Yet another year of contrarian, dangerous and potentially humiliating predictions
by Kent Lewis
In January of each year, I gaze into my crystal ball in an attempt to predict future trends in the search engine marketing (SEM) world. Before sharing my predictions for 2007, I think it’s important to see how I faired last year. In SEM predictions for 2006, I accurately predicted tremendous growth in search engine optimization (SEO) and pay-per-click (PPC) spending, as well as evolving metrics and video adoption. Unfortunately, I inaccurately predicted significant growth in search market share for MSN, which proved to decrease in 2006 about as much as I thought it would increase. Google surprised even the skeptics by continuing to gain share on Yahoo! and MSN. With that said, I hope to hit all the marks in this year’s SEM predictions.
For companies large and small, SEM has traditionally been a fragmented and ad hoc endeavor. In-house and agency talent typically specializes in paid or organic search, but not both. In 2007, the sea-change will involve a shift to holistic, integrated SEM campaigns. Companies that successfully integrate paid and organic search strategies, metrics and teams to maximize ROI will be exponentially more successful and will help fuel the fire as they share their stories.
CPA Cost Structure
The major search engines have stiff-armed cost-per-acquisition (CPA) pricing structures, as it could mean a significant drop in revenue. That may change in 2007 (if not 2008) as awareness of click-fraud and analytics increases. The tipping point will likely be when shopping feeds adopt the performance-based pricing model. Once advertisers get a taste of CPA via shopping feeds, search engines will have a difficult time fighting the tide.
Web surfers have been able to personalize content since PointCast gained popularity over 10 years ago. Advancing technology and changing search behavior will fuel growth of personalization in search applications. Combining the benefits AJAX-powered applications like email and maps with required user registration means search engines now have the ability to completely customize home pages by user. The end result is a more productive experience for the user and a more targeted and efficient opportunity for advertisers.
Social Media Optimization
Social media has been the rage in 2006, culminating with Google’s purchase of YouTube for $1.65 billion. With the growing popularity and usage of social media outlets, SEM professionals will leverage technology and tools to better monitor, measure and integrate social media into search campaigns. Search marketers that do not incorporate social media into their strategies will shorten their life spans immeasurably.
Google’s purchase of Urchin and subsequent release of Google Analytics changed the face of search in 2006. The ability of even the smallest business to track conversions through free Web analytics software provided a pivot point in the overall awareness and adoption of key performance indicators (KPIs). In 2007, Google will take the next logical step and launch Web Page Optimizer, which will allow users to test and tune the effectiveness of PPC landing pages. The widespread use of multivariate testing will elevate awareness of other key metrics (including offline conversion tracking) and generally raise the bar for all SEM professionals.
Search Engine Standards
In an uncharacteristic showing of solidarity, Google and Yahoo! collaborated to set a standard for site map submissions. In 2006, Yahoo! agreed to accept Google SiteMaps for organic search submissions. Now that the barriers have been lowered, expect to see additional collaboration on search standards in 2007. Let’s hope this is the case, as everyone will benefit from submission, reporting and tracking standards across the big three search engines.
While local search has generated buzz for many years, adoption has been slower than anticipated in the past. With evolving technology changing behavior, companies large and small are benefiting from the efficiencies of localized search marketing. The largest impact on local search adoption in 2007 will not be small businesses adopting local search strategies as much as larger companies looking towards local search to lower acquisition costs.
From early-adopter fad to smart business, mobile search will become a core component of marketing strategies for major consumer brands. With rapidly evolving capabilities and deep market saturation, mobile phones are the easiest access point to the Web. As such, search will be a core component of that interaction, and major brands will be the first to capture the market.
Traditionally, video search has been relegated to companies with significant video content. In 2007, forward-thinking marketers will develop video content to capture their share of the growing video search market. The primary challenge for video producers will be developing and optimizing relevant content.
Anyone even peripherally associated with the SEM industry knows the future is bright. With continued economic growth in the SEM sector, the lines will be blurred between service, content and technology vendors. Each segment of the search business will look to get a bigger slice of the pie, which will include cannibalizing other parts of their business or channel. For example, the big three search engines have all made some sort of foray into the service side of the business, usually reserved for agencies, by going direct to large advertisers. In addition, software and Web services businesses are automating more aspects of the search marketing process. The squeeze will be felt most by agencies and SEM freelance consultants that do not adapt to the changing market.
No matter how you slice it, 2007 will be a big year for SEM professionals and companies with active SEM campaigns. I look forward to revisiting these predictions in December to see how well the industry adapts to my predictions.