Upcoming Google and Facebook Changes to Impact Search Market

For marketers engaged in paid search, the rest of 2012 is likely to mean adjusting to big changes. One of the biggest digital marketing stories of the year, mobile, has a growing role in search. And changes in the way Google and Facebook work with marketers has implications for search as well.

Ignition One regularly reports on search industry trends. The firm’s analysts believe that the slowing search spend in the most recent quarter was all about general economic and retail weakness.

Within the search industry, the key players – Yahoo/​Bing and Google continue to battle for market share. Because Yahoo/Bing’s share is small, even a strong growth rate does not translate into more market share and this was true in Q2. The company experienced 32.9% year over year growth but its market share is at 20.9%.

In mobile, search has grown 333% in 2012. So far, marketers are allocating their mobile budgets to both tablets and smartphones. This year, most marketers are spending 60% of mobile search on tablets and 40% on phones.

Google has announced a modification which will impact search marketers in a significant way. Instead of being allowed to submit product listings for free through Google Product Search, marketers will have to bid for placement in the newly named Google Shopping marketplace. In exchange for the added cost, marketers will have “more control over product and category listings.” Effective October 1, this change will likely cause marketers to spend more on search.

The search market could face challenges from other formats in online advertising. For example, Facebook plans to roll out its real time bidding system to marketers. The goal of this change is to prod marketers to retarget visitors. Many questions remain about how well the system will work but some analysts believe that display spending could increase between 12–15% as a result of this change, a development which could cut into search.

[Source: Online Advertising Report. Q2 2012. IgnitionOne​.com. Web. July 2012] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.