Archives for posts with tag: Google

Advertisers and publishers have been telling us for over a decade that they need to track everything we do, and gather ever more and more data about us, so they can show us “relevant ads” – ads that we want to see, about things that we’re interested in.

And after all this time, and all the data they’ve collected, they’re still really bad at it!

They’re showing us more and more ads, but they’re not relevant for the viewer, and they don’t sell product for the advertiser, so it seems like:

  • users have given up their privacy for no benefit;
  • the advertiser’s money is just going down the drain;
  • the ad networks, despite their ineffectiveness, are getting rich!

To illustrate this, I’ll share some examples from Facebook. They have an option on each ad to show “Why am I seeing this ad?” Lately, I’ve been tapping on this option (right before I hide all ads from that advertiser, forever):

I’ll start with a doozy

NSW Cancer Council in Beijing

A couple of things about this:

  • I don’t live in Beijing, and I haven’t recently been there. Facebook knows where I live, because I’ve specifically told them I live in Sydney
  • Why would the Cancer Council NSW – an Australian state – be looking to advertise to people “who live in Beijing?”

I don’t believe that Cancer Council NSW wanted to advertise to people in Beijing; that makes no sense at all! But they’re being charged money for Facebook to present ads to people it thinks (wrongly, in this case) are in Beijing. Either that, or Facebook is lying to me about why I’m seeing this ad.

Or, alternatively, that they’re not lying, per se, but instead their systems are screwed up and are just showing incorrect data… because they’re incompetent. You may think “incompetent” is too strong a word, but this is actually Facebook’s core business – knowing their viewers and matching ads to them – so any errors in their core systems are important problems.

Here’s another series of screenshots. See if you can find a theme:

Now I live in Dubai
Now in live in UAE (still in Dubai, perhaps?)
Sharjah is also in UAE
UAE! UAE! UAE!
Sharhaj again!

I should point out that, although I’ve travelled a lot, I’ve never even been to Sharjah, never lived in Dubai, and the only time I’ve ever spent in Dubai or the United Arab Emirates has been during refuelling stopovers while flying to/from Europe.

Plus, Facebook knows that I live in Sydney, Australia, because I’ve told them that!

Also, like the Cancer Council NSW targeting people in Beijing, why would Australians for Solar want to target people who live in Sharjah? Again, I find that hard to believe.

After more than 10 years of collecting our data, seriously, this is the best they can do? To me, it all looks like a scam.

The publishers tell the viewers – you and me – that they need our data to show us relevant ads, but the reality is that they just spray whatever ads they have and don’t actually care if they’re relevant or not, because they get paid anyway.

And they tell the advertisers that the ads will be shown to only people who meet the criteria the advertiser chooses, but that’s just bullshit too. And they charge the advertiser every time it gets shown.

Like all scams, it can’t go on forever, and I think we’re getting close to the point where both the viewers and the advertisers have cottoned on to the scam, and no longer want to play this game.

I really hope so!

Advertisements

Note: This is part of a multi-part post about advertising. See “All About Advertising” for the start of the series, and for links to the other parts.

Type 1: “Yellow Pages” Advertising

This is for customers who are actively looking to buy; maybe not right this second, but they’re in buying mode and are looking at options. In the past, they would have grabbed the Yellow Pages, or looked in the classified ads, or gone to specialist stores; these days, the first stop is usually Google.

Google

Google is seen as a very successful advertising company and, by any economic measure, that is certainly the case. But do they actually do advertising well?

When Google entered the search arena, they didn’t know how they were going to monetise their search results. Eventually, with their acquisition of AdWords, they figured out how to provide relevant ads next to customers’ searches. These were non-intrusive enough for customers who were just doing general web searches but, at the same time, helpful enough for people who where looking for something to “buy.” Advertisers liked that they only paid for ads that were clicked on, and not for each display. The combination of these aspects made everyone happy, and it made Google very rich.

That was 10 years ago. The world has moved on; competitors offer the same benefits to customers and advertisers alike. However, the model hasn’t progressed. Google (and Bing, Yahoo, Baidu, etc.) still specialise in providing links to other sites, rather than satisfying the customer’s wants. But other sites do a much better job: Kayak, for example, tries to provide customers with relevant information for them to actually buy what they’re looking for. There are, in fact, many travel-related sites that do a very good job of providing relevant results complete with: prices, availability, close alternatives, descriptions, photos, customer reviews and, importantly, the opportunity to actually purchase their selection from within the site. See also: Bookings.com, Skyseeker.com, Expedia.com, etc.

It’s interesting to note that all these examples have their own smartphone apps. Customers are learning that, instead of doing a generalised search on Google, they can go directly to these apps and get the actual results they want and an easy way to purchase their chosen result.

Similar sites exist in all sorts of categories: Amazon for books, DVDs, music, and much more; iTunes for music, TV shows, movies and apps; carsales.com for cars; and so on.

If a customer is an infrequent buyer, they can go to Google and find out which site(s) provide the information they want, and then get there by a link from Google. If they are a more-frequent buyer, they often learn to go directly to the relevant site(s)/app(s).

