Category Archives: Digital Marketing

Should We Believe Google’s Click Fraud Numbers?

Today, Google finally came out with some solid numbers around the click fraud issue. The number of invalid clicks across the Google network? Less than 10%. The total amount of undetected click fraud that advertisers have reported and asked for a refund for? .02% I was briefed by Google little while ago about their plans around click fraud and so I had some time to digest the numbers and think about them. Google also passed my name along as an expert third-party that the media could contact to get more commentary about the numbers and Google’s product roadmap for dealing with click fraud. If you’re interested in what the numbers actually mean, I would suggest going to Danny Sullivan’s post this morning on Searchengineland. Danny does his usual thorough job of making sense of the announcement.

One question that I got from a couple reporters yesterday was, did I believe Google’s numbers? Although I should have anticipated this question, I was somewhat surprised. So last night I thought about. What would Google gain by fudging the numbers at this point? I think there’s a few points you have to consider when looking for the answer to this question. Based on the fact that I’ve already been asked it three times, by three different reporters. I believe it is a valid question and one that a number of people will probably be asking.

Maybe I’m naïve, after all, I am an Alberta farm boy at heart, but in all my interactions with Google I have to say, Google just doesn’t work this way. Google is a very cautious company when it comes to divulging information. I would think one of the biggest frustrations that Shuman Ghosemajumder has had in the past is having to keep his mouth shut while various inflated numbers around click fraud were thrown about. My belief is that it’s been Shuman lobbying inside of Google that finally convinced them to open the box a little bit on the scope of click fraud in the Google advertising network. Maybe the “don’t be evil” motto of Google sounds trite to some, but people at Google believe it and take it to heart.

What would Google have to gain by releasing false numbers about click fraud? The only possible motivation would be to; one, artificially inflate their stock price, and two; encourage more advertising revenue by falsely reducing the sensitivity around the click fraud issue.

Let’s deal with the first point. I talk to financial analysts all the time and frankly, it’s been a long time since any of them asked me about click fraud. As far as a sensitive issue, there are a lot of other factors that financial analysts are looking at much closer when it comes to making recommendations on buying or selling Google stock. I believe click fraud has been already factored into the valuation and analysts have moved on.

When it comes to advertisers, there still is sensitivity around the click fraud issue, but it has lessened in the last year. The recent SEMPO study shows that as a concern for advertisers it actually trended down from 2005 to 2006. Certainly it’s something we should be aware of and keeping our eye on, but I really don’t believe it’s preventing advertising revenue from flowing into Google at this particular point. So any short-term gain that might come to Google from falsely announcing numbers could potentially be a bit of a spike in their stock price. But within a day or a week other factors would smooth that out and it would basically become a nonissue. I really don’t believe it would have any impact on advertisers at all. Short-term gain would be minimal at best.

But, the long-term cost to Google could be tremendous if they were caught releasing false numbers around click fraud. It would just be a really, really dumb thing to do, and you can say what you want about Google, but one thing they’re not is dumb. So do I believe the numbers? Yes, I have no reason not to.

The other question that the reporters asked me was what I believed the number to be for undetected click fraud. One of the reporters was actually from BusinessWeek, and if you’ve read my blog you know that I’ve taken some exception to BusinessWeek’s reporting around click fraud and search in the past. I did happen to mention that to the reporter I was talking to. The way I answered that question for BusinessWeek was that obviously we don’t know what we don’t know. Potentially there could be a lot of click fraud that slips through all of Google’s filters and slips past the advertiser as well. But for it to do so it would have to be click fraud at a extremely sophisticated level. Let me explain why it’s highly unlikely that there’s a large percentage of undetected click fraud in Google’s advertising network.

First of all Google has a number of signals they can watch to determine if click fraud is happening. Shuman mentioned that there’s well over a hundred data points they look at, including overall ROI rates, impression rates, click stream activity, click patterns, IP detection and that’s just a few of them. Also, Google is very, very good at building systems. Their engineers are the best in the world. So if they throw their collective brain power at a problem, you can be pretty confident that they’re going to come up with a robust solution to that problem. Click fraud was one of the biggest threats that Google faced in the last few years. They knew they had to restore advertiser confidence around the click fraud issue. So they threw their full engineering horsepower at the problem to build the filters that they currently have in place. This is the first line of defense against click fraud. The vast majority of the invalid click activity that’s happening in the Google network is caught by the filters. That’s the first screen that this activity would have to pass through.

The second screen is Google’s post-click review screen. This is where they look at questionable activity that made it through the proactive filters, do further investigation, and if they feel it’s warranted, they will go back and make a refund to the advertiser without the advertiser having to take any action at all. Again this is a very robust program that Google has put in place. This represents the second screen that fraudulent activity would have to get through.

The third screen in the advertiser themselves. Think about this. We have a lot of very sophisticated advertisers who have put robust analytics in place and have a deep, inherent understanding of what their website traffic patterns should look like. These advertisers have also been exposed to the so-called reporting of click fraud, like the BusinessWeek expose. They have a heightened sensitivity to click fraud so they would be very vigilant, particularly on any traffic that was coming from Google. So undetected fraudulent activity would have to get past this screen as well.

Finally, as an overall metric, Google aggregates the conversion data from advertisers who have Google analytics in place and uses that as a baseline of what typical behavior across the network should look like. In aggregate form the data allows them to check out anomalies in the dataset that may indicate fraudulent activity. This level of detection is over and above all the other fraud detection I previously mentioned. It acts as a monitor on the overall activity that could potentially indicate undetected click fraud in the network. So the likelihood of there being a significant amount of undetected click fraud is very, very low. Once again, so low it’s probably not worth spending much time worrying about.

The gist of my column today in SearchInsider is advising advertisers to look at a much bigger picture than just focusing on click fraud. I realized Google had to release these numbers because everyone was asking for them. If we can accept those numbers than perhaps we can get on with looking at our overall campaign performance and really spending some time on the things that would have a much greater impact on our overall return on investment. For example, the drum that I will continue to beat as long as anyone is willing to listen is for advertisers to focus on their own conversion rates. Time after time, I see landing pages that aren’t optimized and aren’t aligned to the intent of the potential visitor. I see sloppiness in advertising messages with a lack of relevancy aligned to the queries that are used. If advertisers paid more attention to these things they’d realize far greater benefit than they would by fretting over click fraud.

Don’t Think Click Fraud, Think Negative ROI

First published March 1, 2007 in Mediapost’s Search Insider

The search engines have a dilemma on their hands when it comes to click fraud. We’re all clamoring for more information on the issue. We all want solid numbers to help us define the scope of click fraud. The very fact that we refer to it as click fraud is confusing. A lot of things get thrown in the click fraud “basket” that are in no way fraudulent. Thanks to sensationalist reporting by publications like BusinessWeek, click fraud is portrayed as the biggest scourge to threaten the Nirvana that is search marketing. A tremendous number of resources have been dedicated towards click fraud by the engines themselves, in response to the advertisers’ demand that the problem be stamped out.

But when you do an honest appraisal of the issue, the search engines would rather we get over our preoccupation with click fraud and start thinking of it as part of a much bigger whole, the return we get on our search marketing investment. This in no way negates the importance of click fraud as an issue. I don’t think there’s anyone more aware of click fraud than Shuman Ghosemajumder (Google), John Slade (Yahoo), and Brendan Kitts (Microsoft). They’re the first to say that click fraud does exist and that they’re each, in their own ways, actively policing it.

