Yes, there’s still growth in paid search, and the search engines will continue to make money from advertisers eager to market to consumers who are actively searching. On the other hand, that growth is slowing dramatically. eMarketer Daily recently predicted that by 2015, U.S. growth in search advertising will flat-line and even be surpassed by online display advertising.
Why the stagnation in what has historically been a booming market? The answer comes down to keywords. SEMs are held hostage by them. Their time and resources are constrained; there are only so many keywords they can create, manage, and optimize with current tools. This bandwidth constraint is reluctantly accepted as a necessary evil by the industry, which recognizes that the same unit of trade that permits granular, performance-based ad targeting also limits the ability to build campaigns that are both large and highly relevant.
Given this, how can the search industry unlock the true value of SEM campaigns?
Responding to the Challenges
Google ignited search engine marketing in 2001, and in the ensuing 10 years, the industry has evolved into a complex discipline with its own set of best practices, pitfalls, and paradoxes. Ten years seems like a long time to those of us immersed in search-based marketing, and yet as Alliott Cole espoused on Forbes.com in “Google’s Fundamental Flaw is Search,” there’s plenty of room for innovation and improvement in how consumers and advertisers interact with search engines. Put plainly: "The sector as a whole remains in its infancy."
Keywords provide advertisers with a helpful granular unit of trade and management, but they cause a lively ecosystem to suffer in two ways:
In short, advertisers can't realize the true potential of their SEM campaigns because they don’t have sufficient time and manpower. They simply have no cost-effective way to scale campaigns.
Today, typical solutions require significant trade-offs. For example, SEMs can create coverage by focusing heavily on broad match, but reliance on generic ad copy associated with broad match lacks relevance. And if advertisers want to mine the long tail to build more effective campaigns, more SEMs must be hired.
Clearly, resource constraints hamstring the growth of the search industry.
If ever an industry was in need of disruptive innovation, it is paid search. Technology will drive the next phase of market expansion by overcoming the inherent limitations of keywords.
From Keyword to Intent
The ability to rapidly and efficiently map consumer intent to products and services at an abstract level will provide a better unit of trade and campaign management, and it will underpin richer and more targeted content. Abstracting from keywords to intent helps identify large numbers of relevant keywords, put them into tightly themed groups, and more easily manage large campaigns -- without growing SEM staff.
Perhaps equally important, the proliferation of mobile devices and applications is spawning a dramatic increase in mobile queries and non-query expressions of intent. The National Retail Federation notes that mobile payments for “digital and physical goods” are predicted to reach $630 billion by 2014. And TechCrunch recently reported that smartphones hold a 63% market share in North America. As non-query expressions of intent increase through barcode scanning, location-based searches, and voice-operated searches like Siri, keywords as a unit of measurement will become less relevant, forcing retailers and companies with searchable products and services to master mobile platform-based search advertising.
Intent-based SEM, by design, will help advertisers radically simplify their campaigns and focus on what consumers really want, as opposed to keywords. This will make campaigns more relevant and ads more appealing. Clearly, this goes far beyond creating ads that play to a few of the most popular -- and therefore most expensive -- keywords. Intent-based advertising will have the scalability and relevance that keyword-based campaigns lack. It will also give SEMs an abstraction layer where existing search campaigns can be translated into non-query paid search advertising.
The search industry is not a maturing cash cow. Without question, it's still in its infancy and experiencing inevitable growing pains.
Mapping intent can do much to disrupt industry-wide complacency and spur growth. And the industry at large is beginning to look for ways to do this. Take, for example, Google exploring the possibilities through Dynamic Search Ads (currently in beta testing). When advertisers and the search industry recognize that it is possible to transcend keywords to easily and painlessly achieve relevance at scale, search advertising will realize its full potential.