42 Degrees - Business from a different angle

Steve Leach, of bigmouthmedia, unravels the world of pay per click and search engine optimisation for companies wanting to drum up business on the internet

As Yahoo! says, instead of looking for customers, what if they found you? Making sure your business has a strong presence when people search for the products you sell on Google, Yahoo! or MSN is becoming ever more vital.

If you harbour any doubts about that let me share a few vital statistics with you. Half the world's population now has access to the Web. Nearly 90 per cent of them find websites through search engines. Search engines drive more than half of online purchases.

So how do you give yourself a head start? Well, there are two types of search marketing. The first is 'pay per click' (PPC), which is used if you want to appear in the sponsored links at the top or side of the search engine results page. This is good if you have a transactional site and want to get sales immediately.

The other method has become known as 'search engine optimisation' (SEO). This is where you make sure your website appears high up the 'natural rankings' (ie its position is not paid for) that are shown on a search engine page when a certain term is typed in.

Imagine you fit carpets in Edinburgh and want people to visit your website to get contact details. You need to ensure that when someone types in the terms 'carpet fitter Edinburgh' your website appears near the top of the page. That's where SEO comes in.

This 'natural search', is where agencies really apply their knowledge and technical skills. Google uses artificial intelligence to rank websites and this takes into consideration different "algorithms" – the instructions used to rank websites. It is really important to have a clear, accessible, navigable website, because if a user can't understand it, then neither can Google.

So the search engine ranks sites by looking at things such as how search friendly it is, whether it has original content (copying from others can get you demoted) and what other sites say about it. Google can tell the difference between positive and negative public relations so if there is a blog about you from a disgruntled customer you may find your site slipping down the ranks. Google has 75 per cent share of searches in the UK, though there are many other search engines such as Yahoo!, MSN and AltaVista that use their own methods of ranking sites.

With PPC, you pay the search engine to show an ad for your business on the sponsored links. This works through an auction where you bid an amount of money you are prepared to pay every time someone clicks on your ad. The higher your bid for the terms 'carpet fitter Edinburgh' compared to others, the higher up the rank your ad will appear in the sponsored links when someone types those words into the search engine. You pay the search engine the amount you have bid each time someone actually clicks on your ad.

A good agency should be able to estimate how many clicks you need from sponsored links before you are likely to get a sale by looking at previous online behaviour. This means they can work out your return on investment, although that ultimately depends on the profitability of your product. If you bid £1 per click and ten clicks are likely to get a sale worth £100 giving you £20 profit, then for every pound you invest you get £2 back.

When it comes to 'natural search', good web marketing agencies usually offer a stripped-down basic service option for smaller businesses.

Running PPC campaigns really well is time-heavy, so expect to pay thousands of pounds a month. For most agencies, the lowest spend they would consider for a PPC campaign would be about £5000 a month. On the other hand, if you are prepared to develop the knowledge about search marketing yourself and lots of small business people do, you can go directly to the search engine and run the campaign yourself using systems such as Google AdWords or MSN adCenter. That said, we are experts and we can help maximise the return you get. That is what clients pay us for.

Interestingly, small businesses tend to be the most proactive in search marketing and it is the bigger companies that are in the dark ages.

It's important to remember that it is more cost effective to bid for specific terms. If you are selling second hand cars and want to be top of the sponsored links for sports cars, it will cost a lot to bid on the term 'sports car'. Remember, people who are generically looking for 'sports cars' aren't necessarily buying them, they may just be looking for advice on repairs. A good rule of thumb is to keep the term specific to a model number or particular product, so, for instance, bid on the term 'Olympus SP560', not for a term such as 'Olympus' or 'camera'.

By contrast, using SEO you need to be as generic as possible. You do need to be found with terms like 'Olympus' or 'camera' to move you up the rankings

If you are going down the PPC route, you will spend money every month. It may be expensive in the short to mid term but it is good if you want a return immediately. SEO is a better mid- to long-term tool.

If you combine PPC with SEO, three or four months into a campaign, you want to start phasing out your paid search because natural search is kicking in and, within six months, you should only need to spend a quarter of your original spend on paid search. Remember that paid search is getting progressively more expensive because the market is becoming more saturated all the time.

Part of the appeal of search as a marketing tool is its absolute transparency. This is the first time in history that there has been a direct and obvious relationship between what you spend on marketing and what you receive back, since search marketing is tracked in the minutest detail online.

Any reasonable search marketing agency should be able to carry out a campaign on behalf of a client that shows every minute of every day exactly what is being spent, the traffic to the site and its usability. Most importantly it should be able to demonstrate the end result – how much money the campaign is making.