Searching for Clicks

Book publishers looking to brush up on their Internet marketing tactics could have done worse than sit through sixteen hours of pep talks and panels at the Jupiter/ClickZ Online Advertising Forum on July 30-31 in New York City. Sure, there were blindingly obvious insights — 72% of Internet users say pop-up ads make their skin crawl, compared to 42% who feel the same way about TV ads — and the whole Internet banner ad business is still going down the tubes, though it will sink less this year (6%, from $3.3 to $3.1 billion) than the 13% decline of the past two years. One mini-trend worth noting: “rich media” is hot. Click-through rates for these ads (which move, burble, or make other attention-grabbing gambits) are double those for static banner ads, though dial-up users can’t get them. That should change this year when broadband Internet access hits the critical 15% mark — upping the ante on what gets clicked.

But the biggest buzzword at the forum was “paid search” advertising, which is due to be up 50% this year, and Overture CEO Ted Meisel explained why. “110 million Internet users are now doing four-plus billion searches a month,” he said. “The average user is conducting 35 searches a month, ten of which are for something to purchase.” If a publisher wants to advertise titles among search results — say, a London travel guide that shows up when people search on the keyword “London” — here’s how it works. Advertisers bid at auction for ad placements around the search results for specific keywords. Getting in on the action is cheap: a keyword can be tested for $100, while the average cost for a keyword on Overture is 40 cents, or $400 for 1,000 clicks. Most significantly, Meisel said the average return on advertising spend for Overture was $5.09. “Search will continue to grow dramatically for several reasons,” he predicted. “Marketers will get savvier. New technology will enable them to manage the complexity of marketing at the SKU level, something for which no tools have existed because it’s never been possible before.”

Yet search isn’t everything, countered Martin Nisenholtz, President and CEO of New York Times Digital. “Only 13% of an average user’s time is spent searching,” he chided. “If that’s all you’re focusing on, you’re not doing advertising.” Hence the other buzzword at the Crowne Plaza ballroom — “contextual advertising.” This strategy has been touted as a way for publishers “to make more revenue from advertising while maintaining editorial quality,” and offers the ability to match a publisher’s online content with search keywords. If you have a web page for your London travel guide, for instance, then relevant ads (say, an ad for a London hotel) are automatically placed on your site. Two new such programs are Google’s AdSense and Content Match from Overture, while Primedia’s Sprinks sells categories of pages, rather than individual pages, in its network of sites.

Then there’s plain old email. A discussion headlined “E-mail and Beyond: Interactive Direct Marketing Tactics” grappled with the impact of spam on Internet marketing, and Paul Soltoff, CEO of SendTec, warned: “Be careful how quickly you agree to a do-not-send email list. As it is, 15% of legitimate email is getting filtered out. Look at your inactives to see if they are really getting their mail.” All agreed that email remains the most efficient way to keep in touch with — and keep — your best customers. Take a page from Cosmetíque, for example, which signed up more than 200,000 web site visitors in 12 months for its cosmetics clubs.

We thank New York-based freelance business writer Rich Kelley for contributing this report.