Category Archives: Online Trends

Thoughts on 18 Months with SEMPO

I’m noticing my blogging will power is directly related to my current slate of activities. October has been a busy month for me, with travel and some different initiatives here at Enquiro. As much as I try to schedule some time to post some thoughts, I keep finding things getting pushed back. I’ve got a file crammed with stuff to review to see if it’s comment worthy.

A quick update is certainly in order though. Two weeks ago I was at SEMPO’s planning retreat in New York. I have to give a shout out to Dana Todd and the BOD both last year and this year. The organization is making substantial progress on many fronts and has come a long way. Now, this is to take nothing away from the original board. You know, I was one of the ones that criticized some of those early decisions. As I’ve said in numerous interviews, I don’t think the story of SEMPO is that of revolution but rather evolution. Barbara Coll and the original board got the job done. They got SEMPO off the ground, they build some incredibly valuable relationships and they laid the foundation for the organization as it currently sits. You don’t get an industry organization off the ground in a climate as charged as the search marketing industry without rubbing some people the wrong way. And sure, there were strong personalities on both sides..that’s what makes this business fun. But you know what? There are many who would have thrown in the towel and said this ain’t worth it. Barbara stuck in and handed over a fully functional organization to last year’s board. It was an organization that was still defining itself, but it was well off the ground. I for one don’t think Barb ever got the recognition she deserved for that.

The other part of the SEMPO story is that we all had different expectations for what the organization would become. Some wanted it to police SEO’s, some wanted it to be a lead generator, and some just wanted parties and free booze. As the organization has evolved, those disconnects in expectations have largely corrected themselves. Where the disconnect was too great, members have gone their own way. But the majority of members have learned, as has SEMPO, and we’ve found middle ground. Do we have it perfect yet? Not by a long shot, but we’re trying to do more things right than wrong.

SEMPO is finding its voice and building its franchise. Our State of the Market Survey is in its third year as we’re working towards launch. We had full participation of the major publishers this year, as they recognize that this has become the definitive year over year snapshot of the industry. We’re launched a scaled back version for the European Market. We’re working with Fair Isaac on the Click Fraud issue, again with the participation of the major engines, to try to get a fair estimation of the scope of the problem through an objective third party. And, perhaps most importantly, we’re forging strong relationships between the engines and search marketers, and to attempt to democratize those relationships, opening up the communication lines with smaller shops who may not be handling the budgets to give them a guaranteed ear with the Googles, MSN’s and Yahoo’s of the world.

There will always be the inevitable comments about SEMPO board members doing this for their own benefit. Having been on both sides of this comment, I have my own perspective, which I’m happy to share. There is certainly no monetary reward, and I put in about 20 to 30 hours a month on various SEMPO tasks as the Chair and as the Research Chair. Do I get some increased exposure? Probably, but to be honest, I get a lot more exposure through Enquiro’s research initiatives (something I have to start devoting more time too). The biggest benefit I receive from being on the board is the networking opportunities. Participation with SEMPO has allowed me to meet some interesting people, both at the engines and at other agencies.

A year and a half ago, I was one of the ones bitching in the hallways of SES. I made a choice: either keep bitching from the outside, or jump in and get involved. In the past 18 months, I was able to accomplish some of the things I wanted to do, but I also got the chance to have my perspective changed a bit. These are good, smart people, doing good, smart things. They’re making a difference in this industry.

Okay..off my soap box. I’m going to turn comments on for a little bit. Feel free to let me know your perspective on SEMPO..good or bad. You have the Chair’s ear.

All Hands on Deck! Search Marketing is Crossing the Chasm

First published October 19, 2006 in Mediapost’s Search Insider

Last week, I gathered in New York with 12 other search marketers for SEMPO’s twice-yearly planning retreat. To kick off, we did a bit of brainstorming about the current state of the search marketing industry. Observations included the current build-or-buy-search- marketing-capabilities dilemma faced by the big agencies, the red-hot demand for anyone with search marketing experience, the sudden development of search marketing in-house groups in large organizations, and the current push for industry-wide certification of SEM practitioners.

