Search Execs: Big Brands Muscling Out Small Players

The increasing popularity of search engine marketing for branding purposes has brought well-monied advertisers into the game, while crowding out smaller advertisers, panelists said Thursday at an SG Cowen and Co. Internet conference.

Describing the expenditures as "irrational," Panelist Bill Wise, CEO of Did-It.com, said that branding-focused advertisers are willing to spend whatever it takes to get their keywords listed. "Big companies will spend a lot of money to get that market share," he said.

In part, the expenditures are based on simply wanting their keywords to show at the top, said Panelist Michael Yavonditte, CEO of Quigo. "There's a vanity aspect of this from a marketing standpoint, and that's surprising," he said.

Panelist Gregg Stewart, senior vice president for channel management and marketing at Fathom Online, said that this phenomenon will drive smaller advertisers into the less-contested space of local keywords. "As the brand marketers get in and the smaller marketers can't compete, we're going to see local keywords as a way to hedge." Because of this, Stewart said, it's possible there may be some upward movement in local keyword prices.

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Some analysts concur that brand advertisers are increasingly interested in search marketing. A report from Piper Jaffray, released earlier this week, says it's apparent that advertisers are starting to look at search as more than just a traffic acquisition tool. "There are clear indications that search is now being used for branding impact as well as its core customer acquisition ability," the report said. "Participants indicated that nearly 10 percent of search spending is now driven by the branding impact of search listings."

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