Tag Archives: search

Webrooming: How Mobile Ads Are Driving Shoppers To Stores

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Famous Footwear stores highlight highly searched products.

From my Forbes blog:

Showrooming, the practice of shopping in stores and then buying cheaper online, has long vexed physical retailers that fear they’re losing sales. No doubt they are, but a countervailing trend has been building for awhile now: webrooming, which is shopping online and then buying in the physical store.

That’s potentially a much larger opportunity because the vast majority of purchases still happen in physical stores. The holiday season that just began presents a particular opportunity for retailers that will grow as Christmas approaches and the time to order online before the big day grows short. But the benefits of getting people into stores, not just tapping online buy buttons, is more important regardless of the season, said eMarketer analyst Yoram Wurmser. “People are visiting fewer stores, so they buy more with each visit,” he said.

If getting people into stores to shop is an opportunity for retailers, it’s nothing less than a mandate for companies making coin from online ads. In particular, mobile ads, revenues from which are expected to surpass those of ads shown on desktop computers this year, are key as people increasingly use their phones to find products when and where they want–meaning here and now. “Smartphones have completely changed how we do holiday shopping,” Jason Spero, Google’s vice president of performance media, explained in an interview. “It’s now quick bites and micro-moments.”

No company stands to benefit more from proving its mobile ads work–or to suffer as much if it can’t–than Google, the world’s largest seller of ads. …

Read the rest of the story.

Meet Hummingbird: Google Just Revamped Search To Answer Your Long Questions Better

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From my Forbes blog:

Google has updated its core algorithm that controls the answers we get to queries on its search engine in a bid to make them work better for longer, more complex questions.

The update, code-named Hummingbird, is the biggest change to the underpinnings of the world’s leading search engine since early 2010, when Google upgraded its algorithm to one it called Caffeine. Google made the change about a month ago, it announced at a press event in the garage of the Menlo Park (Calif.) house where Google started. The event also celebrated the 15th anniversary of Google’s founding, which is tomorrow.

Most people won’t notice an overt difference to search results. But with more people making more complex queries, especially as they can increasingly speak their searches into their smartphones, there’s a need for new mathematical formulas to handle them.

This update to the algorithm focuses more on ranking sites for better relevance by tapping further into the company’s Knowledge Graph, its encyclopedia of 570 million concepts and relationships among them, according to Amit Singhal, Google’s senior VP of search. (For example, there’s a Knowledge Graph “card,” or information box, for the Eiffel Tower, and Knowledge Graph knows it’s a tower, that it has a height, that it’s in Paris, etc., so Google can anticipate you might want to know some of those facts.) Caffeine was more focused on better indexing and crawling of sites to speed results.

After the event, Scott Huffman, a key engineering director at Google currently working on natural language, told me that part of the impetus for the change was that as more people speak searches into phones, they’re doing so in a more natural way than they type in queries–which is to say more complicated. So Google’s search formulas needed to be able to respond to them.

Partly that is through even great use of the Knowledge Graph, so obvious discrete terms can be identified quickly. But it’s also interesting that although queries are getting more complex, that doesn’t always mean it’s harder to find the right answers. The more terms people use, Huffman says, the more context Google can divine. So those extra words, even if they’re in a more complex query, can give Google better information–but only if the algorithms are adjusted to be able to recognize the relationship among those terms.

Ultimately, he says, “we want to get to a natural conversation” between people and Google search on whatever devices they’re using. …

Read the rest of the story.

With Graph Search, Can Facebook Kill LinkedIn, Yelp–Even Google?

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Facebook CEO Mark Zuckerberg introduces Graph Search (Photo: Robert Hof)

From my Forbes.com blog The New Persuaders:

Facebook took pains today to tell the world that its new social search service, Graph Search, is only a very limited tool that it will roll out very slowly over a period of months and years.

But CEO Mark Zuckerberg and his search staff couldn’t help but reveal their enthusiasm for the vast possibilities. For all their professed modesty, what struck me at the company’s press event introducing the service was how specific and broad-ranging Zuckerberg and his Graph Search leaders were about what it could provide: just about everything, potentially, that every company from LinkedIn to Yelp to Foursquare to Match.com to … yes, even Google provides today.

That’s an exaggeration, of course, that even Facebook folks surely didn’t intend. All of those companies have distinct, well-developed services with extensive user bases that are unlikely to shrivel up no matter how good Graph Search turns out to be. In most cases, they will probably retain a durable advantage for years to come. And as Zuckerberg said, it’s very, very early for Facebook search, and search is a devilishly complex discipline to do well.

