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Google Educational Webcast on Search and Search Advertising (September 2009)

Google Educational Webcast on Search and Search Advertising (September 2009)


>>SHIM: Hello every–hello everyone, this
is Maria Shim from Google Investor Relations. Welcome to Google’s first investor webcast.
Instead of holding an Analyst Day we are kicking off our educational webcast series. So please
give us your thoughts once we are through today. Please note also that we are not talking
about our current quarterly performance so we will not be taking questions about that
today. If you want to ask a question you will need to submit your question on our Google
moderator page which can be found our website at inverstor.google.com/webcast. You can also
vote for the questions you believe should be asked. So please go to our moderator page
and vote. Before we get started let me quickly cover the safe harbor. Some of the statements
we make today maybe considered forward looking and these statements involve a number of risks
and uncertainties that could cause actual results to differ materially. Please note
that these forward-looking statements reflect our opinions only as of the date of this presentation
and we undertake no obligation to revise or publicly the results of any revision to these
forward-looking statements in light of new information or future events. Please refer
to our SEC filings including our annual report on Form 10-K for the year ended December 31st,
2008. As well as our earnings press release for a more detailed description of the risk
factors that may affect our results. Copies can be obtained from the SEC or by visiting
the investor relations section of our website. For that I’ll turn things over to Patrick
Pichette, Google’s CFO.>>PICHETTE: Thank you Maria and welcome everyone.
Thank you for joining us today. As Maria mentioned we’re trying something new today. Instead
of having these traditional day long analyst day later this Fall. We thought instead we
would try something new in typical Google fashion. That makes better use of your time,
covers more topic, in more depth and in fact cover multiple topics over the course of the
next year. Each webcast will focus on a different part of Google’s business and operations.
Again as a reminder this is an educational webcast series designed to give you more insights
into our business. This is not about our quarterly performance which we till talk about in October
on our next earnings call. Today, we’re starting with our core business, our search and monetization
business. We have a great team here in Mountain View to talk about it. We’ll start with Susan
Wojcicki. And for the people who don’t know Susan she is employee number 16 at Google.
She’s also managing our ads product for the last three years and had been or has been
managing our AdSense product from its inception seven years ago. She is the executive who
leads our ads team product today and will provide an overview of the topics we’ll cover.
We’ll also hear from Johanna Wright to talk about our search quality but also from Ariel
Bardin, Amy Chang and Nick Fox from our ads monetization team. We’ll end up with some
Q and A as Maria Shim mentioned, which will be–will take from the Google moderator as
well as on the phone. So there’s a lot of ground to cover in the next hour and so with
that I’ll turn it immediately to Susan.>>WOJCICKI: Thank you Patrick. Good morning
and good afternoon to everybody. I’d like to begin by first talking about our Search
business. This Search has been Google passion and focus since Day 1. For us a good search
experience means showing the right result to the right user at the right time. And although
we’ve made a lot of improvements in search over the last 11 years, we still think there
is a lot of room for improvement and for us to continue to improve the results and to
innovate. We often say here that we believe that Search is just in its infancy. A few
trends that I’d like to talk about today, which we see as impacting the future of Search.
