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>c) very, very richly valued by the market right now. Yeah. I think, in fact, it's overvalued by the market right now. Many people are bidding for ad words

by lsc 14y ago

>c) very, very richly valued by the market right now. Yeah. I think, in fact, it's overvalued by the market right now. Many people are bidding for ad words as if the google adword is what brought you the customer. The thing is, at least in my case, this simply isn't true. Nobody buys a VPS on the first click; if someone clicks through a google ad for my company, yeah, google should get some credit, but most of the credit should go to the blog the customer saw a month ago. That's the thing; because the adwords are the first hits and are super convenient for the customer, they pick up a lot of people that would have clicked on the organic result. Now, this is okay if they are taking a very small cut, but the way many people use google adwords? the price is bid up to a very large cut of the profit you are going to earn from that customer. I mean, yeah, sure, if google really is bringing me brand new customers that had never heard of me; people I would not otherwise have a chance with, yeah, I can see paying 90% of the profit. But if google is bringing me customers that were very likely to come to me anyhow? eh, I'm not going to want to pay google nearly that much. I think this is also why facebook is so highly valued; people believe that facebook has enough tracking data to see that blog that my customer read last week that actually caused the customer to sign up through the adword this week. And maybe they do... but it's a dang difficult problem, and I haven't seen facebook make much progress. Even then, they are going to have a hard time integrating the people that heard of me because of the checkout-line advertisements I bought in Mountain View Safeways. (because of this, my advertising dollars go into cost per impression advertising, rather than cost per click.)

patio11 14y ago
While I do not disagree with what you have to say with regards to Google getting to claim credit for skimming the cream off of their advertisers' own brand equity (and then selling that cream to them at impressive prices), that's sort of orthogonal to the point I was making. Specific to, say, AdWords, the point I'm making is that people who a) have enough development capability to ship software products and b) also know AdWords well enough to get entrusted with a company's budget are as rare as hen's teeth. Because many, many companies have 6 figure AdWords spends monthly and generate millions of dollars of revenue as a result of them, someone who is capable of applying their skills horizontally across a company's AdWords operation (+) can be very, very useful to have around. There's approximately four people in the world that can do that. Two of them like their jobs, one just got funded, and the fourth one can charge whatever he darn pleases. (This is an exaggeration, but not much of one.) + You might naively assume I'm talking about the AdWords API, but there are so many things a developer could do to wring extra money out of an AdWords campaign that it is virtually cheating. A consulting client once bragged to me that they had a lot of landing pages, and they asked me how many I had. It turns out that they had 11 and I had, at the time, only 900-something. There are a lot of marketing departments which think that developing 900 landing pages would take a team of 20 people the better part of a year. A properly motivated intermediate Rails developer could bang that out on any given Monday. (P.S. If you're not going to make the company a million bucks next Monday, consider banging this out.)
- f0untain 14y ago
  Could you please point to some blog/book on why and how more landing pages translate into dollars ? I am a developer but totally new to AdWords or marketing. I had started a campaign for my online products but not getting enough traffic. I appreciate your help. Thanks.
- lsc 14y ago
  >Specific to, say, AdWords, the point I'm making is that people who a) have enough development capability to ship software products and b) also know AdWords well enough to get entrusted with a company's budget are as rare as hen's teeth. Because many, many companies have 6 figure AdWords spends monthly and generate millions of dollars of revenue as a result of them, someone who is capable of applying their skills horizontally across a company's AdWords operation (+) can be very, very useful to have around. This is something I have very little knowledge of... I have a (perhaps irrational and unjustified) generally low opinion of marketing people, and little contact with that world, but I thought that adwords/seo people were usually mediocre programmers. > (P.S. If you're not going to make the company a million bucks next Monday, consider banging this out.) so, how come you aren't a millionaire many times over? Clearly you are good at this sort of thing, you are a reasonable programmer, and on top of that, you are a good writer, and have a bit of fame. (I am convinced that being able to write well is one of those skills that, while nearly useless on it's own, dramatically multiplies the value of any other skills you obtain.) I mean, I'm not saying you are wrong... just that it's more complicated than that. Marketing fluff, I mean, selling something for money that is pure marketing and nothing else is harder than it looks. And actually providing a service to a large number of users is also harder than it looks. There is always that choice of "do I spend my time improving the product?" or "do I spend my time on marketing?" - the more time you spend on the latter, the harder the former becomes. The more time you spend on the former, the easier the latter becomes. This is my current problem; I can't add users much faster than I am without degrading the service for existing customers. Marketing, right now, is mostly a 'for fun' thing.
  - patio11 14y ago
    This is something I have very little knowledge of... I have a (perhaps irrational and unjustified) generally low opinion of marketing people, and little contact with that world, but I thought that adwords/seo people were usually mediocre programmers. You're mostly right. SWAG numbers: 50% of SEM/SEO professionals are FizzBuzz-level efficient in Excel, 10% of them know what a pivot table is, 5% of them know enough scripting to do their jobs. Against that expertise curve, the least accomplish programmer in e.g. an entire class of YC startups is a programming god among men. If you can ship products, you're so far ahead of the curve it isn't even funny. so, how come you aren't a millionaire many times over? The things I'm really good at tend to scale with the size of whatever line-of-business I'm allowed to work on. A 10% improvement in BCC's numbers is worth, ballpark, $5k a year or so. (Or it was before I doubled conversions recently -- guess it would be worth $10k a year now? Ask me in December for a better guess, summer throws things off.) A 10% improvement in $CONSULTING_CLIENT's $PRODUCT is worth, ballpark, a lot more. The large majority of that upside will accrue to whomever beneficially owns $CONSULTING_CLIENT. marketing fluff You don't need to have a product of your own to sell to monetize an engineering/marketing skillset if you (or someone in the audience) hypothetically has it. Many companies already have things to sell, and they will pay handsomely, in a variety of ways, for your expertise in making that happen. This is my current problem: I'd tell a client in your circumstance to focus on the hardware provisioning or CS bottleneck or whatever which is apparently making it infeasible to service VPS customers acquired at scale. In the meanwhile, continue experimenting with marketing channels. After solving the bottleneck, double down on whatever marketing channels seemed to work in microscale.
jonbishop 14y ago
The problem you're describing is well known in digital marketing. It's called "last touch attribution" - basically giving the last touch point your customer had with your company all the credit for the sale when there often are multiple touch points (story in techcrunch, blog post on site, mention on twitter, then finally a click on a banner ad when the customer is ready to buy). Here's a blog post on hacking Google Analytics to help: http://www.seomoz.org/blog/how-to-get-past-last-touch-attribution-with-google-analytics http://www.seomoz.org/blog/how-to-get-past-last-touch-attrib.... A google search for "last touch attribution" will give you other resources. Agreed on it being a very difficult (and valuable) problem to solve, though. The privacy issues with tracking a person's every touch point with your brand makes it even harder.
- lsc 14y ago
  Huh. cool. Of course, even if that problem is solved, it's still very difficult to track meatspace interactions (I spend, actually, more money on meatspace ads than on online ads. check out the checkout lanes in the safeway on shoreline in mountain view.) If I'm right that people are willing to pay more for advertising they can track, and that meatspace advertising will remain nearly impossible to track, meatspace advertising will remain undervalued.
nl 14y ago
The thing is, at least in my case, this simply isn't true. Nobody buys a VPS on the first click; if someone clicks through a google ad for my company, yeah, google should get some credit, but most of the credit should go to the blog the customer saw a month ago. That's the thing; because the adwords are the first hits and are super convenient for the customer, they pick up a lot of people that would have clicked on the organic result. This is called attribution measurement. It is generally considered the next big thing in advertising technology - primarily by anyone who runs a website where buying intent isn't obvious. I think this is also why facebook is so highly valued; people believe that facebook has enough tracking data to see that blog that my customer read last week that actually caused the customer to sign up through the adword this week. Facebook isn't valued because of this, it is valued because of the sheer volume of people. Facebook lets you advertise to people who "like" something, but doesn't do anything very smart to predict this (perhaps they might in the future). Google, OTOH, does have data on what you search for and actively uses it on 3rd party sites, as well as offering re-targeting.

