Biznology Blog: March 2008

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March 31, 2008

Public Relations 2.0

Yeah, I'm as tired as you are of appending 2.0 on the end of every 20th century concept out there, but what do we call it? I participated as part of a great panel in the Bulldog Reporter Webinar on Friday about how the Web is transforming the PR profession. (You can download my slides on Public Relations 2.0 if you are interested.) As usual, the most interesting part for me was prompted by a question, this one about blogging in Fortune 500 companies.

One questioner asked whether blogging has peaked as a fad, after reading that only 10% of Fortune 500 companies have a blog.

So as dutiful high priests of Web 2.0, I joined the other panelists in assuring that blogging has only just begun, blah, blah, blah. But what does this number tell us? I think there are a few possibilities:

• The number is inaccurate. The article itself says that it's based on old data, so maybe someone has an updated number. Regardless, I wonder if this kind of statistic is the best way to judge the pervasiveness of blogging. We know that companies such as Sun Microsystems and IBM have tens of thousands of bloggers each, so counting those companies the same way you'd count a company with a single blog seems to dramatically understate the influence of blogs on corporations.
• Blogging is taking off slowly in large companies. Perhaps the number is accurate. One explanation is that large risk-averse organizations won't take to the transparency of blogging as easily as smaller companies do. When I interviewed Steve Swasey of Netflix for Do It Wrong Quickly, he had a different take—that Netflix wants to support independent bloggers the way they do the mainstream media, rather than trying have a media outlet of their own. Whatever the reason, maybe large companies are just slower to come around.
• Blogging has a long way to go. Maybe 10% of all companies have blogs and it matters not whether you are large or small. That might indicate that it just takes longer for more companies to jump into the fray then we were expecting. Given how much influence we see from blogs already, you might speculate that there's a lot more to come.

I do think that focusing on blogs is not even the point. Regardless of whether blogs or some other form of publicized opinion publishing is the method of choice, I don't think we're ever going back to the days of a homogenized corporate voice heard nowhere but on PR Newswire. The Web has opened up many possibilities of corporate employees speaking their minds in public, so whether it's corporate blogs, employee blogs, comments on other blogs, message boards, wikis, or something new, I think you'll see more and more openness in Fortune 500 companies.

No matter how you measure it.

Posted by mikemoran at 5:50 PM | Comments (0) | TrackBack

March 28, 2008

How Do You Measure Video Marketing Results?

You've got a metrics solution for Web pages. It might be Google Analytics or it might be something else, but you can count your page views, your visitors, and your conversions on your Web site. But as your marketing increasingly happens off your site and out of sight, you need more metrics solutions to track your progress. This week, YouTube has stepped up with a nice offering to help you track your video marketing.

See, metrics hasn't always been simple. We use lots of weird terms like "page views" and "referrals" just to make sure that normal human beings don't know what we're talking about. As I said in my proposal for simple Web metrics a while back, all marketers really want to measure is

• Did they see it?
• Did they choose it?
• Did they do it?

That's all well and good when the message is on your Web site. You know whether they saw it by using you Web metrics package. And it's great when your message is trying to lead someone to a sale. You can find out if they bought something.

But more and more, we're seeing viral marketing focused on brand awareness. And those viral messages are not usually passed on your site. That's why Web metrics is getting a bit more complicated. Just as you need DoubleClick to tell you whether a banner ad ran, you need Feedburner to tell you how many blog subscribers you have.

So, YouTube is now filling the void for video. It was great that we could upload videos to YouTube for free. Lots of folks watched our videos, but we didn't know much about them. We knew the total number of people that watched, but we didn't know when they watched, where they were from, and how popular your video was. If you use YouTube, check out their announcement of YouTube Insight.

Posted by mikemoran at 2:55 PM | Comments (0) | TrackBack

March 27, 2008

Google Takes Another Stab at Demographics

Google has a reputation as an innovator, but in personalization, they've been anything but. As I pointed out a few weeks ago, Google is deathly afraid of the only thing that can derail their plans—a privacy backlash. So, after yet another beta test for adding demographics to their paid placement offering, Google yesterday announced that "demographic bidding" is live.

Demographic bidding was pioneered by Microsoft in what is now Live Search. Increasing your bid for a keyword allows you to target searchers by age or gender, for example. Microsoft suffered no privacy backlash from this feature, but Google has taken quite a while in adding demographics to its own program.

In 2006, Google launched a test for demographics, using data culled from comScore. You can pick your preferences in three demographic categories and Google decides which sites that are popular with that audience. It wasn't the same kind of paid placement bidding on demographics that Microsoft offers.

In January, Google finally started beta testing demographic bidding. Rather than using comScore data, Google is relying on self-reported data from social networking sites, such as MySpace and Friendster. So, if a MySpace member says she is 19 years old, then the ads that Google serves on MySpace for that member could include ones that advertisers have targeted for that demographic.

This is still short of what Microsoft offers, but you can see that Google is being careful to use the demographic information known about the searcher in a very limited way. My suspicion is that Google knows far more about searchers than it is using today. Perhaps Google is careful with personalized search because it is struggling to improve its search results using the personalized information, but I suspect a more practical reason.

I think Google wants others to blaze the trail. It wants others to be the innovators who take the privacy risks and suffer the inevitable backlash as they sometimes go too far. Then as public opinion, country by country, catalyzes around what is acceptable, Google will move into those areas.

As a search marketer, are you ready for the new personalized search world? Do you know which demographics you'd pay more for? If you don't, you'll have a lot of learning to catch up on when Google finally pulls the trigger.

Posted by mikemoran at 9:01 PM | Comments (1) | TrackBack

March 26, 2008

An Untapped Internet Marketing Opportunity

Now suppose you wanted to buy your special someone a nice diamond ring. You'd probably type "diamond ring" into Google, right? So would I. But what would your not-so-savvy dad do? Is it possible that he'd type "nicediamondring.com" into the address bar of his browser? Read on to find out how you can advertise to folks like your dad.

Sendori.com wants to help advertisers reach this heretofore untapped audience. If your target market knows how to use search engines, you already know how to reach them. (I know a great book to buy if you don't.) But what about those not-terribly-geeky people who don't know how to use search engines? Why would you want to ignore them and only market to the smart?

You might think that there are very few people who skip the search engine and type in that weird domain name, but you'd be wrong. It happens over a million times a day, according to Sendori.com VP of Sales, John Appler. And what happens to these folks today? They get a 404 error, if the owner of the domain has not created a site. Or they get sent to one of those lovely "parked" domain pages that tries to induce an AdSense click to compensate its owner.

Sendori.com has a better idea. Why not send the visitor to a brand name advertiser who pays the domain owners for the privilege? If the payment is more than what the domain holders can make from AdSense on a parked domain, then they would happily go along. And isn't that a better outcome for the visitor also? Perhaps it isn't the exact site they wanted, but it sure beats a parked domain.

