Here is a fantastic article that next week’s guest Jason Prescott asked us to post on the RSS Ray blog. Jason is the CEO of JP Communications, a network of vertical search engines and directories in the wholesale industry. In 2007 he was selected to the Top 40 Entrepreneurs Under 40 roster by San Diego’s Metropolitan Magazine.

Did you hear the one about the online marketing model, guaranteed to deliver high ROI and business success? All you need is (1) a machine programmed with the latest search algorithms, formulas and customer-sniffing technologies … (2) a businessman or businesswoman … and (3) a dog.

Those who claim there is a prepackaged, turnkey technical solution to every business marketing challenge swear by that 1-2-3 model: The man or woman is there to feed the dog. And the dog is there to make sure the machine runs automatically … by keeping people away from the machine!

We don’t need to install high-tech and high-cost “black box” solutions. We certainly don’t need a mean dog to guard our technology. We can search market smarter with three basic principles that go straight to payback on our ad spend and payoff in lower customer acquisition/retention costs:

(1) Use the Right Ad Space – Special Interest Vertical Search Engines;
(2) Apply Tribal Knowledge – Industry, Professional, Human Knowledge Guides;
(3) Go Off the Reservations – Stand Out From a Crowded Online Marketing Crowd.

Inside-track online marketing works far better at attracting serious buyers or sellers, from wholesale to retail or manufacturer to distributor levels of business. Vertical search marketing tactics work more cost-effectively, increasing ROI and lowering cost of customer acquisition/retention. Vertical search engines use their own refined search technology, and they hold pinpoint targets in focus. The right verticals keep industry experience in search engine marketing. (They don’t just feed the dog.)

Vertical Search Engines Drill Down to Pinpoint Prospects

Search for products and services is the second most common online activity, after email. But general consumer search engines don’t always deliver the goods. According to user data collected by Search Channel, Slack Barshinger, PiperJaffray, Outsell and online researchers, two-thirds of searchers look first for business info: Product Sources, Service Suppliers, a Local Distributor. Research also shows that searches conducted on The Big Three (Google, Yahoo!, Microsoft Live) fail to deliver the right results almost half of the time. (39-to-47% of searches failed to answer the search query or did not return results relevant to the searcher’s specific needs.)

Now, I’m not suggesting that powerful, proprietary search formulas driving the engines at Google, Yahoo! or Microsoft Live Search are not doing their jobs. These consumer-focused search engines manage to index and deliver a wide swath of information, products and services available on the web. (Or dictionary editors made a big mistake defining “to google” as “to search,” right?)

At TopTenWholesale, a business-to-business vertical search network, we connect buyers and sellers of clothing, shoes, jewelry and general merchandise across the globe and up and down the entire supply chain. Industry vertical Thomas.com offers search to connect manufacturers and distributors of over 65,000 industrial products and services. Both these business and industry-focused vertical search engines depend on the global approach to search from those Big Three engines: Broad-based search supports our paid-search advertising inventory. It enables the high-ranking search results that vertical search engines – using our own specialized search marketing programs – achieve on Big Three search results pages. Search marketing with the Big Three engines certainly pays the rent for our specialized affiliate marketers, who draw and deliver qualified traffic from them.

The catch: Broad, consumer-focused search engines fail business and industry searchers almost half the time. Even the move to Universal Search Results — Google, Yahoo! and Microsoft pulling from verticals within their own ops (Videos, Maps, Interest/Shopping Channels) for combined search results pages – doesn’t help specialized searchers. (It has lengthened and cluttered results pages.)

