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Canadian Journalists, BlackBerry Should Not Be Viewed Through a ‘National’ Lens

Posted November 12th, 2013 by Andrew Goodman

The dire predicament of once-dominant smartphone pioneer BlackBerry (formerly Research in Motion) has led Canadian scribes and pundits down the usual path of lamenting this outcome as evidence of some deep flaw in “Canadian companies.”

Let’s be clear. No matter where your company is headquartered, especially when it comes to global technology standards, your ecosystem is harsh… because it is dominated by companies like Google, Apple, and Microsoft.

If that weren’t true, then Netscape would still be your browser, you’d be using Lotus for spreadsheets, and you’d still use Wordperfect (of Orem, Utah) to compose documents. And Webtrends or Omniture would still be the header on the web analytics documents you share around the office, or post on your “intranet” built by some old iron enterprise software maker. Heck, maybe you’re one of those weirdos who still does business with some of these ex-brands.

Look at the trends in high tech — and especially, in a digital interconnected world — more closely, and it’s evident that this sector has enormous pressures towards scale and standardization. It’s a “winner take all” scenario, in which apparent leaders like Google or Microsoft must poke their heads up and out of the narrow leads they’ve gained in their industry niches, and look at the forces that could cause them to be fenced in by an even larger monopolist.

 

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So, years ago, folks were “wondering” if Google would develop a browser or an OS. Of course, they did. Years ago, I was suggesting Google would feel stifled by large wireless carriers, owners of utilities/fiber/etc.; indeed, they’ve been busily bidding on spectrum, building out local high-speed Internet services, etc.

Google overpaid — yet somehow underpaid — for a never-convincing display advertising conglomerate called DoubleClick, to advance its lead in digital advertising as a whole. (Is that monopolistic behavior? Sure is!)

When it came to the drive towards mobile, Google bought Motorola, and asked questions later. It was for the patents, people, and a few other assets, but it wasn’t a “good” acquisition. Motorola’s devices aren’t keeping up and they aren’t selling well. No matter. Google keeps rolling.

(Google doesn’t control everything, of course. No one uses Blogger. Everyone uses WordPress at some point, for some publishing reason.)

And then there’s Android.

Globally, there are only two credible smartphone platforms: Android and iOS. Two. If Microsoft or Blackberry make a stunning resurgence, perhaps there will be a third player.

Look at Amazon. It’s back to its old “spurning profit” ways as Jeff Bezos continues to be hell-bent on solving new problems in logistics and scale  to revolutionize the consumer experience, writ large.  Few companies of any type — especially those with vocal shareholders — would have the stomach or patience for such grandiosity, insofar as it transcends any need for small-r republican happiness, profitability, and a peaceful existence.

There are a few takeaways in all of this. The first is quite simple. If a company has never made it an obsession to drive towards the kind of total global dominance that transcends their industry category, then it’s silly to act all surprised when they run up against gigantic forces that impede them from simply convincing their customers to use their perfectly nimble, serious, and beautifully-engineered products. Most engineering-focused companies aren’t good at engineering world domination. And it doesn’t happen by accident. It happens “on purpose.” Google acquiring YouTube, DoubleClick, and Motorola (and appropriating Android) is “on purpose.” Blackberry has never done much of anything like that, though it finally did make a good move in acquiring a solid mobile OS developer.

Companies in consumer-based, standards-driven high tech — even big companies — need to figure out whether they can dominate at an even higher level than their existing massive niche. If they can’t, they need strategy. Strategy often means the foresight to — yes — sell out well before the decline sets in. Skype sold early. Does that mean there is a problem with “Scandinavian” entrepreneurs?

For that matter, pick any given region in the United States outside of a couple of the top high-tech zones, and those entrepreneurs “sell out” as well. And even “pretty good” core digital players like Yahoo, and someday Facebook, try to maintain dominance through what seems like a futile whack-a-mole of buying up upstarts. Yahoo burned tons of cash acquiring Geocities, eGroups, Broadcast.com, Tumblr, etc. The attempt to become a monopoly by simply adding scale does not generally work unless the strategy takes things up a level to command the operating system, infrastructure, etc. Facebook will face the same problem, as recent analyses of the “irrelevance” of the Instagram acquisition attest.

Apple is a sympathetic outlier in all this. For much of its life, despite the appearance of a kind of visionary dominant thought process (iTunes, etc.), it has really worked primarily to engineer compelling products, rather than on chokehold strategies in the vein of Microsoft and Google. When Steve Jobs decried Google’s appropriation of Android, he really was coming from a place of expecting fair play in the ecosystem… despite rarely playing fair with his inferior competitors.

Apple subconsciously compels people because it doesn’t force them to choose between the ancient and timeless virtues of usefulness/convenience, and beauty. Many other successful companies (Microsoft, primarily, in this narrative) have shunned beauty and elegance entirely. Jobs recognized early that technology was a consumer product that needed an aesthetic. That wasn’t *so* revolutionary; his idea of beauty was often something like a Braun blender. But it has continued to insinuate itself into people’s daily lives, much of which are now spent peering at a screen.

Global business (in many industries) thrives on scale. Scale leads to longevity and, in an odd way, the kind of flexibility that comes from being a holding company; a portfolio approach to dominance. The largest market capitalization company in Canada is Royal Bank of Canada. The stocks of Bank of Montreal, TD, and Scotiabank are all on a steady run in part because of those companies’ diversified global holdings.

You can say the same for many other industries. Retail. Technology outsourcing. Supply chain management. Engineering and construction. Monopolies exert dominance of a certain type, leaving room for upstarts to do what they do best.

Perhaps Apple is the exception that proves the rule that you can rarely just focus solely on making your customers happy. For many years, as is well documented, Apple’s lunch was being eaten by Microsoft because Microsoft was device-agnostic and eager to distribute its software (Office as standard) to all buyers. Apple’s victory wasn’t inevitable. It’s an unlikely triumph of beauty and loyalty over mere standards, mere dominance.

