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Announcements

New Clients
We have signed five new clients since our last issue. One of these clients is ActionFront Data Recovery Labs -- a leader in their field. They have offices in Atlanta Georgia, Buffalo New York, Santa Clara California, Toronto Canada, and Tokyo Japan. Here is what they had to say about our service:

"We have been with Red Carpet Web Promotion for less than two months, and we already have top positions in Google for the pages that they created for us. The keywords that they chose to target are closely related to our services and we are already receiving over 1500 new qualified visitors per month to our web site. We are very happy with the service, and are being kept busy servicing these new customers!"
- Peter Rodrigues 09/27/2002

Quote: Fancy Features
"If you design an HTML page that has a Flash element in it, such as a rotating logo or other cool eye-candy on the page, it's fine as long as there is real searchable text on the page." But a site done entirely in Flash -- which can be visually striking -- won't be read by the search engines. The same is true for copy enclosed in graphics. "If you can't highlight the text, then the search engines can't read it."
- Dana Todd, SiteLab

Interesting search behavior statistics
- The average search session lasts 1:50 minutes, ranging from 48 seconds to four and a half minutes.
- Only 1 in 20 visitors will scroll to the second page of search results.
- 22% of searches produce no results.
- 52% of all queries are single word; only 12% are three or more words.
Mundosoft Study - Denmark
http://searchenginewatch.com/searchday/02/sd0829-search-failure.html

Search Engine Navigator

Everybody Loves Google Google has been the darling of the search engines since it first came onto the scene in 1999. It positioned itself as the no-frills search engine, and returned results untainted by commercialism. It also provided the most relevant results of all the search engines. At a time, when all the other search engines were struggling to offer results that actually answered our queries, Google consistently helped users find what they were looking for. Google has repeatedly won awards as the best search engine for searchers, and the best search engine for webmasters. The most amazing part of this story is that Google became popular mostly through word of mouth. Today, 3 years later (an eternity in Internet terms), the love affair with Google is still going strong. Google supplies search results for major search engines such as AOL, Yahoo, and Netscape. Moreover, through its launch of AdWords Select, it offers the only true competition for Overture's pay-per-click program. Google has also pioneered such things as banners that are only text (but clearly paid ads), the listing of non-html files such as Acrobat and Word documents, and PageRank. In my opinion, Google is still the search engine with the best results. AdWords Select In February 2002, Google launched AdWords Select. This service enables you to purchase ads on a cost-per-click (CPC) basis. If you look at the search engine results pages on Google, you will see the ads on the right side of the screen in colored boxes. With Google AdWords you bid the maximum you are willing to pay. Google then charges you 1 cent more than what the next highest bidder is willing to pay. In this regard, Google and Overture's systems are similar. The difference is in the rankings Google's AdWords and Overture differ is in the way they list their results. Google's ranking system is much more complicated than Overture's. Overture lists its results in order of highest to lowest bidder. Google starts out the same way, but over time raises the ranking of the bidder with the better click-through ratio (CT ratio = clicks / impression). Thus, you could be in the #1 spot and also be the lowest bidder, just by having the best CT ratio. This maximizes Google's income, while encouraging bidders to improve their CT ratio. Google also has very stringent rules about what you can put in your ad. These rules include the following: - Title may not contain an exclamation point. - No excessive capitalization - No repeated words or phrases I have found the bidding interface to be less precise than Overture's. There are less ways to manipulate the statistics in order to view them as you desire, and it is harder to move things from one group of keywords to another. I'm sure Google will rectify this in the upcoming months, as Overture did after being in the business for 2 years. Who should you bid with? I would suggest bidding on both Overture and Google AdWords. Overture's results show up on Yahoo, MSN, Altavista, Lycos, and InfoSpace, while Google's AdWords show up on Google and AOL. If you are with both, your ad is shown on every important search engine (over 95% of searches on the Internet will see your ads). Just make sure you only spend what you can afford. See Jason's article for more information about ROI. If you have any questions about pay-per-click advertising, or if you want someone to handle your bidding accounts at Overture or Google, give us a call at 1-877-717-3667, or e-mail us at: help@redcarpetweb.com. Traffic from the search engines Below is the percentage of people who use the major search engines. These numbers don't just represent searches, but any visit to the site that is "search related". Numbers overlap because one person could go to many sites. Statistics are taken from Nielsen/NetRatings

Yahoo 29.8% MSN 29.5% Google 27.9% AOL 18.5%

Ask Jeeves 11.4% Overture 5.9% InfoSpace 5.4% Altavista 4.9%

Netscape 4.5% LookSmart 4.2% Lycos 3.3%

Next issue, I will update you on other changes in the industry.

Shawn Campbell is the co-founder and Chief Search Engine Optimizer at Red Carpet Web Promotion, Inc.
Shawn shares search engine news in each issue.

Feature:
Increase your sales ratio to deliver more ROI

You may have noticed the animation on www.overture.com that says, "Overture delivers ROI daily." Notice that they do not specify whether they are delivering a positive ROI (return on investment) or a negative ROI! Unfortunately, you will have to make those calculations yourself.

Knowing how much you can afford to spend on each visitor, will help you to use your marketing dollars more effectively. First however, let's focus on the nuts and bolts of the marketing plan to sell your products and services online.

CPC
CPC stands for Cost per Click-through. Many marketing options involve paying a fee for each visitor who is brought to your site. Overture is a perfect example. (See our past article on Overture).

