Category Archives: Corporate Strategy

The Long-Term Fallout from MAGA: One Canadian’s Perspective

The other day, an American friend asked how Canada was currently feeling about Trump and the whole MAGA thing. You may remember some months back a number of broadsides towards Canada from the president that seemingly came from nowhere -– Trump threatening/cajoling us to become the 51st state, on again-off again tariffs, continued assertions that the US does not need Canada for anything, completely unveiled threats towards us from Pete Hoekstra, the American Ambassador to Canada.

We took it personally. “Elbows up” became the Canadian rallying cry – a reference to protecting yourself in our beloved national sport – fighting along the boards balanced on frozen water while wearing sharp blades on your feet. Liquor stores had shelf after empty shelf that once were laden with California reds and Kentucky bourbon. Canadian trips to Disneyland and Las Vegas plummeted. Grocery stores started labeling products that (supposedly – which is another story) came from Canada. Canadian consumers and businesses scrambled to find Canadian substitutes for traditional American suppliers.

That was then. What about now?

Trump and the MAGA train have moved on to an endless list of other scandals and dumpster fires. I haven’t heard a whisper of the 51st state for a long time. While our trade war continues on, fueled by shots across the bow from both sides, I think it’s fair to say that we are now just lumped with every other country reeling from the daily bat-shit crazy barrage coming from Washington. Canadians are used to being ignored, for good or bad, so we’re back to situation normal – all F*$%ed up.

But have Canadians moved on? Have we dropped said elbows? The honest answer is – it’s complicated.

Predictably the patriotic fervor we had early this year has cooled off. California reds are back on the shelves. More Canadians are planning to visit Hawaii and Florida this winter. “Grown in the U.S.A.” stickers are back where they belong, in the produce bins at our grocery stores. When it comes to our American habit – it’s like the line from Brokeback Mountain – “We wish we knew how to quit you.”

Like all relationships, the one between the US and Canada is complex. It’s unrealistic to expect a heavily intertwined relationship like ours to disappear overnight. There are probably no two countries in the world more involved with each other’s business than we are. And that cuts both ways, despite what Mr. Trump says. We have been married to each other for a very long time. Even if we want to go through with it, a divorce is going to take some time.

The numbers from the first six months of our “Buy Canadian” campaign are in, and they are less than inspiring. According to StatsCan, 70% of Canadian businesses saw no increase in sales at all. Even with those that did, the impact was minimal and any gain was usually offset by other sales challenges.  

But if you dig a little deeper, there are signs that there might be more long-term damage done here than first meets the eye. In Canadian grocery stores over the past six months, sales of “Made in Canada” products are up 10% while U.S. made goods are down 9%. Those aren’t huge swings, but they have been sustained over 6 months, and in the words of one Canadian analyst speaking on CBC Radio, when something lasts for 6 months, “you’re moving from fad territory to trend territory.”

The dilemma facing Canadians is something called the “Attitude Behavior Gap” – the difference between what we want to do and what we are actually doing. Canadians – 85% of us anyway – want to buy Canadian rather than American, but it’s really hard to do that. Canadian goods are harder to find and typically cost more. It’s the reality of having a trading partner that outnumbers you both in market size and output by a factor of 10 to 1. If we want to have a Ceasar salad in December, we’re going to have to buy lettuce grown in the U.S.

But we are talking relationships here, so let’s relook at that 85% intention to “Buy Canadian” number again. That means that – 6 months after we were insulted – we still feel that a fundamental trust was irrevocably broken. We’re being pragmatic about it, but our intention is clear, we’re looking for alternatives to our past default behavior – buying American. When those alternatives make economic and behavioral sense to us, we’ll find other partners. That is what is happening in Canada right now.

Should Americans care? I believe so. Because I’m sure we’re not the only ones. The world is currently reeling from the sharp American pivot away from being a globally trusted partner. The short-term reality is that we will put up with it for now and pander to the Presidential powers that be, because we have to.

But we’re looking for options. Our dance card is suddenly wide open.

The Raging Ripple Effect of AirBNB

Ripple Effect: the continuing and spreading results of an event or action.

I’m pretty sure Brian Chesky and Joe Gebbia had no idea what they were unleashing when they decided to rent out an air mattress in the front room of their San Francisco apartment in the fall of 2007. The idea made all kinds of sense: there was not a hotel room to be had, there was a huge conference in town and they were perpetually short on their rent. It seemed like the perfect win-win – and, at first, it was.

But then came the Internet. AirBnB was born and would unleash unintended consequences that would change the face of tourism, up-end real estate markets and tear apart neighborhoods in cities around the world..

For the past two decades we have seen the impact of simple ideas that can scale massively thanks to the networked world we live in. In a physical world, there are real world factors that limit growth. Distribution, logistics, production, awareness – each of these critical requirements for growth are necessarily limited by geography and physical reality. 

But in a wired world, sometimes all you need is to provide an intermediary link between two pools of latent potential and the effect is the digital equivalent of an explosion. There is no physical friction to moderate the effect. That’s what AirBnB Did. Chesky and Gebbia’s simple idea became the connection between frustrated travellers who were tired of exorbitant hotel prices and millions of ordinary people who happened to have a spare bed. There was enormous potential on both sides and all AirBNB had to do was facilitate the connection.

AirBnB’s rise was meteoric. After Chesky and Gebbia’s initial brainstorm in 2007, they launched a website the next spring, in 2008. One year later there were hosts in 1700 cities in 100 different countries. Two years after that, AirBnB had hosted their 1 millionth guest and had over 120,000 listings. By 2020, the year Covid threw a pandemic sized spanner in the works of tourism, AirBnB had 5.6 million listings and was heading towards an IPO. 

Surprisingly, though, a global pandemic wasn’t the biggest problem facing AirBnB. There was a global backlash building that had nothing to do with Covid 19. AirBnB’s biggest problem was the unintended ripple effects of Chesky and Gebbia’s simple idea.

