Blind Five Year Old

I’ve made predictions for the past four years (2009, 2010, 2011, 2012) and think I’ve done pretty well as a prognosticator.

I’m sometimes off by a year or two and many of my predictions are wrong where my predictions were more like personal wishes. But it’s interesting to put a stake in the ground so you can look back later.

2013 Predictions

Mobile Payment Adoption Soars

If you follow my Marketing Biz column you know I’m following the mobile payments space closely. Research seems to indicate that adoption of mobile payments will take some time in the US based on current attitudes.

I believe smartphone penetration and the acceptance of other similar payments such as app store purchases and Amazon Video on Demand will smooth the way for accelerated mobile payment adoption. Who wins in this space? I’m still betting on Google Wallet.

Infographics Jump The Shark

Frankly, I think this has already happened but perhaps it’s just me. So I’m going to say I’m the canary in the coal mine and in 2013 everyone else will get sick and tired of the glut of bad Infographics.

Foursquare Goes Big

The quirky gamification location startup that was all about badges and mayorships is growing up into a mature local search portal. I expect to see Foursquare connect more dots in 2013, making Yelp very nervous and pissing off Facebook who will break their partnership when they figure out that Foursquare is eating their local lunch.

Predictive Search Arrives

Google Now is a monster. The ability to access your location and search history, combined with personal preferences allows Google to predict your information needs. Anyone thinking about local optimization should be watching this very closely.

Meme Comments

A new form of comments and micro-blogging will emerge where the entire conversation is meme based. Similar to BuzzFeed’s reactions, users will be able to access a database of meme images, perhaps powered by Know Your Meme, to respond and converse.

Search Personalization Skyrockets

Despite the clamor from filter bubble and privacy hawks, Google will continue to increase search personalization in 2013. They’ll do this through context, search history, connected accounts (Gmail field trial) and Google+.

The end result will be an ever decreasing uniformity in search results and potential false positives in many rank tracking products.

Curation Marketing

Not content with the seemingly endless debate of SEO versus Inbound Marketing versus Content Marketing versus Growth Hacking we’ll soon have another buzzword entering the fray.

Curation marketing will become increasingly popular as a way to establish expertise and authority. Like all things, only a few will do it the right way and the rest will be akin to scraped content.

Twitter Rakes It In 

I’ve been hard on Twitter in the past and for good reason. But in 2013 Twitter will finally become a massive money maker as it becomes the connection in our new multi-screen world. As I wrote recently, Twitter will win the fight for social brand advertising dollars.

De-pagination

After spending years and literally hundreds of blog posts about the proper way to paginate we’ll see a trend toward de-paginating in the SEO community. The change will be brought on by the advent of new interfaces and capabilities. (Blog post forthcoming.)

Analytics 3.0 Emerges

Pulling information out of big data will be a trend in 2013. But I’m even more intrigued by Google’s Universal Analytics and location analytics services like Placed. Marketers are soon going to have a far more complete picture of user behavior, Minority Report be damned!

Ingress Becomes Important

I’m a bit addicted to Ingress. At first you think this is just a clever way for Google to further increase their advantage on local mapping. And it is.

But XM is essentially a map Android usage. You see a some in houses, large clusters at transit stops, movie theaters and doctor’s offices, essentially anywhere there are lines. You also see it congregate at intersections and a smattering of it on highways.

Ingress shows our current usage patterns and gives Google more evidence that self-driving cars could increase Internet usage, which is Google’s primary goal these days.

Digital Content Monetization

For years we’ve been producing more and more digital content. Yet, we still only have a few scant ways to monetize all of it and they’re rather inefficient when you think about it. Someone (perhaps even me) will launch a new way to monetize digital content.

I Will Interview Matt Cutts

No, I don’t have this lined up. No, I’m not sure I’ll be able to swing it. No, I’m not sure the Google PR folks would even allow it. But … I have an idea. So stay tuned.

Twitter will steal Facebook’s bacon and become the most powerful brand advertising platform on the planet.

That’s saying a lot since I previously called Twitter the Underpants Gnomes of the Internet. But Twitter has changed and is no longer simply an altruistic agent of social change with revenue as a side gig. In 2013, Twitter means business.

That’s Entertainment

Those who have been on Twitter the longest probably still think of Twitter as an information source. You may remember back in 2009 when people began talking about how Twitter was their replacement for RSS feeds.

I was not one of those people. Don’t get me wrong, I found some value out of Twitter from an information perspective (and still do), but the signal to noise ratio was never that good.

But here’s what I’ve realized. Twitter is not about information anymore. It’s meta-entertainment.

Mark Cuban recently called Facebook a time waster, an alternative to boredom that looked far more like TV than a Google search. I think he’s right and his description applies to both Facebook and Twitter.

Supporting the idea of social media as entertainment is a March of 2012 The Hollywood Reporter study.

Nine of 10 respondents view social networking sites like Twitter and Facebook as a new form of entertainment, and more than half say social media sites are important tastemakers in determining what to watch and buy. Perhaps more surprising, 80 percent of television viewers visit Facebook while they watch.

