One of the great clichés about the online world is how fast it moves, but it sometimes seems as though even the people saying it don’t quite believe it. New technologies, platforms and businesses can rocket to dominant positions, but we often seem perversely unwilling to accept that someone else may soon appear to challenge them.
Take Google. Before Larry and Sergei’s brainchild took over the world, there were a mass of search engines available, and people swapped recommendations of which they thought was best. Google retro-fitted pay-per-click onto Page and Brin’s search algorithm, and watched the world desert Lycos, Alta Vista and so on almost overnight. Since then the fact that the next great search breakthrough has proved elusive, even to the likes of Microsoft, has left Google in what appeared to be an unassailable position, particularly in the UK. But recently, the building blocks of a challenge have been put into place.
The challenger is Facebook, which until recently was struggling with an apparent paradox at the heart of its proposition. Users’ enthusiasm for simple social networking had given it huge, and rapidly growing, reach, but the way people felt about social media made advertising on the site unpopular with them. In order for social networks to turn their reach and dwell-time into money, we were told, advertisers were going to have to learn how to play by a new set of rules.
That seems to have happened, although there is also an element of users becoming less fussy about what goes on “their” pages. The most obvious manifestation is the way brands have recognised that a presence on a social network can fulfil the functions of the campaign sites they had been accustomed to using, while allowing the massive amplification of messages that online word of mouth can create, and all for much less than the cost of a microsite. As email continues to slump in popularity, especially among young people, advertisers have also found success advertising around Facebook messaging, as they have around real-time search results on the network.
Another crucial step came last year, when Facebook opened up its API to advertisers, allowing them far more control of the creation and management of campaigns across the network. And all of this has combined with the site’s continuing growth; according to M/Metrics figures published last month in New Media Age, Facebook’s share of UK web visits now stands at 5.9%, compared to 8.8% for Google.
The result is that significant ad spend is starting to shift to Facebook. And while that money is being diverted from a number of other channels including TV, one significant loser is paid search.
The huge numbers of results you get from a Google search and their advertiser-led nature are starting to look old-fashioned compared to a world where you can source recommendations from your network of friends.
In some ways, paid search has been a victim of its own success. Even before the recession hit, keyword costs were going up as search became the one form of online advertising that everyone recognised they had to do. The move of ad budgets into the most accountable media that is one of the hallmarks of an economic downturn only racheted up the inflationary pressure. Spending on organic search increased but, of course, none of that cash finds its way to Google.
At the same time, Google made itself unpopular with agencies by dropping its best practice funding – effectively commission. This meant that just as agencies were seeing client budgets coming under pressure, their own revenues from search were being hit, and some looked for higher margin activities elsewhere.
What makes this more worrying for Google is that Facebook is now starting to move further into the direct response area that is Google’s heartland. Last month saw the introduction of a new ad format on the network, which allows users to enter their details to receive information, samples or vouchers from brands. It’s one of eight direct response units that Facebook now offers.
But in a way, all these changes are just symptoms of a more fundamental change. As the M:Metrics figures suggest, for many people Facebook is no longer one of the things they do on the web, it is the web. Where for the past seven or so years, Google has been the starting point for most people’s browsing sessions, increasingly those sessions start with Facebook.
That’s not just because people want to check up on their friends. Increasingly the huge numbers of results you get from a Google search and their advertiser-led nature are starting to look old-fashioned compared to a world where you can source recommendations from your network of friends. Hence all the recent fuss about Twitter and “real-time search”.
Google would no doubt counter that, because as social and recommendation sites have become more important to people, they have correspondingly risen up the Google rankings. It has also made its own moves into real-time search; last December it began incorporating Twitter feeds and Facebook status updates into search results, an approach that will no doubt be refined through its “perpetual beta” philosophy.
Certainly Google still retains massive market dominance, and it has enormous technical resources focused on driving the company forward. But as Lycos and Alta Vista discovered, when sentiment moves against you, the shift can be brutal.