To accompany this article a series of interviews were recorded with such business leaders as Search's coming of age
Although search has powered its way into the marketing arena, many commentators feel that the true power of its conversations has yet to be revealed.
The wall must fall
In many organisations, there remain clear divides between traditional and online channels. Matt Brittin of Google sees signs that these are ready to fall: “Companies haven't got a group of consumers who shop online and a group who shop offline. They have all of us who often research online and purchase offline, and sometimes research in-store and purchase online. We all operate in one world.
“Some years back, when many retailers decided to have an online shop, they probably had it in a separate organisational unit. In many cases, it’s now the biggest store and they're thinking about how to integrate it with their traditional business.
“That creates real organisational challenges. For example, if you’re in fashion retail, what catalogue do you want to offer – do you want more or less range online than in the stores? Those challenges start to surface when you have an online business that's clearly linked to the traditional business and your consumers shop across both.”
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A seamless whole
The marketing challenges of merging the two worlds into a seamless whole are clear to Robin Goad of Hitwise: “More and more clients are closely aligning offline and online spending. It's clear that a successful offline campaign needs to be backed up with online marketing. A simple way of expressing it is that one plus one, if done properly, could potentially equal three or four.
“There are a couple of priorities for companies. One is to optimise their search strategies, to make sure that when people search for that message or company or brand, they go to the right place. The second priority is to build specific landing pages, so that customers driven to your website by a particular campaign recognise what they've seen on TV or posters, rather than just ending up at a generic homepage.”
The demise of pop-ups
Few people like pop-up ads yet they’ve proliferated for years. Nick Hynes knows why: “Unhelpful formats have emerged mainly because clients, advertisers and buyers have concentrated on a very blunt instrument, impressions, as a measure of success. Of course, impressions don’t tell you anything about success. Something popping up in front of someone isn't necessarily going to change their buying habits.”
For Google’s Matt Brittin, the days of the unhelpful formats are numbered: “This is not a world where shouting louder helps win customers. It's a world in which being targeted, relevant and engaging leads to success. Advertising can be relevant and useful too – it doesn't have to be an interruption medium.”
Creating engagement
The journey from interruption to engagement is of great interest to Stephen Taylor: “If I search on anything that's vaguely commercial, the whole experience is less relevant if the advertising is removed than if the advertising stays in. There are really few other forms of advertising where one can say the same thing.
“We need to keep developing ways to bring relevant, compelling advertising into results. The Holy Grail is to put fewer and fewer ads on the page, but they're more and more relevant.
“The word that I like is participate. Advertisers and marketers have to participate in the shared experience, they can't just advertise or sell.”
At Google, the search for more engaging formats continues. For Matt Brittin, one new tool has a lot of potential: “We're experimenting with gadget ads – which can have the functionality of a website, but show up as an ad format.
“For example, if you're thinking about holidaying and you're looking at a travel review website, there might be an ad that lets you type in the destination and date options you're considering, without you having to leave the website. The advertising is relevant, because it's in the right place at the right time, and it's engaging, because it allows you to interact with it in a way that gives you value.”
The social dimension
Social media have been the key phenomenon of Web 2.0. For Stephen Taylor (see panel), social media also hold the key to the future of search: “I believe passionately that the future will be about people and the social dimensions of search. It will be more vibrant and discovery-based. ‘Find something quickly in huge volume’ will still be at the core but increasingly it will be part of a broader experience.”
Recent years have seen social media amassing vast audiences but often failing to emulate the search engines’ rich revenues. In the view of Mike Reid, this could be about to change: “Social networks have climbed enormously in the last couple of years and I think they’ll be thinking, ‘Why aren't we making as much money as those guys?’ There are some wealthy online businesses in and around the search market, and each of the social media players will be starting to seek a slice of the action.”
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The marriage of search and social media
Until July 2007, Stephen Taylor led the ‘Audience Group’ for Yahoo! Europe, giving him responsibility for its European consumer businesses, including search, social media and the price comparison site, Kelkoo.
