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Friday, May 02, 2003

"Will they Sell Adword Positions?" No, Doc.

An interesting and telling article by Doc Searls was posted Wednesday comparing Overture and Google pay-per-click advertising with Linux because "it lowers the threshold of market disruption for companies that take advantage of [its] extreme technical economies." (I think that means it lets the little guys play on the same playing field as the big boys.)

Searls is impressed by the fact that Google Adwords (since being relaunched as a pay-per-click service in March, 2002) now determines ad position on the page partially based on the relevance (clickthrough rates) of ads. Little wonder that this Cluetrain co-author would understand that anything relating to online commerce absolutely must build the user experience into its design. As Sheryl Sandberg, the first director of the Adwords program, explained to me last year, the editorial policies enforced by Google Adwords staff are also part of that long-term approach that aims to ensure that users don't get so turned off by the ads that they stop using the search engine.

Google saw early on that they'd need to screen out the types of ads which were "merely disruptive" - those which might get clicked on, but which might lead to very poor sales conversion rates. Once one moves away from the realm of interruption marketing, into a realm where every advertiser is tracking their sales conversions, it makes sense for all concerned to set up a framework that prevents the "merely disruptive" ad from diverting too much attention from the regular search results, or other advertisers' ads.

In any case, Doc is a bit late to the game; finally discovering the unique user-centered principles that are built into search engine keyword advertising. Jakob Nielsen was probably the first to clearly explain the unique properties of Google AdWords in this respect. The rest of us caught on a bit later. And the majority of businesspeople and journalists are just now starting to catch on.

More recently, Nielsen made another "discovery" (or at least put forward a compelling proposition) about text-based ads: the superior response rates of text-based ads where appearing next to content may be a short-lived artefact of the novelty effect. [Will Plain Text Ads Continue to Rule?, April 21, 2003.] At the same time, he argues, text ads next to search results may continue to resonate with users for the foreseeable future, because "search engines are the one type of website that people visit with the explicit goal of finding someplace else to go."

As an imaginary personification of Yahoo might tell anyone who asks: "I've been rich and I've been sticky. Rich is better." Paid search is here to stay.

[Thanks to Cam Balzer for noticing the Doc article.]

Posted by Andrew Goodman




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