Diorex

Because I am mad at Google about something totally unrelated, I figured I would keep the post streak alive and moan about Google some more…

I was doing some searches on the Google Keyword Tool the other day and one of my search terms was a trademark term and I found it interesting that there were no related keywords, just the brand name itself.

Here is a search for Intel - which yielded just a result for Intel itself.

Whereas a search for Capital One shows lots of related search terms that a trademark bidder would want to use to piggyback on the natural brand traffic.

Interestingly, if you dive deeper and type in related keywords they will show you the volume of that particular search term, but they still protect the brand.

Why do some brands get protection and others dont? Does it have to do with spend? or lawyers? is this available to smaller trademarks? I saw no pattern or rhyme or reason to why some brands or companies had protection and others did not, but obviously some are getting preferential treatment and others arent.

Any ideas?

Almost a year ago I suggested selling Google short.

Here is what the stock looks like since then courtesy of Google Finance.

I ended up shorting 100 shares at 704, but covered way to soon at 520, but that is not chump change.

I used to run a hedge fund and from time to time I make some bets, but I am almost always out of the market except for some retirement mutual funds. This year has been a great time to be out of the market.

The only other trade I made this year was long corn back in February and March and that was a nice win too.

Anyway, with Google now at $311 per share and trading at a PE below 20, I am starting to think about getting long again with no downside hedge. I will probably buy a few hundred shares with an exit price in the high 500’s.

Sure the growth has slowed way down, but there is still plenty left, mostly overseas, but also from Yahoo imploding and basically giving market share to Google.

A few other things I like - they are now starting to take ads on things they used to not in principle, like gambling outside the US or beer and liquor - this could be a few final last straws but I suspect there is some really good money there. They also have lots of talented people who are working for below market wages who now are totally underwater on options packages and thus they will need to work the stock to be able to keep them.

I suspect there are quite a few other levers that have not been turned by the financial guys at Google and now that growth has slowed, that these levers will be strategically pulled in time.

One other trade I am thinking of making is long Oil under $60 with an exit target around $90 in early summer - will probably cover that with some sort of options position in case oil goes to $40.

For those who have not heard, the Adwords tool is now giving approximate volume of searches.

I was prepared for this to be badly flawed like the volume estimates from the old Yahoo tool.

I was surprised by how accurate it was for many of the search terms I used, especially on the exact match setting. Broad match is always a little more hazy, so it was no surprise that my numbers varied, but even then it was not a dramatic difference.

This is valuable data Google is sharing, be sure to make good use of it when planning or expanding new adgroups.

On the other hand, the click estimate tool which guesses at volume and price of clicks received based upon a maximum bid is still badly flawed.

Lots of marketers, both affiliate and otherwise have been encouraged, bribed, cajoled or otherwise convinced to use Google Analytics to track their campaigns. I actually suspect that Google reps are incentivized to get advertisers to use the product.

The main selling point is that it ties into Adwords and uses tracking to determine your cost per lead/sale/whatever back to each keyword with little or no effort on your behalf. If you know which keywords perform good or bad you can then improve your ROI and become more efficient in managing your campaigns. The pitch is perfect for affiliates since they are typically both lazy and like the pricepoint of free.

Google recently bought Doubleclick and there was this huge uproar that they might be in the business of selling rankings via their Performics unit (which they said they would be selling that part of the company), but it turns out performics is also an affiliate marketing network.

Yesterday Google announced that they had renamed the affiliate network to the Google Affiliate Network.

Seems innocuous enough… NOT!

Heres why I think this is a major red flag… If you are an affiliate marketer using Analytics for a product through another network where you are driving traffic via search and Google also has that or a similar offer on their network, then they can simply arbitrage your conversion data and use it to identify the best converting keywords etc.

Say you sell Widgets and Google’s free analytics tool say that the keyword ‘blue widgets’ converts for you at a cost of $6 a sale, yet the widget manufacturer has an affiliate listing through Performics
paying $12 a sale. Your 100% ROI profit is in danger of becoming a $12 profit for Google.  Why should they share that with you? afterall it was their visitor in the first place. Your free analytics tool has now cost you 100% of your profit!

Think Google will not do it? The last time I read their terms and conditions, there is nowhere that it says they cant do this. They will make oral statements saying things like “If we did that we would lose the trust of our advertisers and go out of business”, but they have refused to put that in writing in any way, shape or form. In other words, they can do it.

