Apparent Slumps in Internet Market Could Mean New Opportunities for Search Engine Marketers

A recent report by Fathom found that keyword prices fell an average of 2 percent from the end of January to the end of February. Similarly a report from Nielsen//Net Ratings shows Americans’ time on the Internet has stalled at 14 hours per month.

Is there a connection? Could the recent reports be pointing to trouble in the online market? Is the Internet’s popularity with the U.S. consumer beginning to wane? Are advertisers — tired of click fraud and skewed click through rates — losing faith in the online market?

Before we start carving a headstone for the Internet’s demise, let’s take a deeper look at what all of this really means.

According to Matt McMahon, Fathom’s executive vice president of corporate development, “Overall, the results were in line with expectations, showing a slight average decrease based largely on seasonality.”

As McMahon puts it, “It’s [the Internet] a young market, so it’s hard to say exactly where the prices should be. No one really knows what normal is.”

As for the slump in U.S. Internet usage, the growth pattern in other markets seems to be equally perplexing with mature markets such as Germany and Spain also showing slows in usage growth, while Hong Kong, France and Australia, showed significant growth.

One explanation for the slow down in growth is that U.S. users have to a large degree formed usage patterns and relationships with various online entities. Another proposes that the growth in broadband usage to more than 50 percent allowing users to complete their online tasks at a quicker pace could be a leading cause of the usage slowdown. While yet another theory points to this just being a natural occurrence in the evolution of a very young Internet.

Whatever the cause, this seemingly dreary news does offer a few linings in the cloud for marketers and publishers alike.

McMahon offers, “The drop in keyword prices creates a buying opportunity for media buyers and advertisers who can advertise on these terms with greater efficiency.”

Likewise, Nielsen//Net Ratings senior Internet analyst Kaizad Gotla supposes that in an effort to lessen the high-speed effect of broadband, Web publishers might need to get creative to keep users online longer.

One possible option could be sites’ incorporation of added functionalities that are both beneficial to users while keeping them online, as well as being useful in forming a connection between the user and the sponsor Web site.

For some Web sites, the solution could be as simple as the use of interactive tools, such as customizable charts, databases and forums to keep users online and increase the likelihood of making a sale. Now is as good a time as ever to invest in your Web site to make it as user friendly and “personalized” as possible to keep users online and interested.

Chris Winfield is president/co-founder of 10e20, New York, a global search engine marketing company. Contact him at 718/309-4397 or [email protected]

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