Search Engine Optimization, Advertising Methods & Income - DiUF

E-Business

Search Engine Optimization, Advertising

Methods & Income Sources

Seminar Thesis

Author:

Manuel Anthamatten

Wierystrasse 48

3902 Brig-Glis

Matriculation number: 10-212-512

[email protected]

Background:

Seminar Thesis for a Bachelor in

Business Management

Examiner:

Prof. Andreas Meier

Supervisor:

Luis Terán

Date:

Brig-Glis, 5. July. 2012

University Fribourg

Switzerland

Department of Informatics

Information Systems

i

Management Summary

Since the most people enter the world wide web through a search engine, search engines were getting

more and more powerful. But the criteria used by the search engines to evaluate websites are not

public. Therefore a lot of people are dealing with the question of search engine optimization.

Getting more and more important is also online advertisement, because the time people spend online is

extremely increasing. One of the most growing advertising methods is probably social media, but a lot

of enterprises are still missing out on that opportunity.

The website "www.lernenmitspass.org" is a little project, with which the thesis will explain three

different advertisement methods and show some results with Google Analytics.

The thesis will also show some different income sources and will explain especially affiliate marketing

in more detail.

Keywords

E-Business

Search engine optimization

Advertising methods

Income sources

Keywords

Social media

AdWords

Facebook ads

Google Analytics

Affiliate marketing

ii

Table of Content

Executive Summary ............................................................................................................................... i

Table of Content .................................................................................................................................... ii

List of Tables and Figures ................................................................................................................... iv

List of Abbreviations ............................................................................................................................. v

1. Introduction ....................................................................................................................................... 1

1.1 Background and Motivation ....................................................................................................... 1

1.2 Problem Statement ...................................................................................................................... 1

1.3 Research Questions ..................................................................................................................... 2

2. Search Engine Optimization ............................................................................................................. 3

2.1 How Search Engines work .......................................................................................................... 3

2.1.1 Components of a Search Engine ............................................................................................. 3

2.1.2 Information Retrieval ............................................................................................................. 4

2.2 Keywords ...................................................................................................................................... 4

2.2.1 What are Keywords? .............................................................................................................. 4

2.2.2 Google's Keyword Tool ........................................................................................................... 6

2.3 Why Search Engine Optimization? ........................................................................................... 8

2.4 How to optimize a Website ......................................................................................................... 9

2.4.1 Content ................................................................................................................................... 9

2.4.2 Document-Length ................................................................................................................. 10

2.4.3 Site Structure ........................................................................................................................ 10

2.4.4 Link Structure ....................................................................................................................... 11

2.4.5 Images & JavaScript .............................................................................................................. 11

2.4.6 Metadata .............................................................................................................................. 11

2.4.7 Click Popularity ..................................................................................................................... 12

2.4.8 Common Mistakes ................................................................................................................ 13

3. Description of my Website .............................................................................................................. 14

3.1 Concept, Goals and Expectations ............................................................................................. 14

3.2 Search Engine Optimization on my Website .......................................................................... 17

4. Comparison of Advertising Methods on the Internet .................................................................. 18

4.1 Social Media - A Facebook Business Site ................................................................................ 18

4.2 Google AdWords ....................................................................................................................... 20

4.3 Facebook Ads ............................................................................................................................. 22

4.4 Google Analytics ........................................................................................................................ 24

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5. Affiliate Marketing .......................................................................................................................... 28

5.1 What is Affiliate Marketing? .................................................................................................... 28

5.2 How does Affiliate Marketing work? ...................................................................................... 28

5.3 Criteria for the Selection of Partner Programs ...................................................................... 28

6. What are possible Income Sources for an E-Business.................................................................. 30

6.1 Affiliate-Programs ..................................................................................................................... 30

6.2 Google AdSense ......................................................................................................................... 30

6.3 Digital Products ......................................................................................................................... 30

6.4 Services ....................................................................................................................................... 31

6.5 Online-Shop ............................................................................................................................... 31

7. Conclusion ........................................................................................................................................ 32

Literature ............................................................................................................................................. 33

Internet Sources ................................................................................................................................... 34

iv

List of Tables and Figures

Figure 1: Google's Keyword Tool ........................................................................................................... 6

Figure 2: Results of the Keyword Research ............................................................................................ 7

Figure 3: Organic Ranking Visibility ...................................................................................................... 8

Figure 4: CTPM-Concept ...................................................................................................................... 14

Figure 5: Monthly Traffic Statistics ...................................................................................................... 16

Figure 6: Front page of the Facebook Business Site "Coca Cola" ........................................................ 18

Figure 7: Front page of the Facebook Business Site "Lernen mit Spass" ............................................. 19

Figure 8: Statistics of the Facebook Business Site "Lernen mit Spass" ................................................ 19

Figure 9: Google Results Page .............................................................................................................. 20

Figure 10: Facebook Ads: Targeting ..................................................................................................... 23

Figure 11: Google Analytics Overview ................................................................................................. 25

Figure 12: Google Analytics Traffic Sources ........................................................................................ 26

Figure 13: Google Analytics Traffic Sources (period of campaigns).................................................... 26

Figure 14: Visitors Flow ........................................................................................................................ 27

Table 1: Traffic Statistics ...................................................................................................................... 15

Table 2: Google Adwords Campaign .................................................................................................... 21

Table 3: Adwords Keywords ................................................................................................................. 22

Table 4: Results - Facebook Ads ........................................................................................................... 23

v

List of Abbreviations

Ad Advertisement

CD Compact Disc

CTR Click Through Rate

E-Business Electronic Business

IR Information Retrieval

SBI! Site Build It!

