Memo from Martin P Burns of PricewaterhouseCoopers -------------------- Start of message text -------------------- Actually, I'm not *that* upset about it - and I suspect most users won't be either. Most consumers don't give a stuff about finding non-paid listings. All they care about is finding something which matches their needs well enough. That's why consumers continue to use the yellow pages (where *all* entries are paid for), and classified pages of newspapers (likewise). Now if you're doing real hardcore research, then sure, the best result regardless of whether its been paid for (and that works both ways btw) is needed - that's when you hit Google. The other useful bit of transparency is that you can see *exactly* how much each advertiser has paid for that link. And of course, spamming search engines with irrelevant categorisation is going to get damn expensive - much business advertising effectiveness is based on cost per response. Where this can be directly attributed to accuracy of targetting, spamming will reduce. It works like this - suppose your messages cost $0.10 each. There is a likely market (ie people who need the stuff you're selling right now at the price you're selling it, will buy using the medium you're using and respond to the tone and pitch of the campaign (note that these factors are in the approximate correct descending order of influence)) of 1000 people. Your perfect campaign would only send messages to those thousand people, who would then respond. Number mailed: 1000 Cost per mailing: $0.10 Total cost: $100 Number responded: 1000 Cost per response = $0.10 If the gross profit margin per product is $5, then your net profit margin is $4.90, and you just made $4,900. You're a hero. Clear? OK. Now you do the same mailing, but with worse targeting. You mail 100,000 people, but there's only the same target market of 1000. So only 1000 people respond. Number mailed: 100,000 Cost per mailing: $0.10 Total cost: $10,000 Number responded: 1000 Cost per response: $10 With the same gross profit margin, you've just lost $5,100 and probably received an envelope containing a pink slip. The good direct marketeers always knew this - most good DM campaigns are *highly* targeted (as is possible within available data). The vast majority of offers you get are at least in categories you *might* be interested in. The more data a marketeer has about consumers, the more they can *exclude* consumers with a lower propensity to purchase. As the old marketing dictum goes "Half my marketing budget is wasted. I wish I knew which half" Cheers Martin Please respond to thelist at lists.evolt.org Sent by: thelist-admin at lists.evolt.org To: "'thelist at lists.evolt.org'" <thelist at lists.evolt.org> cc: Subject: RE: [thelist] should we just give up and buy the darn keywords/ra nkings? Obviously this is a sad, sad thing for information-rich, money-poor websites - the fact that a company PAYS to have its site listed in search results is in no way a reflection on the quality of the site itself (whether it contains any actual information)... and those sites that cannot afford to pay for SE results will likely see far less traffic if this trend continues. It's also bad news for surfers, who may not realize that paid placement does NOT guarantee keyword relevance, but who may tire of sifting through paid results before they ever get to the non-paid listings. Hell, this could cast a huge pall over the credibility of the entire internet as an information source, if surfers find that "paid" placements aren't relevant to their keyword search. Finally, SE's must identify paid placements as just that in order to protect their own credibility. Bad news, bad new, bad news, IMO. Janet -----Original Message----- From: Fortune Elkins [mailto:fortune_elkins at summithq.com] this article really kinda threw me into despair: http://www.nytimes.com/2001/06/04/technology/04GOTO.html --------------------- End of message text -------------------- The principal place of business of PricewaterhouseCoopers and its associate partnerships is 1 Embankment Place, London WC2N 6NN where lists of the partners' names are available for inspection. All partners in the associate partnerships are authorised to conduct business as agents of, and all contracts for services to clients are with, PricewaterhouseCoopers. The UK firm of PricewaterhouseCoopers is authorised by the Institute of Chartered Accountants in England and Wales to carry on investment business. PricewaterhouseCoopers is a member of the world-wide PricewaterhouseCoopers organisation. ---------------------------------------------------------------- The information transmitted is intended only for the person or entity to which it is addressed and may contain confidential and/or privileged material. Any review, retransmission, dissemination or other use of, or taking of any action in reliance upon, this information by persons or entities other than the intended recipient is prohibited. If you received this in error, please contact the sender and delete the material from any computer.