Search Marketing: Slowing Down While Breaking Records
Jackie Joyner-Kersee. Carl Lewis. When they broke their own records, their country watched and cheered their enormous accomplishments.
If only the lives of marketers could be so fair. At Search Engine Strategies NYC and throughout the interactive marketing industry, the slowing of search seems to be a hot topic these days, despite ongoing growth and a host of new distribution and targeting opportunities.
The problem centers around the fact that search is not slowing; it’s growing. The only actual slowdown refers to the channel’s growth rate, and that’s inevitable given the explosive growth of past years. Spending on U.S. paid search advertising grew nearly 175% in 2003, according to eMarketer, and this rate of growth will almost certainly never again be achieved. The law of diminishing returns applies, but search is still growing strong, with eMarketer predicting double-digit growth rates through 2010. Calling this a slowdown is like greeting Ms. Joyner-Kersee at the finish line of a record-breaking performance and saying, “You only broke that world record by a few hundredths of a second, Jackie, not nearly the margin you broke it by last time.”
There’s no place for disappointment around a world-record-breaking performance, and “slowdown” has no place in a search discussion. In addition to anticipated double-digit growth rates, big-brand marketers still enjoy impressive growth in their own programs. In the fourth quarter of 2005, the Performics 50, an index based on 50 actively managed search campaigns, saw year-over-year growth of 60% in the number of active keywords as well as substantial growth in clicks.
And the industry’s growth extends beyond transaction-based pay-per-click (PPC) search. A study released in March by Google and comScore Networks, for example, determined that 25% of searchers for product information in several categories eventually made purchases. Approximately 37% of those purchases happened online, with the rest occuring in stores. Certain product categories–consumer electronics, for example–leaned even more heavily toward an offline transaction. As marketers learn how to track and quantify the value of these search-influenced purchases, they are dramatically increasing their investment in search and the cost-effectiveness of their branding efforts.
Search allows consumers to raise their hand and open a dialogue with advertisers, but we have merely scratched the surface so far. More consistent opportunities to connect with consumers lie ahead, and the change is already under way with expanded inventory and growth for advertisers. Contextual advertising and mobile search offer the opportunity to expand the distribution and reach of search ads. Demographic targeting and local search are growth opportunities as well, in this case driven by marketers expanding campaigns as the ability to segment and target improves.
With all these advances and PPC search predicted to grow organically for many years, it’s hard to imagine a slowdown in search, no matter how much we hear to the contrary.
Cam Balzer is director of search strategy for Performics, the Chicago-based performance-based marketing division of DoubleClick, and a monthly contributor to CHIEF MARKETER.
