Five SEM Highlights of 2018

Five SEM Highlights of 2018

Without a doubt, 2018 has been quite a year for PPC advertisers and the SEM industry as a whole. Perhaps not surprisingly, many developments in the SEM space are related to significant changes around personal data — including new, stringent global privacy regulations, the onslaught of consumer information, hyperpersonalization and a slew of resulting data privacy issues.

But there were also some surprises in 2018 — like the fact that Amazon is emerging as a serious contender to the Google-Facebook duopoly in the digital ad space. Or that voice capabilities are well on their way to becoming a mainstay of paid search.

We’ve compiled some of the ways in which the developments of the past year have played a role in shaping the direction of SEM industry — and how they’ll potentially play out in the New Year.

1. GDPR Sets a New Global Standard 

This year, Europe’s new data privacy regulation, the General Data Protection Regulation (GDPR) took effect, representing the biggest regulatory change in data privacy in decades and essentially changing the way all global marketers can advertise to EU citizens. At its core, GDPR is a regulatory act aimed at protecting data and privacy for all individuals within the European Union, and addressing the export of personal data outside the EU. And as of May 25th, any organization found in violation of its mandates face fines of up to $20 million Euros or 4 percent of their annual global turnover.

Yet, despite these threats, many businesses have done little or nothing to bolster GDPR compliance. (According to HubSpot, 36% of marketers hadn’t even heard of it as of November 2017, while only 15% of companies have taken steps to become compliant.) A common misconception is that GDPR isn’t applicable to advertisers if they don’t have a business presence within the EU. But in fact, if your business processes any personal data of European residents, GDPR has a direct bearing on your business and business practices.

And for advertisers, GDPR already has had a significant impact on the personal data that advertisers can collect on consumers for targeting purposes, as well as how they can acquire permission, store and use that data. If you use your own consumer data with platforms like Adwords or Facebook — leveraging conversion tracking cookies, remarketing ads, Customer Match and other data collected from your site — it’s also incumbent upon you to obtain consent and explain how the data will be used. How GDPR’s stringent data privacy policies — and punitive financial penalties — will impact advertisers and their consumers over the long-term remains to be seen.

2. The End of Net Neutrality

The “end of net neutrality” has become a rallying cry for proponents of the free internet across the world. Leading up to the April 23 repeal of net neutrality laws, users have taken to airwaves and fiberoptic cables to decry the dismissal of legislation that mandates impartiality of internet service and traffic. While it’s true that the end of internet neutrality may signify larger problems to bloggers, businesses and entrepreneurs, online paid search advertisers may see a silver lining.

As the name suggests, net neutrality means that all content on the internet should be treated as equal by the corporations that provide services and the governmental bodies that regulate it. But despite public sentiment that has largely maligned monopolies, the end of net neutrality does however open doors to a freer market – which will likely mean advertisers will have greater freedom for employing ad creatives, gathering and analyzing data, combining ad creatives with ad buying, exploring the hundreds of different rates and plans that will open up, and leveraging the variety of free and unlimited bandwidth opportunities that will soon emerge.

Ultimately, net neutrality – or its termination – doesn’t represent the only challenge to successful advertising in the online sphere. Creating meaningful campaigns in a fragmented yet hyperconnected world has proven difficult for years. And a new way of doing things doesn’t necessarily mean a worse way of doing things — especially for a rapidly evolving SEM industry.

3. Amazon Nips at the Heels of Google/Facebook Duopoly

Historically Amazon has made a name for itself disrupting industries and upending market expectations — and its latest achievement is no exception. The online retail giant once again made a name for itself this year after eMarketer projected it would gross $4.61 billion in ad revenues in 2018 — firmly placing it in the No. 3 spot in the world for digital advertising revenue and allowing it inch closer to the Google-Facebook digital advertising duopoly.

eMarketer’s most recent estimation, which represented a significant increase from previous projections that originally placed it at $2.89 billion, was attributed in part to a reclassification of revenue. And, occupying only about 4.15 percent of total U.S. digital ad revenue, it still has a ways to go before reaching the league of either of its archrivals. But it’s undoubtedly experiencing a steadily growing upward trajectory — attributed in part to a rapidly evolving digital advertising environment, Amazon’s astute accounting changes and a clear, holistic understanding of their customers’ buying behaviors and relationship to technology. At the same time, Facebook’s and Google’s ad revenues are in decline.