Up until the debut of the internet and the virtual rewiring of our world, new business ideas usually grew slowly enough for the world to react to their unintended consequences. As problems emerged, new legislation could be passed, new safeguards could be introduced and new guidelines could be put in place. But when AirBnB grew from a simple idea to a global juggernaut in a decade, things happened too quickly for the physical world to respond. Everything was accelerated: business growth, demand and the impact on both tourism and the communities those tourists were flocking to. 

Before we knew what was happening, tourism had exploded to unsustainable levels, real estate markets went haywire and entire communities were being gutted as their character changed from a traditional neighborhood to temporary housing for wave after wave of tourists. It’s only recently that many cities that were being threatened with the “AirBnB” effect responded with legislation that either banned or severely curtailed short term vacation rentals.

The question is, now that it’s been unleashed, can the damage done by AirBnB be undone? Real estate markets that were artificially fueled by sales to prospective short term rental hosts may eventually find a new equilibrium, but many formerly affordable listings could remain priced beyond the reach of first time home buyers. Will cities deluged by an onslaught of tourism ever regain the charm that made them favored destinations in the first place? Will neighbourhoods that were transformed by owners cashing in on the AirBnB boom ever regain their former character?

In our networked world, the ripples of unintended consequences spread quickly, but their effects may be with us forever.

Why I Hate Marketing

I have had a love-hate relationship with marketing for a long time now. And – I have to admit – lately the pendulum has swung a lot more to the hate side.

This may sound odd coming from someone who was a marketer for the almost all of his professional life. From the time I graduated from college until I retired, I was marketing in one form or the other. That span was almost 40 years. And for that time, I always felt the art of marketing lived very much in an ethical grey zone. When someone asked me to define marketing, I usually said something like this, “marketing is convincing people to buy something they want but probably don’t need.” And sometimes, marketing has to manufacture that “want” out of thin air.

When I switched from traditional marketing to search marketing almost 30 years ago, I felt it aligned a little better with my ethics. At least, with search marketing, the market has already held up their hand and said they wanted something. They had already signaled their intent. All I had to do is create the connection between that intent and what my clients offered. It was all very rational – I wasn’t messing with anyone’s emotions.

But as the ways we can communicate with prospects digitally has exploded, including through the cesspool we call social media, I have seen marketing slip further and further into an ethical quagmire. Emotional manipulation, false claims and games of bait and switch are now the norm rather than the exception in marketing.

Let me give you one example that I’ve run into repeatedly. The way we book a flight has changed dramatically in the last 25 years. It used to be that airline bookings always happened through an agent. But with the creation of online travel agents, travel search tools and direct booking with the airlines, the information asymmetry that had traditionally protected airline profit margins evaporated. Average fare prices plummeted and the airline profits suffered as a result.

Here in Canada, the two major airlines eventually responded to this threat by following the lead of European lo-cost carriers and introduced an elaborate bait and switch scheme. They introduced “ultra-basic” fares (the actual labels may vary) by stripping everything possible in the way of customer comfort from the logistical reality of getting one human body from point A to Point B. There are no carry-on bag allowances, no seat selection, no point collection, no flexibility in booking and no hope of getting a refund or flight credit if your plans change. To add insult to injury, you’re also shuttled into the very last boarding group and squeezed into the most undesirable seats on the plane. The airlines have done everything possible to let you know you are hanging on to the very bottom rung of their customer appreciation ladder.

Now, you may say that this is just another case of “caveat emptor” – it’s the buyer’s responsibility to know what they’re purchasing and set their expectations accordingly. These fares do give passengers the ability to book a bare-bones flight at a much lower cost. It’s just the airlines responding to a market need. And I might agree – if it weren’t for how these fares are used by the airline’s marketers.

With flight tracking tools, you can track flight prices for future trips. These tools will send you an alert when fares change substantially in either direction. This kind of information puts a lot of power in the hands of the customer, but airlines like WestJet and Air Canada use their “Bare Bones” basic fares to game this system.

While it is possible on some tracking tools like Google Flights to set your preferences to exclude “basic” fares, most users stick to the default settings that would include these loss-leader offerings. They then get alerts with what seem to be great deals on flights as the airlines introduce a never-ending stream of seat sales. The airlines know that by reducing the fares on a select few seats for a few days just enough to trigger an alert, they will get a rush of potential flyers that have used a tracker waiting for the right time to book.

As soon as you come to the airline site to book, you see that while a few seats at the lowest basic fare are on sale, the prices on the economy seats that most of us book haven’t budged. In fact, it seems to me that they’ve gone up substantially. On one recent search, the next price level for an economy seat was three times as much as the advertised ultra-basic fare. If you do happen to stick with booking the ultra-basic fare, you are asked multiple times if you’re sure you don’t want to upgrade? With one recent booking, I was asked no fewer than five times if I wanted to pay more before the purchase was complete.

This entire marketing approach feels uncomfortably close to gas lighting. Airline marketers have used every psychological trick in the book to lure you in and then convince you to spend much more than you originally intended. And this didn’t happen by accident. Those marketers sat down in a meeting (actually, probably several meetings) and deliberately plotted out – point by point – the best way to take advantage of their customers and squeeze more money from them. I know, because I’ve been in those meetings. And a lot of you reading this have been too.

 When I started marketing, the goal was to build a long-term mutually beneficial relationship with your customers. Today, much of what passes for marketing is more like preying on a vulnerable prospect in an emotionally abusive relationship.

And I don’t love that.

Being in the Room Where It Happens

I spent the past weekend attending a conference that I had helped to plan. As is now often the case, this was a hybrid conference; you could choose to attend in person or online via Zoom. Although it involved a long plane ride, I choose to attend in person. It could be because – as a planner – I wanted to see how the event played out. Also, it’s been a long time since I attended a conference away from my home. Or – maybe – it was just FOMO.

