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Archive for July, 2010

Five Quality Score Myths Busted

Thursday, July 29th, 2010

In search marketing, it’s easy to get people obsessed with a particular metric: you express it on a scale of zero to 10. (Remember Toolbar PageRank?)

It’s only been a few months now that a significant number of search advertisers have even figured out how to look up Quality Scores on their Google AdWords keywords. (You have to “customize columns” and “show Quality Score”; it’s not shown by default.)

What Toolbar PageRank was to dabblers in SEO, Quality Score is to practitioners of paid search. In this running-of-the-bulls-like environment, the main casualty amidst the din of the hooves in this virtual Pamplona appears to be the truth.

Quality Score multiplied by your bid still determines where you rank on the page against competitors in the advertising auction, so it’s indeed important. High Quality Score and awesome ROI  are key, all else being equal.

But let’s dial it down a notch and check out exactly what Quality Score is, and what it can or cannot do. Here are five common myths about Quality Score, with some suggested alternatives closer to reality:

Myth: AdWords used to be all about rewarding higher CTRs, but now, the formula is incredibly complex.

Reality: Keyword Quality Score is based on keyword “relevance,” which is primarily about CTR. Prominent Googlers have stated that other elements of the formula are mostly “just other cuts at CTR.” Keywords develop a history, so good performance can raise your Quality Score over time as statistical confidence grows. You can also be rewarded or punished by the overall (mostly CTR) performance of various account elements: the whole account, a campaign, ad group, or ad. No one outside Google knows the precise formula. “Other relevancy factors” might include semantic analysis that assesses commercial intent or intent related to better-performing keywords on your campaign or similar competitors’ campaigns. These various other factors will generally be trumped by a very strong CTR relative to other advertisers on the same keyword.

Myth: Quality Score is like old-fashioned SEO. You should make a list of keyword elements to “optimize,” and your score will likely improve.

Reality: This myth is circulated so SEOs and other clever vendors can sell you traditional keyword optimization, including tweaking various page elements of your landing page. It bears little resemblance to the marketing strategies that have always made sense in paid search. There was virtually no change in behavior or performance when Google shifted from a less complex version of quality scoring to the new one called Quality-Based Bidding in 2005.

Myth: You should be doing multivariate landing page testing to improve your landing page and Web site Quality Score.

Reality: The purpose of landing page and Web site quality (rolled out as a second kind of Quality Score in December 2005, following initial keyword Quality Score in August 2005) is mainly to punish particularly poor customer experiences or shady business models. Landing page and Web site Quality Score is not discretely broken out from overall Quality Score and is only updated every few weeks (unlike keyword Quality Score). So, you can’t use multivariate testing on landing pages to gauge Quality Score response, period. Google has noted that landing page and Web site quality effects tend to be “binary” (either you’re in the 98 percent of advertisers who are “greenlighted,” or you’re not).

Improving your Web site’s load speed, customer engagement, and information scent may translate back into a small boost in this Quality Score. Going forward, these factors could have a bigger impact on overall Quality Score. These are the kinds of things you should be doing anyway.

Myth: Make heavy use of exact match on your keywords to boost CTRs, and thus Quality Scores.

Reality: Google states that Quality Scores are normalized by match type, and regardless of match type, the system tries to predict how it would do if all comparable keywords in the auction were of the same match type (probably exact match). You should continue to pay close attention to matching options for various other reasons. Exact match is not a ticket to Quality Score bliss, and will sharply narrow your reach. You should, however, make use of negative keywords (exclusions) where it makes sense. Consumers and Google both love this, and it can translate into higher CTRs and higher Quality Scores.

Myth: The Content Network is killing my CTRs. I’m paranoid that this is killing my Quality Scores, so I disabled the Content Network.

Reality: Quality Scores are calculated separately for search and for the Content Network. You’re safe to place a much lower emphasis on CTRs in network placements than you do for search.

Those are the basics. Down the road, I’ll cover some more advanced debates about quality-based bidding.

This column originally appeared at ClickZ on January 29, 2010. Reprinted by permission.

Freedom Sold Separately

Wednesday, July 28th, 2010

Well, this is bizarre.

About a month ago, I posted some incoherent ramblings about number crunching… ramblings that included reflections on Paul the psychic octupus, rapidly declining Iranian fertility rates, and World Cup outcomes.

