• by December 14, 2004

WARNING! ICEBERG AHEAD - When it comes to the next assault of a new and potentially disruptive medium, observers are apt to use a Titanic metaphor to describe the way planners and buyers deal with the situation. "They're busy rearranging the deck chairs," is how the criticism goes. Frequently, it's just that - criticism - as the traditional media - especially television - continue to thrive despite the latest new media incursion. The established media have survived the onslaught of the remote control, VCRs, the multichannel universe, the Internet, and even digital video recorders. So far.

Of course, along the way, the course of the Titanic has been modestly corrected, getting an ever so gentle judge in this direction or that to accommodate for the rising ocean of media options. And while it so far has avoided a catastrophic encounter with a massive floating hunk of ice, some say the traditional media marketplace is now on an imminent collision course. And it it's not the those DVRs floating just up ahead, or video-on-demand, branded entertainment, or any of the other seachanges that are now predicted to sink traditional media plans. It's the growing efficacy of a relatively new media option - paid online search - that threatens to turn TV, radio, newspapers, magazines and the like into so much flotsam and jetsam.

According to online trade group SEMPO (Search Engine Marketing Professional Organization), advertisers will spend $4.087 billion on search related marketing during 2004. While that amounts to only 1.5 percent of U.S. ad spending this year, it's one of the fastest growing segments and its growth likely is coming at the expense of traditional ad budgets.

Advertisers surveyed by SEMPO, on average, said they expect to spend 39 percent more on search marketing programs during 2005. Among the biggest advertisers, search marketing is expected to rise 43 percent. By comparison, overall ad spending is expected to rise only about 6 percent next year.

The main reason for the share shift, say the marketers, is the superior and measurable return on investment of paid search advertising. Amazingly, that ROI continues to grow despite an astronomical jump in search advertising costs. On average, advertisers say their bid prices for key search words have risen 26 percent over the past 12 months. While that may seem like the kind of media price inflation that would collapse a media market, these very same marketers said bid prices likely could sustain another 33 percent increase before their returns no longer justified their investment.

Those kinds of numbers elicited a Titanic reference from the search engine marketing industry. Boasted Kevin Lee, chair of SEMPO's research committee, "The data indicate that current size of the market for Search Engine Marketing services is the tip of the iceberg."