Moderator: Sapna Satogapan - Jupiter Research
Intro: Landscape of Vertical search
Paid search forecast for 2010. 3.1 B spent in 2004 should grow to 7.5% by 2010. Should equal display advertising by 2009 at 6.8 B
Categories leading in paid search: Retail 32% Media/Entertainment 16%, Financial Services 21%, Travel 10%, Telecommunications 6%. Health 4%. Automotive 2% other 9%
Marketers that plan to increase spending for two major reasons: traffic and leads. Also to expand kw inventory, expand to other SE’s, ROI is valuable, kws are costlier, to invest in bid management technology
Speakers for Q&A:
Phil Carpenter (PC) - Sidestep.com; Gary Price (GP)- Searchenginewatch.com; Kirby Winfield (KW) - Marchex; Micheal Yang (MY) - become.com
General Q’s to be covered this session:
What can marketers expect for their spend on vertical search? What strategies would deliver value? How should marketers allocate budget?
(1) “What should a marketer expect from vertical search, any particular categories that can benefit more from vertical?”
MY: If you are targeting travel or something very specific, it makes a lot of sense to advertise on vertical search engines.
KW: “basic marketing rules apply.” If it works, they will keep it, but they have to try.
Pc: Fair for advertisers to have a healthy expectation of ROI in vertical. People are starting to expect more relevant answers in vertical portals.
(2) “For a marketer looking to use vertical search, and has to budget, how should they plan for it?”
MY: Saw a survey that said 80% getting good results advertising on “regular SE’s” and 70% liked to shopping search engines due to the fact that so many visit with CC “in hand.” CPC tends to be lower with verticals, so more cost effective.
KW: Confirm what M said, found that there was an appetite for more shopping SE’s once exposed to them.
Gary asks MY what about the idea of a research search engine. Mike answers that they did develop a search technology called Air that crawls the web purely for buyers’ guides and research/comparisons.
PC: (asked how sidestep competes with other travel portals) Marketers consider scale important as well as the quality of consumers attracted to the particular. Also the range of opportunities for marketing is important such as within newsletters, toolbars, etc. Many new players in vertical do not offer as many such choices.
(3) “What else can vertical offer that general portals cannot.”
PC: Searchers may be more sophisticated since they know that vertical search is more likely to provide specific results. This makes them worth more, and marketers are ready to pay for it.
(4) Gary asks how they get traffic:
KW: Through the ownership of 200k plus sites that are very geared towards keyword searches in the browser bar such as video cameras, for example.
PC: uses standard PR and encourages people to act as evangelists for their product.
MY: says become.com also uses a lot of viral marketing to help increase the traffic.
(5) “How should content be different from other SE’s?”
PC: The more focused content can be, the better the vertical can perform.
KW: You already essentially have the customer “in the store,” so the content should be more descriptive and less geared towards attracting traffic.
GP: Learn the language of people using the site. Use their language or “internal jargon” within the site’s content as well as when deciding what keyword phrases to purchase.
(6) “Is there a specific pricing model that is best when buying ads in a vertical space?”
PC: CPC, CPA, and CPM should all be considered instead of buying inot the prevailing idea that only CPC works. Verticals should listen to the marketers and give them a choice based on prior experiences or established success with a specific model.
(7) “What is the future of vertical search?”
MY: Similar to what happened with media in the early 80’s with the influx of hundreds of new cable channels, there are many new vertical search engines on the way.
KW: More blurring of the line between search and content. Feedback will be gathered on search results, causing for an increase in content geared to satisfying the visitor.
PC: Still a lot of consumer discovery going on with vertical. Vertical is just starting a huge groth stage as more and more people become accustomed to using it.
GP: More options in vertical searching are one the way. A good recent example is the release of the Yahoo Media Search, which seems to be a vertical area that will become very popular.
(8) “What is your vertical search wish list?”
MY: greater technology. Ideal SE should be able to read the searchers’ minds (laughs). This is much closer to being possible with vertical search, since behavior can be already segmented to the particular industry/category. Technology is not quite caught up yet to this.
KW: Overlay of behavioral targeting metrics. Being able to see what stage in the buying cycle a searcher is at the same time as overlaying their actual activity on a page, for example.
GP: There needs to be more education to the consumers about the value/relevance of vertical searches.
PC: An increase in technology to help make the user experience even better.
(9) Audience Q: “How important is application development in order to be better able to track consumer behavior after the click?
Consensus: very important. Eventually this kind of data will help to sell the value of vertical search engines, especially if it indicates that people are buying more. It seems that verticals are more likely to be able to collect information vital to help sell the service.
(10) Audience: “What if Google comes out with a vertical search?”
PC: Unlikely that Google would put itself into direct competition with such a large source of income as this particular vertical. They will probably do something, but different than direct competition.
KW: It is important to try to work together with the verticals in order to be complementary to each other.
(11) Audience: “Should you give up on bidding for a term dominated by verticals in the paid results?”
GP: No, not yet. It is still important to cover as many bases as ;possible to get closer to market saturation.
KW: “There is a lot of low-hanging fruit still to be had.”