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Archive for December, 2010

The Tragedy of Advertising

Wednesday, December 29th, 2010

In “The Tragedy of the Talk Show Host” (this month’s Atlantic magazine), James Parker observes: “Like Seinfeld, The Larry Sanders Show was deeply committed to superficiality, honoring the intuition of the ’90s viewer that Western civilization had essentially ended and that society was a husk of manners and absurd ritual.”

Adweek’s Top 10 Stories of 2010 confirms something similar: that mass advertising as we know it is “so 1961,” has essentially ended, and its ecosystem, awards, publications, and premises (in both senses of the word) are, too, a husk of manners and absurd ritual.

Just check out some of the highlights:

  • General Motors hires a new ad agency. This is news? This is… 1971?
  • Super Bowl ads… Betty White… something to do with a Snickers Bar? This is… 1971?
  • Something to do with Tiger Woods… and Nike. This is… 2001?
  • A mid-sized, scrappy (read: cheap and pliable) agency won Agency of the Year for 2009. “I haven’t worked this hard since my thirties,” cracks Mike Hughes, the 61-year-old president and co-chief creative officer of the 45-year-old agency. I have no problems with this agency’s work and evidently the clients like the value proposition. Then again, all their spots are telling me to do are to use UPS and shop at Wal-Mart (things I probably already do), and eat at Pizza Hut (something you can rest assured I would never do, unless it was the only restaurant in the business park where I worked, miles from anything else). So, if you’re looking for a mid-sized agency that isn’t particularly creative and is essentially “mailing it in,” to support brands that have already spent hundreds of millions of dollars to build brand equity… you’ve got one of the top 10 advertising stories of 2010!
  • 75 years after creating jeans for women, Levi’s tries (again) to make them fit. Stop the presses!
  • The Old Spice guy, social media, yadda, yadda, yadda. A shirtless, less hairy version of your grandfather. Kind of gives you chills!

The mass advertising industry, like Julian Assange, has been telling everyone it’s “39 years old”… for too many years in a row. Consumers are only going to become better at ignoring its messages… although some (less and less well paid) pundits will continue to be employed to amplify the self-referential meta-dialogue.

Google: A Scorecard

Wednesday, December 22nd, 2010

Although Google is a company, it is not unlike a person.

Ever since its legendary ethical compass check — “don’t be evil” — began circulating in the popular imagination, Google-watchers have often judged Google: is it evil or not evil? Is this Google product, action, or strategy evil or not evil?

More subtly, it’s possible to argue that Google is like a person because it’s easy to see that it has better or worse natures. At its best, Google provides unparalleled advances in computing and information retrieval to each and every one of us. At its worst, it’s a greedy, unfair bully. At its best, Google provides an unbiased methodology for all of us to sort through various types of information, helping citizens shine light in dark corners and indirectly, to speak truth to power. At its worst, Google is in itself the power, mobilizes bias to serve its own ends, and invades privacy in the manner of a surveillance operation that can see you but won’t let you see what it can see about you (notwithstanding efforts to be more transparent about all that).

That Google has these multiple natures is a hopeful sign, as it would be for a person. When people don’t have a good side, you don’t try to encourage them to do better — you just avoid them (or when they do evil, you lock them away with no parole). It’s not so different for companies.

As the year winds down, it will be fashionable to come up with long checklists of things companies did well, did right, did wrong. To simplify my year-end scorecard, I’ll be looking at three faces of Google: the most evil one; the most mainstream, productive, Silicon-Valleyish one; and the remarkably good one.

Judge Not the Individual

To this, I’ll add a twist; what may seem like a totally unrelated observation.

Good and evil, successful and unsuccessful: all too often we individualize these matters. After all, how else to give advice to… individuals… (or companies treated like individuals)… so that they can “improve,” “get rich,” etc.?

But like trying to understand the earth’s trajectory without reference to its orbit around the sun, our individualized advice can miss the awe and wonder of… wait for it… systems.

Yep, this post wasn’t inspired by Paul Buchheit’s post of today, “Four reasons Google is still Awesome,” though it’s a great read and timely that it’s up there today.

