Spanish-language online paid search advertising is still in an embryonic state, although online giants (AOL, Google, Yahoo etc.) are jumping into this promising market.
The number of English-language sponsored links greatly exceeds that for Spanish-language sponsored links. For example, type the keyword “car” into Google, and more than fifty sponsored links appear to the right of the page, compared with just three for the word “coche.”
Typing in the keyword “carro” returns 4 sponsored links. Other Spanish-language words like “hipoteca” (mortgage) produced more than 50 sponsored links.
Are Spanish keywords more expensive than English words? Clearly not. Discounts for Spanish keywords can be as high as 95%. The reason is that there is much less competition for Spanish keywords. Nacho Hernandez, CEO of Hispanic search engine specialist firm I Hispanic Marketing Group, tells Portada® that depending on the word, Spanish keywords can be 60% to 80% cheaper than the same word in English.
Most keyword search advertising works on a “cost per click” basis. Advertisers bid on how much they will pay for each click, which determines their positioning on the list of sponsored links. For instance, if Terra were to want to direct more traffic to their automotive channel, they might bid on the search phrase “latinos autos.” However, Univision might also be interested in the same search phrase. The two parties would subsequently bid for the term, say 60 to 90 cents per click, and the high bidder receives the top placement on Google’s list of sponsored links. Hence, when a user types that particular phrase into the search engine on Google’s homepage, they are presented with a list of advertisements, each arranged according to their bidding amounts.
According to I Hispanic Marketing Group’s Hernandez, the difference between Spanish and English keyword prices is smaller in categories like Travel and Finance where there is more competition for Spanish keywords (e.g. “Hipoteca”). Hernandez notes that the cost per click on the words “used cars” was US $2.20 in January, while it’s Spanish-language counterpart “autos usados” cost just US $0.35. Hernandez adds that in local search engine programs like Yahoo Search Marketing or the new MSN Adcenter, the discount for Spanish keywords can be even higher. These services sell words that are displayed on a localregional level (e.g. a certain radius around a zip code). According to Mark Lopez from AOL Latino, discounts have decreased during the last 18 months.
Cost per click for Spanish, and English, keywords varies a lot. For instance, the name of famous singer will have a low cost per click if the item the sponsor is trying to sell is a low priced item (e.g. a CD), compared to higher priced items like mortgages or cars. Additionally, the same keyword might be worth different amounts from one search engine to the next, as other companies such as Yahoo! are also getting in on the action. This is because Google currently has considerably more traffic than Yahoo! and other search engines. For this same reason, doing keyword search advertising in Spanish can offer excellent return on investment, as it has not yet taken off as a means of reaching Hispanic consumers, thus creating an environment of less bidding competition. Furthermore, it has the potential to generate large amounts of Hispanic traffic.
“The reason that this type of advertising is such a powerful tool for Google is that they are not constrained by inventory issues,” explains Natasha Funk, Terra’s Sales Research Manager. “If your business is selling shoes and your warehouse stock runs out, you’re going to need to replace that inventory before generating any more revenue. Google doesn’t have that problem.”
AOL Latino does not yet offer paid search on its site. However, the recent deal between AOL and Google, through which Google bought a 5% stake in AOL, is going to change this. AOL Latino’s Lopez expects to start displaying paid search advertising on his site by the third quarter of this year. Keywords may also be sold by Google’s sales force.
According to a job posting on Google, Google is currently looking to employ a Spanish-language skilled Adsense coordinator to “assist US Hispanic and Spanish Speaking Latin American publishers with account inquiries.” Adsense is structured as a partnership between Google and various online publishers. Jose Luis Carrete, Director of Business Development for Terra Networks, puts it this way: “Adsense is based on providing advertisements that are relevant to the material that the user is viewing. For instance, a visitor to Terra’s Mujer channel might see a Google-hosted ad for beauty products.” Under this model, Google is not merely waiting for the consumer to come to it, but is insteaddelivering targeted, relevant advertising through partner sites, both sharing the advertising revenue.
One challenge that presents itself amidst this evolving advertising landscape is the need for companies to stay onmessage throughout their multi-media campaigns. Ideally, however, the different advertising mechanisms of the advertising-campaign not only align themselves with one another, but serve to complement one another synergistically: “So what we are seeing is greater pressure from particularly the bigger companies to integrate and consolidate the advertising message,” says Paul Suskey of Media 8, a Florida-based interactive adagency. Instead of merely echoing the same message, the integrated campaign is also directing the consumer to different touch-points of the company’s campaign. The TV/Radio might direct the consumer to the website, as might the direct mail piece that the consumer receives in the mail. Each different touch-point reinforces the brand in his/her mind.
AOL Latino’s Lopez says that he is looking forward to offering package deals, which include display, online and keyword advertising, to advertisers like Ford once AOL Latino sells keyword advertising later this year.
“We have seen this integrated approach really take off in the last year,” says Suskey, “although as with all advertising trends, the Hispanic market is a bit slow in catching up with the general market. But things are definitely picking up,” Suskey concludes.
Keywords en español, a $75 million market
Advertisers in the US and Canada spent US $4.7 billion in 2005 on paid keywords placement, according to a report by the Search Engine Marketing Professional Organization. This figure amounts to more than 40% of total online advertising spent in 2005. Portada® recently estimated that the US Hispanic paid search advertising market had an annual volume of US $76 million (see page 35, Portada® No. 17, September/ October 2005). According to Mark Lopez, publisher of AOL Latino, this figure is “realistic,” although it may be a little bit high given that total Hispanic online advertising had a volume of US $100 million in 2005. Spanish-language paid placement only amounted to 1.76% of the total U.S. and Canadian paid placement market.
As consumers’ online patterns become more discernible and quantifiable, (Google receives 100 million unique search queries per month in all languages), keyword search advertising is becoming an increasingly popular method of targeting them, both in the general and Hispanic markets. AOL’s Mark Lopez notes that one of the main obstacles to Spanish keyword advertising, as is the case with many Hispanic marketing endeavors, is that companies do not have a Spanish-language infrastructure (e.g. sales force, collateral material, etc.) to support the business created by the ads.