Search Vs Social – the long tail of ad revenues

Google and Facebook together took away 64% of the total US online advertising spends. And Facebook had around 65% of the overall online display ad-spends. These are incredible levels of consolidation in the ad spends among the leaders.

search vs social long tail

Enough has been said and discussed about

While one cannot argue with the numbers and the line of reasoning, I somehow felt that this discussion has ignored the long tail of ad-revenues or the lead generation aspect of these platforms. These reports are focused on big co’s with big media budgets who may typically have brand-building as the key target.

Let me explain this in some more detail.

There is no doubt that for Google or Facebook, the big marketing dollars would come in from big spenders like Ford, Coca-Cola & Pepsis, Samsung, Levis, Red Bull, Wells Fargo, Amex etc.

But if we were to evaluate these platforms from a start-up point of view (small budgets and maybe need to do lead generation instead of brand building), the story is very different.

1. Social targeting is profile based, too many bidders

On Facebook, the same user may be targeted by multiple brands, because there is hardly any other context. E.g. a 35 yr old male who lives in a metro and has liked multiple lifestyle brands would be a good target for many.

We do NOT have additional context for the specific session on FB when the ad is being displayed. One FB session is hardly different from another in terms of the intent or maybe when mood based marketing algorithms evolve things would change.

This means, each of the target users FB session will appeal to all the brands. Multiple brands would be vying for that same ad-impression, which in turn means higher bid rates and CPMs etc etc.

And this means that small budget advertisers would be elbowed out of the platform by big budget cos.

While this article on Forbes also has the same conclusion, the logic used is very different.

2. Search has deep context, removes non-relevant advertisers

Search on the other hand has hugely relevant context. E.g. a user looking for Mortgage loan options on Google will be targeted by Financial Services brands vs someone searching for Fine Dining Options in India.

And this means, that as an advertiser you are just competing with other competitors or maybe some adjacent industry players.

Bid rates would be lower and even with small budgets one can get the message out to a relevant audience.

3. Lead qualification is efficient on search

If one is looking at online advertising for lead generation, chances are search may be a better platform.

Before the Facebook fans pounce on me, let me qualify my statement.

Many of us run “boring” ventures – we pitch services that consumers may not want to share. And/or we do not have the creative bench strength to get a funny/interesting message out. Our content strategy may still be a WIP. Realities of life.

If the message/ad we create has low viral coefficient (i.e. we do not expect people to share it much), Facebook may not be the best platform. Coz then we are burning marketing dollars to talk to a prospect who may not be primed for our services and who is also not helping spread the word.

Google, on the other hand is a very different story. If a consumer is online actively writing into the search box key words that resonate with your offerings, you may have a very interested customer. Intent is high.

Also, my guess would be that the long-tail ad-spends are stickier.


But all this is just my 2 cents on how small ventures, start-ups and SMEs should look at spending their advertising money online – across the broad theme of Search Vs Social Marketing for the long tail in particular.

What do you think?

 

Prediction comes true – In-site search market heating up

Not so long ago, I had written a blog post on why Bing should focus on in-site search as a way to fight Google’s stranglehold on the search space. While no one at Bing or Google heard me out on this, Techcrunch now reports on how this space is heating up. Two start-ups have already raised serious Series A capital and are focussed on just this one opportunity – Making the In-Site-search experience better.

Bing GoogleWhile the start-ups and its investors can rest assured of acquisition offers coming their way, it is still surprising to see that Bing and other Google challengers haven’t exploited this opportunity so far.

The Techcrunch article assumes that Google wouldnt want a great in-Site-search product as it would mean fewer hits on Google.com. While people at Google might buy this logic (I wouldn’t – better to cannibalize own product rather than let another player come in), but how can someone at Bing justify leaving this space? Beats me. Any ideas?

CSE – Custom Search Engine – Bing’s Opportunity

bing-googleRecently Microsoft shared some UK market specific data, wherein they highlighted how Bing has managed to gain traction and bring Google’s share of the pie below the 90% mark.

One can only begin to imagine the kind of uphill task Bing product and sales teams must be looking at. But, its also a time for them to be focused, to search (no pun intended!) for possible weak spots in Google’s fortress.

One such area that comes to my mind is Custom Search Engine (CSE) – this product was designed to allow website owners/managers to provide a quick search across their site by just copy/pasting a few lines of code. Also, Google shows its own ads along side the search results (like it does on its own inventory), allowing the webmaster to make some extra revenue – from search ads.

