Five Search Marketing Predictions For 2010

Staring into a crystal ball is a dangerous undertaking, especially when you’re attempting to predict the future of a market as dynamic as paid search. Leading analysts continue to project that paid search marketing spend in the U.S. will grow from $13 billion in 2009 to $26 billion by the year 2014. But how this growth will happen remains unclear. One thing is certain, as more dollars flow into paid search, the number of tactics, targeting options and channels available for search marketers will need to grow to ensure that search campaigns can deliver ever-increasing ROI. Here are five predictions for macro-trends that will fuel the next phase of paid search growth.

High keyword prices will drive marketers to try new strategies to boost ROI

While the growth in the number of searches occurring each month may be beginning to slow, the pace of advertiser dollars pouring into paid search won’t. The result: rising keyword prices are here to stay. According to Forrester Research, two-thirds of marketers report that high keyword prices are their biggest challenge in paid search. More importantly, this is a problem that can’t be solved with just a better bidding solution. Smart marketers will be forced to focus on driving increased ROI from their campaign tactics, through a combination of intelligent keyword management, testing, and targeting.

Optimizing for Quality Score will top the list, as an easy way to drive costs down and conversions up through effective keyword selection, match type refinement and use of negatives. Options such as geographic and demographic targeting will also see increased adoption. Expect geotargeting tactics to move beyond the realm of traditional local and financial services players and be used by more traditional national advertisers and retailers. Marketers that invest in testing and applying these tactics will reap not only increased ROI and revenues, but strategic advantage in an increasingly competitive market.

Paid search will become more integrated with the enterprise

With search representing over half of digital marketing budgets, it was only a matter of time before C-level executives took notice. For large advertisers, search now represents tens of millions of dollars in marketing spend annually—and this surge in spending happened almost overnight. As a result, paid search marketing programs are still managed separately from traditional marketing and business units.

Going forward, however, expect organizations to integrate paid search budgeting, reporting and controls more tightly into business units, rather than continuing to allow search to operate as a purely standalone unit. The result of this tighter integration will be a rethinking for search marketers in terms of how reporting and KPI’s are organized and more importantly how this information is communicated upward in the organization through the use of dashboards and proposals for investment. For search marketers who can adjust to this changing landscape, the reward will be more executive buy-in and larger budgets.

Paid search will go multi-channel

Multi-channel marketers have always been at a disadvantage in the search marketing game. According to research by Yahoo and comScore, over half of online shoppers research on the web before purchasing in another channel, such as in a store. That means that search marketers are missing out on credit for half of the revenues their campaigns are driving. In recent years, however, the tools and techniques for measuring across channels have become increasingly accessible—whether it’s tying dynamic phone numbers to keywords, or taking in store surveys to measure search referral traffic.

As marketers perfect these techniques, expect multi-channel merchants to get smarter about how much and where they are spending their search dollars to drive both online and offline conversions. By identifying the whitespace where offline buyers are researching and servicing their needs, multi-channel merchants can find new, low cost keyword inventory to drive profitable expansion of paid-search programs.

More money will flow to the content network

The Google content network already reaches 80% of internet users and accounts for a large and growing percentage of overall PPC spend. But changes by Google in the past year have made targeting on the content network more powerful than ever. With the ability to target not only based on keywords, but also on placements, marketers can now narrow in on audiences exhibiting very specific behaviors.

For example, if you are selling sports equipment you can target your ads to people reading the sports section of their local newspaper and adjust the content of your ad based on keywords that are in the article such as “tennis” or “golf.” Being able to refine and control where ads are shown not only gives marketers the comfort of knowing their brand is safe, but also allows them to acquire higher value clicks and ultimately a higher return on their ad dollars. With a new set of software tools emerging that help marketers manage and optimize placements at a granular level, expect more paid search dollars and attention to flow towards the content network.

Facebook and Twitter will emerge as serious challengers to Google

Search engines today serve over 25 billion queries a month in North America alone, with the lion’s share of those queries serviced by Google. But it’s never too early to watch out for the new kid on the block. Facebook today handles over a billion queries a month, and that number is growing. With such a large audience, it’s hard to believe they will allow those searches to go un-monetized for long. Expect Facebook to extend their own search technology to allow users to query the stream of user-generated content in their news feeds. When they do, users will find it much easier to get recommendations from friends on where to go for the best pizza, whether or not they should buy an iPhone, or which movie they should see this weekend. Once this happens, expect lots of advertising dollars, particularly for keyword placements, to follow quickly.

Search marketers will have to adjust to a different, more social, keyword set and tailor their messaging to the needs of social networkers. In doing so, however, they will be able to catch consumers earlier in the consideration cycle than they can on traditional search engines like Google and Yahoo! Since people looking for recommendations from friends are still in the research phase of buying a product—and they place great trust in recommendations that come from their social networks—the value of these clicks could potentially be high.

While you can’t chase all of these trends, smart marketers will apply the right ones for their business. Whether it is improving measurement, campaign quality, audience targeting or simply finding new channels, marketers who can capitalize on some of these trends first will likely have a leg up on the competition. If you see other trends in the marketplace, I’d love to hear your predictions in the comments section below.