Of course I have to believe these numbers might be a bit over-inflated based on who commissioned the study, but the general thesis resonates and seems solid.

Mobile Is Where It’s At

60% of our 140 million active users access Twitter through mobile – up from 55%. #Twitter4Brands

— Twitter Advertising (@TwitterAds) June 7, 2012

Twitter was mobile before it was sexy to be mobile. Mind you, it wasn’t really Twitter who figured out mobile. They had a robust community of third-party developers who led them to that conclusion over the course of many years. With all that data staring them in the face they moved quickly to double down on mobile. And it’s paid off.

Oh, did you notice the hashtag in that Tweet? Hello McFly!

Multi-Screen Viewing

Twitter’s lead in mobile has allowed them to capture the multi-screen viewing market. Make no mistake, this is the future of content consumption. Twitter understands that they can play a huge part, perhaps the connective tissue, between TV and other screens.

These are not this or that experiences but this and that experiences. Twitter is adding value to mass media content.

Pew found that 52% of adult cell phone owners use their phones while watching television. That’s the popular stat but it gets even more interesting if you look at just smartphone users.

Fully 74% of smartphone owners reported using their devices in one way or another while watching television in the preceding 30 days, compared with 27% of non-smartphone owners.

Of course, smartphones comprise the majority of phones (and rising), making this even more important. Yet, an April 2012 Forrester report shows that smartphones are already being displaced in many ways by tablets.

Tablets are displacing PCs and smartphones as the “couch computer” of choice: 85% of US tablet owners use their tablets while watching TV, and according to Nielsen, 30% of total tablet time is spent while watching TV.

The real takeaway here isn’t which screen is winning but that we’re entering a multi-screen viewing environment. Twitter, not Facebook, seems best positioned to capitalize on this new reality.

Owning The Hashtag

 

The hashtag is Twitter’s secret weapon.

While anyone can use a hashtag most consumers see it as synonymous with Twitter. I have to say I wasn’t a huge fan of the hashtag at first. Or, rather, I didn’t like the way many abused it, using more hashtags than normal words in a Tweet. (I still think that’s moronic.)

But hashtags are clearly a great way to aggregate content on a topic or event. Just watch a stream of Tweets from a conference and you’ll begin to understand the value of hashtags.

What’s more, when you’re attending a multi-track conference you often use the stream of Tweets from the sessions you don’t attend as a comparison and cheat sheet. It’s not unusual to hear someone complain that they were in the wrong session based on a comparison of Tweet streams.

Yet, I was still annoyed by hashtags until I read a piece by Denton Gentry on the use of hashtags to improve communication. Sure hashtags were great functionally but Denton made me realize that they were also ways to add expression.

Why does this matter in this context? The hashtag became entertainment. Hashtag memes were born and those brands who understood how to tap into this dynamic could create entertainment.

Collaborative Entertainment

The hashtag and Twitter’s short form anti-conversation content has created an opportunity for collaborative entertainment. It’s not about conversations it’s about the ever-changing aggregate of opinion, insight and snark.

I was recently down in Los Angeles on business and happened to be in the airport during the second Presidential debate. How did I wind up ‘watching’ it? On Twitter using the #debate stream. It was actually quite easy, interesting and fun to follow the debate this way.

I wasn’t going to wade into the mess of politics with my own Tweets but it was an entertaining way to view the debate and how others were interpreting it.

Pages vs Hashtags

Since the introduction of the Open Graph I really thought that Facebook wanted to kill Pages. In the last few years Facebook has made it more and more difficult for brands and businesses to make Pages worthwhile.

Yes, yes, I know you have a client or a case study that shows they’re killing it on Facebook but from the reduced functionality and reach I think most are swimming upstream on Pages.

I actually think it’s a smart idea to get rid of Pages but that’s a post for another day. The problem is Facebook has no alternative place to aggregate brand conversations. Unfortunately, Facebook doesn’t support the hashtag.

Facebook conversations are with brands. Twitter conversations are about brands.

This is really the functional difference between the two platforms right now. Many still cling to the notion that people want to have conversations with brands. I simply don’t think that’s true. Conversations with brands are not social. Yet that’s the implicit goal of Facebook Pages.

Conversely you need not follow a brand on Twitter to view that stream of hashtag content. I can tune in when I want and it doesn’t even need to be explicitly brand centric. Examples are littered over our television screens. Think of the hashtags on Survivor (#rewardchallenge and #immunitychallenge) or The Soup (#satanstoaster) to name just a few.

The hashtag is both a connection and platform for multi-screen collaborative entertainment.

User Centric Engagement

You don’t have to follow CBS or Survivor. You tune in when you want to tune in. Think about how scary and powerful that is!

The brand account could still be a valuable part of the ecosystem but it wouldn’t need to be the center of the brand experience. That might allow accounts to add value instead of incessantly trying to collect followers and figure out ways to break through the noise or crack the EdgeRank algorithm.

