Category Archives: Digital Marketing

Behind Every Search There’s a Story

First published February 23, 2012 in Mediapost’s Search Insider

This week, I was reminded why I got into this business. The timing was good, because to be honest, after being involved in too many discussions revolving around search budgets and cross-channel attribution models, I had lost touch with what I’d found so magical about online marketing in the first place. But Tim and Daniel reminded me. It’s a story worth repeating.

About a week ago, I was sitting in a boardroom trying to find an “apples-to-apples” comparison for a CMO of a huge company to help validate moving money from traditional brand-building channels into search. We had run dozens of models, compiled multiple spreadsheets, and put together at least six different slide decks. In the process we did our level best to suck all the life out of the exercise, reducing it to a colorless discussion based solely on numbers. We were trying to find that elusive formula that would allow us to compare the impact of a dollar spent on search vs. a dollar spent on TV.

This was a variation of a conversation that I’m sure we’ve all had multiple times in the last year. I guess it was a sign that digital has come of age. We were trying to subject it to the same BS that had propped up TV and print for decades.

However, in the process, we were missing something critical. And I found that something critical on the streets of San Francisco.

When I started in search, I used to get a kick from the fact that thanks to what we did, a small Mustang after-market parts retailer could outrank Ford for keywords like “Mustang parts” and increase its online business by 10 times in under a year, eventually outstripping its traditional brick- and-mortar business, which had been around for decades. Or that a small boat manufacturer in Kelowna, B.C. could rank No. 1 for “boats” and suddenly start getting inquiries from around the world. Online made things possible that had never been possible before. And that was pretty cool.

Those stories are still happening and being talked about. It’s just that they’re not happening at the boardroom tables where I’ve been hanging out lately. But then I ran into Tim and Daniel, and their story restored my faith in online marketing.

Tim and Daniel are just a couple of guys who happen to love their city (San Francisco) and wanted to find a way to afford their sky-rocketing rent so they could continue to live there.  A little over a year ago, they started a bike tour company that takes tourists through the streets of San Francisco, pointing out the little nooks and crannies that give the city its color. They’re both pretty personable guys and the tours benefit from their obvious passion for their subject. They can bring Haight-Ashbury or the Castro to life in a way that no tour book or bus tour ever could. They reduce San Francisco to a street-level, intimate love affair, exactly the way the city should be seen.

Now, as cool as that is, the story wouldn’t be worth telling unless people actually discovered the tour, allowing Tim and Daniel to keep their jobs as guides.

And that’s where the Internet comes in. Right now, their tour is the No. 1 ranked tour on Trip Advisor, with 145 reviews, all of them “excellent.” And so, because of this feedback, they top a very long list of things to do in San Francisco. They probably won’t get rich, but they will keep the business rolling and keep paying the rent. And that’s not a bad outcome for being able to do the thing you love.

I asked Daniel what the impact of the positive ranking on Trip Advisor had been, and he was positive but realistic, “It’s been pretty awesome, but as I keep telling my mom, it’s an algorithm and it might be gone tomorrow. But we’re enjoying it while we can.”

Excellent advice. Enjoy it while you can. And when the big business of search seems to suck all the fun out of life, remember that guys like Tim and Daniel are still stoked about what it can do for them.

That’s why I got into the biz.

Marketing Physics 101

First published February 9, 2012 in Mediapost’s Search Insider

Physics has never been my strong suit, but I think I have a good basic grasp of the concepts of velocity and direction. In my experience, the two concepts have special significance in the world of direct marketing. All too often I see marketers that are too focused on one or the other. These imbalances lead to the following scenarios:

All Direction, No Velocity

As a Canadian, I am painfully familiar with this particular tendency. Up here, we call it a Royal Commission. For those of you unfamiliar with the vagaries of the Canadian political landscape, here’s how a Royal Commission works. It doesn’t. That’s the whole point. Royal Commissions are formed when you have an issue that you wished would simply go away, but the public won’t let it. So a Royal Commission deliberates over it for several months, issues a zillion-page report that nobody ever reads, and by the time the report comes out, everybody has forgotten why they were so riled up in the first place.

