We’re going to cover the basics of search engine marketing, then work our way up to some of the most recent developments that have changed online marketing over the past year.

Many people believe that by the end of this year, search engine marketing is expected to generate about $2.1 billion in the U.S. alone. 

Search engine marketing is a broad term that describes all of the activities undertaken to improve how well a Web site ranks in search engine listings.                                                              

This includes: Web site optimization (design, content, etc.) and Web site promotion (link exchange programs, natural search engine promotion, paid placement, pay-per-click, banner ads, etc.)

Search engines are one of the primary ways Internet users find the products, services, and information they are looking for online.

When the commercial version of the Internet was still in it’s infancy, search directories provided the definitive guide to finding what was available online.  Companies like Yahoo had teams of human editors searching the Internet to find quality Web sites that were relevant to a specific topic.

Search directories are not as prevalent as they were in the past, but this does not mean that they are irrelevant.  Many search engines, including Google and Yahoo, use directory listings to supplement their crawler-generated database of Web sites.  Quite often, directories result in more qualified, targeted traffic because of the way searches are conducted on directories.  

Spammers attempt to influence search results without providing quality content that search engine users are looking for.  Search engines want to provide relevant, quality results to users’ queries, and if you are able to produce an informative, content-rich site that fulfills users’ requests, that’s great.

Search engine marketing is a reciprocal relationship between Internet users, search engines, and Web masters.  The users rely on the search engines to help them sift through the millions of Web sites online to find the sites that provide the most relevant results, and Webmasters rely on the search engines to increase traffic and drive more business to their Web site. 

Introduction to Search Engines
There are two major types of search engines: crawler-based engines and directories.  The former employs specialized programs (called “crawlers” or “spiders”) to compile data, while search directories are compiled by human editors.  Search engines attempt to compile an almost comprehensive list of the information on the Internet, and make it available on-demand to their users.  Search engines do not care how great your site looks; they only want to know what your site is about. Such factors as keywords are used to help them determine how to list your site.

Directories are compiled and maintained by human editors who review your site and manually process your submission.

The goal of search engines is to provide users with comprehensive, relevant results to their queries.  They all seek to improve the quality of their search databases. 

Most search engines have a difficult time indexing Flash, so it is a good idea to submit the first page of your site to the search engines if you are using a Splash page for your intro.

Search is self-perpetuating: the search engines that return the most relevant results to queries become more popular. This increases their importance to businesses with Web sites, the search engine’s database, overall Internet coverage, and the number of Web sites from which the search engine is able to pull the most relevant sites.

Search engines evaluate your Web site based on:

How to choose Keywords
How do you think prospective customers will search for your products or services on the Internet?  What words or phrases will they type into the search engine search bar to find you?  Choosing the right keywords may be one of the most important aspects of ranking well in search engine listings. 

Remember to create keyword-dense content for each page, and do not rely on yourself to come up with all of the keywords for your Web site.  What you think your customers are searching for and what they are actually searching for can be very different. 

Generic keywords do not work!  The competition is too fierce to rank well for words like “books” or “music”.  You’ll be competing with some of the largest, most successful online businesses. They spend thousands of dollars a month marketing and promoting their Web site. 

Remember, general keywords result in general traffic.  If you sell rare or antique books, or books published in foreign languages, you would probably not want the same kind of traffic Amazon.com gets. 

Research has shown that when a customer is ready to buy, they are using very specific keywords or phrases to find the site they will purchase from.  If you list “books” as one of your keywords, you’ll be competing with powerful companies like Amazon.com and Barnes and Noble. But if your keywords are “17th century philosophy books”, you will have a much better chance of ranking well. Also, the traffic you do receive from search engines will be highly targeted customers searching for exactly what you are offering. 

When prospective customers are use a search engine to find products or services, they type in keywords or phrases. Being relevant or ranking well for general terms like “vacation” or “insurance” is incredibly difficult because of the intense competition. 

A good strategy is to try to include keywords in your domain name, in titles, in text, in links, in the name of the actual page and in image names or captions. Remember that each page on your site cannot be relevant for ALL of your keywords.  The more focused and specific each page is, the more relevant it will be for the topic or subject that it covers. 

If you anticipate generating walk-in traffic with your Web site, make sure to include your city in your keywords.  Do not repeat the same keywords more than a few times. If you do need to reuse some keywords, try to spread them as far apart as possible. 

Above all, make sure that the text on your site is well written and convincing. If you succeed in securing a favorable ranking with the search engines, you want to make sure that the people actually reading your site are impressed and persuaded. 

The most important places to include keywords are: in the title of each Web page, and in the first couple of sentences of text of the site. Keyword density refers to how frequently important, relevant words or phrases occur in the text on your Web site. 

