Let's project into the future: the year is 2011. Search marketing spending has dipped to single-digit growth rates for the first time, growing at 9.3 percent, following the 11.8 percent growth in 2010--just as eMarketer predicted.
It's hardly a withering market; paid search ad spending has consistently comprised 40 percent of the online advertising market for nearly 10 years now. Yet we are well into a new phase of our industry, as search engine marketing has become something else entirely.
In the past five years, search engine marketing took two evolutionary steps. One is that the engine was dropped from the name; "search marketing" is the new standard. While the lion's share of paid search spending continues to be on search engines, their market share of paid search is gradually slipping.
The more significant change is that marketers have recognized that insights gleaned from search engine marketing campaigns and consumer search behavior drive creative and media planning decisions, both with interactive and traditional media. This is called Search-Informed Marketing (SIM) (a disclaimer: my employer coined this term back in 2006; Wikipedia added the term in July 2008). SIM spending levels are estimated to come in at anywhere from $29 billion (JupiterKagan) to $72.3 billion (Borrell Associates) for 2011. While search marketing was influencing campaigns in other media and channels for years, it was only toward the end of last decade when the phenomenon became so pronounced that traditional advertisers embraced it.
Even back in 2006, there were signals that SIM needed to be evaluated separately from search marketing. One of the clearest signs involved contextual advertising. Contextual text ads were conceptually much more akin to display ads (as both are ads targeted to the publisher's site, rather than the user's expressed interest), yet the major search engines made it so easy to run search and contextual campaigns together with the same creative that they were often lumped together in everything from return on investment analysis to measurement of click fraud.
Analysts, in fact, seldom distinguished contextual from search. The Interactive Advertising Bureau and PricewaterhouseCoopers included contextual advertising as a subcategory of search spending, though they defined contextual, in their IAB Internet Advertising Report series, as when "text links appear in an article based on the context of the content, instead of a user-submitted keyword." eMarketer similarly grouped contextual advertising in its estimates. (Both PwC/IAB and eMarketer changed their definitions in 2009, grouping contextual with display advertising instead.)
Other types of advertising further blurred the line between what was search and what wasn't. Even now, years after observers first called attention to the issue, research firms still have problems with definitions. Just how do you define search marketing spending?
Here are some guidelines:
After reviewing these guidelines, I don't envy the analysts trying to quantify the market. Far more exciting is how influential search marketing has become.
There was a slide in Google's Analyst Day presentation from 2006, where Google showed the $11 billion spent on Internet advertising as a small sliver of the nearly $300 billion spent across all media. We still need to keep educating advertisers and agencies so that the entire spectrum (now estimated at $343 billion) is Search-Informed Marketing. Perhaps by 2016 or 2021 we'll have made it.