New Methods in Search Marketing: Contextual Advertising and Other

Piper Jaffray during the past 12 months: CTRP, DRIV, LTON, NFLX, TOMO, SNDA 6. Piper Jaffray expects to have the following companies as investment banking clients within the next three months: none 7.<br><br> Other material conflicts of interest for Safa Rashtchy or Piper Jaffray regarding companies in my universe for which I am aware include: CTRP, DRIV, LTON, TOMO, SNDA: all underwriting 8. Piper Jaffray received non-investment banking securities-related compensation from the following companies during the past 12 months: none Best Practices For-Marketing and Optimizing your Search Engine Process Search in 2004: The Evolving Market and the New Opportunities 1.The Size of the Market 2.Why is Search Growing so Fast? 3.How Search Used To be 4.How Search is Evolving Today 5.Most Promising Strategies Best Practices For-Marketing and Optimizing your Search Engine Process Original Estimates-Published March 2003 Search in 2003: A Real and Growing Business § From almost nothing 2 years ago, Search is now a $1.5 billion industry growing to $7 billion by 2007 Worldwide Search Revenue Projections $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 200220032004200520062007 ($ in millions) International Search Revenues U.S.<br><br> Search Revenue 1.4 B 2.1 B 3.0 B 4.1 B 5.5 B 6.9 B Source: Piper Jaffray & Co. Best Practices For-Marketing and Optimizing your Search Engine Process New Estimates: A Faster Growing Global Business § Global Search Revenues, excluding local search, should exceed $11 billion by 2008 Source: Piper Jaffray & Co. Global Search Revenue Estimates $1.19 $2.35 $3.30 $4.37 $4.98 $6.06 $7.01 0.07 0.29 0.63 1.28 1.91 2.84 3.80 $0.00 $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 2002200320042005200620072008 ($ in billions) International Search Total U.S.<br><br> Searech $10.8 1 $8.9 $6.9 $5.6 $3.9 $2.6 $1.3 Best Practices For-Marketing and Optimizing your Search Engine Process Why is Search Growing so Fast? § It 9s Still the most cost-effective way for advertisers: Cost per Lead Across Various Direct Marketing Methods $1.18 $2.00 $9.94 $0.55 $0.45 $0.00 $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 Searche-MailYellow PagesBanner AdsDirect Mail Source: Piper Jaffray & Co. Best Practices For-Marketing and Optimizing your Search Engine Process Why is Search Growing so Fast?<br><br> 1.It 9s still the most cost-effective way for advertisers 2.More advertisers 3growing to 200,000 on its way to seven figures 3.More Searchers: search volume continues to grow at 10%-20% (compare with viewershipof network TV) 4.Advertisers need more search volume 3willing to pay more 5.Searchers are becoming more sophisticated-The Virtuous Cycle: Best Practices For-Marketing and Optimizing your Search Engine Process Why is Search Growing so Fast? The Virtuous Cycle Searches find relevant commercial results More advertiser join Searches find more results- learn to use search more often Searches use more detailed search (word count goes up) 1 2 3 4 5 More advertiser join Source: Piper Jaffray & Co. Best Practices For-Marketing and Optimizing your Search Engine Process How Search Used to Be& The Early Days of Paid Search § Advertisers will buy a few hundred keywords at most § Most managed their keyword buys in-house § Little competition from big brands § On some sites, users were bombarded with paid links § It was easy to discover unused keywords and bid $0.05 for it atGoto.com Search Was Discovered and Driven by Small Businesses It was Very Cheap, and very effective Best Practices For-Marketing and Optimizing your Search Engine Process How Search is Today and Evolving-New Methods 1.Big Business is in-Click charges are going up 2.Companies are also focusing on how increase conversion: Site Analytics is playing a big role 3.Focus on Customer life Cycle is increasing 4.Increased relevancy is the key for the site and for the advertisers 5.Increased focus on algorithmic search: the forgotten free goldmine 6.Contextual search is taking off 7.SEMsare growing in popularity and size; a major force in search business Best Practices For-Marketing and Optimizing your Search Engine Process Four key Emerging Areas § Contextual advertising: Early results are very promising 3could turn out to be a big syndication network of classified ads § Local Advertising: A $12-$18 billion offline business in the U.S alone, could migrate mostly to online § Branding value- Big consumer brands are finding the need to be in front of the customers when they are searching 3a high brand recognition value compared to when user are consuming other content § Keyword Analysis- Find the ROI for each keyword and each position; maximize the total return Best Practices For-Marketing and Optimizing your Search Engine Process Contextual Advertising: The Back Pages of Magazines § Click through rates likely to decline § Will become a permanent part of most content pages § Relevancy and Adjacency is the key-User 9s will get used to ignoring them if they don 9t click on them § Should not be used for branding-specific offers are the key to success Best Practices For-Marketing and Optimizing your Search Engine Process Conclusions § Search and paid search are likely to get much bigger and could start impacting other types of media buys § It is still early days in search and making money in search is easy 3 both for publishers and for advertisers § Customer conversion and customer retention should be the next big goals of the merchants, once a lead is acquired through search § Expect to pay higher prices and focus on increased conversions; successful companies will try to maintain flat cost-to-conversion, despite increasing rates Best Practices For-Marketing and Optimizing your Search Engine Process Thank you<br><br>

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