Author Archive - Peter Hershber
SearchForce or SpamForce?
|
Written By Peter Hershberg | September 26, 2007 | Share This
|
|
I generally wouldn’t give something like this a second of my time, but it’s already been a long week (even though it’s only mid-day Wednesday) and I might as well take my frustration out on SearchForce, the fine folks who sent me the email below:
Now, there are a number of things about this message that I have a problem with, including the feature in the left-hand column that lists three reasons why SearchForce is “different” from other search firms”. None of their claims are actually true (far from it), but we’re used to competing against companies who mislead prospects about their history, capabilities, etc, so I can live with this.
What I’m not willing to overlook is the fact that this email was completely unsolicited – I’ve never signed up for anything through SearchForce and there’s no reason why they should be contacting me. Not only that, but I received three copies of the same message, which means they not only sent it to my personal email address, but a couple of “aliases” that I’m included on as well. I’m pretty certain that the “press” alias at my company, for instance, never registered for anything with SearchForce.
Now, I should be able to definitively say which email addresses SearchForce contacted me at, but the fact that there are no listed recipients in the “To” field makes that an impossibility. As a result, I’m not sure what I need to do to unsubscribe from their mailing list. Yes, I could follow their instructions and put “REMOVE” in the subject line, but that would only take one of the three email addresses they have on file off their mailing list, leaving two others to continuously be spammed by SearchForce.
But what’s most confusing about SearchForce’s ambitious sales effort is the disclaimer at the bottom of the message:
“Disclaimer: This message contains confidential information and is intended only for the individual named. If you are not the named addressee you should not disseminate, distribute or copy this e-mail.”
Named individual? I wish there was one – or three, for that matter. Hey, SearchForce, feel free to let me know who those named individuals are and then unsubscribe them all from your mailing list.
The BusinessWeek Debate
|
Written By Peter Hershberg | September 17, 2007 | Share This
|
|
Douglas McIntyre of 24/7 Wall St. and Silicon Alley Insider’s Peter Kafka have been debating the reasons why BusinessWeek has not been able to replicate its offline success in the online world (according to comScore, BusinessWeek.com trails other finance sites, including Forbes, TheStreet, Morningstar, Bloomberg, CNBC, and Reuters, in monthly page views). For those who haven’t been keeping score at home, McIntyre started things off by suggesting that BusinessWeek’s problems stem from a lack of regularly updated content, BW’s failure to use video on its homepage effectively, and overall site usability problems. Kafka, a former Forbes.com employee, thinks that BW’s page views have been decreasing simply because the site doesn’t have significant distribution.
So, who’s right? Well, actually, they both are. Here’s why:
McIntyre points out that BusinessWeek undoubtedly has the staff to develop unique, fresh content on a daily basis, yet many of its top stories are outdated and its most recent headlines have simply been syndicated from the AP. Needless to say, users are not going to return to a site that doesn’t feature original content with any degree of frequency – particularly in a category like finance, in which news is constantly breaking. A lack of unique content also gives bloggers and webmasters little incentive to link to BW’s pages. This leads to a loss of direct traffic, but more important, it impacts the site’s search engine rankings. Without a significant number of third-party links from authoritative sources, a site cannot count on receiving a meaningful volume of traffic from major search engines. It should be noted that this is where site usability becomes a factor as well: AP articles can be found on so many different websites that webmasters often decide which site they’re going to link to based on the user experience it provides. If BusinessWeek’s usability is poor, it cannot count on being linked.
At the same time, some of BusinessWeek’s strongest competitors are affiliated with other well-trafficked sites. In addition to offering tons of unique content, these competitors are often integrated really well into their parent or partner sites. CNNSI, for instance, drives a huge amount of traffic to CNN.com. And CNN.com drives tons of traffic to Fortune. All of the sites in Time Warner’s portfolio benefit from being part of the family. There’s no doubt that many other finance sites that belong to larger parent companies are benefiting in a similar way. BusinessWeek’s parent McGraw-Hill owns almost no online properties – and none of the ones it does own are very popular. This is where Kafka’s lack of distribution theory really makes sense. Yes, BusinessWeek can strike distribution deals with the major portals, but there is a real advantage to being integrated into a broader network of sites.
