Suddenly, the end of the year is in sight. Where did 2004 go? As the year draws to a close, between holiday preparations and the in-laws’ arrival, it’s time to look back at the last 12 months and forward to the next 12.
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In terms of the online media industry, 2004 has been a good year. Investment in online advertising and media owner revenues has grown considerably. Jupiter Research forecasts $7.6 billion will be spent in the U.S. on all forms of online advertising by the end of 2004 (up 20 percent from 2003). In Europe, that total will be €2.1 billion ($2.8 billion), up 35 percent. These growth rates outperform all other advertising channels.
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These are impressive growth rates. The main beneficiaries will be the search engines, Google in particular. These gateways to the Internet have successfully cashed in on enabling marketers, both large and small, to access a rich seam of self-targeted prospects through paid listings and keyword sponsorship. The business potential of search engines was epitomized by the Google IPO in the middle of year. Paid search was the fastest growing and most dynamic area of online advertising in 2004 and will continue to be so in 2005 as it establishes itself as the cornerstone of the online mix.
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Other key winners in this marketplace will be Internet portals, such as AOL, MSN, Yahoo, and local market variants. These multinational Internet giants offer the highest traffic content, the best online audience reach, and the most diverse advertising opportunities. Furthermore, ad-serving technology platforms, such as DoubleClick, 24/7 Real Media, Atlas DMT; digital media agencies, such as Carat, MediaCom, and I-level; and creative agencies, such as AKQA, AGENCY.COM, and Digitas all had a successful 2004. Online finally shook off its troubles and re-established itself as a viable, grown-up industry.
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Everyone in the industry is looking forward to more success in 2005.
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However, marketers looking to acquire or retain customers through online media, whether as novices or seasoned pros, have their work cut out for them. The cost of implementing and managing campaigns is likely to grow, and the renowned cost efficiency of digital media will be harder to achieve. A number of factors will raise participation costs. That will lead conversion rates rising if return on investment (ROI) is not to slip downwards. More marketers will come online and competition to attract online consumers will intensify. Supply and demand will increase the cost of online real estate as marketers seek to secure premium inventory spots.
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This is already happening in paid search, where auction-style keyword bidding drives up prices, and forces marketers to up the ante or select new keywords. It’s also likely to happen in Web site media, where publishers are charging a premium for value-added inventory. To establish an online presence and attract audiences, online marketing campaigns’ scope and scale will have to grow, demanding bigger budgets.
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Marketers will look to a wider range of formats and ad opportunities to stand out from the crowd. Advertisers are increasingly adopting high-impact rich media formats to differentiate themselves. These come at a premium and are inherently more complex to implement. With rising prices and broadening campaign activity, maximizing efficiencies and optimizing will become even more critical. Marketers must find more resources (whether internally or externally) purely to manage ongoing campaign activity.
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Along with these issues, marketers now must persuade an ever-more wary online audience while complying with increasingly stringent rules, regulations, and best practice codes. Online consumers are growing more experienced and confident. They’re less willing to accept intrusive commercial messages, increasingly likely to adopt ad-blocking software, and less inclined to respond to irrelevant communications. They’re assisted by increased consumer protection legislation and industry initiatives to counter unwanted advertising. E-mail marketing in particular is growing more complex and costly. Legitimate permission-based senders must differentiate themselves by adopting authentication and reputation-based systems and by testing against content filters.
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Marketers must to work harder and smarter in 2005 to achieve good results. They should look to improving campaign targeting and relevancy. Behavioural targeting and auto-optimization technologies will see growing interest. Hard-working optimizers will be in great demand.
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Happy holidays and a prosperous 2005 to you all, wherever you sit within the online marketing sector!

By Julian Smith

While some may wonder what the next step for the search engine industry to take, Google may have already answered that question. Ever evolving, Google has their eyes set on the future with news of their newest innovation, Google Print. Not only will the search engine’s newest entity allow room for an exponential amount of growth, Google’s written word department may also open new avenues for search engine marketers to pursue.?

