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Archive for September, 2012

Like it Or Not, Local Business Owner: This Guy on Yelp is Your Future

Thursday, September 27th, 2012

It keeps coming back: the meme about Yelp being a form of “extortion” driving small business owners out of business, “shaking them down” until they advertise, etc.

Some observers — on scant and selective evidence — allege that there is a pattern. That Yelp calls you up to ask you to advertise, and then when you don’t, favorable reviews start going missing. Kind of sounds like a mob protection racket, right? Exploding bakeries burning to the ground, ominous kidnappings of nieces and nephews, ending in them being mostly unharmed…

Evocative image. But no.

No matter that courts have found all lawsuits alleging these things without merit, ruling in Yelp’s favor on a regular basis.

Why do the courts find this? Consider the evidence. In doing so, go through thousands of randomly selected businesses in a variety of cities and click on the filtered reviews and compare them to the ones that remain live. See any patterns? I’m highly doubtful it has anything at all to do with whether a business has chosen to advertise. Too low a percentage of Yelp businesses pay Yelp a cent to make it a credible claim. Many non-advertisers have robust review profiles, and the filtered reviews you do run across do indeed look thin and suspicious.

Websites like Yelp — and their users — are obsessed with learning more and more about how to tell the difference between reviews people should listen to or trust, and reviews that are out-and-out fake. Subjectivity is a given. But there can’t be any incentive for cheating. And weak enforcement would be an incentive for cheating.

But how can you really know what’s real and what isn’t? Online, you could be a dog, right?

Meet Joey S. He’s the real deal. A live human being who happens to like reviewing run of the mill places like coffee roasters, pubs, and (for some reason) a local bike trail. (Great asphalt! But it rained!)

 

 

 

A user profile on a site like Yelp now leaves so many breadcrumbs, it’s pretty tough to fake. First, there are the reviews themselves. Then, how other users responded to them — liked it, thought he was funny, etc. Then there are friending patterns, offering tips and advice, taking local photos, and a (no doubt imperfect, for now) proof that one actually has been to the locale: check-ins.

I also like the chart for “rating distribution.” So there. You can see that for every user and decide for yourself whether all these review sites are just “bash sites” or whether all reviews are glowing so they must be fake. Neither extreme is true. Reviewers are all different. The distribution of ratings is yet another piece of information you can check out if you want.

Of course, we’ve already been through all of this when Amazon book reviews revolutionized that industry. They’re far from perfect. Warts and all, people still like to read the reviews.

No statistic on its own is proof of anything. But in Silicon Valley, search engines like Google and well-funded tech startups like Yelp can leverage Big Data to look for statistical anomalies and to build patterns that show whether a live (and sincere, non-cheating) human is likely to be behind the content.

(Google does that a lot to look for spam in search results. They’ve also used statistical methods to build one of the world’s great email spam filters, and to come up with ingenious means of thwarting click fraud in their ad program. I suppose spammers and click fraudsters would call that extortion, but consumers and legitimate advertisers would have to deal with the fallout if Google took a more lax approach to such matters.)

I certainly can’t agree with all the opinions of the people who are deemed most trustworthy by the Yelp system. And we shouldn’t be looking for just a couple of know-it-alls to tell us what to think, anyway. Remember the old days? The “restaurant reviewers”? We now know that the know-it-alls can’t scale and may not know what you like. So this is crowdsourced, pro-am info. There is a skill to creating it and using it. The best creators are at least real, sincere, and candid.

On the first page of reviews of Mackenzie’s pub in High Park, in Toronto, there are two elite reviewers among the others. And a few who must be seen as pretty active and credible, short of elite status (whatever it is).

The elite reviewers are at either end of the spectrum. One gives the place five stars. The other gave it one star, complaining about some incident where they were asked to order more, or leave. Probably unfair, some kind of diva behavior maybe? Did she threaten them with her elite Yelp status? Who knows. I’ve been to Mackenzie’s. Nothing of the sort seems imaginable. But if you’re going to settle in for a good long watch of the football or hockey game on scarce tables, it’s customary to maybe order a spot of food, and more than just water. I’m just sayin’.

Business owners have a long way to go towards better handling these differences of opinion. If I were them, and I remembered the incident, I probably would want to join Yelp and respond directly to that negative opinion.

In the Big Data approach Yelp is now taking to try to weed out the many fake reviews (both negative and positive) that trickle into the site, there are bound to be a few false positives and negatives. So if you click on “filtered reviews,” you might find a few that should be released into the wild. But the ones that are public are just so much more reliable, Yelp (and by extension, users) doesn’t need the questionable ones.

Yelp even takes formal positions on reputation management issues in its Support Center. On the question of whether you should ask happy customers to write reviews, they’re surprisingly upfront:

“Probably not. It’s a slippery slope between the customer who is so delighted by her experience that she takes it upon herself to write a glowing review and the customer who is “encouraged” to write a favorable review in exchange for a special discount. And let’s be candid: most business owners are only going to solicit reviews from their happy customers, not the unhappy ones. Over time, these self-selected reviews create intrinsic bias in the business listing — a bias that savvy consumers can smell from a mile away. Don’t be surprised, then, if your solicited reviews get filtered by Yelp’s automated review filter.”

