Friday, May 8, 2009
Search Reshaping The Advertising Business
By Max Kalehoff
Search advertising comprises roughly half of online advertising, and Google is the world's most profitable and revolutionary media company. Sure, we all know that.
But what's not blatantly acknowledged is how search-engine marketing DNA is expanding to new channels, heavily influencing the evolution of the entire media landscape.
And that is the theme of an anticipated panel at Search Insider Summit (occurring the day this column publishes). I'm excited to participate in this discussion with: Matthew Greitzer, vice president of search marketing, Razorfish; Rob Griffin, senior vice president, U.S. director of search & analytics, Media Contacts US; and Gary Milner, global marketing director, Lenovo.
In preparation, I summarized some of the big areas where I see search advertising DNA leaving a broad footprint in the media and advertising business. Here they are:
1. In this down economy, search is leading marketing's overall flight to performance. This was boldly noted in Zenith Optimedia's latest advertising forecast. The firm said Internet advertising, which will account for a 12% share of ad spend in 2009, will be the only medium to see growth this year. That's because of Internet advertising's (mainly search's) accountability and innovation in formats.
2. The prominence of search in a down economy advances the philosophy of goal-based advertising. The idea of defining very specific advertising outcomes and successes, with assigned economic values, and proper conversion tracking, is gaining steam. While search advertising offers perhaps the most complete economic visibility of any advertising investment, it is heightening expectations elsewhere.
3. Search is driving expectations of continuous optimization to maximize profitability. It's helping to shift marketing models and media investments from set-launch-and-forget to ongoing cycles of sense-and-respond.
4. Search is driving more sophisticated, dynamic models to understand the contribution and interplay of multiple media channels and investments. Many call this attribution. Search DNA brings more sophisticated analytics that raise the bar.
5. Search is influencing demand for more efficient and transparent marketplaces of media inventory. The notions of "premium inventory" and "scarcity" are dying, while dynamic and auctions are thriving. Search advertising supports the thesis of self-serve advertising platforms, and applies scrutiny to the value of middlemen -- in every medial channel.
6. Search has been extremely successful in creating advertising that first serves the needs of users, while avoiding disruption and annoyance. Publishers and advertisers that deliver advertising which are highly valued and desired by users will become far more competitive.
7. Major traditional media businesses recognize that search advertising is a new revenue opportunity to augment their receding business lines. If you're a newspaper, broadcaster or online publisher, why not resell search advertising? The infrastructure is in place today, and many traditional media companies are experiencing success, especially serving local, small and midsize advertisers.
8. From an R&D perspective, search is heavily influencing the foundation of tomorrow's advertising technology platforms. You can see it among several of the most promising start-ups, as well as within the ivory tower of Google. At our own startup, Clickable, search is our foundation but not our destination.
How do you see search DNA impacting the broader marketing and media landscape?
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Max Kalehoff is vice president of marketing for Clickable, a search-marketing solution for small and mid-size businesses. He also writes AttentionMax.com
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