|Googlenomics: Data Is The Key To Profitability|
Googlenomics: Data Is The Key To Profitability [wired.com]
|Keywords and click rates are their bread and butter. "We are trying to understand the mechanisms behind the metrics," says Qing Wu, one of Varian's minions. His specialty is forecasting, so now he predicts patterns of queries based on the season, the climate, international holidays, even the time of day. "We have temperature data, weather data, and queries data, so we can do correlation and statistical modeling," Wu says. The results all feed into Google's backend system, helping advertisers devise more-efficient campaigns. |
An interesting article from Wired about Google and how it sees value in its data.
Hat tip to ogletree
those who adopt data driven decision making are screaming ahead of those who are just swagging it.
|those who adopt data driven decision making are screaming ahead |
All the banks, investment bankers, fund managers, economists, policymakers, government agencies, etc. were . . just swagging it, eh? That's why the world economy is in a meltdown? Due to a lack of data driven decision making?
Darn those swagging credit card holders and their lack of data driven decision making!
Data, numbers, are impersonal.
In complex situations, data is a also way too subjective: what do I measure A, or B (or C, but I didn't know C existed).
Data handling is not like pure math or physics (well defined problem, equations, sometimes closed form expressions), it's more statistical and actuarial, and thus imperfect.
Nonetheless, there is vast amounts of knowledge to be unlocked with all the data spewing tools that Google has put in the Webmaster's hands: Analytics to track how your site is perceived by G, AdSense channels to see what works are my 2 most important.
|All the banks, investment bankers, fund managers, economists, policymakers, government agencies, etc. were . . just swagging it, eh? That's why the world economy is in a meltdown? Due to a lack of data driven decision making? |
Darn those swagging credit card holders and their lack of data driven decision making!
i meant in internet marketing, but you bring up an interesting point about the world, beyond webmastering for money.
while you may question whether the point i made is the reason for these things, you do so emotionally and without basis. i didn't make any comments about world economies or meltdowns, and the report i was commenting on was clearly defined and restricted to our usual topic fare here. so why the emotional extrapolation from you? please do let us know how you made that decision and what you hope to accomplish with it.
[edited by: RhinoFish at 2:01 pm (utc) on May 26, 2009]
"In complex situations, data is a also way too subjective: what do I measure A, or B (or C, but I didn't know C existed)."
Very true and very valid point, but I didn't say to begin haphazardly collecting any data you can locate and start making decisions from it. Being data driven includes refining and optimizing data collection, not just analysis and beyond. It also includes continuous exploration of new tactics and techniques to uncover, and find utility in, new data.
[edited by: RhinoFish at 2:00 pm (utc) on May 26, 2009]
"Data handling is not like pure math or physics (well defined problem, equations, sometimes closed form expressions), it's more statistical and actuarial, and thus imperfect."
Another valid, true and important point! I didn't say being a data driven marketer is perfect, I said it's gives you an advantage over others because it's better than not being data driven. So it's not a question of finding perfection, it's optimization, on a relative scale.
|All the banks, investment bankers, fund managers |
Were driven by greed, based on commissions based upon short term turnover as opposed to actual long term profit generated..
|economists, policymakers, government agencies |
Were either on revolving door employment contracts into and around the very people whom they were supposed to be overseeing ..or were having their dinners , vacations etc paid for by the former or the formers lobbyists ..there is a word ( we don't use such 4 letter words here ) for that kind of treachery towards citizens by public servants ..
The whole mess was bound to end in tears ..some of us said so years ago even here ( threads about affs whose main business was providing leads for debt consolidation or sub prime providers via their aff "schools" ) ..and the worst is yet to come when the insurance policies on the reselling of toxic assets that went on before 2008 have to be paid ..lehmans and madoff will seem tiny and inconsequential when that financial tsunami rolls over ..or we'll have a war or two to distract the gallery and reduce the mouths to feed ..plus que ša change ..etc.
The data is/has always been available ..collating and interpreting it is the easy part ..facing upto and acting upon what it tells one is the hard part that needs intelligence "guts", drive, resolve, and the ability to think further than next week or quick bucks..
Google given data is however different ..it's source ( Google ) is not impartial ..it has it's own aims and agendas ..they may or may not coincide with mine or yours ..so IMO their pronouncements are suspect and never to be trusted 100% ..they will help you to help them better ..but they are always their first priority.
Reminds me of the story of a group of blind men trying to discern the nature of an elephant by touching it ..one has a leg ..to him it is a like a tree ..another has the tail ..to him it is like a donkey ..one has an ear ..to him it is like a great bats wing ..and one has the trunk and to him it seems as a great snake ..
If they all bring food it will allow itself to be touched ..
But if it sees tastier food a little way off it will move on..and elephants do not step around what they consider to be ants ..they step on them ..not from malice ..they are just individually too small to be considered ..in an elephants scheme of things ..
Here we are exchanging data and our personal perceptions of the elephant that is Google ..here is a very usefull place to try to pool our experiences and knowledge of the animal..as long as we remember not to believe totally anything that the elephant may have to say or try to hint to us on the subject ..
To Google ..we are all expendable ..there'll be another webmaster, advertiser, publisher along on a minute ..and another ..and another ..and that is the way of things and is how it will be ..
hmm, reminds me of the 41 hues of blue. :-)
I have to agree RhinoFish. People who have the data, can quite easily see where theres money to be made. And some banks, credit card companies etc are not following what their own data is telling them.