Many sites adopted it, few of them discontinued it in favor of their own search technologies and many don’t know how to make it align with the site’s overall, look and feel.

CSE is good opportunity because being where the search gets initiated is probably half the battle for a search engine. Unfortunately, (for Bing) pure-user initiated across-web search mostly begins at Google.com. If the user is not on Google and still thinking of search, thats the best use-case for a Google Challenger.

So here’s why Bing teams should focus on an awesome CSE product:

  • Google is not really the de-facto leader here. Its a whole set of solutions that exist.
  • CSE can be a great gateway for the complete Bing experience. External links on CSE could tunnel the user towards Bing.com
  • It allows them to build the Bing brand as the preferred search destination by tapping into the long tail of web-users. Taking Google head on in web-search will only lead to bleeding. Here each site that installs this product, is helping convert potential future Bing users.
  • Its a seemingly simple product, for each of its installation(s). Deliver the right set of pages in the search view from the site or the web.
  • Many webmasters might be willing to switch, just for a better design or a better set of options or maybe even a better revenue maths.

Do you agree ?

Next Phase of Search Engine Wars

A close friend of mine, just started his own venture after spending over a decade in the banking industry. He still goes to his venture’s web site by going to Google first and then typing his venture’s name in the search bar.

No he is not doing it for some convoluted SEO impact. This is the way he has been going to portals – Go to Google and then type the “name” (not the URL) and “find” the site.

And I am told that many a people follow the same routine. The incremental step (of going to Google etc) is not a hurdle in their minds even when they know the URL.

Well, I wanted to share this to impress upon you as to how Search Engines are now serious gatekeepers of web traffic.
Google has been a clear leader for a long time now and I have been following (trying to understand their approach & rationale) their path of attacking the long tail of search.

Now for the un-initiated, Google made its billions by the auction model embedded into the search engine. This is where a co/trader/individual bids for certain keywords (the ones being searched) and pays for every click. The revenues have been growing very rapidly because of multiple reasons:

  • There was traffic – with Google becoming more of a verb than a noun, there was traffic for most use-cases. With growing internet adoption, each category saw a rapid jump. Maybe some like travel, jobs, real estate, finance, porn, music, entertainment, matrimonials saw a faster growth, but even someone bidding for “2nd hand laptops in Trissur” would get a few leads every now and then. Hence, traffic meant volumes.
  • Clear Context is established – a user searching for Personal Loans in Delhi, is in all probability in the market for one. So most banks/DSAs etc would want to bid for this and get a chance to talk to this guy. Hence, context meant interested relevant prospects and leads.
  • Long tail of supply and demand – unlike Facebook where the inventory to target a particular user is kind of fixed, in a search engine scenario, the inventory is created by the user. Please note, I do not refer to the number of opportunities to talk to a user. That might still be high at Facebook if a user spends a lot of time browsing through multiple profiles and pages. But in case of a search engine, when I search for loan – I am a good target for financial institutes, and when I search for cars, it opens up a whole new category of people to talk to me. All the while maintaining the high relevancy. This also meant, that a small co/user with low budgets operating in a niche category would not always be muscled out by big media spenders. A huge difference over Facebook. This long tail of advertisers is what created the really vibrant marketplace that adwords currently is.

search_enginesWhile all of this was fine, Google and maybe now Bing too, have been trying to grow at a rate faster than the market and they have been adopting a lot of smarts.

  1. Google gave free adwords vouchers to SMEs. This was a neat way to get new advertisers, especially the ones who have never ever used /tested the platform. Since there was traffic, there was an opportunity for these niche players to get visible in their categories, and the product itself was easy to go live on with minimal support. One just needed to have a landing page to divert the click-throughs.
  2. Free/Easy hosting web-sites. I am sure Google would have found that many of its prospects are not continuing with adwords as they do not even have a web presence. They dont want to spend on it. Or maybe some had a presence only on Just Dial, Indiamart etc. By providing users with a template driven, easy to create web sites, Google just expanded the universe for its adwords sales team. Now anyone who had a web site, should be targeted and be on-board with the ad-words program.

All this has clearly worked well for Google. I know a lot of friends from manufacturing and other traditional industrues, who now talk about Google adwords very vividly. But I feel one aspect is still missing.

