Category Archives: Online Trends

Another Year, Another SEMPO Survey

First published December 6, 2007 in Mediapost’s Search Insider

As chair of SEMPO, one of the things I’ve seen establish itself is the regular SEMPO state of the market survey. Every year about this time, we field a gargantuan survey (in excess of over 400 questions, including all the possible branches) in which we attempt to capture a relatively complete snapshot of where search is at this given point in time. We use the data captured to analyze year over year trends and attempt to project forward  how these trends might develop over the coming year. This year, in addition to the main survey, which primarily collects North American data, we’ll also be launching a smaller European version, scheduled for the new year.

One of the interesting things about the survey is that it can act as an early warning system for emerging trends. Among the biggest variances last year was the clear signal that many marketers would ideally like to move their search marketing management in-house. Over the course of the year, we’ve certainly seen this start to happen, and my suspicion is that we’ll continue to see this trend play out in 2008 and beyond. In-house marketers are the fastest growing SEMPO membership segment. By digging this point out of the data, we were able to put it on the radar of search agencies, letting them know that perhaps the value provided wasn’t quite up to what clients were looking for. It may not have been good news, but it was vital.

Two years ago, click fraud emerged as a major concern. While the urgency of click fraud seems to have lessened, it’s still a nagging doubt that seems to linger in the background and throw a shadow on the effectiveness of search as a marketing channel.

Other data points worth mentioning: Last year, for the first time, search seemed to pierce the consciousness of C-Level executives. This trend literally appeared out of nowhere, as one year previous these execs were barely aware of search. Heightened awareness on the executive floor might be responsible for some of the directives to bring search in-house. If you want something to capture the attention of executives, make it a budget line-item. For many companies, search broke this threshold in 2007.

Also, while many marketers seemed to feel there was still room to up their keyphrase bid amounts, the ceiling seemed closer than ever before. Pricing fatigue became a reality for more and more search marketers.

That was the backwards look at last year’s survey findings. This time around, it will be interesting to see how what has arguably been the biggest year of change in search has impacted marketers. With the rollout of unified (or universal, or blended, or 3D, or whatever the label du jour is) and personalized search, the interface has undergone some pretty dramatic changes. While the impact on most of our campaigns has been minimal to this point, we’re all thinking about how this might change the game. It will be interesting to see what changes in attitudes towards search as a channel boil out of the data.

So, if you have a few minutes to spare (about 10 to 15 should do the trick) make sure you take this year’s survey. Like any study, its accuracy is totally dependent on how many people volunteer their information. The more who take it, the more we can slice and dice the data and pull more nuggets out of it. And, by taking it, you get the first look at the findings.

Finally, a word of thanks to my SEMPO research co-hort, Kevin Lee from Did-It. He puts a lot of hours into question formulation and testing every year, all of them as a volunteer. This survey is really his baby.

Edison Also Asked: “When Will People Get It?”

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

Over the past few weeks, my general theme has been “why don’t more people get it?” Why don’t agencies get search. Why don’t CEOs get search? Why don’t more search portals get that it’s the user that determines your success? Why don’t more people get that the world is changing, quickly? What’s with us, anyway?

Well, this week, I gained a little insight; thanks to a paper by Paul David called “The Dynamo and the Computer.” Maybe we just need some time. It’s not the first time this happened. Let me tell you the story of the light bulb.

Lighting Up the Industrial Age

Edison introduced the first practical incandescent light bulb in 1879. The first generating stations in New York and London started their dynamos spinning in 1881. Profound changes were to follow. Productivity was to grow by leaps and bounds.

Factories in the 1800’s were dark, noisy and not particularly pleasant places to spend a day.  At the center sat the steam engine: a huge, hungry and finicky behemoth, connected by an extended system of belts to the operating machinery of the factory. Even the early electrical engines were smaller, cleaner and much more efficient. Electric lighting made 24 hour shifts more practical. The benefits were obvious. Electricity was the ultimate “no-brainer.”

Still in the Dark

But by 1899, almost two decades after the introduction of the light bulb, only 3% of homes were “wired.” And the much-predicted impact on the North American industrial engine would have to wait until the 1920s to take hold. It took a half century for electricity to make much of a difference in America.

You see, technology tends to move fast, but people move slowly. It’s because transition tends to be dependent on many factors. It’s not like the flicking of (quite literally, in this case) a light switch. It’s more like waiting for a long series of dominos to fall into place, each drop contingent on the previous one.

