Live at SMX: State of the Search (Marketing) Union

Where is Internet search heading? That’s the topic of a panel on this last day of the Search Marketing Expo, the conference in Santa Clara held by Search Engine Land, Danny Sullivan’s most excellent Web site. Offering their thoughts will be Vanessa Fox, contributing editor at Search Engine Land; Avinash Kaushik, analytics evangelist at Google; Misty Locke, president of Range Online Media and chief strategy officer at Range Online Media / iProspect; and David Roth, director of search engine marketing at Yahoo!. (I guess Microsoft is leaving whatever it had to say to Steve Ballmer, who keynoted Tuesday.) I’ll liveblog the highlights of the panel here. (Actually, it turns out that, apropos of the thrust of the show, the panelists end up talking more about search marketing than core search.)

Sherman says we’ve seen more radical change in the past year than in the previous 15, and he’s not seeing that slow down. Sounds about right to me, though I think the search interface has a lot of change to come.

Key question to start: A year after the economic meltdown, how’s search doing? Roth says the meltdown allowed Yahoo to change its search engine marketing strategy, optimizing for profits vs. revenue or ROI. Locke says e-commerce performed very well in particular. The economy actually helped her business, since search, which is directed at people ready to buy, did well. Fox says large brands are still lagging in use of search.

Do branding and search ads mix? Kaushik says branding was really a metaphor for creating demand. Search, by contrast, is no mere metaphor but a direct driver of behavior. Search can be a massively effective way to show relevance for the right group of people, though.

How’s the Microsoft-Yahoo deal going? Roth says integration is on, a lot of resources being put against it. Proof will come when advertisers move over (which I believe is going to take awhile). Yahoo will continue to work on Search Boss, Search Monkey, and other features outside the search index.

How’s the cultural integration going with Microsoft and Yahoo? Roth says, true enough, too early to say. A lot of it remains to be seen how that’s going to work out. Everybody on this project understands that this is critical, that this is an “absolutely must work” project.

Are search marketers excited about this deal? Locke: Very excited. This gives us a viable No. 2. Now will be 60% of time spent on Google, 40% on Bing, where before it was 80% Google.

What are the prospects for greater reach with this deal? Locke: Not sure. Microsoft has always shown higher ROI, so looking to see if that holds. Cashback is a big new customer driver for many of our customers.

Now with this consolidation to two major players, what’s the landscape? Kaushik: Competition is a really good thing. But it’s prudent to have a portfolio strategy with acquisitions. People get far too obsessed between Microsoft and Google and Yahoo, but people need to pay attention to using those ad venues in unique ways. Fox isn’t sure how Search Monkey and Boss will work for Yahoo when it doesn’t control the index–not sure how much Yahoo will be motivated to keep improving search.

Why is Google’s Caffeine search index infrastructure improvement late, and what impact will Caffeine have? Fox (who used to work at Google) says search engine optimization (SEO) techniques could change a lot as a result of the speed of indexing. Kaushik says Google plans to continue providing search marketers more tools to analyze what they’re doing. Focus is “self-help at scale.” Also focused on providing tools to use search data to improve SEO and divine what impact various search keywords have.

Who’s really doing what in the Microsoft-Yahoo deal? Roth says Yahoo is staying committed in search, including the sales side. Yahoo is going to maintain the high touch with the big customers. The small businesses will be managed more directly on the Microsoft side. As for the platform, the work will be on making Microsoft’s AdCenter the platform. (So much for Panama and all that other stuff Yahoo has been working on for years?)

Could social media replace search as the way people interact chiefly with the Web? One reporter last week told Fox search is the old thing, social media is the thing now–but she thinks it’s not either-or (true). Locke says search is just starting to become the marketing vehicle that most effectively drives consumer behavior. But we’ll have to find new ways to be relevant. Roth says it’s actually the search marketers who are starting to do Facebook ads and other social marketing. Kaushik says marketers will continue to do both. He once said at a conference that Twitter was the dumbest thing on Earth, and got hundreds of hate emails. Now he thinks it’s the best thing since sliced bread. But the key will be using the right marketing for each medium–you can’t just shout in the social media realm.

If you’re going from mass-marketing to individual touch, how do you manage the data overload? Kaushik: We put on the wrong lens when we ask how can we make advertising more relevant? What we do today is try to influence people to do something. One emerging way to influence people is to have these conversations (with social marketing). We are going to be forced to accept this reality that the way we influence people is changing. The Mad Men era is dead.

Will search become another function of marketing rather than a broad marketing method of its own? (Not sure I understand that question.) Kaushik: In so many words, no. Roth: Social media is the first channel that has delivered on the promise of really engaging customers. Social media is absolutely breaking down the silos in marketing. Everything needs to be social in some way.

What’s going to happen when we get unethical marketing using social data and maybe the government gets involved? Nobody wants to answer at first. Kaushik: If you look at the sides of Egyptian tombs, there is spam in those characters too. (OK, if you say so.) You need to provide incentives to do the right thing. In search, there is so much more incentive to do things the right way. We need to keep making sure we provide those incentives in advertising channels. Locke says there will always be spam, etc. But what’s different about this is it’s now the users who are actually policing. The authenticity, consumers can sniff that. Marketing has to be so good that you don’t get called out by the consumer.

Roth says there’s a good chance of government intervention. But the legislators aren’t really up to speed on what’s going on.

Is mobile here? Roth: It’s here but maybe it’s not what we thought it would be. Citi’s Mark Mahaney says now that we’re at 20% of wireless phones being smartphones, ubiquitous Web access could soon become the norm. Kaushik mentions that voice search changes the search game: He recently used an Android phone to speak “Exploratorium location” (or something like that), and that “query” was transcribed by Google servers, which then sent directions based on where he was (which Google knew from the GPS in the phone). That’s a “search,” but a very different one.

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