NorbellaLabs: The Future of Search
June 08, 2016
Search is Fundamentally Changing – and Most Advertisers Aren’t Prepared.
By Phil Decoteau, Associate Director, Digital
This blog is part one in the NorbellaLabs: The Future of Digital Advertising series which discusses emerging trends and transformation in the advertising industry. Each post will investigate a channel and offer predictions about where that channel is heading. NorbellaLabs is a practice within Norbella which aims to promote and encourage the discussion, rapid testing, and adoption of new media innovation.
Search has been the dominant revenue generator for major search engines for nearly two decades. Last year, Google made nearly $68 billion from search alone, which represented approximately 90% of total 2015 revenue. Needless to say, paid search is essential to the success of search engines, providing the constant support needed to test new products (even those that fail spectacularly). Search is the lifeblood allowing search engines like Google to grow as the preeminent transformative forces worldwide.
However, search is changing, and so must the paid search business model and value proposition for advertisers.
Spurred by the growth of mobile and the subsequent emergence of voice recognition, utility of apps, and shifting of device behavior, along with a growing user distrust of online advertising text ads are becoming less valued by consumers and advertisers alike. Recent tweaks suggest Google may be admitting as much, cramming competition into fewer ad slots thereby driving up competitive CPC bids, and increasing the importance of top positioning through mobile ads and now extended ad units. While text ads aren’t necessarily dying, they’re certainly in ill-health. Search engines realize this and may finally be moving to contingency plans for when search revenues start to fall.
There’s no better example of this, perhaps, than last week when expanded its Gboard mobile keyboard to iOS devices. The utility works within your mobile device’s texting and keyboard apps to integrate searching directly within the mobile experience. For example, if you’re texting a friend about dinner spots, you can search and send results within the texting utility without leaving to search. The inclusion of search results within app experiences is just the beginning, as search engines begin to peel away from on-site searching.
In 2015, voice recognition searches using tools such as Siri, Cortana and GoogleNow grew from statistical 0% to 10% of all searches, which represents 50 billion searches worldwide – not a small figure.
Voice searches naturally adopt different qualities than their typed predecessors. They focus on moments and action vs. information. Users, most of whom are searching on mobile devices, aren’t primarily looking to read an article in response to their query; instead they are looking to fulfill an immediate need, likely without having to jump site-to-site or app-to-app to get it. Voice recognition allows for a more seamless experience.
So where do ads fit in?
Search ads in the future will rely less and less on text format. As voice recognition and app experiences become more prominent, search ads will rely more heavily on sponsored placement within the apps or utilities themselves. For example, that friend looking for a restaurant recommendation within their texting utility may see one organic and one sponsored listing. Google is already moving ahead with sponsored pins within their maps program, which will provide sponsored maps results within the app itself. Gboard gives Google a “back door” into many app experiences. Bing, on the other hand, will continue to focus its growth efforts on Native ad formats as well as image- and social–centric search ads. Amazon has recently entered the fray with their own new search ads format, which will serve the needs of online consumers using Amazon’s apps and large network of retail partners.
As search advertisers move forward they’ll have to think about how to make search part of the user’s mobile experience, and not just through a mobile-friendly website.
Questions like: How can my product fit into a mobile app or utility experience? How can I respond to a voice search, and how would users be searching? Do I have the correct mobile/app experience to provide value and drive results?
Search engine marketing isn’t going anywhere anytime soon, but it’s changing faster than many are expecting, and perhaps faster than many are prepared to handle.