know in advance the resulting changes in clicks and sales-per-click that correspond to a given change in cost-per-click. Even worse, the relationship between cost-per-click and sales-per-click isn’t linear, and click volume and sales-per-click vary by season, by month, by day of week, and by time of day. Making the problem harder still is that the bid landscape is dynamic: you are bidding against competitors who respond to your actions.

Again we digress: economists use a branch of mathematics called game theory to understand situations like auctions, where you are competing against competitors who respond to your moves. Much of traditional game theory depends on an assumption of rationality: that is, the mathematical theory assumes you’re competing against smart opponents who act rationally.

Don’t Assume Rationality

As if bid management weren’t hard enough, the rationality assumption doesn’t hold for paid keyword search bidding. When buying paid keyword search, it isn’t rare to find yourself competing against advertisers who don’t have much of a clue as to what they’re doing. Even if you wisely avoid engaging these folks in bidding wars, such advertisers can drive up click prices for everyone through their seemingly random bid spasms.

The Art Of Bid Management

There is no mathematical formula to solve the bid management problem exactly. (If a vendor claims their bidding algorithm yields truly “optimal” results, they’re wrong.) The problem is simply too hard to solve perfectly.

Instead, paid keyword search bid management platforms employ heuristic rules to reach reasonably good answers to set smart bids.

Good bid management platforms combine basic direct marketing economic calculations, statistics, deep knowledge of the nuances of paid search bid landscape, and human intuition.

A good bid management platform is a competitive advantage to a paid keyword search marketing firm, and so your potential vendor isn’t likely to provide you with the secret inner workings of their algorithm.

However, you should ask a potential vendor how they set bids, and they should be able to provide sufficient detail to convince you that their approach makes sense, and that they know what they’re talking about. (This situation resembles reading the ingredients label on packaged food: while the list of ingredients doesn’t give you enough information to go home and duplicate the product in your own kitchen, it is enough information for you to decide if the food is healthy and something you’d want to eat.)

Bid Management Platform

To dive more deeply into this topic, you might ask a potential vendor the following sorts of questions:

• “How does your bid management platform handle ads which haven’t yet gotten clicks?”
• “How does your bid management platform handle ads which have gotten a few clicks, but not any sales?”
• “How does your bid management platform handle periods of rapid change, such as moving into and out of our peak selling season?”

Again, a potential vendor will not likely provide you complete detail on how their technology these critical issues, but they should be able to respond to your questions with general answers that seem sensible and reasonable.

Reporting

Do you base reports on actual clicks and cost data as reported by the search engines?

When a web user clicks on a paid search keyword ad, they should quickly reach your website. At that instant, three different entities log the click and the visit: the search engine, your search management vendor, and your web site.

However, of these three entities, only one captures authoritative data: the search engine. Only the search engine knows the actual cost-per-click fee paid for that particularly click at that instant. (Your search management vendor should know your average cost-per-click at that instant, and your maximum cost-per-click at that instant, but doesn’t have the full information about the entire space that the search engine has.)

Further, the search engine typically does not bill you for all the clicks it sends to your site, as the engine removes its own visits and suspected fraudulent visits. Your vendor and your site have no mechanism to determine which inbound paid search clicks will be later removed by the engines.

Thus, if your vendor relies exclusively on their internal data to report on clicks and cost, they are not capturing the reality seen by the engines, upon which your actual search advertising fees are based. The only mechanism for getting authoritative click and cost data is to obtain it from the search engines themselves.

Reporting Methods: What To Look For

The significant advantage of basing reports and bids on the authoritative data from the engines is accuracy. You also benefit from the ability to reconcile search invoices from vendors with detailed reports from your search management vendor.

