Competition is Awesome
As seen in SEW Amazon and Wikipedia are forming a search engine.
I absolutely love the idea of there being new blood chasing after my advertising dollars. The way I see it, I am going to be better at Search Engine Marketing than my competition because it is all I do. The more complex they make the game by having different engines and interfaces, pricing structures etc, the better I will be able to position myself in various verticals, the more volume I will be able to drive, the higher payouts I will be able to negotiate, the more I will be able to pay to drive traffic. Like a never ending cycle of prosperity.
As strange as it sounds, I want my competition to get so fed up with the time and resources it takes to manage this that they either hire someone in house to do nothing but this, or even better they go out and hire a SEM firm to do it for them.
The in-house guy is going to be green at best, the guys doing this for themselves should be making far more than any company is willing to pay, so this rookie is going to come in and make all kinds of rookie mistakes. He is actually going to listen to his Google rep say “Try raising your bids”. They will re-write ad copy, they will make mistakes that I made 5 years ago. While all of this is happening, I will just crush them and take their customers.
The professional firms are even better. They charge an arm and a leg based upon total spend, and by the very nature of the compensation package, many of the suggestions they make will be questioned by the firms that hired them. Most of these firms have 2-3 SEM rock stars that make a ton of money and are very good at what they do, but those guys focus on the accounts spending millions. That leaves the $36,000 a year, just graduated finance or marketing majors to run the accounts I am competing against. They are green, they are cautious, they have to win confidence and trust, plus they are probably working on 4 or 5 accounts at a time.
The focus for search firms becomes driving traffic. The goal of SEM is to drive conversions, which requires landing page testing, very tight analytics and tracking, and the willingness to intentionally lose money. That is a tough sell to a client who might already be skeptical.
I am a firm believer, that the more complicated this business gets, the more money those who do it for themselves full time will make.
In my mind the worst thing that could happen is for MSN to buy Yahoo, the best thing would be for Amazon/Wiki to roll out a killer product, I want Ebay and IBM and others to get in this game. Lets make it as complex and difficult as possible.
I want to read a hundred more articles just like this one in Forbes.
December 25th, 2006 at 12:13 pm
[...] As an ex-trader myself (just like Wales) I tend to believe that our mindset is to exploit market inefficiencies. Wales saw one in online encycolpedias, he is teaming with a company that created the idea of an online marketplace, I am guessing they are doing so because they see an opportunity. If I was them, I would not spell out that vision to me, you and Google either. I am not sure if this new engine will support ads (I really hope so… wrote about that a little bit in my blog yesterday.) Although Google is the best of the best right now and for the last 4-5 years, that does not mean someone else can not build a better mousetrap. In 15 years or so of the public internet, there have been 3-4 different dominant search players. The fact that Google was the first to really figure out how to monetize it does not mean they have been granted a perpetual monopoly. Easy to do. No. Possible. Yes. I for one am excited by the possibilities. __________________ Why Not Everyone else is Blogging…. Life and times of an internet marketer [...]
June 17th, 2007 at 8:55 pm
“They will re-write ad copy, they will make mistakes that I made 5 years ago.” Wow this sounds like me. Today. When did it finally hit you that you could do this for a living and make a good living doing this?
June 17th, 2007 at 9:21 pm
@ Al - I got lucky and made money on my first $$$’s spent. This was an eon ago it seems. So as things have progressed, I have had real money to lose by not keeping up with progress which has actually helped me a lot.
Just for example, assume you are making $25k a month - then the search engine changes something and all of a sudden you make $10k a month. While at the same time someone new starts and makes $10k his first month. They are ecstatic and probably a little complacent - meanwhile you have overhead based upon $25k a month + You have knowledge of what is possible from both a volume and CR standpoint. You should fight like heck to get back to $25k. Then the next time the engines change something and you again go from $25k to $10k the guy cruising along at $10k might go to $0 per month and then say “well that was good while it lasted” and move on.
I see lots of URL show up for 6-9 months and then totally disappear. Always seems to happen shortly after major changes in Big G’s algorithm.