I’m not saying there is a connection, but quite possibly, Iranian President Mahmoud Ahmadinejad has his reputation management software set on “high alert for all multi-legged, decadent creature mentions,” as he just reportedly gave a speech associating the psychic octopus with decadent Western plotters and enemies, mentioning the poor mollusk as many as seven times in his speech.

According to Wolfram Alpha, octopus has only 90 calories in a serving, and is high in iron. Between his inherent nutritional value, and official Iran’s hatred of him, it’s not looking good.

Will the BlackBerry Slander Never Stop?

Monday, July 26th, 2010

When a company is #1 at something — or close to it — any hiccup that comes along is proof their days are over… at least in the bored minds of formula-surfing journalists.

Remember 2005? Google was on top of the world and getting poised to really rake it in, right? Actually, no — not if you listened to the press. According to many observers, they had peaked. In 2004, as I worked on the first edition of Winning Results with Google AdWords (after having persuaded the publisher that the topic was big enough for a book), the odd minor legal skirmish or revenue question mark would make its way into WSJ, and before you know it my editor was fielding questions from some VP as to whether to shelve the half-finished book. Because, you know, Google’s days were just about done.

So it goes for RIM, a $31 billion company that seems on the verge of going under — at least, if you believe the New York Times’ Chicken Little Finance Dept.

You see, there’s this thing called the iPhone. Check. So I’ve heard.

Now, there’s this thing called Android. Uh-oh. So long, RIM.

What I can never figure out is why all of these RIM-is-falling stories must begin with the company’s origins as a provider of secure, proprietary email management to a narrow cadre of corporate customers. I’m now on my second BlackBerry (nearly five years using one now). I never once made use of the Blackberry email system. I’ve always used it for mobile browsing and now, lots of apps (including all of Google’s, and the main ones I need like Twitter). The device itself (the 9700) is a great phone and all of the functionality I need is at my fingertips. What does that old email management niche have to do with RIM’s users today? Very little.

Savvy users are of course right to say that the OS and the lack of apps are drawbacks, to some degree. But does that mean you should start lowering the RIM coffin into the ground? No more than you should write off Ford because they “make all black cars” or “that Pinto explodes”. RIM is a great brand with legs, loyal users, and many options for further market penetration and innovation.

If You’re a Linchpin, You Have Nothing to Fear from Trada

Wednesday, July 21st, 2010

Trada, the paid search management environment that enables crowdsourcing in a bid to help advertisers create more effective campaigns, won’t create your marketing plan with you. It won’t jump on a phone call with you to discuss the relative merits of different strategies. It won’t live and die with your results, explain why a certain tactic is working, talk you out of a risky strategy, or suggest bold expansion ideas that might seem expensive on the surface. It won’t act as your trusted adviser. It won’t give you a menu of risks and opportunities for advertising on trademark terms, and it won’t ask about the precise degree of tradeoff between protecting your brand image in ad copy and going “all out” in an unbridled pursuit of direct response. It won’t care if you are made to look like an idiot. It won’t integrate your ads and landing pages with other media efforts, or care to listen patiently while you describe that. It won’t take on certain additional tasks and responsibilities, and it won’t provide feedback on user behavior statistics in your analytics account.

But despite the fact that a crowdsourcing platform can’t provide coherent leadership for your digital marketing activities, it’s quite possible that it might be quite helpful in driving incremental results for some advertisers who don’t want (or who cannot afford) the cost and risk associated with hiring trusted personnel, or outsourcing to a good quality agency.

Trada is big news today primarily because their latest round of funding includes significant participation from Google Ventures, Google’s venture arm. You probably wouldn’t be reading about them today if that hadn’t happened.

Trada founder and CEO Niel Robertson does an insightful job of laying out the pain point in the market: “large” small advertisers with budgets above $5,000 per month (up to, they say, $50,000/mo), who can’t be satisfied with the cookie-cutter services provided by the fast-scaling “local search” and “click to call” focused search marketing shops, but who also cannot afford full customized service from top search marketing focused agencies and their associated experts and automation platforms.

For the US market, Robertson’s characterization is more or less accurate; it can be costly and risky to hire a top agency or to hire someone in-house to work on a smallish SEM account. But it’s important to note that Trada fully admits if your account is large and mission-critical (above $50,000/mo.), you shouldn’t be playing around with an experimental platform like Trada. (And who, I would ask, would be supervising this effort? Won’t a layer be needed anyway? How much will companies truly save here?)