This is similar to a company’s strategists noodling for months, or even years, about their digital strategy without really doing anything about it. They have brainstorming sessions, run models, define objectives and finally, decide on a direction. Wonderful! But in the process, they’ve lost any velocity they may have had in the first place. Everyone has become so exhausted talking about digital marketing that they have no energy left to actually do anything about it. Worse, they think that because it lives on a shelf somewhere, the digital strategy actually exists.

All Velocity, No Direction

With some companies, the opposite is true. They try going in a hundred directions at once, constantly chasing the latest bright shiny object. Execution isn’t the problem. Stuff gets done. It’s just that no one seems to know which direction the ship is heading. Another problem is that even though velocity exists, progress is impossible to measure because no one has thought to decide what the right yardstick is. You can only measure how close you are to “there” when you know where “there” is.

Failing any unifying metrics grounded in the real world, people tend to make up their own metrics to justify the furious pace of execution. Some of my favorites: Twitter Retweets, Number One SEO rankings and Facebook Likes.  As in “our latest campaign generated 70,000 Facebook likes” — a metric heard in more and more boardrooms across America. Huh? So? How does this relate in any way to the real world where people dig out their wallets and actually buy stuff? Exactly what dollar value do you put on a Like? Believe me, people are trying to answer that question, but I’ve yet to see an answer that doesn’t contain the faint whiff of smoke being blown up my butt. I suspect those pondering the question are themselves victims of the “all velocity, no direction” syndrome.

Balanced Physics

The goal is to fall somewhere in between the two extremes. You need to know the general direction you’re heading and what the destination may look like. You will almost certainly have to make course adjustments on the way, but you should always know which way North is.

And if you have velocity, it’s much easier to make those course adjustments. Try turning a ship that’s standing still.

What is an Agency’s Role?

First published January 26, 2012 in Mediapost’s Search Insider

Last week, I was talking to someone about what  role a digital agency would play in the future. We went down all the usual paths and came up with the usual answers, but afterward the question still lingered. What is our role in the future? I’m reasonably certain it won’t be the same as our role in the past.

In cases like this, I sometimes find it helpful to do a little linguistic excavation. I’m constantly surprised by how concise and accurate the labels we choose are, if we spend the time to explore their roots and unearth their true meaning.

What then is an “agency”? Well, agency is simply the capacity of an agent to act. It’s the sphere of “action” that surrounds an agent. So, we have to dig a little deeper. What is an “agent”? An agent is one who acts for another, by authority from them.  It seems simple, but is there a fundamental concept here that has gotten fuzzy with time?

In the early history of advertising, agencies were very much aligned with this definition, I think. They carried out the acts of advertising — including creation of the messages, production and placement — at their clients’ behest. The best agencies also contributed by helping clients uncover and communicate core brand values that resonated with an audience.

It was here that the role of the agency started to shift. It had to do with the concept of brand ownership. Somewhere along the line, agents began to believe they owned the brand. And clients seemed willing to abdicate this power to their agents. One agency talks about “360 degree brand stewardship.” It sounds nice, warm and fuzzy, but let’s cut the fat away and get to the bone of this phrase. What does that mean, really?

To “steward” a brand means to care for it and improve it over time. Again, that sounds like a good thing. But I fear that it shifts a fundamental duty into the wrong hands. I believe that “caring” implies ownership, and it can leave a brand in a precarious purgatory, caught between the company itself and its agency. In the days when brands were built largely around media exposure, perhaps it made sense for the fate of that brand to live with the agency. But that’s no longer the case. As Jakob Nielsen has said on at least one occasion, now “brands are built by experience, not exposure.” And the brand experience has to live with the company whose DNA defines the brand. By necessity, they have to be the stewards of their own brand, because so much of what makes that brand lives beyond the reach of an agency.

So if the original definition of an agency is passé, and the role of stewardship has to live with the company, what then do we become? I can hear echoes of “strategic partners” out there as I write. But to me that term has had its essential meaning squeezed out by overuse. I don’t think it captures the essence of what a digital agency should be. “Strategic partners” as a label is like a blanket, covering everything but defining nothing.

