This installment of the Online Marketing Champion series features Andrew Goodman, founder and principal of Page Zero Media and the much acclaimed Traffick.com. Andrew is also the insightful author of “Winning Results with Google AdWords (One-Off)”, McGraw-Hill Osborne Media. 

In the past two years, Goodman's expertise on search engine advertising has been regularly cited by the business press, including CBS Marketwatch, Media Magazine, Fortune Small Business, New Media Age, The Globe and Mail, Bloomberg Markets, The New York Times, The Washington Post, The National Post, and Reuters.

We talked to Andrew Goodman, guru of search trends and founder of Page Zero Media, as well as editor-at-large for Traffick.com, for his take on the Google desktop search addition; what might happen long-term in regard to all these forays into search; and if all the big leaders are heading not only into local, but ultra-local, on desktops around the world.

eMarketingIQ: What do you think of Google’s local search foray and what seems to be an industry wide push toward “local search”?

Andrew Goodman: Local search is hugely important. In my office, we've been working on some research on it, but the topic has gotten out of hand. The material should be out in January. A few things need to happen for local search to become convenient for users, and for it to become easier for smaller local businesses to understand in terms of ‘how do I buy a listing.

eMarketingIQ: What about the fragmentation in the current markets?

AG: On the whole, I think that the fragmentation in the current market will be solved by portals (Yahoo, Google, MSN, AOL) dominating local search. Ease of use should improve as a result, and it's these companies, I feel, that will leverage their position to really profit from the local search dollars that are poised to be spent.

eMarketingIQ: Does that mean that traditional listings companies in the yellow-pages vein will lose out?

AG: Not entirely. They have their own strengths, including direct relationships with small businesses. In Canada, the Yellow Pages Group is aggressively forming portal partnerships and rolling out their own pay-per-click service. In the US, Verizon Superpages (etc.) are very aggressive. But, by and large, these companies will succeed through partnerships rather than operating destination Web sites, so the biggest story really centers around the major portals who have the ability to aggregate all sorts of disparate info to make things easier on the consumer, and to send that info to whatever mobile device they might be using in the future.

eMarketingIQ: What about the bigger companies buying up the smaller information companies?

AG: Some local information and local media seem ripe for the plucking by the major portal companies. As we know, media is always subject to concentration. Would a company like Yahoo, Google, Sympatico, or MSN begin snapping up local information providers, or even local magazines which provide content and restaurant reviews, such as Toronto Life? I don't see this as out of the question. But, consolidation won't mean the landscape will be simple. The local search space will be subject to a wide range of partnerships in every country around the globe.

eMarketingIQ: Is search really hot? Does it deserve all this attention?

AG: The fundamental reason why search is and should be a hot topic is that it has gone from being a neat hobby that generated next to zero revenues, to generating fully half the revenues of a growing online ad revenue pie. Every time Yahoo blows out earnings estimates, it's mainly thanks to paid listings via Overture. As Steve Ballmer of Microsoft recently observed, many of the principles behind search advertising will be reflected back into the world of advertising generally. In five years or so, you'll be amazed at what advertisers will be able to bid on ("offline" as well as online), and one assumes that companies like Yahoo, MSN, and Google will be right in the center of it all. It will be interesting to watch.”

eMarketingIQ: And what about the impact on consumers with all of this search market messaging?

AG: There is a persistent worry that consumers will become immune to marketing messages. This fear is likely overblown. Consumers today are faced with many messages, but their overall receptiveness and consumptiveness has risen markedly as the average person's purchasing power has risen. I'm old enough to remember the 1970's. In those days, there were things such as vacant lots that didn't get redeveloped for malls and condos.

In fact, in many towns, there just wasn't all that much you could buy. For better or for worse, we're living in a material world. If you have the right offer and understand how to communicate intelligently and with flair, while being respectful and non-offensive, consumers want to hear from you.

eMarketingIQ: How does search impact the economy beyond the marketers’ budgets?

AG: Search is not the only story in the capitalist economy, but it's part of a good news story that would have the average consumer's life get better due to vastly increased choice and lower prices, and the average company get more efficient, through decreased friction in transactions, and increasing transparency in communications.

Today you can get answers to so many questions in seconds that might have taken days or weeks to research (or you simply couldn't find it out) a mere decade ago. Search helps us tap into the growing availability of information of all types, hence its impact is potentially revolutionary -- making the rather large assumption that the average searcher is well-educated and discerning. Improved technology and availability of goods are of course nothing without sufficient social capital so that the majority can enjoy their benefits.

eMarketingIQ: Is there a secret key that marketers miss in search keyword advertising?

AG: It's so hard to boil it down to one. Pick from either of the following: first, we may get so caught up in comparing our costs per new customer acquisition among different keywords or across sources (Overture vs. Google, for example, or paid search listings vs. e-mail ads) that we forget that for many reasonably targeted online campaigns, we are also comparing with the future costs of acquiring those customers. Now is the time to act. Search advertising isn't getting any cheaper. Offline sources are typically many times more expensive than online ads.

The second key is to understand that today's consumer wants you to speak to them directly. They're less price-sensitive and more willing to act if you give them exactly what they want. This means writing more ads that are more carefully tailored to search queries, choosing keywords more carefully, taking people to more appropriate landing pages on your site, etc. (The idea of Web personalization dovetails with this.) People like to feel catered to. Having a human face on your business, a blog, more relaxed sales copy, and other "modern" touches can make a big difference. You want to be visible and "real," as opposed coming across like a faceless corporation or a sneaky small company that is hiding something. Customization and credibility drive sales. Most of the common-sense stuff that was written in The Cluetrain Manifesto applies to the whole process of search advertising from the click through to the sale or desired contact with a prospect. It all adds up to the potential for cool growth companies to eat complacent larger companies for lunch if they work smart. That's exciting.

eMarketingIQ.com: What’s the most common misconception about using Google AdWords?

AG: I find that people assume that there is a single dimension or detail, like writing a good ad, managing bids precisely, or finding zillions of keywords to advertise on, that determines success. Hence various gimmicks and software solutions being sold as "magic bullets." On the contrary, there are no magic bullets. This is about taking a holistic approach and managing all the important details of the project effectively while not getting too caught up in any one aspect of the process.

Many managers also wrongly assume that benchmarks like average click-thru rates or average conversion rates can help them. Usually, other people's numbers aren't very informative, and often they're highly misleading -- after all, who really shares their private business data? The best way of finding out is to test and refine in real time. Many companies do need to make projections, but there are many reasons why projections can miss the mark by a wide margin in search marketing. Therefore I recommend that the only budgeting that should be done at first is for something that is considered a "test." That test might be for one week or three months, and it might cost anywhere from $100 to $50,000. But it wouldn't be wise to put too much stock in any particular projections as to the results of such a test. I understand that's not how many marketing managers are asked to do their jobs, so many will go right on making projections, which is fine as long as their superiors don't hit the roof when they find out they're spending too quickly or too slowly. It's all about ROI in the end. Sometimes online campaigns do take time to ramp up. If you're in a hurry to spend this quarter's marketing budget, you can drop $50,000 real fast if you want to, and acquire close to zero customers due to your haste. Where's the sense in that?