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SearchTHIS: Why Search is Slowing

SearchTHIS: Why Search is Slowing Kevin Ryan
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The big G has gone public and the ubiquitous excitement surrounding the latest thing to Google has died down. Search marketing might once again become just another thing people don’t seem to understand and it seems everything about search marketing that can be written, has been written.


This might be a slight departure from my usual search-aggrandizing opening but last week’s announcement of the latest Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers data along with the Interactive Advertising World conference buzz spawned a flurry of emails about what might happen with search. Most seemed optimistic but at least one senior agency executive wanted to let me know that search is officially over.


Is it? Some of the excitement is, perhaps. However, as with the initial enthusiasm surrounding online marketing, when the party was over, the ensuing hyper mediocrity meant it was time to get down to business and begin to get smart. Let’s look at the numbers and a couple of smart movers that might just keep search leading the way.


Data loves company


As the old saying goes, if you torture the numbers long enough, they will tell you exactly what you want to know. In this instance, the annual IAB report sings like a canary. Ad format spending as a percentage of total ad spending gives us a roadmap of what’s hot, but more importantly what’s not. In this example, I have combined the interstitial format of 2002 and 2003 with rich media as this year’s IAB report has done.



Keyword search not only emerged as a format in 2002 but also began to appear on advertisers' radar. By 2003 it was clear to anyone with a Web site and a dream that search had arrived. This year, growth slowed to merely astronomical, which had more than a few asking if this would be the beginning of a sobering search slumber.


Has search growth plateaued? Not according to Nate Elliot, associate analyst at Jupiter Research. “The growth is slowing, but it had no choice, you simply can't keep a two billion dollar industry growing by 100 percent every year,” Elliot says. The search format "will still grow by 34 percent this year, which is amazing expansion. TV and radio execs are ecstatic if they see 10 percent growth in any given year, so search is still doing just fine.”


Elliot predicts that display, search and classifieds will all grow by 25 or 30 percent over the next couple years, but that raises another question about growth in search spending. Clicking on search results have fueled spending so far, but where will new search growth come from?


Phone books, verticals and shopping engines, oh my!


Contextual search mapping has grown by leaps and bounds in the past year. Advertisers used to fear Jack Daniels' ads appearing on pages which contained editorials on Alcoholism. New mapping technologies are starting to make such train wrecks a thing of the past. Providers like Quigo are helping to pave the way with innovative strategies for delivering a relevant contextual platform. As relevance rises, so will spending.


Greg Sterling, analyst for the research firm, The Kelsey Group, host of the upcoming local Interactive Local Media (ILM) conference predicts the rates of directive search growth will level off in the coming years, but struggles for expansion will be most evident in non-traditional areas. “Local search has been a battleground for search engines, Internet yellow pages and city guides in the past year,” reports Sterling. “The biggest barrier to local adoption of search engines has been awareness and a truly useful tool for searchers; all that is about to change.”


Kelsey and BizRate will release their latest round of research in the coming weeks that shows significant growth in awareness of local search on search engines, which is more fuel for local search spending.  


In terms of shopping engines, Lisa Wehr, president of the search engine marketing firm Oneupweb believes verticals will be a key component to search’s future. “The largest portion of search growth may come from vertical site or business specific segments,” she says. “We have already seen limited growth in shopping engines, but we are likely to see those areas explode in the coming year.”


Shopping, business specific interests or contextual components will be key to the continued success of search, but most agree that we have seen the biggest jumps in activity or spending. History has taught us that innovation can come from the most inane and unpredictable sources. While the search format may not experience technological innovation per se, revenue growth might come from learning to use a tool that has been around for at least a hundred years: the telephone.


Goodbye, pay per click; Hello pay-per-call


Search clicking may have instigated big growth in online ad spending but advertisers may turn to the next big thing which was all-abuzz at last week’s Interactive Advertising World conference in New York, the pay-per-call format.


The performance-based pay-per-call works exactly how it sounds. For small business without a Web site, pay-per-call is a really neat way to enter online advertising, but it works well for big business too. Since many advertisers know that calls lead to sales at a much higher rate, the cost of entry for calls is likely to be much higher.


As a first mover in the pay-per-call space, Florida-based search provider FindWhat offers a unique perspective on how modern technology meets usability in adapting Alexander Graham Bell's "electrical speech machine." 


FindWhat not only gets points for being a leader in pay-per-call, but in my book, it should also receive commendation for keeping the Ft. Meyers headquarters up and running amid this year’s abominable hurricane season. Just as FindWhat isn’t dependent on the weather, Rick Szatkowski, FindWhat’s senior vice president points out pay-per-call isn’t reliant upon search.


“Success in pay-per-call is not dependent on the growth of the search market at all. Paid search marketing is but a fraction of the overall advertising spend in the United States,” Szatkowski says.