When I look at our best relationships with clients, there are three other terms I would use: “catalyst,”  “accelerator” and “guide.”

As a catalyst, we’re there to trigger change, to set off a chain reaction that has the potential to transform an organization.  We can do this by giving clients a vision of what’s possible. As an accelerator, we’re there to remove the roadblocks preventing the transformation. Finally, as a guide, we’re there to provide direction, helping clients a navigate the troubled waters of digital transformation and giving them some idea of what to expect.

Embrace Your Inner “Screw-Up”

First published January 19, 2012 in Mediapost’s Search Insider

Humans hate making mistakes. But the fact is, making mistakes is an essential part of being human. Somehow, we have to learn to live on the edge of this paradox. For digital marketers, our entire industry is balanced on this particular precarious precipice.

There are a few rules of thumb to “screwing up” successfully:

You Can Only Learn from Others if You’re in the Middle of the Pack

If you’re a digital marketer, you’ve decided to travel at the head of the herd. Congratulations. But here’s the thing. You’ve volunteered to make mistakes. The mark is on your forehead and it’s your job to poke the bushes and test the waters, flushing out danger for others to take heed of.

Humans have a long history of leveraging the principle of safety in numbers. But in that dynamic, some have to live on the edge and let others learn from their mistakes. The advantage of that position is that you’re also the first to take advantage of the unchartered wins that come from conquering new challenges. The risks are greater, but so are the rewards. If this balance doesn’t appeal to you, move back to center and follow the leaders. Just realize it’s a lot more crowded there, and there might not be enough perks to go around.

The More Unstable the Environment, The More Important it is to Make Mistakes

You don’t need the safety of a herd in safe and stable environments. We call it civilization. It’s on the frontier, where things get precarious, that you need safety in numbers. Ironically, it’s on the frontier where the herd thins out and you often have to go it alone. That really leaves you no choice. There is no beaten path to follow. You’re going to have to be the one that forges it. And that means you’re going to make mistakes. Get used to it. Embrace it. Take solace in the fact that while taking action may cause mistakes, not taking action pretty much guarantees you’ll end up as somebody’s lunch.

If You Can’t Get Comfortable, Get Courageous

I often tell aspiring digital marketers that this is not a comfortable career. If you want security, become an accountant. But if you want a challenge, you’ve found the right niche. Digital marketing takes courage. It means trusting your gut and betting on long shots. It means embracing opportunities without a mound of evidence to rely on. To succeed in this business, first you need passion — but courage runs a close second.

Mistakes = Learning

I don’t know where making mistakes got such a bad rap from, but I shudder to think where humanity would be without them (read Ralph Heath’s excellent book, “Celebrating Failure”). You can’t learn without making mistakes. You can’t gain ground without occasionally falling down. I’ve spent the majority of my life as an entrepreneur, which pretty much means the regular making of mistakes, so perhaps I’ve become used to it.  But I honestly don’t know why screwing up has been stigmatized to the extent it has.

Learn to “Do It Wrong Quickly”

My friend Mike Moran wrote a book a few years ago calling “Do it Wrong Quickly,” which uncovers one of the essential elements of successfully screwing up: to build learning into the process. Understand that failure is an essential part of the equation (especially in digital marketing), and go in using it as an opportunity to learn quickly, adjust and iterate your way to success. By going in anticipating failure, you won’t be surprised when it happens and can quickly move beyond failure to learning and adapting.

Realize You Don’t Have to Be Perfect — You Just Have to be Better than the Other Guy

Finally, this is a game of percentages. If you bump up the level of activity, you’ll make more mistakes, but you’ll also win more battles. You’ll “fail forward” — and soon you’ll be looking at the competition in your rearview mirror.

Look at the Big Picture in 2012

First published December 29, 2011 in Mediapost’s Search Insider

Another year’s pretty much in the can. And because I’m working on idle this week, trying to catch my breath with my family before plunging headlong into 2012, search marketing falls somewhere behind the recent releases on Netflix and trying out the new Wii game on the list of things preoccupying my mind. So, don’t expect any salient and timely search news from me!

