Oral Presentation to Congress, June 25, 2008

United State Congress
House Committee on Small Business
Subcommittee on Regulations, Health Care and Trade
Hearing on the Impact of Online Advertising on Small Firms
10:00 a.m., Wednesday, June 25, 2008 Room 1539 Longworth HOB

Chairman Gonzalez, Ranking Member Westmoreland, and members of the Subcommittee. Good morning. Thank you for asking me to appear on this panel. My name is Rob Snell. I'm from Starkville, Mississippi.

I'm here today to talk about how the search engine marketing has transformed my family's business, my clients' businesses, and to show how other small businesses can take advantage of this effective and affordable way to drive visitors to their Web sites.

These days I wear quite a few hats. I am co-owner of Gun Dog Supply, our family retail business that sells supplies for hunting dogs.

I'm also the managing partner of Snell Brothers, the consulting company my brother, Steve Snell, and I started that helps some of the 45,000 Yahoo! Store owners with their online marketing. For example, San Antonio, TX, business owner Scott Moore of SouthwestPublicSafety.com is a client.

A couple of years ago I wrote a book on Yahoo! Store: Starting a Yahoo! Business For Dummies." I've included information from a few of the marketing chapters at the end of my written testimony for your review.

Today, I'm going to share real numbers with you, so you can see the impact of search marketing on a real small business in dollars and cents. Every year OUR Yahoo! Stores get millions of visitors from the search engines. Most from free search traffic, lots from paid search ads. Tens of thousands of those visitors convert into paying customers. This year we will sell over $10 million dollars through several different Yahoo! Stores.

The Internet levels the playing field for small business folks like us. As a consultant and speaker, my job is to teach the little guys how to compete with the big guys.

We use the Internet to leverage strengths of small business retailers:

-- unparalleled product knowledge,

-- enthusiasm for what we sell and do,

-- and outstanding customer service and support.

Bigger retailers cannot compete when we go head to head, product to product. They sell too many things!

BACKGROUND -- My parents, Warner & Anne Snell, started GUN DOG SUPPLY, back in 1972 on their kitchen table in Jackson, MS. They ran tiny display ads in hunting dog magazines and went full time with the business in late 1970s. Slowly, the business changed to a retail store with less emphasis on mail order sales. Business was good.

In 1996, Petsmart opened across the street. 50% of our competitors went out of business overnight. And our sales dropped, too. We dusted off our mailing list and put together a new catalog. Unfortunately, we lost money on every single catalog sent.

In 1997, I built a 5-page Web site. I wrote a killer Yahoo! directory listing, and we started getting tons of visitors. We had to figure out how to sell online and fast. Fortunately, we found the online store builder which is now Yahoo! Store.

For my family, selling on the Internet has literally changed our world. We went from a retail company doing $400,000 a year and struggling to make payroll to a multi-Million dollar retailer in a few short years. How? 95% of our marketing is online advertising. And 95% of that is search marketing.


Search marketing is the one-two punch of getting free search traffic and buying paid search ads.

-- To get more free search traffic, you write good content and perform search engine optimization (or SEO) on your Web site to rank better and get more clicks.

-- For even more traffic, buy paid search ads to insure YOU control your advertising message, and you're not at the mercy of shifting search engine ranking algorithms.

SUCCEEDING W/ FREE SEARCH

The secret to our initial success with the search engines back in 1997 was using all the text content from our print catalog in our online catalog. Those 50 pages of text content covering hundreds of products would help us sell everything from dog training collars to retriever dummies.

Originally, half of our traffic came from banner advertising and the other half was free traffic from search engines, but I liked search traffic better. With search engine visitors I could tell WHERE the traffic came from and WHAT keywords folks were searching for, especially buyers. This information was gold!

For example, someone would buy a leather dog collar and the source of the order would show the sale coming from a search on Yahoo for "leather dog collars."

Another order would come in with a search for "retriever training supplies" and they would buy some training dummies, and/or a book or video on training retrievers.

I caught on pretty quick that converting keywords were important. People were buying the things they were searching for, so I started to obsess over our KEYWORDS that buyers used and improving their free search engine rankings.

Here's how: For example, say I want to rank better in the FREE SEARCH results for "orange dog collars." First I choose a page on my store that's ABOUT orange dog collars. Then I put the words "orange dog collars" in the TITLE of the page and in the text ON the page. Finally, I link to that page from other pages with the words "orange dog collars" in the link text.

PROFITING FROM PAID SEARCH

By 2003, the search engines started selling text ads based on keyword searches. The free ride was over. I opened an account with Google Adwords and what is now Yahoo! Search Marketing.

If free search is good, paid search is even better. With an online store, a small retailer can instantly have access to millions of potential customers. With as little as a $5 deposit in a Google Adwords account, you can buy targeted advertising on specific keywords and get instant traffic to your Web site.

-- Retailers can run national ad campaigns targeted ONLY to folks searching for what they sell. Imagine doing that with TV.

-- With paid search, you can buy ads but only for keyword searches relevant to YOUR product mix. And retailers with physical stores can also target their ads to run ONLY in the specific geographic markets they serve.


But which one? Paid or free? I believe you should buy paid search ads EVEN when you already rank well in the free search results.

1) Almost 40 percent of the traffic from the Big Four search engines (Google, Yahoo!, Microsoft, and Ask) comes from paid search ads. Someone is getting that traffic.

2) AND When do you get 2 chances to make an impression with a prospect who is ready to buy RIGHT NOW? It's like buying an ad in the newspaper that runs right next to your feature story. You can't control what they write about you in the paper, but the ad is all yours!

Selling on the Internet via an online catalog is much cheaper than sending catalogs through the mail. Advertising on the Internet is more cost effective than any other medium we've tried.

Search marketing is extremely efficient because you are ONLY marketing to those interested in your products. Search marketing is the least obtrusive form of advertising as the customer is literally asking for your ads when they perform a search.

In my experience, NO other marketing method can touch search engine marketing for targeting the right prospects in the right places at the right time - when folks are ready to buy.

Thank you for the opportunity to appear before this committee. I look forward to answering any questions you may have.