“We’ve moved from the mass to the personal to the social, where you start to see tools such as Yahoo! Answers, that generate results not just algorithmically, but by people using the knowledge inside their heads. And they can share those results, so people can see results that their friends have found to be relevant, rather than simply the algorithmic drive of the traditional search engine.
“It’s not simply about new questions that I want to ask right now, that may have a time delay of five minutes or two days before I get a relevant set of answers. It’s also about the question and answer set that is being built up and stored in a database, so that when the next person asks ‘Where's the best plumber in Richmond?’, I will get algorithmic results back and I will also get people's results back.
“For example, every so often I think about whether to have laser eye surgery. If I put ‘laser eye surgery’ into a traditional search engine, I'm going to get a set of advertising at the top which is going to tell me the best clinics or the prices of the treatments, and try to sell me one London clinic versus another. In addition, there’ll be research papers and comparative studies about the different treatments.
“But if I do this inside Yahoo!, on the same results page I'll also get a set of results from Yahoo! Answers, from other people that have previously talked about laser eye surgery. And that's going to give me comments like ‘it really hurt’ or ‘this has changed my life’. And that has given a much fuller, more vibrant, more engaged set of results, driven by people.”
A match made in heaven?
For Sir Martin Sorrell, there is pressure on social media to advance deeper into online marketing: “The bigger these things get, the more commercial they have to be. Facebook has an implicit value of €11bn because Microsoft bought 1.6% at a price that implied that. I don’t think it really is a valuation of Facebook at that level but the act creates pressure to get economic value out of it as rapidly as possible.”
Even though the commercial logic is clear, Sir Martin has questions about consumer resistance: “Social networking sites were put together by people who thought they were getting untainted sites. You saw with Facebook that Mark Zuckerberg had to alter the Beacon initiative almost immediately because the moment people undermine a site which users believe to be pure, they react against it.
“When Facebook tries to develop its advertising profile, it has to be done very carefully because the reason consumers went into this was not because they wanted to see ads. Mobile search, on the other hand, is a medium that I think people will understand much more in that context.”
Not all blue skies
Search’s headlong expansion can’t be entirely insulated from the wider economy. With world economic prospects looking weaker than they have done for years, what are Sir Martin’s expectations for marketing spend in 2008 and 2009?
“The Olympics traditionally add 1% to worldwide growth and spending on marketing services in the quadrennial year. But what happens post-Beijing? China can’t continue to run at 10% compound growth. The law of big numbers means there has to be some slow up and 2009 might be the year. I don’t think there’ll be a recession in our industry in 2008 but I worry about 2009 – not necessarily that there’ll be a recession but the impact post-Beijing, and after the American presidential election.”
A weaker economy is not the only factor that may be a cloud on search’s horizon. For 3i’s Mike Reid: “There are a couple of other issues which may radically change the landscape. One is regulation. Google have a 73% market share globally and in some European countries, it’s even bigger. If these rates of market share were seen in other industries, the regulators would be straight onto them.
“The second issue is data protection. Search engines will have complete tracking of what you do online – where you go and what you're searching for. Slowly but surely that will become a pretty scary thing. I think it’s quite unpredictable how people will change their habits to say, ‘I don't really like that so I'll use something different.’”
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Coming soon
Many of the practical opportunities offered by search are not that far off. John Battelle outlines a simple example of the fusion of search with the capabilities of mobile image capture: “If you’re buying a bottle of wine and you suspect you’re getting ripped off, take a picture of the label and the phone will understand that you want to know more about this bottle.
“The phone knows where you are through location-aware technology, and it searches for bottles of the same wine on sale within a mile. It seeks information about the wine, reviews from friends and experts and so on. And, of course, the best price. That is the wave of locationand context-aware searching which is coming upon us.”
Nick Hynes agrees on the central role that local search will play and also highlights the high expectations he has for video: “People are searching for more audiovisual content online – last night's soap opera, quiz show or football game. When fast-moving consumer goods advertisers can wrap that audiovisual content with an audiovisual message that looks, walks and talks like a TV advert, those guys will have their entrée to the sector, and there’ll be an avalanche of money into the world of search.“