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

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:

An 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.