• May 7, 2009

    Searchonomics - Search Spend Goes Social

    "Thump!" That's the sound of yet another shoe falling... A report in this morning's WebProNews suggests that over 50% of online retailers were scaling back their search marketing spend in favor of social media and email marketing. The findings come from a Forrester Research study commissioned by Shop.org. Of 117 online retailers contacted in the study, nearly 33% said they would be cutting back on their marketing budgets and just over 50% said they would cut spending on search engine marketing campaigns. Digital retailers are not stopping their online spend entirely however. The study goes on to note that some of that money will be refocused on social media and email marketing, targeting consumers who state preferences through action or association. One underlying fact informing the study is that consumers are increasingly receiving information via the Internet. While many retailers are being forced to cut marketing budgets out of necessity, others are taking advantage of their competitors' weakness by increasing spend on marketing directed towards current customers and targeted towards social communities. The results of the study leave a lot of room for speculation on the directions online ad spend will take in the future. In the study, search appears to include both PPC and Organic results. Savvy online marketers know that organic search results drives more traffic than paid results do though PPC draws far more ad-spend than SEO does. Similarly, an indication of increased spend on social marketing might really be an indication that online advertisers want to drive messages directly to current customers instead of winning over new consumers. Despite years of promises of strictly targeted advertising, online marketing remains predominantly a shotgun style of advertising based on search users requesting information rather than that information being automatically served to those known to be interested in a specific product or service. It should also be noted that surveys record yesterday's impressions and make them today's news. The global economy is in a highly dynamic state right now though it continues to appear and feel somewhat stagnant for retailers and consumers. Everyone harbors fear for the survival of their employers or their operations and in such an environment, decision makers appear to be making increasingly dramatic choices. Those choices, when expressed via survey results tend to create a feedback loop that may or may not give an accurate accounting of today's thinking. That thought aside, the Shop.org study shows online retailers are seeking far better results for their online ad dollars. If spend does shift towards social media, a far larger market opens for members of the search marketing community though that market will involve psychology as much as it involves technology. The most important take away from these findings is simple. Digital marketers must work far harder to engage online consumers if they wish to keep the ad-spend flowing.