There are a handful of disadvantages: the data are always delayed somewhat, usually available from the engines by mid-morning for the day prior; the data are sometimes delayed a great deal, becoming available from the engines a full day or more late; and the data sometimes evolve over time, as the engines adjust their accounting using data from their partners and remove click fraud. (That is, if you ask the engines on Tuesday what happened on Monday, then ask again on Wednesday what happened on Monday, you can sometimes receive slightly different answers to the same question.)

It is important to ask a potential paid keyword search vendor how they obtain cost and click data, and how they reconcile those data with the actual bills from the engines.

Reconciling Sales Reports

Do you reconcile sales reported by your tracking tool with sales reported by the client’s tracking tool?

Your potential search vendor should be able to track clicks, costs, and sales due to their paid keyword search efforts on your behalf. You may have one or several other ways to track web sales and visits. At the beginning of a campaign, and periodically thereafter, it is wise to reconcile the different views on the same numbers via a sales audit and a click reconciliation audit.

Such sales audits are simple and very useful. At their most basic, you and your vendor both pull detailed order lists of all orders attributable to paid keyword search marketing campaigns over a specific time window. The key here is a detailed list, not an aggregate summary. Then the two lists are compared, looking to find discrepancies: “extra” orders, and/or “missing orders,” by date-time stamp and order number.

The two lists usually will not match exactly, but the differences should be acceptably small: under a 5% difference in total sales.

Reconciling Click Reports

A click reconciliation involves choosing a time window and comparing paid clicks as reported the search engine (usually aggregated by day at the ad level), clicks as reported by your paid search marketing vendor (which should be available as the most atomic level, no aggregation), and tagged clicks into your website (if you have opted to tag inbound paid search clicks in some way).

Click reconciliation audits are much noisier than sales reconciliation audits. The three sets of counts will likely not match, but the differences should be reasonably small: under a 15% difference is close enough.

Such audits ensure that both you and your paid keyword search vendor are counting the same things the same way. Such audits can be the only effective means to reveal important “holes” in tracking (which, once discovered, are often easy to remedy.)

Make sure a potential paid keyword search vendor has a formal process for regular audits, and is willing to run such audits with you periodically or at your request.

Batched Order Data

Can you handle batched order data (adding in phone orders, flagging fraudulent orders, etc.)?

One disadvantage of tracking tags is that, in reality, the “thank-you” page doesn’t mark the end of an order, but rather its beginning. For many retailers, a web order can experience both beneficial and detrimental changes once it leaves the website and enters the order processing system.

How do orders evolve after they leave your website? Orders get backordered. Orders get cancelled. Orders get marked as frauds. Sometimes customers call in to add or remove items from their order. The order may ship, yet be returned shortly thereafter. An order which, at time of order, your systems believed to have come from a new customer, could later be assigned to an existing customer, after your in-house match-back or out-sourced merge-purge process runs.

Order Processing

As the tracking tag occurs at the end of the web order but before order processing, the tag is oblivious to such later events. A web tracking tag can’t capture relevant data to report on “net-net sales” (revenue after frauds, cancels, and returns), “new buyer” counts, or “customer lifetime value” (all future revenue and cost streams related to a customer after the current order, discounted back to net present value).

To solve these problems, some tracking platforms allow batch loading of data. In this case, data are periodically sent into the tracking system via batch file uploads.

If your cancel rate, fraud rate, or return rate are very large or very variable, you may want to ask if your paid search marketing vendor can accept post-order data via batch files to make such adjustments, to improve the accuracy of their reports to you.

Paid-inclusion And Feed-based Search Marketing Services
(excluding Paid Placement)

If you are still with us, congratulations! We’ve made it through the first third of the survey!

You may notice that many of the questions are common to each of the three sections. We’ll avoid repeating any questions answered earlier.

This section covers paid-inclusion and feed-based search marketing services. If you’re just joining us now to read about evaluating search feed vendors, you may find benefit in looking over the earlier part of this essay.

Feed Generation And Submission

How often do you generate and submit feeds for clients?

Your feed search vendor should generate new feeds for the engines every time they receive new data from you.

