A lot of ad agencies have been resistant to paid search, despite its unquestionable effectiveness when compared to other media. I think there are a number of factors for this:

Commission (or lack of)
Google PPC media charges are non-commission bearing & this would have to be the number one reason most agencies have actively ignored search until now. The view many seemed to have was that every dollar spent on search effectively cost them lost commission they could earn on traditional commission-bearing media. As a result media plans that should have included search didn’t, or at best it was token.

Obviously the advertising world remuneration structure is changing dramatically. Ad agencies are having to adapt & come up with alternative charge models, such as a transparent management fee on top of media charges.

Measurability
Search is highly measurable & some cynics suggest that not all agencies have liked the associated accountability this brings.

Skills Shortage
There’s a shortage of truly skilled search marketing practitioners in NZ, as there is in other markets. Google have done a great job making the AdWords interface relatively easy to use & training agency staff. However running complex search campaigns takes significantly more time & effort than most agencies realise. As a result many struggle to make money from paid search compared to other ’set & forget’ type media.

Client Ignorance
Until recent times search has been a relatively arcane subject & many clients simply weren’t aware of the benefits of search. This has changed & smart marketing managers are increasingly demanding that media plans from their agencies feature a decent search component.

The good news is that things are gradually changing & increasingly agencies are being compelled to factor search into the media mix. This sea change is clear when you look at the latest IAB figures which show advertisers are shifting spend online & a major part of this is search.

According to IAB, New Zealand television ad revenues were down 13.3% for the first half of 2009 compared to the same period last year. In stark contrast online advertising grew 7%. Online represented 8.3% of all NZ adspend in 2008, and given the current trends, IAB expect it to exceed 10% for the full 2009 year.

One of the key drivers in this growth has been paid search. It’s now the biggest online advertising channel & as at Q2 paid search accounts for 36.3% of all online spend (up 26.14% on the same period last year).

The IAB expects growth in paid search to continue and eventually account for about 50% of online spend, as in other more developed markets like Australia & UK.

Love it or loathe it, advertising agencies really can no longer ignore search. As a result many ad agencies have either been trying to develop skills in-house to manage paid search campaigns (not as easy as it sounds), or have decided the better path is to partner with independent specialist agencies like SureFire Search (shameless plug). An example of this is Ogilvy who use SureFire to provide search marketing services to their clients.

A common mistake made by businesses both big and small is to spend all their budget developing a website and then only consider online promotion as an after thought, (if at all).

Big mistake!

Web marketing is essential, but something that frequently gets overlooked.

Websites are without question a highly effective marketing medium. But to work they need visitors!

Without visitors your website will be like having a TV commercial produced and then never shown on TV. Or brochures printed but not distributed to customers. Clearly to do so would be a waste of money – and yet so many businesses effectively do this very thing with their websites.

No matter how good a website may be or how much money is spent on design and development, it will still be just one of many millions competing for attention on the World Wide Web. Adopting a “Build it & they’ll come” mentality is naive and wishful thinking that simply won’t cut it in these fiercely competitive times.

The Web contains literally billions of web pages and millions more are added daily. [Just how many is not clear, however a study released way back in July 2000 by business intelligence company Cyveillance estimated that 7.3 million unique pages were being added daily. Given the huge growth of the web since 2000 & boom in blogging it's likely the figure is now very much higher. And that means the competition to stand out is even greater].

The vast size of the Web means that simply creating a website and publishing it on the Web does not guarantee your desired audience will find it. If ever the analogy of finding a needle in a haystack applied, then this is it!

So how do you ensure your website gets found?

To break through the clutter and get visibility it’s essential that traffic is driven to a website.

This can be achieved through a variety of off-line and on-line marketing techniques, (ideally in a combined and integrated manner).

When budgeting for your website you need to consider more than just its development costs. Basically there are 3 broad cost areas that should be budgeted for. These are:

1. The initial cost of developing the site;
2. Ongoing maintenance and hosting costs;
3. And last but not least, a budget for actively marketing your website.

Just how much to budget will depend on your specific requirements and the depths of your pockets.

Some US Fortune 500 companies who spend millions on developing websites allocate around 25% of their budget on development, 25% on maintenance/hosting and 50% on website promotion. In NZ significantly smaller proportions of website budgets are allocated to website promotion, however this is changing as smart marketers realise the competitive advantage they can gain.

The key point is don’t spend all your budget developing the site and have nothing left for marketing it.

In future postings we’ll discuss specific ways of promoting your website and driving traffic to it.

Mark Sceats