When I look back on what has preoccupied me over the last 12 months, I will say that much of it has been spent “stepping back” and trying to look at the bigger picture. As online interactions have taken a bigger and bigger chunk of our lives (you’ll notice that both of the recreational options I mentioned have online components woven into them), trying to understand how our actions play out against a broader online backdrop has been the thing I think about most often.

We digital marketers tend to take that “bigger picture” and break it into pieces, trying to make sense of it by focusing on one small piece. Digital marketing lends itself to this minute focal depth because of the richness of each piece. Even the smallest chunk of an online interaction has a lot to explore, with a corresponding mound of data to analyze. We could spend hours drilling into how people use Linked In, or Twitter, or Google+ or Facebook.  We could dig into the depths of the Panda update or how local results show up on Bing and never come up for air.

But think back to what, at one time, was another holiday season pastime. Some of us remember when we used to get a jigsaw puzzle for Christmas. You’d dump out all 5,000 of those little photographic morsels and then begin to piece it together into a coherent image of something (usually a landscape involving a barn or a covered bridge). Success came not only from examining each piece, but also in using the image on the boxtop to help understand how each piece fit into the bigger picture. Without understanding what that bigger picture was supposed to look like, you could examine each piece until the cows came home (again, often a topic for jigsaw art).

So, much of my 2011 was spent trying to understand what the picture on the top of the puzzle box was supposed to look like. What would ultimately tie all the pieces together?  In physics terms, I guess you could say I’m been looking for the Unified Field Theory of online marketing. And you know what I realized? You won’t find it by focusing on technology, no matter how cool it is. Foursquare marketing or search retargeting or hyperlocal optimization are all just pieces of a much bigger puzzle. The real picture emerges when you look at how people navigate the events of their lives and the decisions they must make. It’s there where the big picture emerges.

A few weeks ago I was speaking to a group of marketers about the emerging role of mobile.  This was no group of digital slouches. They knew their mobile stuff. They had tested various campaign approaches and honed their tactics. But the results were uneven. Some were hits, but more were misses. They knew a lot about the pieces, but didn’t have the boxtop picture to guide them.

My message (for those who know me) was not a surprising one: understand how to leverage mobile by first understanding how people use mobile to do they things they intend to do.  Don’t jump on a QR code campaign simply because you read somewhere that QR codes are a red-hot marketing tool. First see if QR codes fit into the big picture in any possible way. If you do that, you might find that QR codes are a puzzle piece that actually belongs in another box.

After delivering my sermon about the importance of understanding their respective big pictures, I asked my favorite question: “How many of you have done any substantial qualitative research with your customers in the past year?” Not one hand went up. This was a group of puzzle assemblers working without any boxtop picture to guide them.

If you want to sum up my past year and fit it into one final paragraph for 2011, it’s this: Understand your customers! Spend a good part of 2012 digging deep into their decision process and their online paths. Make it personal. Stalk if necessary. Ask questions that start with “why.” Observe. Make notes. Broaden your online reading list to include blogs like Science Daily, Futurity, Neuroscience Marketing and Homo Consumericus. At some point, the bigger picture will begin to emerge. And I bet it will be much more interesting than a landscape with a barn and some cows in it.

Is There a Search Marketer in the House?

First published December 8, 2011 in Mediapost’s Search Insider

Once, just once, I’d love to hear an announcement come over the PA system in some public venue: “Ladies and gentlemen, your attention please. Is there a search marketer in the house?”

Let me explain. Recently, a friend of mine was at a soccer tournament with our school team. One of the other parents had a sudden heart attack. My friend, who is in the medical field, swung into action and applied CPR. When the first response unit took over, one of the attendants told my friend that he had saved the parent’s life.

Longtime readers will know I’ve had a long-running identity crisis about my choice of career. This recent incident led me to wonder if there will ever come a time when my knowledge and experience will be considered critical. Will I ever save a life?

It doesn’t even have to be that dramatic. If you’re a mechanic and see a stranded motorist on the side of the road, chances are you can help. All I could do is pull over, gaze in confusion under the hood, kick a tire and explain why you should really optimize your landing pages to get the most from your search marketing campaign.

