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Waiting to Rule the Ad World: The Next Decade Will Shift to Search


With apologies to BTO, “You ain’t seen nothin’ yet.” Over the next decade we’ll see Search explode unlike any media we have ever seen before. Dollar for dollar, in one form or another, sometime before the end of the coming decade, Search will become the most important and valuable media channel in the world.

Search makes up about 15% of the total US advertising spend. Globally it’s even less.  And while the advertising industry continues to shrink (another 15% YoY in H1 2009) the Internet has not been affected. When and if dollars come back it’s hard to imagine this is not where they go.

The efficiency of Search is what will continue to drive dollars into it. No one knows the timing of our needs more than us. Search is the utility of the web, the way we use it – even within applications like email or sites like YouTube. It continues to get more personalized, more intelligent and more relevant.

In a medium where user experience is EVERYTHING, it is our control OVER the medium that provides the best user experience possible. This feedback loop also provides the richest data. Think for a second how smart these relevancy algorithms have been even in the early incarnations of search advertising that we are experiencing now. 

It doesn’t hurt Search’s growth that Google is becoming the Internet. But this is an effect, not a cause of the growth - and there is no end in sight. Local advertising dollars have not even touched search. Direct mail (already data driven) is expected to decline 39% in the next five years - from $49.7 billion in annual spend in 2008 to $29.8 billion and will shift to search. Radio dollars (half local, half national) have not even moved into Search en masse. Then there are the remaining dollars from Newspapers. Looked at a circular lately? Mobile search also has billions more in untapped potential. All these dollars hit search in the coming decade.

Social Media will not eclipse Search as a medium. While important to us for communications it is less important to helping solve problems where the solution has material value. There is no doubt Social Media will continue to become a larger part of our lives as more of our communications take place on the web. Still, it is hard to argue SM will get bigger than the other major communication channel of the web and the other largest consumer of Internet users time, Email. *

Also, as is becoming clearer to the masses, Social Media involves user programming. This requirement is a personal investment people have never made with media before. What is the trade-off? How can we expect to maintain privacy on a web that asks unsophisticated users to manage settings, feeds, alerts and multitudes of preferences all of which are designed to push advertising on them that they don’t want and didn't ask for? And so the analogy with Email continues...

I’m sure there will be plenty of very smart people that will disagree with me and I’m sure I’ve ticked off a few of my friends and favorite people in our business. They all have vital interests in media channels outside of search, as do I. I take nothing away from these channels. We are all viable media that will grow and get better for people & advertisers.

Yet, for some reason I’ve never understood, ever since the rise of Search to critical mass people have been waiting to kill it. Google killers and countless thought pieces on what channel will replace it or take its market share. What’s less realized is that Search has enabled a fundamental shift. This kind of market timing has never been possible to advertisers before. More important, in the ever time-fractured, 24/7 connected, media onslaught world we live in, this kind of pull only gets MORE valuable. Couple with this more and more digital objects getting thrown into the vast sea called the web and Search will undoubtedly continue to be our primary mode of web navigation.

Search a decade from now will be very different than today. One thing that will also be different will be its place in the Media world. As all Media becomes Digital Media, Search will become the world’s dominant advertising medium. But the biggest winner will be you. Happy New Decade!

* Interestingly email and display are roughly about the same market size, $15 billionish. Seems to me that Social Media fits well into that size too. Still I predict by 2015 Search will be bigger than Display, Email & Social Media combined.

** No one will beat Google for combating spam.

Very similar thoughts from last year's "year-end" piece: 

2008: The Year Search Won by a Knockout



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I agree that it's hard to beat search advertising's combination of relevance and intent for efficiency. Your 10-year time horizon offers some time for internet video advertising technology to mature, and you didn't explicitly mention it in your outlook. With all of the top-of-funnel branding campaign dollars looking for a digital home, I'm curious - how do you see that segment of the market evolving relative to search?

Brad - great question.

I'll first say I think it's wrong to assume that all those brand dollars will find a digital home. I'm skeptical.

As far as video, there is so much video coming online now. I think there will be a real blurring of content from professional produced content to user generated content - much like we have seen the past years with bloggers and newspapers. It's all "video" in the mind of the user. Just depends on "what they are looking for." Of course, everything will get more niche and we'll need controls (Search) to sort through it all.

My instinct (as I've written about here in regards to YouTube) is that streaming events will proliferate. Everything from your kids little league game to a Springsteen concert. There will be lots of monetization opportunities there but branding dollars....hmmm, I'm not so sure outside of sponsorships - nothing new here (think American Idol and Coke)

I think brand dollars will turn into development dollars. Brands need to build things. I think you are seeing the early ideation of this with Pepsi taking their Super Bowl money into digital. I align this concept as the digital versions of "book of the month" clubs. Remember, it was not Columbia records that came up with the idea for Columbia house, it was Wunderman. Brands need to find digital equivalent creativity in building new digital assets, not vapor (read banners).

Used to be that the "when" moment was the hardest thing for marketers to discern. No question that search fundamentally addresses that issue. The "why" is still not solved for though and a better understanding of the "why" would lead to better conversion rates (via better, needs-based user experiences on the destination/landing page).

Interesting article, Jonathan. I agree that search is one of the most powerful tactics developed for marketers.That said, I think it's important to realize that it works best when display ads (and other branding spend) have established brand value firmly in the mind of the buyer. That's certainly what comScore's research indicates. Incidentally, according to IAB data search share of total US media spend is only 6% not 15% as you mention above. Yes, that indcates a lot of upside for search, but it also says that marketers spend a ton of money on brand building efforts using traditional media. To date, they have viewed the Internet as a direct response medium. But that is changing. Pepsi's move of dollars from the SuperBowl to digital is a great case in point. And, take a look at this comScore research showing the power of online vs. TV in building retail sales of CPG brands:
Looking to the future, I think that both search annd display will grow strongly. Just don't agree that search will dominate to the degree you do.
Keep up the nice work.

Thanks for the comment and the link Gian. Time will tell if Search will continue to dominate. Popular wisdom seems to align with your thoughts. Regardless, all of us stand to be big winners if we play our cards right and look across all media platforms for optimizing our campaigns and results.

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