In fact, brands can participate in the hashtag stream along with everyone else, supplying ‘official’ announcements or insider content when appropriate. The role of an official account is to egg on your fans to provide that meta-entertainment.

Sure, the number of fans or followers seems comforting but we’ve all seen how little engagement results from these massive numbers. In the end it comes down not to who you follow but what content you’re engaging in.

Viewers Like You 

Imagine knowing which hashtag streams a user has viewed! How valuable would that information be? How easy would it be to advertise to lapsed viewers? Or to understand the other programming or products you might be losing out to based on viewing behavior. This isn’t about the brands I say I like but the ones I’m actively consuming.

The hand-wringing over active users as defined as those who Tweet or how many people they follow may be completely specious. The pure ‘lurker’ may be just as valuable, particularly for brand advertisers. I’d be far more interested to know about interaction based how many hashtag streams users viewed and the dwell time on those streams.

And there’s a really interesting opportunity to map hashtags to brands and categories, not to mention crawling the public social graph of accounts to develop demographic data. It would become relatively easy to match advertisers to users who frequently view a variety of hashtag streams.

The discussion around viewers makes me think about traditional TV advertising. Twitter seems to think so too if comments by Joel Lunenfeld at IAB MIXX are any indication.

A campaign on Twitter, he said, is “the ultimate complement to a TV buy.”

Can they make it any more clear?

Beyond Text

Twitter is doing a lot to make the experience more visual which is critical not just to keep up with competitors but to get mainstream adoption. And the new email Tweet feature continues to push them to a broader audience.

Again, I think Twitter is being relatively transparent in how they’re approaching this issue.

People tell incredible stories on Twitter through photos and videos. When you search for a person, an event or a hashtag, you can now see a grid of the most relevant media above the stream of Tweets.

You can also see media instantly in your search results stream on iPhone and Android. Photos and article summaries automatically show previews to give you a bird’s eye view on what’s happening.

This makes Twitter far more visual, compelling and … entertaining. The need for a consistent experience is also the reason why Twitter pulled back on the third-party apps and ecosystem as a whole.

You need a reliable, safe and consistent platform when securing major brand advertisers.

Context Matters

Facebook has a lot of advantages in being able to capture attention and profile interests. But there’s a fundamental problem with Facebook. It’s far more about navel gazing than anything else. The context is still largely personal.

Facebook aggregates your social graph while Twitter aggregates everything around a specific topic.

Even when someone shares something on Facebook it’s as much about who shared it with you as what is shared. You’re connected with the person not the content. Twitter is the other way around, with content coming first and people reduced to a filter.

Both platforms deliver a type of social voyeurism as entertainment, but the context is different.

Checking out the photos from a friend’s marathon run is not the most effective time or place to advertise running shoes. Sure the topic is right but the context is all wrong. I’m not looking at the marathon photos with shopping in mind. Heck I could hate running. Instead, I’m doing so because I want to keep up with my friend.

The person is important, the content isn’t. That’s not an optimal environment for advertising, even for intent generation.

Twitter Advertising

Twitter has been busy building out different advertising opportunities culminating recently in interest targeting. I’m not sure how this will all work for small businesses, but I don’t think anyone has fully solved that one yet.

However, I believe Twitter is laying the groundwork to catch traditional offline brand advertising dollars moving online. Twitter is creating a comfortable and recognizable entertainment platform that allows advertisers to connect and extend traditional channels.

Not only will brands and businesses want to advertise against these new forms of meta-entertainment, but they’ll seek out ways to create their own. There’s been a lot of talk about content marketing lately but what I see is the dawn of content advertising.

TL;DR

Twitter has quickly evolved into a collaborative entertainment platform that serves as the glue of multi-screen viewing. Their focus on mobile, visual makeover and tacit ownership of the hashtag puts Twitter and not Facebook in a position to capture the lion’s share of brand advertising dollars moving online.

Twitter is changing and a lot of people don’t like it. Developers are howling at being cut out and users are concerned about change. But the fact of the matter is that for Twitter to flourish it’ll need to evolve. Twitter needs to become Twumblr.

The Internet Is Visual

Remember, Twitter was established before the launch of the iPhone or Chrome. Yeah, think about that. Twitter has been around for over six years with a virtually unchanged UX. During that time the Internet has changed dramatically. It’s become vastly more visual in nature.

Many argue Facebook built their business on pictures. Look at the popularity of Flipboard, Pinterest and Instagram. Not to mention the incredible power of memes.

Twitter Cards

In light of this trend, Twitter recently introduced Twitter Cards, new structured mark-up that essentially creates rich snippets for Tweets. (Here’s how you can implement them.)

What this does is transform Twitter from a text based medium to a visual medium. Right now the default for Twitter Cards is closed, but what would happen if the default was set to open?

Suddenly Twitter looks a whole lot more like Tumblr, doesn’t it? And that’s not a bad thing as far as I’m concerned. Nor does it seem like a bad idea to Twitter.

As for the platform itself, Costolo said Twitter is heading in a direction where its 140-character messages are not so much the main attraction but rather the caption to other forms of content.