As I look at it, Google has convinced people on the following:

  • It can get you leads/references – vibrant market place with long tail effects
  • Its easy to create a web-site/landing page if you dont have one – free hosting etc
  • You can easily track campaigns, change them with little overheads – simple DIY approach to adwords
  • It also shares best practices etc on Landing pages/banners to maximise responses – you can improve further

But what is missing is re-inforcing the fact that Google leads convert.

Different businesses have different closure/follow-up cycles and many a times the closures don’t happen because the business/user fails to follow-up efficiently. I am not talking about a comprehensive CRM but a simple way to allow small businesses to track their online leads.

My gut feel is that many businesses try out adwords, but discontinue basis non-qualified feedback on lead quality. If they had access to simple tools to see where the lead went cold, maybe they would see that Google leads are better quality and easier to convert.

My experience has shown me that the real-promise of digital channels is delivered only if the team knows how to follow-up efficiently.

Would we see the future search engines providing an integrated Bidding+Landing Page hosting+ Leads Tracking+ Analytics ?

Bing Cheating from Google

Bing GoogleThe latest in the Search Engine wars has got every one interested – Google has claimed that it has conclusive proof post a sting operation that Bing has been sniffing out Google results and showing them as top-searches, for keywords that have very few possible matches.

While the engineers at Google cry foul at this, many are debating whether this is just a smart move on Bing’s behalf or outright unethical. What do you think?

Facebook advertising will not grow too fast too long

facebookI have been looking at the countless ads & “LikeUs” banners that keep popping up on my Facebook account and I am tempted to feel that all this jubilant rejoice about the advertising/branding power of social networks might just be a temporary phenomenon. I feel that there would be a fatigue soon & think there are multiple sources for that to creep in.

  1. Almost every big brand & local business seems to have its own page on Facebook. This means that the number of brands competing for your attention online, in all probability include all the brands you live with. This would make the CPC/CPM rates go high. Bidding and ad placement is not contextual- its only demographic targeted. Local and small businesses will not be able to participate for long, they can just hope to do a small time campaign to get few “fans” on their pages.
  2. Little or No Context. The fact that Google ads grew so fast was that they could figure out what you were searching/reading/browsing & hence target brands/products/services relevant to that. I think Facebook has a serious limitation here. Most users, I suspect use it to track what friends are thinking/doing and in a smaller # of cases they would be looking at pages relevant to hobbies or for information about places/brands etc. Facebook would have to change this behaviour the other way round to build sustainable advertising revenues.
  3. Advertising OverLoad. I think with most brands embracing Facebook, an average user might now be following five times as many businesses & brands as she did last year. But I can safely assume that her time on Facebook & specifically on brand pages has not increased proportionately. Are you really spending so much time tracking all the brands you follow on Facebook? Not just the time & attention, there is a genuine problem of discovery also- the same issue that most mobile app stores face once they grow too big. How do you keep track of  all the updates from all the brands.
  4. No proxies for customer profile. When we advertise on the net, chances are we can do some sane assumptions about who would see the ad. E.g. if I look at MoneyControl, I can be confident that many of these customers would be active investors in the Equity market & hence probably a good target for a broking firm. There is no such proxy on the social network giant. How do I get similar info on Facebook – Say income bracket etc. I have seen college kids subscribe to luxury brands and it must be a big worry for the marketing manager there to understand how the clicks he pays for are done by relevant people only.
  5. Decreasing value of ThumbsUp. There was a time when I would have noticed/opened/read most of the likes done my some of my friends on Facebook. With the new flood of likes, I have my own sense of distrust and feel that any of us like too many things/updates. If this is Facebook’s entrypass for brands into each user’s network, the value is fast decreasing. Most users would not honor the “Likes” of their friends as they used to before.

Well I have nothing against Mark or the biggest virtual country that has been created, but I sincerely hope some of these issues are being addressed by those smart boys back in the Valley. I would really want to see FaceBook become and stay a stable advertising medium.

Why Google launched Chrome ?

Google launched its very own Internet Browser- Chrome- and die hard fans apart, early experimenters also say- that its cool !

Google Chrome BrowserWhile the industry pundits discuss the features and the strategy behind launching of Chrome- i came up with my very own answer- as to why Google launched Chrome?

And the answer lies in the above image….It was done coz the guys in the Google analytics team wanted to see their name in the reports …. 🙂

I can understand, if you disagree with me…