With Google’s rise to the top of the search engine sweepstakes (see Table 2, below), old-fashioned pure search, as opposed to the bloated “portal” strategy, is very much back in style. Even Yahoo’s latest multimillion-dollar advertising campaign focuses on straight-forward search.

Of importance to advertisers, especially smaller ones, is the ease at which one can reach search engine users through so-called pay-per-click (PPC) keyword advertising. For as little as a few dollars per week, any legitimate business* can post a small, text-based listing within the search results. Google and Overture are the key players with their ads displayed on their own sites and at Yahoo, MSN, AOL, Earthlink, and other search engines (see Table 2, below). 

Here’s how it works. Instead of displaying a banner to everyone that searches on “mortgages” for instance, you can target only those customers in your community by sponsoring the search phrase “mortgages yourcommunity.” You might pay a buck or two for each prospect that comes to your website, but they likely will be high-quality prospects. If you convert 2% to a sale, acquisition cost would be in the $100 to $200 range. For more information on searching for mortgage prospects, refer to the case study on pages 11-15.

Search Term Selection

They key to making search-engine marketing pay off is the selection of cost-effective keywords. Choose too broad a term, e.g., “mortgage” (637,000 searches on Overture in April), and your advertising costs go through the roof. Too narrow of a search expression, e.g., “mortgages for dummies” (285 searches on Overture last month) will deliver negligible volume.

The second criterion for a positive ROI is bidding the appropriate amount for each keyword. Bidding on popular keywords can reach levels that are difficult to justify. For example, if you are a mortgage broker in Atlanta, you might want to advertise on “mortgages Georgia” which logged 2,600 Overture searches last month. Unfortunately, you’d need to bid more than $3 per click to get in the number-three slot. However, if you chose “mortgages Atlanta” (830 Overture searches), you’d pay less than half, $1.40 per click, for a top-three slot. Assuming equal conversion rates, your acquisition cost per loan would be less than half for the “Atlanta” search, although loan volume would be only one-third that of the “Georgia” search.

*The major search engines maintain varying levels of editorial control over the advertising content and relevancy. For example, a soft drink manufacturer cannot buy space on “online banking” at Overture or Google. Nor can a bank advertise on “cola.” In addition, Google has sometimes not allowed ads on certain trademarked terms, such as Amazon.com. But it appears to be loosening that restriction; most trademarked terms we tested recently displayed sponsored ads.

Table 1

Top Search Engines Ranked by Unique Search Users (U.S.)

  Source: 2003 search traffic, ComScore, 5/03; search engine sources, SearchEngineWatch.com, 5/03; 2001 Web traffic from PCDataOnline, 3/14/01

Table 2

Banking and Credit Keyword Selection Tool

choose a word from one or more column to create relevant search expressions*

Source: Online Banking Report, 5/03

Table 3

Top Banking and Credit Search Terms

banking, loan, and insurance phrases with 15,000 or more searches on Overture’s network, April 2003

Source: Overture, 5/29/03 (1) includes singular and plural forms of the keyword as well as common misspellings, e.g., “mortgage” also includes “mortgages” and “morgage”; (2) searches on Overture during the month of April, 2003; (3) Calculated by adding $0.01 to the previous bid before averaging; (4) assumes 3% clickthrough; (5) assumes 2% conversion