For the past ten years the Internet has consistently presented new advertising opportunities to businesses of all sizes. For search marketers, the rapid development of so many unique online communication products has offered a virtually unending number of venues of opportunity. From the earliest days of the banner and general search results to today’s cornucopia of marketing channels, search and internet marketers have been able to get messages spread using an ever growing variety of interlinked venues.
The only notable slow-down in tech came in the period of 2000 – 2003 after the dot-com meltdown in March 2000 followed by the shock of the multiple terrorist attacks on September 11, 2001. Innovation in the form of paid search advertising (and bid-by-auction) pulled tech out of the hole and in the process propelled Google on its current trajectory. Since then, the search and Internet advertising market has enjoyed five years of solid prosperity, growth and extraordinary innovation.
That’s about to change.
This economic downturn will force a lot of change to the search and social media advertising landscape. This is a sobering time and the high-flying days of buying eyeballs before knowing how to monetize the traffic are over. Valuations are again more important than innovations. The free-ride gravy-train of investor or VC capitalization come to a rapid halt, in some cases thousands of miles away from its passengers’ destinations.
Buying eyeballs is more than a nice and spooky Halloween metaphor. In tech, the concept of buying eyeballs has been a practice that has sustained and promoted grassroots innovation and brilliant applications. For instance, Google bought YouTube before fully figuring how they would monetize it. Yahoo! has purchased hundreds of technologies without the faintest financial plans beyond insertions of display ads. In both cases, well financed companies buy start-ups for their traffic and technologies (importantly including the patents behind those technologies).
As Andrew Goodman points out in a post at his Traffick blog today, Yahoo! is in no position to support innovative start-ups with even the faintest belief they might buy them. Neither is Google. After past two turbulent months, both are worth fractions of their pre-slump values. (Google remains in FAR better shape)
In his post, Andrew wonders about the future of Facebook. To add to his thoughts, what becomes of Twitter, Linked-In or other social applications that have more outgoing bang than incoming bucks? Three weeks ago, the legendary venture capital firm Sequoia Capital held an “all hands” seminar and sent an advisory letter to firms on their roster. In short, Sequoia told its fundees to tighten their belts and prepare for a protracted downturn.
In times like these, the smartest thing for a small to medium business to do is find the most cost-effective ways to continue to communicate with consumers. We believe organic and paid-search marketing present advertisers the twin advantages of extending their reach and being able to trace their expenditures to ensure intelligent ROI. Happy Halloween.
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