Search Advertising: Now & Future

Mar 1, 2006 - 5:05 pm 0 by

What's the state of search advertising now and where's it going, especially as search leaps out of the browser and into places like our TVs, phones and music players? This session with search engine executives explores the topic.
Moderator: Danny Sullivan, Editor,
Tim Armstrong, Vice President, Advertising Sales, Google Inc.
Tim Cadogan, VP of Search, Yahoo! Search Marketing
Gerry Campbell, VP & GM Search & Navigation, America Online, Inc.
David Jakubowski, General Manager, MSN Search
James Speer, VP Marketing and Products, IAC Advertising Solutions, Ask Jeeves

Danny: There have been stories that we may be hitting a price ceiling, where we cant spend more. Growth is slowing... What do you think?

Ask: There is significant delta for prices. There are now 4 options to go with. On the query volume side, there is potential for it to lapse. Huge opportunity to deliver ads to content. Yahoo: We see a lot of opportunity to growth, many not online and many online not utilizing search yet. Even larger companies, they are helping them connect the dots of offline and online (I think he said that). Within the core marketplace there is still significant growth by category, such as entertainment, so there are marketplaces with room to growth. AOL: The magic of SEM is that we are all tapping into consumer intent. If you look at the natural progress, there has been amazing revolution to tap into that intent. We need to look into new models to tap into consumer intent. MSN: Understanding more about how conversions are happening, demanding better tools to make the conversion happen. That will take off exponentially. It is our responsibility to drives those initiatives. Google: He mentioned growth as a percentage may slow, but in actual numbers it will grow significantly.

Danny: Will we see changes towards CPM models in the future?

Yahoo: Different people different companies value things in different ways. in the future, they hope to normalize this value. So they want to provide the data to enable people to back out of one model and into a different model. MSN: Didn't get it Let me note that the Yahoo PR team, sitting one row behind is giggling at both Google and MSN's responses. Ask: Ultimately the advertiser is looking for flexibility. They want a complete palate of options at their disposal. At what point in time is there a single medium to make these creatives. AOL: How do you price for video delivery, or picking up a phone. There is a lot of upside to bringing richness to the experience. As we grow to have more and more understanding on how consumers behave, that is where media companies have more opportunities to expand that into other mediums. 99% of ad dollars is spent offline, so see what is coming? Google: said he just agrees

Danny: People like the cost per click method. Contextual ads isn't search directly, now you see radio, etc. How do you see it falling out.

Google: The information that comes from the digital media are transferable to other areas. You can apply the concepts to other medias. You have to think about contextual when it first started. As a specific industry, the scalability is tremendous for advertisers to use all of their assets. There are clear areas of value. MSN: Yea, there we are just scratching the abilities of these areas. Voice recognition technology, not sure what he meant by that... Yahoo: The beauty of intent and then tracking it. They have a large performance and brand marketing business. And they are merging the two closer. there is tremendous potential in all of this. Ask: Notion of getting into video and audio. There is a lot of potential in what will come in the very near future. Yahoo: Social media is going to be big, but he thinks this will create opps and challenges in how ads are delivered.

Danny: How does your services change the traditional ad agencies?

MSN: The more complex it gets, the more the agency becomes more critical. Yahoo: Look at how the conference changed. You had SEOs only and now you have tons of huge companies here. This is very important to the industry and we have programs, Yahoo Ambassador Program. AOL: We are in the middle of a transformation from simple search to data driven metrics. It is critical as an industry to think about advertising FOR users and not TO users. Verticals are critical... Yahoo: Maybe it makes sense to integrate video or audio into the SERPs at one point. It depends on the search intent. Google: We look at our role as tools and data. The agencies can use that information... Ask: yada AOL: Text is easy to create, but to tap into user intent, they need to figure out how to be much more interactive and functional. There has to be some concept of high volume creation.

Errr, so much fluff talk, am I nuts or is it all fluff?

Danny: Click fraud issues.... Is it a big issue, etc.?

Yahoo: It is an issue. Since GoTo it was the first thing they worried about. The first area of technology they built was how do they identify click fraud and weed it out. Since day one it has been looked into and identified. They (1) they look at all clicks and (2) and patent technology that looks at the type of clicks. We take it very seriously. It is about trust and trust adds value. We do think we have a pretty good approach and the clicks we charge for are earned. Google: agrees. The auction itself transfers back to the customer's ROI. We take this issue very seriously. In general, there is a public perception and then there are the things we do behind the scenes to manage them. Those things we do, over meet those perceptions. Google has instant cancellations feature.

Danny: Search ads and marketing mix. Super Bowl ads... Are we going to see a flip side, where we want to drive people to search?

Yahoo: We kind of see that now. You see bi-directional efforts. For example, they had their first annual search light award. And this was won by Honda. We are seeing a lot more of that. AOL: Navigational queries. We know people come back to search. It is habit. it is convenient. 50% of queries are probably already known by users, so 50% of searches at AOL are somewhat navigational. MSN:

Errrrrrrrrrr, im going to stop soon. I am sorry.

Danny: Biggest challenge in upcoming year and most successful at in past year:

Google: Our success is in being staying very focused on user needs. The success comes from ads and our tests. The biggest challenge, there will be a fundamental shift, we are starting to close that gab of % of ad spend. There is a scalability challenge in getting that money shifted. AOL: Success; AOL has had a revitalization of its brand. Growing very quickly on the Web, AIM, Netscape, etc. Search is a huge driver in that. The challenge is, we are riding one horse right now, and we need to think more broadly in the coming year. Yahoo: Find, Use, Share and Expand (the yahoo slogan). So with success, this year they built several key technology (answers, myweb) and bought others like flickr. They have the biggest collection of social media technology. That will lead into the future of ads. The challenge is pretty specific, pay for performance, executing will be a challenge. MSN: The biggest challenge was the head start the other guys had on them. Success is in innovation (version 3.0 of adcenter) and they have tried to listen to the consumer (advertiser). Ask: It is about execution, they have a fraction of the resources. But yet they have a nice market share. They launched Ask PPC. IAC acquisition provides them with a host of opportunities and challenges.

Ok I am done. skipping it...



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