Future of Search Engine Marketing?

Well, had another interesting discussion with Mike Grehan, last Friday. There’s nothing like a healthly debate on where the Industry is heading. I really respect Mike’s opinions and always love to share ideas with him.
One of the things that we touched upon was the future of search engine marketing.

If we are to believe SEMPO’s studies which say that around 60% of all companies active in search engine marketing are highly interested in branding via search marketing, then I believe we will soon see the return of the ad banner on Google and other major search engines. It would be really funny to me, to see this happen.

Years ago, I was blessed to have met Rick Boyce, formerly the VP of Sales at Wired.com who launched the first ad banner on hotwired.com a long time ago. He shared with me a story that the initial banner received a 40% click through rate. At the time, there were many websites and few business models to show how a web-based company would be profitable. I don’t think I need to tell you that when “advertising-supported” became the business model and VC’s got wind of how “well” these banners worked, the Industry exploded. When the cool factor of the banner was turned upside down (people “hate” banners), the bubble burst and text links and performanced-based marketing ruled…still to this day.

Now, we hear all of this talk about click fraud and, as mentioned above, the importance of branding via search engine marketing. This leads me to believe that the banner will return and that CPM (cost per thousand) measurement may return, also. Banners certainly brand better than textlinks and with a CPM measurement in place, there’s no more click fraud. If Google and the others could find a way to have a CPM in line with the vertical (or what people are willing to pay for certain search phrases) and it was weighed against an average click through rate, then there’s no more click fraud issue and everyone is happy with the CPM that they’re paying.

“CPM” has received too much negative publicity. CPM is close to the same thing as CPC, so long as you have a very solid account for the average click through rate. In many cases, it’s easier to negotiate a favorable CPM than it is to negotiate a CPC.

It has been my fortune to have seen the Industry through its infancy when we were trying to fitgure out how we were going to make advertising on the web work, to see Overture come in and change the rules, and then to think that the answers to our current problems could be to look back a few years and rediscover Rick Boyce’s banner and the CPM model that was “working” back then. With new advances in technology and tracking, I think it could work.

What do you think?