WordStream Launches Low-Cost Search Engine Marketing Tool, Raises $4 Million

1/28/09Follow @wroush

Yesterday Bruce wrote about Covario, a San Diego-based search engine marketing (SEM) company whose clients pay $100,000 to $200,000 a year for help making sure that sponsored links to their websites appear in the right places on Google and other search engines. Here in Boston, an SEM company is launching today at the opposite end of the cost spectrum. WordStream says it will charge as little as $300 per month for its Web-based service, which helps Web advertisers get their sponsored links published as prominently as possible on Google search result pages, for the lowest possible pay-per-click rates.

“There is a bit of a perception that [SEM] is a black art,” WordStream president and CEO Rob Adler told me yesterday. “But there are very well-known ways to success in Google pay-per-click advertising. The problem is that it’s very manual and labor-intensive, requiring you to bid on thousands of keywords and write good ad copy. Our founder Larry Kim, who was a search engine marketer for six years, said ‘These are things I think I can build software to handle.’”

That software, which has been in private beta testing for several months, is available to the general public starting today. WordStream also said today that it has raised $4 million in venture funding from Boston-based Sigma Partners; Sigma managing director Paul Flanagan has joined WordStream’s board. (Actually, we first reported the Sigma funding back in August, when WordStream was using the working name NetGraviton.)

SEM is the art (whether black or not) of making paid text ads appear alongside the right non-sponsored or “organic” search results when consumers enter search queries that may indicate they’re on the prowl for commercial products or services. If you do a Google search for “cross training shoes,” for example, you might see an ad on the right side of the screen for KSwiss, the Sports Authority, or other sellers of athletic shoes. On Google—where WordStream is concentrating all of its effort, for now—the ranking for these ads, or how high they appear on the page, is determined in two ways: by the amount the advertiser bids for the keywords (in this case, “cross training shoes”) and by the ad’s “Quality Score,” a measure determined by Google itself.

Using Google’s AdWords platform, it’s relatively easy for advertisers to specify how much they’re willing to bid for various keywords. But that leaves two problems: knowing exactly which keywords will result in the most click-throughs, and influencing the Quality Score.

Adler says WordStream’s software starts by tapping into Google Analytics, a free service that any website owner can use to track site traffic as well as the exact search terms that brought in visitors. “We dynamically track the queries that result in traffic to your website and display those for you,” he says. “We help you discover this ‘long tail’ of queries and then be as specific as you can about … Next Page »

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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