Still, to hear it from Facebook itself, Graph Search will offers ways to provide similar services, sometimes in potentially easier and more effective ways:

* Recruiting: One of the first examples Facebook provided today was that Graph Search could help in finding qualified candidates for jobs. For instance, Lars Rasmussen, the Facebook director of engineering who heads the Graph Search team, mentioned that he could find people from NASA Ames Research Center who are friends of Facebook employees.

As investors, who bid up LinkedIn’s share a fraction today, no doubt recognize, that company has a pretty good if not exclusive hold on recruiters. And given that finding friends who worked somewhere is a rather specific subset of qualified candidates for a position, there’s not much chance recruiters will abandon LinkedIn for Facebook anytime soon. But Facebook, already used in various ways by recruiters, could siphon off activities that might otherwise have gone to LinkedIn. … Read more at The New Persuaders. But to conclude …

No, Facebook won’t kill any of these companies, certainly not anytime soon. They’re too strong, Facebook has too much still to build and then to prove, and rarely does a company kill another healthy company no matter how good its products are.

Investors may be thinking as much, as they sold Facebook shares to the tune of a 2.7% drop in price today. But if anyone doubted Facebook’s ability to keep disrupting the status quo, they surely shouldn’t doubt it anymore. Even with its baby steps into the search business, Facebook has again set new terms of engagement in the battle for the soul, or at least the cash register, of the Internet.

13 Questions For 2013 In The World Of Online Advertising

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questionsCross-posted at my Forbes.com blog The New Persuaders:

For the past few years, I’ve offered predictions here and on The New Persuaders for what’s likely to come in the next year. This year, I’m going to shake it up and throw out a few questions instead. I think I know the answers to some of them, but if many won’t be answered definitively by year-end, they remain top of mind for me and probably for many others in online media and advertising.

So in this, the first full week of the new year, here are some questions to which I hope to start finding answers:

* Will image advertising finally take off online? I have to believe that as people spend more and more time online instead of reading print publications and watching TV, brand marketers will want and need to reach them there with ads that are aimed at creating consideration for later purchases, not just eliciting an immediate sale like Google’s search ads and too many banner ads. We’re already starting to see signs of such advertising with the early success of Facebook’s Sponsored Stories, Twitter’s Promoted Tweets, and YouTube’s TrueView ads–not to mention the explosion of tablets, which provide a lean-back experience more compatible with image advertising. This won’t be a sudden change, since brand marketers and agencies don’t move quickly, but you can’t tell me there aren’t going to be increasingly compelling ways for brands to influence people online.

* Can advertisers and publishers make ads more personal without scaring people? That’s the $64 billion question, and it likely won’t get answered in full this year. It’s easy for headline-hungry politicians to make a big deal out of Facebook’s latest privacy gaffe or the Wall Street Journal’s or the New York Times’ latest scare story about an ad that followed somebody all over the Web. That’s especially so since Facebook really does push the privacy envelope too far at times, and too many advertisers idiotically chase one more sales conversion at the cost of scaring off hundreds of others or inviting onerous legislation. But making ads more useful to each individual person is not only crucial to online commerce, it’s potentially better for most consumers as well–seriously, I don’t need to see another ad for a fitness center or a new credit card, but that ad for Camper van Beethoven’s new CD had me in a split-second. The answer lies in these two words, everyone: transparency and choice.

* Will mobile advertising work? Well, some of it already does, to hear Google and Facebook tell it. And while those already devalued digital dimes so far turn to pennies when it comes to ads on smartphones and tablets, this still feels more like growing pains than a crisis in online advertising. Sure, the screens are small and people don’t like to be interrupted in their mobile cocoons. So a different kind of advertising is probably needed–clearly, banners don’t cut it on a four-inch screen. But the value to advertisers of knowing your location and maybe the apps you’re using, coupled with knowledge of what your friends like–all with permission, of course–is huge. That permission may be really tough to earn. But if advertisers can offer tangible value, perhaps in the form of useful services related to what you’re doing or looking for or shopping for–and isn’t that the ultimate native ad?–people may loosen their hold on that information.

I have a lot more questions, but I’ve got to stop before too much of 2013 is gone.

Check out more questions at the full post.

Google Shuts Off TV Ads Business

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From my Forbes.com blog The New Persuaders:

After five years of trying to sell ads on television using the automated buying system that works so well for its signature search ads, Google has finally given up. In a blog post this afternoon from Shishir Mehrotra, VP of YouTube and video, the ad giant said it will shunt the group’s staff to other projects:

Video is increasingly going digital and users are now watching across numerous devices. So we’ve made the hard decision to close our TV Ads product over the next few months and move the team to other areas at Google. We’ll be doubling down on video solutions for our clients (like YouTube, AdWords for Video, and ad serving tools for web video publishers). We also see opportunities to help users access web content on their TV screens, through products like Google TV.