“Outside of search, consumers are 'calling' in response to direct marketing mediums all of the time. Bringing pay-per-call to market in the paid search space and leveraging it into the broader DM market provides a larger market than the online world has to offer for the foreseeable future. Consumers know how to use it, advertisers know how to convert phone leads, and have the ability to benefit from performance-based marketing across a broader base, reaching more potential customers,” Szatkowski says.


So there you have it, search marketers. It's time to smarten up and buckle down. We don't have to re-create the wheel (or the telephone), but the party is now officially over. In order to keep the search pie growing, we'll have to get creative. The good news is, everything we need is right around the corner.


iMedia columnist Kevin Ryan’s current and former client roster reads like a “who’s who” in big brands; Rolex Watch, USA, State Farm Insurance, Farmers Insurance, Minolta Corporation, Samsung Electronics America, Toyota Motor Sales, USA, Panasonic Services, and the Hilton Hotels brands, to name a few. Ryan believes in sound guidance, creative thought, accountable actions and collaborative execution as applied to search, or any form of marketing. His principled approach and staunch commitment to the industry have made him one of the most sought after personalities in online marketing. Ryan volunteers his time with the Interactive Advertising Bureau, Search Engine Marketing Professional Organization, and several regional non-profit organizations. Meet Ryan at the Kelsey’s ILM:4 Conference, November 3-5, 2004 and Ad:Tech, NY November 8-10.

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The big change in Microsoft Outlook is that the rendering engine for HTML emails moves from Microsoft Internet Explorer to Microsoft Word. As a result, it will also not support the following design elements that have been regularly utilized in email marketing designs in the past:



  • Flash and animated GIFs

  • Javascript and forms

  • Background images

  • Various CSS (cascading style sheets) properties

(A full list of what is supported is located here.)


Craig Spiezle, Microsoft's point man for coordinating the company's internet safety efforts including anti-spam and anti-phishing technologies, says Outlook 2007 improves formatting issues that occurred due to the previous use of two separate rendering engines: Internet Explorer for reading content and Microsoft Word for editing. The newest version eliminates that by using Word's new HTML rendering engine for both reading and editing. He also says the new Outlook "responds to the desires of consumers and provides them with added safety in the inbox."


While Microsoft's positioning of this as a major improvement for consumers and email marketers alike should surprise no one, some email marketing practitioners have very different views from Spiezle on what this does to the email marketing industry.


Stephanie Miller of email deliverability services company Return Path says, "Whatever the benefits offered by the Microsoft product team to subscribers, the changes to Outlook 2007 are not good news for email marketers. The decreased functionality for HTML due to the use of the crippled Microsoft Word rendering engine will cause messages that rendered just fine before to de-format or not display at all in Outlook 2007."


Chad White, who runs RetailEmail.Blogspot, a comprehensive blog that tracks email campaigns in the retail industry, and the retail advisor to the Email Experience Council, is bearish on the new Outlook changes as well, but reminds us that it is the B2C community that can collectively hold their breath... for now.


He says, "Outlook 2007 is certainly bad news for email marketing, particularly B2B marketers, since Outlook has a much higher penetration among businesses. B2C email marketers can bide their time because of the low usage of Outlook among consumers and the time it will take for adoption to ramp up."


Mark Brownlow, who publishes the authoritative and independent website EmailMarketingReports.com (and companion blog, an industry must read), sees the problems presented more as irritating issues than as full-blown disaster. He points out that many of the design elements affected were never being used consistently or supported by other email clients (think Flash).


Luc Vezina of email service provider GOT Corporation takes the glass-half-full approach as well and hopes that these Outlook changes may encourage designers to stick to simple HTML and, as a result, increase compatibility with a greater number of mail clients including those on handheld devices and cell phones. Either way, he says, email designers will have time to adapt as mass adoption of Outlook 2007 will not happen overnight.


Next: Outlook 2007 predictions

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Our group of email all stars had some interesting viewpoints when asked for predictions on how Microsoft Outlook 2007 would affect the email universe.


Miller of Return Path predicted that the overall impact may be small but you run the risk of presenting some key customers with a bad user experience. Her comments:


"Microsoft Outlook enjoys about 75 percent to 80 percent share of the corporate email market, and a significant number of consumers use Outlook to view their Hotmail or other personal accounts as well. If the adoption rate mimics past behavior of about 5 percent to 10 percent over the first year, then the immediate impact in 2007 may be minimal in terms of numbers."


She continued: "However, depending on your business, these early adopters may be some of your most important subscribers. If that is the case, then ignoring the new Outlook 2007 rules and continuing to design with CSS and other advanced HTML may be risky. Even though your messages will render just fine in the majority of subscribe inboxes, you may leave your best customers with a terrible experience or unable to see your emails at all."


