Forecasting the future of any industry is always going to be tough, let alone attempting to predict the future of a market as complex as paid search. Although leading analysts are already estimating paid search spend will grow significantly this year, how this growth is going to happen is still uncertain.

However, it’s obvious that more money will mean the number of tactics, targeting options and channels available for search marketers will need to grow to make sure search that campaigns can deliver ever-increasing return on investment (ROI).

With this in mind, I expect that the following trends are likely to drive paid search growth throughout the coming year…

High keyword prices will force marketers to try new strategies

Although the growth of paid searches each month is starting to slow, the amount of money advertisers are putting into the industry will not. As a result, we’re looking at keyword prices getting more and more expensive. 

According to a Forrester Research report carried out in the US, two-thirds of marketers believe high keyword prices to be their biggest challenge in paid search. Unfortunately, this problem can’t just be solved by using a better bidding solution. Marketers will need to focus on increasing ROI from their campaign tactics, through careful keyword management, testing, and targeting. 

Optimising for Quality Score will need to be a priority, as it’s an easy way to bring costs down whilst driving conversions up through effective keyword selection, match type refinement, and use of negatives.

Geographic and demographic targeting are also likely to be more widely used. We should expect geo-targeting tactics to reach further than traditional local and financial services players, and into the hands of national advertisers and retailers.

The marketers that invest in testing and applying these tactics will not only benefit from increased ROI and revenues, but a strategic advantage in a market that will continue to become more competitive.

Paid search will be more integrated

Search represents more than half of digital marketing budgets, so it’s only natural that C-level executives are starting to take notice. For large advertisers, search represents tens of millions of pounds in marketing spend annually, with a recent, sudden increase in spend for most. 

Most search marketing programmes are therefore still being managed separately from traditional marketing departments. In 2010, organisations will be looking to integrate their paid search operations more tightly into the business, rather than running their campaigns as a standalone unit.

Integrating systems will make search marketers change the way they report and organise their KPI’s, leading to a big shift in how this information is communicated upwards in the business. Search marketers will therefore need to adjust to new processes, using dashboards and proposals for investment.

In return, they will be looking to see more executive support and therefore larger budgets.

Paid search will go multichannel

When it comes to search marketing, multichannel marketers have always been disadvantaged. Google recently found more than half of online shoppers research their purchases on the internet before going on to finalise the transaction in-store.

With this in mind, it’s worth noting that search marketers are currently missing out on credit for half of the revenues their campaigns are driving.

Luckily, tools for measuring across channels have become more accessible. Whether it’s linking phone numbers to keywords, or taking in-store surveys to see how the customer learnt about the merchant.

As marketers perfect these techniques, multichannel merchants will be able to make more informed decisions regarding the allocation of their search budgets, to make sure that they are driving both online and offline conversions.

Learning how offline buyers are researching their needs will allow multichannel traders to find new, low cost keywords to drive profitable expansion of their paid-search programs.

Facebook and Twitter Will Give Google a Run for Its Money

At the moment, search engines are handling over a billion queries each month, with a massive share of searches being made through Google. But it’s never too early to watch out for the latest internet success.

Facebook currently has over a billion queries on its site each month, and it’s still growing. With such a large audience, I wouldn’t be surprised if 2010 were the year to end those free searches. 

Soon, social networking sites such as Facebook will extend their own search technology, allowing users to query the user-generated content in their news feeds. When this happens, users will find it much easier to get recommendations from friends on all manner of things; which restaurants to go to for dinner, which mobile they should buy, or which film they should see at the weekend.

Advertising money for keyword placements will be sure to follow this. Search marketers will therefore have to alter and tailor their campaigns to account for a more social set of keywords.

In doing this, they will be able to catch consumers earlier in the consideration cycle than is possible on traditional search engines like Google or Yahoo! And, as people looking for recommendations from friends are still in the research phase of buying a product (and they place a lot of trust in word-of-mouth recommendations) the value of these clicks could be very high.

While it’ll be hard for marketers to adapt to all of these trends, those on top of their game will make sure to apply those that are right for their business. 

Whether it is improving measurement, campaign quality, audience targeting, or simply finding new channels, the marketers who can capitalise on some of these trends first are likely to be a step ahead of the competition.