Monday, May 02, 2005

Ad Agents for the Search Engines: Organic Search Engine Optimization : website trouble shooting, websit

By BOB TEDESCHI

Published: May 2, 2005



CONSIDER this somewhat strange development: search engines like Google and
Yahoo have become so proficient at attracting advertising that even
competitors, like newspapers and yellow pages publishers, are now selling
ads on their behalf.

Newspapers like The Houston Chronicle, which is owned by the Hearst
Corporation, and yellow pages publishers like the BellSouth Corporation and
SBC Communications have recently turned themselves into de facto agents for
the search engines in the small-business market, where the Internet
companies have had limited success.

Businesses like yellow pages publishers, which exist solely to serve the
local advertiser that Google and Yahoo covet, may appear to be cutting their
own throats by passing those customers onto the search engines. But the
publishers argue that they are taking advantage of the chance to make
additional money, while also studying the search engines closely enough to
determine a long-term strategy to compete with them.

Stephen Weis, a vice president and general manager at Chron.com, the
Chronicle's Web site, said that selling ads on the big search engines would
give his company a "pretty decent opportunity" to understand what its
competition was doing. "Google and Yahoo are definitely a threat, just like
TV and radio, but we can also learn from them and get better."

Last month, the Chronicle's Web site began helping clients put text ads on
Google, Yahoo and other search engines whenever an Internet user searched
for words related to the clients' businesses (keywords, in industry
parlance). Mr. Weis said that over the past year, he saw yellow pages
publishers like BellSouth offer similar services, "and I said 'Wait a
minute. We're missing an opportunity here.' "

That opportunity is similar to one spawned by eBay, which created a cottage
industry of independent businesses that help buyers and sellers manage the
online auction process. Likewise, Google and Yahoo are now served by a
phalanx of search engine marketing firms that help businesses decide which
keywords to link their advertisements with, and how much to bid for the
right to have their ads appear most prominently.

Local advertising is among the most important business opportunities left to
be exploited online, analysts said. Roughly six million small businesses
spend about $30 billion on offline ads each year, according to the Kelsey
Group, a consulting firm that specializes in local advertising. They are
only now turning to Internet marketing - partly because many consumers are
just now beginning to look for such information online.

According to the Internet research firm comScore Media Metrix, the number of
times users conducted Web searches for local information more than doubled
from January 2004 to February 2005, the latest month for which data are
available. (More than 421 million local Web searches were conducted in
February.) Internet yellow pages sites have also experienced increased
demand, to 188 million searches in February 2005, from 87 million searches
in January 2004, according to comScore.

Mr. Weis said that Chron.com's search engine efforts were partly a defensive
measure against other local marketing companies and partly a way to help
seed its own online advertising programs. For instance, he said the Web site
recently introduced a service where advertisers can bid for the right to
have text ads appear near stories related to their products or services.

"As we as a newspaper industry continue to get up to speed on how to play in
this space better than we have in the past, I want to have a relationship
with my advertisers," Mr. Weis said. "So when the next great thing comes
around that we want to offer, I'm not just introducing myself. They'll say,
'You know what, why not? You've helped me in the past.' "

So far, Mr. Weis said the sales effort had yielded positive results.

"A lot of clients are surprised we're offering this service - not in a
shocked way. They're saying 'Wow, this is cool.' "

The Chronicle splits the revenue it receives from search engine advertising
customers with TrafficLeader, a division of Marchex, a publicly held online
marketing company based in Seattle. TrafficLeader's technology analyzes the
Web sites of local advertisers, chooses which keyword advertisements to buy
on various search engines and manages the campaign until the advertiser has
received an agreed-upon number of clicks.

Last week, TrafficLeader announced that it had begun working with SBC to
sell search engine advertisements to clients of YellowPages.com, which SBC
operates in conjunction with BellSouth.

That initiative was prompted in part by BellSouth's already successful
search engine advertisement program, which the company introduced with
TrafficLeader a year ago. Ed Patterson, a BellSouth spokesman, declined to
say how many customers or how much money it had generated from the new
program, but he said it had shown "huge growth" in the last six months,
since BellSouth entered a formal partnership with Google.

Under that agreement, Google helped train BellSouth salespeople on how to
pitch Google's advertising services, among other things, and allowed
BellSouth to use Google's brand during the sales process. To date, it is the
only such agreement Google has announced with resellers of its advertising
services.

Other yellow pages publishers are piggybacking on the popularity of search
engines in other ways. Superpages.com, which is owned by Verizon
Communications, for instance, buys ads on Google and other sites on behalf
of groups of advertisers, like shoe stores in a particular city. A user who
clicks on the Google ad that Verizon has purchased is taken to a
Superpages.com page with several stores listed. When a customer clicks on a
particular store's site, Superpages.com collects a fee from the merchant.

Jim Larrison, an analyst with comScore, said the local online market was
ripe for both search engines and yellow pages advertisers. As more Internet
users subscribe to high-speed connections and leave them on continuously, he
said, more users are relying on the Web to get information about local
businesses. Yellow pages publishers have also stepped up efforts to attract
their print customers to online destinations, while Google and Yahoo have
also started local search services.

One nagging question, though, is whether small businesses will eventually
wean themselves from the yellow pages and newspaper publishers and work
directly with the search engines.

Greg Sterling, an analyst with the Kelsey Group, said such a change "could
happen in five or seven years. But with the current generation of
advertisers, the idea of self-service is a challenge."

Meanwhile, the search engines are understandably pleased with the help they
are getting.

"If an advertiser prefers to have a relationship with them, that's fine,"
said Gaude Paez, a Yahoo spokeswoman. "We don't really see them as
competitors."

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