Here's how it works. Sendori.com has applied for a patent for technology that treats parked domains as a direct navigation marketplace. Advertisers bid on traffic to their site, no different than the way they'd bid on keywords in Google. So, in our example, any advertiser can bid on "nicediamondring.com" in hopes that the domain owners would accept the bid. UPDATE: John Appler of Sendori.com clarified that it's even simpler—advertisers bid on keywords just like with Google and Sendori matches the domains to those keywords. Thanks, John.

The owner of that domain is presented with the bid (marked up just a touch to provide Sendori.com with a tidy profit) and decide to accept it or reject it. Once accepted, the traffic that would have flowed to the parked domain page flows instead to the page the advertiser chooses.

Try it for yourself to see how it works. Type in "nicediamondring.com" into the address bar of your browser—it brings up the home page for DeBeers, the diamond merchant. From the advertiser's point of view, this is no different from bidding on search keywords. If you'd bid on "nice diamond ring" in Google, why wouldn't you bid on that domain name in Sendori.com's auction?

Ofer Ronen, the CEO and Founder of Sendori.com, explained to me how it works. When the domain name owner accepts a bid for traffic, his home page is given a 302 temporary redirect to the page named by the advertiser. Sendori.com counts each visitor sent by the redirect so that the advertiser can be billed and the domain owner can be paid. Sendori.com manages the marketplace, so that the advertiser or the domain holder can stop the redirection at any time. (Or another advertiser might come along to outbid the first.)

Ofer calls Sendori.com a "marketplace for direct navigation search"—I know it's a mouthful, but that is the way that advertisers should think about this opportunity. Today, all these folks typing in direct navigation domain names are landing on parked pages, where very few are captured by advertisers. Instead, they type in something else, slap their forehead and go to Google, or take some other step. Maybe you can intercept them in any of those places, but wouldn't it have been easier to get them direct to your site when they typed in the domain name? That's what Sendori.com can do for you.

Now, you might be surprised to know that Sendori.com already controls the traffic for 30 million visitors to these domains a month. But that's not even the best news. According to John, Efficient Frontier issued a report last June that verified that direct navigation searchers have much higher conversion rates than those from search, while costing 25% to 50% less. Jupiter Research is calling direct navigation "the largest untapped market for paid search advertisers."

Now, some might criticize Sendori.com for benefiting folks that have done nothing more than plunked down a few bucks for a domain name. True, if Sendori.com makes domain squatting more lucrative than it is today, it might prompt more of that behavior. But I think that the good outweighs any harm. Squatters already have bought up millions of domains and the experience of landing on one of these parked sites is universally bad. So why not create a better experience for visitors and provide a better vehicle for advertisers at the same time?

Your dad might want a nice diamond ring, but I want a nice way to reach my customers at lower cost. What about you?

Posted by mikemoran at 9:32 PM | Comments (3) | TrackBack

March 25, 2008

How Do You Find People?

Most of us find people the same way we find information, by firing up Google or our personal favorite search engine. I have been playing with Spock, a relatively new search engine that might make it easier for you to find the people you are looking for. Read on to find out why using Spock might be worth your while.

If you're like me, you've been invited to join enough social networks that you'd like the e-mail invitations to have their own personal spam folder. And I had the same reaction when I was invited to Spock last year. But because it was from Chris Sherman of Search Engine Land, I accepted this one.

I dutifully claimed my profile and added some information to it. But when I started searching for people, I didn't find the results any better than what I get in Google. So I filed it away and decided to look at it again in a few months. I tried it again this week and have been pleasantly surprised.

Because Spock and Google are not trying to do the same thing, I can't really say that one is better than the other. Google is ranking Web sites that contain the person's name you entered, while Spock is ranking people whose name matches.

So, you'd expect see a lot of duplicates in Google results when you search for someone even somewhat famous, because they'll show up in many Web sites. There's a lot less duplication in Spock, from what I've seen, because Spock attempts to automatically link together profiles for the same person. I did find some duplicates, but Spock includes pictures, so that alerted me to them right away.

I found Spock especially useful when searching for someone with a common name, especially if someone else with that name is famous. In Google, I might have to scroll through several pages of results to find the person I am looking for, because the famous person dominates the top of the results across dozens of sites. In Spock, the person I am looking for is very near the top, because the famous person takes up just result #1. And the pictures make it far easier to pick out the person you are looking for.

Spock claims that it uses both algorithmic and social factors to do its ranking based on reputation. If so, my reputation is not as good as my PageRank, because I am third on Spock and #1 on Google for my own name. But that isn't important. What is important is that vertical search facilities have rarely caused me to pay attention, but this one looks more promising than most.

Marketers who work in people-intensive businesses, such as consulting, should consider optimizing their entries in Spock. Just as people use LinkedIn and Facebook to find people, they might start using Spock, too. When they do, you want them to find you.

Posted by mikemoran at 4:04 PM | Comments (0) | TrackBack

March 24, 2008

Are Online Advertisers Trustworthy?

If you been following this blog, you've doubtless read my initial post about using SiteTruth, which employs real-world methods to investigate online advertisers. Perhaps you've also read about the GreaseMonkey script that allows you to see the ratings of contextual advertisers right on the Web page in your browser. But are you wondering how many advertisers pass muster? Check out the pie chart to your left and read on for more details.

According to SiteTruth's blog, over 35% of all ads could not be validated as a trustworthy business (red on the chart above), while fewer than 14% were judged green (site ownership and business identity verified). You can check out the blog for more details, but what does this mean?

Many ads that we see every day do not have enough information about the sites and the companies for customers to be confident about buying from them. Now, understand, we probably buy from these companies quite frequently. But we are taking our chances. If we were to really check out the site and investigate the company, we might be more aware that it's a leap of faith. SiteTruth is just automating that investigation for us.

If you're a marketer who is running search and contextual ads, you might want to check out your SiteTruth score. If this technology or a similar one comes into widespread usage, you don't want to have that red mark slapped on your ad. Customers may be too lazy to check these things out now, but when someone puts it in their face with no effort, see if your click rate plummets.

Posted by mikemoran at 1:37 PM | Comments (1) | TrackBack

March 21, 2008

Use Web Feeds to Get Your Pages Indexed

I got a Google Alert of a site that used my name the other day, and was a bit surprised at the source—a self-described "black hat" firm that helps people use aggressive (some might say shady) techniques for search optimization. Happily, they didn't quote me as supporting unethical techniques, but they sell a package that helps you get your pages indexed and they quote me to show that some things they sell really are ethical. I haven't used their software, but the idea of using Web feeds to improve page indexing is a good one.

