Google Knows How to Flirt

Jim Morris

6/15/2005

Do you hate advertising? Do you zap TV commercials? How much would you pay for a magazine with all the ads removed? Do you lie about yourself to Internet dating services? How much should you spend advertising a $100 item? Do you search for rare books and music? Questions like this are important to companies like Google that are using the Internet to revolutionize advertising.

Advertising is as old as sex! A bird’s song, a lightening bug’s light, a stink bug’s stink, and a peacock’s tail are advertisements.  Each animal uses signaling to find the opposite sex. The lightening bug’s light is like a classified ad; it says “I’m here and available.” The peacock’s tail, on the other hand, is like a very expensive brand ad; it says “I am so healthy I can afford to waste energy on this amazing, but useless display.” It’s like Superbowl ads that cost $5 million per minute. If a company is spending all that money on an ad, they must have a good product. Brand ads can make even useless things attractive and fashionable. When humans advertise themselves it’s called flirting, “a universal and essential aspect of human interaction,” according to Oxford’s Social Issues Research Centre (SIRC).[1]

Our communications infrastructure is changing rapidly and will be different in twenty years. Traditional broadcasting will have declined, replaced by Internet services that make information—whether text, audio, or video—available on demand. With the exception of things you insist on seeing as they happen, such as a Steelers’ game, you will never need to schedule a broadcast viewing. You will never have to watch a commercial.

The advertising business is going to change as the Internet displaces other media; Google is only the beginning. In the following sections I’ll suggest three advertising principles that should be followed:

  • Use two-way communication to target and tailor messages to customers.
  • Don’t force messages on the viewers, they have the power now.
  • Sell a wider selection of things to an increasing fragmented audience.

 

Choose the Right Target

The SIRC suggests the obvious: “Don’t flirt with people unlikely to return your interest.” Broadcast advertisers are relatively blind so can’t apply such a rule effectively. John Wanamaker, the father of modern advertising famously said, “Half the money I spend on advertising is wasted; the trouble is, I don't know which half.”

That needn’t be true anymore because the Internet is a two-way medium. This allows ads to be targeted more effectively because the viewer can signal what they might be interested in. When you type in a search term like “sore heel” to Google, it guesses that you might be interested in arch supports. Actually, Google itself doesn’t have to guess; its advertisers do. A seller of arch supports contacts Google and says, “Whenever someone inquires about sore heels, arch supports, running, podiatry, or plantar fasciitis, please show them my ad. In the past, the seller could only advertise in magazines for runners and podiatrists and hope sore heel suffers read those magazines.

Someday your TiVo might say, “Since you’re watching Law and Order, you might want to watch CSI; 72% of Law and Order viewers also like CSI.” It might also say, “Consider going to Duquesne Law School.”

The targeting of ads can be more effective if the advertisers know more about you, for example, whether you’ve already bought some arch supports; but this raises the privacy issue. People don’t seem to mind when Amazon.com suggests books to them, but Google’s efforts to collect information about its clients seems to raise alarms. While I look forward to receiving an online newspaper titled, “The Jim Morris Gazette,” containing precisely the news and information I need and don’t already know, others reading a copy of it may learn more about me than I want them to know. We were anonymous in the broadcast media; now we’re not.

The exploitation of two-way communication can be taken much further. A great deal more of the sales process can be done automatically, limited only by programmers’ ability to service the customer.

 

Don’t Overdo it

The SIRC advises flirters not to make eye contact for more than a second. That is about how long I want to look at most ads, and I’m not alone.

Recent surveys of consumers show[2]

  • 54% “avoid buying products that overwhelm them with advertising and marketing.”
  • 65% “are constantly bombarded with too much” advertising
  • 33% “would be willing to have a slightly lower standard of living to live in a society without marketing and advertising.”

Figure 1. Television vs. Magazines

The boorishness of advertisers is partly due to the difficulty they have in targeting. They’re shouting into a void. The old school, however, believes that aggressive advertising works whatever people say about it. “Making you sick, then selling you the cure, is what advertising does,” said Marshall McLuhan.

