Paid Search – How long term is the long tail?

By Search Engine Articles and Press Releases – July 26, 2006

The long tail, we were told at this years Search Engine Strategies Conference, is where the best return on your marketing spend can be found. Whilst this in itself isn’t in doubt, how short term is the opportunity?

The long tail derives its name from the shape of the graph you are presented with if you list your keyterms starting with most generic, to most specific and plot against the volume of traffic generated. In short, if you are a vendor of DVD players you will find there is vastly more traffic coming through a paid search listing for the term ‘DVD Player’ than the term ‘Phillips xyz recordable DVD Player’. Why? Because more people search for the short term. However, whilst the generic term produces huge traffic volumes, the more specific term will cost substantially less per visitor.

But, lets look at this in a little more detail. What Google, Yahoo, MSN et al would appear to be saying is that if you want to reach a highly targeted audience, with exactly the product they are looking for, we wont charge you so much for doing so. Put another way, if you want to throw your marketing budget into a load of generic terms that will get you infront of people with varying degrees of interest in what you have to say, or want to sell, we’ll charge you a great deal of money for helping you.

If you want to be ranked in the top three in Google with a paid listing for the term DVD Player expect to pay £0.82 per click (as this is written). For the term’ Philips 612s dvd player’ expect to payless than £0.10.

By now you’ll be getting the picture. There is a paradox at play here. The really hot leads are being sold at discount prices. And sure as eggs are eggs, this wont last for long.

Some companies will of course have valid reasons for paying dearly for top positions for generic terms. A good example would be brand building. Launching a new service, or a new product is often accompanied by significant marketing budgets, and these can be as much about positioning the product or service for the long term as about generating sales today. But if you’re interest is selling your products and services over the Internet profitably, don’t get caught up with the brand builders by accident.

So as more and more online retailers realise this, the search tail will start to become a less lonely place to be. Whilst online retailers should move quickly to take advantage of prevailing conditions, keep a view on the longer term picture. Currently it’s extremely difficult indeed to make money on a generic-term paid search campaign in most sectors. Although you will sell less volume, it’s far easier on ‘long tail’ term campaigns. However, as the bid prices are driven up as more of your competitors take advantage, it will either come down to the prices you have negotiated with your suppliers, or finding other ways to attract your traffic and generate your online sales, at a price that doesn’t kill the profitability of each sale.

So whilst it takes a little longer, and there are no guarantees, don’t lose focus on a good search engine optimisation strategy.

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