News / Business
The Future of Search Advertising
NeXplore Corporation White Paper
NeXplore Corporation White Paper: The Future of Search Advertising
Executive Summary
Will the current economic downturn bring an end to the double-digit growth paid search advertising has enjoyed over the past 5 years?
Popular wisdom among industry experts holds that paid search advertising will remain quite strong over the next decade but will shed its stratospheric growth and settle into a more sustainable, well-performing but relatively modest growth pace.
NeXplore begs to differ. Internet time consumption, reliance on search and dissatisfaction with leading search engines is growing steadily among consumers. The impact of ubiquitous broadband, online video, and the rapid adoption of socialization and personalization tools must also be considered when making predictions about the future of search and paid search advertising.
The NeXplore Perspective
As new technologies gain traction and new Internet user trends emerge, the only thing certain about the future of search and search advertising is change. And with change comes opportunity, particularly for nimble, forward-looking companies that can quickly bring to market Web-based products that have immediate consumer appeal and deliver compelling, high-yield advertising value.
NeXplore Search, in public beta since January of 2008 and surpassing 5.6 million unique visitors per month in 2009, is an innovative Web 2.0 search engine optimized for a superior end-user experience, rich-media display and social network integration.
NeXplore Ads is a full-lifecycle ad creation and management platform that enables marketers to effortlessly create, manage and modify in real time highly interactive rich-media search advertising campaigns that meet today’s exacting standards for vitality, efficiency and measurability.
Today, the winds of change are sweeping across the search and search advertising landscape. The present plateau in paid search growth is best perceived as ground zero for search advertising’s next great ascension—a period of accelerated growth that NeXplore believes will likely surpass search advertising’s 2007 - 2008 peak of 21% year-over-year growth.
Search advertising growth: Apex or launching point?
Given online advertising’s meteoric growth between 2004 and 2007, and considering the marked deceleration of this growth over the past year, one might conclude that, as an industry, online advertising has achieved its inevitable zenith.
SOURCE: IAB
No form of advertising is immune to an economic downturn, and U.S. online advertising growth—while still tracking on a positive curve and faring far better than traditional print and broadcast advertising—is projected to slow into single-digit growth for the first time in 2009.
Paid search advertising, the stalwart segment of the online economy, is projected to experience only 14.9% growth in 2009 compared to 21.4% growth in 2008.
Search advertising growth: Where to now?
So where does online advertising go from here? More specifically, what can we expect from the best performing venue in the online advertising world—paid search?
This is the billion-dollar question discussed today ad nauseam by an army of industry pundits and prognosticators, most of whom tend toward the safe, ostensibly obvious and clear answer—Paid search advertising will remain quite strong over the next decade but will shed its stratospheric growth and settle into a more sustainable, real-world, well-performing but relatively modest growth pace.
This answer, while safe and seemingly prudent, completely misses the mark. It fails to account for the inherent disruptiveness of search advertising; the evolving dynamics of Internet use; the speed and power of Web 2.0 innovation; and the current weighty economic pressure on marketers and those who serve them to wrest ever-greater value from a shrinking advertising dollar.
A more thorough and rigorous assessment of search advertising’s future growth gives credence to how these very powerful forces are working to radically alter the search advertising landscape and, in the process, re-ignite search advertising’s supersonic growth.
NeXplore Search, the company’s flagship product available in public beta January 2008, blends meta-search power with cutting-edge Web 2.0 technology to deliver to consumers in rich-media format accurate search results that can be further filtered by a social- sharing overlay and other personalization features.
NeXplore Search — Changing the Face of Search
NeXplore Search’s visually engaging, user friendly, multi-media interface makes navigation effortless, drill down obsolete and interaction intuitive and helpful.
NeXplore Search — Changing the Face of Search
With three unique, easily navigable search-result display options (summary view, gallery view and line view) and three proprietary, drilldown-eliminating website preview options (thumbnail preview, window preview and pane preview), plus an array of rich Internet applications (RIA) that make searching greatly more interactive, NeXplore Search changes the face of Internet search forever!
NeXplore Search summary View:
NeXplore Search Gallery View
NeXplore Search Thumbnail & Window Website Preview
NeXplore Fully Navigable Website Preview Pane
NeXplore Search — Changing the Face of Search
In just over a year since its public beta launch, NeXplore Search has achieved numerous company milestones and industry distinctions, including:
NeXplore Ads — The Future of Search Advertising
NeXplore Ads — The Future of Search Advertising
The NeXplore perspective on the question of search
advertising growth—evidenced by the wealth of game-changing search-advertising innovations delivered by NeXplore Ads—runs counter to popular opinion but truer to the realities of today.