The first is there’s been an explosion of information online. There are more Internet
users coming online. And with all of the web publishing tools available to everybody anyone
can be a publisher, a blogger or a video producer. And as a result we need to search over even
more information and we have the opportunity to connect the right content to the right
user. We’ve always strived to be as comprehensive as possible in order to make sure that we’re
always finding the right information for the right user. We’ve summed up this trend by
saying there’s been no recession in information. We’re also focusing on continually integrating
new kinds of information into our search results and serving the exact right kind of information
at the right time. For the last few years we’ve been integrating video, books, maps,
products, blogs and all kinds of other information into the search results and improving our
algorithms to serve the right kind of information at the right time. Just as a reminder, when
we type in a hotel today, we are not surprised when we seen it shown on the map. But a few
years ago, just to remind you, this did not exist. And some people at that point thought
it was just a dream. There’s a lot more that we can continue to do and a lot of different
ways that we’re innovating information, that we’re–that we’re showing the right information
at the right time and we’re continuing to innovate in the algorithms with lots of different
kinds of information. We’re also continually working to make our search more global by
allowing any of our searches to happen in any of the languages and we’re enabling translations,
with the goal that anybody should be able to read anything on the Web. We’re also with
the–with the continued proliferation of mobile devices worldwide we want to enable our users
to be able to search on any kind of device. Mobile phones also enable us to do a lot of
new cool things that we weren’t able to do in the past. For example, this morning on
my BlackBerry, I was able to be able to do a voice search for doughnuts and find out
that there was a Krispy Kremes located just across the street. And lastly, we’re always
focusing on improving our search algorithms making our search faster and offering it the
freshest results possible. All of this, we’re searching over all kinds of information in
all locations on all devices in all languages. So as you can see we’re going to be busy for
a while. But ultimately we believe that the future of Search is about continuing to innovate.
Every quarter we have about 90 or so innovations to our search quality, which is approximately
one a day. At any given time we’re running anywhere between 50 to 20 search experiments
to test new ways of continuing to improve our search. Our pace of innovation is accelerating.
We see more opportunities to continue to improve our search experience. We’ve made a lot of
exciting advancements and we’d like to show some of them to you today. So I’d like to
turn it over to our Director of Search Qual–Search Experience and Search Quality, Johanna Wright,
who will be talking about some of these ex–some of these new things for release and then I
will come back and talk about innovation in advertising and we’ll have demos in the search
advertising area as well. With that let me turn it over to Johanna.
>>WRIGHT: Hello, I’m Johanna Wright. I’m the Director of Product Management here at
Google responsible for Search. I’ve been at Google for about four years now. They just
gave you a sense of who am I. One project that I’ve been involved deeply in at Google
is Universal Search. And that’s our effort to integrate all of our different types of
content and media such as news, books, blogs, maps, images into the main search results
lists on google.com. Search is important. Everyone searches and they’re always looking
for new information. Search is also challenging. Twenty percent of the queries that we get
are ones we’ve never seen before. Now let’s step back and think about this fact. That
means that one in five queries that a user types into the search box is a query that
Google has never seen before. And that means our algorithms have to be pretty tiptop to
understand all of this new information and new user requests that come at us every second.
It’s also challenging because there’s an explosion of data right now. Another pretty interesting
fact is that every day approximately 10 petabytes of new information is generated. That’s more
than eight times the information stored in all of the libraries in the United States.
There’s a proliferation of devices and users expect more. It used to be that you were delighted
when a search engine got you the right result because you didn’t expect it. But now, the
search engines are so good at giving you the right answers. It’s much more frustrating
and the situation is flipped when we don’t give you the right answer it’s a frustrating
experience. We have thousands of engineers working on these challenges in Search. But
today, I’m only going to be able to give you a glimpse of the features that we are working
on. So when–instead, I’m hoping is that you’ll take away from this, how we think about innovating
in Search. And the key theme I want you to remember while I’m talking and it should be
available in all of my demos is that one thing that we do is we’ve focused on getting you
the right answer in a shortest period of time. Now, the first feature I want to talk about
may seem obvious but it’s also invisible and that is speed. A search engine needs to be
fast. In fact, we’ve studied this and when we artificially slow down search, we saw that
people searched less. Another thing we’ve seen at Google is that when we speed up our
applications, people search more. So here’s an example on the screen right here of a tradeoff
that we’ve made in the Maps product. On the left, you see uncompressed Maps style, and
on the right, you see a compressed Maps style. Now this difference, in uncompressed version,
it’s slightly degraded but the difference is barely perceptible to the human eye. However,
when we compress the Maps style, this led to a two to three X increase in speed. Now,
so what, it sped up. But what we actually saw was that on average, users who had done
four pans within the Maps application, now did the media pan–a median of seven pans.