Depending on how often your SKU-level data change, you should provide fresh data to your search feed vendor seasonally, monthly, weekly, or daily.

Most online retailers opt for daily refreshes, to capture daily changes in SKU price, availability, and product introductions.

Make sure a potential search feed vendor can update your feeds with sufficient frequency for your needs.

Feed Optimization

If you generate feeds, how, and how often, do you optimize feeds?

“Feed generation” consists of taking page-level or SKU-level information from one common source (the “input feed”), then performing various manipulations and formatting changes to yield a series of feeds for each search feed venue (“output feeds”).

Some advertisers believe feed generation is nothing beyond rearranging and formatting columns of data, and so assign this “lowly” task to their IT department with little guidance. But this belief isn’t correct.

Feed generation certainly involves formatting, as the output feeds must match the feed venues’ specifications, but feed generation is primarily a marketing activity. When constructing your feeds, you or your vendor must place the right data in each field to gain the maximum number of high conversion visits, while minimizing the number of low conversion visits.

Feed Optimization: An Example

So what does “placing the right data in each field” involve?

Feed search is closely related to natural search optimization. Like natural search, success with search feeds requires understanding how the feed venues use the data in each field, as well understanding which keywords consumers use when attempting to find your products.

Here is an example from a car audio electronics retailer about the importance feed construction.

In the car audio industry, a car stereo which sits in a car’s dashboard is called a “head unit.” This term is familiar to dealers and enthusiasts, but less commonly used by the general public.

When creating data feeds, this retailer first used the SKU product titles from their web publishing database to populate the product name field in their data-feeds. On their website, it wasn’t necessary to describe a “head unit” as a car stereo product – that was obvious from context. (Just as in a restaurant, it would be redundant to label every item on the menu as “edible food” – that is clear from context.)

Feed Optimization: Performance

While the product titles worked effectively on the retailer’s own website, they did not perform well in the feeds, because the product name did not make it clear that a “head unit” was indeed a stereo for your car. As a result, a large number of this retailer’s SKUs were not being found in “car stereo” searches.

By adding “car stereo” and other product category names to relevant listings, this retailer found a meaningful improvement in profitable sales from their feeds.

While is just one specific example, many retailers obtain improvements in search feed performance when they tune the data elements for each URL.

Feed Optimization: Category Placement

Another critical aspect of feed generation is making sure each SKU is placed in the correct category in the feed venue’s taxonomy. These categorization schemes vary by feed venue, and may also change annually. To maximize the effectiveness of your feeds, your search feed vendor needs to develop mappings from your product taxonomy to each of the search venue product taxonomies, and ensure these stay current over time. Many retailers and search feed vendors underestimate the importance of getting each product into the correct category on each feed venue’s site.

Make sure a potential search feed vendor applies marketing savvy to their feed generation process. Ask a potential vendor to describe in detail what SKU-level data they will need from you, what ancillary data they will need from you, and how they use those data to produce effective feeds customized for each engine. While a vendor should not be expected to provide you with every detail of their proprietary approach (as discussed earlier, when asking a vendor about the details of their bidding algorithm), a potential vendor should be able to provide a satisfactory and cogent explanation of their methods.

Feed Construction

Do you generate feeds in-house, or do you outsource feed construction? To which engines do you submit directly?

Feed generation is a specialized technical process.

Feed Optimization: In-house vs. Out-sourcing

Certain feed venues, such as Yahoo / Overture SiteMatch Exchange, only accept feeds directly from a small number of certified firms. (These certification processes are often rigorous.)

As a result, some search vendors outsource feed generation and/or feed submission to other vendors with this specific expertise.

Ask a potential search feed vendor if they generate feeds themselves in-house, or work with another outside firm. Ask a potential search feed vendor if they submits feeds to the engines directly, or if they work with another outside firm.

Natural Search Marketing Services

If you are still with us, congratulations! We’ve made it through the first two thirds of this survey!