It’s worth noting that BusinessWeek.com’s Editor-in-Chief, John A. Byrne, responded in a comment to Kafka’s post by stating that the comScore numbers don’t reflect reality - BW’s internal numbers suggest that they had four times as many page views in August than comScore reported. That may be true, in which case, there’s even more upside for the site if it can address each of the shortcomings McIntyre and Kafka have highlighted.
Don’t Just Consider the ‘Last Click’
|
Written By Peter Hershberg | June 12, 2007 | Share This
|
|
According to a new study released by the Atlas Institute, 90% of conversions are driven by overlapping ads across multiple sites rather than by the search ad that leads to the last click. All too frequently, said Atlas, credit for the sale is inappropriately given to search. (more…)
Blame It (and Everything Else) on Quality Score
|
Written By Peter Hershberg | June 6, 2007 | Share This
|
|
This week’s SMX Conference featured a panel called “Inside the Auction Black Box.” Not surprisingly, most of the panelist’s presentations – and nearly all of the questions from the audience – focused on the search marketing community’s collective inability to understand exactly how Google’s Quality Score (and all the associated mechanics of the ad ranking system) works. Questions ranged from “Why did my ad’s minimum CPC go from $.25 to $5.00 when it was getting a 10% click-through rate?” to “Are my landing pages being crawled?”
What was somewhat surprising, however, was the amount of time spent discussing how the black box impacts the type of support Google provides to its advertisers. And I couldn’t help but walk away from that session feeling that my suspicions had been confirmed - that the account teams at Google either have no better understanding of how their ad ranking system works than the rest of the search marketing world does OR they’ve been advised that, when in doubt, blame the unexplainable on Quality Score.
For example, for the past few weeks we’ve been managing an AdWords campaign for a local advertiser. His keyword list, consequently, is extensively populated with local “tail” terms. Not long after the campaign launched, a high percentage of keywords were deactivated due to low quality scores - which we pretty much expected to happen. To our surprise, however, dynamic keyword insertion wasn’t working for many of the city names that we wanted to feature in the ad creative. The instances when it was working seemed to be completely random.
We reached out to the folks at Google to see if they could help us address the issue. Nearly two weeks after opening a help ticket, we received their formal response:
“You’ll recall that we spoke specifically about keywords like ‘XXXX,’ ‘YYYY,’ and ‘ZZZZ.’ These keywords are not dynamically inserted into your ad text because their corresponding Quality Scores aren’t high enough to qualify for keyword insertion.
Maintaining high-quality ads for both users and advertisers is important to AdWords. Your keyword’s Quality Score reflects your clickthrough rate (CTR), plus your keyword, ad text, and landing page content.
This quality standard can affect your ads and keywords using dynamic keyword insertion. Therefore, if a keyword’s Quality Score is low, the keyword won’t appear in the ad (we’ll insert the default text instead). This ensures that users see relevant keywords in a dynamic keyword insertion ad, so that they continue to see relevant ads overall.
To learn how to improve the quality of your ad text, please visit https://adwords.google.com/support/bin/answer.py?answer=27648&hl=en_US.”
Needless to say, I wanted to see how Google suggested we could improve the quality of our ad text, so I visited the url they had provided us with.
Unbelievably enough, Google suggests the following:
“Review your keyword list to choose your ad title. Find keywords with the highest number of clicks or impressions. For example, if the keyword phrase ‘online advertising’ is clearly generating the most clicks and impressions in your account, use this term in the title of your ad. This is an effective way of increasing clickthrough rate because users can see immediately that your ad is relevant to their query. Also, any keywords you include in any part of your ad text are automatically highlighted in bold type on Google, when a user enters the keywords as part of their query. This helps draw the user’s attention to the ad.”
So, the best way for me to increase the quality of my ad is by featuring the keyword that the user searched for in my ad copy? That would be great were it not for the fact that I was just told that my ad’s Quality Score wasn’t high enough to justify using dynamic keyword insertion to feature the keyword in my ad copy. How else can I make sure that user keywords are always featured?
