For any internet user, search is a way of life. If you want an answer on someone or something, key the term into your search engine of choice and take your pick from the results.
Five or six years ago, those results would have all been natural, or organic, depending on your term of preference, with the order determined by the relevance of each site's content and popularity.
Search engine optimisation (SEO) was the name of the game, and indeed, still is. Any website operator that ignores SEO does so at its peril.
But alongside natural search, paid search has come from nowhere over the past few years to become an incredibly important part of the online landscape, with brands bidding against each other to finish close to the top of the listings on literally thousands of keywords - spawning a whole industry of search engine marketing and paid search specialists.
Paid search is now so important in fact, that even in 2005 it was worth 56.2% of the total online ad spend. In 2006, figures released by the Internet Advertising Bureau last week show that its share rose to 57.8% of the market (see table, page 25).
But is it right to think of paid search as advertising?
Some, like Channel 4 consultant and Media Research Group chairman Hugh Johnson, argue that it is misleading to include it in the overall digital explosion. "Search is a listing mechanism, a way of putting your name in a directory or getting your product on the shelf, or behind the counter at a store," Johnson told Media Week. "Good expenditure it may be, but it ain't advertising."
Given the nature of paid search "ads" - a headline followed by a couple of lines of text - it's easy to see why some consider paid search to be a listings rather than an advertising medium.
But just because it appears as a listing, doesn't mean it isn't advertising, says Dom Finney, head of emerging channels at BLM's digital arm, BLM Quantum.
"It is a listing, but it is advertising in the same sense that classifieds are advertising," says Finney. "It's advertising in its purest form. It directs you to a product. As with classified, it's very much response-focused, but it's much more important, due to the rise of the net, and the way this has changed the way people source information and purchase goods."
Engaging the audience
Matt Mills, director at Unite Search Marketing, part of specialist agency Equi=Media, adds: "Whether search is advertising depends on your definition of advertising. If it is a 'medium to engage an audience, influence their behaviour, create awareness, consideration and purchase', then yes, search is advertising.
"But this marginalises the channel that can be the glue between marketing disciplines to a mere ingredient."
Others concede that paid search differs from traditional advertising, but this does not mean it is not performing a similar function.
Warren Cowan, chief executive of search engine marketing agency Greenlight, argues that the consumption of search advertising, and the motivation that drives people to look at it, makes it a different type of advertising opportunity.
"The motivation is usually commerce and product research with a view to buying, so in terms of media consumption, the habit is different," he says. "With traditional media, the ad interrupts, whereas in search media, the advertiser is the content."
But whatever name you give it, says Cowan, paid search is all about getting purchase-motivated customers through the door.
"No matter what you call it," he says, "the fact is, it works."
Clearly there are differences between paid search and other forms of advertising. Compared with other forms, search is incredibly dynamic. Key the same term into the same search engine at different times and there is no guarantee that the same advertisers will make the top of the list, so fluid is the bidding process.
Search is also infinitely accountable; advertisers can track every click-through and see whether it leads to a sale, measuring the return on investment not just on individual campaigns, but even down to individual words and phrases. It's this that makes paid search so appealing to one type of marketer, while at the same time turning off another, according to Ed Stevenson, UK managing director of 24/7 Real Media.
"As with most new things, it's the direct marketers who jump on really quickly," he says. "Cost per acquisition, return on investment, conversions - these are all measurements that direct marketers relate to. 'How much does it cost to market my product? How many conversions do I get?' These are not the sorts of things that appeal to a brand marketer, who is more interested in reach and impact and audience."
But while it may be a different type of advertising, it's still advertising argues John Rodkin, vice-president of Dynamic Search at search specialist WebTrends. "Advertising is the public promotion of something, and that's exactly what search advertising is - the promotion of goods or services next to non-paid search results," he says.
And if you take the argument to its logical conclusion, he says, natural search results should also be classified as advertising.
"Most people pay a high price for a high place in the natural results, and in addition, the natural results are an index of people's websites, many of which are just additional advertising vehicles," he says. "Natural results are also quite a bit like Yellow Pages, which is essentially a vehicle for advertising."
Integrated campaigns
The paid search industry started with GoTo in 1998. It was the first time advertisers could bid how much they would pay to appear at the top of results, in response to searches on specific words and phrases. GoTo was subsequently renamed Overture, and in 2003 was bought out by Yahoo!. Google entered the market in 2000 with Google AdWords.
Though Yahoo! and Google tend to hog the limelight, there are dozens of other paid search companies, such as Kanoodle, which has been providing search-targeted sponsored links since 1999. Microsoft entered the market relatively recently, with the launch of Microsoft AdCenter in August last year.
Microsoft search strategy manager Chris Salmanpour says paid search is now an integral part of many advertising campaigns, as brands look to hit consumers with the same messaging at different touchpoints in the buying cycle through their advertising on TV, in print, outdoor - and through paid search.
"The gateway for consumers to find more information once they have consumed offline campaigns is to go through a search engine," says Salmanpour. "This is how our customers are using search - integrating it with all their other marketing activity."
