Monday, January 23, 2006

Search is OIL.

One of the reasons (and possibly a small reason) - that is so successful is because the leaders of the company from the outset, allowed the marketplace to dictate where precious resources (developers, technology, internal focus) should be allocated.

This is no small task, or feature of a company.

There were companies that had more money, more marketshare, and certainly without a doubt MORE advertising people in them. By definition, THEY WERE SUPPOSE TO SUCCEED, for they had brighter people "from the field."


They had people who had preconcieved notions, baggage, and egos that made them take their companies in this direction or that....and they changed course, as the winds of change blew through 2000-2002. They (competitors) tried to be a network, they tried to do CPA, they attempted to be a technology company, and best of all, in the end, they tried to emulate

The key takeaway here is that the leaders of the company were smart enough to let "revenue, and sales lead, for it is the clients that determine what we should develop, package, sell, and deliver on..."

What a great concept. Companies say they do it. But, do they really?

Really good ones do.

Which leads me to the Search Marketplace. Search is dominated by two companies today, Google and Yahoo.

In the Advertising world for the last 3-4 years, it has been the "search/keyword" marketplace that has really helped advertisers, and marketers WIN online. Sure, there have been other platforms that have helped advertisers gain marketshare, new customers, and increase online efficiency....but, overall the consistent theme is that Goog/Y drive the most/best/cost effective returns for their organization.

Search is the equivalent of oil, for advertisers. (oil for the world economy)

The main search players (in my world) are equivalent to OPEC.

They control the marketplace, clickstream info, ability to test for big clients at the expense of little guys, and are sitting on such a rich resource----THE RICHEST DATA SOURCE KNOWN TO THE ADVERTISING COMMUNITY TO DATE.

Sounds like oil a bit? Couple of countries with the main resources, supply and demand issues, maybe a bit of arrogance....but the theme is RELIANCE.

But, with the search business the reliance is by the Advertisers themselves.

Many marketers have TOO MUCH reliance on results (from Goog/Y) as well as, too much laser like focus on their daily reports from the search engines.

Search will grow this year, and it even will outplace the growth of online spending overall. But, it is not indicative of where the market is going. The growth(in search) is coming from a few places.

* the increase in keyword pricing for terms that have the best ROI
* small to mid sized business coming online and testing
* local businesses coming online and enhanced technology to deliver customers locally
* ability of Goog/Y to PUSH their content, (imagine the yellow page ads, out of the book, and placed in front of you when you WERE NOT looking in the publication)

With my clients, I have explained the CASH COW theory.
Pretend your biggest source of new customers online, best ROI vehicle (in this case search) went away.

What would your immediate course of action be? Is there a plan B?

This is actually a great exercise, because like "oil"- you should have a plan in case there is disruptions in your ability to get and use it adequately. Remember, oil will still be around--- BUT MANY WILL BE PRICED OUT OF THE MARKET FROM USING THE PRECIOUS RESOURCE.

It's happening in the search arena.

I am preparing my clients for that day, and it helps to understand ... that there are other avenues for marketers to start thinking and delivering results for their organizations.

This is not a indictment of the search marketplace. I believe it be a essential part of any media plan -- this more about reliance and focus, and I'd like to see marketers EVOLVE, and rely less on a platform that seems to be "leveling off" in its ability to sustain results for advertisers.

I have recently been involved in "reinvigorating" the email platform.
Couple this with enhanced technology in the "database" marketing service arena. There are some new features, and abilities to segment users based on VERY important information in a database -- and optimize accordingly -- that was NOT EVEN known about a year ago.

Behaviorial Targeting.

Promotions, and the ability to grow a RELEVANT database of consumers in the advertiser's a straight forward, cost effective manner.

And, my new favorite. ( I have seen recent testing on this and it is incredible) -- complete 110% personalization of any ecommerce site, based on user preference. Call it Web 2.0, or whatever you want....but, I'm a fan, and the data proves that CONSUMERS, and ROI are the winners.
(this is easier than many think, and it is basically a landing page, geared toward preference and determined by the user, and the user (consumers) behavior.)

Search is oil, many of us, are working on alternative "ROI" resources online for marketers looking to win.

Feel free to contact me with ideas or input. Thanks to the many who have sent me words of encouragement thus far, it is much appreciated.


Blogger R2K said...

I think it is just luck, and they are bound to fail eventually.


9:10 AM  

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