In Canada, as in every country, there are many regulations governing the terms of mortgages offered to consumers. In addition to that, some of Canada’s banks (called “Chartered” banks) have long enjoyed a special, protected status. Not just anyone can open up a bank. The country’s careful rules around mortgage lending terms, amortization periods, required down payments, and mortgage insurance have seemed wisely conservative in hindsight. No greed-driven bubbles of low-quality mortgage lending… less fallout in the form of bursting bubbles and plummeting asset prices.

But everyone knows there are no formal regulations pertaining to the actual posted rates the banks provide, based on their own calculations of profitability, communications strategy, and the cost of money to the banks. Despite being regulated, if their cost of money drops, they can offer special rates. It’s up to them. And that’s just what some of them have done.

Finance Minister Jim Flaherty decided they shouldn’t. Using not only the weight of his office as a prod, but also (undoubtedly) behind-the-scenes reminders of the special breaks, insider dealings, permission to enter certain categories of investment banking activity and global finance, and favorable legislation the major financial institutions may continue to enjoy (in areas such as service fees and credit card interest rates and terms, for example), Mr. Flaherty scolded some key financial institutions when they decided (based on cheap money in the global financial system, not least of which comes from the Bank of Canada’s monetary policy decisions) to post rates for five-year fixed mortgages as low as 2.99%, as a special Spring offer. He so harassed Manulife and BMO that they reversed their promotions. The government told private companies what to do, in other words, despite there being no law or regulation on the books that prohibited it.

Apparently Minister Flaherty was concerned about a potential housing bubble. People in their 30′s with lives to lead and babies on the way apparently want to do something crazy like lock down the same kind of home ownership lifestyle that has been the norm since Flaherty and his wife bought their first home sometime in the 1960′s. And with interest rates so low (thanks to the central banks’ monetary policy), who could blame them? Homeowners didn’t create cheap money. Neither did lending institutions.

At least one bank president, a Mr. Waugh of Scotiabank, railed against the excessive government interference.

Never mind, Mr. Flaherty, that mortgage brokers, second-tier institutions, etc., rub their hands with glee at automatically now being handed the mantle of “low-rate leader.” Never mind that anyone with strong credit who sits down with their banking rep will immediately be shown the “real” rates, and if they go across the street to a white label lender, will have a rate offer in their inbox numerous basis points below that by the end of the week.

Yet, several of the largest lending institutions decided to roll over and change their posted rates… in most cases to rates above the psychological barrier of 3.0%. Those who didn’t are getting the leg up in terms of consumer attention. What unseen governmental wrath may they now face?

As usual when governmental actors overstep even the bounds of already interventionist government policy, there is a bit of a domino or trickle-down effect. In this case, it trickles down to marketing. Do you think it is just a couple of disgruntled bank presidents or board members that are affected when a large line of business is asked to take a zigzag course in the middle of its busiest season? There are millions of shareholders to think about, first of all. Millions of consumers in the market for mortgages. And whole marketing departments and advertising vendors who need to “make do” with a watered-down message when they had earlier had coherent, well-thought out plans developed around rate specials intended to raise consumer interest in an important season during a fragile economic rebound.

It looks like the government’s random jawboning in the banking sector has just made pretty much everyone less effective in their jobs. And everyone is conditioned to stop driving forward in their area of expertise, lest the wise prophet of bubble doom have another bad hair day and announce his latest viewpoint.

I rarely get political here, because it’s not the place for it. But an agent of the government telling the financial sector what they can and can’t say… from a government that came into power promising less regulation and more economic freedom? It just proves: the longer they’re in office, the less connected they are to the real interests of consumers, and the real challenges of the private sector.

I just hope that most consumers understand that the informal, non-posted rates they may actually negotiate when they sit down with a bank rep haven’t changed. And in many cases, they’re below 3%. If you’re employed and bullish about the future, it’s not a bad time to buy.

Even though arguably valued richly, Yelp stock still managed a remarkable rise of 25% in the wake of its most recent quarterly earnings report.

