Ah, SES week. A week filled with parties, free lunches, colorful business cards and the always interesting Google Dance. I learned a lot of interesting things this week – some of which I’ll share today, others of which may merit a full column a bit later on.

In no particular order though, here are some of my observations about SES:

1. A Standing Ovation at Google: When you entered the Google Dance this year, you wear greeted by dozens of Googlers (mostly temp-to-perm client service reps) who gave you a standing ovation and shouted “thank you.” I had two (not surprisingly cynical) observations about this greeting. First, I thought: you graduate from Stanford with honors, and your first job is a temp answering phones by day and applauding by night? Leland must be proud! The second was that the greeting reminded me of the “Arbeit Macht Frei” signs at Auschwitz. The slogan means “work will set you free.” Of course, that was meant to put new arrivals at ease and to shield them from the truth. As Google rolls out a overly-broad Quality Score algorithm that will literally kill thousands of their most loyal and long-standing customers, I couldn’t help feel that the standing ovation I received rang a bit hollow.

2. . . . But Save the White Gloves for the Press. Once past the Stanford cheering section, I waited in line for my little yellow wristband. Here’s the interesting part – at SES in San Jose, I decided to be a good Samaritan and offer a ride to some random folks who were waiting in the 500 person deep line for buses to the Google dance. The guys I pulled out of the crowd ended up being two technology journalists for USA Today (actually, one of them was the guy who wrote the big spread on Danny Sullivan a few weeks ago, the other was once the manager of the first underground radio station in the US – KSAN in Berkeley!). So when a co-worker, the two journalists, and I arrived at the Google Dance, we were suddenly surrounded by several Googlers with clipboards. For a split second, I thought maybe I had been randomly selected for some sort of prize or something. It turns out, however, that they were only interested in our journalist friends.”Can I get you your wristband? Do you need a tour of the party? Is there anyone you want to talk to you? What can I do to help.” In other words, the advertisers who were getting the standing ovation were clearly not as important as the almighty press, who got the white glove treatment.

3. Big Plates and Small Plates. OK, one final Google Dance observation. When I got in line for the food, I noticed that the plates were “appetizer-sized” at best. I mean, these plates made Las Vegas buffet plates look huge. The next day, however, I got to go to lunch at “Oasis” which I guess is the newest Google cafeteria. The plates there were practically serving platters. And every table had fresh bread and a nice cheese plate. They also had a delicious heirloom tomato salad, tuna steaks, and flank steak. Does the size of a plate mean anything? Hmm, you decide.

4. The Show Seemed Dead to Me: OK, as to the show itself, I actually only went to the exhibit hall. I gotta say, it seemed like a ghost town. Especially compared to Ad-Tech San Francisco,SES was virtually empty. It reminded me of a trade show I went to in 2001 after the bubble burst. You kind of wanted to go talk to exhibitors out of pity. One more thing: why does Google exhibit at search trade shows anymore? Does anyone actually go to SES without having a Google account?

5. Domain Parks are Relevant but Affiliates Aren’t. At the DoubleClick party, I had some fun playing bocce with Geoff the Bocce Superstar, but I also had a few minutes of conversation with a very visible Googler (I am going to withhold the name – gotta protect my sources!). I mentioned to him that I thought that if Google was going after MFAs and affiliate sites with their new Quality Score algorithm, it only made sense that they would eventually get rid of the Google Domain Park. After all, if you take the absolute worst affiliate Web site and compare to a virtually blank page with AdSense on it, that only gets traffic by capitalizing on misspellings of a trademarked name, surely the cyber-squatter presents a much worse user experience, right? Well, apparently not. The official Google line I guess is that there are “many domain names” that are common English language terms, and that when someone types one of these terms into the browser bar, they are taken to a page with highly relevant advertisements. I would translate this response a slightly different way: there’s too much money in domain parking for Google to do anything about it.

6. MSN made Yahoo an acquisition offer over Christmas? Another little birdy told me that MSN made Yahoo a formal acquisition offer last Christmas, but Yahoo rejected it because it was too low. I still think that Yahoo and eBay are the most likely merger candidates, but MSN does have a lot of money to throw around. One person also told me that he thought that eBay was a likely acquisition candidate for Google. If that happened, that would be downright scary. Talk about Internet dominance.

7. Should SEMs root for the underdogs? SEMs must have a rough time at trade shows. It’s virtually impossible to really understand the differences between all of them. Moreover, the value they add is often difficult to measure anyway. How much incremental lift can you achieve in your ROI by having some folks in New Jersey do your SEM versus you and a nice Excel spreadsheet? One thing that occurred to me though, is that if the PPC market becomes more diverse in terms of publishers – if Ask, MSN, Yahoo, and maybe one other provider can actually grow as opposed to lose marketshare to Google – the role of an SEM can actually become quite important, simply because it would be very laborious to actually manage 5-6 different user interfaces.