Brownlow of Email Marketing Reports argues that in a sense, the debate about Outlook 2007 will benefit the industry by forcing marketers to confront rendering issues. His take on the debate:


"The whole issue of how emails display in different end-user environments was bubbling beneath the surface in recent months. But it has taken the Outlook debate to bring it right out in the open. Because it's Microsoft, because it's Outlook, people are talking about it."


Brownlow adds: "So it's a wake-up call that has gotten marketers to focus more on rendering issues and related problems, particularly image blocking, which is far more important an issue than Outlook 2007. So it may sound a little contradictory, but I think the rendering problems with Outlook 2007 will actually lead to better results for email marketers because it will trigger more thought on how to ensure you get your message across despite any anomalies in the display environment at the recipient's end of things."


Vezina of GOT predicts that this change should not be as drastic as others that have affected deliverability. He states: "This is a relatively small change compared with things we've seen in the past years, for example image blocking."


Next: Tactical tips, suggestions and best practices to consider

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Our experts provided these tips and suggestions, lumped into three categories: education and understanding; testing; and adjustments or new best practices:


Education & Understanding



  • Read the MS documentation on Outlook 2007 so you and your designers understand the limitations and can account for these if you want to design Outlook 2007-friendly emails (Email Marketing Report's Brownlow)

  • Outlook 2007 has been available as a no-charge beta for months, enabling many marketers to test and optimize their email in advance of the recent launch. (Microsoft's Spiezle)

Test, test and re-test



  • Test, test and re-test campaigns to optimize deliverability. Tools and deliverability resources are available for mailers at www.microsoft.com/postmaster as well as from http://postmaster.live.com/ (Spiezle)

  • Review your subscriber list to get a feel for the webmail services and likely clients being used by them. Test these services and clients against your design and adjust accordingly. (Brownlow)

  • Ensure your email service provider has tested any plug-n-play templates that the company offers (GOT's Vezina)

  • Test the rendering of your campaigns in all email clients PRIOR to mailing. Use a tool provided by your email service provider, agency or deliverability partner, or just set up test accounts and check manually. (Return Path's Miller)

Adjustments & New Best Practices



  • If you're a beginner or intermediate at web design, simply avoid: CSS (cascading style sheets), background images, animated GIFs and
    tags. (Vezina)

  • Add a link to the web version of your email, so if things look grim there's an alternative for your recipients to view. (Brownlow)

  • Realize that Outlook 2007 is one of many display environments that can wreak havoc with inappropriately designed email. Designing email just for Outlook 2007 is like designing a road for bicycles only. (Brownlow)

  • In Q2, start to roll back to simple HTML and try to inform your design as much as possible with real subscriber input. (Miller)

  • Offer a quick poll asking when your subscribers intend to upgrade (if at all). Talk to your subscribers through online surveys and/or focus groups. Are some of the advanced features you feel you can't live without really that important to them? Will simple links do just as well as interactive elements or search fields? (Miller)

  • Sadly, there is no "sniffer" that will tell your MIME formatted messages that the client is Outlook 2007. However, you can add mouse type to your header instructions to easily view the message as a web page or to change preferences to text only. This will at least address any rendering difficulties until Outlook 2007 has a broader share of market. (Miller)

  • Track subscriber behavior, particularly for B2B subscribers. Are formerly active subscribers suddenly going non-responsive? Maybe they can't see your email! Are there certain receivers/ISPs where you see a drop off in open and click rates? Perhaps the Outlook 2007 adoption is higher to this segment. This data may give you a clue as to adoption of your own file. Invite those subscribers to re-subscribe to the text version. (Miller)

  • Give more attention to the words you use. The tougher the limitations on design, the bigger the role your text plays in driving action. A picture is worth approximately zero words if it isn't displayed properly. Don't let clever design get in the way of the message. (Brownlow)

  • Hope for the best: Using Word as Outlook's rendering engine appears to be some sort of horrible mistake. We can only hope that Microsoft, which is already reportedly at work on Service Pack 1, puts Internet Explorer back in charge of rendering soon so email marketers can avoid some HTML overhauls down the line. (EEC's White)

This will continue to be a hot topic among the online marketing and design community. Considering many email marketers struggle to implement any changes to their campaigns due to intense production schedules and lack of resources, it will be interesting to see if Outlook 2007 receives the sense of urgency that it deserves given the impact it can have on a customer relationship, especially in the B2B world.


We will revisit this topic later this year to see how these predictions fared, what changed and if Outlook 2007 really was a boon to consumers and headache to email marketers. Feel free to share your experiences and thoughts.


G. Simms Jenkins is founder and principal of BrightWave Marketing, an Atlanta-based email marketing and customer relationship services firm. Read full bio.

Kevin Ryan founded the strategic consulting firm Motivity Marketing in April 2007. Ryan is known throughout the world as an interactive marketing thought leader, particularly in the search marketing arena. Today's Motivity is a group of...

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