The Hidden Treasure of the 2nd-Tier

Old habits die hard.  In my experience, the hardest habit to break for SMB’s is considering their advertising as placement advertising instead of performance advertising.  Digital marketing is no longer about where you show up, or how often you show up, it’s about how well convert, and how high your return on investment (ROI) is.

Aside from branding exercises, I’m a strong believer that the only metric that counts when measuring the effectiveness of advertising is the ROI.  Oftentimes, this belief is in direct conflict with the mistaken belief of many advertisers that the only place they should be advertising is on Google.

If you were to advertise on Google, Yahoo and Bing, you could potentially reach 99% of the traffic on the web between them (and their associated networks).  While that sounds fantastic at first, let’s take a step back, and recall that advertising on search engines is a pay for performance (pay-per-click) model.  Therefore, that means, you’re not paying the search engines for the ability to appear, you’re paying them to deliver clicks.

Search engines are very good at delivering clicks, and they’re also very good about managing your budget.  Once you’ve used up your budget for clicks, the search engines stop delivering them, and you stop appearing in the sponsored links.  You get nothing for free.  Now, let’s revisit the idea that you have the potential to reach 99% of all web traffic by advertising with the Big 3.  Is that true?  Not really.  It’s only true if you’re willing to spend enough money on advertising, that no matter how many clicks you got on your ads, you’d still have enough budget left to keep your ads running continuously.

I can not even conceive of how large that number would have to be in order to actually capture every impression on the Big 3.

This fact does not make these search engines less valuable as media, but rather it teaches us a very important lesson:  It doesn’t matter how often you show up in the search results or where; what matters is getting those clicks from users who will convert into customers.

So, if we accept that small businesses generally don’t have a big enough budget to show up more than occasionally on major search engines, then we must acknowledge that the fact that Google captures 70% of search traffic is irrelevant when deciding where to advertise, because a SMB will never touch anywhere near all of that traffic.  The relevant factor is what the ROI on your advertising will be.  In limited unscientific tests I have done, I have found that the Big 3 yield very similar conversion rates, and that Yahoo! tends to deliver a slightly better ROI than Google (probably mainly due to the fact that clicks are generally cheaper on Yahoo!).  Therefore, this means that the logical thing for a SMB to do is to advertise across all three search engines, and see which yields the best results.

There is no logical reason to prefer Google as your main advertising channel.

This is where the second tier comes in.  If we’ve seen that Yahoo! and Bing can deliver results as good or better than Google, what about all those other lesser known search engines (most of which have PPC programs)?  The fact of the matter is that they can be just as good a source, if not better, than the Big 3.

Remember that what’s important is your conversion rate and your ROI, so as long as a search engine is delivering you relevant traffic, it should not matter which search engine that is.  Given that the second tier search engines often have ridiculously cheap clicks compared to Google, trying them is definitely worth it for small budget advertisers.  They may not have the traffic Google has, but most SMB’s will never touch a fraction of Google’s total traffic, so that’s irrelevant.

Search Engine Watch had posted some of the better second tier search engines, but my advice remains to test them out and see which ones deliver results.  Again, the clicks from these engines are cheaper, so testing should not put a huge hole in a SMB’s budget.

The bottom line is that most advertisers who say, “I just want to be on Google,” are ego-marketing.  The source of your clicks does not matter.  The content of your site matters. Instead of worrying so much about where visitors are coming from, SMBs should be worrying about optimizing their sites for conversion.  That way, regardless of source, once visitors arrive on the page, they will be more likely to purchase.

Have you used the second-tier for your advertising? What’s been your experience? Let us know in the comments.