It's always great to be quoted on a Web site where they feel the need to point out that "it isn't even a blackhat activity." But that's OK. The lovely moniker All Day Sucker has been applied to a software package that can turn any Web page into a Web feed.

The major search engines all accept Web feeds (such as RSS and Atom) as a way to quickly index changing content, such as blogs. But there's no reason you can't use this technique with any Web content. It might help your page changes get indexed faster. Last week, I mentioned the possibility that your speedy use of a feed might help search engines recognize that your content is the original version of the page—so feeds might avoid duplicate content penalties.

Again, I have no experience with this software or this company—perhaps there are better choices out there, or at least choices with more mainstream marketing. But I think it's important for search marketers to think about using Web feeds to improve the indexing of their content.

Posted by mikemoran at 2:41 PM | Comments (0) | TrackBack

March 20, 2008

Staffing Up for Search

I spoke to about 80 people today at Search Engine Strategies in New York City on the subject of staffing your search marketing team. (Slides can be found here.) I tried to help the attendees see that they can't restrict themselves to candidates with search experience on their resumes. They need to be willing to hire people who don't have the skills and train them. I even suggested that they be willing to hire a consulting firm to do that training and to fill in the gaps for skills they are struggling to hire. But I was bowled over by the number of people that attended the session who came up to me afterwards to ask me "How can I get a job in search marketing?"

Huh? I thought this session was prompted by the number of companies that can't find the people that they need. I felt like saying, "You just sat next to 50 or 60 people who are hiring—where's your business card?"

But then I realized that the people not being able to find work in search marketing are the very folks that I told companies to hire. The companies just aren't doing it.

One man was a lifelong journalist who is tired of journalism. He wants something new and thinks search marketing is interesting. He could be a perfect addition to a team. He knows how to write a story on deadline. What's more, he knows how to write an interesting story—one that might get passed around to others. (Hey, that's social media marketing, isn't it?) He knows how to fit his copy into a tight space. He knows how to write the big ideas at the top. He knows how to jam the right words into a headline. But he can't find a job in search marketing.

We Internet marketers are not being creative enough. Instead of hiring someone like this gentleman, we're screening monster.com for the keyword "search" and if it's not on the resume, then we don't want you. Then we complain that everyone we talk wants $30,000 more per year than we want to pay. And we're upset that they take the training and experience we give them and leave in six months. We lament that we can't find anyone to staff our teams.

But it's our own fault. We need to accept that hiring librarians, translators, technical writers, journalists, and taxonomists can help us with the word part of the job—optimization and keyword research. We need to admit that hiring a statistician or a CRM analyst or a direct marketer can help us with the numbers part of the job.

My experience at ibm.com is that hiring people from other fields looking for a change works very well. They are motivated. They appreciate you giving them a chance. And I found them to be surprisingly loyal because they appreciate what you did for them.

What about your company? Are you overlooking the easiest way to find candidates for your team?

Posted by mikemoran at 9:34 PM | Comments (0) | TrackBack

March 19, 2008

More on Converting Visitors to Buyers

Yesterday, I shared my slides and some ideas sparked by our panel session at Search Engine Strategies in New York. The room was packed (someone said 300 people), so evidently others had some ideas spurred also. We got heavy blogging coverage, from which I have seen several posts here and here and here and here and here. (Whew! I saw more, but I am getting tired.) Each one picked out different points, but the message is clear. You can't only think about traffic to your site, but also about how your site converts the traffic it gets. That's where the value is. I'll be back tomorrow with a post about my next session at SES, "Staffing Up For Search."

Posted by mikemoran at 8:28 PM | Comments (0) | TrackBack

March 18, 2008

Marketing by the Numbers

I spoke today at the Search Engine Strategies Conference in New York City (you can download my talk on Converting Visitors Into Buyers), and I was gratified by the response to the session, where I presented with a number of experts. Marketing by the numbers is an idea whose time has come. The session was well-attended—I am starting to feel as though direct marketing is finally getting the attention it deserves as the most important piece of any Internet marketing effort. So, if you've been hanging back, if you've been hoping that this marketing math stuff is a fad that will blow over, you might not to re-assess your viewpoint. Is your company still telling itself that banner ads deliver real brand awareness even when they aren't clicked? If so, you probably need to take Direct Marketing 101.

Too many marketers are still running by the seat of the pants. A study that I saw earlier this morning shows that many marketers continue to resist personalized marketing, which must be preceded by marketing by the numbers. My suspicion is the math is the problem. Too many marketers are bedeviled by the math and unable to personalize.

For those of you that are struggling. Decide the purpose of your Web site. Calculate Customer Lifetime Value. Commit to testing. And above all, decide to do it wrong quickly.

Make the commitment to begin experimental marketing guided by customer feedback—marketing by the numbers.

Posted by mikemoran at 1:57 PM | Comments (0) | TrackBack

March 17, 2008

Drawing Sweeping Conclusions

I am a huge baseball fan. (Well, I am a Cubs fan, so some years they resemble a baseball team—any team can have a bad century.) I recall a baseball team's general manager—the person responsible for choosing the players in the organization—who looked very successful because his team made the playoffs several times, but was actually crippling the organization in the long term. He continually traded his young up-and-coming players for stable veteran players. He got a temporary boost, but he was stunting the overall growth of the organization.

I call this kind of behavior, "eating your young." But when animals do it, they are culling the breed of youngsters who won't be able to make it. When we do it, we are sometimes trading the unknown for comfort.

It was far more comfortable for that GM to have veterans that he could count on for a certain level of performance than it would be to have rookies who you did not know what to expect from. The problem is those rookies had much bigger upside than the veterans, and that is how you win the World Series.

But it's worse than that. Not only do we sometimes decide things for the wrong reasons (comfort vs. risk), but when it seems to work out ("Hey, we made the playoffs!") then we conclude that it was the right decision. We humans tend to look very narrowly at what we decided and whether it "worked" when in fact we might have chosen the least successful idea out of our options. Perhaps all of our decisions would have looked like they "worked" but others would have worked better.

We can do the same thing in our marketing. When we have something successful, we tend to think that everything we did must be repeated, like it was some kind of magic formula. Usually, this is not the case. Some things we did were critically important and some were not—a few might have actively bad, but were overwhelmed by the smart things we did.

Also, we tend to see new situations as being similar to old ones, so we might apply our formula even when we shouldn't. These are all basic human tendencies, so we shouldn't feel bad that we suffer from them.

But we don't need to be fatalistic about it. We can actively work against these impulses. We can seek to make our decisions more rationally, using better data, with more experimentation. We'll never become purely rational in our decision making, but that wouldn't be the best approach either.

Are you settling for repeating patterns that "worked" rather than trying something new that might work better? Are you choosing the comfortable rather than the risky? If you are, you need to know that eventually it's gonna cost ya. Eventually you'll lose out to someone willing to sacrifice comfort and break the pattern to profit from the new technique that beats the old ways.

