Coremetrics is Rolling

3.September.2009
Tops in Strategy and Customer Satisfaction

Tops in Strategy and Customer Satisfaction

Yahoo! Web Analytics: does the MS deal change the future for this “game changer”?

4.August.2009
MS deal will influence the YWA roadmap

MS deal will influence the YWA roadmap

With the deal now in place that allows Yahoo! to focus on large advertisers, display advertising, and Yahoo! user properties and experiences, it’s become unclear to many within the analytics industry (okay, at least me) what will become of Yahoo! Web Analytics.

As I understand the intent of the partnership, Yahoo! sees its core competence as servicing large advertisers with advanced products, and creating cool user experiences. Yahoo! wants to focus on those strengths, and does not want to continue investing in products and operations targeted to small and medium sized advertisers.  

On the flip side, Microsoft, with its installed base of Office users, sees small business owners (tail advertisers) as its bread and butter. Following SMBs online (where the first step is showing up in search results (SEO) and the next is driving leads with advertising) is the evolutionary next step for Microsoft. Hence, they want to own a search marketplace, and SMB advertiser relationships.

As such, it is now arguably off-strategy for Yahoo! to continue to invest in an analytics product that provides tail and torso advertisers information primarily used for search campaigns. Small(ish) advertisers and their understanding of search is meant to be Microsoft’s area of expertise [even though Yahoo! still benefits through the rev share]. It hasn’t been determined yet how Y! and MS will divvy up the advertiser base – my bet is that the line will be drawn where Yahoo! believes an advertiser is large enough to spend $5-10k/month on display advertising. That is the de-facto min for an advertiser to get started with Yahoo’s MyDisplayAds product. If they are that large, Yahoo! wants to service the account; if not, adCenter can have them.

Regardless, YWA’s search marketing functionality is already considered quite strong and when you view YWA’s full-featured marketing capabilities, the main thing that could still be improved is simply tightening the integration with YSM (and now AdCenter).

Due to Yahoo’s new focus, it is probably safe to say that the YWA team will focus future innovation on the display advertising side, and that is a good thing, since most analytics packages do not do much in the way of tight integration with display advertising campaigns or provide advanced display campaign performance insight (tracking the conversions from banner and video clicks is only a small fraction of the benefit display advertising provides. And counting display campaign interactions is only a fraction of everything a marketer would want to know about the person interacting with the ad, the creative, the context, synergies between campaigns, etc).

Integration with Yahoo’s Display APIs, and even DoubleClick APIs (as Google continues to ‘open’), probably makes a lot of sense. I reported this in a previous post, but advancements in cross-channel attribution is probably still a holy grail for Yahoo!. Where it will get the resources to invest is another question – perhaps MS will help, who knows.

In other YWA news, the YWA team recently announced the launch of the Yahoo! Web Analytics Consultant Network (YWACN) which I was involved in helping to build. It’s a global network of 48 consultants meant to help Yahoo! sell and support YWA, much like the Google Analytics Authorized Consultants. This, fortunately, helps the product stand alone, to some degree.

In short, YWA still has a chance to be “game changing” as Eric Peterson predicted when it first launched as a free product. Yahoo’s organizational and strategic changes over the past year have overshadowed Yahoo! Web Analytics and greatly stifled the buzz that YWA should have created as a game-changing and innovative free enterprise service. Much of it has been ‘behind the scenes’ but a whole lot of progress was made in its first year (May 2008 – July 2009) by the small but dedicated and talented team I had the pleasure to work with at Yahoo!:

Timeline

May 2008

  • Yahoo! acquires and begins to integrate IndexTools, and the all-star product and support team led by folks such as Marton Szoke, Dennis Mortensen, Charlie Holbech, and Peter Galantha. The 7-year old enterprise product comes with a truly impressive feature set including fully customizable executive dashboards (true dashboards) and custom reports, advanced segmentation and data filters, real-time reporting, APIs, 1-click campaign integration with the major search engines, and UI customization features useful for the global network of agencies and reseller partners.
  • Yahoo! makes the product free to all current customers and future customers

October 2008

  • Product is re-branded Yahoo! Web Analytics, with a refreshed look and feel, and the “the power of Yahoo!” by integrating it with Yahoo’s data highway.
  • YWA is integrated into Yahoo’s hosted website businesses to provide powerful, free, real-time analytics without any implementation pain for Yahoo’s customers.
  • YWA is integrated into the Yahoo! Open Platform to let developers track widget downloads and usage.

Feb 2009

  • First vendor evaluation of YWA by CMS Watch reports “Yahoo! Web Analytics leaps ahead of Google Analytics for Enterprise Use”

March 2009

  • Yahoo! Japan (with 60+% market share in JP) makes a slimmed down version of YWA available to 10,000’s of geocities users.
  • Implementations completed across multiple Yahoo! properties and services for internal Yahoo! use.

May 2009

  • Yahoo! announces free accounts are available to ALL Yahoo! managed advertisers.
  • YWA v9.5 launches, introducing features not available anywhere in the industry, or not in any free application, such as:
    • Website visitor Demographic and Psychographic data, available as a segmentation variable.
    • Rubix-like multi-dimensional data graphing
    • Ability to add notes to a graph and export the annotated graph as a branded PDF report
    • API access to raw, un-aggregated data to bring into offline systems
    • Advanced user access settings and agency reporting capabilities
    • Marketing attribution options, including first click and last campaign click.

July 2009

  • Yahoo! Web Analytics Consultant Network launches with 48 global partners. YWACN partners can issue customers free YWA accounts.

The YWA team has made great progress on a great tool in just over a year. All this, amid rapidly shifting priorities, leaders and org structure at Yahoo!. 