It’s more a question of proportional response, an appropriate amount of attention given the actual scope of the issue. And today, for the first time, Google is giving us concrete numbers on what that scope might be, at least for its network. Google is announcing a multiphase approach and product road map to handle the click fraud question. Accompanying the announcement are hard numbers, for the first time, about how much of Google’s traffic could actually be considered fraudulent. I’ll talk more about the numbers in a moment, but first, let’s explore the dilemma that presents itself to the engines.

Caught Between an Over-Hyped Threat and an Ignored Danger

The engines know that, as a factor that negatively impacts return on search marketing investment, click fraud represents a tiny percentage. There are far bigger drains on the performance of campaign that advertisers should be paying significantly more attention to, but thanks to doom and gloom “exposés,” there’s a disproportionate amount of attention focused on click fraud. So, although the engines would rather advertisers focus more on the big picture and consider all the factors, including fraudulent traffic, that are negatively impacting their return on that investment, they’re playing the game they have to and are keeping the focus on click fraud. Google’s announcement today may allay some of the “sky is falling” concerns that are being whipped up by journalists, but in the long run it may do the advertisers a disservice by diverting attention from more pressing campaign optimization issues.

I’ve talked about some of this before, but here are some of the issues I have with the current click fraud situation:

Just Because We Call It Fraud Doesn’t Make It Fraud

Click fraud seems to be the label that has stuck with this particular issue. There have been calls to try to put numbers around the occurrence of click fraud in search marketing. In reality, it’s not that cut-and-dried. First of all, fraud implies that someone loses money through the deliberate actions of someone else. For a click to be fraudulent, at least in the way that BusinessWeek tried to define it, advertisers have to lose money. They have to be paying for traffic that has no value.

Less than 10% are Invalid Clicks

The fact is, there are a number of factors that may result in traffic that the advertiser would probably prefer not to pay for. Fraudulent traffic is just one of them. Google puts all this traffic into a basket they call invalid clicks. This includes double clicks on ads, questionable activity from a single IP address, automated clicks, and yes, clicks from the nefarious click fraud perpetrator. In today’s release, Google said invalid clicks accounted for less than 10% of its total network traffic. The company didn’t want to get more specific than this, because the actual percentage can rise and fall with a fair amount of volatility, based on spikes in clickbot attacks and other factors. Google works to filter this traffic out proactively, so it’s as if the clicks never happened. The advertiser is never charged for this traffic. In most cases, the publisher of the site from which the traffic is generated is never paid for the traffic. No money changes hands, so no fraud has been committed. If anyone is out of pocket, it’s Google, not the advertiser.

The Bottom Line for Advertisers? .02%!

The traffic that the advertiser should be concerned about is the fraudulent traffic that slips through the cracks. This is truly click fraud. It’s not caught by the Google filters and it’s up to the advertiser to come back and report it and request a refund. In this case, money has changed hands and fraud has been perpetrated. Today, Google announced that this represents .02% of its total traffic. Some time ago I did a column after a talk with Shuman at Google, and after making some assumptions and extrapolating the number, I came out with a “worst case” estimate of .2%. It appears that my worst case was much higher than reality, by a factor of 10X.

I don’t know about you, but frankly, if something is only making a .02% impact on my advertising campaign, I’ve probably got better places to be spending my time. One place you might want to look? The conversion rates of your landing page. If you can bump your conversion rates by .5%, you’ve just made 25 times more impact on your overall campaign performance than by continuing to fret about click fraud on Google.

Google’s announcement today was more than just releasing numbers on the occurrence of click fraud. It is also announcing the creation of a Click Fraud Resource Center, a streamlined reporting process, the ability for advertisers to filter out questionable IPs, more details in its nvalid click reporting and some other initiatives. I believe all these things are good and are needed by advertisers, if only to put to bed the perceptions of click fraud as a major issue. But do me a favor, will you? Take some of the time you may be spending worrying about click fraud, and start looking at all the other places where your return on investment may be slipping through the cracks. My guess is there a lot bigger cracks you should be looking at than the click fraud one.

Marissa Mayer Interview on Personalization

marissa-mayer-7882_cnet100_620x433Below is the full transcript of the interview with Marissa Mayer on personalization of search results. For commentary, see the Just Behave column on Searchengineland.

Gord: It’s a little more than two weeks ago since Google made the announcement that personalization would become more of a default standard for more users on Google.  Why did you move towards making that call?

Marissa: We’ve had a very impressive suite of personalized products for awhile now: personalized homepage, search history, the personalized webpage and we haven’t had them integrated, which I think has made it somewhat confusing for users. A lot of people didn’t know if they had signed up for search history or personalized search; whether or not it was on.  What we really wanted to do was move to a signed in version of Google and a signed out version of Google.  So if you’re signed in you have access to the personalized home page, the personalized search results and search history.  You know all three of those are working for you when you’re signed in.  And if you’re signed out, meaning that you don’t see an email in the upper right hand corner that personalized search isn’t turned on.  If anything, it’s a cleaning up of the user model, to make it clearer to users what services they’re using them and when they’re using them.

Gord: But some of the criticism actually runs counter to that.  One of the criticisms is that it used to be clearer, as far as the user went, when you were signed in and when you are signed out.  There were more indicators on the Google results page whether you were getting personalized results or not.  Some of those have seemed to disappear, so personalized results have become more of a default now, rather than an option that’s available to the user.

Marissa: If you think about it as default-on when you’re signed in, I think that it’s still as clear on the search results page.  We removed the “turn off the personalized search results” link, but you still see very clearly up in the upper right-hand corner whether or not you’re signed in, your e-mail address appears, and that’s your clue Google has personalized you and that’s why that e-mail address is there.  I do think, based on our user studies and our own usage at Google, that we’ve made the model clearer.  We were actually ended up at the stage with our personalized product earlier this year where, at one point, Eric (Schmidt) asked “am I using personalized search?”  And the team’s answer as to whether or not he was currently using it was so complicated that even he couldn’t follow it.  You’d have to go to “my account”, see whether or not he was signed up for personalized search, make sure that your toggle hadn’t been turned off or on, and there was no way to just glance at the search results page and easily tell whether or not it was invoked.  So now it’s very easy, if you see your username and e-mail address up in the upper left-hand corner, you’re getting personalized results and if you don’t, you’re not.  So effectively there are two parallel universes of Google, per se.  One if you’re signed out where you see the classic homepage and the classic search results and one where you’re signed in, where you get the personalized home page and…you’ll be able to toggle back and forth, of course…and then the personalized search results page and the search history becomes coupled with all that because that’s how we personalize your search.

Gord: So, to sum up, it’s fair to say that really the search experience hasn’t changed that dramatically, it’s just cleaning up the user experience about whether you’re signed in or signed out and that’s been the primary change.

Marissa: That’s right.  Before you could be signed in and be using one of the three products or two of the three products but not all and, of course, because people like to experiment with a new product, they forget whether they signed up for personalized search.  Had they signed up for search history?  This just makes it cleaner.  If you’re signed in you’re using and/or have access to all three, if you’re signed out, you’re on the anonymous version of Google that doesn’t have personalization.

Gord: We can say that it cleans up the user experience because it makes it easier to you know when you’re signed in or signed out, but having done the eye tracking studies, we know that where the e-mail address shows is in a location that’s not prominently scanned as part of the page.  Do the changes mean that more people are going to be looking at personalized search results, just because we’ve made that more of a default opt in and we’ve moved the signals that you’re signed in a little bit out of the scanned area of the page.  Once people fixate on their task they are looking further down the page.  This should mean at a lot more people are looking at personalized search results than previously.