In the case of electricity, significant money had been invested in steam power. You don’t just rip it all out and start over again, no matter how compelling the advantages might be. So factory owners waited for things to break down, and then retrofitted with new electric engines. But even this retrofitting had to wait for the supply of electrical engineers to catch up. In 1899, not many people knew how to design an electrical delivery system. The skill gap had to be eliminated. And this lack of expertise also showed up in less direct ways. America also had to wait for a new generation of factory architects to appear, who could design factories built to be powered by electricity. For every obvious benefit of electrification, there was a long series of factors that had to fall into place first. That’s why it took five decades to turn on the light.

History Repeating Itself

This technology adoption curve has been repeated over and over. The replacement of horsepower with steam power. And more recently, the information technology revolution. We can get as frustrated as we want with the snail’s pace reluctance of many to grasp the realities of the new world, but the fact is, we’re just being human.

Technology adoption usually follows a predictable path: introduction of technology, commercialization of technology, layering the technology onto what preceded it, and finally, throwing out the old completely and building from the ground up to embrace the technology. Each step depends on the step before it. And in every case, legacy investment slows the speed at which we move from one to the other.

If we look at the adoption of Internet technology and compare it to previous technology adoption curves, we’re just starting up the beginning of the long and steep part of the “S” curve. There’s no doubt we’ll get there, but it will take time.

Android and Pondering the Future from Portugal

AlgarveSagresThis afternoon, I saw what was, at one point, probably the most exciting and terrifying place in the world. Sagres is the southwest corner of Portugal. From this point, sailing west, you leave the Mediterranean and enter the vast expanse of the Atlantic. Beyond Sagres was no man’s land. Everything safe and familiar was behind you. New worlds of discovery and vast expanses of the unknown lay beyond. It was a powerful personal experience. Sitting on a rock overlooking the cliffs, looking at nothing but water, you discover something primal in yourself.

It was also metaphorical. We’re on the cusp of our own voyage. In our world, there’s a lot of unknown that lies ahead. For anyone that has pondered where we’re at, and what it might mean for us in the future, the possibilities are as exciting and frightening as they must have once appeared from the vantage point of Sagres.

It was somewhat fitting that the day I visited Sagres was the same day that Sergey Brin announced Google’s support of Android developers, to the tune of $10 million. No one doubts the potential of mobile. We all know that ubiquitous computing and access to the Internet will change everything. It will put the world in our hands.

And Google’s move into the space is interesting to think about as well. They’re betting on the power of community and open source to be the best way to reduce the friction so prevalent in the mobile space. Lack of standards, in fighting between telcos, convoluted politics between hardware manufacturers and service providers: Google is saying to hell with it, opening the door and letting things fall where they may. It’s a greenfield ripe for exploring, so the more the merrier! If our bets pay off (and in the grand scheme of things, $10 million is less than a pittance) there’s more than enough potential here for everyone. Forget control, let’s just get the ball rolling.

So, not to get all metaphorical on you, but if you compare it to the exploration of the new world, with many of those voyages rounding the point of Sagres, you’ll find a lot of similarity. Unlimited potential, a lot of unknowns, great odds that somebody’s going to get rich and, if you really think about it, scary as hell. But then, that could just be the Madeira talking.

Caution Will Kill You in the Search Game

First published November 8, 2007 in Mediapost’s Search Insider

A strange thing started happening to me in the last two years or so. As I became more vocal about my opinion, people started seeking it out more often. The more I shared it, the more people nodded their heads. And the more obnoxious I got about it, the more people jumped on my own little opinion bandwagon. It you look at comments to this column as an indicator of striking chords, it seems like I touch cords either when I’m being a total dickhead (increasingly frequent) or introspective and emotionally deep (a much rarer occurrence). But other than a “right-on” post or comment, and the vigorous nodding of heads, I’m not sure it will go much further than that. Inside, we all like to be smarter than our bosses and a little bit revolutionary. But on the surface, where we live and work, we go with the flow. I call it the Cluetrain Conundrum.