We shall see what the new organization and the folks in charge of the Microsoft partnership think of web analytics, and how the tool is framed within the organization. That will probably determine how fast and in what direction the product innovates and free accounts are available to the market. I wish the team good luck! Keep truckin’.

Analytics Vendors – is the feature race over?

28.July.2009
The feature war is over?

The feature war is over?

Today I re-discovered this blog post by John Rodkin, the interim (turn-around) CEO for WebTrends, from early last year on the impact culture had on WebTrends declining performance (despite what was and today still is considered a strong product). It’s simply very interesting to see how leadership style and employee morale can make or break a product’s success. And it’s only more magnified when you’re in a feature race, as WebTrends “was” (keep reading) and Yahoo! is. I don’t want to draw too close a parallel between WebTrends and Yahoo!, but as the 4th CEO in 3 years, Yahoo’s Carol Bartz certainly recognizes that Yahoo!’s business model has placed it in multiple feature races, and that reforming the culture is an important piece of the puzzle to even stay competitive in many of these markets.

What’s also interesting is that I just learned today that despite this amazing graphic showing intense intra-industry competition, the analytics feature war is over.

In short, John Lovett, lead author of the Jupiter Research Web Analytics Buyers Guide finds that we are no longer in a fierce feature competition beyond a few low impact areas like video tracking. Rather the new differentiators in this highly competitive market are pricing and flexibility, and the analyst concludes that a big part of this “flexibility” is the ability to integrate different sets of enterprise data together, such as online and offline data. And he even goes so far as to say that one reason we need data integration is to unite all of the multiple ways a marketer touches a customer with a marketing message, and all of the revenue and costs related to each transaction, so that marketers can get a holistic picture of the TRUE value of each marketing channel, message, product, search term, etc.

This is what I refer to as Attribution – attributing the correct value of a transaction (not just a sale btw) across all of the elements of a marketing campaign.

Though he has taken a strong stance with this release, I pretty much agree with Mr. Lovett. I’ve been doing competitive evaluations in the analytics and SEM management space and I’ve had difficulty finding many KEY differentiators. Depending on your prioritized needs, there are multiple choices depending on the level of sophistication you need, the tools you need to integrate with, and how much you’re willing to pay. Most vendors can now provide you more than you need or will actually use. And Attribution is certainly an area the team at Yahoo! Web Analytics has been thinking about as the next frontier for analytics.

The first step in attribution is the ability to track individual visitors, not simply individual sessions, which is how analytics data is currently collected and reported by almost all major vendors (congrats to Coremetrics LIVE Profiles which seems to me to be the truest visitor-level tracking available, though there are still obstacles to be overcome as I will discuss).

Though Yahoo! Web Analytics (and others) can already identify that a visitor is a returning visitor and that today’s visit is their 7th visit to the site (at least since the user’s cookies were last deleted), no vendor with the possible exception of Coremetrics is currently able to capture data for each of those visits – at the individual visitor level – to allow you to view all of the touch points with a specific visitor before or after a specific visit or action (ie Sale), in order to track back from the purchase all of the things that affected the purchase.

Furthermore, no vendor (even Coremetrics) has the visibility to KNOW all of the touchpoints that occurred on all of the places that visitor has gone on the Internet. Sure, we know clicks, but even display ad impressions running on ad networks are hard to track at the visitor level. This is a sticking point, and will probably be best solved as publisher networks get large enough to actually be able to follow visitors for a larger % of their total online experience and thus have better insight into all of the ads, articles, widgets, and perhaps even conversations they have been exposed to. And don’t forget offline advertising exposure. We will need a way to integrate offline panel information on TV ad viewing, for instance, to get an even more robust picture of each visitor’s true exposure.

Example

Take an Internet user who eventually purchases something on a website. It would be interesting to see all of the ways that user was influenced before making the purchase.

User X sees banner ad1

User X sees banner ad2

User X is an average TV watcher for his zipcode and demographic and has seen TV ad1 twice

User X sees that a Facebook friend was talking about the product

User X interacts with rich media ad1 for 45 seconds

User X searches on Yahoo, clicks a search ad, and looks around on the website

User X sees banner ad1 again

User X searches Google and arrives on the site and completes a purchase

Today: Google receives 100% of the credit for the purchase because all the website owner knows is that the referring source for the visit that led to the purchase was a Google search and of course the query that was searched. There is no past visibility into that user, prior visits, or prior advertising touch points, such as ad views or clicks.

Future: Advertiser enters some rules (perhaps suggested by the analytics vendor based on industry standards as well as that vendor’s customer base, and perhaps customizable by the marketer to reflect their own experience). There are many possible ways to divide the credit up amongst all the ads/touchpoints. Here is simply a list of options:

  • First banner ad should get some credit for raising awareness. The value of that impression though should perhaps decline over time or expire after 30 or 45 days.
  • Or perhaps split the credit between all banner ads since it’s a well known advertising doctrine that most people must see an ad 5-7 times before a message registers, so perhaps 1 on its own is not worth much.
  • A banner viewed the same day as a search seems like it should receive special credit since it very likely influenced the user to search.
  • What is a TV ad view worth relative to a banner ad view?
  • What is a brand impression from a Facebook friend worth? It is surely much more impactful than a corporate banner ad.
  • What would a banner ad containing a user review or the quote of a trusted third party be worth relative to a corporate banner ad?
  • Interaction with any kind of ad is a sign of engagement and should receive credit. What is a video play worth relative to a rich media interaction? Does the length of the engagement you created matter?
  • Some will argue that the last search should receive a great deal of the credit because you cannot deny that the search helped enable the actual sale, however others might argue that many people do a Google search and click an SEO listing as a way to navigate to a website after they are already “sold” on the idea in their head, so how one actually navigates to the site is of little importance at all.
  • Or for simplicity sake, an advertiser might just average the value of the transaction out over all the impressions and all the clicks that occurred prior to the last click. For it may not be perfect, but at least it’s more accurate than giving the last click 100% of the credit.

