Search spending slowed in the fourth quarter of 2007, according to Didit’s CEO, Kevin Lee.  Henry Blodget reports, "Q4 search spending by DidIt’s clients grew about 30%, below Kevin’s expectations for mid-30s growth."  Eh – 30, 35, whatever, you might say.  Hence the pebble analogy.

Yet the economy wasn’t nearly as bad in the fourth quarter of 2007 as it’s starting to look now.  If search spending dips accordingly, well . . . it could be time to invest in the equivalent of head-to-toe armor.

To address another issue brought up in the Didit report – the idea that a decent ROI will keep people interested in search marketing – Blodget writes, "In our opinion it is irrelevant that search engine marketers closely tie spending to ROI: Less consumer spending means fewer searches means fewer clicks means less revenue."

So with these less than cheery bits of information, we wish everyone a good weekend.

Moderator: Maura Lewis, Director, Measurement Planning & Analytics, Grey San Francisco

• Kelly Graziadei, Sr. Agency Development Director, Yahoo
• Dave Honig, VP of Media Services, Didit
• Mike Jarvinen, Director, Search Marketing, The Search Agency

Increasingly search is expanding into other channels. Search overlaps more and more things.

Maura Lewis

Integration. For many of the marketers here today and many agencies, we find ourselves in almost an intractable situation. We seem to have at least some level of integration on the strategic level. People are beginning to understand that search is a great medium that can provide us with unique information. The knowledge that you gain from search can serve to drive some of the other channels—wording, the message to the audience, etc.

Still on tactical level, it’s almost impossible to integrate search and display and emerging media and offline media, whatever that may be.

I think that we’re still getting there, but we’ll still always face this challenge. Hopefully this panel will shed some light on how we as an industry can come together better to grow the pie in a holistic way, and how we can work toward that on a day-to-day level.

David Honig

What I’m seeing: I’m a media guy for the past 10 years—DoubleClick, Conducive Ad marketplace, Didit. Didit was previously purely search; clients wanted to integrate media campaigns. We saw the silos begin to break down about two years ago.

What I’ve been seeing. Last 6 months—to clients: you need to do other things to grow your company outside of search. You can’t be so one-dimensional. The fact of the matter is that Google is investing a lot of money in platforms outside of search. Because they see that there’s not so much growth outside of the queries. Google sees that image ads manufacture queries.

8 months ago we really started to push media buying with my team. One of the things we’re doing effectively is buying specific content: looking for what the advertisers are looking at. You have to bite the bullet and take a risk. We’re seeing an ROI, but not nearly as much as search. The click rates are abysmal on the search side.

But we’ve started tracking the users with cookies. With some of our campaigns, we’ve seen up to 70 (30?) % lift while running media campaigns; up to 24 hour latency pd.

We have to really find these users outside of search and drive them back. We’ve been tracking feverishly when our advertisers have bought MSN or Yahoo front page—seeing extreme growth of queries when that happens. We look at the competitive landscape and we track very carefully to be prepared.

Looking at DNA of the users. So many different algorithms for behavior—we just don’t understand behavior. The one thing I see for value for search marketers—observe platform data within their network and see that they’re doing and understand what they’re doing online. Look at their DNA, subset DNA and comp. DNA of people not going to our clients’ sites.

Retargeting has always been successful—50% of our clients are retargeting. WEelook at 8-10 segments of our clients’ sites and using exchanges to buy media. Clients were initially against not knowing what sites they’d be targeted to.

Advertisers know the importance of following their users. We’ve been seeing a lot of adaption within the retargeting.

Segmentation, retargeting.

Kelly Graziadei

Part of what I see driving the importance of search—consumer behavior. People used to engage with a brand by worshipping TV. Today people are still engaging with brands, but we’re in a multichannel (at a time) consumption world. We need to embrace that and not jump around, but not focus on just one medium.

With that, it becomes our responsibility to understand that. As search practitioners we can lead the way to communicating that. We can help drive the conversations understanding that interplay with search and other media on and offline.

Magazine ads—47%; articles—44%; TV ads 43%; newspaper ads 42%—motivated to conduct a search after seeing that (BIGresearch’s Simultaneous Media Survey)

We need to think about this as we plan—break down silos. We need to understand what else is going on on our media campaigns.

Yahoo—close the loop study to quantify impact of search and display. In 5 verticals, saw lifts on search and display

lift in share of pages view 68%
lift in share of time spent 66%
lift in offline sale 89%
life in online sales 249%

Retail space—offline revenue lift vs. control group
90% life in search & display. (43 + 15 isn’t 90) $511M
15% display only. Delta $157M
43% search only delta $108M
Reach of display + relevance(?) of search = power

As search practitioners, I think we also need to look at the value of a searcher as the target audience, and what happens as they engage with the site. We’ve really begun to understand that they’re not only looking to be influenced, but they’re more likely to influence others. We need to enable that activity, give them a platform—post online reviews, join a group, post comments—social media. The whole consumer experience is incredibly powerful.

