I ran the SEM eonMedia in 2002-2004, before it was sold to aQuantive. During the beginning of this period, sites like Fuckedcompany reported daily layoffs  and ad firms going under. But at eonMedia we had a waiting list of customers waiting to be onboarded.

I asked one client - an online travel site –  why they were investing so much in search while bodies were falling ot the left and right. Here is what they said:

“I know for each dollar I spend, I get $10 back in sales. I can prove my worth. As long as I can do that, I have a job.”

What kept these people employed was a digital Scheherazade: as long as those digital markets could account for a contribution margin which exceeded the marketing spend, they knew they would live another day.

The chapters that went into their marketing success:

1. right keywords on the right engines

2. optimized copy

3. optimized bids

4. efficient account structure

So what has changed? Most noticably, TIME.  Eight years, later, any digital marketer working in search (for instance) and worth their salt has already optimized their campaigns with the right keywords, the right copy, the right bids, the right account structure. What’s left but maintenance? Maintenance hardly sounds like an effective job retention strategy.

Graphically speaking, the search marketer in 2002 was able to “shift the curve” – getting increasingly greater volume of sales at any given marginal cost (ex: CPA) or getting lower marginal cost at any given volume. Or both.

Well, that line ain’t shifting any more, at least for most marketers. Most marketers are now faced with moving up or down the curve: either accepting a lower volume of sales in return for a lower marginal cost, or else a higher marginal cost in return for a higher volume.

1. This is where you start from – lots of headroom. You optimize with the four levers to shift the curve up and to the left.

2. You a hero. You continuously drive greater volume at lower marginal cost (or a tradeoff of these two).

3. You are stuck. The curve does not shift any more. You already have the right keywords, bids, copy, and structure

4. What now? You were a hero yesterday. Today, higher volume means increase in marginal cost (you need to bid up, use poor keywords, etc) and decrease in marginal cost means lower volume.

Why is #4 a problem for marketers? Because – if you are only about maintenance, that can be done with technology. Or an intern. Or both. Regardless of how you assess value, it is certainly less than when you kept shifting the curve.

One reason I’m interested in this:  The company I work for, Microsoft, is trying to shift the curve even further up-and-to-the-left with its Bing cashback program. It’s one way to shift the curve for marketers,   who are responding, but this is just the beginning.  Thoughts?

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