My father-in-law, who has been a carpenter all his life, can walk into most any home and fix the drawer that sticks, or put up a set of shelves. That same father-in-law can’t help a sharp and panicked intake of breathe every time he sees me pick up a power tool. My wife has acquired the same habit. Neither can explain exactly what I do, and they’ve both known me for a quarter century.

Even an accountant will constantly be asked for tax advice, a lawyer about a particularly sticky divorce, or a veterinarian about Pookie’s unfortunate habit of passing noxious gas when company’s over (and yes, Pookie is a dog). Each of these careers contributes something to the greater good of mankind. But a search marketer? We’re just not in hot demand to make the world a better place.

In my fantasy, after the aforementioned announcement, I raise my hand and confidently stride forward: “I’m a trained search marketer. What’s the problem?”

“Thank God you’re here,” says the announcer, pointing to an obviously troubled man staring at a laptop. “This gentlemen here is extremely upset.”

Beaming with quiet confidence, I gently sit down beside the man and say, “Sir, I’ve been a search marketer for almost 20 years. How can I help you?”

Through his tears, I can see a small twinkle in his eye that indicates that he’s dared to hope again. “I don’t understand it. I just can’t get this damned site to rank.”

“Well, here’s your problem — your title tags aren’t optimized. And your incoming links have no anchor text. I can fix that.”

As I take the laptop from his trembling hands, a single person in the circle of onlookers who have been drawn by the scene starts clapping. Slowing, it spreads around the circle. In minutes, uproarious cheering and clapping surround me. Outwardly, I respond with gracious humility, but inside, I’m high-fiving myself and saying, “Yah..who’s da man? I’m da man!”

Maybe there should be a medal for search marketing bravery.

The Challenge of Social

First published December 1, 2011 in Mediapost’s Search Insider

Every quarter, I fill out an online survey about digital marketing trends. One question always shows up: “Are you looking at social as a replacement for search in your online marketing strategy?” I always answer no, and to myself, comment that it’s a stupid question asked by someone who obviously doesn’t know much about online marketing. But now I wonder  — is it really such a stupid question? Aren’t many experienced marketers asking themselves exactly the same question?

The Social Graph (or Network, or whatever you want to call it) should be the single biggest opportunity in marketing history. But marketers are stubbing their toes by the millions in trying to step over the threshold into the golden glow of the online social party. It seems it’s incredibly difficult to figure out.

Search, on the other hand, was easily pigeonholed as a direct-marketing channel. Search was so easy to “get” for marketers that Google turned it into a self-serve model and became the fastest growing company in history as a result.

For marketers, I suspect, the very ease of search has caused it to be considered a limited opportunity. Social, on the other hand, seems virtually limitless. It expands into hundreds and thousands of fascinating, if somewhat cloudy, opportunities to connect with customers. As I said, in theory, social seems like a marketer’s dream come true. But in practice, it’s an unwieldy animal to wrestle to the ground.

Here’s just one example of the challenges inherent in mapping the online social landscape.  Pitney Bowes felt there was tremendous potential in social to foster deeper engagements with its customers, building long-term loyalty. But rather than jump headlong into it, Pitney Bowes decided to test its assumptions through a survey of those customers first. The result? Social may not be all it’s cracked up to be:

“These findings will give decision-makers pause for thought,” the report (from the survey) stated. “Businesses can be forgiven for getting swept away by the hype of surrounding social media and wanting to invest in such activity as soon as possible. … But results show that those businesses tempted to lead with such techniques will quickly find themselves out of step with customer thinking.”

So why is social so awkward to leverage effectively? I suspect it’s because the exact same things that make social so promising also make it incredibly unwieldy to manage.  It’s part of our lives, which means we’re engaged, but what we’re engaged with is rarely what an advertiser wants to talk to us about.