Yelp can say this now, because they no longer need to bend over backwards to “seed” the site with any terse, questionable review they can get their hands on. And because they raised so much money, they were actually able to motivate and even compensate Elite reviewers to sweep through neighborhoods to get some legit feedback on the majority of the busier establishments.

Many review sites don’t take that position. They’d be happy to help business owners solicit positive reviews from customers… just as long as they’re real.

Yelp is telling business owners that these uninformative, solicited, one-off reviews aren’t too objective or helpful to the consumer. They’re warning that these reviews might be filtered by an automated system or editorial controls combined with the automated system.

A robust review profile basically looks like this: more Joey S.’s coming into your establishment and reviewing it. People who are well ahead of the semi-anonymous, one-off little blurb writers; yet may fall somewhere short of the grandeur and obsequiousness of the self-appointed Gods of Yelp.

Basically it’s like this: if you take issue with Yelp’s existence, then you take issue with the community. Yelp isn’t biased; its mission is to perfect a system of conversation that avoids bias wherever possible. You can even read the filtered reviews if you want. (It just takes a little effort.)

And if you’re a “local business” but somehow don’t actually have a significant number of Joey S.’s coming into your establishment and reviewing it… in a world where hundreds of millions of people have an opinion, a voice, and a smartphone with a check-in feature and a review app… seriously, do you really exist?

Successful businesses do “exist,” warts and all. Yelp hopefully helps people find them and helps them listen to the 5% of gripes that are truly legitimate and actionable.

Unfortunately there are still many holdouts. Business owners who don’t like to listen. Business owners who don’t “exist,” currently. Who think it’s all a scam, so why not cheat, even sue, when things don’t go their way?

I hope, for their sake, they put aside their egos and realize that the Yelps of the world are here to stay. And insofar as they represent the legitimate consumer community — all of us, in other words — they’re much bigger than you. And so far, that position’s been sanctioned by judges weighing the evidence in a court of law.

The information is pretty much all out there. You can weigh it yourself.

5 Things Google Gives Away Free

Tuesday, September 25th, 2012

I’ve developed a slightly mystical belief: there is no free lunch. Or call it instead the Free Stuff Karma Syndrome. Better yet: Maybe You’ll Do Me a Favor Sometime.

To sum it up, if you’re an end user, and you cherry-pick all the best online content and services without ever paying a penny for them, and do your best to avoid engaging with the ads…well, you might be OK. There are slightly less than even odds of you being hit by a bus on your way to work at the local hospital.

If you’re a marketer, though – if you take and take and take, and then try to get out of all the paid services and whine at Google whenever it makes a tweak to its (free) organic search algorithm that slightly disadvantages your for-profit company – well, let’s just say that a “wrong turn at Albuquerque” via Google Maps’ driving directions will be the least of your worries. Unless your idea of a wrong turn is off a cliff. It’s just bad karma, man.

The interesting thing about all the free products and services Google develops for consumers – and some for the benefit of small and large businesses – is that they aren’t all tied efficiently to revenues. Google just invests heavily in products. Sometimes it does a good job of monetizing them. But generally speaking, Google derives the lion’s share of its revenues from the same old things all the time (search ads and display ads). Not all of them tie well to the investments Google has made. It’s almost like Google’s bad at monetizing (or doesn’t care enough to monetize everything, since free stuff keeps you happy and keeps engineers engaged in worthwhile projects).

Here are five free Google things we’re pretty much all using.

  1. Cool features in Google Maps. A co-worker was moving closer to downtown Toronto from the suburbs. Excited about his new address, he checked out the driving directions feature to find out how close he would be to the airport. Turns out that two totally different routes gave him about the same travel time in light traffic: 27 minutes and 28 minutes. And in “current” traffic, they were 34 minutes and 46 minutes. (Needless to say, both routes were mapped out flawlessly.) What? Google has integrated local real-time traffic databases seamlessly into Maps, in an actionable way? Then, my friend was further gratified by finding the fastest walking route to the subway station – seven minutes. A walking route to an old haunt – 25 minutes – was accurate because it took a diagonal route through a large park.

    It’s pretty clear that Google has invested heavily in Maps, Earth, Street View, and all these related functions. Sure, it eventually hopes to recoup that investment through local advertising (Google Places, if you want to use the cute name), and why shouldn’t it? Please don’t jump up and down and hoot and holler when Google suggests your clients buy the local ads instead of hoping to get everything for free.

    You know who you are. You know you’re using the services. You’ve run 52,358 driving directions on Maps and your version of Second Life is Google Street View. Karma…

  2. Google Search. Uh oh. Lest we forget that one…it’s free. No one else can hold a candle to it. Google has invested billions in it. It seems Microsoft has lost billions trying to figure out how this “web division” should make money. Not as easy as it looks, eh? Expensive to run a search engine, eh?

    So next time you’re in a casual conversation about what you do for a living, and someone blithely says, “Oh…I had nooo idea…I mean, I never even look at the ads” (an assertion that is now proven to be 100 percent impossible, BTW), as a marketer, it’s not acceptable for you to smile and nod to maintain the peace – even if they’re your dog walker. It’s your job to punch them in the face.