Marissa: Actually, I don’t think it will change the volume of personalized search all that much, not based on what we’ve seen on our logs and usage.  It makes it cleaner to understand whether or not you’re using it and I do think that over time, what it does is it pushes the envelope of search more such that you expect personalized results by default.  And we think that the search engines in the future will become better for a lot of different reasons, but one of the reasons will be that we understand the user better.  And so when we think about how we can advance towards that search engine of the future that we’re building, part of that will be personalization.  I do think that when we look five years out, 10 years out, users will have an expectation of better results.  One of the reasons that they have that expectation is that search engines will have become more personalized.  I think that in the future, working with the search engine that understands something about you will become the expectation.  But you’re right in that we believe that for users that are signed in, who find value in the personalized search results, over time as those users know they are signed in and that there search history is being kept track of, that their search results are being personalized, and they don’t need to look at every single search task to see whether or not they are signed in because that’s what their expectation is and they’re expecting personalized results.  So I do think we won’t see a drastic increase of volume right now of the use of personalized search but that it will hopefully change the user’s disposition over time to become more comfortable that personalization is a benefit for them and it’s something they come to expect.

Gord: There are a number of aspects of that question that I’d like to get into, and leave behind the question of whether you’re signed in or signed out of personalized search, but I have one question before we move on.  We’ve been talking a lot about existing users. The other change was where people were creating a new Google account and they got personalized search and search history by default.  The opt-out box is tucked into an area where most users would go right past it.  The placement of that opt-out box seems to indicate that Google would much rather have people opting into personalized search.

Marissa: I think that falls in with the philosophy that I just outlined. We believe that the search engines of the future will be personalized and that it will offer users better results.  And the way for us to get that benefit to our users is to try and have as many users signed up for personalized search as possible.  And so certainly we’re offering it to all of our users, and we’re going to be reasonably aggressive about getting them to try it out. Of course, we try to make sure they’re well-educated about how to turn it off if that’s what they prefer to do.

Gord: When this announcement came out I saw it as a pretty significant announcement for Google because it lays the foundation for the future.  I would think from Google’s perspective the challenge would be knowing what personalized search could be 5 to 10 years down the road,  what it would mean for the user experience and how do you start adding that incrementally to the user experience in the meantime?  From Google’s side, you have invested in algorithmic work to categorize content online. I would think the challenge would be just as significant to introduce the technology required to disambiguate intent and get to know more about users. You’re not going to hit that out of the park on the first pitch. That’s going to be a continuing trial and error process.  How do you maintain a fairly consistent user experience as you start to introduce personalization without negatively impacting that user experience?

Marissa: I will say that there are a lot of challenges there and a lot of this is something that’s going to be a pragmatic evolution for us.  You have to know that this is not a new development for us. We’ve been working on personalized search now for almost 4 years. It goes back to the Kaltix acquisition. So we’ve been working on it for awhile and our standards are really high.  We only want to offer personalized search if it offers a huge amount of end user benefit.  So we’re very comfortable and confident in the relevance seen from those technologies in order to offer them at all, let alone have them veered more towards the results, as we’re doing today.  We acquired a very talented team in March of 2003 from Kaltix.  It was a group of three students from Stanford doing their Ph.D, headed up by a guy named Sep Kamvar, who is the fellow who cosigned the post with me to the blog. Sep and his team did a lot of PageRank style work at Stanford.  Interestingly enough, one of the papers they produced was on how to compute PageRank faster.  They wrote this paper about how to compute page rank faster and it caused a huge media roil around the web because everyone said there are these students at Stanford who created an even faster version of Google.  Because the press obviously doesn’t understand search engines and thinks that we actually do the PageRank calculation on the fly on each query, as opposed to pre-computing it.  Their advance was actually significant not because it helps you prepare an index faster, which is what the press thought was significant.  Interestingly enough, the reason they were interested in building a faster version of PageRank was because what they wanted to do was be able to build a PageRank for each user.  So, based on seed data on which pages were important to you, and what pages you seemed to visit often, re-computing PageRank values based on that. PageRank as an algorithm is very sensitive to the seed pages.  And so, what they were doing, was that they had figured out a way to sort by host and as a result of sorting by host, be able to compute PageRank in a much more computationally efficient way to make it feasible to compute a PageRank per user, or as a vector of values that are different from the base PageRank.  The reason we were really interested in them was: one, because they really grasped and cogged all of Google’s technology really easily; and, two, because we really felt they were on the cutting edge of how personalization would be done on the web, and they were capable of looking at things like a searcher’s history and their past clicks, their past searches, the websites that matter to them, and ultimately building a vector of PageRank that can be used to enhance the search results.

We acquired them in 2003 and we’ve worked for some time since to outfit our production system to be capable of doing that computation and holding a vector for each user in parallel to the base computation.  We’ve been very responsible in the way that we’ve personalized Search Labs and we also did what we called Site Flavored Search on Labs where you can put a search box on your page and that is geared towards a page of interests that you’ve selected. So if you have a site about baseball you can say you want to base it on these three of your favorite baseball sites and have a search box that has a PageRank that’s veered in that direction for baseball queries.

So, the Kaltix team has been really successful at integrating all these Google technologies and taking this piece of theoretical research and ultimately bringing it to life on the Web.  And as it’s growing stronger and stronger and our confidence around the Kaltix technology grew, we’ve been putting it forward more and more.  We started off on Labs through a sign-up process, then we transitioned it over to Google.com and now we are in effect leaning towards a model where for people who use Google.com and have a Google account, they get personalized search basically by default.  If you look at the historical reviews of the Kaltix work it’s gotten pretty rave reviews.  The users that have noticed it and have been using it for a long time, like Danny (Sullivan), they’ll say that they think it’s one of the biggest advances to relevance that they’ve seen in the past three years.

Gord: So when you the Kaltix technology working over and above the base algorithm, obviously that’s going to be as good as the signals you’re picking up on the individual.  And right now the signals are past sites they visited, perhaps what they put on their personalized homepage and sites that they’ve bookmarked. But obviously the data that you can include to help create that on-the-fly, individual index improves as you get more signals to watch.  In our previous interview you said one thing that was really interesting to you was looking at the context of the task you are engaged in, for example, if you’re composing an e-mail in Gmail. So is contextual relevance another factor to look at.  Are those things that could potentially be rolled into this in the future?

Marissa: I think so.  I think that overall, we really feel that personalized search is something that holds a lot of promise, and we’re not exactly sure of the signals that will yield the best results.  We know that search history, your clicks and your searches together provide a really rich set of signals but it’s possible that some of the other data that Google gathers could also be useful. It’s a matter of understanding how.  There’s an interesting trade off around personalized search for the user which is, as you point out, the more signals that you have and the more data you have about the user, the better it gets.  It’s a hard sell sometimes, we’re asking them to sign up for a service where we begin to collect data in the form of search history yet they don’t see the benefits of that, at least in its fullest form, for some time.  It’s one of those things that we think about and struggle with. And that’s one reason why we’re trying to enter a model where search history and personalized search are, in fact, more expected.  And I should also note that as we look at reading some of the signals across different services we will obviously abide by the posted privacy policies.  So there are certain services where we’ve made it very clear we won’t cross correlate data. For example on Gmail, we’ve made it very clear that we won’t cross correlate that data with searches without being very, very explicit with the end user.  You don’t have to worry about things like that.