Ollie Bishop, chief executive of Steak Media, agrees: "When a consumer sees an ad on TV or a poster, they go online and search for the product. If they can't find it online, it has a negative brand impact.
"This is why paid search is so popular, and of course it is advertising. It's more of a pull than a push medium, but it plays such an important role, because any advertising, online or off, ties back to search."
But while search is inextricably linked to other forms of advertising and promotion, it is also becoming more sophisticated in its own right.
Salmanpour points out that Microsoft AdCenter offers advertisers the ability to target their paid search campaigns by demographics and geography. Google's paid search vehicles now include books and the Froogle shopping search engine, in addition to its regular search engine, plus Google Earth for geographical-based campaigns.
Natural language search engines are in development, which promise to produce more accurate and relevant results to search queries than even the best of today's search engines.
And with the increasing sophistication and web enablement of all but the most basic mobile phones, there's a lot of excitement around mobile search. There's even something of a landgrab going on, as a handful of mobile search providers look to secure deals to "white label" mobile search offerings for mobile operators.
Many believe the pay-per-click rates for mobile search terms could dwarf those paid for keywords online, since someone searching a keyword on their mobile is likely to be close to making a purchase.
But there's a lot of work still to be done on formulating pricing models and ad formats, and Steak Media's Bishop finds the hype around mobile search hard to understand. "What surprises me is to hear all this talk about mobile search when most people still haven't got hold of an industry that's been going since 1998," he says.
Bishop is not alone. There is widespread feeling among search specialists that mainstream agencies have, on the whole, failed to "get" search. While some search agencies have relationships with agencies outsourcing their search work, much of their work comes direct from advertisers who want their expertise in this sector.
Like the big agencies, many advertisers are still playing catch-up where search is concerned, according to Jeremy Spiller, managing director of search specialist White Hat Media.
"Often the companies you see at the top of the results are not the ones you would expect," he says. "Larger businesses are embracing it slowly, but this is what you would expect, because while the budgets for TV advertising are much bigger than for paid search, the profits are too. It's like when the web first began."
But Marco Bertozzi, marketing director at ZenithOptimedia, disagrees, pointing out that Zenith's digital strategy agency Zed has 20 people on search, as part of a total communications plan.
"Companies are realising that search cannot work in isolation," he says. "It's telling that a lot of the big users - brands in travel and financial services, who have previously put search out to specialist agencies - are now bringing it back into their mainstream agency."
Almost 10 years after the first paid search advertising service launched, you might have thought the big businesses would have their heads around paid search by now. That said, even Microsoft is less than a year into its paid search adventure, and as Salmanpour points out, in relative terms it is still early days.
"Search is still a very, very young medium," he says. "It's only been around in any sort of form for five years. It will be another 15-20 years before we get to what search will deliver in terms of its full capability."
MEDIA AGENCY OR SPECIALIST?
Media agencies stand accused of not adapting to incorporate search as part of their offering.
"Agencies are not up to the job," says Ed Stevenson, UK managing director of 24/7 Real Media. "I have not seen a level of sophistication from an agency that I see from search engine marketing specialists. Agencies are there for planning and buying, but search is all about execution."
Steak Media chief executive Ollie Bishop says it was hard initially to win blue-chip clients off traditional agencies with global contracts, but they are now coming on board because they are "fed up with being presented with a beautiful pitch process, but no team in the background to service it".
Paul Frampton, head of digital at Media Contacts, concedes that many traditional agencies pay lip service to search, but claims his company takes it more seriously. "There are a lot of traditional agencies whose approach to search is to have a few people in a corner covering it, but you can't do it like that," he says. "We have 30-odd people doing search, and when you have clients like Thomson with two million keywords, you need that resource.
There is no silver bullet to getting search right. Technology helps, but the only way to truly manage search is to have an adequate marriage of technology and people."
However, Warren Cowan, chief executive of Greenlight, believes that not enough agencies understand what the medium is, and how it functions.
"They ask how to bolt search on to their ad campaigns," says Cowan. "But an ad campaign runs for six weeks. These people are out there 52 weeks a year and if they are looking for a digital camera, for example, they are looking for it whether you are advertising on TV or not. Paid search advertisers should be there 52 weeks a year, not just when there's an ad campaign going on."
And WebTrends vice-president of dynamic search, John Rodkin, has a stark warning for traditional ad agencies.
"Agencies need to adapt or die," he says. "With good analytic solutions, it's now possible to draw a very clear connection between the advertising purchased and the results obtained, and to do so quickly.
"This is different from the offline world, where it takes a long time to measure whether an individual ad was effective, and usually the measurement is only directionally accurate."
Rodkin believes agencies will need to have their creative and strategic people backed by very strong maths specialists or products to clearly evaluate how campaigns are going, so they can be adjusted in real time.
"The upfront creative strategy is hugely important, but with the ability to measure performance accurately and continuously, agencies that learn to optimise their campaign midstream will be the most successful," he says.
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