SEO Search Engine Optimization

SERP Search Engine Results Page

URL Uniform Resource Locator

WWW World Wide Web

1

1. Introduction

1.1 Background and Motivation

More and more individuals are trying to earn money on the internet. You can find tons of information

on how to do it. Google "how to make money on the internet" and you will get 1,470,000,000 results!

You'll come across terms such as: Keywords, Keyword-Research, Affiliate Marketing, Click-Through-

Rate, Google AdSense, Search Engine Optimization, and much more.

What is behind all those terms? A lot of people don't even know any more! So what is it all about?

1.2 Problem Statement

For a layperson the internet delivers way too much information about this topic and people don't know

anymore which information is relevant and which not. There are tons of programs or books out there

and a lot of them promise you that you can make a lot of money in no time. But building a successful

e-business takes time and you need to offer real value!

An e-business differs from a physical business in a lot of ways. Even people who are good

businessmen in the "real world" might not understand anything about an e-business. It starts with the

way people find you. For example: When you have a physical business, people can see you when they

are shopping or when they are on their way home from work, but if you have an e-business people

don't just bump into you! In addition to that, online-marketing offers a lot of new facilities, which

don't exist in offline-marketing. In the internet, everything is about information. If people are, for

example, looking for a good science-fiction book, and you have good information about science-

fiction books, they are going to land on your site. So people find your information and not your

business if you don't have a famous brand. That's a big difference! So delivering high-valuable

information is by far the cheapest way to get people into your e-business.

And that is why search engines play such an important role. But the thesis will also show some other

possibilities, how you can get people into your e-business.

2

1.3 Research Questions

The following questions will be answered in the following Thesis:

1) How to optimize the content of a website for search engines?

a. Relevance: Search engines are very powerful and it is important for every e-business

to get good rankings.

b. Method: Argumentative-deductive analysis

2) How to get more visitors?

a. Relevance: Google and Facebook offer different tools to promote for your website.

But before starting it is important to make sure if it is worth the money and which tool

is best for you.

b. Method: Case study with the website www.lernenmitspass.org

3) What are possible income sources?

a. Relevance: For an e-business it is also important not to have only one pillar. The

thesis wants to show different options of income sources, which can be used in

combination.

b. Method: Argumentative-deductive analysis

3

2. Search Engine Optimization

Search engine optimization refers to all actions that are appropriate to achieve a better position in the

editorial search engine results page. [Lammanett 2006]

2.1 How Search Engines work

"A search engine is a web application designed to hunt for specific keywords and group them

according to relevance." [Clay / Esparza 2009]

To get a better understanding on how to optimize a website for search engines, it is helpful to first

understand how search engines actually work. The thesis doesn't want to go into any details of this, but

it wants to give a quick overview.

2.1.1 Components of a Search Engine

Every search engine consists of three major elements:

Crawler

Index

Search Engine Software

A crawler is also called spider. To get into the search engines' results, a website first needs to be

"spidered". That means that a crawler visits the site to get information about it. A crawler doesn't see

the website like a human visitor though, which needs to be considered when you optimize a website

for search engines. [Alby / Karzauninkat 2007, p.21]

Everything the crawler finds goes into the second part, the index. The index is a huge collection of

data, which contains a copy of every webpage that was spidered. A crawler needs to visit the same

website over and over again, to notice possible changes and to update the index.

Then the search engine software tries to find the most relevant matches to a search and puts them into

a ranking. [Search Engine Watch 2010]

According to [Baeza-Yates / Ribeiro-Neto 2011, p.468] ranking is the hardest and most important

function search engines have to execute. There are two main challenges they have to face.

1. Evaluating the efficacy of a ranking

2. Identification of quality content in the web

Besides those two main challenges, a new challenge is to avoid web spam.

4

2.1.2 Information Retrieval

"Web search has its root in information retrieval (or IR for short); a field of study that helps the user

find needed information from a large collection of text documents." [Liu 2007, p.183]

Information retrieval is more complicated than data retrieval in databases, because data in databases

are ordered in relational tables, while the websites are unstructured. Another difference is, that

websites have hyperlinks, and those are really important for the ranking. [Liu 2007, p.183]

The information retrieval needs to work for different forms of queries like:

Keyword queries

Boolean queries

Phrase queries

Proximity queries

Full document queries

Natural language queries

While a keyword query is pretty simple, a natural language query can get very complex. [Liu 2007,

p.185]

One important goal of information retrieval research is to develop models, which optimize the rate of

relevant information for a search. [Leibniz Gemeinschaft 2012]

Due to technical restrictions, information retrieval systems can not analyze any type of file. This needs

to be considered, when doing a search engine optimization. [Bischopinck / Ceyp 2009, p.190]

2.2 Keywords

Keywords play an important role in search engine optimization. Therefore this thesis wants to explain

what keywords are, why they are so important and especially how you find the best keywords for your

website.

2.2.1 What are Keywords?

Almost everyone in the internet is looking for information. The search term people enter into a search

box is also called a keyword. [David Asen 2009, p.67]

But which meaning have keywords for the one who builds the website?

The main question is: "Which words would the target group choose, to find this content?"

[Bischopinck / Ceyp 2009, p.175]

5

If the builder doesn't choose any keywords for a specific website, all the words of this website are used

as index terms. An alternative is to select a set of terms as indexes; those terms are usually called

keywords. [Baeza-Yates / Ribeiro-Neto 2011, p.227]

It's better to select only a few keywords. If you select too many keywords, the search engine doesn't

know for which theme the document is actually relevant and the website gets a bad ranking.


The first keyword you enter for a website is the most important one and it should describe what the

site is about. The first keyword is often called the specific keyword. [Site Build It! 2012]

The basic thought is that each page is optimized for one specific keyword. [Alby / Karzauninkat 2007,

p.64]

Choosing the right keywords is an important step of search engine optimization. The goal is to find

keywords with enough demand, but not too much competition. [David Asen 2009, p.67]

But when is the demand enough and the competition not too much?

