Cut Marketing Expense With Search Engine Optimization

Small businesses can stretch marketing dollars with online search.

For more than a decade, Patty Englebaugh knocked on doors of corporations to sell ergonomic computer accessories. These days, she’s using a lot less shoe leather, yet going a lot further--by focusing on search engine marketing.

The key is search-engine optimization—techniques (beyond simply paying for listings) to increase the odds that when users type “ergonomic furniture” or “monitor arm” into Google or Yahoo, they’ll see Ergostoreonline.com. Traffic on the site, which opened in 2001, has quadrupled since it was optimized in 2003, she says, and three-quarters of the company’s sales now come online. “The world becomes your customer,” says Englebaugh, president of the Charlotte, N.C.-based business.

Englebaugh’s experience isn’t uncommon, experts say. Search engine marketing is changing the way many small companies do business, attracting customers who were previously out of reach and opening doors to new markets—all for less than the cost of traditional marketing.

Advertisers spent $5.75 billion on search-engine marketing in 2005, up 44 percent from the previous year, according to the Search Engine Marketing Professional Organization. Search marketing is largely divided into optimization, where web pages are purposely designed to boost their showing in searches, and pay-per-click, where companies pay for traffic sent to their sites by bidding on keywords and phases.

More than 80 percent of the spending in 2005 went for paid placement, including pay per click. Yahoo’s paid inclusion program accounted for another 4 percent. Optimization accounted for 11 percent, mostly for site design and construction.

The Phrase That Pays
Optimization is gaining in part because paid search can be costly and inefficient. Businesses often bid on keywords that are too broad or generic and wind up paying for visitors who click but don’t convert (come to your site to do business) because they were looking for something different, says Duncan White, director of client services at OneUpWeb in Lake Leeanau, Mich. “Don’t pay Google $6 a click for `bed and breakfast,’” he says. To get better results and pay less, bid on a more specific term, like “San Francisco bed and breakfast.”

Another tip: avoid jargon, says Fredrick Marckini, chief executive of iProspect in Watertown, Mass. A university client thought “prior learning” would be an important keyword, but it lured just 55 people per month. But “college credit for life experience.” drew 362 searches on Yahoo in January.

Marckini recommends checking Overture’s search inventory tool at http://inventory.overture.com/d/searchinventory/suggestion/ , which tells how many people searched on Yahoo for a given keyword.

Keywords are the foundation of both search engine optimization and pay-per-click. An optimized site is chock full of keyword-sprinkled content. Graphics may be appealing to you and your Web designer, but search engines use “spider” programs prefer words. They scour the Web, looking for keywords and page title tags, which each page of the site should have to make it easily identifiable to the spiders.

To make sure your optimized site is working well, scour your log files to determine which keywords and phrases brought visitors. You can use log file analyzer software to help sift through the files and create a master list of keyword phrases.

Mixed Media
Despite the cost-effectiveness of optimization, there’s a reason why pay-per-click continues to dominate. “It’s so highly trackable,” says Richard Turcott, chief marketing officer at Constant Contact, a 140-employee e-mail marketing company in Waltham, Mass. “You can zero in on your return on investment very easily.” To get the most out of pay-per-click, you cant’s get too attached to a keyword. Trucott analyzes results daily basis and pulls keywords that aren’t performing to his standards. Also, it helps to mix search-engine marketing with other marketing efforts, Turcott says. Constant Contact sees “very good lifts” in Web site traffic every time its radio and print ads run, he says.

The company also uses “geotargeted” search, paying Google to show its listing only to customers from certain zip codes. This is substantially cheaper than national buying. Constant Contact twins geotargeted search buys and radio campaigns in markets with rapid new-business growth. It now has more than 50,000 customers, double the base in 2004. “All these channels are working in concert with each other to generate more electricity and maximize the value of the dollars we spend,” Turcott says.

Design Toscano, a $30 million multi-channel merchant of decorative accessories, is printing fewer catalogs and putting more money into Web marketing, says Michael Stopka, president and co-owner. He has boosted pay-per-click spending to nearly $400,000 a year, because the web draws more first-time customers and does so at a lower acquisition cost. In 2005, 15,000 customers found the company through search engines and rang up $1.8 million in sales, Stopka says.

How much does it cost?
While businesses that rely on pay-per-click can easily run up tabs of $500,000 a year, many smaller firms do as well with a much smaller budget by emphasizing optimization and choosing keyword buys more carefully, suggested Grant Crowell, co-founder of Grantastic Designs, an Elgin, Ill.-based Web site design and search marketing firm.

A budget of $5,000 to $10,000 can cover SEO and PPC for very small companies (under $1 million in revenue), he says. On that budget, using very specific key words, you can score in the top 10, says Crowell. If you have only $1,000 to $2,000 to spend, stretch your budget by doing your own homework, researching keyword traffic and adding metatags to better identify the content within the site.

Another way to stretch the budget is by using more targeted search engines than Google and Yahoo. Looksmart.com, now has 181 categories, including health, home living, money, and sports. Designed to draw in users with specific interests, Looksmart’s search engines provide advertisers with a more targeted audience—like trade or enthusiast magazines do. “It’s all about serving passionate audiences,” says CEO David Hills.

Similarly, many business-to-business online directories provide additional opportunities to get your listing noticed by the right people. Many tried-and-true industry directories are now available online as vertical search engines, such as Thomas Register’s Thomas.net. Business.com offeres a variety of vertical areas. And there are many insutry-specific sites, such as Lawyers.com . To get vertical and local, try online yellow pages, Crowell says.