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Businessandleadership.com published an article yesterday on JP Morgan's predictions for the paid search marketing sector in 2009. The JP Morgan team was lead by internet analyst Imran Khan and the full article is available below:

http://www.businessandleadership.com/news/article/12177/marketing/measurability-key-to-search-growth-in-2009

Some interesting points are raised. In 2009 marketing budgets in many organisations will face pressure as companies seek to cut costs and minimise profitability erosion.

Imran predicts that newspaper and radio advertising will take the biggest hit and that performance-driven advertising channels like search will do well as measurability becomes the watchword.

The overall prediction for the global paid search marketing sector in 2009 is 12% growth which is a pretty good figure in the current economic climate where many industries are facing shrinkage.

This will be driven by the aforementioned growth in search advertising's share of marketing budget along with a global increase in query inventory of over 20% as consumers and business research their purchases online to achieve cost savings.

Now is not the time to stop marketing but it certainly makes sense to squeeze every last bit out of your spend and to make cuts in non-performing areas.

Search advertising is measurable, proven, performance-driven channel that delivers awesome return on investment. That is more valuable now than ever.

 

Gord Hotchkiss of Enquiro has penned an interesting column on searchengineland.com:

http://searchengineland.com/who-owns-the-search-page-15720.php

He talks about ‘ownership' of the results page and differentiates nicely between brand communications and direct-response search advertising. 

His paid-search philosophy is that staking out a presence on a broad range of relevant keywords is a good place to start  with search advertising. The results page doesn't and will never belong to a particular advertiser's brand and a presence here on a particular keyword is a necessary first step before advertisers can bring searchers through to their turf (the landing page).

This is a useful way to think when deciding where you should be keyword-wise. Defining your basket of keywords too narrowly is a mistake which means you may never get to start many conversations which could have potentially ended well.

His airline ticket-counter analogy is simple and clever. The message is that when designing your paid-search campaigns you need to pick keywords based on your competitors' definitions of their brands and searchers' anticipated behavior as well using your own brand definitions.

If you start with a broader keyword net then you may have thought would be optimal you get the chance to make the cuts where you see poor return. If you start out with a very narrowly defined search campaign you may never get a chance to evaluate some opportunities that would have delivered well.

What the customer thinks they are looking for is sometimes more important than what you think you are selling.

Greg

 

 

Om Malik wrote an interesting short article last week on Microsoft's efforts online and how they continue to bleed market share even as they funnel vast amounts of cash into their loss-making online division.

http://gigaom.com/2008/11/26/why-microsoft-fails-to-win-online/

Om talks about Microsoft's structural issues and the gimmicky marketing of the Live search engine.

I see plenty of other problems for Microsoft as an organisation.

 

On the consumer OS front there is no single competitor ready to snatch a big chunk of the market but I see a number of things happening:

·         Mark Shuttleworth is putting a lot of cash behind Ubuntu and I expect it to improve dramatically in terms of ease of use.

·         Mac OS will increase market share due to increase in Mac sales.

·         Mac OS may be licensed for PC use in the future.

·         One or more virtualisation packages may evolve into an OS-type platform.

·         I expect Google to eventually release a platform aimed at Windows, probably a suite of web services bolted onto a Google flavour of Linux. 

·         As mobile devices become increasingly important, Symbian and Android will become major competitors to Windows.

·         As free alternatives (open-source and ad-supported) proliferate, and the importance of the OS diminishes, Microsoft will be forced to reduce OS revenue per user or stop charging completely.

·         Disruptive things I can't predict will happen but I doubt they will favour Microsoft and its dated business model.

 

 Outside of the consumer OS market, Microsoft have other challenges:

·         Their cash-cow, Office (inc Exchange), is under attack from free/cheap web services and software packages like Google Apps, Zoho, Zimbra, StarOffice, OpenOffice.

·         Window Server 2008 looks like a decent product but Linux will continue to make inroads in the datacentre.

·         Oracle and MyQL are causing problems for SQL Server.

·         I have doubts about the quality of Microsoft's leadership at the highest level. I think Bill Gates is already being missed. 

 

Today, Microsoft is worth as much as Google and Apple combined. I think that ratio will change radically over the next 5 years unless Microsoft make some major changes.

 

Greg

 

 

eMarketer has quite dramatically reduced its social networking ad spend forecast for 2009 as  Michael Learmonth noted on AdAge.com:

http://adage.com/digital/article?article_id=133147

The notable thing about this for me is that the forecast is still predicting growth of 8.3%. While that may seem unremarkable for us digital types used to seeing much bigger numbers, I think it’s safe to say that most sectors would be delighted to see growth predictions like this given the current economic circumstances.

It is also interesting to see to what degree Facebook is lagging behind MySpace in terms of ad revenue. I would attribute this largely to clever deals with minimum revenue guarantees that MySpace has signed in the past and I imagine this gap is set to close.

Greg 

 


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