Future of Search Marketing

Gord Hotchkiss looks ahead to the future of search and search marketing. Among the search trends: localisation, personalisation, integration with the desktop, unwiring, and expansion of search indexes.

In the midst of writing this article, I was called by a fund manager for a major mutual fund that has some investments in the Industry. She asked me if I believed search advertising revenues would flat line and maybe even start dropping in the near future.

I said that it’s possible that revenue produced by existing business models could slow from their previous meteoric rise, but I wouldn’t ever see them decreasing. As keyword inventories get tapped and bid prices find their natural ceilings, we have to see revenue growth slow.

But then I started talking about some of the potential of search that I’ve laid out in this article. We have to understand that this channel will evolve into an integrated and fundamental function of being online. It will be at the base of all we do. And the opportunities to deliver relevant, targeted marketing messages to highly motivated consumers will grow exponentially.

Will search marketing be the same as it is today? No. Will it be as straight forward? No. Will it cross over into other channels to a greater extent? Yes. Will there be money in it? Yesbillions and billions. Do Search Marketers have a challenge ahead of them? You have no idea how big a challenge!

Change will be the imperative for the industry. The search marketers who survive and prosper will be the ones who anticipate, pursue and embrace change. The pace of change in search will accelerate in direct relation to the amount of money invested. Microsoft’s entry into search is only the beginning. As search moves to the center of the online experience through the convergence of new search functionality, it will create a white hot tornado of demand. New technology will appear, be assimilated and become the new standard at a dizzying rate. The marketing potential of search will also move at a breakneck pace.

The largest search technology players will be investing huge amounts in monetizing this potential. They will be joined by a long line of partners waiting to jump on the rapidly moving bandwagon. Finally, we’ll see large portions of traditional marketing budgets being directed to the new online Chimera which has partially evolved from the search we once knew.

As with any situation that involves accelerated change, uncertainty and discontinuous innovation, there will be a huge demand for visionary practitioners to help navigate through this change. The brightest and best search marketers will accept this role and work to help advertisers plug into the new possibilities. It will take time for seamless solutions to catch up with the innovations and until then, it will be up to search marketing professionals to bridge the gaps. To do this, the search technology providers will finally, for once and for all, bury the hatchet and embrace search marketing vendors as their partners in the industry. They’ll have no choice. They won’t have enough feet on the street to help introduce the channel to all the potential advertisers and explain the intricacies. The potential for search marketing companies is huge, but so is the challenge.

Esther Dyson invests in Flickr

Esther Dyson writes:

As many people are discovering, writing blogs is hard work – sometimes almost as hard as reading them! Photos are much quicker, and almost anyone can do a decent photo – at least of/for friends. and now that it’s easy to post by mail, and everyone has a digital camera or camera phone, these services are becoming great ways to sell value-added storage.

My own experience is that it’s quite addictive, and Flickr has a rich but natural-feeling set of social protocols. Each time you go to your home page you see a new set of photos (unless your friends are really slacking on the job and haven’t produced any new photos). You can comment on your friends’ photos and they on yours, send messages, set up groups for friends and group albums for events and so on, but there’s less of the me-me-me feel you get on, say, Friendster, and more of the I-see feel you get from blogs (but without so many words, lucid or otherwise).

Microsoft’s New Set-Top Box

New s.com provides an overview:

On the outside, it’s slick, with new video-playback and photo-viewing programs, and a custom version of Internet Explorer 6 designed to make Web browsing on the television a far less painful process. On the inside, it’s a Windows CE-based product with a 733MHz Celeron–slow by PC standards but downright zippy in the world of set-top boxes.

Microsoft will sell the $199 device in two ways–as a dial-up product for technology newbies with $21.95 monthly service; and as an additional way for broadband homes to view the Web for $9.95 using the existing Internet connection. Newbies, who have historically been the bulk of MSN TV subscribers, are likely to be the majority of initial customers, said MSN TV General Manager Sam Klepper.

“We think over time, broadband (subscribers) will be half or more,” Klepper said in an interview at Microsoft’s Silicon Valley campus here.

Many of the new features are aimed at those customers, including the ability to play music or movies stored on a PC in another room. The device can connect via wired or 802.11b wireless networks, though Microsoft plans to add support for faster 802.11g wireless networking in mid-November. Customers will get 2GB of e-mail space for their primary account and 250MB for up to 11 additional accounts.

The new box, which is being made by Thomson and sold under the RCA brand, will be shipped to stores starting next week. The product has no hard drive, but it has enough flash memory to store some data, including 100 compressed photos that can be used as part of a slide show.

Web Services and Network Computing

Headshift’s Lee discusses the “number of interesting observations made lately about the ways in which web services are starting to move us towards a world of accessible distributed computing” and writes:

Microsoft, arguably the biggest barrier to progress in this direction, is facing big threats on several fronts. On one hand, Apple PCs and music devices are setting new standards in terms of usability and design, and OSX “Tiger” promises much of the functionality that Microsoft has announced and then retracted from the development of its next generation Longhorn system. At the same time, the Apple threat is linked with the more general Linux and Open source threat that Microsoft has faced for some time, because OSX is Unix-based. But while the consumer end of their market is vulnerable, the concept of a Google OS is a more fundamental danger to the Windows cash cow that Microsoft is based upon. A distributed system powered by Google’s computing and search power, but which is run through a browser and Web services, could simply render Windows obsolete.

