Author Archives: ghotchkiss

Search and the C-Level Ceiling

First published June 15, 2006 in Mediapost’s Search Insider

What is the No. 1 thing that keeps the sales teams at Yahoo, Google and MSN up at night? It’s not click fraud, it’s not capping of bid prices, and it’s not counting their stock options. This is another “C” word. I call it the C-Level Ceiling.

No Keys to the Executive Washroom for SEM

In corporate America, there’s a vast distance between the front line and the top management in most Fortune 500s. The C Level sees rolled-up dashboards, while front-line practitioners are up to their earlobes in masses of detail. Both bring their own kind of blindness. At the C Level, aggregation of metrics means senior management might not see the small emerging factors that could make a big difference if applied more broadly. And practitioners get swept away in minutiae, sometimes not getting the luxury of seeing their contributions as part of the bigger picture. Somewhere between these two extremes, search is caught in the land of the “trial” budget.

Search just hasn’t broken into the spotlight at the top of the corporate ladder. Senior execs don’t get search, they don’t want to get search and they certainly don’t want to move significant budget to search. As you move down the corporate ladder, the love affair with search gets more ardent. At the front-line practitioner level, it’s a full-blown romantic obsession, because the front line sees in gritty detail how well search can perform. But as you move away from the front line, the search story gets lost in a maze of numbers, being rolled up into one category after another, until it all but disappears at the highest level of reporting.

Search is a blip in the total marketing picture, a rounding error in most budget allocations. Despite the best efforts of the big search engines, the industry has been unsuccessful in getting the C Level to buy into search. So why is that?

I’m Too Sexy for This Channel

First, even if you don’t “get” something, you can still be interested in it. Everybody at the C level loves to get involved in the new corporate TV ads, because that’s sexy. If you’re launching a sponsorship of a NASCAR race, or the Olympics, or the World Cup, or a Rolling Stones Concert Tour, that’s sexy (with room for differing opinions on the sexiness of the Rolling Stones). If you’re doing product placement on “Survivor” or “American Idol,” that’s sexy. Search just isn’t sexy. Never was and never will be. The CEO or CMO is just not going to give up a weekend yacht trip to approve the latest search ads.

So, the first thing against search is there’s no sex appeal to draw in corporate execs, whether or not they “get” it (and most times, they don’t).

Use Me, But Please Respect Me

It’s estimated that there are about 630,000 C-Level executives in the U.S. If you asked them where the most effective place to reach them with an advertising message would be, they would tell you the Wall Street Journal print edition. And, according to a new study by Ipsos, there’s some validity in that. The Journal reaches 46 percent of the market. This is the place C Levels turn to get detailed information and opinion. They respect the Journal.

But an even more effective intersection would be search. The most dominant medium these executives use to stay in touch is the Internet. 55 percent use it at work, and 34 percent use it at home. Now, unless C Levels use the Internet in a totally different way than every other human, that means they’ll be using search a lot. So the very same executives that continue to allocate huge budgets to TV and print, and teeny tiny budgets to search, use search, a lot! Way more than they watch TV. Why is that?

The Generation Gap

A generation gap exists between the C Level and the front-line practitioners, and the executives at the top just haven’t accepted the fact that the world has changed right under their very feet. At the C level, despite tons of evidence that confirms the world is turning online, they’re still stuck very much in an offline world when it comes to budget allocation. And it’s not that they aren’t aware of the quantum shift in our society. It’s a comfort level issue. They know customers are wired, but they’re not exactly sure how online marketing works. The rules are still being written. At least with television or print, there’s the comfort of knowing they’ve been doing it for years. There are budget line items that are rubber- stamped each year, media buyers and agencies that are more than happy to take the money, and media outlets that are hanging on tenaciously to the budgets. For executives allowing the status quo to continue, the question they reassure themselves with is, “How could the world change so radically that the things we’ve done for the past 3 decades could be no longer valid?”

We saw an example of this recently. A travel company that targets young adults (18 – 30) continues to spend millions each year to produce huge, glossy brochures. At the practitioner level, this company has initiated research that shows that the vast majority of their target market does their research online. Yet the entire online budget is a tiny fraction of the print budget for the brochures that nobody reads anymore. Everyone who works on the front lines of this company knows they are seriously out of step with their market, but no one has been able to convince executives to cut the budget on print and swing it into online. The word hasn’t been able to get past the C-Level ceiling.

