Are You An SEM David or Goliath?

Malcolm Gladwell recently wrote an article for The New Yorker entitled  "How David Beats Goliath. " Gladwell's prime example of his thesis -- that raw effort is often a better weapon than innate ability or excellence -- is the "full court press," in which a basketball team contests the entire field of the court against its opponent through a game's entire period of play. The remarkable thing about this effective strategy, he argues, is that it is so infrequently used by coaches who prefer to play "according to Goliath's rules."

Gladwell's idea has direct applicability to the current state of search marketing, which, like basketball, is a game of simultaneous offense and defense. The offensive dimension involves deploying segmentation and bid strategies to win and retain qualified search customers, while at the same time forcing competitors into less profitable positions or reducing their numbers through a sheer process of budgetary exhaustion.

In the context of search, we only witness "full court presses" in the prime Q4 shopping season, when the battle for consumers' wallet is most heated. For the rest of the year (specialized merchants vying for second-tier holidays notwithstanding), the battle pitches lower, with objectives focusing more on sustainable ROI than on daring, risky raids designed to seize or defend market share. And yet it seems that now, in the long season before the mad Q4 rush begins again, is the prime season to plan and execute attacks against larger rivals -- call them Goliaths -- whose habit and history has drawn them into complacency and search campaigns "running on auto-pilot."

Case in point: Shop.org's study, released last week, which highlights the fact that a sizeable percentage of e-commerce merchants are now backing out of paid search to pursue cheaper, but less effective channels. Thirty percent of these retailers are cutting back spend overall, with more than half (55%) specifically targeting search marketing for a haircut. At the same time, 25% of surveyed retailers report that they plan to increase search spend to exploit their competitors' retreat. We are witnessing, in other words, an authentic shift wherein about a third of online retailers will soon exchange places in search, with winners rising and losers throwing in the towel. My bet is that the time Q4 begins again, the competitive landscape will have shifted so drastically that no amount of last-minute spending on the part of Goliaths will be able to restore the balance.

The inherent dynamism of the search marketing landscape has been accelerated by these shifts in spending. Yesterday's incumbents are already on their way to becoming tomorrow's has-beens. Marketers who model themselves on Gladwell's "Davids," in respect to being unafraid to use unconventional strategies and tools, will gain traction against their larger but more tradition-bound opponents. Goliaths who have ruled the game for years will continue to see their hold on customers further weaken.

Still, the mere fact that search spending on the part of e-tailers is shifting doesn't mean that competition will diminish for the high-value customers that every e-tailer craves. Search will remain a "zero-sum" game (I only win if someone else loses), mistakes will remain costly, and only wily, technologically advanced marketers have a hope of exploiting opportunity. Like the full-court press, building and maintaining search campaigns that build market share requires the deployment of extraordinary resources, both in terms of technology and HR. Add raw effort to executional brilliance and you've got all you need to be a David in a world where Goliaths only rule if you let them.