Also, more than a few at the table mentioned that they’ve noticed a significant change in the prospects they’re talking to–and the contact points within those companies. Today, our sales leads are more often Fortune 1000s than the latest online start-up. With increasing frequency, we’re starting to get C-level interest at the table when talk turns to search.

“My God!” I thought to myself as we jotted our observations down on a flip chart, “Search is crossing the chasm!”

Chasm Dead Ahead

Geoffrey Moore’s book Crossing the Chasm belongs on that small and select shelf of “must-reads” in technology marketing. It explores the fundamental break between early adopter and mainstream markets, and why so many companies founder in trying to make the transition between the two. For the ones that do, the reward is a sudden firestorm of demand.

Exactly three years ago now, I wrote a column asking if search marketing had crossed the chasm yet. My conclusion, (reinforced by a note of endorsement from Moore) was that search marketing had yet to do this. Until recently, I still thought we were squarely in the early adopter camp. Either search was practiced by aggressive, early adopter companies or by individuals in larger organizations that fit the early adopter profile. Budgets allocated to search by most “mainstream” organizations made it clear that it was an interesting experiment of limited scope, nothing more.

Calling All Pragmatists

But it seems that the climate is changing. One thing to remember about mainstream markets is that when they move, they tend to do so en masse. Search marketing is starting to show the early signs of a marketing channel that’s ready to make the leap from early adopters to mainstream markets.

What does this mean for search? First of all, search is too limiting a definition. There is a built-in inventory bottleneck with search that will keep it from meeting the demand that will be generated when large advertisers move large budgets into the arena. People only search so much. The relatively tame growth curve of search usage will soon be outstripped by the steep incline of advertiser demand.

So we look to two additional markets that will move across the chasm in lockstep with search. I’ll call them by more generic, all-inclusive labels. First of all, there’s “consumer-initiated marketing.” Search is the literal embodiment of this, but the search publishers will be finding other ways to enable consumers to reach out and connect with advertisers on the consumers’ timeline, not the advertisers’. Secondly, there’s “targeted accountable marketing.” These are the channels that allow advertising messages to be more precisely targeted through behaviors, geography, demographics or areas of contextual interest, providing unprecedented accountability to the advertiser. Every single search publisher is heavily invested in this area, and this will continue.

The Local Search Wildcard

Another category of new advertising inventory that will begin to crack in 2007, and will turn into a flood in 2008, is local search. According to InfoUSA and the Kelsey Group, there are about 350,000 Web-based businesses in the US, and 4 million businesses with a brochure-ware site. That leaves almost 10 million businesses without a Web site at all. That’s a total of almost 15 million businesses. There are no hard numbers for Google’s advertiser base, but an educated guess would put it somewhat north of 300,000. So, even with businesses with a Web site, that means Google only has 6.9% market penetration currently. If it seems like search marketing is old-hat and everybody’s doing it, it’s probably because you’re an early adopter and so are the people you hang out with. Add the businesses without Websites, most of which are only interested in local markets, and that penetration drops to an infinitesimal 2.3%. That’s a ton of upside potential which all sits in the local market, currently throwing its money at other channels, such as the yellow pages, newspaper and radio.

And You Thought Google Had Too Much Money Now?

Let’s do a little more math. Based on Google’s reported revenue of approximately $6 billion, that averages out to about $20,000 per advertiser. That may sound impressive until you remember that a substantial portion of Google’s advertisers are large, multi-million-dollar companies.