The Cluetrain Manifesto was posted in 1999, when the Internet was still new and bold and gritty. Much of the initial grass-roots appeal that tweaked the interest of Messrs. Locke, Weinberger and Searles has since been paved over to make room for commercial storefronts. At the time of publishing, as an in-your-face, spit-in-your-boss’s-coffee and laugh-all-the-way-to-the-corporate-bathroom call to action against the cluelessness of the command and control establishment, it attracted its own rush of “right-ons.”. In fact, since it went online, thousands have signed the Manifesto. It seemed like the world could change. But now, eight years later, we’re still waiting.

You see, it’s one thing to say you’re ready to change. It’s another to convince the rest of the people in all the cubicles in all the offices in all the world that you’re right. You know it, and the person in the next cubicle knows it, but the chowderheads in the X-0 suites seem intent on running the company off the cliff. Why? In a word, caution.

No, Really, Tell Me what You Think…

In the last few months, I’ve been asked for my opinion on how to improve certain search properties. I think the people asking me are hoping for an answer like this: “You see all these ads you’re trying to get people to click on? Well, all you have to do is move them here and put this colored box behind them, and people will sprain a finger trying to buy from your advertisers. It’s that simple!”

Of course, it’s not. It’s understanding all the things that the Cluetrain authors were trying to get across. It’s understanding that markets are conversations, that we’re sick of advertising, that we long for authenticity and transparency, and that we can sniff insincerity and BS a mile away. It’s saying that you have to worry about users first, build up truckloads of trust, and then figure out how to make money. And that’s just not likely to happen when you already have an existing search property.

The problem is that you’re already somewhat successful. There’s existing revenue and advertisers. Generally speaking, although attrition is higher than you’d like, most of the advertisers keep coming back. And as long as they’re doing that, management won’t be very motivated to change. Because the changes required are not simple fixes. They’re stripping things down to the foundations and rebuilding for the user. And that means a lot of money, and almost certainly lost revenue in the short term, against the remote possibility of long-term gain. That’s a ton of risk, and it’s not surprising that someone in the C-level executive wing is unwilling to stake their corporate reputations on this particular roll of the dice. There’s a lot better chance you’ll go down in flames than be crowned a hero.

The Illusion that You Have a Choice

But the irony here is that while it appears you have a choice, you really don’t. Because if you don’t take this chance, someone with a lot less to lose will. And eventually, that someone else will win. They’ll win, and you’ll lose, because Web traffic is a zero-sum game. Just ask every search engine who’s not Google. So while it appears there’s way too much to lose by reinventing your business model, it’s much, much riskier not to. Because as much as you think you’re in control of your business, you’re not. The users are, and you have them now by the simple virtue of there not being a better place to go — yet. In the Internet world, there will always be a better place to go, eventually. Either you build it or someone else will.

Last month, in a hotel lobby, I was having this conversation with somebody who had asked me my opinion. I basically told him what I’m telling you today and asked him if his company had the courage to do this. He wasn’t sure, and asked how important it was. I said it depends on the competition. He was a little reassured, because their competition is even more cautious. The reassurance was short-lived when I replied, “Ah, but that’s the competition you know about. Chances are, this is going to come completely out of the blue and you won’t know what hit you.”

I suspect people are going to stop asking my opinion.

Will Agencies Get Search? Don’t Hold Your Breath

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

It seems like anytime I have a conversation with anyone who knows search and its effectiveness, we always come back to the same question: “Why don’t more ad agencies and brand advertisers get search?”

Just this week, I was having this conversation. Twice, in fact. One of my pet peeves is an arbitrary allocation of budget to search, with no regard for the objectives of a cross-channel campaign. “We’ll take this pile and give it to television. We’ll take this slightly smaller pile and give it to print. Here’s a small pile for online, and, oh, make sure you take a little bit of that and set it aside for search, because everyone’s telling us we should be doing search.” I guess I shouldn’t be complaining. At least there’s now a little bit left over for search, which is a vast improvement from where we were just a few years ago.

But what this approach does is force your search campaign to be managed to budget, rather than to overall objectives. So we see more restrictive targeting, movement down the tail into longer and more specific key phrases, day parting and flighting, geo targeting and other ways to slice and dice the campaign to get the best quality clicks from the budget available.

Now, there’s nothing wrong with this. It’s called campaign optimization. But it’s often done to keep within an arbitrary budget cap that has no logical reason to exist. I’ve said it before and I’ll say it again. Search dollars should be the first ones in, not the last. Take as much search inventory as you can get. Judge your costs per acquisition not against your top performing keywords, but against your other channels, both online and offline. If even the marginal search traffic is generating a lower CPA, beg, borrow and steal as much budget as you can and top up search. Only then should you move from “pull” (prospects holding up their hands to purchase through search) to “push” (trying to persuade latent prospects to purchase). Only put restrictions on your search campaign if you’re absolutely certain that another channel can exceed its effectiveness.

