"The thing that benefited us most was moving [our listing] to key areas where we're No. 1 or No. 2 versus being one of six or seven listings on a printed page," Stilley said. "At this point it's too early to tell overall return on investment, but we did get one contract worth $3 million. I'm going to China very soon to sign the contracts."
A smaller target
Marketers' confidence in search engine marketing is evident in their use of the medium. Paid search represents 40% of all online advertising, according Jupiter Research's "US Paid Search Forecast, 2005 to 2010." It's expected to surpass online display ad spending by 2010. Paid search, which, according to the report includes paid listings and paid inclusion, grew 70% in 2004.
This year, search advertisers will spend $4.2 billion, up from $3.1 billion last year. The sentiment is voiced by searchers, too. An October 2004 MarketingSherpa study of b-to-b buyers found nearly 64% of b-to-b businesspeople said search engines are the first place they look when they are online researching a major purchase.
Recently, there's been increased interest in vertical search engines that are designed around a specific business type or sector. These sites, which include Business.com, Thomasnet.com, IT.com and Gowholesale.com, among others, provide something the traditional engines simply can't: relevancy. Vertical engines attract people looking for a specific genre of information, unlike traditional search engines that count both consumers and businesspeople among their users.
"There are a million different places to search online," said Laurie Hood, VP-marketing for KnowledgeStorm, a search resource that targets the information technology sector. "The challenge isn't about finding buyers, it's about them finding you on their terms."
Vertical engines can also be much more affordable than pay-per-click advertising on traditional sites, even in the eyes of b-to-b marketers used to paying a premium for such relevancy in the print world, said Lane Soelberg, Business.com's VP-marketing and communications. "It's a broad range, but marketers [using vertical search] could see clicks that are anywhere from 90 cents to the $8 or $9 range," he said.
While traditional search engines might charge less—especially for arcane terms, since clicks are more targeted—the advertiser may get fewer qualified click-throughs. Another recent Jupiter Research report said that the combination of auction-based pricing dynamics and relatively low awareness of vertical search is creating an artificially depressed pricing model.
Still, even if vertical search placement was free, it wouldn't be worth doing unless there were results, said Keith Crosley, director of corporate communications for anti-spam technology provider Proofpoint Inc. and one of IT.com's first customers. Today, Proofpoint sponsors the engine's e-mail security section. Previously, Crosley was bidding on Google.com AdWords, but it was too expensive, he said, and didn't provide enough return on investment.
"The types of leads we were getting were all consumers," he said. "You'd spend hundreds of dollars before you got to a single decent lead."
The IT.com sponsorship nets him one to two click-throughs each day, but every one is a qualified, relevant lead, he said. "There are no homemakers or students, it's all enterprise-level IT people," he said.
There are also more advertising opportunities on vertical engines. Marketers can buy sponsorships, pay to have their sites indexed or bid on search terms and rankings. Vertical vendors also offer services such as hosting marketing materials and prequalifying leads.
As a bonus, these marketers also get placement on general search engines because many of the vertical players buy placement to draw in additional traffic for their clients. Other services, such as KnowledgeStorm, ink deals to put their advertisers' content or their search services on other media sites. And just as important, some verticals such as Thomasnet.com give advertisers analytic and tracking tools so they can see exactly how their investment stacks up.
And the vertical search space continues to evolve. Take IT.com, the new engine designed for IT buyers. The site takes a page from both traditional engines and their vertical search brethren. It offers category sponsorships and featured links, but its organic search is just as important, said Mark Cordover, the company's CEO. Instead of listing sites and companies based solely on buy-in, or ranking organic listings based on page ranking—how often a site is mentioned by or linked to other sites—IT.com bases its listings on industry buzz and relevancy, Cordover said. "We don't spider everything. We include news, white papers and Webcast," he said. "Players who come up correspond roughly to who has market presence in the space. We consult nonbiased peers, media sites, blogs, people who have engaged in the process of choosing an IT provider."
All of the vertical sites fill a space that none of the top search players is addressing directly. Google, for example, doesn't look at vertical markets any differently than it does horizontal, said Spencer Spinnell, Google's head of business and industrial services. Instead, the company chooses to partner with vertical search players.
Meanwhile, Yahoo! has created several consumer-based vertical categories, but there's nothing industry-specific. LookSmart, which also recently launched consumer verticals, is interested in partnering as well, said Dave Hills, LookSmart president-CEO.
One analyst said it only makes sense that marketers—and other engines—expand their horizons with vertical search. "For b-to-b advertisers especially, this is a key issue," said Gary Stein, a senior analyst with Jupiter Research. "Most of the searches on the traditional engines are going to be performed by consumers. Think about the word `router.' A router search on Google could be someone who wants a router that's a tool, a home router, or someone looking for a router for a small office. Searchers' needs are different, and there's no way of knowing what they are on a general search engine."
Nevertheless, a number of experts—including an executive at a vertical search engine—said both vertical and traditional engines should be part of a marketer's strategy.
"People might ask, `Why should I spend money on Google when I'm listed in Thomasnet?' We tell them that they need to be in both," said Linda Rigano, director of strategic alliances and new business for Thomasnet. "Deciding on the breakdown is a calculated risk, but you wouldn't say I want to be in one over the other."
Jupiter Research's Stein agreed. "It makes sense to start thinking beyond Google, and Yahoo! and MSN, but you still want to be found by the general search engines," he said. "That's why it's important to think about optimization, too, so you're getting leads without necessarily paying for them."