Search Summit Takes: Full-Funnel, “Portal” Search Remains Resilient
The second annual The Transformation of Search Summit in New York provided an opportunity to check on some current search marketing trends from the practitioner perspective, and review a few predictions from last year’s conference. On balance, the advertising takeaways for Google were positive over the near-to-medium term, despite participants’ acknowledgment of Amazon’s “full-funnel” threat, and uncertainty about how voice search could affect the search ecosystem over the next few years. Sourced points are so indicated.
Search pushes for more paid clicks and “portal” status
There is a trend to shifting search marketing efforts to paid search from search engine optimization (SEO), per Disney’s Carolyn Shelby. She sees that, at the industry level, a lot of traffic is shifting to paid clicks from non-paid clicks, with a large reduction in the number of organic listings. Shelby noted that Google’s focus on diversification of results drives larger companies to invest more in paid search, because the number of their organic listings can be capped. Data presented by Jumpshot shows a trend to more clicks on paid links, with paid click-through rates rising, and fewer clicks on organic links.
Back to the future: some search results echo AOL’s portal pages
Search results, whether paid or organic, strive to be more complete, multi-media and the product of the engine, as opposed to links from the engine. Per Condé Nast’s John Shehata, 50% of searches on Google result in no clicks, keeping traffic on Google properties, and many search engines are becoming content publishers themselves, and thus competitors to other publishers. Jumpshot’s Steve Kraus said that more Google search engine results pages (SERPs) look like the AOL portal pages of the Web 1.0 era. MindShare’s search & social group director, Tarik Mugisuddin, sees search becoming more full funnel, using more audience targeting, and more automation.
Amazon threat to ad spending may be broader and slower to develop than expected
One take from attending last year was that the threats from Amazon to search ad spending on Google were overblown, and this theme continued with variations at this year’s conference. Last year’s speakers generally said that brand performance budget increases looked set to go largely to organic and paid search on Google. This year, key points on this issue this year were citing Forrester’s view that Facebook budgets might be more at risk from Amazon, and the opinion of John Denny of CAVU Venture Partners that Amazon’s media strategy has been somewhat slow to develop. One obstacle has been that Amazon has been paranoid about sharing data, taking the attitude “play my way or go home,” per one Q&A session. Rather than focusing simply on taking search ad spending share through its e-commerce platform, Amazon is investing in other parts of its ad platform, like video, which are more likely to threaten prime time TV and national broadcast budgets, per CAVU’s Denny.
One catalyst to watch for Amazon’s advertising growth is use of the platform to drive sales occurring off the platform. Per CAVU Venture Partners, using data from its portfolio companies, 75% of sales attributed to Amazon display advertising occurred off Amazon, and 85% of sales attributed to Amazon search advertising occurred off Amazon. The breadth of Amazon’s ad platforms should facilitate its taking ad share across the full purchase funnel.
Visual search more market-ready than voice search
Another theme consistent from last year was the trend to more competition in niche search use cases, such as visual search. Pinterest said its strategy is to optimize for shopping, a complement of sorts to Amazon, which optimizes more for buying. Pinterest’s strategy here has three pillars: visual discovery, personalization by taste, and making all products shoppable.
There is undeniable interest in voice search, which continues to gain share of overall search volume, but a general consensus, similar to last year, that marketers are preparing to use voice search in the future, but not doing so now. Per a Convince and Convert study cited at the conference, smart speakers take media time away from a range of media: smart phones, TV, print and radio. However, search engines have yet to monetize voice search, per a comment from Volvo, and it is difficult for advertisers to make a case for the ROI on voice search, per a comment from MasterCard. Amazon’s Echo Show, with its screen, could be a catalyst for advertising via voice search. Global marketers are preparing for voice search so as to be able to better compete in “leapfrog markets” like India, where 50% of all searches are by voice already, per Synup on a panel. One panelist thought voice search could be meaningful by 2022, say, as the vendor ecosystem to support voice migrates.
Data: jam tomorrow?
Although walled gardens like Google and Amazon promise measurable results, the reality for digital marketing overall has been different, and increasing restrictions on the use of consumer data may aggravate the shortfall in effective measurement of digital strategies. Per the presentation of Jake Grabczewski of Xaxis, 71% of marketers say it has become more difficult to evaluate the effectiveness of digital media investment in recent years. There was a candid assessment in Disney’s talk that the SEO industry as a whole has yet to arrive at a Plan B if cookie restrictions (e.g., Apple’s Intelligent Tracking Prevention, Chrome’s cookie blockers) and data privacy regulations (e.g., GDPR, California’s Consumer Privacy Act) play out to full effect. Per Disney’s Shelby, only larger companies are likely to have the scale to fall back on using only first party data. Increasing integration of machine learning (ML) and artificial intelligence (AI) into marketing will put a greater premium on data access, given that, according to Xaxis’ presentation, data and talent — not algorithms — are the key differentiators in improving performance by means of ML and AI.
Finally, blockchain was mentioned once, to note that it was on last year’s agenda. The realist’s view of blockchain technology from last year’s conference was that the self-imposed limitations of creaky crypto infrastructure were in service of achieving insufficiently compelling consumer benefits. Perhaps next year’s summit will be able to provide a more sanguine update.
After practicing corporate and securities law, James Dix began his career on Wall Street as an equity research analyst in the technology media telecom sector at Deutsche Bank in 1999. Dix has appeared frequently on media outlets such as CNBC, FOX Business and Sky News to discuss trends in media investing, as well as publicly traded companies he has covered, such as Alphabet/Google, CBS, and WPP. Since 2017, James has advised clients on media investing and fundraising, blockchain applications, and the use of digital incentives in advertising. He has a BA in Economics from the University of Chicago, a JD from the University of Virginia School of Law, and an MBA from the University of Chicago Booth School of Business, and is a CFA Charterholder.
