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The process of e-marketing starts from the analysis of market, marketers
conduct the initial market opportunity analysis these analysis could
be of different types like segment analysis, supply chain analysis or
consumer behaviour analysis. After this initial analysis, a firm must
know the scope of their business. SWOT analysis is the best way to determine
a firm’s positives and negatives in market. SWOT analysis would help
firms for set the realistic growth goals and progress in the right direction.
For example, a firm is going to launch an online gadget
store. SWOT analysis would be almost mandatory. SWOT stands for Strengths,
Weaknesses, Opportunities, and Threats.
Let’s perform a general SWOT for this firm ABC.com.
Opportunities:
Gadgets Market is constantly growing.
People do like to upgrade their gadgets regularly.
There are still gaps in market.
Strengths
Have Profitable supply chain.
Good innovative website design.
Strong customer services department.
Have excellent database system.
Threats:
Have to compete with giants like
amazon.com and Ebay.com
There is price war to attract and capture customer in gadget market.
It is really hard to stand out of gadget store crowd.
Weaknesses:
Company has a new and unknown brand name.
No technical support department.
These are just the general SWOT analysis for an
imaginary gadget store. This analysis will help driving marketing mix
and branding strategies, these strategies will help to achieve the e-marketing
objectives. Traditional marketing mix must be implemented in web environment
to achieve right results, Product, Price, Place and Promotion will be
focused by the marketers according to the web environment.
2.7: Search Engines:
Search Engines are the most important and useful web application. A
search engine is a Website which scans other websites and Web pages
to match the input of user. This input could be a Keyword or a Key Phrase.
Search engines are primary method of finding information about a company
or its products. A simple definition of Search engine would be “A type
of web site designed to search the content of the internet based on
the user’s input of key words”. (Dann and Dann, 2004)
Chaffey and Mayer give a more technical and detailed
definition in their book ‘Internet Marketing’. They say “Specialised
websites that use automatic tools known as spiders or robots to index
web pages of registered sites. Users can search the index by typing
in keyword to specify their interest. Pages containing these keywords
will be listed, and by clicking on the hyperlink the user will be taken
to the site.” (Chaffey and Mayer, 2003) Internet search engines (eg
Google, AltaVista) help users find web pages on a given subject. The
search engines maintain databases of web sites and use programs (often
referred to as "spiders" or "robots") to collect
information, which is then indexed by the search engine. Similar services
are provided by "directories," which maintain ordered lists
of websites, e.g. Yahoo!
Search engines are actually web applications or software that enables
users to search the Internet using keywords. Examples of well known
services of this type are MSN, Yahoo and Google. Large number of web
surfers use search engines to find information. Research shows in book
‘Internet Marketing’ that over 80% surfers use search engines (Chaffey
and Mayer, 2003). PR Smith and Dave Chaffey reckon in their book ‘Emarketing
Excellence’ that 90% of the web users’ use search engines to find required
information and data. The above statements clearly show that search
engines are the most popular type of websites, so if a website or e-business
is not registered with search engines that make it very difficult for
consumer to find you unless they know or could guess your web address.
(Smith and Chaffey, 2005)
2.8: Working of Search Engines:
How do search engines work?
It is hard to understand the working of search engines without getting
technical but here is the overview of how search engines work on backend.
A marketer does not need to have detailed technical knowledge to implement
any search marketing strategies but it is always handy to know to what
you are playing with.
Chaffey and Mayer (2003) explains the
working of search engines, they state that “search engines compile an
index by sending out spiders or robots to crawl around the site that
are registered with that search engine. The spider compiles an index
contain every word on every page against the page address. It weights
the index according to different parameters and then stores the index
as part of a database on the web server. This index is what searched
when potential customers type in keywords.”
The above structure of search engines is explained in a following figure
(2.6). Most of the users select websites to browse that are near to
the top of listing. So the Marketers who want more customer attention
will want their website listed above in ranking or search engine. The
techniques and strategies to improve your website rankings in Search
engines listing are known as search engine optimisation
Figure
2.6
Stages Involved in creating a search
engine listing (Chaffey and Mayer, 2003).
