In The News

BRW: Clout of the click

by Agnes King

Israeli Oron Raviv touched down in Melbourne as a 42-year-old migrant. “Coming to a new country at that age, you can’t afford to make mistakes,” he says.

With scarce funds to promote his fledgling catering business, Catering on the Move, Raviv dropped leaflets in letter boxes at 2 am. It was not enough he realised that he had to market himself more aggressively. But without a big advertising budget, whatever vehicle he chose had to be affordable.

“Yellow Pages wanted $25,000-30,000 for a small space in 2004,” Raviv says. It was too much. Instead, he designed a rudimentary website and engaged a company, E-Web Marketing, for $100 a month to enhance it so that when people searched for “catering Melbourne” with Google, his business would appear near the top of the listings.

This practice, known as search-engine optimisation, is growing in popularity, and its goal is to improve website’s ranking in search engines such as Google, Yahoo! and Ninemsn.

Without optimization, Raviv was getting 300 visitors to his website monthly. After several months of tweaking the content and design cateringonthemove.com.au was attracting six times more traffic. By the close of the 2005 financial year, the business was turning over $70,000 without any mainstream advertising.

With 9.1 million Australians searching the internet every day – it is common for small businesses that invest in website optimisation and search advertising to realise a return on investment of 25 to 500 per cent.

“It depends on the vertical and how aggressive small businesses want to be – do they want to maintain current growth or grow dramatically,” ReachLocal Australia chief executive Steve Power says. “We have a client, Balmain Rentals, getting 600 to 700 phone calls a month. At the same time, we have a plastic surgeon who only wants 10 phone calls a week because that’s all he can literally cope with. So, we scale the campaign according to the business’s ability to cope with it.”

Cost is an important factor encouraging small businesses to move online – followed closely by rivalry. “A chief executive’s face goes ashen when they hear a competitor is appearing in the top five listings on Google while they’re not even appearing on the first page,” director Llew Jury of Reload Consulting, a business coach and consulting service for small and medium enterprises, says.

Others claim an additional dynamic is present: conventional forms of advertising are not working for small business like they used to. “In 99 per cent of cases, this is Yellow Pages adverts that used to bring in 50 calls a year but now attract only five,” Power says.

Relying on intellectual property from the United States, ReachLocal set up an Australian operation last April to capitalise on the rush of small businesses grappling with this shift in marketing and advertising. The company has expanded to 50 staff within 10 months, a statistic Power offers as an indication of the strength and demand.

Before plunging into the internet realm, the first thing small business should consider is whether having a web strategy is appropriate. “Not every company will need a fully fledged e-commerce website [where customers can purchase goods and services online], but some will,” Jury says.

SMEs need to ask: how will this help the business? What kind of leads will come from it? And, how many of those will we convert into sales? “SMEs need to make an honest assessment of where it fits within their marketing mix,” Jury says. From there, they can assign a budget.

The way business operates online has changed substantially in the past eight years. In 2000, it was all about selling goods and services – electronic retailing or “e-tailing”, as it came to be known. A lot of companies failed in this attempt.

These days, the reason for being online is to be seen. With people relying less on the Yellow Pages to source service providers and turning instead to internet search engines, it is about being where the customer looks. “ [Web presences] is another component of the business that’s required to grow,” suburban Sydney lawyer Alan Rigas says. “It’s not the only part, but it’s integral.”

Companies are less likely to sell goods and services online now. My Coffee Shop, which supplies automatic coffee machines to offices in Melbourne and Sydney, spends several thousand dollars each month on sponsored links on Google, but rarely sells a machine online.

“We encourage people to call our toll-free number to consult us prior to purchasing to avoid choosing the wrong machine for their needs,” owner Carmelina Pascoe says. And this is typical for companies, big and small.
Sponsored link (also referred to as pay-per-click, search advertising or paid search) are a step up from search engine optimisation, although they operate on the same principle. They refer to the listings that appear in the sponsored section at the top of a search results page or down the right-hand side. Unlike pure search listing, however, these premium spaces are purchased from the search engine provider (see “Key word for customers”, right).

Once a person types in a key word or phrase, a search engine’s goal is to return a list of the most relevant websites. Relevance is assessed using ever-changing factors, including matching key words or phrases to those embedded in the content of a website, how often that website is updates, and how many other websites link or “point” to it as an authority on a particular topic.

The search engines of companies such as Google and Yahoo! use complex algorithms (called “bots” or “spiders”) to make these assessments – algorithms that are changed continually and enhanced to stop people from deliberately fooling the system.

The number of pages a website contains also has an impact. “If your website only has five pages and your competitors have 50 pages, you need to consider adding more content to boost you up the natural listings,” E-Web Marketing chief executive Gary Ng says. “The more a client is able to work with us in terms of our suggestions and recommendations, the better the result they get.”

Google also rejects intricate sites designed and animated in Macromedia Flash format. But some companies, having gone to a great deal of expense to create these websites, are reluctant to change to a style search engines can read.

Help in dealing with the tricks of the trade is a good reason to engage a search engine optimisation, but not everyone trusts their competency. My Coffee Shop does its own optimisation, spending up to 40 hours a week fine-tuning the website. Pascoe claims she is achieving better results than some rivals paying $60,000 to optimisation experts.

Whichever route a business takes, people looking for good results have to invest at least three to four hours a week reworking their website and tweaking search advertising campaigns. “It’s crucial you know what exact words people going to buy your product are typing into Google,” Pascoe says. Search engines have free tools to help but she says to watch out for Americanisms such as “coffee maker” or “breast augmentation” instead of the Australian alternatives “coffee machine” and “boob job”.