What’s driving the optimism for a company that lost 8 cents a share (more than estimates), but posted strong revenue growth of 68% year over year (ahead of estimates)?

• When it went public, the company had scant revenues, but was already becoming universally known and widely used.
• Unlike some companies in this user-generated-content space, its international expansion is relatively seamless and legit (like TripAdvisor).
• Mobile! Some companies worry that rapid shifts to mobile user engagement mean challenges for monetization. Yelp is already killing it in this channel and is only just getting warmed up.
• The “freemium,” “claim your company and then consider the benefits of paying for enhanced listings” ad sales model is logical and is amenable to constant refinement. Quite simply, Yelp is doing a good job of perfecting and scaling the model, and there is no reason to think it won’t be highly profitable as it grows. Compare the nightmare scenario at Angie’s List where the money largely comes from users, they churn endlessly, and to make up the slack, the company is also taking revenues from companies, something their print advertising has trumpeted they never do.
• Despite some grumbling about review content (a necessarily messy world where the veracity and usefulness of reviews falls under constant scrutiny), Yelp is easy to recall, and basically likeable. When you see a story about folks reviewing jails on Yelp, it’s a fairly good sign that you may be top of mind. Controversy isn’t bad, as long as people understand what they can do with your app.
• Most of all, Yelp is doing what, in going public, it tacitly promised investors it could do: turn into a viable, big-time business of far-reaching relevance to consumers and businesses in every city and town in America, and many countries around the world. Those who bet against them executing on that have been proven wrong.

Has Yahoo been doing enough to monetize its home page?

Sounds like one of those questions that might’ve made Yahoos really bear down and think hard in 1999, and again in 2003. Which is why, a decade down the road, I wonder if Yahoo needs to reinvent itself entirely, rather than just try to execute better on being Yahoo. That was the argument I made in my previous post. (I’m sure quite a number of folks at Yahoo disagree.)

This week I caught wind of a new beta product that’s about to launch for advertisers: Yahoo Stream Ads. (Screen shot below.) The ads are being promoted to advertisers as being “native” and “performance-based.” Based on some personalization, the ads will run on the Yahoo home page as units accompanying the news stream.

The fact that “monetization should be native” is something I gather Fred Wilson knows a lot more about than I do — or pretty much anyone else. For this reason alone (Wilson’s savvy and that being conveyed to the Twitter braintrust), I figure that Twitter has a chance to figure out its monetization puzzles and thrive financially, despite long odds.

Yahoo’s new ad offering looks kind of like what Twitter is doing, but based only on screen shots and some brief bits of hearsay, I’m not really sure what it is. It seems a bit to me like merely contextual ads that may be shown to users who have certain interests, when they are viewing certain kinds of content. This kind of advertising can work, as many of us have seen. The more the algorithm learns about relevance and performance, the better it can work.

How significant is this development? I suspect it’s just another small piece as publishers focusing on less effective forms of performance advertising experiment with what many advertisers are starved for: performance-based media that can be tightly segmented.

As for how “native” various forms of monetization are, that’s going to be a subjective debate to an extent. The only real certainty is that many forms of display advertising are ineffective, irrelevant, and from a business model standpoint, essentially broken.

Would Yahoo do better in future if it focused on, for lack of a better term, native advertising that advertisers can count on to perform well? Of course. If only Yahoo had somewhere other than the Yahoo home page, or the current generation of what Yahoo counts as content, to run this advertising. But this too may come.

P.S. Did Yahoo get the idea from this guy?

This is the long Yahoo strategy post that I don’t have time for today. Instead, it’s now become the 45-second Yahoo strategy post!

A lot of people don’t have time for Yahoo anymore, so that’s probably about right. Yahoo’s situation has been dire for many years, yet the company has bumped along at about the same size for so long, it’s easy to lose sight of the need to do something dramatic to change its fortunes.

