The real reason Google will fail(altgate.com)
altgate.com
The real reason Google will fail
http://altgate.com/blog/2011/01/real-reason-google-may-fail.html
17 comments
> With 8% of surfers clicking 87% of ads (can't find the link, it was on here a while ago)
http://news.ycombinator.com/item?id=2101163
As many people pointed out, that study was relavent to "display ads" only, so Google's context ads aren't really in that same boat.
http://news.ycombinator.com/item?id=2101163
As many people pointed out, that study was relavent to "display ads" only, so Google's context ads aren't really in that same boat.
but google isn't just google search anymore, so even if some competitor comes up with a "better advertising model" will they be implementing it in many domains (search, free email client, youtube) at once?
Google has a leg up by virtue of the fact it could deploy any new product massively and immediately, but that barrier to entry is hardly insurmountable. It just means the new paradigm would have to be significantly better than the current one, for the following three groups:
1) Advertisers. Companies would need to see a significant benefit to moving to the new platform.
2) Site owners. Either by virtue of UI or increased revenue, a new platform would have to offer a significant advantage to site owners to spur adoption.
3) Users. This one's basically optional, and included in 2). A new advertising platform would have to be unobtrusive enough to not piss off users drastically more than current ads, but a strong enough showing in 1 & 2 would make that less important. Ideally, a new platform would offer ads that users want to see, by virtue of being either entertaining, relevant, or both. See movie previews in theatres for a good example of this.
1) Advertisers. Companies would need to see a significant benefit to moving to the new platform.
2) Site owners. Either by virtue of UI or increased revenue, a new platform would have to offer a significant advantage to site owners to spur adoption.
3) Users. This one's basically optional, and included in 2). A new advertising platform would have to be unobtrusive enough to not piss off users drastically more than current ads, but a strong enough showing in 1 & 2 would make that less important. Ideally, a new platform would offer ads that users want to see, by virtue of being either entertaining, relevant, or both. See movie previews in theatres for a good example of this.
Google is still "just ads" even if they do have other services and popular properties to put those ads on, which is why someone else's better solution would be a threat.
Does the next AdWords/AdSense need YouTube to succeed? No.
Does the next AdWords/AdSense need YouTube to succeed? No.
But this "just ads" is really widespread, when someone will come with a better solution, until they reach even 1% of what Google has, Google will come up with a better solution :) And no one would like to switch from expert like Google to some new guy
Lots of companies used to be really widespread, now they're dead or dying - AOL, Yahoo, Digg, MySpace, Altavista, etc.
Google will have plenty of opportunity to fight for their position in the next round. Some companies can win that fight again and some can't, no way to know which category Google or anyone else falls in until after the fact.
Google will have plenty of opportunity to fight for their position in the next round. Some companies can win that fight again and some can't, no way to know which category Google or anyone else falls in until after the fact.
Yes, there is always probability left for someone new to takeover. But it is really small, especially in this case. At least for now. While Google is making really smart strategic moves like android and chrome. And yes, Google will have LOTS of advantages in the next round for the position.
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Financially speaking, Google is very much "just search".
The key point is that click fraud will be the downfall of Google, not users' switching to a different search engine. I disagree. The beauty of Google's ad model is that it's extremely sensitive to market forces. This means that click fraud probably won't matter to most advertisers—it's just priced into the ads. If 25% of clicks are fraud, then ads will be approximately 25% cheaper than they would be if there was no click fraud.
A major media or government expose on click fraud could cause Google short term problems, but there are lots of advertisers who are addicted to Google's traffic. If they stop buying it, where will they go?
I'm sure there are some edge cases where click fraud is a serious problem for individual advertisers, but Google can likely address those more effectively because they should be easier to spot.
My second though is that Google has amazing resources available to combat click fraud. Who else is going to do a better job than they will? Nobody has at much at stake as they do.
A major media or government expose on click fraud could cause Google short term problems, but there are lots of advertisers who are addicted to Google's traffic. If they stop buying it, where will they go?
I'm sure there are some edge cases where click fraud is a serious problem for individual advertisers, but Google can likely address those more effectively because they should be easier to spot.
My second though is that Google has amazing resources available to combat click fraud. Who else is going to do a better job than they will? Nobody has at much at stake as they do.
I think you're right that in aggregate it doesn't matter. There are enough people willing to put up with it for Google to be impressively profitable.
