Posts Tagged ‘google’

How New Media Is Eroding the Mass Interruption Model

Friday, March 4th, 2011


(Warning: This is a #longread that I’ve been marinating on for about a month now. I would highly advise you, dear reader, to take advantage of the Print functionality below or use a service such as Instapaper to enjoy when you have some good thinking time. Have a look and please share with others and share your thoughts in the comments!)

From time to time we all take some “facts” for granted and fail to question them until it is too late to adjust. For example, many of us grew up hearing the repeated fears that we will see human population grow at an increasing rate, and past the point of resource exhaustion. Futurists predicted that current growth trends would continue unchecked. This led to much worry over the past several decades, and even inspired the government of China to create a one-child-per-couple law.

But now we know better. We were silly to miss the fact that rising standards of living around the world would lead to a natural reduction in birth rates. While population is still growing, the warning signs are pointing in the opposite direction: Birth rates in some countries are declining at a rate below what is needed to sustain the current population, and some United Nations scenarios show that our population could shrink from a little more than 6 billion today to 2.3 billion by 2300. While there will be less traffic on your great-great-grandchildren’s daily commutes (by hover car, of course), a population implosion has its own dangers and would dramatically reorder societies and economies. I believe the false inevitability of population growth is mirrored by the false inevitability of advertising impression growth—and if you don’t readjust to this new reality, your business could be left in the past.

For ages we have heard the siren song of growing advertising spending, powered by the digital media shift and rise of ad-powered start-ups. Nearly everyone in our business excitedly shows upward trending prediction graphs of marketers’ new outlays on mobile, social, virtual gifts—you name it. Just this week Eric Schmidt, outgoing CEO of Google, spoke before the IAB to share his firm belief that the online display ad market—what many of us call “traditional digital” at this point—could rise to $200 billion in the near future.

This seemed high to me, so I went a-Googling to discover that J.P. Morgan claims today’s global display market is only $25 billion. Further, the global TV commercial market is $169 billion, and the entire advertising market has been fairly flat for years at a total of $500 billion. Unfortunately, Schmidt did not share his model with the IAB audience, but I do wonder how digital display advertising could grow at a 700% rate. In fact, I believe that the media trends we see today and increasingly in the future point to a world in which advertising spending might just shrink. Much like the false claims of population explosion, I believe a new world order is resetting old assumptions and the next evolution of marketing will usher in a world of fewer advertising interruptions. Heresy, I know, but please allow me to make my case…

Consumer Media Choices Make Mass Advertising Harder

One of the reasons we are accustomed to 3,000 ad messages per day and buy into the assumption that ad spending will only increase is that it has been relatively easy to create and distribute advertising over the last few decades. Mass media arrived in the form of newspapers, magazines, radio, and television. Following closely was the chance to do mass advertising; brands could create a print ad once and run it across a critical mass of millions of eyeballs. Enough people were moved to purchase products by these handful of ads that marketers could see sales as a direct consequence. Life was good.

But today, fundamental shifts in media habits and practices are making it much harder for mass marketers to hit their target audiences with impressions. Here are just some of the changes, which are only accelerating:

  • We have gone from three television channels to more than 1,000 on most cable systems. Brands now need to negotiate media buys across dozens of networks in order to hit a similar critical mass. Many are now spending more for less in a handful of “mass-like” television programs. For example, viewership of this year’s Academy Awards was down 10%, while the cost for a 30-second ad was up 20%. Because audience is not guaranteed for advertisers, this translates into a 33% year-over-year increase in the cost per impression.
  • People are multitasking in ways never seen before, and clearly at the expense of ad impression impact. In the near-past, some people flipped channels or walked out for a beer or bathroom break, but today’s TV viewer is habitually distracted. A recent study in the U.S. by Deloitte shows that 42% of people surf the ‘Net while watching, while 29% talk on the phone and 26% text.
  • Our consumers have decided to use digital technology to shift media to their needs—not marketers’ needs. Once a group of people are given freedom and control, a funny thing happens—they like it and want more of it. So it’s not a surprise that time shifting of media consumption has grown thanks to DVRs, DVDs, Netflix, and Read It Later. Conveniently, these media shifting tools allow the consumer to skip over advertising messages. When we had no choice but to watch or page through advertising, we couldn’t complain much—but once we have the freedom to control what media we consume, we guard it jealously—and advertising feels much more painful to sit through.  And no matter how “must see” a particular program is, there is simply too much other good content out there to hold people hostage to 20 minutes of commercials for every 40 minutes of content.
  • People are employing tools to actively avoid advertising. A rising number of people are moving from “passive” to “active” advertising avoidance thanks to simple technology. Take Adblock Plus, for example, a free plug-in for the Firefox browser that removes 100% of banner ads from a Web page—often putting useful content and links in the ads’ place. You might think this is deployed by only a small fringe group of users—and you would be wrong. Adblock Plus is used by 12 million people on average each day, and has been downloaded 112 million times (84,000 per day). Compare that to a tool that has gotten 10 times the hype: Foursquare has only about 600,000 daily users, and it is downloaded 25,000 times per day.
  • Government is limiting the number of impressions we see. Democratic governments usually listen when voter trends emerge. Europe continues to pass laws limiting everything from TV commercial time to product placement. In the U.S., the Do Not Call list was an overwhelming success, and now legislators are eagerly considering a Do Not Track law that will prevent banner ad targeting that our industry claims will help drive ad spend further.
  • And while new media offers new advertising opportunities, it is still exceedingly hard to make them work. Take gaming, for example. This is one of the media choices that young men are leaving TV for. And for years we have read hype about how in-game advertising networks would be the prime time of the future. But then reality caught up. Game companies have found that it is too hard to build big enough scale to win mass marketer dollars, and the people who have paid $60 for a game don’t like the idea of having additional ads forced upon them. The general manager of EA says, “We actually aren’t getting much from ad revenue at all”—while his competitor at Activision laments that, “There was a time when we thought advertising and sponsorship was a big opportunity…”

New Media Can Make Fewer Impressions

Aside from these fundamental changes in consumer behavior, there is a dramatic change in how new media alternatives behave in terms of advertising: They allow for a lot fewer impressions, often of poorer quality. Let me take this as the cue to tear down the age-old assumption that advertising dollars will follow consumers’ media attention. Again and again we have been subject to a PowerPoint slide showing the percentage of time people spend with various media in comparison to the percentage of marketers’ budgets that go against advertising in them. Most recently, industry guru Mary Meeker presented this argument in an otherwise strong deck about trends in mobile.

A lot of smart people have pointed to this “gap” in spending, but I have heard none of them spend as much as one additional slide considering what could lie behind it. Allow me: This is not an apples to apples comparison. Advertising spending amounts are guided by much more than how much time consumers choose to spend. First, there is the quality of the creative platform—TV and print allow a much higher-quality ad experience and are much more “interruptive” than typical banner ads. Second, a lot of marketers are still struggling to build ROI models for digital while they have decades of experience and test results from traditional ad platforms.

And the future of digital marketing does not necessarily spell more opportunities for closing this perceived gap. The shift to mobile offers a perfect case study. This is another specific area that has gotten prognosticators excited. eMarketer predicts mobile will be a $2.6 billion market in the U.S. by 2014, and one mobile expert, Paran Johar of Jumptap, claims that, “Mobile advertising will eclipse traditional PC ads very quickly.”

Johar might be right, as each dollar to mobile could take $3 from display. The mobile screen (whether phone or tablet) is significantly smaller than a laptop browser window. By my back-of-the-envelope calculation, a consumer’s shift from a PC to mobile Web page is at least a 3-to-1 reduction in the amount of space available for banner ads. So, at consistent CPM rates, the move to mobile could shrink the ad market dramatically—or they would have to be 3x the CPM of display ads, which is so far not close to holding true.

Or perhaps mobile will get bigger because there will be a lot more ads squeezed onto the tiny screen, and ways for businesses to helpfully alert passersby of what is on sale inside their stores. Unfortunately, there’s another problem: Consumers already find mobile advertising to be the most disliked marketing platform, per this research by Advertising Age.

