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Reality Check: Vertical Search Opportunities August 14, 2007

Posted by David Card in Media.

Here’s a silly view — un-ironically running as a “Reality Check” column in InfoWorld — about how vertical search is going to kill off Google just like niche magazines killed off Look and Life. It ignores that most of Google’s ads are targeted by purchase intent, and paid for only upon some kind of a conversion. Or that Google is well aware of vertical threats, and working hard to counter them. Not to mention renting them technologies, indices, and ad networks.

Here’s a Jupiter report on vertical search that’s a bit more realistic and actionable. Using lessons from shopping comparison engines, advertiser surveys, and market projections, we think that vertical search is quite possibly best implemented as a feature of a vertical site, rather than as a standalone business.

    Mature categories such as retail and travel will continue to lead vertical search spending. However, the best opportunity for vertical search is in growth categories such as financial services, automotive, and health, in which combined search spending will grow more than 94 percent to $3.4 billion in 2011.
    Vertical search providers must build out multiple ad revenue streams in addition to traditional pay-per-click (PPC) paid listings. Shopping search sites show that a breadth of offerings—including content—strengthen engagement and lend themselves to a relatively richer advertising and marketing platform. Offering services to sites with existing audiences can relieve expensive customer acquisition costs and tap advertiser relationships.

But then again, we don’t quote Frank Sinatra.

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