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.

NZ marketers are finally realising the value of search marketing.

Latest figures from the IAB show online advertising spend continues to grow & that paid search is now the biggest online marketing channel in NZ.

Hallelujah!

At last we’re starting to catch up with other markets where 50% or more of online spend is invested in paid search.

There are plenty of good reasons for this level of investment. Here are 3:

1. Traffic from search engines – by definition, people actively interested in finding out more about your company & products – is highly valued by marketers. These visitors are more engaged than other site visitors, viewing more than twice the number of pages per session & spending twice as much time onsite.
2. Search engines are now seen by users as an arbiter as to the sites – and brands – of value. In one study by Yahoo! & Compete, 61% of users responded that they expect brand leaders to consistently appear in the top search engine results.
3. In their annual polling of marketers as to the most effective forms of offline & online advertising, both eMarketer and MarketingSherpa have consistently concluded that, along with email marketing, SEO & Paid Search Marketing are the strongest tactics producing the best Return on Investment (ROI).

In summary, the reason marketers are increasingly investing in search is simple – it works! And very cost effectively compared to other channels.

If you’re not doing it yet, maybe it’s time you gave it serious consideration. Your competitors probably are…

Here’s a funny T-shirt I found in a Bangkok night market, of all places…

No, you won’t find this in the Google store.

It looks like even the search colossus Google isn’t immune to the impact of the global recession.

Despite earning a staggering $4.2 billion on revenue of $21.8 billion last year Google is now aggressively trimming expenses to protect profits & stop its stock price from falling further.

Since January Google has eliminated outside contractors; curtailed some of the employee perks they’re famous for; & canned services that weren’t paying off, like their foray into radio advertising.

Google’s huge growth in revenues has fueled significant growth in the last couple of years with headcount jumping to almost 21,000 employees, compared to 10,674 at the end of 2006.  But now to further reduce costs Google has  started laying off staff & consolidating some offices.

Google’s announcement last week that it’s laying off 200 sales & marketing staff globally came as a surprise, given this is the part of the business responsible for generating advertising sales which reportedly account for 97% of Google’s revenue.

Disappointing is the fact that this decision has impacted on the Australian & New Zealand operations. Apparently the Melbourne office is being closed & the New Zealand office staff of 8 cut back significantly.

The Google NZ team is a great group of highly committed & talented people who’s efforts have undoubtedly played a key part in the significant growth of search marketing in New Zealand. Search has taken off since Google established a local office & the level of agency support we’ve experienced has been outstanding.

If Yahoo had a similar presence in the NZ market they’d no doubt be getting a far bigger share of the search cake.

According to the latest Hitwise figures Google has 92.52% of the total NZ search volume share whilst Yahoo has just 3.1% & Microsoft even less at 1.14%.

Sure, there’s much more to Google’s dominance than just having great people on the ground, but it’s certainly played a part.

Our best wishes & sincere thanks go to the local Google NZ team. Thanks guys, you’ve been terrific.