Over the last few years, researchers at Forrester, Jupiter, MarketingSherpa and Outsell found that market conditions were ripe for a new class of specialized or vertical search engines (VSEs). Three years later, VSEs are de rigueur.
Vertical search engines became necessary in short order because of the dissatisfaction with general search. Outsell's study, "Vertical Search Delivers What Big Search Engines Miss," reports that the average search failure rate on general search engines is 31.9 percent. This opens the field to vertical search, which is projected to earn advertising revenues of $1 billion by 2009.
General search challenge
Multiple researchers confirmed that typical business search users find it difficult and time-consuming to access relevant results in general search engines (Forrester, Jupiter, MarketingSherpa, Outsell, Convera). While Google search is powerful, many business and professional internet users find that it often fails to provide fast, relevant results.
The shortcomings of general search have resulted in lower productivity, failure to find critical content and unmet informational needs. In the meantime, the weaknesses of general search engines created a gap that is being filled by vertical search engines.
Vertical search advantage
Vertical search engines have an advantage over general search providers because they can excel in their industry or topical niche by serving highly relevant results.
GlobalSpec is a classic example of a fine-tuned vertical organized to serve the engineering, manufacturing and related scientific and technical market segments. TopTenWholesale.com is a trade vertical organized to give users access to general merchandising wholesale and retail information. Other verticals like Technorati for bloggers and Podzinger for podcasters are indispensable among today's savvy internet users.
Users are driven to verticals because they know they can find highly specialized information quickly. Advertisers are driven to verticals because the inventory is less crowded and they can negotiate better rates, possibly get better conversions and receive a better return-on-investment (ROI) for their marketing campaigns.
Niche specialization
A team of highly specialized professionals typically runs vertical search engines. These people are experts on the topics within their niche. General search engines do not focus on niche markets or the type of marketing tactics and interactivity needed for these unique business segments. Verticals offer pay-per-click advertising, banner ads and promotional marketing services. Because they are smaller players, they must get their competitive edge through fast customer service, efficient software solutions and administrative features that meet specific industry demand.
Small business vehicle
Vertical search engines provide a new, cost-effective way for smaller businesses to compete in pay-per-click (PPC) advertising. General search engines like Google and Yahoo! have mainstream advertisers like Amazon, Overstock and Target. These large retailers spend millions of dollars each week on search advertising, buying every possible term related to their strategic keywords. That prevents smaller businesses from competing for these key terms.
For instance, if you conduct a search on Google for the term "wholesale toys," you'll see that companies like AOL and the Discovery Channel have purchased this term despite the fact that they are not wholesalers. AOL and the Discovery Channel are retail portals selling to consumers. But they'll buy every term that people use to buy toys because it brings traffic and they can afford it.
This creates a problem for smaller advertisers. When companies like AOL and Amazon start bidding on search terms without regulation, the bid price and ability for real businesses to compete get distorted, making it impossible for small businesses to buy these terms. While many small businesses might actually be the most relevant source for a term like "wholesale toys," they can never compete with those 50-million-dollar-a-year search budgets.
That's why vertical search engines are gaining a toehold in the search game and are becoming known as category killers. A vertical in a small niche can become the information super highway on a specialized topic. Many VSEs have forums, blogs, fresh content and huge networks set up around a niche topic, providing many attractive promotional opportunities for advertisers.
Cost effective
The cost to compete on a VSE is much lower than on general search engines, and marketers can expect much higher clickthroughs and conversions on their search ads, as well as a higher ROI on their marketing campaigns. VSEs are attracting savvy professionals and business users searching for niche topics and are providing them with a good user experience.
Next: Ad benefits of vertical search engines
