Search Advertising: A Look Back at 2009...and How to Prepare for 2010

Over the next year, LookSmart will be writing a series of blog posts for Electronic Retailer Magazine. The first, written by LookSmart VP Gill Brown, can be found on their blog Electronicretailerblog.com.

I have posted it here as well for your convenience:

Search Advertising: A Look Back at 2009...and How to Prepare for 2010

It’s that time of year again when we start to see industry pundits and influencers thoughtfully reflect on the year in review. Overall, 2009 has been a tough and tumultuous year for the economy, and digital advertising, as a whole, has not been immune to that. A look back at the year in search, however, tells a slightly more promising story.

While some things continue to remain the same in search advertising—for example, the market dominance of Google, Microsoft and Yahoo—there were some major market shifts, which are going to impact the year ahead. From the introduction of Bing to the major search deal between Microsoft and Yahoo!, one thing is for certain: as we head in to 2010, these dynamic industry events have search marketers and advertisers on their toes.

There has been news to write home about, too. Just this past month, both Efficient Frontier and SearchIgnite issued reports based on search advertising industry data from the third quarter of 2009. Both reports indicate paid search spend was up during that time period, compared to Q2.

This latest industry data comes on the heels of the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers LLP (PwC) release of the IAB Internet Advertising Revenue Report for the first half of 2009, which indicates that search revenues were up slightly from that same period in 2008, amounting to more than $5.1 billion for the first six months of 2009.

While all of this recent market data certainly alludes to an underlying sense of cautious optimism, given the ups and downs of the past year, it’s certainly understandable that many search marketers are still hesitant, and unsure of how to move forward in 2010. Our tip? Don’t put all your eggs in one basket. One important thing advertisers can do right now is to diversify their efforts by complementing campaigns on major search sites like Google, Yahoo! and Microsoft, with alternate sources of traffic with less-competitive CPCs.

What’s the bottom line for 2010? Innovate, diversify, and think outside the de facto search standards. Your ROI will thank you for it.