Whatever the reason, I’m glad I was there, in the room.

This was a very small conference planned on a shoestring budget. We didn’t have money for extensive IT support or AV equipment. We were dependent solely on a laptop and whatever sound equipment our host was able to supply. We knew going into the conference that this would make for a less-than-ideal experience for those attending virtually. But – even accounting for that – I found there was a huge gap in the quality of that experience between those that were there and those that were attending online. And, over the duration of the 3-day conference, I observed why that might be so.

This conference was a 50/50 mix of those that already knew each other and those that were meeting each other for the first time. Even those who were familiar with each other tended to connect more often via a virtual meeting platform than in a physical meeting space. I know that despite the convenience and efficiency of being able to meet online, something is lost in the process. After the past two days, carefully observing what was happening in the room we were all in, I have a better understanding of what that loss might be – it was the vague and inexact art of creating a real bond with another person.

In that room, the bonding didn’t happen at the speaking podium and very seldom happened during the sessions we so carefully planned. It seeped in on the sidelines, over warmed-over coffee from conference centre urns, overripe bananas and the detritus of the picked over pastry tray. The bonding came from all of us sharing and digesting a common experience. You could feel a palpable energy in the room. You could pick up the emotion, read the body language and tune in to the full bandwidth of communication that goes far beyond what could be transmitted between an onboard microphone and a webcam.

But it wasn’t just the sharing of the experience that created the bonds. It was the digesting of those experiences after the fact. We humans are herding animals, and that extends to how we come to consensus about things we go through together. We do so through communication with others – not just with words and gesture, but also through the full bandwidth of our evolved mechanisms for coming to a collective understanding. It wasn’t just that a camera and microphone couldn’t transmit that effectively, it was that it happened where there was no camera or mic.

As researchers have discovered, there is a lived reality and a remembered reality and often, they don’t look very much alike. The difference between the effectiveness of an in-person experience and one accessed through an online platform shouldn’t come as a surprise to us. This is due to how our evolved sense-making mechanisms operate. We make sense of reality both internally, through a comparison with our existing cognitive models and externally, through interacting with others around us who have shared that same reality. This communal give-and-take colors what we take with us, in the form of both memories and an updated model of what we know and believe. When it comes to how humans are built, collective sense making is a feature, not a bug.

I came away from that conference with much more than the content that was shared at the speaker dais. I also came away with a handful of new relationships, built on sharing an experience and, through that, laying down the first foundations of trust and familiarity. I would not hesitate to reach out to any of these new friends if I had a question about something or a project I felt they could collaborate on.

I think that’s true largely because I was in the room where it happened.

It’s Tough to Consume Conscientiously

It’s getting harder to be both a good person and a wise consumer.

My parents never had this problem when I was a kid. My dad was a Ford man. Although he hasn’t driven for 10 years, he still is. If you grew up in the country, your choices were simple – you needed a pickup truck. And in the 1960s and 70s, there were only three choices: Ford, GMC or Dodge. For dad, the choice was Ford – always.

Back then, brand relationships were pretty simple. We benefited from the bliss of ignorance. Did the Ford Motor Company do horrible things during that time? Absolutely. As just one example, they made a cost-benefit calculation and decided to keep the Pinto on the road even though they knew it tended to blow up when hit from the rear. There is a corporate memo saying – in black and white – that it would be cheaper to settle the legal claims of those that died than to fix the problem. The company was charged for negligent homicide. It doesn’t get less ethical than that.

But that didn’t matter to Dad. He either didn’t know or didn’t care. The Pinto Problem, along with the rest of the shady stuff done by the Ford Motor Company, including bribes, kickbacks and improper use of corporate funds by Henry Ford II, was not part of Dad’s consumer decision process. He still bought Ford. And he still considered himself a good person. The two things had little to do with each other.

Things are harder now for consumers. We definitely have more choice, and those choices are harder, because we know more.  Even buying eggs becomes an ethical struggle. Do we save a few bucks, or do we make some chicken’s life a little less horrible?

Let me give you the latest example from my life. Next year, we are planning to take our grandchildren to a Disney theme park. If our family has a beloved brand, it would be Disney. The company has been part of my kids’ lives in one form or another since they were born and we all want it to be part of their kid’s lives as well.

Without getting into the whole debate, I personally have some moral conflicts with some of Disney’s recent corporate decisions. I’m not alone. A Facebook group for those planning a visit to this particular park has recently seen posts from those agonizing over the same issue. Does taking the family to the park make us complicit in Disney’s actions that we may not agree with? Do we care enough to pull the plug on a long-planned park visit?

This gets to the crux of the issue facing consumers now – how do we balance our beliefs about what is wrong and right with our desire to consume? Which do we care more about? The answer, as it turns out, seems to almost always be to click the buy button as we hold our noses.

One way to make that easier is to tell ourselves that one less visit to a Disney mark will make virtually no impact on the corporate bottom line. Depriving ourselves of a long-planned family experience will make no difference. And – individually – this is true. But it’s exactly this type of consumer apathy which, when aggregated, allows corporations to get away with being bad moral characters.

Even if we want to be more ethically deliberate in our consumer decisions, it’s hard to know where to draw the line. Where are we getting our information about corporate behavior from? Can it be trusted? Is this a case of one regrettable action, or is there a pattern of unethical conduct? These decisions are always complex, and coming to any decision that involves complexity is always tricky.

To go back to a simpler time, my grandmother had a saying that she applied liberally to any given situation, “What does all this have to do with the price of tea in China?” Maybe she knew what was coming.

The Credibility Crisis

We in the western world are getting used to playing fast and loose with the truth. There is so much that is false around us – in our politics, in our media, in our day-to-day conversations – that it’s just too exhausting to hold everything to a burden of truth. Even the skeptical amongst us no longer have the cognitive bandwidth to keep searching for credible proof.