Which means that by adding this invisible feature we practically doubled the usage of
Maps. Now let’s turn it back to the computer for let me–for me to take you through a couple
of other examples. So these next examples, you’ll be able to see, but they’re still going
to be subtle, because when we’re done our job right, it appears simple. And the next
two examples I’m going to take you through show the concept of exposing relevant information
and getting you to your results more quickly than you would’ve been–when then you would’ve
previously. So let’s say we’re looking for train schedules and we do the query, metro
north. Now what our algorithms tell us is that even though you didn’t type the word
schedules, it’s quite likely that you were looking for schedules. And so we print this
link right here on the page and give you a deep link right into the Metro North site
to the schedule section. And what does that for our users is it gets them to what they’re
looking for and it removes a step in the process. Another feature that we’ve added recently
last spring is something that we call Rich Snippets. This enables our webmasters to add
to their page information such as rating, reviews and other metadata about authors.
Now, one challenge users have is figuring out which result is the one that they should
click on. So I’ve heard of this Pixma Pro 9000 photo printer and I’m interested in reading
reviews because I may be interested in buying it. But first, I want to find out how it’s
been reviewed. So what you can see here on this result that I’m hovering over is our
rich snippet feature where we have stars and we can tell that CNET has had a review by
Philip Ryan. So this result may be interesting to me. But as I scanned on the page, I also
see that there’s the other site, Bazillions that includes 137 reviews. And so if I’m interested
in reviews this metadata about the site gives me a lot more information that this link may
be more relevant to me when I’m making this decision. Now you’ve probably seen this feature
and it’s kind of entered your consciousness subtly but, these kinds of things that we
take for granted didn’t even exist a year ago. So, we talked about surfacing information
and getting users one step further in the process but what about when it’s just hard
to type in your query at all. So that’s the challenge that users have, is figuring out
how to type, express their information need in terms of keywords. So one example that
I have right now is a couple of years back, there was a story in the New York Times about
honeybees. And apparently, honeybees are going extinct and we may not have honey in the future.
And then this came up again last week because there was an op-ed piece about this. So now
I want to go back and find this op-ed and see what people are saying about this now.
So let’s go ahead and try and find this article. I’ll search for New York Times, honeybees
and what Google gives me are these more authoritative articles when the story broke from 2007. So
how can I tell Google–actually, I want to get this op-ed piece from last week. What
we’ve added is the search option panel which allows users to slice and dice based on type
of content, time and related queries. So now I can just go ahead and say past week. And
right here at the top of the page, we can see that this op-ed piece from the New York
Times from six days ago is right there available to me. And previously, this would’ve been
quite challenging for me to figure out how to ask–how to ask for. And we think that
slicing and dicing data is going to be extremely important for our users across all kinds of
content types, so we’re also rolling out our search options panel on image search. So here,
I’ll go ahead and do a query for planets. But what about if I am interested in the red
planet, I can just go ahead and specify a color and now all of my results will be focused
on–will give me red planets which I think is pretty neat. Okay. So let’s go back to
the slides. What the search option panel did is it showed us how to get information when
it’s hard to express that in words. But now what about the situation where you know exactly
what you want. You know how to express it in words but it’s just challenging to actually
write those words and input them into your device. And we see this to be true on mobile
phones. So the feature I’m going to talk about now is something that we call Google Suggest.
And what you see is below the query box, what we do is we add potential query completions.
You see this on the desktop and it’s very useful to you on the desktop but on the mobile
phone, it’s a life saver. And what we’ve seen is once we launch Google Suggest on the mobile
phone the number of characters that a user had to type in to get their results was halfed.
Let’s pop back to the computer. So, location is something that’s important in getting you
the information that you want. And Susan mentioned this, but say; tonight I am looking for a
restaurant in Brooklyn. I can go ahead and type in “Restaurants in Fort Greene.” And
here Google will surface for me a map and a listing of all those business homepages.