That’s a really interesting insight from Twitter’s CEO. I’m not sure you could make it any more clear than that.

Advertising Demands Attention

The reason this is all so important is that advertising demands attention. Twitter simply doesn’t have enough of it right now. People don’t sit on or browse Twitter. Instead, Twitter functions like the digital version of those black electricity power lines that cut across our landscape, ferrying people to interesting content where it is then monetized.

You’d think being a utility of sorts would be a good place to be, but it requires charging for the delivery of that content. The problem is, Twitter doesn’t own the power plants (content) nor limits who uses their service. All they really own are those wires and that’s important but ultimately … a commodity.

Twitter realizes that they need to be a destination. They need attention and eyeballs so they can monetize that content. They don’t want you reading Tweets on LinkedIn or in a third-party application. They want you to read them where they can advertise against them.

There have been many arguments recently about whether Twitter is looking to usurp those publishers. That there’s a tension there that will ultimately cause a rift. There might be, but perhaps not if Twitter can pull this off (which is not altogether clear.)

Twitter Wants to Monetize Sets of Content

If we think about Twitter less as an Internet megaphone and more as a curation service, you begin to see how it benefits users, Twitter and publishers.

Your stream becomes a highly curated set of content. It’s that set of content that Twitter seeks to monetize, not each individual piece. It is then up to individual content creators to ensure their content is optimized for that environment. That means good titles and great visuals to take advantage of scanning behavior.

Of course Twitter will allow advertisers to promote content into that steam, but it is all on the premise that the set of content displayed is valuable and secures attention.

Frictionless Engagement

Instead, I’m far more interested in how this impacts engagement. Because Tumblr is on to something.

They’ve reduced the friction of engagement by asking users to perform only one of two actions: reblog or like. And if you scroll back up and look at those open Twitter Cards you’ll note that the same metrics are displayed: retweets and favorites. That’s not a coincidence in my opinion.

The huge numbers on Tumblr are not an aberration either. There is a very connected and engaged audience there. Marketers should be falling over themselves to get their brands in front of these people.

This is also the reason I’m not convinced that limiting third-party development is some sort of death knell. It’s always hard to put the horse back in the barn, but you can have a decent developer ecosystem that builds value into your platform, not outside of it.

Conversation Killer?

The question for me is about conversation and comments. Tumblr is frustrating in this regard. Yet maybe that’s by design. Sure, you can integrate DISQUS into Tumblr but it’s certainly not the out-of-the-box default. Deeper engagement is found on the publisher site or other social networks.

The question to me is whether publishers want to own the conversation. Do they want users to comment and converse on their site? Many seem to think comments are more trouble than they’re worth but I have to believe that being the place where conversation is happening is good for business, if only for the extra page views.

That’s where Twitter has a problem. Because many use Twitter like a public instant messaging platform. The problem? It’s far from instant. You wind up having these clipped asynchronous conversations that feel like deep space time delay communication.

And the 140 character limit doesn’t even work to provide any type of real dialog. Other platforms like Google+ are far better at fostering strong conversations.

So, does Twitter want to try to hijack those conversations and foster deeper engagement on Twitter proper? To me, that’s the greater threat to publishers. Sure, Twitter wants to be a destination but not the destination.

TL;DR

Twitter needs to embrace radical change and evolve to stay relevant. The future of Twitter is one in which they monetize a visual set of ever changing curated content that captures attention but not conversation.

Top Tweets look like Promoted Tweets. That’s no mistake.

Top Tweets

Twitter is getting users used to seeing something ‘stuck’ at the top of search results. Today it’s Top Tweets but tomorrow it will be Promoted Tweets. Top Tweets are innocuous for the most part and leverage game theory psychology around being the best or most popular for a certain fiefdom. Twitter would likely say that Top Tweets deliver ‘resonance’ (aka relevance) for that search result and they’re probably right.

Resonance is Quality Score

Twitter’s resonance sounds an awful lot like Google’s quality score. The launch of Promoted Tweets touted the fact that low resonance would mean the removal of that Tweet. Perhaps a few will fall below that resonance threshold and be removed. More likely, resonance will be used to secure top placement for a search term and/or reduce the CPC paid for that placement.

Multiple Promoted Tweets

Right now you see just one Promoted Tweet per search result. But lets look at how Twitter is displaying Top Tweets.

Top Tweets are stacked at the top of search results. What does that remind you of?

So, how long until we see stacked Promoted Tweets?

Integrated Tweets

The difference in presentation between a Top Tweet and a Promoted Tweet is small. This allows Twitter to swap Top Tweets for Promoted Tweets with little visual dissonance. Not only that, but Twitter could integrate Top Tweets and Promoted Tweets, stacking them by order of resonance. What better way to make that real estate interesting to users. By doing so they’ll prevent ‘banner blindness’. Far-fetched?

Trojan Frog

Twitter is undertaking a boiled frog strategy for getting acceptance of ads within search results by using Top Tweets as a Trojan Horse. In doing so, Twitter may actually have a viable paid search business in their future, and they’ve already got a potential ‘network’ in place with application partners.

