The Digital Lookout

Whilst we in the search marketing business consider the UK market as one of the most advanced in terms of search engine marketing and search engine strategy a recent report by hosting company fasthosts claims that British consumers still don’t understand how search works.

According to the report 1 in 4 Britons were unaware that website owners were able to make changes to their website which would influence their position in the natural results and 22% believed that the natural SEO results were influenced by how much a company was paying to appear.

On the PPC front 1 in 3 respondents claimed to ignore sponsored links completely due to their commercial nature believing them to be “less worthy” and “less useful” than the natural search listings.

As a search engine marketing professional it is shocking to read the understanding of search in the UK is so poor but it does raise the question of what this means to the future of search engine marketing as consumers become more knowledgeable about search engine marketing. 33% of the respondents claimed to avoid PPC listings as they were less useful, but I would argue that they are less useful because the user does not understand them. I am fully aware of how PPC works but I still use sponsored listings when it suits my need. If my search is due to end in a purchase I am far more likely to use paid search listings as I know they will direct me to the most useful page and also contain details of any special offers available to me. However if my search is based around finding information I am more inclined to use the natural results as they will be less commercial.

As I also understand how natural search results work I am also more considered in how I view them. Rather than clicking blindly on the top results I take some time to read the results, check the URL and the listing content to decide which one is going to be the most useful. I am not going to rely on the search engine to decide which the best website is for me, I will make up my own mind thank you. I may even perform a second search before even clicking a link!

The results of this report suggest that consumer interaction with search engines could be changing over the next few years and companies engaging in search marketing are going to have to understand what this means to them. Is CTR going to drop on paid listings as users understand them more? Is position 1 in the search results going to mean less as people become more selective with what they click? Only time will tell.

The finance comparison market has been a very lucrative and successful one over the past 5 years and it seems that Google has finally decided that it wants a piece of the pie! The screenshot below is taken from a Google UK search for secured loan (interestingly it only worked in IE and not in Firefox) and shows the Google Merchant Search function appearing above all PPC listings with drop down functionality allowing the user to select their desired loan amount before they even leave the SERP. Once an option is selected the user is taken to the Google Merchant page with their options shown based on the original selection, much like with all the other comparison sites in the market.

At the moment it appears this is just in Beta on the secured loan keyword but surely if successful this will be rolled out onto all other financial products. I couldn’t see where Google was getting these results from, and so I am not even sure if the providers know they are being compared (although I assume they are aware) and there is not indication of how a company would get its products listed, although this could just be a closed beta for now.

This could have massive implications for the comparison market, above and beyond the fact that there is another competitor in the market. In the first instance they have knocked moneysupermarket off the top PPC listing which will impact their volume, I am assuming they are not paying themselves a premium CPC for this position! They are also allowing themselves much more prominence on the page than a standard listing. 49 characters for a title and drop down functionality make it stand out on the page. Users could also see this as an easier option than clicking through a link and going through the whole process on a separate engine.

On top of this, if the beta is successful, what is to stop them adding in a variable to quality score which penalises other comparison sites? In one fell swoop generating themselves both more revenue from the sites willing to pay more and reducing the prominence of these sites and so driving more volume through their own tool. I may be a cynic but I can see it happening. Moneysupermarket spend a lot of money with Google but if they see a bigger opportunity in doing it themselves then they will surely pursue this avenue instead.

Is this the end of independent comparison sites? No, I doubt it, but if/when the beta is expanded it could be a big dent in their revenues and they will have to think of other ways to differentiate themselves. Some insurers (direct line to name one) are already boycotting the comparison sites and if Google is to offer this service for free, which they may well do in the name of stickiness and keeping people within the Google realm, more could follow suit.

It seems like Yahoo! may have finally given up trying to beat Google with the announcement that they are running a two week trial displaying Google AdSense listings alongside their search results in the US (more detail).  The initial trial will include the results displaying on no more than 3% of search queries submitted and will only be seen by Yahoo! US users.  Yahoo! claim the move is is part of an “exploration of strategic alternatives to maximise stockholder value”, i.e. make them more money.  Microsoft have already expressed their own concerns that should a future deal be struck this would take Google past the 90% market share mark and raise further competition concerns.

It concerns me what a future deal could mean for the search market as the it effectively means a consolidation of the market as opposed to the fragmentation we had seen coming over the past 2 years.  This simplifies the process and doesn’t necessarily bode too well for search marketing agencies.  From Yahoo’s perspective it may come down to purely monetary figures.  If they have decided that they are not going to get very far with challenging Google in the paid search market then displaying AdSense results would allow them to significantly reduce their staffing levels and technology costs.  Although it wont be nice for those people that end up getting the boot, the boardroom wont be concerned if the figures stack up.

It does make you wonder what sort of deal has been brokered for the trial and the possibilities beyond though.  A typical AdSense partner might be earning 40% of the click revenue generated but Yahoo! aren’t you standard partner! Could Google be willing to let Yahoo! keep all of the revenue for the sake of market share?

I spotted something on Google today which I hadn’t seen before and is a new development in universal search.  On a search for “times” I was presented with the standard search results you get for a brand term but then in addition to this there was a search box contained with the results! On entering a search phrase into this box I was presented with the site search results but still with the Google SERP.  This functionality is well known and nothing new but the inclusion of the search box in the results is not something I have seen before. 

It is obviously just another element of Universal Search in action but is alos a good tool for Google to make their results as accurate as possible and keep people within their pages.  By allowing them to search within Google for keywords contained within a site you are not only enhancing the user experience but promoting loyalty and boosting query numbers at the same time, win all round.  On top of this they are also able to produce additional Adwords results on the secondary search and potentially boosting revenues as well.

I have just come across the Yahoo! Buzzapplication which is currently in beta testing.  From what I can see this is very much like Digg and Sphinn in that users provide articles of interest which are then voted on by the users to push them up the listings. 

Stories are given a “buzz score” which is ”derived from search term popularity, the number of times a story is emailed from Buzz, and the number of votes a story receives.”  Which could add a slight element of mystery if it is more than simply a case of adding the sum of all these parts together.  If it is going to work much like the quality score system in PPC then it may change the game a little and avoid all the spamming which takes place in Digg.  There will apparently be a manual editorial team in place to prevent spamming from taking place but how many and how effective they will be remains to be seen.

The other major twist in the tale is the statement from the site “stories with the highest Buzz Scores may be published on the Yahoo! home page.”  this would make the reach of top performing articles massive and the potential of this new application greater than that of Digg and Sphinn as it goes beyond the user base of the programme itself.  Apparently the same editorial team which will monitor the spam will also be responsible for deciding which stories are worthy of the Yahoo homepage exposure.  It will be interested to see what prominence these articles are given as they are free content and so Yahoo! would potentially be losing out on revenue if they replaced any of the paid placements.

It will be interesting to see how this progresses and whether the exposure on the Yahoo! homepage can make it a bigger property than the more established players in social bookmarking.