Organizations using pay-per-click Google ads are seeing costs rise, and to date the excuse has been increased competition. (Google ads are an auction-based system, and as more companies shift ad dollars online, even in a recession, the jostling pushes prices up.) Google reported healthy results in fourth quarter 2008 with $5.7 billion in revenue, up 18% from Q4 2007. “Search query growth was strong,” said Eric Schmidt, CEO of Google.
But Google’s rising revenue may mask that people are using its search engine less.
When we visit the search giant’s own Google Trends for assessing search volume, all signals are down. These graphs from Google show five years of search volume based on the average for the entire time period. We punched in a series of common phrases (see blue text at top of each chart) that people would seek online.
As the economy slowly entered a tailspin, search queries for “financial services” trended down — when you’d think people would be researching brokers. “Debt consolidation,” perhaps the hottest topic as people fear losing their mortgages, also declined after a peak of interest in 2006.
Aggregate use of Google for common search terms is fading. Why? Consumers continue to grow more comfortable with the internet and may not need a search front-door to navigate. If you want lingerie, you now know that Victoria’s Secret has a web site. And the shift of consumers to user reviews, blogs, Facebook, and user-generated video are hours not using Google.
Google remains the single most effective form of advertising media — because you only pay when a customer actively searching for your service clicks on your ads, and the costs to generate leads are still far below all other media. Even with escalating competition and slight decreases in demand, PPC Adwords must be part of most marketing budgets. But the trend is one to watch. Consumers are already moving to social media, and soon cell phones with tiny screens will be the main path online. Google is still the leader, but its pace is slowing down.
Ad pundits seem pleased that Bud.tv has kicked the can. The site drew heavy criticism when it launched, and Adweek editor Brian Morrissey has perhaps the best analysis of how Bud.tv failed by trying to be a content portal in a world of disseminated internet entertainment.
We wrote a year ago that one major problem was the lead form, or more accurately the sign-up process. Bud.tv asked visitors to create accounts with a complex age-verification system that included your driver’s license number. The site launched with a $30 million Super Bowl blitz and content by Kevin Spacey’s Triggerstreet and Matt Damon’s LivePlanet, but instead of reaching the goal of 2 million users per month, traffic hovered around 150,000 uniques, then slid. Anheuser-Busch tried to fix the site with help from guerrilla New Media Strategies. Bud.tv eventually was redesigned to give away some content previews. Alas, fail. At last check Alexa gave Bud.tv a traffic ranking of 1,296,883 among all web sites; by comparison, this niche blog’s ranking is 958,442.
There is an important lesson — web sites who hope to build audiences or sales need to give away something of value before asking too much of users in return. Anheuser-Busch was in a tough box, trying to promote beer and so being forced to verify the ages of its participants really before they got to the juicy content. (We hear there were wild girls-on-film parties inside, but never made it past the bouncer.) Registration processes or online lead forms that request too many data fields are a sure way to kill the buzz.
When GodTube.com launched in August 2007 it grabbed 1.7 million unique visitors in three weeks, becoming the fastest-growing site in the U.S. But even though 82.2% of Americans believe there is a heaven, the God-specific branding may have been too niche. The site rebranded Feb. 2 as Tangle.com, a “family-friendly Christian” site with a shift in focus from simply sharing videos to broader social-media connections. To date Alexa and Quantcast show the renaming has not moved traffic volume.
Will the Tangle name broaden the customer base? Or will leaving God behind alienate users? Ah, the perils of picking a brand in a world where diversity rules.
Via Patrick Evans.
In its fourth quarter ended Dec. 31, 2008, Amazon.com, Inc. reported $3.63 billion in North American segment sales, $3.07 billion in international segment sales, $2.89 billion in worldwide electronics and other general merchandise sales …
Oh yes, and Amazon reported no sales data on the Kindle.
This is a noteworthy PR move because analysts and pundits are lauding the Kindle as being a hot-seller despite the fact Amazon has released no sales figures for the e-book device. Amazon pushes the Kindle (now updated in design) on its home page constantly, and crows it will transform how people read books. Stephen Dubner over at Freakonomics, usually an intelligent writer, illustrates the buy-in when he notes: “although Amazon is famously quiet about releasing sales figures, the consensus is that the Kindle has been a big success.”
So let’s do a logic test: Say you are Amazon and you launch a new technology product to great fanfare, and the numbers roll in, so you:
A. release the sales data to boost your stock, since you’ve exceeded expectations;
B. don’t release the data, since true figures wouldn’t meet expectations and thus would hammer your stock.
Hmm. No, really, Amazon, we believe you. Feel free to comment below with the actual Kindle sales results.
Improvements in online video quality are seeding new educational tools. Not only can you watch free lectures from MIT or Stanford, you also occasionally find brilliance from upstart designers. Here’s a wonderful animation of how cheap credit and low interest rates convinced investors to upend capitalism as we know it.
There’s been lots of chatter since The Consumerist pointed out Facebook changed its terms of service so that its license doesn’t expire after users leave. Bloggers cried foul, thinking Facebook wanted to “own” their content forever even if they delete their Facebook accounts.
We told BusinessWeek yesterday that everyone is missing the point: It’s not about Facebook wanting your content. Facebook wants to keep you in a prospect database forever.
It’s simple, folks. Facebook, like Google and YouTube and MySpace and Twitter, is building an enormous data set of millions of consumers, their demographics, interests, and interpersonal connections. Facebook now has a list, if you will, of 175 million people, what they like, and who is just like them. This information is incredibly valuable to marketers.
Of course Facebook does not want to reduce that list. If 5% or 10% of Facebook users delete their accounts per year (as the social media site, like others before it, begins to crest and fade), Facebook would have to continuously update its prospect database. Since much of the value of that data lies in the connections between people — which allow marketers to perform lookalike modeling, proven in studies by AT&T to quintuple response rates to advertising — scrubbing the list of dead accounts would be a royal pain.
The real story here is Facebook is anticipating customer churn so has expanded its legal language as a preemptive strike to keep the data on your relationships, even after you leave. Perhaps Facebook’s execs realize that all social media sites have a limited window of popularity, so it’s best to lock in the customer database value while you’re at the top.
So stop worrying, people. As we told BusinessWeek, Facebook doesn’t want your baby photos. It wants you and the relationships you hold.
Photo: Marco Bellucci
Tomorrow The New York Times technology section and WSJ.com will be reviewing the new Recovery.gov web site, which launched today to showcase how the stimulus funds are being used to perform CPR on our economy. It has some nice touches: Omnipresent web video, registration for email updates, chance to share your personal stories, a timeline of activities. MSNBC will run a puff piece and Rush Limbaugh will have histrionics.
But the real story is advertisers are scared, because Recovery.gov is one more illustration of how large and complex organizations (such as the federal government) are bypassing traditional media sources (CNN and Fox News) to speak directly to the public. And when big players talk to small consumers directly, the old model of third-party interception with advertising gets pushed aside. The issues driving this are manifold:
+ Low-cost mass media — the White House can set up a web site anyone can access for a few thousand dollars.
+ Almost-perfect access to scheduling — news of new information sources travels extremely fluidly, so consumers know almost instantly that a major new source (Recovery.gov) has launched without reading TV Guide.
+ A plethora of free media platforms — YouTube, Twitter, Blogger — give enterprises of any size free video and text publishing tools to set up their own transmissions.
+ Growing consumer comfort in finding, sharing, and adding to source material — perhaps the biggest trend of the past 5 years is people yearning to participate directly in how information is shared.
It’s a lovely move, watching people become more creative with more access to more programming. Except it is squeezing the financial sources that make it all possible. With nary an advertiser in sight.