I’ve been traveling much of this week and I have barely powered up my laptop all week. It’s likely that you (like most of us) are increasingly experiencing most things online on your mobile devices rather than the desktop. That’s great for you and me…but not so great for Google. Google just released it’s Q2 results and they were pretty darn good…revenue up but also significant increases in spend, many in areas unlikely to yield revenue for a while. While the suits in Mountain View are investing in “moonshot” projects like wearable tech and self driving cars the part of the business where the bacon gets made is under pressure. The long and short of it is that the advertisers have not followed the users in any where near enough numbers to keep the average value per click sold from declining…again…a decline which has dogged Google for the past few years.
Mobile devices don’t have as much real estate, are harder to track and the advertising folk involved are still more conservative than the users. So although Google’s revenue has continued to grow investors are looking at a strategy of moonshot projects in the context of challenging key metrics in the core business with less than enthusiasm. In the same week that Google announced its numbers it also announced the departure of the guy officially running their ad business. Nikesh Arora departed to SoftBank. It was interesting to see him address this very issue of click decline a few months back. He commented then that he sees local advertisers as the silver bullet solution to this problem. We have certainly seen the impact of increased interest in online advertising by local businesses result in significant click inflation. The problem Google has is a relatively small number of local businesses currently spending like drunken sailors on clicks they don’t necessarily feel the benefit from isn’t a long term solution. Local businesses don’t have the marketing fire power enjoyed by agencies and large companies….they want leads not clicks. That’s exactly where we come in, we turn those clicks into the leads they need. There is a cultural ravine called “local” which Google will have to cross or fill in to turn the tide on click price decline. Interesting times indeed.
Back in the late middle ages when I was running a good part of one of the big search engines (before it was acquired by Yahoo) we had an interesting relationship with EBay. Back in these far off days they would send over vast lists of keywords which they routinely bid 5c on. These weren’t just obvious product lists there were exhaustive lists of terms which in many cased didn’t seem even remotely commercial. We used to joke that we’d always have one ad match for left handed Aardvark Taxidermists….as EBay would have it in their big pile of words.
So it was with some delight that I read a report today that not only had EBay continued their campaign of bidding on pretty much every word known to man and they were now using that research to attempt to discredit paid search as an advertising medium. Their conclusions were that paid search really doesn’t work because ads for left handed Aardvark Taxidermists aren’t very effective. Back in the day the E-Bayers claimed that their main reason for their strategy was acquiring new users. That makes sense as how often have you found that the only place online you can find that special thing is Ebay. Of course as the population of people who don’t buy on Ebay continues to fall recruitment can’t be as large a factor.
I offer you this story not because I necessarily agree with their findings but as an illustration of lengths that the behemoths of our new order will go to throw mud at each other and their respective business models. Of course Ebay would rather have you shopping direct in their ecology rather than clicking on Google or Bing or buying at Amazon. Collecting data from a decade of bidding on absolutely everything is fascinating…but it doesn’t account for the kind of real shopping searches targeted by advertisers and doesn’t take into account factors like ad copy or landing pages. So it’s probably all a bit silly…but still fascinating to watch.
Freshly back from vacation and other assorted adventures I was catching up on search stories and there are some head scratching items out there. What seems to be happening is that the role of search as a measure of intent is potentially getting criminalized. Here’s a couple of examples:
You are probably familiar with the Cannibal Cop trial which is currently happening in New York. It’s an incredibly creepy and weird story which surrounds either a bunch of fantasists or would be murdering psychopaths. My personal experience with the police is that it could easily be either (possibly both) but a good chunk of the police case centers around searches done by the accused. Leaving aside simple questions like “why didn’t he use an anonymous browser like Chrome Incognito” (oh no wait he’s a cop) the larger question is does the mere fact that someone is searching for something online can that search be used against them in a court of law. Do you in fact have a first amendment right to search for ways to kill and cook a woman. Taking that to it’s logical conclusion does searching for Silence of the Lambs on Amazon make you part of Hannibal Lectors fan club?….where do you draw the line?
There’s an interesting regulatory question which could also end in search based Jail for somebody. This tracks back to our good friends at the FDA. If there is any example of our tax dollars at work to a fault it’s the FDA. Whilst they are happy to allow meat processors to feed pink slime to our children they are fanatically keen to be sure that no herbal product ever make claims that it do more than gather dust on your bathroom shelf. The issue here is where herbal companies who are not allowed to make any claims for efficacy link their products with disease conditions with things like meta data on web pages which gets those products found for disease relates searches. Pretty much any medical related search will bring up unconventional solutions to the problem. The other use case they are bothered by is where on a companies own website a search for a disease term brings up product which the retailer would like to link to that disease but can not make legitimate disease claims for. I would have thought that anyone (even a cannibal cop) with a modicum of common sense would read the warnings and might figure out that the supplements which are coming up in the results aren’t FDA approved drugs….but you never know.
The billion dollar question this raises is can the FDA attempt to regulate search in that way. If they can where does it stop? Google was recently cleared of FTC violations are they going to be up before the FDA now for including herbal products in results sets for disease queries. Could merely doing the query “cure for cannibalism” get me hard time in the Big House….it’s OK I just did that query Incognito.