  3. YouTube. Free. Extremely costly to build. Every day you share a video, or 20. Would it kill you to buy an ad or two on there?
  4. Google Analytics. Comparable SMB enterprise class software will run you $20,000 to $50,000, yet for some reason, this is free. (The pro version of Google Analytics is also well-priced, and since so many advertisers and webmasters use the free version, let’s not be under any illusions that Google is covering its costs on this product.) That’s mainly because Google figures if advertisers have the very best data, then they’ll understand how to best allocate their online marketing dollars. It would be nearly impossible to go about the business of allocating a decent-sized online ad budget without spending some of it through Google. That would take some real contortions.

    So if you’re one of these wankers who uses free GA only to watch over your organic search referral traffic and the occasional Facebook “like,” you didn’t hear it from me, but a large flowerpot is falling toward you from that eighth-story window. As we speak.

  5. Gmail. Yep, there’s a corporate version of Google Mail you might want to look into, but most of you are rampantly using Gmail for free. So save the rant about the “intrusive” ads…especially if you’re in marketing. Consider figuring out how to buy the ads in Gmail if you haven’t already. You might even have clients who could class up the place. Is Google currently making money hand over fist on this free service? You have to wonder. After years and years of running “lucrative” Hotmail, Microsoft appears to be shutting it down. Yahoo Mail is a leading service, and that company isn’t exactly pumping out Apple-esque profits either.

There is one free Google thing that went away a few years ago, and that’s the annual Google Dance event held in connection with the Bay Area stop of the SES conference every summer. Hey Google, most of the attendees pay to attend the conferences; and they’ll wear the dickens out of the t-shirts as they smile at the camera and post the results on Google+ so they can enhance their Klout scores, or on Pinterest (for reasons unknown). Bring back the Google Dance! Karma…

 

This column originally appeared at ClickZ on Aug. 24, 2012. Reprinted by permission.

Blogs as Conversations(?)

Sunday, September 23rd, 2012

Blog comments — and by “blog” here, I really mean blogs with commenters plus the (probably more numerous) mainstream press articles online, with commenters — can be a curious manifestation of free speech at best, a depressing spectacle of barely legible misanthropy at worst.

In the middle of a major election, it’s tempting to be lulled into the assumption that we’re in the midst of a conversation — at times heated — among (or between) opposing world views.

But as I’ll explain, that’s a really optimistic way of looking at it (and in calling it “optimistic,” I’m speaking from the standpoint of someone who would favor the idea of “conversations” between people with differing but coherent ways of looking at the world… or indeed the idea of “conversations” as some of us might refer to them at all).

In the field of economics, or better yet, political economy (harkening back to those brave days when some universities actually put the two fields together, perhaps based on the understanding that they fit together in the real world) — it’s possible to identify (for example) two different kinds of assumptions, and therefore explain why people are arguing.

(When you read blog anger, scorn, flames, etc., it might be nice to think that was where people were coming from. Because it would mean, at least they were coming from *somewhere*.)

Position 1 might be characterized as classical economics. You might see terms crop up like “rent-seeking behavior,” “rational maximizers,” etc. — all of them point to the assumption that all else being equal, individuals will try to maximize their pecuniary returns. C.B. Macpherson called this possessive individualism. Economists of this ilk would say it’s neither good or bad, it just is. Adam Smith, a pioneer in political economy, actually thought it was bad (along with writing The Wealth of Nations, he wrote The Theory of the Moral Sentiments) — but it still “is”… and explains most of everything (at least it did at the time).

Position 2 might be seen as the communitarian position (yikes to how vague that term can be, but hey, it’s hard to get by on a single word). Tendencies towards compassion, empathy, and altruism are (empirically speaking) long-term survival strategies and many times are the “best policy”. Long-term benefit often comes from cooperation or even what appears to be selflessness. (See Robert H. Frank, Passions Within Reason: The Strategic Value of Emotions).

Now can two seemingly opposed world views like this get along? Or even have a coherent conversation? Only, it seems, under pretty strict conditions. Most of the time, as “discovered” by Jürgen Habermas, interlocutors are speaking strategically — trying to bargain or win. They rarely if ever bring a “mutual orientation to understanding” to the table. The hypothetical table Habermas speaks of is laid out painstakingly towards what Habermas called an “ideal speech situation.” He called his approach or system an attempt to construct a “universal pragmatics,” and opposed it to most worldviews which devolve into various forms of self-contained “hermeneutics.” As such, observers have called Habermas an “optimist.”

So back to Positions 1 and 2 above. When you read the never-ending attacks on an author’s motives, beliefs in a company’s self-interested moves “by definition,” etc., it’s tempting to believe that the authors are simply Machiavellian cynics or advocates of a strict form of classical economics. Everyone is always self-interested, so that explains everything.

When you read more closely, though, it turns out that’s not the case. Blog commenters (at least the worst ones, who attack everyone and everything) do not posit any type of specific assumptions about humanity or how systems or society work, other than simply wildly assuming most everyone else is morally and intellectually bankrupt, except for themselves. They alone would do the right thing, in the right circumstances — and if they didn’t, it would be because they had somehow earned or deserved it.

