• by Erik Sass , Staff Writer, December 9, 2010

 It's a sign of the times that some of first panels and presentations at MediaPost's Search Insider Summit in Park City, UT were about social media. Social media and search marketing are converging, one way or another, and understandably everyone (including me) wants to know how they can make each other more effective and efficient. But in the end it's all about the bottom line -- so I'm also curious whether combining social media and search can really help boost total revenues for search marketing.

The background of this discussion is the slowing growth rate for search marketing revenues. There's no question search is still big business, and will remain so: in the first half of 2010 search marketing revenue came to $5.7 billion, according to the Interactive Advertising Bureau, or just under half total online ad revenues of $12.1 billion. But there's also no question that search, like every other business, is subject to the law of large numbers, with the year-over-year growth rate slowing from 188 % in 2002-2003 to 11% in 2009. The incremental dollar additions are also declining: after adding $2 billion in 2007, search marketing revenue added $1.7 billion in 2008, $1.2 billion in 2009, and $600 million in the first half of 2010.

All this points to search marketing approaching maturity -- the inevitable fate of all industries, unless they can find a way to innovate and break through into a new phase of growth. At first glance, the convergence with social media seems like it might hold out hope for new opportunities for expansion. But a presentation at the Search Summit this morning by John Yi, strategy manager for APIs at Facebook, gave me pause on this issue.

Yi was careful to distinguish search and social platforms: "Facebook ads are not search engine marketing." He explained that search is useful for marketing at the lower end of the sales funnel, "including demand fulfillment," versus Facebook, which is stronger at the top of the sales funnel, including "discovery and demand generation." While distinguishing between the two disciplines, Yi added that they are complementary -- the big idea behind this trend.

But complementary and mutually reinforcing don't necessarily mean synergistic in the sense of leading to more growth. Because while search and social may function together, the new relationship between search and social content (it seems to me) is very similar to the earlier relationship between search and the broader, non-social Web. In the old system, the broader parts of the sales funnel, including discovery, demand generation, and so on, might occur in the context of surfing the Web or consuming non-online media. In the new social search model, social ecosystems are simply substituting for the broader Web.

This is all well and good -- but is there any reason to think that there is anything in the nature of social ecosystems that will lead to more or greater demand generation, which might in turn translate into more searches and more search revenue? From one point of view, switching out the Web and replacing it with social ecosystems might just transfer the arena for discovery and demand generation -- not make it bigger. However I'm curious to hear other perspectives on this: is there a way that social media can help search break through to more growth?