The Classic Brand Building Gambit

Sure, you say, but what about ‘branding”? That’s TV’s domain. Well, I disagree. I think there’s no better branding opportunity than deep engagement with a Web site from a qualified prospect. Again, this is someone well down the funnel who is considering his or her purchase options. And search drives these opportunities. Sure, TV, print and other channels can build brands, but I challenge anyone to prove to me that they build brands as cost-effectively as search driving Web site engagement. I’ve yet to see a study that shows that. I’ve seen several that show search blowing away other channels, including the CPG study I wrote about last week. Brand-build with prospects that are ready to buy first, then build with the “maybe, someday” crowd with what’s left over.

So, why is it such a struggle to get search on the horizon of big agencies and advertisers? I’ve come to the conclusion that search is being held back by four things:

Search is small. Advertisers and agencies like to think big. They like big, bold ideas. Killer campaigns. Knock-your-socks-off creative. Search is none of those things. Search is thousands of micro-niche campaigns. Search is granular and gritty. Search is turning a whole bunch of dials and pulling a lot of levers, to squeeze out new customers a few at a time. You can’t “unveil” a new search campaign, like snatching a sheet off a sculpture. Launching a search campaign is more like putting a million grains of sand into a bucket, one spoonful at a time. That’s not a concept that “brilliant” advertising minds can get fired up about.

Search is measurable. You can measure the hell out of search. You can hold everyone accountable. You can demand to know who screwed up the campaign because your ROI dropped 10 points. That can cause a lot of red faces round the ol’ agency conference table.

Search is hard. Because search is granular, search is hard. It takes a lot of work to squeeze out an impressive bottom line. And the harder you work, the more impressive that bottom line will be. You’ll never hit a search home run with one inspired brainstorm. There is no golden concept. You just keep plugging away, tweaking keywords and pulling in prospects. Agencies and big advertisers are looking for that single perfect run down the mountain, with fresh powder and the sun shining. Search is more like cross-country skiing up the mountain.

Search is utilitarian. Search is constantly accused of not being sexy. That drives me nuts. The irony is that in pigeonholing search as being boring and utilitarian, all these brilliant advertising minds are missing the biggest idea of all: search works because it’s the customer driving the process, not the advertiser. All you have to do is a half decent job of meeting them halfway. Some say it’s that lack of control that scares the bejeebers out of agencies and brand marketers. To be fair, I don’t think that’s always true. I just think that search just doesn’t get the juices going in the average marketer. It may not be that they’re scared; it may just be that they’re bored.

And for all these reasons, I don’t think big agencies will ever truly get search. It’s too much of a cultural mismatch for them. They’ll bring search in-house, but they’ll silo it off, in a back room, far from the playground which is really where everyone wants to be, cranking out killer creative for the next TV campaign.

It’s just too bad that those TV ads won’t work very well. At least, not when you compare them to search.

 

Ask Beginning to Break Through

For quite some time, I’ve been wondering if my user “Spidey-Sense” was wonky. From everything I saw about the Ask 3-D interface, it should have been gaining marketshare. Also, for all my preaching about build a better user experience and you’ll reap the rewards, Ask’s reaping appeared to be a little on the grim side, lingering at about 3.5% of the market. But finally, according to a recent post by Bill Tancer over at Hitwise, my instincts seem to be back on track. Take a look at this graph:

ask

Ask is finally making a move. And their “share of search” has moved up from 3.49% of executed searches in August to 4.32% of searches in October, a bump of 23.7%. That’s huge. Bill wonders if it has anything to do with the ads Ask is running. I suspect it has a lot more to do with a great interface and some user generated buzz that’s beginning to catch some ears. Michael Ferguson and his team did exactly what they needed to do, shake things up by thinking about what users want.

Ask’s strategy has always been to be your first second choice. They don’t ever expect to knock Google out of the lead, but what they want to do is be the place you turn when you find Google just isn’t cutting it. So their move to 3D made a lot of sense. For certain types of searches, notably entertainment or discovery searches, users want something more than Google’s spartan, click and get out interface. They want a stickier, richer, more visual appearance. They want Ask 3D. We found the interface tested pretty well in our recent Search:2010 Eye Tracking study for entertainment based searches.