So, what keywords should you be using?  You may know your business better than anyone else, but when it comes to selecting keywords, that can be a detriment. Don't make them too general or you may have a difficult time ranking well with any of the search engines.  The more specific your keywords are, the better your site will rank, and the more targeted and qualified the resulting traffic will be. 

Ask your existing customers and suppliers what keywords they would use to search for your services or products online.  You may be surprised at their answers.  What you would search for and what your customers would search for are often very different.  Better yet, search for your competitors Web sites, and look at what keywords they’re using for their site.  Just right click anywhere on the page, and select "View Source".

If you want to check out how popular your keywords are, use a tool like the one on http://www.digitalpoint.com/tools/suggestion/ and find out how often that term is searched for every day.

Links and Search Engines 
So how do links figure into ranking well with search engines?  Many search engines and directories use links as a way to determine how “popular” a Web site is. They reason is that high quality sites with useful content will be linked to more often than sites of marginal quality. 

Some search engines like Google use links to find new Web sites.  One reason link analysis has become increasingly important in search engine ranking is that placement of external links to your site is very difficult to fake or manipulate (like some of the other components search engines evaluate in determining how to rank a site). 

A great way to increase ranking in the search engines is to use keywords as link text instead of a generic "Click Here". 

Each month, when Google’s search spiders are refreshing their search database, they begin by reviewing all of the sites already indexed. From there, they follow hyperlinks from site to site until they have found all the linked sites. 

Content Matters
Linking to existing sites can play a significant role in driving more traffic to your site. It's important to keep in mind that you will be judged by your content matter -- as well as to who you are linked to. 

Before exchanging links, ask yourself a few important questions: Does this site offer products or services that would compliment mine?  And would I want to be associated with this site?  Think of inbound links as votes in a popularity contest.  Many search engines assume that if other Web sites think your site is worth linking to, it must be good. That's because there are many tricks that Webmasters can use to try and trick the search engines, but inbound links cannot be artificially controlled. 

Avoid Link Farms
Link farms are Web sites or pages that serve no other purpose than creating inbound links to member sites.  If you come across a site guaranteeing links from several other Web sites, avoid it like the plague.  Free-for-all link collections are bad for business. 

Links from popular, respected Web sites in your industry result in high-quality, targeted traffic and associative respect, relevance, and consideration from the search engines.  Now, back to content.  You need to give the Webmaster incentive for linking to your site. You need to demonstrate how your content will benefit their customers and potentially improve their business.  

The number of links pointed towards your site is important, but the quality of these sites is just as important.  Search engines do not assign the same weight to links from unknown, unlisted Web sites that do not appear in their search listings; however, having well known sites linking to your site reflects very favorably on your overall link popularity.

Use a Site Map
Have you ever wondered why some Web sites use a site map?  Because of the way search engines index Web pages. Site maps give the crawlers a way to “find” all of the other pages in the Web site.

Free vs. Paid Listings
If you’ve been keeping up with the online advertising industry, you know that it is quickly becoming a huge business.  Paid placement programs are also referred to as:

¨ Pay-for-placement
¨ Pay-per-click
¨ Cost-per-click
¨ Contextual advertising

Paid search generated over $2 billion for search engines and portals in 2004, with annual increases of 20% expected through the end of this decade.

Cost-per-click advertising accounted for 43% of all revenues generated from online advertising.

Pay-Per-Click (PPC) rankings are not based on merit; they are awarded based on advertising budget.

Again, choosing the right keywords factors in heavily to how successful your PPC campaign can be.  If you are bidding on the wrong keywords, you will end up paying for visitors that are searching for the wrong content.

PPC advertising can be extremely cost effective because of the highly-targeted traffic (or visitors) that find your site.  If your site is not ranking as well as you would like in natural search engine listings, PPC advertising ensures that your listing will appear in the sponsored results next to the top sites for any given keyword.  Also, because your PPC ad includes a short description of the products or services you are offering, there’s a good chance that the person clicking on your link is very interested in what you have to offer -- possibly even ready to buy.

These are some of the disadvantages to PPC advertising:

¨ Paying for redundant visitors – Many PPC programs do not differentiate between unique visitors and total visitors.  Most people searching for products or services online look at several different sites before making a final decision.  If the same visitor uses your PPC link several times, you end up paying for that same click several times.

¨ Bidding wars – If you want to be found on popular keywords or terms that generate a ton of traffic, you can quickly find yourself in a bidding war that may drive up the price you pay per click—from only a few cents to a few dollars per click.  If you want to be found for unique keywords or terms, you won’t have this problem.

Performance-based advertising
Performance-based advertising has become increasingly popular over the past year. Internet advertising has become a huge business, taking in $7.3 billion over 2003 — up 21% from the year before.

Is this different than paying to be listed in a search engine’s database?

Yes.

Bidding on keywords has become big business for search engines, and as competition for popular keywords increases, so do prices.  In the past year, the average cost for cost-per-click has risen over 200%! 