(And oh yes, by the way, there will be no speech today — or ever. Forget having a conversation. There are no world views. Why bother even looking them up?)

Indeed, it is possible that a certain class of blog commenters have elevated their own personal status as random haters to that of a deity, albeit a deity that could only exist in a world willing to worship the Tasmanian Devil.

To sum up the position that covers most of it: “corporations, the author of the article, Billy Joe Armstrong, anyone who tweeted something they liked or ever got Pinterested in anything, identifiable social groups, politicians, (continue very long list…)” are stupid, corrupt, evil, and…well, just generally yucky.

It would be comforting to conclude that this stance is so typical because blog, article, and YouTube commenters are all 14 years old behaving like 8, and are by definition immature & just don’t know anything yet. Again though, as you read on, it turns out not to be the case. Every age group is well represented.

Maybe a shorter way of saying this is that the majority of people (at least if you believe what you read even from gainfully employed commenters on user experience blogs, to say nothing of the more random stuff on Yahoo, etc.) are cynics. Cynics don’t believe in actual conversation. It’s tough to come to that realization… tough to hear Jürgen Habermas referred to by intelligent intellectuals (even if maybe in a positive light) as the ‘theologian of talk‘. Speech needs to be evangelized! Conversations aren’t just a goal to work towards… Habermas himself would have to gain a cult-like following if we want people to start working towards having actual conversations! :( Pretty sure that ain’t happening.

It’s probably better to put one’s head in the sand and ignore that (rampantly cynical yet bizarrely narcissistic) segment of humanity — even if it appears to be most people. I’m pretty sure that’s roughly why Seth Godin studiously ignores cynical reactions, and eliminated the comments section on his blog.

I’d like to think that’s also a fair way to apologize for Mitt Romney’s unfortunate private comment dismissing Obama voters; his apparent decision not to listen to 47% of (voting) Americans. Unfortunately, he called the people parasites, not cynics. Not nice, and not accurate (where I come from). But he’s out there trying to convince people of a world view, and he is not a cynic but rather an optimist. We’ll give him that.

And I leave you with the following. We can always call the cynics on their unstructured bullshit commentary, as some old dog did on this entertainment blog :)

Casey Kasem12 hours ago -28 Green Day is nothing but a bunch of poseurs. Oooh, little “punk” troll is screaming f words at a teleprompter. He’s so rebellious and punk rawk!!!!!! loser.
Bri H 12 hours ago +53 Wait a second, Green Day is “poseurs” now?! Hold up, a punk rock band that’s been around since 1988 is now “poseurs” seriously, I fail to see how in the **** you came to that conclusion. Honey, let me tell you something. Green Day will always have fans, and will always gain more fans, because they give good quality music that’s worth listening to. Justin Beiber, Usher, etc….they’ll wash out in a couple years. I give Justin another..2 or 3 years before he’s nothing but a memory. A bad memory. Green Day has fans that have been by their side for 20+ years, they are always gaining fans. But keep on with the “poser” ***** Cause guess what? Someone losing their temper over something they weren’t forewarned about because someone thought they had the right to go over their time limit, someone that has more *dedicated and devoted* fans than said person than went over, is not something to judge their character over. Billie Joe Armstrong is, in reality, and typically, a sweet, funny guy. Who has always been, and always will be awesome, and will always have fans. I mean come on, they’ve made music for over 20 years now, and still keep getting more fans. Yet, he’s a “poser”. But go ahead, keep speaking out of your anus. It’s amusing. Or better yet sweetheart why don’t you try going to this place called “YouTube” and listening to some Green Day songs, educate yourself on this band you called posers. Bet you you’ll be a fan in oh…30 minutes or less?

Improving ROI through SEO by COB (via Captain Picard)

Wednesday, September 19th, 2012

This was going to be a little post that basically said “Hey! Have you guys seen the National Car Rental commercial where they actually mention improving ROI through SEO?”

I’ve been loving those commercials, actually, since shortly after they started. I think I was hooked when the third character came along — the woman whose “core competency… is COMPETENCY.” I started mimicking that guy at the boardroom table who squints and points meaningfully when she makes a good point. He’s funny. And after all, she is Princess of Powerpoint!

And above all, I started digging the narrator’s voice. Delightfully over the top theatrical elocution… “pay for a mid-size, and take a fullsizeorrrrabove!!” Before long, “Just like you, business pro. Just like you.” became a catchphrase around our home.

It was only lately that I realized why I loved that voice! It’s Patrick Stewart! Tea. Earl Grey. Hot. Go to the End of the Aisle, Numbah One.

Those ad agency people may be sarcastically ripping ‘business pros’ they don’t really like, but this time, it worked like a charm. The overt takeaway for me as a customer was the main thing: I love being reminded that I can get to the airport and just march over to the vehicles with my Emerald Card. No lineups.

But looking into it a bit more (as I read up on the commercial online), there are actually a few more takeaways. Three, to be exact.

