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Sunday, May 31, 2009

Amid Bing Hype, Blekko Wants To Be Left Alone

Blekko, a stealth search startup headed by Rich Skrenta, is doing its best Greta Garbo impersonation while getting this sort of "glowing non-coverage" over at Techcrunch.

Like them, I respect the reclusive starlet (sorry, startup's) interest in privacy while they develop the product and the strategy.

In the next couple of weeks I will finally have the time to demo both Bing and Blekko.

But perhaps I can "leak" a couple of ideas I've gleaned from the past year or so of sporadic conversations with Rich.
  • You don't need the blogosphere to tell you, they're pretty serious about this one, and their idea of A-Level Talent doesn't just mean product managers with search engine names attached to their resumes, or business development folks with same. Along with those, they seem particularly focused on attracting high end engineering talent. You'd have guessed that anyway if you looked at the investors who have seeded the company, such as Marc Andreessen (to say nothing of Skrenta himself).
  • Although Screenwork reports they're "happy with the name Blekko," if you were a stealth startup, wouldn't you say that? They'll probably change it.
  • While not speaking directly to Blekko's own functionality, I've found Skrenta's (perhaps offhand) criticisms of search engine innovation in the past couple of years to be very telling. Skrenta told me last summer that users don't really want all these stage-managed "blended" results nearly as much as the major search engines let on. He's also been quoted as saying that PageRank wrecked the web, and implying that Google is out of answers when they begin threatening people with penalties and begging them to use web conventions in the "right way," instead of fixing their algorithms. Let's explore a bit more where these thoughts lead us... Bing may be a quintessential example, but Ask, Cuill, and the major search engines themselves (Google, Yahoo, Microsoft) have all been engaged in an overwrought effort to display search engine results in panes; variegated search results that purportedly guess at 'intent' (sometimes they do a great job); and other bells and whistles that speak to a broadening of the terms of what constitutes 'search' to convince us that search engines need to be good at finding, classifying, ranking, and displaying all 'objects', not just pages of information. "Ten Blue Links" has rapidly become code for "obsolete search engine design". "A page with panes and pics" is code for what "users really want today". Supposedly. Unfortunately, this leaves a gaping hole in what search engines used to do, or try to do: to be really good at providing relevant results for specialized queries, and getting the rank-order right. The fact that you get a bunch of panes and distractions instead of a really relevant list of links to serious content may be seen as some kind of evidence that search engines have given up on their core mission, and are engaged in a massive attempt to change the subject, whether consciously or not. And this kind of overwrought "integrative thinking" has apparently begun to pervade these companies' thought processes on other products. In terms of workflow and productivity, users shouldn't be satisfied with steady efforts to improve upon GMail functionality, integrated calendars, and IM integration (plus a to-do list that is a bland and clunky offering at best)? Instead of perfecting the core functionality, let's change the subject, and invent a new tool that assumes people want to share data and shift modes of communication willy-nilly. Google Sea of Distractions, as it were.
In that spirit, then, will Blekko turn out to be one part Kicking it Old School (no pretty panes, but going back to the fundamentals of serious searches for the right information, and rank-ordering serious results well, in a way that does a better job of keeping spam out without over-rewarding a handful of brands?), and one part Kicking it Up a Notch (soft-innovating in the information retrieval field, and leaving the portal guys to pretty up the planet with panes and pics)? Let's hope so. That would be one of the most noteworthy entry into the "serious consumer" web search space in the past five years. It might even turn out to be the type of search engine a librarian could love again. I'm looking forward to a deep dive... and launch later this year. As the other analysts have implied, maybe this won't be for everyone. What great product is? But the appeal also has to be wide enough to matter, and I hope that's true, too.

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Posted by Andrew Goodman




Friday, May 29, 2009

Blodget Blase on Bing

Although I currently lack 4,000 words to match his analysis, (and 10,000 to match Danny's), I agree with Henry Blodget's answer to Microsoft's search problems, I think. In case you somehow missed it, I also roughly believe that it's a good idea to spin Bing and MSN into Yahoo, in exchange for a major share in the company. (Add a Bartzian Boatload of $ to that, for good measure.)

Still and all, a lot of folks have an ever-optimistic take about what money can do for market share. Not everyone agrees with our grizzled search analysts' take that says: the money won't move the needle. Folks I had dinner with last night said "$80mm in marketing has to do something." You would think constant TV ads would get to people somehow right?

Many of us have seen this movie before, and we disagree. Users try out the new thing, the traffic spikes incredibly for one or two weeks, and then it goes right back down to where it was and people resume using Google. This has happened with Ask, Hotbot, A9...

One interesting twist with Bing is, well, the bling. If there is any segment that is amenable to switching, it's customers who will subscribe to loyalty programs for cash or points. I'll tell ya, I'm a pretty big points addict (Aeroplan miles) and that would almost get me to switch. So I think if Microsoft is absolutely dead set on spending cash to build market share, they might be able to build it one customer at a time and one giveaway at a time, and keep market share holding steady just north of 10%. With weak profit margins, but at least in the game and gathering valuable data.

So with all that being said, Bing is a major search product and it therefore deserves our full attention - some people (I think they'd need convincing with some points or cash, though) will use it if it's actually good. With that in mind, I'll be attending a demo and gathering notes for a review next week.

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Posted by Andrew Goodman




Thursday, May 28, 2009

Pre-SES Interview Blitz Continues: Digital Marketing U

I'm grateful to Marty and Manny over at aimClear for allowing me the chance to ramble in this interview.