Back in 1999 I sat in the San Diego County Courthouse reading Seth Godin’s Permission Marketing, hoping that I didn’t get selected to serve on the class-action lawsuit against grocery chains who had allegedly conspired to fix prices on eggs.

I run hot and cold on Godin these days but Permission Marketing made a lot of sense and still does to a large extent. The core principle was that you needed permission to market to your customer.

Make the Permission Overt and Clear – Chapter 9, p 163.

As an early email marketer I recall the days when double opt-in lists were all the rage. Opt-in just wasn’t enough because the methods of collection could have been less than overt and clear. A double opt-in list ensured that you were getting the best list, the Glengarry list.

Opt-In versus Opt-Out

The difference between opt-in and opt-out can be substantial. Opt-in is the active choice to accept something, while opt-out is the passive acceptance of something. The problem here is that inertia can be quite powerful. The default presentation is often used by users as they seek to efficiently complete a task.

That’s not to say all opt-ins are created equal. The acceptance of terms of use (and privacy) before completing a download or registration is a weak opt-in since the majority of people don’t read it and those that do often don’t understand it. This type of coerced opt-in may be better than an opt-out but not by much.

Is Opt-Out Bad?

As a marketer, opt-in can be frustrating. A product or service that you just know would be valuable to a user is gated by their natural inertia. You run the numbers and it’s clear that an opt-out would be better for both the business and the user. Quite simply, you’d be able to deliver a valuable product to more of the right users. Those who don’t see that value can opt-out. No fuss, no muss right?

Well, permission marketing would tell you that you need overt and clear permission from a user to start that relationship. A user must raise their hand. Is opt-out overt enough? That’s debatable but it brings us to another permission marketing principle. Once given permission, you can’t abuse that permission. That’s where things have gone awry.

Opt-out got a bad name because (way) too many businesses abused that weak permission by not being relevant. It’s a shame since a good marketer could probably pull off an opt-out program. And that’s just what Facebook and Google are doing.

Value and Relevance

The value of your product or service and the relevance you deliver to the user are going to be paramount to maintaining that permission, no matter how it was attained. Think about that for a minute.

What I’m saying is that if your product or service is that good, you can acquire those customers in nearly any way. Opt-in, Opt-out, Optimus Prime, it won’t matter. Sure, some people will claim it does, but there’s evidence to the contrary.

Google is Good … Enough

Google tracks and uses your search and site history to personalize your search results. They actually do this when you’re signed-in and signed-out. Here’s a look at how you sign up for Web History.

It’s opt-out and it’s relatively overt, but is it clear? It communicates the benefits quite nicely but what the feature actually does … not so much. But hey, that’s why there’s a Learn More link, right?

Web History actually can make your Google experience better. For most users I’d guess the Web History feature is completely transparent and they have no idea that their actions are being recorded. They simply think Google works great.

But what happens when someone figures out what’s going on?

What People Say and What People Do

People may say they would turn Web History off but how many really do? Sure, sometimes there’s a meme that takes hold and a few folks will very publicly call it quits. But the majority don’t … even when they say they will. The bark is much worse than the bite. And both Google and Facebook know it.

Lets take behavioral targeting (BT) as an example.

Behavioral targeting uses information collected on an individual’s web-browsing behavior, such as the pages they have visited or the searches they have made, to select which advertisements to display to that individual.

When people are asked whether they want this type of advertising, the response is generally negative.

Yet, behavioral targeting has proven to be very successful with click through rates substantially higher, often cited at three times the normal click through rate and recently noted in one study (pdf) as having the ability to achieve a 1000% lift. The ads are more relevant and people are voting with their clicks.

Google’s DoubleClick has a BT program. They call it interest-based advertising. The program is opt-out and Matt Cutts recently commented on the opt-out behavior.

Only a relatively small number of people visit that opt-out page each week, and the majority of them change their interests rather than opting out.

Once again, we see a product delivering enough value and certainly enough relevance to overcome any ire users might have about the ‘auto’ opt-in. In fact, the product produces such relevance (as seen by the high CTR) that most users simply think the ads are getting better. They’re not giving much thought to the how, just that it’s a better experience.

What about Privacy?

I still believe in privacy. I actually have Web History turned off and I don’t share much on Facebook. I consciously made those choices. Just like I make the choice not to give my name and address away at the drop of a hat to enter to win the new car parked in the middle of the mall. There’s a certain level of personal responsibility and common sense that must be levied on the user.

I believe that you would see users opt-out of these services if they didn’t provide the requisite relevance and value. Right now, Google and Facebook do for the majority of users.

Marketing Privacy

Google has been careful, outside of Buzz, to not provoke negative user interest. Instead, they’ve worked and publicized their attempts to make opt-out and privacy settings more available. Why? They’ve seen that users are willing to give up a certain amount of privacy to engage in their products. So they’re happy to have 100,000 people a day visit their dashboard.