Other new media similarly might mean a trade down in the number and/or price of advertising impressions, and thus a contraction in the global market. For example:

  • Hulu—One of the fastest growing “channels” is only willing to show one-third the number of commercials as network broadcasters show during the same programming. Its CEO has boldly claimed that “Traditional TV has too many ads. Users have demonstrated that they will go to great lengths to avoid the advertising load that traditional TV places upon them.”
  • Groupon—Only one offer per city per day. This might grow to more offers, but they will increasingly be personalized—so you will get one, more-relevant offer per day.
  • Twitter—Has added and plans to expand Promoted Tweets program to try to monetize the service. It will interrupt your Twitter stream with advertising, but if these are more than a handful per person per day, there will be a mass exodus of users.
  • Facebook—Current advertising formats are few, small, and out of the way on the right. The company learned from MySpace that ad clutter leads to lost users. Unfortunately, that means fewer clicks and low CPMs. With more than 600 million highly active users, and an ad-building tool that can have your small business up and running in minutes, the company only reached $8.9 billion in display sales in 2010.
  • Pandora—If you are a frequent user like me, you have likely noticed more ads between songs lately. But, again, there is a natural limit of only a handful of interruptions per hour of listening or you lose people to one of the many ad-free alternatives.
  • AOL—Well, AOL isn’t a new company, but it is reinventing itself with a model that has a lot less advertising. AOL CEO Tim Armstrong strongly believes that, “There are just way too many impressions on the Web.” And he has put his money where his mouth is by redesigning AOL to reduce the number of banners per page—to the tune of a 25% drop in ad sales.

Efficient Targeting Means Less Spending

We’ve all heard the old saw about “half your advertising spending being wasted; you just don’t know which half.” Well, with the increase in targeting information and new ways to track actual purchase behavior, there is growing hope that marketers will be able to discover and eliminate the 50% (or likely much more) of spending that is wasted. So the multi-billion-dollar question is: What will they do with the savings?

I believe that the majority of saved dollars will be taken to profit, thus removing a significant amount of money from the $500 billion global advertising market. Shareholders have this odd desire to see companies improve profits, and too many CFOs are closely eyeing the marketing budgets.

What This Means to You

My first hope at this point is that you have become a little more wary of the hype that continues to plague the digital marketing world. I know it might sound crazy for a leader working in a large, global digital advertising agency to sound pessimistic, but the reality is that we all suffer when companies make poor business decisions. The last thing we need is another digital bubble that will cause marketers to overreact in a very negative direction. Instead of falling for the hype, marketers must examine the bigger trends and changes in the landscape and take the time to shift how they go about their jobs.

Here are three implications of the shifts in media and marketing that you must begin adjusting to today:

  1. From Impressions to Engagements—Now is the time to choose a new common denominator for marketing performance across media. As I hope the 2,000 words above made clear, the impression—while somewhat measurable—is more and more meaningless. Instead, a growing number of marketers and media companies are moving toward Engagement-based planning. I wrote a lot about this in my book and in this blog post, and just this week YouTube and the IAB came together to suggest a new engagement measure: the Cost Per View (CPV). The CPV is a way of pricing advertising or other videos in which a consumer actively chooses to push the play button. It is meant to complement an impression-based plan, adding some further performance data. Marketers must begin to measure engagements and start to build financial models that allow them to uncover the value of an engagement.
  2. From Paid Media to Earned and Owned—In a world where it becomes harder and harder to track down your customers and interrupt their attention, it becomes imperative to attract them with content that they choose to engage with. Of course, this is the story behind Marketing with Meaning—but it is even clearer in the growing recognition that marketers must create Earned and Owned media. Earned and Owned is not only often cheaper than Paid, but it delivers a higher-quality experience—whether it is Charmin’s iPhone app for finding a public restroom or Red Bull sharing “Drunkish Dials” from its consumers on Facebook. (Disclaimer: Both are Possible Worldwide clients.)
  3. Relentlessly Track to Sales Results—One of the most exciting things that I have seen in business is the rise of e-commerce, which allows companies to closely track the price and performance of every marketing decision and investment all of the way to the final sale. This is the main reason search marketing took off and Google is now a $30 billion/year company. I believe that every large-spending company must invest in tools and models to apply this way of making marketing choices—whether or not e-commerce is the way a sale is made. In this future, brand managers will come into the office and get a heads-up display of the previous day’s sales results, quickly alter spending on the fly, and measure the response in real time. If the Shake Weight can do it, you can do it. And we’d love to help you.