Here’s what Yahoo should do:

• Acquire Yelp
• Then, divest every last shred of its “content” and old-media-world functionality to a major media conglomerate. Some revenue stream from licensing and revenue shares, plus a small stake in the parent media company, should be retained.
• Move any stray pieces to Microsoft. Maintain relationship with Microsoft if it will assist in areas like mapping, etc.
• Develop a plan to migrate any and all uses of its mediocre, disparate services to a future architecture with a unified, robust user ID.
• Then, acquire OpenTable
• Then, acquire FourSquare
• Build a new company laser-focused on mobile and local functionality.
• Find and/or build important technology that is way more useful and important than Summly. Summly? Come on, guys!
• Rename the company to something like “Yelp”.

Yahoo investors, you’ve been warned. It will be a bumpy ride, but total reinvention is the only way to make Yahoo relevant again.

Yesterday’s news can look pretty silly when you go back and look; in our industry, in particular. Especially when that was news about something from the future that was going to be the next big thing. The blog you’re reading now was originally called “The Guide to Portals.”

Many years ago, people started talking about “vertical search” and “vertical portals” taking over from the soon-to-die “a mile wide and an inch deep” services such as Google (in search) and Yahoo (in portals). Just in case it was an important trend, I snatched up a domain called “vortals.org.” (Didn’t keep it for long.)

Where that theory kept failing was on the front of Google’s role as a gatekeeper in deciding who gets to find out about a company in the first place. Your service can be really useful and specific to a market segment’s needs, but how are you going to get the word out in an online setting? TripAdvisor got lucky (timing-wise), and stayed good long enough that it was the exception that proved the rule: they ruled the top couple positions in the organic SERP’s so well for so long that they won over the consumer drip by drip, in the effective way that a steady replenishing of the funnel with free “new visitors” from organic search referrals can achieve. Amazingly, they still seem to do that well in the free SERP’s. Again: the exception that proves the rule. TripAdvisor, today, is a $7 billion company. Awesome work, guys.

Many specific services haven’t been so lucky — shopping search engines, for example. It got costly to keep reminding people to try Pricegrabber, or whatever. That company seems to be enjoying annual spikes in traffic at holiday time, but its audience is dwindling year over year. According to reports, PriceGrabber was bought by Experian for $485 million in 2005; it was unloaded for less than $200 million in 2012.

As the logic of the claim of “vertical search engines chipping away at Google” unfolded, it became clearer that a handful of destination digital brands (we wouldn’t call them vertical portals or vertical search engines today) might break through to become a “destination brand,” but they’d need to do it will Google’s blessing. So this hardly boded ill for Google’s bottom line or its status as a dominant player. In line with our premise when we started writing about the industry at Traffick.com in 1999, these monopolistic gatekeeper companies (these were Yahoo, AOL, and Microsoft then… Google hadn’t pulled it off yet) can reach such a stage of ubiquity that their competitors and ecosystem coopetitors may be seriously hampered if the gatekeeper simply stops giving them permission to exist. Do a search one week and find a variety of resources, the next week, maybe you find Google resources primarily, with the option of paying for increasingly expensive ads. Google isn’t quite all-powerful, but they’re not going to let their whole business be eroded by the “rise” of anyone in particular, or a variety of threats from “vertical search engines” who are trying to Out-Google Google.

The supposed failings of Google being “too generalized” and trying to cover too much ground are a recurring theme — most recently in this New York Times article that wonders if Google will lose traction to appealing apps from companies like Yelp, TripAdvisor, Kayak, and Weather Underground, as more people seek quick answers and tailored tools in a mobile environment.

Google should, and still might, lose a healthy amount of user engagement to these more specific services. It’s no secret I’m a big fan of companies like Yelp and TripAdvisor who have built appealing, useful services on their own, with their own loyal communities of engaged users. Sure, they have flaws, but in building these services independently to the level of success they currently enjoy, Yelp and TripAdvisor (to say nothing of many other growing services like OpenTable, Pandora, LinkedIn, Angie’s List, etc.), it’s bravo all around.

What seems to unite these success stories? They’ve all raised large sums of cash — and their profiles — by taking their companies public. This way they have war chests to keep building the value of their services; to hire lawyers to beat back attacks from larger predators; to build their profiles through sales and marketing; to leverage and scale their platforms for better economies of scale; to achieve international expansion; and to get their names out there in the media, who love to cover companies whose stock you can buy.