Things have been just as bad on the Internet. Many web sites devote large portions of their pages to ads, forcing them on computer users whose screen space is precious. These ads are hard to ignore; they are over-colored and animated. To make matters worse, some advertisers deploy pop-up ads: little windows that jump onto to your computer screen obscuring the pages you are trying to view. We don’t have comparable data on how annoying these ads are, but anecdotes suggest the ads are not effective. And everyone hates spam.

The Internet user, unlike the TV viewer, can fight back. They can write programs to process incoming web-pages and emails to block pop-ads or strip out ads entirely. The same kinds of trick are available to TiVo users. The day of viewer control of content is at hand!

Internet advertisers should emulate magazine advertisers, not broadcasters. Magazines have never been able to force-feed ads, and they are better for it. An average magazine devotes 60% of its space to advertising, while television ads take up only 25% of the broadcast time. Yet 83% of adults find magazine ads appealing while only 69% find television ads appealing. Also, 44% of magazine readers report shopping for things advertised in a magazine while 36% of television ad viewers do so. Figure 1 illustrates the facts.

Better advertiser behavior is induced by pay-per-click, an ad pricing policy in which advertisers pay only when someone clicks on their ad. This simple change revolutionized Internet ads and led to the emergence of Google. Now the advertisers are spared Wanamaker’s problem: every item they pay for represents an interested customer. Advertisers are no longer motivated to force their ads on viewers because they want the clicks they pay for to represent genuine interest. Everyone’s motivations are aligned. If I search for information about a problem, I’ll be happy to see ads for solutions. The ads are unobtrusive and brief because Google wants me to click on them to get further information.

Diversity and the Long Tail

The mass-produced Model T was a one-size-fits-all car. One ad was sufficient for all, too. In the mass market days, one applied an 80-20 rule: If 80% of the sales are concentrated in 20% of the product line, stop selling everything but the 20%. Now things are different. Manufacturing techniques have improved and spread worldwide making popular products are so cheap that exotic things produce more profit.

Markets are dividing into hundreds, even thousands of niches. We all spread out our demands over many more different products. Chris Anderson, editor of Wired, calls the part of a market with great diversity the long tail.[3] If you rank all the song titles in the world by popularity and draw a graph of the results, there will be a long tail on the graph where the less popular ones are found. The longer and higher the tail, the more diverse are the tastes of the population. Generally, the tails are getting longer for everything because people desire more diversity, and it is getting easier to deliver.

Figure 2 shows such a graph and makes the point that Rhapsody, an online music seller, offers 20 times the number of titles that Wal-Mart does. Similarly, bookseller Amazon and DVD renter Netflix offer 20 times the titles of their conventional competitors. Over 20% of the sales of these online companies are of things you can’t find at the competitors.

Anderson believes, furthermore, that diversity is growing; and there’s money to be made from the 80% of customers left out by the 80-20 rule­—those people seeking things ranked in the long tail. He argues that the supply of increased diversity will stimulate demand for even more diversity so that the curves will get flatter.

 

Figure 2. The graph of the long tail

 

Just as the needs of mass production encourage broadcasting the same ads to everyone, the current marketing needs of business will drive diversity. Sellers want qualified buyers—ones who are interested and able to buy their products. Therefore, they like niche magazines or other outlets that pre-qualify the buyers. Just as a Google reader is searching for the answer to a problem, the Google advertiser is searching for people needing his solution. Therefore, he wants the material attracting the reader to be as specific as possible. In other words, we’re getting more diversity not just because we might like it, but also because the sellers use it as a tool to sort through the population in their search for buyers.

Our media are becoming bigger and far more diverse. Magazines, already very diverse, represent a glimpse of the future. Viewers are going to gain more control over what they watch and when they watch it. Advertisers better learn to flirt.

 

 



[1] http://www.sirc.org/publik/flirt.html

[2] http://www.jrosenfield.com/articles/WhyAmericansHateAdvertising.htm

[3] Chris Anderson, http://longtail.typepad.com/