Apple products, by global standards, are costly and elitist. This fact is lost on many Americans. Even in advanced nations, there are eye-opening stats about Internet usage that prove that not everyone is on board with the dominant discourse of the digital age. Over 30% of low-income people in advanced nations do not use the Internet at all. (Ironically, many will probably get an iPad as their first device.) Only two years ago, many ordinary working people internationally had never even seen an iPhone in person. I saw a country boy on a train in Italy berating a passenger for his “Chinese phone” (it was an iPhone). He didn’t get the point, nor care to. A lot of people in Europe drive Citroens, Fiats, and Renaults, too. Perfectly good national monopolies make telecommunications equipment, and will continue to do so. Digital folks in Europe care very little about the Twitter IPO, can’t see the point of looking into advertising on Twitter. Not everything looks as obvious when you pull away from the relentless Silicon Valley driven worldview.

In any case, the kind of victory Apple achieved is rare. It required them to pull back from the brink of bankruptcy, and luck into allowing Steve Jobs to return as CEO. Microsoft invested hundreds of millions of dollars in a foundering Apple at a crucial time. In comparison with that, investors injecting $1.5 billion into BlackBerry, to go along with their multiple-billion-dollar bank balance against no debt, looks pretty good.

BlackBerry (Nokia, HTC, Motorola…), Yahoo, and many others may fail trying. The flip side of that argument is that if you get to a certain size, and at least have a longshot chance to hang around long enough to develop a rabid global following, you can build beautiful and useful things that a large number of people continue to like. That kind of brand isn’t built through TV advertising or other ad-agency shenanigans, but it can amplify it if the fundamentals are in place. Apple’s advertising from 1984 is legendary. It was the upstart. Microsoft was “Big Brother.” The ad pulled no punches. It didn’t go through the motions of putting a glossy coat on something “nice.” It had something serious to say. And it took square aim at Goliath.

Following 1984, Apple’s fortunes crumbled. Its stock price dropped. Steve Jobs was forced to resign. It took many years for the company to rejoin the road back to glory and dominance in personal computing (etc.). In 1985, split-adjusted Apple shares traded below $2.00 for most of the year. Between 1981 and 1995, Apple’s stock appreciated 175%. Microsoft shares rose 6,000%.

Usually, an upstart like Apple doesn’t become Goliath. In this case, the company was essentially on life support for half of its first 20 years.

So doing better than pure life support is not so bad, actually. You can just get big enough to be remembered, and to fund schools, hospitals, and scientific research, as Canadian tech heroes Mike Lazaridis and Jeff Skoll have done.

As Malcolm Gladwell illustrates in David and Goliath, what makes a giant fearsome is also its undoing: it may not be nimble when conditions change. It can’t take potshots at the big guys and run away… since it is the big guy. There are advantages to being small. There will be many more upstarts and many more happy customers outside of the obvious areas that monopolies control. But if most of you prefer to use that “Chinese (Apple) phone” rather than the “Canadian” one, at least think twice before adopting the cheap and cheerful (Android) standard. I’ve made up my own mind. If forced from my BlackBerry, I’ll not use Android.

If the Canadian business reporter could improve one part of her game, it would be to stop setting unrealistic expectations for companies (losing to Google/Apple/Microsoft is something pretty much everyone does!), and get out there and focus on all those fast-growing Davids. And for Canadian companies, poke your head up and try to get noticed for your “David status”. There are probably thousands of upstarts who haven’t thought about applying to appear in the Profit Hot 50 or even the Profit 500.

What Makes Page Zero Tick? “Know Thyself” As Business Strategy

Posted October 16th, 2013 by Andrew Goodman

Jim-Collins-Hedgehog-Concept-300x280The “three circles” planning exercise in Jim Collins’ Good to Great has, for me, stood the test of time as a powerful business compass for anyone contemplating corporate strategy for a company of any size. That coupled with the “BHAG” (Big Hairy Audacious Goal). A goal, in fact, doesn’t have to be all that big to be pretty audacious when your company is tiny or small. But it’s definitely the case that you can benefit by non-delusionally attempting to position and steer yourself towards interested markets — even very big ones — instead of just “taking what fate hands you.”

Although I and our fledgling agency, Page Zero Media, were pretty well known as subject matter experts early on starting around 2000 (and not just for PPC, but related concepts as well), it’s a lot harder building a real business than it is to be a “blogger” or to “get a few speaking gigs”. Early “success” doesn’t mean you’ve got the capacity to build a business. Taking on a few clients is just that. It’s a start.

Page Zero did a pretty weird thing from 2001 to 2006: it focused 95% of its client work on just one thing: managing PPC accounts (AdWords, etc.) and related paid, performance-based online media.

That was working out pretty well. I made the decision to focus so narrowly based on about three factors: (1) As a tiny consultancy starting up, we met a bunch of people, some of whom became clients. Those who came to us for SEO behaved less professionally at the time. Those interested in PPC were not only innovative entrepreneurs (and/or established companies), they put their hand up and said “I have a budget”. We chose the “rational” “budget-based” route over the “low rollers” who wanted search engine magic to make them rich. (2) I thought PPC would become huge. Turned out to be true. (3) I’d read Ries & Trout and those other various books about positioning. Seth Godin had some good ideas there as well. The idea that a FedEx could take what was perhaps perceived to be a tiny sliver of the market, master that, and then branch out later, was very compelling. Indeed, that’s a classic case study in positioning. Go narrow when you enter a field with established players.

So like I said, we did that — for approximately those reasons — for about five years, and did well out of them. They were good choices, and a bit lucky. I’d rather be lucky than good.

