Tag Archives: google

2010 – new decade, new rules

Somewhere in the ancient scrolls of American media and telecommunications two truths are written:

1. cable companies shall not pay broadcasters to carry their signal
2. manufacturers of mobile devices will sign exclusive distribution agreements with phone networks

By the end of the first full week of the decade we will know if Fox will have forced Time Warner’s hand on carriage fees and if Google will really launch the unlocked Nexus in a challenge to Apple, AT&T, Verizon and the rest.

These two events along with potential charging for online content from News Corp, Hulu and others, the publishing industry’s e reader initiatives, Apple’s tablet, the continued drive to addressable television and the FTC’s decisions on Net Neutrality suggest that a broad ranging exploration of the economics of content, devices and distribution will dominate the media news of early 2010.

For the most part advertisers will sit on the sidelines of these issues which is not to say that they won’t be impacted by the outcome. As the economics of communications change so does the way consumers receive and interact with content and that includes advertising.

Leave a comment

Filed under Uncategorized

Closer and closer…

Microsoft and Yahoo! seem to have chosen the flowers and the hymns and are on the verge of consummation. What large corporations join together let no regulator tear apart.

So what should advertisers think? Well the reader of this blog (hope all is good with you) will know that I believe that advertisers want and need scale, competition and innovation. In reverse order:

1. Bing is good.

2. A contest in which 30% plays 65% is better than one where 65% plays 20% and 10%.

3. 30% represents scale by any calculation.

So all boxes are checked. The new operation has an opportunity to build query volume and advertiser volume, it has the opportunity to compete effectively for wholesale distribution. Now it needs to execute with minimal fuss and drama and realize that it has now firmly attracted the attention of the smartest competitor in the world!

This should be good.

2 Comments

Filed under The world we work in

Bing – the decision engine

If you search “Bing” on Google you get 22,300,000 results. In here lies the premise of Bing.

Microsoft’s position is that there is little value in 22,300,000 results and that all the value is in the one result that you actually want that helps you achieve the task in hand. It’s not a bad thought and if it delivers on the promise Bing offers a serious alternative to Google and one that may have a long term impact of the behavior surrounding search. It’s a little fanciful to suggest that Google maybe one click – albeit by lots of people – away from losing its near monopoly but it appears that Microsoft is taking a position. It’s a position that may succeed in extensive retrial and with the rumoured promotional support Microsoft are giving it their best shot.

The notion of Bing as a verb may be hard to process  but it’s no less unlikely than Google.

2 Comments

Filed under The world we work in

Tim Armstrong

Tim Armstrong’s departure from Google represents a loss to Google (assuming it has no designs on AOL), to advertisers and the agency community. Tim and his team have done an exceptional job in articulating the Google proposition and doing it in a way that has attracted revenue and goodwill to him and his team. 

It is well known that many in the agency community have issues with Google but few of those issues relate to Tim’s leadership and the manner in which he has encouraged his team to behave.

On the face of it his departure to AOL seems like leaving the Dreamliner  for the Hindenburg but that would be to ignore AOL’s still significant audience and assets and the assets of its parent company. Given that he is unlikely to be leaving for the money we can only assume that the promise is a good one. In Platform A AOL has some first class assets in the display space and maybe, just maybe, Tim believes that he can beat his old bosses at that game.

Leave a comment

Filed under The world we work in

You say potato – Google and Yahoo call the whole thing off

Readers of these musings would know that the termination of these discussions is welcome news to me; and it is.

The satisfaction is limited, a threat to competition has been averted but now the focus turns to how Yahoo!, Microsoft and the rest can create and sustain a credible alternative that forces market innovation and creates real choice for consumers.

As for Google, they remain the outstanding enterprise of their generation. They did not need this deal to remain so.

1 Comment

Filed under The world we work in

Google / Yahoo 25% pregnant for two years

The WSJ this morning has suggested that Google and Yahoo! have proposed a modification to their proposed deal which leaves it open to further review after two years and limits the total share of Yahoo! search revenue which passes through Google to 25%.

This is good news for advertisers relative to the previous positon taken by the parties. Three issues remain:

  1. On what basis will the deal be extended, expanded or discontinued after two years?
  2. What level of data will be available to advertisers from search terms bought through Google that appear on Yahoo?
  3. Why is the 25% related to revenue rather than query volume?

Our view is as follows:

  1. The evaluation criteria need to relate to the total query and advertiser volume on Yahoo! If they go up then they are meeting their stated objective from the deal.
  2. We need data at the keyword level. Today we get that from Google on google.com and from Yahoo! on yahoo.com. If we buy on Ask or AOL via Google we do NOT get data at the keyword level. If the same applies to Yahoo! advertisers lose visibility and good decision making data.
  3. The share should apply to queries not revenue. If it is on revenue the deal could operate on the most popular (head) terms and (see 2 above) significantly effect data on high click volume terms. The deal was announced as a way of monetizing the long tail of Yahoo! inventory and thus the deal should be restricted to (for example) 25% of the long tail excluding the 30% of queries that generate most clicks.

If this was the outcome advertisers and agencies would most likely be at least somewhat content and it would be appropriate to withdraw further objections in the hope that the deal spurred Yahoo! performance and increased competitiveness. Many of us have severe reservations about this and continue to believe that Yahoo! and the market would be better served by a transaction that consolidated a block of query share that enabled real competition without any Google / Yahoo! whatever its limits and gestation period.

Leave a comment

Filed under Uncategorized

Pain is good

Bear with me and read to the bottom of this.

Without pain receptors few of us would last long. Pain acts as an indicator of troubles ahead and sets useful limits of tolerance. A life without pain would be short and dangerous. So it goes with markets. Pain, in this context is often substituted by ‘friction’. It has been suggested by many that taking friction out of markets eases the flow of data and funds in a way that is good for everyone but the ‘recent unpleasantness’ implies something different.

Two things happen when friction disappears; first we end up with machines talking to machines and the growth of contempt for human judgement; second we have a class of trader who in pursuit of the biggest buck develop instruments that have everything to do with making money and very little to do with propelling business itself. In all the explanations of credit default swaps we don’t here so much about any real purpose they may have had in the first place. Frankly if you choose to buy $1 billion bond in company X you should do so on the basis that you understand the risk not on the basis that you can insure it.

In our business a ‘friction free’ world is the stated ambition of many. They argue that if only all the pain could come out of the system the ability to  make money from bazillions of media impressions would go up immeasurably. In pursuit of this goal ad networks and exchanges proliferate and they and others develop more and more imaginative targeting systems to optimize the inventory ocean. The problem is that it does not seem to be working other than (and I have said this before) for transaction oriented direct response advertisers.

There is a particular irony in all this. Microsoft and Yahoo, the two biggest sellers of online inventory other than Google both lament two things:

  1. The relatively small proportion of the budgets of really big advertisers that go online
  2. Their relatively small share of the search market

So taking all this together maybe they should consider the following:

  1. Massively reduce the amount of inventory that goes to networks and exchanges at pitifully low prices
  2. Use some of that inventory to massively increase the visibility of the world’s biggest advertisers tied to some kind of performance metric like site visits or search queries
  3. Use some of that inventory to drive search volumes on their own platforms

By doing this they at least have a chance to compete in a race to the top rather to the bottom and to build conjoined search and display marketplaces that turn their size into real value.

Leave a comment

Filed under Uncategorized