The headlines about our latest report on SEM have offered a negative view of search advertising. The intent of the report was to offer quantifiable evidence of problems with churn and profitability, and to point out that the industry is in dire need of reform. But hidden in the bad news was the fact that search engine marketing still works incredibly well. It is the most dynamic and cost effective form of lead-generation advertising I’ve seen in my three decades in the media industry.
For all the industry’s troubles, I am impressed at Google’s openness to discuss the problems and try to correct them. I attended Google’s Certified Reseller Symposium last week in Mountain View and was amazed to hear a frank and honest debate about how to improve the system. It was underscored by the fact that when we agreed to undertake our report last January, we warned Clickable, who offered to underwrite the research, that the findings might not be pretty. David Kidder, the CEO of Clickable, responded that the industry needed “transparency,” and that bringing those findings to light would help strengthen the industry. We thought that was a refreshing viewpoint.
As resellers drive SEM products downstream into the small-business market, they’ve got to understand that salespeople can sell local advertising, but trust is what renews it. As far as I can tell, Google is doing everything it can to provide a viable lead-generation product for small businesses. It’s up to the resellers to tweak their sales machines in such a way that delivers cost-effective results – which in turn will earn that trust and sustain the industry.
I agree, honesty and transparency is the key. The local search companies that focus on how to drive business to their customers instead of just working out how to spend their budget every month will win. Until campaigns are optimised around calls, coupons or reservations / appointments and the sales people are rewarded appropriately for driving that then we are all flying blind spending our clients money on campaigns of unknown effectiveness. There are some local search companies that are moving in this direction and they will be the winners.
Your blog has some great information for small businesses. Thanks for taking the time to share your knowledge!
I’ve been going through the numbers in the “Economics of Search Marketing” report and I can’t seem to duplicate the results from Figures 4.1 – 4.3. Is there any way you could give me some background on how you calculated the Reseller Profit figures given the inputs you used?
Thanks,
Todd
Yeah, it must be nice.
Thank you for information
That was a nice read
As ecommerce grows, so will its impact on the overall economy. An even larger increase in economy wide productivity levels may result from productivity gains by business firms and companies not engaged in e-commerce as they respond to this new source of competition. Businesses recognizing this new opportunity and seeing the potential impact of e-commerce is important for policy makers, and forecasters as they project economic activity for the future.