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November 2007

Why Google is Trouncing Yahoo?

And what that means to your advertising and messaging...

A Yahoo employee has a perspective on why Google is trouncing Yahoo when it comes to search advertising revenues in a recent post.

As it turns out, Google is doing better not because it is returning better organic search results, but because its ads are better.  And by better I am keying mostly on ad relevance.  Google users are increasingly finding the paid ad links helpful in the quest to find what they're looking for. 

And why the increased relevance?  Because Google began to move away from ranking ad placement solely by bidding on cost per click.  For some time now, Google has been using an algorithm to rank ads by relevance to keyword searches, partly based on ad content and partly based on the relevance of the destination page gained by clicking the ad.

If ads are more relevant, users will click them more often, viewing the ads as helpful and not a nuisance.  If clicks double, then as long as costs per click recede less than 50% you make more money.  Ask Google, their share price topped $700 today.  Now imagine that... Google adapts its advertising to make it better for its customers (those using search, not the advertisers) and it turns out to be better for the company too.

Now, here is the extended revelation from this phenomenon.  Relevance and salience are the most important attributes in any advertising - TV, radio, print, direct mail...  Relevance stirs interest which creates "clicks" which ultimately (If there's integrity between your message and the product or service you deliver) will result in increased revenues.

Strategically Outrageous

I’ve written about the value of being strategically outrageous before. 

Rush Limbaugh provided a recent example of utilizing this tactic to the max.  Senate Majority Leader Harry Reid and 41 other Democratic Senators recently sent a letter to the president of Clear Channel Communications criticizing Limbaugh for allegedly referring to all troops who opposed the war as “phony soldiers.”  The letter asked Clear Channel for a public repudiation of Rush’s comments and an on-air apology from Limbaugh who was characterized in the letter as unpatriotic.

You can read the letter here (PDF).

The letter received a lot of publicity and media coverage mostly with a negative slant toward the conservative radio talk host.  But then Rush did something very clever.  He offered the letter for sale on eBay, promising to match the winning bid from his own pocket with the proceeds being donated to a Marine Corps scholarship charity.  The letter sold for $2.1 million, a record on eBay for a charitable auction.

This stunning PR move completely turned the tables on the Democratic Senators who now must be feeling pretty silly for jumping aboard Mr. Reid's wagon. 

Sometimes the outrageous can be the most strategic move you can make.

PS. This post is about marketing, not politics, so please don't assume I'm a dittohead.