So I can see right where the restaurants are located or I can click through to see the
menus or get the home–or get reviews of those sites. This information has now surfaced and
much closer me on right on the web results page. And location’s really important when
we’re thinking about the neighborhood that we’re in but is also important when we’re
thinking globally. And Google is a global company. So, this next example, I just always–it
never ceases to amaze me and it’s pretty awesome. So, let’s head on over to Google Egypt. By
some estimates Arab countries constitute 5% of the world population but only 0.5% of the
web pages. And so this means that for people in these emerging markets there’s a lot of
content online that’s unavailable to them because it’s not written in their language.
So this next feature I want to show you is called cross language information retrieval.
And what I’ve typed here in the query box is the query Bob Marley. So, I’m going to
go ahead and search for it and you’ve seen our interface is translated and is now in
right to left and when I scroll down, what I see at the bottom of the page is this universal
search result that tells me there are other results for Bob Marley but they’re actually
available on the English web. So, what I can do is just go ahead and click on this. And
what Google does in the background is it translates my Arabic query into English. Does the query
Bob Marley in English on the English web, returns and ranks those results and then translates
them back into Arabic. And now I have all this content that was previously unavailable
to me now available to me in my language. Translate we think is going to be extremely
important to getting users the information they need and making information that was
previously unaccessible to people accessible now. We have Google Translate available in
51 languages at this point. And let me show you another application of Translate which
is awesome. So say I–so I don’t speak Japanese but I want to buy my friend in Japan an Aibo
and have it shipped from a Japanese store. So here I am at Amazon Japan. I type in Aibo.
It runs a query. I get these results and they’re all in Japanese and somewhat hard to read.
But I can go ahead and click on the Translate button that we’ve added to the Google tool
bar. And now I can see that this Aibo is in stock, while others are not. And I could even
go ahead click on this Aibo, translate the resulting page and even buy this product and
have it shipped to my friends even though I do not speak a word of Japanese. Sp hang
on a second while this translation goes. And this feature we think is going to be extremely
important and is pretty exciting for getting users access to content that are previously
not available to them. And as we role this out in the tool bar we imagine that we’re
going to get about–we’re going to get hundreds of millions of translations per day. So in
closing I’d like to take you through. I’d like to summarize the things that I’ve shown
you and why they all focus on getting the users the information as quickly as possible
and how important this is to Search. So the first thing I talked about was speed. Then
I talked about [INDISTINCT] some rich snippets, where these features surface information for
users within the results page and get you one step closer to your information task without
having to wade through other sites. And then talked about the challenge of query input.
Sometimes it’s challenging because you don’t know how to formulate a query but sometimes
it’s also challenging because the device you have, it makes it not easy to enter a query.
And so speeding up this processes and making them available improves your ability to get
your answers and to get them quickly. Finally, we talked about location and translation.
And now the theme is user’s information that they want more quickly, but sometimes one
component of this is getting users information that was previously not even available to
them. And this is where we see things like translate and cross language information retrieval
having a huge impact. So, with that I just want to say, that it’s a really exciting area
to work in Search because of all of the challenges that we’re facing and also because every day
is a new opportunity to delight our users. With that I’ll turn it back to Susan who will
talk about our ads business.>>WOJCICKI: Thank you. Thank you, Johanna.
So, as you just saw there’s a lot of incredible innovation going on in Search. We think about
ads as just another form of information. It’s commercial information. And sometimes the
best search result on the page is an ad. Just like in Search we are always trying to show
the right information to the right user at the right time. It just happens to be commercial
information. So today I’d like to talk with you about a few big areas that we’re working
on in our search ads business. And then I’ll give an overview and there’ll be three different
presenters that will come up and that will give demos in their respective areas. The
first big area of innovation for us is new ad formats. As you can see, our search is
no longer just about text results. Our ads have not made a lot of changes over the past
years in terms of format. But we see this as a big opportunity for us to be able to
serve the right ad to the right user at the right time. For example, if you’re a movie
producer the right ad for your movie could be a trailer. If you are the owner and seller
of a specific product the right ad can be an ad that has product information and pictures
of that product. We’ve been in the process of testing a lot of new ad formats here and
you’re going to see some of those today. But we’re still early in this process and over
the coming year you’ll see a lot of innovation and new ad formats that will be rolling out.
