Haven’t heard of search marketing automation yet? You soon will.

As Intel began to ramp up its search engine marketing efforts three years ago, it faced an unlikely competitor in keyword auctions—a microprocessor company that likes to use three bald, blue percussionists in its ad campaigns.

Organized into largely autonomous divisions, Intel constantly has a number of different technology groups working on a plethora of marketing campaigns around the world. As search grew as part of the company’s overall marketing mix, it became increasingly difficult to manage what search engine keywords these individual groups were looking to buy for their respective campaigns.

“We were bidding on thousands of keywords in multiple countries, in multiple languages, and on multiple search engines at the same time,” said Corey Carrillo, Intel’s worldwide search engine marketing manager. “It created confusion as to who would get priority for certain terms and who wouldn’t, and it even created some competitive bidding situations. In some cases, we ended up bidding against ourselves trying to get top placement.”

Intel wasn’t alone in its search Catch-22. As many global enterprises have discovered, managing search efficiently requires tools they simply don’t have. But as luck would have it, a company in San Diego was in the process of developing the perfect solution.

Wine and cheese
In 1996, Dema Zlotin and Curt Nelson formed enterprise software development firm Silicon Space. As the company grew, its principals noticed an increasing number of Fortune 500 companies were facing the same types of search engine marketing problems as Intel.

The Silicon Space team began developing software to address the specific search engine marketing needs of enterprise-level businesses, and in 2004, the company formed a new division to spearhead its efforts, SEMDirector. Russ Mann, appointed CEO of the spun off division in 2006, described why software and search engine marketing go together like wine and cheese.

“At the end of the day, both paid and organic search is all text and numbers, all on the Internet, and the best way to gain cost efficiencies and improve effectiveness is by turning a manual process into an automated process with software,” Mann said. “And because this is text, math, and numbers, you can apply analytics to it—most times even more than a person might be able to.”

The SEMDirector hosted software was just what Intel was looking for, and in 2004, the technology giant became the company’s first client. According to Carrillo, SEMDirector’s product allowed Intel to centralize and automate its numerous search engine marketing campaigns and track them through a single interface.

“It’s allowed us to look at the really granular details and then exponentially build that out into all of our global campaigns to run the most cost effective, and arguably the highest performing, search engine campaign in the B2B space dealing with microprocessors,” Carrillo said. “It’s been a big success for us.”

Marketing accountability
According to Jupiter Research, more than half of large US advertisers plan double-digit spending growth on search engine marketing this year. And Microsoft recently announced that within three years, 51% of its total marketing spend would be online. Statistics like that are music to Russ Mann’s ears.

Although there are dozens of search engine marketing companies dotting the landscape, including leaders iProspect, Reprise Media, and iCrossing, no one else is catering to the Fortune 500’s specific needs like SEMDirector. “When you have one Web site that you’re trying to drive all of your traffic to, that’s a different type of problem than we’re trying to solve,” Mann said. “When you’re a large scale company, revenue over $1 billion, 100 business units, different Web sites targeting different segments in different geographies, sometimes with competing strategies, you need to figure out the most valuable use of your search engine marketing spend. That’s the problem we’re trying to solve.”

Privately held SEMDirector’s hosted products are so unique, and cater to such a growing niche, analysts have created a new term to describe the space: search marketing automation. While the automation aspect gives enterprises greater efficiency, there’s another A-word related to search marketing automation that executives crave: accountability.

“It’s not just about search,” Mann said. “It’s about accountability. We take a no-nonsense, practical, hard-ROI look at search engine marketing. Our goal is to help further a new age of advertising accountability.”

At Intel, Carrillo said SEMDirector’s analytics tools allow him to provide senior management with clear-cut information regarding the return on search spend. Depending on how much Intel is willing to pay for a keyword, it can dial up or dial down the amount it is spending in an individual channel or campaign on a real-time basis. As a result, the company sees anywhere from a 0.2% to 0.5% higher click through rate while paying $.15 to $.20 less per click than the competition.

The numbers indicate Intel executives are cherishing this new level of marketing accountability. Since the company began using SEMDirector in 2004, it has increased its total spend on search engine marketing by 475%. And last year, as marketing budgets decreased across the board, Intel increased its spend in search by 5%.

“Each year, we’re doubling what we’re spending in search because it’s proven itself again and again,” Carrillo said. “Once we demonstrate our productivity and efficiency in one country or business channel, the other countries and business channels want to get involved as well.”

According to Mann, SEMDirector clients are telling similar stories across the globe. “Search has become a C-level issue, and the largest companies in the world are calling SEMDirector to help answer the questions they have.”