How would consolidation affect search?

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The gloves are off
The gloves are off

Recently, Google backed away from a shared advertising agreement with Yahoo, which itselfis eyed by Microsoft. Our experts debate how consolidating engines affects search marketing


CONTENDER
Lorrie Thomas
Principal, Lorrie ThomasWeb Marketing
More than 10 years of Web marketing expertise

Consolidation of top search engines would drastically drive up advertising costs, shift search spend from online acquisition to branding, and devastate online ROI.

The majority of today's Web surfers find products, services or information by going to a search engine first. Consolidation would limit search options and minimize online advertiser's campaign placement options.

Competition is a search marketer's friend. Different algorithms, demographics, traffic lev­els, tracking tools and conversion rates across various search engines provide marketers with options, unique testing grounds and multiple opportunities for lucrative results.

Search marketing is powerful because it is targeted, track-able and flexible. The variance in search engine advertising today creates heated competition to offer value via enhanced search results, tracking solutions and unique campaign placements.

With a consolidated model, the only advertisers that could stay in a merged search world would be the brand advertisers who could afford to buy expensive “reach” and “traffic.” ROI-based marketers would be forced to retreat back to affiliate marketing as their main channel to generate action-based buys. This concept of top search engine con­solidation seems like a giant step backward to the old days of online advertising.


CONTENDER
Miguel Salcido
VP, operations, eVisibility
More than seven years of marketing experience

Consolidation among search engines would most likely result in a price war, decreasing ad costs and accelerating technology.

Google's competition would most likely come from a Yahoo/Microsoft or Yahoo/News Corp merger. Next, we assume that their two biggest hurdles could quickly be overcome, those being cultural/technical integration and a dramatic improvement of their ad platform to compete with Google. Although Google would still have a dramatic market share advantage, a Yahoo and either Microsoft or News Corp. merger would give the new entity a large advantage in unique visitors.

Now that we've established that consolida­tion is plausible, let's talk about the impact on advertisers and ad prices. Increased competi­tion for online ad space would no doubt be beneficial for advertisers. This is abundantly clear with Google's announcement back­ing out of its deal to serve Google ads on Yahoo's network for fear of Department of Justice antitrust lawsuits. The DOJ cited that the deal “denied customers the benefits of competition.” These “benefits” would come in the form of lower ad prices and a race to develop better ad serving technologies.

A third benefit would be an accelerated path to offering offline advertising and online media within the same platform, creating a one-stop shop for advertisers.


DMNews' DECISION

Thomas argues that consolidation would eliminate competition, increase ad costs and make ROI efforts too costly for most adver­tisers. Salcido welcomes consolidation, saying it could result in a competitive price war and lower ad costs, as well as a possible race to develop better technology. Start your engines.

Have your say E-mail your topic to nancy.kearney@dmnews.com

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