Paid inclusion and cost-per-click programs are quickly becoming a normal part of the online marketing landscape.  Remember, search engines are commercial companies that try to make money by directing users to relevant Web sites.

Spending money on paid or sponsored listings will not improve your ranking with the search engine.

Paid search programs do not guarantee your placement at the top of search engine results.  Relevancy and ranking are still determined by the search engines’ complex relevancy algorithms.  

Buying Your Way In
Paid inclusion marketing is becoming increasingly important to achieve success with your online marketing campaigns. 

Paid inclusion programs allow Web site owners to submit their information to a search engine with a guarantee that the site will be included in the search engine’s database.  There is not, however, any guarantee of how well the Web site will rank in the search engine’s listings.

Top PPC Advertising Tips:
1. PPC advertising can be very expensive if you are not careful when selecting the keywords you bid on.  Remember, you are paying for each person that clicks on your advertisement/listing, so you only want to attract targeted traffic that are specifically looking for your products or services. 

2. Don’t bid on general words that may end up attracting attention from visitors that are looking for a similar but unrelated product or service.  Do not waste money on people that are not interested in what your site has to offer. 

3. Specific, targeted keywords and phrases are often less expensive, and the traffic that you get is usually much better too because that’s exactly what the user is searching for.  T

4. Try to pay for click-throughs, not views. 

5. Nearly all PPC ads are text links that briefly describe your site, so make sure that your ad is well written and persuasive. 

The Major Search Engines
Some studies have been done that show minimal correlation between search results between the major search engines.  Basically, the database coverage from one search engine to the next is different. Even when a Web site is listed in multiple search engines, its relative position is usually different -- indicating that each search engine factors rank positioning differently. 

If your site has been optimized for Yahoo, it may not rank as well in Google.  This is because search listings have little overlap from search engine to search engine. According to ComScore Networks, over 40% of all U.S. Internet users search through the Web using Google.

Google used to supply Yahoo with search results.  Now, Yahoo is using its own search technology—including AlltheWeb and Alta Vista, who now use the Yahoo database for their searches.

The Main Players

Google
Each day, Google performs over 200 million searches for products and services on the Internet, making it one of the most important search engines in the world.

Google uses search spiders to index all of the Websites on the Internet. Google uses automated spiders or crawlers to search through over 3 billion Web pages every month! Google does not penalize you for submitting your site multiple times, but it will not improve your ranking on the search engine either. 

If you’re having difficulty getting Google to pick up your site, they suggest that you submit your site to Yahoo or DMOZ (the Open Directory Project hosted and administered by Netscape).  Once your site has been listed with Yahoo or DMOZ, you should appear in the Google index within six to eight weeks.

To submit your site to Google, or to read over their rules for submitting a Web site, please visit www.google.com/addurl.html.

Overture
Overture is a subsidiary of Yahoo.  Overture was one of the first companies to offer keyword advertising programs.  Overture’s Pay-for-Performance program allows users to bid on keywords and have their listings appear.

Overture also administers a program called Site Match that provides results to search engines and portals like Yahoo, Lycos, Alta Vista, and AlltheWeb.  The non-refundable, annual fee for the first URL is $50 with a $29 charge for each additional URL. There is also a  cost-per-click fee of 15¢ for Tier 1 Categories (including books, music, and jewelry) and 30¢ per click for Tier 2 Categories (including industries like real estate, travel, and electronics). 

Yahoo!
Some studies suggest that Yahoo’s search engine favors Web sites with more text. Yahoo now owns Inktomi, AltaVista, AlltheWeb, and Overture.

MSN
Currently uses Inktomi for its primary search engine technology, with paid ad listings coming from Overture.

Many industry experts expect Microsoft to release its own proprietary search engine to rival Yahoo and Google within the next 12 months.

DMOZ (Directory Mozilla)
The directory is arranged by broad, general categories with more narrow, specialized sub-categories and topics. 

The Open Directory Project is a human-compiled database of Web sites organized by categories.  DMOZ provides directory-powered results/data for large search engines like Google, Yahoo, Netscape, AOL Search, HotBot, Lycos, and many others.  Submission to DMOZ is free.

DMOZ does not attempt to provide a comprehensive directory to all of the Web sites on the Internet; their main goal is to make the directory as focused, relevant and useful as possible.  Consequently, they are relatively selective about the Web sites that are included in their database. 

DMOZ will only accept one submission for each Web site—even if you have multiple URLs for the same site, or multiple sites listed under the same URL.  The description that you submit with your site must be concise and descriptive, without any superfluous marketing or promotional information.  You are also required to select the most appropriate category for your Web site from the DMOZ list of categories. 