As we also think about new kinds of inventory like mobile, product or map and local information,
we’re also thinking about how can we serve the right ads specific to that kind of user
experience? We think that there are new formats and ways that we can show information that
will benefit both the users and the advertisers as we develop our ad products in these emerging
areas. Another big way that we are innovating is in an advertiser ease of use. We just released
our new AdWords interface which was the biggest overhaul of our UI in six years. I’m very
pleased to say that we have successfully rolled this out to all advertisers at this point.
And we are going to show some of those improvements to you today. Many of these features enable
our advertisers to make better decisions, to more effectively manage their campaigns
and there’s accounts and the new infrastructure that we rolled out enables us to innovate
faster and to be able to role out more features to our advertisers. We are also very active
in helping our advertisers improve the effectiveness of their campaigns. We want to make sure that
for every dollar that an advertiser spends, we can help them get higher ROI and that their
ROI is able to increase over time. Some of the tools that we have in this area that we’ll
be showing you today are keyword tools like our search based keyword tool, this some of
our search technology that enables advertisers to find more keywords. If you’ve managed an
AdWords campaign, you know that there are a lot of keywords out there. The keywords
are changing all the time and that it’s essential to have the right keywords to get your campaign
to perform. We are also in the process of releasing better pricing tools. We want to
enable advertisers to have more insights about how they should be pricing their keywords.
For example, if you bid more, how many more clicks will you get? If you bid less, how
many more clicks will you get? We want to be able to show these curves to our advertisers
and show them what these tradeoffs are. This is actually a lot like finance, so I’m sure
everyone on the call understands the benefits of this feature. Our goal is to expose these
tradeoffs to our advertisers so they know how to bid and they can run more effective
campaigns. We also want to enable our advertisers and website owners to have a lot more insights
about what happens once those users actually get to their site. Do they convert? What do
they do? How long do they stay? What are the size of the purchases that they make on their
site? We’re going to be showing you our Analytics product which has been very widely adopted
across the Web. This gives both website owners and advertisers a lot more insights into what’s
happening and lets them better optimize their campaigns. These are just a few of the many,
many projects that we have in Ads. All of which are designed to enable our advertisers
to run more effective campaigns and get in front of the users that are the right users
for them which is a benefit for the users too since often the right result on the page
is an ad. Now, I’d like to turn it over to Nick, who’s a Director of Product Management,
managing Ads Quality as well as new ad formats and he’ll be showing about some of the new
formats and some of the–talking a little bit about Ads Quality.
>>FOX: Thanks, Susan. Hi, everyone. I’m Nick Fox; I’m the Product Management Director,
responsible for Ads Quality. I’ve been at Google for about six years; a little bit over
six years and I’ve been working on Ads Quality for roughly five of those years. Before I
get into some demos, I’m mostly going to spend my time talking through some demos of new
ad formats. But before I do that, I thought it would be good to talk a little bit about
our philosophy here. So Johanna spoke about many of the ways in which we’re improving
the users experience by innovating in Search and search quality. But going back to day
one, one of the things that’s made AdWords unique is that we’ve taken that same leader
focus on user experience and applied it to our advertising products as well. If you go
back to when AdWords first launched, we incorporated a click-through rate into how we rank our
ads and how the action works and ultimately how we decide which ads to show. We did this
because we knew it’s critically important to show only high quality ads to our users
so that our users would continue to trust our ads, look at the ads and ultimately click
on those ads. One thing we often say in my team is that we want our users to love our
ads and that’s really the high level goal and the cornerstone of our approach in AdWords.
And I personally think that this focus has been one of the secrets to our success here.
