Feature

Digital Essays: The rise of search

The popularity of the paid search category of online advertising is likely to grow as the medium becomes better able to target with more precision.

If the Campaign Digital Essays were to represent the importance of search marketing within the online mix fairly, then more than half of them would be written on the topic.

As we know from the Internet Advertising Bureau, UK online adspend reached £1.36 billion last year and now exceeds spend on outdoor, radio and cinema (and is rapidly catching up with national press). Of this, paid search now accounts for 56.2 per cent, having experienced growth of around 79 per cent between 2004 and 2005.

So why is search marketing growing with such pace and dominating the online marketing mix?

Search is an intrinsically buyer-led medium, unlike most others. When consumers search online for a product or service, they are actively asking to be provided with information. The buyer is in control and chooses the time, place and manner in which to interact with a company. In addition, search is highly inclusive and accessible - anyone with a computer and internet access can take part. It is intensely measurable and can be managed to definite return-on-investment and cost-per-acquisition targets.

It is flexible and responsive, with the ability to be switched on and off, or altered and optimised to reflect internal advertiser changes such as stock levels or promotions, or external influences such as the time of day or the weather.

Most importantly, however, with search the advertiser only pays when it works. It costs nothing to place the ad on a search engine. Only when a consumer clicks on the advertiser's search ad and goes to their website does the advertiser pay. No other medium is so clearly renumerated by performance.

Search marketing has enjoyed a remarkable few years. If we bear in mind that in the UK, the business model for paid-search marketing did not even exist before the end of 2000 and is now an industry worth £768.3 million per year, we can begin to grasp quite how far it has come. Search has evolved from an "I don't care where my ad is as long as it's top" mentality to a more sophisticated approach determined by return on investment, not vanity or profile. Even so, search marketing in its present state is still a relatively simplistic (and predominantly domestic) medium with limited ability to target different audiences, either by demographic or geography, and it is plain there is scope for it to develop.

Local search, for example, has been talked about for a while but has yet to really take off, while the implications of more sophisticated geo-targeting techniques are considerable. Not only will the value of leads increase as they will be better targeted geographically, but the playing field will be opened to new advertisers that may not be able to afford national campaigns but for whom locally targeted campaigns can be highly cost effective. The growth of a local search platform will also serve to create a meaningful proposition for mobile search - a discipline that makes virtues of location and timeliness, but has yet to find its feet.

Similarly, pay-per-call is beginning to take shape as another interesting facet of the search mix. Its particular relevance for smaller business means search is becoming more accessible to all sizes of business.

The search engine landscape itself is also poised for significant changes. The launch of MSN's paid search offering is imminent and will leverage the company's background in demographics to raise the game for other search publishers and create a wider market of players for advertisers to choose from. Then there is Yahoo! Search Marketing, which is preparing for the introduction of its new "Panama" platform, which will change the way results are displayed to an algorithmic, not purely financial model.

Even more revolutionary, however, will be the development of multimedia search, which is seeing rapid improvements month by month. As fast, high-quality broadband access becomes ubiquitous, we will see more and more content becoming available through a channel previously limited by bandwidth restrictions and download times.

It is likely at some stage that we, as consumers, will have all our digital entertainment, including online gaming, television programmes and, of course, the internet, delivered through this channel.

Also likely is that we will use a search engine of some description to access this plethora of information and content. While this in itself will be a major change in the way in which consumers interact with search engines, and the function that the internet will perform, what is important from a paid-search perspective is that it will open the doors to other advertiser groups that have previously not been able to get what they need from search. FMCG brands in particular will be able to provide dynamically wrapped content appropriate for individual consumers. Search is sure to become a cost-effective mass-market targeted advertising medium capable of small-scale targeting.

Spending on search is only going to increase this year and as the discipline becomes more complex, having specialists who know what they are doing will be of paramount importance. Media agencies that cannot provide a robust search solution for their clients will have cause for concern (if they have not got one already).

Our agency, whose clients outsource their search marketing to a team of expert editorial and account managers, is consistently winning clients from media agencies that do not have enough quality skills in-house to meet client demand. Some media agencies have recognised this and have chosen to partner with us to help deliver search marketing services to their clients, either by drawing on the expertise of The Search Works' team, or by licensing our proprietary search management technology, BidBuddy, from The Technology Works.

More and more offline budgets are being switched into online and, increasingly, into search. Ignore this trend at your peril.

- Nick Hynes is the group chief executive of The Search Works and The Technology Works.