Simply put, NeXplore believes that the present plateau in paid search growth is best perceived as a well constructed launching pad for search advertising’s next great ascension—a period of accelerated growth at hand now that NeXplore believes will likely surpass search advertising’s 2007 - 2008 peak of 21% year-over-year growth.
The NeXplore perspective on search advertising growth is based on a careful analysis of the following prevailing forces shaping today’s Internet:
1. Growing Internet time-consumption, reliance on Internet search &
search dissatisfaction
Consumers are spending increasingly more time online. Today, Internet time-consumption is rapidly closing the gap on TV time, with the average consumer spending 29% of his or her time on the Internet compared with 37% watching television.
For the young adults & teens demographic, Internet time consumption surpasses that of TV at 39%, a clear harbinger of the increase in daily Internet use sure to occur over the coming years.
SOURCE: Nielsen Media
NeXplore Ads — The Future of Search Advertising
According to PEW Internet & American Life project, the percentage of Internet users who use search engines on a typical day has been steadily rising from about one-third of all users in 2002, to a new high of just under one-half (49%) in 2008. With this increase, the number of those using a search engine on a typical day is pulling ever closer to the 60% of Internet users who use email, the only Internet app ahead of search, on a typical day.
The search market is currently dominated by Google and nearly completely covered by just a handful of search engines—Google, Yahoo, MSN, AOL and Ask. With so much Google and so little competition, one might think that consumers are completely satisfied with today’s offering of virtually indistinguishable search engines. This assumption would be incorrect according to a recent J.P. Morgan survey that found that a whopping 62% of respondents are willing to consider switching search engines.
2. Ubiquitous broadband
Broadband’s near-blinding uptake in U.S. households and mobile devices is rapidly transforming the Internet, driving accelerated invention and adoption of increasingly more robust, engaging and interactive applications. In its 2009 annual Internet investment guide “Nothing but Net,” J.P. Morgan cites broadband uptake as the primary catalyst for explosive growth in Internet activity. J.P. Morgan pegs the current U.S. broadband penetration at near 80%.
3. Video explosion
Perhaps the most dramatic and obvious evolution of Internet activity occasioned by near-ubiquitous broadband adoption is explosion in video consumption. eMarketer predicts that the U.S. online video audience will grow to 190 million people by 2012, representing 88% of the Internet user population.
4. Interaction, socialization and personalization
Over the past few years, advances in Internet, Web 2.0 and rich interactive applications (RIA) technologies have forever altered the traditional “text in, text out” Internet experience. In its place today is an Internet replete with ever-evolving, easy-to-use interaction and socialization tools.
Blogging, wikis, social networks, podcasts, RSS feeds, Twitter, photo-sharing, gaming,
tagging, video-surfing, video-conferencing, instant messaging, VOIP phoning…The list is virtually endless.
To be sure, we have begun a new era of unprecedented and boundless Internet interaction and socialization.
Enter NeXplore Ads
NeXplore Ads enables marketers to easily create and manage visually engaging, highly interactive rich-media paid search advertising campaigns that include the full spectrum of traditional response options, plus an arsenal of entirely new breakthrough interaction, socialization and personalization capabilities.
Video commercials for the long tail
The tenets of paid search advertising’s increasing popularity and meteoric growth arise from the fact that it is by far the most productive direct-response, performance-based easily measurable advertising medium.
NeXplore Ads takes these tenets—response, performance and measurability—to an entirely new level.
Now, for the first time, marketers can create, execute and manage search advertising campaigns built around interactive video commercials that play immediately (when prompted by consumer) on a viewer hovering alongside the specific organic search result, sponsored search result or paid search advertisement that has piqued the consumer’s interest.
Video commercials for interaction, socialization and personalization
Online video commercials are proven to increase conversions by double digits, reduce returns by up to 10%, build brand loyalty and enhance customer service.
NeXplore Ads takes video search commercials to an all-new level by integrating a wealth of built in, easy-to-use, real-time interactive capabilities— from video chat to call scheduling (VOIP, landline, and mobile) to email to instant messaging and more.
Executive Summary
Will the current economic downturn bring an end to the double-digit growth paid search advertising has enjoyed over the past 5 years?
