Over at my catalog business, Koeze Direct, we anticipate that the economics of mailing catalogs to strangers -- called catalog prospecting -- will continue to get worse and worse as costs rise and response rates -- the number of consumers who actually order -- continue to fall.
What won't go away is our need to find new customers. Like everyone else in the industry, we're hoping that search engine marketing (SEM), the combination of organic search (trying to get a high rank on search engine pages) and pay-per-click (PPC, buying ads that go with certain search terms), will replace prospecting as a source of new customers.
I fear, however, that Google is going to make that hard as they continue to attempt to make searching more personal by adding new features. Douglas MacMillan on the Tech Beat at Business Week writes about Google's new features:
Last Friday, Google quietly rolled out a feature which may have even greater impact on Web users — though many are unlikely to notice. With something the company calls Personalized Search, Google will start showing different search results for different users, depending on which links they have clicked the most in the past. In theory this means that eventually, a car lover and a zoologist typing “jaguar” into the search field will wind up with two different sets of search results.
Search tailored to individuals will no doubt make Google more useful. But what will it do to advertisers? Businesses that have spent years and millions of dollars optimizing their Web sites for search may find themselves gradually shoved out of the top 10 listings for choosy Web surfers who prefer non-commercial pages like Wikipedia and LinkedIn. Ultimately, businesses could decide to spend less money juicing their placement in “organic results” and more on the paid search ads from which Google derives the bulk of its revenues.
The problem for new customer acquisition is a little different. We need to get in front of people who aren't familiar with us. But if Google is sending folks back to the places they have already been, that will be harder and harder. PPC might be an alternative, but big brands with big budgets will probably rule that world in a way they haven't (yet) been able to in organic search.
I sense I have this problem with Google already, as they have many tools to use to "personalize" my results. I remember first using Google and thinking it was a crystal ball. But now it seems more like a mirror.