August 18th, 2008 by Richard Lee
SES SJ 2008 – Panel: Search Economy and Trends
Search Engine Strategies (SES) San Jose – 2008
Panel: Search Economy and Trends
Secular Growth Trends in Internet Advertising. Advertising is a $700B industry, Internet advertising is a $45B industry. Of which Search Advertising is the faster growing format.
Sean Walsh, VP, Online Marketing, LuxuryLink.com:
Health of the US Economy / Travel Industry as one example (using google insight):
Keyword vacation: peak in 2004, with 20% decline to now. For the last couple quarters, up to 12% vacancies for luxury hotel bookings i.e. Phoenix 12%, Virginia Beach 9%, except for some places like San Francisco is up by less than 1%.
Lodging demand/trend graph from: calculatedrisk.blogspot.com
Annual consumer Inflation – CI vs SGS trend graph from: Shadowstats.com
The American economy is worse shape than many would have you believe
American consumer demand is entering a decline
70% of GDP is made up of US consumer. We’re dependent on US consumer to continue purchasing trends.
Heather Dougherty from Hitwise – Market stats (release search volume monthly):
Google has 70% share of searches, 10% of last year. (87 percent globally).
Auto manufacturers = 37.60% traffic from search
Banks = 8.52%
Paid search by industry = Top is retailers (28%), Auto Manuf (26%), Banks & FI’s (15%), Food & Bev Brands(14%)
Kevin Lee, Did-It, Click Z editor:
Spending based on marginal profit
Paid PPC Bid Budgets:
Google 74%
Yahoo 24%
MSN 5%
Other 1%
Factors:
Monetization
Click Share
CPC Escalation
Trends:
Contextual Adv.
Mobile? CPC, CPCall, CPM, CPA, CPSMS? (no clear winner but possibilities)”
Real time advertising (cookie/profile driven)
Singh from Spock.com (People Search):
36 people, $8M venture capital from clearstone and Opus Capital
25% growth month over month (powering search)
Market Share / Monthly Volume of Search:
Search Engines = 7B per month
Social Networks = 7B per month
Address Books = 30 B
Content = 1 B
Directories = 2B
People Search is Name + Keyword Driven
People Search Market Share:
Name + Keyword = 35%
Keyword Only = 25% (i.e. Dentist)
Name Only = 45%
Open Discussion:
Re-targeting + Search Advertising:
Using Search to target people who are ready to buy or who are actively interested (but only limited space to catch attention). Then using display advertising to target those people with a more robust creative and messaging. Brand Advertising is experiential. Search Ads are not conducive to the experience by itself. It’s hard to attribute to sales for Brand Advertisers / Manufacturers. Combined/integrated campaign is necessary (Display Ads, with Sponsorships, with Contents, with Search Keywords).
Brand Advertisers Adopting Search:
Corporate is perplexed what to do with Search? Will coke advertise on keyword Thirsty??? Search requires creativity, such as buying American Idol or Olympic Athlete names for areas they advertise or sponsor other display Ads.
Spending Trends in Spending:
Competition still has reserved spending for PPC
Travel spending = CPC coming down
Mortgage/Financial space = CPC up, land grab from banks looking for depositors
Overall search volume and spending growing dramatically
More volitility on search volume and client side decision
Some clients spend based % of sales, some are raising based on directly with Search performance
Search efficiencies rising higher than macro economic decline affects (search advertising and performance growing)
What if Google bought Yahoo, what is the effect?
CPC prices will go up, because Yahoo’s CPC traffic will be routed through Google engine. The open market of bidding will erode when you combine both market spaces together.
Yahoo and MSN will be innovating:
Increase search features and different from Google
Start searches from the applications i.e. email, news, other apps.
Shopping Search Engines:
Target different type of users
Discount / price sensitive user more so than regular search
Some are in discovery shopping (awareness/finding/browsing)
Different ROI on these users (bargain hunters with lower life time value of the customer)
Advertisers can find the long tail and use CSEs for research and real-time trends (added benefit)
Agency Tips / Find Trends by:
Client by Client Trends
Industry by Industry Trends
Speakers:
Sean Walsh, VP, Online Marketing, LuxuryLink.com (Discount Luxury Hotels). Priceline vs eBay for luxury travel.
Heather Dougherty from Hit Wise
Kevin Lee, Did-It, Click Z editor
Singh from Spock.com