These are all questions and issues that individual analysts and the industry itself are waiting to tackle, once true visitor-based tracking is available. At that point, we will finally come closer to understanding the true value of different formats of ads, publishers, audiences, creatives, offers, etc. These answers will have a huge impact on where the money flows in the $500B per year global advertising industry. So yes, attribution is kind of a big deal. And data integration a necessary feature? to help solve the attribution question.

\o/

New Forrester Report evaluates 8 of the top tracking tools for web businesses

23.July.2009

 

Enough fragmentation to meet most needs, even cost!

More than enough options for most web tracking needs - TOO many?

John Lovett and the Forrester team just released their 2009 Forrester Wave Report on Web Analytics. In it, they gave great marks to Omniture and Coremetrics (wow, great work!), with Unica and Webtrends following close behind, and Yahoo and Google  considered strong (especially for free offerings, which are more than enough for most website businesses in many people’s opinions, including mine).

What is most immediately obvious is that this is a highly competitive field of players with plenty of strong offerings providing something for most any kind of website tracking and online marketing need. Furthermore, this intense competition will only lead to a faster pace of innovation (my favorite) and hopefully differentiation (my 2nd favorite).

What is unfortunately less obvious is that this evaluation leads shoppers to believe that the best solution is in the upper right, a “strong offering” with “strong strategy”. :)  It is unfortunate because many businesses DO NOT NEED the “strongest” offering, as determined by the package with a broad suite of applications that do very specific and often very sophisticated things, and include the MOST features (aka bells and whistles). For many businesses this level of features is actually overwhelming and intimidating for users (many of whose requirements are actually simplicity), requires a great deal of up-front setup and training (which becomes an ongoing need), and as you can imagine can get pricey (> $200k/year is fairly normal for big packages).

So the question is really how much power does your organization need, what actual business problems need to be solved with analytics and how SIMPLY does the solution solve it for them. Another question is related to staff and budget. With huge budgets and staff, powerful tools can pay themselves off. With moderate budgets and staff, sometimes that money could better used on staff (or marketing) rather than a tool to collect reams and reams of data. I have an entire list of vendor evaluation questions you should ask when selecting a web analytics tool, but if you’re on this page you’re either already familiar with analytics or you’re a newby, in which case it is probably not a top concern for you right now.

In fact, if you want to learn more about the analytics market, you can visit Wikipedia, go here for some basics from Eric Peterson’s book, check out Avinash Kaushik’s page for beginners, or perhaps just check out a new video on Yahoo Web Analytics to see an analytics tool in action.

In my next post, I will go in-depth on Yahoo’s own web analytics initiative, and even some of the top-of-mind things Yahoo (and others) are thinking about to help website owners improve their business and drive more, better leads to their website.

\o/ martiniak

Google AdSense in Trouble?

8.July.2009

 

How will YOU monetize your website in 2010?

How will YOU monetize your website in 2010?

There was a great article today on ReadWriteWeb about Google AdSense, in fact hinting at its eventual demise (with caveats of course). I quite agree with many of the points made, but ultimately not with the conclusion.

Here are the biggest points in an argument, in my opinion.

1. AdSense is the Best ‘Easy, No-Fuss’ Monetization Solution

AdSense is still by far the easiest way for small publishers to quickly and easily make money from their websites. Slapping AdSense ads on a site is very easy to implement and manage, and remains a good option for many blogs, small e-commerce sites, and social media properties with any “space” on pages (or in widgets, for that matter, an emerging kind of business). An easy, no-brainer option allows website owners to focus on content and not building monetization teams. The sheer volume of advertisers and publishers already participating in AdWords and AdSense creates a very liquid market with strong network effects that will continue to drive competitive performance vis-à-vis other options. But again, it is already here, is the de-facto solution, and is most importantly, EASY.

2. Google’s Monopoly is Really Swell, for Google

The irony is that while publishers love access to all the advertisers in one place and a team of PhD’s optimizing the ad relevancy, AdSense is also a monopoly with a black box solution to determine relevancy and pricing, with Google in control of the levers. Fraud is prevalent in the long tail of publishers, but Google ultimately determines what is and isn’t fraud, and the monetary outcome. Google also controls the rev split with publishers. Google is the judge of how good a partner you are, and then hands down the ruling about what the rev share will be. Yes, it’s quite easy to get started with AdSense and start getting a check every month, but it’s not as fun for those web businesses that take a moment to consider if they are getting their fair share of the monetization.

The result? The best Publishers are likeliest to consider testing other ad networks or bringing inventory selling “in-house” and increase margins with new ad networks, guaranteed ad blocks, and sponsorships. In the grand scheme, this is a continuous cycle though as new websites will always emerge, some will get larger and more sophisticated, etc. Impact on AdSense? Neutral.

3. No Lock-In and New Substitutes Increasingly Available

In the words of Rod Tidwell, the self-preservationist wide receiver in the movie Jerry Maguire, “Just show me the money”. This really, truly is the axiom of most publishers. There isn’t much loyalty in this business and switching costs are really pretty low, so publishers and advertisers can and will test substitutes and are often encouraged to continually test in this industry. As new options emerge, such as the recent spike in ad networks and ad exchanges, and more recently social ads, we are very likely to see behavioral changes by all of the players: users, publishers, and advertisers. As the quality and volume of banners, rich media and video ads rises, text ads will appear increasingly OLD and unpleasant. Both publishers and advertisers will test tools that make it easier to create and run banner, rich media and video ads, as well as new forms of targeting.