But with more people joining our agency, and the industry becoming more complex, I was becoming sensitive to all the water cooler talk that looked at all kinds of different services. Many agencies did just the opposite of what we did. They offered tons of other stuff. Were we just plain wrong to specialize? It was worth asking the question from time to time.

So, in 2006, I went back and re-read Good to Great by Jim Collins. The planning exercise in the book also helped me to draw the three circles for co-workers and new people.

His questions are roughly:

1. What can you be the best in the world at? Makes sense. Competitive advantage won’t come from being 30th best at something. “Top of mind” wins customers, and “RC Cola” wins nothing.

2. What are you passionate about? That’s a nice question because it makes it clear that work isn’t just about rational actor models and making profit — it has to be built on the fact that these environments run on the passions of real people. Maybe you can be unpassionate about something 400 days in a row, and keep coming into work. But on day 401 you’ll check out. Clients can sense who is and who isn’t 100% committed to their field. I subsequently read books about workplace motivators by smart authors like Daniel Pink.

3. And finally, what drives your economic engine? That one really stands out for me. I’ve seen so many experts and small agencies running after 1 and 2, but still not succeeding. Some activities and some subject matter simply don’t translate well into businesses. They keep you busy, but they don’t easily translate into sending a bill. That’s just the facts. That’s the difference between Hugh McLeod, who eventually did turn his art into a thriving business, and the millions of starving artists who simply wait tables to survive. Also, I’d grudgingly left a passion-filled chase for a PhD, and that had already left me starving. I had entered the business world at least in part to put solid food on the table. Building a sound economic engine is good for the clients, too. It means you’re a solid business with continuity, that they can rely on. Sort of how they want their own business to operate. B2B means “Business to business,” not hobby-to-business.

Here’s what emerged from the analysis.

1. This was pretty easy. From the accounts we’d already worked on, from the book I wrote, and from the interplay with other global thought leaders and conference audiences, I was pretty darn sure we could be second to none at Google AdWords.

2. On passion, I thought a bit more deeply about what made people tick around our shop. Of course, we loved the nature of the new digital marketing world because of the promise it offered of key principles of accountability, transparency, data-driven, flexibility, and a host of other amazing and revolutionary changes to the way businesses spent their marketing dollars. But we also had pioneered (in our own way) a way of working remotely, avoiding bureaucracy, and other flexible workplace routines and informalities that actually could facilitate us working harder and better (not less). People were passionate about escaping a corporate cubicle or a meeting-based culture and embracing the empowering feeling that a client could come from anywhere, not just our local area. These seem like easy questions to answer now, but it’s all too common for platitudes about client satisfaction or some detail of a particular industry to be substituted in as answers to this question. I’m glad we dug deeply when answering that question, because it gave us a strong sense of who we are, why we want to be here, and consequently, what we bring to the table.

2a. Answering those questions frankly scares a lot of people (though fewer now), because people mistake form for function, ritual for success. If you don’t “look” like people used to “look” in the “corporate world,” how can you possibly gain “corporate clients” like Postmedia, Capital One, Direct Energy, Torstar, Careerbuilder, and so on (as we have done)? The reality is, life has changed, and “corporate world” is just a stereotype held by some people. We were hired by one of the above companies because the new marketing manager went to bat for us, fresh off reading a couple of my recent blog posts. He pointed to one particularly edgy one, and I thought “Oh no!” – because he seemed pretty buttoned-down and corporate. I told him that style was necessary to stand out, and that deep down we were pretty conservative in how we do business. He dismissed my concern, returning to the subject matter of the blog post. Regarding the style, he said: “It works for me!” Authenticity is increasingly a tool for winning business, not scaring it away, as we’ve seen of late. (And it shouldn’t have taken a read of The Naked Corporation by Don Tapscott to convince you or anyone of that.) At the extreme end of the trend towards authenticity and openness, we see people like Rand Fishkin posting the annual (private) financials of his company, SeoMoz (now Moz). The numbers look pretty impressive now, right? But the ballsy thing is, Rand posted those numbers a long time ago, too… when they were fairly anemic. Many of Moz’s current fans might forget that it wasn’t that long ago that it was an incredibly lean operation where the CEO made $26,000, then $38,000, per year. Believe me, all of us have been there. (Eventually, if you keep growing, it’s got to be someone’s job — like your accountant, or peer, or an expert VC investor who says that eventually “salaries must normalize so anyone can put a true valuation on this business,” to stand up and force the owner to be paid properly, lest the whole point of running a business for profit be lost in the pep talks about passion etc. So in a scalable business that is fast headed towards the $20 million mark in annual revenues, I hope Mr. Fishkin now makes over $200,000 a year, despite his equity position or any partial exits that VC investment may have facilitated.) … And guess how the marketplace has responded to all of Moz’s reckless openness? It says “Works for me!”

3. So what was, realistically, driving our economic engine? Was PPC doing it? Could it continue to do it? The answer we came up with in 2006 was: “Keep doing what we’re doing.” Although established agencies were doing well offering many services, we also saw a lot of people failing after they hung out their shingle, struggling to grow past one or two people when they started dabbling in everything clients were asking for. But we did have reservations to how well the model worked… for us. It wouldn’t work with the smallest accounts. It would work better if we did a better job of positioning ourselves. And it would work better if we kept adding top talent to the team. So we worked on all of those things. We also made the decision to begin selling SEO and those kinds of things to existing clients, quietly.

Today, we’re seeing significant growth in our Findability division, which focuses on the interrelated prongs of SEO basics, Social integration and strategy, and content strategy. We’ve always had strengths in those areas, but it’s taken some time to work out how we can best help our clients succeed. Again, the primary challenge going forward is to “add top talent to the team” so that we can ensure the best quality results for our customers.