2.7: Search Engine Marketing:
As discussed earlier that search engines are the primary
source for the users to find information on internet. This quality makes
search engines an extremely useful tool for marketers to interact with
potential customers. Strauss and Ansary gave a simple and meaningful
definition of search engine marketing. they say that the search marketing
is act of marketing a website via search engines, whether through improving
ranks in listings, purchasing paid listings, or combination of these
and other search engine related activities.(Strauss, Ansary and Frost,2006)
Search engine marketing is the term used to describe the range of marketing
techniques required to make a website visible on search engines and
directories so that it will attract visits from its target audience.
This includes the optimization of a site, the submission to directories,
the use of 'pay-per-click' search tools and keyword related advertising.
Positioning-search-engines.com says this is a newer term and separates
what was once part of the function of a Search Engine optimizer, Search
Engine Marketing specifically is the function of locating, researching,
submitting, and positioning a web site within the proper search engines
for maximum exposure and effectiveness. SEM may also include the function
of choosing the target keywords and keyword phrases for the web site's
meta tags.( www.positioning-search-engines.com/glossary.htm, 2006)
We can say that search engine marketing is actually using the search
engines in a strategic way to market a website this may include improving
rank in organic listings, purchasing paid listings, or a combination
of methods all designed to increase visibility, clicks and, of course,
leads and orders. Related terms: Conversion rate, Cost per click (CPC),
Search engine optimization (SEO), few keywords must be new to most of
us like Organic search, search engine optimization, pay-per-click. Organic
search means the natural search results or the pure results from a search
engine based on a keyword, no preservatives added, means no paid results
or the sponsored links are included. It is a popular term among the
search engine marketers to represent the un-engineered search results.
To know rest of the terms better we need to know the types of search
engine marketing. There are three main types of search engine marketing.
i) SEO (search engine optimization)
ii) Paid Listing
iii) Pay-per-click
(I) Search engine optimization:
Search engine optimization is a term used for the techniques used by
the marketers to improve the listing or position of a website/e-business
in the natural results of search engine. It involves a variety of techniques,
such as link-building and site optimization. There are so many techniques
like augmenting HTML code, web page copy editing, site navigation, linking
campaigns and more, in order to improve how well a site or page gets
listed in search engines for particular search topics, this whole process
is commonly known as SEO.
Andrew Goodman (2005) quoted Seth Godin in his book ‘Winning results
with Google adwords’, he says,” Lucking into (and it is luck) the top
slot of a great word on Google is not a business plan. It’s superstition.
It’s blind faith.” He also praises Google adwords and says,” if you
can figure out how to buy (not luck into) keyword searches that bring
you X number of visitors, and then you can figure out how to design
your site so that Y% of those visits turn into customers, you win. And
nobody can stop you from growing all you care to grow.”
Goodman (2005) thinks that SEO is not a real marketing thing. He says
that it is very much obvious if you design you website in a simple and
clear manner, you can always achieve high rankings in search engines.
He also mentioned some major mistake people make while designing a website
like not having proper title page or not having the right domain name
for site. He recognizes that SEO does not work all the time and it is
being highly over rated. Goodman (2005) gives his personal perception
about SEO, the ground realities tell us the different story, and SEO
is one of the fastest growing businesses in UK in last decade. Marketing
companies like infoserve.com are providing SEO services to blue chip
clients and growing business on good rate. (www.infoserve.com)
(II) Paid Inclusion:
The practice of paying a fee to search engines, directories or shopping
comparison sites that a given web site or web pages may be included
in the service's directory, although not necessarily in exchange for
a particular position in search listings. The best example would be
Google’s Froogle.com or dealtime.com. Google don’t do paid inclusion
in there natural search results neither do MSN. Yahoo do include websites
in there directory for a fixed price ($299 per year) and fee for the
inclusion in yahoo search ranking may vary. (http://www.yahoo.com, 2006)
(III) Pay-per-click:
It is one of the most popular search engine marketing
type, Text ads targeted to the subject of writings on web pages, such
as news articles and weblogs, using programs such as Google's "AdSense"
and Overture's "Content Match" programs. (www.e-consultancy.co.uk)
In Pay-per-click type of search marketing, search engine show advertiser
ads beside the organic search listings based on a keyword. These ads
could be in text or graphics format. Search engine will charge a fee
when visitor click on that advert. Advertisers would not pay anything
to search engines just for displaying their ads. The cost model is ideal
for advertiser as they just pay for the results. All the 3 search engines
giants Google, MSN and yahoo are following this model.