Gord: One of the points of concern seems to be how smart will that algorithm get and do we lose control?  For example, when we’re exploring new territory online and we’re trying to find answers we’ve refine our results based on our search experience.  So, at the beginning, we use very generic terms that cast a very wide net and then we narrow our search queries as we go. Somebody said to me, “Well, if we become better searchers, does that decrease the need for personalization?”  Do we lose some control in that?  Do we lose the ability to say “No, I want to see everything, and I will decide how I narrow or filter that query.  I don’t want Google filtering that query on the front end”?

Marissa: I think it really depends on how forcefully we’re putting forth personalization.  And right now we might be very forceful in getting people to sign up to it, or at least more forceful than we were. The actual implementation of personalized search is that as many as two pages of content, that are personalized to you, could be lifted onto the first page and I believe they never displace the first result, in our current substantiation, because that’s a level of relevance that we feel comfortable with.  So right now, at least eight of the results on your first page will be generic, vanilla Google results for that query and only up to two of them will be results from the personalized algorithm.  We’re introducing it in a fairly limited form for exactly the reason that you point out.  And I think if we tend to veer towards a model where there are more results that are personalized, we would have ways of making it clearer: “Do you want to explore this topic as a novice or with the personalization in place?” So the user will be able to toggle in a different filter form.  I think the other thing to remember is, even when personalization happens and lifts those two results onto the page, for most users it happens one out of every five times.  When you think about it, 20% of the queries are much better by doing that, but for 80% of the queries, people are, in fact, exploring topics that are unknown to them and we can tell from their search history that they haven’t searched for anything in this sphere before. There’s no other search like it. They’ve never clicked on any results that are related to this topic, and, as a result, we actually don’t change their query set at all because we know that they need the basic Google results.  The search history is valuable not only because it can help personalize the results but they’re also valuable because we can tell when not to.

Gord: There’s two parts to that: one is the intelligence of the algorithm to know when to push personalization and when not to push personalization, and two, as you said, right now this is only impacting one out of five searches where you may have a couple of new results being introduced into the top 10 as a result of personalization.  But that’s got to be a moving target.  As you become more confident in the technology and that it’s adding to the user experience, personalization will creep higher and higher up the fold and increasingly take over more of the search results page, right?

Marissa: Possibly.  I think that’s one of many things that could possibly happen, and I think that’s a pretty aggressive stance.  I look at our evolution and our foray into personalization, where we’re sitting here three or four years in, with some base technology that several years old already and it still has been very slight in a way that we have it interact with the user experience.  Mostly because we think that base Google is pretty good.  As it becomes more aggressive, certainly I would be pushing for an understanding of the ability of the user to know that these results are, in fact, coming from my personalization and not background and if I want to filter them out and get back to basics, that that would be possible.  One thing that we’ve struggled with is if we should actually mark the results are entering the page as a result of personalization but because team is currently and frequently doing experiments, we didn’t want to settle on a particular model or marker at this exact moment.

Gord: The challenge there is as you roll more personal results into the results page and get feedback from some users that they would want more control over what on the page is personalized and the degree of personalization and introduce more filters or more sophisticated toggles, it complicates the user experience. And as we know, that user experience needs to be very simple. Is it a delicate balance of how much control you give the user versus how much do you impact the 95% of the searches that are just a few seconds in duration and have to be really simple to do?

Marissa: There are two thoughts there.  One, even if we introduce them to filtering on the results page, it wouldn’t be any more complicated than what you had two weeks ago, so we already have that filter.  Two, we put the user first, and people have varying opinions about whether their search results page is too complicated, but the same people who designed that user experience will be the people who will be tackling this for Google, so I think you can expect results of a similar style and direction.

Gord: In the last few weeks, Google has introduced some new functionality, related searches and refine search suggestions, that are appearing at the bottom of the page for a number of searches.  To me that would seem to be a prime area that could be impacted by personalization opportunities that are coming.  As you make suggestions about other queries that you could be using, using that personalization data to refine those. Is that something you’re considering? And how long before personalization starts impacting the ads that are being presented to you on a search results page?

Marissa: Refinement is an interesting but a neophyte technology from our perspective.  We are finally now just beginning to develop some refining technologies that we believe in enough to use on the search results page.  A lot of people have been doing it for a lot longer. When you look at the overall utility, probably 1 to 5% of people will click those query refinements on any given search, where most users, probably more than two thirds of users, end up using one of our results. So in terms of utility and value that is delivered to the end user, the search results themselves and personalizing those are an order of magnitude more impactful then personalizing a query refinement.  So part of it is a question of, it’s such a new technology that we really haven’t looked at how we can make personalization make it work more effectively.  But the other thing is on a “bang for the buck” basis, personalizing those search results get us a lot more.

And as to ads, I think there are some easy ways to personalize ads that we’ve known for some time, but we’ve chosen at this point to focus on personalizing the search results because we wanted to make sure to delivered the end-user value on that, because that’s our focus, before we look at personalizing ads

Gord: So, no immediate plans for the personalization of ads?

Marissa: That’s right

Gord: Thank you so much for your time Marissa.

The Inevitability of Personalized Search

First published February 15, 2007 in Mediapost’s Search Insider

Google’s announcement a little more than a week ago that it would be showing personalized search results to more people through a change in the sign-in/sign-out default signaled perhaps the most significant change in search marketing in the past few years. Fellow Search Insider David Berkowitz dealt with some of the SEO implications in his column on Tuesday. Today I’d like to deal more with the user side of the story. Although Google’s announcement heralds a relatively minor change in terms of user experience, at least for the present time, it represents a step down a path from which there is no return. This path marks a dramatically different direction for search that will have far-reaching implications, both for advertisers and users.

Google Gets Personal

First, a brief recap of Google’s announcement and what it means to users right now. Here are the details: Now, everyone signing up for a Google account gets Search History enabled by default. The opt-out box is positioned so that most people would likely not even notice it during the sign-in process.

Whether or not you have Search History enabled, you get personalized search turned on by default. This means that Google will subtly change your results, based on various “signals,” like what you have on your personalized Google Homepage and what sites you’ve bookmarked as Google favorites. Of course, if you have Search History enabled, this is the main “signal” for personalized search

 

Finally, and probably least significantly, everyone gets his or her own Google Home Page when s/he signs up for a Google account.

The End of One Page for All

Let’s leave aside the privacy issues of Search History right now. That’s a topic that deserves a column by itself. It’s the end of the universal search results page that I want to touch on today.

There has been significant dissent voiced about Google’s move to personalized search, and it’s coming primarily from one source: search engine optimizers. In opposing personalized search, they’re saying it degrades the user experience. I responded by saying that it was the wrench that personalized search throws into their SEO plans that was raising their ire. But let me set aside my jaundiced view of the search world for a moment and chronicle its concerns (excluding privacy issues), as near as I can understand them:

 

  • Taking control away from the user by making personalized search a default and making it more difficult to toggle on and off 
  • Fear of anomalous browsing patterns (i.e. going to visit a number of humor sites on a whim or the invite of a friend) unnaturally biasing search results 
  • The “machine learning” algorithms that power personalized search not being smart enough to really provide more relevant resultsI’ve come out as saying that personalized search is inevitable; the day when all of us see the same page of search results is rapidly coming to a close. To me, this just seems obvious. But still, there are those that protest. Here’s one example from Michael Gray, a well know SEO Blogger: “I’ve never met a business owner who’s said, ‘Man, you know what, I wish the search engines could create anarchy by making sure no two people got the exact same results for the exact same search — that would be the best thing since sliced bread.'”