Facebook, on the other hand, has provoked negative user interest. They make broad sweeping changes that highlight the exchange of privacy for value. Coupled with a poor user interface for the various opt-out settings and Facebook has caught substantially more flak.

Google has been marketing privacy while Facebook has been marketing value.

Intravenous Permission

Have Google and Facebook killed Permission Marketing? Not really. Google, and Facebook to a lesser degree, has short-circuited the natural progression of permission and achieved a type of intravenous permission (the highest level) through the release of great and free products. (Free is important. It creates a subtle user obligation.)

Users can always revoke this level of permission. It will take a break in trust, an abuse of permission, to force users to evaluate their exchange of privacy for value. Even then, that balance will have to be substantially different for users to make a change.

A new study by .Fox Networks and comScore shows (again) the positive relationship between display advertising and search.

Video and display advertising both successfully increased brand engagement in each of the four campaigns analysed. The average uplift across the campaigns saw site visitation increase by more than a factor of seven over a four week period following exposure to an ad, with consumers three times more likely to conduct search queries using brand or relevant generic terms in the same time period.

Advertising Attribution

These studies all point to a synergy between advertising channels. That’s not ground-breaking, though the measurement of it is innovative. What marketers have been trying to figure out is attribution. What channel or channels should get credit for a sale or lead? It goes to the heart of the old marketing adage: I know I’m wasting half of my marketing budget, I just don’t know which half.

Impact on Display

Many advertisers and agencies still measure success of a display campaign based on traditional click through rate (CTR) and ROI. The low CTR of display ads makes marketers suspicious. The concept of a view-through conversion made sense to some, but it still seemed like a bunch of hand waving and didn’t solve the problem of attribution. New services like Vizu also go beyond clicks and provide measurable brand lift based on display campaigns.

Studies and tools that provide multi-channel insight into conversion will help advertisers move beyond antiquated success metrics and increase their display advertising budgets.

Impact on Search

Convincing advertisers of the relationship between display and search is only half the battle. How will advertisers respond? The obvious knee-jerk reaction is to increase their display advertising spend. But is that really where advertisers should start?

If display generates more search volume, wouldn’t you first ensure search was optimized to convert that additional volume? Even within search, would you allocate more dollars into PPC or SEO? Would you prefer to pay for that customer twice or once?

Display and SEO

I’d argue that the first action item based on this study would be to invest in SEO. We already know that the vast majority of search clicks come from organic listings. The importance of rank cannot be denied, even with recent studies showing interesting behavior around brands.

Display primes the pump and generates intent. But you could be generating that intent for your competitor if you haven’t done enough SEO. Branded terms are likely safe, but the ‘relevant generic terms’ are a battlefield.

For example, if Best Buy ran a display campaign for HDTVs, this would create additional search volume for branded searches (Best Buy) and relevant generic searches (HDTVs). A brand search works out just fine. But a search for hdtvs returns Walmart as the first retailer result. Best Buy could wind up spending advertising dollars to drive sales for Walmart.

My fear is that instead of investing in SEO advertisers will simply throw money at the problem through PPC. Never mind that you’ll still only capture a small segment of that additional search volume, it’s also eating into your overall ROI.

As we begin 2010, it’s time for me to go on the record with some predictions. A review of my 2009 predictions shows a few hits, a couple of half-credits and a few more misses. Then again, many of my predictions were pretty bold.

This year is no different.

The Link Bubble Pops

At some point in 2010, the link bubble will pop. Google will be forced to address rising link abuse and neutralize billions of links. This will be the largest change in the Google algorithm in many years, disrupting individual SEO strategies as well as larger link based models such as Demand Media.

Twitter Finds a Revenue Model

As 2010 wears on Twitter will find and announce a revenue model. I don’t know what it will be and I’m unsure it will work, but I can’t see Twitter waving their hands for yet another year. Time to walk the walk Twitter.

Google Search Interface Changes

We’ve already seen the search mode test that should help users navigate and refine search results. However, I suspect this is just the beginning and not the end. The rapid rate of iteration by the Google team makes me believe we could see something as radical as LazyFeed’s new UI or the New York Times Skimmer.

Behavioral Targeting Accelerates

Government and privacy groups continue to rage against behavioral targeting (BT), seeing it as some Orwellian advertising machine hell bent on destroying the world. Yet, behavioral targeting works and savvy marketers will win against these largely ineffectual groups and general consumer apathy. Ask people if they want targeted ads and they say no, show them targeted ads and they click.

Google Launches gBooks

The settlement between Google, the Authors Guild and the Association of American Publishers will (finally) be granted final approval and then the fireworks will really start. That’s right, the settlement brouhaha was the warm up act. Look for Google to launch an iTunes like store (aka gBooks) that will be the latest in the least talked about war on the Internet: Google vs. Amazon.

RSS Reader Usage Surges

What, isn’t RSS dead? Well, Marshall Kirkpatrick doesn’t seem to think so and Louis Gray doesn’t either. I’ll side with Marshall and Louis on this one. While I still believe marketing is the biggest problem surrounding RSS readers, advancements like LazyFeed and Fever make me think the product could also advance. I’m still waiting for Google to provide their reader as a while label solution for eTailers fed up with email overhead.

