• by Ryan DeShazer , July 17, 2012

I don’t know if “shocking” is the right word. Improbable. Unexpected. Sad. Indescribable.

Last Thursday Digg announced it had been sold to Betaworks for a reported measly $500,000. The social news site that was one of the early darlings of the online social media movement will now be folded into a revamped Betaworks offering, News.me. Digg’s rise, and subsequent fall, offers a sobering look into the fickleness of the modern Web consumer. Through the constant stream of innovation, the status quo is always being challenged.

Search marketers should take notice of the lessons Digg’s demise offers.

Lesson #1: Nothing lasts forever. One of my first paid search clients was an e-tailer who sold flower seeds, bird feeders, and a handful of other products for the gardening enthusiast. We saw some initial ROI from our paid search campaigns and began brainstorming other ways to put this new channel to use. One use was in testing possible new products for the site to carry on a regular basis. My client had a drop-ship partner that allowed us to assess the demand for products without committing dollars to stocking inventory.

One product we tested was a high-end, wooden sandbox for children. The sandbox retailed for $250, so we weren’t entirely sure what to expect. Sure enough though, the second we turned on our first campaign, the sales started rolling in. My client and I were both elated with the results. It was like turning on a water spigot; the dollars flowed when our search campaigns were live.

During that time, I’d strut around the office high-fivng people every chance I got. I thought it was my genius that enabled my client to sell so many high-margin sandboxes (I know, sandboxes, right?). A quick audit of the search results pages would have told a different story, though. There was no competition. We were the only (sandbox) game in town.

That didn’t last long. Money was changing hands online, and other retailers took notice. Soon, we were advertising among a sea of competitors. Our ROI would take a hit.

Lesson #2: Know your role. Search marketers have benefited from the role search plays across the buy cycle. Though many studies have concluded that search is important across all stages of the customer journey, it is often a last-touch channel before conversion (I realize this is a broad generalization -- humor me).

With most modern analytics packages attributing conversion credit to the last touch, search is often perceived as the most critical channel. This has led to is an overvaluation of its importance. Anyone who has ever attempted to manage a search campaign where it was the only communications activity in the market has experienced this overvaluation firsthand. Conversions suffer because the interest- and demand-generating activities of other tactics aren’t there. There is no silver bullet.

Multichannel attribution analytics are beginning to solve this by shedding light on the realm of touches that help shape purchase decisions. Though we’re still in the early days of multichannel attribution, it’s clearly here to stay. Over time, it will deliver a reality check to search marketers. Our high-fiving days are numbered.

Had Digg recognized its role, it would have focused on being the absolute best at social news discovery and sharing. It would have perfected that singular mission and experience, rather than meandering into other areas of social media functionality.

Which leads me to…

Lesson #3: Know when to hold ‘em, know when to fold ‘em. Diversification is a good thing; don’t be confused about my Lesson #2. Diversification shouldn’t distract you from your core mission, though.

Search programs can be over-optimized. There’s a point where you could spend more time attempting to eek incremental value from a particular keyword, ad group, landing page, whatever, but there’s often greater opportunity available elsewhere.

Rather than noodling with your top-performing programs, it’s often smarter to set those on autopilot while turning your attention to new efforts. Can we pursue new keyword portfolios with new content and offers? Should we look to shut down under-performers and reallocate budget and resources? Have we yet leveraged the full range of opportunities across search?

At one point, Digg entertained overtures from potential suitors in the near $100 million range. Following Thursday’s fire sale, I’m sure it wished it played its hand a bit differently.