by lsc 14y ago

patio11 14y ago

While I do not disagree with what you have to say with regards to Google getting to claim credit for skimming the cream off of their advertisers' own brand equity (and then selling that cream to them at impressive prices), that's sort of orthogonal to the point I was making. Specific to, say, AdWords, the point I'm making is that people who a) have enough development capability to ship software products and b) also know AdWords well enough to get entrusted with a company's budget are as rare as hen's teeth. Because many, many companies have 6 figure AdWords spends monthly and generate millions of dollars of revenue as a result of them, someone who is capable of applying their skills horizontally across a company's AdWords operation (+) can be very, very useful to have around. There's approximately four people in the world that can do that. Two of them like their jobs, one just got funded, and the fourth one can charge whatever he darn pleases. (This is an exaggeration, but not much of one.) + You might naively assume I'm talking about the AdWords API, but there are so many things a developer could do to wring extra money out of an AdWords campaign that it is virtually cheating. A consulting client once bragged to me that they had a lot of landing pages, and they asked me how many I had. It turns out that they had 11 and I had, at the time, only 900-something. There are a lot of marketing departments which think that developing 900 landing pages would take a team of 20 people the better part of a year. A properly motivated intermediate Rails developer could bang that out on any given Monday. (P.S. If you're not going to make the company a million bucks next Monday, consider banging this out.)