This is by design. Somewhere in the past four decades, politicians and society’s power brokers have discovered that by pandering to beliefs rather than trading in facts, you can bend to the truth to your will. Those that seek power and influence have struck paydirt in falsehoods.

In a cover story last summer in the Atlantic, journalist Anne Applebaum explains the method in the madness: “This tactic—the so-called fire hose of falsehoods—ultimately produces not outrage but nihilism. Given so many explanations, how can you know what actually happened? What if you just can’t know? If you don’t know what happened, you’re not likely to join a great movement for democracy, or to listen when anyone speaks about positive political change. Instead, you are not going to participate in any politics at all.”

As Applebaum points out, we have become a society of nihilists. We are too tired to look for evidence of meaning. There is simply too much garbage to shovel through to find it. We are pummeled by wave after wave of misinformation, struggling to keep our heads above the rising waters by clinging to the life preserver of our own beliefs. In the process, we run the risk of those beliefs becoming further and further disconnected from reality, whatever that might be. The cogs of our sensemaking machinery have become clogged with crap.

This reverses a consistent societal trend towards the truth that has been happening for the past several centuries. Since the Enlightenment of the 18th century, we have held reason and science as the compass points of our True Norh. These twin ideals were buttressed by our institutions, including our media outlets. Their goal was to spread knowledge. It is no coincidence that journalism flourished during the Enlightenment. Freedom of the press was constitutionally enshrined to ensure they had the both the right and the obligation to speak the truth.

That was then. This is now. In the U.S. institutions, including media, universities and even museums, are being overtly threatened if they don’t participate in the wilful obfuscation of objectivity that is coming from the White House. NPR and PBS, two of the most reliable news sources according to the Ad Fontes media bias chart, have been defunded by the federal government. Social media feeds are awash with AI slop. In a sea of misinformation, the truth becomes impossible to find. And – for our own sanity – we have had to learn to stop caring about that.

But here’s the thing about the truth. It gives us an unarguable common ground. It is consistent and independent from individual belief and perspective. As longtime senator Daniel Patrick Moynihan famously said, “Everyone is entitled to his own opinion, but not to his own facts.” 

When you trade in falsehoods, the ground is consistently shifting below your feet. The story is constantly changing to match the current situation and the desired outcome. There are no bearings to navigate by. Everyone had their own compass, and they’re all pointing in different directions.

The path the world is currently going down is troubling in a number of ways, but perhaps the most troubling is that it simply isn’t sustainable. Sooner or later in this sea of deliberate chaos, credibility is going to be required to convince enough people to do something they may not want to do. And if you have consistently traded away your credibility by battling the truth, good luck getting anyone to believe you.

Just Behave Archive: Q&A With Marissa Mayer, Google VP, Search Products & User Experience

This blog is the most complete collection of my various posts across the web – with one exception. For 4 years, from 2007 to 2011, I wrote a column for Search Engine Land called “Just Behave” (Danny Sullivan’s choice of title, not mine – but it grew on me). At the time, I didn’t cross-post because Danny wanted the posts to be exclusive. Now, with almost 2 decades past, I think it’s safe to bring these lost posts back home to the nest, here at “Out of My Gord”. You might find them interesting from a historical perspective, and also because it gave me the chance to interview some of the brightest minds in search at that time. So, here’s my first, with Google’s then VP of Search Products and User Experience – Marissa Mayer. It ran in January, 2007 :

Marissa Mayer has been the driving force behind Google’s Spartan look and feel from the very earliest days. In this wide-ranging interview, I talked with Marissa about everything from interface design to user behavior to the biggest challenge still to be solved with search as we currently know it.

I had asked for the interview because of some notable findings in our most recent eye tracking study. I won’t go into the findings in any great depth here, because Chris Sherman will be doing a deep dive soon. But for the purpose of setting the background for Marissa’s interview, here are some very quick highlights:


MSN and Yahoo Users had a better User Experience on Google

In the original study, the vast majority of participants were Google users, and their interactions were restricted to Google. With the second study, we actually recruited participants that indicated their engine of preference was Yahoo! or MSN (now Live Search), as the majority of their interactions would be with those two engines. We did take one task at random, however, and asked them to use Google to complete the task. By almost every metric we looked at, including time to complete the task (choose a link), the success of the link chosen, the percentage of the page scanned before choosing a link and others, these users had a more successful experience on Google than on their engine of choice.

Google Seemed to Have a Higher Degree of Perceived Relevancy

In looking at the results, we didn’t believe that it was the actual quality of the results that lead to a more successful user experience as much as it was how those results were presented to the user. Something about Google’s presentation made it easier to determine which results were relevant. We referred to it in the study as information scent, using the term common in the information foraging theory.

Google Has an Almost Obsessive Dedication to Relevancy at the Top of the Results Page

The top of the results, especially the top left corner, is the most heavily scanned part of the results page. Google seemed to be the most dedicated of all the three engines in ensuring the results that fall in this real estate are highly relevant to the query. For example, Google served up top sponsored ads in far fewer sessions in the study than did either Yahoo or MSN.

Google Offers the “Cleanest” Search Experience

Google is famous for its Spartan home page. It continues this minimalist approach to search with the cleanest results page. When searching, we all have a concept in mind and that concept can be influenced by what else we see on the page. Because a number of searches on Yahoo! and MSN were launched from their portal page, we wondered how that impacted the search experience.

Google Had Less Engagement than Yahoo with their Vertical Results

The one area where Google appeared to fall behind in these head to head tests was with the relevance of the OneBox, or their vertical results. Yahoo! in particular seemed to score more consistently with users with their vertical offerings, Yahoo! Shortcuts.

It was in these areas in particular that I wanted to get the thinking of Marissa and her team at Google. Whatever they’re doing, it seems to be working. In fact, I have said in the past that Google has set the de facto standard for what we expect from a search engine, at least for now.

