Search Industry Matures, Bringing New Challenges

May 02, 2006
By Patricia Hursh

As search engine marketing continues to grow and mature, marketers must explore fresh opportunities and face new challenges. This article addresses some of the major shifts occurring in this fascinating yet adolescent industry.

Growing numbers of search marketers. So you want to be a search engine marketer? You’re not alone. SEM firms seem to be a dime a dozen these days. Merely 18 months ago, such companies were quite unusual. Just being a "search engine marketer" provided a clear point of differentiation.

Today, every interactive agency claims to have a search offering. Enabling tools, such as bid management software and conversion tracking programs, are popping up like wildflowers, and new "search experts" emerge daily.

I suppose all of this was inevitable. After all, search is viewed by many as the darling of our industry, single-handedly spearheading interactive marketing’s rebound. Much has been written about this small but rapidly growing sector. What does all of this mean for search engine marketers? Several trends are emerging:

Marketers are specializing. Search engine marketing agencies are starting to specialize. Often this is necessary to maintain a high level of expertise and to differentiate from a growing number of competitors.

The most obvious form of specialization can be seen in firms that provide either pay-per-click advertising or search engine optimization services only. For example, Did-It is an agency that focuses exclusively on advertising.

One driving factor here is that it’s becoming tougher, especially for smaller firms, to maintain a high level of expertise in both disciplines. On the advertising side alone, marketers now must understand the intricacies of contextual advertising, site-specific ad buys and new search-oriented behavioral offerings. As search networks and product offerings continue to expand, we realize more than ever that search marketing has moved beyond the results page.

Another common approach to specialization is to serve clients in a geographic region. Many smaller agencies tend to serve clients nearby.

As the number of vertical search engines rises, agencies are taking note and finding ways to support this trend. For example, Business.com is a search engine that serves business searchers and advertisers. In a related move, SmartSearch Marketing (my firm) recently announced an offering, SmartSearch B2B, focused on agency services for business-to-business clients. Other agencies are specializing in particular industries such as real estate, automotive or travel.

A few firms are pursuing the local search market. Firms such as LocalLaunch and ReachLocal tend to consolidate and simplify multiple search products and package them into bite-size options for small and midsize enterprises.

Other examples of agency specialization include ethnic marketing, such as the services offered by iHispanic, and PR/news-oriented search marketing as offered by SEO-PR.

Competition from new places. As the market grows, search marketers are bumping into new sources of competition: from large interactive ad agencies, from new market entrants and even from the search engines themselves.

Agencies, especially those serving large PPC advertisers, are complaining that Google and Yahoo are becoming too aggressive at forging direct relationships with clients and are offering account management services at "no charge." Of course, every engine wants a larger slice of the overall marketing pie, and agency fees represent funds that could be going into the search engine’s pocket in the form of click charges. But cutting out value-add partners, like agencies, is likely a shortsighted strategy. Engines should look at other industries to discover the power of a well-supported channel strategy.

A maturing marketplace. There’s no doubt about it: Signs of a maturing marketplace are appearing. Search engine marketers are working harder than ever to keep clients and increase their business. Agencies are specializing to maintain a high level of expertise and differentiate themselves from the competition. Market consolidation is occurring as large players need to build, buy or partner to serve clients. SEM skills are in short supply.

Even with these emerging challenges, most search marketers agree, it’s still a great time to be in this industry, and there are plenty of opportunities for hardworking, innovative marketers.

Click here to find out more!

Patricia Hursh is president and founder of SmartSearch Marketing, Boulder, CO, which offers search engine marketing solutions for clients in consumer and business-to-business markets.Patricia@SmartSearchMarketing.com

Posted on May 2, 2006 11:34 AM

---

Previous - Patricia Hursh to Share Search Engine Marketing Tips for Catalog Industry

Next - SmartSearch Marketing Provides Tips to Catalogers at ACCM


Back to Main