It’s incredibly hard to gain permanent brand awareness in a world where bigger players like Google decide how visible you are. And Google won’t take any of this lying down. In an Android, Chrome, YouTube, Google Apps, Google Plus world, Google’s Microsoft-in-the-1990′s-analogous chokehold on the digital user’s environment is well along the way to being complete.

But with direct pipelines to their user bases, wisely built through timely and large cash infusions, this new generation of “vertical portals” seems better positioned to stand firm than the flimsy attempts we saw a decade ago.

Will many of them wind up being acquired, or consolidated? Or will we see more long-term diversity with more large (but not enormous) “vertical” companies being run independently? That doesn’t seem like a stable set of affairs when Wall Street tends to dictate that the biggest companies keep doing something to get even bigger. What’s likelihood of TripAdvisor, Yelp, OpenTable, etc. staying independent for longer than five years?

It will be interesting to watch. Some of the results could be surprising, heavily dependent on the type of “lens” users prefer to see the world through (assuming that sufficient resources and regulation are in place to allow some reasonable degree of choice of lens). Does everyone want to be subject to an opinionated “master lens,” a giant Google Glass, if you will? An AOL, Facebook, or Apple style walled garden? Or will folks find ways of enabling more neutral platforms (or somehow using the above technology in a neutral way) that will help them do a better job of enabling many “starting points,” a postmodern collection of “lenses,” in the manner of their choosing?

Companies like Yahoo can do their part by blowing up their old, broken purple monolith model, acquiring some of the above “lenses” (like Yelp, and why not OpenTable while they’re at it), and leaving open the possibility that those parts of the new company grow so fast that the new company of tomorrow is actually renamed Yelp.

Whatever happens, I think a lot of people are still cheering for that old idea that “verticals” can chip away at the dominance of an all-consuming player that actively tries to hamper the growth of that ecosystem for anticompetitive, profit-driven reasons alone.If we don’t have choices, then what’s left?

Is that realistic? Well, it’s more so if investors and investment bankers are willing to bet on it – so score one for big bad Wall Street. “Greed is good.”

The last generation of “vertical services” rarely came close to the type of scale needed to reach a tipping point of full and direct access to consumer mindshare. This time may be different.

Many of us make our app and platform decisions based on a certain calculation: go with the large, integrated provider that has momentum. The alternative is inconvenience, a lack of integration, possibly clunkier functionality, lack of “cool factor,” and in some cases, cost.

For example, our company recently adopted Google Apps for Business, joining the legions who have already done so. It hasn’t been without its issues. But our old way of doing things was worse.

For various tools, though, I’ve often felt that a less efficient mix-and-match approach was somehow healthier. I arrived at this view based on my belief in something I call the Single Overlord Adoption Threshold. America itself was founded on the basis of checks and balances. It’s an ideal; an ideal of multiple centers of power and influence so none gets too big. It’s such a valuable ideal to so many, that Americans put up with a lot of political gridlock, for fear of the alternative (tyranny).

People are starting to get it.

Om Malik has recently declared that he’ll never use Google’s new competitor to Evernote because of how arbitrarily they shut down the much-valued Google Reader… even if it’s better.

That’s sort of why I still like and use Basecamp from 37 Signals. Anytime a more impressive, integrated alternative has come along, I’ve wanted less integration… less “impressive.” For some reason. Probably for reasons similar to what Malik and the American founding fathers had in mind.

Better-integrated, more impressive, cheaper systems developed by a single overlord have many advantages, but if they can all be snatched away, that syncs up perfectly with what Nassim Taleb criticizes as “fragile” systems.

Adopting non-Google solutions for mission-critical business and personal use, by contrast, may make your life more robust, if not anti-fragile.

