Search engine marketing is big — and getting bigger. Just check Google’s latest price-earnings report to see how popular putting sponsored ads next to search results has grown.

That success is starting to draw the attention of big-brand marketers, particularly in consumer categories where buyers like to do lots of Web research before laying out their cash. But that doesn’t mean SEM holds no further promise for companies outside the Fortune 1000 — even wayoutside. After all, pay-per-click ads were intended as a means to draw small marketers into Web advertising, ensuring that advertisers would only spend what they could afford on marketing that worked. And “organic” search optimization — designing Web content to get a high rank on Google or Yahoo! search results for your category — can work even better than paid ads in the long run.

But if you’re just now gearing up to do search marketing, or if you’re looking to optimize a program that was started long ago, be advised that the game has matured since the pioneer days of 2001. Attendees at the Search Engine Strategies conference in San Jose, CA earlier this month heard about those changes in the session “Big Ideas for Small Budgets.”

New Rules of the Game
Forget about discovering a “magic formula” that will win a high ranking for every search on your appropriate keywords, said Jennifer Laycock, editor-in-chief of Search Engine Guide. To determine which Web pages are most relevant to their users, Google, Yahoo! and the other engines use math formulas called “algorithms.” And in the past, SEM consultants used rules of thumb they said helped marketers’ pages parlay those algorithms into high rankings.

The problem is that search engines are aware of those tactics and tweak their ranking system to minimize the effect of these gambits, making their methods of evaluating relevance more closely resemble human thought processes.

For example, in the early days of search marketing, engines judged that a page was significant if it simply had a lot of links. When everyone started adding links to their pages, the engines got savvier and looked at the text in those links, to see what was actually said and how relevant those linked pages were. Marketers caught on to that tactic too, so Google and the others began looking at the quality of the links, on the theory that a link from some unknown Geocities page was not as authoritative as one from The Wall Street Journal.

Now search engines are factoring in a link’s age to decide if a site deserves a high ranking. Sites that have been up and amassing high-quality links for five years count more than those that only sprang up two months ago. Other tactics that may apply in the future include watching user behavior after they’ve clicked on a result or a paid search ad; if the user clicks back right away, the content may get downgraded in relevance.

Use Common Sense
Faced with those continual adjustments by the search engines, marketers need to rely less on programming tricks and more on the kind of common sense they apply elsewhere in their business, Laycock said.

Marketers sometimes complain that Google isn’t giving their new site its proper ranking in search results; this often is called getting trapped in the “Google sandbox.” But Laycock said those complaints usually ignore the business judgment behind those rankings. Search engines have raised the entry bar for new Web sites, but a unique site with interesting content and offerings can still get included quickly and move up the ranking.

“If you’re launching a mortgage site, there are already 5.5 million mortgage sites listed on Google,” Laycock said. “Why is Google suddenly going to put your site in the top 10? They’re not, because there’s already plenty of information filling that need.” Marketers in competitive categories have to invest time and effort to prove their Internet value, rather than blaming some imaginary penalty for newness.

The best rule organic search rule that small businesses can apply, she said, is to understand the search buying cycle and build sites around it. If you want to reach searchers early in the cycle, put up content that talks broadly and usefully about your product or category, to make it more likely that users will find your site when simply searching for general information about “muscle cars,” for example.

To hold users’ interest once they start researching and comparing models, design Web pages around that phase of the cycle as well: “fastest muscle cars.” That will put your name in their mind when they get ready to purchase and start searching for “muscle car dealerships.”

With paid search ad campaigns, the most essential rule is to do effective tracking on your pay-per-click (PPC) campaigns, Laycock said. Too many small businesses simply open a Google or Yahoo! account, toss a PPC campaign onto some keywords and assume it’s working. That’s like launching a TV campaign, a direct mail effort and a Yellow Pages listing all on the same day and not tracking which customers came through which medium.

“It’s not about buying clicks, it’s about buying customers,” she said. “You’ve got to get in and tie those clicks to actions on your site, so you can make smart decisions about where to spend your money rather than simply continuing to spend because you’re afraid the traffic’s going to dry up.”

A Few Good Tips
* Links matter, but highly relevant links matter more. Don’t look at links as short-term traffic boosters. Take the time to earn a good link to a useful site, just as you’d invest time to get a personal referral in real life. “The best way to get a link is to earn it,” Laycock said. Ultimately, good Web content will attract good links and will be rewarded by the search engines.

* Don’t assume you can’t afford to hire an outside firm to carry much of the load for your search marketing. True, big brands spend in the millions for SEM services, but there are good small firms that will take on clients that spend thousands, said Matt McGee, project manager for One World Telecom and author of the SmallBusinessSEM.com blog.

* Remember that outsourced SEM is a partnership and take responsibility for forging a good one. Ask questions before you hire a firm and evaluate the answers you get for their sales-pitch content. Also, assess your own comfort level with risk; some SEM firms employ tactics that, if detected, can earn your site a penalty from the search engines. You may not want to pay the financial (or ethical) price for those techniques.

* The search world doesn’t stop with the big engines these days. If your market is geographically limited, local search engines and online directories can pay off in conversions, if not direct traffic. The major engines all have local directories and often list those results above the general search rankings. Other third-party directory sites (Merchant Circle, Yelp) pop up every day, some with features such as customer reviews. It’s a big job to make sure you’re listed correctly on all these sites. But it needs to be done; there’s no telling which site could hit big a year from now.