It’s probably worth adding that $50,000 is probably really code for $25,000. And in small markets (like Canada, or Scandinavia), you might be able to find a cost-effective, professional solution (campaign manager plus appropriate automation) that makes sense even for a “smallish” campaign spending $25,000 per month. These needles in a haystack might be hard to find, but surely a good one would be preferable to attempting to “work with” a semi-anonymous rabble of wannabes.

How, in a nutshell, does Trada work? Advertisers offer a certain markup to would-be workers on their accounts, vetted semi-to-full professional paid search experts who have joined on the system. The so-called Optimizers in the system strive to beat the CPC or CPA targets offered by the advertisers. If they do, they get paid the appropriate spread for each click or lead generated.

Based on the demo I viewed yesterday, the idea is far more powerful than it seems at first blush. Trada has built sophisticated communication functionality into the system. Advertisers have the benefit of communicating marketing objectives — or anything else — they would like to the stable of Optimizers who have chosen to work on their account. Optimizers get to look at a battery of statistics that make the exercise competitive.

In addition, the basic credentials of the Optimizers are verifiable. They have to use their real names, leave a paper trail including filing tax forms, and must pass a certification exam.

The “too many cooks” objection, surprisingly, is not as worrisome at first glance as it might seem. Account coordination would seem to be a must to work on something as complex as AdWords (or the other paid search platforms). Not so, Trada seems to suggest. Through a quirk in how AdWords works and how Trada is architected, you define Optimizer ownership by ad group. Once an ad group is yours, even if there is keyword overlap with keywords “owned” by other Optimizers, that doesn’t inherently break the system. May the best interaction between keywords and ad copy win.

Still, that’s a significant departure from what we might have viewed as best practices in the past. In fact, given the potentially unwieldy and theoretically unlimited number of overlapping experiments that could grow inside accounts, it’s the kind of account usage that Google no doubt wants to monitor closely. By making an investment in Trada, Google Ventures can keep a particularly close eye on the company and the behaviors of its Optimizers.

In the end, Trada will live or die on the premise upon which it is based: incentives. The broad proposition, obviously, is that advertisers are incentivized to offer a certain bounty for anyone, regardless of method, hitting certain performance targets in their accounts. Optimizers have an incentive to hit those targets for campaigns they think they can help out on; a greater incentive where there is “low hanging fruit” and a decent markup offered by the advertiser, and little to no incentive where those conditions do not exist.

On the plus side, Trada has the makings of an open marketplace for this type of specialized effort, and it gives Optimizers considerable flexibility in pursuing opportunities where they can find them.

There are several significant drawbacks to the model, however.

First, it remains to be seen if the market will become liquid enough to generate enough overall account activity to “get things done” in the way that a self-motivating, whole human professional or adviser would. If advertisers are stingy with markups either in the early going or as time passes, participation by expert Optimizers will languish.

More importantly is the defection problem: primarily, the incentive advertisers have to offer only short-term benefit to their army of enthusiasts. Whereas relationships between companies and employees or trusted advisers in agencies might be based on some minimum standard of meeting halfway and recognizing that life is a two-way street, you don’t have any moral or legal obligation to a “crowd”. The so-called “crowd” shows you a reasonable way to get your leads for $15? Kick them to the curb, and keep the markup for yourself. After all, they can’t withdraw their leadership or care from the relationship: there was no relationship to begin with.

Trada has significant merit as an economic experiment. It is “hyper-rational,” one might say, so if the proper incentives are offered, the crowd might just be willing to show you how to build a better mousetrap (or 1,000 of them). But what is the proper incentive for an Optimizer? The opportunity to continue making a certain markup for (what?) a month, six weeks, before the program is shut down or before your “markup juice” slips away to the Optimizer who overlaps on your keywords, doing just slightly better? Before markups are squeezed at the behest of the advertiser?

Many serious business relationships in expert fields require coordination and a long term view. They are “extra-rational” — participants in non-formal (i.e. real) game-theoretical environments are much more likely to inject intangibles like trust and reciprocity into the equation. You don’t have to be a famous sociologist to recognize that social ties and trust can be a prerequisite to truly getting things done; and that includes the willingness to exchange deep expertise in any field. Will Trada’s Optimizers continue to see enough benefit to keep playing the game of building permanent assets for companies too cheap to hire a professional – or for that matter, working as low-paid help for agencies unwilling to scale up their paid search practices?