Goodman thinks Pay-per-click (PPC) is better than pay-per-thousand
impression (CPM) and pay-per-sale. He says that although CPM (pay-per-thousand
impression) was the first pricing model in search engine marketing but
there is no guarantee of results with CPM (pay-per-thousand impression).
There is not any kind of performance if an ad is just shown. Advertiser
is charged for it even if hardly anyone ever clicks on it to find out
more. Many advertisers think that CPM (pay-per-thousand impression)
pricing model is a rip-off, but CPM (pay-per-thousand impression) is
still there in market so it must be performing for some one.
2.8: Google and search marketing
Google.com is most popular and dominant search tool on the internet
at the moment. Google have set some real high standards in industry,
other search engines are trying to keep up with Google’s incredible
growth rate. One can rightly say that Google is the market leader in
online search engines. It was not one of the first search engines to
launch, Larry Page and Sergery Brin, two graduate students from Stanford
University started it in 1998. (Schneider and Blachman, 2004, P13)
Goodman (2005) explains Google’s early days as a straight success because
of their simple design and complex back end code. After few early relatively
low profile year, in 2000 Google took a major step forward when they
started providing supplementary search results for yahoo. They made
very important strategic alliance in US with AOL and Freeserve, in UK
with BBCi. This gave Google exceptional coverage of all over the world
and they developed the reputation of most reliable search engine on
the internet. Goodman in his book, ‘Winning results with Google Adwords’
says that Google expanded there operation on different parts pf the
world, they developed different regional search tools, both in English
and other languages. Their global reach expanded immensely and they
emerged as true market leader. It is not just Goodman or Schneider or
Blachman but almost everyone agree upon the global dominance of global.
According to Mintel research (mintel.com,2006), in UK, Over 70% of total
web searches were made on Google.UK has become the second biggest market
for Google after US.google.co.uk is the local domain address for UK.
Research shows on Alexa.com that google.co.uk is the most visited country
specific domain name in the world. If we visit Google now one will be
amazed the way this simple search engine has expanded they have developed
range of different search options, including image search, news search,
shopping search (Froogle) and local search options. Moreover there are
search marketing add-ons like ‘Adwords’ and ‘Adsense’. There is Google
email service Gmail, Google Earth product, Google Talk, Google Base
and Google Book Search, which is part of its ambitious project to make
the content of thousands of books searchable online. (Google.co.uk)
Adsense and Adwords are the Marketing Programs started by Google which
revolutionized the whole search engine marketing industry. Adsense is
for the website publishers who get paid to display Google ads on their
website, they also get paid when visitor click on the Google ads. Adwords
is a program for advertisers who want there ads to be displayed on Google
and its partner sites. Advertisers specify the words that should show
their ads and the maximum amount they can pay per click. When a user
searches Google's search engine on www.google.com, ads for relevant
words are shown as "sponsored link" on the right side of the
screen, and sometimes above the main search results. The ordering of
the paid listings depends on other advertisers' bids.
Stats prove that Google is one of the
fastest growing company in the world, on internetworld.co.uk, analyst
report Google's financial results for the quarter ended June 30, In
2006 company see revenues rise to $2.46 billion, an increase of 77%
as compared to same period last year
In April 2006 Google Search grew 34% YTY, followed by Yahoo! Search
with 27% growth. MSN Search rounded out the top three, growing 10% YTY.
