Search Marketing Losing Effectiveness
April 21, 2010
My feedreader yielded an article called “Atlanta Marketing Research Company Reports Marketing Metrics Show Declining Success.” Lousy economy. Inflated specious claims. Meaningless glory words. Yep, marketing at its finest. The write up (if it is still online by the time you read this post) documents some of the dull edges of today’s marketing methods. The source is an outfit called Polaris Marketing Research and the write up provides some interesting factoids, largely out of context, I wish to note. Nevertheless, several are suggestive and triggered my thinking about the reliance on newer forms of marketing.
Here are the three factoids that caught my attention:
- “The Marketing Science Institute (msi.org) reports that a 100% increase in advertising expenditures yields a 1% increase in sales.”
- “The University of Michigan (umich.edu) has discovered that customer satisfaction has fallen below 77%”
- “The MMA (mmaglobal.org/favicon.ico) finds that $54 are returned for every $100 invested in advertising. Further, taking Consumer Package Goods (CPG) advertising expenditures out of the measurement yields a return of $87 for an investment of $100 in all other types of advertising.”
Assume these factoids are reasonably accurate. My thoughts about search and content processing ran along this path:
First, the hyperbole and freneticism that I perceive may be an example of vendors’ inability to find prospects and make sales. If the problem persists, then the noise in the search and content processing sector will go up. I find that some of the search vendors see salvation in more public relations, more spending for azure chip consultants, and more churning of their sales managers. If the factoids from Polaris are accurate, results will be difficult to deliver.
Second, the notion of spending more on marketing may be incorrect. The choking off of technical investment and the elimination of old fashioned interest in a customer will accelerate problems in sales and marketing. Jumping off a roller coaster is tough, but the present marketing thrill ride is a closed loop and may become less enjoyable with each cycle.
Third, spending more on marketing may not increase sales. More marketing means more costs which may increase the financial pressure on search and content processing companies.
In the last few weeks, I have gathered some interesting information about the problems some search and content processing companies are experiencing. The issues range from somewhat wild and crazy “mergers” to investing in trade show exhibits, hoping that conference organizers can deliver qualified buyers with checkbooks.
My view is that the economic challenges that roil certain markets may be abating in some niches. However, search and content processing is beginning to run into headwinds caused by larger firms treating search and content processing as an add in or a utility. Examples include Microsoft’s forceful approach with the Fast ESP system and SAS’s stepped up push in text analytics.
What can most of the 300 vendors of search and content processing systems do? I have some ideas, but I don’t have answers. The upside is that the Polaris factoids are wrong and my preliminary thinking is skewed into the rain shower, not the sunny day. Marketing has not lost its effectiveness and pays off for those who have mastered the art. The downside is that the Polaris factoids are correct. Maybe the future belongs to those who come at search and content processing in a fresh, imaginative way?
An even larger thunderstorm may be building for text content. In a world in which audio and video seem to be outpacing text, what’s the role of key word search and online marketing tied to words? Incumbents in key word search advertising may face a shrinking or at least more reluctant market.
Stephen E Arnold, April 20, 2010
Unsponsored post.
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