Wednesday, March 25, 2009

Do they pay these guys to be angry at Google?

Over the weekend, I came across this article, Why Advertising is Failing on the Internet by Eric Clemons. According to the bio posted on Techcrunch, he is a Professor of Operations and Information Management at The Wharton School of the University of Pennsylvania. A quick synopsis of the post is that traditional advertising models don't work on the Internet and that advertisers need to find alternative approaches. My first pass through the post left me feeling like I was rereading Seth Godin's Meatball Sundae, but without the fun.

The thing that caught my eye though, was his assertion that the way that Google makes advertising money is through "misdirection." Apparently, he also had an earlier post on Techcrunch where he went that concept in more depth. Here's how he explains that revenue model.
Misdirection, or sending customers to web locations other than the ones for which they are searching. This is Google’s business model. Monetization of misdirection frequently takes the form of charging companies for keywords and threatening to divert their customers to a competitor if they fail to pay adequately for keywords that the customer is likely to use in searches for the companies’ products; that is, misdirection works best when it is threatened rather than actually imposed, and when companies actually do pay the fees demanded for their keywords. Misdirection most frequently takes the form of diverting customers to companies that they do not wish to find, simply because the customer’s preferred company underbid.
When I read through this, I couldn't help wondering if he had access to the same Adwords results that I did. Here's a thought for you -- if Adwords was powered by misdirection, do you know what you would find behind every Google Adword -- porn. Or snake-oil enhancement products and get rich quick scams. But you don't. Why, because for Google and Adwords, relevance is important. Pick a word and follow their ad format, and you can advertise on any word you want. And you can run that ad until nobody clicks on it for an extended period of time; then, lacking an complete disregard for your willingness to give them money, they stop serving your ad.

If you want another example, pick a product or a brand and do a search -- do you see the major competitor in the paid search listings? There's no ROI. The program described in Clemons' post is closer to the old Yahoo/Overture model -- and once was the only time that they got my budget money.

One of the reasons why I'm such a fan of Google's Adwords as a program is specifically because of the way that relevance is handled. But one thing that I suspect that many people miss, one thing that seems like it's under-represented in Clemons' post, is the secret sauce that powers Google Adwords -- the brains of the user. Good Adwords don't draw clicks by traditional advertising or direct mail tricks -- free, limited time offer, new. Instead, the thing that draws people into Adwords clicks are listings that are actually related to the thing that they searched for. Clickers aren't being suckered, they're drawn in because somebody was found ROI in paying for improved listing visibility.

Anyway, you know what they say...
Opinions are like Adwords -- no matter how unique, specialized, or unusual you think yours is, there's probably somebody who thinks that they should outbid you and have the top spot.

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