Enough Talk about Search Bubbles!

First published March 9, 2006 in Mediapost’s Search Insider

Geoff Ramsey from eMarketer is a smart guy. At Search Engine Strategies in New York last week, Geoff said that search marketing is only at 10 percent of its potential size. I’m not sure how Geoff quantified the 10 percent figure, but when it comes to the fact that we’re only scratching the surface of search, I agree wholeheartedly.

There was also a lot of press last week about Google’s share price eroding because its CFO, George Reyes, said he expected slowing growth in the next quarter. So what’s the deal? Is search growing, or isn’t it?

My Breakfast With The Analysts

While in New York for SES, I had breakfast with a number of financial analysts. They wanted me to quote a hard number to try to quantify the growth of search spending quarter over quarter. They wanted the exact impact of click fraud. They were hungry, and it wasn’t for the scrambled eggs and bacon. They wanted numbers to plug into a spreadsheet and try to predict a growth trend for Google. They wanted to eliminate ambiguity, put form to the nebulous and try to quantify a social phenomenon. My panel partner, New York Times / About.com‘s Marshall Simmonds, and I tried to give them what they were looking for, but I couldn’t help but think we were on opposite sides of a communication chasm. We weren’t looking at the industry through the same lens.

Here’s the problem. I tend to be a big-picture, long-term thinker. In that context, I see nothing but blue sky for search. It can’t help but grow exponentially. Meanwhile, the analysts are focused on the next three months and what the next earning report is going to look like. Is there a gremlin lurking out there that will jinx Google’s profitability next month?

I understand the short-term focus. I know it’s vitally important to investors. I am somewhat familiar with how the market works. But I’m just not sure how you micro- measure something that’s perhaps the most significant sociological event in our lifetime. And no, I don’t think I’m overstating the case.

This Isn’t A Bubble, It’s A Tidal Wave!

I’ve said this before, and I’m saying it again. Search is the key to online interaction. It is the connector between intent and content online. And online will soon become the only line. It will be the umbilical cord through which we interact with everything beyond our immediate physical world.

We have no idea how much our lives will change in the next two decades. It will be the most rapid assimilation of sociological change in history. Everything that forms our current reality will be reengineered and reinvented from the ground up. This includes our definitions of community, social relationships, family, communication, our work, our leisure and our very concept of self. The physical and the virtual will merge, and the simple act of searching will become the synapse that connects us to the World 2.0.

That’s a big concept, one that’s hard to constrain with talk of quarterly earnings, bid prices remaining flat and the potential danger of click fraud. These are all valid concerns, but to me, it’s a bit like forecasting the demise of the automobile in 1902 because poor roads caused frequent flat tires and there were no gas stations. Perhaps that dampened sales of automobiles in the short term, but the fact remained that a fundamental wave of change was underway, and any restricting obstacles were eventually swept away by the sheer force of that change. The same is true of search.

Consumer Control

Here’s just one concept that has been irrevocably altered forever. The individual is now in control. We can connect instantaneously with other individuals, and ground swells of societal change can happen literally overnight. We no longer mindlessly accept what is given to us, we take what we want. And search is the mechanism we use to find what it is we want. It used to be that vast power constructs were required to form the pipelines required to get goods, services or entertainment to us. The Internet has made those power constructs unnecessary. The infrastructure now exists for any company to connect to any consumer. But, and this is a fundamental concept, the consumer now chooses to connect with the company, not the company with the consumer. The agenda lies totally in the hands of the individual, and that agenda usually includes search, in any of its various forms.

Defining Online Interaction

The biggest issue facing search now is not flattening bid prices or click fraud, it’s in quantifying the value of search in the context of complex online interactions. At Search Engine Strategies I had the privilege of being on a panel with Greg Stirling from the Kelsey Group, Alan Rimm-Kaufman of the Rimm-Kaufman Group and Diane Rinaldo from Yahoo. In the Q&A after the session, Greg and I both stated that we suspect online interactions are much more convoluted and messy than we might think. We don’t navigate online in a considered way. We click quickly, make split-second decisions and use the “back” button extensively. Somewhere in this soup of online interaction, we work our way through our own buying funnel, but this could happen in one distinct session, or it could happen as fragments of several sessions spread out over months.

In there somewhere are our interactions with search. And when I say search, I use the term in its broadest context, not a clearly defined interaction with Google, Yahoo or MSN. Search for me is any user-initiated request for information, so it could be internal site search, vertical search or general search. To me, it’s the concept of search as the user-controlled online connection that holds the promise, not any individual property. I’m sure Google, Yahoo and MSN are all smart enough to realize the potential and are all working on ways to capture as big a share of this fundamental activity as possible.

To try to extricate the search activity and tie quantifiable value to each touch point from this tangled mess of online interactions becomes tremendously challenging. That’s why most search marketers only measure the end, the click that leads to the final transaction. It’s easy, but it’s not capturing the value of search along the way. And if, as I suspect, search is a essential element in online navigation, then the value is significant.

So I return to Geoff Ramsay and his prediction that we’ve only so far seen 10 percent of the potential of search. Absolutely! It’s like standing with your feet in a puddle while you watch a tsunami coming your way. It’s not a question of if you’re going to get wet, but rather, when.

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