Let’s assume that over the next three years search marketing does cross the chasm, and Google manages to capture 50% of businesses with a Web site. Also, let’s assume that budgets loosen up substantially as search moves into the mainstream and more advertising options are open, increasing average spend up to $50,000. Neither of these predictions is overly optimistic, given a chasm-crossing scenario. And that doesn’t even touch the 10 million Web-less businesses that are likely prospects of local search, or the global market. That puts Google’s potential revenue at $208 billion. Currently, that would put Google at number 3 on the Fortune 500, right behind Exxon and Wal-Mart, and ahead of GM and Ford. Even if I’m wildly optimistic, those are numbers to pay attention to.

What is Web 2.0?

It’s probably the emptiest catch phrase since the Information Highway. Everybody refers to the Web 2.0 but nobody really knows what that means anymore. The folks at PEW Internet tried to sort that out in the Future of the Internet II report I blogged about earlier. More and more, it seems that the Web 2.0 is used to refer to everything that is wrong with the Web 1.0: it’s not interactive enough, it’s not useful enough, it’s not democratic enough, it’s not engaging enough.

I think the problem is that by it’s very nature, the Web defies definition. It’s the largest organic being on the planet. It’s all encompassing and is enmeshed into society, business, government and every other aspect of our every day lives. So to try to define a new generation of the web through some technical criteria becomes impossible. There is no versioning on the web, because versioning implies some centralization of control. The beautify of the web is that it is organic and grows from the ground up. There is no one controlling body that defines what’s in scope and what’s out of scope. We all define our own scope.

Web 2.0 could refer to the explosion of consumer generated content (and if consumers are doing the generating, doesn’t that preclude them from being consumers?). It could refer to the new social hubs of the net like MySpace and YouTube. It could refer to the proliferation of web delivered applications. In fact, it refers to all this, but the beast has outgrown the name tag that we’re trying to pin on it. Web 2.0 doesn’t really mean anything, because something as vast and amorphous as the Web defies pigeon holing.

Microsoft Too Long in the Tooth to Play Online?

Bambi Francisco indicates that Microsoft might just be too old, too slow, too stodgy and, dare we say it, too bulky to play with the youngsters in the online sandbox any more. She points to the new YouTube clone, Soapbox, that Microsoft is rolling out.

You know, I’m starting to agree with Bambi. I’ve always said don’t count Microsoft out, because I still remember what they did to Netscape, but they seem to be lagging further and further behind the cutting edge. Increasingly, the game is being taken out of the courts they tend to dominate in. It’s okay to be late to the party if you’re bringing the beer, but increasingly, Microsoft is showing up with a case of empties (okay..maybe I’m stretching the analogy beyond the breaking point).

Is Microsoft finally becoming the dinosaur that everyone’s always accused them of being? Perhaps the world is changing too quickly for them to keep up. When’s the last innovation that rolled out of Redmond that wasn’t a pale and inferior imitation of something that already existed? One can’t help thinking that perhaps Bill Gates could see the writing on the wall and bailed when he could.

Yahoo’s Stock Slump is not Indicative of the Industry

Yahoo is currently taking some lumps for a slow down in a couple of sectors, but don’t try to extrapolate this to the industry at large. In a Business Week column Catherine Holahan indicates why the slump is due more to internal issues at Yahoo rather than some industry wide malaise.

What is pointed out in the column that is probably more interesting is the growing fragility of Yahoo’s largely banner dominated network, which has been a steady revenue anchor for the company for some time. Increasingly, online is improving the ability to put the right message in front of the right person in the right place at the right time with increased targeting options, either through behavioral targeting, online property targeting or demographic targeting.  Banner distribution on a tired stable of portals isn’t fitting the bill in any of these regards. The behavioral targeting dollars are currently going away from the top 3 into smaller players like Tacoda and Revenue Science. Google has the edge in targeting ideal online properties through roll out of display in their AdSense network and MSN is definitely building a robust demo targeting platform in adCenter. Yahoo’s push back of Panama, which would at least even the playing field for awhile is definitely an Achille’s heel and the race is picking up here.

In the rush for ad spending accountability, Yahoo is starting to lag behind and that could prove fatal if they don’t catch up fast.

What Happens when the Whole World Becomes Searchable?