Selecting the right key words and phrases is an effective way to filter out low-value clients, Power says. “A big thing we see with electricians and plumbers is that they’re always busy running around doing little jobs. We structure their online advertising so they can choose bigger and better-paid chunks of work.”

Targeting customers in this manner becomes more crucial as companies move into paid search advertising. And as competition increases, companies will have to spend more money on increasing their popularity or their relevance, or both, on search engines.

The cost of key words in hotly contested markets such as mortgages and travel has increased substantially. For example, those relating to certain weight-loss products – says, Optifast diet shake – have become very expensive in recent months, Rania Awad, who runs online pharmacy Your Chemist Shop, says. “It’s hovering around $1.10 per click where less-known brands are 20 cents per click.”

This is countered by a trend towards more refined searches. For example, where people used to search for a “dentist in Sydney”, they are narrowing that search to “cracked tooth North Ryde”. The benefit of these cheap and unusual “long-tail” words is that they are more likely to clinch a sale, Power says.

10 ways To find the right website developer

01 Develop a clear idea of business objectives and requirements in a briefing document, including a rough budget.

02 Invest in getting to know your customers and their website needs – a basic step often overlooked.

03 Ask for a referral from industry peers or business partners who have had previous experience with a web-design agency. If a referral is not available, scan business listing from credible industry associations or trade press.

04 Shortlist a few agencies (no more than three) that have client credentials that match the relevant scale, quality and target audience desired.

05 Meet the agency, discuss requirements and find out whether they can meet them. Listen for an agency that talks about the business results it has delivered for its clients, and ensure that its approach includes building awareness as well as the website itself. Listen for good ideas.

06 Interview the agencies in the same way as an employee – it is a long-term partnership.

07 Ask for a proposal and look at value, not price. Clarify the details and agree on the parameters of the work for a fixed fee.

08 Ensure the technology platform that is being proposed will not soon be out of date.

09 Make sure business objectives will be met, and appoint the preferred contractor.

10 Dedicate enough time to educate the agency on all aspects of the business – it does not know your business as well as you do.

Source: Bulls-Eye Website Solutions, Reload Consulting
The credibility bonus
Being number one on Google lends an unusual level of credibility and authority to small business, Melbourne caterer Oron Raviv, above, says.
Raviv is director of Catering on the Move, which has ranked in the top three listing in its category on Google for the past two years.

“Suppliers offer you better term of trade,” he says. Suddenly, big food companies are soliciting my business, sending me samples, and if I take one of their products on board they use my being number one on Google as a testimonial.”

People should not underestimate the benefits of these non-financial aspects of a well-performing website, Raviv says.

Design for delivery

There are three basic levels of website, ranging in price from $1000 to $100,000-plus to build.

The first is a basic “brochure-ware” site (costing up to $5000), which takes a conventional brochure introducing a business and its services and posts it online, “It covers who you are, what you do, how to get in touch,” Reload Consulting director Llew Jury says.

The next step – a big one – is executing business transactions through the website. This ranges from automated forms to sophisticated online retailing and other financial transactions, such as banking.

“When you start automating business processes on the web, you need to engage specialist web programmers, not just web designers,” Jury says.
In this category, mid-range costs can run from $5000 to $30,000. The cost of a top-end website starts at $50,000.

There are mixed view about whether small business operators should invest more in optimising their websites so they rank higher in “natural listings” or on the look and feel of the site itself. Catering on the Move founder Oron Raviv believes money is best spent ensuring that a business appears in the top five listings on a relevant Google, Yahoo! or Ninemsn search engines.

“If I only had $8000 to spend, I would spend $6000 on search engine optimisation and less on the design,” he says. “People tend to invest a lot of money in beautiful website but if no one gets there it’s like building a shop in the middle of the dessert.”

On the other hand, My Coffee Shop owner Carmelina Pascoe says potential clients make a lot of assumptions based on appearance.

“Quite often the website is the first point of contact people will have with your business so it needs to project the right image,” she says.

This image must be conveyed not just on the home page but on each
subsequent page since it is difficult to gauge exactly where within the various pages of a website a search engine will direct viewers.

Pascoe concedes that no matter how visually enticing a website is, it won’t propel a business up the search engine ranking.

Drugs over the net

Rania Awad, above, owner of the Maroubra Medical Centre Chemist in Sydney’s south-east, invested $70,000 with four other chemists in online pharmacy Your Chemist Shop three years ago.

Assisted by publicity on the Nine Network’s A Current Affair, it takes in nearly $1 million in sales.

“It’s $1 million I would never see sitting in Maroubra,” Awad, who is buying out her partners, says.

The online chemist is more competitive – the lower cost of operation means Your Chemist Shop can sell products at a steep discount.

Competitive pricing also increases its market, with customers logging on from Western Australia and Victoria.

Awad used Sydney online media agency Freestyle Media to build and optimise the website.

Key word for customers

Pay-per-click, also called sponsored links, search advertising or paid search, refers to the listings that appear in the sponsored section at the top or side of a search results page. These premium spaces are purchased from the search engine provider.

To get started in pay-per-click, a company first needs to identify the key words that consumers will type into a search engine when looking for its product, service or business. It must also consider preferred geographical regions and demographics targets.

Next, an account with Google, Yahoo!, Sensis or all three is necessary. The relevant key words or phrases must be nominated, and the available budget determined. Pay-per-click works on an auction model – the key word costs the going rate every time a prospective customer clicks on the advertisement. But it is possible to cap the maximum daily spending.

The goal is to convert clicks into customers, so it pays to focus on quality rather than quantity – making the wording of a sponsored link crucial.

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