SEM (PPC) Ineffective. The industry needs to evolve or slowly deteriorate

By now, most of you have read the New York Times article that highlights EngineReady study about conversions from organic search vs. paid search. (Jan, 2008)

Our study showed that, paid traffic returned a more valuable visitor than that from organic
listings.

The discussion is about the influence of both channels on the bottom-line. This study helps trigger the conversation about the future of search engine marketing.

The fact is that paid search marketing is far from an optimal way to spend ad dollars. It is a passive medium with hit-and-run methodology that has worked well for a while now but it is starting to break down. With CTRs of less than 5% on average and a less-than-optimal long term customer acquisition model, search is becoming the new banner of the online advertising industry. The internet is evolving towards the development of deeper customer experiences and towards a higher level of customer trust . In this new internet panorama, search marketing (as it is today) is at odds with this evolution.

Customers want more. Advertisers want more. Search sits in the middle brokering deals quite efficiently but as publishers realize the value of their own content, search traffic might become obsolete for some, being replaced by traffic from social media sites and word of mouth.

Social networks offer a medium where internet citizens feel comfortable spending their time and interacting withbrands. They are within a circle of trust that provides support, guidance and suggestions about products and services. They know you and they know what you like. They have networks you can tap and they are human. They understand needs.

That is the reason why (at the present moment) targeted search ads do not work within a social network.

Why would people care about a search result when they have hundreds of friends that can help them figure out the best way to purchase a product or service. For instance, it is nearly impossible to find a unique travel experience by searching the internet. There are hundreds upon thousands of results that have zero relevance to what you are looking for. A search engine does not know you.

The question is not if but how the search engine marketing industry is going to evolve.

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