While this is true that new substitutes will continually arise and clamor for attention, the fact of the matter is – and Yahoo! can attest to this – getting a publisher to rip out old tags and implement new ones is no easy task, particularly when there is only a promise of increased performance, but no clear evidence that it will apply to my business, or if so how much and for how long. While it is not terribly difficult for smaller publishers to switch, it IS difficult to convince one to switch, and the larger the publisher the more work replacing the tags is.

4. Only the tip of the Branding Iceberg is online

What many people overlook is the potential impact we might see as the HUGE amount of branding budget ($Billions) still used offline slowly begins to flow online. Since brand advertising is less measurable and because branding substitutes are so expensive, there is quite likely much more money to be made monetizing a site’s audience through impressions than clicks. As such, a lot of publisher inventory will likely shift to display advertising and sponsorships. Yes, advertisers prefer cost-per-action pricing, but there is still a large industry where awareness is still a perfectly reasonable objective. And in many cases, other campaigns will be used to ‘close the deal’.

5. Google know all of the points above, and is ready

Where the article really fails IMO, is not recognizing that AdSense and AdWords are already ready for display advertising. It is quite easy and will become easier to create, run and A-B test different forms of display ads. Since the installed base is already in AdWords, and already has their “direct response” campaigns in the system, there is a strong incentive for them to use this same system for top-of-the-funnel types of campaigns. The data is already there and the tools are already in place to make it the best place to view campaigns across the entire funnel, apples-to-apples (as much as possible), over time, and against selected segments or even individuals. And because Google has already acquired DoubleClick, Google is very well situated to help the long tail of advertisers make the transition into banner ads, or wherever the format and targeting winds may blow.

Conclusion

Ultimately, an ad platform is necessary for the continuously growing long tail of publishers to easily run and manage its inventory without an in-house sales staff (and potentially even better performing than an in-house staff). AdSense is well positioned to guard this turf and Google bolsters this position everyday with new webmaster, publisher and advertiser tools.

For the record, Yahoo! is also on-strategy trying to build an equally user-friendly way for publishers to find highly relevant advertisers – and vice versa – by leveraging an advertising exchange which brings to the table ALL of the ad networks (including Google) and thus potentially every advertiser and every publisher. This is called APT. Check it out!

What does YouTube mean to Google? PART TWO

29.June.2009
NPV of Google's Brand rose $7.8B in 2008

NPV of Google's Brand rose $7.8B in 2008

In my last post, I explored why marketers and Internet businesses should tie “social marketing” metrics to true business metrics, and some ways they might consider doing so. The reason this is important is because most ad-supported consumer sites are being forced to add social elements, and most social sites are being forced to add ads. Understanding the business value of a user-generated “ad”/lead/brand reference has become an important thing for product managers and marketers to know so they can maximize the use of social media when building and advertising products.

In this post I will address the question “What is YouTube worth to Google?”, by focusing on some of the lesser known ways that YouTube creates a great deal of value by fortifying Google’s core business.

The original article What is YouTube worth to Google? assumes that products like YouTube – or Android or Google Search or Google Earth or whatever – can only be valued by the direct revenue that they provide (user fees and/or advertiser fees), however, there are at least 4 other value drivers that should also be considered. I will start with 3 which are often over-looked, but end with the big one which dwarfs the rest.

1. Preserving Google’s Marketplace Liquidity.

Google’s enormous network effects stem from the fact that it has created a marketplace and marketplaces are very difficult for late-comers to build. The only way the advertising marketplace works is if you can bring both users and advertisers – two different segments to build and sell against. It is obviously most common to start with users and then find advertisers who care about those users.

YouTube has done a great job of bringing a lot of users to the table for Google’s advertiser base to monetize. Google advertisers are loyal to Google’s platform because it is the place that provides the highest volumes of sales leads (people clicking ads). Google must ensure that they always have the most advertisers by ensuring that they always have the most users (ad clicks). YouTube should get credit, then, not just for ad clicks on YouTube, but its impact on advertiser retention, and ad quality (ad quality is correlated with the amount of attention spent optimizing Google ads. Over Google’s volume, ad quality and thus click rate = beaucoup bucks).

2. Lifting Google’s Marketplace Performance and Prices.

It’s a little dubious to me how much value a person’s video search behavior is worth. That said, over Google’s and YouTube’s user volume, there is certainly some video behavior (content and format preferences) that advertisers can use to create more targeted ads and thus improve click-through rate. Again, the more liquid the market, the more this behavioral data is worth to Google.

3. Google Employee Morale.

We’re getting a little soft and fuzzy here, but bottom line, employees love hearing about their company in the news and amongst friends, and they also like growth opportunities. Having YouTube in the Google family potentially improves employee retention and employee turnover is perhaps one of the biggest risks to the Google empire. Yes, you are only as good as your employees, but even moreso, Google does not want to bring in the brightest most entrepreneurial minds they can find, give them the most cutting edge learning and then watch them leave to the next big competitor.

4. Google Brand Value.  [The Big One.]

 

Free Marketing = More Users, More Consumption per User, More Pricing Power, and Greater Barriers to Entry for New Competitors (which prolongs all of the first 3 benefits). News that is generally positive in nature, either corporate news or non-corporate news (blogs) – and by extrapolation all of the social conversations that this news creates – is like free brand building. And probably even more impactful than brand advertising since it is done by third parties, and is thus “truthier”.

Ironically, while Google benefits from the billions of dollars being spent each year in brand advertising, Google is in fact NOT SPENDING A DIME on “corporate advertising”, yet is receiving the same benefit that a business spending billions per year would receive. In fact, I wouldn’t even judge the benefit by the cost savings of not needing to advertise, I would judge the benefit by the business equity created.