Here is where Vertical Search Engines deliver:

• Zoom in on a targeted industry or interest group. Drilling down to pinpoint parameters that talk to sales prospects, business searchers and insider groups, verticals seek not to index the universe … but to deliver refined results that are most relevant to their identified target users. This pinpoint search focus demands technical filters plus tribal knowledge to read users minds or intentions. (See Apply Tribal Knowledge, below.) So, while the Big Three search engines develop ever more complex algorithms or accept friendlier inputs – such as natural language search terms – the Big Three search engines still focus wide-screen, rather than zoom.
• Better return on advertising dollars spent. Monitor ROI/ROAS (cost-per-click or cost-per-ad-serve charges divided by number of customers/leads generated by paid search advertising), and uncover lower per-conversion costs … if you advertise on the right vertical search networks. Advertisers on vertical sites reach more motivated targets — potential customers who are closer to purchase decisions than the average searcher on Google or Yahoo!. (Web analytics data from TopTenWholesale’s search network. Kelsey Group analyst Greg Sterling at Forbes.com.)
• Local verticals close the loop. While vertical search engines excel at matchmaking business-to-business transactions, anyone searching out a local outlet for a national advertised brand – like the user of a cell phone, iPod or Blackberry who seeks the nearest source of chocolate diamond jewelry or chile-head spices or rental designer handbags — uses VSEs, too. Local or city-based search sites are simply geographic-targeted verticals.

Applying Tribal Knowledge

We all know Classic Machine Marketing. Search spiders or bots work by algorithm, closely guarded formulas of branded search engines. They crawl web pages, follow links and index findings in a database, awaiting keyword requests typed into a search engine public page … or keyword triggered by the context and topics of an informational web page someone is eyeballing. On the backs of humble search spiders rest grand search marketing systems: Results pages with text, video and graphic links. Organic, unpaid search results listings or Paid Ads listed at the top. Keyword-triggered pay-per-click ads or context ads that appear alongside (or inside, or popping out of) web articles.

All search engines, broad-based or small and specialized, use sophisticated search programs and spiders. The difference with verticalized search is that it doesn’t depend only on the technology.

Knowledge workers drive vertical search. Spider bots work the front lines of search marketing and run by rote, which works just fine for broad-based, general searchers. But, vertical search engines and ad networks make sure specialized knowledge workers and industry professionals direct the search marketing machine. Type “sport hats” into a general SE and you’ll get millions of results pulled from every indexed “sport” and every “hat” topic – helmets to Easter bonnets. Search results page 32 – indexed by spiders but unseen by humans who rarely go past page 2 – may list the NASCAR-logo baseball caps you want to sell at rallies, country fairs and online auctions. Comprehensive results? Yes. Practical business intell, product sourcing, cost-efficient online advertising? Maybe not.

Next, search “sport hats” at an apparel wholesale vertical search site, like TopTenWholesale or WholesaleU or OffPriceNetwork. Now you get a manageable list of results from manufacturers and distributors of Licensed Sports Apparel, NASCAR and professional/collegiate sports team baseball hats, Harley-Davidson motorcycle logo leather or cloth gear. You’re also likely to get results for Sporting Goods suppliers of every type of headgear, from cycling helmets to hiking hats.

Our proprietary search spiders, crawlers, indexers and formulas are good. But our human knowledge base makes it better. We hire industry professionals, people who know off-price lots from salvage pallets, T-shirt trends and trade show attendees. By analyzing TopTenWholesale traffic, in- and outbound links, organic rankings, affiliate marketing performance … by hawking our web analytics and log files in over 200,000 searches a week … TopTenWholesale refines the search results it returns to specialized buyers and sellers of clothing, footwear and general merchandise.

• We scrub unintended search words, keywords like “hog” or “harley” that have 28 meanings to a general searcher … but a very specific meaning to, say, leather goods buyers.
• Our knowledge tribe of industry experts also filters and redirects common misspellings. For example, humans know “hancag pravda” should redirect to several results pages: “handbags,” “brand name Prada,” “women’s accessories,” “purses” and “leather.” The spider doesn’t.
• Experience from an industry, profession or interest group also means vertical search engines serve the right links and related categories to searchers. For example, “drop ship” entered at a wholesale merchandise VSE will return an array of product sources, distribution points and shipping policies. But nothing on cruise line ports of call or ship-in-a-bottle hobby kits. Sorry.

