Danny Sullivan wrote an interesting blog post this morning titled Google’s Broken Promises & Who’s Running The Search Engine? whose central thesis is that Google now does a number of things it once described as “evil” when it comes to how search results and ads work in Google Search. Given that I now work in Bing Ads, this is a fairly interesting topic to me and one I now have some degree of industry knowledge about.

Promises Are Like Pie Crust, Easy to Make and Easy to Break

Danny Sullivan categorizes two big broken promises in his article, one in 2012 and one from 2013. The 2012 broken promise is excerpted below

The first broken promise came last year, when Google took the unprecedented step of turning one of its search products, Google Product Search, into a pure ad product called Google Shopping.

Google Shopping is a different creature. No one gets listed unless they pay. It’s as if the Wall Street Journal decided one day that it would only cover news stories if news makers paid for inclusion. No pay; no coverage. It’s not perfect metaphor. Paid inclusion doesn’t guarantee you’ll rank better or get favorable stories. But you don’t even get a chance to appear unless you shell out cold hard cash.

What Was Evil In 2004, Embraced In 2012

Shopping search engines have long had paid inclusion programs, but not Google. Google once felt so strongly that this was a bad practice that when it went public in 2004, it called paid inclusion evil, producing listings that would be of poor relevancy and biased. The company wrote, in part:

Because we do not charge merchants for inclusion in [Google Shopping], our users can browse product categories or conduct product searches with confidence that the results we provide are relevant and unbiased.

There is a similar Google then versus Google now perspective when looking at the second broken promise related to banner ads in the search results page.

“There will be no banner ads on the Google homepage or web search results pages,” Google promised in December 2005, on its main blog, to reassure consumers concerned that its new partnership with AOL would somehow change the service. Eight years later, Google’s testing big banner ads like these:

These excerpts could almost be a cautionary tale to idealistic young companies about making absolute statements and the staking one’s brand on these statements without thinking about the future. However that isn’t the point of this post.

I decided to write this post because Danny Sullivan’s article starts starts out quite strongly by pointing to this misalignment between Google’s past statements and their current behavior but then peters out. The rest of the article is spent studying Google’s org chart trying to figure out which individual to blame for these changes as well as trying to come up with a rationalization for these moves in the context of making search better for consumers. As an industry watcher the rationale for these moves is quite straightforward and has been a natural progression for years.

The Love of Money is the Root of all Evil

Any analysis of business decisions Google makes in the arena of search, is remiss if it fails to mention Google makes the majority of its revenue and profits from ads running on Google sites. As an example, Google made $9.39 billion last quarter from ads running on its sites whereas of the $3.15 billion it made from ads running on other people’s websites it paid those people $2.97 billion. Combining that with the fact that its $12.5 billion acquisition of Motorola has so far produced nothing but financial losses, there is a lot of pressure for Google to make as much money as possible from ads running on its sites specifically in Google Search results pages. 

When it comes to search engine advertising, the money is primarily in queries with “commercial intent”. This is a fancy way of saying that the person who is performing the search is planning to spend money. Advertisers are willing to pay several dollars to a search engine each time a customer clicks on their ad when the search term has commercial intent. In fact, companies are willing to spend up to $40 – $50 each time a user clicks on an ad if the user is searching for a life insurance policy or a home loan.

Over time both search engines and advertisers have figured out exactly where the money is and how to extract the most value from each other. Google has slowly been making changes to their search engine that implies that for queries with commercial intent they always want a cut of the action. This is why if you perform a search today that has commercial intent, there are an order of magnitude (i.e. ten times) as many links to ads as there are unpaid search engine results. For example, take a look at this screenshot of a query for “northface jackets” on Google.

There are two links on this page that are unpaid search results and eighteen links where Google gets paid if you click on them. Given that context, it is no surprise that Google eventually realized it was competing with itself by having a “free” shopping search engine. This explains the broken promise in 2012 related to paid inclusion.

Now if you take a close look at the above screenshot, you’ll notice that The North Face is actually the top advertiser on this page. This means that despite the fact that the user was specifically looking for the North Face brand products, the company has to still compete with other advertisers by paying people for clicks to their website from Google search results. Brand advertisers hate this. A lot. Not only did they spend a lot of money and effort to become a well-known brand but now they still end up paying when this brand recognition pays off and people explicitly are looking for them on Google.

This leads us to the second broken promise, banner ads in search results. What Google is trying to do is to appease brand advertisers by letting them “take over” the search engine results page in cases where the user is quite clearly searching for their brand. Treating this is a giant billboard that reinforces their brand as opposed to scrabbling with other advertisers for a user which they already consider theirs is a more amenable pitch. This explains the broken promise of 2013.

I expect to see more aggressive commercialization of the search results page given Google’s seeming lack of interest and inability to diversify their sources of income. Doing this while preserving the customer experience will be the #1 challenge of their search engine and other similarly advertising focused web products in 2014 and beyond.

Note Now Playing: Jay-ZF*ckwithmeyouknowigotit (featuring Rick Ross) Note


 

Tuesday, 19 November 2013 02:39:26 (GMT Standard Time, UTC+00:00)
A hot topic in web development is SPA ("Single Page Application")

Entering spa into google gives a surprising result in that there is no attempt to reign in the commercial result to actually give some information. Last time I checked, the first real result is about 30 pages in.

There appears to be zero awareness that there might be non-"commercial intent" meanings to a search term.
Don
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