According to the InterBrand / BusinessWeek study, the net present value in real dollars of Google’s brand was $25.6B in 2008. That is up $7.8B (43%) from 2007. BusinessWeek cites that “innovations like Google Mobile, Google Docs, Google Book Search … and its core search business … extended the brand’s reach.” If BusinessWeek or Google were to study how much lip service was being given to each of Google’s products and then attribute this $7.8B in value creation proportionately across the products, it’s safe to assume that several of Google’s products accounted for north of $1B in value each, simply by being innovative enough for people to talk about.

One caveat is that brand strength can only be turned into brand equity if there is indeed a business model where there are customers to charge, untapped new consumption to serve, and the ability to raise prices (without a business model, supporting customers with free products is actually a huge cost).

And yes, brand equity can be lost and gained quickly. But the purpose of the study is to evaluate the real market value that the brand equity can create, from the ability to raise prices, to the ability to sell more units with essentially the same feature set (and thus resource investment), to the barriers of entry that Google’s brand favorability awards them against potential competitors in each of its markets. These competitors must spend billions of dollars to build a brand that can compete with Google’s. There aren’t many businesses, now or in the future, that will be able to out-spend Google on both product innovation and brand building. It’s kind of funny, but a newcomer will probably have to out-publicize Google in order to divert its resources into out-innovating Google. And vice versa. :)

Even when you put aside the revenue streams that might occur from Google Mobile or Google Docs or Google Book Search, the NPV of the brand equity has already paid the investment off in spades.

Lesson:  Build a business that a large set of customers will pay for, and then pour your resources into constant and continuous innovations and PR, not advertising. (note to Microsoft and GM) ;)

 

Trend: Ironically, companies may seek to shrink ad budgets and spend that money on viral applications, communities, events, and other ways to get users to evangelize their brand and products (or perhaps even sell to each other). Google should not have too much difficulty turning user generated content into highly targeted ad units in order to facilitate a trend toward social marketing with ROI responsibilities.

How much does this brand impression “YouTube” mean to Google?

29.June.2009
What is the value of this impression?

What is the value of this impression?

One type of question I hear a lot is something like “What is YouTube worth to Google?

Since I’m in a line of work where valuing products and technologies is important, I think about this kind of thing a lot. Most of the time, this is not from an M&A perspective (“what is the value of that revenue stream + goodwill + synergies?”), rather a lot of the valuation I care about in this Web 2.0 world is from a couple of other perspectives.

One:  How does a product or feature or promotion create value for a business where the revenue stream is more ‘indirect’ (i.e. ad-supported businesses) – what does that feature or promotion do to get more users to the site or increase their value to advertisers OR to attract more advertisers to the site and increase their value to the site? Even in the YouTube question above, this is an interesting question – a fairly literal question of how YouTube brings users and advertisers together. I’ll save that analysis for another day.

Perhaps more interesting is the second type of value analysis I spend a good amount of mindshare on – understanding the true business value of different forms of marketing. A related wrinkle on this subject (again, for another day) is the area of marketing attribution – divvying up business benefit (profit) across multiple marketing touch points in proportion to each marketing tactic’s contribution to the benefit (i.e. sale). However, we need to start with the basics first.

To me, most companies still have a problem with the very first step. “What is a Brand impression (i.e. banner ad) worth to my business?” Or, similarly, with viral marketing, “What is a PR impression worth to my business?”

I’d like to say we’ve come a long way in understanding the value of a brand impression, but aside from the most sophisticated marketing companies with the most sophisticated marketing intelligence tools and people, the true value of a brand impression is unknown to most brand managers and marketers. They simply know they need to do it, and gauge the size and importance of this campaign to that campaign, and base their budget and media plan on that historic benchmark. This is obviously a poor habit – budgets should be based on the benefit you expect to receive (unfortunately many businesses in the brave new world of Web 2.o can’t even get this benefit piece quantified, so the idea of prioritizing and budgeting in line with benefit is a lost cause). IMHO, this is lazy – some form of  revenue modeling must be done by anybody setting product and marketing strategy. But I digress. :)

One of the ways you might gauge the value of brand impressions is to try to isolate a campaign (geographically or among a segment or bucket of users) and measure sales before and after the campaign. Another way is to research things like brand awareness, brand favorability and likeliness to buy before and after a similarly isolated campaign.

I haven’t seen it used anywhere, but I believe a similar proxy could very well be used to evaluate the value of PR and perhaps even social marketing. The PR industry is even farther behind than brand marketers in the desire to quantify performance. That’s probably because PR budgets are not performance-based and so there is no incentive to change a perfectly good business model where PR performance is based on # of placements, and social marketing is judged by # of downloads, followers, and comments, rather than the actual observed impact on sales).

Not to confuse “business value” with “cost”, but it might at least help to know the market value of a half- or full-page editorial article in a publication or website, compared to the market price of a similar sized advertisement in the same publication, and eventually work towards a ballpark proxy of what a single reference is worth from a trusted writer vs. an anonymous contributor vs. a known product user vs. an anonymous product user.

Without knowing this information, no marketing director or brand manager can know the true business value of garnering positive reviews, and thus there is no quantifiable way to ensure that product development and marketing plans are correctly prioritized, and that these crucial and scarce resources are maximized!

If asked to proxy PR value, I’d probably multiply the market value of a similarly placed ad by some set of factors:

  • On a scale of 1-5 is the article definitely positive, generally positive, neutral, slightly negative or very negative? You might even bucket test with a panel or survey the real results on actual purchasing or brand affinity after presenting unknowing users with similar types of articles.
  • What is the click-through-rate (CTR) and conversion rate (CR) of leads from different publications, editors, and types of brand references? Which perform best and worst and by what margin?
  • What is the CTR and CR if I put links to the product in question (or FAQ page) right inside the user reviews?