Marketers get caught up in the concept of participation rates and usage. Facebook has one of the highest reaches of any online property, second only to Google. Alexa estimates that almost half of the total Internet user population (about 49%) uses Google regularly. Facebook is just behind at 43%. But if we look at time spent on site, Facebook comes it an about 25 minutes a day, compared to 13 minutes a day for Google. If we were using engagement as an indicator of marketing potential, this would have us salivating like a St. Bernard over a fresh bowl of kibble.

But the reason I don’t trust engagement as a metric is that it doesn’t consider intent. And intent is the key difference between social and search. The reason search excels in marketing is that it’s all about intent, and what’s even better, it’s about identified intent, neatly labeled by the search query. In the history of marketing, it’s never been easier than this to intercept a motivated buyer.

I don’t mean to minimize the value of a well-managed search campaign, but compared to other channels, it’s pretty difficult to completely flop on a search campaign. The same is not true for social. To illustrate, let’s step back and look at this from another point of view, one that removes some of the hyperbole that surrounds online social.

Let’s say you’ve just decided to sell your 2007 Honda Civic. As you’re backing out of your driveway, your neighbor flags you down and asks you how you like your Honda, and if you know where she could buy a good used one? From your perspective, this aligning of the planets seems too good to be true, but it’s similar to what happens on a search engine millions of time every day. It’s the power of alignment with purchase intent.

But let’s take a different tack. Let’s imagine that as you drive down the street, you see that one of your neighbors is having a party. In front of their house, there are at least 12 cars parked, including four Hondas. “A-hah, “ you say, “a perfect gathering of potential Honda buyers, with at least 33% of them showing a preference for Hondas” (note: if this is what your internal dialogue actually sounds like, you should consider an extended leave from work). You ring the doorbell and begin to work the crowd. The only problem is, no one came to the party to buy a Honda. Not to mention the obvious question on everyone’s mind: “Who the hell invited you?”

If your goal is to unload your Honda, I know what scenario I’d be betting on. It almost seems ludicrous that we’re even considering Scenario B as a substitute for Scenario A. Yet, every three months, I get that survey asking me if I’m thinking about it.

I know — it doesn’t make any sense to me, either.

Walmart vs. Amazon: A Regime Shift in Motion

First published November 17, 2011 in Mediapost’s Search Insider

Financial analysts are not predicting a rosy short-term future for Amazon’s stock price.  Recent blunders with the rollout of new Kindle devices and earnings under increasing pressure have these analysts predicting a shorting of Amazon stock. In all likelihood, Amazon’s share price will tumble.

So why is Walmart so worried about Amazon?

A recent article indicates that Walmart is preparing for what could be the “retail battle of the decade.” When you match the two up on numbers alone, it seems like the “mismatch of the decade.”  Walmart is 10 times the size of Amazon in overall sales. It’s the largest retailer on the planet, by a huge margin. Amazon doesn’t even crack the top 10. In fact, Amazon sits at #44 on the list of global retailers.

But let’s flip the numbers. When it comes to online sales, Amazon outsells Walmart 10 to 1, and its topline growth is 44% while Walmart’s per location sales growth is trapped in the low single digits (if there is growth at all). So, if online retail is a game changer, and if this signals a “regime shift” in the retail landscape, then Walmart is right to worry. In fact, they should be petrified.

The article steps through Walmart’s strategy for ramping up e-commerce, but one line in particular raises a huge red flag: “Walmart would love Amazon’s top-line growth, but isn’t about to settle for its profits.”

Walmart has built its empire on incredibly precise supply chain management, obsessing over the details of physical fulfillment. Company strategists hope to use this to their advantage in their war on Amazon. Fair enough. But when it comes to the tough calls required to fully embrace digital (and they will come), Walmart will be hampered by the need to protect an existing model that relies on bricks and mortar. This mixed set of priorities will virtually ensure Walmart will move slower than Amazon, who has no option but to excel when it comes to e-com. This is a classic “regime shift” scenario, and history is not on Walmart’s side. The fact that its e-com head office is pretty far removed, philosophically and physically, from the head office in Bentonville, Ark. speaks to the challenges that Walmart has ahead of it.

