Inside Search Engine Strategies, 2003

Danny Sullivan’s Search Engine Strategies rolled into San Jose this week, bringing an unprecedented 4 days of search engine marketing advice (SEM) and news to more than 1,700 attendees. If you still had reservations about the legitimacy of search engine marketing, one look at the impressive roster of exhibitors, sponsors and attendees would quickly dispel any doubts.

More than 48 companies, including Google and Yahoo!, decided to exhibit at the event (the highest number of exhibitors ever for SES) and speakers included representatives from all the main search engines and top SEM companies.

Day One

At the immensely busy registration desk, a buzz was developing with attendees enthused about recent developments in the search engine industry. With Overture, Google and Lycos being just a few of the search engines expected to make some big announcements during the proceedings, the conference was expected to provide a lot more than just “how-to” information.

Day One of the conference had been designated as a “pre-conference” day, with the sessions taking two distinct streams. Sullivan had decided to move all the beginners’ SEM sessions to this first day, and to take the opportunity to provide an annual update on the economics of the search engine industry.

As part of this exclusive insight to the world’s largest SEO conference, I decided to take a seat in many of the search engine economics sessions, taking a break only to deliver my own presentation on “Search Term Research” (provided as part of the beginners’ itinerary).

Search Monetization Strategies

One of the most interesting sessions of the day was unquestionably Search Monetization Strategies. While none of the panelists could agree on what “monetization” really meant, they all had interesting information to share.

Sheryl Sandberg, VP of Global Online Sales & Operations for Google, was the first to speak. She explained that not only is Google the largest search engine property, it’s also the fastest growing. With more than 100,000 advertisers, 88 different interfaces and products in 11 languages, Google has taken great steps to secure its position and become profitable.

Sandberg also shared with the audience the great success Google had seen with the Google Search Appliance product, which allows any business to purchase an easy and effective search tool for their own Website. The list of customers for the tool includes Boeing, Cisco, and Xerox, confirming that this is another growing market for Google.

Sandberg also took the time to showcase the recently launched AdSense service, which allows the average Website to display Google’s AdWords campaigns and receive a commission on the click-throughs. The success of AdSense is in part due to the fact that Google is able to spider the Website of the proposed partner and use an algorithm to determine which ads would be most relevant to the pages the site displays. This format has proven to be far more accurate than simply asking the site owner which terms they thought were relevant to the page.

In finishing, Sandberg answered audience questions, and in so doing, confirmed that:

• Google has no plans to introduce a “paid inclusion” or trusted feed service at any time in the future.
• While Google’s AdWords service does track the click-through rates of ads, it does not track how long a visitor remains on the advertiser’s Website.
• In response to a question about eBay’s request that Google remove any ads that infringe on its copyright, Sandberg confirmed that these requests could be made by any company concerned about trademark or copyright infringement.

While Google is still the darling of the search engine industry, Yahoo! has caused quite a stir with its recent acquisitions. Tim Cadogan, VP of Search for Yahoo! explained some of the initiatives the business had taken to improve search offerings.

One of the most interesting developments has to be the new Product search. While still in beta testing, this service strikes an uncanny resemblance to Google’s new Froogle service. It comes as no surprise that the new service from Yahoo! will also include sponsored listings from Overture.

Cadogan also describe some important steps Yahoo! has taken to improve user access to search. These included:

• Showing Yahoo! Yellow Pages listings in search results for products or services that also include a zip code. E.g. Pizza delivery 95110
• A search for Weather or Maps for a particular location will bring up relevant information, not just search results
• Including a search box in Yahoo! Mail accounts so that a user who receives an email on a product or service can search without leaving their mailbox

With the inclusion in this session of Tony Mamone of LookSmart and Jim Diaz from Ask Jeeves, a lot of valuable information was shared.

Advertiser Roundtable

Another session of interest was the Advertiser Roundtable. This was an opportunity for respected experts in the search engine marketing industry to discuss future developments of the search engine technology, in particular the areas of PPC and Paid Inclusion.

Most of the panelists agreed that there needed to be many improvements made to PPC or paid inclusion if the search engines wish to see marketers continue to use these mediums. Dana Todd of SiteLab International made a valid point when she complained that all current PPC solutions required an advertiser to pay the same click-through rate whether their ad appeared on one of the top search partners or some lowly, little-known search engine. She suggested that a model should be developed to allow for different costs per click depending on the quality of the traffic.

Kevin Lee of Did-It.com offered that there are two types of company that place high bids for search terms: those that are very smart, and those that are incredibly dumb. The smart bidders are the ones that track traffic and understand the value of their visitors, while the dumb bidders simply continue to increase their bids without knowing if the high bid will bring an ROI.

