Web Search & Marketing Newsletter - January 2010

Welcome to the January issue of our monthly newsletter - the first for 2010 and we would like to take this opportunity to wish all our customers and readers a happy and prosperous New Year.

As with the previous January newsletters, we attempt to predict what might happen over the next 12 months with the main trends that might be expected in web search and online marketing, as well as look back at the predictions we made a year ago. We have been reporting the main news stories during the past year in our regular web marketing blog and will continue to do so each month during 2010, as well as posting links and summaries through our Twitter account.

The past year has seen some continuing product and service developments by Google, as well as the launch of Microsoft's Bing search engine and their acquisition of Yahoo's search service. The full launch of this combined search tool is likely to be one of the main developments in 2010, which should also bring advantages to web users and advertisers as Google and Microsoft compete for search share and advertising spend. In addition, the social networking scene can't be ignored, particularly the recent growth of Twitter, but 2010 will be a notable year in terms of how this media will be used and how it will be developed.

You can read more below, or you can also browse through previous editions of the newsletter, either by month or by subject .

On to this month's edition...

A review of our predictions for 2009

These were our 5 predictions for 2009 that were made in January last year, together with a review of what actually happened:

1) The economic slowdown focuses attention online: the 'Global Financial Crisis' appears to have peaked in the past 12 months with many economies now showing signs of recovery, although many will still be impacted by the long-term effects of government bail-outs during this time. Australia has fared better than many western economies but online marketing has continued to grow at a much faster rate than other forms of advertising, with search advertising now estimated to be the fastest growing sector and the largest part of online marketing spend. It's difficult to know what the growth rates might have been like without the economic difficulties, but online marketing and search remains a strong growth area and a popular form of marketing for many companies.

2) Analytics becomes more mainstream: Google's Analytics service has clearly opened many opportunities for companies who now use this data to help understand and improve their website marketing and conversion performance. As with many Google products, it has become the primary tool of choice by many websites, despite the launch of Yahoo's similar free tool during the year, which although highly regarded, doesn't get the exposure and usage that Google receives. Google has also added more features to the service during the year which increases the power of the service and its applications for companies. There is still some way to go before the value of this data is used more effectively, but Google's product has definitely opened up the value and awareness of the market.

3) Yahoo won't survive in its current form: as noted a year ago, this prediction seemed to be an easy one since the attempts by Microsoft to buy Yahoo appeared to be inevitable at some point, and so the merger did happen with Yahoo's search service being acquired by Microsoft in their ongoing attempt to gain share from Google. The completion of the purchase and the impact of the change has yet to be seen, although Microsoft's updated search service - Bing - appears to be gaining a small level of market share in the US, supported by extensive advertising and the integration of the search tool with the new Windows 7 operating system.

4) Video becomes the new marketing tool: video does appear to have gained some ground in the past year, both as a feature of business websites and as a tool to attract new visits through search, particularly via YouTube. The addition of a video advertising service by Google towards the end of the year has also expanded the opportunities for companies to use video although many businesses have yet to consider creative ways of harnessing video as a marketing tool and to develop professional looking films.

5) Reputation management becomes a core service: as social networking continues to grow, particularly through the dramatic growth of Twitter in the past year, online reputation management should be taken more seriously than it is by many companies. Monitoring what is being said online will become more important, and then dealing with any bad publicity a vital measure of how a business will cope with their reputation management, which can quickly get out of control if handled badly. It's not yet become a core service or priority for many companies and may only become so once negative comments begin appearing online.

What is the likely trends for 2010?

What do we expect to see as the main trends for this year that will impact web search and online marketing activities? Here are our predictions for some of the key developments expected this year.

1) Pay-per-click advertising opportunities increase: PPC advertising - and Google AdWords in particular - is now a much more prominent part of the search experience and a powerful marketing tool used successfully by many companies. Google is already experimenting with new advert display formats, such as local maps, images and video, partly to improve the user experience and also to gain more revenue. These formats will become more widespread this year as Google also develops the service to counter the launch of the combined and improved Microsoft/Yahoo PPC service, and overall, the opportunities for advertisers will be increased to help expand the impact and reach of this fast-growing form of advertising.

2) The Bing-Yahoo merger takes effect: as noted above, the acquisition last year by Microsoft of Yahoo's search service will begin to take effect this year once the regulatory and structural issues get resolved. In theory, the combination of the next 2 most popular English-language search tools after Google should be significant and create more of a challenge to Google's dominance, although the quality of the search results and the services being offered will need to be considerable to change inbuilt user habits and make a dent on Google's market share. As part of the merger, it is hoped that a new and improved PPC service will be launched so that advertisers have a better alternative to Google AdWords with an improved user friendly interface and more reliable results than is currently offered by Yahoo.

3) Personalised search impacts search marketing: the low key introduction of Google's personalised search results for all web users (rather than just those signed into their user accounts) has passed relatively unnoticed in the press but this could start to have a significant impact on the performance of their search results this year. From a search engine optimisation perspective, it will become harder to track the ranking visibility of a website, although the important measure of a successful SEO campaign will remain the increase in search engine referral traffic as a result of any marketing investment on the site.

4) Twitter's make or break year: 12 months is a long time for the Internet and the growth of Twitter in the past year has clearly shown this. The micro-blogging service has attracted a huge amount of press coverage and online comment, but the next 12 months will really determine whether Twitter becomes a significant marketing tool or fades from view as the next fad comes along. Twitter needs to start making money from its growing user base, or it will be an acquisition target. Outside of a hard-core of users, it also needs to demonstrate to businesses that it can be an effective marketing tool that is worth the input time. It certainly can't be ignored if it continues to grow, and it's likely that the service will become more sophisticated this year to offer users a better return, which will also place the service on a more secure financial footing.

5) Local search options see new developments: we've predicted improvements for small companies through local search marketing in the past and the opportunities continue to improve, particularly for those impacted by the new generation of Internet mobile phones. It is likely that new PPC opportunities will be introduced for local businesses to help improve the focus of their online budgets, plus the increasing localisation of social networking services will also open up new opportunities for companies to reach their target markets.

Recent articles from The Marketing Workbench

The Marketing Workbench is our regular web marketing blog covering news and comment on Internet marketing events and trends. If you want to keep track of current stories you can visit this section of our website on a regular basis, or set up an RSS feed. These are just some of the items posted over the past month:

• Social marketing predicted for change in 2010
• Estimating the cost of poor Google AdWords management
• Advertisers to spend more online in 2010
• Search and video advertising main growth areas in the US
• Facebook faces privacy backlash again
• Google sues work-from-home scammers
• Google launches 'real time' search
• New developments from Google

We hope you've found this month's issue useful. Please contact us if you need any more information on the items covered, or our advice on any aspect of your website's performance. Also, if there are any issues you would like to see in future editions of this newsletter, please submit your suggestions to us.