Perhaps this year in particular, it’s move to No. 3 wasn’t that surprising, considering that the internet retailer experienced its biggest shopping day in history on Cyber Monday, with the most products ordered worldwide than any other day — which undoubtedly contributed to the record $7.9 billion spent online globally during the Cyber Monday shopping bonanza.

Among other things, this all means it will also actively be taking share from its two major competitors for the foreseeable future. And over time, merchants will be under increasing pressure to buy up even more advertising space to compete with other merchants, lest they lose visibility in the search results to sponsored listings. Looking ahead, that untapped potential will continue to be a powerful driver for growth in its ad business as merchants look to capitalize on Amazon’s copious search traffic.

4. The Onslaught of Consumer Data, Hyper-Personalization and Data Privacy

As user data has become more abundant, available and accessible, it’s no secret that advertising has become increasingly more targeted and personalized. While the industry has been heading in this direction for a while, compiling and strategically leveraging audience data has now become status quo in almost every aspect of digital advertising — especially paid search. These days, marketers can target their audience by thinly sliced demographics and most recently, on life events. In a shift that will fundamentally change the way marketers reach their key audiences, Google has designs to target users based on observable behavior, such as repeat visits to restaurants, stores and other places of interest, as well as by targeting in-market audiences.

Underscoring this trend, ad tech giants have created an identity consortium, comprised of nearly 20 ad tech firms, which enable brands to target audiences using their email lists. And similarly, publishers are also combining their data resources to offer more comprehensive and farther-reaching targeted advertising opportunities than they would be able to individually.

But this ongoing collection of consumer data comes with a slew of user privacy challenges — a development that recently has been called out by Apple CEO Tim Cook, who issued a blistering critique of these data practices by global tech giants such as Google, Facebook and other data repositories of this ilk. Among other things, Cook asserted that digital data is being collected, compiled and then — in many cases — used as weapons against individuals, communities, and societies. That said, his assertions, as well as many rapidly unfolding global privacy issues, inevitably impact brands that are reliant upon consumer data — business owners who only want to run their organizations and meet revenue goals, while providing the best and most personalized consumer experience possible.

5. The Rise of Voice Search

It’s well established that smart devices and virtual personal assistants are about as commonplace as any household kitchen appliance. For most users, finding information is now as easy as saying, “Hey Siri/Google/Alexa, what’s the fastest way to work?” “Where’s the best Mexican food near me?” or “Who won the World Series in 1924”

Thus, it stands to reason that these devices and the power of voice technologies are also the future of search. The Wall Street Journal reports that 51 percent of consumers use voice search in their cars, and 39 percent use voice assistants in their homes. And these statistics are only increasing as more consumers become both familiar and comfortable with voice search technology for their day-to-day activities. In short, users simply want to ask questions and receive an answer — as they would in any conversation.

But as Google Voice Search and other voice capabilities rise in popularity, they’re also becoming important vehicles for businesses that want to improve their pay-per-click performance and reach new consumers. As a result, it’s now vital for marketers and businesses to start thinking about how they can optimize their PPC ad campaigns for these types of search engine queries. Among other things, this could include incorporating keywords that match voice searches, identifying keywords that correspond with the phrase “near me” and using  sentences or phrases with more words that sound, well, more conversational.

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Stefanie Hoffman

Stefanie Hoffman is a Content Marketing Manager at QuanticMind. As a former award winning journalist and public relations specialist, she specializes in the art of storytelling, with a passion for developing compelling narratives and creating strategy that drives brand awareness and elevates industry thought leaders. She holds a Bachelor of Arts in English from Cornell College.