Tuesday, February 20, 2007

Google Adwords with a private label / White label

In Norway, several search engines are trying to compete with Google. They're having two basic problems:
  • Relevance
  • Ad platform
In terms of relevance, sesam.no is doing a great jobb. They are incorpating Norway specific content like telephone listings, company information and Norwegian newspapers. Sesam is taking advantage of their location.

Sesam's main problem is the ad platform. They currently use Yahoo Search Marketing, which is far inferior to the Google Adwords platform(even after they upgrade to the new Panama platform in Europe).

So Sesam basically has three choices:
  1. Build their own ad platform(which I think they're trying to do)
  2. Use Microsoft Adcenter, Yahoo Search Marketing or Ask's ad platform
  3. Approach Google and get a private label version of Google Adwords
If they choose option on, they will most likely fail just like Microsoft and Yahoo have with their "new" platforms. They've spent million of dollars on development and they're still far behind Google Adwords.

If they choose option two, they have a better chance of succeeding since they benefit from the resources of the larger players.

The last option of private labeling Google Adwords is the most interesting one. This option has probably not even been considered, since it may not be possible. I think it would be interesting to explore. The advantage to Sesam is that they would get a user friendly and scalable ad solution that would be easy to fill up with advertisers(because advertisers already know how to use it). The advantage to Google would be that their platform would become the standard for internet advertising(it probably will anyway..) and at the same time assisting a smaller player generate more revenues. If Google's goal is to make Adwords the standard platform for all internet advertising, it would be a great move.

As Sesam continues to burn money, another Norwegian search player is way off. I recently blogged about how Kvasir is failing to understand (in Norwegian) the importance of an automated ad solution and they responded that they thought is was really important that their "talented" sales people took care of their advertisers communication. To me that seems very strange since the majority of Google's revenues comes from the Google Adwords platform.

Tuesday, January 09, 2007

Click revenues generated by bidding on brand names should go to the brand owner

Search engine marketers know that bidding on strong brand names is a great method to generate sales.

E-mail marketers know that a brand name in the e-mail subject line usually increases the open rate.

Online marketers know the power of branding in purchasing processes. Customers feel safer when shopping on well-known websites and the conversion rate on well-known sites will be higher(if all else is equal).

Brands are important. Large and small companies around the world are struggling to protect their brand names in all marketing channels.

Among the strictest are Nokia and Apple. If you are a mobile phone dealership and you would like to promote your product using Google Adwords, you have to ask Nokia and Apple for explicit permission to bid on terms that they own, i.e. Nokia and Apple iPod.

Instead of refusing advertisers to advertise on brand terms, Google should offer the brand owners a chance to make money when people bid on their brand names.

This is how it would work:
- An advertiser bids on the term NOKIA.
- An automatic e-mail is sent to NOKIA requesting permission to advertise.
- Click revenues generated by bidding on brand names should go to the brand owner
- Google should be paid a transaction fee for enabling the brand name rent

If this implemented the brand owner will always be able to spend more on protecting their brand in Google. The brand owner could pay more to affiliates and afford a higher cost per click. Google would avoid expensive lawsuits while enabling brand owners to spend more on keyword advertising.

Win - Win - Win.

Interesting statistics:
Hitwise Research shows that Internet users are increasingly searching by brand - 75 of the top 100 search terms across all categories in February 2006 contained brand names, an increase of 17% versus February 2005.