Also, DMOZ will not accept any Web sites submitted automatically using submission software or services, so please be sure to adhere to all of the rules and regulations, otherwise you risk having your site removed from the directory.  Directories do not rely on keywords, titles, metatags, and other things that spiders and crawler-based search engines use to evaluate a Web site’s content and relevance.  The only thing that you can do to improve your ranking within a search directory like DMOZ is to provide quality, useful information, services, or products.  You cannot manipulate portions of your site to improve your overall ranking. 

Once you have submitted your site, it usually takes about two weeks for a DMOZ editor to review your site (sometimes longer, depending upon how busy or popular the category is).  After your site has been accepted, it can take anywhere from two weeks to two months before your Web site data begins to show up on the search engines that use DMOZ results.  Make sure that you submit your site in accordance with their submission guidelines.

Here’s a link to the page on the DMOZ site to submit your Web site: http://dmoz.org/add.html.

Search Engine Optimization
Optimization is not about tricking the search engines into giving your site a better ranking than it deserves; it is about presenting your site and the information it contains in the most favorable light possible.  After all, if there is no substance to your site, visitors will quickly leave anyway.  Optimization is about maximizing each page on your Web site to make it as informative and user-friendly as possible.

When a search engine is adding your Web site to its database, it uses special programs called “spiders” or “crawlers” to catalog all of the data your site contains.  These indexing programs look at the HTML code used to create your site, and for this reason, many Web developers spend considerable time trying to refine the HTML coding and tags to improve search engine ranking.  The only reason that these automated programs are in such wide use is because it would be impossible to read every single Web page submitted to the search engines.  In lieu of hiring thousands of people to read each page, these automated programs attempt to ascertain what the site is about, and include that information in a searchable database.

The search engines do not like to be tricked, so it is better not to concern yourself with manipulating HTML code or tags to improve your ranking.  Two of the most important aspects of Web site constuction as it relates to search engine rankings are:

DESIGN
Design is more than just attractive graphics and layouts.  Good design is user-friendly, keyword-dense content that does a good job of selling your products and services. 

TITLE
One of the most important elements in optimizing your site for the search engines is the HTML title tags. 

In the past, everyone believed that there was a natural connection between hits and conversions—be it banner ads, pay-per-click ads, or even just a visitor to your site.  As paid placement and paid inclusion programs become more prevalent and important, it is essential for your customers to evaluate the success and effectiveness of their online marketing efforts.  Track what keywords, which search engines, which ads, and which listings — paid or natural — are resulting in the most traffic. And more importantly, which ones are responsible for bringing in the most new customers.

Web analytics should be a part of everyone’s search engine and Internet marketing programs.  You will be able to drive more qualified, targeted traffic to your site and improve your customer conversion rate and spend less money in the process.  How are you going to measure the effectiveness of your marketing efforts?

Identify the keywords, search engines and ads that are generating the most customers, and focus your efforts (and budget) on those sources. 

IMPROVING NATURAL OR ORGANIC LISTING
Despite the growing popularity of paid programs, natural, algorithmic, or organic search listings will always remain important.  Users want the most relevant sites for their search, not a list of companies that have paid to trigger ads and links according to certain keywords. 

This is where site optimization comes into play.  If you can reduce the amount of money spent on paid inclusion programs by improving your natural search ranking, do it! 

The data and information you collect from Web analytics plays a huge part in the process.  When you first set up your Website, you were probably wondering what keywords potential customers would use to search for your products or services?  After your site has been up for at least a few months, you’ll have statistical data on which keywords have been resulting in the most traffic for your site.  With this information in hand, you should go back and fine tune your keywords to boost your ranking with search engines.

Search Engine Marketing (SEM) Companies
In fact, on Google’s Web site, they purposely discourage using software that automatically submits Web pages or checks a site’s ranking.

Many SEM companies also rely heavily on doorway pages to get their clients’ sites ranked in the top ten.  Basically, the company creates a separate Web site pointed to a domain name they own, and optimize all of the elements to rank well in search engine algorithms.  Many search engines consider doorway pages to be a form of spam, putting these Web sites at risk of being banned from search listings.

CONCLUSION
Search engines can be an important source of traffic for your Web site, but always remember that your Web site should focus on the end-user that will (hopefully) spend money on your site.  If you are overly concerned with optimizing your site for search engines, it may not be very user-friendly, and ultimately, that will cost you business.

Pay-per-click advertising can provide an extra boost to online marketing activities, but be careful how you are spending money.  If you don’t follow up to track the performance of your paid inclusion programs, you have no way of evaluating the success of your efforts.  Most business owners know how well past advertising and marketing campaigns have performed—on TV, radio, print, and other forms of media. In fact, most can probably tell you what kind of return on investment

Before you spend thousands of dollars advertising on Google and Yahoo, start by looking at some of the more inexpensive ways you can increase traffic — site design, content, keyword density, etc.  It does not matter how successful your paid inclusion and paid placement efforts may be if your site is unable to convert visitors into customers.