Search engine marketing

Meet the new kid on the block that promises advertisers better returns on advertising.

Precise figures are hard to come by, since search engines have Kerberos (the three-headed dog that is said to guard the gates to Hades, the Greek underworld) to guard their data.

However, the Internet and Mobile Association of India (IAMAI) and Pinstorm, a search engine marketing company, recently managed to ferret information which indicates that Search Engine Marketing (SEM) in India is a rapidly-growing sector.

They are not exaggerating. Consider these figures "" over one billion searches a month; over 300 million searches with ads on them; almost 5 million clicks on ads every month; and Rs 70 crore online ad spend by Indian companies (not those of Indian origin, but ones with operations here, so ebay.au would not fit this bill).

The report has estimated the annual ad spend of Naukri (jobs), 99 acres (property) and Jeevansathi (marriage) "" all part of the Naukri group "" to be around Rs 10 crore (the highest of the key SEM players in India).

eBay would come next with a spend of around a little over Rs 9 crore, Monster and Jobsahead come third with around Rs 6.25 crore ad spend. The report qualifies these figures by stating that these approximations are based on today's costs.

While general annualised online ad spend would be around Rs 23 crore, retail e-commerce accounts for around Rs 19 crore; jobs, around Rs 17.5 crore; travel, a little over Rs 17 crore; and banking/finance, Rs 14.5 crore.

Citibank, HSBC and ICICI Bank dominate the banking/finance sector spends, with Rs 2.7 crore, Rs 1.1 crore and Rs 9.2 crore respectively.

The travel sector ad spend is dominated by Yahoo! Travel (around Rs 1 crore), Lufthansa and MakeMyTrip. Travel sites routinely buy and deploy over three million keywords each on SEM campaigns.

Technology is dominated by HP "" around Rs 2.5 crore, with Dell tailing at Rs 12.5 crore, and Siemens way behind at around Rs 5 crore. As for retail, eBay takes the cake with nearly Rs 9.5 crore as ad spend.

The interesting part, though, is the Pinstorm Search Maximiser Index (PSMI), which is a way of measuring if a campaign is over- or under-performing (with performance defined in strictly technical terms).

"We compare the clients' share of spend with his share of searches," says a Pinstorm spokesperson. Average performing campaigns score a zero; under-performing ones get close to -1; and outstanding ones score close to +1.

The index shows campaigns for Futurebazaar, Google, Zodiac Online,v Shaddi4ever and Fropper to be not-so-beneficial. Campaigns for Match India and Yahoo, however, score better on the index.

Yet, such online metrics are not without their sceptics. No SEM user can ignore terms like "cloaking", which refers to the hiding of links so that you're selling only the page rank, and "click fraud", the illicit manipulation of keyword-based advertising metrics involved in pay-per-click or PPP deals.

These deals aren't cheap anymore either. Average PPC costs have increased 37 per cent from 2005 to 2006, according to Doubleclick.

SEM will also have to put up with the "distrust" factor "" up to 85 per cent of searchers say they "tend to ignore the paid listings". And 87 per cent of commercial clicks take place "on the natural (not sponsored) search results", according to Jupiter Research.

However, even though it's a new channel to many companies, it is changing the way that many advertising agencies do business. It simply cannot be ignored any longer.

SPONSORED SIFTING

With over 100 billion web pages, scrounging for meaningful data can be quite a task. But it's the top 10 or 20 results that matter.

Pinstorm studies indicate that up to 40 per cent users on any search term typically click on the sponsored links instead of the natural results. This is why paid search or Search Engine Marketing (SEM) is catching the attention of advertisers.

SEM worldwide is estimated to be a $14 billion business. Not surprising, since spending on Internet ads is expected to be around $29 billion in 2010 in the US alone, according to researcher eMarketer. In India, the sector is still in its infancy "" around Rs 230 crore.

However, with Internet users predicted to grow to 42 million by March 2007 and 52 million by March 2008, SEM has a future you cannot ignore.