As mentioned earlier, many of the questions are common across the three sections of survey. If we’ve discussed a topic earlier, we’ll avoid repeating that discussion again here.

This section covers natural search optimization. If you’re just joining us here to read about evaluating natural search vendors, you may find benefit in looking over the earlier parts of this essay.

Natural Search Marketing Services: Business Models

Describe the objectives of a typical organic search marketing project for your firm.
Describe the scope of a typical organic search marketing project for your firm.
Describe the duration of a typical organic search marketing project for your firm.

There are many valid business models for natural search optimization (NSO) services.

Some NSO vendors provide short-term advice on a project basis. Others work for clients on a retainer basis, providing services each month. Some vendors specialize in training the client’s staff on NSO techniques, so the client can handle the effort ongoing with in-house resources. Other vendors serve clients who lack the expertise or resources to handle NSO internally. Some vendors specialize in building new search-engine-friendly site for clients; most focus on retrofitting existing sites.

While there’s no “best” approach, be sure to select a vendor that is aligned with your firm’s expectations and needs.

In particular, it is important to discuss with a potential vendor the specific outcomes you seek to obtain, the timetable for obtaining them. Vague goals can lead to misunderstanding and disappointment for both sides. “We want our site to score higher on the search engines” is a too vague goal.

Natural Search Marketing Services: For Discussion

Here are some examples of possible specific outcomes to discuss with potential NSO vendors.

• “Our homepage has a Google PageRank of 5. Within four months, we wish to reach a PageRank of 6.”
• “Currently, only 10% of our site’s 500 pages are indexed by the search engines. Within two months, we would like to have at least 85% of the pages on our site indexed.”
• “According to our server logs, we receive approximately 20,000 visits each month from visitors finding us from the search engines. Over the next six months, we would like to increase this rate to 50,000 per month.”
• “Our web analytics package indicates our site sells approximately $100,000 each month to visitors coming into our site from search engines. On a year-over-year basis, we would like to increase these monthly sales by 25% over the next four months.”
• “Currently, only 35 sites link to ours. Over the next six month, we seek help reaching 100 inbound links from reputable relevant sites.”
• “Our current site offers a single article providing tips on how to use our top-selling product most effectively. By the end of this quarter, we’d like to hire a firm write and lay-out similar articles for each of our three main product lines, optimized for the search engines, and supporting our brand position in the marketplace.”

Natural Search Marketing Services: Achieving Goals

Is your potential NSO vendor comfortable with signing up for achieving specific goals over a specific time period? Even if the vendor can not provide contractual guarantees of certain results (indeed, search industry ethics guidelines state it is inappropriate for a NSO vendor to guarantee a prospective client a specific ranking on a given term), clear and explicit goals are essential to a successful natural search optimization project.

Natural Search Marketing Services: Page Hosting

Do you host pages for clients?
Do you build new pages for clients that are placed the client’s site?

Some NSO vendors provide hosting services for websites, just as some web site hosting firms provide search optimization services. There is no conflict of interest in such arrangements, and they often make good sense.

Some vendors, however, will propose hosting new pages on their servers on your behalf with the intent of bringing traffic to your site. Avoid such vendors. If your site needs new additional pages to help site visitors and to attract search engine traffic, such pages should reside on your servers, within your domain. Allowing an outside firm to control key pages or domains essential to your web success exposes you to the risk of being held hostage should your relationship with that firm turn sour.

Natural Search Marketing Services: Page Review

If your NSO vendor does create new pages on your site to increase search engine traffic, make sure you review such pages. Check that the new pages add value to human visitors. Check that the visible elements of the new pages conform to your site brand. And check the HTML source of the new pages does not contain HTML tricks designed to deceive or trick the search engine spiders.

Do you revise existing client pages?