Popular wisdom among industry experts holds that paid search advertising will remain quite strong over the next decade but will shed its stratospheric growth and settle into a more sustainable, well-performing but relatively modest growth pace.
NeXplore begs to differ. Internet time consumption, reliance on search and dissatisfaction with leading search engines is growing steadily among consumers. The impact of ubiquitous broadband, online video, and the rapid adoption of socialization and personalization tools must also be considered when making predictions about the future of search and paid search advertising.
The NeXplore Perspective
As new technologies gain traction and new Internet user trends emerge, the only thing certain about the future of search and search advertising is change. And with change comes opportunity, particularly for nimble, forward-looking companies that can quickly bring to market Web-based products that have immediate consumer appeal and deliver compelling, high-yield advertising value.
NeXplore Search, in public beta since January of 2008 and surpassing 5.6 million unique visitors per month in 2009, is an innovative Web 2.0 search engine optimized for a superior end-user experience, rich-media display and social network integration.
NeXplore Ads is a full-lifecycle ad creation and management platform that enables marketers to effortlessly create, manage and modify in real time highly interactive rich-media search advertising campaigns that meet today’s exacting standards for vitality, efficiency and measurability.
Today, the winds of change are sweeping across the search and search advertising landscape. The present plateau in paid search growth is best perceived as ground zero for search advertising’s next great ascension—a period of accelerated growth that NeXplore believes will likely surpass search advertising’s 2007 - 2008 peak of 21% year-over-year growth.
Search advertising growth: Apex or launching point?
Given online advertising’s meteoric growth between 2004 and 2007, and considering the marked deceleration of this growth over the past year, one might conclude that, as an industry, online advertising has achieved its inevitable zenith.
SOURCE: IAB
No form of advertising is immune to an economic downturn, and U.S. online advertising growth—while still tracking on a positive curve and faring far better than traditional print and broadcast advertising—is projected to slow into single-digit growth for the first time in 2009.
Paid search advertising, the stalwart segment of the online economy, is projected to experience only 14.9% growth in 2009 compared to 21.4% growth in 2008.
Search advertising growth: Where to now?
So where does online advertising go from here? More specifically, what can we expect from the best performing venue in the online advertising world—paid search?
This is the billion-dollar question discussed today ad nauseam by an army of industry pundits and prognosticators, most of whom tend toward the safe, ostensibly obvious and clear answer—Paid search advertising will remain quite strong over the next decade but will shed its stratospheric growth and settle into a more sustainable, real-world, well-performing but relatively modest growth pace.
This answer, while safe and seemingly prudent, completely misses the mark. It fails to account for the inherent disruptiveness of search advertising; the evolving dynamics of Internet use; the speed and power of Web 2.0 innovation; and the current weighty economic pressure on marketers and those who serve them to wrest ever-greater value from a shrinking advertising dollar.
A more thorough and rigorous assessment of search advertising’s future growth gives credence to how these very powerful forces are working to radically alter the search advertising landscape and, in the process, re-ignite search advertising’s supersonic growth.
NeXplore Search, the company’s flagship product available in public beta January 2008, blends meta-search power with cutting-edge Web 2.0 technology to deliver to consumers in rich-media format accurate search results that can be further filtered by a social- sharing overlay and other personalization features.
NeXplore Search — Changing the Face of Search
NeXplore Search’s visually engaging, user friendly, multi-media interface makes navigation effortless, drill down obsolete and interaction intuitive and helpful.
NeXplore Search — Changing the Face of Search
With three unique, easily navigable search-result display options (summary view, gallery view and line view) and three proprietary, drilldown-eliminating website preview options (thumbnail preview, window preview and pane preview), plus an array of rich Internet applications (RIA) that make searching greatly more interactive, NeXplore Search changes the face of Internet search forever!
NeXplore Search summary View:
NeXplore Search Gallery View
NeXplore Search Thumbnail & Window Website Preview
NeXplore Fully Navigable Website Preview Pane
NeXplore Search — Changing the Face of Search
In just over a year since its public beta launch, NeXplore Search has achieved numerous company milestones and industry distinctions, including:
- NeXplore Search ranked 7th on AltSearchEngines.com list of leading alternative search engines. (February 2009)
- NeXplore Search tops 5.6 million unique monthly visitors. (January 2009)NeXplore Search ranked 7th on Alexa ‘Top 10 Movers & Shakers’ for rapid growth. (September 2008)
- NeXplore ranked among top 3,000 Web destinations worldwide by Alexa (May 2009)
NeXplore Ads — The Future of Search Advertising
NeXplore Ads — The Future of Search Advertising
The NeXplore perspective on the question of search
advertising growth—evidenced by the wealth of game-changing search-advertising innovations delivered by NeXplore Ads—runs counter to popular opinion but truer to the realities of today.