(1) No matter how good something is, some sad “Internet commenters” are going to hate on it. Sure enough, there they were on YouTube, denigrating Patrick Stewart of all people! I have a hard time believing everything is subjective in this life. I mean, “Zoom-Zoom” is stupid in my opinion, and I would never personally buy a Mazda just because of that. ;) But Jean-Luc Picard himself in a brilliant voiceover? Get out of town! So anyway, this week I ran across two really uplifting posts by 37 Signals co-founder Jason Fried. One post praised a car window design, so naturally some commenters jumped all over him, implying that he was a dickhead bragging about his fancy car. Another post praised a warning screen on a check-out process (disclosure: a client of ours) as an example of “defensive design” that sought to ensure that consumers were given options in their means of shipping sensitive goods. And the commenters piled on the company for covering its ass, not going nearly far enough to protect the consumer from all harm (to be perfect they would need to do things such as banning shipment on certain days of the week, going into the red by paying for the expensive shipping method despite not a single competitor doing this, etc.)!

I’m pretty sure if you had a comment field under Edvard Munch’s The Scream, right in the museum, the scrawling  commenters would pile on with all manner of scorn… “This is the most overrated piece of crap ever produced!!” “This guy can’t even draw a straight line!” Etc.

(2) The fact that I loved that announcer’s voice for months without realizing it was Patrick Stewart, I think, points to the sheer quality of the production. It also says this: hiring the best isn’t always prohibitively expensive. If you have a radical idea like “Hey, why not hire Captain Jean-Luc Picard for this job?,” why not price it out, and just do it? The best are out there, waiting for your call. And they’re the best for a reason.

(3) Speaking of The Scream, of course, at $120 million, the painting is overpriced, and what’s more, it isn’t the artist’s best work. But if the fact that something is a pop icon or the subject of controversy leads to more people visiting the gallery in Oslo to see all of Munch’s work, and developing an appreciation for art, isn’t that what it’s all about? Similarly, the producers of that commercial, when they are all done, will no doubt be able to point to other, much more creative, projects that they were able to work on because their day job allowed them to produce little pop vignettes like that. Back to the sex and cash theory. People do make advertising because it pays the bills, just as Munch drew portraits of wealthy patrons so they would pay him. Get over it.

Ha ha… I still can’t get over one of the comments on the National ad:  ”And who the hell hired the clown with the I-love-my-voice vocals? Talk about clueless on subtlety.”

Clueless indeed, YouTube commenting pro. Clueless indeed.

Being BIG vs. Thinking Different

Monday, September 17th, 2012

The tech world is littered with tales of cage matches between perceived underdogs and huge overdogs, the latter of whom don’t realize at the time that they’re even in a cage match. (Oftentimes, they’re still gradually figuring it out to this day… until, even, their dying day.)

That’s one of at least 1,000 deep insights buried in the Walter Isaacson bio of Steve Jobs.

“You know Steve, he has his own agenda,” Sony’s CEO Nobuyuki Idei explained to Red Herring editor Tony Perkins. “Although he is a genius, he doesn’t share everything with you. This is a difficult person to work with if you are a big company… It is a nightmare.”

In the ten years since Sony’s CEO made that statement, Sony’s stock has dropped 70% in value (while, admirably, paying a consistent dividend). Over that same period of time, Apple has become the most valuable company in the world. Apple’s stock price increased 9,751% over that same period.

Who’s the big company now? Why did Sony assume that Apple wasn’t one? And that you could talk about “Steve” so dismissively? Did Sony feel threatened yet dismissive all at the same time? (By market capitalization, today Apple is 50X Sony’s size.)

You’ll notice a consistent tone in such bigger-company bully talk. “We’re a big company” style big companies have a habit of “big companying” themselves into the ground. Even when obviously threatened by change, they cling to dismissive, supercilious language — as if size alone is a built-in advantage, as if their market is a constant.

It’s a competitive landscape and there is no “end point,” so naturally upstarts maniacally focused on execution often trump those who’ve lapsed into “being big.”

“Being big” is something you do in the passive voice and the present (soon to be past) tense. The prickly upstarts so often speak in the active voice, about future outcomes.

PPC… Still Unsexy

Saturday, September 8th, 2012

If you’ve heard of Hugh MacLeod’s sex and cash theory, and you’ve been wondering which category your day job managing paid search accounts falls into… wonder no more. I’m here to tell you: compared with the orgiastic goings-on over on the SEO side of the search marketing game, PPC is… well…not sex.

[As it turns out SEO also merely seems sexy, but isn't quite "sex" in the strict sense of MacLeod's theory, where sex refers to a noble pursuit or high calling (or a longshot path to true global stardom).  But nonetheless, it's as close to sex as we've got.]

In your life and career, the fact that no one cares about you just because you’ve got a few dollars — maybe even big bucks — to spend may be sinking in about now. You’ve blown a cool million this year on advertising, so where’s your entourage? The limo? The paparazzi? The closest you’ll get to groupies will typically be sales reps pitching you to spend even more.

You’re in good, sad, sorry company, friends.