And when that happens, don't be surprised. Don't tell everyone about how you are doing the same things you always did, so they should have worked this time, too. That's the kind of sweeping conclusion that can only get you in trouble in a rapidly changing marketing world.

Posted by mikemoran at 4:12 PM | Comments (0) | TrackBack

March 14, 2008

What Google Could Do to Stop Negative SEO

Perhaps you've heard about "Negative SEO" or "Google bowling," where your competitors use spam techniques seemingly on your behalf to knock down your site. Ethically-challenged search marketers are once again bringing a black eye to the industry by intentionally using spam techniques to get their competitors penalized. And what can you do about it? Not much, except to complain to Google that this is the wrong way to operate. Google has choices and we need to scream that they make some better ones.

This is a story that I have been following several years, but I haven't written about it because I'd seen little evidence that it was happening. Forbes wrote an article on it last year, but I still wasn't convinced. It seemed like a theoretical problem and I thought that the search engines had the problem under control. From what I am hearing now, I no longer think that is the case. Google bowling is certainly not widespread, but I think it is possible to pull off and that it is a threat to honest marketers.

First, let me say that I totally understand why Google penalizes sites that benefit from spam techniques. (Throughout this article, I will refer to Google, but there is every reason to believe that all search engines need to worry about the same problems.) Search spam has grown out of control in recent years, as spammers use duplicate content, fake blog comments, fake sites, and paid links (among other tactics) to try to get their sites boosted. Google has long identified spammy content and spammy links and ignored them for ranking purposes.

But, just as with e-mail spam, simply ignoring spam did not hurt the spammers. They just threw more and more spam at Google, hoping that some of it would stick. So Google needed to up the ante.

Just as it does when it finds other spam techniques (such as hidden text or cloaking), Google began to penalize sites for receiving spammy links or posting duplicate content. This had the desired effect, I am sure, of tamping down spam techniques, because now getting caught could actively hurt the spammer rather then merely being a missed opportunity. Google is trying to turn a neutral consequence for the spammer ("oh well, that one didn't work") into a negative consequence ("damn, I'll have to close that site"), which make perfect sense.

But it has opened the door to nefarious characters perpetrating spam against you, the honest marketer. This is a new search marketing problem. No one could get access to your site to create spammy content or cloaking violations. If Google caught your site crossing those lines, it's clear that you actually did it, so your site can be punished without reservation. But these link spam and duplicate content techniques can be themselves faked so that your competitors use them precisely to have Google catch you and penalize you.

And there's not very much you can do about this, except complain to Google. Even that much is hard. I mean, you won't know why your rankings dropped. You also don't know exactly what links Google is seeing to your site, or what duplicate pages are out there. And you certainly don't know which ones Google thinks are spammy.

Rather than waiting to complain to Google after your site is hit, I think we should complain now. We need Google to come up with a way for honest marketers to protect themselves.

Unfortunately, the possibilities I can come up with are few.

Let's start with duplicate content. Spammers now intentionally create duplicate content and aggressively promote their duplicate copy in social media so that your original is seen to be the copy by Google. Google see both copies at about the same time and judges the more popular one to be the original.

I can see two ways to combat this. One would be to promote your content yourself, so that spammers can't easily outdo you. This takes a lot of effort and is kind of cheesy--I mean, I don't think that Digging your own blog entry is good form.

Another way to do battle is to set up Web Feeds (RSS or Atom) for all of your content. When you publish, your feed can ping Google before the spammer's copy can, so that should indicate to Google that you have the legitimate one. I don't know whether Google uses this information to flag the legitimate version of the content now, but maybe it should.

But that's not the really tough one. The really difficult negative SEO technique is link spam. Google doesn't want to tell you when they penalize you for bad links, and they don't want to tell you which links are the problems. The reason is simple--the real spammers would love to know what Google knows. In the game of cat and mouse, they could try lots of different types of spam links and stop the kinds that Google detects. If Google tells them what they detect, that's rather simple, isn't it?

So, Google can't afford to be open about what the problems are that cause the penalties. So what else is left? I think that Google needs to allow your site to refuse a link.

Just as Google asks that paid links be coded with "nofollow" to avoid triggering the penalty, why shouldn't the receiver be allowed to say "noaccept"? If the link recipient states that Google should ignore that link, then isn't that an indication that no spam effort is underway?

Now, I understand that this is easier said than done. First, Google does not today show all of your links, either with the link: operator or in Webmaster tools. So, if Google wants to continue this practice of showing you mere samples of your links, then it needs to make sure that the sample includes a sample of the links it considers questionable. So, Google would have to update its sampling algorithm to ensure that.

Second, marketers would need an interface that allowed them to examine their links and refuse the benefit of any of them. I think that Google Webmaster Central could be easily updated to accommodate this. Because Webmaster Central is controlled by ID, it's clear that the rightful owner of the site is refusing the links (so this could not become a new form of negative SEO by having your competitors refuse good links).

Third, Google would need to update its ranking algorithms so that the benefit of the links that you refuse would really disappear. If Google does not do that, then it would be beneficial to just go in and refuse all links—that would save you from spam penalties and not hurt your rankings. Instead, refusing a legitimate link must hurt your ranking, so that you will have the incentive to refuse only the spammy ones.

Fourth, there needs to be a way of making it easy to keep up with new links that are added and with links whose characteristics change. So Google should provide an RSS feed or a sortable interface to allow marketers to examine links that are new or changed so that you get a new chance to refuse the spammy ones.

If this is sounding very complicated, well, it is. I am not clever enough to know if this idea is bullet-proof. Perhaps the spammers can think of some hole in it. It's a lot of work for Google, but worse, it is a lot of work for you and me. I just can't think of any alternative.

Google could make it easier by trying to provide the smallest number of links in a sample for you to accept or refuse, but I can't think of any way to reduce the work beyond that. It seems to me that, like click fraud, this is one of those immensely scary problems that could kill the goose that laid Google's golden egg. Even if negative SEO is not widespread (yet), Google needs to nip this in the bud.

What do you think? Are there holes in my proposal to Google? If there are, let's plug them or come up with an alternative. But we must come up with something to end this madness. Search marketing has a bad enough reputation without this. Let's work together so that honest search marketers still have a chance to succeed on their own merits.

Posted by mikemoran at 12:47 PM | Comments (10) | TrackBack

March 13, 2008

Market Research to Uncover the Unexpected

My teenage daughter and her younger brother were kidding around, when he had an idea for something silly. Dwight removed the stick-on name tag from his shirt and adhered it to his sister's knee. She showed herself to her mom and said, "Look, mom! What do you think my knee's name is?" My wife laughed and said, "Dwight." And my daughter said, "No Mom, I mean the other knee."