Well, according to Google:
“To help ensure that your ad appears for a specific keyword and includes this keyword in the ad text, please manually create the ad. Such ads that do not use keyword insertion are considered ’static text ads.’ The static ad you create can appear with your specific keyword when your dynamic ad is not eligible to appear with that keyword. “
Forgetting for a moment that creating tens of thousands of “static ads” is a complete pain in the ass, I’m having a hard time following the logic here. On the one hand, Google is suggesting that the use of dynamic keyword insertion on ads with low Quality Scores may cause users to see “irrelevant” ads. But if I manually create a static version of the *exact* same ad that was previously deemed irrelevant, users will suddenly find it relevant? Right.
Call it a catch-22, call it poor customer service…or just blame it on Quality Score.
History Lesson for Mahalo
|
Written By Peter Hershberg | May 31, 2007 | Share This
|
|
Jason Calcanis officially launched his “people-powered search engine,” Mahalo, yesterday.
“Mahalo is the world’s first human-powered search engine powered by an enthusiastic and energetic group of Guides. Our Guides spend their days searching, filtering out spam, and hand-crafting the best search results possible. If they haven’t yet built a search result, you can request that search result. You can also suggest links for any of our search results.”
Mahalo’s press release features a Q&A section, wherein it outlines the differences between the company’s business model/processes and those of some other “comparable” companies, including About.com, DMOZ, Yahoo Directory, and Wikipedia. Interestingly enough, there’s no mention of the company that, in my mind, most closely resembles Mahalo – Ask Jeeves.
I worked at AJ from 1998-2002, during which time we employed over 100 human editors. Those editors – who, btw, were all well-versed in their assigned vertical categories – were responsible for hand-selecting the best answers to the site’s most frequently asked questions on an ongoing basis. The thought was that 80% of the people asked the same 20% questions all the time. By using humans to direct users to sites that most effectively answered each question, we’d be able to ensure the web’s most relevant search experience.
Needless to say, Jeeves’ original business model failed for a variety of reasons and I suspect that, based on Mahalo’s processes as they exist today, the new engine will likely suffer a similar fate. Here’s why:
- Content is being created at way too fast a place to ensure that the “best” answers today will be the best answers tomorrow. Given the recent explosion in CGM, etc, this is a far bigger issue today than it was seven or eight years ago. It’s unrealistic to expect that Mahalo’s Guides will reassess the search results they’ve created on a regular basis.
- The company is only as scaleable as the number of people it can hire (i.e. there’s little to no technology leverage). The more successful Mahalo becomes (as defined by the number of queries it receives), the more content it will need to create. The more content it needs to create, the more people they’ll need to hire. As Danny Sullivan notes in his post on Mahalo,
“Ask’s problem was scaling. Having so many editors cost money. In contrast, Google’s link-based automated approach provided good relevancy for both popular and unusual (or long-tail) queries. Over time, the machine has reigned supreme when it comes to the major search engines. Yahoo’s human-powered directory has been buried in various ways over the years, while Microsoft once heavy-reliance on human editing of top results was long-abandoned in the technological chase after Google.”
Granted, Calcanis admits that Mahalo is not intended to be a “google killer”. But even in competition for a single percent of search market share, I think they’ll run into problems competing with algorithmic-based search engines. It’s no coincidence that Ask’s new ad campaign claims, “The Algorithm Killed Jeeves”.
- Yesterday, Calcanis asked, “Why not build a Reuters or AP organization to handle 24 percent of searches.” Why? Because winning – or even competing – in the search game isn’t about finding the best answers to the 20% of most frequently asked questions — the difference lies in each engine’s ability to find the most relevant answers for the remaining 80%. Google recognized that from day one, which is one of the many reasons why they’ve come out on top.