It was inspired by a bit of daydreaming from last week, trying to make sense of the behavior of young crabs on the beach in Costa Rica. When you look at the crabs as a whole, they all appear to be going somewhere, and eventually they get there. Look at the behavior of an individual crab, though, and they don’t seem very smart. They often wander in the “wrong” direction, or zigzag, winding up back where they started. The overall pull of the instincts of all the little crabs together gets them somewhere better, without too many of them wandering off and dying alone, but taken individually, many of the little critters stumble around like they don’t know what they’re doing. As individuals, they’re often dysfunctional. As a system, it works for most of the individuals (and powerfully for the system itself).

Fortunately, in recent years, techie types have taken to this insight that has been known to some economists, and many sociologists and natural scientists, for centuries; they’ve been sharing and embracing the insights of books like The Wisdom of Crowds, Wikinomics, etc. (As explored in depth by Brian Barry and Russell Hardin in Rational Man, Irrational Society?, certain formal game theorists and public-choice economists have tried to show the opposite — that crowds suck and cannot produce rational outcomes, such as preference ordering that confers true legitimacy in elections.)

Google’s Systems Thinkers

Google, as a company, taps into systems.

It may seem painfully obvious to state this, but indeed it provides a powerful yardstick for measuring what the company is capable of. In tapping into systems that are much more powerful when tapped as opposed to untapped, Google can be a powerful, mainstream Silicon Valley player; it can become evil by crossing some line where it is appropriating to much of the benefit of “our” systems for its own ends; and it can do surprising amounts of good, essentially subsidizing public purposes with its wisdom and technologies.

There’s no question that Google’s founders and many of its product developers are sophisticated “system” thinkers through and through. It starts with PageRank being developed to capture the authority structures within a large peer-review system based on a public, shared platform (the Web). All of those interrelationships, captured and filtered. Individual hubs and authorities matter, but it would be incoherent to mention them in the absence of the network itself, to the interdependence implied by links pointing to other links, implicitly being (as the Googlers said at the time) “votes” for those they link to.

(Even the word “link” implies that we are all interlinked, and that while we may have property within that system, the system itself belongs to all of us in some way.)

Google is also famous for its advances in “massively parallel computing.” By linking together a bunch of inexpensive Linux servers, Google’s innovators paved the way towards faster growth for itself, using less capital. Ultimately this type of thinking provided a much better search experience for more users, while also making Google more profitable. Google Search was faster than other search engines, and its index generally larger and fresher. By 2004, it was game, set, match, for any competitor trying to keep up without blowing about a billion dollars in a futile attempt just to keep pace.

Google’s innovators also like to design self-learning systems; predictive systems that get better with a large amount of data. These include many elements of the matching technologies in the Google Display Network (aka AdSense); smart pricing in the same network; invalid (fraudulent) click filtering in the advertising program; smart keyword research tools; and various settings within AdWords. The entire organic search algorithm of course relies on massive numbers of “signals” indicative of user satisfaction, relevance, etc., and in itself constitutes a massive social and information system with relatively clear end goals. The title of Ian Ayres’ book Super Crunchers is slightly misleading as an encapsulation of all this data crunching; I prefer John Battelle’s term “the database of intentions,” as it highlights the fact that Google’s systems adjust and help advertisers tap into real intents behind real people & customers.

The evolution of this seemingly “self-refining” system design continues on many fronts. Take the Display Network. Many advertisers take the following strategy. First, they let Google’s predictive, automated matching technology scan a massive database of participating publisher pages and guess at where to put their ads. Later, they assess the results of the effort, and refine, using something called managed placements. By re-bidding and unselecting poorly-performing publishers and increasing bids on good-performing “managed placements” in the content network, advertisers and publishers get better connected, and profitability for both should be enhanced. Google is in effect providing an information conduit back and forth between advertisers and publishers on a large scale. They add much more value to their role than traditional advertising brokers, rep firms, and display networks.

Google Search in general has gotten better over the years in large part due to the great signals Google gathers, though arguably not as “better” as we would have predicted in 1999. Google’s algorithm has creaked under the constant strain of the efforts of spammers, but the spammers haven’t been able to best Google. Arguably here Google is using workarounds (more characteristic of its underpowered competitors) such as more human oversight on the most popular queries, and shifting to blended search results that rely less heavily on the more easily-spammable open Web. But I digress.

