Thoughts on the Search Tornado: The Chasm Revisited

First published October 26, 2006 in Mediapost’s Search Insider

While pondering topics for this week’s column, I was in a quandary. I could join the 1.65 billion people who are penning about the GoogTube deal. I could do something timely about Danny Sullivan’s decision to stick it out with Incisive and Search Engine Strategies for a little longer (yes, if you haven’t heard, it appears they’ve kissed and made up, kind of, and Danny will be around for the New York, San Jose and Chicago conferences, although he’ll be transitioning to a new chair) or I could chat about meeting Marissa Mayer last week (albeit briefly), the person in charge of user experience at Google.

I pick… none of the above!

I’ll loop back to Marissa in a later column, but I’m angling for an interview to talk about some of the things I’ve learned in my rather obsessive detailing of user behavior on Google, so put that on the back shelf for now.

Instead, I’m continuing to pick up the thread from last week’s column. The idea of search marketing crossing the chasm perked up a few ears, notably amongst financial analysts, so I thought I’d spend a little more time exploring the concept and what it means for search. Ironically, the day after the column ran, Google was heading for a new stock high and I was scrambling from building to building and meeting to meeting at the Google complex in Mountain View. I must say, everyone seemed to be smiling. I think the surge in stock prices had everything to do with my column running and nothing to do with their quarterly earning report, but some may argue differently.

If search marketing is indeed crossing the chasm, there are some rather interesting aspects to look at.

Who’s Crossing First?

The ideal strategy for crossing chasms is to gain critical mass in a particular vertical, and then market to adjacent markets that share similar pains, gradually reaching the tipping point where everybody jumps on board. Geoffrey Moore refers to this as the Bowling Alley strategy, hitting the head pin and knocking down the adjacent ones.

Search is well down this road (or alley). Over the last few years, search has gained this critical mass in the verticals that tend to be proficient in direct response marketing. Categories like travel are heavy users of search, and we’re starting to see this extend into areas such as consumer electronics, software and other B2C consumer categories.  Hard on the heels of these head pin categories are financial services and automotive. These verticals will be the first to jump.

It will take longer for search to gain critical mass in the B2B sectors, but the early adopters in these verticals are already laying the foundations.

The last to cross will be the local Mom and Pop shops. There are still some challenges to be addressed in gaining local traction, the most notable being a lack of a quality Web presence. But every month that goes by, the functionality of online local search increases to the point where it will be the users driving adoption, since local businesses can no longer ignore the fact that this is where people are searching prior to purchasing. And this is where search can open up vast tracts of unexplored potential.

Reducing the Pain With a Total Solution

Another trend that is becoming more apparent is the assembling of a total solution. The chasm can only be crossed when a significant portion of pain and risk is eliminated from the equation. Early adopters can stomach this, but pragmatists will avoid it like the plague.

The early markets are comfortable with cobbling together pieces of solution from disparate sources, providing the glue that holds them together and investing significant resources in coming up with an advantage over their competitors. This is exactly where search is right now. You need a pretty savvy inside person who can make search click for most organizations. It’s still far from a turnkey solution.

But look at what’s currently happening with the engines: The belated release of Yahoo’s Panama platform. New targeting capabilities from MSN. Google’s offering of free analytics and landing page optimization tools. All these speak to one goal: eliminate the pain for a mainstream market by assembling a total solution. The engines are putting together the package they need to appeal to a mainstream buyer.

Who’s the Gorilla?

The biggest question: Who will the winner be? There can only be one 800-pound gorilla, despite all the talk from the three engines that there’s more than enough market to go around. Google’s current marginalization of Yahoo’s business model speaks to this. The fact is, the marketers will crown the winner, based primarily on market share, which is dictated on the best user experience. Google wins this battle hands down. While it seems as if the engines have up to now been willing to cede the pole position to Google, if they don’t want to end up in the chorus, they have to get serious about this race. It goes quickly–and right now, Google has a huge head start. I’m beginning to think it may be uncatchable. Perhaps that share price isn’t as ridiculous as it seems.

I drop one last King Kong-sized hint for the engines. You can’t pay enough attention to the user experience. And right now, Google’s eating your lunch, and your afternoon snack. Ad management platforms only matter if you have a market to target the ads to.

What This Means for SEMs

So, if we’re crossing the chasm, do SEMs get shut out? No, in fact, the opportunity has never been greater. We can ride along with the main players in this chasm crossing, the engines. But we have to be nimble and fleet of foot. There are plenty of opportunities to add value along the chain as the engines assemble the total solution. But remember, the aim of the total solution is to reduce the pain points, not increase them. Therefore, the engines will be working hard to identify where mainstream buyers experience pain and try to introduce new solutions to eliminate it. That means if a SEM finds a spot where they can add value, i.e. bid management, they have to be prepared for the engines to introduce a solution and wipe out their business model overnight. Another strategy is for SEMs to gain deep vertical expertise in one particular industry, because the engines will be caught in a vortex of demand and will be stretched far too thin to be all things to all people.

So there will be a lot of opportunity, but be prepared for it to be transitory. While this holds true for service-based SEMs, it applies to a much greater degree to technology developers. Sure, this might make it tough to navigate, but if the tornado develops, you really have no choice. Either you hang on for the ride, or you sink.

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