Something to think about next time you take the easy way out and throw Google Analytics on your pages. There is no such thing as a free lunch.

As I was reading through the SEC posting about the Google Yahoo search deal, (Nicely summarized at TechCrunch) I ran across one tidbit I find very interesting and something Google may not have thought all the way through.

This line in particular: “Yahoo! also has sole discretion to decide on which pages to display ads provided by Google”

Any advertiser with a grain of metrics turns off the Yahoo content network due to the huge volume of non-converting clicks.

Google is also known to allow partners to serve search ads in some really strange places as search not content.

So if Yahoo wanted to hurt Google - My quick read saw nothing that says Google has a buyout right - I would just serve search network ads to the Yahoo content network.

Advertisers would start seeing their Google returns diminish greatly, Google makes it almost impossible to opt-out of specific advertising partners, and most advertisers do not even know that the search network is an option that can be turned off. If in mass, advertisers lowered bids by even 5%, that would take a huge chunk out of Google’s revenue and stock price, almost certainly triggering some articles about how Yahoo seems to be a better ROI for advertisers etc.

Probably will not happen, but what if…

Looking at GOOG stock after hours, it is once again at its all time highs of about $700 per share.

The metrics to me just do not make a ton of sense. It is trading at 54 times earnings and almost 20 times REVENUE, absolutely insane for a company thats growth curve has to slow and sooner rather than later.

Now I ask myself what major advertiser in this country or even the major economic countries is not yet advertising on Google. What company is going to come in and continue to push up CPC’s?

Absent continued quality score ‘adjustments’ how is this company going to drive further significant earning growth? Sure their is a little opportunity over seas that has not yet been exploited, but it is not like they have not yet launched in every major country. Some of its biggest spenders are financial and automotive companies that rely on availability of credit. These companies are in the midst of a huge mess and are probably not trying to figure out ways to raise their search engine exposure. A lot of major corporate spenders after years of too good to be true margins from search are starting to see that the CPC inflation has caught up ROI on search with other advertising mediums is starting to be more equalized. Throw in that search is a finite volume when compared to mass media or direct mail or even banner ads and that compunds the problem.

Google is trying to expand via acquisition, but more of them have turned into economics busts than revenue streams. Things like Grand Central, YouTube, Dodgeball, Orkut, Blogger and Dmarc just dont seem to be driving new revenue growth. Doubleclick is not looking like a sure bet to close. Yahoo and MSN are driving up the price of things like MySpace and Ask syndication deals, AOL is slowly crumbling, and publisher programs from YSM and MSN and Quigo are squeezing once lucrative Adsense margins.

They have failed to execute well on any of their offline initiatives, like radio, TV, print etc. Even so, the margins there are bound to be much much smaller than online revenues and thus the very attractive profit margins will not translate even if they can execute.

Google employees (the truly valuable ones who built the company) seem to be jumping ship on a regular basis leaving the company with a giant sucking sound at the top and middle layers of management and a whole lot of people who seem full of themselves just because they were employee number 7437 and are worth half a million in stock.

I am not saying this stock is not going to 800 or even 1000, much less sane things have happened in the stock market. I am just saying that the visible metrics and ancillary products don’t seem to be going at a pace to sustain the blistering growth that Wall Street expects.

As an ex-derivatives trader I know there are dozens of ways to short the stock while still limiting losses to the upside. The real trick is predicting the quarter when Google misses earning the first time and the air comes racing out of the bubble. I have not yet found the perfect trade, but I am thinking buying a near term out of the money call and combining that with a short of the stock. That way if I am right and it tumbles to $300-$400 range (a sensible valuation IMO) then I make out, but if it takes off or even stays relatively neutral, I am not risking significant amounts of money.

The actual trade will probably be significantly more complex like short a just out of the money call, then use that credit to buy 2 out of the money calls 50 or so points higher for even, plus sell the stock. LIke I said, I dont yet have the trade, but I am starting to look…

To follow-up on a recent post about domain and error page exclusion ability, we think we have a possible workaround that will enable us to bid on content, domain ads and error ads separately.

We have enough evidence to suggest that the conversion rate on these items are vastly different, and also are susceptible to fraud on different levels as well. As part of our philosophy we always want to bid on the lowest common denominator whenever possible. Match types are in different campaigns, almost all keywords are in their own adgroup etc.