We’re now aggressively expanding our mandate beyond PPC and paid media, but we’re very pleased with the stable growth we’ve enjoyed by not trying to be all things to all people. “Know thyself” is pretty important for individuals, but just as much so for businesses. I’ll always be grateful to Jim Collins for the epiphany, and also for the concrete planning method attached to his concepts. Avoiding the negativity of those who see the world otherwise, who see convention instead of business wisdom, has sometimes been a challenge. We’ve taken inspiration from others who have gone on similar journeys… and from those, like Daniel Pink and the folks at 37 Signals, who have been good enough to put some of that inspiration in print form.

We’re in the business of helping our clients grow. It’s been important that we also have our own house in order as we do so!

“Jail Time Warranted” For Youths Who Misuse Search Engines: Agency Head — The Shallot

Posted October 15th, 2013 by Andrew Goodman

the shallotBy James Dinnerklieg

Digital Culture Reporter — The Shallot

October 15, 2013

 

Children engaged in class projects, or simply curious about what something is, have been playing havoc with online advertiser ROI, according to Cynthia Tripani, CEO of Providence, RI-based digital advertising agency Cyan Cyclone, LLP.

“Google seems to be bent on enhancing shareholder value, and has an elaborate agency partnership program,” said Tripani. “Yet sometimes I wonder if they have the proper commitment. Children as young as seven years old are searching for items our clients want to sell, yet they don’t have high purchase intent. They may not even have credit cards! It appears they’re just looking for learning opportunities. That’s nice, but it’s hurting our Quality Scores and driving up CPC’s.”

The problem has escalated to the point where the agency, despondent about Google’s lack of enforcement, has turned to the police to consider laying charges in such cases.

“Yes, we’ve been approached,” acknowledged a perplexed-looking Sgt. Don McConnell of the local police department in an exclusive interview with The Shallot. “Unfortunately, we don’t have full national cybersurveillance powers.” McConnell further implied that the same lack of spatial awareness that would cause someone to set up an ad agency in Providence, RI might hinder them from seeing the wider scope of the FBI, NSA, and other agencies when it comes to interfering with searcher privacy.

It appears the problem extends beyond the prepubescent set. Local industrial container supplier Henry Kendrick noted: “I love Google. I use it all the time to check out new wholesalers. Big, thick, metal containers of all shapes and sizes, with fine work on the reflective logos to add an easy 20% to profit margins… I can look at this stuff all day long. But I only make a supplier decision every couple of years, and that’s usually over a few boilermakers at the annual convention in Chicago.”

It appears that some industry experts agree with Ms. Tripani’s take. James Falconer, a former lead engineer on the Bing Ads team, agrees that “this can be a real problem for advertisers. Word to the wise: if you want full exposure on some of these mass information words such as ‘garter snake’ or the exact match for [stinky], try Bing Ads. Our Quality Score was never all that accurate. Chances are you can stay up there for single-digit pennies per click.”

At press time, children and other conductors of low-buying-intent searches remained at large.

This story was fake. And don’t try Googling “The Shallot,” the name of a nonexistent satire publication. You may be disgusted by all the ‘information’ you’re forced to look at.

5 Insanely Great AdWords Automation Tricks

Posted October 7th, 2013 by Andrew Goodman

With the proliferation of high-powered third-party tools, we might be forgiven for overlooking the loads of performance and personality you can inject into an account using the latest and greatest capabilities of Filters in Google AdWords. Give this a try! By creating bespoke outcomes using techniques you customize yourself, you’re not only providing the high-value-added service your client or company deserves, but you can feel a bit more creative than you would using somebody else’s off-the-shelf methodology.

We didn’t used to think of “Filters” as particularly actionable, even though, of course, they are. But with today’s capability to select all the filtered keywords and take any type of action (similar to bid automation) on all of them, AdWords Filters behave nearly the same as third-party bid automation tools, or the “Automate” button in Google AdWords.

 

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Using Filters as your automation method comes with a number of advantages. Foremost, you enjoy the flexibility and ease of sorting and viewing that is baked into the AdWords platform. But perhaps the greatest advantage of Filters is the flexibility in date ranges. For some reason, those creating bid automation software have loved “data look-back periods” of a week, a month, or (woo-hoo!) all 90 days…or “all time.” Notice a gap there? Between “90 days” and “six years,” for example? A whole bunch of your account might not have meaningful data from just the past 90-day period. And “all time” may be skewed, or overkill. With Filters, we can opt for a certain 18-month period and make our first couple of parameters related to minimum volume and cost, so we’re now managing a large, meaningful set of keywords or ad groups with a nice, statistically significant history. (To be sure, you should manage accounts frequently – daily, even – but for long-tail segments, you do want long date ranges.)

The principal drawback of using Filters as an automation method is the lack of a well-developed logging system and revert functionality such as that offered by AdWords in relation to the “Automate” button.

Without further ado, here are five fun tricks you can try. Tip: most filters can provide misleading results unless you are thinking of ways to further filter out or avoid anomalies, such as brand terms. It can be helpful to filter at the campaign level as opposed to the whole account level.

  1. Goosebump. Sometimes you need to give volume a boost, but you can’t always do this in the most perfectly rational manner. Special situation: a client in the travel industry is willing to temporarily relax the allowable CPA in order to hit certain short-term volume goals – to impress an investor, for example. The account’s performance over the past 12 months has been volatile due to steady improvement via optimization and the deployment of Enhanced Campaigns in recent months. We want to reach the short-term sales target, but while minimizing waste. We’ll go on data from just the past 120 days, with the parameters as follows:
    • Conversions ≥ 1 (we’re taking any glimmer of performance as smoke to find fire).
    • Conversions ≤ 15 (anything high volume, we already manage directly).
    • Ad position worse than 1.6.
    • Cost/conversion < $52 (target is $60; we’re cherry-picking the good stuff).
    • Select all filtered keywords and increase bids by 10 percent.