In fact, Marissa Mayer at Google paid Michael and his team the ultimate compliment when she mentioned the likelihood of Google moving to more of a portal, encyclopedia type format sometime in the future. So..that would make Google more like..Ask!

I will be watching with interest Ask’s marketshare numbers over the next 6 months. Again according to Hitwise, the jump regains all the marketshare they’ve lost in the last year, and puts them a lot closer to the current number 3, Microsoft, who is sitting just 3 and a half points ahead at 7.83%. Microsoft has been on a continuous slide for the past year, dropping 3 full points. Yahoo seems perpetually stuck between 22 and 23%. Google has captured most of the fallout, adding those 3 points to their marketshare numbers. But Google’s .5% drop in the last month seems to have gone directly to Ask, showing that the “First Second Choice” strategy might be paying off. Like Jim Lanzone said to me once, “Our goal is to take our 20 million users, who are currently using us twice a month, and bump that up to four times a month. That doubles our market share,” At the time Lanzone made the comment, Ask was sitting with about 2.5% marketshare. If you look at the table below, Ask has just about hit their goal.

 

Percentage of U.S. Searches Among Leading Search Engine Providers
Domain

Sept-07

Aug-07

Sept-06
http://www.google.com

63.55%

63.98%

60.93%
search.yahoo.com

22.55%

22.87%

22.29%
search.msn.com

7.83%*

7.98%*

10.87%*
http://www.ask.com

4.32%

3.49%

4.28%
Note: Data is based on four week rolling periods (ending 9/29/07, 9/01/07; 9/30/2006) from the Hitwise sample of 10 million US Internet users.

* – includes executed searches on Live.com and MSN Search.
Source: Hitwise

But I don’t think Ask is going to stop there. Within 6 months, you’re going to be reading stories all over the web about how Ask bumped Microsoft out of the #3 spot. It will be David vs Goliath, or in this case, Barry (Diller) vs Bill (Gates). Ask is on a roll, and thanks to Bill Tancer’s revisiting of the numbers, I have regained enough confidence to say, “mark my words”.

Face to Facebook

The one thing that’s interesting about Facebook is that it’s really a framework in search of a purpose. What’s not interesting about Facebook is that Microsoft just bought a tiny sliver of it for 240 million dollars.

The problem with the world today is that we all try to jump on an online bandwagon without really seeing where it’s going. As the usage numbers stack up, we pile on, determined to hang on for the ride, whereever the destination might be. It remains to be seen if Facebook can avoid the fate of the online community platform. There’s a lot of headstones in this particular cemetary, including Orkut, Friendster and MySpace (sure, MySpace is still breathing, but barely). I’ve been in a few meetings recently where everybody is talking about how to tap into social networking. I think the thing that’s missing is that social networking isn’t a killer app. It’s human behavior, and that comes with some challenges. Humans are unpredictable.

Here’s one way we’re unpredictable. The same group that made Friendster a hot online community, Orkut the next big thing and MySpace the next Google moves from community to community, lighting a fire and then moving on, leaving nothing but a burned out shell. These are the online “nomads” who are always pushing the envelope. Green fields are their motivation, but once main street gets a little civilized (i.e. boring) they pick up stakes and move on. When the dollars chase the next hot online community, this is the gang they’re chasing. Good luck!

Here’s the second way we’re unpredictable. Even if we’re not all online “nomads”, we have a tiny little sliver of us that’s curious. We have to check out the new hot online neighbourhood. Think of it as visiting a show home. We want to look at the furniture, oooh and aaah over the decorating, but we have no intention of actually moving there. The online translation would be registering to become a member, visiting once or twice, and then never visiting again. So here, we have a compounding effect. The nomads visit  and start creating buzz (everyone loves the nomads, because they’re just so leading edge). Then the tire kickers (that’s the rest of us poor schmucks) visit for a look. Suddenly you have a hockey stick registration chart that everyone drools over. You’ve got the traffic, now you just have to monetize it! Investment and acquisition offers pour in. Life is good. Two Porsches in every driveway. But then the nomads move on to the next green field (Rule One of Online Communities, There’s always another Green Field), the tire kickers don’t come back (they’re checking out the show home in the new hot community) and the hockey stick breaks in half.

