Wow, 2009 flew by! Staring into the crystal ball, here are 4 predictions about search marketing in New Zealand during 2010…

Prediction #1 – Paid Search Takes Off

2010 will be the year paid search marketing is finally taken seriously by the NZ advertising industry. However for many agencies it will still be given token lip service because they:

1. Don’t understand it
2. Are uncomfortable with how measurable search is & the associated transparency of agency performance this brings (‘accountability’ – yikes!)
3. The non-commission bearing nature of Google AdWords forces change in the ad industry’s traditional charging paradigm

Despite this, agencies will be compelled to include more than just token search buys into media plans because their clients will increasingly demand it. As a result we’ll continue to see growth in paid search spend at the expense of other traditional media, as has been case in Australia & UK.

Prediction #2 – More Focus on SEO

Associated with the increase in paid search marketing will be an increase in investment in SEO.

For most businesses their entry into the world of search marketing is through paid search (usually Google AdWords). Usually new paid search advertisers are blown away by how well search performs compared to traditional channels they’ve used. As a result, most wonder why they haven’t done this earlier & substantially increase their ongoing investment in search.

Smart move.

However shrewd players recognize the risk of putting all their eggs in the PPC (paid search) basket & also invest in improving their organic search performance using SEO (search engine optimisation).

Even smarter move – given that around 70% of all commercial search traffic is organic, rather than from paid search.

In 2010 NZ businesses will increasingly rely on search as a key component of their marketing mix. And those who do best will have a properly integrated search marketing strategy to maximise the synergistic benefits of paid & organic search.

Prediction #3 – Local Search Grows

New Zealand consumers will increasingly turn to using local search in preference to Yellow Pages – as is the global trend.

Switched on NZ businesses will ensure they are highly visible in local search results so they can exploit this growing opportunity. And grow it will, as more & more mobile phones are web enabled.

In fact, 2010 is likely to be the year mobile search really booms, thanks largely to the iPhone.

Of course it’s not all over for the Yellow Pages – people will still find them useful for raising the level of their computer monitors

Prediction #4 – Money that should be invested in Search will be wasted on Social Media Marketing

All the breathless hype about social media will continue & increasingly NZ businesses will feel compelled to try & ride this new wave. Unfortunately with all the hype & perceived sexiness of social media marketing many NZ businesses will waste money on poorly conceived & badly executed campaigns.

Smart businesses instead will look to the lessons learned in the more advanced markets of Australia, UK & the USA to see what does & doesn’t work.

And really smart businesses will first ensure they’ve got their search marketing strategy well & truly sorted before diluting their focus by dabbling in social media marketing.

Why? Because search marketing consistently brings home the bacon, whereas social media marketing is more of a crap shoot -  i.e. it can sometimes have astounding results, but most times is a fizzer.

OK – that’s my admittedly biased perspective on what 2010 will bring.

Congratulations to the Short Courses team from The University of Auckland Business School for winning the Business to Business Award at the recent  TVNZ NZ Marketing Awards.

This is a great result and a reflection of how well they’ve performed, achieving a record number of student enrolments in 2008, despite the impact of the recession on the training industry in general.

This year the Business School redesigned its marketing strategy with a strong focus on ROI and re-directed marketing spend into online and direct marketing. Search marketing was a key component with Google AdWords PPC advertising being run and managed by SureFire.

We’re proud to have played a small part in their success. Congratulations to Darren Levy, Director of Short Courses & Rawinia Lange, Marketing Co-ordinator.

In a recent posting I celebrated the fact NZ online advertising spend continues to grow & that paid search is now the major component.

However compared to Australia, NZ is still well behind the curve in terms of adopting online marketing.

According to latest IAB figures NZ online spend accounts for only 8% of total advertising spend, whereas in Australia it is around 25%.

The difference in the NZ & AU markets is very obvious when paid search spend is examined.

• In NZ paid search for the year ending June 09 was only NZD$67 million (36% of total online spend).

• In stark contrast paid search spend for the same period in Australia was AUD$884 million (49% of total online spend).

• Reduced to a per capita basis, Australian paid search spend is AUD $42 per person. By comparison NZ’s is only AUD $13.  So proportionately the Aussies are spending 3 x more than we are in NZ.

Damn, I hate it when the Aussies beat NZ!

In a recent post I mentioned recent IAB figures which showed for the first half of 2009 New Zealand TV advertising revenue plummeted 13%, while, in stark contrast, online advertising grew 7% compared to last year.

This may have been a shock to some media planners & buyers.  Especially those who to date have given little, if any, attention to online. No one likes their world turned upside down, so some may even be in denial & view this as a short term aberration due to the recession.

I don’t think so!

Most people acknowledge UK is a couple of years ahead of NZ on the online curve & generally what happens there is a pretty good indicator of things to come in NZ.

Whilst things have been tough enough in NZ, the recession has been much worse in UK. As a result the UK advertising industry has really suffered, with a £1.5 billion reduction in total media spend. Despite this, online advertising has continued to grow because of its performance accountability.

The real bombshell however is that, for the first time ever, more money is being spent in UK on online advertising than on TV!

That is pretty astounding & makes UK the first major economy to see online spending overtake television.

As the above table shows, UK’s growth in online advertising has very clearly been lead by paid search.

In NZ paid search is now the biggest online advertising channel & accounts for 36.3% of all online spend. However to put this in context, according to the IAB, paid search in UK accounts for 62.6% of all online spend.

Begs the question – when will that happen here? My money’s on it being within 2 years.