According to [David Asen 2009, p.67] the competition is not too much, if the keyword typed into

Google gives you less than 80'000 results. Otherwise it will be really hard, to get on the first page of

the SERP with this website.

Finding out if the demand of a keyword is high enough is a little bit more complicated. First we need

to differentiate for what site the specific keyword is for. If the keyword is for the homepage, there

should be a demand of at least 2000 searches a month. Is it for a tier-two page, the demand should be

at least 1000 and for a tier-three page at least 100. [David Asen 2009, volume 2, p.23]

A good way to find out the amount of the demand is Google's keyword tool.

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2.2.2 Google's Keyword Tool

Consider you want to build a website about different studying techniques, and you want to find a good

specific keyword for that site.

1. First you need to make sure, that you have chosen the right tool.

2. It is recommendable to check the box [Exact], because it is important to know how many

queries are exactly for that term, not counting any synonyms.

3. Then you type in the keyword you want to check. Here it is "studying techniques".

4. After activating the advanced options and filters, select the location and the language, so you

will also get the "Local Monthly Searches".

5. Click on "Search".

Figure 1: Google's Keyword Tool [Google Keyword Tool 2012]

7

You will get a table that looks something like this:

Figure 2: Results of the Keyword Research [Google Keyword Tool 2012]

First you can see that the competition for the keyword "studying techniques" is low, which is good.

Like that it is much easier to get on one of the first rankings on the SERP with this keyword. The

approximate 12-month average of user queries for this keyword on Google search is 880. For the

United States and the language English it is 390.

With the keyword tool, you can not only see how high the demand is, you also get some ideas for

alternative keywords you could use.

Compared to the other keywords, it is possible to say that "studying techniques" wouldn't be a good

choice for a specific keyword, because some other keywords with the same meaning have a lot more

searches. The ones with more searches are "study techniques", "study skills" and "memorization

techniques".

Let's first compare the two with low competition. The global monthly searches for "study techniques"

are higher than the one for "memorization techniques". But the local monthly searches are less. In this

case it is probably better to pick "study techniques", because it doesn't matter where the visitor is from.

But if the website is an online shop, your clients are usually from the region. In that case, the local

monthly searches would be crucial.

"Study skills" has a lot more searches than the other ones, but the competition is not low anymore.

This means you need to work harder to get on the first page of search results. It differs from case to

8

case, whether it is worth the extra effort or not. Even if the competition is high, sometimes it's worth

the effort.

You should do a keyword research like this for each website you create, to find the most lucrative

specific keyword.

An additional tool is "Google Trends", which enables you to have an overview of the historical search

volume. [Bischopinck / Ceyp 2009, p.179]

2.3 Why Search Engine Optimization?

Unless you are a household name like eBay or Amazon, chances are rare that people will simply type

in your URL. The biggest traffic is coming from the search engines. And they are getting more and

more powerful. [Clay / Esparza 2009, p.10]

Since search engines are often the place, where people enter the world wide web, no one can ignore

them. Only slightly more than ten percent of all search engine users click on the second page of search

results. That is why especially the first ten entries are highly competitive. Only those who are visible

are able to guide the user on their site. [Alby / Karzauninkat 2007, p.4]

This is also confirmed by a study from Nielsen/NetRatings at 2005. It says that for 79 percent of all

internet users, search engines are the most important starting point for a purchase decision.

[Lammanett 2006, p.146]

Interesting is also the eye-tracking-study from the enterprises Enqurio Inc., Did-it LLC and Eyetools

Inc.:

Figure 3: Organic Ranking Visibility [PRWeb 2011]

9

It shows which areas of the search engines are most likely to be looked at. The first three ranks of the

SERP are being read by 100% of all searchers. But rank 10 is only read by 20% of all searchers.

[Lammanett 2006, p.146]

All this shows, that search engine optimization has an economic relevance.

2.4 How to optimize a Website

First of all, there is to say that the different criteria used by the search engines to evaluate the websites

are not public. In addition to that, not every search engine is using the same criteria and they also give

them different weightings. But it is still possible to list some general measures, which have a positive

effect on the ranking of the website. [Bischopinck / Ceyp 2009, p.185]

2.4.1 Content

If there is more than one language used on the same webpage, it is really hard for search engines to

determine the language of the document. An important knowledge for the optimization. [Alby /

Karzauninkat 2007, p.61]

Another relevant point is not to use too many technical terms, because most of the users won't search

for them anyways. Try to empathize with the user, and use the words you think he or she is going to

look for. [Alby / Karzauninkat 2007, p.67]

Also the writing style affects the ranking. A good possibility is to write in the up-down style. That

means the most important information is right at the beginning, and farther down it gets less and less

relevant. [Alby / Karzauninkat 2007, p.70]

How to integrate the keywords, which we have found with the keyword tool before:

Keyword-Identity

Synonyms and homonyms are not being recognized. Neither are different word forms. That is why the

keyword needs to be used in the exact same way. It is even important to differentiate between plural

and singular. [Bischopinck / Ceyp 2009, p.210]

Keyword-Density

The keyword density describes the numerical occurrence of the keyword in relationship to all the

words of a document. It is undisputed that the keyword density has an effect on the ranking, but there

are different opinions how high it should be. They vary from one to seven percent. On

keyworddensity.com you can analyze how high your keyword density is. [Alby / Karzauninkat 2007,

p.64]

10

If the keyword density is too low, the search engines won't classify the website as relevant for that

keyword. And if the keyword density is way too high, it will be classified as spam attempt, and it is

possible that they kick you out of the index. This kind of manipulation is also called keyword-stuffing.