Asked whether PPC and paid inclusion would overtake Organic SEM, Frederick Markini of iProspect suggested that there would always be a need for a balance in online marketing. With PPC campaigns, Markini said, there is always a risk that a company will run out of money or no longer be able to keep up with escalating bids; he argued that organic SEM did not suffer from these pressures.

Industry Analyst Roundtable

The Industry Analyst Roundtable session brought together some of the industry’s best know analysts. Sullivan and Chris Sherman of Search Engine Watch were joined by Brett Tabke of WebmasterWorld.com and Greg Notess of Search Engine Showdown.

This open forum took on a simple format that allowed audience members to interact directly with the panelists. Topics that were discussed included:

• Anecdotal evidence that simple paid inclusions did offer some assistance in achieving better search engine rankings, despite claims to the contrary by the search engines themselves.
• The limitations of PPC. Advertisers are limited to having their ads displayed only for search requests that they have identified and bid upon. Many search terms therefore have no PPC bids placed on them.
• The constant evolution of search engines. Google replaced AltaVista; will Nutch replace Google?
• Should XML Trusted feeds be labeled as such, clearly identifying their placement in search results?

Day Two of the conference reverted to the normal format expected from SES and with three distinct streams being offered, there was a variety of information to report back. In the meantime, I attended the “Google Dance”, a soiree that took place at the Googleplex, where I hoped to track down a Google employee and find out exactly what’s happening with their PageRank these days…

Day Two

On Day Two, Search Engine Strategies promised to step up the pace by offering 3 separate itineraries for search engine marketers to choose from. While many attendees were recovering from the Google Dance the night before (which should probably be re-named “Googlepalooza” as the open air event offered a soundstage with DJs, marquees, Segway rides and massage chairs all designed to sweep attendees into further Google hysteria), they soon got down to business when Sullivan took to the podium to give an unprecedented keynote address on the state of the Search Engine Industry.

While Sullivan started off his address with a comical look at industry’s recent trend of acquisition upon acquisition, he soon got down to the nitty-gritty of the future of search. The fact that over 5 billion searches were conducted in the month of June this year confirmed that the search engines are here to stay. Sullivan decided to look into his “crystal ball” and made some predictions about what is to come. Some important predictions included:

• Sometime in 2004, Yahoo! will launch a new search engine that combines Inktomi, AltaVista and AllTheWeb technologies.
• MSN should also be ready to launch their own crawler in 2004, with the possibility of purchasing any of Ask Jeeves, FindWhat, LookSmart or even Google, to help speed up the implementation.
• AOL is likely to continue its partnership with Google as this remains a non-competitive relationship for them.

Moving on to consider the audience reach of the search engines, Sullivan explained how Google’s current reach of 76% of all searches would decline in 2004. He predicted that Google’s total audience would decrease to around 51%, with Yahoo! at 25%, MSN at 15%, and the other engines making up the remainder.

Next, Sullivan discussed the future popularity of the search engines, and suggested that Google might become a victim of its own popularity if both reporters and users experience “burn-out”. With his tongue firmly planted in his cheek, Sullivan predicted that Ask Jeeves would make valiant attempts to become the “Avis of search engines” by positioning itself as the #2 preferred search engine. He also believed that LookSmart would position itself as the most popular supplement to primary search results, continuing its current trend of being a provider to other search engines.

Sullivan expects to see growth and development in the paid placement and paid inclusion markets as search engines look to increase their advertising revenue from search results. Citing results from an IAB survey, Sullivan said he didn’t believe that search engine users would object to paid advertising, as 64% of them are already aware that it exists, and 52% of those do not care, provided the paid advertising is relevant to their search. Drawing from his previous journalism experience, he estimated that in the coming years search engines would increase the amount of paid advertising shown on a search results page from an average of 25% to around 70%.

Sullivan wrapped up his keynote address by answering a question on everyone’s mind; “Will SEO still be important in future?” He believed strongly that search engine optimization (SEO) would still be a dominant part of the industry as there will need to be a balance between paid ads and organic listings for some time to come.

Search Engines and Trademarks

While the Search Engines and Trademarks session concentrated on information that would be of most interest to those involved with the legal aspects of a company’s SEM campaign, there were some interesting comments that were important for all participants.

The recent incident where eBay asked Google to remove any sponsored ads that included their trademarked name drew claims of hypocrisy from this session’s panelists. They pointed out that while eBay did not want companies to bid on the word “eBay”, one could go to Google and search for trademarked names such as “Barbie” and instantly see paid ads for the product on sale at eBay.com.

