The Economic Lifecycle of a Search Engine Result

Sticking with my recent economics kick, I’m pondering the lifecycle of a search result. I think just about every keyword nearly qualifies as still being in the “boom period” as there is still relatively little competition being pushed out of emerging search result microeconomies. In fact, there is still room for extensive arbitrage in most fields which is exemplified by shopping engines, local search engines, and 2nd tier PPC engines bidding on phrases and reselling similar traffic from their own sites.

1. ERP is introduced or discovered
   2.Pioneer takes top spot and learns economic value
   3.Over time, others identify the potential value based on volume or cost per click (or user) and try to rank
   4.Competition increases
   5.Barrier of entry is raised
   6.Pay per click ads appear
   7.More competition appears in the marketplace – barriers continue to rise
   8.Equilibrium is acheived within the SERP space as volume and value after the consideration of the higher barrier to entry doesn’t justify newer competition.
   9.Something disruptive must occur to result in a renewed lifecycle.

Stages of the Search Engine Result Economic Lifecycle

i) Search Engine Result Boom

A boom occurs when a keyword is easily monetized. In a boom condition, competition and volume are growing exponentially. This often occurs when a search result is discovered or created with news, creation of new technology, discovery, invention, or a multitude of other reasons. The demand to achieve rankings for the keyword are high.

Characteristics of an keyword/ search result boom:

• Strong and rising level of aggregate demand – often driven by fast growth of consumption
• Rising competition and cost per click on PPC.
• High demand for SEO services in the field
• Increased competition leading to a higher barrier of entry for new players.

ii) Search Engine Result Slowdown

• Irrational paid search spenders are pushed out of the market.
• Those not tracking ROI and cost per action will resign from competition
• Reduced growth rate for total search results for the term

iii) Search Engine Result Recession

The lines are drawn, the major competitors in the field have marked their territory, and will take substantial effort to move from the search results.

Less emphasis is placed on these phrases as new niches are discovered and entertained.
iv) Search Engine Result Recovery

Recovery occurs when something changes the playing field, like a disruptive technology or new specialization. These would be a few of the triggers to relaunch the economic lifecyle of a search engine result at this time.

SEO’s would again raise the stakes of competition to promote a keyphrase.

Referenced: Tutor2u economic life cycle explanation