We just put this live so I cannot guarantee that it works, and in fact am sure that Google’s screwy content system is likely to mess it up in some way, but in theory this will work.

We start with adwords editor and copy and paste the enitre content account into a spreadsheet. We then alter the URLs (that is our tracking mechanism) and upload the account twice into campaigns called error ads and domain ads. At this point we have 3 identical campaigns with same bids, ad copy etc.

We then turn off domain and error ads in the original campaign so that it is now content only. In the domain group we turn off error ads so that it is content and Domain ads. Similarly we turn off domain ads in the error ads group leaving it with just Error ads and content.

At this stage we need to eliminate the possibility of content ads showing in the 2 new adgroups. The way we accomplish this is by running a performance placement report and then negative matching every domain that shows up in both the error and domain groups.

This leaves us with 3 campaigns, one that is content only, another that is Domain ads only and a 3rd that is Error ads only. I can now adjust bids and monitor performance for each type of ad and bid according to the return I am seeing from these different tranches of content.

LIke I said it just went live and is not fully battle tested, but on paper it should work.

Paul at Uber Affiliate shared a tip with me about GeoTargeting at Ad:tech and then blogged about it today.

We had tested this in the past and our results were that our CTR went down significantly and our CR also declined slightly. One thought for the change, is that we are selling national products that people probably do not think of as state specific. I was more profitable even with the non-targeted out of zone clicks (which was less than 5% of total click volume) so since my primary goal is total profit, I preferred to do without the Geo-Targeting.

A second thing is that Google’s geo-targeting is screwy. For a long time our search results at the office thought we were in a city and state more than 1000 miles from our actual location. I have spoken with other industry Pro’s who also have similar problems. Also dont forget about the school district that sued Google because it showed ads for another country. I don’t exactly get a warm fuzzy when an advertisers tells me I can get a great deal 4 states away - their credibility (courtesy of Google) is shot from the start.

I think Paul’s idea of testing this is very valid and will probably work for some verticals. The problem is that lots of people will just read and implement without testing. Anything you read on my blog or any other should be taken with a grain of salt and only implemented if it makes sense for your business, as well as actually performs better than what you have now. The only way you will figure it out is by testing.

Just read about how Google is allowing advertisers to exclude different types of traffic such as Error Page or Domain Ads, as well as social networking, tragedy, gross-out and other pages.

I applaud that they are finally allowing advertisers more control over where there ads might show. I am frustrated that the additions are all or nothing.

If Google really wanted to let me have control they would let me run all of this stuff independently with bids and tracking for each. Say I just wanted to bid on error page ads, why not let me. As it is set-up now, I cannot put different bids on error page ads than I have on search ads.

When they let me do this in Content, my spending for that segment went from $0 to several million a year.

I suspect that domain ads convert really well (ok I know they do, but not all of them - negative site match domainsponsor.com and enjoy the increase in conversion) and might even be willing to pay more for them than I do for search…

What about the search network? I want to buy AOL traffic - I am lukewarm about Ask - I want to avoid Iwon and Lycos like the Plague. My search network bids end up being an amalgam of conversion. Say 80% of the traffic and 90% of the conversion comes from Google. I end up bidding less in Google in order to offset the lower conversion elsewhere. So I end up paying Google less for the clicks where they get 100% of the revenue.

Bottom line - the more segmentation and options you give sophisticated buyers, the more they will spend with you. I will spend it in different ways and in different places within the network based upon my conversions, but in the long run it will help Google earn more from me. (A scary thought…)

Ok here is something else I have been playing with that is having mixed results.

I find a page for which I want my ads to appear, but they are not currently. I want to be CPC, but I dont want the ugly site targeting ads that cost a fortune, I just want to show up in the normal adsense ads on that page.

This is probably stupid simple but here is what I do…

Go to the Google Tools page
Click on Keyword Tool
Then click on left tab “Site Related Keywords”
Then I copy and paste the URL where I want to appear
Make sure the checkbox is unchecked
Copy and paste all of the keywords Google suggests into a brand new adgroup

I usually not only show on that site, but on others I had not been aware of previously.

Not full-proof and not always cheap, especially if you are bidding on keywords not related to your site.

PS. Want to know what keywords Google thinks your landing page is about, do the exact same thing with your URL, use that list to massage your quality score for search.