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News Analysis
SEM’s the word
An ecosystem of companies that optimise and market search
on the Internet is making its presence felt in India, says Vinita Gupta.
In the bad old days, before the ubiquitous Internet search engine was invented,
finding information on the Net involved visiting portals with their directory
structure of links. Today, search engines such as Yahoo and Google scan and
index millions of pages, permitting you to fine-tune a query and get relevant
information in a jiffy.
According to a recent Internet in India (I-Cube) report released by the Internet
And Mobile Association of India (IAMAI) in association with IMRB, search is
the primary application for 32 percent of active Internet users.
Imagine that you are the owner of a business. When a potential customer keys
in a query on a search engine, one of three things happens: your company’s
Web site (which has the relevant information) comes up, or it doesn’t,
or your biggest competitor’s Web site might pop up first. If your company
is not even listed among the top three results of a search engine (such as Google
or Yahoo) it could have an adverse impact on your business. That’s where
search engine optimisation (SEO) firms come into the picture.
Here are some key findings of The State of Search
Engine Marketing in India study.
- IAMAI estimates that there are 37 million Internet
users in India as of September 2006. This figure is expected to grow
to 42 million in March 2007 and 52 million by March 2008.
- Search advertising aimed at Indian users is now estimated at Rs 230
crore. Of this, about a third, or Rs 70 crore, is spent by Indian companies
alone.
- Categories of advertisers that have invested massively in search
include technology companies, retail and e-commerce firms, job sites,
the travel and hospitality business, and online portals.
- Search engine marketing worldwide crossed the $10 billion mark in
2006 and is on its way to hit $23 billion by 2010.
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Search engine marketing
"India produces more than a billion searches
a month, and that number is growing as people research choices"
- Mahesh Murthy
Founder & CEO
Pinstorm |
SEO firms are specialists that tweak Web pages and make a
host of submissions to search engines so that the next time a potential customer
runs a search on Google your company will appear on the top of the rankings
for the words used. This is known as search engine marketing (SEM), and it has
become one of the most efficient methods of online advertising. It has been
adopted by numerous companies around the world. SEM involves a set of marketing
methods to increase the visibility of a Web site in search engine results.
IAMAI, in association with Pinstorm, recently released a study titled The State
of Search Engine Marketing in India. This study shines a light on the evolution
and growth of SEM in India. It found that over 40,000 marketers are using this
platform. Mahesh Murthy, the Founder and CEO of Pinstorm states, “22 of
the top 50 and 37 of the top 100 search advertisers by keyword volume are firms
that have Indian operations. India produces more than a billion searches a month,
and that number is growing as people research choices.”
Unlike other advertising media, SEM allows an advertiser to exactly specify
and reach its target audience. The process of SEM involves bidding for the right
words at a cost on major search engines such as Google, Yahoo and MSN.
According to the report, SEM is now a $14 billion business (Rs 63,000 crore).
Over 99 percent of Google’s revenues come from selling ads, and it has
quickly overtaken online display advertising as the preferred route for online
advertisers.
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At the event to launch Yahoo Search Marketing
Yahoo India recently announced the launch of its latest offering in search
marketing solutions for Indian marketers. Yahoo Search Marketing (YSM)
is a product that helps businesses and consumers connect with each other
through Sponsored Search that allows businesses to bid for placement within
the Web results that are served in response to a user's search for a specific
product or service.
‘‘Indian market is of strategic importance
to Yahoo. Now, as part of the global Yahoo organisation, YSM can provide
businesses of all sizes-from large, branded advertisers to micro-entrepreneurs-a
way to easily and effectively target and reach over 25 million active
Internet users in India,’’ says Craig Wax, Regional Managing
Director of YSM.
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Net vs Print/TV
There are a number of positives to SEM in terms of targeting the right audience
which cannot be achieved through newspapers or TV. First, the ads are targeted
only through words that users are searching for, and you can choose the exact
set of search words to have your advertisement appear on so there is little
or no wastage in terms of reach. Second, an advertisement is shown right at
the moment and on the page that the user is searching from, so there is no wastage
of frequency either, unlike on TV, where the same ad sometimes get repeated
so much that viewers start mentally tuning it out.
To advertisers, search comes closest to delivering the Holy Grail of targeting:
getting the exact target audience as determined by their search and demand patterns,
and getting them only at the time when they’re looking for information
and choices to make a purchase decision. Not surprisingly, search as an advertising
medium is growing at 35 percent a year.
Search results are better with a greater number of keywords. The ‘long
tail’ theory holds that the greater the number of relevant terms you bid
on, the lower the cost of acquiring results. While typical advertisers bid on
50 words or less, experts bid on upwards of a million search terms in their
online campaigns. A client is charged based on cost-per-click for all clicks
and visits generated through a search engine, or on a cost-per-acquisition basis
where the results paid for are either leads, enquiries or sales.
Some search specialist firms have moved to a pay-for-performance model, where
they offer a flat price to a client for a result after using their technology
to arbitrage and buy clicks at a lower cost.
With all this, search marketing is still an evolving medium.
The future will have video, audio and other innovations within the pay-for-performance
format.
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Estimated annualised
spend (Rs)
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