And here’s the third way we’re unpredictable. We like to pick communities that make sense to us, that do something for us, that make us feel at home. We’ll choose the community, the community won’t choose us. This manifests itself in a number of ways. Every brand is trying to create an online community around their brand. I don’t want to belong to a brand based community. Most people I know don’t. Certainly not if the brand is something like potato chips or underarm deodorant. Maybe some one some where has enough time in their day to squander some of it on www.nevergetcaughtoffguard.com (I kid you not, a viral game put out by the good folks at Right Guard) but it sure the hell ain’t me. Harley riders frequent an online community, but in true Harley fashion, they took over the joint and basically kicked the landlords out. No, we create communities where it makes sense. Netflix is a community. Amazon is a community. TripAdvisor is a community. eBay is a community. They’re communities because they give us a chance to connect with other that share our interests while we’re doing something that’s important to us. The community aspect just evolves out of our desire to see what other people think about the things we’re interested in.

And there lies Facebook’s challenge. Being a cool community isn’t enough. Being a hot community isn’t enough. And communities online are rather amorphous. As I said above, communities can form in the click of a mouse online. We don’t need a lot of infrastructure to start connecting. And we don’t tend to stick in one place long. But..and this is a big one…if Facebook can create an open ecosystem where developers create functionality within the community rather than outside it, it has a chance. It won’t be the fact that it’s a community that keeps Facebook alive. It will be that it attracted enough functional critical mass to one place. It’s heading in the right direction, but we’ll see if it gets there soon enough.

The Wisdom of Consumer Crowds?

Following up on the theme of the rewiring of our brains, is the internet making us smarter consumers as well? There certainly seems to be evidence pointing in that direction.

A study by ScanAlert  found that the average online shopper in 2005 took 19 hours between first visiting a store and completing a transaction. In 2007, that jumped almost 79% to 34 hours. We’re taking longer to make up our minds. And we’re also doing our homework. Deloitte’s Consumer Products group recently released research saying 62 percent of consumers read consumer written product reviews on the Internet, and of those, more than 8 in 10 are directly influenced by the reviews.

In James Surowiecki’s Wisdom of Crowds, he believes that large groups, thinking independently with access to a diversity of information, will always make a better collective decision than the smartest individual in the group. Isn’t the Internet wiring this wisdom into more and more purchases? When we access these online reviews, we’re in fact coming to collective decisions about a product, built on hundreds or thousands of individual experiences. As the network expands, we benefit from the diversity of all those opinions and probably get a much more accurate picture of the quality of a product than we ever could from vendor supplied information alone. The marketplace votes for their choice, and the best product should theoretically emerge as the winner.

Of course, nothing works perfectly all of the time. As Surowiecki points out, communication can be an inexact and imperfect process, and information cascades based on faulty inputs can spread faster than ever online. But it’s also true that if a cascade leads to rapid adoption of an inferior product, we’ll discover we’ve been “had” faster and this news can also spread quicker. The connections of online make for a much faster dissemination of information based on experience than ever before, ensuring that the self correcting mechanisms of the marketplace kick into gear faster.

There’s a pass along effect happening here as well. For social networking buffs, you’ve probably heard of Granovetter’s “Weak Ties”. Social networks are made up of dense, highly connected clusters, i.e. families, close friends, co-workers. The social ties within these clusters are strong ties. But spanning the clusters are “weak ties” between more distant acquaintances. The ability for word to spread depends on these weak ties. What the internet does is exponentially increase the number of weak ties, wiring thousands of clusters together into much bigger networks than were ever possible before. This allows word of mouth to travel not only in the physical world but also in the virtual. I looked at a fascinating follow up study to Granovetter’s where Jonathan Frenzen and Kent Nakamoto also looked at the value of the information and the self interest of the individual and their “strong ties” within a cluster as a factor in how quickly word of mouth passes through a network.

Deloitte’s study graphically illustrates the weak tie/strong tie effect. 7 out of 10 of the consumers who read reviews share them with friends, family or colleagues, moving the information that comes through the weak ties of the internet into each cluster, where it spreads rapidly thanks to the efficiency of strong ties. This effect pumps up the power of word of mouth by several orders of magnitude.

But are we also becoming more socially aware in our shopping? The research by Deloitte also seems to indicate this. 4 out of 10 consumers said they were swayed by “better for you” ingredients or components, eco-friendly usage and sourcing, and eco-friendly production or packaging. The internet wires us into communities, so it’s not surprising that we become more sensitive to the collective health of those communities in the process.