The panelists also mentioned cases that are currently working their way through the legal system. They suggested that, while it might be fair for a company to use trademarked names in comparative examples, the waters become very murky when it comes to simply bidding on a competitor’s brand name. The best suggestion from all panelists was to seek legal advice before bidding on the trademarks of any company.

Cleaning Up The Mess

A topic that’s new to SES was “Cleaning up the Mess”, which looked at how to clean up spam that had been left by another SEO company. Many of the panelists discussed techniques for identifying spam that included viewing Google’s cache of the sender’s site, and the source code.

In addition, Matthew Bailey of The Karcher Group offered an assortment of techniques for spotting and rectifying spam. With Google’s PageRank fluctuating wildly over the past couple of months, Bailey urged SEOs to not automatically assume that a low or zero PageRank meant their Website had been penalized. However, he said, if you do determine that your site has been banned by Google, fixing the problem and then sending an apology email to Google to outline the problems that were fixed and promise not to take such actions again would be the best approach to having the ban lifted. Bailey also suggested owners view their Websites with a text viewer such as the one located at http://lynx.browser.org to determine how a spider might see their site.

Shari Thurow of GrantasticDesigns.com also suggested a few issues for which site owners should keep an eye out when they review a site. She pointed out that a site might not be banned from an engine, but may be prevented from being listed if it uses certain techniques. These included:

• A recently redesigned site that had switched from static to dynamic content might have trouble getting listed.
• A newly implemented Robots.txt file might also have an adverse effect on a site’s ranking if it wasn’t correctly formatted.
• The new use of cookies or session IDs might also be to blame for a Website’s sudden drop in ranking.

All panelists suggested that businesses should review the contract of any SEO firm they might consider to ensure that they wouldn’t be taking any risks with their rankings. A clearly outlined “anti-spam” policy was considered to be among the most important aspects to assess in the search for an SEO firm. The use of doorway pages was seen as one of the worst things an SEO could implement as part of an “organic” optimization campaign. Sullivan pointed out that using doorway pages for PPC was completely acceptable, though he confirmed that using them for “crawler” listings would be bad for any site.

Search Engine Ratings

It seems that a new search engine statistic or survey is released every week. The Search Engine Ratings session promised to shed some light on exactly where all this data comes from. Up first was James Lamberti of comScore Networks to provide details on how his company collects information and what they know about search engine use. Lamberti explained that comScore uses data collected from more than 1.5 million online consumers who agree to have their Internet activity monitored passively. Unlike some consumer rating companies, comScore is able to track numerous types of Internet activity including searches, click-rates and conversions.

The company is unique in that it’s able to track online activity in addition to asking the normal consumer survey questions. The benefits of this were apparent when Lamberti offered two stunning statistics:

• 15% of Google visitors do not actually visit Google to search. He gave the example that many people have Google set as their homepage; it appears every time they launch their browser. This registers a visitor for Google even though no actual search was carried out.
• 20% of consumers surveyed attributed their searches to the wrong search engine. For example, they may have said they went to AOL, but the data tracked by comScore showed they actually used MSN.

The remainder of the panel was made up of experts from Nielsen/NetRatings, Hitwise and Statmarket. While none of them could agree on percentage share of search engine users, between them they offered some very interesting statistics:

• While Google may be dominant in the US, in Japan, Yahoo! receives 74.19% of all searches.
• There were 5.5 billion searches carried out worldwide in June 2003, up by 28% on the previous year.
• In 2002, more than 25% of all online product purchases originated from a search engine.
• While 96.9% of US searches are carried out on US search engines, only 56.6% of UK searches were done on a UK search engine. In fact, the US Google is more often used in the UK than Google.co.uk.

The end of the ratings session also marked the end of the second day of Search Engine Strategies, San Jose. Day Three brings Google co-founder Sergey Brin to the Keynote address podium and advanced topics of search engine marketing and search engine technology are also introduced.

Day Three: A Chat With Sergey Brin

Day Three of Search Engine Strategies, San Jose included a wide range of sessions covering broad topics such as “Meet the Crawlers” and the more targeted “Google API”. However, there was not an empty seat in the house when Danny Sullivan sat down with Google co-founder, Sergey Brin on the eve of his 30th birthday, to chat about the past and future of the world’s most famous search engine.

Sitting in two elegant arm chairs with a large plasma screen providing a back-drop of a roaring log fire, the setting suggested that we were eves-dropping on 2 old friends as they reminisced about the past.