Jonathan often talks about the dozen or so launches. Jonathan on our earnings calls often
talks about the dozen or so launches we do in Ads Quality in any given quarter. I thought
it would be helpful to give a little–a little bit more context on what these launches actually
are and more generally what we can do in Ads Quality to influence the user experience and
the ads that we show. There are five areas that we think about. And there are really
five areas that can–that we can–that we can adjust to impact the user experience.
The first of those is targeting and this is figuring out the set of ads that match a query.
So I’ve had the query flowers and I’m have figuring out whether I should show flowers,
keyword ads, florists, targeted ads, et cetera. The second is ranking. This is the order of
the ads that we show where that we show the highest quality ads at the top of the page
and go from there. The next question is promotion. Promotion is the–is how we figure out which
ads to show in the yellow region above the search results. And we do this when we have
the very highest quality ads and we want to give those ads additional prominence, we–what
we do as we promote them to the top of the page. On the flipside, if we have lower quality
ads that we think are not an improvement to the user experience we’d rather not show,
we disable those ads so that we don’t show them to our users at all. And finally, the
format, this is what the ad actually looks like. One of the efforts we’ve talked about
over the–over the course of the past year is our efforts to–is the fact that on the
set of commercial queries, we thought that in some cases, we weren’t showing all the
high quality ads that we could be showing. So this impacts area one here, targeting,
as well as number four, disabling. Well, the observation we made roughly a year ago was
that there were–there were queries that we thought should show ads but for one reason
or another weren’t showing ads. And the reason we are worried about this was because from
the users’ perspective, we really saw that this was, we are missing out on an opportunity
to provide the user with the answer they might be looking for within our ads. Which is–which
isn’t good for our businesses, not good for advertisers but most importantly it’s not
good for users either if they’re not getting the answer they’re looking for. So as a result
of this observation we’ve invested a lot over the course of the past year to figure out
ways to find those high quality ads and make sure that we’re actually displaying them.
And as we’ve said on our–on some of our recent earnings calls, we’ve been able to return
our coverage levels to what we think are more historically appropriate level. The amazing
thing is, what’s amazing to me at least is that despite increasing the number of ads
that we’ve shown relative to say a year ago, the quality of our ads has actually improved
while we’ve done this. And this really goes to the quality systems that we’ve developed,
that we’re able to have that kind of a dynamic. An area that we’ve recently invested more
in and increased our–basically increased our level of investment in is new ad formats.
And Susan spoke about this in some detail and I’ll go into a bunch of demos here. But,
the key observation here is that our search ads have largely looked the same over the
course of the past seven or eight or nine years. They’ve been a blue link followed by
roughly 70 characters of text, followed by a green URL. And as we’ve looked at what we’ve
done in Universal Search and a lot of the work that Johanna and her team have worked
on and what Johanna talked about, we’ve seen that users respond very well to showing results
in a format that’s appropriate for the information they’re looking for. Video, thumbnails for
videos and apps for local, et cetera. So now we’re looking at how to apply the same philosophy
to our search ads as well. So I’m going to walk through a bunch of demos that give you
a flavor of this today but I expect there to be a lot more of this to come in the months
and the years ahead. One thing I would point out, one thing I would mention is that, um,
the demos that I’m going to walk through today are really the start of this and I think that
we’re going to see a lot more development and improvements to this areas as well. So
I’m going to do four demos today, I’m going to start off with site links, then move to
videos. From there, go to products and then I’m going to wrap it up with local. So let’s
jump right in. I’m going to start with site links which Johanna talked about from the
organic perspective. As Johanna mentioned, when we know the right site to show for a
query the best thing we can do is help the user figure out where within the site they
should go. So let’s take a look at this example of Chevy. Let’s say I’m looking to buy a new
car. So I do a search on Google for Chevy. What I can see now in the ad up here, this
is the ad up here, but what I can see here in the ad is that we now show four links below
the–below the standard text ad, below the title and the–and the rest of the standard
text ad linking deeper within the Chevrolet site. So I have a link to Silverado, Malibu,
