SearchMarkeking-UK.com

3.1: Growth of online shopping in United Kingdom:

United Kingdom’s high streets are not enjoying the most excellent time, but internet shopping has ascended sig¬nificantly in recent past, this boom has made online shopping a major retail channel in United Kingdom. According to report published in ‘Marketing week’ (issue: April 14, 2005), writer quotes a research from Royal Mail conducted by ‘Con¬tinental Research’ that half the United Kingdom pop¬ulation - 29.4 million people - used the internet to buy gifts for Christ¬mas. This led to a 20 per cent increase in e-tail sales compared with the year 2004. Consumers spent more than £3bn online, rep¬resenting 6.8 per cent of all UK retail sales. By comparison, high street sales grew by just 2.5 per cent over the festive period.

In another article published in ‘Marketing week’ (issue: April 14, 2005) Caroline Parry reckons that increase in online retail transactions is part of an overall trend for 2004: total sales for the year have been valued at £14.5bn, which suggests that managing retail in a multi-channel environment - Web, in store, catalogue and interactive transactions - has come of age. In the same article Richard Roche, Head of multi-channel retail at royal mail contributes that the Royal Mail White Paper Report (The Future of Retail: a 2010 Vision) predicts that online sales will continue to grow. It forecasts that by 2010, online retail will account for 15 per cent of total retail sales and will be worth about £40.5bn. TESCO, the biggest retailer in United Kingdom is also enjoying this Online shopping boom, A news article in Daily Mirror (August 31, 2006, p14) reports that TESCO.com’s 750,000 regular customers spent £1bn in 2005.

According to the reports, published in ‘Marketing week’ (issue: April 14, 2005) 46 per cent of UK adults have bought something online and consumers are increasingly keen to shop across a variety of channels. The research shows that one in three respondents expects to do half of their shopping from home by 2010; one-third also expects to shop using interactive and hand-held devices by that year. The challenge for retailers is ensuring that they meet this demand and market it appropriately.

The facts, figures and consumer attitude clearly indicate that online shopping is growing on very high rate, especially in United kingdom where consumer have more buying power than other parts of the world. Retailers can use new digital media to build more powerful relationship with customers. Online presence can be as fruitful for sellers as high street; the need is to send the message across in simple and effective way.

3.2: Search Engine marketing in United Kingdom:

As discussed earlier that search engine marketing is growing rapidly in United Kingdom. According to a leading market research company E-consualtancy.com (2006) the UK market for Search Engine Marketing will be worth an estimated £1.41 billion by the end of 2006, with the value of Paid Search alone bursting through the £1 billion mark. The analyst reckons that the search market will remain extremely optimistic in 2006, following a stunning year of growth in 2005. One can expect the market to grow at a minimum of 65% in 2006. (E-consultancy.com, May 2006)

Further in report Search Engine Marketing: a Buyer’s Guide, E-consultancy analyst recognizes the primary driver behind the growth is awareness of marketer. As more and more marketers are recognizing the benefits of Paid Search Marketing and Search Engine Optimization. Other research suggest that its not only the marketer who is recognizing the importance of search engine marketing but the end consumer behavior is becoming more and more favorable for industry. New Trends within search market are recognized by E-consultancy are:

• Growth in the market for Search engine optimization services will continue to accelerate during 2006 as marketers increasingly realize the importance and value of organic listings.
• Marketers are becoming interested in Paid Search.
• Search is increasingly being built into overall marketing plans as it becomes more strategic.
• There is increased awareness about the need for ethical search engine optimization.

3.3: The role of Google:

Google reported high profits for first half of 2006, as they keep on influencing search engine marketing heavily. Their role in this rapidly and extensively moving search market is huge. With respect to Google’s competitors, we can simply rank Google the market leader in search engine marketing. There are several factors behind Google’s success in search marketing. The business model Google introduced to the market wasn’t something new but still good enough to attract million of people to Google’s search marketing paradigm. Innovation, automation, self-service are key factors which differentiate Google’s search marketing model from its competitors. Google has found a way to match ads with content that does away with the great panoply of middlemen we have come to expect. Suddenly, technology is offering a black box in place of all those agency guys without whom we had always assumed it was impossible to create ads and buy media.

Automation is everywhere and so is search tech¬nology. Things are being shaken up, but the consumer enjoying the benefit of constantly developing technology and market. This latest phase of online competition is working in the consumer's interest. Search engines like Google, yahoo and MSN are using all the tricks of trade to acquire the market more share. Search Engines are not only attracting customer online but offline as well. One of the examples of search engine trying to attract offline users is ASK.com. They recently advertised through banner ads and leaf lets during the England verses Pakistan cricket series. Some people would argue about the effectiveness of the offline channels to bring people online but it certainly reflects the level of competition in the market.

But back to Google: it's taking another giant leap into the advertising spotlight by offering three new features to its advertisers: Marketing week (July 2006) reports, Google advertisers can choose which websites their ad will appear on; they can pay for the ads according to how many times they are viewed rather than how many times they are clicked on; and, most signifi¬cantly, they can go for animated ads instead of graphic or word-only ads. Animation and the CPM (cost-per-thou¬sand) type payment model means Google has stepped into the very heart of traditional advertising. Yahoo and other media companies are really scared of Google’s progress.