Conclusion

To quote Sir Martin Sorrell, “The 21st century is not for tidy minds. It’s messy.” The wrong way to behave is to sit on the sidelines and wait for new advertising media to evolve to meet your historic marketing model. On the other hand, just jumping on the bandwagon of hype can end up burning your business as well. I believe the right answer is to step back and look at broader trends in how people live and society works today—then invest time and money into building a new approach that beats the competition and meets customers’ needs.

This is what our agencies recently did by combining into a new global digital network with a purpose to create interactions between our clients and their customers. We saw a future and shifted multiple organizations into a position to survive, thrive, and lead. What will you choose to do?

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Posted in Organizational Behavior, mobile | 1 Comment »

Google Builds Its Brand by Challenging China

Tuesday, January 19th, 2010

google china flowers

Somewhere along my career I heard that character is defined by who or what you choose to fight against. A character’s foils define who he or she is—and “define” here means both creating and describing. Churchill was defined by his stand against Hitler. Lincoln was defined by his belief in a unified United States. And Superman is defined by his fight against those who would bring evil upon mankind. I keep this in mind here at this blog, choosing to call out meaningless marketers from time to time, at risk of pissing off prospective clients and partners. This lesson can be applied to Brand Characters as well, and Google—the most valuable brand in the world—took a large step toward further defining and improving itself by taking a stand against the evil within the Chinese government last week.

For those who missed the news, last week Google issued a threat to shut down its operations in China after it discovered several, likely government-backed attempts to hack into its servers in order to uncover dissidents’ emails. Google also spoke against the continuing censorship of search results. The business press expressed general shock and awe at the move, wondering how any company could ignore China, and then speculating that this was merely a way for Google to save face in a market where it is not the leader.

I do believe this was a highly calculated move by Google and its company leaders—they would never make such a big move without a lot of strategic thinking and analysis. However I believe the company’s choice is not another Machiavellian move by a bunch of MBAs. Rather, it is the product of a company culture that is founded on a desire to truly improve the world, and a fear for “doing evil.”

Since its very early days as a public company, Google has acted in ways that exemplify its culture, while founding hardcore capitalists. Google allows people to spend 20% of their time on projects of their own choosing. They splurge on free gourmet meals for all employees. And when the company issued an IPO it warned prospective shareholders that it would focus on the long term and refrain from artificially smoothing out earnings results to make large investors happy.

Perhaps one of its most-debated cultural features is the company’s belief that “You can make money without doing evil.” This phrase has attracted many positive feelings toward Google, especially in the technology world where everyone from dominant leaders such as Microsoft to legions of spammers and phishers abuse their access to our computers. This statement has opened Google up to criticism as well—ranging from its avoidance of taxes in the U.K. to using its leading search business to crowd out competitors in new markets. But nothing challenged the company more both internally and among the court of public opinion as when Google agreed to the Chinese government’s demand for censored results when it entered the country in January 2006.

We will likely never know what the conversations were like back then or now in the offices of Google’s leadership. But I believe the censorship issue has been a personal pain-point for some time. I choose the words “personal pain-point” very carefully, as I believe these leaders and many Google employees have had serious misgivings about playing along with government censorship. This is a company that believes that access to information can make the world a better place. The leaders have more money than they could ever spend. And they have a lot of people on their side. The flagrant hacking attempt was probably the personal breaking point.

