Copyright (c) 2005, Dow Jones & Company Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.CAN YOU CONVEY a corporate "brand" in 10 words squeezed into less than two square inches? Some big advertisers are grappling with that question as they begin to use Web-search ads served up by Google Inc., Yahoo Inc. and other search sites to burnish corporate images, as well as to sell products.
Online sellers of consumer goods and services have traditionally dominated Web-search advertising. Internet auctioneer eBay Inc., for example, is one of the largest search advertisers.
Now major corporations are experimenting with search ads that aren't aimed at generating immediate sales. In some cases, the ads are designed to promote a company brand. Intel Corp., for example, isn't selling anything directly through its ads. Instead, it's trying to get information to tech buyers and software developers. In other cases, companies -- Pitney Bowes Inc., for one -- are looking to reach executives at other businesses they hope might someday become customers.
The small text ads appear alongside search results provided by Google and its rivals. Companies select keyword phrases, such as "mail security" in the case of Pitney Bowes, and have their ads displayed whenever users search for those terms. The companies only pay each time a searcher clicks on their ad, with prices for the most sought- after terms approaching $100 per click. They bid on each phrase using automated auction-like systems; generally, the higher the price, the higher the placement on the Web page.
Intel, the world's largest maker of computer chips, buys search ads that appear when users type one of nearly 10,000 keyword phrases, ranging from "Intel" to "mobile computing," into Google, Yahoo and other search engines. Clicking on the Intel ad that appears next to search results for "mobile computing," for example, takes users to an animated site promoting Intel's chips for laptop computers.
Intel won't discuss how much it spends on search ads but says the total is increasing because the ads yield results even when there is no direct sale involved. The company tracks how much time users referred by its search ads spend on Intel's Web site, and how many of them download technical "white papers," among other things.
Search advertising typically has been "about e-commerce," says Martin Laetsch, Intel's manager of world-wide search marketing. "Intel and some of the brand players had trouble fitting in." He says that while businesses looking for online sales could easily tell if their search ads were paying off, companies like Intel, using their search ads to impart information, had to learn other ways to measure the impact of their messages -- tracking visits to their Web site, for example.
For the search engines, ads promoting corporate images and business- to-business sales represent a large pot of potential new revenue at a time when some analysts see signs of slowing growth in traditional search ads. Research firm eMarketer, for example, predicts the roughly $4 billion U.S. search-ad market will grow 22.5% this year, after growing 51.3% last year.
In one sign of the new push, a trade group whose members include the big search companies funded research to show that search ads can polish a company's image. Some sites are specializing in business-to- business searches and ads within specific industry niches, such as GlobalSpec Inc.'s offering for engineers. "Within the last 12 months, there has been a significant sea change" in businesses' interest in using search ads to reach other businesses, says Tim Armstrong, Google's vice president of advertising sales.
Pitney Bowes began buying its ads on Google in December. The Stamford, Conn., mail- and document-management company had been using search ads to sell products such as postage meters online. But, with the new batch of ads, targeted to phrases such as "business security," it doesn't aim to sell anything directly; rather, it directs computer users to a Web page featuring a white paper about security. Pitney Bowes is trying to reach senior executives, who are otherwise hard to reach with marketing.
In January, about 3,000 people clicked on its ads. More than half downloaded the paper. Pitney Bowes executives believe they are reaching their target audience. "We can't compete with the IBMs of the world" in marketing and advertising, says Matthew Sawyer, vice president of corporate marketing. "So we have to be smarter about it."
Search ads targeting other businesses don't generate huge numbers of responses, says Forrester Research analyst Charlene Li. But she says they produce "extremely high-quality leads." More than 90% of business people say they would use the Web to research a corporate purchase, according to an October survey sponsored by search-engine-marketing firm Enquiro Search Solutions Inc.
As for conveying a message in the 10 or so words in search ads, many companies favor a straightforward approach. Intel's ads linked to queries for "mobile computing" are representative. "Discover the freedom and flexibility of wireless computing w/ Intel," they say. Pitney Bowes ads for "mail security" promise "Results from Business Week and Pitney Bowes' survey on Workforce Security."
Searching for "On demand," an International Business Machines Corp. slogan, produces a simple ad offering users to "Read About the On Demand Solutions that IBM is Providing to Businesses" and linking users to a Web site with extensive management advice.
A search for "Sarbanes-Oxley," the name of the 2002 accounting and corporate-governance act, prompts an Ecora Software Corp. ad for a "Practical Guide To SOX IT Audits. Free Booklet. Good Info."
Some search-ad experts say the most successful ads include the keywords in their text and exhort searchers to do something, such as "Discover" or "Read." The search engines screen ads to make sure their content corresponds to the keywords.
Some are skeptical that the small-text search ads themselves do much to buttress a company's image. "The brand recall of search ads is minimal," argues Niki Scevak, analyst at Jupiter Research, adding that it's hard for advertisers to track whether these ads ever result in sales.
Some companies are working to enhance the Web pages linked to their ads. "It puts a lot of focus on the depth of content on your site," says John Graff, vice president of marketing and customer operations at National Instruments Corp., an Austin, Texas, maker of scientific- testing gear.
National Instruments uses search ads to sell its hardware and software. But it also uses search ads to deliver technical information, such as white papers, to potential customers. For a new product line launched last year, the company offered tutorials and seminars through its Web site.
This year, National Instruments cut the size of its product catalog from 900 pages to 500 and shifted the rest of the information online. It used part of the savings to buy search ads. National Instruments spends about 20% of its marketing budget on search advertising, up sharply from 10% to 15% a year ago.
Mr. Graff says the amount spent will likely go higher next year.
For its part, Google has stepped up efforts to have its advertisers' ads displayed on Web sites targeted at specific industries. In February, it announced that Dutch-American media company VNU's business-to-business sites, such as those for National Jeweler, Progressive Grocer, and Accountancy Age, would feature Google ads.
"It's a little more challenging with business-to-business, as the end sale could sometimes happen three, six, 18 or 36 months" after a user clicks on an ad, says David Hirsch, director of Google's business-to-business ad-sales group. While much of its advertising sales are automated, Google sends out teams to consult with the largest companies about their search-advertising efforts.
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