SAN FRANCISCO–Eighty-five percent of Web site visitors arrive at a particular site via a search engine, according to Andy Beal, VP of search marketing for Websourced. That’s enough to make any business–on or offline–understand the power of search marketing and the importance of designing an overall online lead strategy.

As the possibilities increase for Web marketing, the choices among companies doing business in the space also have multiplied.

SAN FRANCISCO–Eighty-five percent of Web site visitors arrive at a particular site via a search engine, according to Andy Beal, VP of search marketing for Websourced. That’s enough to make any business–on or offline–understand the power of search marketing and the importance of designing an overall online lead strategy.

As the possibilities increase for Web marketing, the choices among companies doing business in the space also have multiplied. To help real estate companies sort out the menu of offerings, Inman News this morning hosted a discussion, “The Online Lead Marketplace,” during Real Estate Connect 2004

Representatives from five online lead and search marketing companies explained how their companies deliver customers to local advertisers’ doorsteps. Many audience members took notes as each lead model was presented.

Search marketing and online lead generation a few years ago were the savvy real estate agent’s secret arsenal. Today, the methods are an integral step to getting noticed online.

Beal, along with Greg Sterling, program director with The Kelsey Group, presented Web advertising and search statistics to further prove the current value of the online lead to any business, especially such locally focused businesses as real estate offices. The average cost-per-lead online is 29 cents, versus the average cost-per-lead via direct mail at $9.94, Beal noted.

About 1.2 billion Web searches are conducted worldwide each day, he said. “And 72 percent of all real estate searches begin online, according to the National Association of Realtors’ statistics,” Beal said.

He reviewed natural results search marketing as well as paid search methods and said a combination of the two is the strongest online marketing plan for businesses. For natural or “organic” search marketing, Beal suggested that each Web page have a unique title and metatags that focus on the identified search terms for that page. He also said that each page should have at least 250 words that identify with the search terms people may use to find that site.

Sterling pointed out the growth in consumers who use localized search terms, such as “Chicago real estate” or “New York real estate.” As more consumers conduct localized searches online, more local companies are spending advertising dollars on keyword search advertising. In keyword ads, companies must bid on a cost-per-click that they’re willing to pay for consumers to click through to their Web sites.

Since companies bid against competitors for the same keywords on search engines, the cost-per-click may increase over time. To answer how this will impact small businesses trying to compete with larger companies that have more ad money, Beal said keyword searching and advertising will adopt more specialized and niche phrases. Two-word or common search terms will be much less useful for advertisers.

“Advertisers should start looking at four or five-word phrases,” he said. Real estate agents, for example could buy the name of the suburbs in their markets or what type of real estate is their specialty.

“The more generic search phrase you target, the more it will cost and the lower the return will be,” Beal added.

Hear Barry Diller and industry luminaries predict the future of real estate! Get complete audio recordings of this year’s event by becoming a Member of Inman News. Join now!

Other panelists included Payam Zamani, CEO of Reply! Real Estate; Rafael Ortiz, Co-founder and VP of marketing for Nextag; Glenn Houck, VP of agent success for HomeGain; Rodney Rice, co-CEO of ServiceMagic; Jim Delli-Santi, product director of Overture’s Local Match; and Craig Newmark, founder of Craigslist.org, an online message and classified board.

Each of the companies are in the same business: attracting and selling online leads. But no two are exactly the same.

Reply! Real Estate is the parent company of AgentConnect and RealtyNow. AgentConnect now sells online leads to real estate agents on an exclusive basis. The company charges agents a monthly fee based on the number of leads they choose to receive and the average prices in their market. RealtyNow also specializes in online leads for real estate brokers and agents.

Nextag sells qualified leads to real estate agents, brokers and mortgage lenders, among other businesses. The company calls itself the “Search engine for shoppers.”

HomeGain specializes in matching qualified home buyers and sellers with real estate agents nationwide. HomeGain founder and CEO Bradley Inman is also the publisher of Inman News.

ServiceMagic, which recently was acquired by Barry Diller’s InterActiveCorp, matches consumers with real estate agents, mortgage lenders, and a host of local service providers such as carpenters, plumbers, house cleaners and house painters, to name a few.

Overture is a search engine marketing channel. The company is owned by Yahoo! and operates the sponsored results and pay-per-click advertising program that puts paid results on Yahoo! search pages as well as a handful of other online search engines.

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Send tips or a Letter to the Editor to jessica@inman.com or call (510) 658-9252, ext. 133.

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