Web services are often referred to as the “plumbing” that joins together distributed applications, and without it, we can’t do much of course; but we also need to think long and hard about how we implement these applications.

Comcast CEO Interview

[via Rafat Ali] WSJ has an interview with Brian Roberts, the CEO of Comcast:

Our desire is to reach out to content companies whether we are an owner or a partner or a purchaser. Right now, we are the world’s largest purchaser of programming content, about $4 billion a year. We think a lot of customers will want to store that content on a box in their house — their digital-video recorder. But most customers will want much more content than the 100 to 200 hours you can store on a box. If you could access 10,000 hours, maybe someday you’ll be able to access 30,000 hours or virtually unlimited content. That would be nirvana.

We’ve been saying for the last five years we wanted to turn Comcast into a new-products company. In the next couple months and years we’re going to have digital-video recorders and voice-over-IP phones. We already have high-definition television and video on-demand. We’re also already planning on the next suite of products: videophones, video chat, interactive television, Internet search capabilities and interactive advertising.

We’re approaching seven million users on Comcast’s high speed Internet service… We also have video on-demand and a very exciting arrangement with Sony and MGM to get lots of movies and a deal with the NFL. In fact, we think eventually 10,000 hours will be available on demand. And if you then overlay that with access to the Internet, there is virtually unlimited content that consumers will be able to access on a television, a PC and perhaps on a mobile device. There is constantly going to be a need to make it easy for consumers to access what they want when they want it. Call it a search engine. Call it a portal. Call it an on-screen guide or navigation device.

Cellphones in India

WSJ writes:

Companies are jostling to capture a bigger piece of one of the world’s fastest-growing markets — just this month, many of India’s cellphone companies slashed rates by more than 50%. With lower rates and new handsets priced at less than $50, a cellphone is within reach of millions of middle-class Indians.

Cellphone-service providers in India, including Hutchison Essar Telecom Ltd., Reliance Infocomm Ltd. and Tata Teleservices Ltd., will be adding two million subscribers a month for the foreseeable future, analysts say. That likely will lift the number of cellphones in India past the number of fixed-line phones before year end.

The growth and increasing competition show that cellphone companies — as well as international handset makers such as Nokia Corp. and equipment makers such as Nortel Networks Corp. — recognize India is at last a market worth fighting for. As more Indians go mobile, total cellphone revenue will double this year to almost $6 billion and double again over the next two years, analysts say.

With lower rates, the average revenue per subscriber per month has fallen more than 15% this year to less than $10. The secret to survival in this market, analysts say, is offsetting the decline by finding ways to get Indians to spend more money on data services. Indians can use their phones to download pictures or songs from their favorite films or get video clips of cricket matches. In the Punjab, India’s bread basket, wheat farmers can look up local and international prices, while fishermen in southern Kerala can check the different prices for their catch at each port before deciding where to dock. While data services account for about 5% of cellphone revenue, they will make up more than 20% by 2008, Ms. Desai of Gartner says.

TECH TALK: The Network Computer: What Is It?

Wikipedia has this to say about the network computer:

A network computer is a lightweight computer system that operates exclusively via a network connection. As such, it does not have secondary storage such as a hard disk drive it boots off the network, and it runs applications off the network, possibly acting as a client for an application server. During the mid to late 1990s, many commentators, and certain industry players such as Larry Ellison, predicted that the network computer would soon take over from desktop PCs, and everyone would use applications over the internet instead of having to own a local copy. So far, this has not happened, and it seems that the network computer “buzz” was either a fad or not ready to happen.

The idea actually goes back a long way however, back to the text-only dumb terminal, and later to the GUI of the X terminal. The former needed no software to be able to boot, everything was contained in ROM, and operation was simple. The latter requires some files to boot from the network, usually using TFTP to get them after obtaining an IP address via DHCP and bootp. Modern implementations include not only the X terminal, but also the Terminal Server in Microsoft Windows 2000 and XP, and others. The name has also evolved, from dumb terminal to network computer, and now to thin client.

Webopedia adds:

A computer with minimal memory, disk storage and processor power designed to connect to a network, especially the Internet. The idea behind network computers is that many users who are connected to a network don’t need all the computer power they get from a typical personal computer. Instead, they can rely on the power of the network servers.

This is really a variation on an old idea — diskless workstations — which are computers that contain memory and a processor but no disk storage. Instead, they rely on a server to store data. Network computers take this idea one step further by also minimizing the amount of memory and processor power required by the workstation. Network computers designed to connect to the Internet are sometimes called Internet boxes, Net PCs, and Internet appliances.

One of the strongest arguments behind network computers is that they reduce the total cost of ownership (TCO) — not only because the machines themselves are less expensive than PCs, but also because network computers can be administered and updated from a central network server.

Sun too has said since its inception that the network is the computer. There is something appealing about the idea about low-cost, simple computers connected to a centralised computing platform. The network computer has had many names thin clients, diskless workstations, information appliances. It is one of these enduring ideas in computing that refuses to die and keeps floating back every few years.

The world of today is very different now as compared to the mid-1990s when Larry Ellison first proposed the idea of a network computer. To understand if the network computer can succeed in todays world, we first need to travel back and see what went wrong when the network computer was first introduced.

Tomorrow: Ellisons Ideas

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