On Benefits of Microhoo Search Scale, Disagreeing with Hal Varian

I disagree somewhat with Hal Varian's (Google's Chief Economist) criticism of the theory that combining Yahoo and Microsoft in search will lead to improvements based on scale, data, etc.

Statistically, for sure, scale is already high enough that more won't apparently lead to significant improvements in either search performance or ad program performance due to the impact of data on improving relevancy. That's on paper, in the lab.

Off paper, in the real world lab:

  • Yahoo's reported 20% share is fiction. Globally, it's much lower. In the US, the real number is actually lower.
  • Data is highly granular in a number of ways. So to start, Yahoo and Microsoft have different search shares in every language and every country in the world, and different search shares in sub-regions of the world. In many, one or the other currently hold share of 1% or less. By bringing both up well over 1% and closer to say, 3%, you get a significant increase in useful data.
  • Even the tools that Microsoft provides for advertisers will improve markedly with a doubling or tripling of available data across all major markets, because usable data also comes in the form of highly granular data about keywords. Google doesn't have every last useful tool for researching keyword and consumer behavior: Microsoft has and will develop some really useful ones. Currently, as an advertiser trying to use the tools, you get "insufficient data".
  • And though this may stray somewhat from the subject of how to improve a search engine's relevancy... what about something super real-world and practical: running an ad rotation test for a group of keywords and trying to select a winning ad from a field of eight? Isn't that search marketing? Right now, no one is testing very much on any platform other than Google. I suspect they'll be more likely to try tests specific to the Microhoo audience now, rather than just porting all of their consumer feedback driven campaigns over to the Yahoo and Microsoft platforms. The current way is just guessing: really testing in the actual auction you're buying the media in, is more precise.
  • By "now," of course I mean when the Microsoft-Yahoo platform consolidation is complete in around a year's time.
I believe that Varian's assumption is mainly wrong because he's giving his competitors credit for having more consistent share across all major segments than they actually do. Aggregate numbers look impressive, but the information is less consistent as you drill down. Doubling or tripling the available information in any given segment, especially small ones, is bound to be helpful.

To double predictive accuracy, Varian suggests you need "four times as big a sample". Well depending on whether you're looking at it from the standpoint of Microsoft or Yahoo for any given teeny tiny segment, the number of instances where one of them now has "four times as big a sample" is going to be very high. Doubling predictive accuracy on teeny tiny segments - either as a search advertiser or a researcher looking into search trends - is our bread and butter out here. We'll take the "bogus" scale of the Microhoo deal any day.

P.S. I loved Varian's other insights, including the interesting note on the emergence of the "micro-multinational" type of growth company. Though I might have to take a run, at some point, at the recurring Google theme about "communication costs basically going to zero." The costs for collaborative tools have gone close to zero. But...

‘The Most-Introduced Vehicle in America’

Ed Wallace in BusinessWeek on how GM doesn’t understand how to sell cars:

There’s a fundamental rule of a successful business: “underpromise and overdeliver.” That concept has been around since the Studebaker Brothers were building wagons for the Civil War. After the war ended, they codified their business ethic in Studebaker’s motto: “Always give a little more than you promise.” Nothing better sums up GM’s wrongheaded thinking than its execs’ promise that the company will return to technological superiority once they finally bring the new Chevrolet Volt to market. […]

Why won’t it be knocking socks off? Because by the time dealerships actually receive their Volts, the impulse buyers will have been seeing the vehicle for almost three years. To GM’s most cherished buyer demographic, the Volt will be old news by the time the first one hits the streets.

GM could learn a lot from Apple. (Via John Siracusa.)

[Sponsor] Where To? — Find Points of Interest on iPhone/iPod Touch

“Where To?”, the popular points of interest finder for iPhone, is now available in version 2.0 that adds several iPhone OS 3 features. The built-in map displays the results right within the app. Then, the user can quickly make a phone call to the business or visit the website using the integrated web viewer. Check out the FutureTap website for more info including a screencast.

Where To is currently on sale for $0.99 ($2.99 regular price).

Meditations On the Mad Men Season Three Premiere

cuar01a_madmen0806Yesterday I watched the season three premiere of Mad Men. At this point, it’s hard to imagine anyone not being aware that the show will be debuting its third season tonight on AMC. In an advertising bonanza that would flatten anything Don Draper might have imagined, the show has managed to permeate the public consciousness (despite the fact, based on ratings, it seems very few people have actually watched it). Between Banana Republic, Sesame Street, Twitter, and Frank Rich the show has officially become a cultural phenomenon (something that often precedes a jump the shark moment, but let’s hope that between Matthew Weiner strong writing and the huge time lapses between seasons, that moment won’t arrive for at least another season or two).

