Thanks Search Engines, We’ll Take It from Here
The rise of the search engines has caused a great sucking sound of advertising dollars heard throughout the media world. Here’s how we realized the search engines were stealing our revenue and how we got it back.
In 1996, we founded an integrated print and Internet trade publishing company with a magazine, a custom publishing and marketing group, and a Web site at Info-now.com. Our premise: Readers would turn to our site to get how-to and reference content while in a buying or planning mode, with advertisers reaching their audience at that critical moment.
Our early Web strategy was based on the controlled circulation model: Readers had to register so we could track who visited which article. This business grew year after year and proved quite profitable, because how-to and reference articles only have to be updated once or twice a year and because we could place numerous ads on each article.
Then, in the early 2000s, we began to see a decline in our business, which we can now trace to the rise of the search engines. The number of visitors dropped, advertisers bailed out. Eventually, we dropped the registration requirement from the Web site, sold only a few key advertisers on the home page guaranteed to get traffic, eliminated our marketing budget for the site, and joined one of the major search engine’s advertising programs.
Search Advertising Kicks In
We began to notice that many of our former Web customers were advertising on search engines, and that new advertisers appeared that we had never heard of. Our advertisers using the search engines told us they were paying from $5 to $30 per clickthrough for keywords in b-to-b marketing. It was apparent that the search engines had created a concrete value for a new type of lead: A click-through.
About nine months after we dropped the registration requirement, we analyzed our traffic. Not only had our traffic doubled, each article was generating about 500 to 600 visits and 50 to 150 clickthroughs on advertising a month.
Thanks to the search engines, we realized we now had an asset of at least $250 to $750 per month per article in click-through revenue, based on getting about $5 per clickthrough for business-to-business leads. With over 100 how-to and reference articles on our site, that added up to a lot compared with what we received from the search engine ad program. After testing the concept with our advertisers, we updated our Web proposition to include the following elements:
- Sponsorship of how-to and reference articles in related topics;both in print and online. Our advertisers understand the value of editorial adjacency. If we don’t have an article that relates to an advertiser’s topic, we can easily create a new one. The articles also appear in print.
- The opportunity for advertisers to pay on a per-click basis (between $5 and $10 depending on the topic and what the related keyword commands online). Advertisers make an advance payment of at least $2,500, but most commit more, because on average their ads generate more than 100 clickthroughs per month.
- The ability to place ads in our e-mail newsletters that highlight sponsored articles.
- The ability for advertisers to build opt-ins to their own newsletters and special offers by providing them a permission manager tool to put on their own sites. As a result, not only do our customers get clickthroughs as a result of their advertising, they build their own databases of people opting in to receive information from them;with many customers asking our custom publishing group to create those communications.
In only a few months after introducing the new model in the fourth quarter of last year, our committed Web advertising nearly doubled over the year before, and now totals more than a hundred times greater than what we generated from the search engine. This will be the fastest-growing part of our business in 2007 with the most impact on the bottom line.
We suggest that if our fellow media companies (who haven’t done so already) leverage their audiences, how-to and reference content, and advertising relationships they, like us, may thank the search engines for creating a huge market opportunity for the traditional media business.
Bruce Bolger and Jim Kilmetis are co-founders of Sales Marketing Network at Info-now.com, and creators of Solata and OK2SEND integrated communications technology at Solatatech.com.