These are just some of the ways that marketers should begin understanding what PR and personal references mean to the business, relative to traditional marketing (where the voice is a corporate voice). With at least acceptable proxies, product designers and marketers can apply data to make business decisions, and then track their own performance – or learn where implementation has faltered – by these key performance indicators. What would you rather tout to shareholders: an increase in revenue or an increase in positive brand references, twitter followers and facebook fans?

Next, I will take a stab at how I might evaluate YouTube’s value to Google, by looking at value drivers that are perhaps different than you might expect.

Bing: If you can’t buy em, bleed em to death

23.June.2009
Is video hover the killer app?

Is video hover the killer app?

For the past few days I’ve been playing with Bing.

My first impression is that Bing has done a good job focusing on relevancy and the ability for users to easily refine their search intent after the initial search. Bing has also added some new wrinkles to make certain kinds of searches — in particular shopping, news and entertainment — somewhat easier to do. While Carol Bartz thinks that the re-launch will not impact share much – which was my immediate reaction at first blush too – I am a little more concerned than she is.

Bing is definitely launching at a good time to gain awareness. While a revamped search engine by MS would not normally be considered juicy news, as an avid internet user myself, there feels to be a bit of a dearth of news going on right now – the Facebook and Twitter talk is getting stale, and so are John & Kate + Eight. And there are certainly more and more jobless out there with more time on their hands to play around on the internet and chatter about a new free online app. So the timing is good to give content-starved bloggers and internet users something to play with and pontificate about. Oh, and by the way, yes I did use the word “app”. Some of Bing’s usability improvements do qualify Bing as an “app” in my humble opinion. In fact, making the search experience more like an app is probably a story in its own right. People enjoy apps, and until now they haven’t exactly found search engines “delightful”. With Bing’s new video view, I think Bing is getting there. With a little luck (and continued marketing campaign), Bing could indeed threaten Yahoo as a #2 search engine, which to me is the story.

Bing Review

For a first-time user, after an hour or so of playing with Bing, I think most users will still get the impression that Bing is still not differentiated enough to change their search behavior. And after a couple weeks now, the name still does not capture the imagination — nor does it work well as a verb. I think this is a definite mistake.

“No honey, just bing the restaurant”

“Guess what, I binged her boyfriend last night. What a weirdo.”

“Did you Bing Map the store? Did you try Bing Shopping?”

Can it catch on? Yes. But in the culture of cool, it is not a delight. It is still of course easier to bing your girlfriend than Yahoo! Search her, so Bing does one up Yahoo! as potential mainstream lexicon.

Strategically, Bing is focused on making it very easy to refine searches – by search intent (with the side bar and the way results are organized) and by result format (URL link, video, image, etc). Furthermore, Bing has clearly focused its ease-of-use features on shopping types of activities, which makes sense because shopping searches are by far the easiest to monetize with advertising. In fact, this is where the war will be won, since most advertisers will follow the shoppers. Ultimately, one risk to Google is that it’s quite possible that an engine like Bing or Yahoo could catch on as the best engine to use for shopping and leave Google as the engine for “research”. This is not new. In fact, MSN used to – and Bing has carried 0n – cash back discounts for shopping done on the engine. It hasn’t been successful, but did you read Tipping Point?

After my first impression (which is perhaps as far as many will get), I read a little more buzz and revisited Bing to play with it a little more (thank you bloggers!). Gradually I found just enough new wrinkles in each of my search experiences to feel a bit of the joy of discovery that one gets from a new app. There are certainly just enough wrinkles in the search experience to keep one exploring. [Though relevancy is always Job 1 with any search engine, relevancy alone is not a very delightful experience worth buzzing about].

I’ve found that Bing does a perfectly adequate job (as does Yahoo) of producing relevant results for most searches [some might disagree; I of course agree with myself]. In fact, Bing’s results are sometimes even better than Google’s if you tend to be most interested in news about what you’re researching. Bing does a very good job of incorporating this morning’s news into search results (better than Yahoo), which actually makes sense — if you’re looking for a way to differentiate, the easiest way to do it is to engineer recency into algorithms when you don’t have the SEO juice Google and Yahoo have built up with the advantage of time and search volume. When you think about it, however, news-based relevancy is also the easiest differentiation for new entrants (or incumbents) to imitate. There are plenty of search services trying to differentiate on real-time search.

To test relevancy yourself, go ahead and compare Google and Bing results side-by-side.

The Bing Scorecard

1. Search Relevancy & Getting to Answers Quickly: Bing’s sidebar of categories and the way results are sectioned helps the searcher quickly scan and refine search results. For the query “turkey” the sidebar shows:
i. Images
ii. Recipes
iii. Facts
iv. Map
v. Tourism
vi. Weather

This is arguably accomplished already by G and Y by how they blend search results to provide something for many kinds of search intents, the way results prominently use wikipedia, etc., and by using sublinks to show deeper into the resulting webpages, all of which provide most of the options that Bing’s method provides.

On Bing, scrolling over a result will (sometimes – bug?) preview a short snippet of text on the page to see whether the content is relevant before clicking through to it. Many results that are a homepage show sublinks of key pages deeper within the site, similar to Yahoo’s and Google’s quicklinks

2. Flight Search: For flight travel searches, such as “lax to sfo”, bing immediately provides you the lowest available flight in its online search (akin to kayak). In comparison, Google presents a box to enter your date range, and links to popular sites to instantly run the search. Yahoo doesn’t provide instant help, just search results.