In today’s column, Rich says the reason we are all obsessed with the show is that in many ways it mirrors the tone of our lives today:

What makes the show powerful is not nostalgia for an America that few want to bring back — where women were most valued as sex objects or subservient housewives, where blacks were, at best, second-class citizens, and where the hedonistic guzzling of gas and gin went unquestioned. Rather, it’s our identification with an America that, for all its serious differences with our own, shares our growing anxiety about the prospect of cataclysmic change. Mad Men is about the dawn of a new era, and we, too, are at such a dawn. And we are uncertain and worried about what comes next.

It is certainly true that less than seven months after January’s triumphant inauguration this country suddenly finds itself currently mired in anxiety, anger, and near-violence. Will the same be true for the characters in the series? Season Two ended during the midst of the Cuban Missile Crisis. Don Draper, having supposedly faced his demons, is reunited with a newly-pregnant Betty, and Peggy, having triumphed over workplace sexism has landed her own corner office. The season Three opener certainly appears to suggest, however, that the more things change the more they stay the same (with one major exception, which I won’t tell you about).

So: What to tell you about the premiere? No details, that’s for sure! (I hate spoilers.) But here are two things to perhaps keep in mind, especially if you are new to the Mad Men fan club and have crammed all the previous episodes into a few weeks of viewing (and therefore haven’t had to suffer any sort of wait to find out the repercussions of Peggy’s pregnancy, or who the woman is that Draper calls while on the fly in Palm Springs). My takeaway: Matthew Weiner does not like resolution. Or the sort of immediate resolution TV viewers have come to expect from regular September season premieres. Be prepared to be patient (and cope with viewer anxiety, I suppose). This, of course, is nothing new – devoted viewers may recall that we were a few episodes into Season Two before all the story lines introduced in Season One had a chance to work themselves out. It appears that trend will continue this season as viewers are dropped into the lives of these characters already in progress.

As for the rising water we’ve seen in all those advertisements? The opener only hints at its meaning. One of my favorite scenes from last season comes at the end of the second-to-last episode “Moutain King’ which closes with Don Draper walking into the Pacific ocean in a sort of metaphoric baptism, only to emerge in the finale a changed and repentant man. Really? After two seasons of Mad Men even the casual fan probably knows better than to think it’s that easy (whether or not Betty has come to a similar conclusion remains to be seen). Draper hints at this lack of reinvention in a line partway through the episode, which struck me as thematic (I will add it to the post later; I am serious about spoilers!). Needless to say, for a show filled with such flawed and complicated characters, it’s safe to assume nothing will be tied up so easily. Or at all. It is this very refusal to resolve things neatly that, despite all its glamor and decadence, is the aspect of the show which most accurately mirrors real life.

In the meantime, while you wait for the 10pm hour, here is a video mashup set to Don Draper reciting parts of Frank O’Hara’s poem Mayakovsky from the collection Meditations on an Emergency (a copy of which pops up in both seasons one and two). It’s also a title which could aptly describe this show, which follows the personal emergencies of its characters against the backdrop a country on the brink of larger catastrophe.


Rachel Maddow Talks to Dick Armey’s Cold Shoulder on MTP

Meet the Press convened its own panel today to discuss this week’s angry town halls and the death panel, Nazi, Tree of Liberty assertions that have accompanied them. Today’s panel consisted of three middle-aged white men and Rachel Maddow (with a drop-in from Charles Rangel). Tom Daschle assures the abrasive tone some of the town halls have taken is merely the sound of Democracy. Senator Coburn (R- OK) says the tone is not about Health Care at all, but fear of loss of control over the government. Rachel Maddow thinks that the Dems are giving up their elected majority to GOP’s like Senator Grassley who are touring the country handing out copies of Glenn Beck’s book. And Dick Army mostly appears tolerantly amused that Maddow has been allowed on the panel at all. Until she starts grilling him, at which point he turns a cold shoulder, literally.

Visit msnbc.com for Breaking News, World News, and News about the Economy

Maddow Battles Dick Armey In “Meet The Press” Debut (VIDEO)

Rachel Maddow appeared on "Meet the Press" for the first time on Sunday, August 16th. On a panel with former Senate Majority Leader Tom Daschle (D-S.D.), former House Majority Leader Dick Armey (R-Texas), and Sen. Tom Coburn (R-Okla.), the MSNBC host more than held her own.

When Armey said he took no responsibility "whatsoever" for the virulent protests against President Obama and compared it to MoveOn.org running an ad comparing President Bush to Hitler, Maddow pointed out that that never actually happened. Later she elaborated, pointing out that major conservative groups had speakers going around the country comparing Obama to Hitler, Pol Pot and Stalin and asking supporters to put the fear of God in their congresspeople. When Armey said that he denounced violence, Maddow pointed out that his organization, FreedomWorks, was in a coalition whose website was promoting the violent fight at a Tampa town hall as a good thing.

Maddow also questioned President Obama for not getting more personally involved in the legislation while Sen. Max Baucus (D-Mont.) is letting Republicans on the Senate Finance Committee have an equal say even though a huge Democratic majority was voted in in November.