Over the last few years, researchers at Forrester, Jupiter, MarketingSherpa and Outsell found that market conditions were ripe for a new class of specialized or vertical search engines (VSEs). Three years later, VSEs are de rigueur.
Vertical search engines became necessary in short order because of the dissatisfaction with general search. Outsell's study, "Vertical Search Delivers What Big Search Engines Miss," reports that the average search failure rate on general search engines is 31.9 percent. This opens the field to vertical search, which is projected to earn advertising revenues of $1 billion by 2009.
General search challenge
Multiple researchers confirmed that typical business search users find it difficult and time-consuming to access relevant results in general search engines (Forrester, Jupiter, MarketingSherpa, Outsell, Convera). While Google search is powerful, many business and professional internet users find that it often fails to provide fast, relevant results.
The shortcomings of general search have resulted in lower productivity, failure to find critical content and unmet informational needs. In the meantime, the weaknesses of general search engines created a gap that is being filled by vertical search engines.
Vertical search advantage
Vertical search engines have an advantage over general search providers because they can excel in their industry or topical niche by serving highly relevant results.
GlobalSpec is a classic example of a fine-tuned vertical organized to serve the engineering, manufacturing and related scientific and technical market segments. TopTenWholesale.com is a trade vertical organized to give users access to general merchandising wholesale and retail information. Other verticals like Technorati for bloggers and Podzinger for podcasters are indispensable among today's savvy internet users.
Users are driven to verticals because they know they can find highly specialized information quickly. Advertisers are driven to verticals because the inventory is less crowded and they can negotiate better rates, possibly get better conversions and receive a better return-on-investment (ROI) for their marketing campaigns.
A team of highly specialized professionals typically runs vertical search engines. These people are experts on the topics within their niche. General search engines do not focus on niche markets or the type of marketing tactics and interactivity needed for these unique business segments. Verticals offer pay-per-click advertising, banner ads and promotional marketing services. Because they are smaller players, they must get their competitive edge through fast customer service, efficient software solutions and administrative features that meet specific industry demand.
Small business vehicle
Vertical search engines provide a new, cost-effective way for smaller businesses to compete in pay-per-click (PPC) advertising. General search engines like Google and Yahoo! have mainstream advertisers like Amazon, Overstock and Target. These large retailers spend millions of dollars each week on search advertising, buying every possible term related to their strategic keywords. That prevents smaller businesses from competing for these key terms.
For instance, if you conduct a search on Google for the term "wholesale toys," you'll see that companies like AOL and the Discovery Channel have purchased this term despite the fact that they are not wholesalers. AOL and the Discovery Channel are retail portals selling to consumers. But they'll buy every term that people use to buy toys because it brings traffic and they can afford it.
This creates a problem for smaller advertisers. When companies like AOL and Amazon start bidding on search terms without regulation, the bid price and ability for real businesses to compete get distorted, making it impossible for small businesses to buy these terms. While many small businesses might actually be the most relevant source for a term like "wholesale toys," they can never compete with those 50-million-dollar-a-year search budgets.
That's why vertical search engines are gaining a toehold in the search game and are becoming known as category killers. A vertical in a small niche can become the information super highway on a specialized topic. Many VSEs have forums, blogs, fresh content and huge networks set up around a niche topic, providing many attractive promotional opportunities for advertisers.
The cost to compete on a VSE is much lower than on general search engines, and marketers can expect much higher clickthroughs and conversions on their search ads, as well as a higher ROI on their marketing campaigns. VSEs are attracting savvy professionals and business users searching for niche topics and are providing them with a good user experience.
There are many benefits of advertising on VSEs versus Google AdWords if you pick the right vertical for your product or service. Below are a few examples showing how VSEs can be used to good advantage.
Clickthrough rates: You can get higher clickthrough rates (CTRs) because the audience is segmented and highly qualified. Imagine advertising your dropshipping service on TopTenWholesale.com versus Google.com. While you may get fewer clicks because the audience at the vertical is miniscule compared to Google, your conversion rates might be higher. You won't be paying for all those non-converting clicks.
Branding: The advantage is better brand recognition. Using the above example, the niche audience at TopTenWholesale is going to show a lot more brand recognition for dropshipping services than the general audience on Google. Not as many will be exposed to your brand, but those who are will likely remember you as your ad shows up on daily searches for dropshippers.
Banner ads: You can request custom positioning for your banners on vertical search engines. Most verticals will go out of their way to please customers. They offer users highly relevant content with targeted banners on the SERPs, meeting their advertisers' needs.
Direct links: Most verticals will provide a link directly to the client's site or requested URL. This gives the advertisers an SEO benefit because search engines can now associate the advertiser's site with a highly ranked vertical search engine. It's like getting a directory link, and without such direct links, search engine spiders might never find some sites.
Special ad placement: Verticals can accommodate a client's request quickly and on the fly. Major search engines, on the other hand, must deal with corporate structure, perhaps running issues by IT and corporate. Vertical search engines are lean and versatile; they can react quickly to changing market conditions and industry trends.
User-generated media: Vertical search engines cover issues related to specific topics or industries. Therefore, they can enable customers to blog on their sites, encouraging industry participation. This can transform these verticals into Web 2.0 information highways for their niche. Content can be user generated or industry generated. In fact, some verticals employ journalists to cover industry topics. They provide forums for users and advertisers. These blog and story links also provide great SEO benefits if a customer is linked to them.
Email marketing: Many verticals have email lists, and these databases consist of recipients interested in the niche. These opt-in email lists can be more relevant than any mass-market offerings. Users opt in and look forward to receiving weekly newsletters with stories on the industry. Normally, the advertisers are pleased with the responses received from their email newsletter ads. Relevant ads to a relevant and receptive audience make this offering a win-win.
Ad placement: Many verticals sell their advertising programs through a dedicated sales force. Others will use an ecommerce-based system that enables marketers to buy, monitor and revise their ad campaigns online by using a credit card and through a self-service, password-protected interface.
Google has dedicated advertising professionals who can assist you for a fee, as well as a self-service interface online. You can get free Google Analytics. Additionally, Google's AdWords API service allows advertisers to manage large or complex AdWords accounts and campaigns with computer programs that interact directly with the AdWords platform.
B2B ad advantage: The big difference is that vertical search engines provide an ad advantage for B2B marketers because their ads are exposed to a highly motivated, targeted audience. Clickthroughs can be fewer, saving you money. Conversions can be higher, making you money. Plus you can take advantage of all the auxiliary promotional services. Vertical search engines provide an advertising advantage in B2B niches.