Are search engines parasites?

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Web usability guru Jacob Nielsen wrote an article earlier this year titled "Search Engines as Leeches on the Web" which still resonates with many marketers today. Nielsen's critique of search engines was made from the publishers' perspective, i.e. that search engines suck value from the content sites they index. He said although they deliver traffic in return, the value of this traffic does not equitably compensate the site owner, once all the costs, including the costs of paid search marketing, are added up.

Nielsen's solution to this problem is for site owners and marketers to do more to "liberate" themselves from the influence of search engines by using a mix of non-search strategies, including e-mail newsletters, affiliate programs, and offline branding of site URLs.

While I think that Nielsen's critique has merit, the fact is that most marketers can't afford to simply abandon search in favor of non-search media. But it's clear that there are many unhappy marketers out there who have come to the conclusion that it's just as easy to lose money running search campaigns as it is to make it. This unhappiness is reflected both in industry surveys such as SEMPO's "State of Search Marketing," which reported that only 33 percent of respondents were happy with their SEM agencies.

Marketers such as FTD, Blue Nile and Travelocity decided to basically abandon search in favor of more traditional, less challenging media. Clearly, the rising cost of traffic and growing complexity of the search marketplace are taking their toll.

On the other side of the coin is the fact that search engines bring to marketers enormous potentials which are historically unprecedented. And these capabilities are going to grow as the industry evolves beyond the simple keyword-based model used today. Targeting technologies using day-parting, demographic and behavioral targeting are either already deployed or waiting in the wings.

Marketers who know how to use these technologies will achieve significant strategic advantage over those who lack such expertise. Unfortunately, running a search campaign which fully leverages these new targeting technologies is more difficult than running a simple, keyword-based campaign, once one adds up all the possible permutations of even a few keywords.

Every marketer is different, of course, so it's impossible to propose a one-size-fits-all solution to the problem of how to conduct search campaigns in an era which comes with the double-whammy of increased traffic costs and increased complexity. Some will find that it's possible to master this challenge with a well-trained in-house team equipped with the latest generation of campaign automation software. Others will find that outsourcing the task to an external SEM agency with the same qualities makes better economic sense.

Neither course of action is risk-free or cost-free, of course. In-house teams need to have their knowledge of the search marketplace continually refreshed to keep up to speed on the latest technologies the engines are rolling out. External agencies need to be equally proactive, in terms of making sure that their technology and analytical infrastructure does not fall behind the times.

Sadly, many marketers who have embarked on paid-search campaigns impulsively, or without proper preparation, will realize that they've been burned after they tally up their click costs versus their expected ROI metrics. Some will conclude that the search marketplace is "fixed," that the search engines are indeed parasites, or that their SEM agencies are incompetent. Others will exit the market in favor of more traditional media.

My hope is that as more marketers learn how challenging the search marketplace is, and about the arsenal of strategies and tactics necessary to win in it, marketers' expectations will come into line with reality, decisions will become more informed, less waste will occur and the promises of this exciting new medium will be more widely realized..

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