Search Sense

Interesting to read Chris Sherman’s post over at Search Engine Land on the latest US court ruling that allows paid search advertisers to bid on trademarked search terms.

Some commentators have suggested this is carte blanche for marketers to bid on anything they darn well please including a competitor’s trademark terms.

Actually, it not such a bad thing for trademark owners in the search space after all.

It introduces flexibility in bidding, yet still empowers brand managers with registered trademarks on Google with a mechanism to stop unscrupulous competitors and affiliates impersonating their “official site”.

However, the ruling effectively allows Pepsi to bid on the search term “Coca Cola” provided the advertising creative displayed states quite clearly this is a Pepsi product or site.

We’re so used to the US being ahead of the UK in web technology and marketing, that to hear US executives say it’s the other way around is a bit of a shock. But that’s exactly what Yahoo!’s boss has been saying in the New York Times:

There are big differences between the advertising markets in Britain and the Unites States. In Britain, much of the advertising is national, while there are strong local and regional ad markets in America. Still, some believe that online advertising in Britain provides somewhat of a roadmap for where online ads in the United States and elsewhere may be heading. “The U.S. is so behind,” said Terry S. Semel, the chief executive of Yahoo, in a recent speech in London. “It’s certainly lagging the U.K. by at least a year or two.”

As well as a national advertising market, the UK has surged ahead in broadband adoption too. 47.4% of UK households now have broadband compared with 43.9% in the US, thanks to cut-throat competition in the ISP market here.

Part of the US “lag” is about legacy, according the article, about commitments both financial and psychological to TV as the lead-medium for advertising. That’s understandable - it is genuinely difficult to understand how far and fast people’s media consumption has changed and still is changing unless you keep a close eye on the figures.

I was impressed by simple slide someone from Google used at a recent meeting comparing the percentages of media spend in the average blue chip company with people’s consumption of media. While about a fifth of the average person’s media consumption is now web-based, spend on internet ad spend is only just over 6%.

And that’s just ad spend - think about the other, non-advertising-based marketing and communications opportunities for brands online. Creating better content, engaging with customers direct via social media, making sure that they are optimised in natural search…

I wonder who will be bold enough to call the ‘top’ of the online ad market? I have felt that online will easily reach a 15% share of advertising revenue for some time now, but it feels like we will surpass this figure even quicker than many anticipated. With so many distribution channels yet to be fully realised, including the burgeoning community networks and natural search optimisation, the challenge to digital agencies will be how to embrace their clients needs at a pace that keeps up with a voracious consumer demand.

The latest data from the Internet Advertising Bureau (IAB), carried out in partnership with PricewaterhouseCoopers (PwC) and the World Advertising Research Centre (WARC) confirms that online advertising’s break-neck growth continues to outpace any other form of advertising media.

Given that the wider UK advertising sector is struggling, and in many areas is depressed, the 40.3% like-for-like annual growth for the first half of 2006, confirms that we are in for another record breaking year and pushes online’s share of the pie to 10.5%.

2006 will not be far off 2 billion in online revenues, bring-on 20%!