    In fact, Michael’s beef seems to be a consistently recurring theme among the dissenters, that a move to personalization suddenly seems to open the door for chaos on the results page. I believe the opposite is true.

    Every Search is an Island

    I am an individual, with unique interests, experiences, values and goals. My intent when I search for hybrid vehicles, or New York hotels, or Smart Phones, or any of the hundreds of other things I search for monthly, will be significantly different than all the other people that launch those same searches. I want a search engine smart enough to know that. I’ve always said that humans are complex, far too complex for a simple search box to get it right. That’s why personalized search is inevitable. If we want search to move to the next level, to get smarter, more intuitive, more relevant, we need to leave standardized search results behind.

    Does this mean Google will get it right out of the box? No. It will take baby steps towards what personalization eventually needs to become (although I believe those steps will be in rapid succession, because Google can hear the competition hard on its heels). Yes, there will be many who find that in the early stages, personalization may be more frustrating than it is useful. But for search to mature, these are growing pains we’ll have to endure.

    I’ve been labeled as an early proponent of personalization. I’m not sure this is necessarily the case. To me, it’s not a question of liking or disliking the recent moves by Google. To me, fighting search personalization is as pointless as refusing to accept today’s weather.

The Personalized Results are Coming, The Personalized Results are Coming!

Okay, sometimes the temptation to say I told you so is overwhelming. Danny has a nice long post in Searchengineland about Google’s changes to Personalized Search, making it more of a default and less of an option for millions of users. Danny details it more than I intend to, so please check it out.

As Danny says, he’s been talking about personalization for years, but up to now, it never materialized. After interviews with head user experience people at all three engines, I felt the time was right for personalized search to roll out (check The Future of SEO in a Personalized Search Interface and The SEO Debate Continues). And it appears my sense of timing was bang on. Much as I’d like to claim to be prescient, it’s really just common sense. You could see all the engines inching towards it. Now, Google has just upped the ante a little.

There are two major implications to this: what it means for search marketers, especially organic optimizers, and what it means to users. I’ll deal with each in turn.

What it Means for Search Marketers

The “Is SEO Dead? Rocket Science? A Scam?” Debate has been winding it’s weary way through several blogs in the past few weeks. My take was that SEO is, and will continue to be, vitally important as long as organic search results continue to be important to the user. Based on what I’m seeing, that continues to be very much the case. But, organic optimization now has a completely new rule set, which will irritate the hell out of many organic optimizers. The disgruntlement is already beginning to show. Michael Gray, better known as Graywolf, was the first to post a comment on Danny’s story:

Just because I ordered my coke with extra ice last time doesn’t mean I want it that way this time. I hate personalized SERP’s, I despise it even more that they don’t tell me they are personalized, and I loathe not being able to turn it off. I also have extreme antipathy for not being able to keep my search history on and not be part of personalized search.

Let me have it the way I want, not the way you think I do. I don’t want SERP’s that work like Microsoft programs that try to anticipate what I want to do, because more often than not it’s wrong. Bring back truth, purity, and clarity to the SERP’s.

Graywolf is complaining as a user, but I can’t help thinking that the more significant pain he’s feeling is as an organic optimizer who’s world suddenly just became a lot more complicated. “Truth, purity and clarity to the SERP’s”? In whose eyes? Come on. Personalization is being implemented because it enhances the user experience. It doesn’t take a “Rocket Scientist” (sorry, couldn’t resist) to see that one set of search results is not the best way to serve millions of users.

As Danny said, there’s now an explosion of new fronts for the organic optimizer to consider. Right now, Google is only injecting a few personalized results into the search page, but expect that threshold to gradually creep up as Google gains confidence in the targeting of the results to the person. The days of the universal results page are numbered. Which means that the days of the reverse engineering approach to SEO are equally numbered. I’m sure people will try to figure out ways to spam personalized search, but as I’ve said before, reverse engineering requires a fixed constant to test against. Up to now, the results page and the other sites that appeared on it represented that fixed constant. That’s gone now.

So where does that leave SEO? Well, it’s certainly not dead, but it has dramatically changed. You can’t optimize against a results set, but you can optimize against a user. Let’s use an analogy that’s often been used before to describe SEO. Think of it as Public Relations on the Web. If you launch a PR campaign, you don’t target a particular position on the front page of the NY Times, you target a type of audience. You plan your release distribution and messaging accordingly. And you give reporters what you think will catch their attention. Most of all, you have to wrap your campaign around something that’s genuinely interesting. Then, you hope for the best.

Now, SEO becomes the same thing. You don’t target the first page of results on Google for a particular term. You target an end user. You wrap your site messaging in terms that resonate with that user. You write in their language, you give them a reason to seek you out, and you sure as hell don’t disappoint them when they click through to your site. You do all this, and you remove all the technical barriers between your content and the indexes you need to be in. Then, you hope for the best.

The problem with SEO has always been that it’s been treated like some magical voodoo that can be applied after the fact, like some “secret sauce”. And yes, that was what the infamous Dave Pasternack has been trying to say. He just went several steps too far. The fact is, with universal search results, you could actually do this. Thousands of affiliates have made millions of dollars doing it. Link spamming, cloaking, doorway sites..the fact is, up to now, this bag of tricks has worked. It’s gotten harder, but it’s worked. Site owners looked to SEO to help them hi jack traffic that wasn’t rightfully theirs. They hadn’t done the heavy lifting to create a site that justified a place in the top rankings, and they tried to take an easy short cut.

But now, organic optimization means that you have to do the heavy lifting. It has to be integrated into the entire online presence. What Marshall Simmonds has done with About.com and the NY Times is a perfect example of the new definition of SEO. Get to the front lines, to the people who are churning out the content, and teach them about what search engines are looking for. Make sure SEO best practices are baked right into the overall process flow. Work with the IT team to create a platform that entices the spider to crawl deeper. Work with the marketing team to crawl inside the head of your target audience and figure out the who, the when and the why. Don’t worry so much about the where, because you can’t really control that any more. It’s a tough paradigm to break. We’ve been struggling with our clients for the past year or so. They’re still fixated on “being number one” for a particular term. We’ve been trying to ease them into the new reality, but it’s not easy.

I guarantee this will create an identity crisis for the SEO industry. As recently as a few months ago I was moderating a panel that was talking about analytics, and in the Q&A someone asked the panel, who had a few very well known SEM’s on it, about what they used for ranking reporting. The names of various options were thrown out and people started scribbling them down. I saw this and thought I had to comment.

“You know, the whole concept of ranking is quickly becoming irrelevant”

Nobody lifted their head, they were still busy writing down tool names. Maybe they hadn’t heard.

“As search engines move to personalized results, there will be no such thing as ranking. It will all be relative to the user.”

That should get their attention. Nope, nothing.

One of the search marketers said, “Yes, but knowing how they rank is still important to people.”

Huh? Am I speaking a different language here? I shook my head and gave up.

So, does this mean SEO is dead? Absolutely not. It becomes more vital than ever. Here are a few things that remain to be true. Preliminary results from the new SEMPO survey say SEO continues to be the number one tactic in search marketing. Yes, people want to bring it in house, but they recognize it’s importance.