    Remember, you can do this with just a couple of keystrokes with the current version of filters. You don’t need to change 92 bids individually. You can also “preview” the change if you wish. The only major difference between this and a more conventional bid management method is that this method is focusing on a shorter date range than might be warranted to make a statistically significant call on what bid level is accurate for some of these keywords. But given the turbulence in the account in the past year, and the short-term nature of the client’s new sales target, taking account of recent conversion behavior is a decent heuristic.

  2. Quality watchdog. This one’s easy. In an account that has relatively misleading attribution in the first place, it’s been decided that pausing low-Quality-Score keywords is high priority even if some of those keywords appear to generate some business. The action taken is to be roughly threefold. First, arrest the drain on the account-wide Quality Score factor by pausing all keywords with QS of three or worse. Second, given the waste that was apparently allowed to go unchecked for two years, determine whether the current account manager is up to the job. Third, rebuild the account structure as warranted, resuscitating some of the keywords and showing them against more relevant ad copy, implementing Sitelinks, and evaluating landing pages. The simple filter is as follows:
    • All keywords in account with Quality Score ≤ 3.
    • Date range: past six months.
    • Select all filtered keywords, and pause them.
  3. Keyword myth-buster. A truism around the micro-water-cooler that is the PPC division of your company has it that all keywords involving the word “buy” or “wholesale” will be worth more than product-related keywords not containing those keywords, so they should always be bid aggressively out of the gate. As it turns out on further investigation, that isn’t always the case. Phrases containing “buy” actually fail relative to other keywords when it involves the broad match type or a mobile device. “Wholesale” only works well when shown against relevant ads and landing pages. How do you challenge the “myth of the buy words” in just a few seconds? Across a whole account or campaign, simply employ the following filter. Again, this parameter is now easily findable in the menu that drops down from the Create Filter function.
    • Keyword text contains: “buy.”
    • Set the date range on this to the most recent one-year period.

    That’s pretty much it. Now you scroll down to the totals at the bottom of the page and look at the relevant statistics (such as ROAS or conversion rate) for “all filtered keywords” and compare it to the mean for “all keywords” across the campaign or account. In an account with many moving parts, this can make a big difference to your methodology in setting initial bid levels for new ad groups, for example. To get more granular with your analysis, you could add parameters for > 30 clicks and match type=broad, for example.

  4. Group love. If you are stuck filtering just for keywords, you probably use volume thresholds to avoid managing keywords with too little data to be statistically significant. But are you forgetting you can also look at aggregate keyword data – in the form of ad groups – to look for signs of trouble that might not be adequately captured by keyword sweeps?
    • Go to the ad group level and set your date range to the past year.
    • Clicks > 100, or some arbitrary volume threshold that is not too high, not too low. (Definitely not too high, as part of the point is to catch underperformers that have been flying beneath the radar.)
    • Assuming your target ROAS (conversion value/cost) is 2.8, filter for conversion value/cost < 1.4.
    • These problem ad groups are now “singled out” for special attention. If your filter only shows 30 to 40 ad groups or less, you could immediately go in and make a number of bid changes in these groups – even on lower-volume keywords arbitrarily. If you have a large account and more than, say, 300 culprits on this list, you may be in for a month or two of more fundamental renovations on these ad groups.
  5. Match game ’13. Here, we’ll go on the warpath against broad-matched keywords that are underperforming, singling them out for an extra dose of the bid-down treatment as they clearly haven’t gotten the message they aren’t wanted. Broad match types can pull valuable impressions away from more specific match types, and that situation won’t abate if they’re hanging around with medium to high bids. In this case, rather than taking the situation gradually, you want to give it a little extra emphasis with across-the-board cuts.
    • Set up your normal bad-keyword-sweep parameters, such as past nine months, cost > $75, cost/conversion > $40.
    • Add a parameter, match type. Check only broad match.
    • Decrease bid for all filtered keywords by 8 percent. Instantly, your account’s more specific keywords get more of a chance to shine, rather than having their thunder stolen by broad match types.

    Over time, your overall ROAS should improve as you bid more accurately by match type as a rule, rather than taking everything case by case. Case by case makes sense on the surface, but if you’re like me, you believe that broad match should be bid above other match types only some of the time. If it’s most of the time, your account isn’t doing as well as it should in terms of relevance. This strategy does not substitute for deep dives into the Search Query Report. It also blends Broad Match Modifier with the more-frequently-misbehaving ordinary broad match, unfortunately. (Come on, Google!)

Many of these techniques are quirky and personal rather than being universal, obvious rules that everyone should apply. This goes to show how much scope there now is for customization and creativity in the use of Filters as bid rules. The Filter menu contains nearly every parameter under the sun, from max bid to impression share, keyword and ad text, engagement metrics like bounce rate, and beyond. Enjoy making your own rules.

This column originally appeared at ClickZ on July 12, 2013. Reprinted by permission.

The Man Who Took On Chips Ahoy… And Won

Posted October 5th, 2013 by Andrew Goodman

Recently, Canada lost a giant in marketing: Dave Nichol.

Strangely, for twelve hours following his death, only one media outlet reported it. And the tributes and official obituaries were particularly slow to trickle in. It’s as if no one quite knew what to make of the man. The Globe and Mail has now published a full obituary weeks after Nichols’ death.