Search Delegated down the Ladder

With the meager budgets going to search, we can count on the responsibility for these campaigns being passed far down the line. Executives spend their time looking at the things that have the greatest impact financially on the company. If search is 2 percent of the entire advertising budget, but television accounts for 45 percent, the CMO is going to be spending a lot more time with television. That just stands to reason. So the future of search lies lost in the middle management layer, cut off from the budget allocations that can make a real difference.

Hammering the Message Home

So, what will shake up the status quo? Well, the shift has already begun. Calls for more accountability in advertising are great news for search. Someday in the not-too-distant future, the CMO, looking at the detailed report on the search campaign, will scratch his head and ask the fateful question, “Why can’t we get these kind of metrics for all our channels?” And there, in that one sentence, the battle will be won. It won’t be a quick win, but it will be tremendously satisfying.

Engaging Conversation about Engagement

The AAAA, ARF and a lot of other acronyms out there are all waxing on eloquently about engagement being the new metric. Over at iMedia, David Smith says it’s not really a metric, but more of a psychographic.

I’ve had bones to pick with the trotting out of engagement as a one size fits all metric myself, and talked a little about this in one of my Search Insider columns. When you look at ARF’s existing media model

  • Vehicle exposure
  • Advertising exposure
  • Advertising attentiveness
  • Advertising communication
  • Advertising persuasion
  • Advertising response
  • Sales response

One thing strikes home. This doesn’t really work very well for “pull media”. It’s all about push. ARF’s aiming at adding engagement to the mix. Same thing holds true. That’s a brand metric that is relevant when you’re pushing messages at a market, rather than having them request the messages from you, via a search engine, for example. It’s a completely different dynamic, and needs a different set of measurements. Let me guess who’s driving the ARF MI4 agenda: big agencies perhaps?

RSS Feeds vs E-mails: More Eyetracking Data from Jakob Nielsen

Jakob Nielsen’s Neilsen Norman Group just released an eyetracking study looking at scan patterns of e-mail newsletters vs RSS feeds. The summary results? People spend more time scanning newsletters, but are ruthless in scanning titles that pop up in their newsreaders. Again, both Jakob’s studies and ours seem to keep coming to the same conclusions, we’re evolving a very advanced form of “thin slicing” when we interact with information online. We have to, as there’s an overload of stimuli. I’m heading down to San Francisco next week to spend some time at Jakob’s usability summit, and hope to chat with him more about this.

Google Trying to Broaden Revenue Stream

More evidence that Google is very aware of it’s single stream revenue vulnerability, and is looking for ways to broaden it. VP of global online sales, Sheryl Sandberg was cornered by Piper Jaffray’s Safa Rashtchy about their ongoing experimentation for new ad formats, including video, and indicated that while it’s still in testing phase Google will continue to play in this particular sandbox. “I think it’s fair to say we have basically just started,” said Sandberg.

Based on my understanding, the testing will be far more aggressive in the AdSense network than it will be on the actual SERP’s, and that’s a good thing. One has to approach further commercialization of a search results page with tremendous trepidation. In fact, my advice would be, don’t even go there.

MySpace Working to Monetize Traffic

Just last week I took a CNN analyst to task for not seeing the importance of MySpace. How quickly things come to pass on the online world. Yesterday came the announcement that News Corp is looking for a search partner to help them monetize the incredible traffic that MySpace is generating. See, create an online community and there will be ways to monetize it. Analysts, look up just a little from the quarterly returns and try to look a little further down the road.

Stay Tuned for more from Quintura

The developers of Quintura, the semantic mapping engine that I took a look at last month, apparently took my comments to heart. I got an email from Yakov Sadchikov saying they launched a new service for the Russian market and an English Version should be coming soon. Yakov says, “we will keep on introducing new features to solve this issue of ‘longer than a second and more than one click to refine search'”. He also pointed me to a good review on Tucows. He says to keep tuned. I will!