I am, however, a bit uncomfortable with the term "intellectual". In my experience, intellectuals are people who attend plays, read literature, and go out to debates on foreign policy. By that standard, I ain't no intellectual: I've been too busy running a business for the last few years.

It is important to have foresight and some kind of framework for understanding digital media, though. So I'm glad our field has so many "intellectuals lite" mixed in with the genuine articles. Almost every scribbler who can be counted as a quality blogger is an intellectual, in my book. Digesting the deeply-researched and principle-profound books produced by folks like Tara Hunt and Emanuel Rosen the past couple of weeks (I mention them as they're are SES keynotes for Toronto), I know how powerful a message can be when it's more than just observations, but backed by some kind of scientific research and historical knowledge. In both Tara's and Emanuel's case, I come away from their work not just feeling "smart," but with urgent tactical priorities for my business.

Posted by Andrew Goodman




Wednesday, May 27, 2009

Yahoo?: Redesign Follies Continue

Careful, Yahoo. Your on-again, off-again home page redesign saga risks crossing over into "Microsoft's new, new, new search engine" ridiculousness.

In March we heard of your plans to once again revamp the Yahoo home page. Now we hear you plan to revamp the home page revamp, based on "user feedback":
"...We recently started testing some new designs based on your feedback. We recognize that many of you like your homepage just the way it is, thank-you-very-much, so the overall look and feel of the page will be familiar. But take a closer look, and you’ll see that we’ve made some fundamental improvements and packed in features that are easy to use and easy to make your own – things you have told us you want."
When you hear the phrase "packed in features," you should be very afraid. My Spidey sense tells me this is less about user feedback and more about ... well, something else probably (trying to better monetize the home page, maybe?).

Maybe instead of tweaking the edges, it's about time Yahoo scrapped the whole cluttered portal approach and started thinking more like The Google. As any longtime Traffick reader knows, we're well aware that these "portal" brands thrive in part because of the comprehensiveness of their offerings, and believe that they will continue to thrive due to their ability to connect these services. And search-based navigation will continue to anchor the user experience with these major digital destinations.

Yahoo has plenty of excellent properties and, understandably, they want to expose you to them. On the other hand, Google has properties-a-plenty, too, and has never had any trouble getting users to adopt them, despite having a spartan home page that makes you work to find many common features. In the past, Andrew has called for Yahoo to make a bold statement by adopting a scaled-down, search-based home page in the past. Is now the right time for Yahoo to take the plunge?

Perhaps a direct copycat approach isn't the best way to go, but surely Yahoo can come up with a more original home page. They can and should find a way to apply the "New Marketing," as Seth Godin might say in Meatball Sundae, rather than going the tired old banner ad route. It seems funny to associate a former trailblazer like Yahoo with Old Marketing, but that's what they're doing, at least on the home page.

Regardless of the approach, Yahoo isn't going to reclaim market share with an evolutionary home page redesign. I say it's time to go bold -- especially now that Microsoft is set for an advertising blitz to promote Kumo, Bing, or whatever their latest attempt at building a viable search engine will be called.

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Posted by Cory Kleinschmidt




Monday, May 25, 2009

Will Microsoft's Search Ad Campaign Work? (Groundhog Day... All Over Again)

So via AdAge, we're told that Microsoft is readying an $80mm+ advertising campaign, and that it will promote yet another brand of their search technology, this time, called Bing?

Further to Cory's piece about potential reasons for consumers to switch to Yahoo Search, now we have evidence that Microsoft plans to put not only persuasion, but money, into the "getting people to switch" effort.

What a shame, though, that these two companies don't get serious about working together to achieve that goal.

We can only be excited about the potential for Microsoft to create better technology in the space. Competition is good. But it's already a concern when the story is shaping up to be more about the promo of the alternative to Google, as opposed to the technology it actually offers. That's certainly been the case with the various lavish Ask campaigns (and I still won't forget when their PR people wanted me to write about the "significance of getting rid of the butler," as they saw it), and we all know that all that money didn't move the needle on market share.

The premise is that search technology doesn't matter all that much, and that brand does: you put a Google skin on other people's search, and consumers still prefer the Google. Sure, but how did Google build that brand? Through innovation, focus, and technology... not advertising. And by keeping the *same* brand for ten years. I don't think consumers are going to be compelled by the "meta-story" of how Microsoft is (again) spending a lot of money to make (another) stab at the search space.

Microsoft and Yahoo are already working together on some cross-promotion efforts. But the $80mm standalone campaign for the Bing technology seems to work at cross-purposes with that.

With one major search engine (Yahoo, say) benefitting from the largesse of toolbar love from 96% of browser share (IE, Firefox, + Safari, say), a real alternative could be created organically out of how consumers already behave, and how they already think about online brands.

So rather than waste breath casting aspersions on the potential cash sinkhole that could be opened trying to build the Bing brand, I'll vote again for the only major brand alternative to Google that makes economic and emotional sense to a wide cross-section of consumers: Yahoo.

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Posted by Andrew Goodman




Friday, May 22, 2009

Could Anti-Google Choices Re-Energize Yahoo?

Can declarations by tech celebrities (the technorati, as it were) start a snowball effect that impact the usage patterns of regular people? It doesn't always happen, but such sentiments can galvanize the crowd in certain cases, especially when attached to widely shared sentiments of fairness, transparency, and equity that have given rise to significant shifts in the locus of high tech power in recent years (such as, no less, the Open Source movement).