The shutdown is clearly a disappointment for Google, yet another sign that its math-driven advertising systems don’t readily translate to traditional advertising. Back in 2009, the company shut down radio and print ad efforts for lack of interest.

Mehrotra’s not being entirely disingenuous when he says that Google’s efforts are better spent on online video advertising. After all, more and more TVs get connected to the Internet and more and more people watch TV shows on their laptops, smartphones, and tablets. With its Google TV project and its fast-growing YouTube video service, Google remains in a prime position to vacuum up ad revenues as big advertisers start to follow their audience onto the Web.

Indeed, YouTube especially has shown considerable traction in attracting new ad spending–$3.6 billion this year, by the reckoning of Citigroup analyst Mark Mahaney. As I wrote in a recent story, YouTube is where Google is placing its television-scale bets:

Now Mehrotra’s goal is to try to grab a big chunk of the $60 billion U.S. television business. But to do that, and fend off TV-content-oriented online rivals such as Hulu, YouTube has to become a bit more like conventional TV. To that end, it organized itself last year into TV-like channels, investing $100 million in cable-quality launches from Ashton Kutcher, Madonna, the Wall Street Journal, and dozens of others. More and more TV advertisers are being won over, says David Cohen, chief media officer at the media buying agency Universal McCann. “They’re getting marketers to think about YouTube as a viable outlet,” he says. 

Mehrotra, who last year became ­YouTube’s vice president of product, envisions millions of online channels disrupting TV, just as cable’s 400 channels disrupted the four broadcast networks. “We want to be the host of that next generation of channels,” he says.

In other words, Google’s strategy is to attack the TV ad business from where it’s strong instead of from where it’s not.

Why Do Programmers Hate Internet Advertising So Much?

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Facebook ad question (Photo credit: renaissancechambara)

From my Forbes.com blog The New Persuaders:

Another week, another pontificating programmer slamming online advertising. What is it with these guys?

The latest example is a steaming heap of linkbait from software developer and entrepreneur Patrick Dobson entitled Facebook Should Fire Sheryl Sandberg. That would be the chief operating officer of Facebook, whose purported crime is that she steered Facebook toward being an ad-supported company.

In Dobson’s telling, while Facebook cofounder and CEO Mark Zuckerberg was off at an ashram in India, onetime Google ad exec Sandberg mandated that Facebook would henceforth be an advertising company. Proof of her folly? Facebook’s now worth half of what it was at its IPO three months ago as it “continues to flounder in advertising hell.”

This, despite the fact that Facebook will gross about $5 billion in ad revenues this year, despite the fact that its current market cap is still more than $40 billion less than eight years after the company’s founding in a Harvard dorm.

Thousands of Web developers would love to flounder this badly.

Dobson’s preferred alternative is that Facebook should gradually phase out advertising in favor of–and I have to get technical here, because the bigger picture he provides is fuzzy–selling access to its application programming interface. That way, developers can build businesses like Zynga did on top of the social network in the way personal computer software developers built applications atop Microsoft’s Windows. From his post:

… There is massive value in the social graph and the ability to build applications on top of it. I believe the value is greater than all of the advertising revenue generated on the web to date. … What is the best way to monetize the social graph? To sell access to the social graph! … Developers can then figure out if advertising, or micro transactions, or payed access is the best way to monetize the social graph.

I’m not really sure what “selling access to the social graph” would be, though it sounds like the result could make Facebook’s many privacy gaffes to date look tame.

But the bigger problem is the persistent implication by tech folks like Dobson that advertising is beneath them, and beneath any intelligent human being. Now, I’m no huge fan of most advertising, and all too often it is indeed lame. But there’s no doubt it can be useful at the right place and time, and even when it misses the mark, advertising is a small, remarkably frictionless price to pay for a whole lot of free Web services.

The notion that advertising is evil, to use a favorite term of Google critics, or at least useless is a longstanding meme in Silicon Valley. It goes at least as far back as Google’s founding, before it became–right–the biggest online ad company on the planet. Cofounders Larry Page and Sergey Brin famously wrote in their Stanford doctoral thesis describing Google that advertising could pollute search results.