The Real Impostors

Saturday, July 17th, 2010

There was a bit of an unanticipated dustup in response to Mona Elesseily’s perfectly sensible column about “fake” PPC experts over at Search Engine Land last week. (George Michie also nicely pointed out some useful advice he’s really written lately.) Surprising that it was so controversial. We may come back to that issue, but it also reminded me of the larger issue of vendor selection that keeps coming up again and again in our industry, so I thought I’d offer my spin on it.

A serious marketing professional in the audience of a session at SES Toronto stood up in Q&A and asked the very sensible question of how you go about sorting out who is a legit search marketing vendor (in Canada, but it could apply anywhere). It’s not nearly as easy as it might sound. In reality there are only a handful of top firms, and you should be able to spot them. But because of the noise level, it’s very possible for those on the client side to waste a lot of time tripping over many unqualified wannabes before they finally figure out how to take shortcuts to creating a proper short list.

I was reminded of the problem again when I took a call from a marketing manager from a software firm that sells to government. They needed an overhaul of their SEO efforts because the previous vendor had created a brand-jeopardizing boondoggle. The marketing pro — just hired on the case — could see that, but his bosses couldn’t. They swore up and down that the previous firm was one of the top ones in the business. Why dismantle their yeoman efforts based on the say-so of some rival claims by some other, maybe not as ingenious, marketing professional? Finally, we tracked down who the “top” vendor was. Unknown, but sporting overblown claims right and left. A scattershot of tactics at your disposal. The owner’s photo was an out-of-focus shot of him leaning on his Ferrari (rented, probably) by the highway. Lovely.

And again today when I saw an ad for a company that had a very similar name to my company. A website full of claims. And no doubt a slick sales pitch when they get you on the phone. (Also on the website: not a single mention of a single employee’s name, founder bio, press mentions, or client names. Nothin’.) You don’t have to infringe trademark to prey on consumer confusion. Preying on consumer confusion, unfortunately, is what many SEM firms do. That’s because at first glance, many SEM firms look alike, or can be made to look alike.

But you know what? Not really.

For those seeking a vendor, you really don’t need to be all that rigorous to rule out impostors and to begin moving towards a serious big-league short list. Just ask the following questions that relate to basic issues of transparency and reputation. If they aren’t on the website, then get on a call with someone at the company, and ask. (In return, it helps if you’re a real client. Good vendors don’t like tricks and games.)

  • What are the founders’ names? What can you find out about them and their track record?
  • What are some employees’ names? Just one or two? How long have they worked there?
  • Would it kill these folks to have at least one or two team members with extensive bios on LinkedIn?
  • What are some past clients? Current clients?
  • Can you get references? How about a long list?
  • Any external evidence of this firm’s reputation? Use your research skills, not canned lists or surveys.
  • Does the firm or founders blog, speak, write books, or otherwise have a following? What can you learn from them? Does their real world presence, connections, audience, etc. “check out”? Much with the social world – “social proof” means someone has friends. That helps if you’re looking to gauge someone’s friend potential. Social proof in business means “has friends, intersected with group interests in substantial issues”.
  • Does the firm *actually do* the type of work you’re looking for? How can we find some basic evidence of this fact?
  • Beyond that, is there some evidence that they’re in some way passionate about it? Highly specialized and current? Not out of date? Willing to be a trusted adviser to your firm, to take ownership of change and turbulence to keep you out of trouble, rather than exposing you to obsolescence?
  • Maybe they don’t have unique or patented technology. But should they be able to speak about the merits of things like automation, technology, and processes? Of course. Can you find evidence that they’ve engaged with that side of the business, either by developing products, advising on them, writing about it, or *something*? That would be a bonus. There don’t even have to be right or wrong answers.
  • Does some genuinely authoritative person in this or a related industry know them? Willing to recommend or comment on them? Doesn’t have to be Danny Sullivan, Bryan Eisenberg, or Seth Godin, but that would help. Such people don’t put their reputations on the line for chumps.

By contrast, one-dimensional methods of vetting vendors should be avoided. If it’s too easy to fake for the benefit of lazy researchers, someone is going to fake it. The following are insufficient:

  • Awards that might depend on who you know, easily gamed voting systems, or logrolling
  • Ratings systems and rankings from companies that create rankings for a living. Research reports that may leave out companies who don’t pay, or who disagree with their bias or reliance on self-reported information.
  • Memberships in trade associations. These are a good start, but don’t end there. Quite simply, you can buy your way in, and from there easily get yourself elected treasurer or Sargeant-at-Arms if you want.
  • Logos you can easily slap on a website. Google is moving to a new, more rigorous certification, but as of now there are tens of thousands of folks & firms with Google and Yahoo search marketing certifications. It’s a good idea to have these business relationships and to write the (relatively easy) tests, but they are so easy to get, they’re virtually meaningless in distinguishing one firm from another. The total levels of paid search spend under management required as a minimum qualification are so low that they do not speak to any kind of track record, either.