In other cases, falling well short of embracing open source models, consumers become more open to a second-place private-enterprise power because they see it as, at least, an "alternative." In the search space, that's why so many have continued to hope that Yahoo! stays solidly on the map.

Gina Trapani, the influential founding editor of Lifehacker, one of the most popular blogs around, says she's dumping Google search in favor of Yahoo! search. While this isn't exactly the equivalent of Jay-Z dropping Cristal and throwing his support to Dom Perignon, it may well be the start of a trend.

Before going down that road, it's worth noting that various pundits have previously predicted Google backlashes before, in 2007 and even 2003, and it seems to be a recurring theme every few years. Who knows, maybe we'll be saying the same thing two years henceforth in 2011.

But this time it feels a bit different.

As Google's supremacy over its rivals has quickened and as the Big G has begun intruding more aggressively on others' turf, concern over a potential Google monopoly is growing in many corners. This has caused many people to step back and ponder the consequences of an ascendant Google.

Recently, Ralph Tegtmeier (aka fantomaster aka the Dark Lord Voldemort of Cloaking) wrote a compelling piece comparing Google's burgeoning hegemony to the Kraken. Andrew and I debated it internally for quite a while, trying to decide whether concerns over Google are about to cross over from conspiracy theory territory into full "Google is actually becoming evil" land. Even the most forgiving of Google fans would have second thoughts of entrusting so much personal data to one company after reading fantomaster's take.

This unease with putting too many eggs in one basket is part of the reason why I've decided not to use Google Chrome as my primary browser, even after Chrome gets full extension capability similar to Firefox, which many people predict will lead to a mass abandonment of Firefox for Chrome. For similar reasons, I've also uninstalled the Google Toolbar from Firefox now that many Toolbar features are available inside the browser (I didn't really use the Toolbar much anyway). There's just too much data being beamed back home to Mountain View than seems necessary.

We've seen this sentiment repeated in other ways.

One of our clients at Page Zero opted not to install Google's Sitemap Generator due to data privacy sensitivity, despite the fact that they happily fork over their site activity to Google through Google Analytics. Their belief was that GSG acts as a network "switch" of sorts, with all server requests coming and going through GSG, and believed this would give away far too much sensitive information.

Search Engine Land has been chronicling the various anti-trust concerns associated with Google lately, concerns that seem to be proliferating more every week. For its part, Google is proactively attempting to blunt the momentum of this movement with their recent "charm offensive." Whether they succeed in fending off anti-trust actions in the future remains to be seen.

One thing seems certain. Just as the U.S. government's inquiries into Microsoft's business practices in the late '90s gave organizations like Red Hat and Firefox a vital opening, something similar is bound to happen with Google if it gets too big for its britches.

Could the main beneficiary of this be an old-timer like Yahoo?

It's conceivable that some shrewd moves by Yahoo! could lead to a reversal of Yahoo's declining search market share, and perhaps a resurgence to something on the order of 25% search share in the next few years.

Recall that Google's search distribution deal with Firefox expires in November 2011. It's a safe assumption that Google won't renew it due to their increasing support of Google Chrome. Or another way to look at it is, with Firefox's market share hovering around 20%, and perhaps headed to over 30%, Firefox might feel emboldened to be the one dictating terms. Regardless, Google must be a bit worried about Chrome's meager market share, as they've begun running TV ads for Chrome, a first for Google.

Mozilla could soon be in a position to be a quasi-king maker. They're independent-minded and, having emerged as a credible alternative to Internet Explorer even among mainstream users, they seem to be on a mission of sorts. If they decide to place a crown on Yahoo's proverbial head, things could get very interesting. Maybe we'll once again see a more diverse search landscape sooner than we think.

By the way, it's worth noting that last year Yahoo acquired the popular search-based extension Inquisitor, which I find myself using on a regular basis these days. It's a fine tool that I highly recommend to every FF user. Oh, and guess which search engine is set as the default? Yep, Yahoo.

Ultimately, I'm all for personalization and targeted advertising, and I don't really have a beef with Google knowing a lot of information about me. But there comes a point when too much is enough. When I realized just how much I rely on Google's services, it hit me like a slap in the face from Moe the bartender. Like Gina Trapani, I think there's nothing wrong at all with spreading the love around.

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Posted by Cory Kleinschmidt




Tuesday, May 19, 2009

Is Guy Kawasaki Singlehandedly Ruining Twitter? (Part 2)

I said a lot of overly theatrical things about Guy Kawasaki in my last rant about him: Is Guy Kawasaki Singlehandedly Ruining Twitter? (Part I). Included in these were suggesting that Kawasaki was a "politician" who should never run for office any higher than "small town mayor"; that his tactics could turn Twitter into a "digital trailer park"; that he was like the regional manager of a vacuum cleaner direct sales organization; and that he would soon grow a mustache and begin smoking unfiltered cigarettes.

And for these indiscretions, I would apologize if asked. But not for stirring up the serious underlying debate about the unfortunate potential for Twitter's brand to degrade every time some spammy tactician auto-follows me, or you.

Is there a more charitable interpretation of Guy Kawasaki's Twitter antics than the one I put forward? Yes, there is a more charitable interpretation. If you choose to interpret it this way, I'd understand. It's how I choose to approach certain other seemingly annoying personalities myself. Here's an overview of how the argument might go.