Google is in preparation to one-day launch Google Print. How do you think this will impact the search engine industry? Does the idea of Google as a publishing entity sound appealing??

The announcement of Google Print revealed the search engine would be “partnering” with five academic institutions in order to convert the public domain of their print libraries into a digital format that can then be indexed. According to the BBC, four of the five are prestigious universities including Stanford, Oxford, Harvard, and Michigan. The fifth institution to give Google access is the New York Public Library. Google hopes to have this digitised content available to the public by 2010.?

A comment from the Harvard Gazette explains the university’s outlook for the project: “If the pilot is deemed successful, Harvard will explore a long-term program with Google through which the vast majority of the University’s library books would be digitised and included in Google’s searchable database. Google will bear the direct costs of digitisation in the pilot project.?

By combining the skills and library collections of Harvard University with the innovative search skills and capacity of Google, a long-term program has the potential to create an important public good.”?

While the goal for Google Print is explained on their about page: “Google’s mission is to organise the world’s information and make it universally accessible and useful. Since a lot of the world’s information isn’t yet online, we’re helping to get it there. Google Print puts the content of books where you can find it most easily - right in Google search results.”?

Although Google Print is in the pilot stage, the future looks promising. The possibilities of having these incredible libraries literally at one’s fingertips are staggering. No longer will research original text from literary masterpieces considered a daunting task. A few simple keywords will alleviate the majority of the legwork. While this may come across as common knowledge, John Battelle also gives another reason to be optimistic about Google’s newest endeavour, “this move clearly puts Google in the category of innovator when it comes to adding information to their index.”?

However, the very reason John gave for his optimism also led him to have some interesting thoughts:?

“Google’s job was not to build the web, its job was to organise it and make it accessible to us… But all this new Print material, well, it’s never been on the web before. It’s Google who is actively bringing it to us. How, therefore, does Google rank it, make it visible, surface it, and. importantly…monetise it? If a philanthropist were to drop the entire contents of the Library of Congress onto the web, Google would ultimately index it, and as folks linked to the content, that content would rise and fall as a natural extension of everything else on the web. But in this case, Google itself is adding content to the web, and is itself surfacing the content based on keywords we enter. This is a new role - one of active creator, rather than passive indexer.”?

Undoubtedly, Google Print does redefine the role the search engine has been playing since its inception. No longer will Google by merely indexing the web; they will be adding vast amounts of content as well.?

John also mentioned the monetise-ation of Google’s upcoming feature. This is another area that Google Print may help energise: search engine marketing. Although Google Print isn’t going to be available for some time, once launched, the amount of search engine real estate available for advertising will increase a great deal. This dwindling space has become an issue to some marketing experts. John also introduces other avenues that Google may be able to monetise, breaking their dependence on advertising revenue, an issue that was noted in their IPO filing, “it’s a very short distance between that and, say, an affiliate link to Amazon or any other booksellers for a cut of an in copyright sale. It’s also a very short route to the on demand publishing of an out of print and out of copyright book with a company that is set up to do such a deal…” Google the publisher? To quote the guys from the Guinness commercial, BRILLIANT!?

However, with every new innovation, there are potential pitfalls that can be encountered. A couple of conversations deal with some of these. Like non-destructive scanning; no doubt a priority from these academic pillars. There are also rumblings of how the American Library Association will react. But, we have quite a bit of time until the problems become reality. Of course, if Google can’t meet the expected launch window, these rumblings will grow ever louder.

