Boot-strap or Wedgie: Paid Search
1 plural: unaided efforts -- often used in the phrase by one's own bootstraps
2: a looped strap sewed at the side or the rear top of a boot to help in pulling it on
1: a shoe having a wedge-shaped piece serving as the heel and joining the half sole to form a continuous flat undersurface
2: the condition of having one's clothing wedged between the buttocks especially from having one's pants or underpants yanked up from behind as a prank -- often used with get or give
There's been a lot of talk lately about the use and success of paid search as a marketing tool. Last week Yahoo! announced that they would be acquiring Overture for $1.63 billion. The day that announcement was made, the IAB kicked off its 3-city, one week Search Road Show, in San Francisco. The other two cities the Search Road Show went through were Chicago and New York.
Though the spirit of the events held in each city was to promote the benefits of search marketing, the primary tenor and thrust was to feature the benefits of paid search and discuss the effectiveness of sponsored listing.
A few weeks ago I wrote about a small study conducted by Webwatch Research, a part of the Consumer Union, publishers of Consumer Reports. The study found that individuals are surprised to learn that search results on some search engines are paid listing and that some of those people had negative, emotional reactions to learning this.
My feelings on this, which I made known three weeks ago, are that anyone can find anything wrong with anything if they just put their minds to it.
But whether consumers care or don't care about search listings being paid or sponsored by advertisers doesn't really concern us now. What is apparent to all who work in this industry, paid search is VERY popular and desperately effective.
In 2001, Search Advertising comprised 4% of all interactive advertising revenues. In 2002 that number had tripled to 15% of all interactive advertising revenues. These revenues are almost entirely due to advertisers bringing money to search engines and paying, in some form or another, for inclusion in the search result listings.
Something else that has been on the lips of those working in this industry is the supposed ad recovery. Just over a month ago, the Wall Street Journal reported that Goldman Sachs analysts issued a research note revising their forecast upward for 2003 online-advertising spending to $5.99 billion from an earlier forecast of $5.47 billion. They based the upgrade in part on upbeat comments they heard from new-media companies at an Internet conference hosted by Goldman in San Francisco. One of the things that the Wall Street Journal article mentioned as being largely responsible for this upward revision is paid search listings.
So, does it make sense to look at paid search as the vehicle that will boot-strap the rest of the online advertising industry?
The success of search on behalf of advertisers is both unparalleled and indisputable. I've got clients who aren't doing anything else online at the moment save for their paid search listings. And without saying too much, let me tell you, the results are extraordinary. Revenue from sales outstrips the costs of the media by several magnitudes.
As evidence of success with the use of paid and/or sponsored search listings make the rounds, such as through venues like the IAB Search Road Show, more and more advertisers will be finding their way onto the web. And it is likely this vehicle that they will feel most comfortable trying. After all, the risks are low and the rewards are great.
But could all this success and popularity also be a bane as well as a boon? With too many advertisers vying for pole position within search results, the prospects of declining relevancy and the integrity of the search service begins to be called into question.
And what about the rich mosaic that is the rest of the web? There are ample opportunities for marketers to put effective advertising in front of the right audience. With the right combination of rich media and well-targeted placements, advertisers can yield results as good as, and sometimes better, than those found with search. Will marketers get accustomed to the low-risk/high-yield of search and decide that the best they can hope for from the web is incremental consumer engagement so long as the medium can distribute product and service, effectively ignoring the rest of the web?
I am not suggesting that this will be a long-term problem: I happen to believe that quality search properties will preserve their integrity by insisting on only the most relevant results being allowed within the paid environment for fear of alienating users. And making sure that those results are as relevant as possible, advertisers should continue to see superior results. I also believe that the daring advertisers, typically those who bet on the youth of today being the markets of tomorrow, will continue to use the web as they've done and expand their efforts. But we should be wary when Napoleon takes the crown from the pope and declares himself the Holy Roman Emperor.
I'm always wary of leaning too much on only one leg. That's fine if you are trying to get your boots on, but it's a good way to fall over if someone's pulling your underwear from behind up to your shoulders.