8. Mr. X and the War at Google: A good friend of mine who started at Google in around 2002 (and has now left) had some interesting observations about the war inside Google between “Larry, Sergei and the engineers” and the “business side.” Apparently the engineers think that most marketers are “scum” and should be avoided like the plague. The only legitimate marketers are the big brand advertisers or direct sellers of products. In other words, everyone from affiliates, to lead generation companies, to comparison shopping engineers are nothing but leaches on the system. The business side, of course, disagrees, and thinks that with the right rules in place, AdWords and AdSense should take all comers. Until recently, the business side has been winning. But apparently that is changing, and that’s partly due to the good work the business side has done in attracting more and more big advertisers. Now that the brand advertisers are getting into SEM, the engineers at Google can argue that the financial impact of booting out the “scum marketers” will be minimal if at all. And the good news is, even if the engineers are wrong, the “Quality Score” algorithm is so ambiguous that it can always be changed later on to allow the scum back in to help hit those quarterly numbers!

9. SES Milan? It looks like there are something like 20 SES shows a year now – Milan, London, Germany, Japan, China, New York, Chicago, Miami, San Jose, etc, etc. Is this really necessary? I could see San Jose, New York, London and maybe Japan. But Milan? Maybe that explains some of the low attendance at SES San Jose – burn out!

10. YPN coming soon? Finally, over at the Yahoo booth I was told that YPN was going to get out of beta “very soon” and start kicking AdSense Ass. Of course, I was also told that Panama would be released on August 15th. I’m betting that by February, YPN and Panama will still be ‘in the works.’

2 Comments

  1. Anonymous August 11th, 2006

    I enjoyed your vitriol against Google, and agree with most of your points. I sure hope that their engineer’s smug know-it-all attitude hurts their business.

    However, it is amusing that your whining has reached peak after they ruined your business. I didn’t see such passionate critique of plate sizes while the lead-gen was humming along nicely.

  2. searchquant August 17th, 2006

    Great writing, as usual. With regards to 8 (Mr X and the War at Google), I think there’s another possibility, which is that Google makes more money by activity booting out certain advertisers. The following logic comes from ‘rbacal’ on WMW, who responds to someone who posits that bidding aggressively to get spot #1 is the only surefire way to avoid Google’s QS penalty:

    [Post rbacal quotes before his response:]
    Actually, as far as I can tell, the best insurance against getting hit by the QS seems to be bidding aggressively at spot #1, regardless of cost. Bidders who insisted on being at the top rather than exploring higher return spots down the panel seem to have escaped harm….at least in my relatively small sample of observations. Anyone have info to the contrary?

    [rbacal’s response]
    No. I don’t believe there will be much evidence to the contrary. I think you are correct that bid amount is a critical component (but one that interacts with the QS itself).

    Once you understand the google reasoning, economically, it makes sense. Low bid ads have an “opportunity cost” to google. As such, it’s in their interests to discourage those, UNLESS those ads also supply “quality” to visitors, thus improving the viablity, long term of the program and its reputation to VISITORS.

    The opportunity cost refers to the idea that, from google’s perspective, let’s say there are eight ads for a keyword ranging in bids from .01 cent to $10.00 (that happens in some of the areas I work in).

    By showing 3 low bid ads, you LOWER the probability that a visitor will click on a high bid ad. And you don’t recoup that cost. By getting rid of the 3 low bids, you increase the chances that a high bid will be clicked, and even if the probability increase is small, with a large bid range, google wins (as do we on content if the same conditions hold).

    Google may be willing to show lower bids IF the ads provide “value” in other ways to VISITORS — hence the QS.

    So, QS will “hit” those at the low end, AND particularly those that have junk sites.–>

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David Rodnitzky
David Rodnitzky is founder and CEO of 3Q Digital (formerly PPC Associates), a position he has held since the Company's inception in 2008. Prior to 3Q Digital, he held senior marketing roles at several Internet companies, including Rentals.com (2000-2001), FindLaw (2001-2004), Adteractive (2004-2006), and Mercantila (2007-2008). David currently serves on advisory boards for several companies, including Marin Software, MediaBoost, Mediacause, and a stealth travel start-up. David is a regular speaker at major digital marketing conferences and has contributed to numerous influential publications, including Venture Capital Journal, CNN Radio, Newsweek, Advertising Age, and NPR's Marketplace. David has a B.A. with honors from the University of Chicago and a J.D. with honors from the University of Iowa. In his spare time, David enjoys salmon fishing, hiking, spending time with his family, and watching the Iowa Hawkeyes, not necessarily in that order.