It made me laugh the first time I heard it, because her response was so unexpected. You know it's goofy that she has a name tag on her knee, so you assume that you know what she is talking about, but you actually don't. It's very human to analyze a situation and make assumptions about communication—it saves us lots of time, except when it throws off totally off the scent.

We have this same situation with our customers. Sometimes we think we know what is on a customer's mind, but we actually don't. We can craft all the survey questions in the world, but if we fail to provide the choice that fits a customer's mindset, we might not truly find out what they are thinking. Or we can offer open-ended survey questions, but they take a lot more time and money to aggregate the results, and they can sometimes be misinterpreted if categorized improperly.

That's one of the reasons that I love search marketing. You can think of the search box on your site as a "fill in the blank" customer survey. You get unfiltered insight into what customers are really interested in.

You don't have to know ahead of time what to ask about—they just tell you. You don't need to make any assumptions about which choices should be offered. You don't need to go through the pain and the expense and the waiting associated with fill-in-the blank surveys.

You can count the occurrences of search keywords to spot new customer interests that are beginning to crop up, or to note changes in the popularity of subjects that you have been tracking for some time. All without the unavoidable bias that multiple-choice survey answers introduce and without the expense of interpreting an open-ended survey.

If you've been used to taking a utilitarian view of your site's search engine, treating it as just a tool to help customers find what they are looking for, step back and take a fresh look. Perhaps your site search engine is a free source of market research that you've overlooked all along.

Posted by mikemoran at 1:54 PM | Comments (0) | TrackBack

March 12, 2008

The Misguided Quest for Control

You've been there. Perhaps you're in the supermarket minding your own business when you are suddenly struck by a scene. A child is totally out of control, screaming, carrying on, and you are asking yourself, "How come that parent can't control that child?"

If you're a parent yourself, you might be telling yourself something else, too. "The parents of that child must be doing something horribly wrong to put up with behavior like that." Why is it that we reflexively blame parents for their children's misbehavior?

Because it gives us the illusion of control.

As parents, we desperately want to think we have control over how our kids turn out. So we tell ourselves that because we don't make the mistakes those other parents make, then our kids will be OK. So every time we see a kid who has problems, we want to blame the parents, just to make ourselves feel more in control. Because if it isn't the parents fault, then (oh no!) those problems could befall our kids, too! Scary.

Unfortunately, we don't have as much control as we wish we did. Sure, parents are a huge influence over their kids, but sometimes kids don't turn out the way we expect even when we did a good job.

I remember being the person in that supermarket asking myself what was wrong with the parents that allowed that kind of behavior, and my wife brought me up short with her typical wisdom. "How do you know what problems that child has? He could be autistic or have some other wrenching problem those poor parents cope with every minute of their lives. For all you know, that kid is having a good day."

Wow.

She's right. We tell ourselves these things to give ourselves the illusion of control. It's a natural human impulse that soothes us in times of upset. But it might not help us to think clearly and rationally about the situations we are in and it certainly doesn't help us provide help to other parents.

Marketers, unfortunately are human beings too, and suffer from similar mindsets. (You knew I would eventually get around to talking about marketing, huh?) So, when you see a company suffer a huge public relations black eye, do you say to yourself, "Boy, that PR team really screwed that one up"? When a rival product begins to attract denigrating word-of-mouth, do you tell yourself, "Those guys just do not know how to practice message control"?

Or do you look at those experiences as a cautionary tale?

As marketers and PR professionals, we need to resist the impulse to explain away the problems of others with incompetence. While it's true that some problems really are screw-ups, many are simply the luck of the draw. We'd love to believe that our superior decisions, policies, messages, and other assets determine our success and protect us from similar travails, but they don't. We don't have the control over our situations that we want, and we need to be ready for something unforeseen to happen without it ruining our entire self-image of competence.

Can you watch others deal with situations and learn from them, or must you explain them away to soothe yourself? Do you analyze things you see and ask yourself what you'd do in that situation, or do you tell yourself that you can control things so that would never happen?

"That will never happen to me" is probably something that many people have said to themselves. And it did happen to some of them. Are you learning how to handle difficult situations or are you just telling yourself that you are in control?

Posted by mikemoran at 1:35 PM | Comments (1) | TrackBack

March 11, 2008

Does Google Have Enterprise Software Ambitions?

Google is the king of advertising, and it's made moves toward productivity software, with Gmail and Google Docs. But what about enterprise software, the stuff that powers businesses, even large ones? Does Google harbor ambitions to be an enterprise software player? I've recently taken a look at Google's strategy and Google's supreme motivation to own the moment of purchase. Let's look at how Google might step up to the plate in the big leagues of software.

Google has already taken some baby steps into enterprise software, licensing Gmail for businesses and selling the Google Search Appliance to power Web site search. But what if Google wanted to do something big?

Google is not considered a player in enterprise software—marketers will tell you that it doesn't have "permission" to sell into most enterprises. What they mean is that Google's brand reputation does not carry the kind of customer service that most businesses expect. Most companies don't think Google understands how to keep their business running. They don't think Google understands how to create a software package that can be easy to run in their environment. The Google Search Appliance, where you buy the hardware from Google to run the software, is seemingly evidence of this point.

But enterprise software competitors should not take much solace in this state of affairs, because the software business is changing.

Just a few years ago, it would be a hysterical claim that businesses would even consider buying an appliance. Or would be happy to use Gmail—a system that runs completely outside its corporate firewall. Even today, few businesses make those choices, but that number does increase each year.

Both appliances and Software as a Service (SaaS) are trends that are taking root because enterprise software is sometimes costly and hard to use. Every enterprise software vendor is developing its capabilities in these areas. My company, IBM, has unique strengths to pursue SaaS because it has experience in both software and services businesses, but some enterprise software vendors are understandably wary about their abilities to compete with companies like salesforce.com (who sells a sales force automation service) and Amazon (who sells an e-Commerce service).

So what about Google? Google would likely have the brand permission to sell a service to the enterprise. It has the chops to scale its services to any level without breakage. No customer would doubt Google's ability to keep a service up and running. But enterprises might still wonder whether Google has the business perspective to provide support to make it work no matter what. Enterprises might still balk at paying Google each month for a service for which support is an unknown.

How could Google address those issues? Well, they could work to create an organization (either through acquisition or organically) that convinces customers that they will service what they sell and keep the business running. That might require a real culture change within Google and would likely take time.

There are two easier ways to win this brand permission, both of which fit far more easily into the Google culture:

• Make it easy. A lot of the support required for enterprise software have to do with how difficult it is to integrate software into existing environments, and how hard it is to customize software to unique needs of the very largest companies, and how difficult software can be to use sometimes. SaaS can eliminate most integration problems, and Google could decide to avoid the very high end customization market completely, while providing simple user interfaces for simple tasks. You can see them taking this approach with the Google Search Appliance—it does not match the capabilities of other enterprise search engines, but it is easier than many to install and use (in part because it does less).