Calcanis understands Mahalo’s scalability issues and has decided to backfill long-tail searches with results from Google. This certainly provides a better overall user experience, but once again history would suggest that it won’t go far enough. Ask Jeeves tried backfilling results from engines including About.com, AltaVista, Excite, Infoseek, and Webcrawler, Direct Hit, and finally Teoma. The problem was, backfilled results were always treated secondary to any possible human-edited match, which meant that the most relevant answers were often buried in the back pages of search engine results.
Not long after acquiring Teoma, Ask dropped its “human” element and decided instead to feature only algorithmic search results. If Mahalo continues to lean heavily on the human-powered model, I predict it will eventually come to the same realization that Ask made in 2002. Especially with the emergence of image, video, audio, and user-generated content, Mahalo will have an extremely hard time maintaining relevancy. Though Mahalo might reach a balancing point between ad revenue and operational costs, I predict that it will never generate a loyal user base that extends far beyond Calcanis’ circle of friends.
Taco Bell, Connoisseurs of Damage Control
|
Written By Peter Hershberg | March 1, 2007 | Share This
|
|
Last week a dozen or so rats invaded a KFC/Taco Bell in New York City, whose scurryings were caught on tape by local onlookers. I was particularly touched by the story because I’ve spent close to five years living a mere three blocks from the scene of the “ratfest”.
What I found *almost* as fascinating […]
Last week a dozen or so rats invaded a KFC/Taco Bell in New York City, whose scurryings were caught on tape by local onlookers. I was particularly touched by the story because I’ve spent close to five years living a mere three blocks from the scene of the “ratfest”.
What I found *almost* as fascinating as watching a dozen giant rats consume low-quality meat off a filthy floor, however, was the way that Yum Brands (owner of KFC/Taco Bell) used search to respond to the crisis. According to Pete Blackshaw, quoted in an AdAge article, neither KFC nor Taco Bell bought ads against “negative terms” on the major search engines the day the story broke. While this oversight was seemingly corrected at some point later in the day, Blackshaw rightly points out that “this is a missed opportunity because the organic search results generally reinforced negative perceptions about food hygiene.” Who knows how many people searched for terms along the lines of “taco bell rats” before Yum Brands realized they had the opportunity to respond to those users with their position (however weak it was) on the issue.
Here’s a screen shot of the Huffington Post’s early coverage of the story:
And the NYT’s coverage shortly thereafter..
AdAge reports, “By midday Friday, more than 1,000 blogs had cited or spread the story and footage… A search on Google News for “rats and KFC” yielded 443 stories and “rats and Tago Bell” some 600 stories posted on websites of publications from Wyoming to the UK.” I bring this up to illustrate something that marketers and P.R. agent often overlook - when responding to negative criticism, start with the publisher pages. Consider the number of major media sites like NYTimes.com and Huffington that use AdSense to monetize their pages. By including contextual ads in a damage control campaign, marketers can feature their side of the story alongside an article that’s likely to be critical of the company. More importantly, this can be done at the same speed at which the story is likely to travel.
Yum Brands eventually caught on:
(from Huffington)
(From the NYT)
Despite the fact that Yum Brands was a little late in responding to the rat crisis, it’s good to see that marketers are finally starting to understand the role of search in the distribution of information online. As for my local KFC/Taco Bell, it may be time to call in…
Panama’s Indirect Impact: Will We Finally See a Two Horse Race?
|
Written By Peter Hershberg | March 1, 2007 | Share This
|
|
On Monday, Comscore released data on the short-term impact of Panama on Yahoo’s performance. From the release, “ComScore data show that the recent introduction of Yahoo!’s new search marketing ranking model is already having a positive impact on the click-through rates for Yahoo’s search advertising.” They report that click-through rates on paid search ads have risen by 9% since Panama’s official launch on February 5th.
