Computerized search services, such as consumer search engines (e.g., Google®, Bing®, Yahoo!®), implement computerized, predetermined search algorithms to allow users to search computer resources, such as websites or databases. Users enter a search query comprising strings of alphanumeric characters or words. The search engine algorithms use the search query to approximate and locate the resources (e.g., website, machine-readable computer file) sought by a user. Some commercial search engines allow advertisers to “purchase” keywords as a revenue stream. In these scenarios, the search engine algorithmically determines a price for the advertisers to purchase a keyword. Although frequently computerized to some degree, the pricing algorithms are frequently auction-based or market-driven so that the price of a particular keyword is sensitive to the search popularity of the particular keyword. For example, common words for marketable consumer products, such as “dress” and “shoes,” are likely more expensive for advertisers, compared to words for academic concepts, such as “constructivism” and “relativism.”
The moment at which advertisers are charged for the keywords may vary. In some cases, advertisers could be charged up front, at the time they buy advertising space associated with the keyword, or they may charged “per click.” Under a pay-per-click scheme, when an advertiser pays to be associated with a keyword, the advertiser will provide the search engine with an advertisement they wish to be displayed when the keyword is part of a user's search query. The advertiser is then charged for the keyword if the user clicks on the advertisement. The actual price for the keyword is often fluid and dynamically calculated. The cost of a keyword is usually determined on a periodic basis or at the time the user clicks the advertisement, and is usually based on the popularity of the keyword (i.e., how often the keyword is searched within a predetermined time period).
Search engine marketing (“SEM”) refers to a marketing practice that attempts to capitalize on the technology of search engines, while strategically gaming the pricing structure for keyword advertising. Advertisers pay for hyperlinks, usually in the form of brief advertisements or graphics that are presented with the search engine's search results, to be associated with keywords that are relevant to their businesses. In other words, SEM is the paid injection of content to be associated with a strategic set of keywords. In many cases, the advertisers may place parameters on the advertisements to be displayed, such as identifying a particular geographic location or media market that the advertiser would like to have associated with their ad unit.
Local search engine marketing, i.e., SEM techniques geared towards a particular location or media market, is traditionally associated with small-business owners who purchase ad unit “space” featured somewhere on a search results page. Typically, the space purchased is as associated with a keyword so that the advertiser is featured when a user's search string contains that keyword. The problem for smaller business entities or franchisees of a larger conglomerate is that SEM techniques are not always a beneficial, efficient, or effective on a local scale; even though SEM is one of the most effective ways of delivering a message to possible customers.
Dense Markets
One complication is that markets are sometimes dense. For example, franchisees of a corporation may have a large number of competing franchisees in the same market—not to mention franchisees of competing companies. Companies often allow franchisees' territories to overlap. Beside cannibalism among co-franchisees of the same parent company, one problem is that consumers may get confused by the overlapping options presented to them, since there is often no way for the average consumer to immediately distinguish the franchisees. One option for advertising online would be to jointly pursue an SEM agenda to drive consumer traffic to their websites. However, it would be a problem for co-franchisees to then distribute or share business leads, since the parties would debate whether to have an even distribution (same number) or an equitable distribution (proportionate to what is contributed) among them.
Equitable distribution is not always easy from a technical perspective, because certain targeting features enabled within the SEM advertising platforms may not align with business boundaries of the parent company, or as agreed by the franchisees. Thus, the issue here remains overlapping territories; particularly in dense markets.
Daunting Costs for Advertising
Another complication is that online advertising is often cost prohibitive; at the very least, it may be intimidating for some small businesses to spend the amount of money necessary to launch an effective SEM campaign. One common scenario is where an independent business owner selling a product in a product market having notoriously high cost-per-click advertising costs. In cost-per-click schemes, advertisers pay search engines like Google® for the right to advertise based on certain keywords, and the advertiser is charged their service fee based on the traffic generated when their advertisements are presented during keyword searches, and then their advertisement is later clicked. An additional cost for effective SEM campaigns are the fees for hiring a SEM service to help consult and manage the SEM campaign. In some cases, these services can cost about half the anticipated advertising budget. What is needed is a way to aggregate the advertising budgets of multiple companies or franchisees, so the costs are shared
Inefficiencies of Disparate Campaigns
Yet another complication is the inefficiencies that go with running all of these campaigns, which may corrupt the auction dynamics for a keyword. For example, when multiple co-franchisees are all bidding for the same keywords in a pay-per-click environment, in an overlapping territory, they end up inadvertently driving up the costs of those keywords. The algorithms of the search engines that determine the costs of the keywords do not account for this type of friendly fire, so the co-franchisees or cooperating business owners may corrupt the automated dynamics of the auction, by all going after the same keywords at the same time. This may be problematic for a parent company, because the franchisees are members of the same brand.
Lack of Control, or perception thereof; Cannibalism
Still another complication is that small-businesses and big corporate parent companies may perceive that there is a lack of control over online advertising, and thus SEM services may be a moot expense since the online advertising is uncontrollable, if not entirely random. One concern for implementing a joint-advertising, particularly at a higher-level of the corporate parent level, is that there is no mechanism to centralize the way SEM services and/or franchisees spend their advertising money. As a result, corporate franchisors will often counter-intuitively relinquish responsibilities over online brand messaging to the franchisees of each market. This practice may or may not produce great online marketing results.
Another common result is cannibalism among co-franchisees who, instead of competing with one another, should have some distinction within their territories and/or product markets. What is needed is a way for online marketing to be centrally managed. What is needed is a way to mitigate cannibalism, and instead help facilitate franchisees to leverage a very large asset: the network of co-franchisees. Ultimately, at least in the online marketing context, the franchisees who usually opted into the corporate network because presumably the franchisees wanted to be part of something bigger and have the credibility of brand recognition, end up competing against their co-franchisees and their network, instead of working with the network.
Shortcomings of Online Advertising Consultants and Tools
What is needed is a way to help facilitate more effective online advertising among local small businesses. What is needed is a way too pool resources to spread costs for advertising and costs for SEM services. What is needed is a way to equitably distribute the outcomes and the costs associated with the online search campaign. Having human SEM consultants may not satisfy these needs due to human inefficacies or the simple impossibility for humans to be a party to computer-based communications and processes.
A technical and computerized solution is needed for the problems discussed above: fierce market competition, daunting costs (particularly for smaller entities), campaign inefficiencies, cannibalism, and the perceived absence of tactical control over advertising campaigns. Specifically, what is needed is a coordinated SEM computing platform that is capable of coordinating a multitude of issues arising during an SEM campaign. More specifically, what is needed is an SEM platform capable of supporting an SEM strategy while mitigating cannibalism in a market. What is also needed is an SEM platform that simplifies the purchase and payment processes for coordinating SEM efforts for multi-advertiser portfolios.