Links Sold Separately

The kinetic energy of paid search is undeniable with daily mainstream press reminders of its continued momentum. Joining this movement are Paid Inclusion sites that are getting big headlines, like with Yahoo!’s recent acquisition of Inktomi, or Wall Street prognosticators saying the other giant in this space, LookSmart, is ripe for acquisition.

Though Paid Inclusion has existed in the search menagerie for some time, conversations with advertisers and agencies led me to believe there are a couple of monstrous questions floating around about this form of search marketing, like how does Paid Inclusion fit into the search puzzle? And should an effective search-marketing plan contain Paid Inclusion?

You may be surprised to find the days of flat-fee, per-page inclusion pricing structures are going the way of the Dodo. The influential successes of Pay-for-Placement sites are bleeding onto inclusion, allowing an easy to adopt cost-per-click structure. With that, perpetual releases of new Paid Inclusion technologies are promising fresh and accurate listing information.

Sorting it Out

Stare into a map depicting search listing relationships long enough and the image that emerges will be similar to something Jackson Pollock may have created while under the influence of some really bad acid. I am speaking of the infamous search engine relationship chart, which illustrates top portals’ source of syndicated listing content. Lines drawn from the big three types of search marketing-- Paid Placement, Paid Inclusion, and Editorial Listing Providers -- intersect endlessly in an attempt to explain to marketers exactly where their listings might appear.

While this jumble might seem a bit unnecessary, the idea is simple. Identify listing content so marketers can capitalize on the respective advantages and disadvantages each site offers.

Pay-for-Placement providers like Sprinks, Google, and FindWhat allow frequent messaging changes so the most timely and relevant links are made possible. The downside? Bidding costs can empty your budgetary pocketbook faster than Anna Nicole Smith on a shopping spree at Saks. Lovely.

Editorial Listing and Meta Search providers bill this portion of results as more trusted by searchers because it is not advertising. But, the “pray-for-positioning” method, referred to as traditional Search Engine Optimization, can take months or never to be listed. It is considered unthinkable if your listing does not appear in the first couple of pages in a search, according to a panel-based study from iProspect. In May, 2002 more than 1,400 users were asked how many results they review before selecting a listing. Over 70% responded they wouldn’t go past page two.

At last, we have Paid Inclusion with top providers like LookSmart and Inktomi dominating this space. Inclusion can be described as an unhappy marriage of traditional Editorial Listings and Pay-for-Placement. Your listings go up relatively inexpensively on a comparatively short timeline. An advertiser pays to have site addresses included in results that make sense for the search experience as opposed to buying a list of keywords.

Click costs generally run in the neighborhood of 20-50% less than some Pay-for-Placement areas and there are no bidding wars. Post-click activity is reasonably comparable to other paid search elements, thereby providing the icing, although marketers have less control over how the listings read than in Pay-for-Placement.

Smart Search

LookSmart is the 3rd largest search provider in terms of revenue and reach, according to Media Metrix. The dominant portion of its traffic comes from powerhouse portal, MSN, and now operates exclusively in a cost-per-click, performance-based environment. I can remember the not-so distant past when a flat fee was charged to include a site address in search results. If you have one page site, that’s a hell of an idea. If you have a 200-page site, that’s a problem.

As stated, Inclusion sites like LookSmart are driven more by relevancy than specific keywords, which advertisers may perceive as a disadvantage. Dakota Sullivan, vice president of Marketing at LookSmart, offered another perspective. “The downside of an exact match component is in inherently limiting the user experience. While a Pay-for-Placement strategy will include a targeted list of keywords, there is always an unknown keyword combination, which can be missed.”

A prime example of a Paid Inclusion provider moving in the right direction is LookSmart, which is going to a text-only environment. Why? “LookSmart has conducted a massive amount of research focusing on the right thing to do for search relevancy and user satisfaction”, reports Sullivan. “LookSmart is sacrificing short-term revenue in the interest of creating a better search environment for users.” In addition, Dakota informed me that LookSmart is about to unveil a new product that will deliver industry-beating relevancy to attract new distribution partners.

Yahoo!’s New Best Friend

While the full ramifications of Yahoo!’s ownership is yet to be witnessed, the proud new parent assured me the Inktomi brand name is not likely to disappear. Materializing outside of Pay-for-Placement sponsored links, Inktomi listings can also be viewed on MSN, About.Com and Overture along with, you guessed it, LookSmart. At first glance, there appears to be a nauseating level of overlap (ala search listing relationship map), but LookSmart and Inktomi maintain enough separate listing partners to warrant participation in both programs.

Freshness is a key factor in Inclusion that is an inherently moot point in Pay-for-Placement. Simply put, a high frequency with which site addresses are updated keeps users from clicking on dead links. Both Inktomi and LookSmart maintain frequent refresh factors, with the former updating inclusion links every 48 hours.

Inktomi’s Paid Inclusion models fall into two distinct categories with similar site address indexing arrangements. The first, Search Submit, is an annual subscription based on a flat-fee pricing structure for advertisers that have less than 1,000 pages to include. The second, Index Connect, is for large advertisers who have more than 1,000 pages. In the latter instance, an advertiser may enjoy a performance-based pricing structure. Of course, there are exceptions to every rule, and Inktomi’s people maintain it has the flexibility to address advertiser-pricing models on a case-by-case basis. In the foreseeable future, Inktomi promises more enhancements in the algorithmic search results realm in topics like shopping and news.

Perpetuity

In the end analysis, advertisers would like to know if users are more likely to click on listings that are not Paid Placement. Questions also arise relating to user behavior in the world of multiple search results on a page. Ultimately, this may be construed as spamming users with search results. As Sullivan so succinctly put it: “Search is the exact opposite of e-mail marketing -- the bigger it gets, the better we are, unless we over-monetize the space.”

Consider MSN search results. The MSN search contains, among other elements, a proprietary pay-per-click product, Overture results and LookSmart listings. What happens if users get wise to paid “sponsored links”? Will they stop clicking on them and go to main body listings exclusively?

LookSmart reports that over 70% of users head to this area over other paid listings. That’s an interesting fact when you compare this figure to one given by consumers in a January, 2002 report for Consumer WebWatch. Surfers were asked if they would still click, knowing the advertiser had paid to be listed more prominently. Only 30% said they would be less likely to action the listing. Conclusion: The jury is out.

Combine the pattern of rediscovery and consolidation in search with the decidedly negative, sometimes angry industry press relating to spam regulatory actions and two distinct thoughts emerge. One, ipso facto, Paid Inclusion belongs in your Total Search Marketing program. Two, it would behoove search providers to keep revenue greed in check in favor of user experience.

About the author: iMedia search columnist Kevin Ryan’s current and former client roster reads like a “who’s who” in big brands; Rolex Watch, USA, State Farm Insurance, Farmers Insurance, Minolta Corporation, Samsung Electronics America, Toyota Motor Sales, USA, Panasonic Services, and the Hilton Hotels brands, to name a few. He is currently Director Market Development of IPG’s Wahlstrom Interactive where he provides guidance in directional online marketing to Wahlstrom’s prestigious list of clients and sister agency brands.

 

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