How big an impact did Nichols have on the average consumer? Talk to any Canadian, especially one over a certain age, and they will share with you the experience of:

  • Having eaten a Decadent chocolate-chip cookie (or maybe the whole bag). And remember those Oreo knock-offs with more filling? Seems like the Oreo folks had to run to catch up with that one. I don’t go down that aisle anymore, and the big-ass Oreo knock-offs are one big reason why.
  • Having stuffed their fridge with “Memories Of…” exotic-at-the-time sauces. Nichol introduced things like Szechuan flavoring to the average consumer.
  • Having shopped on price for No Name(TM) products.
  • Switching to President’s Choice peanut butter, because for many years, it was the only credible way for most people to get unadulterated peanut butter in a decent size at a good price. And maybe, especially…
  • Witnessing your usually-immune-to-marketing Mom waiting excitedly for Nichols’ Insider Report, a folksy, old-school 18+ page “newsletter” about recipes, food, new discoveries, etc. — information all delivered to you by pitchman Nichols. For the rest of us, who hadn’t just traveled to Italy or Turkey to check out all the culinary delights, Nichols’ publication was like a brief winter vacation. And in 1980′s Canada — before retail choice exploded and before most ordinary folks were routinely slapping such holidays on their credit cards — those mini-vacations livened up the place just a little bit, evoking sights, sounds, and smells just slightly more exotic than Zamboni fumes.

Someone has finally come out and compared Nichols to Steve Jobs, in a sense. And that’s accurate. He was impatient, detail-oriented, and visionary. He was said to eschew focus groups as pandering to the “lowest common denominator.” Although he never owned or controlled a large company, Nichols did transform an industry and how the average consumer looked at and purchased familiar products.

The Decadent Chocolate Chip phenomenon alone was transformative. “All” Nichol did was oversee the engineering of a much superior private-label cookie to the one that dominated store shelves at the time. Everyone “got” what Nichol had done, because it was everyone’s dream cookie — the one you’d draw up on the whiteboard if you were an immature 6-year-old being asked what you wanted. It would seem to be mostly just chocolate chips — real ones. The dough would be better, too. And you’d jam a few walnut pieces in there wherever there was room. You’d make sure the bag had big close-ups of the cookie all over it. You’d give it an audacious name. And finally you’d sell it for 50 cents less than the dominant brand.

Chips Ahoy didn’t know what hit it. During the Decadent’s heyday, if you’d have dropped in randomly on those Canadian homes with a “need” for a bag of cookies or two, you’d be more than likely to see a bag of The Decadent in the cupboard.

That represented so much of what was to come in the grocery business. Not in every field, but enough to change consumers’ perceptions (and thus, demands) permanently. Brands were in retreat. The grocery retailer could not only wipe what they wanted off the shelves and replace them directly with their private-label creations, their pitchman could speak directly to consumers in those same channels. The success of these products improved the profit picture at the retail level. Those profits meant that the retailer could increase share of voice for their “non brand” brands by outspending the brands themselves.

This accelerated the recognition that television advertising for products like cookies, toilet paper, and soft drinks was becoming increasingly wasteful. Television advertising for these products was based on the idea that costly exercises in “brand lift” would somehow cause consumers to search high and low for one brand over another. Sometimes, they still do. But the proportions have changed. The advertising seems ever more wasteful. And people only want to trust brands in certain areas.

Ironically, those who have cut into the appeal of brands by releasing private-label products — and now, in our era, creating information revolutions and means of helping consumers find out about products — have become the brands themselves.

Nichols as the brand never sat well with his corporate masters. And he never felt adequately recognized. While paid handsomely, Nichol wanted to graduate to the owner class. Imagine a Steve Jobs who was just kept on as a consultant, with his chum Steve Wozniak working anonymously down the hall, both earning $1 million salaries, but ultimately having to bow to the superior class of people who “gave them the opportunity.” It was a great opportunity for Nichols, but it could have become even more. He was right to strike out on his own.

Today, the trim, 40-year-old corporate scion Galen Weston Jr. has taken over the TV pitchman role at Loblaw — a role that had gone dormant after Nichols left many years ago. The role is still a powerful one, and the creation of innovative private label successes continues apace. But of course, Weston is no Nichol. He’s unconvincing as a foodie, and looks even more uncomfortable pretending to enjoy a barbecue with regular folks or holding a piece of fruit handed to him by a well-scrubbed farmer.

But his family and shareholders are big and strong — the strongest in the land. While the Sobey’s folks may have just merged with Safeway Canada, that has been eclipsed by Loblaw acquiring the nearly-as-large-as-itself drugstore empire Shopper’s Drug Mart. Although the corporate structure of all Weston and Loblaw related holdings may be too complicated to convey with a single valuation, all put together it’s above $30bn, far ahead of the competition. That effort to scale up may not have been a choice, but rather a perceived imperative. Various retailers compete with Wal-Mart, Costco, Target, and more. Loblaw makes money not only from groceries, but its pharmacy, the Joe Fresh clothing line, and the various other departments in its Superstores.

Corporate strategy has eclipsed personality and innovation, at least for now. We won’t see another Dave Nichol for a long time to come.

Good Aggregate Tablet Performance Doesn’t Equal Sound Bid Strategy (Exhibit C)

Posted September 25th, 2013 by Andrew Goodman

Let the data revolution continue!

Client C:

  • In retail. This is a good-sized account with a lot of diversity. Big dataset, long date range chosen (but not too long). The business is 99% online.
  • AdWords-attributed revenue annually is north of $4 million and less than $50 million, and that’s all we’re saying. The point is that blanket inefficiencies can cost a lot in absolute terms.
  • All metrics are watched closely by segment (keyword, ad, etc.); particularly revenue (ROAS) & CPA. We also weigh various attribution models in decision-making.
  • The site functions well on both computers and mobile devices, and the checkout process is very smooth by industry standards.
  • Average CPC is virtually identical tablets and computers; tablet CTR’s are slightly higher, but it depends on the product.
  • About 13% of clicks are on tablets.
  • In the aggregate, CPA and ROAS on tablets are only slightly worse than on computers, and they still hit our ROAS targets.