Though it’s still WAY too early to assess Panama’s long-term effects, the immediate CTR increase has many industry observers hopeful about Yahoo’s overall financial performance. I’m surprised however, that few have mentioned two additional factors that are critical to the effective monetization of those clicks. They are:
- Geo-Targeting
Both Google and MSN have offered Geo-targeting for years, giving both engines a significant advantage over Yahoo. With Panama, however, Yahoo has arguably surpassed Google and MSN with more sophisticated targeting mechanisms and nifty UI features like interactive maps. It goes without saying that “local” advertisers will find Yahoo a more attractive advertising venue, while national advertisers will have the opportunity to expand campaigns that were previously limited. This should mean an increase in ad dollars spent on Yahoo. - Separate Campaigns and Tracking for Contextual Ads
Yahoo has technically been in the “contextual” advertising business for years, but its distribution and tracking capabilities were limited. As a result, significant traffic volume and contextual-specific performance results were difficult to capture. In November 2005, Google implemented separate search and contextual channel management in response to heavy demand from SEMs (Reprise Media included). Yahoo has finally made the same move with Panama by separating contextual and search tracking, thus giving marketers a way to measure the effectiveness of contextual advertising as a separate entity. Again, this should mean an increase in ad dollars being spent with Yahoo, as advertisers begin realizing the benefits of contextual on its own.
Only with the combined effects of better CTR, more sophisticated geo-targeting, and visible contextual results, will Yahoo have “currency” to begin competing for syndication deals that it has historically lost to Google. With better syndication deals, Yahoo can build a portfolio of high-quality inventory, and may finally address one shortcoming that Panama cannot directly fix - conversion rates. Once Yahoo improves its conversion rates to a level that rivals Google, we may actually see a legitimate two horse race.
Yahoo Fixes Minimum Bids in UK and Europe
|
Written By Peter Hershberg | January 18, 2007 | Share This
|
|
A recent thread on WebmasterWorld highlights the fact that Yahoo has apparently lowered some of its minimum bids in the UK and Europe from £0.10 to £0.05. Readers of SearchViews will recall that I’ve encouraged Yahoo to drop its minimum CPC on a number of past occasions. This is a no-brainer decision for several reasons, not the least of which is because Yahoo will undoubtedly generate incremental revenue from its system by monetizing a larger percentage of overall queries. There’s also an opportunity to capture dollars from current Google advertisers being penalized by Quality Score, and therefore unable to profitably bid on some number of keywords
Now Yahoo needs to take things a few steps further by making the same change here in the U.S. And the lower minimum shouldn’t just apply to some keywords as it appears to in the U.K. For instance, some “finance” keywords allegedly still require £0.10 minimums. That doesn’t make any sense. Google realized that shortly after they launched AdWords and they’re clearly doing something right.
Hey Yahoo!, How Low Can You Go?
|
Written By Peter Hershberg | January 3, 2007 | Share This
|
|
Well, I promised I wouldn’t tell Yahoo what to do when I posted several weeks ago, but as Panama moves closer to becoming a reality, I felt it would be an appropriate time to revisit some thoughts I previously shared about Yahoo’s minimum cost-per-click.
I, like many others, believe that the release of Panama (specifically the pending algorithm change) will help Yahoo more effectively monetize its searches. Though Panama’s impact may not overwhelmingly improve Yahoo’s market status relative to Google, there is one immediate change that Yahoo can make if it wants to capture some of Google’s ad dollars – one that requires no technology enhancements or new syndication partners.
Yahoo should simply drop its minimum bid to $.05/click. Here’s why:
When looking at the different ways a search engine can make money, the following variables need to be considered:
- Average cost-per-click
- Average click-through rate
- Percentage of queries monetized
Panama will help Yahoo address the first two factors, but the last one is being completely overlooked. In November, SEO Roundtable reported that Panama would not honor “grandfathered” bids (less than $0.10) left over from Overture. The elimination of those “grandfathered” bids means that Yahoo will ultimately monetize a lower percentage of its overall searches, which in my opinion, is a huge mistake.
When most people talk about search marketing, they’re referring to its use by direct marketers or e-tailers. A growing percentage of website publishers, however, use search to drive traffic to pages that feature ad units sold on a CPM basis. They’d like to spend ‘X’ and make ‘Y’ from the advertising displayed every time a user clicks through to their site. By sticking with a minimum bid of $.10/click under Panama, many of them will be priced out of the market.