Most of the best referrals in business happen word of mouth. That’s definitely part of the equation. You can kickstart that by simply asking probing questions about “who the heck are these guys, and do they actually do this stuff well”?

I’m just going to pick one example out of a hat: Chris Winfield at 10e20. (His company has expanded further and is now called Blueglass, BTW.) At some point a few years ago it came to my attention that Chris and his firm had been getting national level media attention for years, dating back to 1999. It led me to do more research about his firm. Even in his quotable quotes, I could see that Chris was a consistent, thoughtful spokesperson for the industry. No, that alone didn’t sway me, but it’s a far cry from being a company run by Anonymous Coward. From that day forward, I had a real solid feeling about Chris and his colleagues. And sure enough, they’re still in business, still attracting good clients and employees, still welcome at events, and still making noise. That’s what I’m talking about!

All of the above doesn’t guarantee a perfect fit, but interestingly, it keeps hundreds of good quality vendors in the mix. What it does is rule out bogus claims, easily faked awards and ratings, and most of all, those cookie-cutter companies with websites that don’t respect you enough to say if anyone real actually works there.

At SES Toronto, I called out one of those fake “vendor ratings” sites. I stated point blank it’s pay-for-play. Because that service was paying for a booth at the show, a lot of people were afraid to say anything, and assumed I’d get my head bitten off. Fortunately, I didn’t.

Respected vendors don’t need to take this lying down. Everyone needs to grow a pair and denounce such shenanigans, any chance they get. That doesn’t mean holding us all up to impossible standards. That doesn’t mean you can’t find a private, quiet, one-person shop who can do great project work (nothing stops the good ones from making plenty of noise about their track records).  But we do need to rule out the impostors and the third-rate outfits that lurk in the shadows and imitate real firms. The only way we do that is to keep speaking up, and reminding prospective clients that thorough due diligence will save them a lot of wasted time and money.

PPC Advertising Copy: 7 Heavenly Virtues

Thursday, July 15th, 2010

In the landing page optimization world, only a small elite reach peak performance. Those are the multitalented practitioners who have the good fortune of being fueled with data from a decade’s worth of testing, and who excel above the pack at sussing out the patterns that matter. From there, they relentlessly follow that logic in every test. (Beyond that, there is the potential for lucky accidents that lead to successful genetic mutations.)

No one has ever died from a mediocre landing page or text ad. But to borrow from Seth Godin via Charles Darwin: in business, mere survival is not enough. Let’s live larger.

Testing tiny text ads for superior performance is similar in some ways to testing landing pages. Anyone can play. A small elite “test to win.”

So, if I may borrow some terminology from Tim Ash: there are some things you absolutely must not do here (“Seven Deadly Sins”). But let’s flip that on its head: pursue these “Seven Heavenly Virtues” of paid search ad copy:

  1. Focus on your core message. Simple ideas work. But it’s easy to get carried away. Product description, shipping offer, benefit, testimonial, call to action. If you have a file of ad elements that work, it’s tempting to try them all at once. But your ad will confuse people if you cram in four ideas where two will do. That must be because of the nature of the search and navigation process. The main site for persuasion is the website, so relax! Think about perfecting two ideas or elements in your ad, and if you’re good, fold in the third.
  2. Love and honor your winning headline. In mature accounts, you should have reached the point where your headlines are optimized. Don’t go ripping into ad groups with a huge batch of new ads that disrespect the exalted status of your winning headline. Try new ones, but keep multiple versions of your winning-headline ads running so you don’t throw money out the door testing the upstarts.
  3. Real words, please. Maybe if you’re a penny-pinching classified ad buyer renting out apartments in the local newspaper, you can get away with “2 br kit w/o deck” and its ilk. But as soon as you abbreviate, you’re speaking Greek to searchers. It just doesn’t look crisp. You’ll find the odd ad that can tolerate that compromise, but it’s likely the exception that proves the rule. So by all means, completely rewrite an ad to remove one exciting element if you need to, in order to avoid saying “brkv!” Searchers don’t know what “brkv” is.
  4. Test significant contrasts in ads initially, not trivial ones. A/B testing is better than “no testing,” but it’s mediocre in the wrong hands. If you sequentially test tiny differences in your ads in a series of A/B tests until the cows come home, will you someday achieve direct response nirvana? Doubtful. Consider testing big differences in your ads in A/B or A/B/C tests. Later, consider testing more (eight plus) ad variations at once, as you get closer to perfection. Multivariate testing isn’t always possible for volume reasons, and is for advanced practitioners only. But it’s sweet when you have the volume and when you know how to make it work.
  5. Use sensible date ranges when analyzing performance. There is too much seasonality in most businesses to let Valentine’s Day tussle with March Madness, or to let the August lull face off against Halloween, to say nothing of the more obvious aberrations that occur in December buying patterns. Pick smarter date ranges for comparisons, and make sure the impressions allotted to the ads in the test were roughly even.
  6. Create “evergreen” ads and record winning principles. In fast-moving industries, it’s tempting to change offers (shipping, new promotions, new products) frequently, and sometimes this is done by overwriting all the ads in your ad groups frequently. Of course, this is a must for many businesses that rely on promotions and seasonality. But the marketer’s dream is to build up a file of learnings, and you won’t get that by running a jumble of ads for a few days at a time, creating too few conversions associated with any ad creative to build up any momentum for analysis. The political and strategic challenge in any fast-moving account is to up the overall proportion of ads and ad principles that don’t change, as a percentage of all the ads running in the account. Fast-moving promotions will at least then be able to use versions of well-tested copy.
  7. Look at search-only CTR data. When you have both the search network and placement targeting enabled for the same ad group, your CTRs on ad creatives are typically reported in the aggregate. You need to unearth the “real” CTR data for ad creatives based on search-only response, and make decisions on that basis. Unfortunately the blended CTR data will look all squished together (0.71 percent, 0.68 percent, 0.68 percent, etc.), as content targeting creates a high number of impressions and a low CTR on nearly all ad creative, swamping your search-only data. Hopefully all of the search ad platforms will make this search-only reporting capability more seamless so you can do it in one click, without being forced to segregate content-only campaigns in every case.

If you fail to pay attention to these sometimes-esoteric factors, it’s just possible that you may make a living and achieve happy mediocrity — but you’ll surely never reach AdWords Heaven.

This column initially appeared at ClickZ.com on April 23, 2010. Reprinted by permission.

Google Changes Ad Policy in Response to France Case

Wednesday, July 14th, 2010

Among several other policy updates related to permissible advertising categories and claims, Google has quietly updated its policy to allow “radar detection databases and software,” specifically in France and Poland.

Imposing Coherence: Ever-Shifting Mission Statements

Friday, July 9th, 2010

At a recent industry presentation, I had the chance to see several of Google’s high-ranking executives provide the high level elevator pitch about how they’ve evolved and where they’re headed as a company.

Putting a shiny, consistent wrapper on any company that has dozens, then hundreds, of products, must never be easy. So you update, transform, and reorient the language until everything seems to fit.

The Google exec who kicked off the day announced that Google was fundamentally an “innovation” company.

Why not. Even as broad as it is, a mission statement like “to organize the world’s information and make it universally accessible” might tend to hem you in, if you plan to do something cool with lasers next year.

The clever thing about saying you’re an innovation company is that you open the doors to innovators around the globe and in any technical field who may wish to come join you. Yet you stay rooted in that quintessential “Hewlett Packard” “in a California garage” mentality. We’ll get the right people on the bus — innovators — and build cool stuff. Growth potential: unlimited. So Google gets to have unlimited growth potential, yet stay rooted in a particular “place,” all at once.

Making life this coherent can’t be easy. The danger, of course, is that your mission statements and positioning become diluted. In which case (like SCJohnsonafamilycompany or P&G), the specific brands and divisions need to have their own strong identities and relationships with customers. That’s undoubtedly true of any conglomerate, and it doesn’t make them unprofitable or bad companies.

But it does make the overarching wrapper, and the lofty speeches about the diversified company being “a family company” or “an innovation company,” mostly just a feel-good cultural exercise. Or in terms more understandable to people in smaller, more entrepreneurial companies, “time wasters”.

Canada: Do Not Call, or Do Not Care?

