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Tuesday, May 19, 2009

Ads Vs. Conversations, Revisited

It's worth coming back to this subject.

Cited by John Battelle, comScore analyst Gian Fulgoni points out that the slowing growth in paid search clicks can largely be attributed to a decline in search coverage (proportion of searches monetized), and that's largely attributable to deliberate search quality and user satisfaction initiatives taken by all three major search engines. 100% right!

Fulgoni then points to a trend chart that might also contain an explanation: a rather slight increase in the average number of words used in a query, from just over 2.8, to just over 3.0.

From this, Battelle interprets very loosely, speculating that people are using search engines more like "natural language" tools and that Google is having trouble "matching advertiser demand to increasingly complex queries."

That's a bit rich. At the very least, it's an overly high-level, general explanation for users' increasing reliance on the new query-sensitive talents of Google and other engines. People's queries didn't get that much more complex in two years. Insofar as they're evolving, Google and other engines do a better job of tailoring the whole page to user needs. That may mean, for now, a slight shift towards the organic results being more compelling to users on informational queries. But that's exactly what Google wants. They want people to embrace, not ignore, the ads when they do appear. In part, they do that by keeping ads out of people's faces when they're inappropriate to user intent.

One reason you and I might type in a longer query is a higher expectation of getting an excellent local search result from Google, and then carrying on to look at restaurant reviews, maps, movie listings, etc. So to be sure, as confidence levels rise in the versatility of search technology, we're actually typing in more functional queries about movie times, the location of the local Home Depot, or even just our city name followed by "roofing contractors." Some of those merit ad coverage and lead to users clicking on ads; others merit query-sensitive local information results, not so easily monetizable.

Again, this is deliberate on Google's part. They're serious about search intent and the use of the engine as "functional software" -- at least when people use the engines in that way. For example, if I use the Google Search calculator function or the currency and measures conversion tool in my Firefox toolbar to type something like "2000 GBP in CAD," I get (today) the result "2000 British pounds = 3,582.69061 Canadian dollars." There is little point in showing an ad here. Usually you'll see zero ads, or maybe a single ad, on such queries.

That sort of behavior is of course growing. So the number of unmonetized queries is growing faster than the number of monetized queries.

The reality is, there are multiple things happening. Fulgoni's principal analysis is accurate. The search engine results pages are turning to enticing universal & blended search formats, highlighting video and local content. Even when they show no images, the organic SERP's often point to video content. Funny: long term, Google will be monetizing video and local just as well as they monetize search, so it's likely a net wash for them.

Longer term, our propensity for real-time search, conversations, and peer trust networks may indeed put a cap on how much advertising is appropriate in our "sacred areas" digitally. But that's always been the case, even when advertisers tried to invade/spam it. For some thoughts on where search is headed generally and how it might affect paid search advertising, check out Mona Elesseily's recent column on Search Engine Land: Important Questions You Should Ask About Where Search Is Headed.

Related note: I think it's too early in its life cycle for Wolfram Alpha to be showcasing sponsorships. They may soon find that it's tougher to monetize search than it looks... especially with a small number of users. The appearance of ads might also be a public relations distraction for a young product.

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