So, I went into my recent AI interview with some excitement, because I expected it would be a completely new experience, and it was…

The Good:

• The AI bot asked me questions (likely seed questions or prompts written by the hiring manager). But, follow-up questions were clearly generated to dive deeper into specific elements of the answers I gave,
• These deeper questions were very specific, in a way that I’ve never experienced with human screening interviews.
• By the third question on a topic, I found myself talking about concepts I was surprised to be discussing at this stage.
• Clearly, I was impressed at this point.

The Bad:

• Shortly after the interview ended, I was surprised to feel short-changed. I am more than a robot, it is my humanity and empathy that steer my curiosity, decision-making, and my creativity. Without the “getting to know you” phase, I was left with the feeling that AI missed learning who I really am.
• I answered the questions well. I did all the things you are supposed to include, specifically naming results/impacts/learnings.
• But, there were never more questions after I did this- meaning, whatever I said as my “wrap up” wasn’t the most important thing.
• I feel like a human HR person would have listened to me say “as a result, I quadrupled top-line revenue in 6 months” an had some follow up questions to make sure they believed it.
• But, the AI bot just moved on.

In Conclusion:

I am certain that AI will play a major role in the hiring process. In my first experience “face to face” with a robot I was thoroughly impressed with how much the questions seemed as if they were the words of a smart person in my exact field. But, I believe there is much more to this than just checking the right boxes. So, while I am excited by the rapid progress it has made, I don’t think I’m ready to hand over the HR keys to an AI robot quite yet.

THEM: “What do you do for a living?”

ME: “Pay per Click Marketing”

THEM:”You market paperclips???”

I first launched a WordPress blog at this same URL over 20 years ago. I did it all myself; the writing, the graphic design, the CSS. I even learned PHP to build my own custom template.

Over the course of twenty years in “the game”, literally everything has changed. Some things changed for the better, some not so much. I have managed the spend of many millions of dollars in ad spend (mostly on Google), trying to help literally thousands of businesses to survive and even prosper. It only seems fitting (and more than a bit cathartic) to resurrect this blog and share some of my thoughts from inside this world, but in a very different universe.

In 2005, I was part of a small team with the ambitious goal of bringing the power of digital marketing to small-to-medium sized businesses (SMBs). This was at a Chicago startup called LocalLaunch. Those days were a lot like the wild west, and it was fun. Phone book ads, newspapers, and direct mail were owned SMB marketing. Owned by some of America’s oldest businesses, they weren’t really looking for things to change.

Back then, most of the internet was funded by national brands buying banner ads (that were basically hardcoded onto publisher websites and showed for all of their visitors for a contracted amount of time. These were fairly complicated transactions to navigate that necessitated large prices to justify.

We sold LocalLaunch to RH Donnelly (think Dex YP) in 2006 and that started the journey…

It’s been over 20 years and I’m not going anywhere. I (again) invite you to follow along on this exciting journey.

According to the latest Comscore data, Yahoo sites still generate the most unique visitors of any internet property (121,962,000 as compared to Google’s 85,685,000). 

This is no surprise, as Yahoo is a content play before anything else.  With thousands and thousands of pages of proprietary content, discussion groups, forums, email, and everything else under the sun, being a search engine has never seemed to be the biggest priority in Sunnyvale.  With all these page views— one would think that Yahoo would reap enormous revenues. 

According to Yahoo’s own finance page on their business, Yahoo posted gross revenues of $1,817,602,000 for the first quarter of 2008.  By dividing gross revenue by the latest Comscore data on unique visitors (extrapolated to be representative of the same 3 month time period), Yahoo appears to have grossed $4.96 per visitor per month.  And, using a 41.5% cost of revenue (calculated using data from the same balance sheet), that would effectively reduce Yahoo’s net profit to $2.90 per user per month.  Yahoo claims to average 3.4 billion page views per day.  That’s 102 billion page views a month.  So, if my math is correct, Yahoo makes about $0.017 per page view.

When you are talking about how much money you make per page view, less than 2 tenths of a cent per page isn’t too good.

Compare this with Google.  By the same calculation, Google posted gross revenues of $5,186,043,000 for the same period.  Divided by the number of users in the Comscore report, adjusted for time, that equates to $20.17 gross, or $11.90 net per user (profit margin being calculated in the same manner).  Good luck finding accurate page view per user data from Google— so, let’s just say it is 2.7B (thanks to SearchEngineWatch for the guess).  That means, by the same calculation, Google makes $0.52 per page view (that’s 30X more per page).