In the PC era, everyone (except Apple) ran the same operating system (OS) and, therefore, the same software. So PC manufacturers could only differentiate themselves based on one or more of: hardware specs, price, etc.*

This mentality has carried over into the smartphone (and, now, tablet) arena. However, these areas are different from the PC world because these devices don’t all run the same OS, and, therefore, don’t all run the same software. It’s actually the software that people want; it’s the software that allows people to do what they want, whether it’s update their status on Facebook, check their mail, play Angry Birds, or whatever.

This is why app stores are so important, and why attracting developers to write software for a particular OS is so important.

Apple obviously gets it; they should, they’ve been here before. The other phone manufacturers don’t, perhaps because they weren’t competing on software in the “feature phone” era. And the PC manufacturers, such as Dell, HP and Lenovo, that are trying to compete in this area, still seem to be operating as if the OS/software combination was available to all.

Maybe HP, with their acquisition of Palm, gets it too.

As for Microsoft and Google? Google thinks it is in Microsoft’s PC position, and Microsoft thinks it should be, and one day will be.

But no-one is likely to end up with a Microsoft-like share of the smartphone/tablet/ebook/music player market. The general consensus seems to be that three or four OSs will share domination for the foreseeable future.

* Ok, not all PCs ran the same software—there were minimum specs for the newest software at any one time—but you know what I mean.

With the release of Safari 5, Apple has added two very interesting things, Reader and extensions, both of which directly attack Google’s main (some would say only) business – web-based advertising.

Firstly, Reader. Reader allows you to read online articles in a continuous, clutter-free view, much like the javascript utility Readability. Reader places an icon prominently in the Address Bar which, when pressed, displays just the text of the article, nicely formatted, in a scrollable “page” overlaid in front of the original page, which it blackens out to de-emphasise it.

As Apple themselves say, “Reader removes annoying ads and other visual distractions from online articles.” [Emphasis added] How does this affect Google? By presenting articles in this way, readers effectively don’t get to see ads and, if they don’t see the ads, they won’t click on them. No clicks equals no money for Google. (As an aside, no clicks also equals no money for Bing or Yahoo, but I think they’re just collateral damage. As for the site’s publisher, who is also affected by this, I’ll get to that in a moment.)

The second thing Apple did was allow third parties to write extensions to Safari. Based on the most popular extensions to other browsers such as Firefox and Chrome, I would expect that two of the more popular extensions will be ad blockers and Flash blockers. (There is already an excellent Flash blocker, ClicktoFlash, for Safari, but I expect that either it or new Flash blockers will be written using the new extension API.) I am sure that Apple is not shedding any tears at the prospect of more people blocking Flash in Safari.

So, adding support for extensions will surely have the same effect as Reader – it will reduce the number of ads being displayed, and therefore clicked on, on web sites seen with Safari – but will be more generalised (i.e. not just article-type pages).

Is this really an “attack”?

Apple must know the effects that both these decisions will have on Google’s ability to effectively display ads, and to monetise the ads that do get displayed. What makes it particularly interesting, though, is that neither is strictly necessary.

You could argue that adding extensions is just bringing Safari up to parity with Firefox, Chrome and IE, all of which have had extensions for a long time. But extensions are a convenience, not a necessity, in a browser; Safari could have continued on without them. There has not been any kind of push recently to have them included in Safari, so it really is Apple’s choice to include them.

Reader is even more of an obvious attack. Readability gives much the same functionality and, as it is a javascript applet, it already worked with earlier versions of Safari. No other browser offers similar functionality out of the box. The decision to make and include it, especially so prominently, is, therefore, a direct attack on Google’s cash cow, in much the same way that Google Docs is a direct attack by Google on Microsoft’s cash cow in MS Office.

The object of the exercise seems to be to reduce the amount of money Google makes. The collateral damage to Microsoft and Yahoo is really of no concern to Apple at all.

But what about web publishers, many of whom rely on ad clicks for revenue? Fortunately (from Apple’s perspective), there are two ways web publishers can still earn money for their work:

  1. They can make an app and sell it on the App Store, and make money directly from sales; or
  2. They can make an app and give it away for free through the App Store, and make money from ads embedded in the app. These ads will, of course, not be affected by the changes to Safari. Publishers can choose Apple’s iAds, or any other ad distribution network, such as Google’s AdMob.

If Apple really is going after Google’s sources of money, though, I’d expect to see some change(s) that would hamstring AdMob. Other ad distribution networks, such as  Millennial Media, AOL/Platform-A’s Third Screen Media , Microsoft’s MSN Ad Network and Jumptap may or may not be collateral damage from any such change but, again, I don’t see Apple shedding any tears about that.

What Now?

Apple has several successful business: its Mac business, iPods and iTunes, the iPhone and its App Store, and now the iPad. Each of these generate significant revenues for Apple, and each faces already-intense competition. It would be hard for Google to attack any of these businesses in a way that existing competitors haven’t.

Google, though, really has only one significant revenue stream, online advertising. Its foray into Android was meant to secure it a foothold for advertising on mobile devices, so that revenue stream would continue on what will undoubtedly be the next major platform for computing – the “next big thing,” if you will.

If we take Steve Jobs at his word and that the relationship between Apple and Google was fine until, “We did not enter the search business. [Google] entered the phone business,” well, Google might end up regretting its decision, and might find to its dismay that it has bitten off more than it can chew.

[Update]: Apple has announced changes to their analytics rules that do, indeed, hamstring AdMob (and MSN Ad Network)