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October 04, 2004
Paid search exploding in the legal field
Paid search is really driving new business in certain areas, such as the legal profession.
A day after Merck recalled its arthritis and painkiller Vioxx drug last week, many class-action lawyers started bidding for the term "Vioxx" on paid-search engines.
A search for that term on Google (GOOG) will bring up three law firms advertising their services to represent anyone who's been injured by taking Vioxx. The top paying law firm, Brown & Crouppe, said the advertisement just went up.
In a subtle sign that Google's ads are more relevant than Yahoo's in this particular case, Yahoo's (YHOO) Overture ad division kept an online drugstore selling Vioxx in the No. 1 position. But in the No. 2 spot was Fort Myers, Fla.-based law firm, Paige & Tropp.
A Google search for "vioxx victim" also resulted in sponsored ads for law firms while the same search on Yahoo did not result in sponsored links.
Paid search isn't new, but the immediacy of the ads going up underscores the real-time and personalized nature of this channel.
The advertisements went up in response to Merck's (MRK) announcement on Wednesday that the drug company was withdrawing the drug, which generated $2.5 billion in sales last year, from the global market.
Vioxx currently has 2 million users worldwide. An estimated 84 million people have taken the drug since its approval by the FDA in 1999.
That's a lot of people. And, increasingly, paid search has proved to be one of the best ways to target and find specific buyers, or in this case, possible victims.
At the moment, the price the law firms are paying for the term "vioxx" is roughly $2 per click.
If all 84 million people went to a search engine and clicked onto the ads, they'd ring up $168 million worth of clicks for the ad agencies. The best online ad agency will put various keywords together in order to target the most people.
It's important for search companies to have the ability to deliver ads for any combination of search terms. New search terms have helped drive the paid-search industry in the last couple of years.
Some search terms are ridiculously expensive. For instance, the price to be ranked at the top of the sponsored links for the term "mesothelioma" is $100 per click. Mesothelioma is a rare form of cancer that legal cases seek to link to asbestos exposure.
Paid search has been the fastest-growing segment in the online advertising business. Paid search shot up 182 percent in 2002, and rose to $2.5 billion by 2003, or about a third of the online ad pie, according to Thomas Weisel Partners. TWP also estimates that paid search will be half the total ad pie by 2008, implying an annual growth rate of 21 percent.
Currently, paid search accounts for 35 percent of U.S. Internet advertising. And, Internet advertising accounted for 3 percent of the total U.S. advertising pie in 2003, according to Morgan Stanley.
Source: Investors.com
Posted by nakul at October 4, 2004 11:35 PM | TrackBack