Why this antipathy to advertising? A lot of tech folks seem to believe they’re immune to the influence of advertising. More than that, they assume that no one else is much influenced by it either (despite ample evidence over many decades that ads do influence people’s attitudes and behavior). Therefore, the reasoning goes, ads are nothing more than an annoyance, an inefficient allocation of capital. Dobson accuses Sandberg of a “rampant lack of business creativity” that has “no place in centers of innovation,” later saying she should start an ad agency in Miami. …

Read the complete post at The New Persuaders.

Here’s How Badly Google Wants To Make Nexus 7 Tablet A Hit

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From my Forbes.com blog The New Persuaders:

Only a couple of times has Google deigned to clutter its famously spartan home page with advertising. This is one of those times.

Today, Google is running an ad below its search box for the Nexus 7, the seven-inch tablet that it hopes will steal a march on Apple’s enormously popular iPads. Why now? Google hasn’t said, but it seems likely the ad push is looking ahead to Apple’s expected October release of the seven- to eight-inch iPad Mini, as well as to the expected announcement of Amazon.com’s new Kindle Fire next week.

As tablets take the computing market by storm, Google clearly views them as a critical device on which to make sure its search and other services, and the advertising that rides atop them, continue to be front and center. I remain doubtful about whether Google itself really wants to become a full-on maker of hardware, Motorola Mobility acquisition aside. But at the very least, a successful Nexus 7 could spark other manufacturers to pick up the pace of innovation in tablets.

That’s all the more critical in the wake of Apple’s big win in court last week, when Samsung was found to be infringing multiple Apple patents. Although Google’s underlying Android software was not directly involved, the jury’s ruling cast a pall on Android’s potential for further gains vs. the iPhone and the iPad.

The Nexus 7 spot marks a rare appearance of a Google ad on its home page, though not the first one. The company also ran ads for Motorola’s and Verizon’s Droid phone in 2009, followed by one for Google’s own Nexus One phone a few months later. It also has promoted other Google products, including the T-Mobile G1 phone in 2008. And just a few days ago, if you hovered over the “I’m Feeling Lucky” button, you got alternative messages that sent you to other Google services.

Still, don’t expect to see Google start splattering ads all over its home page. After all, then we’d all stop writing about how unusual it is and Google won’t get the free publicity it’s getting right now.

Stung By Click Fraud Allegations, Facebook Reveals How It’s Fighting Back

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From my Forbes.com blog The New Persuaders:

It’s a question that has haunted online advertisers since soon after Google perfected pay-per-click search ads a decade ago: Are those clicks from real potential customers, or are they from scammers draining my ad budget?

Now the issue of “click fraud” has hit Facebook full-force. On July 30, Limited Run, which provides software to enable bands and music labels sell physical products like records, said it was closing its Facebook account after finding that some 80% of the clicks it got during a recent ad campaign on Facebook were likely generated not by real people but by bots. Those are coordinated groups of computers hijacked by scammers or spammers, so any clicks they generate cost advertisers money for no benefit. (In a separate issue, in fact the main reason Limited Run said it’s leaving Facebook, the company also said Facebook asked it to spend $2,000 on ads in order to change its Facebook page name, something Facebook has said is not its policy.)

Limited Run said it came to the conclusion that the clicks were fraudulent after running its own analysis. It  determined that most of the clicks for which Facebook was charging it came from computers that weren’t loading Javascript, a programming language that allows Web pages to be interactive. Almost all Web browsers load Javascript by default, so the assumption is that if a click comes from one that isn’t, it’s probably not a real person but a bot.

To be clear, Limited Run isn’t charging that Facebook itself is responsible for those apparently fraudulent clicks. Often the culprits in click fraud are small-time ad networks and other outfits that pay people to click on Google and other ads they run on their sites, though that’s unlikely to be an issue for Facebook, which does not yet run its ads outside its own site as Google and others do. Perhaps, Limited Run has suggested, rivals could be using the bots to cost the company money by forcing it to pay for useless clicks.

The click fraud issue has at times loomed large for Google and other companies because of the potential impact on advertiser trust, and Google continues to fight click fraud–as does Facebook. Indeed, the issue isn’t new for Facebook either, with complaints, including lawsuits, bubbling up since at least 2009.

But while click fraud doesn’t seem to have driven away a large number of Google advertisers, whether because the company has minimized it or because advertisers simply factor it in as a cost of doing business online, the issue is a particular concern for Facebook now. It’s trying to prove to skeptical advertisers and investors that its ads work, and claims that there’s rampant click fraud don’t help. At the same time, Facebook has said recently that some 1.5% of its nearly 1 billion accounts are “undesirable,” meaning “user profiles that we determine are intended to be used for purposes that violate our terms of service, such as spamming.

