Does It Pay to Advertise on Vertical Search Engines?

Vertical search engines are still maturing, but they're becoming more popular and can be a wise investment for targeted campaigns.
Vertical search engines continue to proliferate on the Internet, hoping to capture eyeballs and advertising revenue with their subject-specific content. For consumers, these sites — which focus on areas such as shopping, travel, health and jobs — can be real time-savers. For marketers looking to capture these consumers, niche search engines, which typically charge much less than the major search engines for advertising, hold out the promise of a greater return on investment.

The question is, with so many vertical search engines, many competing in the same niche, and Google and Yahoo just a click away, do these sites actually deliver?

Breaking Up with Google is Hard to Do
Many analysts who study the search engine market have yet to be sold on these so-called vertical search engines. "It's tough," says Stefan Tornquist, the director of research at MarketingSherpa. "Anything in the search world is affected by the immense gravitational pull of Google. It's like being a minor [satellite] around Jupiter. I've spoken to so many marketers who say, 'I've done a number of experiments with other search engines… with niche sites, and none of them compare to Google.'"

That said, Tornquist does add that he has also heard of marketers who have been able to find good opportunities and good price-to-return ratios on some vertical search engines, albeit mostly shopping comparison sites such as Shopping.com.

Sapna Satagopan, an associate analyst at JupiterResearch, notes similar findings. Vertical search engines "are much less expensive," she says. "So your investment is not going to be as high as it is with Google, and you can expect targeted traffic." However, she, too, notes that vertical search sites "are not going to provide you with the kind of returns that Google could."

Does that mean you should forget about advertising on niche sites? No, say both Satagopan and Tornquist. But you should do some homework before you to start paying for key words.

Optimizing Search Advertising
"When we talk to marketers that are seeing success [with the vertical search engines], they're typically the ones that have the highest level of internal information about their customers and products, so they can specifically target certain products with certain sites they've found to convert well," says Tornquist.

A good example of a marketer who got it right is the e-commerce division of a major theme park. "They've got a lot of interesting challenges selling a unique kind of product," explains Tornquist. "But they have a very good internal research and analytics [team], so they know with a high degree of accuracy which ads work, which don't and through time and experimentation discovered which of the different niche sites and vertical engines work for certain offers."

That's why Tornquist advises companies to invest in Web analytics (which can vary in price, though Google Analytics, which Tornquist says is a perfectly good, basic program, is free), before spending advertising dollars on any search engine. If that isn't possible, "I would absolutely recommend experimentation," he says. For example, you could test out two vertical search sites — or one vertical search site and a major search site — per quarter by running campaigns that are easily comparable and see which yields more sales.

Choosing a Vertical Search Engine
The challenge for vertical search engines, says Satagopan, is they "have to convince marketers or advertisers that the quality of traffic is fantastic on their site." For example, Shopping.com knows that people who come to the site are interested in shopping. "They're not just there to browse or look up interesting information," she says. "They're there to shop. So they can say to an advertiser that the traffic they are getting is high quality," which is why Shopping.com is one of the more successful vertical search engines.

Other vertical search categories that Satagopan says show promise are health, specifically sites such as Healthline and Medstory, travel sites, including Sidestep and Kayak, and job search sites such as Simply Hired and Indeed.

And while vertical search engines may not be able to boast the same conversion rates as Google and Yahoo right now, many of these sites are still in their infancy. And as they continue to attract consumers and marketers, the opportunity to convert visitors to buyers should increase, say the analysts.

Indeed, for e-commerce businesses offering niche products, a niche search engine that targets that niche market segment, has a good reputation and offers low rates to advertisers is "a no-brainer," says Satagopan.

Jennifer Lonoff Schiff is a regular contributor to ECommerce-Guide.com and writes a blog for small business owners.

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