Ex-Googlers Bust Google SEM Brand Battle
By DONNA BOGATIN • Mar 31st, 2008 • Category: CONFERENCE CIRCUITOnce a Googler, (not) always a Googler? While the Googleplex holds a tight leash over public commentary of its “rocket scientists,” alumni of the number one search engine are proving talkative once out of Mountain View’s gates.
Google was absent from the Advertising Research Foundation conference’s power panel on online advertising in New York City this afternoon, but former Google standard bearers Ash ElDifrawi, Netshops, and Patrick Keane, CBS Interactive, shared rare insights into the difficulties Google faces in winning over the hearts and spends of coveted Madison Avenue advertising accounts.
I have consistently refuted Google’s consistent claims of no theroretical ceiling to its CPC monetization. Today, the two ex-Googlers reinforced my assertions.
ElDifrawi recounted that when he had first started at Google, he reached out to all his brand marketer contacts as a Google ambassador. Incredulously to Google, brand marketers where incredulous about Google: What is it that Google does? How does Google make money exactly? ElDifrawi shared were typical high quality marketer reactions to Google’s branding pitch.
ElDifrawi joked: Have they heard about Google’s margins? Keane seconded the Google has no shot at big brand advertising dollars theme:
We met with Kraft and all the CPGs, they showed us how TV advertising could lift sales, but we couldn’t show the same for search.
Despite Google’s inability to make serious hay with Madison Avenue, comScore Chairman Gian Fulgoni touted his Google and Yahoo sponsored studies attempting to slef-interestingly convince that search spend is enormously undervalued, by a purported 80%, if latent and offline consumer (difficult to measure) impacts are taken into account.
During the Q & A, I questionned the sustainability of auction-based, bid up our own rate card ad models, saying:
“Former Google staffer Ash ElDifrawi joked about Google’s oversized margins, while comScore nevertheless promotes that the search buy is undervalued. What is the impact of CPC auctions on rates of SEM adoption across diverse verticals? Are there certain categories that are more resistant to self-inflating ‘rate cards,’ despite theories of self-liquidating bid pricing?”
ElDifrawi indicated that an aggressive bidding up of auction-based clicks is not sustainable across all verticals.
Lee Doyle, CEO, mediaedge:cia, said CPC bidding approaches vary by industry, depending upon individual consumer lifetime value and profitability analysis.
Ted McConnell, Proctor & Gamble, the one consumer brand marketer on the panel, was the most explicit: “We are not going to pay $2 per click for “shampoo” when the bottle itself sells for $2,” he emphatically responded.
McConnell indicated that competitive search auction bidding scenarios often result in shady marketers bidding up CPC beyond brand advertisers’ reach. For example, purveyors of baldness cures sell $20 products made from 10 cents worth of ingredients and therefore render category keyword bidding useless.
Bottom Google SEM brand marketing line? Google CPC is NOT a Madison Avenue hit.
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DONNA BOGATIN is the Founder & CEO of STARTUP ALPHA
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