First published September 21, 2006 in Mediapost’s Search Insider

There are a few items that crossed the threshold of my inbox recently that led me to speculate about search in the grand scheme of things.

First of all, fellow Search Insider David Berkowitz talked about online data storage, and how it could introduce reams of new content into online depositories, there to be connected to by consumers through search.

Secondly, Apple and Google are in talks about iTV, Apple’s new set-top box that allows you to view downloaded video on your TV, at the same time making it searchable.

Welcome to e-World

The fact is, the whole world is becoming digitized and indexable. It’s not a new trend, it’s been making inroads for the last two and a half decades, but there seems to be a tipping point of convergence that’s rapidly approaching. National and international news is almost fully digitized, and local news is following in the same footsteps. There are now digital editions of most periodicals. And Google is doing its level best to digitize every book ever written. So the print world is well on the way.

The Genetics of Music

For electronic media, music is largely in the digital domain, and the searchability of it is rapidly improving. The biggest bottleneck is in trying to categorize and rationalize what is largely a subjective experience. I either like music or I don’t. How do you make that searchable? Well, interestingly, Pandora’s Music Genome Project is trying to do just that. Since 2000, it has analyzed hundreds of thousands of songs based on over 400 attributes or “genes” (hence the Genome moniker) which include melody, harmony, rhythm, instrumentation, singing styles, lyrics and arrangements, to name just a few. It’s a large-scale attempt to make music searchable by something other than genre, artist or title, which is far too limiting for most of us. The Pandora interface, in its attempt to be intuitive, doesn’t allow for power searching, but it’s still a quantum leap forward in allowing us to help define our likes and dislikes in the musical universe.

What You See is What You Search

If you take this same approach to video entertainment, there is a much more complex, and therefore richer, content depository to mine. Think of the universe of movies, TV shows and documentaries that exists, each loaded with dialogue, topicality, visuals and styles. As complex as music can be, video explodes the content to be categorized and analyzed in a dozen different directions. It provides a huge indexing challenge, but therein lies the promise and profitability. And it appears to be a challenge that Google is ready to take on. Of course, we haven’t even touched on aspects like consumer-generated video content (the YouTubes of the world, which seems to be the latest overladen bandwagon) and social tagging.

We’ve Only Just Begun…

But that’s the globally visible world, the tip of an immensely large iceberg. There is very little in our physical world now that isn’t digitized somewhere. There is a virtual mirror for almost every physical presence. Store inventories exist in the digital domain, and have for some time. Aggregating those inventories and making them searchable turns the entire world into your personal shopping mall. We leave GPS trails as we move from point A to B. Our vehicles churn out detailed performance summaries via the onboard computer as we do so. Mobile computing makes the very stuff of our personal lives; our thoughts, our activities, our appointments, our contacts, all digital and indexable. At work and at school, we all produce content on a daily basis. My daughters are content producers each time they do homework, and increasingly, that work is in bits and bytes.

As the barriers disappear between our hard drive and the Net (the subject of David’s column) all this content theoretically can enter the public domain and be searchable. Increasingly, the question we ask ourselves is “where do I draw the line between my private and my online world?” File sharing becomes a substantially bigger deal.

Brain Melting Questions

Fellow blogger Mitch Joel calls these kind of questions “brain melters.” I like that. It captures the mind-numbing aspects of this stuff. Our electronic footprint is now bigger, and in some ways more real, than our physical one. There is this vast binary universe out there, terabyte after terabyte of data that grows each and every second, capturing the essence of who we are and what we do. And the sole door to that world, the channel we all must pass through to gain entry, is search. In the act of searching, we connect to that universe.

Cast the search question in that light. Realize that we have yet to scratch the vast potential of this fundamental glue that holds the Internet together and bonds us to it. Imagine owning the solitary access point to everything!

Google, Yahoo and Microsoft are jockeying for position to do just that. It should excite the hell out of their respective shareholders, but it should scare the hell out of us. Do we really want this much power in the hands of so few?

