What Can Search Tell Us About the Future of Marketing?

Sure, search marketing is "hot," but does it also provide clues about the future of marketing? The dramatic success of search for the consumer, marketer, and publisher demands closer examination. Is search simply a useful Yellow Page system, or are there evolutionary marketing trends going on here?

Intrusive advertising gives way to "advertising utility:" Consumers have become more resistant to advertising due to its overwhelming ubiquity in everyday life, and the fact that they are far more informed. A recent Yankelovich Partners study1 found that 65 percent of consumers now feel "constantly bombarded" by advertising. To make matters worse, 59 percent feel that ads have very little relevance to them. Nearly 70 percent even indicated they would be interested in products or services that would help them avoid marketing pitches. Yet according to a Pew Internet & American Life Project (PIP) and comScore Networks "data memo" released last week, Internet users are largely satisfied with the returns from their frequent searches and 87 percent of search engine users find the information they're seeking "most of the time". Search marketing works for consumers because it is not merely messaging, but is also providing a useful service.



Negotiation gives way to market-based pricing: Negotiation for advertising positions has long been the established method for determining the value of media. Even in the early days of search, "keyword banners" that ran above relevant search results were originally sold this way. However, the supply-and demand pricing of pay-per-click (PPC) search today eliminates negotiation from the process and lets the marketplace set the pricing.

Data management and analytics becomes critical: Marketers have long attempted to gather data to understand consumers and to target more effectively. With search, the amount of data that can be gathered constantly about the audience and their interaction with marketing efforts is generating new customer insights and the ability to continually optimize to the right type of customer. The downside of the data influx is the data management and analysis challenge this creates.

Specialists required: Fragmentation is accelerating the segmentation of marketing expertise, and is making it nearly impossible for marketers to keep up with the expanding opportunities (much less be able to execute effectively). This trend is occurring throughout the media world, but in the search space the speed with which fragmentation is occurring is possibly a harbinger of the pace at which marketers can expect change in the future.

Accountability is here to stay: Search is proof that marketing can be accountable, and the dramatic growth of search shows that accountability is paramount today. Marketers are under incredible pressure to prove the value of marketing efforts, so it is unlikely the good old days of advertising will return any time soon. A recent article in Advertising Age showed the kind of pressure marketers are under to produce results - the average tenure of a CMO among top marketers is 24 months (the average tenure of a CEO for comparison is 50 months)4.

The advent of continuous market research and campaign refinement: Search can be used by marketers to glean daily market research - this is done by analyzing how customers are searching and finding their products and services. Marketers can consistently fine tune their messaging once they have uncovered how customers "categorize" their offering.

Competition gives way to "co-opetition": The search world of today is built upon "co-opetition" - partnering and competing at the same time. For instance, Yahoo! provides search results to the MSN audience, and the two search engines share the ad revenue produced; Google and AOL have a similar relationship. At the same time, they all are competing for traffic. The engines need each other to maximize revenue potential, but they are also direct competitors. A similar trend is occurring among advertisers, as they are finding it necessary to partner with specialists to produce solid returns from a more complicated and fragmented marketplace.

Advertising gives way to...well... advertising: At a recent IAB search roadshow event, an attendee (from a traditional advertising background) grappling with the methods SEMs are using to manage search proclaimed "what you are doing is not advertising!" The formula for what advertising "is" has been well defined and ingrained in those of us that grew up in traditional agencies. Unfortunately, "advertising" as we know it is losing its effectiveness, and if search is an indication, advertising is evolving more quickly than marketers can internalize and capitalize on. The methods SEMs are using to grow sales and acquire new leads for clients - and spread awareness of new offerings - is clearly effective advertising in a world where "advertising" as we know it is losing it's punch.

It is easy to say that search marketing occupies a unique role in the media world today. Yet wouldn't marketers, publishers and consumers welcome these changes in other media if it can lead to greater consumer relevance and greater advertising returns?

1. From the Economist, June 24th 2004 2. US Bancorp Piper Jaffray, Myers Report, March 2003 3. AdAge May 3, 2004

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