So I’m really not sure — when the case is so obvious in this “Evernote-competitor” instance — why people are so unwilling or unable to see the same dynamic in action on other fragile, all-in Google moves of a more far-reaching nature — like Android? At a plenary session at this week’s SMX Toronto, I just heard a roomful of Canadians (all but two) essentially swear they’d never get another BlackBerry. But if the OS is as good as Android or iOS, and there are many other attractive reasons to use the non-overlord product, why the paranoia that somehow life won’t be as optimized or integrated if we don’t rush into a Google environment?

The funny thing about this is — this is exactly how many people used to behave with “Microsoft stuff” before Apple, Netscape, Google (and others) became the clever upstarts that toppled them. Of course, in many cases it would have been absurd to suggest people even had a choice. To stick with Corel Wordperfect for documents (once the leading word processing software) became, at a certain point, “impossible.” (But was it, really? What about all those Apple users who for years didn’t use Microsoft’s Office products? Remember the years where document format translating companies made a ton of cash helping people convert stuff?)

And Google’s behavior — “embrace and extend” and try to play even in verticals where it doesn’t belong or doesn’t truly have its heart in — resembles that which was once so vilified in Microsoft.

Certainly, when it comes to project management, note-taking, etc., we have credible alternatives to the overlord products.

In other areas where many of us have left ourselves vulnerable and fragile — Google Analytics, say — it can seem tougher to easily replace or at least “back up” our data and workflow so that we can be covered if some Black Swan event occurs. But maybe we should be thinking harder about, if not replacing Google Analytics, then at least implementing a backup. BUBGA (Before Urchin Became GA), only a small percentage of business owners were site analytics mavens, but that percentage tended to dig deeper into the field, willing to deal with cumbersome logfile analysis software of various stripes… so that they could have more control over their own data. Now, most of us are just handing over the keys to that kingdom – directly to Google.

(As an aside, I still feel it was quite a blow to us when Microsoft abandoned Gatineau, the code name for its direct competitor to GA.)

I think it’s food for thought. We too easily race for the convenience and integration of the leading products, ignoring their risks. Largely that’s out of herd mentality, and a wish to conform and avoid criticism.

When there truly are credible alternatives — such as the Blackberry 10 OS — it’s time people realized that it’s worth trying out those alternative… even if it’s simply on principle.

In many of these areas, Google is the new Microsoft. Does that mean, then, that they will someday also fall out of favor and become “tired,” like Microsoft apparently did? Not necessarily. There’s no law of nature that says that will happen.

(And of course, how tired is any company worth hundreds of billions of dollars, really? A friend was telling me today about how much he loved his Surface tablet. I suppose some blog commenter will want to explain to him that he is just “wrong!” The point is, it’s his choice, and he’s made it! “Logic” of a certain sort says he shouldn’t have. The price point for the version with a keyboard makes no sense in the mass market; nor does the positioning — do I need a laptop that works with a tablet, and why pay for a third or fourth device? But most of those calls are made by people thinking about what people “should” or “will” want, in the context of a belief that (say) Google or Apple are basically all-knowing and either inevitable or impossibly cool. And yet, when someone picks up a Microsoft or Blackberry product and likes it, their positive reactions are genuine, and the dollars they’re willing to spend are genuine. There is no “inevitability” in any of the current trends.)

Overall, many people are underestimating the “Founding Fathers factor” here: a populist will to stop simply adopting everything Google is already gradually emerging, as evidenced in Om’s rant about Reader. Over time, I believe many more people will begin joining this “on principle” rejection of “better, cheaper” Google products.

Anti-Microsoft sentiment, at one time, was so widespread you could answer the doorbell and hear your mail carrier talking about open source and how he was going to get a “Linux box.” The sentiment is out there, and if Google pushes too far… it will return in force. All people need is alternatives.

Bye for now,

Andrew

P.S. This post and blog are powered by WordPress for one reason, primarily: after we’d been using it for six years, Google drastically reduced support for Blogger.

Great times! What could be better than a search marketing conference in Toronto, home of Richard Florida, six legitimate starting pitchers, and Page Zero Media?

Tomorrow you can catch me speaking at SMX Toronto, on the subject of PPC Analytics: Crunching Your Own Data.