Traverse and Equinox. So say I’m entrusted in buying the Chevy Malibu. Now what I can
do is simply click on the Malibu link and I can get right to where I want to go without
needing to navigate around the Chevrolet site. What you can see here is that Chevy has actually
decided to show different set of links in their ad than they’re showing in their algorithm
result below. For example they’re showing a Traverse link that they weren’t–that they’ve–that
they weren’t showing. What we believe we can do here is provide advertisers with an ability
to really control the branding and promote the brands that are most important to them
by giving them this level of control. And we’ve actually made this very easy to do within
the new average interface. I’ll flip through another quick–a couple of quick examples
here. Here’s the example for Expedia Flights, where Expedia is focusing on flights and vacation
packages. Another example for Staples here, where they’re focusing on–for example ink
and toner, office supplies, office equipment et cetera. The business model here is that
the advertiser pays a cost per click for any of the clicks within their ad, whether it’s
the headline or any of the four deeper links. And based on initial results we’ve seen here,
we’re really excited about the opportunity. I’m personally particularly excited about
the site links launch because we basically took this from a decision we want to do it
in June and then we’re able to launch it two months later in August. So I was–I was particularly
happy to see how quickly the team moved to get this launch out the door. So let’s talk
about video now. As many of you know the best way to get information isn’t always text.
And I believe–my take is that the amazing success of YouTube has really demonstrated
for us that in many cases the best information is a video. So I’ve heard a lot about the
upcoming movie Fame, the revival of the 1980s movie. It’s coming out in a couple of weeks.
So like many of you I may come to Google to search for the video. So I’m here–here I
am, I’m searching for Fame and I see an ad that’s an ad for Fame and now what I can see
directly within the ad here is a link to watch trailer. And if I click on that link right
there on the results page, I see a trailer for the movie Fame.
>>You ain’t seen the best of me yet. Give me something now a face to for…
>>FOX: So the trailer plays right then and there in the–in the results page, which is
really great because if I’m a user this is the best thing I can see. This is the best
possible piece of information for me if I’m interested in finding out about the movie
Fame. And similarly if I’m a movie studio this is exactly what I want my audience to
see. So it’s really a win–it’s really a win-win. This isn’t just for movies though. You can
also see an example of the videogame Tiger Woods PGA Tour 10. And again we show it–we
show the videogame trailer as well, again right within–right within the ad. This also
works for products–for complex products for example you might want to see a product demonstration
and can work in other areas as well. The business model here is that the advertiser either pays
for a click to their website or more importantly for a play of their video. So again it’s really
enabling the advertisers to show the information that’s most useful for them and then–and
then also have a business model that aligns the value that they pay based on the value
that they get. So that’s video. Let’s move on to products. Let’s say I’m looking to go
on a trip and I need to buy some luggage. I need to buy some new–I need to buy a new
suitcase. So I come to Google and I search for suitcases. And for the most part our text
ads don’t provide all the information that I really need if I’m looking to buy a suitcase.
If I’m looking for a suitcase as Susan mentioned I’m probably looking–I’m probably interested
in a picture of–an image of suitcases, a picture or maybe prices, maybe some rating
information. But let’s take a look at this ad up here for Luggage.com. If I click on
show products from this advertiser, I can actually see right there pictures, prices
and descriptions of various certain suitcases. So I can see very easily which ones might
be more interesting to me. Do I want to spend $36 or do I want to spend $70 or $135 et cetera?
I can see size et cetera, all the information that’s useful to me. Well, let’s say I’m interested
in a Samsonite suitcase. Very easily I can search for Samsonite suitcases and see just
Samsonite results, same thing with Red Luggage. I can see just red suitcases. So this works
very well. This really does provide the information that the users’ looking for, particularly
if in the case of products and again we’ve seen some very positive results, more early
tasks and we’re starting to role this out more broadly. So let’s jump to my final example,
my final demo is local information. This is a really important area for us because a lot
of information is local. So from a user perspective, local information is really important. There
is also a lot of advertising spend in local, particularly if you look at things like Yellow
Pages et cetera. So there’s a couple of things we do in local that I think are interesting.