Why do they think it’s important? Because it kicks ass in ROI. Here are the results from another recent study by Ad:Tech and MarketingSherpa, asking advertisers about the return they get from various marketing channels.

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The biggest jump from year to year? SEO. Now, let’s look at where marketers plan to spend more money in the next year.

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SEO, from flatlined last year to looking to spend 25% more this year. So SEO definitely isn’t dead. But it is moving to a new home. Here’s some early results from the SEMPO State of the Market Study (by the way, final results should be available next week. Look for them):

SEMPO2a

It’s true that most companies would far rather bring SEO in house, if they could. And when we consider the new definition of SEO, it probably makes sense for SEO to be integrated into the internal work flow. But the problem is that there’s not a lot of SEO expertise out there. If SEO was so easy, why don’t more companies do it, or do it well? Contrary to Pasternack’s argument, it’s not a “set and forget” type of tactic. It requires a champion, buy in and diligence.

I think the future is bright for SEO as a skill set, but we’re talking a modified set of skills. I talked about this in a recent SearchInsider column and a follow up online debate with Andrew Goodman. My view of the future for the really good SEO’s out there fall into three categories:

Get a (Really Good) Job

As companies bring this in house, there will be a firestorm of demand for skilled SEO Directors, but ideally as employees, not consultants.

Broaden Your View

Become an expert in how consumers navigate online and help your customers with the big picture, including the new reality of SEO.

Adapt and Survive

Find a new online niche where your search honed skills give you an advantage.

User’s View

Okay, this is already a much longer post than I intended, so I should probably talk about personalized search from the user’s perspective now.

Personalized search is a big win for the user. Don’t judge by the first few tentative steps Google is taking. Personalization is a much bigger deal than that. Google is easing us in so the experience isn’t too jarring. By the end of 2007, all 3 of the major engine’s results pages will look significantly different than they do today. Personalization will be like a breached dam. Right now we’re seeing the first few trickles, but there will be a wave of much deeper personalization options over the next several months. Search will become your personalized assistant, tailored to your tastes. As you search more, your results will draw more and more away from the universal default and closer and closer to your unique intent. Immediately after your query, you’ll be dropped into a much richer search experience. Disambiguation will become much more accurate, and you’ll find that you will pretty much always find just what you’re looking for right at the top of your page, without having to dig deeper. Here’s how I see it playing out at each of the big three:

Google

Google has a religious devotion to relevance, and as they gain confidence with personalized search and their ability to disambiguate, this will manifest itself with a laser focus on relevance above the fold. They will continue to maintain a good balance of organic results, but these results will not just be the current web search results. They could be local, image, news or a mix of each. And ads. Yes, you won’t escape ads, but Google will be the most judicious in what they show. Expect more stringent quality scoring, down to the landing page level and a high degree of relevancy in the ads that do show. Google will be the most concerned of the three in disambiguating intent.

Yahoo

Yahoo will put their own spin on personalization by wrapping in Social Search. They will continue to leverage their community, as they currently do in Yahoo! Answers so when you’re logged into Yahoo, you’ll be plugged into their community and that will impact the search results you see. Relevancy will be determined more by what the community finds interesting than what you find interesting, although it will be a mix between the two. Yahoo will target two types of searches, serendipitous search, where you’re looking to discover new sites, and what I call “frustrated” search, where your own efforts to unearth the data online have come up empty and you want the help of the community. When it comes to monetization, Yahoo will be the most aggressive, pushing more ads above the fold into Golden Triangle real estate. These ads will trail Google’s in terms of relevance

Microsoft

Microsoft will use their targeting capabilities and probably tie in some behavioral targeting to personalize their search results. Also expect personalization in the Microsoft product to be integrated at a deeper, more ubiquitous level, into apps and OS. This probably won’t happen in 07, but it will be a long term goal. When it comes to ad presentation, Microsoft will fall somewhere between Google and Yahoo in both the number and relevance of the ads being presented. The heaviest investment will be in building out the platform to manage and model the ad program, rather than in policing the quality of the ads themselves.

It promises to be a very interesting year in the Search Marketing biz!

New Click Fraud Numbers: But Can You Trust Them?

There’s new click fraud numbers out from Click Forensics indicating that click fraud is on the rise.  In fact, according to the study, click fraud on high-value keywords could be as high as 20%.  The overall industry average click fraud rate for the fourth quarter was 14.2%.  According to the report, the average click fraud rate on PPC ads on search engine networks was 19.2% for the fourth quarter of 2007.

In the report I saw it didn’t indicate which search engine networks this number was coming from.  I would have to assume that this includes both first-tier and second-tier search engine networks.  Some further data around this would be helpful, as my suspicion is that a majority of the click fraud being reported by Click Forensics is likely to coming from second-tier networks that don’t have the same stringent click fraud filtering mechanisms in place as Google, Yahoo and soon to be newcomer to the space, Microsoft.

Andy Beal casts doubt on these numbers in his blog MarketingPilgrim.com, making the salient point that you have to remember they’re coming from a company that has a vested interest in the growth of click fraud.  Also Click Forensics sample includes only companies that are concerned enough about click fraud to actually use Click Forensics to monitor fraudulent activity on their sites.  One has to assume that these companies would be especially vulnerable to click fraud and are not an accurate representation of the total universe of advertisers.  Like Andy Beal said, it’s a bit like going into a hospital and asking a number of people if they feel sick.

Perhaps it’s coincidence, but about the same time that this report was coming out, Danny Sullivan had a conversation with Shuman Ghosemajumder at Google about their concerns on some of the click fraud reporting that’s coming from companies like Click Forensics.  Apparently one of the main points of contention is around the use of the back button on a browser.  I had previously talked with Shuman about some of the reported numbers around the click fraud issue in their concern about inflation of those numbers.

Regardless, at this point it looks like we’re still going to be grasping at straws when we try to put scope around the click fraud issue.

The Social Fabric of Search

First published February 1, 2007 in Mediapost’s Search Insider

You know the phenomena of Synchronicity, where once you become aware of something it seems like everyone is talking about the same thing? You can’t turn a corner without seeing some reference to something that just a week ago didn’t even register on your social consciousness. For me that was social search and the time was last week. While I was certainly aware of social search before that, for some reason, last week was the week where the knocking got so loud I had to pay more attention.

In looking at the referrer logs for my blog I noticed that Stumbleupon seemed to have emerged as a major traffic source. Also last week, I was on a panel with Danny Sullivan and he mentioned that we have to start watching social engines like Digg and Stumbleupon as emerging trends in the search space. Finally I did an interview with Larry Cornett, one of the key usability people at Yahoo, and when I asked him what the differentiating factor was for Yahoo in the future, he pointed to the emergence of social search and gave me Yahoo! Answers as the current example of that in practice.

There seems to be a lot of buzz around social search but exactly how is social search shaping our search experience and why we should be looking at it in the future? When Danny Sullivan mentioned that social search is something to keep your eye on, I made the point that different types of search engines lead themselves to different types of search activity.

Serendipitous Search

What I noticed Stumbleupon show up in my referrer report, I did some investigation into what Stumbleupon is about. Stumbleupon is the embodiment of serendipitous search. Its whole purpose is to help you find new sites that you might think are interesting. And here’s where the aspect of social search, or community, comes in. Stumbleupon depends on a network of like-minded people to earmark sites that would be of interest based on your profile. It’s based on the concept that great minds think alike. Apparently, someone in the online universe had pegged my blog as one that might be of interest in some particular niche and suddenly dozens of other people were stumbling upon it, guided by their online friends.