Kawasaki's heartfelt personal insights (recent, and longstanding) combined with the range of favorable accounts of his accomplishments and personal qualities inevitably humanize a figure that in Part I, I'd only sought to demonize.

[Please keep in mind that I didn't set out with the intention of demonizing any individual. My complaint with him was actually pretty specific: his material in the SES keynote, and the approach to marketing it encouraged. It's one thing to be a well known underachieving spammer, telling people how to spam. Audiences know how to read that. But to see someone considered an eclectic, cultured, community-savvy leader and to turn around and violate both the spirit and letter of marketing ethics -- and to encourage others to do the same -- was bizarre to me. I've been to dozens of SES conference keynotes. Many have been provocative. A couple have violated basic keynote etiquette by being, umm, boring. But none (though Jason Calacanis came close) have been so hypocritical, self-serving, and silly as Kawasaki's Twitter advice. It was a keynote only because of his prominent name. The talk would have been more or less fine had it been a rank-and-file panel at Pubcon, for the gotta-learn-all-the-tactics crowd.]

The Case for Kawasaki as Ethical Showman

So thinking about the real human being that lurks behind the current public persona, I was reminded of a couple of people who have made millions being showmen and who are well known for being intelligent, cultured, thoughtful, and caring -- behind the scenes. (And I'm not even counting Howard Stern, probably the most polarizing example of someone like that you can think of.)

To go with one example, I've always been a fan of the financial analyst Jim Cramer, and remain so to this day. The Cramer many people know today was the sheepish fellow who was recently called on the carpet by Jon Stewart, made to atone for his pro-Wall-Street cheerleading, picking bad stocks on his show Mad Money, and all manner of other damage he'd done under the cover of showmanship, propped up by an endless bull market.

The general crowd reaction to this Cramer, I felt, was unfair. They didn't "get" Cramer. The real Cramer who was always the slightly disadvantaged Harvard boy who never quite fit in on Wall Street. The one who left Wall Street. The one who started up TheStreet.com (how many people can point to an accomplishment like that, for heaven's sake), which despite many ups and downs remains as one of a tiny percentage of "dot com" IPO's that has remained independent and solvent to this day.

When Stewart "outed" Cramer for telling people about shady tactics that Wall Street commonly used to create false futures activity overseas in order to fool the opening markets just long enough to help a trader liquidate a large position, the assumption was that Cramer advocated shady tactics. But that's an overly literal, "flat" way of listening to a smart man who is nuanced in how he communicates. I interpret Cramer differently, because I feel like I get him. I think in many cases, he's been out there trying to warn people: this is what Wall Street is really like! Don't be scammed. Buyer beware.

How does it benefit Cramer to be so transparent about Wall Street's (and his) shady tactics? It doesn't. It's a public service.

(So there, I do see an interesting parallel between Cramer and Kawasaki. Kawasaki jokes: "I may be a spammer, but I'm a transparent one." In the SEO world, there have been a few folks like that. Name your favorite transparent spammer SEO.)

The attention people suddenly paid to Cramer as a villain was nothing less than silly. Ultimately, The Daily Show taking a one-day interest in Jim Cramer's antics on Mad Money was something agreed to by both Cramer and Stewart for one reason alone: further showmanship leading to ratings. I imagine Jon Stewart is aware that there are worse villains to pay attention to than Jim Cramer. After Bush and co. left the scene, it got harder to fill air time with progressive rantings against the powers that be. And Stewart is paid millions of dollars a year to fill air time.

After the dust settles, I'm convinced that Jim Cramer will continue to be two things: (1) a decent man with a lot of talent who has more courage and scruples in his little finger than most folks on Wall Street; and (2) a brilliant opportunist and showman who (much like a Bill O'Reilly, Jon Stewart, or Howard Stern) has risen to a position where he can make serious coin and in some way "get back at" the people and system that didn't afford him the same opportunities as his wealthier peers. And he has every right to be both.

Kawasaki, like Jim Cramer, is a bundle of contradictions; a hero to some, a villain to others. On the positive side, Kawasaki's antics serve as a canary in a coal mine to help Twitter regulate itself before it's eaten alive by abusers. Already, Twitter is tightening up its rules, formal TOS, and API policies, angering some third party developers but pointing towards an ideal of "normal" Twitter usage as opposed to "spammy" usage. In that regard, Kawasaki's massive Twitter presence can be seen as doing the growing company a great service... almost like ethical hacking.

Opt Out??

Like any would-be plague on society, as many commenters on this debate to date have implied, the pivotal question is: can you opt-out? If a few stupid people choose to subject themselves to bad ideas, interruptions, etc. - it shouldn't affect me, right?

On that count, we still have a debate on our hands. That's how I've always felt about Jim Cramer's "work"; just as how I've always felt about people buying ineffective contraptions and cheap jewelry on The Shopping Channel. If it's not for you, don't do it, right? Unfollow, unsubscribe, opt out. Change the frickin’ channel.

But: what if, after unsubscribing, unfollowing, and opting out, the problem is still getting worse?

One smart reader of the last column referred to the problem as “digital blight.” Take digital blight, and accelerate it through social media contagion, and you’ve got a recipe for disaster.

The upshot is: I do still think Kawasaki is a spammer. And thousands of people are deliberately following his tactics. Many others are accidentally following them, or advocating them, because they haven't taken time out to think it through (or they didn't see the puerile SES keynote).

