Why won’t Yahoo or Microsoft ever spin out search, as I and others have counseled in the past? I had an opportunity to bat that question around with a particularly well informed fellow this week, and the most interesting part of the answer became quite obvious to me: They need search to protect what they already have: Brand advertising.
Before you declare “What are you smoking, Battelle!?” – it is Friday, but it’s not quite noon, guys – let’s pick this one apart a bit.
Traditional thinking around categories of advertising draw a very clear line between search advertising, which given its deep roots in CPC is seen as driven by direct response (DR), and brand advertising, which has awareness and demand creation as its main goals.
Most agencies, until recently, have stuck search (SEM, SEO) inside a speciality arm of their holdings, usually lumped in with their DR functions. Brand, on the other hand, was where all the cool kids live, making award winning creative that compelled, convinced, cajoled.
The history of online advertising has been marked by three major eras. The first era – 1995-2000 – was dominated by brand advertising, in particular, crappy brand advertising that, for the most part, didn’t work very well for any number of reasons. The second era was dominated by direct response advertising – the rise of search and the yellow pages model. The third era – the era we are in right now – marks the reconciliation of these two forms. If you look at the percentage of online spend presently represented by search, you can see what I am talking about: Search is the largest single factor, at 40%, followed by display + rich media, at about 30%, and classified at 18% or so.
So why am I arguing that the two will merge? Because I have been listening to customers – the marketers. And they are starting to realize a couple things.
First, they are noticing that when they run brand advertising both online and off, searches for their brands increase. Second, they are noticing that when searches for their brands increase, sales (or at least valuable, measureable leads) follow. And they certainly want searches for their brands to increase. But they have noticed something else as well: There’s a lot of stuff that comes up when folks search for their brands that they don’t control. In particular, there’s a ton of messaging out there – the equivalent of brand advertising, in a sense – that reflects the world’s view of their brand.
So the trick is this: How to coordinate the two sides? In a world dominated by conversational media, how does one truly integrate demand creation (branding) with demand fulfillment (search)? The answer is not as easy as one might think.
Search results, as we know, are more than paid results. Organic results are critical to a person who is searching on a brand. If I see an ad for the Mitsubishi Lancer Evolution, for example, and I put that into Google, what do I see? (see image above)
I’ve marked in green all the sites that, from the point of view of a marketer, not in that marketer’s control. Each of them, it turns out, are conversational media sites – forums, blogs, photosharing sites, wikipedia – where the brand is being actively discussed. Try this search for any number of specific brands, and it’s surprising how often this occurs.
In short, there are a lot of conversations out there that marketers can’t “control”, but that are vital to the brand’s perception, consideration, and performance. I have to run to an appt, but I’ll be updating this post with thoughts on what this means for Yahoo, Microsoft, Google, and Facebook, as solving for this issue is a key task that major advertising platforms – and all of the aforementioned companies are just that – must execute upon. Facebook’s announcement this week was a first step toward this, but it lacks several key factors necessary to create a fully realized ecosystem. But so far, no one else has that ecosystem either.
More on what such a system might look like when I get back…