From Adage.com Rise of the new search based media buying agencies.
NEW YORK (AdAge.com) -- New kinds of media shops that specialize in search engine ad buying have outdistanced larger general market agencies to control the lion's share of money spent by advertisers on "search marketing," according to a study by JupiterResearch.
The findings indicate search-engine marketing, which was once dominated by mom-and-pop shops spending $20 a month on credit cards, has matured into a mainstream media-buying venue, said Nate Elliott, associate analyst at JupiterResearch, who wrote the report.
$2.6 billion this year
Jupiter forecasts that $2.6 billion will be spent on search-related marketing in the U.S. this year, and $3.2 billion is forecast for next year. The area is expected to continue growing into 2009.
Another issue is that search-based ads are a form of direct marketing, and traditional agencies tend to be more attuned to branding. Also, the bidding and cost-per-click environment is unfamiliar to traditional agencies. "They say, 'What do you mean there's no budget?'" Mr. Elliott said.
Unlike traditional advertising placements, which generally involve purchasing a set space for a set period of time, search-engine advertising is based on more fluid concepts of interactive engagement with consumers.
The marketer sets a bid price on keywords used during Internet searches based on the "pull" the marketer feels each word or phrase may have on his target demographic. The bidding process often pits marketers against each other in battles for the most meaningful words related to their products. The fee the winning marketer ultimately pays is then dependent on how many "click-throughs" the keyword ad actually generates.
So it all revolves around a keyword, what happens when the keyword takes on a new context? Better still, what happens when the keyword has more than one dimension?