A friend of mine, someone with a lot of respect in the business world, followed me back recently when I followed him. His automated message pointed to a series of Twitter tips posted by Kawasaki last November. Without even trying, within seconds, I was able to discredit three of the five tips as spammy and/or contradicted by what Kawasaki actually does. 60% of the advice is easily refuted, and yet this is a "great article" that my friend sends to every single person who follows him (thousands to date)? "Great"? How about something by Malcolm Gladwell, maybe? Why was an otherwise smart person bamboozled into shilling for the King of Shill? Peer pressure, maybe? Or perhaps respect for Kawasaki's past accomplishments. Or the jokes about penis size and shiitake mushrooms were oddly disarming.

Maybe there's more to say about the problem of digital blight. Time allowing, I'll complete that thought in a Part 3. In the meantime, I welcome your thoughts.

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Posted by Andrew Goodman




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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Posted by Andrew Goodman




Sunday, May 17, 2009

A Hitwise Report Does Not a Financial Report Make

The recent Hitwise report as related by analyst Heather Hopkins should have been vital reading to anyone into digital marketing or search technology. Paid search clicks, the cash cow that almost entirely drives the industry leader, Google, were being portrayed by those reporting on the item as "down 26%" year over year in Q2. Easy conclusion: "the meltdown" has "finally hit paid search."

Economic weakness affects the click auction, no question about it.

But given the potential economic bombshell this represents, it's eye-opening to see the lack of actual responses to these reports. Look at any of the main stories reporting on the item, and they range from the misleading, to the credulous, to the snarky. Cade Metz's snarky response was at least an attempt at analysis. Hundreds of others linked to the story or retweeted it, without it apparently entering their heads for a second that flipping a link up of an oft-retweeted story isn't giving us any more insight than we had pre-re-tweet.

This has actually been a typical pattern. A few weeks after Google's financial reports for a quarter give us real insight into how the business has been going, everyone seems to go back to not understanding how the business works. Speculations on the next quarterly report tend to predict imminent doom, for whatever reason. We're in that "dark, suspicious" period now. We'll wait for next quarter to see if all the weird speculation was based on reality.

Since last year's misleading comScore report that tanked Google's stock before producing a clarification from comScore, it seems that no one's prepared to offer much of an interpretation of third party data at all. So into the void of no analysis, rushes headlines that seem to say paid search clicks are down 26% year over year. Or more accurately, the proportion of overall traffic referrals to (the subset of) websites (in Hitwise's sample), among all sources, that comes from paid search, has dropped by that much.

What can we make of this, really? Here's a stab at it.

1. The data may not be accurate.

1a. Or at least, the data might not be insightful because it treats a click as a click as a click. Some clicks are expensive or meaningful; others are not. There's a whole host of potential reasons for skew.

2. Why are we paying so much attention to travel sites? They do spend a lot. They may be spending a bit less. Their sector has been hard hit. It's hard to say, unfortunately, how the stats on clicks affect the dollars being spent on those clicks (see below). We do know from a study put forward in a webinar offered by Google that travel searches are holding pretty steady, but conversion rates are down. You can certainly see how in a sector like this, with massive overcapacity developing and brand-building efforts in the distant past, dozens of travel sites like travelocity, Expedia, Hotwire, and others, may be scaling back campaigns, and bids. They're one of the top paid click generators, ergo that looks pretty bad for Google on the surface, until you look at the financials overall. Does this mean, then, that the "sky is falling" on the "Google money machine"? That the sky is falling for the travel websites? I doubt it, for either. The much bigger problem is at the end of the suppliers - the hotels and airlines - who are being forced to go to thin and negative margins to fill rooms and seats.

3. The theme that came to light with misinterpretations of last year's comScore numbers has yet to be digested fully by observers: 0verall, the nature of Quality Score keeps more white space on the page more often. (Google's overall monetization rate, % of pages with ads on them, remains relatively low.) Many conventional advertisers are barely affected, though they've been annoyed by arbitrarily high "reserve" prices on less competitive phrases and keywords that supposedly aren't relevant. Many conventional advertisers are still seeing growth in paid clicks; some in weak economic sectors are seeing appropriate declines. Google's purge of affiliate marketers and click arbitrageurs has been widespread, so it removes a lot of low-quality, low-priced ads from the system entirely. Financially this is only a short-term hit for Google. It increases satisfaction with search results and maintains pricing on keywords with high commercial intent. Granted, pricing power is diminished as smart advertisers take this opportunity to lower their bids, but the decline in sheer volumes of paid clicks isn't purely due to a weak economy, but rather, the side effect of a deliberate Google policy that was still going strong throughout 2008.

4. Has Google experimentation with various blended search results and page layouts actually resulted in more people clicking on SERP's, local results, and video content as opposed to looking at paid clicks? This is a pretty bold move on the surface, but owning local business relationships and video ads in the future is part of the overall strategy, so it's perhaps expected that Google will be willing to see users click on the paid ads slightly less often. If it was a shift that terrified Google, I don't think they'd continue pressing forward as aggressively with the changes.

5. Some - maybe many - large-company CEO's are ganging up on Google, informally, as this "don't buy your brand clicks" meme seems to spread. While that adds up to quite a few clicks, those are inexpensive clicks anyway. Brands' refusal to buy those clicks hurts them, in my opinion, more than it hurts Google. Anecdotally talking about "ranking on those terms in the organic results anyway" is not an accurate way to measure the incremental sales lift from those keyword ads, for a host of reasons, including a 2003 view of what it means to "rank in organic". Some folks will continue to try to pinch pennies in the digital channel in spite of the waste going on in other channels; others will get over it and go back to putting more profit in the till with straightforward direct marketing to searchers, including those parts that focus on brand terms.