Here’s the interview:

Gord: What, at the highest level, is Google’s goal for the user?

Marissa: Our goal is to make sure that people can find what they’re looking for and get off the page as quickly as possible

If we look at this idea of perceived versus real relevancy, some things seemed to make a big difference in how relevant people perceived the results to be on a search engine: things like how much white space there was around individual listings, separating organic results from the right rail, the query actually being bolded in the title and the description and very subtle nuances like a hair line around the sponsored ads as opposed to a screened box. What we found when we delved into it was there seemed to be a tremendous attention to that detail on Google. It became clear that this stuff had been fairly extensively tested out.

I think all of your observations are correct. I can walk you through any one of the single examples you just named and I can talk you through the background and exactly what our philosophy was when we designed it and the numbers we saw in our tests as we had tested them, but you’re right in that it’s not an accident. For example, putting a line along the side of the ad as opposed to boxing it allows it to integrate more into the page and lets it fall more into what people read.

One thing that I think about a lot are people that are new to the internet. A lot of times they subconsciously map the internet to physical idioms. For example, when you look at how you parse a webpage, chances are that there are some differences if there are links in the structure and so forth, but a lot of times it looks just like a page in a book or a page on a magazine, and when you put a box around something, it looks like a sidebar. The way people handle reading a page that has a sidebar on it is that they read the whole main page and then, at the end, if it’s not too interesting, they stop and read the sidebar on that page.

For us, given that we think our ads in some cases are as good an answer as our search results and we want them to be integral to the user experience, we don’t want that kind of segmentation and pausing. We tried not to design it so it looked like a side bar, even though we have two distinct columns. You know, There are a lot of philosophies like that that go into the results page and of course, testing both of those formats to see if that matches our hypothesis.

That brings up something else that was really interesting. If we separate the top sponsored from the right rail, the majority of the interaction happens on the page in that upper left real estate. One thing that became very apparent was that Google seemed to be the most aware of relevancy at that top of page, that Golden Triangle real estate. In all our scenarios, you showed top sponsored the least number of times and generally you showed fewer top sponsored results. We saw a natural tendency to break off the top 3 or 4 listings on a page and scan them as a set and then make your choice from those top 3 or 4. In Google, those top 3 or 4 almost always include 1 or 2 organic results, sometimes all organic results.

That’s absolutely the case. Yes, we’re always looking at how can we do better targeting with ads. But we believe part of the targeting for those ads is “how well do those ads match your query?” And then the other part is how well does this format and that prominence convey to you how relevant it is. That’s baked into the relevance.

Our ad team has worked very very hard. One of the most celebrated teams at Google is our Smart Ads team. In fact, you may have heard of the Google Founder’s Awards, where small teams of people get grants of stock of up to $10,000,000 in worth, split across a small number of individuals. One of the very first teams at Google to receive that award was the Smart Ads team. And they were looking, interestingly enough, at how you target things. But they were also looking at what’s the probability that someone will click on a result. And shouldn’t that probability impact our idea of relevance, and also the way we choose to display it.

So we do tend to be very selective and keep the threshold on what appears on the top of the page very high. We only show things on the top when we’re very very confident that the click through rate on that ad will be very high. And the same thing is true for our OneBox results that occasionally appear above the top (organic) results. Larry and Sergey, when I started doing user interface work, said we’re thinking of making your salary proportional to the number of pixels above the first result, on average. We’ve mandated that we always want to have at least one result above the fold. We don’t let people put too much stuff up there. Think about the amount of vertical space on top of the page as being an absolute premium and design it and program it as if your salary depended on it.

There are a couple of other points that I want to touch on. When we looked at how the screen real estate divided up on the search results page, based on a standard resolution, there seemed to be a mathematical precision to the Google proportions that wasn’t apparent on MSN and on Yahoo. The ratio seemed pretty set. We always seemed to come up with a 33% ratio dedicated to top organic, even on a fully loaded results page, so obviously that’s not by accident. That compared to, on a fully loaded page, less than 14% on Yahoo.

That’s interesting, because we never reviewed on a percentage basis that you’re mentioning. We’ve had a lot of controversy amongst the team, should it be in linear inches along the left hand margin, should it actually be square pixelage computed on a percentage basis? Because of the way that the search is laid out linear inches or vertical space may be more accurate. As I said, the metric that I try to hold the team to is always getting at least one organic result above the fold on 800 by 600, with the browser held at that size.

The standard resolution we set for the study was 1024 by 768.

Yes, we are still seeing as many as 30% plus of our users at 800 by 600. My view is, we can view 1024 by 768 as ideal. The design has to look good on that resolution. It has to at least work and appear professional on 800 by 600. So all of us with our laptops, we’re working with 1024 by 768 as our resolution, so we try to make sure the designs look really good on that. It’s obvious that some of our engineers have bigger monitors and bigger resolutions than that, but we always are very conscious of 800 by 600. It’s pretty funny, most of our designers, myself included, have a piece of wall paper that actually has rectangles in the back where if you line up the browser in the upper left hand corner and then align the edge of the browser with the box you can simulate all different sizes so we can make sure it works in the smaller browsers.

One of the members of our staff has a background in physics and design and he was the one that noticed that if you take the Golden Ratio it lined up very well with how the Google results page is designed. The proportions of the page lined up pretty closely with how that Ratio is proportioned.

I’m a huge fan of the Golden Ratio. We talk about it a lot in our design reviews, both implicitly and explicitly, even when it comes down to icons. We prefer that icons not be square, we prefer that they be more of the 1.7:1.

I wanted to talk about Google OneBox for a minute. Of all the elements on the Google page, frankly, that was the one that didn’t seem to work that well. It almost seemed to be in flux somewhat while we were doing the data collection. Relevancy seemed to be a little off on a number of the searches. Is that something that is being tested.

Can you give me an example?