That doesn’t mean there isn’t a problem, though. The trick is in the fact that “aggregate” takes a lot of interesting and diverse behavior by product (ad group), and averages that behavior. It’s in the detail that you find the opportunities, of course. That’s pretty obvious to anyone who has ever bid on a keyword since 2001.

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Here’s what you get when you dig in, ad group by ad group (for this account).

This account is a poster child for the general theory that “usually, tablets perform about the same as computers.” And in many cases, that performance is very good. In fact, as I run through a long list of ad groups by top volume spenders, I find only about 20-25% of the ad groups have deviations in tablet behavior sufficient to warrant a special bid for that ad group. The ratio of “we would bid down” to “we want to bid higher” is around 3:1. What’s more, the deviations in behavior seem to be for recognizable reasons. The poor performers tend to share certain characteristics that attract more casual, nonconverting clicks in the tablet environment specifically.

Long term, it’s clear that Google comes out *roughly even* if they simply allow power users to enter adgroup-specific tablet bid factors, similar to those we can currently control for smartphones.

In this particular account, “only” 20-25% of ad groups being bid too high or too low represents a lot of misallocated resources. It’s really not all that much work to set those bid factors, especially since, past the first 300-400 ad groups, you won’t see statistically significant volume for a long time, so you wouldn’t want to tinker with them.

Whether it is a best-case or worst-case scenario (this being best-case), I say either way, case closed.

As Avinash says: “All data in aggregate is ‘crap’.”

 

Concrete Evidence on Tablet ROI in AdWords (Exhibit B)

Posted September 23rd, 2013 by Andrew Goodman

Continuing the data dump. Data: what a great way to start the week!

Client B

  • In a travel-related business. The dataset is pretty big, so no problem with reliability here.
  • We’re getting lukewarm, but steady, conversions from mobile devices (smartphones) with full browsers. We’re able to control these bids.
  • Success is measured by e-commerce transactions (bookings). Some business is on the phone, but about 60% of conversions happen online.
  • Average CPC is roughly the same between tablets and computers; tablet CTR’s are quite a bit higher.
  • About 15% of clicks are on tablets; about 13% is on smartphones, leaving 72% of current clicks in this account on computers. The smartphone CPC’s are 40% lower than computer, so the spend is manageable.
  • CPA on tablets is about 48% higher than on computers. Much better than the previous example, but still not a profitable channel for the client. Just like any other big segment, we want to control the bid.

Before Enhanced Campaigns, many clients were quite granular with their mobile bidding strategies. Some excluded Android because the buying behavior seemed markedly different on Android devices than on iOS, etc.

I can think of no good reason why Google wouldn’t move to allow this flexibility.  It’s already working well in the mobile devices arena, with many advertisers continuing to spend at “mobile appropriate” levels.

The market for clicks is efficient and opportunists always pile in whenever pricing gets better in a given segment.

“Concrete Evidence” On Tablet ROI in AdWords (Exhibit A)

Posted September 20th, 2013 by Andrew Goodman

At a recent conference, a Google executive reiterated what has become a surprisingly sustained refrain from Google since the full switchover to the Enhanced Campaigns architecture in AdWords: Google believes that “tablet behavior is about the same as computers,” and that there is “no concrete evidence” that any disparities in behavior warrant separate bidding capability for this device type. Yet Google feels that “this does not mean that Google plans to take away the separate reporting, as Google has always maintained the principle of providing data and not shutting off data breakdowns that can help advertisers gain insight.” Do you feel lucky?

Most PPC advertisers are now well aware that all of the granular bidding options for various mobile devices (including OS, device types, etc.) have been taken away under Enhanced Campaigns. Some of this is available for Display, but much of the control was removed for Search. Despite the removal of a “mobile only” campaign capability, some of us believe that the bid factors for smartphones are a convenient way of using a heuristic to simplify account management. The smartphone bid capability is now customizable to the ad group, allowing us to avoid wasting funds on a channel that needs a different bid structure to be profitable for most advertisers.

So the question remains: when will Google let us control our tablet bids? Want to see “evidence” that we urgently need to stop wasting funds in this channel?

All we have to go by is our clients. I’ll start with data from one dart-picked client, and keep going until I get farther down the alphabet. I will also be holding my breath until I turn blue.

In order to maintain client confidentiality, I’ll refrain from sharing date ranges and other private data, but the date ranges are long & the data is significant. The industry segment may be disguised, also.

Client A

  • In a printing-related business
  • Success is measured by e-commerce transactions (sales) and revenues (CPA, ROAS).
  • Average CPC is identical between tablets and computers; tablet CTR’s slightly higher.
  • 7.7% of spend is on tablets; less than 1% is on smartphones as we’ve chosen to largely avoid the latter
  • CPA on tablets is 5.4X that on computers (440% higher)
  • Tablet ROAS is 80% worse than computers (or, it’s 20% the computer number).
  • This is on search campaigns. In our Remarketing campaigns in the Display Network, we have not a single conversion from tablets, ever. Depending on the month, this channel amounts to 10-15% of remarketing spend, but we can’t shut it off or even turn down the bid, despite it never having converted.

Of course, people may switch devices and attribution may not be perfect. And some advertisers may not have a website that makes it quite so hard to customize a purchase on some tablet OS’s, as this advertiser’s does.

But it should be up to the advertiser to decide how to handle bidding on all of their significant, identifiable segments.

Exhibit B… to follow soon!

Testing and Statistical Confidence: The Three Bears

Posted August 26th, 2013 by Andrew Goodman

The primary danger in taking actions in response to data (or even structured tests) in our industry appears to be overconfidence in overt data points and a lack of grasp of randomness and statistical confidence levels, leading to a flurry of actions and tweaks that get us more lost in the woods, not less. (I pointed this out here, last week.)

According to cognitive scientists like Daniel Kahneman and Amos Tversky, humans — even professional statisticians — are “poor intuitive statisticians.” (Predictably, some up-and-coming scholars in the same field have argued just the opposite.)