[Bischopinck / Ceyp 2009, p.210] If your keyword density is too high, you should replace some

keywords with a synonym. [Alby / Karzauninkat 2007, p.65]

Keyword-Proximity

The proximity of the keywords is a further relevant weighting factor. The closer the single words of a

query in the site context are, the more relevant is the document in regard to the query. Therefore,

keywords that are often searched in combination should also be close to each other in the document.


Keyword-Position

Besides the keyword-proximity, also the absolute location within the text is of crucial importance for

the weighting of the relevance. The keywords should already be used in the beginning of the text.


It can also help to put the keywords into HTML-Tags like <h1>, <strong>, <u> or <b> to emphasize

the relevance. [Bischopinck / Ceyp 2009, p.214]

2.4.2 Document-Length

The goal of search engine optimization is to be found for as many requests as possible at the first

places of the search results. That is why it is preferable to divide longer documents into two websites,

since every website shouldn't have too many keywords. [Alby / Karzauninkat 2007, p.69]

2.4.3 Site Structure

Search engines can spider flat directory trees much better. It also helps to have a clear structure and it

makes the URL shorter and easier to remember. [Alby / Karzauninkat 2007, p.74]

According to [Site Build It! 2012], the website should be structured so, that you get from each page to

any other page within three clicks.

But opinions differ. [Bischopinck / Ceyp 2009] advise not to have more than four clicks starting from

the home page to any other page.

But if the website has tons of pages, it is usually not possible to get in three or four clicks to any page.

In this case you should consider creating a sitemap. It helps the visitor as well as the crawler. Sitemaps

are lists of all linked pages. [Alby / Karzauninkat 2007, p.81]

11

Since the URL is an important part for the weighting of a document, it should contain the specific

keyword. Even more relevant is the domain name, which represents the figurehead of each web offer.


2.4.4 Link Structure

There are two kinds of links: internal links and external links. Internal links are compared to the

external links less important for the ranking of a site, but the naming of the internal link is still

important and it should contain the specific keyword of the site. This applies also for the external link.


Generally one can say that a high number of external links pointing to your site has a positive effect on

your ranking position. [Bischopinck / Ceyp 2009, p.217]

That is why an entry in a major catalog can mean an improving position in the search engine, because

of the improved linking. [Alby / Karzauninkat 2007, p.42]

But crucial for good link popularity is not only the number of backlinks, it is especially the quality of

links. A good quality means that the site the link is coming from has itself good link popularity and it

should have thematic similarity. The link popularity with Google is defined as page rank. This is

represented by a number from one to ten, with ten for the highest possible achievable value. For the

calculation of the page rank, there are numerous free software-tools. [Bischopinck / Ceyp 2009, p.218]

2.4.5 Images & JavaScript

Search engines do index images, but they are not able (yet) to analyze them. Images are being found

through the alt-attribute and that is why files like images should have descriptive names. And it is also

a good opportunity to integrate a keyword. [Alby / Karzauninkat 2007, p.71]

Since JavaScript is invisible for search engines, it is not advisable to use it very often. If you are using

JavaScript-links, you should at least make an alternative navigation for search engine crawlers at the

bottom. [Alby / Karzauninkat 2007, p.101]

2.4.6 Metadata

What is metadata? "Simply put, metadata is data about data." [http://kb.iu.edu/data/aopm.html]

To embed metadata you need meta tags. Here is an example of a meta tag:

<meta name="description" content="">

In between the apostrophes you can now write your metadata, which is some kind of information.

Here it is a description:

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<meta name="description" content="your data about data"> [SEWM 2012]

Metadata is mostly invisible for the visitor. One exception is the title, which is visible. It appears on

the head of the browser. The title of the document plays also for the search engine optimization a very

powerful factor, since the title is used as a headline on the search engine results page. [Bischopinck /

Ceyp 2009, p.197]

Not giving a title name at all, is almost already a guaranty, that you won't be found. [Alby /


For the ranking it is important to put the specific keyword of a website already in the title.


Besides the title, there are usually two kinds of metadata on web resources: keywords and the

description. All the other forms of metadata are usually being ignored from the search engines. For the

ranking it is good to have a short description in about 200-250 signs for each page. In addition to that,

the description is often used by the search engines for the SERP and it appears right underneath the

title. For that reason the description should also appeal to the visitor. [Alby / Karzauninkat 2007, p.69]

Nowadays some people even say, that the meta tag "keywords" is outdated and that most search

engines don't even look at the keywords anymore. As you already know, the criteria used by the search

engines to evaluate websites is not public, so one can only speculate whether to ignore meta tags or

not. But even if the search engines ignore all the meta tags, it is still good for you to have an appealing

description, because it is almost always better than the description that the search engine generates

automatically and that helps you to get a higher click through rate to your site. [SEWM 2012]

The meta tag "keywords" got also less important after some time, because the search engines realized

that they were often misleading and unreliable because people misuse them. [Wikipedia Meta Tags

2012]

2.4.7 Click Popularity

The more clicks a link on the search engine results pages get, the higher is the click popularity. But the

click-through rate can not be influenced by the site owner. The only thing you can do is writing an

attractive title as well as a description, which makes the user want to see more about your website.


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2.4.8 Common Mistakes

Since concerning to search engine optimization a lot of mistakes are being made, the most common

ones are listed here:

A lot of multimedia, but no text. This means the search engines don't get any information and

the user will see cryptic signs as description. [Alby / Karzauninkat 2007, p.102]

Duplicate content. If a page moves to another domain, you should use a redirect. If the content

is on two or more servers, the search engine experts talk about duplicate content, and it

happens often that search engines kick duplicate content out of the index. [Alby /


Link farms. Link farms have a very high number of connected pages. Those sites

automatically refer randomly on tons of other pages, which don't have anything in common.