Now, I’ll be the first to admit that this math is absolutely and completely flawed beyond being in any way accurate.  It fails to take into account any variables that exist, including revenue from other sources (content network, partnerships to name a few).  But, I would argue that this analysis is “directionally correct” at the very least, if not true to scale.

Although terribly simplified, this analysis does illustrate the problem Yahoo has.  All the users in the world are worthless if they don’t generate revenue.  That’s why Yahoo’s stock is at $21.45 (as of June 22) and Google’s is $545.21. 

But, don’t count Yahoo out— it takes many years, millions of dedicated users, and billions of dollars to generate the depth of content Yahoo has across its properties.  Search is easy, serving ads is easy.  A recent deal with Google might finally give Yahoo the means to better monetize that traffic.  Combine that with true dedicated usership, and Yahoo still might have a chance to win in the end.

It is possible.

A tidal wave is about to hit PPC advertising and forever change the landscape that has become so familiar. That wave is called demographic targeting. If you haven’t heard the phrase before now, get ready— you will be hearing it a lot very, very soon.

As PPC advertisers (and their representative agencies) grow increasingly more sophisticated, there is no question that the very platforms that provide the media must also evolve or risk extinction. MSN only fanned existing flames when it’s new AdCenter was recently released featuring targeting options including known demographic groups and behavior expectations. But, MSN won’t be alone in offering this functionality for long — expect Yahoo and Google to counter with their own features soon enough.

For certain, demographic targeting is a rich feature. For those less than familiar with it— demographic targeting works by the advertiser choosing a target age group, median income level, area of interest, or other differentiating factors. PPC ads are then only displayed to searchers (or website visitors to other sites displaying these ads) known to meet these criteria.

Want to sell a Mercedes? How about targeting rich males. Want to sell a Toyota Prius? Instead target visitors with an expressed interest in the environment. You get the picture…

Of course, the initial rollouts of demographic targeting functionality in PPC won’t be very sophisticated. Demographic groups will begin broad, (i.e. ‘women over 35′) and get more and more specified as time goes on (i.e. ‘30-35 year old women who like classical music’). While many of the major search properties have for years owned properties that have been collecting rich data about their user bases more than capable of being used in segmenting them into demographic groups for targeting advertisements (think MSN’s Hotmail, Yahoo’s email and groups, and Google’s… well, Google’s been busy in plenty of other ways) most if not all will end up purchasing this data from 3rd party providers.

In the end, demographic targeting will result in higher transaction rates and thereby lower costs for customer/client acquisition. There is little question that displaying ads to a predisposed advertisee will have the desired affect— creating more buyers out of the same size sample group. But, there can also be little question that there will be one more eventuality certain to follow— increased costs per click. However, so long as advertisers see a bump in their ROI, expect adoption to be substantial— and expect demographic targeting in PPC to be here to stay, because it already is.

• AI
• Archive
• Google
• Internet Marketing
• Paperclip Marketing

For a while…

Now, nearly 6 years later, video search is back in the news thanks to the introduction of the ultra-cool iPod Video.
Suddenly, there is an urgent need for digital video by the ones who really matter– the buying public. Who better to bring it to them quickly, efficiently, and indexed to be easily found than the search engines? Not currently. Neither Google or Yahoo have ever invested in Video or Audio recognition applications to the extent that they may have, especially considering how long they have been available. Instead they focused on meta tags and file names, attributes hardly even considered by their website ranking algorithms. Now, they are all frantically scrambling to quickly put the pieces together and capitalize on the newest opportunity that Apple has created for them.

So, who was the first one to really make a play for the space? Believe it or not, it was AOL. This week, AOL purchased Truveo, and while the Truveo system does not conduct actual video recognition, it does go a step farther than anyone else has taken— comparing some attributes of the video file with certain page elements to index it far beyond simple meta tagging and titling.

Meanwhile Google continues to stuggle with it’s fledgling destination on the topic, Google Video.

True video and audio search is a certain eventuality. It is an obvious progression of Internet search, and is likely to impact things in ways we have yet to even imagine. And, it is likely to happen very quickly as most of the technology has been tested, proven and available for years.

