free html hit counter As We Head Toward A More Conversational Interface, Can AdWords Keep Up? | John Battelle's Search Blog

As We Head Toward A More Conversational Interface, Can AdWords Keep Up?

By - May 15, 2009

Gian Fulgoni, Executive Chair of Comscore, has an interesting analysis of what’s happening in paid search lately. It’s germane to my earlier posts about paid search share sliding and Google’s decision to allow trademark ad bidding.

In his post, Gian notes that overall search queries are up dramatically (68% over two years) but:

if one looks at the number of paid clicks, the growth rate is a lower 18%, which raises the question: why have paid clicks grown 3x slower than the total number of queries?

Gian answers:

The reason appears to be that the ad coverage (i.e. the percent of search results pages with a paid ad) has dropped from 64% to 51% of searches.

Here’s where it gets interesting. Why has ad coverage dropped? Gian has two hypotheses. First, search engines are getting better to reduce less relevant advertisers from the mix. But the second reason points to a more important potential breakdown in the AdWords model:

comScoreWords-per-SearchUS.gifAn analysis of comScore data shows that search queries are actually getting longer and that as searchers become more experienced they are using more words per search query. And this apparently reduces the likelihood that an advertiser has bid to have his/her ad included in the results page from these longer queries, due to paid search advertising strategies that limit ad coverage, such as Exact Match, Negative Match, and bid management software campaign optimization.

In short, our queries are getting closer to real conversation, real natural language, and Google’s algorithms are having a harder time keeping up – matching advertiser demand to our increasingly complex queries.

As Gian said, fascinating.

Also worth noting, my pal Chas’s analysis of what the decline in paid search means for brand advertising.

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11 thoughts on “As We Head Toward A More Conversational Interface, Can AdWords Keep Up?

  1. Chas says:

    Thanks for the shout-out, John. I think we’re witnessing an early sign of “peaking” at Google, and for the direct-response wave of online advertising. That’s not to say that paid search is over, or that all the ad networks will be out of business by Thanksgiving; it’s just to say that growth rates for brand-building investment will grow faster than DR / CPC investments. That’s good news for quality publishers.

  2. I think this might mean something different – that people are creating more targeted intent and marketers will be able to target better in the future. This equilibrium will create a gap for now, but as it fills in you will actually be able to reach people in better ways as a result of a longer query.

    I think there is still a large amount of people who do not understand advertising accountability, and paid search provides a way to track this.

  3. James says:

    I remember seeing a Google presentation by Udi Manber, Google’s VP of Engineering, a few years ago that mentioned offhand that 20-25% of all searches on any day had never been done before.

    Details: http://www.flickr.com/photos/lynetter/649325804/

    This explosion of variance and complexity, combined with the orientation of marketers to adhere to budgets, had to reach its tipping point sometime.

    It appears the complexity of purchasing the ads has started to prevail against the management tools in place to make it accessible.

  4. nmw says:

    It’s a fallacy to think that longer search queries are closer to natural language than shorter queries (i.e., by number of words)

    In fact, they are probably more removed.

    It’s mainly novices who do not understand that Google queries are “artificial” just as the command line (e.g. DOS) is artificial.

  5. Giuseppe says:

    It’s wrong to consider longer queries as closer to natural language, therefore more conversational. what we see instead is a trend toward more refined and specific queries. 5 years go people would search for “Hotels in London”, whereas now they tend to look for “Hotels in Central London close to British Museum”.
    Stan Schroeder also gives an interesting point on Mashable

    http://mashable.com/2009/05/14/semantic-web/

  6. Free PPC says:

    Cost per click is very expensive. Adwords can’t keep up any longer.

    Brand advertising is the new trend that’s why Google will allow now to bid on trademark terms in their Adwords.

    But still Adwords ppc can’t keep up any longer.

  7. People are simply getting better at search queries; with the natural result being more words used. Isn’t that the news here? Especially to the 98%+ of advertisers that should not consider brand advertising. Sponsored search is a wonderful direct response vehicle and won’t be going away anytime soon.

  8. Jim Kovarik says:

    John – interesting to see your post as I’ve sensed this was occurring, and so we’re working on something now that we think addresses this oppty.

    And I agree with Eric above, that Adwords just hasn’t caught up to the increased specificity of how people are searching. But that’s more of an opportunity for Google than a limiting factor, and if they provide more targeting capabilities in Adwords marketers will continue to spend heavily on search.

  9. amit says:

    is this based on US data only? I wnoder if the growth is from geographies which have a poor ad coverage resulting in lower clicks…

  10. Well, I think this is great news for SEM agencies like ours.

    For years, top sales guys at Did-It, SendTraffic, ICrossing, or wherever have sold clients on the idea of HUGE keyterm builds being paramount to their success. The account managers running the campaigns, by contrast, will tell you that’s nonsense, and that properly focusing on the top 5 keyterms is a better use of one’s time than building out endless lists.

    It’d be nice for us if these bigger builds really did equate to client success.

  11. corfu says:

    I think adwords will not disappear in a short future ,but it’s hard to say the reason.