Overture sets a minimum bid of $0.05 per click-through, so to use this service, you should at least be able to spend this amount per visitor to your site, and still make a profit. Since your competitors also want a higher position in results for the same keyphrase as you, the bids escalate, and in some cases, companies end up paying over $10 per click-through! Many companies are getting caught up in the challenge of keeping the top positions, and may even be losing money on these bids in order to be the market leaders. In these cases Overture is the only winner.

Another factor in the bidding wars is that search engines such as Yahoo, MSN, and AltaVista display the top three Overture results, therefore making these positions even more sought after. Paying click-through fees that are above your estimated profit margin is a dangerous practice because your competitors may be able to keep beating you until you run out of money! Is it worth it playing chicken with a company that may have much deeper pockets than you do? It is a good idea to figure out how much you are willing to spend per sale, and then to figure out your sales-per-visitor ratio. This will help you to find out how much you should spend per visitor. Avoid spending any more than that amount.

SEO
SEO stands for Search Engine Optimization. It is often a better investment to pay for search engine optimization and submissions, than to pay click-through fees. As CPC bids escalate, the long-term benefit of SEO becomes more evident. An SEO campaign increases your position in the search engines to generate more traffic. Although you will have to pay to optimize your site, you will not have to pay a forever increasing click-through fee. Rather than paying by the visitor, you are investing in a long-term strategy to bring in a steady stream of customers. You may find after some experimentation that a combination of both CPC and SEO services works best for your needs.

Sales per visitor
The sales-per-visitor ratio is a crucial number to monitor and improve for a higher ROI. For example, if you make one sale on your site out of 100 unique visitors to your site, then you have 1% sales-per-visitor ratio (depending on your industry this could be average). A higher sales-per-visitor ratio is more desirable because you will make more sales for the same amount of visitors. This may allow you to increase your marketing budget and to achieve an even higher volume of sales. Even if you do not raise your marketing budget, an increase in your sales-per-visitor ratio will leave you with a higher ROI.

Steps to increase your sales-per-visitor ratio

1. Improve the quality of your traffic
2. Improve your site's usability to keep visitors on the site
3. Improve your perceived credibility to increase customer confidence
4. Improve or simplify your ordering process to reduce shopping cart abandonment

Sales-per-visitor ratio of 1%

1% of 1000 visitors 10 sales $15 time 10 sales $150 profit before CPC - $100.00 CPC cost: ($0.10 X 1000) $50 total profit

If you increase your ratio to 3% your profits go from $50 to $250 for the same amount of visitors! At this point you may consider raising your bid to $0.15, which may in fact raise your volume enough to increase your overall profit.

Sales-per-visitor ratio of 3%

3% of 1000 visitors 30 sales $15 time 30 sales $450 profit before CPC - $200.00 CPC cost ($0.10 X 1000) $250 total profit

Key to success
Depending on your goals, you may choose to increase your profit per unit or your volume, in order to make more money. Either way, you must first understand the relationships between CPC, sales-per-visitor, and profit. An increased sales-per-visitor ratio is the best way to take advantage of increased visitors because it will turn more of those visitors into buyers.

Jason Campbell

Jason Campbell is the co-founder and President at Red Carpet Web Promotion, Inc.

Stay on Top

Each month we review articles from leading industry magazines and newsletters. The following articles are some of the most interesting of the last three months. Click on the link to view the article.

Yahoo Renews With Google, Changes Results www.searchenginewatch.com/sereport/02/10-yahoo.html The Search Engine Report, October 2002 - "In a unique twist, Yahoo didn't simply renew the deal for Google to be its "backup" partner, used only when Yahoo itself doesn't have an answer. Instead, the company has embraced Google's results even more tightly. Unveiled to the general public today is a new Yahoo search results page, where there is no longer a separation between Yahoo's own human-powered listings and Google's crawler-based results. Instead, the two are blended together." Global Internet audience increases www.nua.com/surveys/index.cgi?f=VS&art_id=905358259&rel=true Nua, August 2002 - "Almost ten percent of the world's population now has access to the Internet, according to newly released figures from Nua.com." The Internet Power Grab www.fastcompany.com/online/61/jellis.html Fast Company, August 2002 - "Everyone knows that the Internet is moving from free to fee. So why isn't the Internet army fighting back?" Google and Overture: CPM in Disguise? www.clickz.com/search/opt/print.php/1456201 Clickz, September 2002 - "Your bill may say CPC, but is it really?" Ebusiness is alive and well www.nua.com/surveys/index.cgi?f=VS&art_id=905358176&rel=true Nua, July 2002 - "report from EDS indicates that most businesses treat e-business as a fundamental, long-term, strategic business direction, rather than a tactical, short-term reaction to changing client demands." Compare and Contrast: Overture and Google Guidelines, Part 1 & 2 www.clickz.com/search/opt/print.php/1445571 (Part 1) www.clickz.com/search/opt/print.php/1449521 (Part 2) Clickz, August 2002 - Paying for placement? A step-by-step guide to Google and Overture's guidelines. FAST Breaks the Flash Barrier www.searchengineguide.com/wi/2002/0918_wi1.html Search Engine Guide, September 2002 - Nice details here on how FAST is interacting with Flash files. More spending online during holiday season www.nua.com/surveys/index.cgi?f=VS&art_id=905358356&rel=true Nua, September 2002 - E-marketer reports that consumer online purchases in the U.S. are expected to rise by 27 percent during the 2002 holiday season.

Letters to the Editor

Write your questions and comments for our next issue to news@redcarpetweb.com. Be as specific or general as you want - other subscribers are probably wondering the same things you are. You should also let us know of any promotions, sales or new products on your web site.

Next Issue

- New feature article - More on how Search Engines work
- Stay on top: Articles from industry newsletters and magazines
- And more...

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