This, my friends, is why Google is the best brand in the world. The company and its people believe in something good, and genuinely desire to make the world a better place. This is why people in China are laying flowers at the company headquarters sign in Beijing. And if it continues to follow these core values, Google will be a leading company for many years to come. Who knows—Google might even help finally usher in human rights reforms and freedoms in one of the largest corners of the world.

One of the other interesting lessons here is to observe how few companies we could imagine taking a similar stand. No other tech company jumped to Google’s side, and I struggle to think of any other large company in any industry that might follow its lead (much less lead to begin with). Microsoft’s Steve Ballmer has already blown off any thoughts of leaving the country. Not surprising at all; this follows Ballmer’s personality and Microsoft’s culture very well—it is a company based on beating competitors and retaining power. At least he has a personal and company culture, I suppose, as most leaders are simply beholden to the annual bonus and short-term shareholder demands.

I will continue to follow this story closely and root for Google in its heroic stand against evil. Meanwhile, I’ll continue using as many Google products and services as I can get my hands on. I hope you do the same.

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Posted in Government, culture | 2 Comments »

Google Defines Meaningful Tech Marketing

Wednesday, December 2nd, 2009

Google-Sesame-Street

This week, I wrote about three once-proud technology companies that are trying to save their businesses by embracing a marketing playbook straight out of the Don Draper era. Yahoo!, eBay, and AOL have all recently chosen to go with expensive, interruptive advertising campaigns rather than try something different and meaningful. Perhaps they should have taken the path to success of their number-one competitor, Google.

Google was named the most valuable brand in the annual Millward Brown BrandZ study for the third consecutive year in 2009. Not bad for a company that does almost no marketing. Well, it does some marketing; for example, the company launched a series of outdoor billboards recently to drive awareness of its suite of business apps. But traditional, interruptive marketing by Google is very, very rare. A lot of what makes Google a valuable brand comes from its great search engine and series of useful tools. One could argue that everything Google does is “meaningful marketing.” In other words, by offering useful, free software tools such as Gmail and Google Maps, the company draws people to its search-engine business, where it makes money on every AdWords click. But let’s save this angle for a future post. Instead, I want to highlight a few of the little things Google does that make it the leader in meaningful technology marketing.

The Google Home Page

Google understands that its home page is very valuable real estate. Tens of millions of people per month visit Google.com to start their many, diverse searches. But instead of ceding its home page to advertisers who would love to capture its eyeballs, Google puts its visitors first and offers a clean, clutter-free experience. This “page of truth” sends a clear message to users and clearly differentiates versus the competition such as MSN and Yahoo! It clearly communicates that searchers come first at Google, and its traffic is not merely sold out to the highest bidder.

But Google sometimes does change this home page… when it wants to celebrate a milestone or draw attention to an issue. People are often surprised and delighted to see how Google has toyed with its logo to highlight a holiday or news item. Recently, for example, the company celebrated the 40th Anniversary of Sesame Street with several logos, including the one shown above. By highlighting the program on its home page, Google actually drew more media attention to the milestone as well. Other special logos in November 2009 included the 20th anniversary of the fall of the Berlin Wall, NASA’s discovery of water on the moon, Father Frost’s Birthday in Russia, and National Teacher Day in Vietnam. Instead of offering us another meaningless banner ad like Yahoo.com does, with these little touches Google earns a special place in our hearts.

Free Wi-Fi for Airports

Google always seems to be adding services for Internet users while asking for nothing in return. The latest example is its offer of free Wi-Fi service in 47 airports across the U.S. through January 15, 2010. It is a great gift for weary travelers who are often stuck in airports while trying to see loved ones for the holidays. One might expect that the “price” for free access is being forced to see a Google ad when you successfully log on. Instead the company directs users to a page where they offer the chance to donate to one of three charities that Google supports. And Google will match donations of up to $250,000 per airport.