Search engine marketing is big — and getting bigger. Just check Google’s latest price-earnings report to see how popular putting sponsored ads next to search results has grown.

That success is starting to draw the attention of big-brand marketers, particularly in consumer categories where buyers like to do lots of Web research before laying out their cash. But that doesn’t mean SEM holds no further promise for companies outside the Fortune 1000 — even wayoutside. After all, pay-per-click ads were intended as a means to draw small marketers into Web advertising, ensuring that advertisers would only spend what they could afford on marketing that worked. And “organic” search optimization — designing Web content to get a high rank on Google or Yahoo! search results for your category — can work even better than paid ads in the long run.

But if you’re just now gearing up to do search marketing, or if you’re looking to optimize a program that was started long ago, be advised that the game has matured since the pioneer days of 2001. Attendees at the Search Engine Strategies conference in San Jose, CA earlier this month heard about those changes in the session “Big Ideas for Small Budgets.”

New Rules of the Game
Forget about discovering a “magic formula” that will win a high ranking for every search on your appropriate keywords, said Jennifer Laycock, editor-in-chief of Search Engine Guide. To determine which Web pages are most relevant to their users, Google, Yahoo! and the other engines use math formulas called “algorithms.” And in the past, SEM consultants used rules of thumb they said helped marketers’ pages parlay those algorithms into high rankings.

The problem is that search engines are aware of those tactics and tweak their ranking system to minimize the effect of these gambits, making their methods of evaluating relevance more closely resemble human thought processes.

For example, in the early days of search marketing, engines judged that a page was significant if it simply had a lot of links. When everyone started adding links to their pages, the engines got savvier and looked at the text in those links, to see what was actually said and how relevant those linked pages were. Marketers caught on to that tactic too, so Google and the others began looking at the quality of the links, on the theory that a link from some unknown Geocities page was not as authoritative as one from The Wall Street Journal.

Now search engines are factoring in a link’s age to decide if a site deserves a high ranking. Sites that have been up and amassing high-quality links for five years count more than those that only sprang up two months ago. Other tactics that may apply in the future include watching user behavior after they’ve clicked on a result or a paid search ad; if the user clicks back right away, the content may get downgraded in relevance.

Use Common Sense
Faced with those continual adjustments by the search engines, marketers need to rely less on programming tricks and more on the kind of common sense they apply elsewhere in their business, Laycock said.

Marketers sometimes complain that Google isn’t giving their new site its proper ranking in search results; this often is called getting trapped in the “Google sandbox.” But Laycock said those complaints usually ignore the business judgment behind those rankings. Search engines have raised the entry bar for new Web sites, but a unique site with interesting content and offerings can still get included quickly and move up the ranking.

“If you’re launching a mortgage site, there are already 5.5 million mortgage sites listed on Google,” Laycock said. “Why is Google suddenly going to put your site in the top 10? They’re not, because there’s already plenty of information filling that need.” Marketers in competitive categories have to invest time and effort to prove their Internet value, rather than blaming some imaginary penalty for newness.

The best rule organic search rule that small businesses can apply, she said, is to understand the search buying cycle and build sites around it. If you want to reach searchers early in the cycle, put up content that talks broadly and usefully about your product or category, to make it more likely that users will find your site when simply searching for general information about “muscle cars,” for example.

To hold users’ interest once they start researching and comparing models, design Web pages around that phase of the cycle as well: “fastest muscle cars.” That will put your name in their mind when they get ready to purchase and start searching for “muscle car dealerships.”

With paid search ad campaigns, the most essential rule is to do effective tracking on your pay-per-click (PPC) campaigns, Laycock said. Too many small businesses simply open a Google or Yahoo! account, toss a PPC campaign onto some keywords and assume it’s working. That’s like launching a TV campaign, a direct mail effort and a Yellow Pages listing all on the same day and not tracking which customers came through which medium.

“It’s not about buying clicks, it’s about buying customers,” she said. “You’ve got to get in and tie those clicks to actions on your site, so you can make smart decisions about where to spend your money rather than simply continuing to spend because you’re afraid the traffic’s going to dry up.”

A Few Good Tips
* Links matter, but highly relevant links matter more. Don’t look at links as short-term traffic boosters. Take the time to earn a good link to a useful site, just as you’d invest time to get a personal referral in real life. “The best way to get a link is to earn it,” Laycock said. Ultimately, good Web content will attract good links and will be rewarded by the search engines.

* Don’t assume you can’t afford to hire an outside firm to carry much of the load for your search marketing. True, big brands spend in the millions for SEM services, but there are good small firms that will take on clients that spend thousands, said Matt McGee, project manager for One World Telecom and author of the SmallBusinessSEM.com blog.

* Remember that outsourced SEM is a partnership and take responsibility for forging a good one. Ask questions before you hire a firm and evaluate the answers you get for their sales-pitch content. Also, assess your own comfort level with risk; some SEM firms employ tactics that, if detected, can earn your site a penalty from the search engines. You may not want to pay the financial (or ethical) price for those techniques.

* The search world doesn’t stop with the big engines these days. If your market is geographically limited, local search engines and online directories can pay off in conversions, if not direct traffic. The major engines all have local directories and often list those results above the general search rankings. Other third-party directory sites (Merchant Circle, Yelp) pop up every day, some with features such as customer reviews. It’s a big job to make sure you’re listed correctly on all these sites. But it needs to be done; there’s no telling which site could hit big a year from now.