Thursday, July 8th, 2010

Canada’s version of the Do Not Call anti-telemarketing legislation (offering homeowners a chance to sign up for a national Do Not Call registry) has been a flop, according to reports.

300,000 complaints; 11 fines; total collected: $250.

Come on, Canada’s marketers and regulators. We can do better. We can do more to speak out against outdated practices, against intrusive advertising, against flouting opt-outs. There are plenty of legitimate marketing methods. Why are we allowing the actions of a few to discredit our entire profession?

As a first stop, our national marketing organizations can stop lobbying to weaken such legislation in the first place. Two years’ experience have shown: it’s plenty weak enough.

French Navx AdWords Banning Case – Comments

Monday, July 5th, 2010

Google will appeal the French regulator’s decision in this Navx case… and I can see why.

There are so many products and services banned from advertising with Google, third parties have a field day documenting all of them. Google’s own help files keep evolving, and provide a real sense of the breadth of the issues they must consider when deciding whether to accept advertising.

The French decision appears harsh in that it claims Google “abused its dominant position” to shut off an advertiser account. Yet if Google leans too far to the permissive side, it has to worry about being liable for facilitating violations of the law.

Due to its size, Google will inevitably face claims of favoritism and caprice when it comes to banning advertiser accounts (or in practice — the way it normally plays out — allowing Landing Page and Website Quality scores to sink so low that the final keyword quality scores are very low, which may affect not only minimum bids but “eligibility” for each and every potential keyword auction). The only way to avoid such claims is for Google to keep publishing its policies, and to be as transparent as possible as to what’s banned, and what isn’t.

Unfortunately Google has been transparent about around 50% of the process, and opaque about the other half. The various deceptive and discouraged practices Google refers to in its Landing Page and Website Quality guidelines are very much open to interpretation.

Despite Google in some sense bringing this type of scepticism on itself, the question remains as to whether they have indeed “abused their dominant position” in any given case. On the whole, its stock price is high because Google is able to exploit its dominant position generally, to keep ad prices high under an auction regime that is tuned to extract de facto reserve prices.

In attempting to solve several distinct classes of problems — economic issues, user experience issues, legal and policy issues, enforcement issues, etc. — by tossing them all into the same Quality Score cauldron, Google has in some sense made some problems (appear to) disappear from view while guaranteeing that they’ll keep coming back to life, like any undead life form you try to bury. As it turns out, you can’t take a subjective policy decision on whether to accept an advertiser’s money, hope the industry will uncritically accept your characterization of it as a “largely technical” calculation of “quality score,” and have the resulting debate and due process just disappear.

That being said, there is a flaw in the French regulator’s attitude and approach, insofar as it seems to rely on excessive due process being required of a publisher in its advertising policy decisions. All publishers might be second-guessed as to their decisions to accept or not accept certain advertisements. The law here can be quite complex, and it usually leans towards the publisher having the right not to take certain advertisers’ dollars, unless the refusal can be taken as overtly discriminatory or anti-competitive.

But was it so in this case? In this case, presumably Google was acting in good faith to refuse advertising from a service that helped users contravene traffic laws. They do much the same on many similar issues, including products that help people beat drug tests.

Google (or any publisher) will miss the mark on some of these calls: that’s only normal. As a private company, they shouldn’t be assigned the burden of creating an excessive layer of regulatory bureaucracy in their private dealings, given that there are plenty of regulators on the outside to fulfill that role.

Perhaps the French regulator is happy that the nation’s investment in traffic cameras will now be negated, and public safety further jeopardized by people playing with their smartphones in their cars. Maybe that’s their call. But Google banning ads because they thought they were for something prohibited hardly counts as abusing one’s “dominant position” as a publisher.

The European regulator’s reaction is unsurprising, however. Silicon Valley companies think more than anyone else in the world about “scale,” which means sucking unnecessary extra steps out of all business models. I’ve begun to write about how Google necessarily plays a role as a quasi-regulator of many things, and I’ve termed that role “the guvernment“. The “guvernment” of Google attempts to run cheaply to scale; Google always tries to ensure that it can quantify and codify what it can to remove capricious judgment and excess steps (and cost) from the process of passing editorial (etc.) judgment.

That model is not well understood by old-school regulators, who relate better to government in its more cumbersome, weighty role. Surely, though, part of it is professional jealousy. Google has gotten pretty good at exacting a hefty “tax” from advertisers who run afoul of “the guvernment”. Abusing its dominant position? It takes one to know one.

 


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