Tribal Knowledge spells Customer Support. Vertical search engines, by definition, drill down into a specialized base – designer clothing or air compressors, veterinary supplies or employment law. That knowledge transfers to custom customer support. The TopTenWholesale tribe knows the players at each point in the global supply chain (manufacturer, chain reseller, online auction seller, retailer). We partner and co-market with the right trade shows and media. This offers customized service to:

• Help clients refine best-drawing keyword search terms for their paid-ad campaigns. Our tribe draws on actual search behaviors for over 20,000 product categories, as those keywords enter our search network. They advise on which keywords draw high SEO rankings, which make Top 10 or
  Most-Searched Trends, even the hottest misspellings for certain products.
• Ditto popularity, frequency, trend factors above, to write successful display ads — banners that draw low-cost leads, qualified clicks, affiliate promo and high organic search page rankings.
• Offer click fraud protection. Levels of click fraud at general search engines is contested by the Big Engines and their Customers. Click fraud is billing excess CPC charges for invalid, fraudulent clicks to the search advertiser’s site (est. 4-23%) and click fraud by competitors.

It’s more difficult to pull off click fraud among a defined, special interest group, such as a vertical search community, than it is in the deep electronic shadows of large general search engines, which dominate over 60% of the market. Narrower playing fields and closer customer contact mean low or no click fraud at VSEs, especially those with web analytics, software and filters that also scrub through human tribe filters. The best proprietary technology – and the best-fed machine guard dog – can’t sniff out all fraud.

Going Off the Reservations

Search marketing proved its bona fides for measurability of results and certainly flexibility in launching, tracking, testing and changing advertising campaigns at a run. Ad opportunities through search engine networks – multimedia formats, inventory, reach – grow at a faster rate than traditional print and broadcast advertising.

Still evolving, search engine advertising offers pay-per-click, pay-per-action, pay-per-1M-impressions, one-time paid inclusion ads in directories and product catalogs, display/banner ads and search optimization tactics that improve organic (unpaid) results page rankings. Of course, search engine market share has also tightened up, with Google search and paid-ad programs now dominating up to 60% of revenues in every nation of licensed operation. At the same time, the Big Three – Google, Yahoo! and Microsoft Live Search – backfill their internal verticals (Shopping, Interest Channels) and buy links missing in the search chain, like ad-serving networks, social media and video serving sites.

Search marketing has changed tack again. Many smaller, niche entrepreneurs have been pushed out of the search engine boat because they can not affording rising, minimum bids for auctioned keywords in Google or Yahoo! paid-search programs. Having read this far, you know that even large wholesale marketers, working in specialized industry, professional or interest segments have not been served by big search engine ad programs. (Recall the almost 47% failure rate for business searchers; and the irrelevant results drawn from broad-base consumer search engine results.)

Strike time is now for strategic search marketers to take advertising dollars, euros and yen “off the reservations.” Off the dominant, broad-based consumer-focused big engines, investing instead in pinpoint targeted, pre-qualified audiences on specialized vertical search engines.

• VSEs filter their ops to talk to the right targets – be they wholesale apparel jobbers, golfers, mom entrepreneurs who are MBA virtual project managers, engineering purchase agents, chain store shoe buyers or construction site managers.
• Scroll back for the payback data on marketing through verticalized search networks: Higher ROI by attracting specialized business searchers who are further along the decision-making purchaser chain … feeding higher conversion ratios and better return on ad spend.
• Last piece of the VSE stat pie: Acquiring new customers costs up to five times the expense of retaining a customer through, for example, customer service. And that’s for the direct-marketing consumer retail model. Acquiring new business-to-business customers costs up to ten times B2B customer retention, because of the longer decision-making chain in business purchase cycles.

So, install all the right technology, hardware and software. Play it seemingly “safe” — Go with the market dominant search engine ad programs. Track all your metrics: impressions served, cost-per-click, time-of-day ad serves, bids, best-and-worst performing keywords, bounce rates from landing pages. And ignore the nagging thought that if you’re not reaching the right searchers with the info they seek at specialized, vertical cyber-hangouts, then you may simply be keeping the machine running. Don’t forget to feed the dog.

Learn even more about vertical search next Wednesday, August 6th at 6 pm Eastern, 3 pm Pacific on wsRadio.com. Jason Prescott will appear for all four segments to talk about what a marketer should know about vertical search engines.

Tags: Search Engine Advertising, Search Engine Marketing, vertical search, Wholesale Marketing