Google: Three Faces, One Company

Now to the three faces of Google, if you’re looking for a handy way to “judge” Google.

Google as Mainstream Silicon Valley Power

As always, Seth Godin offers a nice bit of critical distance in this post about so-called cliches: “You can’t be offbeat in all ways, because then we won’t understand you and we’ll reject you. Some of the elements you use should be perfectly aligned with what we’re used to. The others… Not a little off. A lot off.”

We used to notice unique things at Google like the “I Feel Lucky” button, the crazy IPO auction, 20% time, and the amazing cafeterias. And rightly so: these things set the brand apart.

What shouldn’t be missed is that the source of Google’s power was in part its status as a magnet for the best of an already elite talent pool in Silicon Valley, in a wide range of areas: code, management, strategy, venture capital, legal, innovation, business development, and more. The more of this talent went to Google, the less of it was available to run Microsoft, Yahoo, and other competitors, including startups.

As a mainstream Silicon Valley powerhouse, its team as a whole knew how to leverage scale, and it understood the power of the crowd: its users, the data, auction formats, etc. – to extract maximum value in a business and user loyalty sense.

Google became breathtakingly profitable and huge, in the most conventional senses. It files impressive, conventional annual and quarterly reports that anyone on Wall Street can’t help but admire.

This is mainly what Google is. It was able to get that way in part because of the talent it brought on board, and in part, due to an extended honeymoon period with the force that really matters: the “user”. Hundreds of millions of them, to be exact. Until recently, what those users admired about Google was the fact that Google was on our side. Where some players would appropriate or spam our public, shared realm for nefarious ends, Google would defend us against that by taking a more balanced approach.

It’s important to recognize that this sensitivity made Google a successful, private company and a relatively non-evil company at a larger scale than many imagined was possible. An impressive feat in itself even if Google never did anything notably public-minded in a non-business sense.

Google as Evil Appropriator of Too Much of the ‘Public’ Realm

The problem is, Google does many of the things that it claims it is protecting us all from.

When a large natural resources company like an oil company or gold mining company exploits too much of a resource in a country without paying sufficient royalties and while taking undue risks with our health or creating excessive environmental externalities, many of us speak up and say that the company is out of balance and is profiteering at the expense of fairness to the public. We might also find that if the company was vertically integrated and started muscling into other industries using its influence or power, at some point it might be just too large or too monopolistic to be fair to would-be new entrants. Economic theories of perfect competition may be pie-in-the-sky, but we do draw the line somewhere.

Google’s policies and practices often claim to be tilted towards public service; they also enforce sanctions against spammers, scrapers, producers of “non-original” content, etc.

Albeit with the permission of website owners based on Web standards which allow anyone to opt out of having their site indexed, Google’s empire is fundamentally built on its ability to serve ads up against other people’s content. Google is the world’s biggest “scraper” company. That goes for Google Search, Google News, YouTube, and so on. Google isn’t alone in this.

But has it lost the ability to recognize where a “better for the user” version of someone else’s content is actually a wrapper, layer, or product that simply lines Google’s pockets, instead of giving a fighting chance to a legitimate publisher or aggregator that now finds itself in the harrowing position of competing with all-knowing arbiter Google?

With Google Books, and Google’s project to scan old books, Google is providing a “public service”. Did we ask for it? Why Google?

Google Checkout is a PayPal (and other payment processing systems) competitor. By using Google Checkout, advertisers in practice experience an improvement in visibility and even conversion rates because Google allows them to show an icon next to their ads.

In quite a few areas, it appears that Google invents its own definition of “fair,” and looks askance at “scrapers and spammers” trying to make a living, while appropriating (organizing and making universally accessible?) the world’s content to show ads against.

The situation would probably be even worse if users weren’t so ferociously loyal to Google competitors that Google has tried to muscle in on. Knol was a dreadful failure, and users still think of Wikipedia as “the” user-created resource.

Users will have to maintain that type of loyalty to a lot of other Google competitors (who did not realize that Google would show up one day and compete with them, after years of highlighting their content as best of breed), because Google has the ability to hurt ecosystem players by making them relatively invisible, or downgrading them to one of a series of contenders in a vertical, and adding Google’s own layer or wrapper as a superior, more “trusted” approach to that same vertical. This is particularly evident in Google’s potential to eradicate (while seeming to “highlight”) vertical review sites like Yelp and TripAdvisor.