Keillor and Altman Fans Rejoice!

I’m very excited, and it has nothing to do with anything online. A Prairie Home Companion is now playing. I’ve always been a huge Garrison Keillor fan, for 3 reasons. First, I grew up in a Norwegian prairie town (Sundre) that seems to be the Canadian equivalent of Lake Wobegon. Secondly, I started my career in radio. And third, he’s probably America’s greatest living humorist.

So when I heard he and Robert Altman were teaming up on a movie version of a Prairie Home Companion, I couldn’t wait. And what a cast! Meryl Streep, Kevin Kline, Lily Tomlin, Tommy Lee Jones…those are four of my favorites right there. Granted, it also has Lindsey Lohan, but apparently she’s pretty good in the role.

Not sure how many share my tastes, but if you do, check out the website.

Google, Microsoft, Print, TV and other Thoughts on a Rainy Day

It’s raining and I’m not feeling particularly industrious, so I’ll push back the “To do” pile a little bit farther and catch up on some blog posts.

There’s been a lot of buzz lately about the search engine’s foray into the world of print advertising, and Tacoda CEO Dave Morgan tries to pinpoint where Google’s attempt to introduce an auction based model to print could have gone wrong.

One point put forth in the column (although not Dave’s) that’s worth considering is that an auction based market is a tremendously efficient one. It has little overhead and it allows prices to find their own sustainable levels, based on the value in the buyer’s mind. This worked well for search because it presented untapped value. There was no place for search to go but up. Which it did.

Print is another matter. It represents an entire food chain with an accompanying industry that subsists on it. That comes with built in inefficiencies and therefore, pricing inflation. Arguably, when introduced to an open, dynamic, buyer controlled pricing market, print had nowhere to go but down. Which it did. And that was the problem.

But Dave points to another issue, and that’s the significant differences between print and search. Search is driven by intent, which means that search interactions generally lead to a purchase event in the not too distant future. And each click is an expression of that intent, which makes it easy for markets to start assessing value to the click. This measurable value provides easy justification for the bid price. In fact, it’s this direct response approach to search that’s introducing many of the challenges we face in trying to quantify value to search touch points as we move further away from the purchase.

Print is a different animal. It’s often used for branding, a much less quantifiable objective, and it’s not clickable. There’s no way to immediately and easily assign value, which makes bidding a guessing game at best, rather than a provable strategy.

In the end, it comes to down to a number of factors, including underestimating the inertia of the print market, the fact that in a price inflated market, an auction based model will find efficiencies, not profit, and, once again, Google thinking that as soon as they enter a new market and affix a Google label, the world will change rotational direction to accommodate them.

And yes, there is a theme emerging in my posts. I’m not a Google basher. I like much of what they do, I like their cocky optimism, I love what they’ve done for search and deep down inside, I do hope they reinvent at least part of the way we do business (nods to John Battelle) but the fact remains that I don’t agree with their strategy of attacking everything at once. It’s not sustainable.

I was in an interesting conversation yesterday with a multi year veteran of the technology wars. He said that Google takes a typical engineer’s view of the universe, and that is in any model, including business models, the more points you have between the producer and the end consumer, the more friction that is introduced. Google’s view is that friction is inefficient and should be eliminated, disintermediated, freeing the flow to go direct. Other companies, through long experience, including Microsoft, have learned differently. Friction is good, friction is valuable, and friction is inevitable in a world populated by people, not machines. Each friction point is an opportunity to add value.

With the two different views of the universe, it’s interesting to note that Microsoft is looking to enter the offline world as well. They announced that their vision of adCenter is a multi channel platform, that will introduce an auction based model and search like accountability to other channels, including television and print. Boy, if you thought print was a tough model to crack, wait til you take on television! Google’s problem, says Microsoft, is that they didn’t understand the print medium. By the way, in this story near the bottom there’s a really interesting line that speaks of many blog posts to come:

Bradford also indicated that Microsoft was gearing up to compete with Google for employees. She said Microsoft hopes to lure staff from Google when the company’s stock options begin vesting next year.

But another post, another day.