Let’s say, for example, that a popular online news publisher is selling ads at an average CPM of $40 (which is aggressive) and that users visit an average of one page per session. That publisher could afford to pay only $.04/click to breakeven on each user ($40/1000 x 1). I don’t think there are many marketers that would be willing to run a search campaign that would effectively guarantee a loss of $.06/click ($.10 minus $.04), so they would give no consideration to Yahoo.
But what if that same publisher found a way to increase the average number of PV’s it generated to two. All of a sudden, it would be in a position to spend up to $.08/click for search traffic ($40/1000 x 2). A minimum CPC of $.10/click would still guarantee a loss of $.02 on each visit, so as it stands, Yahoo still wouldn’t get any consideration from this publisher.
If Yahoo dropped its minimum CPC to $.05, however, the publisher could potentially make a profit of $.03/click ($.08 minus $.05). Given that scenario, I think the publisher would find a way to increase its search budget and spend as much money it possibly could knowing that it was making a profit with every click. Furthermore, because Google’s Quality Score forces advertisers to pay substantially more than the alleged $.01 minimum CPC when an ad initially launches (while it tries to establish its quality), a publisher trying to minimize the X/Y (CPC/CPM) ratio will be hard pressed to find a way to make this profitable. How many marketers want to pay up to $5/click while they establish the quality score necessary to reach that figure? And even if/when they do get there, how many clicks will they need to generate at $.01 to get back to breakeven?
As it stands, there are a number of publishers - with significant marketing budgets - sitting on the sidelines because they can’t find a way to make search profitable. If Yahoo continues to alienate publishers that depend on CPM ad revenue, Yahoo (like Google) will fail to fully take advantage of a growing opportunity.
One final point on this topic. I’ve made my case on Yahoo’s minimum bid to a bunch of people in recent weeks. Many of them have suggested that it would be a terrible idea because publishers bidding at low cost CPCs to meet high-cost CPMs are essentially “arbitraging” traffic. I agree that sending users to a site that simply provides another set of ads, like a page littered with AdSense, should not be allowed - but that is a completely different scenario than the one I’m describing. There are numerous instances where paid ads are actually more relevant than organic search results - Online news publishers, for instance, have a hard time getting their stories in the general search index while they’re still relevant. Given that paid search ads can be launched in less time than it takes a search engine to organically index pages, news publishers may rely on paid search to send traffic to their CPM-supported sites.
The ability to directly monetize queries aside, Yahoo could probably benefit from a little more relevance too.
SEM Agency Differentiation (or the Lack Thereof)
|
Written By Peter Hershberg | December 12, 2006 | Share This
|
|
I had the opportunity to share some thoughts on Business Issues for the Big SEM Shop at last week’s Search Engine Strategies conference in Chicago. While other panelists discussed pricing models and human resource challenges, I chose to focus on SEM agency differentiation - or the current lack thereof.
In just a few years, ’search marketing’ has from gone from the bid management of text ads, to running campaigns across multiple ad networks - content pages, display ads, even radio. Search marketing spend grew 44% between 2004 and 2005, and will likely accelerate as the search engines develop new ad channels (print, audio, mobile, etc). Naturally, the number of agencies offering search services has also grown. Today - in addition to traditional SEM firms - interactive agencies, direct marketers, analytics companies, independent consultants, ad networks, and the engines themselves all claim to “do search”.
Recently, a friend asked me for advice on choosing a search marketing solution. He asked specifically about the search capabilities of company called Eyeblaster , to which I was fairly taken aback. ” Do they have a core competency in search engine marketing?” I told him, “Absolutely not. Is Eyeblaster a leader in the area of rich media advertising? Perhaps, but I know far too little about that market to say they are with any degree of certainty.”
It struck me, though, that if the customers cannot make the distinction for themselves, then perhaps these questions are irrelevant. As a founding partner of one of the largest SEM firms in the market today, I (like my colleagues) have experienced first hand the difficulty of describing my company amongst the clutter of ’search’ options. There are three real reasons why search marketers have a hard time differentiating themselves.