Google’s Growth

It has been 5 years since Google entered the search engine arena, and in that time the then unknown challenger to AltaVista has grown from indexing 15 million pages to a colossal 3+ billion, and now serves 76% of US searches. Sullivan recalled how Brin had attended one of the earlier conferences and had asked the audience who had heard of Google. Back then, few hands went up. Laughter circulated today’s audience when Sullivan gave Brin the opportunity to ask the same question, “Who here has heard of Google?”

Sullivan then proceeded to real off the developments that Google had made this year alone — AdSense, Toolbars, buying Blogger, launching Google News Alerts, and more. Asked if he was proud of these accomplishments, Brin replied modestly that despite the list sounding impressive, he believed they were “not doing enough.” Brin wanted his company to expand even further and provide searchers with even more technological developments and enhancements that would expand the use and enjoyment of Google.

Expanding Content on the Web

Sullivan wanted to know which of the past year’s accomplishments Brin was particularly pleased with. After giving the question some thought, Brin replied that the recent launch of their “AdSense” service was his proudest moment. The affiliate type service allowed small businesses an opportunity to display Google’s AdWords sponsors on their own Website, providing a means for many companies to increase income from their sites by sharing the revenue these sponsorships generated. Brin expressed his desire for AdSense to “spur the next generation of content on the Web”.

An IPO for Google?

Sullivan asked Brin if an IPO was on the horizon, and if he could estimate when Google might make a public offering. In giving his answer, Brin made it clear that he was focused on building a better search engine to assist the world; the last thing on his mind was to have to answer to Wall Street. “We debate [going public] periodically at board meetings” said Brin, adding that it “would be nice to have currency to do acquisitions, [however] there are significant management distractions with being public”. While his statements seemed to signal that Google does not intend to become a public company, Brin did admit that there is a “good chance eventually” that they would issue an IPO, but that it is currently “not the most pressing thing.”

Google to acquire MSN?

If issuing an IPO was not in the future for Google, was an acquisition strategy likely to be developed? Sullivan couldn’t resist putting a twist on a recurring question, “Any chance Google would buy Microsoft?” Brin joined the audience in raucous laughter as everyone dismissed this as an impossibility, although with Google’s reputation and dominance, you might be forgiven for thinking that this impossible scenario could just happen.

On a more serious note, Sullivan did ask Brin whether Google would entertain any advances made by a rival such as MSN. “We have always said “no” thus far” Brin explained, before going on to elaborate that the company “can’t discount any approach.” This statement created more questions than it answered, suggesting that rumors of an approach by MSN and Yahoo! contained an element of truth.

Preventing Misuse

Turning to the technology developments that Google had planned for the future, Sullivan asked Brin to elaborate on the work that goes into the constant development of the famed Google PageRank. Brin explained that it was still very much an important part of Google’s ranking system and that more than half a dozen new ranking technologies are tested each month, with roughly half of these being integrated into Google’s PageRank algorithm.

He went to on discuss the issues Google faces with spam and indicated that Google is aware of the “corrupt” practices of some companies in an attempt to manipulate the PageRank, making it quite clear that the engine has technologies to deal with any misuse.

Paid Inclusion not Likely at Google

A request that’s often made to Google is that the engine introduce a paid inclusion option so that those interested in obtaining faster inclusion in the index can do so at a premium. While many representatives of Google have in the past suggested that this is unlikely to happen,

Brin made a point of clarifying his dislike for the introduction of paid inclusion. “I don’t really believe in it,” he said, adding that he wanted to “keep any kind of payment from objective search results”. Indeed, “objective search” is the very thing that has made Google popular, hence it’s founder’s reluctance to tinker with its formula for success. In the second part of the question, Sullivan asked whether Google had given any thought to offering some form of “paid support” to allow Webmasters a faster and easier way of communicating problems to Google engineers. This was also a “no go” as far as Brin was concerned, as he believed that offering this type of premium support would sap resources and “slow down [Google’s] pace of development.”

As the virtual fire-place started to die down, Sullivan asked Brin what was the worst thing about being at the helm of the world’s most popular and widely-analyzed search engine. After taking a few seconds to consider the question, Brin offered a simple answer, “coping with the growth”. While many of us might think that we would love to be involved with a company growing as rapidly as Google, being in control of behemoth such as this can be a daunting task for anyone — let alone someone who has yet to celebrate his 30th birthday.

Day Four

While many attendees had decided to forego day four of Search Engine Strategies in order to catch flights home, those that did stay on were offered very diverse and interesting sessions.