Your company may employ a formal content management workflow governing how new web content is proposed, written, edited, approved, staged, and rolled out to the public. Or your site may have little or no formal process for managing content creation and revision

Natural Search Marketing Services: Modifying Your Site

Your NSO vendor will likely propose many changes to your current site. Some of the suggested changes can be accomplished by changing your global page templates. Other suggestions could require page-by-page editing, either manually or via automated scripts. Make sure a potential NSO vendor can work within your content management workflow. Will the vendor need access to your content management system? To your development servers? To your production servers? Will the vendor edit pages themselves, or will they instruct your web team on the necessary changes?

Natural Search Marketing Services: Adding Content

Do you write content for clients? If so, discuss.

The three key ingredients to natural search optimization success are content, inbound links, and correct mark-up.

Search engines scour the web for well-written authoritative content so they can provide relevant answers to their users’ queries. If you want human visitors and search engine spiders to find your site interesting, you need to provide them with solid, informative, text-based content. While interesting design and images make your pages more appealing to humans, search engines focus on the words on your site, not on how your site looks.

Natural Search Marketing Services: Spider Vision

If you’ve never done so, it is highly instructive to view your site as a search engine spider sees it, stripped of HTML markup and images. There are simple web tools that will do this for you. A web search on the phrase “search engine simulator” will return many sites providing this free service. Many leading brands have been shocked to discover that their beautiful well-designed corporate homepage is, from the perspective of the search engine spiders, nearly blank.

Natural Search Marketing Services: Add Relevant Content

There are many different types of content that may prove valuable additions to your site. Ideas for relevant content include:

• More detailed, longer, and richer product descriptions
• Product information and specs
• Informative articles on the use and enjoyment of your products, services, or information
• News, commentary, and analysis
• “How to” articles, both beginner and expert
• Newsletters, both current and past archives
• PR releases
• Product owner’s manuals
• Testimonials
• User-contributed content: reviews, discussion forums, ratings
• Relevant public information from government sources
• Relevant out-of-print, out-of-copyright-protection books or magazine articles
• Public domain, “copy-left”, or “open source” content

You seek text content that is relevant to your visitors, useful, informative, and reflects favorably on your brand.

If your content is good, if your content is marked up reasonably well with search-engine friendly HTML, and if the search engine spiders can find it, you will be rewarded for your efforts with significant increases in natural search traffic into your site.

Natural Search Marketing Services: Writing Content

Good content takes effort. Will your firm require new content to be written, or can you publish your existing off-line content on your site? If new content, will your firm do the writing internally, hire an expert to write on your behalf, purchase online publishing rights to existing content, or use free public domain content? New or existing, how will this content marked up for the web? How will it be organized?

Make sure a potential NSO vendor reviews your current web content and proposes strategies to enhance it. Make sure these proposals are consistent with your brand and your budget. Make sure you and a potential vendor clearly understand which party will handle which aspects of implementing their proposals.

Natural Search Marketing Services: Inbound Lnks

Do you obtain inbound links for clients? If so, discuss.

Search engines follow links to find more sites and more pages. The engines also use links to establish the authority of a site.

Google’s original PageRank algorithm takes this approach: a site is important if important sites link to it. (And what makes those other sites important? Why, the fact that other important sites link to them!)

This definition of “importance” is cleverly recursive and relatively robust. Because a site does not have direct control of links from other websites pointing to it, such inbound links comprise a more-or-less unbiased “vote of confidence” for the destination site.

Natural Search Marketing Services: Who Is Linking To You?

You can ask the various search engines how many links they have found which point to your site. On Yahoo, for example, you can run this query by prefixing the domain with a “link:” prefix. (Note: do not place spaces before or after the colon.)

