Targeting is of course a staple of most any type of advertising. How does it play out in the case of search engines? One major form of targeting is the practice of buying advertisements which will appear in the vicinity of the search results on your chosen keywords. The new Google Adwords program, for example, is an easy-entry system for buying impressions in the right-hand margin, next to the search results.

Was Free Placement a Distortion of What Was Always a Market?

Advertising has always been part of the equation for commercial providers of web search services. But the Holy Grail for many online marketers remains the pursuit of search engine placement as opposed to advertising. These marketers want their web site to appear right in the search results, not in a banner, text link, or button "nearby." Why has so much attention been paid to this? The main attraction for many, it seems, was that the game of search engine and directory submission cost nothing to play . Because this free ride - unpaid advertising, in essence - made some businesses possible where they might not have existed in the past, legions of small business owners and content-creating hobbyists have spent inordinate amounts of their time trying to unravel the mysteries of search engine algorithms in order to drive free traffic to their sites.

Indeed, because the no-cost regime was in place for several years, many site owners have developed an attitude of "entitlement" towards search engine traffic - they feel it is somehow unjust if they don't get their share. But seen as one amongst several low-cost marketing options, it isn't always clear that this feeling of entitlement is warranted. After all, email marketing in the form of spam is also a low-cost marketing method. You'd be hard pressed to find a marketer willing to justify their "right to spam." Spam may be a very different means of reaching people than search engines - most assume it's unethical. Yet is it really all that different? One characteristic of email spam is that it competes for the attention of email recipients. No matter how fast you click on the delete button, each piece of spam reduces your patience for the remainder of your emails - spam, personal correspondence, and everything in between. Similarly, competing for search engine position is a question of crowding out a search result from some competitor or keyword-related resource. Rather than a question of entitlement, in many cases search engine marketers are really engaged in something closer to a dogfight - or at the very least, a marketplace for advertising, be it paid or unpaid.

The immediate incentive for "working the search engine traffic" is obvious, but one wonders if the artificial economy of free search engine traffic might have diverted some entrepreneurs from focusing on the long-term viability of their enterprises or on the bigger picture of what they are marketing and how best to market it after the free ride ends.

SEO Can Deliver ROI to Larger Enterprises

Medium-sized and larger businesses have also played the search engine marketing game, though they haven't always seen the need. A certain percentage have hired staff or consultants to work on what has become known as "search engine optimization" or SEO. Web site traffic can be increased significantly using such methods, such that hiring someone to do the work can be very cost-effective. As the bio attached to leading SEO consultant Paul Bruemmer's columns explains: "Tracking search engine traffic to point of acquisition, sale, signup, or any action, gives you the ability to determine ROI." A look at the experience of one major content business with many pages of topical content - About.com - offers convincing proof that SEO makes sense from the marketer's perspective (see Human Internet Makes Peace with the Search Engine Robots , Traffick.com, July 19, 2000).

Inktomi Pulls Out the Rug: SEO Will Never Be the Same

But the economics of the game are rapidly changing. "Because it's free" will no longer be a sufficient rationale for devoting time and resources to search engine optimization, and strategies will need to be adjusted to the new pay-to-play environment that is emerging. The most notable change is with the spider engine Inktomi, which is now charging sites on a per-page basis to guarantee indexing. Danny Sullivan's thorough report on the change outlines the cost structure: for a 150-page site, the cost would be $1,310 per year to stay fresh in the "Ink" database.

You can do a lot with $1,310. Of course, if you're a company like About.com, you won't be getting off that easily. About.com, back when we were still working under the assumption that search engine placement was a free marketing tool, was boasting about having hundreds of thousands of pages that would need to be indexed. If they submitted them all, they'd be into Inktomi for well over $100,000. If they chose to submit only 5% or so, there is no guarantee that Inktomi's spider would bother with anything but the 5% of pages About submitted for paid indexing. This kind of outlay is even worse in the case of spiders like Inktomi, because search engine placement and clickthrough rates are unpredictable, and payment is not based on clicks. (As Danny Sullivan described it: paid placement in LookSmart's directory or Inktomi's index is akin to buying a "lottery ticket." However, at a one-time-only payment of $199, LookSmart's lottery ticket comes considerably cheaper.)

Because of the burden on content-rich sites like About, it may be a slight distortion to claim that the new Inktomi fee will give the advantage to "deep-pocketed" companies, leaving the little guy in the dust. Some big companies will find the Inktomi cost structure even more prohibitive when weighed against the whole universe of traffic-driving options. And some of the smallest of small fry might just thrive on the new regimen: a spam-reduced, pay-to-play Inktomi index. If a site has one page, and the owner sells something on that page, $20 is a bargain to keep that site listed and updated every 48 hours in the Inktomi index. On the other hand, if you run a magazine or vertical portal with many pages of quality content, Inktomi's cost structure could be prohibitive, and now, sadly, topically-curious surfers will have more trouble finding you.

Could it be that Inktomi is letting the Internet community down in a more profound way than it realizes -- that the new pay-to-be-indexed regime, in the words of one indexing technology veteran, "breaks all the rules?"

Should Marketers Bother with Search Engines?

Faced with a radically changing cost structure, for those entering the search engine marketing "game" today, it's worth asking: (1) Is the game worth the candle? (2) If search engine positioning is only one amongst many kinds of targeted advertising, does it still have a special advantage? (3) As implied above, do pay-to-index-pages and pay-per-click trends dictate a shift in business strategies from content and community towards targeted product marketing and ROI tracking?

The three answers are: (1) It depends; (2) yes; and (3) unfortunately for those who have thus far enjoyed the low cost of providing and consuming online content and community, yes. Big, unfocused content plays will have to reorient themselves to cut costs and diversify revenue streams, at least until a new micropayments/syndication regime allows the best content providers to make a go of it by syndicating their content widely to paying clients. (This is a few years off yet.) It's no longer "go big or go home." It's "get focused or get flattened." And by focus we mean selling products and services to a targeted demographic, not just choosing a topic and sticking with it.

There are potentially rough seas ahead, then, for site owners who have in the past relied heavily on search engines. The changing environment threatens site owners with a double whammy: not only will site owners increasingly have to pay for listings and placement in or near search results, but the second special advantage of search engines - their perceived legitimacy from the end user's standpoint - may be jeopardized.

However, this is not a cut-and-dried situation. In the first place, spider engines like Google will continue to drive a lot of traffic through their main (non-paid) listings, and will continue to be trusted by end users for their ability to point to relevant resources. That's important for those millions of users who still see the spirit of the Internet as resource first, shopping mall second.

Secondly, insofar as paid submissions to engines like Inktomi and directories like LookSmart reduce the spam burden on the "relevancy referees," the degree of usefulness of the search results to the end user might go up, not down. On the other hand, rampant partnerism and paid listings on some portals and search destinations threatens the perceptions of scientific objectivity and editorial integrity which have come to be associated with the major search engines and directories.

Although they must now make serious concessions to their own business models and take steps to increase revenues from search traffic, search engines and directories must continue to act primarily as great referees, or the game will lose its meaning. We referred in an earlier column to GoTo's status as a "high-octane bazaar," and speculated that it would fly because a bazaar is often what consumers are looking for online. Often, but not always. Let's not fool ourselves into believing that all search engines can turn into unfettered advertising vehicles without some form of consumer backlash. In fact, something more complex may be developing: a segmenting of online populations into, on one hand, those with an unusually high tolerance level for advertising (let's call them the receptives) and those who are turned off by "all that noise" (discerning surfers, professionals, recluses, and b2b'ers). The former might be good customers, but they're not good customers for every business.

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