But sign up for an AdWords account, turn on the display network, and then tell me click fraud doesn't matter when some site in India takes half your advertising budget for the day. Google isn't as smart as everyone assumes.
In my experience, it's not an edge case - it's common and Google doesn't know or care about it if you're not spending the $10k per month they require to actually talk to a person. You just have to suck it up and not allow ads to be automatically placed.
But sign up for an AdWords account, turn on the display network, and then tell me click fraud doesn't matter when some site in India takes half your advertising budget for the day. Google isn't as smart as everyone assumes.
In my experience, it's not an edge case - it's common and Google doesn't know or care about it if you're not spending the $10k per month they require to actually talk to a person. You just have to suck it up and not allow ads to be automatically placed.
Exactly. Click fraud is just part of the cost of doing business, like shoplifting for a retail store. The problem is that the individual stores don't have a lot of control over the level of fraud that Google will tolerate. There's a big difference between stealing a Slim Jim from the 7-11 and stealing a diamond necklace from Tiffany's. If you are successful on AdWords it's only a matter of time until the fraudsters realize it and leech on your success.
Chris Dixon just made this point on Twitter. http://twitter.com/#!/cdixon/status/26679729247485952 Advertisers who optimize for CPA pay for this less (but not zero since CPA is in arrears). The publishers are the ones that pay the most. Hmmm.
So a company that sells a solution to click fraud says there is a lot of click fraud. Wow, that's really surprising.
Even if there is significant click fraud, which I personally doubt, it still has to be really massive to destroy the ROI of Google Adwords campaigns.
Even if there is significant click fraud, which I personally doubt, it still has to be really massive to destroy the ROI of Google Adwords campaigns.
Am I the only one that only uses Google as I'm about to describe? With very few exceptions, I only search Google for specific things I know exist. For example, I will search for the name of a specific restaurant, a famous person, or the name of a song. I rarely see spam because I rarely search for blanket terms like "prescription drugs," "video camera," "news," etc. I have never noticed a decrease in the quality of Google results (although I do think the design of the results page has gotten less useful).
I guess about a month ago, there was a blog like "Sacked by Google algorithm". If the author of the blog read this, i guess he would've changed his mind.
I disagree with all reasons which may lead to Google's fail. Google's results are getting better and better, in 30% cases, it is almost first result what I've been looking for, in 80%, it is in the first page. If i don't see what i want in the fist page, i change the search query. Instant is really helpful in getting the right search query.
I disagree with all reasons which may lead to Google's fail. Google's results are getting better and better, in 30% cases, it is almost first result what I've been looking for, in 80%, it is in the first page. If i don't see what i want in the fist page, i change the search query. Instant is really helpful in getting the right search query.
I dont think either clickfraud or search quality is as big of a threat long term to google as is their monolithic nature. So far google has refused to open up programmatic access to
a) The data that they index
b) The metadata that gets generated on top of the data
c) The user context available for individuals based on their online activity.
As the economic value of the above three entities grows, the financial incentives to prove the above three things also grow. I believe people/companies need the above three things to build compelling online applications. In the long term if google refuses to provide context + data + metadata someone else will step in to fill the gap.
I clicked through to the Click Forensics site to try to understand where they got the 20% fraud number from. It is not there. There is a press release but no methodology or anything else but the bare number.
Understand I do think they are doing sound work that could identify fraud. They use a learning engine on data like IP, user agent, referrer, and post-click behavior, and extract features.
What's really missing is distinguishing fraud from what they call low value, unlikely to convert clicks. You might be able to uncover fraudulent behavior patterns as opposed to crappy inbound links. But what is the ratio? What is the method? I looked everywhere for this without reading and watching their marketing sessions...
Understand I do think they are doing sound work that could identify fraud. They use a learning engine on data like IP, user agent, referrer, and post-click behavior, and extract features.
What's really missing is distinguishing fraud from what they call low value, unlikely to convert clicks. You might be able to uncover fraudulent behavior patterns as opposed to crappy inbound links. But what is the ratio? What is the method? I looked everywhere for this without reading and watching their marketing sessions...
Sure is a lot of "google's in trouble" chatter in the echo chamber the last couple weeks. All because of a couple of subjective search tests?
Honestly, if you want to spin a good "Google collapse" yarn, start with how advertising is a derivative of sales and talk that up in to a bubble of overvalue bursting, that's at least sort of believable.
Way too much talent and they have too many things they are exploring. They are a one trick pony still but I suspect they'll find some followup acts. If they could crack medical care or put some serious energy in to the salesforce.com type space of enterprise apps... it could be a different kind of company than the world has ever seen.