6. By quasi-organizing against Google and collectively angling to take revenue out of Google's pocket on brand terms (despite Google playing nice by policing trademark in a variety of ways), it appears the Moose Lodge of CEO's may have incurred Google's revenge.

Google may have grown tired of being handcuffed in monetizing those terms by both the rhetoric of trademark holders and Google's own editorial policies. They've launched the first major initiative in the direction of re-opening that monetization avenue, especially in the U.S., starting in June. (Although it refers specifically to ad text, I believe the announcement may also signal a shift in overall stance towards trademark terms.) It almost feels like the Hitwise report spurred Google's timing of the announcement. Insofar as the Hitwise report did a good job of showing that many brand keywords got taken off the board year over year, Google's response is going to be to put them back on the board. IMHO that means not only less editorial squelching of ad copy, but a relaxing of punitive Quality Scores on brand terms. Maybe Cade Metz's verbiage is apropos here: Google's going to "turn the dials" on something they had dialed way back on (largely to avoid the nuisance of legal squabbles and CEO's carping). "Turning the knobs" back towards a more relaxed setting for brand keywords should mean more paid clicks back on the board, more fun and profit for some qualified and creative advertisers, and more revenue for Google.

To put it another way: if you don't want to pay a few dollars here and there for your brand keywords, not only will we let someone else do it, but we'll let them use your name in their ads, as long as it's legal. So there.

No doubt, advertisers and search marketers today need to shift to a more comprehensive strategy of being visible in searches across various search "forms" as search behavior shifts and new blended search formats emerge. But that said, the fact that Google's stock hasn't dropped much on reports of a supposed 26% decline in paid search clicks indicates that investors, at least, now understand that the paid search auction is highly predictable, still a real cash cow for both advertisers and Google alike, and user behavior in clicking on ads remains surprisingly resilient, even in the worst period of negative economic growth seen in most of our lifetimes.

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Posted by Andrew Goodman




Saturday, May 16, 2009

Paid Search Click Decline Caused By Longer Queries? Nah.

Too much interesting stuff happening late week and this weekend, including Wolfram Alpha going live, data about paid search, and Google's trademark policy change. And a long weekend here in Canada to boot!

Anyway, I think I agree with Michael Arrington. Recent reports suggesting that declines in overall paid click volume (or, the proportion of referrals that came through a paid search click) year over year cannot be explained away by consumers typing longer searches that are less monetizable. The change in search behavior (towards longer queries) has not been that abrupt, and all advertisers didn't suddenly start using more negative keywords and exact match options all at once.

That said, bad economy aside, the explanation for the paid search data is a little more subtle than "bankrupt advertisers." I'll have to get back on here in between bouts of barbecue cleaning and hootin'-and-hollerin' for the Blue Jays, to offer a more comprehensive explanation and to catch up on the pressing news items that came out late week.

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Posted by Andrew Goodman




Wednesday, May 13, 2009

Google Hurdles Headlong Into Real-Time Search

As widely reported in connection with their Searchology event, Google has introduced a feature to allow you to set the results to display "past 24 hours" (similar in a way to the feeling you would get searching Twitter, or Google News by recency). As the screen shot below shows, that same pane opens up a variety of other advanced search options. Once viewing recent results, you can switch the sorting mechanism away from "by relevancy," to "most recent."


In Marissa Mayer's and Jack Menzel's post about the new features, they also allude to the increased use of "rich snippets" to display review content graphically, for example. (Similar to Yahoo's Searchmonkey initiative.)

These developments open up a new type of search behavior - further solidifying the notion that many different users will see more and more different results pages with content differently ordered. Although not unfolding exactly as described long ago in these pages, the principle of users taking charge of the "algorithm" (or at least becoming more comfortable with displaying search results in a form that is more useful to them) is gradually taking hold.

An excerpt from Traffick's post in 2004:

So that's the future as this glassy-eyed pundit hopes to see it: a search engine that works like a sophisticated flight simulator, with a bunch of dials and instruments formerly available only to classified personnel. But to the extent that your settings become comfortable to you, it would be a flight simulator operated largely on autopilot. Now that would be one sweet ride!

Keep in mind, though, that at that time, Marissa Mayer flatly stated in a Q&A at SES that hardly any users wanted to use advanced features. What seems to have happened is that Google sometimes believes behavioral data about what people actually do, rather than looking at possibilities that don't show up in straightforward tests. As such, Google can be a reactive company despite its labs and vast resources. No one would debate that the current focus on real-time search and rich snippets was moved up on Google's agenda by the popularity of Twitter and Yelp, and flashes of innovation shown by competitors like (yes) Yahoo.

Reactive business, arguably, is smart business. Who, after all, could have predicted the Twitter phenomenon?

Takeaways for search marketers, aka business owners thinking about their search visibility:

1. Marissa is right: a small percentage of users access advanced search features. That will continue to be the case. 85% or more of searchers will continue just typing words into toolbars, the search box, or the address bar, and "play around." Only a small percentage will be using the advanced features.

1A. As such, fresh content and the like matters, but don't be obsessed with the idea purely for the algorithm's sake. 100% of users aren't going to be switching on the Twitterizer when they perform a search on Google.