The search was for digital cameras and we got news results back in OneBox. Nikon had a recall on a bunch of digital cameras at the time and we went, as far as disambiguating the user intent from the query, it would seem that news results for the query digital cameras is probably not the best match.

It’s true. The answer is that we do a fairly good job, I believe, in targeting our OneBox results. We hold them to a very high click through rate expectation and if they don’t meet that click through rate, the OneBox gets turned off on that particular query. We have an automated system that looks at click through rates per OneBox presentation per query. So it might be that news is performing really well on Bush today but it’s not performing very well on another term, it ultimately gets turned off due to lack of click through rates. We are authorizing it in a way that’s scalable and does a pretty good job enforcing relevance. We do have a few niggles in the system where we have an ongoing debate and one of them is around news versus product search

One school of thought is what you’re saying, which is that it should be the case that if I’m typing digital cameras, I’m much more likely to want to have product results returned. But here’s another example. We are very sensitive to the fact that if you type in children’s flannel pajamas and there’s a recall due to lack of flame retardation on flannel pajamas, as a parent you’re going to want to know that. And so it’s a very hard decision to make.

You might say, well, the difference there is that it’s a specific model. Is it a Nikon D970 or is it digital cameras, which is just a category? So it’s very hard on the query end to disambiguate. You might say if there’s a model number then it’s very specific and if only the model number matches in the news return the news and if not, return the products. But it’s more nuanced than that. With things like Gap flannel pajamas for children, it’s very hard to programmatically tell if that’s a category or a specific product. So we have a couple of sticking points.

So that would be one of the reasons why, for a lot of searches, we weren’t seeing product results coming back, and in a lot of local cases, we weren’t seeing local results coming back?. That would be that click through monitoring mechanism where it didn’t meet the threshold and it got turned off?

That’s right.

Here’s another area we explored in the study. Obviously a lot of searches from Yahoo or MSN Live Search get launched from a portal and the user experience if you launch from the Google home page is different. What does it mean as far as interaction with search results when you’re launching the search from what’s basically a neutral palette versus something that’s launched from a portal that colors the intent of the user as it passes them through to the search results?

We want the user to not be distracted, to just type in what they want and not be very influenced by what they see on the page, which is one reason why the minimalist home page works well. It’s approachable, it’s simple, it’s straightforward and it gives the user a sense of empowerment. This engine is going to do what they want it to do, as opposed to the engine telling them what they should be doing, which is what a portal does. We think that to really aid and facilitate research and learning, the clean slate is best.

I think there’s a couple of interesting problems in the portal versus simple home page piece. You might say it’s easier to disambiguate from a portal what a person might be intending. They look at the home page and there’s a big ad running for Castaway and if they search Castaway, they mean the movie that they just saw the ad for. That might be the case but the other thing that I think is more confusing than anything is the fact that most people who launch the search from the portal home page are actually ignoring and tuning out most of the content on a page. If anything you’re more inclined to mistake intent, to think, “Oh, of course when they typed this they meant that,” but they actually didn’t, because they didn’t even see this other thing. One thing that we’re consistently noticing, which your Golden Triangle finding validated, is that users have a laser focus on their task.

The Google home page is very simple and when we put a link underneath the Google search box on the home page to advertise one of our products, we say, “Hey, try Google video, it’s new, or download the new Picassa.” Basically it’s the only other thing on the page, and while it does get a fair amount of click through, it’s nothing compared to the search, because most users don’t even see it. Most users on our search results page don’t see the logo on the top of the page, they don’t see OneBox, they don’t even see spelling corrections, even though it’s there in bright red letters. There’s a single-mindedness of I’m going to put in my search, not let anything on the home page get in the way, and I’m going to go for the first blue left aligned link on the results page and everything above it basically gets ignored. And we’ve seen that trend again and again. My guess is that if anything, that same thing is happening at the portals but because there is so much context around it on the home page, their user experience and search relevance teams may be led astray, thinking that that context has more relevance than it has.

One thing eye tracking allowed us to pull this apart a little bit is that when we gave people two different scenarios, one aimed more towards getting them to look at the organic results and one that would have them more likely to look at sponsored results, and then look down to organic results, we saw the physical interaction with the page didn’t vary as much as we thought, but the cognitive interaction with the page, when it came to what they remembered seeing and what they clicked on, was dramatically different. So it’s almost like they took the same path through, but the engagement factor flicked on at different points.

My guess is that people who come to the portal are much more likely to look at ads. I like to think of them as users with ADHD. They’re on the home page and they enjoy a home page that pulls their attention in a lot of different directions. They’re willing to process a lot of information on the way to typing in their search, and as a result, that same mind that likes that, it may not even be a per user thing, it may be an of-the-moment thing, but a person that’s in the mindset of enjoying that, on the home page, is also going to be much more likely to look around on the search results page. Their attention is going to be much more likely to be pulled in the direction of an ad, even if it’s not particularly relevant, banner, brand, things like that.

I want to wrap up by asking you, what in your mind is the biggest challenge still to be solved with the search interface as we currently know it?

I think there’s a ton of challenges, because in my view, search is in its infancy, and we’re just getting started. I think the most pressing, immediate need as far as the search interface is to break paradigm of the expectation of “You give us a keyword, and we give you 10 URL’s”. I think we need to get into richer, more diverse ways you’re able to express their query, be it though natural language, or voice, or even contextually. I’m always intrigued by what the Google desktop sidebar is doing, by looking at your context, or what Gmail does, where by looking at your context, it actually produces relevant webpages, ads and things like that. So essentially, a context based search.

So, challenge one is how the searches get expressed, I think we really need to branch out there, but I also think we need to look at results pages that aren’t just 10 standard URLS that are laid out in a very linear format. Sometimes the best answer is a video, sometimes the best answer will be a photo, and sometime the best answer will be a set of extracted facts. If I type in general demographic statistics about China, it’d be great if I got “A” as a result. A set of facts that had been parsed off of and even aggregated and cross validated across a result set.