Google has launched its new local search service in United Kingdom, Local advertising is the next big thing in search marketing and it's great that a search engine of the caliber of Google has recognized that targeting customers on the basis of place is just as valuable as doing so by content. Marketing week report explains that with Google Local UK, users simply enter a key phrase (fish and chips, for instance) plus their post¬code or area name to receive a comprehensive list of nearby fish and chip shops. Each result is accompanied by a phone number, street address and links to related websites such as those of other fish and chip shops, reviews and other useful information. As well as searching by postcode or area, users can also search by street name, London Underground sta¬tion or airport.
Google is also launching Google Maps UK, a dynamic mapping fea¬ture that is integrated into Google Local UK. Users looking for local information can immediately see their search results on a map and find directions on how to get there from any given point. (Marketing week, APRIL 28, 2005)

A report published in Financial Times (August 29, 2006) focuses on the Google’s recent growth through strategic alliances. The author Richard Waters thinks that new alliance between the key online players like Google and eBay is major step towards new era of internet. He reckons that the leading internet search and auctions companies have seemed to be on a collision course of late, triggered by Google’s decision to build a platform that could support a range of e-commerce and eBay’s rush to diversity from its maturing core market.

Writer quotes Joe Wilcox, an analyst at Jupiter research, “Google is building infrastructure that looks like a marketplace, for itself and its partners”. Richard further says in the report that like other recent landmark deals involving Google and AOL, Yahoo and eBay and Google and Myspace, this is an acknowledgement that long term strategic planning should not get in the way of short-term commercial reality.

Report further quote Google’s CEO Eric Schmidt that Google is changing according to market needs, they are expanding in more user involved fields (e.g. online communities).He said that the more people involved in using of online services the more stronger will be the marketplace. It is simply visible that Google is constantly improving it services and expanding in new areas. Search market may be Google’s Power arm but user generated content is changing the nature of online behavior. Google has to keep working to stay on top.

3.4: Click Fraud and Google

Click fraud occurs in pay per click search engine marketing when a person, automated script, or computer program imitates a legitimate user of a web browser clicking on an ad, for the purpose of generating an improper charge per click. Click fraud is the subject of some controversy and increasing litigation due to the advertising networks being a key beneficiary of the fraud whether they like it or not. (http://en.wikipedia.org/wiki/Click_fraud, 2006)
Theregister.co.uk reports (Published Tuesday 5th April 2005) an alarming issue:
“Google, Yahoo! and other players in the search business have become embroiled in a lawsuit which involves overcharging for pay-per-click online advertising.
The Wall Street Journal says that plaintiffs in the US filed a lawsuit in February alleging that Google and Yahoo overcharge advertisers, and also that they collude with each other, to continue overchargin.
In the pay-per-click model used by Google, Yahoo! and Ask Jeeves , advertisers pay each time a user "clicks through" on an ad listed alongside search engine results. Each click costs on average between €0.30 and €0.50 with more popular keywords costing as much as €10 per click.
Led by an Arkansas company called Lane's Gifts and Collectibles, the plaintiffs want the lawsuit certified as a class action. They allege that the defendants, which include Google, Yahoo!, FindWhat, Ask Jeeves, America Online and Look Smart, improperly charged advertisers for incidents "click fraud".
Click fraud is a growing problem in the search industry. The practice has seen people - such as competitors or unhappy employees - click repeatedly on an ads to run up a bill for the advertiser. This can cost advertisers a lot of money and is difficult to track down.
Google and Yahoo! and other search engines say they have anti-fraud systems in place and that they regularly give advertisers refunds for fraudulent clicks. However, they have been sketchy with details, causing some advertisers to worry that the problem is bigger than they are being told.
Click fraud statistics from Sempo, a non-profit association that works to increase awareness and promote the value of search engine marketing, indicate that advertisers are concerned about click fraud but haven't been able to seriously track it. Between 36 per cent and 58 per cent of advertisers are worried about click fraud but been unable to track its full extent, according to a report by Sempo published in December 2004.
While the majority of the named defendants of the lawsuit have so far declined to comment, Ask Jeeves said in a March regulatory filing that "we intend to defend this lawsuit vigorously".” {Google and Yahoo! accused of click fraud collusion, 2005}

The above article clearly reflects that click fraud is no low-risk matter to search industry. Search engine giants like Google and yahoo are taking this very seriously. Governments are keen to impose legislative controls. There are already some cases in which courts give sentences for organized click fraud. Advancement in technology has made organized click fraud easy to catch. Each search engine has its own click fraud prevention strategy but still click fraud is happening all over the world. It is biggest threat to search engine marketing. There's a crisis developing in this industry. Poor click quality has the potential to hit marketers hard and to negatively affect search engines. It manifests itself in many ways, including as network click fraud, competitive click fraud, and mislabeled traffic. Like other Search engines Google has been hit by click fraud problem, Search engine marketing has turned Google from just a search engine into corporate superstar. A report published in Financial Times July 21, 2006, Richard Waters quotes a court-ordered report, Alexander Tuzhilin, a professor of information systems at New York University, has just pronounced Google’s efforts to stop fraud to be “reasonable”. Google seeks out those clicks that have been made for no other reason than to generate a payment from an advertiser- most commonly they come from dodgy online publishers make up the wider Google network, carrying ads from the search engine on their sites and taking a share of money that advertiser pay.
Richard Waters (Financial Times July 21, 2006) further recognize that however good Google’s detection methods, it may never escape the perception that fraud is common. By definition, it can not explain to advertiser why it has decided that some clicks were fraudulent but charged them for others. That would give away its detection methods and expose the system to even greater fraud. In United Kingdom, there is need of educating the common search engine user more about the ethical aspects of pay-per-click marketing model.
In this chapter author had a detail look into growth of Search engine marketing in United Kingdom. Discussions about online shopping growth, Google’s role in United Kingdom’s search market and click fraud has helped author to have a clear idea about the market trends which will help in the following chapter to formulate scientific hypothesis.

Next : Hypothesis

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