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Tag: search engines

Google Loves to Make Marketers’ Lives Harder

Customer acquisition is oftentimes the key cost for a startup, and hence one of the most important capabilities for a startup to build and a key skillset for a startup to hire for. One reason for that is that Google, while a great tool in many ways for helping companies with customer acquisition, can really make customer acquisition hard to do.

Why? Well, the importance of Google to the internet means its algorithm and policy changes have HUGE impacts on customer acquisition costs and strategies.

Case in point: a little over two years ago, content businesses — like Demand Media which had learned to profit on the difference between the cost of acquiring customers from search engines and the advertisement money they could make on their content — woke up to a sudden shock when Google algorithm changes drastically changed their cost of acquiring web traffic. While this was a conscious effort by Google to improve its search results for its users, the result was like a natural disaster: an unanticipated and massive change in the business environment. Investors dinged Demand Media’s stock price by 50%, Yahoo shuttered its Associated Content business and replaced it with Yahoo Voices, and many of the initial big losers from Google’s algorithm updates continue to lag in search rankings.

Just a few months ago, Google again shook the customer acquisition world by introducing a new tabbed interface in their Gmail web email client. While tabbed interfaces have been around forever, what made Gmail’s special was that these tabs also served to filter email messages so that Facebook/Twitter updates, forum posts, and – drumroll – promotional emails/coupons – weren’t the first thing a user sees when they open up their mail. The result? All those brilliant subject lines and email marketing campaigns that you’ve come up with? There’s a really big chance they got shunted to a tab that the user is predisposed to ignore with impunity. The result?  Companies who rely on email as a customer acquisition channel have to find ways to counteract this — getting users to (1) open up their “Promotions” tab and (2) designate to Gmail that they want those particular promotions to hit the main inbox – or shift to a new way of getting customers to act.

This type of thing is typical in the customer acquisition world: to succeed, you need to not only get really good at today’s modalities of acquiring customers, you also have to be adaptable – and roll with the sudden changes that Google or Facebook or one of any sudden shifts in the digital world can do.

Update at 11AM PST, 8 Oct 2013: As if on cue for my blog post, I received an email from eCommerce jewelry vendor Blue Nile today about moving their promotions into my main email tab 🙂

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Private concerns

imageOne reason I love science fiction is that it challenges our morals and beliefs in a way that other art forms rarely do. It asks us difficult questions, like, what if we had the ability to visit other planets and encounter different cultures? What if we could genetically “design” our children? What if we could go back in time and change history?

Unsettling questions aren’t they? But, why are they unsettling? My personal belief is that they are unsettling because our intuitions, our values, our beliefs, our laws, and our institutions were not designed to handle those questions. If you assume that Western culture is heavily derived from Ancient Greek and Roman humanism, is it any wonder that society has trouble understanding what to do with our nuclear arsenals or with humankind’s new ability to genetically alter the people and animals around us? After all, the foundations of today’s laws and values predated when people could even conceive that humans would ever have to think about such things.

So, when people ask me what I think about all the press that privacy concerns about Google or privacy concerns about Facebook or any of the other myriad social networks have garnered, I view it as manifestation of the fact that we now have technology which makes it super-easy to share information about ourselves and our location but we have yet to develop the intuititions, values, and laws/institutions to handle it.

Lets use myself as an example: I personally find auto-GPS-tagging my Tweets to be oversharing. However, I frequently Tweet the location I’m at and even the friends I’m with. Is this odd combination of preferences an example of irrationality? Probably (I was never the brightest kid). But I’d argue its more about my lack of intuition on the technology and the lack of clear cultural norms/values.

image And I’m not the only one who is beginning to come to terms with the un-intuitiveness of our digital lives. My good friend, and prominent blogger, Serena Wu recently went through a social network consolidation/privacy overhaul as a result of understanding just what it was she was sharing and how it could be used. All across the internet, I believe users are beginning to understand the consequences to privacy of their social network and search engine behavior.

Now, the easy reflex thing to do would be to simply cut off such privacy issues and cut out these social networks like one would a tumor. But, I think that would be a dramatic over-reaction akin to how the Luddites reacted to factory automation. It ignores the potential value of the technology: in the case of sharing information on social networks, this can come in the form of helping people advertise themselves to employers, assisting friends with keeping in contact with one another, and/or even delivering more valuable services over the internet. Now, that shouldn’t be construed as a blanket defense of everything Facebook or Twitter or Google does, but an understanding that there is a tradeoff to be made between privacy and service value is necessary to help the services, their users, society, and the government realize the appropriate changes in intuition, values, and rules to properly cope.

I’m not smart enough to predict what that tradeoff will look like or how our intuitions and values may change in the future, but I do think we can count on a few things happening:

  • Privacy will remain a big issue. Facebook and Twitter’s early years were marked by a very laissez-faire approach by both the users and the services on privacy. I believe that such an approach is unlikely to persist given the potential dangers and users’ growing appreciation for them. There is no doubt in my mind that, whether it be through laws, user demand, advocacy groups, or some combination of the above, data privacy and security will be a “must-have” feature of great significance for future web services built around sharing/accessing information.
  • Privacy policies and settings will become more standardized. I believe that the industry, in an attempt to become more transparent to their users and to avoid some of the un-intuitiveness that I described above, will build simpler and more standardized privacy controls. This isn’t to say that there won’t be room for extra innovation around privacy settings, but I think a “lexicon” of terms and settings will emerge which most services will have to support to gain user trust.
  • Data access APIs will become more restricted and/or use better authentication. The proliferation of web APIs has created a huge boom in new web services and mashups. However, many of these APIs use antiquated methods of authentication which don’t necessarily protect privacy. Consequently, I believe that the APIs that many new web services have grown to use will face new pressures to authenticate properly and frequently as to avoid data privacy compromise.

In the meantime, the few tips I listed below will probably be relevant to users regardless of how our rules, values, and intuitions change:

  • Understand the privacy policy of the services you use.
  • Figure out what you are willing to share and with whom as well as what you are not willing to share. Only use services which allow you to set access restrictions to those limits.
  • Check with your web service regularly on what information is being stored and what information is being accessed by a third party. (i.e., the Google Dashboard or Twitter’s Connections)
  • Advocate for better forms of authentication and privacy controls

No matter what happens in the web service privacy area, we are definitely in for an interesting ride!

(Image credit – ethics) (Image credit – Big Facebook Brother)

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