These are big questions, and I’d love to get your viewpoint. Leave your thoughts on the Search Insider blog, or drop me an email at gord@enquiro.com.

What Happens When the Whole World becomes Searchable?

My Search Insider column today was big picture stuff, looking at how search can connect us to a digitized world.

Here’s an excerpt:

There is this vast binary universe out there, terabyte after terabyte of data that grows each and every second, capturing the essence of who we are and what we do. And the sole door to that world, the channel we all must pass through to gain entry, is search. In the act of searching, we connect to that universe.

Catch the rest of the column at MediaPost.

The column drew some interesting responses, both on the Search Insider blog and emailed to me.

Martin Edic truly thought globally

In the spirit of creating a ‘brain melter’, imagine the extension of search created by GPS and satellite imaging. Suppose I want to create a search engine devoted to global climate change. If I can access these sources I could literally do a planetary search that included both digital data a geographoc, geological, weather and other environmental data all viewable as imagery, maps, text, etc.

David Gust took exception to my plaudits for Pandora: I initially thought Pandora was great, but eventually it became monotonous. A descriptor genome for the music is great, but it doesn’t decipher the music consumption genome in me.

My point is that indexing means little without context. Context is about behavior and that is where the true focus must be placed to truly unlock value of “Indexing the World”

Derick Harris,w ho obviously has a lot of time on his hands, took me to task for my “pointless” vision of an Orwellian future

I do wish that these marketing rhetoricians of search, such as Mr. Hotchkiss, would “think first” about what they are asking, in terms of “big questions” — instead of wasting our time with patently pointless essays that amount to self-serving indulgences posing as questions that really amount to a whole world Googleized into an information hell.

…Ouch! Sorry Derick, I obviously hit a sore spot.

And in the spirit of wired “Big Brother”, Warren Peace (come on..that can’t be your real name. But if it is, kudos to your parents!) shared his vision of a database schema for a “global object database” or GOD for short…

whereby every kind of digital data could be stored, indexed and cross-referenced, and rated for accuracy (couldn’t find funding for it, though). One issue is that many things are analog, not digital, and digitizing them means losing important information. An image of a person and a list of their interests is NOT the person, just an avatar. Do we really need an avatar of every living thing?

Perhaps that’s what the real “God” is – an analog, searchable object database that details absolute accuracy.

Talk about your brain melters!

Online Video Needs Critical Mass

More on the topic of online video. It seems the majority of stories I’m seeing in this space recently have to do with moving video to the Net. A recent one was the agreement between YouTube and Warner.

YouTube is as hot as a high grade viral infection right now, which is what it essentially is. It’s the latest Net “Buzz” poster child, and it’s reaping huge amounts of traffic. That’s a great step towards sustainability, but as we’ve seen in the past, the Net’s traffic patterns are notoriously fickle. The tide can turn overnight and head to a new spot. What YouTube has to do is grow up without growing old. Kafka gets it right in his article.

Kudos to Warner for understanding the ebb and flow of the Internet. You have to watch where the new communities of interest are gathering, and shift your strategy to be in the right place at the right time. Presently, YouTube is the right place. The only question is how long is the “right time” window. YouTube in it’s present form is all hype and little substance. We’re still playing with the novelty of online video. We still get a kick out of watching teenagers lip sync to a popular song (or the theme song for Pokemon) in his/her bedroom. That will get old fast. Not to mention the questionable legality of most of the content on YouTube.

Warner is smart enough to realize that the consumer is at the wheel and will control where distribution occurs. They’re laying their bets on YouTube, and it’s probably a smart bet. At least, it’s a smarter bet that where the competition is placing their chips. Universal is still trying to maintain the illusion of control by going head to head with another red hot property, MySpace.com, with threats of legal action due to copyright infringement. EMI and Universal has also gone with SpiralFrog, a start up. They have obviously given up traffic for greater control.

