E-Commerce Will Take Big Hit as States Close “Amazon Loophole”
By dave_pasternack | April 29, 2008
Last Friday, Google’s chief economist pointed to figures suggesting that even a severe recession won’t dent e-commerce (which apparently has grown 22 percent in the past two years). The economist went so far as to claim that a recession helps e-commerce, “because cautious consumers are doing more research and comparison shopping online before making a big purchase.”
The real problem — and it’s an obvious one — is that e-commerce is about to get hit by several unstoppable factors which will inevitably slow it down. As my colleague Mark Simon noted last week, cash-hungry New York State, whose property-based revenues have been depleted by the subprime mortgate mess, has enacted a tax on Internet retailers, and it’s a sure bet that other states will follow suit. Online shopping will grow less attractive as fuel prices surcharges are added to the shopping bill. E-commerce will survive, but the kind of growth we’ve seen will plauteau and maybe even fall once states stop footing the bill for Amazon and its ilk. We’re still at the leading edge of the damage to state finances, and somebody’s going to have to pay for schools, roads, police, and other essential state services. Once New York’s bill goes into effect, look of other states to get on the “soak the merchants” bandwagon.
Topics: Online Ad Industry Foolishness | No Comments »
Apocalypse Yahoo?
By dave_pasternack | April 25, 2008
I spent some time this week watching Apocalypse Now (Redux), one of my all-time favorite films from the 1970s. I’ve seen this film at least 10 times, and it always has some new lesson to teach me about the state of the world, and this time around, a few scenes reminded me of Yahoo’s current death dance with Microsoft.
One such scene occurs when Willard, reviewing the secret dossier on Colonel Kurtz, notes that Kurtz claimed that “he only needed ten highly motivated divisions to win this war.” This observation unerringly describes Yahoo’s troubles.
Another scene (deleted from the original release) concerns Captain Willard’s encounter with a group of French colonialists holed up at a rubber plantation who refuse to face their inevitable fate. These die-hards aver that they will “never leave,” because their entire identity and family history is intrinsically bound to the land. Captain Willard leaves them before their fate is revealed to us, but it is clear that they are ultimately doomed. I’d hate to think that the Yahoo board’s apparent failure to reasonably negotiate with Microsoft is rooted in a similar, irrational emotional connection to the Yahoo brand.
Topics: Search Engine Marketing | No Comments »
Online Ad Network Bubble Will Soon Burst
By dave_pasternack | April 21, 2008
Remember, about a million years ago in Web time, when all the pundits were saying that the Net was going to “disintermediate” all of those obnoxious middlemen skimming pennies from every commercial transaction? Well, exactly the opposite’s happened, at least in the world of interactive advertising: today, we’ve got more than 200 ad networks, each of them incompatible with each other, each promising to provide some magic elixer of microtargeting powerful enough to convert dross inventory into pure gold through some proprietary alchemy.
The whole ad network as gold rush thing is sickeningly ridiculous. Every new ad network that comes along means another decision level for media buyers to perform, even as the whole industry is crying out for a simpler way to buy media. Just about everybody with a clue expects massive consolidation to occur in the online ad network sector, and it’s not going to be pretty. The last thing this industry needs is more middlemen, incompatible technologies, and new fly-by-night ways to buy crap inventory. What we all need is a way to buy media in a way that’s less, not more annoying than it is right now, and only the SE’s seem to be getting this right. As SE’s get better a
Topics: I'm Mad as Hell and I'm Not Clicking on It Anymore, Online Ad Industry Foolishness | No Comments »
Loyalty is Dead; Long Live Marketplace Amorality
By dave_pasternack | April 17, 2008
Loyalty, it’s said, is dead. Already buried is the traditional loyalty which corporations used to display towards those working for them and the reciprocal loyalty of workers toward these organizations. Loyalty towards brands is an illusion, especially in a recession, when consumers figure out that they can get the same value from a non-branded good as from an over-priced one with a fancy package. And in search marketing, loyalty has died a very hard death indeed, and yet nobody’s bemoaning it (except, it seems, myself).
The absence of loyalty from the search marketplace is a rude awakening for many old-school ad agencies. For years, being known as the guy who booked a million dollars a month worth of airtime on a network counted for something. Beyond the invitation to the glitzy upfront, such loyalty often translated into negotiating leverage. The guys who spent money were rewarded (even though it wasn’t really their money they were spending) with a volume discount. That was just the way advertising worked.
Today, there’s no loyalty at all. If you’re the guy spending a million dollars a month on Google or on one of the other engines, you’re treated the same as some shlub with a $10 per day PPC budget. You not only get bupkis as a reward but the SE’s do everything they can to undercut your position. For example, Google has a very active sales force recruiting competitors who will do everything they can to make your existing SEM strategy unprofitable. You’d think they’d show a little loyalty to the guy who’s spent a half billion dollars over the last two years, but that’s not the way these guys think. This isn’t bitterness, folks; it’s just reality. Why expect loyalty from anybody when we’ve selectively bred it out of our whole culture?
Topics: I'm Mad as Hell and I'm Not Clicking on It Anymore, Search Engine Marketing | No Comments »
Breaking News: Search Marketing Techniques Devised in 1930’s
By dave_pasternack | April 15, 2008
Excellent article by Alan Rimm-Kaufman on the fact that today’s search marketing best practices are inherited directly from traditional Direct Mail techniques devised 80 years ago. Especially relevant is the “List-Offer-Package Rule” holding that Lists (the segment you’re marketing to) are the most important variable, followed by Offer, and then Package (i.e messaging). This basic rule should inform everything we search marketers do; the amazing thing is that they were promulgated in the 1920s and 1930s. While the mechanics of marketing have changed radically, the principles haven’t; if more people were familiar with them, we’d have far more effective search marketing campaigns today.
