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Sunday, February 08, 2009

Search is a Chaos Pimp: Hotchkiss

Why is search marketing holding up, relatively speaking, as so many other areas of the economy come crashing down? Gord Hotchkiss explores seven reasons. One in particular caught my eye: "search is category-agnostic."

In many consumer categories, you're locked into a single logic. Selling more high-end perfumes is your goal, if you're a high-end perfume company. Selling more Hummers is your goal, if you work in the Hummer division. You're going to look pretty silly, and have an awfully difficult time of it, selling the same perfume for $20, or switching the dealership around so that you turn into a Toys R Us type environment selling only $100 toy Hummers or $500 battery-powered ones. The economy as a whole may switch gears, but those particular actors aren't typically nimble enough to profit or even survive.

The point might be reinforced by looking at patterns of ad spending and sponsorship in areas that have relied on a booming economy, such as the PGA Tour. When people are no longer buying Cadillacs (or settling for a Buick because Tiger likes it), and when financial-sector sponsors are no longer able to afford these marketing budgets, that advertising venue takes a hit. These ad budgets were more a product of overconfidence than of measurable ROI, so they can be cut.

To be sure, a drop in spending on high-ticket items eventually has to trickle through to search ad revenues. Bids would have to stop rising on certain keywords as margins shrink on luxury items. But search has a hard core of measurable ROI, and the emergence of new industry categories, to counteract that trend.

So the hit isn't as severe because search engines and search marketers can take a portfolio approach. Whereas individual sectors are hard-hit by chaos in the economy, search is resilient.

Once, in a long ago debate about "broken" indexing and ranking technology in the search technology business, an incoherent critic accused "people like me" of being "chaos pimps." (If you Google hard enough, you can dig up that accusation, though some of the attacks on me in particular seem to have been relegated to the dustbin of history. Just goes to show... Google's broken and doesn't index everything ;) ).

The argument suggested that because search marketing experts, writers, consultants, and agencies benefit from frequent changes in search technology, we deliberately try to promote an atmosphere of chaos, and from this we profit. That's taking the notion of "chaos pimp" in its worst sense. It's an unfair accusation in the sense that you have to work very hard to keep up, and the return on that investment of time and commitment is only about fair as compared with, say, commodity speculation with large sums of other people's money. Commodity speculators need to study trends, but as a group over the past decade, they made off with a lot more booty per hour spent in deep study than the comparable gang of search marketers.

In a much more important sense, search marketers are comfortable with chaos, and that beats the heck out of putting your head in the sand. We didn't create it; it's not a clever ploy. The global economy is what it is. Yet few search marketers would recommend that you deviate from certain fundamentals; not if they're true professionals.

To be sure, we would also agree that rapid change in the requirements of online visibility is ongoing. It's a primitive sort of pipe dream that suggests we could build a "simple system" where the "rules never changed"... once and for all. Someone recently wrote to me angrily denouncing some poor search results, suggesting that a "five-year-old could get it right" and that the company displaying the "poor" results "should hire a five-year-old". Hmmm. Have you noticed that people denouncing the quality of search results often have an ax to grind about one specific result they don't like... such as their own inability to rank well, or shortcomings in their own company's reputation?

What is happening in the economy right now will always be happening. That is, business conditions change rapidly and periods of relative stability are followed by periods of rapid adjustment. In that sense, search engines and search engine marketing are "chaos pimps" in the best sort of way. They capture and respond nimbly to rapidly changing business conditions. When their needs change, consumers search for different things. (A B2B example I can think of right now is an HR consultancy that formerly did a lot of volume based on the assumption of an expanding economy and the need to recruit and hire people, and now helps companies deal with the fallout of layoffs and other ugliness. As some aspects of their business fell and ROI on some aspects of paid search dropped, other areas picked up, to balance things out.) The best search engines, the smartest companies, and the nimblest search marketers are there - working in concert - to efficiently connect people to what they're looking for, in good times or bad.

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