Search Marketing in 2005 - Adaptation Ensures Evolution
Jim Hedger
engine sector is continuously growing warmer as interest in
search-advertising increases. Over a dozen consecutive quarters of this
intensifying heat is melting the ice cap that formed a glass ceiling
between search engine marketers and mainstream advertising
consciousness. Long-term revenue streams are now flooding as the
melting ice cap sends buckets of liquid capital flowing into all
regions of the sector.
Changes to an environment are often signaled by several seemingly
unconnected events, the effects of which only become fully apparent as
they unfold. The list of seemingly unconnected events grows longer
every day. For months astute observers have noted the very real effects
these events have on how search results are provided. An example would
be the effect of Blogs both on popular culture and Google results.
Another is the growing adoption of broadband in the United States.
Other examples include, Yahoo's growing relationship with Hollywood,
Google's global goals, MSN's declaration of tech-war, Ask's recent
acquisitions, and this week's purchase of About.com by the New York
Times. With search engine related items hitting the financial news on a
daily basis, multi-billion dollar revenue projections and the sudden
realization of what were once science-fiction fantasies, a shift in
corporate group-think was inevitable. One day, the print-addled
ad-execs on Madison Avenue woke up, smelled the silicone and went to
the bank.
This shift in corporate consciousness has, to a large degree, caused
and affected the evolution of the search engine environment. Over the
past three years, various concepts of search have moved in from the
peripheries towards the middle on the radar screens of corporate
marketers. Being creatures of habit and working from their power base,
they went where the money was.
Until recently, the largest advertisers appeared to define search as
the PPC (pay-per-click) offerings of Google's Adwords and Overture, and
the myriad of smaller pay-per-click programs. Unlike the technically
challenging and unpredictable world of organic SEO, PPC programs give
marketing departments solid numbers to base budget estimates and
outcome projections on. PPC programs with their massive contextual
distribution networks caught the attention of corporate marketers and
their investments in PPC have sustained and driven both Google and
Overture's bottom lines.
The reliance on PPC has had a positive effect on the business of
search, allowing both Google and Yahoo to post record profits on
astronomical revenues in the last quarter. Investment in the search
sector is also driven by the success of PPC/ad-delivery programs. That
bulk of money is being pumped back into innovation and acquisitions
with both giants and their smaller rivals expected to release dozens of
new features in the coming months.
Corporate reliance on PPC has had a negative effect on growth in the
search sector as well. With more attention being paid to paid listings,
many large corporations neglected their websites' organic placements.
Numerous studies have shown that most online traffic is generated by
the organic or unpaid listings and that actual sales tend to stem from
a holistic branding approach to search engine marketing. Reliance on
one form of search-advertising has almost certainly inhibited online
sales for many larger corporate sites, a situation which places their
confidence in search-advertising models at risk. A lowering of
advertiser confidence may be evidenced by a slight decline in the
number of ad-purchases and keyword cost-bids in January though
post-Christmas budget-shock might be an invisible factor.
For the past few weeks search engine journalists have written about the
lack of corporate interest in organic placements and the perils of
ignoring the free listings. Another study released today by Nick Hynes
of UK SEM shop, The Search Works notes that over two thirds of FTSE100
(UK version of Fortune100) companies do not appear in the Top20 under
keyword phrases relevant to their industries. Similar results can be
found when searching for Fortune100 companies at Google, Yahoo and MSN.
This prompting is starting to have an effect with an increase in
corporate awareness about the importance of organic placements. If
corporate advertisers find a profitable balance between organic and
paid search marketing, this balance will form the basis of optimal
search-marketing campaigns for the coming years, thus providing both
advertisers and the SEMs who serve them a sense of solid ground in the
midst of the rapidly changing environment.
Ultimately, the effects on the environment have been very positive for
most of the SEO/SEM sector. Established SEM shops tend to be coping
quite well with the sudden changes and are happily netting increasing
volumes of big and small fish. They are hiring and training new SEOs
and retraining older staff in SEM technique in order to keep up.
Several independent SEOs are even turning work away as they are simply
too busy to take on new clients. Conventional wisdom says that the
organic SEO shops that learn to combine organic and PPC services
(either directly or with a third party) will not only survive the
changes in our working environment but will be in a position to provide
a much more comprehensive service to their clients.
Today's bottom line for both corporate advertisers and the SEMs who
serve them is simple; learn, adapt, evolve, integrate skill-sets and
thrive in the ever-expanding world of search. As the floods come in,
don't be afraid to get your feet wet.