Viral Video

Last week while I was compiling examples of the meaningless ads for technology companies in my last post, someone in our office forwarded a “commercial” for Google. I discovered a few videos under the title of “Google Search Stories” that blew me away. Check it out:

What you find here is TV commercial-quality production of a lovely ad for Google. In 30 seconds, these videos bring deep emotion while showing off many of the latest and greatest Google features. It’s no wonder that the 40,000-and-growing viewers give it five stars. And in case you thought Google went off and hired a hot creative agency to put these together, think again. These videos were created in-house by staff at the Google Creative Lab. Shouldn’t every company know its consumers and products well enough to do a brilliant ad in-house versus outsourcing it to people who spend a handful of hours watching from the outside? But I digress…

Conclusion

All of these little things from Google come with little pomp and almost no advertising budgets. Instead of clever ad messages that tell you Google is a great brand, the company uses its consumer access and brilliant employees to actually do things that make us more effective and happier throughout our day.

At this point you might be wondering: Why has Google chosen a meaningful marketing path while Yahoo!, eBay, and AOL all are failing to break through? After all, each company has developed great products and services in the past and they all hire similarly smart people. They are strategic enough to do competitive analysis and understand what Google is up to. So why the difference? It’s hard to tell, but I believe that a lot of it comes down to the fact that Google has a clear Brand Purpose. Google exists to index the world’s information, it believes in a philosophy of “do no evil,” and it has founders who are still actively, passionately steering the company. These factors give the company a basis for decision making that is clear and differentiated, and it means that no pricey advertising agency or clever tagline is required to make a campaign to keep the company “cool.”

Next week, I have the opportunity to present my book to employees at Google’s San Francisco office as part of its Authors@Google program. I look forward to honoring these meaningful technology marketers and learning more about what makes them special.

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Posted in Organizational Behavior, Technology | 6 Comments »

How the Starwood iPhone App Pressures Delta

Friday, July 17th, 2009

Over the weekend I somehow discovered that the Starwood Preferred Guest program was now offering a free iPhone app. In less than five minutes I had Googled it for a review, downloaded the app, input my membership number, and was checking out this cool new marketing service from one of my favorite hotel chains. My next thought: Why does my regular airline, Delta, not have an iPhone app yet? A great service by Starwood also made me feel worse about my airline, a company not even in the same business category! This reaction is an example of how great customer service and meaningful marketing in one category puts pressure on every business to improve.

My friend and colleague, Jonathan Richman, recently referenced this idea on his blog, Dose of Digital. It’s an idea that I share often with clients as we try to help them navigate the sea of digital choices and choose which services to offer and competitors to benchmark. This idea that customer-service expectations are rising across categories first sprung up in my mind when I read an Accenture survey from November 2008 of the customer-service attitudes of 4,000 respondents. It found that 31% said their customer-service expectations are higher than a year ago, and 52% said their expectations are up from five years ago. That’s an incredible increase in a short period of time, and it shows the path of the economy of today and tomorrow: As competition increases, service and value will increase, and people will expect these improvements to continue across every industry. The more we give them, the more they expect.

I believe this idea manifests itself in several divergent categories. My favorite example comes from Domino’s Pizza. In January 2008 it launched an online Pizza Tracker that shows an estimate of the step-by-step process of making the pizza you order online. Some laughed at the idea, but Domino’s felt it was necessary because a significant number of people call back to ask how their orders are progressing (before the 30 minutes, mind you). While others laughed, Domino’s racked up its millionth user of the tool before six months. Why? Well, I believe that people have become used to viewing the progress of their online orders from services such as UPS and FedEx. These two companies have great package tracking systems that millions of people have used. So the consumer’s expectation is that if these orders can be tracked, why can’t my pizza?

Other examples abound. A few years ago Facebook and Twitter started allowing mobile updates on information as trivial as when a friend updated his status or uploaded a photo, but banks and airlines were much slower to provide mobile updates for important information such as low balances and canceled flights. Another example is the increase in self-checkout lanes at retail stores. I firmly believe that they have rapidly expanded because customers are used to self-checkout online at e-commerce stores, and expect similar freedom in the offline world.

Our agency has seen this recently with our work on the Vicks brand. Just weeks before we launched our first online cold-and-flu tracking tool, Google came out with its own flu-trends tool, which grabbed the media spotlight before we did. So now CPG brands are competing with Google? That’s a pretty huge challenge!

