Twist in the Tail

Search engine marketing is getting pretty competitive, and the bestselling keywords are becoming expensive. Take a long-tail approach!

Pay-per-click marketing on search engines through programs such as Google AdWords and Yahoo! Search Marketing is becoming increasingly popular among marketers worldwide. These programs work on an auction model: Marketers bid for keywords, which when used by Internet users on search engines, will trigger their ads. The ads of the highest bidders, usually, get top billing on search engine result pages for the keywords they have bid on. Marketers then pay the bid amount for every click that a user makes on their ads.

As these programs become more popular with marketers, the competition for keywords and the cost-per-click for popular keywords are constantly rising. So, how can marketers lower their costs and yet get the clicks they desire? Is bidding for the most popular keywords the only way to get traffic and increase ROI?

It certainly is not. More and more people are buying into the long tail concept. So what exactly is the long tail of search engine marketing? Let’s illustrate with an example.

Let’s say you sell digital cameras and accessories online. You want to run a search engine marketing campaign. To begin with, let’s consider the keyword ‘camera’. Let us assume that it’s a very popular keyword and costs Rs. 50 per click and you get 100 clicks per day. Your cost works out to Rs. 5000 per day. Now what if you have a budget of only Rs. 2500 per day? Check out the tail. Buy lower-priced keywords such as ‘3 mega-pixel digital camera’, ‘5 mega-pixel canon digital camera’, ‘nikon digital slr camera’ etc. These keywords will typically be priced much lower than ‘camera’. Though each one of them may deliver lower clicks, a collection of long tail keywords will give you 100 clicks for Rs. 2500 (assuming an average price of Rs. 25) instead of the Rs. 5000 you would have paid for ‘camera’.

Of course, this is a simplistic example, but it brings out the power of the long tail. The term long tail was coined by Chris Anderson in a Wired Magazine article to describe the success of online retailers such as Amazon.com and Netflix.com. Anderson contended that in the physical world, retailers stocked only the bestsellers since shelf space was limited. Online retailers have no such constraints on the inventory that they can stock. As a result, they were able to cater to the narrowest of niches. In the aggregate, these niche markets often proved to be larger than the bestseller or ‘hit’ market.

In search engine marketing, as the cost of popular keywords keeps rising, long tail keywords can be a powerful force

While, the cost per click of long tail keywords will obviously be lower, there are other compelling advantages as well. Broad-based words such as ‘camera’ may indeed attract a large number of searches, but the conversion rates could be much higher at the narrow end of the spectrum. When someone is searching for the keyword ‘camera’, that person may be searching for anything from camera maintenance tips to camera servicing centers. But when someone searches for ‘5 mega-pixel digital camera’ or ‘nikon digital slr camera’, they are looking for a specific product. Clearly, the narrower the search, the more likely they are to convert.

In fact, many experts believe that people who enter long tail keywords are those who are far ahead in the buying cycle. When people begin researching a product they tend to be more broad-based in their queries. But the queries become more and more focused and refined as they approach the end of the buying cycle.

So, it’s not just a question of lowering your costs, but it is also about increasing effectiveness and ROI.
Here’s another reason why the long tail is important. According to Joe Kraus, a co-founder of search engine Excite, while the top 10 searches were thousands of times more popular than the average search, these represented only 3% of the total volume on Excite. A vast majority – 97% – of its searches came from the `long tail’, that is, queries asked a little over once a day. According to him, Excite went out of business because it couldn’t figure out a way to make money from that long tail.

Search engine marketing has become an extremely important tool for any online marketer. That’s because it’s relatively inexpensive, can be targeted with a fair degree of accuracy to the right audience, and offers the best return on investment. It’s also becoming big business. According to a study by IBIS World, SEMPO, search engine marketing is expected to become a $19.3 billion industry in the year 2011 in North America alone.

So you can imagine the competition that’s going to be out there. To win, just grab the tail!