Today's search engines uncover this manipulation attempt pretty fast and they will put the site

on the blacklist. You should avoid link farms in any case. [Alby / Karzauninkat 2007, p.81]

Broken links. Make sure that you don't have any broken links. It is very annoying for the

visitor and not all sites can be crawled. [Alby / Karzauninkat 2007, p.98]

Link text: "click here". It is way better to use a descriptive text with one or two keywords.


Frames. [Alby / Karzauninkat 2007, p.88] recommends to stay away from frames.

Poorly written HTML. A correctly written HTML-Code makes it easier for the search engines,

but nowadays the search engines have learned to cope also with poorly written HTML. [Alby /


Optimizing one website for a lot of keywords. [Bischopinck / Ceyp 2009, p.209]

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3. Description of my Website

3.1 Concept, Goals and Expectations

The goal of the website "Lernen mit Spass" is to build a little e-business and to generate a little income

with that. Since I don't know a lot about building a website, I subscribed with Site Build It! (SBI!).

SBI! is like a service, which helps you to build your own e-business step by step. A video tour, called

action guide, will carry you through the whole process from finding a good topic to the monetization

of your website. But SBI! is not only that, it is also your web hoster and it has a lot of tools, which

help you to optimize your site. But you should be aware, that most of those tools only work for

websites written in English. Since I wanted to build my website in German, I had to use some external

tools and I could not perform all the steps from the action guide. According to [SBI! 2.0 2012] also

universities are starting to use SBI! as the way to teach students how to build a successful online

business.

The main concept of SBI! is called CTPM. The "C" stands for Content, which is the basic of an e-

business. It is important to deliver high-valuable information so people land on the site of an e-

business. Together with the right keywords, a good site-concept and targeted linking, it is possible to

generate continuous Traffic. As soon as people are on the site, the goal is to convince them of a

product. Either that of the own company, or that of an affiliate-partner. This process is called

Preselling. Eventually, it is necessary to work out a good Monetization-Plan. [Site Build It! 2012]

Figure 4: CTPM-Concept [Site Build It! 2012]

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The main idea of my website is to help people how to study. On my website you will find topics like:

Learning techniques

Time management

Studying abroad

Brain jogging

Learning environment

Exam preparation

The concept is that people visit my website for information about studying. I am delivering high-

valuable content and at the same time I am recommending books, software and apps. Those

recommendations will then lead to one of my affiliate partners. In chapter 5 of this thesis I will explain

what affiliate marketing is and how it works. Right now, I am working with two affiliate partners:

Amazon and TradeDoubler. So far only a few sales have been operated like that, but I am still working

on preselling better and getting more visitors. The traffic has been growing since the beginning and

has reached its peak in April, ever since then the traffic has been declining how you can see on this

table generated by a tool of SBI!:

Table 1: Traffic Statistics [Site Build It! 2012]

In my opinion, the traffic has fallen since April, because I didn't update anything in the last two

months and I also didn't add any new pages. The month of July is not representative yet, because so far

there are only a couple days in the calculation.

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Since February 2012 I am also tracking with Google Analytics and the first thing I noticed was that

with the tool of SBI! it always tracked many more visitors than with Google Analytics.

Figure 5: Monthly Traffic Statistics [Google Analytics 2012]

The amount of unique visitors in each month from February - June were:

February: 427

March: 1'265

April: 1'426

May: 1'006

June: 912

I think Google Analytics delivers you more accurate data and it offers more additional tools, which is

why I have been using Google Analytics instead of the SBI! tool.

Besides affiliate marketing I am also using Google AdSense on my website. More information about

Google AdSense you will find in chapter 6 of this thesis.

If the website should be doing good in the German market, I can also imagine to translate it into

English to get even more visitors. But right now I'm giving my little project a little time to get some

feedbacks and also to see if it is even possible to generate a little income with that.

17

3.2 Search Engine Optimization on my Website

First of all, I made a sitemap with about 30 different pages. The criterion of each page was always to

have a specific keyword with enough demand but not too much competition. Only when I was done

with that, I started to write the content. I was always aware not too use any technical terms, to write

short sentences and to use the specific keyword from time to time. After I was done writing I got a

feedback from SBI!, if the keyword-density is okay or not. Usually I wrote about 300 - 500 words for

each page.

Since search engines can spider flat directory trees much better, I decided to have only three

hierarchical levels: homepage, tier-two pages and tier-three pages.

To improve the link popularity I have applied for some major catalogs. So far I have only been

accepted by "Webliste Schweiz" and "webseiten-schweiz.ch". Also for improving the link popularity I

have signed in with StumpleUpon and added some of my pages to it. In addition to that, I have

answered questions about studying on Yahoo and put a link underneath my answers, which also

brought me some traffic, even though it was little.

In my opinion good link popularity is not only very good for the ranking, it will also bring more

visitors to your site. That is why I will spend some more time with link building in the near future.

Whenever I embedded a picture or some other kind of graphic, I always added a descriptive name to it

so that it can be found by the search engines.

The most important meta data for me was the description. There is not a single page on

www.lernenmitspass.org without a description.

But not all the visitors to my website came from search engines. I also tried out some alternative ways,

which you will find in the next chapter.

18

4. Comparison of Advertising Methods on the Internet

The thesis is going to show three different advertising methods. First social media with a Facebook

business site and then it will compare Google AdWords with Facebook advertisements. Google

Analytics is used to evaluate the results.

4.1 Social Media - A Facebook Business Site

On Facebook not only people can create a profile, also businesses have the opportunity to create an

own site. Most of the big companies are trying to get as many "Likes" as possible, to be in touch with

as many clients as possible. Coca-Cola for example has about 41 million (28.04.2012) Likes.