- Quality of work isn’t obvious
Generally speaking, we’re talking about three lines of text - 25 characters in the title and 70 characters in the description. Paid search ads are not designed to make consumers laugh or cry - they’re meant as a bridge between a search term and a related landing page. Thus, search ads don’t strive for difference, they strive for relevancy and similarity to other key terms on the page. While some ads will undoubtedly outperform others, advertisers may not be able to identify the quality of work without seeing backend performance metrics. - Search is used in Combination
Search is often only one part of a cross-media campaign. As a result, most companies dealing with online marketing offer “search”, though few specialize in SEM. Eyeblaster, for example, is known for rich media, but describes itself online as a “one-stop shop for all aspects of paid search marketing.” - The Search Market is Young
Lastly, because search is a young market, there’s an excess of parity. The industry is wrought with buzzwords – “full service,” “integrated solution,” “proprietary technology,” “campaign management,” “best-of-breed,” and “portfolio management.” SEM’s use the same vacant terms to describe what makes them different from their competitors and in the process of doing so, they’re all saying the same thing. As Forrester wrote in their recent WAVE report, “Search Agencies are immature overall.”
How Can SEM’s Differentiate Themselves?
Despite the challenges highlighted above, there are a variety of approaches search marketing firms can take to set themselves apart.
- Take a vertical approach
Rather than trying to be all things to all people, SEMs can choose to focus on a specific industry. Page 1 Solutions, for instance, targets lawyers, plastic surgeons, dentists, and lasik practices. It’s presumably easier for them to establish credibility within these categories because they position themselves as specialists. - Focus on a specific market segment
There are millions of businesses in need of search marketing services. Pursuing a smaller segment of the broader market can create differentiation. WebVisible, for instance, has created a set of solutions exclusively for the “local” market. - Create a partnership or become part of a larger entity
A good partnership can lead to an incremental sales channel for the search marketing firm. For example, in addition to servicing a variety of direct clients, Outrider - Focus on a limited geographic region
While this strategy would never work in major cities like New York and San Francisco, many SEMs have benefited from servicing the businesses in their specific regions. - Work in Emerging Markets
In addition to developing a more specific focus, search companies need to give consideration to how they can continue to stay ahead of the curve. As mentioned earlier, the definition of “search” has expanded over the past few years. Companies that develop a competency in some of the “emerging” ad formats, including mobile, print, video, and audio are likely to stand out from their competitors. - Promote depth of expertise, not breadth of service
With Yahoo’s expected launch of Panama in Q1, the search marketing platforms offered by all 3 major search engines will cease to be completely transparent. Successful search marketing campaigns will be less about “bid management” and more about “campaign management.” SEM’s that understand the strategies required to effectively optimize all variables involved in the search marketing process (keyword identification, creative copywriting, landing page optimization, etc) will be rewarded with lower minimum cost-per-clicks. And the results they subsequently produce on behalf of their clients should help them prove that they have been able to evolve with the market while some of their competitors can’t.
*Disclaimer: I am not endorsing the above companies in any way, but merely using them as examples for this post.
Where is it all headed?
There’s no question that by the time the next SES show rolls around in 4 months, much will have changed. It seems that some of the trends we saw in Chicago last week should give us some insight into where the industry stands as a whole. It appears as though search is moving in two different directions at the same time.
- Mergers & Acquisitions
- Greater Niche Focus
SEMs will offer increasingly niche-focused services. Already at SES Chicago, we saw numerous firms exclusively focused on keyword generation, creative optimization, competitive intelligence reports, and landing page optimization. As I mentioned above, look for Geo-specific, vertical, and emerging market search agencies as well.
Because the search industry lacks a clear category leader, and because an increasing number of ad agencies want to become competent in search, there will be more company acquisitions in the months ahead. I predicted that this would happen around the time isobar acquired iProspect (December, 2004). This past week, iCrossing’s bought out Newgate - a signal of more to come.
In sum, the search marketing world will soon be made up of a smaller number of large full service shops, and a greater number of small niche players. If executed properly, both strategies could prove to be extremely profitable.