I’ll cover some semi-advanced issues with attribution and search funnels, of course. But as is my modus operandi typically, I’ll seek to uncover complexities in seemingly simple processes and data. I’ll argue that you need to get your arms around these complexities and work from a clear plan… because you probably aren’t.

Take ad testing. There are at least four or five common approaches to ad testing. But most campaign managers mix and match strategies… change tack all the time… which isn’t a strategy at all.

The vast majority aren’t even aware of how to determine whether tests are statistically valid. Most of the rest are aware, but don’t stick to a plan or consult the statistical confidence stats.

Among other things, I’ll also cover cool and key segments to manage… and include a couple of key nuggets as folks gear up for Enhanced Campaigns in AdWords. See you there!

Right now at Page Zero, we’re running a couple of internal ad creative contests, where we throw open an ad group to the expert participation of experienced members of our own team, in an attempt to improve client results with a testing process we sometimes refer to as “internal crowdsourcing.” The idea is to tap into the diverse minds in our company (but coupled with lots of deep experience and extreme competitiveness in this one specific field: generating max ROI on PPC), to discover unexpected variations (genetic mutations, if you will). This is something you really can’t do effectively in traditional media – not in the same way, anyway.

Despite the incredible power of ad rotation in AdWords, most campaigns underperform on the creative dimension. It’s a constant struggle to find that next leap in performance.

Seth Godin had a term for using diversity to stumble on new directions and thought patterns: it’s called mDNA (or “meme DNA”).

We’re closely watching our tests right now… trash talking… watching revenue figures… and eagerly anticipating the mouthwatering dinner that the company (or colleagues) will have to buy us if we win one of the contests.

What’s going on with the winning entries? How about the losing ones? In both cases, massive learning.

A real hallmark of these tests is the realization that almost half the time, someone is attempting some way to win that the others react viscerally to as “cheating.” Although all the ads are well within the contest rules, the client’s parameters, and Google’s editorial and other rules — for some reason, people are coming up with loopholes you just didn’t think of.

Someone picks a different landing page as the destination URL. Someone does something a little different with the display URL. Someone puts unusual (but perfectly acceptable) punctuation in the headline. Someone uses DKI unexpectedly. Someone tries something sneaky to increase the average order value. Someone tells you how to browse the site, because the landing page might not be explicit enough. (Among other things, the latter is a meta-message. Not only does the offbeat CTA help you decide what to do next, it’s also reminding searchers that *this is advertising* about *searching for a product* that is hard to find. Maybe that’s why it works. It both entices and filters.)

And then there are the surprises that break no rules, but didn’t occur to you. Someone uses copy that is a bit more flowery and full of itself than you ever thought would work for what you assumed was a commodity product. Someone speaks to a vanity benefit that you just wouldn’t have bothered to try, because you unconsciously dismissed that as a motive for buying this product.

At the end of the contest, there will be one winner per ad group. And much will have been learned.

Above all, when a half dozen or a dozen professionals enter a really contentious (but friendly) competition to test something, you are reminded of how little testing typically happens when a single person is trying to “run a test” with their own ideas of which elements to test.

And isn’t it amazing that when given a challenge and a wide scope with fairly unrestrictive rules, we create our own mental prison anyway? Subconsciously, it’s all about “Oh, I thought when we meant ‘testing’ we meant try these couple of relatively inconsequential variations, plus one benefit statement we threw into the mix for good measure, and we were just about done.”

Not every second pair of eyes will do much to improve on well tested ad copy, to be sure. Often, new contenders fail. But put half a dozen, or a dozen, highly motivated pros in there and ask them to break stuff for bragging rights and a free dinner – and watch the fireworks.

I’m also a firm believer in aligning performance with motivation. And if you can fuse fun, incentives, competitiveness, and plain old trash talking with client performance goals… all the planets and stars align.

Get a second pair of eyes on that? A good idea? Umm, yeah! At least a second pair.

Who says cheaters never prosper?

P.S.:

Is it cheating if we ask you to vote for us (that’s @webmona and @andrew_goodman) in the PPC Associates 2013 Most Influential SEM tournament? Now that’s our kind of March Madness. Vote early and often. We’re in the quarter-finals.