Transparent Traffic Measurement Arrives

Publishers and advertisers are tired of ballpark figures or trends which are directionally accurate. Between Google Analytics and Quantcast people now expect a certain level of specificity. Even comScore is transitioning to beacon based measurement. Panel based traffic measurement will recede, replaced by transparent beacon based measurement … and there was much rejoicing.

Video Turns a Profit

Online video adoption rates have soared and more and more premium content is readily available. Early adopters bemoan the influx of advertising units, trying to convince themselves and others that people won’t put up with it. But they will. Like it or not, the vast majority of people are used to this form of advertising and this is the year it pays off.

Chrome Grabs 15% of Browser Market

Depending on who you believe, Chrome has already surpassed Safari. And this was before Chrome was available for Mac. That alone isn’t going to get Chrome to 15%. But you recall the Google ‘What’s a Browser?‘ video, right? Google will disrupt browser inertia through a combination of user disorientation and brand equity. Look for increased advertising and bundling of Chrome in 2010.

Real Time Search Jumps the Shark

2009 was, in many ways, the year of real time search. It was the brand new shiny toy for the Internati. Nearly everyone I meet thinks real time search is transformational. But is it really?

A Jonathan Mendez post titled Misguided Notions: A Study of Value Creation in Real-Time Search challenges this assumption. A recent QuadsZilla post also exposes a real time search vulnerability. The limited query set and influx of spam will reduce real time search to an interesting, though still valuable, add-on. The Internati? They’ll find something else shiny.

The other day I received an interesting email from Yahoo!

It’s pretty easy to read between the lines here. In fact, little line reading is necessary. The new comScore beacon is providing more accurate results. Yahoo is not currently participating in the beacon program. Yahoo wasn’t keen on the “apples-to-oranges” comparison that “could create confusion for advertisers” because it would likely negatively impact their display business.

Don’t Forget Yahoo!

Bashing Yahoo! seems to be the cool thing to do these days, and they’ve certainly driven themselves into a ditch. But Yahoo! still holds a powerful position as a portal, content and email provider. This email seems like a not-so-gentle reminder that Yahoo! is still a 900 pound gorilla in some circles.

Beacons and Panel Data

The other takeaway here is the fact that beacons are fast becoming the best way to measure traffic. I see comScore’s introduction of beacon technology as a direct reaction to Quantcast.

The rise of Google Analytics allows more and more companies to know exactly how much traffic they receive. The result of this knowledge is a growing dissatisfaction with panel based measurements that aren’t just inaccurate but are sometimes flat out wrong.

No More Hand Waving

Whether it was the Web 1.0 darling Alexa or recent upstart Compete, panel based services continue to fail. The difference this time around is that we have beacons (like Google Analytics and Quantcast) that let us know when they fail and by how much.

So while Yahoo! has secured a 6-month repreive, the future will be in accurate and transparent traffic measurement.

Two weeks ago my wife dug out some Fall felt stickers from the closet for our daughter. Delighted, my daughter stuck one of them on my shirt before I walked out the door to work.

It was a red leaf.

Being a bit sentimental, I left the red leaf on my shirt for the day. That decision led to a renewed appreciation for the power of iconography.

Are You Canadian?

That was one of the first things a co-worker asked me that day. The question seemed rather random and out of left field. In reaction to my puzzled expression, he pointed to the red leaf.

Later that day another co-worker asked if I liked maple syrup. And yet another started up a conversation about the upcoming hockey season. (Go Flyers!)

The Power of Iconography

I suppose it does look like the Canadian maple leaf. And the sticker was out of place and likely attracted attention. But all that aside, I wasn’t wearing a Canadian flag sticker. It was a simple, small red leaf.

The meaning that this red leaf conveyed was impressive. A single red leaf created an instant association with Canada and then, like a needle skipping on a vinyl record, to maple syrup and hockey. A stream of data, of experience, of knowledge, was trapped inside that red leaf.

How does that happen?

Semiotics

Semiotics, or the study of signs, helps explain how a simple red leaf can have such a profound impact. The field of semiotics is both dense and ambiguous, filled with academic rhetoric and debate. Even a beginner’s guide to semiotics clocks in at over 5,500 words.

The main elements of semiotics are syntax, semantics and pragmatics, described in as follows in an icon design article.

Syntax: the internal grammar of parts that enable a properly formed sign to be parsable by someone or some system—think of the computer throwing a “syntax error”

Semantics: the intending meaning of the sign by the maker(s) of it

Pragmatics: how the sign is received, perceived, and acted upon by some person or interpreter by the confluence of syntax and semantics; the resulting effect

Pragmatics is where it really gets interesting in my opinion. Pragmatics deals with the impact of context and experience as it is applied to the perception of signs.

Now, back to the red leaf.

The syntax is fine. You know it’s a leaf. However, the intended meaning (semantics) changed through the prism of pragmatics.