Topics: Good Stuff, Old vs. New Media, Search Engine Marketing | No Comments »
American Express Slams SEO, SE Spammers React With More Whining
By dave_pasternack | April 8, 2008
One of the most annoying things about the SEO crowd is how thin-skinned they are. They might come off all rough and tough on their Blogs, but this hard shell masks a quivering level of insecurity that’s clearly rooted in their own precarious and highly temporary status in the search economy.
All it took was American Express to mention in a marketing document that SEO isn’t worth paying for and the whining hit the 300 db level. Here’s what AmEx wrote:
Don’t waste money on so-called Search Engine Optimization (S.E.O.) specialists. Search engines are very quick to penalize sites that try to trick their filtering techniques, and once your site has been put on Google’s blacklist, it will take forever to get off.
What’s so controversial about this statement? It simply reflects the very obvious fact that most SEOers specialize in trickery that can and will blow up in your face. When did it become a crime to tell an inconvenient, but completely obvious truth?
Topics: I'm Mad as Hell and I'm Not Clicking on It Anymore, SEO, Search Engine Marketing, Shady Marketing Tactics | No Comments »
Toxic Buzzword of the Week: ORM (Online Reputation Management)
By dave_pasternack | April 8, 2008
I don’t have any real quarrel with the article that John Carcutt wrote for SearchEngineJournal.com this week, because he does us all a service by pointing out that most SEOs are, for a variety of reasons, completely unqualified to handle online reputation management. Not only do they not have the proper skillsets, but as he notes, putting guys who are ethically challenged to repair PR issues that may have ethical dimensions is practically suicidal.
So I have no problem with the thrust of Carcutt’s piece. But do we really need ORM, a new and useless acronym, to describe the process? Let’s take this one outside and shoot it before it metastasizes further, shall we?
Topics: SEO, Search Engine Marketing, Shady Marketing Tactics, Toxic Buzzword of the Week | No Comments »
The SEM Agency Crisis Won’t Be Solved Over Coffee and Crumb Cakes
By dave_pasternack | April 8, 2008
This week, DMNews’ Sara Holoubek wrote an article entitled “SEMs are from Mars, clients are from Venus” which alludes to the fact that clients and SEM agencies very seldom have good long term relationships.
In my view, however, Ms. Holoubek’s evident belief that a solution lies in the application of “mutual respect, professionalism, intellectual curiosity and creative thinking” misses the main point. Clients need to have a much better understanding of the real issues involved with running paid search campaigns. Expectations must be brought into line with reality. Understandably, most agencies utterly fail in setting such expectations at the outset of any relationship because they want the business. The result is the predictable cycle of failure that gives the whole SEM industry a black eye. As I’ve written before, the stages of the SEM Failure Cycle include:
- Manic Enthusiasm (”Amazing! We just set our budget, select our keywords, our geo, our demo, our daypart, and Google does the rest!”)
- Denial (”Our ROI’s in the tank and we’re losing market share: let’s get the search team on the first flight to SES so they can figure out how to run this stuff”)
- False Hopes (”Our search people came back from SES with this great new tool that will take care of everything. Yay!”)
- Alarm (”This stupid tool doesn’t do anything we want it to do so we’ve hired two new people to run campaigns manually. Can you authorize another $10,000 in training please?”)
- Panic (”We need an SEM agency we can drop this headache on — and fast!”)
- Betrayal (”The SEM agency we hired are idiots and charlatans. Find a new one!”)
- Defeat (”You know, maybe we’re better off running newspaper ads.”)
SEM agencies have to start leveling with clients or the whole industry will be trapped in this unsatisfying cycle forever. Solving this crisis has nothing to do with “having coffee with the agency,” however pleasant this might be, or palavering over expense account dinners, or demonstrating “creative thinking.” A solution only can begin when agencies start telling the truth about what clients can reasonably expect from search.
Topics: I'm Mad as Hell and I'm Not Clicking on It Anymore, Ridiculous Statement of the Week, Search Engine Marketing | No Comments »
Dell + Da Vinci = Doubt and Delay
By dave_pasternack | April 4, 2008
Back in December 2007, in an article entitled “Has Dell Lost Its Mind?,” I wrote about Dell’s “Da Vinci” project, which promised to rationalize Dell’s ad spending by creating an umbrella agency to replace 800 smaller ones. At that time, I criticized Dell for moving away from the “component” approach and “putting its eggs into one basket.”
Today, I read that this venture is both behind schedule and lacks a CEO. This doesn’t auger well for Da Vinci’s future: if the project makes so much sense, why isn’t it easy to get a captain on board?
Topics: Old vs. New Media | No Comments »
Dave to Online Ad Industry: Let’s Abolish The Childish Company Names
By dave_pasternack | April 1, 2008
Azoogle. Vonba. Zango. Vringo. Quigo. PopCap. These are just a few of the childish-sounding appellations adopted by online ad companies. Others sound like the crude speech of some doomed aboriginal tribe. Of course, it’s true that the name “Google” sounds like baby talk, so these companies are in good company, but I wish somebody would put an end to all the silly speak, which suggests our industry has all the maturity of a colicky infant (which it does). Being young and fresh is great, but what consumers want is some assurance that online ad companies aren’t going to abuse their privacy, install hateful spyware on their PCs, or otherwise behave like 3-year olds in a mud fight. The prevailing goo-goo ga-ga style of branding does exactly the opposite, and as long as it persists the online ad industry will have to eat its porridge at the children’s table.
Topics: Online Ad Industry Foolishness | 1 Comment »
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