Espotting: 'we are looking to Asia for the future'

Originally published on EuropeMedia.net, 26/03/2002

In the continuation of a series of interviews with leading search engines and their partners, Duncan Parry talks to his own employer, Espotting Media, about the company's future plans. Here he speaks to Espotting co-founder Sebastian Bishop.

Pay-per-click (PPC) search network Espotting currently operates in the UK, France and Germany and is expanding into Spain and Italy this year. The company's search results are used on sites including Yahoo! Europe, Lycos Europe and LookSmart. Espotting has just launched its new website, introducing new advertiser tools.

Q: Espotting recently signed a deal to provide search results to Yahoo! in the UK, Germany, France, Italy and Spain. Does the company have plans to move outside of Europe, or do you intend to concentrate on the continent?

Bishop: Our focus is on Europe at the present. However, we are looking to Asia for the future – it's the second largest advertising market globally. We will always look to enter territories on the back of contracts with search partners.

Q: Espotting already provides results to Lycos Europe's websites in the UK, France and Germany – will you be providing results for Lycos Italy and Spain, too?

Bishop: This is something we are looking into.

Q: Will Espotting look to move into the Scandinavian countries?

Bishop: We are focusing on our five European territories right now. But we have developed our systems so they can be promptly rolled out into additional territories – the Scandinavian countries are on our hit list for the future. It's a case of when and how we enter those markets.

Q: What are Espotting's future plans (if any) for WAP and 3G – are you looking to offer PPC search services for mobile internet devices?

Bishop: Regional searches on 3G devices are of interest to us, and we've already entered the mobile internet access market through our partnership with Pogo Technology in the UK, providing the default search results on their colour 3G device.

We are particularly interested in using 3G to provide search results from local SMEs websites – anything from restaurants to shoe shops – in the user's current location. But 3G is still in development and there are few usability studies to draw on at the moment. We are waiting to see what happens, but we can supply results when the time comes.

Q: Is it your intention to promote Espotting's own websites as destinations in its own right, or to focus on building your search network across partner websites?

Bishop: Espotting is not a destination site. Our focus is on search partners. Espotting's own websites are a gateway to our account management and reporting tools for our advertisers and search affiliates. We are a B2B company.

Q: Espotting seems to be unique in offering anybody the opportunity to add PPC search results to a website with the ability to customise the search results page and earn from click-throughs.

Have you plans to team up with a mainstream search company – e.g. Inktomi – and offer websites the ability to integrate both normal (meta tag-based) results and your PPC results in one package?

Bishop: Our search results already feed through to the Inktomi database on our own websites and selected affiliate sites, except for those with their own search engines, obviously. We are always happy to meet the individual needs of our affiliates.

Q: Yahoo! USA stated it intends to develop its own PPC technology (currently, they use Overture results in the USA and Espotting's in Europe). Do you perceive a danger that your European existing search engine partners will develop their own PPC systems and deal directly with advertisers?

Bishop: No – for several reasons. First of all, it takes time to develop the systems to power a PPC engine, which must be able to manage millions of keywords per territory, and offer bid management and reporting functions. These need to be backed by expert staff in sales, client services and editorial for each territory. This all costs money and takes time to put together, eating into revenue.

Instead, by partnering with us, search engines get a pure revenue stream, which goes straight to their bottom line.

This works to the favour of advertisers, too. To get the media agencies that represent big name websites to spend considerable amounts of their budgets on a PPC engine, you have to offer them favourable business terms and expert staff (e.g. for account optimisation).

If each search engine had a PPC department, media agencies would have to split their budgets between each engine and deal with each one in turn – increasing their workload and reducing the ease with which they can mange territory-wide advertising campaigns.

This would also penalise SMEs who run their own campaigns, increasing their costs and reducing the ROI they receive from PPC advertising. Our business model, partnering with major search engines, works for all concerned because of the economies of scale involved.

Q: Google has indicated it may offer its PPC style “addwords” advertising to other websites that want to display them (and presumably share the revenues). Do you see this as a sign Google intends to build a network of websites using their advertising results similar to Espotting's?

Bishop: Although it's impossible to predict the future, it will be hard for Google to achieve the same sort of revenue flow as Overture in the US and Espotting in Europe because bids on Google will be lower. This will mean sites looking to introduce a PPC feature company are likely to choose the dedicated PPC engine over Google; it will make financial sense for them to do so.

Google's positioning is also very different to Espotting's. Google is a destination site and therefore competes with other search engines for users. Espotting on the other hand, works alongside the other search engines. Search engines may be reluctant to take Google search results if they feel that their users would then migrate to Google's search service.

Q: Recently, it was announced a US health company is suing several PPC engines in the USA for allowing advertisers to bid on its copyrighted named, on the basis this confuses the consumer and infringes on copyright. How does Espotting protect advertisers' brand names?

Bishop: Espotting does not allow advertisers to bid on competing brands. If an advertiser ever has a query about this, they should contact us straight away. But we do allow them to bid on product names and some product brands if relevant, for example an electrical retailer could bid on "Sony," if they sell Sony products, but not on “Sony website” because they are not the Sony website, and that would provide a bad search experience to the consumer, and the advertiser would be paying for low quality traffic. We have set editorial procedures on this. A large part of our business is online branding, and therefore brand protection.

Q: The majority of search engines use PPC results now. How do you plan to further extend your distribution network? Espotting results are already used on e-commerce websites like Kelkoo – will you be pursuing deals with ISPs and high profile destination (content led) websites, too?

Bishop: Our technology has been developed to allow us to provide different levels of search results to our affiliates, including bespoke searches to fit into their site design. Our business development team is always focused on expanding our search network to drive even more high-quality traffic to our advertisers' websites.

Q: Overture already offers advertisers a search term suggestion tool; what tools do you intend to make available to help advertisers optimise their campaigns?

Bishop: We've just launched a new website with a new keyword generator tool based on the feedback we have received from advertisers. This allows advertiser to type in a search phrase and see a list of related terms that have been searched on within the last 30 days, and then drill down to variations of them. They can then simply tick the relevant ones and submit them to our editorial team for review, with deep content links, all from inside their accounts.

In addition, our editorial team will suggest terms that advertisers should consider bidding on and list them in a new area inside accounts, again with deep content links. They can then select the words they want to bid on and instantly add them to their accounts.

We've also introduced an automated bid management tool, so advertisers can automatically increase their bids to stay in one of the top five positions on a search term. Advertisers set a 'cap' to their bid price, so that they never pay more than they desire. This tool will also ensure they only pay 1p more than the next advertiser down, reducing large gaps between bids.

We are always looking for ways to introduce new tools that help advertisers manage their accounts easily and increase their ROI, while ensuring we provide a high-quality experience search experience to consumers.

Thanks to Sebastian Bishop for this interview.