Figure 6: Front page of the Facebook Business Site "Coca Cola" [Facebook 2012]

Every time Coca-Cola posts something, all this 41 million people will see it on their Facebook

homepage. This is a great possibility for the company; it means totally free advertisement.

A Facebook business site is a good opportunity to communicate with customers and at the same time

you can link people to your e-business. With the new timeline the companies also have the opportunity

to tell their history from the beginning on. By asking questions or creating polls you can learn more

about the needs of customers and you can get relevant feedback.

The big advantages of social media are:

Totally free

Less pushy

Customers perceive it more openly

Interactive

19

Let's have a look at the traffic statistics of the Facebook business site "Lernen mit Spass". First of all

you need to know that Facebook only starts your tracking after you have reached 30 likes.

Figure 7: Front page of the Facebook Business Site "Lernen mit Spass" [Facebook 2012]

After that, Facebook automatically starts to track how many people you reach, how many people are

talking about that page and it also tracks your posts:

Figure 8: Statistics of the Facebook Business Site "Lernen mit Spass"[Facebook 2012]

20

Posts: "The size of the bubbles represents the number of posts your Page published each day.

Page posts are the simplest way to encourage people to talk about your Page." [Facebook

2012]

People Talking About This: "The number of unique people who have created a story about

your Page in the last 7 days. Getting more people talking about your Page is one of the best

ways to reach more people." [Facebook 2012]

Weekly Total Reach: "The number of unique people who have seen any content associated

with your Page in the last 7 days. This includes Ads or Sponsored Stories that point to your

Page." [Facebook 2012]

In this example you can see clearly, that posts can boost your "People Talking About This" and your

"Weekly Total Reach". On 17.06.2012 it was one post and on 25.06.2012 it was two posts.

Social media is getting more and more important, and in my opinion every business should deal with

the question whether to use it or not.

4.2 Google AdWords

Google AdWords are those ads you usually see on the right side of the Google results page. But

Google also has a lot of partners, which offer advertising space against payment.

Figure 9: Google Results Page [Google 2012]

21

1. These are typical ads of Google AdWords.

2. Since some time also the first results can be paid ads, what you can see by the colored

background.

For those who have asked themselves how Google makes money, this is the main source of income.

The big advantage for the advertiser is, that he doesn't need to worry where to place the ads. Google

displays them automatically when someone is typing in a keyword that matches to the ad or Google

displays the ad on a site of a partner, whose content fits to the ad.

Here you can see the results of a Google Adwords campaign for "Lernen mit Spass":

Table 2: Google Adwords Campaign [Google Adwords 2012]

Budget: Here is the daily limit, which you want to spend in one day.

Clicks: "A click is when a user interacts with your ad by clicking on it, typically showing an

intention to learn more about what you offer." [Google Adwords 2012]

Impr.: "An impression is counted each time your ad is shown on a search results page or other

site on the Google Network." [Google Adwords 2012]

CTR: "Click through rate (CTR) is the number of clicks your ad receives divided by the

number of times your ad is shown. " [Google Adwords 2012] A low CTR tells you that your

ad is not appealing enough for the visitors to click on it.

Avg. CPC: "Average cost-per-click (CPC) is the average amount that you've been charged for

a click on your ad." [Google Adwords 2012]

Cost: "The sum of your cost-per-click (CPC)." [Google Adwords 2012]

Avg. Pos.: "The average rank of the ad in the auction. Auction rank determines the order of

the ads on the page." [Google Adwords 2012]

When you set up your ad, you can choose how much you are maximum willing to pay in one day as

well as the maximum CPC - that's the most you are willing to pay for a click on your ad. Another thing

you can set up is, for which keywords your ad shall appear.

22

After the campaign ended, you can check which keywords were profitable:

Table 3: Adwords Keywords [Google Adwords 2012]

Here you can see that some keywords didn't get any clicks at all. But those keywords usually also have

low impressions, which means that probably not enough people were looking for this keyword. The

more important criterion is the CTR. "Lerntechniken" has with its 3.32% a relatively high rate.

All in all, the Adwords campaign brought 96 visitors in one week to the site "Lernen mit Spass" with a

daily budget of CHF 4.- .

4.3 Facebook Ads

Why is Facebook so valuable? Because it knows so much about millions of people! People voluntarily

give away valuable information about brands, sports, music, enterprises, food, people and products

they like. This way it is possible to display highly targeted and personalized advertisement.

23

Figure 10: Facebook Ads: Targeting [Facebook 2012]

For the Facebook campaign "Lernen mit Spass" people were chosen who live in Switzerland, are 55

years old and younger, and who like one or more of the following:

Academia

College

Lehrer

Schüler

Student

Student society

University

Ausbildung

lernen

With these settings the ad targets 86'300 users.

Here are the results of the one week campaign with a daily budget of CHF 4.-:

Table 4: Results - Facebook Ads [Facebook 2012]

Actions: "This data includes all actions taken by people within 24 hours after viewing an ad or

Sponsored Story in this campaign, or within 28 days after clicking on it. You will only see

data here if you are promoting a Page, event or app." [Facebook 2012]

CPM: "The average cost per thousand impressions on these ads, calculated as amount spent

divided by the number of impressions received." [Facebook 2012]

24

It is striking that it didn't even use up the daily limit of CHF 4.-, which was set. This can have two

reasons: The CTR is too low or the target group is a too narrow selection. With a wider selection it

would be possible to get more impressions and with that also more clicks with the same CTR. A low

CTR means that the ad is not appealing enough for the visitor, but Google AdWords reached a CTR

that was more than ten times as high (0,41%) with almost exactly the same ad. The supposition is, that

you get a naturally higher CTR with Google AdWords, because when the costumer types something in

the search box, he or she is looking for a product or for information. And like that it is more likely that

he or she clicks on an ad, than when surfing on Facebook.