I don’t disagree with introducing efficiencies in the ad buying market. I believe it’s long, long, long over due. And I love the idea of introducing more accountability. But everyone has to understand going in that this means the tearing apart of an existing and considerable power construct (or several) and reinventing from the ground up. That takes time and resources. It takes patience. It takes adoption. Each of these speaks to a strategy that will take a considerable time for execution and to turn a profit. The fact that everyone is jumping on the Google print experiment (including Google themselves) because it wasn’t profitable out of the gate is a little ridiculous. Did Google really think they were going to change the world that quickly? Did the analysts? Did we learn nothing from the Dotcom bust?

Speaking of Google and TV, there’s an interesting column over at iMedia by Alan Shulman about the Googleization of TV. Check it out.

Okay, the rain is stopping, I thinned a few items out of my “blog fodder” in box, my “To do” pile is inching closer and the hordes are starting to gather at my door. Time to get back to work!

Friday’s Fodder Folder Clear Out

After almost 2 months of blogging, I’m started to get a system. Usually, when I see items of interest come through my inbox or have interesting conversations, I file them away for a future blog post in a folder called Blog Fodder. Well, the folder is overflowing, and I don’t have time to do full posts, but I did want to pass them along, so I’m cleaning house today.

More Search Research

The Daves (Williams and Berkowitz) and the rest of the gang over at 360i and SearchIgnite released a study looking at the value of multiple clicks on a search ad. This is an interesting indicator of the complexity of the search interaction in a purchase life cycle, something that needs a lot more light shone upon it. I remember Greg Sterling and I talking at one point at a SES session about the messy and twisting nature of a consumer’s online path in a purchase cycle. I’m happy to say that research companies are starting to focus on this Gordian knot (and I’m pretty sure it wasn’t named after me).

ComScore is one of those jumping on board with a recently announced study to look at the influence of online research on offline purchase. The value here is huge, just never quantified that well (or at all) and the ComScore study should be a step in the right direction. I’m hoping to chat with VP James Lamberti more about the study next week. If I’m able, I’ll drop a few tidbits about what they’re looking at.

OMD and Yahoo also released a study looking at this, called the Long and Winding Road. Speaking of Greg Sterling, he’s got a look at the study on his blog, with links to the press release and a few columns. Not sure how publicly available the study is. If you’re interested, perhaps contact your friendly neighborhood Yahoo rep. Fascinating reading!

The Bulls of SEM

Sapna Satagopan from JupiterResearch is bullish on the future of SEM, saying as the number and size of companies moving into search continues to increase, it will drive SEM outsourcing. At first glance, this seems to contradict the findings from the annual SEMPO survey, which indicates that more companies are bringing this in house. Steven Rappaport, a writer who’s currently working on an online advertising field guide for ARF, asked about this in a conversation this week. I explained that the two seeming different viewpoints are two stages in the same cycle. As companies dedicate more attention and budget to search, they do want to gain control in-house, so they are looking for search expertise to bring on board. While these new “directors of search” oversee search activities, they look for experts in specific areas to outsource to. It’s not really efficient for companies to set up an entire search marketing division in-house, and many companies realize this after going down this road for awhile.

Long Tail and other Musings

Cory Treffiletti wrote a column on the Long Tail model of business that has been exploited expertly by Amazon, eMusic, iTunes and the king of long tails, eBay. This is an idea I’ll have to come back to, as it has fascinating implications for retail. But until then, consider, an internet etail model doesn’t have any of the physical limitations of a traditional store. With virtual inventory, provided by direct suppliers, the store, or site, simply acts as the connector. And with expert use of search, the primary connection vehicle, it becomes possible for an online story to carry everything, but with the inventory infinitely segmentable. This brings about the idea of a mega-online shopping site, which is close to what eBay and Amazon have become. Tie this in with smarter shopping search tools and the social networking WOM power of a MySpace, and you’ve got a convergence model that’s mind blowing in its implications.

Tom Hespos takes a stab at a favorite subject of mine, the transference of control over brand messaging from the advertiser to the consumer.

American “Idol”izing Google Trends

First published June 8, 2006 in Mediapost’s Search Insider

Let me apologize right off the bat. I’m going to jump on a pop culture bandwagon, but I’m doing it to prove a point. Search trends reflect the interests of our society, and they can provide an invaluable way to gain intelligence about what’s on the public’s mind.

