It’s hard to imagine a busier week in advertising. Advertising Week events in New York are offering the best and brightest in the business a look inside the latest and greatest. In London, ad:tech is making its debut, and out in sunny Coronado Bay, California, the iMedia brand summit is in high gear.
Wherever you are this week, among the key topics of discussion are integration, integration and, in case you weren’t listening to the first two panel discussions and keynotes, integrating online, offline and specialized interactive initiatives that fall into the “other” category are top of mind for everyone.
Among the big news makers this week was the release of MSN’s new paid search interaction which, if it lives up to the hype will spell big changes in search marketing as we know it today. Coinciding with the MSN launch, the IAB released its latest round of ad spending data. Add this up and it’s an exciting time to be in search marketing.
Search is flat
Not that it should come as a surprise to anyone in the advertising industry, but the IAB/Pricewaterhouse Coopers report that was released at the IAB MIXX conference this week indicates that search’s overall share of online advertising revenue has remained flat for the first time in three years.
While total search revenues have increased alongside other advertising formats, 40 percent of spending was the best that search could muster. Overall spending increased 27 percent from the first half of 2004 to the first half of 2005 in the search category but the all encompassing rich media category kept pace at a 26 percent increase. The remaining ad formats saw marginal increases or maintained existing revenue share as well.
What does all this mean for marketers? Though search is still a growth category the heady days of search love for everyone are over. Get ready for stiff competition in advertising providers and third parties such as search engine marketing firms. The inevitable shake-out of search marketing firms is upon us. As growth percentages slow, there will be less advertising dollars to feed the search marketing masses.
Fluid search options
MSN’s AdCenter, which first saw action in Singapore, opened for business in France this week. MSN has promised that stateside marketers will have access to the next evolution of search marketing early this fall. This great big pile of targeted search fun has been hyped about since marketers got a sneak peak at the interface last March.
The new and improved approach to auction-based sponsored listings allows advertisers to target by gender and age, among other factors. The system uses a combination of third party profiling information along with registration data that provides a clearer picture into the mind of the searcher. AdCenter will also allow dayparting and geographic targeting options, but most smart marketers are already targeting in this manner via bid management tools.
Currently, the only options for reaching MSN searchers in the paid realm are buying sponsored listings via Yahoo! search syndication or stiff flat rate purchases from MSN directly. Perhaps these targeting options are only the beginning since it has been widely reported that Microsoft is considering a purchase/ merger with the likes of AOL and Claria. Behavioral targeting combined with the vast expanse of AOL subscriber data would seem to be good bedfellows for search.
Who cares about demographics anyway?
Well, I just searched for it didn’t I? I mean, the odds that I am a mom are pretty high if I just entered the term “Huggies” into the search box, right? What possible reason might you have for reaching into the great expanse of user profiles if I have already told you what I wanted?
There are plenty of really good reasons as a matter fact. For instance, it would be helpful to know that I am actually a new mom that lives in a very exclusive gated community. I can then change my messaging to address the specific needs of these moms, based on what I already know about them. I can also make the search experience much more pleasant for the Lexus driving soccer mom because I know exactly which type of diapers she needs.
Landing pages and messaging are just the beginning in the new targeting model. MSN search’s market share is still relatively small, according to August, 2005 data from Hitwise, MSN represents 15 percent of total search activity while Yahoo! and Google hold 18 percent and 40 percent respectively. However, with MSN’s 9 million plus subscribers, the targeting potential for search activity would seem to be endless.
Change is good?
Redefining search targeting beyond the query is also significant in that it represents a foundational change in the search listing dynamic. If an advertiser can pay a premium to reach its target audience, surfers that fall outside of a marketer’s existing profile will be excluded from seeing certain listings.
Data may suggest otherwise, but this may exclude some potential buyers unjustly. For example, just because the profile says I can’t afford a Rolex, that doesn’t mean I am not in the market to buy one. Also, search listings are perceived as an information resource and the shift to “highly targeted” listings may represent a more clearly defined and possibly unwanted form of advertising for consumers. Only testing will tell.
Most rules-based search engine marketing or bid management tools will have to change to suit the needs of targeting audiences with keywords and phrases. Firms that have invested millions in establishing communication vehicles that interact with paid search provider programs to help optimize paid search campaigns will have to transform how they do business. In short, all the rules are about to change. Are you ready?
iMedia Search Editor 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.
Mr. Ryan is chief strategy officer at Zunch Communications.