Predictions – What 2011 holds for Paid Search

When it comes to paid search, here at Greenlight we're tipping 2011 to be the year that, display marketing starts to mirror much of what is search in practice.  And that's just one of our predictions. Here's more on what we're expecting to unfold for paid search in 2011.

Display marketing will mirror much of what is search in practice

Google's acquisition of Double Click, Yahoo! Right Media Exchange, and Direct Response crossing over; and MSN bringing its exchange to the forefront, as well as offering similar display programmes and formats to search advertisers - is turning what we all once knew as 'traditional display marketing' to a very search-like feel to display.

The Ad Exchanges specifically have been pivotal to this evolution, providing real-time bidding and optimisation. It is making advertisers and brands rethink their display strategy and investment - and ask the question, does display have a new lease of life?

The best example of this was in 2010 following Google's acquisition of Double Click, where it transformed its Content Network into a fully fledged display network (also rebranded Display Network) proving that in fact traditional display (blanket run of network etc) is a thing of the past, and marketers can expect more sophistication, control and results from a new era of display marketing.

Imagine having search-like control with display. Moving into 2011 we expect to see more from this new form of display marketing and quite uniquely, being led by search specialists.

Y! "Rich ads in Search" proposition will take off, prompting Google to consider offering display style ads within the search engine results pages (SERP)

A little similar to Google's recent introduction of Video extensions via its AdWords programme.  Yahoo! has launched its 'Rich Ads in Search' (RAIS) proposition.  In summary RAIS are designed to deeply engage the target audience through images, videos and multiple direct links to the respective site.  Differently to Google, Yahoo! is offering permanent real-estate. You buy full inventory over a fixed period of time and are charged on a cost per thousand impressions (CPM).

RAIS is focused on branded search. It aims to highlight a respective brand even further, incorporate its video assets and extends its search functionality including site links and a search function in the ad as well.

The proposition is expected to increase click through rates (CTRs) significantly for brand owners, and aims to take back some of the control/brand visibility lost from affiliates and competitors.

RAIS has to be one of the most exciting things to come from Yahoo in a while and in my opinion is a great example of the search networks finally taking responsibility over their advertisers' brands.  Although Google's version is yet to make its mark, we do expect Google to up its game, especially now Yahoo! has shown its hand.

There will be massive growth in the contextual base pay per click model - pulling away from the search engine domain to advertisers such as Ebay or Amazon

With the success of Google's Content Network (now rebranded the Display Network), many publisher sites and shopping aggregators are following with similar paid for listings models, offering their real estate at a price.  Although very early stages, none of them have quite mastered a 'quality score' of some type making the payment model very much a fixed cost per click (CPC) but still split by vertical.

For advertisers, this is another advertising option that in most cases is a cheaper option. With CPC's being relatively low it helps spread the risk, so an advertiser's budget isn't just spent with Google - but doesn't quite offer the same amount of reach as advertising via one of the search engines or Google's contextual network.

That said it's an interesting proposition and one which many advertisers (especially retail and travel) are already exploiting.  So far the biggest selling points are the competitive CPCs some of these publisher sites are offering, almost undercutting the search engines.  Are they offering something different though?  And do they have a real chance of cutting into Google's monopoly of the contextual space?  We think so.

Pre-targeting, Re-targeting, Re-marketing - will be a prerequisite of any search strategy

Personalised re-targeting, the online channel that allows advertisers to create new customers or re-engage with lost customers via personalized banners across the Internet.  Some of the biggest players in this market include Criteo, Struq, My Things Media and adGENIE. Even the search engines are giving it a go with Google's Remarketing or Yahoo! Smart Ads.  Personalised retargeting is quite a unique proposition and a twist to display in some ways, to the point whereby dynamic personalised retargeting has been proven to drive increased click through rates (CTR) and conversion rates from what is considered the typical 0.05% for traditional display versus personalised re-targeting which normally starts off around 0.8% CTR and has been known to reach as high as 5% CTR.

The dynamic nature and flexibilities of re-targeting mean advertisers can optimise their ads in real-time, therefore responding to what their consumers really want and get the most out of their investment.  Again this is another example of display marketing taking on the qualities of paid search - and making it work for the advertiser.

Combining our earlier prediction (Display marketing will mirror much of what is search in practice) with the re-targeting model sees search marketing expanding its remit within the online space - claiming more investment, and presenting more opportunities to close the loop outside the existing buying cycle. 

Google comparison ads will be rolled out across all finance (and perhaps more) vertical keywords

Over the last year, Google introduced Comparison Ads into the mix (part of the AdWords programme).  After a successful trial in the U.S, Google rolled out the proposition in the UK at the beginning of 2010. Invited advertisers were able to set a target cost per acquisition (CPA) against a group of specific keywords and not have to worry about inflating CPCs as a result of a poor quality score or aggressive competition.  This programme alone not only assists Google in monetising its excess inventory but also allows the advertiser to have confidence in securing a positive return on investment (ROI). 

One of Greenlight's credit card clients was invited to this programme at the beginning of 2010 and has so far seen very positive results from the trial.  Now almost a year on, it makes sense for Google to push this proposition out across the entire Financial sector and most likely into Travel.

However, what does this mean for the aggregators, as Google is effectively taking a punt at their businesses? Furthermore, with some of the aggregators being Google's biggest clients; is Google shooting itself in the foot by trying to recreate its own version of this market? I'm sure 2011 will add more interesting developments in this space.

Go to http://bit.ly/bchpta for more on Greenlight's paid and natural search predictions for 2011, the role of social media in search marketing, the changes to local search and the future of mobile search.

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