• Make it free. A lot of resistance fades away if you sell something for everyone's favorite price. You can see Google taking this approach with Google Analytics and Google Website Optimizer, powerful tools that are not at the top in functionality, but are at the bottom in price.

But how could Google afford to make it free? Its leadership in advertising could be the answer. We are used to accepting advertising in our Gmail accounts in return for free personal e-mail. Could businesses decide to make the same trade-off for enterprise software if presented the chance?

But it's more than advertising that Google wants—they want access to information about people's interests, so they can personalize the advertising. Google follows this model with Gmail, also. They promise not to divulge your private e-mail to anyone, but they regularly examine it (with their computers) so they can provide targeted advertising based on what your e-mail tells them you are interested in.

How powerful would that model be inside an enterprise? Perhaps the price for powerful, free, low-support (read: high productivity) software would be allowing Google a peek inside the firewall. Companies would allow Google to peek at the content (with computers) to detect what the interest areas are for each employee. Maybe Google would even want to tie into a company's intranet ID system to learn about each individual user (gender, job role, etc.) so that Google can even better target its ads.

Google might offer businesses two versions of the software, a free one that peeks inside your enterprise and a paid one that does not look at such information.

I have no idea if Google is thinking about these things, but it is an opportunity staring them in the face if they are interested. Think about the powerful advertising they could unleash for B2B purchases if they had the access to companies that allowed them both to personalize and to present ads. Google might offer your company a discount on placing these valuable ads if you agree to open up your own company to receive them.

Google has many choices about how it can do this. Always, it must be careful of any privacy backlash, but I think many businesses (especially small-to-medium ones) would leap at the chance to run their business online. Intuit's Quickbooks Online is not a fluke, it is the beginning of a trend. Google could ally with Intuit, salesforce,com, and other SaaS companies that would be willing to share in the advertising wealth in return for offering a free version of their service. They might work in concert with existing enterprise software vendors to convert their packaged software to SaaS. Possibly, these service offerings would not even need to be free—a deeply discounted price might be good enough for some.

I certainly don't know if these ideas are part of Google's plans—even their distant plans—but I do think that they have the intrinsic capabilities and the market position to try it. Maybe enterprise software is too varied and requires too much investment for such a model to work, but I am not sure. B2B purchases can be extremely lucrative and it is far harder for advertisers to reach the B2B buying team at the moment of truth. I wonder if free SaaS enterprise software is an idea whose moment is coming.

Posted by mikemoran at 2:17 PM | Comments (0) | TrackBack

March 10, 2008

How Do You Effectively Budget for Customer Acquisition?

I read a great post last week on the RKGblog on how to spend customer acquisition dollars wisely. Read it yourself, but remember that its audience is catalogers steeped in the world of direct marketers. That world has its own parlance that it trots out as shorthand to explain what they are doing. Internet marketers who don't have a direct marketing background might not understand the advice in this excellent post, because they are lacking the background. So, if you understand the RKG post, you're done for today. If not, you might want to stick around to get a background on two important direct marketing concepts that you can use to assess your acquisition budget on a regular basis.

The first concept you might want to get acquainted with is RFM—it stands for "Recency, Frequency, and Monetary"—a time-honored way for direct marketers to cull their mailing lists so that they identify their most valuable customers to lavish the most attention on. Web marketers from benefit from knowing how to apply RFM to the Web and from how to use RFM to increase the value of customers.

The other concept you might not be familiar with is Lifetime Value. When you are deciding how to allocate your acquisition dollars, wouldn't you like to acquire customers based on the lifetime of profit that a customer relationship will bring you, rather than simply the profit on the first sale? If much of your business is built on customers returning to you to buy more, you might want to a simple way to calculate Lifetime Value for your customers.

Sometimes the advice you get might seem a bit daunting, because it assumes you know more than you do. Don't be afraid to slog through the terminology and learn what it means so that you can absorb what the experts are prodding you to do. There's no reason that you can't be an expert Web marketer if you're willing to learn a bit of direct marketing background.

Posted by mikemoran at 4:37 PM | Comments (2) | TrackBack

March 7, 2008

Who Says Banks Are Stodgy?

Sure, we've all heard of these new born-on-the-Web banks and trading companies. They're cool and trendy, but surely no old-style bank could be like that, right? After all, we all tell ourselves that the traditional companies we work for can't move that fast or take such chances. Meet the Co-CEO of a company that doesn't tell itself that. While in Copenhagen, I met Lars Seier Christensen of Saxo Bank, which combines cutting edge technology trading services, primarily in foreign exchange and derivatives. Saxo is not your father's stodgy bank. Lars agreed to an e-mail interview that I expect you'll find enlightening

Me: How did you get started with Saxo Bank? How did you get where you are now?

LSC: I founded the bank together with Kim Fournais in 1992. We still share the responsibility as Co-CEOs today. We started as a tiny brokerage on a shoe-string budget of $100,000 (US), and have developed largely organically to being a 1,200-person operation valued at around $2 billion (US) today. We were then, and are today, the first and foremost foreign exchange trading specialists. although we have now expanded to deliver a multi-asset trading platform.

Me: How and when did the bank first decide to get into electronic trading? How did you convince others to try this?

LSC: We became aware of the Internet in the mid-90s and saw this as an opportunity to differentiate ourselves as a very small financial institution back then. As we, the CEOs, always believed strongly in the future of electronic trading, we also drove the process firmly from the top. Interestingly, it was the employees that were very skeptical and the CEOs that were the enthusiasts. Initially, after our first launch in 1998, the results were disappointing—we were simply ahead of our time in a traditionalist markets such as foreign exchange. Business began to pick up around 2000, and since then, neither we nor the rest of the industry has ever looked back. Today, more than 50% of all global foreign exchange is traded electronically.

Me: Who are the target customers for Saxo? How do you know if a technique is working or not?

LSC: Our customers are sophisticated individual traders, smaller to mid-sized institutions and, most importantly, white label partners that use our technology in their name towards similar client segments. Our most prominent white label partners include names like E*Trade and Citigroup. Originally, we developed the platform for our own customers, but realized that we could gain significant leverage on our heavy technology investments by letting other financial institutions white label the product. Our approach is one of flexibility and to a certain extent, hit or miss. If something works, we add resources, if something does not work we are pretty good at shutting it down before it becomes a millstone around our necks.

Me: Can you relate an anecdote of an on-line marketing tactic that started slowly and eventually started to work as you modified your approach?