But that’s reality. And on my other personal blog, The Challenge Dividend, you can read many, many stories of how Challenge Drives Improvement. (Warning: It’s not been updated in a few months as I’m focused on this blog and book.)

I believe that the many increasing examples of Marketing with Meaning will start setting a very high bar for businesses across every industry. Consumers will gravitate quickly toward those brands that provide value through marketing, and increasingly punish the brands that continue to interrupt and annoy them.

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Posted in Applications, customer service | 3 Comments »

Value in Meaningless Search Impressions? UPDATED

Wednesday, September 3rd, 2008

I have to warn you that I’m a bit riled up today. In the past few weeks I’ve read some pretty questionable research commissioned by companies with a vested interest in the reports. Both point to a pretty doubtful conclusion: that unclicked paid search impressions somehow build CPG brands’ business. It’s a strike against meaningful marketing and a strike against common sense – aimed to put brand dollars into the coffers of the search giants.

The first research report comes from Google, which updated its CPG blog for only the third time since April to announce that a study came back showing that people exposed to brand names during a mock search for words such as “drinks” filled out a survey and showed (surprise!) a stronger brand impression for the exposed brands. Even more shocking was the fact that (gasp!) if your competitor got the search impression, your brand’s awareness actually goes down in viewers’ minds. So, there’s a little fear marketing thrown in for good measure. Kevin Kells, Director of CPG for Google concludes:

the need for ROI models of search to include the impression–not just the click–to value the effectiveness of a search campaign in CPG.”

Interestingly, Google helpfully points to a similar study by its arch-competitor, Yahoo!, which also showed a significant increase in brand purchase intent in a research study that sat consumers in artificial search exercises.

Here’s the real story if you haven’t figured it out by now: Search companies have been unable to turn CPG brands – some of the biggest spenders in marketing – into big buyers of search terms. They are spending only $140 million to $180 million per year on paid search, according to eMarketer. That compares to P&G alone spending $4 billion per year on advertising. Plus, did you know that many, many searches come up with NO paid search results? (for example, type in the words: “this is a wasted search” on your Google search bar, and your results page will have no ads). That’s because no direct-response marketer wants them. There’s tons of ad inventory out there waiting for Crest or Coke to jump in!

I do not think Google or Yahoo! or any other self-interested agency or media company is necessarily evil. But marketers need to dig deeper when they come forward with the PowerPoint slides. Here are just a few issues I have with this study:

  • Both experiments put consumers into an artificial search scenario. Research subjects tend to pay more attention, and tend to want to reward the brands that are paying for their opinions.
  • Neither experiment has a tie to an impartial organization, such as a university, which could serve as a neutral third party.
  • The survey used to measure brand attitudes came immediately after the test. Of course people remember brands right after that. What happens a day or longer later when the person is actually at the shelf?
  • Where’s the ROI analysis? Google’s Kells wants these search impressions included, but fails to show the business benefit in his research. Marketers need to know if this blimp is worth their money and time.
  • The experiments measure concepts such as awareness and purchase intent, rather than actual change in sales. Yahoo! does a great job with its Consumer Direct program, in which it partners with ACNielsen to get actual household panel sales data – but why didn’t it do so for this study?

I think my friend Randy Peterson, innovation leader at P&G, got it right when he told Advertising Age that:

I think our brands have such a strong presence that it’s nice to be in the first position, but I don’t think we have to be there. I’m not convinced it’s worth paying the extra money or the extra effort to get there yet.”

We are all trying to figure out how to retain or increase sales at a time when consumer media habits are changing dramatically. My passion, my gut, and, yeah, my self-interest, is for us to stop inventing studies that “sell eyeballs” and put that effort into creating marketing that consumers actually find useful, and that actually moves cases.

UPDATE: At a recent Ad Age Digital Bites Breakfast, a host of digerati admitted that they still cannot get a good engagement measure for search.  I love that “engagement” is coming to the fore here.  It’s not enough for us to rely on impressions when people see over 3,000 ads per day.

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Posted in Search | 5 Comments »