Converting Visitors into Buyers

The most important topic of the day for any search engine marketer had to be Converting Visitors into Buyers. While some marketers concentrate on simply obtaining top rankings in Google, Yahoo! and other search engines, more experienced SEM’s know the importance of actually converting that valuable traffic. An impressive panel of speakers provided the audience with ideas and solutions to increase a Website’s conversion ratio.

While iProspect is known for its more comprehensive service and higher pricing, it does allow for extensive work in the area of visitor conversion. Conversion Product Manager, Larry Kerstein, shared with the attendees different factors that help ensure a Website encourages conversions. While the natural thought process might lead a Website owner to write text that screams “buy it now”, Kerstein suggested that in some instances your visitor may not yet know that they need your product or service.

He suggested that the copy on a Website should inform and educate a visitor so that they can ultimately decide what meets their needs. Once they know what it is you offer and why it is better than your competitor’s product, you can then encourage them to order. Talking to the buyer in the language of the buyer and using benefit statements rather than product specifications were also conducive to increased client conversions according to Kerstein.

Michael Sack, Chief Product Officer for Inceptor offered similar advice, but suggested that you “do not have to take apart your Website to increase conversions.” Citing an example from Dell’s Website he backed up his theory by demonstrating that the computer manufacturer had increased conversion rates by 6% through simply enhancing the category structure of certain areas of their Website. He provided research from Shop.org that suggested that the average conversion rate for the retail sector was just 1.8%.

Sack also gave attendees examples of questions a visitor may ask themselves when at a Website:

• Why should I buy from you?
• Should I trust you?
• What is special about your company?

The most important part of Sack’s message was that site owners should simply “expose their content on the Internet”. By this he was suggesting that too few Websites offer enough information about a product or service and with many people using the search engines to research a purchase, it was essential that marketers provide this valuable information. Finally, Sack told attendees to constantly “test, analyze and adjust”, giving a great example of how different types of pages tested on MSN yielded conversion rates from 1.75% to more than 3%.

Repeat speaker Heather Lloyd Martin took the conversion process to a different level when she argued that the conversion begins when you entice a search user to actually click on your listing. She implored marketers to ensure that Title tags and Descriptions were compelling to real, live humans and not just search engine friendly. She explained that a site that was ranked towards the bottom of a search result page could have higher click-throughs than the number one listed site if its listing were more enticing and strongly targeted.

Of course, in order to accurately track all of these conversions, a Website owner would need to ensure accurate reporting and tracking of visitors. The Measuring Tool Vendors session brought different Web analytics companies together in one room to tout the benefits of each of their respective products.

Representatives of all the major analytics tools were in attendance, each offering the benefits of their product and how it worked. The companies included:

• Urchin.com – software-based analytics starting at $895 with additional modules priced at $695. A 15 day trial is available at their Website.
• ConversionRuler.com – for the minimalist who’s looking for a cheap alternative. Focused on reporting PPC data, the service is priced “per click through” analyzed. A free trial is available.

  WebTrends.com – the most well known and most popular Web analytics service on the market. Comprehensive stats can even show you which stage of a site’s checkout process causes the most aborted sales.

  ClickTracks.com – the newest, but arguably the most original Web analytics package around. ClickTracks displays Website visitor behavior directly on the pages of your site. Different demos can be downloaded from the Website.

John Marshall of ClickTracks was particularly entertaining when he decided to skip thru his entire presentation in about 30 seconds so that he could discuss a book that he felt would provide great insight for marketers looking to collect and present data. Marshall suggested that each attendee purchase Edward Tufte’s “The Visual Display of Quantitative Information” as it would assist them in analyzing Website data. While the unique abandonment of his own product to discuss a book may have seemed crazy, I suspect that Marshall knew that the findings of the book would lead marketers to conclude that ClickTracks’ unique display of Website analytics was the perfect solution to their needs.

Wrapping Up

As the last day of the conference wound down, a wave of satisfaction appeared to be felt by all of those involved. The attendees, staff, exhibitors, speakers (and those of us who had agreed to write daily articles when they should have been relaxing) all agreed that the event had been the most successful and well received search engine conference yet.

The industry is growing at a rapid rate. Not only is there change in the landscape for the search engines, but search engine marketers are also evolving and adapting. With the successful launch of SEMPO (Search Engine Marketing Professional Organization), marketers now even have a “trade union” in an industry that is expected to grow by billions of dollars each year.

If you were not able to attend the conference in San Jose, I hope this article has given you an insight into the developments taking place, and maybe even encouraged you to attend the next conference in Chicago in December. If you were able to make it, I’m sure you will agree that the event was an outstanding success.