LSC: We were among the very first to use paid search. I remember buying—personally, in those days, because it fascinated me, and still does—fantastic words at 5 cents (which was the minimum bid) and having no one else bidding. The same words are in the tens of dollars today. So over time , the ROI has dropped on search, but on the other volume has become more scalable, a fine balance, when you operate a $50 million (US) annual budget for marketing campaigns.

What has been our biggest problems have been to scale efficiently while the company grew exponentially, and today we are deploying a much more diversified approach including a lot of offline events, such as seminars, closely coordinated with highly-targeted local campaigns on the net. We do business in some 170 countries, so we need to both brand our name widely in some contexts, but very narrowly in others, to attract a small niche segment of investors. Quite complex, really, and we make many mistakes, but also here, we track carefully, and stop things that don't work.

Me: You seem to use search marketing very heavily. How much of your marketing budget is devoted to search marketing, and to Internet marketing as a whole?

LSC: Pure search is around 20-25% of our total budget of around $50 million (US). As stated above, we increasingly find it necessary to combine different methods intelligently to keep results at the right level.

Me: What do you see as the biggest opportunities and challenges remaining for Saxo? Do you see changes in on-line marketing that Saxo needs to adapt to?

LSC: We used to be very cutting edge, and have probably relaxed a bit too much in the past couple of years. But we are very aware of this and our beefing up our internal expertise in various aspects of online and offline marketing. There are lots of new formats and opportunities out there, and as Internet users become increasingly resistant to advertising, you've got to get smarter all the time. We are currently trying to move towards one-to-one dialogue in our campaigns, which is cost- and labor-intensive, but justifiable because the value of a customer is quite high for us.

Me: Do you see the Internet emerging as a force that punishes bad behavior in corporations (and rewards good behavior), much like the media and government have served as those forces in the past?

LSC: No doubt that the Internet creates transparency and accountability. It also creates a lot of opportunities for operators to manipulate debates in bad faith, unfortunately. But we are very focused on increasing our user and client involvement, and I believe that most of the really successful new concepts are based primarily on user-generated content. This is also applicable to financial services, although not many use it yet, but we hope to be trend setters in this area in the future. People want to sympathize with the provider they buy from, and that goes for financial institutions, too.

Me: Thanks so much, Lars, for taking the time to talk to us. Saxo is a great example to all of us that think we work in stodgy companies and industries. If we want it badly enough, we can make things happen.

Posted by mikemoran at 11:45 AM | Comments (0) | TrackBack

March 6, 2008

Can You Trust Contextual Ads?

You might recall I talked about SiteTruth a while back, a free service that revamps search results from popular search engines to rate the trustworthiness of advertisers based on a variety of real-world factors. I suggested that they develop a GreaseMonkey script to rate contextual ads, and they went ahead and did just that.

Check out SiteTruth AdRater. It requires GreaseMonkey and Firefox, and it gives you the same kind of experience for many contextual ads that SiteTruth has done for search engines. You can see an example of its ratings for my blog's home page below.

SiteTruth's AdRater stepped in to show what it thought of the ads. You can see the Google ads on the right of the screen, with one ad getting a green check, one a red minus sign, and the third a yellow question mark. Now a bad rating wouldn't keep me from clicking on an ad that really seemed relevant to me, but I admit I would probably give the company a longer sniff test before I actually bought something.

I don't know if SiteTruth will catch on with consumers, even savvy ones, but this is an idea that makes too much sense not to show up in one form or another. Perhaps SiteTruth should team up with Norton or one of the other companies that markets products to prevent phishing attempts. The same folks concerned about phishing would probably be interested in SiteTruth's take on the reliability of advertisers.

If you're an Internet advertiser, check out SiteTruth and see how it rates your company. As the Internet continually becomes a more sophisticated marketplace, you need to be aware of what criteria your customers will use to rate your company, and to stay ahead of the pack. Using offline criteria to rate online ads is an idea whose time has come. Don't get caught napping with your reputation at stake.

Posted by mikemoran at 1:50 PM | Comments (0) | TrackBack

March 5, 2008

The Convergence of Content Management, Text Analytics, and Business Intelligence

I spoke this morning to over 100 people, which isn't news in itself, but you might be surprised when I tell you the topic. These good folks want to know about how content management, text analytics, and business intelligence are coming together. I expect to draw large crowds (often larger than this one) when I talk about Internet marketing, but this crowd wanted to know about the technical forces that are moving under the surface. This crowd is well-schooled in content management, but I hope that I was able to show them how content management is just part of what businesses need to solve some kinds of problems—text analytics (and text search) combined with business intelligence can augment content management to form a powerful solution to help typical business users, including Internet marketers.

As I explained to the audience, I was reluctant to show the normal where-the-rubber-meets-the-sky presentation depicting big clouds of technology converging on each other, full of "gee whiz" questions about what we can imagine comes in the future. No, I wanted to do something more practical.

So, I conjured up a scenario that combines content management, text analytics, and business intelligence, but uses these technologies exactly as they exist today. No invention required. What is required is all of us looking at these technologies as pieces to integrate rather than silos that must be managed by technical experts.

My scenario featured Dorothy, the marketing executive of a mid-sized telecom firm who is using technology to find out what the market is saying and to respond with an improved marketing campaign. Again, all the technology in the scenario exists, but it isn't integrated in such a way to make this possible today. If you're interested, you can download the scenario from my talk on the convergence of ECM, text analytics, and BI.

After the talk, I got a good question: "Is OLAP still needed?" Frankly I hope no one gets the idea from my scenario that business intelligence experts won't still be needed—they will. All I am trying to do is point out that we should reserve them for things only they can do, freeing up the information from requiring expertise to perform simpler tasks.

If you're an Internet marketer, I hope that you'll benefit from the type of system I showed in the scenario someday. Someday soon, I hope.

Posted by mikemoran at 7:19 PM | Comments (0) | TrackBack

March 4, 2008

Advertising at the Moment of the Buying Decision

I spoke yesterday about Google's strategy, but a few people wanted to understand a bit more, so I am revisiting that topic. To understand what Google (and many other companies) are trying to do, you need to think more carefully about the purpose of advertising. Sure, sometimes it's simple brand awareness, but more often it is to influence a purchase decision. It stands to reason that the most valuable advertising you can do is at the moment someone is considering a purchase. Google's strategy is to be there at the moment that your customers are making their purchasing decisions, and to charge you for access.

Internet advertising is different from offline advertising in significant ways. It's an interactive medium, so you must attract people to listen to your marketing message, rather than interrupting them when they are doing something else. It is a more personal medium, so you must speak in a more subdued, less bombastic tone. But one difference is often overlooked. Marketers can identify each customer's progress through a personal buying cycle.

In many ways, Internet customer behavior is an open book—we marketers must just be willing to read it. Think about a big purchase you've made, such as an automobile. How did you start?

