Getting the most from your keywords strategy is more complicated than ever.

There used to be a simple rule for any company seeking prime placement for its advertising messages on internet search engines: pay up. Read original article.

These days, though, the booming business of search advertising – also known as sponsored listings – has become a far more complex affair. Grabbing the attention of potential customers, and converting that attention into valuable leads, has become equal parts art and science. At the same time, the price to advertise against many of the “keywords”, or search terms, entered by internet users has risen steadily.

The result: nearly 10 years after GoTo.com became the first to experiment with the idea of linking relevant adverts to search engine results, it is starting to turn into a field where only advertisers with a willingness to monitor their campaigns closely and with a relatively high level of sophistication can hope to make reliably consistent returns.

“People are having to work much harder to make it work for them,” says Duncan Parry, director of strategy at Steak Media, a digital marketing agency. “It has become a lot more like other advertising mediums: you have to pay it much more attention [and] look at it scientifically.”

Until recently, obtaining a decent showing for an advert on one of the three big search advertising networks was all about price (Yahoo eventually acquired the business of GoTo, while Google latched on to the same idea with its AdWords system; Microsoft launched its own rival advertising network last year). The more a business was willing to pay each time someone “clicked” on its text advert, the higher that ad would appear in the sponsored listings returned with search results.

A large part of Google’s financial success, however, has been built on its early realisation that there was a more effective way to do this. By weighting adverts based not just on the “price per click” but also how often they prompt a response from users (known as the “click-through rate”), Google was able to give prominence to those messages that generate the most activity – and hence the highest fees for itself. Following Yahoo’s relaunch of its advertising network this year, this approach is now standard throughout the industry.

It has not ended there. Google and its rivals now weigh up a number of other factors about an advert – and the advertiser – before deciding how much prominence to give to the message. These qualitative assessments have turned search advertising into a more opaque affair, one where the advertiser can never really know exactly what factors determine the way search engines decide how to rate adverts in their systems.

“It’s taken power back into the search engines,” says Ed Stevenson, UK managing director of 24/7 Real Media, a digital marketing company being acquired by WPP. “They’ve got more ‘secret sauce’.”

Faced with this, how can advertisers get the most out of their search advertising budgets? According to most online marketing experts, the most important consideration in this changing world is relevance: how relevant is the wording of the advert to the keywords that have been bid for – and, equally important, how relevant is the web page that users land on when they click on an advert? Underpinning it all, how closely does the overall marketing message relate to a company’s brand and its products?

Long a central concept in how “natural search” is conducted (the “editorial” results returned by search engines), relevance is now becoming a big factor in search advertising as well. Google, for instance, “crawls” the landing pages used by advertisers, much as it crawls other pages on the internet, to try to assess how useful they will be to people who click on adverts.

That has led to a convergence of the skills needed for effective natural and paid search, says Mr Stevenson. The practice of “search engine optimisation” – improving a site to give it a better chance of it appearing high in natural search rankings – now has application in search marketing as well, he adds.

Of course, the importance of relevance extends beyond simply winning a higher placement for an advert. Without a relevant landing page, advertisers will struggle to convert visitors into customers and the only ones to profit from the whole process will be the search companies, points out James Clayton of Latitude White, a search marketing company.

Other factors are also turning search engine advertising into a more complex science. For instance, the role of brand awareness in how users respond to search ads is currently gaining considerable attention.

Yahoo helped to give this issue greater prominence last year, when it said that its own research showed that consumers were far more likely to click on a search ad if they had already been exposed to some brand-building banner advertising from the same company.

The tools needed to understand the interplay between online display and search advertising have yet to become widely available or affordable, says Mr Parry. Advertisers wanting to carry out this type of analysis have to commission a special report from an ad serving company such as DoubleClick – though Mr Parry adds that analyses such as these should become more readily available as the search and display advertising worlds converge, for instance with DoubleClick’s own planned sale to Google.

While the level of sophistication in search marketing has been going up, the cost of entry has also been rising – and not just because of the higher costs for the technology and outside professional help needed to manage online campaigns. Pricing of keywords has also risen steadily as more advertisers have been drawn into the market. “The opportunities for finding bargains in high-volume keywords has pretty much ended,” says Mr Stevenson.

Despite that, most experts say there are still good deals to be had for companies prepared to advertise against more specific search terms. This is the “long tail” of internet searching, where the search terms are likely to be entered less frequently, but where the very specificity of the search gives a far more precise clue about a person’s interests.

Yet advertisers who adopt this strategy are not immune from the broader laws of effective search marketing. Companies bidding on large numbers of highly specific terms may find it hard to fit their adverts and landing pages to the particular keywords, warns Mr Stevenson. “Once you opt into the ‘long tail’, you can get away from relevance very quickly,” he says.