Viewing entries tagged
Michael Arrington

The Changing AdWords, Paid Search Landscape - And What it Means

Interesting data out of Comscore and TechCrunch this morning that points to the slowing growth of paid search activity despite a rise in search activity. Comscore believes it is a consequence of longer search queries, but Michael Arrington has a larger picture answer (which I agree with):

U.S. Search queries are up 68% in the last year, but paid clicks are up only 18% in the same period...

he reason there are less ads on search results, I believe, is that there are, simply, less advertisers. Far less. Big spenders, the category leaders, are just gone. Sharper Image, Wickes Furniture, Levitz, Foot Locker, Wilson’s Leather, Ann Taylor, Zales, Mervyn’s, Macy’s, Circuit City and a ton of other retailers are either shutting down entirely or closing lots of stores. And more are on the way. All of these companies used to spend tons of money on paid search ads. Those budgets don’t exist any more.

Combine that with the fact that, as any paid search advertiser knows, it is downright hard to spend more money effectively. SMBs face the same problem: scaling paid search spend in both click volume and conversions.

And - let's not forget that the affiliate landscape is rapidly changing. Affiliates once accounted for a major portion of AdWords spend (either directly or by indirectly bloating the prices of keywords). As major affiliate programs have changed their policies (ie Amazin prohibiting paid search), an entire tier of sophisticated marketers disappeared.

So in a move that certainly is not coincidental, Google yesterday announced that AdWords advertisers can now bid on brand terms. Wow. That is a very significant change - both directionally and operationally (for advertisers and Google alike).

Brands spend countless hours protecting themselves. And that, until now, has included protecting themselves in paid search. Meanwhile, competitors or savvy arbitragers (affiliates, etc) have long capitalized on branded keywords. Early on at eBay, for instance, we had to specifically prohibit bidding on eBay's brand - which included numerous derivatives of eBay, Half.com, etc.

I am sure Google has operational reasons to allow brand bidding: it is both messy and intensive to protect the brand names (and not always accurate or fair). But this is clearly a move that is intended to drive revenue by reopening high-traffic keywords.

Expect related CPCs to rise, brands to complain loudly, and affiliates to scramble immediately.

WWDC 2008 Starting, Twitter Already Struggling (TechCrunch Too)

Twitter is already struggling to stay afloat as the tech world buzzes about Apples WWDC 2008... and Steve Jobs hasn't even taken the stage yet. Perhaps Twitter shouldn't have made their "we're ready" announcement yesterday (or as Michael Arrington noted, "Tempted Fate")?

Twhirl isn't passing data in either direction and Twitter.com is moving remarkably slow.

That said, TechCrunch is down as well...

Why Twitter Needs It's Power Users: They Play Host to Newbies

In response to Om Malik's proposal that Twitter tax it's top users with usage fees, I argued that Twitter needs power users like Michael Arrington, Robert Scoble, and Loic Lemeur. Loic then shared the article via Twitter, sparking an influx of Twitter friend requests and direct messages... which lead me to a point that, in hindsight, is very obvious: Power users are essential to Twitter for more than just their content... Power users drive connections.

We all agree that there is nothing more awkward than arriving somewhere where we don't know or recognize anybody. If you come to Twitter without a close set of friends - it's an empty, useless place.

But users like Scoble and Arrington are your MCs. They play host to your experience on Twitter. Even if you don't particularly love their content, they update frequently and demonstrate that there is activity and interaction. The other critical role of a host is to make introductions - and that is precisely what these users do. Some times it's direct - like the example where Loic referred his followers to my blog post (and with a @berecruited comment). But most often the introductions are indirect. @techcruch has nearly 20,000 followers - which equates to 20,000 users who have somewhat relevant interests. That's 20,000 pivot points and 20,000 more users to act as hosts to new conversations and communities.

Update (and a future post to come) - 9:31 pst, 5/30/2008

VentureBeat has a post saying that Twitter doesn't blame Ruby's infrastructure, they blame power users like Scoble. The following quote is from Twitter developer Alex Payne. His point is accurate - but I would be *very* cautious of placing blame. If Twitter (which we should all remember is still in it's infancy) can't handle a handful of power-users, they are going to be in real trouble:

The events that hit our system the hardest are generally when “popular” users - that is, users with large numbers of followers and people they’re following - perform a number of actions in rapid succession. This usually results in a number of big queries that pile up in our database(s). Not running scripts to follow thousands of users at a time would be a help, but that’s behavior we have to limit on our side.

Twitter Needs Its Power Users and They Need Twitter's Data

Twitter and FriendFeed have sparked serious controversy over the last few weeks – and now the controversy is surrounding super users like Robert Scoble.

As Twitter searches for a business model and stability, Om Malik argued that perhaps both can be achieved by charging super users like Scoble (@scoble), Michael Arrington (@techcrunch), and Loic Lemeur (@loiclemeur).

I completely disagree. Scoble, Arrington, Loic and the countless other web 2.0 celebrities (Guy, Calacanis, etc) are Twitter evangelists and the type of free marketing that most companies pay for via traditional marketing… they are unpaid spokesmen. Why would Twitter turn around and charge them for usage?

Nearly 20,000 people follow @techcrunch – meaning that 20,000 users find Arrington’s tweets interesting and useful. Does Twitter need @techcrunch more than he needs the platform? It’s tough to argue at this point – but I can argue with certainty that Twitter needed Arrington and other powerful early adopters at launch. Turning around to selectively charge him (as a power user) not only strikes me as hypocritical - it affects 20,000 ordinary users whose first experiences with Twitter likely came from power users.

Moreover, power users on Twitter are only power users because their audience enables - dare I say demands - their frequent postings. I am a big believer that markets correct themselves. If Scoble twitters too frequently or too obnoxiously, he will lose followers.

Instead of charging users for usage, I am a firm believe that Twitter should charge users for data… and perhaps this is where the business model arrives from power users. Let’s use @techcrunch as a continued example. Arrington often pushes out new posts through his Twitter account - reaching 20,000 new potential readers. But, based on my experience on a much smaller scale, he likely has little to no understanding of what happens next. Users start coming in from so many disparate sources that measuring the impact of his Twittering is damn difficult (or even currently impossible). Would Arrington pay for more detailed information about what happens after the tweet? How about relevant on-Twitter search data? Or competition?

I know that I would.

Equally important - I believe that this sort of usage would be good for Twitter (beyond the revenue) as it makes its users more effective communicators. By understanding my usage and its impact, I am likely to use Twitter more often and more effectively. Another example of the market correcting itself.

Compete has taken an interesting step into charging per-query, but I think the solution is likely a monthly charge.