Jakob Nielsen has destroyed a lot of the admiration I once had for him by writing an absolutely absurb column on how search engines “feed upon” content sites and “confiscate” their value. Now all that is left is for Paul Krugman to write a column on how search engines prey on the world’s content.
Danny does a wonderful job of comprehensively panning the column while still letting Nielsen down gently by saying that he probably really meant that depending on search engines too much is a bad thing. But then again, if that was his main point, why write the article in the first place?
The meme of search engines preying upon content sites has been gaining steam, which first started with Tom Foremenski and Craigslist CEO Jim Buckmaster and the decision by Craigslist to ban Oodle, a classifieds aggregator.
The one nails-down-a-chalkboard point that Jakob Nielsen made was around search bidding. He gives a theoretical example of how a site that initially bid $4 a click on keyword X and improved its conversion rate was then forced to bid $8 a click and pass on that improvement to the search engine.
This is a transparent marketplace at its best, not worst.
What ultimately matters is not the velocity of improvement but rather the relative velocity as compared to an advertiser’s competitors. If you improve your conversion rate by 100% this year that only matters if your competitors improve it by less. Indeed you could find yourself unable to bid on certain keywords if a 100% improvement in conversion is substantially less than what your competitors are achieving.
Advertising transparency is good for the most efficient advertisers and great for the search engines. It is bad for inefficient advertisers who are unable to increase their conversion rate and other underlying business drivers fast enough. That’s just Charles Darwin.
Ironically this fundamental dynamic of search marketing will create immense demand for the services of Jakob Nielsen. Maybe he should just pipe down and start taking the orders from high volume search marketers that will inevitably ensue in the coming years.