Simply put, NeXplore believes that the present plateau in paid search growth is best perceived as a well constructed launching pad for search advertising’s next great ascension—a period of accelerated growth at hand now that NeXplore believes will likely surpass search advertising’s 2007 - 2008 peak of 21% year-over-year growth.
The NeXplore perspective on search advertising growth is based on a careful analysis of the following prevailing forces shaping today’s Internet:
1. Growing Internet time-consumption, reliance on Internet search &
search dissatisfaction
Consumers are spending increasingly more time online. Today, Internet time-consumption is rapidly closing the gap on TV time, with the average consumer spending 29% of his or her time on the Internet compared with 37% watching television.
For the young adults & teens demographic, Internet time consumption surpasses that of TV at 39%, a clear harbinger of the increase in daily Internet use sure to occur over the coming years.
SOURCE: Nielsen Media
NeXplore Ads — The Future of Search Advertising
According to PEW Internet & American Life project, the percentage of Internet users who use search engines on a typical day has been steadily rising from about one-third of all users in 2002, to a new high of just under one-half (49%) in 2008. With this increase, the number of those using a search engine on a typical day is pulling ever closer to the 60% of Internet users who use email, the only Internet app ahead of search, on a typical day.
The search market is currently dominated by Google and nearly completely covered by just a handful of search engines—Google, Yahoo, MSN, AOL and Ask. With so much Google and so little competition, one might think that consumers are completely satisfied with today’s offering of virtually indistinguishable search engines. This assumption would be incorrect according to a recent J.P. Morgan survey that found that a whopping 62% of respondents are willing to consider switching search engines.
2. Ubiquitous broadband
Broadband’s near-blinding uptake in U.S. households and mobile devices is rapidly transforming the Internet, driving accelerated invention and adoption of increasingly more robust, engaging and interactive applications. In its 2009 annual Internet investment guide “Nothing but Net,” J.P. Morgan cites broadband uptake as the primary catalyst for explosive growth in Internet activity. J.P. Morgan pegs the current U.S. broadband penetration at near 80%.
3. Video explosion
Perhaps the most dramatic and obvious evolution of Internet activity occasioned by near-ubiquitous broadband adoption is explosion in video consumption. eMarketer predicts that the U.S. online video audience will grow to 190 million people by 2012, representing 88% of the Internet user population.
4. Interaction, socialization and personalization
Over the past few years, advances in Internet, Web 2.0 and rich interactive applications (RIA) technologies have forever altered the traditional “text in, text out” Internet experience. In its place today is an Internet replete with ever-evolving, easy-to-use interaction and socialization tools.
Blogging, wikis, social networks, podcasts, RSS feeds, Twitter, photo-sharing, gaming,
tagging, video-surfing, video-conferencing, instant messaging, VOIP phoning…The list is virtually endless.
To be sure, we have begun a new era of unprecedented and boundless Internet interaction and socialization.
Enter NeXplore Ads
NeXplore Ads enables marketers to easily create and manage visually engaging, highly interactive rich-media paid search advertising campaigns that include the full spectrum of traditional response options, plus an arsenal of entirely new breakthrough interaction, socialization and personalization capabilities.
Video commercials for the long tail
The tenets of paid search advertising’s increasing popularity and meteoric growth arise from the fact that it is by far the most productive direct-response, performance-based easily measurable advertising medium.
NeXplore Ads takes these tenets—response, performance and measurability—to an entirely new level.
Now, for the first time, marketers can create, execute and manage search advertising campaigns built around interactive video commercials that play immediately (when prompted by consumer) on a viewer hovering alongside the specific organic search result, sponsored search result or paid search advertisement that has piqued the consumer’s interest.
Video commercials for interaction, socialization and personalization
Online video commercials are proven to increase conversions by double digits, reduce returns by up to 10%, build brand loyalty and enhance customer service.
NeXplore Ads takes video search commercials to an all-new level by integrating a wealth of built in, easy-to-use, real-time interactive capabilities— from video chat to call scheduling (VOIP, landline, and mobile) to email to instant messaging and more.