Stumbleupon is probably the best example of serendipitous search but Digg is another one, albeit with a slightly different flavor. While Stumbleupon helps you find sites, Digg connects you directly to new content about specific topics. Like Stumbleupon, Digg uses a rating system to allow community members to vote on whether a site or story is noteworthy. Both Stumbleupon and Digg have emerged as significant drivers of traffic in recent months so as marketers, we have to keep these sites on our radar.

From the user’s perspective, the aspect of social search becomes interesting in these two examples because they help guide us to explore undiscovered territory online. We’re going where we haven’t been before and it helps us when people who share our interests can guide the way. In each case, social search lends credibility to new sites with which we have no previous experience.

The Wisdom of Crowds

James Surowiecki wrote a book called the Wisdom of Crowds. The basic premise of the book is that crowds, given the right conditions, can be amazingly intelligent. He cites a number of examples where a large group of people, acting independently with limited amounts of information, collectively came to decisions that were more valid than those of all but the very smartest individuals within the group. The whole became greater than the sum of its parts.

This is the basis of a new flavor of social search where the community collectively builds the index of the search engine. Consider Yahoo! Answers. You pose the question and Yahoo’s community kicks into gear to provide the answers. These answers are aggregated and provide searchable content that make up Yahoo! Answers. Based on my conversation with Larry Cornett and recent comments by Yahoo CEO Terry Semel, it appears that Yahoo Answers provides a clue into their strategy for going head to head with Microsoft and Google. This concept of community building a better search experience is key to Yahoo and a main strategic platform for the future.

Another example of this variation of social search can be found in Search Wikia, the new search initiative that “is going to change everything” according to Wikipedia founder Jimmy Wales. In Search Wikia, it’s a case where the broad concept seems to be in place but the specifics on how it’s going to be executed still seem a little thin.

The biggest challenge with this variation of social search is that it depends on the engagement of individual members of the community. Unless you have volunteers that are willing to spend their time enhancing the search experience, the scalability of the project breaks down. Anything that depends on people to take time to tag results, to contribute or to answer questions is dependent on the person’s motivation to participate. While that’s present in a very small percentage of our population, it’s not a commonly found trait in most of us. It’s generally been proven that hardware is rapidly scalable, people are not.

However you define social search, the fact remains that the combination of search and the very notion of an online community are inherently aligned. Communities are all about connections, and nothing can connect faster than online search. It will take us a while to smooth out the wrinkles, but search is fundamentally social and communities are fundamentally connected. These concepts will live together in the online world.

 A new study from BIGResearch has shown that Word of Mouth continues to be the most influential factor in consumer decisions.

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There’s nothing too earth shaking about this. But consider how Word of Mouth is defined today.

The Web has taken Word of Mouth, which used to be restricted by geographic realities, and exploded it outwards in all directions. Even the very phrase implies a face to face conversation, which by necessity restricts how quickly word of mouth could spread. But now, word of mouth encompasses consumer generated media, which means that stated opinions can spread much further and faster than ever before.

Perhaps the easiest way to judge the implications of the web effect on word of mouth is to strip it back to it’s essential meaning, and then work outwards again.

Word of mouth implies that you’re getting an opinion from someone who:

    1. is familiar with a product or service through personal experience; and,
    2. can be objective because they have no vested interested in whether you buy the item or service in question.

If it meets these two criteria, word of mouth has the ring of authenticity, which is rapidly becoming a valuable commodity on the Web. Historically, word of mouth came primarily from friends and family, so our circle of potential influencers was limited to a few hundred people at the most. We received our word of mouth recommendations in two ways. Either the person giving the opinion had become an evangelist for the product and was offering their opinion whether it was asked for or not, or we would seek out someone we knew who we trusted and who we knew to have previous experience with a product or service. For me, the second type of word of mouth was generally a little more influential. In either case, the reach was restricted, because there was no way for the average person to expand their communication network beyond their normal contacts.

If you took an evangelist and tried to expand their coverage, the value of the message eroded. If the vendor facilitated this, the authenticity decreased and the message became a testimonial. Influential, yes, but not truly word of mouth. Or if the person happened to have a forum that allowed them the spread the word farther, i.e. a newspaper columnist or a TV personality, the authenticity was lost and it became another celebrity endorsement. Again, influential, but missing the grass roots power of true word of mouth.

For word of mouth to be truly powerful, it has to live close to the ground, come from real people, and not have the faintest whiff of commercialism about it.

Now, look at what the empowerment and connectivity of the Web has enabled. If a person chooses to be an evangelist, they still sacrifice authenticity, even if distribution of the message is done digitally. But search allows consumers to connect to real people, just like you and I, who have shared their opinion on something with us online. This maintains authenticity, and opens up the new power of word of mouth.

Think of what sites like TripAdvisor has done for travel. If you were going to go to Florence and you wanted to find a hotel, what would be the odds 15 years ago of finding someone in your social circle that would have the personal experience necessary to give you the advice you were looking for? Probably slim. But now, through search, you can find a number of people who have all stayed at hotels in Florence and have shared their experiences, both good and bad. TripAdvisor uses this collective “word of mouth” to rate the hotels. It’s tremendously influential and it’s available to all of us.

This tying together of consumers into ad hoc ideological communities around a product or service is becoming tremendously powerful, and is completely redefining the principles of marketing and branding.

Kevin Lee on the Lee-ching Effect of Search

Kevin runs a great column on a topic I explored awhile ago in SearchInsider: are search engines leeching value from the web? Kevin approaches it from a slightly different angle than I did, but the conclusion was similar. Vendors are beginning to resent having to pay for every search generated touchpoint with a consumer. Kevin’s point, which I share, is: Get Used to It!

Here’s the 10 second summary of the idea, but please take some time to read the column. Consumers continue to turn to search to connect with an online vendor, even after the initial introduction. The vendor has to either maintain a prominent position in the sponsored ads, or, in some cases, pay an affiliate who is maintaining a high organic position (this reference is somewhat ironic, coming from the company that says SEO is simple enough that these affiliate sites should be cut out of the ecosystem). The vendor resents having to pay this recurring toll every time the customer visits them.

Having to invest to maintain share of wallet with a consumer is nothing new. It’s just that the new power of online and search in part makes this investment more focused than it’s ever been before. It used to be that maintaining enough top of mind to ensure a continuing connection with a customer was spread out over a number of marketing channels. Somehow, advertisers would accept this. But now, with the focused use of search to navigate the web, including return visits to a particular site, the cost is being concentrated in one channel. If anything, this introduces efficiency into the marketplace and could potentially save the marketer money, but all they see is a growing cost they have to pay to one channel to keep customers they thought they had already won. The missing piece here is solid data about the shift of influence from more traditional channels to the new search one. The marketer doesn’t know whether they have to maintain all the previous marketing activity, or can they confidently begin moving budget to the new one, namely search.

Read Kevin’s column, and then take a look back at my view. It’s a thoughtful look at an interesting shift in marketing dynamics and is a refreshing change from some of the other opinions currently coming out of Did-It.

The Goodman – Hotchkiss Smack Down

Okay…maybe it’s nowhere near the Pasternack vs the Rest of the SEO World Debate that’s currently going on (which is apparently now even spawning it’s own T-shirt), but Andrew Goodman took exception to my recent SearchInsider column, where I also ponder the future of SEM/SEO.