Honestly, if you want to spin a good "Google collapse" yarn, start with how advertising is a derivative of sales and talk that up in to a bubble of overvalue bursting, that's at least sort of believable.
Way too much talent and they have too many things they are exploring. They are a one trick pony still but I suspect they'll find some followup acts. If they could crack medical care or put some serious energy in to the salesforce.com type space of enterprise apps... it could be a different kind of company than the world has ever seen.
I hate to ruin the party. Google can't fail. Even if they are or become susceptible to something, they have already succeeded tremendously. I really dislike contrarianism for it's sake.
Can't fail? The industry is littered with companies that were once household names...
Yes: can't fail. They've already won. They may stop being #1, but they've entirely changed changed the game. The Google legacy will live on.
I know what you mean, and I'm not trying to start a war of semantics. My point is given what Google has already done they can only be rightly called successful. I wouldn't consider AOL a failure; nor would I consider Microsoft a failure; nor Facebook, even if something bigger a better comes along (and, in time, I think it will).
I know what you mean, and I'm not trying to start a war of semantics. My point is given what Google has already done they can only be rightly called successful. I wouldn't consider AOL a failure; nor would I consider Microsoft a failure; nor Facebook, even if something bigger a better comes along (and, in time, I think it will).
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Only danger for Google is Facebook, in my opinion. Only they have potential to compete with Google in ads arena
I agree completely. Let's say I'm an advertiser. I can put my ads next to a wall of search results, on some random blogs, etc... OR I can put my ads next to the photos, videos and profiles of the target customer's friends and relatives. Facebook allows an advertisers to tap directly into potential customer's lives, associating themselves directly.
Plus, fb has nearly perfect demographic information. If I want to advertise ONLY to divorced single moms, ages 35-45 in Cleveland who have birthdays in December, and identify as republican, I've got all that info right there on fb. Google can only guess.
Plus, fb has nearly perfect demographic information. If I want to advertise ONLY to divorced single moms, ages 35-45 in Cleveland who have birthdays in December, and identify as republican, I've got all that info right there on fb. Google can only guess.
Good point. Because of the user profile, FB can say with greater certainty that an ad was clicked on by a real person.
Despite that, they can display ads with bigger accuracy. They have all info about users. But Google has made a very precise step with android. And anyone who would like to compete with them in this arena is still FAR behind.
I just got a ping back from this site on my original post.
http://www.answersinsurance.com/life_insurance/why-should-yo...
(Don't click on any ads)
Awesome!
http://www.answersinsurance.com/life_insurance/why-should-yo...
(Don't click on any ads)
Awesome!
As others have mentioned, this is priced into CPC. An increase in fraud will push more people to CPA.
Remember: Google does not want click fraud. Yes they share in the revenue, But it is detrimental. The goal of google is: Sell ads, sell the fact that google ads = profit for your site. In reality having insane click fraud is ok, as long as everyone is happy. Obviously people stop doing business with google if click fraud gets rampant.
The only question is: Is most click fraud happening on google, or other advertisers? This could be where google succeeds, "we have 10% of our competitor's click fraud, we are the trusted network"
The only question is: Is most click fraud happening on google, or other advertisers? This could be where google succeeds, "we have 10% of our competitor's click fraud, we are the trusted network"
Google had better do something soon about this, but they're damned if they do (cite the AOL experience noted in the piece) and doubly damned if they don't. Wouldn't like to be in their position...
Your title: "The Real Reason Google Will Fail"
A bit sensationalistic, no? Click fraud is a problem, but not a huge one. It's always been a fact on the Internet, and it's not going anywhere. It's priced into the cost of ads. More important, I think, is the unsustainability of the current model itself. With 8% of surfers clicking 87% of ads (can't find the link, it was on here a while ago), and those 8% being an undesirable market, we're going to have to move towards impressions, rather than clickthroughs. Some sites have moved towards this model, and it sucks. The mandatory ads before Youtube videos are a prime example of this. Whereas AdSense is almost impossibly profitable considering how unobtrusive the ads are, the model we are moving toward represents a significant decrease in user experience.
This, more than anything, represents a potential hazard for Google. Just as Search sucked in '98, advertising is far from solved. Someone will come up with a better advertising model, and it won't be Google. Google better hope they can acquire them before Apple does, or before they decide to pull a Google themselves and stay independent.