3. Video: For web searches, where video results are blended in, or for pure video searches, bing gives you the very cool, very time-saving ability to hover over a video to instantly play it, which I have to admit makes it really easy to both scan videos to see whether any or all meet your needs, or just consume the content there without clicking through to another website. For the search ‘will ferrell’ both bing and google provided video results, Yahoo did not. I don’t do very many searches where I expect a video result, however I must admit that now I will definitely think twice before I begin a search session to consider whether a video result is likely, because it is so nifty to review content this way. I’m a bit shocked myself, but this may actually be the killer app that bing is counting on.

4. Image Search: Like videos above, I really like bing’s infinite scroll capability, since again it doesn’t require page loads to go from one set of photos to the next. Google doesn’t offer infinite scroll (bummer), but it does offer an easy way to filter results by image size, some options for the type of content images are tagged with (faces, photos, news, clip art, even line drawings!), and even colors in the photos (for design usages I imagine). Yahoo provides a slideshow type of way to quickly scan through a large set of “Recent images” at the top of the screen. It’s sort of hidden, but Yahoo also provides a dropdown with ways to narrow searches by image size, color v. black & white, flickr or non-flickr images only, and what kind of restrictions the creator may have on the images for re-use.

5. News: Bing just launched but after a couple days using it, I’ve noticed Bing does a good job of incorporating today’s news into its search results. IMO – or perhaps it’s just the searches I’ve been doing – what’s more relevant than big items in today’s news? In fact, according to Yahoo, “winner of make me a supermodel” is the top search right now on Yahoo, yet when I go to Yahoo’s search results I get a normal set of results where a searcher would need to click through to one of the sites to (hopefully) learn the winner. On bing, there is information about the show at the top of the page including who was eliminated last episode, remaining contestants, and all of the original contestants. There are also “Related searches” in the sidebar which may also help answer a question, or refine results. And of course there are video results at the bottom to easily scan for answers. However, the quickest result of the 3 engines was Google, which had a blog article titled “Make Me a Supermodel Winner” (posted 50 minutes ago) with an image of the winner next to it.

6. Local Search / Maps: I searched “video store, 90027”. Google and Yahoo produced similar results with a local map at the top of the page and a list of local video stores next to it. Google’s list of local video stores was twice as long. Yelp was the 2nd result. Bing’s result was not nearly as good (and yelp was noticeably missing – perhaps yelp hasn’t built up the SEO juice yet?), however when you click the Maps header link you presented with a very nice map. The way it was presented clearly and with the area’s topology I found very nice to read. And when you hover over a result, a picture pops up with business name, a photo, and links to get driving directions, etc. The only problem was that it was noticeably missing local video stores, including my preferred video store. Yahoo’s version, Yahoo Local, presented me with a better list of local video stores (including my store) but the map wasn’t very useful (far too large an area was presented) and I had to Enlarge the Map (unneeded click) to make it usable and then fiddle with it a bit; for instance, hovering over the points on the map did not pop any information up for you – you needed to scroll up and down the list on the side. There is a satellite and hybrid viewing feature but I didn’t find these as useful. Google Maps is very clean and zoomed in to my local area. It had the most local video stores of the 3. Hovering over the points gave the business name only. Google’s “Terrain View” is quite good as well.

7. Shopping: I did a search for “Michael lewis book” and only google’s shopping feature actually presented me with his new book at the top of the list. Neither Yahoo nor Bing showed the new book in the first page of results, which is basically an unsuccessful search, after which I would likely leave for a better or more targeted shopping engine.

More interestingly, Microsoft has carried forward its search “cashback” program where a portion of merchant results for shopping search will be tagged as “cashback” deals offering some kind of discount. When you complete a transaction (a “conversion” from the advertiser perspective), you get cash back into a user account you setup. When you have $5+ in your account, you can request your cash back from Microsoft. It’s clearly a way to incent search engine users (at least price sensitive search engine users) to use bing for shopping-related searches. This makes sense for a number of reasons, the biggest and most obvious is that search engine advertisers want “conversions” – most search engine advertisers are hoping to complete a commercial transaction of some kind and will allocate marketing dollars (and very importantly, time) to search engines based upon where they generate the most revenue and best ROI.

Should Google and Yahoo be scared?

The brand awareness and top-of-mind awareness game is being played out right now. Once you’ve played with it, I do think that many users will begin to consider Bing over their current search engine just to continue learning about it, as well as for certain types of searches such as video and travel, where Bing has a nice advantage from a usability perspective in my opinion.

Yahoo should be more concerned than Google about losing share, since they are already being chipped away by Google (as searchers get more advanced they tend to switch to Google and both Google and MS are in a better position to out-spend on partner deals to be the default home page or search tool). Second, Yahoo’s asset is slowly being undermined by the one and only company interested in buying it. In wall street terms, if 20% of the market is $1B per year in revenue, then two points is very likely in the $100M’s (per annum) or $1-2B in market cap.

Third, from a search monetization point of view, for a search engine advertiser, there is a search volume threshold at which point it is no longer worth the bother to invest time and energy managing campaigns on a search engine. In April 2009, Google had 64%, Yahoo 20.4%, MSN 8.2%, Ask 3.8%, AOL 3.4%. At 20% of the market (and clear #2), Yahoo is enough volume to be worthwhile for well-resourced companies and some smaller businesses to make investments to go after those leads. If and when the market becomes closer to 65-15-15 – well that’s when an advertiser might justify spending that time and money on other channels – and we’re not just talking other search engines, but other traffic sources whatever they may be, including print, radio, localized sites/yellowpages/yelp, banner ads, etc. One thing we do know, once you’re #3 — like MSN is right now — the advertiser base falls off quite a bit (which explains the highly irrelevant sponsored search results you’ll find on Bing/MSN right now).