2. That said, Google may begin to infer your preferences and turn those features on for you, or flash different types of content in oneboxes and so on. SERP's will look different for every user. The notion of where your company ranks on certain keywords becomes ever more fluid. More sophisticated assessments of search referral analytics are a must to gain insight into your user behavior (but then again, you'll need to think about how to gain insight into the users who aren't finding you, and figure out why).

3. A diversity of content production and community-facing PR strategies are needed to be seen by a variety of searchers. Algorithm-literal SEO strategies are dying. Comprehensive SEO strategies are on the rise. And in contrast to the awkwardly-named Orion Panel we're putting together for SES Toronto in June (Is PageRank Broken? The Future of Search), PageRank is not broken per se. It's just becoming increasingly irrelevant. (The name of the panel is my fault.)

4. The more things change... the more they stay the same
: The ads always seem to stay prominent, don't they? Google doesn't seem to be sweating about the revenue impact of making changes to how search functions.

Not a takeaway, but fascinating anyway: it's even more interesting today to ponder who is going to acquire Twitter (Microsoft or Google), or whether they can really stick it out alone. Does Google not want Twitter? Does Twitter not want Google? Does the world not want Twitter inside Google? Are they haggling on price or not talking? Are you as curious as I am?

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Posted by Andrew Goodman




Monday, May 11, 2009

50 Ways to Use Your Hover (Part 1?)

Method 1: Make that link right, Dwight.

After getting sort of hooked on Twitter and seeing the clear need for the URL shortening & forwarding services such as bit.ly, I really don't know why anyone would use anything other than Hover to shorten and share long URL's. With this service, you get a dashboard that makes it easy to manage all of your URL "Hovers" (forwards), but it's with your own personalized domain.

I've found it fun and useful on several fronts, but one feature is really handy. Several times, I've put the wrong link in, then posted the forward to Twitter telling everyone about some article or post. With Hover, it's easy to correct my mistake. I go into my own domain's back end, click on the edit icon, and fix up the forwarding info for the URL I've posted. Now the public forward goes to the correct (long, unwieldy) URL; problem solved.

Disclaimer: Hover is a client! I didn't quite twig to how cool it was first either (I made them explain it patiently a few times, at least). Although it works best with your own domain or domains (and gives you an incentive to find cool shorter ones to call your own), you can give it a spin for free using Hover's domain. Did someone say "no risk free trial"?

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Posted by Andrew Goodman




Microsoft Raises Cash, Cheaply

Of course it's a sound financial move for Microsoft to tap funds based on its solid credit rating, but I have a tough time believing they'll earmark the $3.75 billion largely for share buybacks and small technology investments. Stuff like this always makes me think a big acquisition is coming.

Yahoo? Facebook? Twitter? Wolfram Alpha?

Or maybe a combination of things, including the smaller investments, and I am just getting stirred up over nothing.

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Posted by Andrew Goodman




Training Days Increasingly Popular

If you scan the SES Toronto program, you may be curious to see little green magnifying glasses next to some speakers' names. For example, Shari Thurow, who is speaking on Day 1 on the SEO: Then and Now panel, is highlighted. The icon indicates that she is also leading a half-day training workshop on Search Engine Optimization on Wednesday, June 10.

If you're considering signing up for training workshops, consider doing so early. Shari's sessions in particular typically sell out. Seating is limited!

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Posted by Andrew Goodman




Thursday, May 07, 2009

Happy 10th, Permission Marketing

Another anniversary to report, Seth Godin reminds us. I don't do email marketing for a living. But it had a profound impact on my understanding of the past, present, and future of marketing and advertising. Godin's concept of "interruption" marketing, and later, his characterization of a dying mass-advertising era with its own internal logic (the "TV-industrial complex"), framed a whole generation of thinking about marketing in an original, actionable way that no professor's marketing textbook has ever done.

The 10th birthday of the Cluetrain Manifesto is one thing.

But of all books about marketing, it's Permission Marketing that really and truly changed my life. As Seth points out, the concept has entered the language, and many people are unaware that it is only 10 years old.

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Posted by Andrew Goodman




Twitter and the Visible Web

Nice post by Andy Beal about Twitter's plan to crawl links in posts and index those web pages.

Indexing a significant part of the web? Developing a ranking algorithm? Twitterians, is that a threat, a promise, or some kind of masochism? Have fun guys!

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Posted by Andrew Goodman




Wednesday, May 06, 2009

Check Out Our Lack of Reputation!

This doctor's site says "See Our (0) Reviews on Yelp." Hah!

Posted by Andrew Goodman




On Brand Keyword 'Extortion'

As often happens, Danny has about 40 more paragraphs in him than I do on this issue -- Jim Spanfeller of Forbes moaning about Google at PaidContent.org -- but I do have a couple to spare.

On one hand, I actually think Spanfeller is within his rights to talk about Google's growing power. His is not the only sector rocked by the bad economy, and in the sense of figuring out who produces things of genuine value and who profits the most from that value, it's a valid armchair discussion. Are we getting away from rewarding productive people and companies for their contributions to our society or economy?

That said, who can take seriously the CEO of a company whose brand is an emblem of capitalism itself, raising Marxian concepts of "use value"? Forbes as humble content-producing "worker". Google as monopolistic "robber baron." Nice touch.

On the specifics of Google "forcing" brands to buy their own names as keywords: Danny rightly points out that no one has a gun to anyone's head. We work with this day-to-day for a wide variety of companies, and I really think when you start getting into a discussion like this, you have to dig into the details, not just spout off like a stereotypical CEO pointing at the SERP's on the screen and not really understanding what he's seeing.