It’s Amazon’s move into CPG that has raised the ire of the giant from Bentonville. Soap, diapers and other consumer staples are the essentials that drive Walmart’s revenues, and these are areas that Amazon is aggressively expanding into. But it’s not just consumer packaged goods that Amazon has set its sights on; it’s also going after the industrial and B2B market. In fact, Amazon is attacking the established marketplace on all fronts, with the full intention of smashing the current model and replacing it with one that takes full advantage of online efficiencies. In short, if we remember the stages of a Kondratieff wave, Amazon is building the foundations of the reconstruction phase.

Amazon’s plans go far beyond the Kindle sales and struggles with profit margins currently beleaguering its stock price. This is a massive long-term play, and one that I would be hesitant to bet against. The act of shopping is about to change forever. In my previous column on this topic, many commented that for some things, the ability to touch and feel a product is essential. That may be true, but there are many, many more things where we could care less about the need for physical evaluation. Also, this divide between online and physical shopping tends to be a shifting one. Things we couldn’t imagine buying sight unseen just a few years ago are now purchased online without a second thought.

I’m not sure what lies ahead for retail in general, or the battle between Walmart and Amazon specifically. But I do know the retail landscape of the future will bear little resemblance to the one we know today. And I also know that the battlefield will be littered with causalities. It’s not beyond reason (or historical evidence) to suspect that the world’s biggest retailer may well be one of them.

Why Google has to “Get” Platforms: It’s the Future of Search

First published October 27, 2011 in Mediapost’s Search Insider

Last week, I shared portions of Steve Yegge’s post (from inside Google) about how Google doesn’t “get” platforms. But why, you may ask, does Google have to get better at platforms? Certainly, open platforms open greater levels of innovation, one reason why Facebook gained the critical mass needed to dominate social networking. That is certainly applicable given Google’s forays into the social space. But there’s another reason, one very germane to Google’s core business. Becoming a platform provider is likely the only way Google can compete in a new search ecosystem.

Consider this recent shot across the bow from Microsoft, which is opening the Bing backend as a service to be integrated into third-party apps. The company is making its search engine a platform. And, according to Yegge, Microsoft does “get” platforms:

“(Microsoft) understands platforms as a purely accidental outgrowth of having started life in the business of providing platforms. So they have thirty-plus years of learning in this space. And if you go to msdn.com, and spend some time browsing, and you’ve never seen it before, prepare to be amazed. Because it’s staggeringly huge. They have thousands, and thousands, and THOUSANDS of API calls. They have a HUGE platform.”

Now, by all competitive measures, Google is beating the Bejezus out of Bing, but pay close attention to this move, because it likely marks the future of Web search. Increasingly, we’re going to see a wider and wider gap between the back end algorithms and index of a search engine and the actual search interface. The days of a search engine being a destination are numbered. In this scenario, search becomes a utility, providing a portion of the functional underpinnings of thousands of specialized apps.  The search provider of the future will have to excel at three things:

A)   Indexing increasingly complex forms of content;

B)   Interpreting a user’s interests and intent — and then

C)   Delivering the best results given the optimum intersection between A and B.

The third part is critical, as the actual delivery point of the results moves outside the scope of the search provider and into the domain of independent developers, who will rely on robust platforms to accommodate this.

Google is the current leader in A and B, although recent work by Microsoft shows it closing the gap. But C may prove to be Google’s Achilles heel. Google will be reluctant to share its user’s eyeballs with third-party developers, because those eyeballs represent the vast majority of the company’s current revenue stream. There will be all kinds of internal pressure at Google not to head down this road. By contrast, Microsoft has nothing to lose by doing this. As Steve Yegge rightly points out, this strategy is actually a better fit for Microsoft’s corporate DNA, as the development of platforms is familiar territory for them. Being the end destination for users has never been Microsoft’s strong suit.  And Microsoft still has reams of cash coming in from other revenue channels, so it will be more likely to share the search revenue pie with other parties than will Google.

Some time ago, Steve Ballmer signaled the possibility of this shift of revenue streams coming from search.  Google was able to capitalize on a perfect storm of revenue opportunity, by tapping into the single biggest concentration of consumer demand in history. But the window of opportunity that has fueled Google’s growth to this point is rapidly closing. The new models will require search providers to slice up the revenue pie with an increasing number of partners.