Translated into terms we see in our daily work in performance-based ad testing (etc.), it’s very common for novices — or even good workers who feel under the gun from bosses/clients who push us to “test more, do more,” — to respond frequently to random bits of data. For example, ads will be paused in favor of the ad or two that are “winning,” despite the statistical confidence levels on the win being (if you took the trouble to run them through a calculator) below 70%, despite the fact that a suboptimal attribution model is used such that sometimes segments get “last click credit” for “converting,” but other times do not (and again, often that is for no rhyme nor reason other than pure randomness). “What’s working better” in a combination of ads, keywords, queries, landing pages, inter-family buying dynamics, and medium to long consideration cycles — is never as easy as it looks. Tweaking to random data is, arguably, tantamount to concluding tests before they’re finished. In other words, you set up a whole bunch of experiments, and then shut them down prematurely. Wasted resources and insufficient learning/takeaways.

Too much random tweaking, we might say, is the action of the Impetuous Bear.

At the other end of the spectrum is the Inertia Bear. That bear once saw an A/B test that was rigged to be exactly the same ad competing with itself. 9 conversions accrued to the “winning version,” and only one to the “losing” (yet identical) version. Consulting the math experts, that outcome (in the case of a truly fair coin flip) happens only ten times out of 1024, so it’s less than 1% likely to happen. And yet it happened! From this, the Inertia Bear decides to insert a lot of these “placebo tests” into testing as a way to guard against acting on purely random results. Over time, though, the paranoia about some results necessary being random or impossible to explain (or correlate with the triggers being tested) begins to creep into a general mistrust of testing. That leads to a broader trend away from building anything new. That works fine, until it doesn’t.

So is the answer to simply be “Moderate Bear” and chart a path in between the two? Well, certainly you want to avoid either of these two extremes.

But in addition to that, you probably should be Curious Bear or Creative Bear, the kind of bear that fashions new things to see what might come of them, regardless of what the data say. If you’re purely driven by spreadsheets, provable outcomes, and “what’s best for the shareholders,” your output is bound to be less interesting. (See If Steve Ballmer Ran Apple.) And the end result of that, we see all around us. It’s why — despite not being an Apple guy either — while I have been somewhat intrigued by the Microsoft Surface tablet, I never bothered to actually buy one. If someone didn’t demonstrably pour some passion into the conception and development of the product, then why would I line up to buy it? Probably, I eventually will. Maybe. (Is that level consumer intent even worth testing around?)

The Relentlessly-Widening Performance Gap

Posted August 14th, 2013 by Andrew Goodman

Recently, I had a chance to review a deck produced by one agency handing back over a PPC account to its client owners (or potentially, a future agency).

Bullet point after bullet point referred to emphatic actions taken in the account. No doubt this only scratched the surface of the great number of actions taken.

I’ve always worked in the AdWords auction with a tacit ideal of “the perfect account.” Of course, there is no such thing. But insofar as every action has a chance to move either towards or away from perfection (much like a bronze sculpture, except that PPC is 90% science, 10% art), the end result of a vast many changes can vary greatly from manager to manager, account to account.

Analogy #43,589: you can think you’re going in a straight line in the forest, when what you’re really doing is making so many wrong turns you get impossibly lost. Getting out of the forest is actually easy, though, if all goes reasonably well. You find a river and follow it. Not counting the potential hypothermia and bears, “lost in the forest” is a picnic compared with “made 5,000 wrong moves in AdWords.”

What if the majority of changes in the account are pure guesswork, such that no change — the status quo — would have been superior to the change? As performance challenges toughen, are those errors compounded by further changes and desperation borne of declining performance? That sense of urgency — ironically, created by an urgent sense that bold, decisive action needs to be taken (often in the absence of insight into how much of that action is based on inexperience or guesswork) — parallels the “Death Spiral” concept that Jim Collins outlines in books like Good to Great. (That’s the opposite of focusing on the Hedgehog Concept and Turning the Flywheel.)

When you see a list of initiatives being taken in account management, it’s worth asking: how much of it is pure guesswork? Guesswork is nothing like testing. A testing orientation will greatly reduce guesswork. A typical “guesswork” bullet point would say something like “paused all ads with CTR below 1%.” Testing isn’t like that. Try instead: “Chose the winning ad, based on a thorough understanding of performance criteria, not necessarily reduced to one variable in all cases, and insofar as feasible, with statistically significant data (to a 95% or 99% confidence level).”

Other guesswork gimmicks include adding 1,000 new exact match keywords to an account from a keyword dump, because you have a theory about exact match. Despite 30% of those phrases being poor fits in the account. One step forward… two steps back… endless busywork… not data-driven.

When accounts are managed based on pure guesswork, they get farther and farther from perfect, rather than the other way around. Approaching perfection isn’t easy. Even the best account managers using the smartest rules will make many so-so decisions. But they need to be vastly outweighed by a strong overall sense of how moving parts in an account strategy fit together. And most of all, the actions taken should be accurate (not guesswork) most of the time.

Not as easy as it looks. It’s especially daunting to decide (many times over) that “no action” is safer than “wrong action.” How can you improve anything unless you’re constantly doing stuff, right? (Unless it’s the wrong stuff!)

If you hand a high quality account over to a relative novice, it’s predictable what will happen: performance will begin gradually deteriorating from Day One. As things worsen, the scattershot “panic tweaking” begins. It then takes a steady hand and a high quality rebuild to bring everything back into line.

Give an account to a guesswork-driven manager to build from the start, and there’s a good chance it won’t reach anywhere close to its potential.

As one of my colleagues said to a client, once: “It’s like chess.” (Unfortunately, turned out the client was a Chess Grandmaster, and far smarter than 99.99% of the population at chess. But that’s a story for another day.)

 


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