By: Bill White, Member/Manager, MillerWhite Integrated Marketing

One thing marketing directors and company CEOs need to be concerned about, if they aren’t already, is how search engine advertising fits into their overall marketing plans.

Growing up in rural Indiana, when I needed help or answers to my questions, I’d go to a family member or neighbor. Today, the Internet has profoundly changed the way people seek out information and advice. In case you doubt that, a 2007 Pew/Internet and American Life study reports that the place Americans are now turning to most for answers is the Internet. The study revealed that 76% of Americans have Internet access and that 58% search the Internet when they have questions about things like health, school, careers and government issues.

I saw another Internet use study the other day – in fact it was another Pew study. The big question on that survey was, “Did you happen to (use an online search engine) yesterday, or not?” The number of Internet users who said they search at least once a day had risen from about one-third in a 2002 study to just short of half (49%) in the 2008 survey. Search came in a close second to eMail in daily Internet activities, but it beat out reading the news (39%), checking the weather (30%), researching a hobby (29%), surfing for fun (28%), and visiting a social networking site (13%). Of the respondents, 89% said they had used a search engine sometime previously.

Online spending increases

With people’s dependence on search on the rise, it’s no wonder that search engine advertising is increasing as well. An eMarketer report looked at the advertising spending of Ad Age’s “100 Leading National Advertisers.” Between 2005 and 2006, they spent less on the four traditional media (TV, radio, newspapers and magazines), but increased Internet ad spending by $558 million. That report projected a 26.7% growth in Internet advertising for 2007.

One reason for this could be the drive to achieve measurability in marketing results. By its very nature, the Internet allows advertisers to keep track of how many times an ad is “served,” how many times it is clicked on, and how many sales are made as a result of the click-throughs.

Tracking the buying decision

Online, even the buying decision process can be tracked. Systems have been developed that will allow advertisers to map the web sites and ads a consumer has looked at prior to a sale, to get some idea of what contributes to a buying decision. Called assist or attribution modeling, these methods allocate credit for a click-through to all the “touch points” that preceded the one that apparently made the sale.

Of course some buying decisions are no-brainers. The toothpaste is gone, so you go out and buy toothpaste. Nine times out of 10, you probably buy the Crest brand you bought the month before. But maybe that tenth time, the ad you saw online, part of an Aquafresh or Colgate campaign that’s been running heavily, is in your head when you are in the toothpaste aisle and you grab a tube of that. And maybe Aquafresh or Colgate, whichever one you chose, chalks that sale up to its online campaign.

Targeting your consumers

Which raises a question – what is the best way to target potential consumers online? Marketing companies and media buyers are being asked to do a better job of targeting potential consumers than has been possible with geographical or demographical targeting. They have a lot of exciting options open to them. The development of some new technology has fueled a debate about which of two particular types of targeting – contextual or behavioral – is more effective.

Contextual advertising is used all over the Internet. It puts an ad message on pages where the topic relates to the ad. For example, it makes sense that new car ads show up when you go to the Kelley Blue Book new car site. Behavioral targeting is a complex process that uses tracking codes to follow an Internet user’s search behavior. This data comes into play in selecting what ads to serve to that user. Say you researched several new car models.

Behavioral targeting would make it possible to deliver new car ads on your web browser or other sites you visit. Several sophisticated systems have been launched just this year, and the technology is still being fine-tuned and popularized.

Some early results

A case study from Snapple illustrates the process further. The company used behavioral tracking technology to find out who had visited iVillage’s dieting/fitness pages in the previous 45 days. Then rather than placing ads for its Snapple-A-Day meal replacement drink on this channel, it delivered the ads to the dieting/fitness-tracked visitors when they went to any iVillage page. The effectiveness of the tactic was measured by an independent research company, finding that these specific visitors scored higher for key brand metrics than others who saw the same ads within the dieting/fitness channel.

Companies providing contextual targeting maintain their method is better, noting a study showing that 62% of consumers are more likely to respond to an ad that is on “a subject of particular interest to you.” However, the same study revealed that one-third of the respondents in fact weren’t sure or had no opinion about what motivates them to respond. So clearly, the debate rages on about how to best reach your consumers with your search engine marketing dollars.

Integrating your efforts

Perhaps more importantly, online marketers need to evaluate how search engine marketing fits into their overall marketing plan. Just this week I saw a Jupiter Research study done for iProspect. It reported that 45% of search engine marketers aren’t integrating their efforts with offline channels. Some of the reasons for this were lack of budget, human resources or senior management buy-in; separate people managing the search marketing and online channels; or they just never thought about it. Of the 55% percent who do integrate online and offline marketing, 34% use direct mail, 29% use magazine/newspaper advertising, 12% use television, and 12% use radio.

So why integrate online with offline efforts? An earlier iProspect study found that 67% of search engine users are driven to their searches by an offline channel, and that 39% of those offline-influenced searchers actually make a purchase from the company that motivated their search.

At MillerWhite, our client’s unique needs determine whether we recommend behavioral or contextual targeting. Based on our experience, we’ve had success with both, as well as impressive success integrating our clients’ online presence with their overall integrated plans. They’ve found it beneficial to work with an integrated marketing partner who can help them optimize their search engine advertising.