Let me tell you a story about my cousin, Alvin. (It’s not his real name, but we’ll call him Alvin here because he has chipmunk cheeks, and they puff out especially when he gets worked up about something.) Alvin is my Mom’s second cousin. This barely makes him family. In any case, you run into him at family reunions. At these reunions, we marvel at the sheer volume of roast beef, mashed potatoes, and jelly salads that can be ingested by people who, in earlier generations, would have done heavy manual work as farmers. Now, machines do more of the work, of course; in other cases, the family sold out of the farm biz long ago. Alvin falls into this latter category. Like a few of his friends, he managed to sell the family farm soon after inheriting a piece of it, rolling the proceeds into a Burger King franchise, and then another. I’m not going to comment on whether Alvin “eats his own dog food,” but suffice to say that either metaphorically or literally, he’s not starving.

Alvin, I suppose, is one of those humble “millionaires next door” you keep hearing about. Wears cowboy boots, comes from a small town, and wouldn’t know a Chablis from a cherry Coke. Except for the humble part. When Alvin rents a Cadillac, or vacations at the same “4 star” resort all the rest of us vacation at in the winter, he wants everyone to know he’s got a lot of money. Alvin proudly explains at family reunions how he runs roughshod over the locals when they don’t give him VIP service.

Alvin loves to tell stories about his screaming fits in the airport, and especially, his delightful brand of pushiness while trying to explain to those pea-brained foreigners just how important he is because he paid $23 a night extra for the Mega Deluxe room.

Alvin genuinely seems amazed that when he screams at them about owning four McDonald’s franchises (OK, so he felt he had to embellish slightly), that a bulletin isn’t sent out to all corners of the resort: let Alvin win at beach volleyball; have the valet bring a selection of scooters around for Alvin’s family to choose from anytime they approach the lobby; give Alvin a choice table at the restaurant; etc.

The problem is twofold, really. (1) Alvin isn’t cool. Money isn’t cool (until it’s $1 billion or more). Rebellion is cool, especially when its parameters are simplistic and easy for anyone to follow. If the founder of Wikileaks were to drop into the resort, imagine the scene. They’d probably hug him! Make sure he had access to the “good stuff.” Light his cigar. Provide a pedicure. Money isn’t everything. (2) Alvin isn’t rich. He confused having some money with having a lot of money. The president of an insurance company, Alec Baldwin, and Donald Trump are all (probably) rich. Much richer than Alvin. If you’re going to play the “money talks” game, be sure to have a lot of money.

[It reminds me of how Steve Jobs got a pile of respect after he was ousted from Apple and bankrolled little Pixar. Jobs was sort of rich. Pixar was small. Disney (et al.) gave them no respect. Pixar raised megabucks in an IPO. Jobs was now a billionaire. Pixar now wore the big boy pants and could push for much better terms in deals. "Rich" doesn't impress anyone much. Mega-rich, different story.]

So is PPC cool? Unless you’re mega-rich, it’s about as cool as my cousin Alvin.

Online banner ads have been running for over fifteen years now. Google AdWords has now passed its tenth anniversary. So naturally, the business world at large now warmly embraces online advertising. Or does it?

Some days you wake up and it still seems like it’s all SEO, all the time. Oh, my aching head. Why??

Take the recent SES conference in San Francisco. A flash keynote Q&A by Google’s famous head of the web spam team, Matt Cutts sent a buzz through the conference, packing the large hall on Day Two at 8:30 a.m. Barely a minute into the proceedings, fearless MC Mike Grehan (Publisher, ClickZ and Search Engine Watch, and Producer, SES Conference & Expo) invited the founders of two other prominent online marketing conference series – Danny Sullivan and Brett Tabke – to join him and Cutts onstage.

It was like having Mick Jagger, John Cleese, Che Guevara, and the Marlboro Man on stage all at once, with Julian Assange playing the fiddle nearby.

There before us (once again) were four Gods of SEO (or Godfathers, at least). Everyone in the audience on the edge of their seat, waiting with bated breath for any SEO insight that might slip out! The lanyards around our necks? From an SEO tools company, naturally.

To be sure, all four “SEO Godfathers” have many diverse pursuits beyond SEO – Mike, for example, is much more into integrated marketing these days – but arguably, SEO defines their raison-d’être in the industry. (Mike may still be best known for his books, articles, and talks that teach people about the science of organic search and the signals used by search engines.)

Googlers over on the PPC side (to say nothing of the display advertising side, Google News, Google+, etc.) really don’t enjoy such celebrity status, in two senses of the word “enjoy.” They aren’t accorded that status by the public at large or on the trade show circuit. And when it’s thrust upon them (in the form of a keynote opportunity), they don’t seem to particularly relish it.

Ex-Google ad sales maven Tim (“Don’t You Know Who I Am?”) Armstrong, tellingly, has shuffled off to that great digital retirement home, AOL. I’m sure he’ll move into something better eventually.

SEO gurus still being mobbed by their little Cuttlets after they appear onstage? What’s up with that? Where’s the buzz around publisher revenue, effective ad targeting, and ROI? Who can galvanize advertisers? Does Google – or the industry – really care? Is Wall Street the only place you can listen to people discuss average CPC’s anymore?

