The Shopping Season Cometh
Summer is behind us, and the all-important Q4 shopping season looms ahead. Savvy search marketers will want to make the most of this period, but should steer clear of the pitfalls that always appear during this season. While precise predictions about what's going to happen to the marketplace in the next few months are always risky, here are some things we're likely to see as the temperature drops and the shopping season heats up.
Competition Will Be Fierce. As students come back from school and office workers return from the beach; Internet traffic begins to rise, as do the expectations of search marketers. While overall advertising spending in the United States is essentially flat, spending has been shifting from traditional media to search for some time, and the latest figures indicate that this shift is accelerating. According to TNS Media Intelligence, Internet ad spending grew 18.9 percent in the first half of 2006. Paid search spending wasn't measured by the TNS survey, but it typically accounts for 40 percent of the total spend. And e-tailers will continue to pour dollars into paid search: in a survey of 300 multi-channel retailers published by WebTrends in August, 46 percent stated that they will increase spending on SEM, with 38 percent planning to raise SEO spending. All of these projections indicate that we'll all see more competition for scarce search engine response page space and higher campaign costs.
Uncertainty Will Continue. The search marketplace has come a long way in just a few years, but lots of uncertainties and tough challenges remain and nobody's betting on them being solved in the next few months. Click fraud is one of these issues, and, although Google has pledged to disclose information about "invalid" clicks to marketers using its service, the industry is really only beginning to attack the issue in a systematic fashion. Wherever you find competitors, you'll find competitive click fraud. And, until such time as the search industry improves its ability to differentiate bogus clicks from bona fide ones, marketers will have to figure in click fraud as a cost of doing business, much as retailers have factored in shoplifting and shrinkage.
The Engines Will Continue to Refine Their Algorithms. The past few months have seen the major engines continue to refine their ad serving algorithms. Google made major waves this summer when it began to take landing page quality into account when determining keyword bid prices. Yahoo's long-awaited "Panama" upgrade, expected to appear in the fourth quarter of 2006 or first quarter 2007, will mark its departure from a simple auction system to a true yield-based auction. This move will certainly have an impact on keyword pricing and campaign effectiveness in Yahoo. At the same time, MSN's adCenter continues to add features providing better targeting for advertisers, including behavioral search targeting.
The Stakes Will Remain High. Bear in mind the cautionary tale of flower vendor FTD, which decided to withdraw dollars from the paid search marketplace during the 2005 Christmas shopping period. This decision proved very costly to the company, and resulted in the dismissal of its marketing chief in 2006. Choosing to opt out of the search marketplace may seem tempting when you add up all the uncertainties and competitive threats, but this strategy has enormous risks.
Obviously, you need the best team possible when planning your search strategy for the fourth quarter shopping season. There is no substitute for experience when it comes to designing a search marketing campaign that can deliver ROI and market share growth in these competitive, uncertain times. Whether your search campaigns are being handled by an in-house team or SEM agency, take heed of the lessons from shopping seasons past, use the smartest campaign management tools possible, and be flexible with your tactics as competitors enter and exit the market.