At the same time, Kruger said that while advertising on search engines is extremely cost-effective, it would not, by itself, be a sufficient way for AT&T Wireless and other corporations to market their products and burnish their images. He said online searching has limits when it comes to driving volume of sales. "There is a limited inventory available in search," Kruger said. "There are only so many people searching."
Google did not invent the concept of auctions for search terms. That distinction belongs to Overture Services Inc., which is now part of Yahoo Inc., Google's biggest competitor. But industry experts say Google refined the bidding process and attracted thousands of businesses to participate in its giant marketplace, where consumers looking for information online carry out hundreds of millions of searches daily.
Google also made it extremely easy for businesses large and small to sign up and start bidding. All a company needs is a credit card so it can pay the search engine every time someone clicks on one of its ads.
"You can launch a Google ad in 10 minutes," said Dana Todd, executive vice president of SiteLab International Inc., an interactive ad agency. "It is a ready-made market."
On Google, the minimum bid for a search term is a nickel, but that is about the only price that is stable. The rest rise and fall depending on what companies are bidding at any given moment as they try to tweak their positions on the results pages. One of the most expensive search terms these days is "mesothelioma," a type of cancer caused by exposure to asbestos. Top bids for the word hover above $30, a premium price. The reason: The ads are for pricey legal or medical help.
Kruger's goal is to bid high enough so that AT&T Wireless shows up among the first several ads whenever the phrase "cellular phone" is searched. Yesterday morning, that meant AT&T Wireless was bidding around $1.49 to get the prominence Kruger sought.
"The pricing absolutely changes and varies very widely," Kruger said. "It is still the wild West out there in the search world today."
AT&T Wireless and many other large corporations rely on search marketing specialists and online advertising experts to do the bidding on search terms for them. They also seek help in designing Web sites that will enable them to show up in Google's free search results, since consumers are even more likely to pay attention to the free results than the paid ads.
The buzzword for maximizing the chances of showing up in the free results is search engine optimization, or SEO. Kruger said that to maximize revenue for AT&T Wireless, it is crucial to show up consistently in both the free search listings and the paid ads.
"I manage both the natural and pay-per-click side of search marketing," Kruger said. "You want to get as many clicks and orders as possible coming through natural search since you are not paying for each click. That said, you want to be on the paid side as well. You want to have a presence on both."