Why don’t most Googlers appear to care?

From Google’s standpoint, that’s not hard to figure out. It’s summed up in a telling phrase used onstage by Matt Cutts in the Q&A: “We want people to trust us.” They’d rather not be known for talking about money. And the sales side can be taken care of quietly and sometimes very little effort needs to be made. PPC really does sell itself.

I guess that’s why Google wastes so much breath mollifying its “webmaster” clientele. The fact that the money comes from somewhere else – from conscientious businesses investing in the same type of search traffic as the “webmasters” seem to feel they deserve to get for free – can be taken for granted. It certainly is by the SEO community, many of whom seem blissfully ignorant of the fact that search engines wouldn’t stay in business without advertisers.

Contrary to what some might believe, a few dollars just don’t make you very interesting to the search engine folks these days. Nor do you get the same “cool points” as you’d get if you refused to spend a cent.

Some smarty-pants once wrote that advertising is “the price you pay for being unremarkable.” See? Not only do you get to give your cash to Google (et al.), but you get insulted in the process! And here I thought advertising was the price you paid for a measurable chance to win an incremental customer you wouldn’t have got otherwise just by sitting back with hope and platitudes about “inbound marketing” and “word of mouth.”

It’s great that Geek Squad (or whoever) could grow entirely through word of mouth and PR. Imagine! A world without advertising! The power of pure, unadulterated remarkability!

It’s mind-bending to think about it. Too good to be true, actually. Here’s why. Those great “word of mouth” and “user generated content” sites like Yelp and TripAdvisor? The cool social spaces like Facebook and Twitter, where everyone goes to connect with their peers? Search engines like Google, that return billions of helpful results every month, based solely on the quality and relevancy of the listings to the queries typed in by users?

ALL OF THESE COMPANIES ARE SOLELY FUNDED BY ADVERTISING!

A large number of advertisers have to see real, measurable value in that advertising. Or these companies would have to fold. Online ad pricing can be “brutally frank,” as it has been with remnant display advertising inventory, which has dropped into the sub 25-cent CPM range.

Being a rank-and-file PPC marketer is potentially lucrative, but face it: you’re going to have to enjoy toiling away in relative anonymity – similar to being the 188th-ranked golfer on the PGA tour (or cousin Alvin). If you were the top amateur, people would know your name despite you not making a dime. If you were making $15 million a year like Rory McIlroy, people would know your name. But no one cares about Russell Knox, who will finish this season with $164,000 in PGA Tour earnings (and hopefully some supplementary income), barely enough to cover expenses. Russell Knox cares, though. A couple of good weeks next year, and Russell Knox makes half a million – still anonymous, but way better than working.

So what gives with the online marketing trade show circuit? Weirdly, it still seems to break down into people who view targeted web traffic sort of like a lottery, and those willing to pay a fair price for it.

Take a real estate analogy to see how ridiculous this is.

Imagine if they held an expo in the park, explaining how there would soon be a luxury brownstone next door to the sold-out development – and owning a unit would be free if you just found the right key! And by the way, here’s a cryptic map to help you find one of the keys. They’re buried somewhere here in the park. I’m betting you’d have 50,000 people in the park for that expo. People would be hanging on every word. Some would buy shovels. The organizers would clear $5,000,000 just selling hope, much more than they’d get for just selling one of the units for the market price of $800,000.

There’s plenty of money (still) to be made selling the picks and shovels to those hoping to get theirs in the proverbial gold rush. Why would someone in a full-time, steady job in marketing for a good-sized company feel the need to “recommend” tactics proffered by the last person they had a drink with, who happens to be an affiliate-marketing-through-SEO punter gainfully employed in their Mom’s basement? Maybe the industry is to blame, in part. Maybe we’re too reverent of all the talk of backlinks, rankings, “PageRank sculpting,” Matt Cutts’ latest updates on Panda/Penguin/Puffin/Popsicle, H1 tags, and now, “social media signals.”

Real companies have long succeeded in organic search with 90% fundamentals and 10% tactical tweaks. This latter stuff is — quite often — not rocket science. Yet we must sell it like it is… we’re selling shovels, right?

Maybe the conferences should have a mandatory Strategy track, with an intro session about “How NOT to attend every single SEO session, furiously taking notes, getting your shorts in a knot over things you probably can’t control, i.e. how Google will inevitably re-rank your pages over time based on real signals of quality, relevance, and true user response patterns, none of which they will ever disclose!”

Anyway… while the SEO shovel show plays on to record audiences… the buyers and sellers of the ads – the people on the business side – quietly go about their business.

A symptom of the noise differential on the two sides is a skewed perspective on just how effective or urgent PPC is as a tactic as compared with SEO.

One of the most enduring myths in online marketing is that SEO is a “core” element of traffic generation, while paid search is an “optional add-on.”

Even my super-intelligent friend Avinash Kaushik has fallen victim to “sexy SEO rhetoric.” In recent keynotes, he used the analogy that “SEO is like owning” traffic whereas PPC is “just like renting it.” I beg to differ! When it comes to organic traffic, you own nothing but a shovel. It’s a great thing, but it’s not your thing. It’s up to Google – and the rest of the world – to decide how much you get.