The bag of colored leaves was intended to be a sign of Fall. Yet, the one red leaf taken out of context is instead perceived to be a sign of Canada, which opened up a whole new flood of associations based on personal experience and perspective.

Icons and Marketing

The Internet is a vast landscape of icons. My red leaf experience reminds me that iconography can be a very effective marketing tool. It is done wrong and badly for the most part, but when done well can have a tremendous impact. (For more on semiotics and advertising I recommend the retro semiotics hypercard essay from Thomas Streeter at the University of Vermont.)

The challenge is figuring out how to create icons that unlock that stream of data. Creating icons that tap into shared experiences and personal histories can deliver a tone to your website that you simply can’t convey otherwise.

The Icon Test

Sometimes you’re capitalizing on ancient archetypes and sometimes they can be recent and repetitive shared experiences. Don’t believe me? Lets try a little icon experiment. I’m going to show you an icon of sorts.

Tell me what you instantly think about after seeing it.

Post the first three words that came into your mind in your comment.

Last week the Google AdWords blog posted some ‘research’ conducted by Hal Varian, Chief Economist at Google, that stated that “conversion rates don’t vary much by position.”

Do AdWords Conversion Rates Vary by Position?

My personal experience is that AdWords conversion rates DO vary by position. That’s not to say that I can’t be convinced otherwise, but I’ll need a lot more evidence then was provided in the blog post.

As a fundraiser many moons ago, my first instinct was to say that there would always be an inverse relationship between dollar amount and conversion rate. The lower the pledge amount, the higher the conversion rate.

Yet, I found that there wasn’t a tremendous difference between some giving levels. Conversion rates on $25 pledges weren’t substantially different from $100 pledges. However, that variance increased as you climbed up the solicitation ladder. Conversion rates for $500 pledges did vary materially from $25 pledges.

So, I’m not unwilling to be persuaded by real research and statistics that might contradict my anecdotal evidence. The problem is that the post didn’t link to the research to help validate the methodology or assumptions that led to this conclusion. Only a few variables are discussed, leaving a number of others open to interpretation or debate. It doesn’t help that one of the three links in the post goes to a 404 page.

How Did They Define Conversion?

That broken link … it was to the definition of conversion rate. Oddly, this is an important point. How did they define a conversion? Were only those conversions configured in AdWords included? Or did they pull from Analytics Goals as well? Essentially, we have no idea as to the universe of those who were included in this research, nor is there any mention as to what type of bias this might introduce.

Does the Type of Search Impact Conversion Rates?

Second, what type of searches were included? Given the differences in transactional versus informational queries one would believe that there might be a difference in conversion rates by position as well. An ad advertising a product (eCommerce or transactional) may exhibit different behavior as those advertising content (content or informational).

Does Query Length Impact Conversion Rates?

Blognation points out that an analysis of conversion by “token length” would be important.

Here’s a different way to think about the Google conversion rate data that I think would probably have a much different outcome. Do a conversion rate analysis by “token length”, which is search engine language for the number of words in a search query. If someone types in “baseball” for example, what’s the conversion rate differential between position #1 and position #10, versus a query for “buy Louisville slugger size 28 wooden baseball bat.”

I suspect that the conversion rate for the first query is going to be very low for the first position, simply because you are going to have a lot of browsers who simply click on the first ad that they see. Any browser who eventually makes it down to position #10′s result may very well have turned into an actual shopper after clicking on all the other ads. Conversely, if you already know the exact product you want – and your search query indicates that intent – you are much more likely to convert on the first ad you see that actually offers the specific product you want.

Related to this would be the conversion rate by position by match type. With so many advertisers unknowingly bidding solely on broad match, this type of analysis seems necessary and … useful!

Does CPC and Ad Category Impact Conversion Rates?

Finally, was this analysis performed to determine whether conversion rates by position remained constant depending on the average cost of the keyword? Could it not be true that different behavior could exist for a keyword with a $10 per click cost versus 10 cents?

Might different categories produce different conversion rates by position? Would the conversion rates for books, movies and music differ from long term care insurance? Could the number of competitors or volatility of a keyword impact the conversion rate by position?

Why Present AdWords Conversion Rate Research?

The presentation of this research without … the actual research makes me suspicious. What message is the AdWords team sending to advertisers? It seems to me that they’re encouraging advertisers to bid for the extra traffic received from higher ad positions. That advertisers can do so without negatively impacting their conversion rate and subsequent ROI.

Never mind that the higher CPC to achieve that extra traffic would reduce your margin. And that’s IF your conversion rate does remain the same. Should it not, you’ll pay a premium to obtain traffic that converts at a lower rate. So, who is this research advice really supposed to benefit?

Given the lack of supported evidence I can only rely on the experiences that I and my colleagues have had over numerous years. Experiential learning tells me to beware of monkey clicks, which do cause the top positions to have lower conversion rates.

I’m still willing to be convinced, but until something material is presented, this seems akin to evidence of the Loch Ness Monster. The cynic in me sees it as marketing copy meant to drive more advertiser dollars. I’d love for Google to prove me wrong.