For example, a consumer that has settled on a particular search result can click to watch a brief video commercial and, if so inclined, can click again to initiate a real-time video chat with a call center representative of the advertiser—all within seconds, with absolute privacy and without leaving the search results page. (Not to mention the chair, desk, sofa, etc.).
Add to this the many innovative social sharing and personalization features built into NeXplore Search, and it becomes abundantly clear that NeXplore Ads also unleashes the full viral potential of search advertising.
Conclusion
Change is the one constant steering through the history of search—from Excite, Lycos and InfoSeek in the early-to-mid ‘90s through AltaVista, Inktomi and Overture in the late ‘90s.
For the current search leaders—Google, Yahoo, MSN Live—the pace of change has discernibly stalled over the past several years.
A correlation can be made between the predicted plateau in search advertising growth and the current stasis among leading search engines—a stasis manifested most through an irrational and illogical weddedness to serving up the same old ten, boring and static blue text links and confining paid search advertisers to pretty much the same display options.
For the marketing and advertising world, nothing drives innovation harder and further than a tough economy. Case in point—Paid search advertising’s entry into and glorious ascent within mainstream marketing began amidst the costly ashes of the ‘dot com’ bust and thrived despite (or maybe because of) the economic malaise that followed.
Today, the winds of change have gathered force and are once again sweeping across the search and search advertising landscape.
The transformative power of broadband, an Internet forever changed by Web 2.0 and rich-media innovations, a growing dissatisfaction with the present search experience and the pressure cooker of today’s tightening economy make one thing certain for search and paid search advertising—Change.
NeXplore Search—with its elimination of tedious drilldown and refreshing presentation of visually engaging, rich-media search results that can be personalized and socialized for enhanced relevancy and usefulness—changes the face of search.
NeXplore Ads—with its addition of brand-building images, conversion-driving video commercials and greatly enhanced consumer/advertiser interaction that elevate to new heights search advertising’s valued attributes of precise targeting, great reach and performance-based measurability—exhibits today the future of search advertising.
Forward-Looking Statements: A number of statements contained in this industry backgrounder are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the applicable statements. These risks and uncertainties include, but are not limited to: our ability to commercialize a proprietary product, our ability to generate product sales and operating profits, potential vulnerability of technology obsolescence, potential competitive products by better capitalized companies, potential difficulty in managing growth, dependence on key personnel, and other risks which will be described in future company Securities and Exchange Commission filings.
Add to this the many innovative social sharing and personalization features built into NeXplore Search, and it becomes abundantly clear that NeXplore Ads also unleashes the full viral potential of search advertising.
Conclusion
Change is the one constant steering through the history of search—from Excite, Lycos and InfoSeek in the early-to-mid ‘90s through AltaVista, Inktomi and Overture in the late ‘90s.
For the current search leaders—Google, Yahoo, MSN Live—the pace of change has discernibly stalled over the past several years.
A correlation can be made between the predicted plateau in search advertising growth and the current stasis among leading search engines—a stasis manifested most through an irrational and illogical weddedness to serving up the same old ten, boring and static blue text links and confining paid search advertisers to pretty much the same display options.
For the marketing and advertising world, nothing drives innovation harder and further than a tough economy. Case in point—Paid search advertising’s entry into and glorious ascent within mainstream marketing began amidst the costly ashes of the ‘dot com’ bust and thrived despite (or maybe because of) the economic malaise that followed.
Today, the winds of change have gathered force and are once again sweeping across the search and search advertising landscape.
The transformative power of broadband, an Internet forever changed by Web 2.0 and rich-media innovations, a growing dissatisfaction with the present search experience and the pressure cooker of today’s tightening economy make one thing certain for search and paid search advertising—Change.
NeXplore Search—with its elimination of tedious drilldown and refreshing presentation of visually engaging, rich-media search results that can be personalized and socialized for enhanced relevancy and usefulness—changes the face of search.
NeXplore Ads—with its addition of brand-building images, conversion-driving video commercials and greatly enhanced consumer/advertiser interaction that elevate to new heights search advertising’s valued attributes of precise targeting, great reach and performance-based measurability—exhibits today the future of search advertising.
Forward-Looking Statements: A number of statements contained in this industry backgrounder are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the applicable statements. These risks and uncertainties include, but are not limited to: our ability to commercialize a proprietary product, our ability to generate product sales and operating profits, potential vulnerability of technology obsolescence, potential competitive products by better capitalized companies, potential difficulty in managing growth, dependence on key personnel, and other risks which will be described in future company Securities and Exchange Commission filings.