Many of us would start such a purchase by searching for broad words describing the type of car we want, such as "hybrid sedan" or minivan" or "mid-size SUV"—you get the idea. Searchers using those broad terms are learning about what is available. They have some idea what they want, but they are at the beginning of the buying cycle.

Depending on what you sell, you might break up your customer's buying cycle in different ways. I recently purchased a Slingbox, but when I started out, I didn't know what a Slingbox was. I began my learning with "wireless TV" and found everything from an adapted nursery monitor to Verizon V CAST for mobile phones. After some reading and a lot more searching, I narrowed down what I wanted over time, but I started out searching for a solution to a problem, not even knowing the right words for that category.

Your customers might start even farther back, searching for problems themselves. They know there's something wrong, but they don't have the slightest idea what to do about it. Regardless of the exact path that customers take through the buying cycle, you need to focus on what messages to send based on where they are in the process.

This is fundamentally different from most advertising. No matter how many TV ads or print ads you do, you'll never know how many people are actively ready to purchase and how many are only vaguely aware they have a problem. That's why traditional marketing messages have been scatter-shot full of different messages that try to explain the problem, explain the product, and persuade that this is the right one for you—all in the same ad.

Internet marketing allows you to break up the message so the right pieces are pinpointed at the right people. Wouldn't you prefer to deliver a different message to someone looking for "family sedan under $25,000" then "family sedan"—perhaps one segment cares a bit more about price? If the Slingbox folks tell me how it works when I search for "wireless TV" and tell me about free shipping when I search for "buy Slingbox Solo," they will sell a lot more.

Google knows this. Google's paid search ads are effective precisely because advertisers will pay more to get at the customer at the exact moment a buying decision is being made. But Google wants to go further, Google wants to reach people at the point of that decision even when they aren't searching. Yahoo! is already using retargeting, a technique that uses past behavior (such as searching for "Las Vegas hotel") to trigger personalized ads within a content network (such as tickets to an upcoming fight in Las Vegas, or promotions for nearby casinos). Google will do the same with DoubleClick, using searches and other customer activity to predict which banner ads might be more persuasive to this customer at this moment.

Google wants to own the real estate where customers make their buying decisions because that's the most valuable real estate to advertisers. But don't worry. They'll be more than happy to rent that real estate to you.

Posted by mikemoran at 1:24 PM | Comments (1) | TrackBack

March 3, 2008

What's Google's Strategy?

Boiling Google's strategy down to just one thing is impossible, but Internet marketers (and search marketers in particular) ought to be thinking about where Google wants to take the industry, because even if Google ultimately can't go where it wants, the industry will be changed regardless. Watching Google helps us understand not only where Google is going, but where others might go also. So, what is behind all the actions we've seen Google take over the years?

Some of the motivations are simple. Google's revenue is based on advertising, so it needs more and more places to show its ads to increase its revenue. So, expanding its reach through its AdSense contextual ad network makes sense. So does its acquisition of DoubleClick. Both of these moves allow Google to place ads on Web properties it does not own.

Similarly, Google has been consistently acquiring properties that serve as venues for its ads, such as Blogger and YouTube. Google has also pioneered new offerings that attract audiences for its ads, such as Gmail.

But Google's strategy is far richer than merely adding new venues for the same kind of ads it shows on search results pages. Google knows that the reason that its ads have commanded premium prices (versus banner ads) is because Google ads have the customer's attention. When someone is searching for something, they are interested in the ads, while Web surfers might not be. Google understands that the attention paid to a message is a critical part of why it has high value to an advertiser.

So, attention is more than real estate. Showing a display ad does not ensure true customer attention. True attention is a function of relevance.

Google already commands attention with its search ads, and seeks to create similar relevance with other forms of advertising. The act of searching itself is based on relevance, but Google's contribution to advertising relevance is the hybrid paid search ranking scheme—they were the first to rank search ads based on the combination of bid price and clickthrough rate. By adding clickthrough rate to the previous high-bidder approach, Google not only maximized its income, but also increased the relevance of those paid search ads. It's reasonable to think that the gradual increase in clicks on paid search ads is partially caused by the fact that they are more relevant than they once were, and searchers have learned trust them more.

But that's not Google's strategy, it's Google's history. Google has a history of selling advertising that is the most relevant—it's relevancy is driven by the attention people pay to it. Google's strategy is to broaden this kind of relevancy beyond search.

Google wants plain old banner ads to command the same level of attention that paid search ads do. And the key to that kind of relevance is personalization. That's Google's strategy. If you look at what Google has done over the years, it all ads up to finding out more about everyone.

The Google toolbar can report search terms and Web sites visited. Geotargeting identifies where they are. Google Analytics reports all activity on a Web site. Google Checkout knows what gets bought. Google Website Optimizer knows which variations of your marketing message work best. Gmail knows what your customers say, even in private. Google might even bid on mobile phone spectrum, which might allow it to know people's whereabouts and even more of their behavior. And it's all tied together with your Google Account.

Some people see some sinister "Big Brother" aspect to this, but I think it's just the natural evolution of relevance. Search engineers have spent the last 40 years working on the content, but now it's time to focus on the searcher. That's why you're seeing Google and the other search engines beginning to personalize search results. And it will only escalate—a few small changes to results here and there will lead to more and more personalized results over time.

But that's not all. Behavioral targeting and retargeting brings personalization to banner ads. (Even ISPs are looking at behavioral targeting.) And Google is well-positioned to mine personal information, given how well it has executed its strategy. It's hard to remember how, just a few years ago, Google seemed less capable than Yahoo! and Microsoft to bring about personalization. Those companies had portals that promised to detect far more information than Google's simple (and anonymous) search interface. It's remarkable how much ground Google has covered since, so that today it appears to know more about searchers and surfers than anyone.

Could anything derail this strategy?

The most likely problem Google will have to face down is a backlash based on privacy concerns. As the public becomes savvier about privacy with each passing year, providing free software might not be enough to persuade people to part with their privacy. Even the work underway is slow because searchers don't understand the benefits of personalized search. Google is well aware of this danger, so it remains to be seen if they can evade it.

It's always dangerous to attempt to summarize a company's whole strategy in a short blog post—Google's strategy is far more diffuse and nuanced than this. But it helps us to try to simplify things to their essence, even at the risk of oversimplifying, because it helps us understand the forces at work in Internet marketing.

Understand that what Google wants to do might not happen, but it is certain to affect what others do and what eventually does happen in Internet marketing. If you pay attention to these broad themes as you do think through your marketing strategy, you'll be more prepared for whatever does come along.

If you receive this newsletter once per month but are left wanting more, you could be reading these rants every day. Sign up for the daily Biznology blog as an RSS feed or by e-mail and other options.

Posted by mikemoran at 2:18 PM | Comments (7) | TrackBack