Why Search Is the Worst Form of Advertising (but the Best form of Targeting)

Josh Shatkin-Margolis founded Magnetic in 2008, and has 10 years of experience in the field of online marketing and data. Previously, he spent three years at Yahoo, where he was the director of engineering, responsible for data processing within the advertising division.

Search-engine marketing (SEM) is the worst form of advertising. Sure, it's able to get in front of the right audience, but who is really being persuaded by 130 characters of text split across four lines with no call to action? Giving SEM credit for being the form of advertising that drives billions of dollars in sales is like giving the checkout person at a supermarket credit for all the food sales annually. The checkout person does not persuade the shopper to buy Coke instead of Pepsi, and neither do text ads.

I'm not saying SEM lacks value. Placing your text listings in search engines, comparison shopping engines and other places users seek out does remind your customers: "Oh, right, I remember them. They are who I was looking for." But, let's be clear, SEM is only part of the equation, as it is not persuading users to chose you over your competitors.

So the big question is: If SEM presents to the right audience but lacks persuasion, is there a way to actually advertise to the right audience?

The short answer is yes. SEM represents only 2% of users' time online while the other 98% is spent on sites with graphical (display) advertisements that persuade users to buy specific products. The other question is, How do you pull the 2% out of SEM and apply it to the 98% of display?

Well, thanks to the rise of data and audience buying, there's a relatively new offering now available to marketers called search retargeting. Search retargeting is the ability to target display ads based on user search history. This allows marketers to show advertisements to the right "in market" consumers and entice users who are already looking to buy a specific product or use a service. This combination of search and display results in the acquisition of new customers and drives targeted awareness across all sites.

Imagine you are a consumer looking to buy a luxury car. You enter "Mercedes" in the search box. Next, you see a display ad for a luxury car across CNN.com.

We've all heard the promise of the right ad in front of the right user at the right time and hundreds of thousands of people across hundreds of companies have sought out this goal. How can it be that now there is a new industry that is finally delivering the goods?

My assumption is that this hasn't happened until now for three reasons. These are:

  • Online advertising is a large multibillion-dollar industry and, thus, takes time to evolve
  • Advertising exchanges (the large market places for buying media) have only come into existence recently with Google and Yahoo making huge advances in the past year
  • Search and display have largely operated as silos rather than playing upon one another for both search and display based ad campaigns

Regardless of how we got here, we now find ourselves standing on the shoulders of the search-engine giants, armed with useful data and accurate information to identify who the right audience is, and, finally, are able to apply traditional graphical methods of advertising to that audience. The results will change the way the other 98%t of media is being monetized. Let the advertising begin!



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Comment by Olof Wadehn on June 1, 2011 at 12:42pm
100% correct David. In fact SEM is not advertising at all. It is inbound "marketing" as the "M" in SEM denotes. The basic premise of Advertising is that it is an "Outbound Marketing" or "Push" method to get people to buy products. SEM is at best like the author said "only part of the equation, as it is not persuading users to chose you over your competitors."


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