Furthermore, Yahoo is actively trying to focus its business (and shed costs), so it’s hard to imagine it can keep up in the investment race. In fact, innovation is likely to go even slower than it has gone; Yahoo’s best hope is probably attracting developers to BOSS and SearchMonkey, in other words open up and let others do the innovation for Yahoo. These initiatives have not exactly taken off yet, so competition for developers is yet another sphere where Yahoo is under-resourced vs. Google, MS, Apple, and even Facebook, Twitter and other newbies.

Strategy – If you can’t buy em, bleed em to death

At the end of the day, search engines monetize their business by bringing advertisers into the fold, providing them quality searchers and searches that lead to sales. For the most part, e-commerce advertisers that “sell stuff” like products or leads to other businesses (i.e. shopping engines or insurance quote aggregators) are those with search engine marketing budgets and staff. When you are a #3 or #2 player, you really need to do things to ensure that you are a sizable enough portion of sales leads to justify marketers spending resources (money AND TIME), on your search engine to actively create and manage ad listings for the 1000’s of search queries, bids, ads and landing pages that are required for EACH query on EACH engine. Each Keyword/Bid/Ad/LandingPage combination is tracked and optimized, as appropriate, and this is very manual work, even WITH SEM and bid management software that can cost well over $200k/year. When you’re a one- or two-man online marketing team and you’re only getting 10% of your sales from the #3 search engine, you can either choose to spend time doing a better job on the other 90% or you can spend time on that 10%, or you might even spend that time on other lead generators, such as banner, affiliate and email marketing, etc.

When it’s 20% of your sales, it’s clearly more compelling, but still not compelling enough for MANY. At 61-20-8, Google is a must for most advertisers and Yahoo is a good chunk if you have the resources to manage it, and finally MSN, a clear 3rd place, and a big drop-off point for many online advertisers, pending the opportunity costs. 60-30 makes a MS/Yahoo partnership/merger a more compelling second option for advertisers, particularly small and medium advertisers with scarce staff and budget.

The Future: One Stop Search + Display Advertising

Long term, however, when you consider that one day search AND display advertising will perhaps run through the same ad management system, suddenly MS/Y! are actually in a market leading position due to Yahoo’s and MSN’s current lead in the display market. This is why MS wants to combine with Yahoo. HOWEVER, if the combined search marketing system runs through the MS platform, and MS now owns the advertiser relationships, MS is now in a position to complete the search/display integrated platform value proposition and begin undercutting Yahoo’s display-only value proposition. Many advertisers will still want to run their ads on Yahoo properties, but it may be more difficult to create a liquid market and create customized “guaranteed” ad deals – which command higher prices than “non-guaranteed” or run-of-network buys. The degree to which that leads to softness in advertiser demand for Yahoo banner & video placements is the potential catastrophic risk that Yahoo is considering right now, when determining the value of a search deal.

If you can’t buy em, bleed em to death. That seems to be both Microsoft’s and Google’s ‘Yahoo strategy’. One that COULD work, if advertiser and ad agency search and display marketing departments DO merge and seek this integrated platform, and if Yahoo cannot continue to innovate and differentiate its display ad network (with advanced forms of user targeting, dynamically created ads, or robust user profiles, for instance), OR if Yahoo cannot maintain its share of time and attention of the world’s internet users, particularly the high income and spendy ones.

I think Yahoo is prepared to take that chance, BUT will the value to Yahoo ever match the value to Microsoft? Yahoo wants to sell at some multiple of the current search revenue + some money for the risk selling search poses to the overall advertiser value proposition. The value to Microsoft is not as clear since it likely extends beyond the literal value of the search monetization business, and into other synergistic benefits in building that online presence.

Even with a sale, there is a great deal of work in store for Microsoft & Yahoo teams to make the new search system work, so it is a risk and resource suck even with an outright acquisition.

I think the next few months of Bing will tell a big tale. If Yahoo has lost search share 2-3 months from now, and advertisers’ Yahoo budgets begin to fall, Yahoo will want to get what it can to avoid a long protracted search investment battle. Remember, this is not just G and MS that Yahoo is competing with in search, but social networks, newcomers and mobile. Yahoo will have to compete on ALL of these fronts, and that is just too big a risk to the rest of the business where Yahoo DOES have a competitive advantage and would like to focus.

If Bing’s big push does little, I don’t think there are many more rabbits to be pulled out of their hat to organically get that share. They will have to buy that share through embedded browser partnerships, which I believe they are very prepared to do. Google, with its brand and cash, will not make it easy to do. In FACT, I don’t see it as likely but if Apple ever developed or acquired a search product and embedded it on its own computers and phones, this would actually be a serious NEW threat to even the incumbents, even Bing.

I don’t see acquiring a strong up-and-coming search prospect or aggregating a bunch of little engines as the answer either. I don’t see Twitter or Ask as threats to steal serious share – at least not until they can provide a really NEW shopping experience and steal shopping share. Real-time search is nice for some people (people who want news, which is not monetizable). But the rest of the world wants relevancy for EVERY search they do. The incumbents are strong and in a game that’s all about always producing the most relevant results, the network effects are simply too large for a small guy to leapfrog the big boys.

Apple Search + Yahoo Open?

It’s kind of fun to think about Apple in the equation. Apple would never acquire Yahoo or Yahoo Search because it is a hardware company, not an advertising company. HOWEVER, if Yahoo’s BOSS project can offer Apple a solid search platform that Apple can slap it’s brand on and innovate upon, I can see a way for Yahoo to stay in search while simultaneously taking focus off search. Apple would own the brand and user experience and potentially work a way to take more of the profit split than they get from Google (this assumes Yahoo’s new APT platform can draw enough advertisers to continue doing a competitive job monetizing searches), and Yahoo would continue to own (and strengthen) the advertiser relationships with its ad platform.

Web 2.0 finally realized by the first Web 2.0 company.  : )

Just in time for Web 3.0 – Semantic Search Recommendations. We will get to that later.


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