In PPC, Larry and Sergey have struck gold. Keyword inflation, as competition continues to excert it’s pressure on bid prices, will undoubtedly continue. With little increase in overhead , Google will continue to reap the rewards (as will those lucky investors who bought in early). Due to strong leadership and a head full of steam, Google will keep pushing the online envelope and will likely remain at the forefront of progress and on the frontier of e-capitalism for some time.

So everything at Google is going great, right?

Well, maybe not everything…

Turns out that a growing population within the Internet marketing community have developed some trepidation regarding the company that swore to “do no evil”. In fact, current buzz has Google looking to learn a thing or two from Bill Gates about reputation management (see, Time Magazine ‘Persons of the Year“). Once universally heralded as the biggest, scariest gorilla in the jungle, a quieter-gentler Microsoft is now learning how to play second fiddle to a search engine (that, it is worth mentioning, is single-handedly the largest corporate evangelist of Microsoft Explorer’s biggest competitor, Firefox).

In recent months, it seems that anti-Google sentiment seems to be running high on the Internet marketing message boards. On any given day, several posts announce conspiracy theories (some new, some old) about Google. Most are focused around a few topics, “Google is trying to artificially inflate click prices”, or “Google gives preference to the big companies”.

Well, guess what folks? They are right. But, before you chalk me up as another agent Mulder, hear me out. Google is trying to raise their click prices, it’s called “increasing revenue”. Before you scold them for it, think. Isn’t it the same thing you are trying to do using their system, for yourself or your clients? And, guess what… Google is giving preference to the big companies. Of course they are, don’t you take special care of your best customers?

People seem very willing to forget that Google is, afterall, a business. A big, public, profitable business with Wall Street’s sharp eagle eye focused firmly on it, at that. They have to constantly push forward to make more and more money. That’s what big, public (not to mention profitable) businesses do. Don’t act so surprised, this isn’t conspiracy— it’s capitalism. And, because they are learning while they are growing, there is opportunity for all along the way. Who knows, keywords may be 10x more expensive in years to come. Then, the market will eventually level itself out when keywords reach a point where businesses don’t see positive returns for advertising them anymore. And, yes, Google will do everything they can do until then to see that they reach that point as quickly as possible. Don’t be surprised, don’t be offended, don’t believe all the conspiracies and other nonsense— just work with what you have and watch your own profitability closely enough to get a little something out of it for yourself.

An article in the latest issue of Wired Magazine (“How Click Fraud Could Swallow the Internet”) has raised a few feathers in the search engine advertising professional community. In fact, discussion of the article has hit front page news on Webmaster World where the focus has primarily been on the possibility of PPC systems eventually migrating to a CPA (cost per acquisition) model. It seems much of the world sees this concept more than any other as possibly holding the key to solving the problem of click fraud.

First, my thoughts on click fraud itself. I have managed many, many PPC campaigns for businesses in every industry imaginable. Some of these businesses have been in markets that are quite competitive, some of them have even been cutthroat industries such as personal injury law. I have seen click fraud, and have worked with Yahoo on multiple occassions in their investigations of claims on behalf of my clients. Like just about everyone else, I have also seen Google regularly and repetitively credit back costs for large numbers of clicks seemingly deemed uncredible (although, as the article amply describes — Google does shroud these refunds in an air of mystery). Even so, I have an extremely hard time believing that the speculative figures so often stated as fact surrounding the prevalance of click fraud are true. Even with proxied bots clicking ads, impression spamming competitors, and splogging (yes, splogging) — my experience with PPC simply can not support claims that fraud makes up such a large percentage of total click volume.

But, reporting on click fraud makes good news. It plays upon people’s fear of Internet scams that the traditional advertising, marketing and even retail communities are so happy to get behind. “Stick with what you know — print advertising, tv, radio… they are safe“, they say.

Don’t believe the hype. PPC advertising works. That’s why in the entire story, written entirely on the subject of the danger of click fraud, the sentence that really caught my eye was: “Pay-per-click is the fastest-growing segment of all advertising, reports the Interactive Advertising Bureau.”

Seeing that in print gave me goosebumps — surely PPC is going to continue to evolve as it matures, certainly combatting click fraud is one element of this that will have to be addressed along the way. But, make no mistake about it — PPC is here to stay.