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Wednesday, October 18, 2006

Nattering Nabobs of Never-Say-Neveritism

Messengers often get shot.

In the paid search industry the news has often been unpleasant to convey, primarily on three fronts. At a certain point, when nearly every observer had about the same criticisms, it must have seemed to folks at Yahoo and Google that we just liked to be difficult.

On the major bones of contention, our comments here were far from the worst, but we were often the first.

The major bones of contention have been pretty consistent over the past couple of years.

  • The Yahoo Direct Traffic Center sucks. We've said it here; Mona Elesseily's handbook pointed out its glaring flaws while telling advertisers how to survive; some message board posters actually pointed out 20 or more specific ways in which it sucks.
  • Click fraud is a problem.
  • A lot of that problem comes from the content targeting side. So the complaint here was that you couldn't trust content and that you needed to develop workarounds that helped you bid much less on it. Typically the group of presenters at Search Engine Strategies on this topic, like my colleagues at Reprise Media, made this point diplomatically. I tried to inject humor using "souped-up Pinto" and other goofy analogies that would have been even funnier if I had a good animator on staff for my Powerpoints. A whole host of other critics just basically yelled a lot, which no doubt the Googlers and Yahoos found unhelpful. But it did help to get the point across.
This week's meetings with Yahoo were so uplifting in the sense that a lot of that air was cleared. When several members of Yahoo's Panama team could openly say things like "improving on the DTC would have been setting the bar so low because I cannot imagine a worse product," it made us feel like they were acknowledging our pain, and acknowledging that we may well be fair-minded critics who were simply stating facts.

The result of that constant stream of criticism has been positive, in fact.

  • Panama's out, and it's no piecemeal change but a complete re-do. With loads of fun for marketers in store. We can even try to reverse-engineer a Quality Index. For the time being, the new ranking algorithm will not take effect (until full migration is done in 2007), but advertisers who get early invites to Panama will be able to begin A/B testing ad copy right away, to learn a bit about response.
  • Yahoo's team developed a revolutionary concept of tracking not just direct conversions from clicks, but also prior clicks associated with a sale or conversion, calling these "assists." In vanilla web analytics, all but the most recent click leading to a sale are "wiped," so prior clicks also leading to that sale get no credit. Imagine if the National Hockey League only counted goals. Wayne Gretzky would have been seen as a mediocre player (until that year he scored 92 just to make sure he survived any retroactive retooling of the hockey points concept). John Slade at Yahoo thinks this will contribute to a significant uptick in marketer sophistication around the impact of online advertising, and give credit more accurately to clicks that occur earlier in the sales cycle and from multiple sources. I agree. Mona Elesseily gave our listeners (PZCast 001, our first ever audio broadcast for Page Zero Advisor subscribers) a sneak preview of the assists concept back on May 23. This stat will only be available to advertisers using Yahoo's conversion counter / analytics products, of course. But for those wondering about an incentive for installing a second or third code snippet on their sites, this may well be an incentive. It's not a trivial stat and one that will be very hard for most of the current metrics solutions in the marketplace to replicate.
  • Click fraud hasn't gone away, but specific steps have been taken to "clean up" the content networks, and Google shows a record of clicks they considered invalid, if you run a report within Adwords. There is continued progress on this front.
  • Related to that, confidence is growing in contextual ads. I've noticed more conversions and fewer scary traffic spikes. 18 months ago, I would have said you'd set your content bids around 75-80% lower than you'd usually set your search bids (in the aggregate, on average) if you're looking for about the same ROI. On some of our accounts, this has crept up. When advertisers begin seeking content clicks rather than acting defensively towards them, this is a sign of a real change in overall traffic quality. I'm not 100% sold on Yahoo's network yet, but because their content offerings will have to be "Panama compliant," we'll just have to wait for 2007 iterations of Panama to see what level of advertiser control we get to play with there.
Some of these changes have been revolutionary - most, evolutionary. But for me, one heartening thing about the various developments is that the vendors now understand that hey, we're not generally negative folks by nature. As advertisers, we are perhaps inherently optimistic and also creative. We like to test, and we like to know stuff. Now that we're closer to being on the same page, admissions like "the DTC was basically a really simple spreadsheet" are refreshing, because us "outside critics" feel like we're playing a constructive role. We're not Oscar the Grouch by nature - we only scream when something is truly horrible, as things sometimes have been. We're also good sports when we lose at bowling.... although much more so when you let us win. (Is 123 a good score?)

Posted by Andrew Goodman




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