Web Search & Marketing Newsletter - September 2005

Now that the summer fades away, many companies will be focusing on the important next few months of business as the last quarter of 2005 approaches. In this issue we have therefore considered the role of search engine traffic in generating business and some of the issues that should be considered when measuring the effectiveness of any online marketing campaign.

After our coverage of the new Google Earth product last month, we consider the competition this time, with MSN's Virtual Earth, plus we start a new regular feature called 'Whatever happened to…'. To begin with, we look at the LookSmart directory.

We've also tried really hard not to mention Google too often this month after the 'Google-Fest' of last month's issue. However, as you can tell, it didn't last long as we had to mention the new Google Talk product that was launched 2 weeks ago. This has received extensive coverage in the press - some would say excessive - but it's another significant move to broaden Google's reach of the online market.

As we mention below, you can currently only try this new Google product if you have a Gmail account, and these can only be obtained from existing users, so do let us know if you'd like to receive an invite from us to set one up.

To find out more, please read on below. You can also browse through previous editions and if you would like to subscribe to the newsletter, just submit your details using the form at the side of the page.

On to this month's news...

The role of search engines in consumer buying behaviour

Online marketing can be a highly accountable form of advertising if you use a good web stats package and, with the use of some more advanced technology, it can also become a powerful form of direct marketing. Like any marketing spend, however, you ideally need to track the responses to each activity to measure the cost-effectiveness and, specifically, to compare the return on investment (ROI).

The pay-per-click element of search engine marketing can provide some excellent tracking data, particularly through the main tools on Google AdWords and Overture, where tracking code can be used to measure the leads generated or sales converted from each individual search term.

This accountability is something that can't be replicated so well through natural search engine rankings, although if both are run alongside each other, certain assumptions can be made or different tests undertaken. Ultimately, the natural listings should generate a better return on investment over a longer period and, whenever this can be measured, it can undoubtedly help to support and refine the ongoing search marketing strategy.

But should these listings - whether sponsored or natural - be measured by clicks alone? Research on 2004 by the IAB in the US reported an element of brand recognition within sponsored listings, even if web users didn't click through to the site itself. This impact is unlikely to be as great as more visual banner advertising, but it is still a factor to be considered.

There is also a general consensus that search activity online can lead to offline sales or even latent sales conversions that may not immediately be picked up within any response tracking. Research published by comScore at the end of 2004 reported on the results of a survey made with Internet users looking to buy electronics and computer products on a major search engine.

Using a combination of online behavioural observation and consumer survey data, the study found that a quarter of all searchers eventually bought a product and that 92% of these occurred offline, so that for this type of market there was clearly a large element of price comparison searching being undertaken.

Of the 8% who did buy online, none of these occurred immediately after clickthrough, but 15% did happen during the same user session. However, the remaining 85% of conversions occurred in a latent or non-search session, such as when users may have returned to a site at a later date through another route, or perhaps bookmarked the domain for future use after having conducted further product or price research. In total, 40% of all the purchases took place between 5 and 12 weeks after the initial search took place.

This survey makes interesting reading but clearly the results are determined by the type and cost of products being purchased. Low-cost items like books, CDs or even flowers are likely to show a different pattern of sales conversions over time, although in these cases, more regular sales from returning loyal customers will also be important in calculating the cost-effectiveness of the initial activity that obtained the customer in the first place.

Whenever possible, we like to work closely with each of our clients to identify the best ways of measuring the ROI of their search marketing or other online marketing activity. This information can help to refine the campaigns to achieve better results or even to raise issues about how well the website is converting visits to customers. If you'd like to know more, please contact us for details.

MSN develops Virtual Earth

Following our feature on the new Google Earth product last month, we felt it only fair to review MSN's new Virtual Earth product in this issue, as it has recently been released in a beta version. By enhancing its established local search tool, MSN is clearly playing catch-up with Google's impressive new application.

The basic search functions of MSN Virtual Earth include the usual options to help searches find the type and location of a local business or service and the results generated are now overlaid onto maps and aerial views. However, the aerial images are mostly black and white, falling short of the impressive quality of Google's offering, plus detailed coverage is currently just for the US.

The advantage of MSN's product is that it is a web-based application so that you don't need to download and install a piece of software, which therefore makes it easier to access and use from Internet cafes or other computers that don't have this program installed. Another good feature of this tool is that the aerial photographs are overlaid with labels for street names or landmarks, and directional arrows for one-way streets are also included to help any route planning with this tool.

A novelty feature on this product is a 'locate me' option that attempts to pinpoint the geographic location of a user's computer through IP address tracking. A more accurate utility that tries to do the same thing can be downloaded as an additional application.

MSN is making clear that this new product is still under development and at the moment it does struggle to compete on the same level as Google Earth. Better images and enhanced functionality are promised for later releases and, as Google and MSN start to square up to each other across different product applications, it will be interesting to see who can ultimately create the most effective and popular products.

If you'd like to know more about getting the best from these local search tools, please contact us for more information.

Whatever happened to LookSmart?

This is the first of an occasional feature in which we look at some of the search tools that used to be major players in the market but have now largely disappeared from view. To begin with, we consider LookSmart this month, which used to be a significant directory and search site alongside Yahoo and the Open Directory.

First established in October 1996, LookSmart became a significant web directory where human editors would review and list sites. As the Internet boom arrived after 1998, the site became an important source of search traffic for sites that were listed - either through its own domain or through its listings partnerships with other search engines, including AltaVista and MSN, so that eventually free listings were charged for and the backlog of submissions grew.

There was a UK office and website established as the global coverage of this directory was expanded and additional revenue also began to be gained from the growth in pay-per-click advertising as Overture listings were included within the results. However, this all came to a sudden end at the end of 2003 when MSN, its main distribution partner, withdrew the arrangement and an estimated 70-80% of the company's revenue was lost.

Since then LookSmart has faded into obscurity. The UK site no longer exists and the original US site has become a shadow of its former self with only a tiny percentage of the search market, which was not helped by a confusing series of changes to its pricing policies. It still earns some revenue from its own pay-per-click activity, although the company recently reported a large loss which included the costs of trying to combat click fraud on the site.

LookSmart still retains its directory listings and also displays search engine results from WiseNut, which it bought in 2002 when this new search engine index was being hailed as the new Google. This tool has now dropped behind in terms of current technology and the financial forecasts for the LookSmart business are poor.

If you'd like to know more about LookSmart, or if there is a search tool that you used to use in the past and wonder whatever happened to it, please let us know

A final word about Google Talk

Another new tool has just been launched by Google. This time it's Google Talk, which marks their entry into the VoIP market, allowing users to make free phone calls over the Internet.

Google Talk is a small piece of software that can be downloaded for free onto a PC or laptop that uses broadband connectivity. Once installed - and with the use of a microphone and speakers - users can make free calls over the Internet to other computers that also have the software installed. Nothing new in this all you might say, as a number of suppliers have been offering this for some time, most notably Skype.

However, the fact that Google has now entered this market is significant although their strategy is unclear, other than extending their dominance across the global Internet community. VoIP is expected to grow significantly over the coming years and the quality of Internet phone calls will be vital to make this work. The general consensus is that Google's call quality is very good compared to most competitors, although the functionality of the tool currently lags well behind the more established players.

The main issue regarding Google Talk at the moment is that it is only available to users of Google's Gmail service and getting an account for this can only be achieved by receiving an invite from existing users. However, if you wish to try Google Talk and possibly communicate with us in this manner in the future, we have a limited number of Gmail invitations that we can send out through accounts that we hold, so if you'd like to set up your own Gmail account, please let us know and we will send you an invitation.