Search is so tremendous, the only thing it can do now is get smaller.
By smaller, I’m not talking about spending on paid search. Jupiter Research (a Jupitermedia Corp. division) expects advertisers will spend $2.6 billion on search by the end of this year, rising to $5.5 billion in 2009.
That’s not small.
Nor is our four-day, four-track, all-search-all-the-time Search Engine Strategies (SES) conference, which is growing as rapidly as the search engine marketing (SEM) industry is. I’m just back from the flagship San Jose SES. With 4,000-plus attendees, the event has burgeoned from hotel-size to convention-center dimensions.
By “smaller,” I mean I see search fragmenting into specialized niches. Hypersearch growth is channeling into increasingly more specialty and niche search players and opportunities. Just as three TV networks can’t satisfy advertiser demand for inventory, or their need to reach very targeted niche audiences, a small number of generalized search engines can’t be all things to all advertisers, marketers, or users.
Like TV, which became smaller to become bigger (local, cable, satellite), search is fragmenting.
The major players’ primary focus on “smaller” is local search, an area in which they’re coming up against a relatively new competitive set — online Yellow Pages. In addition to new local offerings from Google and Overture, Yahoo and Ask Jeeves both introduced new local search offerings last week at SES. New players such as StepUp.com are popping into the fray, either as future competitors or acquisition targets.
The rush is not only to build the technology and tools but also to determine what the nature of “local” is. We all know the part about how a searcher prefers finding a pizza he can order now over learning a California Pizza Kitchen franchise will soon open in Rancho Cucamonga (I’m not making this up — it’s in the top Google results for “pizza”). But on the paid search side of the equation, can a Web-based e-tailer hoping to target local markets (Netflix, for example) pit its ads and listings against those from the neighborhood brick-and-mortar store, like Blockbuster?
Google’s Sukhinder Singh, manager of local search, says yes. Her counterpart at Overture, Geoff Stevens, says no. And at an online Yellow Pages panel I moderated, AOL, Verizon, Yahoo Yellow Pages, and InfoSpace executives had diverse and equally contradictory answers to the same question.
It’s interesting to consider what effect phone number portability may eventually have on local search, as area codes gradually lose geotargeted meaning.
Advertisers who elect to go outside “broadcast” search media will have to carefully consider many media choices to select the right version of small. After all, local isn’t alone in playing a big role in smaller search. Business-to-business (B2B) search is gigantic, as well as gigantically misunderstood. I shared a sandwich with Martin Laetsch, who manages worldwide search at Intel. Think your campaigns are complex? Martin is juggling 40 campaigns in eight languages over don’t-even-ask how many marketing divisions (all of which want “Pentium” as a keyword, as do the company’s global network of resellers and affiliates). His search budget? In the neighborhood of $30,000 per day. “And people here think they have a big search budget if they’re spending $30,000 per month,” he shrugged.
Solution? For starters, go smaller. Laetsch is spearheading a taskforce formation with his counterparts at IBM, Xerox, and Hewlett Packard. Together, they’ll grapple with the issues surrounding enterprise search on the multinational, multimillion-dollar buy level.
Not every business is that big, but the snail-like pace of B2B SEM adoption is getting awfully perplexing. Are B2B players not getting the message? Are the B2B niche players, such as Business.com, ThomasB2B.com, and KnowledgeStorm, not properly communicating the value proposition? Or must they first wait for Google’s and Overture’s vertical sales staffs to make the initial inroads into business verticals?
Sure, B2B conversion takes longer and is plenty more complex than business-to-consumer (B2C). But companies such as Dow Chemical report CTRs of up to 7 percent on wildly more targeted and dramatically cheaper keywords than most B2C advertisers could hope for — and the latter are happy to get 2 percent CTR. Meanwhile, B2B companies are looking at five- and six-figure sales. Why aren’t these guys all over search? I predict they soon will be, and the result will be search media’s further segmentation.
Search data is being parsed and crunched into tiny tidbits that reveal big things about the competition. Vintage Tub & Bath’s Allan Dick had an audience on the edge of their seats as he demonstrated how he uses search and search data to profile his competitors (down to who their suppliers are), lower SEM costs, and refine his site and product offerings.
Smaller search is a trend happening not only online but among search professionals, too. The tight-knit community of search marketers is growing. In many ways, it’s growing apart. Recent SEMPO-related scuffles are only one example. The old gang may be in for a bit of Balkanizing, but this is probably healthy, a certain indicator of a maturing industry.
In closing, I’d be remiss not to add a footnote to an observation made last spring, at SES in New York. Search is fascinating in large part because many of the players have backgrounds that are eclectic, to say the least. I wrote that before learning about Lisa Wehr’s former life. Oneupweb’s president was an Iditarod racer raising huskies in Alaska. “Until I got pregnant and learned Web design,” she told me.
Search may be getting smaller — but it’s no less interesting.
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