What all these leads to is a better informed consumer, who’s not reliant on marketing messaging coming from the manufacturer or the retailer. And that should make us all smarter.

Are Our Brains being Rewired?

I have to start out by thanking Nico Brooks and Jess Gao. Without intending to, they both provided me more than enough fodder for a rather lengthy column in Seach Engine Land on Friday.

Nico is the Chief Search Strategist at Atlas. Jess is our intern at Enquiro, who’s currently working towards her doctorate, specializing in cognitive psychology. Through different paths, they both gave me some major brain melting ideas to chew over. I’m still digesting, but you can catch the thought process in action on my column.

But consider this. What if our brains are being rewired by the internet? Some of our behaviors are innate. They’re our OEM operating software, put there by the manufacturer. Flight or fight. The need to procreate. The appreciation of beauty. This stuff is hardwired.

But some of our behaviors are learned. We’ve developed them as we go. The things sit in our temporary memory caches, and we can adjust them if they’re no longer working. The thing that started all this was how we learn to navigate a physical environment. First we look for landmarks, then we memorize routes, then we put the two together to create a cognitive map. Nico’s suspicion (and Nico, I hope I’m capturing the essence of the idea accurately) is that our need to identify landmarks and even our ability to memorize routes is probably innate. It’s just how we are programmed to get around. But cognitive mapping, at least in the essentially rectangular grid pattern that is common in the Cartesian coordinate model, is a learned behavior. Rectangles have no place in the n dimensional space of online, so as we spend more time navigating online, will we change our mapping process?

Then, with Jess, we had a great chat about how we perceive things, especially ads. There’s a great introduction to selective perception that I would urge you to check out. In recent studies we’ve done at Enquiro, one of the interesting findings has been that the more intrusive the ad, the less it seems to work. It registers high in the first stage of perception, stimulation, and manages to succeed in the second, registration, but fails in the last two stages, organization and interpretation.

Other conversations I had this week, that didn’t make it into either of the columns. On Thursday I was in New York for Google’s B to B Summit and had a chance to chat with Mark Martel, who supports the B to B Tech Sales Vertical at Google. Mark has a healthy intellectual curiosity and I always enjoy chatting with him. We discussed schemas and how important they are in the process of perception. Then, on Friday, I was in Toronto chatting with the Yahoo Canada gang, including Maor Daniels and Adina Zointz (what a great name, literally covering everything from A to Z!) and we talked about how quickly we’re learning to judge the authenticity of content online. It’s as if our bullshit filters are more finely tuned than ever.

I’m definitely on a riff here, but there’s a lot of threads coming together. Even in someone of my ever upwards creeping years (I’m 46) I suspect my synapses are under construction. Old routes are being torn out and new ones are being built. And with my daughters, many of the paths are being built differently right from the start. The routes that were so important to me in grade school, times tables, rote memorization, etc, are becoming overgrown with weeds through lack of use. But new routes I never even thought of, like how to do homework, carry on an online chat and watch the TV with one eye, are being upgraded into major turnpikes. Multitasking is a major operational imperative now, and selective perception is kicking into overdrive.

Anyway, to further dive into some of the things on my mind, here’s some of the columns where I’m beginning to open up some of these ideas to the fresh, online air:

Infomediating a Broken Marketplace – a look at Hagel and Singers Infomediary model from their book Net Worth. Is Google aiming to be the ultimate match maker in the marketplace?

4000 Ads a Day, and Counting – Part One of the Infomediary Doubleheader, looking at the disconnect between customers who just want the facts, and advertisers that just want to control our buying habits

Some Big Ideas for a Friday – Some musings about how we perceive advertising, based on recent studies we conducted, and how we might be remapping the perception process

How We Navigate Our Online Landscape – The original exploration of landmark, route and survey knowledge and how it may map (or not) to how we navigate our online space

And please, do me a favor. This is all stuff I want to explore further in the book. If you think I’m full of bullshit, call me on it. Share your thoughts. Post a comment. Start a dialogue. I know it’s a pain in the ass posting comments on blogs because of spam, but PLEEASSSE take a few moments to do so. Or drop me an email.