To save you a ton of reading, I’ll summarize the salient points of both.

My take:

SEM shops, and in particular, SEO shops, have been so tactical and have developed such a specialized set of skills that it will be difficult for us to step back and look at the bigger picture necessary to guide us in the next evolution of search into a more personalized channel. Further, as the current reality of universal search results pages gives way to personalized results, the market value of this highly developed skill set, largely based on the current paradigm of optimizing to gain rank, will begin to lose value to potential acquirers as rank ceases to have any meaning. This will create a shakeout in the industry as some of the best practitioners become employees with large companies and others can’t keep up with the new evolution of search.

Andrew’s take:

I missed some factors, in particular the fact that you can’t predict financial fads and roll ups and acquisition are often driven more by buzz from Wall Street than logic, and that acquisition is often driven by the target’s client list and expertise in a skill set that the buyer doesn’t currently have. Further, Goodman feels that contrary to my point, SEM’s are actually pretty strategic in their execution of campaigns and that our front line approach in customer acquisition is giving us exactly the skills needed to market in the new online reality. He goes on at some length about how the majority of the agency world is drastically out of touch with this new reality.

Of course, both Andrew and I being Canadians, we’re probably both way too polite and pragmatic to create much of a stir. Note the carefully worded way Andrew threw down the gauntlet:

Gord Hotchkiss argues that SEM firms aren’t getting acquired for large sums mainly because they’re too tactical and don’t have skills that help them work on segmenting and customer profiling. I tend to think that the picture is more complex. Or maybe, it’s actually simpler. Either way, Gord’s assessment of current reality is correct, but his analysis is wrong.

It’s kind of like Mac n Tosh, the really polite Warner Brothers gophers, in the WWF. “You hit me first.” “No, I insist, you take the first swing.” “No, no, that would be rude, please put me in a pile driver.”

But I do encourage you to read Andrew’s post, as I think it definitely adds to the perspective. And here, I’d like to dive a little deeper on some of the points Andrew brings up:

I happen to think search marketing is a fine training ground for the strategic mind. Of course, no small consulting firm is given the keys to the entire marketing strategy for a large client, but discounting for size, the influence of the search marketer is impressive. Look at all the data clients already let search marketers work with! While expensive, ponderous segmentation and market research exercises are not the typical MO of the searchie, that’s often because these don’t translate very well to the particular campaigns they’re asked to work on.

Well, in most instances, this usually contradicts the point Andrew is making. While I agree that we often get access to a lot of data, it’s usually in support of the crushing load of tactical work that has to be done in search. We need to dive into conversion data, site stats and a mound of other data to tweak and optimize the campaign. And it’s this deep dive into the data that often keeps us from seeing the big picture. And yes, segmentation and market profiling are ponderous work, and that is tactical, but it’s the ability to take the results and apply them strategically that truly sets apart great marketing. I agree with Andrew that there’s a real danger of misuse of profiling, and it’s horrendously abused in the traditional agency world to justify expensive sponsorships that are more about boondoggles and perks for agency execs than it is about effectively reaching target consumers. But to me, the biggest thing missing in Search is the who and the why. We know where and we guess at what, based on a series of tests.

Here’s how it usually works. We test for best position. We come up with messaging and test for effectiveness, often based on a set of metrics that are end of funnel targeted, because that’s the best we can do right now. There’s testing, testing and more testing.  Andrew makes this point as well:

(Testing is) certainly something search marketers are uniquely skilled to do. In paid search, we learned “direct marketing analysis on steroids,” not from any book, but from the ground up. Now we’re busy writing the book.

This brings us to a point that came up during our panel at the recent Microsoft Summit. One member of the audience equated search to direct marketing. This is a common comparison, but it points to the very reason most SEM’s are too myopically focused. Here’s one definition I found for direct marketing:

Direct marketing is a type of advertising campaign that seeks to elicit an action (such as an order, a visit to a store or Web site, or a request for further information) from a selected group of consumers in response to a communication from the marketer.

From a marketer’s perspective, this pretty much sums up search. It’s what we all want people to do through search. But, and here’s the thing, it’s often not what the user wants to do. The point at which search is used and the point at which the consumer is ready to take the action could be seperated by days, weeks or even months. Here’s another symptom of our short sightedness. When we measure actions, we show a strong bias towards the purchase end of the funnel. Most marketers either don’t or can’t measure promising activity earlier in the funnel. It’s often not our fault, because the leap from measuring end of funnel activity to full funnel activity is huge, and largely impossible. It requires a sophistication of reporting that’s beyond the ability of any single platform. So we tend to focus on what we can measure. And this leads to an increase in short sightedness.

What we need is the who and why. We need to look at presentation of our messaging through the eyes of the target. We need to understand intent, and deliver on it. That dramatically reduces testing cycles. When you learn to do that, your strategy defines itself. Contrary to Andrew’s point…

Customer profiling? I think it’s useful, but let’s not get too cute.
(By the way, I think Andrew’s Canadianism is showing here. Most Search Marketers I know would call it BS)

…knowing your customer isn’t cute, it’s critical. Up to know, search has been able to effectively deliver leads without this understanding. That’s a testament to the power of search as a channel. But those days are rapidly ending. My point is this view is now essential to reach customers in a more personalized search reality, or if it’s not essential now, it will be very very soon. And knowing your customer means research, profiling and creating paradigm shifting frameworks, such as personas. And I don’t mean in the way traditionally abused by agencies, but in highly effective ways pioneered by product designers and employed by Future Now, who Andrew refers to.

A few totally awesome data analysts in these firms – and a handful of independent analysts – are doing exactly the right things, while most everyone else in the agency infrastructure is not empowered to act on the power of the data (or put less politely, they’re just pretending). Agency culture is still dominated by the power of “creative,” and subjective judgments of “spots.”

Okay, here’s one point in where Andrew and I are in complete agreement. Agencies don’t get it, and although some bright individuals within the agency structure do, they’re hamstrung and stiffled by crushing inertia and old thinking. Andrew seems to think I implied agencies wouldn’t buy because they knew how to do it. That wasn’t my point. It was agencies won’t buy because they think they know how to do it. And the distinction is important. In fact, somewhere on my desktop is a half finished blog post where I looked at why this happens, but I shelved it because I thought it might be too “impolite”. Maybe it’s time I dug it up and finished it. But in the meantime, everything that Andrew points out as being wrong in the agency space I agree with totally.

From the ashes of all of this rises search. Which, though highly tactical, is a great training ground for strategic minds like Joe Morin, who is now CEO of StoryBids, a startup that offers an auction system for product placement.

Again, in trying to point out a difference in opinion, Andrew actually helps reinforce a point I was making. Joe is a good friend and a great example of the handful of survivors who are evolving into the new reality. I mentioned that the challenge for SEOs in particular (which was Joe’s background, along with being a private investigator) was in being willing to draw back from their current view and skill set and to reinvent themselves to find a niche in the rapidly evolving online ecosystem. Joe is a master of this and acts as a great example for the industry. Andrew also mentioned he has some skin in a new game, and as one of the smarter people in search, he’ll evolve quite nicely as well. And I think in the word “evolve” we come to the crux of this. Perhaps the best way is to sum up with the following comparisons

Traditional Agencies = Dinosaurs
SEMs/SEOs Unwilling to Change = Mastadons
SEMs/SEOs Embracing Change = Primates