Facebook has declined to say much about the Limited Run situation, though the company says it believes it catches and filters out the vast majority of “invalid clicks” before they’re even charged to advertisers. Its own page on “click and impression quality” doesn’t reveal much detail about how it deals with click fraud, however, so I asked the company for more insight on what it’s doing about the problem.

Mark Rabkin, an engineering director on Facebook’s ads team, responded to questions by email. While at times he’s repeating what Facebook has said before, he also reveals that the company has a growing staff of 300 people working on security and safety and explains in more detail the various ways the company tries to catch bad clicks. Here are his answers. …

Read the complete interview at The New Persuaders.

Google Makes Renewed Grab for the Rest of Online Advertising

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New DoubleClick ad system heats up battle to create an operating system for digital marketing

Cross-posted from my Forbes.com blog The New Persuaders:

It wasn’t supposed to be this way. Hundreds of well-funded online ad technology companies have sprouted up in recent years, each aiming to make it easier and more efficient for marketers to reach just the target audience they want.

Terence Kawaja, CEO of boutique investment bank Luma Partners, created this now-famous Display Lumascape to show how complex the online ad tech industry has become.

Yet the result is a crazy quilt of companies–graphically illustrated in that mess of a chart on the right–that drives marketers and agencies crazy. The very existence of so many competing products, in fact, has made placing ads online and measuring their impact more complicated and cumbersome than ever. “Venture capital has supported and financed a bunch of chaos,” advertising veteran Randall Rothenberg, CEO of the trade group Interactive Advertising Bureau, griped at a recent ad conference.

The result: Most ad dollars, nearly $200 billion a year, still get spent on television because it’s so much easier.

That’s the problem Google aims to solve with a revamped ad buying system it will announce today at a private Future of Advertising event hosted by its DoubleClick display-ad management and technology unit. (Part of the event will be livestreamed here.) The company, which already dominates 60% of the online ad business–those little text ads that appear on the right and top of the page when you do a search–now has its sights set on the remaining 40% of the industry. That would be the $25 billion worldwide market for display ads, the graphical and video banners familiar on virtually every commercial website.

Google’s goal: Provide the leading one-stop shop for advertisers and publishers to buy ads on websites, mobile phones, social networks, apps, and whatever other new media the Internet spawns. Essentially, it’s building an operating system for ads much like Microsoft did with its Windows for PCs–with much the same appeal to marketers and agencies as Windows has for PC users. “When you’re putting together a campaign, you want everything connected vs. trying to piece it all together,” says Kurt Unkel, president of the online ad buying operation at Publicis Groupe’s VivaKi digital ad agency, a Google partner.

Google’s announcement is the latest salvo in a war to control the next era of digital marketing. After a decade in which Google’s search ads overtook display ads with an unmatched ability to turn clicks directly into sales, many advertisers and publishers expect–or at least hope for–a resurgence of new kinds of display ads that could woo brand advertising dollars from TV. Neal Mohan, Google’s vice president of display advertising products, has predicted that display will be a $200 billion industry in a few years.

Read the rest of the story at The New Persuaders.

Facebook Ad Chief David Fischer: Making Ads ‘the Best Thing on the Page’

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In March of last year, just as market watchers Hitwise and comScore reported that Facebook overtook Google as the most visited website for the first time, Facebook also stole one of Google’s top ad executives: David Fischer. The former deputy of Facebook COO Sheryl Sandberg at Google and a onetime editor at U.S. News & World Report, the 37-year-old Fischer left a job spearheading the search giant’s local ad effort to become Facebook’s vice president of advertising and global operations.

Despite his sales background, insiders say Fischer was a good fit with Facebook’s geek culture. At Google, “he made (sales) people in an engineering culture feel that they were valued,” says David Scacco, Google’s first ad salesman and now chief revenue officer at MyLikes, which pays celebrities and other online influencers to promote ads on social sites. And despite a modest demeanor in public, he was known for sometimes cutting loose, dressing up as Ozzy Osbourne and singing ‘80s songs at sales conferences. That said, he’s clearly a sales guy: In a 50-minute interview, he used the word “opportunity” or its plural 58 times.

In this edited interview for my story on Facebook’s advertising strategy in the latest issue of MIT’s Technology Review magazine, Fischer talks about how Facebook hopes to transform marketing into “the most useful thing on the page.”

Q: What’s your vision of advertising, and how can Facebook make that happen?

A: The Web is being rewritten around people. There’s this transformation that’s happening from an information Web to a social Web. Once the Internet was great for answering questions like “What is the weather going to be like in Cambridge tomorrow?” and “What flights can I get from Boston to San Francisco?” It wasn’t so good at aggregating information about the way we actually live our lives, which is people.

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