Digital advertising costs are rising, the online advertising market is increasingly saturated and the way people search for information on the Internet is changing, popularizing new search methods beyond Google. That leaves advertisers thinking about diversifying their search spend away from Google, agency executives say.
Fragmentation cracks are starting to show in search advertising as platforms like Bing’s new AI integration and Feature of TikTok present search ad options beyond Google. However, advertisers say they’re not willing to shell out money for these options, at least not until they’ve proven their brand is secure and scalable enough to work with or instead of. Google.
“Google remains the tried and tested way to reach the bottom of the funnel and that’s not going to change overnight,” David Gelt, director of paid search and YouTube at Rain the Growth Agency, said in an email. . statement to Digiday, “but as users change their behavior, advertisers will have the flexibility to spend their budget elsewhere.”
As is the case with marketing, advertisers seek audiences to which they migrate most frequently. The trick is to get into emerging spaces and platforms early enough to be a frontrunner and capitalize on building audiences for potentially less ad spend. Betting on the remaining audiences is not easy, however, as online consumption habits change frequently.
Even so, the way people search for things is changing. Historically, Google has been the go-to search engine. Now, search has become fragmented as TikTok and YouTube serve as a search platform for things like video tutorials. Reddit and Amazon are product information search sites. Meanwhile, Microsoft’s new ChatGPT and AI search feature allows for a more nuanced conversation as opposed to a one-way search. People can now find brands and products in many ways, and advertisers are reconsidering what the future of search might mean for advertising.
This year, Google is expected to account for more than half of US search ad revenue, according to eMarketer. At Gupta Media, e-commerce and retail clients spend approximately 30% of their advertising budgets on paid search. In some cases, this figure varies from 10% to 30%. Still, the bulk of those dollars goes to Google, said Phil Decoteau, account manager at Gupta Media. At Tinuiti, performance-driven startups spend between 60% and 70% of their budget on paid search. This figure is estimated to be between 10% and 15% for more mature brands, according to Aaron Levy, vice president of paid research at Tinuiti. Again, the bulk of those dollars goes to Google. (Neither Decoteau nor Levy provided exact spending figures or specific channel names.)
But with the rise in CPCs (find a full breakdown on it here), the increasingly saturated digital advertising market and its share of new entrants into the search ad space, agency executives say they are considering these new options and potentially diverting bucks from Google.
“Fragmentation splits Google’s dominance a bit in the mind, and then we see other tools taking advantage of it, which can ultimately lead to some market share degradation,” Decoteau said, without naming specific names. .
Diversification in research
Enter Microsoft and TikTok.
Earlier this month, Microsoft announced its new Bing search engine powered by ChatGPT, which could become a competitor to Google Search. With the integration of AI, Bing is on its way to becoming a more conversational search engine, where users can ask questions rather than keyword searches.
And the current golden child of social media, TikTok, has taken over in recent months. While its search ads are primarily seen as an experimental marketing channel to reach Gen Z consumers, media buyers and agency executives expect it to become a focal point later this year.
I hope that [social is] not a cake [advertisers] taken out of the oven before it was cooked.
Aaron Levy, Vice President of Paid Research at Tinuiti
As the short-form video platform has begun to take a bigger slice of advertising dollars, it’s about brand marketing rather than search and performance, advertisers say. Ultimately, budgets will go where the performance is, Decoteau said. If TikTok’s search becomes effective and expands enough to challenge Google’s dominance, expect to see dollars follow, he added.
YouTube, Reddit and Amazon pose their own threats to Google. Again, if they can prove their scale and effectiveness, advertisers say.
“We will generally focus all of our efforts on Google just because the data set is bigger, the tests go faster, we will learn more. We will take what works there and then pass it on to Microsoft in general” , Levy said. “But these things are so small that they just don’t have a material impact.” (He didn’t disclose ad spend details.)
As more and more search ad options become available, more and more unknowns in terms of brand safety, success metrics and scale become part of the picture, making all best left to experimentation, the advertisers said. Or, as Levy puts it in reference to the growing interest in emerging search options, “I hope it’s not a cakewalk. [advertisers] taken out of the oven before it was cooked.
Economic concerns
And as economic uncertainty looms, there could be less willpower devote spending to experimental channels beyond testing and learning. And the bulk of Search Network ad spending will likely continue to go to Google for the time being.
If it’s not trackable, they won’t spend money on it.
Aaron Shapiro, President and Founder of Product Marketing Agency
“The biggest change is that in this uncertain environment, advertisers are much more disciplined to ensure their ad dollars are generating a return,” said Aaron Shapiro, president and founder of the product marketing agency. “If it’s not traceable, they won’t spend money on it.”
There is more excitement surrounding the future of search advertising than there is advertising dollars to spend on it. Advertisers say that could change as these search opportunities evolve and become more sophisticated — and potentially at a lower cost.
For now, this is seen as a possible power shift for search engines and search ads, said Lawrence Edmondson, chief technology officer at Barbarian Digital Ad Agency.
“We are all holding our breath to see what happens,” he said.
https://digiday.com/?p=490141