Search Marketing & Recession
Search marketing seems to be recession-proof, according to Hal Varian, former Berkeley economist, now Chief Economist at Google, as it caters for price sensitive searchers who know that they can get what they want cheaper online - obviously, search helps to compare various promising deals and discounts.
Hal Varian: It’s very apparent brand advertising tends to be pro-cyclical. When the economy goes up, it goes up. When the economy goes down, it goes down. On the other hand, direct marketing is definitely not procyclical. … And we feel that Google is more like direct marketing than brand advertising. … when you look at a recession in aggregate, it’s basically a 2% or 3% reduction in GDP — instead of growing at 3%, you grow at zero. So it’s a relatively small amount. … This is like the Wal-Mart effect. Wal-Mart’s sales go up during a recession.
In the context of this AdAge interview pitching Google as recession proof rather than keyword targeting as such, search marketing is still primarily viewed as direct marketing, despite (e.g. Marketing Sherpa) studies on how top results for core keywords are seen as top brands, in spite of another AdAge article in the same issue hinting at this opportunity, and despite the fact that Google has moved a long way away from exclusively paid search sponsored links. In addition, Google AdWords was highlighted as an optimal recession marketing tool, competitors were not even mentioned (AdWords still not copied by either Microsoft AdCenter or Yahoo Search marketing, although it could hugely increase advertising on Yahoo and Live search platforms too).
Hal Varian also points out that search marketing for real estate is less shaken by recent market changes (highlights by me).
It’s true that overall real-estate queries have gone down as a fraction of total queries. But there are interesting anomalies. Type in “California foreclosures” or “Arizona foreclosures” or “Florida foreclosures,” and you’ll see 11 ads for companies that are providing lists of foreclosures, advice for bidding on housing auctions or getting a great deal in the housing market. Remember, every time a house is sold, another is bought. You’ve got to advertise to make that happen, and the internet’s the place to go for a deal on Hawaii or a house.
It seems that other forms of keyword-based advertising, e.g. keyword based content network advertising is still neglected and somehow wrapped into the term ’search marketing’, although it’s not clearly search and it’s not clearly brand. As is many other ad tools offered by Google. I feel Google is somehow crammed into a narrow pigeon hole of ’search’, even in an infomercial article in a professional magazine like AdAge. Is the brand vs. direct marketing a valid dichotomy or a simplified outdated terminology that old time marketers are sticking to? How will they categorize ads in the future that are keyword targeted based on speech to text TV and video ads? Will it be seen as recession-proof?
source: AdAge
This is great information. Thanks!