First of all, some facts to consider:

  • The most votes ever cast for a presidential candidate were 54.5 million, for Ronald Reagan in 1984.
  • On Wednesday, May 24, 63 million votes were cast in the final voting episode of “American Idol”
  • All votes for “American Idol” were cast in a 2-hour window. Typically polls are open for most elections for 13 hours, not including advance polling.
  • In “American Idol,” there was not one hanging chad.

Obviously, “American Idol” struck a chord with the public this year. Some say the final choice of Taylor Hicks was a surprise, but was it? With the help of Google Trends, I did a little forensic investigation and charted the rise in popularity of the contestants, as captured on Google.

A couple of caveats. Total search volumes are an approximation, as Google Trends doesn’t show actual numbers, and currently Google is only showing trends up to the end of April. But as you’ll see, for the purposes of this column, that’s enough.

I divided the contestants into three groups based on indicated search volumes: the Front Runners, the Also-Rans and the Basement Dwellers. I’ve included a link to the chart for each.

The Front Runners

Taylor Hicks started the strongest out of the gate, dominating search volumes in February during the early rounds. Although he lost ground to Kellie Pickler and Chris Daughtry in March, he came back strong in April, only being edged out in total volume for the month by Kellie, due to a surge in searches the week she was voted off.

Pretty boy Ace Young was No. 2 in February, but lost steam moving into March and never seemed to recover. Chris Daughtry was a slow starter in February, but built steam through strong performances in March. Unfortunately, he seemed to lose his edge in April, as search volumes started to drop from their high in mid-March.

The sleeper in this group was Katherine McPhee, who slowly built up steam through late February, March and April, with a huge peak towards the end of April.

If one was to predict outcomes based on search trends from February through April, I would have called it this way

1. Taylor Hicks

2. Katherine McPhee

3. Chris Daughtry

4. Kellie Pickler (one has to adjust for the spike on the week she was voted off)

Remember, this was almost a full month before the final show.

The Also-Rans

In the middle of the “Idol” pack was a group that just couldn’t seem to spark the interest of America, despite significant talent.

  • Lisa Tucker started off the strongest of the group, but could never seem to rise above the search volumes generated mid-February. There was no “buzz” around her. Kevin Covais, on the other hand, emerged out of nowhere and did build through February and March. It’s also interesting to note that when many of the contestants were voted off, their search volumes dropped off the Google trend radar. However, Kevin was voted off March 22, but kept showing up well into April.
  • Diva Mandisa started from nowhere, but generated some of the highest search volumes of all on the night she was voted off. Sometimes you don’t know what you’ve got till it’s gone. And poor Elliott Yamin didn’t have a chance. Despite a great voice (maybe the best, if you believe the judges) he just didn’t turn America’s crank. Although he built search volume slowly, he never emerged as a contender.

The Basement Dwellers

The three who were certified “buzz”-less were Paris Bennett (maybe she should change her name to Hilton), Bucky Covington and Melissa McGhee.

Paris started off hot right out of the starting gate in January, but never went anywhere from there. It seems we got used to the dynamic vocals, the pixie-like speaking voice and the cool hats–and ceased to care. Bucky and Melissa really only attracted significant volumes on the days they were voted off.

The point of this exercise is this. Search volumes do mirror public opinion, and can act as an amazingly accurate indicator of our collective interests. If you would have had access to search volume information, you could have called the results of “American Idol” long before the final show.

The other thing that was interesting was to see the power of community, both in the search results and the actual results. When you look at the top locations for searching, they are, in order: Greensboro, N.C., Charlottesville, Va., Raleigh, N.C., Charlotte, N.C. and Atlanta.

The North Carolina contingent was incredibly active in its quest for information on Chris, Kellie and to a lesser extent, Bucky, far out-searching the rest of the country for those individuals. The search demands for Taylor, Katharine and Ace were spread evenly throughout the country.

If you haven’t played with Google Trends yet, give it a spin. It can provide a fascinating glimpse into search buzz, and through it, what’s on our collective minds at any given time, on any given subject.