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Is Search Recession-Proof?

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It's looking more likely every day that the economic downturn we're currently experiencing might turn into a full-blown recession (that is, if we're not in one already). The online advertising industry hasn't been immune to these recession fears – Wall Street's darling Google found that out the hard way. Its stock price took a big hit after a recent comScore report, which indicated a decline in the search giant's paid clicks.

Of course, it seems likely that the decline was actually due to Google's diligence in weeding out accidental clicks and combating click fraud – both positive changes that will deliver more meaningful traffic to Google advertisers. But the situation still begs the question: Is search due for an even bigger fall?

While online advertising will probably suffer if there is a recession, I predict search will be the last place from which marketers pull their ad dollars. Why? Paid search is accountable, efficient, and built on a cost-controlled model, making it the most recession-proof medium in the ad world.

Accountability

John Wanamaker famously said, "Half the money I spend on advertising is wasted; the trouble is I don't know which half." He would have loved search marketing, because it is one of very few kinds of media that provides visibility into the wasted half. Furthermore, it is arguably the most accountable of all advertising media. By virtue of robust reporting from search engines, sophisticated web analytics, and back-end tracking systems, advertisers can see exactly where their money is going in a paid search campaign: what keywords are converting into sales or page views, and what's not working.

Efficiency

Because paid search is such an accountable medium, it's also one of the most efficient – the return on investment is controlled by the marketer, who can continually fine-tune campaigns to maximize that ROI. And because of quality-based bidding models, paid search is possibly the only medium that actually becomes progressively more efficient: as campaigns improve their quality score, minimum bids go down and ad rank goes up.

Cost-Control

Search engine marketing affords advertisers one of the most controlled and targeted ways to spend in the ad world. Daily budget caps, day-parting, geographic targeting, and site targeting all give marketers unprecedented flexibility to find out what works and quickly change things around so they don't waste money on what doesn't work. Because search is pay-as-you-go, marketers can spend as much or as little, as slowly or as quickly, as they see fit. And they can make these changes on the fly – something that can't be done with traditional media.

In Conclusion

Though we're not technically in a recession (yet), I think it's less likely that paid search – and the companies built on it – will suffer as significant a blow as other industries if a recession is in the cards. In fact, the triple-threat of accountability, efficiency, and cost-control would make search even more attractive to marketers in a recession economy. Whether or not we're recession-bound, I'm betting that search will continue to grow, since it not only tells advertisers which half of their ads are working, but gives them a way to do something about the "wasted" ads before its too late. Wannamaker would be proud.

As managing partner of Reprise Media, Joshua Stylman oversees all aspects of the organization, from technology and product marketing to media management and sales. Joshua calls on more than a decade of experience in building and diversifying businesses in the digital economy. Prior to co-founding Reprise Media, Joshua was VP of business development and syndication at Ask Jeeves (now Ask.com), and co-founder and president of Rotomedia, a boutique consulting and advertising firm. A world-class rotisserie baseball player, Joshua also sits on the board of Into the Outside, a non-profit organization focused on enriching the educational experiences of students through field-based activities.


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