It will also require those partners to wholeheartedly embrace platforms. Let’s see if Google can “get” that.

Amazon = Evolution, Google = Intelligent Design?

First published October 20, 2011 in Mediapost’s Search Insider

Ironically, the hottest thing on Google+is a rant from a Google Insider about how Google+ is hopelessly limited because Google doesn’t get the importance of platforms.  Steve Yegge goes on at some length (over 4,000 words) contrasting his first six years at Amazon and his last six years at Google.

The media jumped on it, because Yegge spent some of his rant bashing Google+, which is rapidly collecting more holes than Bonnie and Clyde’s ill fated 1934 Ford sedan. But Yegge was simply using Google+ as an example of how badly Google has dropped the ball when it comes to building platforms to support external development. There are many, many things that Google does far better than Amazon (according to Yegge) but building out platforms is not one of them:

“Bezos realized long before the vast majority of Amazonians that Amazon needs to be a platform.”

In contrast, Google tends to keep their code base under internal lock and key to protect their IP. In fact, even their own Chinese developers didn’t have access to Google’s core code, for fear that IP would somehow leak out and end up on a Chinese competitor’s site. A valid concern, to be sure, but that approach runs directly counter to the open environment required to become a platform developer, something that Yegge says almost everyone does better than Google:

“That one last thing that Google doesn’t do well is Platforms. We don’t understand platforms. We don’t ‘get’ platforms.

What, Google+ is a prime example of our complete failure to understand platforms from the very highest levels of executive leadership (hi Larry, Sergey, Eric, Vic, howdy howdy) down to the very lowest leaf workers (hey yo). We all don’t get it.”

What, then, is the advantage of being a platform developer?  For one thing, it leverages the power of Darwinian development. As long as development stays locked behind the corporate firewall, you simply can’t match the innovation that will come from an open ecosystem. This is especially true in a corporate environment where management tends towards micromanagement, true of both Amazon and Google. Bezos and Page both tend to run roughshod over internal developers, dismissing ideas out of hand and turning development into a political minefield. But Steve Bezos realized the limitations of this command and control approach.

“The other big realization he [Bezos] had was that he can’t always build the right thing.”

Every successful species evolves through a long and arduous process of trial and error. Evolution requires sheer volume, leaving the environment to be the eventual judge of success. Bezos has harnessed the same approach for Amazon. Google is instead taking an “intelligent design” approach. Personally, I much prefer Amazon’s odds for success. But they’re not the only one who has embraced Darwinian development.

In exploring the lack of momentum of Google Plus One, you have to compare against Facebook. One thing that Facebook did which helped build incredible momentum was to turn their site into a platform for social networking of all kinds.

“Facebook gets it. That’s what really worries me. That’s what got me off my lazy butt to write this thing.”

In looking at social, Google got that it was important, but what they didn’t get was that communities, whether online or in the real world, develop organically on top of required superstructures. They evolve, they aren’t created.  Facebook understands this, but Google hasn’t quite caught on yet.

“Google+ is a knee-jerk reaction, a study in short-term thinking, predicated on the incorrect notion that Facebook is successful because they built a great product. But that’s not why they are successful. Facebook is successful because they built an entire constellation of products by allowing other people to do the work.”

As luck would have it, Yegge also touched on the topic of last week’s column, the incredible intuition of Steve Jobs. I mentioned that I hadn’t seen the same “magic” in Larry Page. Yegge seems to agree:

“The problem is that we are trying to predict what people want and deliver it for them. You can’t do that. Not really. Not reliably. There have been precious few people in the world, over the entire history of computing, who have been able to do it reliably. Steve Jobs was one of them. We don’t have a Steve Jobs here. I’m sorry, but we don’t.”

Yegge’s post is required reading, because it offers a startlingly frank and transparent view inside Google, and I applaud Google’s courage in allowing it to remain open to the public. What is really fascinating though, is what this means for the future of search and the role of Google in it. Unfortunately, I’m at my maximum word count, so I’ll explore that next week.