Twelve Predictions for Search Marketing in 2008

In a courageous show of unity against the oppression of Base 10 numbering systems, here is our list of a dozen predictions for the search engine marketing industry this year.

1. Management tools become the cost of having a seat at the paid search table, rather than a competitive advantage.
In past years, advertisers in competitive spaces received a significant advantage over others simply through the proper use of PPC tools. In 2008, one better use management tools if one even wants to be in the game. The more advanced tools (those that provide true campaign management, rather than just bid management) will provide some advantage at first, but that will decrease as the traditional bid management tools add campaign management functionality.

2. Business/marketing acumen becomes more important to paid search management than technical prowess.
As the technical landscape levels out, the need for true business acumen will increase. Competitive advantage will be provided by marketing abilities, not proprietary or third-party tools. Testing and measurement of ad copy, landing pages, and lead forms will be critical for success.

3. Search engines continue to provide better bid management functionality. Most tools vendors don’t react.
The search engines have made it clear that they consider bid management to be their bailiwick. As a result, they have veiled the control of bids, so that one needs only set a maximum bid, rather than adjust bids at regular intervals. In fact, bids need only be changed when data changes on the advertisers end, such as conversion rate of margin per order, and Google Editor gets better at this task with every version. The PPC tool vendors, however, have considerable money invested in the development of bid management, and will be resistant to change. The more savvy vendors will add campaign management functions, but we won’t see much until the 3rd or 4th quarter of the year, at the earliest.

4. Google extends its lead in the paid search market, either a little or a lot, depending upon how you measure the industry.
Not surprisingly, Google remains the industry leader in paid search. If you count their actual revenue from paid search, they should grab several more percentage points of the market pie from their competitors. If you count all the revenue they roll in with paid search (such as that from AdWords), their gains will be substantial as they continue to expand their service offerings.

5. Local search continues to grow, but still has a difficult time providing substantive traffic in most markets.
The search engines have invested considerably in improving the tools around local search over the last couple of years. In most cases, however, the traffic levels are still not material. One certainly shouldn’t rely on local search as one’s only traffic source, but that would be true about any marketing technique. As more cell phones have access to services like Google Maps, the traffic will increase, but most of that impact won’t be seen until 2009.

6. Google rolls Click-To-Call in with its local search service and still no one cares.
Click-To-Call has not exactly been a success. The call volume has been practically non-existent. There are limited people interested in making phone calls from Internet advertisements, and Ingenio has most of that audience locked up. As a result, Google plans to combine Click-To-Call with their local search service. Unfortunately, this won’t make a substantial difference in 2008. If few people are utilizing local search (see above), even fewer are interested in calling directly from said advertisements.

7. Google Pay Per Action gains traction in with B2C advertisers, struggles with B2B advertisers.
Pay Per Action (PPA) is the latest attempt by Google to reduce the risk of online advertising, while capturing a larger percentage of the value generated. It has had moderate success with B2C advertisers, but very little with B2B advertisers. This trend will continue in 2008, with PPA building to a non-trivial amount of its revenue from B2C advertisers.

8. Google Product Search (previously Froogle) celebrates its sixth birthday, remains in beta.
Google’s never ending beta price comparison engine goes off to first grade, but still doesn’t become a formally released product. The General Availability first graders laugh.

9. Google continues to rail against paid links. The paid linking industry adjusts and continues to provide SEO benefit to its clients.
If any doubted Google’s feelings towards paid links, Google made them very clear in 2007. As it happens, most of Google’s actions were about generating F.U.D.; the actual penalties to those selling links were limited at best. Google’s ability to detect paid links in a programmatic manner is quite limited, so they will continue to monitor their complain-about-paid-links form. The number of false and competitor submissions to this form will greatly reduce its utility, however. We can expect Google to force changes in behavior on the paid links industry, but the amount of money is such that the industry will find a way to adjust. At best, Google will push paid links underground, which is not a winning solution for anyone.

10. SEO becomes more metrics driven as companies learn to measure their SEO performance.
For all too long, SEO has been about attaining rankings and little else. Some firms are at least tracking the traffic generated, but when push comes to shove, clicks are a cost center. Companies need to move to metrics that really matter, such as leads or sales generated.

11. Rumors swirl about an imminent merger between Yahoo and Microsoft triggering a deluge of blog posts and nothing else.
This has become an annual summer event, and 2008 will be no different. Like two college kids who can’t quite seem to make it work, Yahoo and Microsoft will talk about getting together, but decide yet again that neither is ready to settle.

12. The line between Search Engine Optimization and Social Media Marketing blurs further, except among those that actually know how to perform SEO and/or SMM.
While there is clearly some overlap between SEO and SMM, the proper approaches and expected outputs of each are very different. Still, many in the online marketing industry will confound the issue by equating them, performing poorly at both. The more savvy firms will either build separate teams for each, or outsource to firms that specialize in one or the other.

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