(zdnet.com. 2006)
“The firm reported that its Google-owned
sites generated revenues of $1.43 billion, 58% of total revenues. This
represents a 94% increase over last year. Google's partner sites generated
revenues through AdSense of $997 million, 41% of total revenues, a 58%
increase over network revenues of $630 million in Q2 of 2005. From international
revenues, Google earned 42% of total revenues, compared to 39% in the
second quarter of 2005. According to the company, had foreign exchange
rates remained constant from the first quarter through the second quarter
of 2006, its revenues would have been $26 million lower. Whilst, it
added, had foreign exchange rates remained constant from Q2 of 2005
through Q2 of 2006, revenues would have been $18 million higher.
Commenting on the results, Eric Schmidt CEO of Google said: 'Google
grew at an impressive pace during a seasonally slower quarter,' 'We
continue to deliver valuable new products and services to users around
the world through our partnerships and investments in our business.
Our strong performance results from our clear focus on increasing the
quality of user experience, particularly in search and ads.' “(http://www.internetworld.co.uk,
2006)
It is not just Google but over all digital marketing is over powering
the traditional marketing. On the site internetworld.co.uk, analyst
quote KPMG, the leading UK accounting firm that digital and direct media
continues to thrive and is underpinning the growth of the advertising
industry. The barometer recorded a year on year drop in traditional
media spend for the first time since 2002 when comprehensive coverage
began. The total advertising spend was up 3.4% driven by a growth in
digital and direct media of 22% on Q1 last year. (http://www.internetworld.co.uk,
2006)
“Search giant Google has teamed up with a host of application providers
to integrate its search technology into their applications so users
can search their own intranet and internal data as well as the web.The
Google Search Appliance, featuring Google OneBox for Enterprise, gives
enterprises secure access to information in any application in the enterprise
as well as external web sources from the Google search box. Its name
"OneBox" comes from the familiar process of typing a query
into Google.com. Now, as part of an enterprise search corporate information
such as contact and calendar info, sales leads or purchase order status
is instantly searchable. Application companies supporting the move include
Cisco, Oracle, Cognos, NetSuite, Salesforce.com, SAS and Employease.
‘With Google OneBox for Enterprise, businesses can unlock virtually
all their information -- securely and simply -- using the familiar Google
interface,’ said Dave Girouard, vice president and general manager of
Google's enterprise business. ‘With the help and cooperation of many
of the world's leading enterprise application vendors, search is breaking
down the silos of information inside of businesses.’
A spokesman for the on demand solution partner NetSuite described the
following scenario as an explanation of the typical benefits. 'A marketing
person can efficiently make changes to a product catalogue in multiple
applications and documents. A Google search for a product SKU would
return relevant pricing and inventory results in NetSuite, product marketing
documents, and product references on the company from external Web sites.'”(
http://www.internetworld.co.uk, 2006)
“Business maybe booming for Google, but gainsayers is now questioning
the integrity of search strings on the behemoth engine. At a recent
Knexus Community face-to-face forum, participants from companies including
Avis Europe, Capital One, Diageo, Janssen-Cilag, Kimberley Clark, L’Oreal,
Prudential and Shell felt that Google is fast becoming too commercial.
According to the group, there is a 'diminishing prominence of natural
search results' on the first page of search queries highlighted 'the
danger that Google is sacrificing its original value proposition for
greater commercial gains'. When discussing Google’s dominance within
the search arena, one participant described the search giant as 'the
new Microsoft'. Participants, whose companies said they made 'a significant
investment [in] Search Engine Marketing', urged Google to become 'more
transparent' by publishing detailed guidelines and to listen to them
more by providing 'account managers'. The companies added that by following
such a path, Google would 'not only sustain their leading position,
but also gain the trust of their corporate customers.' ” ( http://www.internetworld.co.uk,
2006)
The above ideas, stats, figures, comments and trends clearly show the
growth and potential of search engine marketing specially Google as
search engine. Author does not agree with all the above ideas presented
in theory. In next chapter, to authenticate the theory author explore
the search engine market in United Kingdom in depth.
Next:
Search Engine Marketing in United Kingdom
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