Kevin Ryan, Vice President, Global Content Director, Search Engine Strategies and Search Engine Watch moderated this session which was part two of SES’s global search series here in Chicago today.
Julian Lynch, Account Director, Interactive Return discussed search marketing in the UK. The population is about 60.8 million and 37.6 million are Internet users. Penetration hovers around 61.8%. Make no mistake about it, in the UK and generally in Europe, it’s ALL about Google which dominates with 82% market share leaving Yahoo (4%), MSN/Live (4%), and Ask (3%) in the dust.
Total UK SEM growth in 2007 is up 58%, PPC is up 56% and SEO up about 68%. The market is completely dominated by PPC with more focus on long tail and ROI. That said, in the last year investment in organic optimization grew faster than PPC for the first time ever due to improving tracking technology, PPC keyword inflation, trends towards longer term focus, and overall sophistication of the advertising market.
Organic listings are still more attainable than in the US and there’s an increased investment in usability and accessibility. While users are less sophisticated than the USA, they’re learning fast. As with all locales, understanding the regional motivators, customs, and lingo is a key to success.
Nacho Hernandez, Founder and CEO, iHispanic Marketinga Group was up next and offered splendid insight. Latin America is a tremendous opportunity for both advertisers and SEM agencies alike. Looking at the worldwide population growth rate, according the Nielson, Latin America is growing extremely quickly and is the third most quickly expanding population in the world.
IHispanic Marketing Group/ Global Market Insight (March 2006) indicates that search is the second most important commodity trailing only email. Online stores, shopping portals, news sites, instant messaging, banking, music and video sites, travel reservations, and photo sharing are all less important activities.
87% of Hispanics online utilize search. There are about 3 billion annual Latin American searches which adds up to somewhere in the vicinity of 100 million searches per day. According to ComScore the primary markets are Brazil 32%, Mexico, 19%, Argentina 14%, Chile, 10%, and Columbia, 6%.
74% of Latin Americans are not really sure of the difference between natural and paid search. This represents a huge opportunity for those wanting to test things quickly. Single word queries are most effective still over longer phrases. However, one of the biggest Latin American SEO challenges is link building because it requires Spanish speaking locals. Social media link building (and baiting) has not really taken root so the old method, relationship brokering, is more prevalent.
Latin American users query primarily with Spanish words, Hispanics in the United States use English keywords, but it’s not a hard line in either locale. The bottom line is that marketing to Hispanics requires a special effort in that both languages are required for full coverage, especially in the United States.
SEM advertisers will grow over 5X in Latin America with over 100,000 advertisers. There’s a lot of revenue to tap into. Translated, there exists a tremendous opportunity for search marketing agencies in Latin America. Nacho ultimately sees mobile as a gigantic piece of the puzzle. 308 million Latin American people own a mobile phone as of early 2007. Latin America and the Caribbean hold approximately 12% of the world’s 2.6 billion mobile subscribers.
James Beriker, President, Efficient Frontierspoke about European markets. This piece of the search pie will double over the next 5 years. The growth is largely coming from Western European countries including UK, Germany, France and Italy. He recommends not focusing on just the biggest markets. The smaller ones, including Africa will develop. Have an eye towards developing nations and, at minimum, commit to a long term understanding of emerging spaces.
EU is agency-driven. 50% + of all paid search spend going through traditional media agencies in the UK, and 60% in France & Germany. The soon-to-be-phased out Google“Agency Discount Program” (3-15%) commissions to agencies has created an industry of agencies set up only to benefit from this program. Many agencies charge clients nothing and keep commissions. Other agencies share some of the commission with the client. The result of this will end at the end of 2009 making the market more accountable to actual ROI. The net result is a window of opportunity for SEM agencies in Europe as useless middlemen are blown out of the space.
EU Best Practices
Use a local SEM firm to develop and manage campaigns. Evaluate and understand the value proposition and credentials of the agency. Ask if they have any technology, what their skill sets are, the experiences of their account managers, and determine if they understand the local markets. Keep in mind the differences in the way people convert. In Europe, sales are much more dependent on trust and local social and linguistic vernacular.
European and American markets are very different in terms of maturity levels, query behavior, conversion motivators, growth of ecommerce, broadband penetration, and payment platforms. Leverage data and experience from the US campaigns but do not depend solely on it. Have a real local presence and make sure your website is in the actual native language. Be respectful of any culture with which you’re trying to do business. Have business leadership with domain knowledge in-market with a services team on the ground. Don’t forget social search as an emerging channel.