Google as Benevolent Subsidizer of Cool, Good Things

Like Clint Eastwood in Gran Torino, Google often lets its best nature slip out, so it’s tough to hate on them no matter how ferocious they may seem on the surface. The world would be a better place if Google could keep doing “best nature” types of things while backing off its more warlike moves to “own” networks and resources that really don’t belong to Google exclusively.

In many of Google’s products there are a ton of cool tools that Google will never monetize. They’re just there, and you can use them and enjoy them. Like those goofy calculators and unit/currency converters that you can type right into Google Search, if you wish.

Make your own list, but one I keep coming back to is Google Public Data Explorer. Using this app, I can pull up a line graph to see quickly that Canada’s fertility rate declined from 3.81 (3.81!) in 1960 to 1.60 in 2008, while Costa Rica’s declined from 7.31 in 1960 (7.31!) to 1.96 in 2008. (Juxtapose that against the tour guide’s bullet point that Costa Rica is “80% Catholic”.)

I like it when Google applies the things Google’s good at, to data and problem-solving that simply help make the world to be a better-functioning, more transparent, safer, and healthier place… without undue privacy invasions or profiteering.

I don’t for a second believe that “Google is at a crossroads,” because most of what Google is, is captured by Face #1: it is now and will continue to be, a mainstream Silicon Valley powerhouse that has built a profitable enterprise out of its skill in leveraging powerful networks and crowds, an enterprise made possible by both its incredible talent and a loyal user base.

We can only hope that in 2011 Google will keep working on subsidizing a few more of the things that make life good for all, while looking in the mirror from time to time and pulling back from initiatives that cross the line from powerful company to ugly profiteer.

Will it do so? Paul Buchheit’s words offer hope, because they describe how Google has always been: “Systems (or individuals) that don’t welcome negative feedback are doomed. Cultures that don’t laugh at themselves are cults.” Google has generally accepted honest feedback from within and without, and word has it some Googlers retain a wicked sense of humor.

The Use and Abuse of TripAdvisor

Wednesday, December 22nd, 2010

Back fresh from a week at a resort in Costa Rica, I’m kicking myself… for being taken in by a “TripAdvisor scam”. Essentially, we trusted a tour company because they touted their “great reviews on Trip Advisor” on the brochure, and verbally referred to it in their pitch. In short, we were done in by our love of user-generated content. :)

The good news is, the resort itself totally exceeded expectations. And TripAdvisor’s large number of reviews accurately reflected that. It’s not too tough to sort through a few misguided complaints by grouches who show up in a rain forest in rainy season, when the hotel is half under construction (as you can predict like clockwork, every year).

The problem: the tour company we fell in with, Issys Tours, doesn’t really have positive reviews on TripAdvisor. But you don’t have your Blackberry on the beach, and the smooth talking salesman (“Michael”) knows it. They have a single positive review (if you search high and low), and part of that was praising the company for taking the visitor in a van from the airport to the hotel. Not exactly a “tour”.

Our (private) tour was supposed to be to a volcano and was supposed to involve hiking. It had better involve a lot, because it was nearly four hours’ driving to the destination. Incredibly, when we finally got finished with all the driving, it turned out the highlight was going to be a shopping and poking around in a tiny, uninteresting town called Fortuna, where maybe we’d pick up some nice brochures for local real estate, and then four hours back. (Lunch in Fortuna was delicious. Unfortunately we didn’t require the calories for hiking.) Fortunately, we wheedled some small amount of hiking out of the driver. The driver, by the way, was a friendly and reasonably well-informed chap. It just wasn’t a real “tour”.

The promised “hot springs,” though in the end pleasant, weren’t as expected either. Somebody built a hotel around a hot springs and created a Rainforest Cafe-like effect with diverted pools and so forth, all man-made. Fun, and hot — but not exactly the nature walk we had planned.

What a rip!

And all because we simply took at face value a salesman’s claim that his company actually had “positive reviews on TripAdvisor.”

The established tour companies on location, namely Swiss Tours and the one affiliated with the Sunwing package holiday company, were far more reputable. No major harm done: we booked a wonderful national park river tour through Swiss Tours and had a great experience.