And sometimes the best result would be an ad. Out of interest, when we tracked through to the end of the scenario to see which links provided the greatest degree of success, the top sponsored results actually delivered the highest success rates across all the links that were clicked on in the study.

Really? Even more so than the natural search results?

Yes. Even the organic search results. Now mind you, the scenarios given were commercial in nature.

Right… that makes much more sense. I do think that for the 40 or so percent of page views that we serve ads on that those ads are incredibly relevant and usually do beat the search results, but for the other 60% of the time the search results are really the only reasonable answer.

Thanks, Marissa.

In my next column, I talk with Larry Cornett, Senior Director of Search & Social Media in Yahoo’s User Experience & Design group about their user experience. Look for it next Friday, February 2.

The Question We Need to Ask about AI

This past weekend I listened to a radio call-in show about AI. The question posed was this – are those using AI regularly achievers or cheaters? A good percentage of the conversation was focused on AI in education, especially those in post-secondary studies. Educators worried about being able to detect the use of AI to help complete coursework, such as the writing of papers. Many callers – all of which would probably be well north of 50 years old – bemoaned that fact that students today are not understanding the fundamental concepts they’re being presented because they’re using AI to complete assignments. A computer science teacher explained why he teaches obsolete coding to his students – it helps them to understand why they’re writing code at all. What is it they want to code to do? He can tell when his students are using AI because they submit examples of coding that are well beyond their abilities.

That, in a nutshell, sums up the problem with our current thinking about AI. Why are we worried about trying to detect the use of ChatGPT by a student who’s learning how to write computer code? Shouldn’t we be instead asking why we need humans to learn coding at all, when AI is better at it? Maybe it’s a toss-up right now, but it’s guaranteed not to stay that way for long. This isn’t about students using AI to “cheat.” This is about AI making humans obsolete.

As I was writing this, I happened across an essay by computer scientist Louis Rosenberg. He is worried that those in his circle, like the callers to the show I was listening too, “have never really considered what life will be like the day after an artificial general intelligence (AGI) is widely available that exceeds our own cognitive abilities.” Like I said, what we use AI for now it a poor indicator for what AI will be doing in the future.  To use an analogy I have used before, it’s like using a rocket to power your lawnmower.

But what will life be like when, in a somewhat chilling example put forward by Rosenberg, “I am standing alone in an elevator — just me and my phone — and the smartest one speeding between floors is the phone?”

It’s hard to wrap you mind around the possibilities. One of the callers to the show was a middle-aged man who was visually impaired. He talked about the difference it made to him when he got a pair of Meta Glasses last Christmas. Suddenly, his world opened up. He could make sure the pants and shirt he picked out to wear today were colors that matched. He could see if his recycling had been picked up before he made the long walk down the driveway to pick up the bin. He could cook for himself because the glasses could tell him what were in the boxes he took off his kitchen shelf. For him, AI gave him back his independence.

I personally believe we’re on the cusp of multiple AI revolutions. Healthcare will take a great leap forward when we lessen our requirements for expert advice coming from a human. In Canada, general practitioners are in desperately short supply. When you combine AI with the leaps being made by incorporating biomonitoring into wearable technology, I can’t imagine how great things would not be possible in terms of living longer, healthier lives. I hope the same is true for dealing with climate change, agricultural production and other existential problems we’re currently wrestling with.

But let’s back up to Rosenberg’s original question – what will life be like the day after AI exceeds our own abilities? The answer to that, I think, is dependent on who is in control of AI on the day before. The danger here is more than just humans becoming irrelevant. The danger is what humans are determining the future of direction of AI before AI takes over the steering wheel and determines its own future.

For the past 7 decades, the most pertinent question about our continued existence as a species has been this one, “Who is in charge of our combined nuclear arsenals?” But going forward, a more relevant question might be “who is setting the direction for AI?” Who is it that’s setting the rules, coming up with safeguards and determining what data the models are training on?  Who determines what tasks AI takes on? Here’s just one example. When does AI decide when the nuclear warheads are launched.

As I said, it’s hard to predict where AI will go. But I do know this. The general direction is already being determined. And we should all be asking, “By whom?”

The Tesla Cybertruck’s Branding Blow-Up

The inexact science of branding is nowhere more evident that in the case of the Tesla Cybertruck, which looks like it might usurp the Edsel’s title as the biggest automotive flop in history.

First, a little of the Tesla backstory. No, it wasn’t founded by Elon Musk. It was founded in 2003 by Martin Eberhard and Marc Tarpenning. Musk came in a year later as a money man. Soon, he had forced Eberhard and Tarpenning out of the company. But their DNA remained, notably in the design and engineering of the hugely popular Tesla Model S, Model X and Model 3. These designs drove Tesla to capture over 50% of the electric car market and are straight line extensions of the original technology developed by Eberhard, Tarpenning and their initial team

Musk is often lauded as an eccentric genius in the mold of Steve Jobs, who had his fingers in every aspect of Tesla. While he was certainly influential, it’s not in the way most people think. The Model S, Model X and Model 3 soon became plagued by production issues, failed software updates, product quality red flags and continually failing to meet to meet Musk’s wildly optimistic and often delusional predictions, both in terms of sales and promised updates. Those things all happened on Musk’s watch.  Even with all this, Tesla was the darling of investors and media, driving it to be the most valuable car company in the world.

Then came the Cybertruck.

Introduced in 2019, the Cybertruck did have Musk’s fingerprints all over it. The WTF design, the sheer impracticality of a truck in name only, a sticker price nearly double of what Musk originally promised and a host of quality issues including body panels that have a tendency to fall off have caused sales to not even come close to projections.

