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Search Marketers Poised To Dominate Exploding Growth Of Social Media Advertising

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There probably isn’t a single advertising or marketing communications agency today that hasn’t checked the box on “social media marketing.” Can you think of one that hasn’t? No? Didn’t think so.

With so many agency disciplines and the absence of meaningful advertising platforms on the social networks, most agencies have been building social-media marketing (SMM) capabilities around “earned media” tactics. Peter Hershberg, co-founder and past CEO of Reprise Media, one of the first search-engine marketing firms (SEMs), wrote a great post where he pointed out how “every type of agency could make a compelling case as to why SMM was most directly aligned with its legacy business.” And they have: Consider agencies that specialize in PR, media, planning, digital, as well as full-service and creative ones that pat themselves on the back for “the big idea.”

While the earned side of social media is foundational, “paid media” is quickly entering the social-media stage, at scale. For instance, Facebook’s revenue was estimated to be $635 million last year, and is expected to reach $1.1 billion by the end of 2010, according to an estimate by Eric Eldon at Inside Facebook. This is going to be a big, well-defined industry, with a lot more clarity, currency exchange and measurable precision than the earned side that social media has surfaced thus far.

And this is where performance-based players in search marketing are advantaged, and others clearly are not. Out of Facebook’s estimated $635 million in revenues, Eldon projects that $350 million went to performance advertising, and that segment could see $600 million in 2010. Not surprising, Hershberg underscores in his post that “SEMs haven’t had to migrate towards offering other ad programs because the market has actually migrated towards them instead.”

The recent Twitter and Facebook developer conferences signaled tremendous wind behind the backs of search-engine marketers. For example, Twitter announced its Promoted Tweets platform, which enables businesses to pay to highlight their Tweets to a wider group of users. This is only the first iteration of Promoted Tweets, and it’s already looking a lot like search-engine advertising. Facebook, which just released a host of promising apps to embed its “Open Graph” platform across the entire Web, also recently introduced its Facebook Ads API. Not surprising, a short list of leading search advertising technology partners (including my company Clickable) emerged to innovate and simplify social advertising.

SEM experts also are highly equipped to support a larger trend in online advertising: the shift from targeting content to targeting audiences through data-intensive techniques. Search marketers have always done this with traditional keyword-based contextual advertising, and social introduces new opportunities with interest- and relationship-based segmentation. Search marketers, which command half of online advertising spend, also are well positioned to reallocate existing budgets to experiment in social media, and scientifically track the results.

It’s also important to recognize small and mid-sized businesses, which command half of all search advertising spend. In addition to their significant investment in search, they’ve long been oriented to community, local and general online marketing. They’re highly interested in social media advertising, and they’re eager for technology solutions and experts to help them be successful, just as in search advertising.

Importantly, opportunities where social advertising and earned media intersect are potentially the most rewarding. However, they will require tremendous coordination from experts in both social media camps — earned and paid. For example, social network advertising that converts prospects into relationship-driven venues will require strong relationship-driven marketing platforms and authentic brand interaction.

The paid-media side of social media marketing is starting to get very interesting. What do you think?

This also was my latest column in MediaPost.