By Chris Richardson

Search. It’s as hot as Chicago is cold (and the city of my birth is very cold indeed). Search Engine Strategies Chicago (SES), which ended yesterday, boasted a staggering all-search, all-the-time line-up of no less than 63 packed sessions over four days. You leave both overwhelmed with new knowledge and wondering what you missed. No way can one person cover four tracks, over four days, of search marketing expertise.
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So herewith, top-line gleanings of the trends, news, and, of course, a little of the latest gossip from Internet marketing’s most hypergrowth-oriented sector.
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The Changing Results Page
Danny Sullivan shared what may have been SES’s most interesting insight in his keynote: search results pages are going to change, and marketers are going to have to deal with those changes.
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“Personal search is here,” Sullivan observed. Last year’s dream is this year’s reality, with the launch of more personalized engines such as A9 and MSN Search and moves like the Eurekster alliance. “Personal changed this year to memory/history, or discovery versus recovery,” said Sullivan. “There are shortcuts and direct display, like Yahoo shortcuts, AOL Snapshots, and AskJeeves’ Smart Search.” All these, in some, way funnel Web results into vertical or local results. “Marketers need to get it. Marketers need to plan for it,” is Sullivan’s message. Are you optimizing solely for organic Web search results? One day soon, your listing could vanish from the results screen.
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Click Fraud
It’s been around a while, but only now is click fraud a topic of serious attention. There are lawsuits, case studies, and a handful of vendors offering services to victims of search engine pay-per-click (PPC) scams. Sessions on the subject were packed with search advertisers, many of whom fear they’ve been paying for malicious clicks on their PPC search engine ads. You’re going to hear a lot about click fraud in coming months.
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Personally, I’m hoping to hear a definition of the term. Like “spam,” “click fraud” can be a matter of perception (outside the egregious cases, of course). I hope a definition falls within parameters of cost threshold and malicious intent. It’s not unreasonable to accept some traffic via your ads from competitors (hey, you’re probably clicking on theirs once in a while, too). And click fraud certainly is not all unwanted traffic or traffic from an undesirable geographic location. Expect screaming, finger-pointing, a few penny-pinching marketers out to lower their bills a few bucks, and solutions. Doubtless, we’ll all witness a measure of click fraud-fraud before this one simmers down.
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Tools, Tools, Tools
Someone ought to build a search engine just for all the tools and solutions out to manage, operate, and optimize search campaigns. All this simplification is getting mighty complicated. Every major site analytics program has search campaign functionalities baked in by now (including click fraud detection, of course). There are tools to manage search ads, tools that bid, tools to select and manage keywords, tools to track conversions (online and off-), and even tools that measure searcher attitudes based on search behaviour. There are new consumer search tools (especially desktop search apps, blooming like flowers in May) that may, or may not, ever have advertising or marketing implications.
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New Products, Renewed Companies
The tools and new search products just keep coming, and search-related companies are in a phase of hyper-growth, expansion, and hiring.
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The most recent product launches from engines and directories are aimed at marketers, particularly in vertical and local search. Just a few recent examples: Find.com teamed with ThomasB2B.com to create business listings of more than 550,000 industrial suppliers from 29 countries. KnowledgeStorm came out with “Click-to-Lead,” a search solution IT managers can use — without bothering to learn search engine marketing (SEM) principles. Both Yahoo and Overture enhanced their local search products with new, richer offerings. And did you hear? MSN is in the house — with search. Justin Osmer, MSN marketing product manager, told me “a yellow pages-type directory is the next logical step” for MSN search. He also says “there’s a lot to be done with personalization and vertical search tools,” citing the “dials” on MSN Search can customize results to a searcher’s preferences (see that bit above about the changing results page…). And Dariusz Paczuski, AOL’s VP of local products, promised to reveal more about AOL’s new local search products right after the holidays. The launch is promised for January.
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And then there’s all the sworn-to-secrecy skinny I can’t share… yet. I’m hearing about alliances and acquisitions, particularly between European and U.S. search firms and, in some cases, ad agencies.
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Finally, dear readers, thanks for sticking through another year with us at ClickZ. Thanks for reading and for writing. We’re as grateful for your accolades as we are for your criticism, which hopefully helps us grow.

By Rebecca Lieb