In its first year of sales (2024), the Cybertruck sold 40,000 units, about 16% of what Musk predicted annual sales could be. That makes it a bigger fail than the Edsel, which sold 63,000 units against a target of 200,000 sales in its introductory year – 1958. The Edsel did worse in 1959 and was yanked from the market in 1960. The Cybertruck is sinking even faster. In the first quarter of this year, only 6406 Cybertrucks were sold, half the number sold in the same quarter a year ago. There are over 10,000 Cybertrucks on Tesla lots in the U.S., waiting for buyers that have yet to show up.

But it’s not just that the Cybertruck is a flawed product. Musk has destroyed Tesla’s brand in a way that can only be marvelled at. His erratic actions have managed to generate feelings of visceral hate in a huge segment of the market and that hate has found a visible target in the Cybertruck. It has become the symbol of Elon Musk’s increasingly evident meltdown.

I remember my first reaction when I heard that Musk had jumped on the MAGA bandwagon. “How the hell,” I thought, “does that square with the Tesla brand?” That brand, pre-Musk-meltdown and pre-Cybertruck, was a car for the environmentally conscious who had a healthy bank account – excitingly leading edge but not dangerously so. Driving a Tesla made a statement that didn’t seem to be in the MAGA lexicon at all. It was all very confusing.

But I think it’s starting to make a little more sense. That brand was built by vehicles that Musk had limited influence over. Sure, he took full credit for the brand, but just like company he took over, it’s initial form and future direction was determined by others.

The Cybertruck was a different story. That was very much Musk’s baby. And just like his biological ones (14 and counting), it shows all the hallmarks of Musk’s “bull in a China shop” approach to life. He lurches from project to project, completely tone-deaf to the implications of his actions. He is convinced that his genius is infallible. If the Tesla brand is a reflection of Musk, then the Cybertruck gives us a much truer picture. It shows what Tesla would have been if there had never been a Martin Eberhard and Marc Tarpenning and Musk was the original founder.

To say that the Cybertruck is “off brand” for Tesla is like saying that the Titanic had a tiny mishap. But it’s not that Musk made a mistake in his brand stewardship. It’s that he finally had the chance to build a brand that he believed in.

Can Innovation Survive in Trump’s America?

If there was one thing that has sparked America’s success, it has been innovation. That has been the engine that has driven the U.S. forward for at least the last several decades. Yes, the U.S. has natural resources. Yes, at one time the U.S. led the world in manufacturing output. But in their pursuit of adding value to economic output to maximize profit, the U.S. has moved beyond resource extraction and manufacturing to the far-right end of the value chain, where the American economic engine relies heavily on innovation.

Donald Trump can talk all he wants about making America great again by bringing back manufacturing jobs that have migrated elsewhere in the world (a goal that many, including the Economic Policy Institute, feel is delusion, at least using Trump’s approach), but if innovation dies in the process, the U.S. loses. Game over. It’s innovation that now fuels the American Dream.

Given that, MAGA adherents should be careful what they wish for. The Great America they envision is a place where it may be impossible for that kind of innovation to survive.

World class innovation needs an ecosystem, where there is adequate funding for start-ups, a friendly regulatory framework, a robust research environment and an open-door policy for innovative immigrants from other countries – all of which the US has historically had in spades. And – theoretically at least – it’s an ecosystem that Trump is promising high tech and why the tech broligarchy has been quick to court him. But like so many things with Trump, the reality will fall far short of his promises. In fact, he will likely stop innovation in its tracks and send U.S. ingenuity reeling backwards.

Next to the regulatory and economic inputs required for innovation – and perhaps more important than both – the biggest requirement for innovation is an environment that fosters divergent thinking. Study after study has shown that innovation lives best in an environment that fosters collaboration, invites different perspectives and provides a safe space for experimentation. All those things can be found in exactly the opposite of the direction in which the U.S. is currently headed.

Each year, the World Intellectual Property Organization publishes their Global Innovation Index. In 2024, the U.S. was in third spot, behind Switzerland and Sweden. To understand how innovation flourishes, it’s worth looking at what the most innovative countries have in common. Of the top ten (the others are Singapore, the U.K., South Korea, Finland, Netherlands, Germany and Denmark), almost all score the highest marks from the Economist Democracy Index for the strength of their democracy. Singapore is still struggling towards full democracy, and the U.S. is now considered to be a “flawed democracy”, in real danger of becoming an authoritarian regime.

The European contenders also receive very high marks for their social values and enshrining personal rights and freedoms. Those are exactly the things currently being dismantled in America.

There is only one country which is defined as an authoritarian regime that made the top 25 of the Global Innovation Index. China sits in the 11th spot. This brings us to a good question, “Can innovation happen in an authoritarian regime?” The answer, I believe, is a qualified yes. But it’s innovation we may not recognize, and which may turn out to be a lot less attractive than we thought.

I happened to visit China right around the time that Google was trying to move into the huge Chinese Market. Their main competition was Baidu, the home-grown search engine. I was talking to a Google engineer about how they were competing with Baidu. He said it was almost impossible to match the speed at which they could roll out new features. The reason wasn’t that they were more innovative. It was because they innovated through brute force. They could throw hundreds of programmers at an issue and hard code it at the interface level, rather than take the Western approach of embedding core functionality in the base code in a more elegant and sustainable approach. The Chinese could afford to endlessly code and recode.

It’s Brute Force Innovation that you’ll find in authoritarian regimes and dictatorships. It’s what the Soviets used to compete in the space race. It’s what Nazi Germany used when they developed rocket science in a desperate bid to survive World War II. It is innovation dictated by the regime, innovating in prioritized areas by sheer force despite the fact that the typical underpinnings of innovation – creative freedom, divergent thinking, the security needed to experiment and fail – have been eliminated.

If you look at the playbook Trump seems to be following – akin to the one Victor Orbán used in Hungary (ranked 36th on the Global Innovation Index) or Putin’s Russia (ranked 59th) – there appears to be  little hope for the U.S. to retain its world dominance in innovation.