As Google rolls out “enhanced” campaign setup options and parameters, various accounts of the changes are referring to some backlash from concerned advertisers. We’ve even been notified of another Change.org protest of the (yet-to-be-experienced) new features.

It’s to be expected, given how competitive the environment is and how hard many of us work to turn a profit for our clients’ campaigns, that suspicion abounds that this is just all about Google making more money from mobile.

But if you listen to Nick Fox’s account of it, it syncs up with the idea that the current approach is simply too cumbersome. Big accounts are indeed “pivoting around” way too many dimensions. In another year’s time, many of these accounts would go from having “way, way too many campaigns” to “way, way, way too many campaigns.”

Certainly, there is an economic question in this. But rather than it being about “Google making more money from mobile,” Google is looking longer term and simply trying to stem a potential loss of growth in revenue overall. Indeed, excluding emerging international markets, if the shift to mobile usage patterns accelerates, and the number of clicks on desktop computers declines sharply, Google could make less money year over year. Can you imagine that? One day — despite whatever it might do to help advertisers better control mobile ads — that could in fact happen. As newspapers and network TV are finding, advertising isn’t forever.

Google is actually making a lot of money now from inefficient mobile deployment. Contrary reports, you don’t need to set up separate campaigns to bid separately on mobile ads, or to activate ads in that channel. They’re on by default. So this change is likely to be revenue-neutral, or even revenue-unpredictable. By reducing advertiser frustration with the channel (and unfortunately, “sexing up” the change with the usual examples of extreme bidding precision based on proximity, time of day, and whether the prospect has showered that day), Google seems to be looking long term.

As for the collapse of desktops and tablets into a single channel, we largely collapsed these back together this year after experimenting with splitting them out. We feel that they perform similarly enough as to not warrant additional “pivoting” around yet another dimension. My hunch is that this shift — essentially, to call tablets desktops — is something Google hopes will slide by analysts in the maelstrom of data and forecasts. By defining tablets as “computers,” they’ll show a less horrific decline in clicks from “computers” from quarter to quarter, in their financial reporting. That will spook Wall Street less. And for some reason, Google has reached a stage in its history where it seems to be very concerned about any optics that might cause a downward shock to its stock price. A far cry from the company’s insouciant attitude of days gone by.

Today, I’ve been going through all of our client AdWords data, looking at the aggregate CPM rates Google is commanding for both Search and Display advertising. CPM (cost per thousand impressions) is a lesser-used metric in our field today, but it can provide additional perspective as a benchmark.

That exercise reminded me that many of the dominant forms of “display” advertising in client accounts today are in the various types of remarketing. That makes aggregate figures misleading, because remarketing pulls the average CPM pricing up.

The more these higher-value forms of display advertising crowd out the lower-value stuff, the happier Google is, financially. Could it be that this will also help the publisher ecosystem? One hopes.

Just a back of the envelope calculation, but here is roughly what I’m seeing:

• The strongest forms of remarketing are priced at 10X (or more) what display advertising is typically selling for in the case of advertisers not being particularly performance-focused on the latter
• For less valued forms of remarketing, the ratio is still 5X
• Even when advertisers are managing tightly to some performance metric (not as demanding as search, but tight) in display advertising, remarketing typically goes for 3X the price of the other display advertising, and at least 2X

Here’s where advertisers need to be careful. Remarketing is harvesting existing demand, leveraging past investments, and speaking to certain kinds of audiences. It’s “low hanging fruit.” That’s why it’s worth spending the money. But it shouldn’t be confused with a serious effort to build out display advertising. Many of us believe that advertisers under-invest in display advertising compared with peers who do it well. Remarketing isn’t really the same thing. It’s good, but it also shouldn’t be an excuse to get complacent. If you can find great prices on the regular display inventory, then there may indeed be a benefit.

As for Google, and publishers, this must be good for profit margins. There is too much near-worthless display inventory out there. Getting some of those clicks to shift over to audience-based targeting is a better way to monetize user attention… financially speaking only, of course.