f0untain 14y ago
Could you please point to some blog/book on why and how more landing pages translate into dollars ? I am a developer but totally new to AdWords or marketing. I had started a campaign for my online products but not getting enough traffic. I appreciate your help. Thanks.
lsc 14y ago
>Specific to, say, AdWords, the point I'm making is that people who a) have enough development capability to ship software products and b) also know AdWords well enough to get entrusted with a company's budget are as rare as hen's teeth. Because many, many companies have 6 figure AdWords spends monthly and generate millions of dollars of revenue as a result of them, someone who is capable of applying their skills horizontally across a company's AdWords operation (+) can be very, very useful to have around. This is something I have very little knowledge of... I have a (perhaps irrational and unjustified) generally low opinion of marketing people, and little contact with that world, but I thought that adwords/seo people were usually mediocre programmers. > (P.S. If you're not going to make the company a million bucks next Monday, consider banging this out.) so, how come you aren't a millionaire many times over? Clearly you are good at this sort of thing, you are a reasonable programmer, and on top of that, you are a good writer, and have a bit of fame. (I am convinced that being able to write well is one of those skills that, while nearly useless on it's own, dramatically multiplies the value of any other skills you obtain.) I mean, I'm not saying you are wrong... just that it's more complicated than that. Marketing fluff, I mean, selling something for money that is pure marketing and nothing else is harder than it looks. And actually providing a service to a large number of users is also harder than it looks. There is always that choice of "do I spend my time improving the product?" or "do I spend my time on marketing?" - the more time you spend on the latter, the harder the former becomes. The more time you spend on the former, the easier the latter becomes. This is my current problem; I can't add users much faster than I am without degrading the service for existing customers. Marketing, right now, is mostly a 'for fun' thing.
- patio11 14y ago
  This is something I have very little knowledge of... I have a (perhaps irrational and unjustified) generally low opinion of marketing people, and little contact with that world, but I thought that adwords/seo people were usually mediocre programmers. You're mostly right. SWAG numbers: 50% of SEM/SEO professionals are FizzBuzz-level efficient in Excel, 10% of them know what a pivot table is, 5% of them know enough scripting to do their jobs. Against that expertise curve, the least accomplish programmer in e.g. an entire class of YC startups is a programming god among men. If you can ship products, you're so far ahead of the curve it isn't even funny. so, how come you aren't a millionaire many times over? The things I'm really good at tend to scale with the size of whatever line-of-business I'm allowed to work on. A 10% improvement in BCC's numbers is worth, ballpark, $5k a year or so. (Or it was before I doubled conversions recently -- guess it would be worth $10k a year now? Ask me in December for a better guess, summer throws things off.) A 10% improvement in $CONSULTING_CLIENT's $PRODUCT is worth, ballpark, a lot more. The large majority of that upside will accrue to whomever beneficially owns $CONSULTING_CLIENT. marketing fluff You don't need to have a product of your own to sell to monetize an engineering/marketing skillset if you (or someone in the audience) hypothetically has it. Many companies already have things to sell, and they will pay handsomely, in a variety of ways, for your expertise in making that happen. This is my current problem: I'd tell a client in your circumstance to focus on the hardware provisioning or CS bottleneck or whatever which is apparently making it infeasible to service VPS customers acquired at scale. In the meanwhile, continue experimenting with marketing channels. After solving the bottleneck, double down on whatever marketing channels seemed to work in microscale.

jonbishop 14y ago

The problem you're describing is well known in digital marketing. It's called "last touch attribution" - basically giving the last touch point your customer had with your company all the credit for the sale when there often are multiple touch points (story in techcrunch, blog post on site, mention on twitter, then finally a click on a banner ad when the customer is ready to buy). Here's a blog post on hacking Google Analytics to help: http://www.seomoz.org/blog/how-to-get-past-last-touch-attribution-with-google-analytics http://www.seomoz.org/blog/how-to-get-past-last-touch-attrib.... A google search for "last touch attribution" will give you other resources. Agreed on it being a very difficult (and valuable) problem to solve, though. The privacy issues with tracking a person's every touch point with your brand makes it even harder.

lsc 14y ago
Huh. cool. Of course, even if that problem is solved, it's still very difficult to track meatspace interactions (I spend, actually, more money on meatspace ads than on online ads. check out the checkout lanes in the safeway on shoreline in mountain view.) If I'm right that people are willing to pay more for advertising they can track, and that meatspace advertising will remain nearly impossible to track, meatspace advertising will remain undervalued.

nl 14y ago

The thing is, at least in my case, this simply isn't true. Nobody buys a VPS on the first click; if someone clicks through a google ad for my company, yeah, google should get some credit, but most of the credit should go to the blog the customer saw a month ago. That's the thing; because the adwords are the first hits and are super convenient for the customer, they pick up a lot of people that would have clicked on the organic result. This is called attribution measurement. It is generally considered the next big thing in advertising technology - primarily by anyone who runs a website where buying intent isn't obvious. I think this is also why facebook is so highly valued; people believe that facebook has enough tracking data to see that blog that my customer read last week that actually caused the customer to sign up through the adword this week. Facebook isn't valued because of this, it is valued because of the sheer volume of people. Facebook lets you advertise to people who "like" something, but doesn't do anything very smart to predict this (perhaps they might in the future). Google, OTOH, does have data on what you search for and actively uses it on 3rd party sites, as well as offering re-targeting.