On the legal and related moral aspects of who buys brand keywords for what purpose, as Danny points out in his example of selling his old Forbes magazines in a garage sale, brand names are going to be part of sellers' content and their advertising in many ways. They could be distributors, partners, writers of articles about companies, and many other things. Some trademark owners wish the law allowed them total control of every use of their brand name in every context. However, that's not what the law does, for very practical reasons.

But where I'd really like to zero in, is on the paltry sum it's costing the biggest companies to voluntarily buy their brand keywords (which convert extremely well to sales, and maybe better than organic varieties of listing that might get clicked more often if you don't bid on your brand keyword... the conversions are better because you tailor the copy, test the landing pages for response, etc.) in the AdWords auction. Larger companies have these garish line items for all sorts of marketing. Money going out the door in megabuck quantities based on whims and untested theories.

Meanwhile, one of the greatest sites for visibility in the world, Google, gets a few hundred k out of you for some keywords that happen to return a positive ROI. While sending you millions in free publicity from the organic SERP's.

It's a pittance to pay. And yet because of the Stereotypical CEO Pointing at the Screen syndrome, we're supposed to be all upset, because the law, or morality, or something else, should be forcing Google as some kind of public utility to hand over advertising space for free? Advertising has never worked that way. If Forbes wants Rich Beem to wear the Forbes logo on his cap so that every time someone watches him place 58th on a PGA tour event, they might glimpse the logo and remember the brand, does Rich sell the space for free? If you want people to pay attention to you and react in a certain way in a media venue, you pay to distract them. Google is a private company, not some public trust functioning as a "universal lookup service." Especially not one in service of any given CEO's exact wishes for the details of online navigation.

Where it really comes into focus is Spanfeller's focus on how much money Google is making. Because when you add it all up, Google takes in a lot of revenue. So? Why should you care how wealthy someone else is getting? Especially if individually, what they're "misallocating" from you is a pittance compared to various other forms of marketing? By rallying other poor, beleaguered businesses together so that collectively, they might whine about some sort of Mass Misallocation, Spanfeller seems to be calling for some revolutionary overthrow of our Google overlords, and buying into the Politics of Envy besides... flaky left-wing thinking I'm sure hundreds of his company's columnists have weighed in on over the years.

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Posted by Andrew Goodman




Saturday, May 02, 2009

Google's Soft Sell: Content Network Whitepaper

What's better: 100 ad sales people in your ear all trying to get you to buy subpar inventory? Tendentious studies trying to prove "brand lift" from ads even when they don't seem to convert?

Or a network that is quietly optimized and improved over the years, one that adds control and opt-out features including separate bidding, domain exclusion, and reporting on content types, such that it performs -- yes -- just as well as search on a CPA basis?

Why, the latter of course. Brand lift is real, and lattes with ad reps can be fun, but when I talk to my clients, for the most part, they're looking at AdWords like direct marketers and want measurable results.

Google's White Paper on CPA Performance Trends on the Google Content Network, based on data from 25,000 accounts, shows that:

  • On a CPA basis the Content Network performs about equally to search;
  • Content provides about 20% of the conversions in the median account;
  • Two account controls improve performance in particular: (1) site exclusion; (2) Conversion Optimizer;
  • Canada is getting the best deals on content on a CPA basis; the worst return is reported for the UK market. In line with past conclusions about these markets, I assume this is because Canadian advertisers are stingy with budgets on average, and not enough have entered the auction. In the UK, account management practices are sometimes shoddy, and anectodally, UK Google reps have encouraged advertisers and agencies to overbid, so until these practices improve, CPA's will not. The US places second behind Canada in content CPA performance, in keeping with expectations again: in the US there is widespread account optimization; many accounts today are actively managed and scrutinized as opposed to "set and forget".
Additional notes, from the fine print:

  • Image and alternate format ads were included in the study, but 86.9% of the spend under study came from text ads.
  • 90.3% of the spend under study used classic content targeting using keywords to trigger placements. Presumably the remainder used the new custom Placements options.
I have questions about the methodology, as follows:

  • Beyond these account controls, how many advertisers are doing anything special to actively improve performance?
  • Is the sample, based on a billion clicks and 70 million conversions, random? It doesn't sound quite random, but it does sound like anomalous accounts were tossed out, and a high number of accounts (>500) were aggregated in any given vertical.
  • Aren't the conversions a jumble of registrations, sales, leads, and actions of many kinds, jumbled in together?
  • Will a smaller study become available, one that looks at conversion revenue divided by conversion cost (ROAS or Return on Ad Spend) for those accounts that pass revenue through to the reporting?
  • What proportion of these accounts have been optimized by a Googler putting in research hours to select specific placements, tweak keywords, set up separate ads, etc.?
Despite some open questions about the methodology, based on accounts I see these days, I roughly concur with the conclusions. Though I think it is essential for advertisers to "do some special things" to succeed with content, including bidding lower in many cases, the CPA and ROAS trends have been quite favorable.

Based on the huge volume of accounts studied and the compelling way they've presented this data, I have to say this is an impressive study from Google. And they slipped their call to action in (no Buy Now!) in pretty subtly: advertisers in Canada, the United States, and Italy should look again at enabling content, or bidding higher on it. Those with broken-out content-only campaigns should consider using Conversion Optimizer to improve CPA.

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Posted by Andrew Goodman




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