But for a more representative statement, it would be necessary to check a longer period and work with

a higher daily budget.

4.4 Google Analytics

Google Analytics is a great free tool, where you can analyze how your website is doing. Google

Analytics makes it easier to discover the potential for improvement. You just need to embed a code on

every page of your website and it automatically tracks everything. A simple solution is to put the code

into a footer, which appears on every webpage. Like that you don't need to add it to every single page.

Here is a list of a few features that Google Analytics offers:

Counting all unique visitors of a period

Showing percentage of "New Visitors" and "Returning Visitors"

Which cities are the visitors from

What browsers are the visitors using

Visits with a mobile phone

Percentage of "Search Traffic", "Referral Traffic" and "Direct Traffic"

Which keywords did they enter before they landed on your page

...

And there are even a lot more features you can profit from. [Google Analytics 2012]

25

Here is an overview of the weekly visits from 01.04.2012 - 27.06.2012:

Figure 11: Google Analytics Overview [Google Analytics 2012]

Visits: "Visits is the number of visits to your site." [Google Analytics 2012]

Unique Visitors: "Unique Visitors is the number of unduplicated visitors to your website over

the course of a specified time period." [Google Analytics 2012]

Pageviews: "Pageviews is the total number of pages viewed. Repeated views of a single page

are counted" [Google Analytics 2012]

Pages / Visit: "Pages/Visit is the average number of pages viewed during a visit to your site.

Repeated views of a single page are counted." [Google Analytics 2012]

Avg. Visit Duration: "The average time duration of a session." [Google Analytics 2012]

Bounce Rate: "Bounce Rate is the percentage of single-page visits." [Google Analytics 2012]

% New Visits: "% New Visits is the percentage of visits that were first-time visits." [Google

Analytics 2012]

The Google Adwords campaign as well as the Facebook Ad campaign was from 13.04.2012 to

20.04.2012. Looking at the graphic overview of Google Analytics, we can see a clear peak around

15.04.2012. The visits around that date are almost double as high as during the rest of the time and that

with a daily budget of only CHF 8.-, which was not even used up. To exclude the possibility that the

traffic is naturally high in mid-April because of other reasons, it would be necessary to measure the

traffic in another year without any campaigns.

Excluding that possibility, the campaigns were a success.

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The results of the campaigns are also visible in the traffic sources overview of Google Analytics.

These are the percentages over the whole time:

Figure 12: Google Analytics Traffic Sources [Google Analytics 2012]

Search Traffic is all the traffic that comes from search engines.

Referral Traffic is all the traffic that comes from links pointing to your site.

Direct Traffic is from those visitors who type in your URL.

By far the most traffic is coming from search engines, followed by a little bit more "Referral Traffic"

than "Direct Traffic".

Taking only the period from 13.04.2012 to 20.04.2012, when both campaigns were running, the output

looks like this:

Figure 13: Google Analytics Traffic Sources (period of campaigns) [Google Analytics 2012]

As you can see, the referral traffic during this period has increased by over 10%.

27

Also interesting to see is the visitors flow of Google Analytics. First of all, you see from which

countries visitors enter which page of your website. Then you see how many people go to another

webpage and also to which ones, as well as how many people drop off. Like that you know exactly

which pages need some optimization.

Figure 14: Visitors Flow [Google Analytics 2012]

28

5. Affiliate Marketing

This chapter explains what affiliate marketing is, how it works and how to choose the right affiliate

partners.

5.1 What is Affiliate Marketing?

On [Wikipedia Affiliate Marketing 2012] affiliate marketing is defined as: "Affiliate Marketing is a

type of performance-based marketing in which a business rewards one or more affiliates for each

visitor or customer brought about by the affiliate's own marketing efforts."

5.2 How does Affiliate Marketing work?

The affiliate partner advertises products or services from another merchant on his website with a

special affiliate link. Through this affiliate link the merchant can see which visitors come from his

partner's website. Now the affiliate partner gets a commission for each transaction or for each sale he

has generated. [Lammanett 2006, p.23]

5.3 Criteria for the Selection of Partner Programs

There are some criteria that should be considered when selecting:

5.3.1 Quality of the Partner Program

Your partner and the partner program should make a serious impression. For a client it should be easy

and uncomplicated to buy with your partner and for you it is important that your partner program has

clear and detailed statistics. The quality of your partners also indirectly affects your image. [Asen

2009, volume 3, p.66]

5.3.2 Thematic Proximity

The products or services of the partner program should fit to your content. According to experiences,

advertisement which is directly detected as advertisement, is less clicked. Therefore the products

should be easy to integrate into the content of the website. [Abseits 2003]

5.3.3 The Duration of the Cookies

This criterion is particularly important and should not be overlooked. Cookies are important because

people usually don't buy a product the first time they are on a website. They compare different web

shops and they may return only after a few days back to your partner's website. Without cookies you

wouldn't get any commission, unless the visitor is buying the product right away. Cookies are little

files that are saved on the visitor's computer. As long as the cookie is on the computer, your affiliate

http://en.wikipedia.org/wiki/Performance-based_marketing

http://en.wikipedia.org/wiki/Affiliate_%28commerce%29

29

partner will know that the customer came through your website to his web shop and you will get the

commission. [Asen 2009, volume 3, p.68]

The duration of the cookies should be at least 30 days, the longer the better. [Asen 2009, volume 3,

p.68]

Also according to [Infoakademie 2012] the cookie duration should never be under 30 days.