For example, typing

link:http://www.amazon.com

into Yahoo reveals that, at the time of this writing, over 1.2 million sites link to Amazon. Replace “amazon.com” with your domain to get a rough sense of scale on how many other sites link to your site. Natural Search Marketing Services: Gain Links To Gain Rank

To gain higher rank in the search engines, inbound links to your site are essential. There are many sources for gaining inbound links. Some of following entities and web site owners may agree to link to your site:

• Vendors
• Customers
• Partners
• Clients
• Trade Associations
• Web Directories
• Press Coverage
• Paid Advertising
• Blogs
• Forums
• Link Swaps

Natural Search Marketing Services: How To Gain Inbound Links The Right Way

As with content, gaining solid inbound links takes effort. Less-than-ethical NSO firms use trickery to gain links for your site: link farms, bogus directories, forum spam. Avoid such tricks and vendors who promote them.

A potential NSO vendor should review your inbound links and propose strategies to grow that list. Make sure their proposal is consistent with your brand and your budget, and make sure you understand who will handle which aspects of implementing their proposals.

Natural Search Marketing Services: Submission Services

Do you offer submission services for clients?

Search engines provide mechanisms for site owners to submit their sites for potential crawling. This is useful for new sites, before other sites have linked to them, and for getting your site into the smaller engines, who might not find it otherwise. In general, however, search engines find sites and visit sites because other sites link to them. Frequent resubmission of your site to the engines provides little benefit. Beware a vendor that places undue importance on frequent site submission.

Natural Search Marketing Services: Tracking Your Site

Can you track incremental visits, sales and conversions resulting from organic optimization efforts?
Do you provide ongoing tracking and reporting for clients?
What changes must clients make to their site to support your tracking?

The ultimate goal of natural search optimization is increasing web site sales or conversions.

Ask a potential NSO vendor how they track the incremental benefits gained from their efforts. Ask a potential vendor to provide actual reports or case-studies from previous clients (with all client-identifiable information redacted, of course) showing the “before” and “after” results following a typical engagement. Make sure the potential vendor can explain, in general terms at least, how they achieved these results, and that the case-study seems credible.

Natural Search Marketing Services: Changes Take Time

How many months does it take for your typical client to see sales or conversion increases?

Unlike paid keyword search and paid inclusion, natural search optimization is a slow process.

First, making proposed changes takes time. It can often take a company weeks or months to implement changes to their site, with large corporations typically needing even more time. Adding content and gaining additional inbound links are also slow processes.

Second, once those changes are in place, it takes time for the engines to notice the changes, and additional time for the changes to affect search rankings.

It is reasonable to expect to see some improvement in traffic and sales within three months of when changes are made.

Natural Search Marketing Services: Ongoing Improvements

Be sure to adjust your timetable for the time it may take our organization to make necessary changes to your website. If it took your company six months to implement NSO changes, that three month clock should begin ticking at month six, with initial results expected at month nine.

Many natural search optimization campaigns involve ongoing rounds of site improvements. There can be several months lag between each round of improvements and the resulting benefits observed in visits and orders. Before starting to work with a NSO vendor, establish a clear “deliverables time-line” of what work will be performed when, matched with an “outcomes time-line” indicating when those deliverables should yield results, and what those results will be.

Conclusion

There is no single “right answer” to picking a search engine marketing vendor for all firms.

After careful evaluation, some firms will opt to handle the whole process in-house. Other firms will hire vendors or consultants to assist with certain parts. And other firms will decide to outsource the entire process. Firms will also reach different conclusions regarding whether to hire a single vendor to handle all aspects of search, versus dividing different portions of the business between multiple vendors.

The “right” answer to the search marketing vendor selection question depends on your needs, your preferences, your site, and your budget. Do seek a search marketing vendor which matches your company’s style. Do seek a vendor who offers strong client references. Do seek a vendor who will provide services with a high degree of transparency. Do seek a vendor who offers a client-friendly contract.

We hope you’ve found this survey and essay helpful. Again, you can find survey results from leading search marketing vendors at the MarketingProfs site.

May you and your firm enjoy great success with all your online efforts!

Survey for Evaluating Potential Search Vendors