Tour companies come and go. Common sense indicates that if a major, respectable resort provides permanent office space to a tour company, you can probably trust them more than the guys relegated to hawking from the beach. Those salesmen have taken to making up TripAdvisor reputations they don’t have. I shouldn’t be surprised. Trust, but verify.

More expensive than Google buys tall building

Friday, December 3rd, 2010

In today’s ClickZ column I finish up a series about marketing budget allocation decisions. In the course of this discussion, I have wondered aloud about the value of “marketing” related investments as diverse as vanity URL’s and renting Class A office space. And I’ve claimed that “signaling bonus” can be at work/play: you not only get benefit A from the investment, but your positioning or esteem in the eyes of the press, partners, investors, potential employees, etc. goes up.

When it comes to the fancy office space renters, Google has gone one better: they liked their space in Manhattan so much, they bought the whole building.

Google is about to purchase the building that houses its chic operations on 8th Ave. in New York, for a reported $1.9 billion.

In this case, though, I’m sure it’s a matter of practicality and good economics as much as “look at what who we are and what we can do.” By not buying the building, you commit yourself to ongoing, potentially exorbitant rent costs down the road as well as potential increases in asset prices (though the latter is unlikely).

The same goes for domain names. What if it’s a pretty good idea to buy that vanity URL now, and $50,000 is actually cheap compared to the $150,000 you’ll pay in three years, when it’s become a very good idea?

All goes to show, many “marketing” investments cannot be boiled down to pure ROI. For companies with more cash or access to capital, there is more flexibility to take advantage of the opportunity to buy up valuable real estate — literally, or virtually.

Organic SERP’s Could Take a Page from the Ad Book

Thursday, December 2nd, 2010

It was a wintry night in 2004 (guessing here) when my longtime Page Zero colleague Dean Towers poured the paid search advertising Kool-Aid and opined to me: “frankly I think the ads are way more relevant and compelling than the so-called organic or ‘real’ search results… when I look at the other stuff, I just see a mess of junk!”

In particular, Dean was referring to the “metadata” or “description” parts of the organic SERP’s in the ten blue links, which remain a pile of crap. Google, as you know, has this lovable way of yanking snippets of text from the page instead of using meta descriptions, etc. It’s a workaround to avoid nonexistent or spammy description tags, to be sure, and they are to be lauded for that. It’s also fugly. I’m looking at a screen right now and seeing a “description” that includes a mishmash of a date, a rambly beginning of a description of what’s on the page (impressive to be honest), and – ugghhh, breadcrumb navigation, heavy on the crumbs. Some of it’s impressive. It’s still fugly.

In the advertising world, and obviously this only matters to the user if they have something approaching commercial intent, you have tight benefits statements and calls to action.

So anyway, it’s not the ugliness and the yecchiness that are the only issues with today’s ten blue links organic results on long tail and torso terms: it’s also the relative lack of rules.

Plenty of pages with commercial intent creep up pretty high in the results, depending on the term. I can’t give you an example because I don’t want to give props to sketchy businesses!

Suffice to say, I have never sided all the moaning about Google AdWords Landing Page and Website Quality guidelines, though I will side with the “wrongly accused”. The advertising part of Google is so great because there are strict rules!

I’m looking at a page that ranks high in organic on a commercial term (not uncommon at all) that would be slapped silly by Quality Score. It’s got nasty promotional language with one of those long, scrolling pages, it’s got weird, deceptive navigation; the list of gimmicks employed is long. I don’t see any keywords in that account garnering higher than a Quality Score of 2. You’re talking about eight bucks per click, minimum, just to show up a few times a day in the advertising program. The reason is the website and the landing page — not competition or keyword selection.

Yet here is this awful, consumer-unfriendly page, lah-de-dah’ing its way up to the top of the SERP’s.

It’s no coincidence that the recent New York Times brouhaha illustrated Google has a long way to go to fix relevancy problems in the organic results. That’s due to the degree of difficulty: the Web is humongous; you have to make sense of it all and you’re supposed to be comprehensive.

By contrast, the world of paying advertisers, though large, is a finite world of known players with credit cards, physical addresses, and other real world relationships with the search engine peeps.

Google’s advertising programs — due to their clear vision, rules, and market principles — are still a great win for both users and consumers.


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