5.3.4 The Amount of Commission

The amount of the commission has a direct impact on the height of your profit, but it shouldn't be the

main criterion. You should still prefer a web shop with a higher quality, even though the amount of

commission is lower. Common is a commission between 5,0% - 15,0%. For digital products it is

usually higher and between 25,0% - 50,0%. [Asen 2009, volume 3, p.67]

5.3.5 Low Payout Level

This is the amount of commission revenue you need to have before you get paid out. Make sure it is

not too high for you. If not reaching it in one month, it should be possible to take it over to the next

month without expiring. [Infoakademie 2012]

5.3.6 Subsequent Sales Commissions

With some affiliate programs you even get a commission for all further purchases of a client that you

have brought. [Asen 2009, volume 3, p.70]

30

6. What are possible Income Sources for an E-Business

6.1 Affiliate-Programs

Affiliates act as intermediaries between advertisers and potential customers. They are professional or

private website owners, who are providing advertising spaces. There are various possibilities how the

affiliates are paid:

PPC (Pay per Click): The affiliate receives a fix amount as a commission, when a user clicks

on the ad.

PPL (Pay per Lead): The affiliate receives a fix amount as a commission, when the user

performs a certain action.

PPS (Pay per Sale): The affiliate receives a percentage commission per sale.

To get the best results, the promotion should always fit to the content of the website. [Alby /


6.2 Google AdSense

Google AdSense is a system that automatically puts content relevant ads on your site. With every click

you get something between about 5 centimes up to a few francs. [Asen 2009, volume 3, p.33]

It is actually exactly the opposite side of view from Google AdWords. Now you are the one who

provides the ad space. It is important to check, that there is no advertisement of competitors on your

site, otherwise you might lose some of your customers.

But in my opinion, most people rarely click on such advertisements and only a few people make good

money with Google AdSense.

6.3 Digital Products

Digital Products are one of the most lucrative ways to earn money on the internet. Compared to

physical products, there are some crucial advantages:

No inventory costs

No shipping costs

No manufacturing costs

Your digital products can be images, music, movies, software, e-books and so on. The alternative is to

purchase sales licenses from other vendors. [Asen 2009, volume 3, p.34]

31

6.4 Services

The internet is also a good opportunity to commercialize your service as a lawyer, tax consultant,

translator, yoga teacher, web designer and many more. [Asen 2009, volume 3, p.35]

6.5 Online-Shop

Last but not least you can also sell conventional products like CD's, cars, food and clothes. [Asen

2009, volume 3, p.37]

You don't need to choose one of these income sources, also a combination can be a good solution.

32

7. Conclusion

There are a lot of possibilities how you can optimize your website for search engines and since the

criteria are not transparent, there are also a lot of speculations, whether some optimization is useful or

not. All in all, one can say that search engines are getting better and better in delivering the most

valuable sites for the visitors and it is getting harder to manipulate search engines to get a better

ranking. So search engine optimization is going in a direction, where it is important to optimize your

website for your visitors. And when you do that, you are automatically already optimizing your

website for search engines. Because search engines want to deliver the best sites to their customers,

and therefore you will get a good ranking. That is why in my opinion the importance of search engine

optimization will lose weight in the future.

In contrast to this, social media will probably get more and more important. People are not very open

anymore for advertisement, but social media offers the enterprises a totally new way to present

themselves. Since the customers are deciding themselves from which companies or products they want

to see news or messages, it is perceived less as advertisement. And with the new time line of Facebook

enterprises are now able to tell their history from the beginning on. How the thesis could show with

the Facebook business site of "Lernen mit Spass" it is possible to reach a lot of people with only a few

likes and a couple of posts. Another big advantage of social media is that customers can communicate

with the enterprises and ask question or give feedbacks. Like that it is kind of a win-win-situation.

Comparing Google AdWords and Facebook ads the results show a much higher click through rate

with Google AdWords. The supposition is that you get a naturally higher CTR with Google AdWords,

because when the costumer types something in the search box, he or she is looking for a product or for

information. And like that it is more likely that he or she clicks on an ad, than when surfing on

Facebook. But for a more representative statement, it would be necessary to check a longer period and

work with a higher daily budget.

Before subscribing to SBI! it is important to know, that most of the tools only work for websites

written in English and it is probably better to use Google Analytics instead of the traffic statistics of

SBI!.

Affiliate marketing works better the less it is perceived as advertisement. In my opinion, the best use

of affiliate marketing is when you want to make recommendations for products.

33

Literature

[Alby / Karzauninkat 2007] Alby, Tom; Karzauninkat, Stefan: Suchmaschinen Optimierung -

Professionelles Website-Marketing für besseres Ranking, 2. edition, Carl Hanser Verlag,

München, 2007.

[Asen 2009] Asen, David: Erfolg im Internet - Der Grundstein zum Erfolg, 1. edition, 2009.

[Baeza-Yates / Ribeiro-Neto 2011] Baeza-Yates, Ricardo; Ribeiro-Neto, Berthier: Modern

Information Retrieval: The Concepts and Technology behind Search, 2. edition, Pearson,

Dorchester, 2011.

[Bischopinck / Ceyp 2009] Bischopinck, Yvonne; Ceyp, Michael: Suchmaschinen-Marketing -

Konzepte, Umsetzung und Controlling für SEO und SEM, 2. edition, Springer, Berlin, 2009.

[Clay / Esparza 2009] Cley, Bruce; Esparza, Susan: Search Engine Optimization All-In-One for

Dummies, Wiley Publishing, Inc., Indianapolis, Indiana, 2009.

[Lammanett 2006] Lammanett, Erwin: Praxiswissen Online-Marketing - Affiliate- und E-Mail-

Marketing, Keyword-Advertising, Online-Werbung, Suchmaschinen-Optimierung, 1. edition,

Gabler, Wiesbaden, 2006.

[Liu 2007] Lui, Bing: Web Data Mining - Exploring Hyperlinks, Contents, and Usage Data, 1. edition,

Springer, Berlin, 2007.

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Internet Sources

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