The Hindu Business Line : What's the good word on sale now? It's `keywords'

Ever since the search engine became an inherent part of our daily life, the relevance of a certain word or tag has made itself clear to advertisers. They can directly reach someone searching for, say, a cheap hotel in Bangalore. So their business is just a click away.

This is not to be confused with the search results: the search engine is an impregnable program, which brings you the most relevant pages churned out by a complex algorithm. Along with the results, there is a column on the right with select advertisements on the same topic. Have you ever wondered from where they popped up? What lies beneath this is the tooth-and-nail competition fought by online advertisers.

By paying the search engine a certain amount per word, the advertiser is assured of a presence in the column on the right. The link to their site is displayed, along with a short summary. Some popular words (known as keywords) in the Indian online advertising industry are `cheap', `discount', `flight', `MBA', `laptop' and `home loan' (also internationally popular). A combination of two words - `cheap flight' or `cheap hotel' - is also bid on.

Bid words

Keywords are priced anywhere between Rs 2.50 and Rs 2,500 ($50) in India. Some of the more highly bid keywords, with their current bids for a top position, are: Discount hotel Rs 95.40 cost-per-click; Stock broker Rs 81.90 cost-per-click; Cheap hotel Rs 78.75 cost-per-click; Flight to Mumbai Rs 72 cost-per-click; MBA Rs 58.95 cost-per-click; Laptop Rs 53.10 cost-per-click; Cheap flight Rs 52.65 cost-per-click.

According to a recent survey by Internet and Mobile Association of India in association with the Bangalore-based online marketing agency Pinstorm, the average number of keywords bought by a brand is 42.

Travel sites, the most competitive online advertisers, routinely buy and deploy over three million keywords, the study reported. Many individual Indian advertisers bid on up to five keywords, to ensure traffic flows into their site.

Pricing

The pricing of keywords is directly proportional to the number of advertisers, said Mr Vinod Nambiar, Director Global Delivery, Position2, a US-based search and online marketing firm with an office in Bangalore. It's an open supply-demand based system, much like the stock market, he added.

On Yahoo's recently launched search engine marketing platform, the keyword `travel' had a highest bid of Rs 55. Interestingly, `hote;' also had been bid, for Rs 5.5!

The fact that a typo could dish out an ad is an example of the amazing flexibility of the Internet! `Books' was bid at Rs 27 and `flight' at Rs 48. `Bangalore real estate' was bid for Rs 46, while `Delhi real estate' was at Rs 28.

Online advertising

Sulekha.com spends around Rs 4 crore a year on online advertising, including keyword advertising. Social networking site Fropper.com bids on 12-15 keywords, ranging from internationally used `dating services' and `friendship', to a more local combination of `Mumbai dating', said Mr Raj Seth, Product Manager, Fropper.com.

The firm has invested in keyword advertising on all three players in the online advertising arena: Google, MSN and Yahoo. 25 per cent of the people who search Google for these words visit Fropper, said Mr Seth.

Besides offering keywords for bidding, search engines also use other tactics to ensure highest earnings, said Mr Nambiar.

The search engine would review your ad for its performance. You could be charged a lesser price for the keyword compared to what your competitor, whose campaign performance is bad, has bid on for the same word. This is on the basis of the conversion rate - as the search engine earns more from your better ad, it offers you a better price. The lesson is for advertisers: it may be wiser to focus on your ad, than depend on the Internet to bring in the crowd.

Activity in search marketing is seen in travel and hospitality; banking and financial services; technology — hardware and software (examples: Dell, HP, Sun); online data businesses (Shaadi, Naukri, 99 acres etc.); E-commerce and retail sites such as eBay and FutureBazaar and universities, said Mr Mahesh Murthy, Founder and CEO, Pinstorm. In 2006-07, the Indian online advertising industry is expected to be worth Rs 250 crore.

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