A recent online news article entitled “Five Reasons Why Ad
Agencies Hate Search Engine Marketing” struck a responsive chord
in the search engine marketing (SEM) community. Lots of posts,
both critical and supportive, showed up in online forums. The
article made some points that I have noted myself in previous
articles. The most important ones are that good SEM is labor
intensive and expensive, that profitability is hard to achieve,
and that the search engine companies keep moving the goal posts.
I think it's worthwhile considering the extent to which these
problems also impact localized search engine marketing.

Naturally, the search engines themselves, for example Google and
Yahoo, have evolved with an eye to the big, national customers.
Given that background, they have developed tools and systems in
the PPC arena that seem to assume the end user, whether an ad
agency or a small business owner, has lots of time and resources
to work with the tools. Anyone who has even dabbled in the
administration of keyword bidding on these search engines knows
how complex it can quickly become. Hence, the system is stacked
against the small business owner from the get-go, because he or
she does not have the time or resources to administer these
programs. The author of the article asserts that a camapaign of
$50,000 per month is necessary to turn a profit on paid search
advertising. While I would question the universal validity of
this statement, it does highlight the time and resources dilemma
of running a successful paid search program.

Why is it so complicated to run a good PPC campaign? At bottom,
because the model itself requires the advertiser to get inside
the head of the consumer in an unprecedented manner. As an
example: an important key phrase for my own business is “web
design.” So, I bid on this phrase. (This concept itself,
“bidding” on a keyword, is a truly alien advertising concept to
most small business owners I know). And every day, I get visitors
to my website who are interested in “web design.” But does this
mean they want to hire a web design firm? Who knows. Maybe they
are writing a term paper. Maybe they want to steal some ideas.
Maybe they are the competition (or worse yet, a flunky hired by
the competition to click on the other guy's ads). Maybe, maybe,
maybe. But I've spent my money, and taken my chances. Now, of
course, there are lots of ways to hedge my bet. Keyword
suggestion tools, bid management tools, etc. But that's where the
time and expense comes in. As a small business owner, I can't
afford much of either. Controlling for the variables is what
makes this kind of search engine marketing prohibitive for most
small businesses. As an alternative, the various IYP programs
offer a more targetted audience for the advertiser, as well as
stable pricing and predictable placement. IYP is also a model
that small businesses recognize, because of the crossover from
print. The search engine audience may be larger, but the IYP
audience is surely more qualified.

The other major point that was made in the article, besides the
inter-related points of expense and profitability, is that the
search engine companies themselves keep changing the rules,
thereby making a tough job almost impossible. Absolutely true. It
seems that Google and Overture come out with a new option, and a
new set of rules, almost every day. Of course, it's not really
every day – it just seems that way to those of us laboring to
keep up with the field. What is most irritating is the feeling
that they are doing this to keep up with each other, not to
benefit the consumer or the advertiser. These competitive forces
do little to help the industry mature, a phenomenon we have seen
many times in the high-tech arena. Again, it comes down to
resources – if the big ad agencies are having trouble keeping up
with the changes, can the small business hope to adapt? Not
really. Not until the dust settles, at least.

One facet of search engine marketing that holds some hope for
small local businesses is search engine optimization (SEO) with
geographic modifiers. In this scenario, the optimization of a
website for organic search is made infinitely easier if a
geographic term is added. For example, optimizing for the term
“chiropractor” on a national level would obviously be useless;
optimizing for “chiropractor, CT” has been successful in giving
one of my own clients an excellent ranking on Yahoo, achieved
through fairly basic SEO. Even here though, there are
limitations. It may be difficult for the small business owner to
find good SEO. And even geo-modified SEO is only good for certain
categories: “attorneys New York” entered on Google brings up a
plethora of entries that are obviously highly competititive. It
depends on the industry, and on the local market in question.

It was high time an article like the one in question was
published. Search engine marketing, and website promotion, is an
absolutely chaotic, immature discipline, made worse by the
get-rich-quick scams that are littering the Internet. Choices for
small businesses abound, but they must be made very carefully.
One project currently in development here at Small Business
Online, http://www.SmallBusinessOnline.net is a website promotion
model that approaches the problem from the opposite end – the
consumer. If the advertiser can't reliably and consistently place
his message in front of the right consumer, then perhaps the
consumer needs to be directed to the advertiser by a different
mechanism. At Small Business Online we are working on a program
that will cost-effectively help drive traffic to specific
advertising. Certainly, as the shortcomings of SEM via the major
engines are scrutinized, more creative methods for linking
advertisers with consumers in a cost-effective manner will
eventually bubble up. In the meantime, the small business needs
to keep in mind that if Madison Avenue is struggling with SEM,
then it's fraught with risk. More than ever, caveat emptor should
be the rule.

About the Author
Neil Street is co-founder of Small Business Online, based in Wilton, CT., a web design and internet marketing company dedicated to the Internet needs of the small business. His website is at http://www.smallbusinessonline.net Send email to neil@smallbusinessonline.net He can also be reached at (203)761-7992.