Everybody wants to know where the online ad industry (and the search ecosystem that drives it) is going. The problem is that everybody's looking in the wrong places for the answer to this question. Trade magazines.
You'll rarely get a point of view in a trade magazine that's not biased by some hidden agenda. Why? Trade magazines are generally run on a shoestring and few can afford to pay columnists with a truly independent point of view. So most of the content is written by -- guess who? Vendors pushing their own products. (Disclosure: I work for a paid search firm. Does that mean that I want to sell you some paid search? Probably not, but the reasons for this belong in another column).
The result of all this vendor-driven content is that everybody's got a solution (even if there's no compelling problem to solve) and few people want to ruffle any feathers (because it's a small business and your former competitor might be your next employer in six months). There's really nothing wrong with serving information this way, unless, of course, you're looking for the truth.Trade shows
Trade shows work much like trade magazines. "Informational" seminars are vendor-driven, "solutions-providing" spokespeople are self-serving, and things only get worse once you get to the trade show floor, because the junior marketing people at the booths rarely have a clue about what their companies do. Things are so bad that the boosters of a certain online ad trade show have been reduced to making a desperate pitch, which goes something like this: "the real action at the Big Search Show isn't at the conferences (which usually just rerun the stuff that the vendors were saying last year), or on the trade show floor (where there is no meaningful information at all), but in the after-hours networking."
There is a certain preposterous genius to this approach ("let's see how many mid-level managers we can get to con their bosses into spending $6,000 for an all-expense paid trip to New York for three nights worth of after-hours networking") but it's basically a con, and everybody in the business knows it (or should know it). Don't look for trade show promoters to drop their "learn the future of this industry" pitch and switch it to "Pay $6,000 and drink for free!" anytime soon: it just doesn't have the same ring.Where to find the truth.
If you want to really know what's happening, you have to talk to the spenders. What the forecasters, gurus, and vendor spokesmen say doesn't matter: it's the spenders that write all of our paychecks, and what I'm hearing now from many of them isn't heartening. Several of my contacts report that online media spend for 2008 is being cut, not expanded. Others who haven't cut their budgets are watching the economy very carefully. There's genuine fear out there, and that isn't good news for anyone in online advertising. Even search, the most efficient and accountable online marketing medium, isn't immune from cuts.
I don't buy the proposition that search is recession-proof (although it might well be more "recession-resistant" than other online channels). What I know is that if orders dry up, things could get dire across all channels. For several big-spending industry verticals, including finance and travel, orders started drying up several months ago due to the sub-prime mortgage meltdown, a weak dollar, and stratospheric oil prices.
Orders are the underpinning for the whole online ad business that keeps us all employed. When they stop, the whole game ends, so we all might take a cue from Georgia Governor Sonny Perdue this holiday season, who recently asked his state's residents to pray for rain. Because if and when the orders dry up, almost everybody in this business is going to be up that proverbial creek