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We Should All Have Such Problems….

By - July 20, 2004

Ad space is running out (pdf download) on search engines. Damn….

Why do we care? It means the demand has outstripped supply. And that means very good things for high quality community driven web sites. Blogs? Yes.

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7 thoughts on “We Should All Have Such Problems….

  1. The number of searches conducted worldwide is growing by 10-20% quarter-over-quarter, with no end in sight. Moreover, there is another 100-150% of potential search distribution available to the paid search networks (Yahoo, Google, FindWhat, AskJeeves, AOL, etc) that will be added to their networks in the coming 2-3 years; namely the 400-800M daily searches conducted on small, medium and large websites that are not currently distributing paid search advertising. As an example, eBay has 100M searches/day, EA.com has 10M+, Sony USA has 10M+, etc. Add to that the millions of small and medium-sized websites that are either too new or too busy to add paid search to their revenue streams, and it is clear to me that potential distribution is as big or bigger than existing search distribution.

    Additionally, as the major search players move into desktop and application-specific search, additional search inventory will be created and subsequently added to the paid search space. As a dedicated user of Lookout (purchased last week by Microsoft) I can attest to how indispensable desktop search becomes to a user once he/she starts using it – that means this additional search inventory will support sponsored listings.

    Lastly, improvements in search relevancy are by no means the only way to avoid a slowdown in the paid search industry as Nielsen suggests. Just as is the case with any other industry, increasing commodity prices drive efficiency improvements in the manufacturing process, and the paid search sector is no different. Implementation of tracking, expansion of keyword lists, improvement in ad copy and landing pages, and bid management (this industry’s yield management) are to search what Supply Chain Management is to manufacturing, and more and more advertisers are taking these steps.

  2. ID:entity says:

    In addition to comments via Chris, every page indexed by the majors can be targeted via ads. So “access” providers could decide to apply ad syndication system to content regardless. Contentious as this may seem, I’m sure these options must be under consideration.

    I agree John that this is has to be seen as good news for the World Live Web. If this explicit type of advertiser demand can help sustain the evolution of the web up its ecosystem (unstructured to semi structured) then everybody will benefit – and in turn we get better search services, this again fuels usage and off we go again.

  3. I don’t think you can say online ad space is running out. in light of the great posts above, the additional advent of geo-searches is dawning which creates an entirely new marketplace, not to mention the sprawling growth of paid search providers. It reminds me of the days of the free ISP, when everywhere you turned, a new one would appear. But only the strong will survive…but ad space is not running out. its only running out if market dynamics remain static – which they wont.

  4. Ravi says:

    Well, only 40 to 45 percent of the Internet searches in the United States are currently linked to an ad by the search engines. The remaining 55 to 60 percent searches also provide ample opportunities for advertisers to exploit.

  5. Hey, rates could always go up! :-)

    - AdSense publisher

  6. ID;entity says:

    Looks like Doubleclick are feeling the impact as highlight on Nate Elliot’s blog (Jupiter Analyst blog)
    http://weblogs.jupiterresearch.com/analysts/elliott/

    Do we see a merger or possibly takeover on the cards? Consolidation continues….

  7. dan says:

    well, people are tired of all ads on webpages. I believe that pages without ads is what people wants.