One example: Hellman’s (and bring out the best!)

Hellman’s wanted to change the dialogue around “real food” and elevate their own brand perception. Put CTA on jar lids, TV spots, print ads: go to Yahoo! And search for REAL FOOD.

Searches on [Real Food] inc. 8223% vs. 6 months before campaign. Had a unique branded experience with Hellman’s Real Food logo (also, a yahoo shortcut).
Also saw Hellman’s searches increase ~50%. Think about other terms when doing that type of campaign.

Also created some unique content—Dave Lieberman of Food Network traveled the country filming Real Food Spots

Social Media: Y! Social Media tools—904 people joined group in the first month.

Users could submit their own Real Food stories online.

Mike Jarvinen

Are we getting pushed into display as an SEM? Yes by our clients—because we have a performance basis for it.

What are our goals when we present display:
Increase the nonbrand (unknown brands) content side where we can get more interaction where people are going in their daily lives in the Internet to drive them back through queries.
Own brand space

What could happen with display? What if we could just do something small? Such as moving just 4% of cost in a nonbrand contextual buy; couple pctg pts in brand content (just rebalancing the search budget). This decreases the CPA, increase conversions—20-25% increase in conversions; 16 to 20% decrease in CPA.

Understanding of the search engines on brand side. Understanding momentum and quality score. In the content network, it takes longer for us to gain momentum. On the performance side there are some of those same challenges. We’re doing full time ad testing, and they want to see that in display. But there’s a lot of other challenges in display—takes longer to work up creative, etc.

Change from brand creative to performance creative.

Display creative metrics—3 month campaign
2006: CTR 0.37%, Conversion rate 0.12%, CPA $77.40
2007: CTR 0.23%, Conversion rate 0.90%, CPA $36.10—prequalified clicks.

Strategic focuses for TSA in 2008:
Further content campaign optimization
gadget/widget ads
feed-based ad opps
Aggressively grow display: more clients, more distribution, more best practices.

LPs: get the person what they want ASAP so they can interact with it, get what they want.

Yahoo SmartAds or the next product.

Questions

For Dave & Kelly—one of the things we’ve come across: clients being hesitant to allocate pure display dollars because they say our company is purely an SEM.

Kelly: I don’t see a macro trend; it’s hit-or-miss. We do see those pureplay SEMS broadening their skill set and offerings. The challenges seem to be around creative development. But I think that SEMs are very well positioned for a performance-based world. Where you’ll need to make your clients feel more comfortable is around that creative development: outsourcing?

Dave: Last year, I would have said as a whole, yes. This past year, we’ve started to see a lot more allocated to display for us without affecting clients’ search budgets. If everybody just really can see the value to media, and driving to the search and the value of search queries increasing, it’s just natural. One-dimensional SEM companies won’t be around in a couple years. All of us follow the lead of Yahoo and Microsoft of offering these image ads. We’re hiring really good people to compliment our search teams in creative.

Followup from Maura: do you think that there will be a mass consolidation or do you think that there will be a coexistence of traditional SEM agencies who have morphed into something new? Or will they start blending together without differentiation?

Dave: You have to understand your core competency. But we understand that they’re asking for more. We might contract out, but we’re going to specialize in what our clients feel is important. We’re never gonna forget that our core competency is search.

Kelly: I think we’ve already seen some consolidation. Now we’re trying to find our way to find the best model—specialist SEM arm, further integration for better planning, individuals devoted to planning. From a nuance perspective, you do still need a specialty.

Last night we were talking about how display can lift search performance. Kelly, have you provided some case studies on this before?

Kelly: Yes. And we’ve looked at it on the macro level. I’m hoping what we can drive is that as an industry we can have and need to have a better measurement model.

Mike: It’s a challenge, measuring interaction between different media. But we’re trying to measure and adjust to measure lift. The more we can measure that as an industry, the more value we can show we provide in the long term.

A lot of discussion on how to get everything together, sharing budgets. We get a lot of “We don’t want to do our search with a big agency because it’s expensive.” What we’ve found is that because we have all these other groups consolidated, we can bring the data together and model it and package up for the client to show them. Sometimes Yahoo and Google don’t get conversion data—hard to close that loop. How does someone from Yahoo work on capturing conversion data and look at other media?