PPC isn’t so far off “renting,” of course, but I have argued in the past that building a predictable, tested response asset that will give you a predictable return month in and month out isn’t exactly like waking up every morning and eating only what you kill. You have tens of thousands of keywords and ads (etc.) with honed histories, to say nothing of Quality Score history.

Consider, also, the manner in which successful businesses typically operate: they are comfortable with variable expenses they can tailor to shifting conditions, and are wary of excessive fixed expenses. How many mid-sized (or even larger) firms own the building they operate out of? In order to meet investor expectations and national regulations related to capital ratios, one of North America’s largest banks – Scotiabank – decided to sell off the office building they own (for a cool $1.2 billion). They will rent space instead. This provides far more flexibility.

If a huge bank can rent a building, then why can’t you “rent” a click?

Despite its general importance, it’s possible to over-invest in SEO, or misallocate time and hope worrying about it. (Should you really have to become a content publisher just because you have the world’s largest selection of dog chew toys, and wish to sell more chew toys? What if well-tested, commercially-focused landing pages that aren’t pages of “great content” convert 5X better than landing pages with “great content”?)

Onto the more prosaic part of this conversation: I outline seven ways that PPC mops the floor (for those interested in money, not sex) with SEO, over on the Acquisio blog.

Twitter Will Survive… Because “Tweet” Is A Verb

Wednesday, September 5th, 2012

Over the past few years, there has been well-founded speculation on whether Twitter will go public, whether it will be acquired, or indeed, whether it can survive financially at all despite being a popular service.

We jotted down some thoughts about Twitter’s suitability for monetization via ads, way back in April 2010.

Today, Sarah Lacy has an excellent piece about the tug-of-war in the world of analyst and VC opinion about Twitter. Broadly speaking, we have — “in this corner!” — the view that Twitter is actually better suited to thrive long term than Facebook, even, because it will do well in the continuing transition to mobile, and due to the relevance and power of the small ads that may appear in user streams. In the other corner: the powerful argument that Twitter’s rumored financials are abysmal. We have yet to see significant revenues out of this juggernaut and some folks can’t remember a company this big that had this many lives without ever working out its monetization model. (Even there, it’s merely an argument for a “down round” or an acquisition rather than going public.)

I gave this some thought and I have to say I can’t imagine Twitter, after another year or two, winding up on the defensive. Somehow, their revenues are going to hockey-stick up and they may do so to the point of even a generous IPO valuation as opposed to an acquisition or another (down) round of funding.

Simple reasoning, really: “tweet” is a verb. Like, the kind of verb that’s in the dictionary, despite the activity being the domain of a private company. It’s an activity that’s universally understood, accepted, and practiced. Other “verbs” like “google” have done OK. And precious few tech companies or media companies have ever become this universal. Even LinkedIn (“you can Link In to me”… halfway towards “verb” status) is doing pretty well, and “to link into” is a relatively obscure, career-oriented activity.

Certainly, without a big upswing in revenues, you’re not going to see a lucrative Twitter IPO. Without being able to release financial statements showing significant profits for at least one full year, via non-fishy, not-like-Groupon accounting, you won’t see much enthusiasm out of investors and investment bankers. But with all the tweeting out there, the company still has a shot at achieving lofty financial goals. The combination of targeting and reach for advertising is there, so getting more advertisers to start paying for this is a (simple, or not-so-simple if you fail at it) matter of execution.

Financially speaking, Twitter to date might have been suffering from the twin drawbacks of slow advertiser uptake and an inefficient pricing model.

It’s said that Twitter uses an auction model for much of its advertising. The question is, what proportion of their potential advertiser base are aware of this? How many are truly excited about it? Well, the excitement may be about to begin. Reportedly, Twitter is dropping its floor price for an “engagement” to one penny, down from 50 cents. That’s huge.

Minimum monthly spend floors are a momentum-killer, too. Even large companies like to start out with tiny test budgets nowadays, given the self-serve revolution created by Google. Or they assign their agency to do a little reconnaissance, even (say) $2,000 for a two-week trial in a specific niche. $2,000 tests can turn into $1,000,000+ budgets amazingly fast… though the process may take years. Given this potential, Twitter’s current reported revenues of $350 million equates (in terms of $1 million spenders as “good” ad clients) having 350 mid-sized ad accounts. Quite simply, for this stage of the game, that’s crap.

At our small agency, we have some small business clients spending $4 million a year on Google AdWords (you heard right, you don’t have to be a household name to spend that much profitably on advertising). The total Google ad budget of a typical small agency with 40 clients (a few of them large) would be, like, 15% of Twitter’s entire revenue base. Yikes.

Remember, Google stalled initially when it debuted with an inflexible CPM-based model for search ads (AdWords 1.0) in 2001. Moving to an auction that allows advertisers to get in at a low cost, then get addicted — one that allows millions of keyword micromarkets to set their own price — was pivotal in creating a full market for the targeting Google Search offers advertisers. Twitter must iterate towards a clear, powerful advertising model and not just leave multiple options on the table in the hopes that advertisers will figure them out.

 


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