I personally dont believe that the 'economy is in a meltdown', but is in a big state of change (actually partly due to the internet), and that isnt being measured correctly.
Greed and lack of any responsibility overtook the use of data in financial markets. There were many who could intuitively feel it was going to end badly.
Thing in the marketing world is so many still don't collect data or look at it, don't do anything with it or discount it and still shoot from the hip. Data --> Information --> Knowledge -->Action --> Analyze --> Repeat.
In most cases, those who do, particularly on the web will be crushed by those who pay attention to what is going on under the hood and let that be their guide along with some common sense gut checks.
"In most cases, those who do, particularly on the web will be crushed by those who pay attention to what is going on under the hood and let that be their guide along with some common sense gut checks."
Exactly! And I really like the way you phrased this. One big problem is ignoring all data. Another problem, also huge in its own right, is not applying common sense in gathering or analyzing data. The latter causes more ROI pain, in my experience. Blindly following certain numbers can get you in some real serious ROI trouble.
I'm glad to see this thread, because I read this article earlier today and I was particularly struck by the excerpt posted above. That excerpt really isn't central to the article, which is more focused on the auction model. But I was really struck by the excerpt because it resonates so closely with the conversion optimizer that Google was really pushing at the beginning of the year. I'm sort of surprised no one else has mentioned the conversion optimizer, because it seems so germane to the discussion that has been unfolding here.
If success really does come down to a matter of prowess in terms of analyzing data, it seems that the conversion optimizer would be pretty stiff competition...
...at least in theory--I'm not very up to date on current opinion of the optimizer. I use it on one campaign and it hasn't put me out of a job yet.
optimizing conversions and optimizing profits are two different things, unless you only sell one item (or every item has the same profit margin and cost basis).
that said, if you're not doing any analysis, then allowing the conversion optimizer to make choices for you, would likely improve things. then again, if you're the type not doing any analysis, i doubt you'd fiddle with the conversion optimizer either.
I suspect that paying "too much" attention to "data" is the quickest way to failure via the lowest common denominator.
Or perhaps optimizing conversions is a part of optimizing profits, rather than those being two different, discrete things.
Thus making the conversion optimizer just a tool at our disposal rather than a robotic replacement, as I originally phrased it.
It's all kinda complicated. I've seen new VPs of marketing who have lots of data and some experience with it who don't get the web. Ya gotta get the web. They'll come in and see a search campaign generating $5 in sales for every $1 spent, double the budget from say $150K a month to 300K a month, demand it gets spent and then throw a fit when the incremental $150K in spend generates $150K in incremental sales even after we tell them that is exactly what will happen. Ya gotta understand the dynamics of the web, search and a demand driven marketplace.
Companies need to understand the sleight of hand pulled in reporting media (banner) campaigns when lumping "view through" conversions in with click-through conversions. If the measurements changed to be the same as search where someone must click on an ad and buy something, not just get cookied because they were on a page where there was an ad, CPMs in media would plummet to nothing. Ad networks and big media agencies will do anything in their power to keep the measurements from changing.
Data is very useful in PPC campaigns but paid search is fundamentally a language problem and not so much a bid problem (where everyone puts all their efforts and millions of dollars). Get the language right and the bid stuff gets a lot less important.
You need to collect the right data, make all decisions on the web under the constraint of "will this help us make more profit now and/or in the future?".
It takes data and a "systems" thought process - see Peter Senge in the "5th Discipline" (book) and Goldratt, "The Goal" (theory of constraints). Both were penned well before the web got big but outline the type of non-linear thinking required to succeed on the web.
Brute statistical analysis doesn't work so well on the web, IMHO, but it seems that that is what the engines use to analyze data. Maybe it is necessary with the volume that they have. Pure statistical analysis is no substitute for thinking about the intent behind the action and looking at the actions (data) on a pretty granular level to get a better "feel" for the intent behind the query or action.
If they really believe that the loose match types are good and that an algo that matches out terms does anything more than drive click prices higher and generate more revenue for the engines, then I think they are kidding themselves.
It will be interesting to see if Facebook can do more with their data than ad networks. Both can collect all kinds of stats about people and their behavior online. Person X visits these 5 sites, did a search for these terms over the last 4 weeks, is 45 years old, etc... and they can serve an ad to very targeted demos and profiles. They cannot take intent into that equation and I think intent is the single most important thing. With search, there is definitely intent because the person is searching for something and intends to find something. By looking at the stats from search you can get a pretty good idea of whether or not you are anticipating intent of the keywords accurately.
As a professor of both Computer Scientists and MBA students at the University of Colorado, your comments re the void between Monetary Intelligence and Technical Intelligence reminded me how critical it is to have upper level management skilled in SEO, Networking, Security and proficiency in at at least two computer languages.
Let me be the first to welcome you to WebmasterWorld Dr Lewis.
(Your words stuck me as obvious statement that sounded quite complicated!) I do agree that anyone trying to make money from the internet do need to be skilled in a few different areas.
Thank you for your kind words! I look forward to reading more of your comments.
Its ironic that with all our computational math re SEO blah blah blah. Matt Cutts puts it so simply in his recent interview. Its compelling to bear in mind that this guy kicked BMW off of the Internet. He espouses that data is indeed to key to profit - not Black Hatting