09/26/11 How Search Marketing Costs Are Evolving

Search marketing’s bull-boom years appear to be over. At this point, the humble banner ad is where the action is. Display is growing faster than search and, according to one estimate at least, will be a bigger ad category in 2015.

Does that mean you should ditch search for display, or does it mean that prices for search are coming down? No on both counts. Search may be maturing, but that doesn’t mean that your dollar goes any further. On the contrary, the $1 million you spent on a campaign back in 2007 is probably going to buy you fewer keywords.

That said, your $1 million might be more effective now than it was a few years ago thanks to more integration with other forms of advertising, new opportunities in mobile and more sophisticated landing pages. Let’s take a closer look at each of these factors.

More Integration

Not too long ago, search marketing was siloed away from other forms of advertising. The people who created search ads were on a separate team from the display ad people, and there wasn’t much interaction. That’s the result of the changing nature of user behavior, says Roger Barnette, president of IgnitionOne. “The full purchase path is online,” says Barnette, who noted that only a few years ago, consumers would talk to friends offline about products they were thinking of buying. Social media and expanded ecommerce opportunities have changed that. “People are going through the whole process online now,” he says.

For someone considering a buy, that means that search no longer comes at the very end of a purchase decision. A consumer might do a search after hearing about a new sneaker from a friend, for instance. Barnette says display and search ads not only have to complement each other, but they have to be designed to hit consumers at various steps in the purchase funnel. For that sneaker shopper, for instance, ads emphasizing price and the ability to click through to buy should appear after a consumer has gone on a site like Foot Locker’s to research the buy. But another search and banner ad should be served up when the weather’s getting warmer, and a consumer is in the early stages of thinking about buying new shoes.

Mobile Opportunities

Online search still dwarfs mobile search by a wide margin, but that spells an opportunity for a would-be search advertiser. As smartphone penetration continues to grow, prices for mobile search terms are likely to rise. “Mobile is growing aggressively,” says Rob Murray, CEO of iProspect, a search ad firm. “We’re running mobile search for all of our clients. You have to these days.”

Of course, the amount of money you want to allocate to mobile search varies depending on what you’re trying to do. Businesses with a physical storefront, like a restaurant, are more likely to want to hit consumers while they’re on the go than, say, auto marketers, whose purchases are much more considered.

“Some marketers are increasing their budget to focus more on these areas of mobile opportunity,” says Rob Garner, vice president of strategy of iCrossing, “but others are increasing their local search spend with paid search and also increasing their earned local visibility through content creation.”

Better Landing Pages

Marketers have learned over time that having the right landing page can make a big difference in click-through rates. Murray uses the hypothetical example of an Adidas Samba sneaker. If a shopper is interested in buying the shoe, he should be sent to a site where he can do that with as little effort as possible. But if a consumer searches “indoor soccer shoe adidas,” then he should go to a page with all the soccer shoes that Adidas offers. It seems like common sense, but search experts say that many marketers are still behind the curve.

A More Complicated Buy

Like marketing in general, search marketing has grown exponentially more complex in the past few years. Partially, that’s because there are more sources to inform a search buy. For instance, social media conversations offer good linguistic clues for keywords and targeting. Mobile has made geotargeting more important, and general usage patterns have changed the way search campaigns perform. The explosion of variables, however, means that your search buy can be more cost-effective.

The good news is that you will be rewarded for better ads. Google, for instance, considers an ad’s efficacy in its rankings so, a fourth-placed ad can move up a slot or two if it’s getting more clicks. “The technology has advanced greatly,” says Murray, “and the targeting is better.” The biggest problem, Murray says, is managing client expectations in a time when the category is past its huge expansion. “People assume that there will be 20% year-over-year growth forever,” Murray says, “but that’s not the case.”

Mashable – Todd Wasserman