Performance-based Search Engine Marketing to Thrive in 2009

It is going to be a tough year for search marketing ahead in 2009.

Many companies have been negatively affected by last year’s economic downturn, and one of the first casualties during the time of financial crisis is marketing spend. Even as the most cost-effective marketing channel – search engine marketing’s spending fell 8% in the US. Before setting advertising budgets for 2009, companies for the first time in nearly a decade started to severely scrutinize search marketing’s performance.

This is definitely the right time to manage your marketing spending according to your revised business goals. After all, search marketing is not an expense, but an investment.

Shift from off-line to online marketing

For companies that have been spending aggressively on mass marketing (for example, TV commercial ads), it is time to cut back and review the performance.

For companies that can rely entirely on online channels, it is the perfect time to shift completely from traditional marketing channels to online – especially to search marketing. In doing that, companies should start:

• Outsourcing search marketing to experienced search marketing agencies or individual experts
• Building an inhouse PPC team slowly and from scratch
• Structuring a global PPC team, with the end goal to save operational cost

Leverage from your competitors’ loss

Your competitors’ biggest loss will be your biggest gain when you use the economic downturn as an opportunity for growth.

In 2009, it is the time to recruit some of the most experienced PPC specialists when your competitors are starting to cut expenses and have laid off their online marketing experts.

It is the time to buy ads at a cheaper price – If your competitors have cut search marketing spending, you should increase (or at least maintain) yours. You will be surprised that many competitive keyword inventories are now available at lower costs.

Focus on performance-based search marketing

It is the time to focus entirely on return-on-investment from your marketing budgets and figure out the most cost-effective PPC business models.

Sophisticated bidding algorithms will help to optimize monetization of your PPC campaigns. By integrating your PPC campaigns into systems like Omniture or Efficient Frontier, it will allow you to:

• Streamline the set up of your new PPC campaigns
• Optimize your spending by auto-pricing your keywords based on their individual performances
• Review and analyze your PPC performance on all levels across all major search engines
• Manage your long-tail keywords more efficiently
• Identify and minimize PPC click fraud

Google continues to dominate in search

Even 2009 may seem like a bad year for search engine marketing, Google still managed to gain significant search market share among all other major search engines in 2008. It will depend on whether this vigorous growth in search volume can compensate the loss in advertising revenue.

Regarding advertising platforms, Google will further pull away from Yahoo Search Marketing and Microsoft Adcenter by regularly introducing new features and innovations to Adwords.

Diversify your marketing channels, but select the right channels

If you have been a big buyer on display ads, start reviewing the performance of all your banners and stop spending on those that have been under performing.

Find fast growing web sites that provide ad spaces that are truly worth spending your advertising budgets. Leverage from social media, video and viral marketing.

Complement PPC with SEO, and vice versa. Leverage from the keyword long tail by using SEM keyword research tools.

Partially or totally cut spending from the second tier PPC search enginesthat have been generating poor ROI.

Use social marketing to boost SEO, combine several online marketing channels, and blend PPC into your overall marketing strategies. Leverage from Google’s Universal Search.

Be as creative as possible!

Focus on your website’s users, especially the most valuable users

A successful PPC campaign is about using the right combination of keywords, ads, and landing pages.

• Improve usability of your web site - SEO is Usability for your users, so as PPC
• Improve PPC copywriting - Ensure the marketing message on your PPC landing page is consistent with the marketing message of your PPC ad
• Optimize your PPC landing pages for higher conversion rates
• Run A/B testing using Google Website Optimizer

PPC can be used to identify the patterns and behavior of your most valuable customers. The common scenario for most of the websites is that 80% of the sales are driven by 20% of customers. Focus on the “higher value” traffic and generate more conversions.

• Identify the keywords that have been driving high conversions and/or large profit margins - Track your conversions and traffic by using Google Conversion Tracking, Google Analytics and other third party analytic systems.
• Increase the CPC bids for those keywords or use Adwords Conversion Optimizer
• Improve the ad copy for those keywords
• Optimize the landing pages

Shift towards new markets

If the sales volume of your target market is shrinking, move to target a new market. Most companies in the developed western countries believe China is the new market. Ensure your marketing team:

• Knows the cultural differences when selling to Chinese
• Is aware of the language barriers when selling through the China market
• Understands whether your business will be scalable in the Chinese market
• Focuses on quality and be customer-oriented, so try to understand the Chinese consumers before selling your unmodified American-customized products to them!
• Figures out the China PPC strategies