The Pontiflex Blog

A new model for search

May 20, 2008 at 12:24 pm Arun Krishnan Leave a comment

An article in Mediapost argues that advertisers are not extracting all the value they can from their search engine marketing campaigns. Studies have shown that there is a lift in branding from organic and paid search results from search and hence there is a case for search marketers to work in a CPM model for search engine marketing.

To this I have three points to make:

1. Search marketing by its very nature rewards ads that result in clicks – and penalizes copy written for branding purposes.

2. By utilizing search advertising for branding, advertisers will drive up the cost of already expensive keywords even further. This could be really damaging in instances when companies compete for keywords with their retailers and franchisees.

3. The reason search engine marketing became popular in the first place is because it enabled marketers to pay for performance. A branding lift was a secondary benefit.

As the latest IAB spending report shows, marketers are investing more in pricing models that place an emphasis on performance. CPM pricing models have been characterized by a history of poor visibility into campaign performance resulting from “neither here nor there” metrics such as click-through rates. Market dynamics indicate that there will continue to be a shift away from these pricing models – be it in search, online lead generation Cost-per-lead (CPL) advertising or any other form of online advertising.

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