Infomediating a Broken Marketplace

First published October 18, 2007 in Mediapost’s Search Insider

Last week, I explored the disconnect between how advertisers define Nirvana; the ability to control consumer and persuade them at will by inundating them with advertising; and what consumers dream about: authentic and reliable information on needed products and services. There are costs associated with both sides, the cost of advertising, and the cost of consumer research. Max Kalehoff, from Nielsen BuzzMetric, pointed out another cost: the nuisance cost to the consumer of wading through an earlobe-deep sea of irrelevant and uninvited advertising: zapped TV commercials, blaring billboards, glaring signage, email spam, ubiquitous interstitials and pop-ups, preloads… .or one of the zillions of other ways advertisers choose to scream at you.

So, with this highly inefficient, annoying and disconnected marketplace, there has to be a better way, right? Well, Marc Singer and John Hagel III think so. They call it the infomediary, a concept introduced in their 1999 book, “Net Worth.” It’s well worth the read. The one thing that struck me is that in the entire book, the word “Google” is not mentioned once. This is not really surprising, given the publication date, but for reasons that will soon become clear, the irony was not lost on me.

How to Spot an Infomediary

Here’s the basic foundation of the infomediary. Acting on behalf of the client when he’s looking to make a purchase, the infomediary takes previously gathered personal information, as well as information volunteered by the client, and searches for the best match with vendors. The client can choose to remain anonymous, saving himself from an onslaught of advertising. Or, if the client agrees, the infomediary will pass his name along to a qualified vendor, and for this privilege, the vendor will pay the prospect. In essence, the infomediary plays the role of marketing matchmaker.

There are a number of offshoots of this basic premise. The infomediary supplies privacy tools to clients, marketing intelligence to vendors, the opportunity to bargain as a group for lower prices on regular consumable products, and it also acts as an aggregator of consumer power. In effect, the infomediary takes over control of the client relationship, inserting itself squarely between the consumer and the vendor, with the ultimate goal of protecting the consumer. This is a decidedly customer-centric model.

But it’s in the basic concept of gathering information about a client, and using that to ensure a good match with a vendor, that one begins to speculate about Google’s ambitions to fill this role. In essence, at a rudimentary level, Google is already fulfilling some of the role of the infomediary. Certainly if you factor personalization into the equation, we move a big step closer to Singer and Hagel’s concept.

Disruptive Influences

There are a number of dramatically disruptive possibilities in the infomediary model:

  • It forces advertisers to surrender all pretense of control over the consumer. Persuasion becomes a non-issue. The touchpoint with the consumer is stripped of hype, ensuring that product information is authentic and factual.
  • It gives the aggregated consumer voice a level of power never seen before. Previously, the marketplace was vendor-centric: here’s what we offer, here’s how we offer it, here’s what we charge. The consumer’s choice was restricted to “take it or leave it.” Now, the balance shifts to the consumer: here’s what we want, here’s how we want it, here’s what we want to pay. Provide it or we’ll find someone else who can.
  • By gaining control of the customer relationship, it forces companies to focus on two other core processes: one, either product innovation and commercialization; or two, infrastructure management, excelling in producing and distributing a product.

Something’s Rotten in the State of Advertising

There are a number of other seismic shifts in the landscape that come out of the infomediary model, but “Net Worth” weighs in at over 300 pages, and I have a bare 700 to 800 words for this column. The sum of it all is that the infomediary model, or some variation of it, dramatically changes the rules of the marketing game. A terribly inefficient marketplace has evolved in the past century, with some very wobbly power structures. The communication disconnect is almost laughable in its dysfunction. Advertisers spend more and more, hoping to penetrate a barricade set up by increasingly militant consumers. It’s literally a war, with strategies to match. The only hint of concession to the increasing power of the consumer has been search, and that has been done reluctantly. Remember Einstein’s definition of insanity? “Doing the same thing over and over again and expecting different results.”

If you look at the characteristics of an infomediary laid out by Singer and Hagel, Google has many of them in place already, and certainly has the resources to assemble the rest. The one piece that’s missing, and this is the critical one, is a purely customer-centric approach. For all Google’s focus on the user experience, their advertising models are still primarily driven by advertisers, not consumers. But for the model to work, consumers have to have complete trust in the infomediary and be willing to share their personal information. As we’ve seen with the initial pushback to personalization, there’s still a healthy degree of suspicion on the part of users that Google will use personal information for its benefit and not the advertiser’s.