Kelly: Partnerships with agencies and clients to get comfortable in sharing conversion data for modeling and data insight.

Comments

Yes, this is more of a contract renewal than a brand new arrangement, but when Pepsi, Pfizer, and Walt Disney World are involved, it’s news (those three companies are among Q Interactive’s clients).  Didit even issued a press release in which Matt Wise, the CEO of Q Interactive, stated, “Didit continues to be that partner and does it with passion and dedication through their combined knowledge of our business and the overall online marketplace.”

Gerry Bavaro, Didit’s vice president of client services, also commented, “We value long-term partnerships with clients who recognize that paid search is a critical part of efficient business growth.  Our relationship with Q Interactive continues to support consistent sharing of ideas, business goals, and critical requirements which are ultimately the key elements of our success.”

Other than that, there’s not a lot to say.  Q Interactive added a few fresh executives over the weekend, and a couple of months ago, Didit was named a Certified Ambassador Agency by Yahoo Search Marketing.  This new development is just another positive step for both companies.

Hat tip to MediaPost.

According to Yahoo! Search Marketing:

The Certified Ambassador tier is designed to meet the needs of high-performing agencies, search engine marketers (SEMs) and other resellers who channel large amounts of business to Yahoo! Search Marketing. Prior to attaining Certified Ambassador status, all program participants must prove their success as Ambassadors.

Yahoo! Search Marketing Certified Ambassadors receive prioritized service.

The Sponsored Search Certified Ambassador designation is designed to enable search engine marketing companies to list their clients in sponsored search results across the Web. It allows the search engine marketing company to control their clients’ position by the amount the client bids on keywords and pays only when a customer clicks through to the client’s web site.

Did-it is a full-service online advertising and marketing services firm and the industry leader in search engine marketing. With award-winning expertise in search engine marketing, auctioned media management and targeted online advertising, Did-it has been leading the evolution of online marketing with its blend of technology, intelligence and passion since 1996. Through its multi-disciplinary methodology, Did-it combines top-tier Search Engine Marketing Strategy, sophisticated analytics and modeling, and best-of-breed technology to produce unmatched SEM results for its clients. Did-it was co-founded by Executive Chairman, Kevin Lee.

Did-it recently caught a considerable amount of attention from their peers (other search engine marketing consultants and other search engine marketing firms) when Threadwatch, a popular marketing and technology web site, sponsored a contest which involved one of Did-It’s employees, Dave Pasternack. The goal of the contest was to see which search engine marketer could “outrank” others in a SEO contest. The winner of the contest was later announced.

Comments

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Wise, who has worked with Did-It since January 2005 after being hired away from Ask Jeeves’ sales department, said his departure stemmed from a fundamental disagreement about the direction of the company. "I wanted to take the company in one direction. As CEO, and as a guy who really, really helped scale and create the brand that it has in the marketplace, that’s what I wanted to do," said Wise

Well, considering founders Lee and Pasternack seem intent on attacking SEO and have a strange affection for comical frogs, I’m putting my money on Wise having the best idea for taking the company forward.

As a side note, this was not a very well kept secret. A note to all Plaxo users, when you update your company name, email and telephone, ALL of your Plaxo contacts get an email automatically if you select to update them. I’ve spooked a few people in the past with an email asking "so, I just noticed you left company X", before they had announced it.

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Reddit

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Ok, I have a question. Kevin recently brought in Kevin Ryan and now Bill Wise, effectively pushing himself out of the top position. You normally only see that when a company has a lot of VC backing or is trying to get some VC (with pressure coming from the VC company to install more experienced management). Anyone know if that is the case with Did-It?

Did-It Company Bio for Bill Wise:

Bill Wise, Chief Executive Officer, Bill Wise joined Did-it in January 2005 as the company’s CEO. With several successful tenures in executive positions within leading interactive companies such as Ask Jeeves, MaxOnline, and DoubleClick, he has enjoyed a distinguished career in the online marketing world.

Bill is also currently on the board of directors of ContextWeb, a contextual marketing company, and the DoubleClick Client Advisory Board. He has been quoted in numerous trade publications and articles, including Business Week Online, MediaPost, AdWeek, Internet Week, DM News, iMarketing News, and AdAge. He is a Certified Public Accountant licensed in New York State, and lives in Larchmont, NY with his wife and two children.

Andy Beal is an internet marketing consultant and considered one of the world’s most respected and interactive search engine marketing experts. Andy has worked with many Fortune 1000 companies such as Motorola, CitiFinancial, Lowes, Alaska Air, DeWALT, NBC and Experian.

You can read his internet marketing blog at Marketing Pilgrim and reach him at andy.beal@gmail.com.