But for YouTube, the trick will be to provide more meat as it transitions from a viral novelty to an internet mainstay. This trick has been successfully pulled off only a few times in the past. One was Google.

Google and the Future of Video

The talks that Google and Apple are currently in about video will likely start defining the future of video entertainment as we know it. And it’s just one more example of “push” going to “pull”.

The news story is about iTV, the new device that bridges the gap between the TV and the PC, letting you viewed video from your hard drive on your TV. It’s the continuation of convergence that I’ve been talking about for some time now.

But what is interesting about this to me is not so much the hardware as the extension of searchability to online entertainment. It’s just a matter of time before the walls come down between something like YouTube and the world of broadcast TV. They’re already crumbling rapidly. And setting your viewing preferences based on searchability opens up a whole new world. I’ve had just a taste of it through Microsoft’s Media Center and I like it. You can search up to two weeks of programming by keyword, looking for a particular topic, director or actor.

Now, let’s extend this the next logical step. Let’s open up the rapidly exploding world of video. All the movies, all the tv shows, all the documentaries ever made, as well as the crushing wave of consumer generated video content, all as searchable as the web thanks to Google. You in the mood for a show about 9/11 conspiracy theories? A quick search and you’re watching Loose Change. Plus, Google suggests other shows you might be interested on based on your topic. It’s just a matter of time before somebody does for video what Pandora is doing for music, allowing you to explore the world of video entertainment based on similarities to what you already like.

Social tagging opens up more possibilities, allowing you to tap into the most popular choices of the various online communities you belong to. The buzz effect takes over (as we see currently on YouTube) and suddenly watching online video becomes a communal experience.

It’s a revolution in video distribution, and the seeds are being sown currently in the chat that Steve Jobs and Eric Schmidt are likely having as we speak.

Schmidt Takes a Bite of Apple

Eric Schmidt now sits on the board of Apple, which is leading to a flurry of speculation about what potential partnerships between Google and Apple may be in the offing. So far, the speculation seems to be rather mundane meanderings about integrating Google search technology in iTunes, possible assistance for Google in assembling a suite of apps to compete with Microsoft, and possible entertainment content distribution deals, with Jobs ties to Disney.

To me, the potential lies in the possible creation of power positions on Microsoft’s outposts, rather than assembling the forces for a head to head onslaught on the heavily fortified desk top app market. Even with Apple at their side, Google faces a daunting task in taking on Office with their tremendously entrenched position. At best, I would see them capturing a good percentage of the relatively small “alternative” market, but unless something shifts in market positions, I don’t see them swinging many main stream customers away. These apps are squarely in the pragmatist market, and the customers adverse to the risks inherent in a switch, especially when there will be a seamless upgrade path offered by Microsoft to a live version of Office.

But the cozying up takes on a more interesting dimension when you explore the possibilities beyond Microsoft’s power positions. In the mobile computing world, Microsoft has been struggling to gain market share, and the step from an iPod to a full mobile pc is not that far. Tie that together with Google’s work in creating compelling mobile apps and a web based application matrix and some interesting possibilities present themselves. We’re not far from the horizon where mobile computing starts to replace the desktop. And mobile distribution of entertainment content is rapidly moving through the early adopter stage. A chasm crossing of significant magnitude isn’t far away. I’ve got to believe that Jobs is visionary enough to see this. Apple never managed to beat the Wintel cartel on the desktop, but the hip pocket is a whole new ballgame.

Also of note is what this means for Eric Schmidt himself. Is this move solely for the benefit of Google, or is Eric positioning himself for life after Google? As the Times articles states, this moves him into a pre eminent position as a Silicon Valley power broker, and he has had political aspirations in the past. While Schmidt has done an admirable job in minding the kids at Google, the power triad structure has never been that elegant, leading to questions of its stability.

Whatever the outcome, in the swirl of partnerships that have recently been announced, this emerges as one of the more interesting developments, with some intriguing long term possibilities.