The first–here’s a query for a dentist in San Francisco. We have this product called
the map, a feature called the Maps Plus Box, which in this local ad I can actually see
where this–where this dentist is located on the map. And I can also see the address
and phone number and I can even click to get directions to this–to this dentist. So it’s
really providing a much better experience for this–for this local oriented query. Similarly,
if I’m searching on Maps we can do even more. So in the case of Maps, if I’m searching for
a hotel in San Francisco, I can see little map heads with the advertiser’s brand again.
They have their own icon as well as–as well as their–as their branding message there,
again with the address and phone number information and the ability to get directions through
Street View and things like that. The other interesting thing is, as I zoom in the results
actually change based on–the advertising results actually change based on the area
that I’m looking at. You can see a hotel that wasn’t showing up before, that’s now showing
up as result of my–of me panning around on the map. So that’s local. I’m often asked
about the opportunity in search advertising. The typical question I get is, “How much headroom
is there? And how we pluck all the low-hanging fruit?” I believe that this industry, the
search advertising industry is still very much in its infancy and I hope these examples
and demos give you a feel for the opportunities in front of us to make our ads much richer
and much better. For example, product information like images and prices. Local information
like addresses, maps and phone numbers, videos and probably much, much more. And the great
thing is, that as we make our ads better, we actually make our search experience better
as well. So in other words, I believe we’re just getting started. So I’m now going to
hand it over to Ariel who’s going to talk about the new AdWords Interface. One of the
things that’s particularly exciting to me about the new–the new interface is it makes
it easier for advertisers to create all these new formats that I’ve talked about. So with
that, here’s Ariel.>>BARDIN: Thank you, Nick. So, name is Ariel
Bardin and I’m a Product Management Director. I’ve been at Google about five years now and
I’ve always been working on trying to improve our tools to help advertisers. Recently, my
responsibility was for releasing the new AdWords interface that Nick mentioned. I’ll be talking
about what we’re doing in AdWords to help advertisers make better decisions so they
can improve their ROI as well as make the system more efficient so advertisers can do
more with less time. On the ROI side, I’ll talk about new tools that help advertisers
understand how to bid as well as find new keywords. On the efficiency side, I’ll talk
about how we allow advertisers to tell us what they care about and will alert them when
that event happens as well as ad extensions which is our way of allowing advertisers to
leverage all of the formats that Nick just showed us. Let me start though by giving an
overview of AdWords and it’s important that we all put on our marketing hats for a few
minutes and think of ourselves as advertisers. And for the–for this demo, let me pretend
that I am the marketing manager for the Google Store. So this is the Google Store at googlestore.com
and as you can see, we have all kinds of amazing swag here. If you’d like to buy a pen with
our logo on it, you can do it here. For the sake of this demo though, I’m going to talk
about notebooks. And let’s pretend like my boss is rather concerned at the sales of our
notebooks. So let’s take a look at the AdWords interface and how we use AdWords to actually
market our products. So this is the new AdWords interface. As Susan mentioned, this is the
biggest release we’ve done in the AdWords front end or the interface since 2003. It’s
built on completely new technology with two goals. One is to make the application feel
much more like a desktop. As you can see, I can jump around my account and I’ll talk
in a moment about the key parts of an account. But also to allow us to release features quickly.
And Nick pointed out that we were able to make a rapid change starting in June ending
in August to support the site links ad format. So let me just go quickly through what an
AdWords account is, assuming that not everybody on this call actually uses AdWords day in
and day out. So as you can see, AdWords accounts have campaigns. I know that the display’s
going to be a little bit small, so I’m going to read what I see here. So we have a campaign
for Europe. We’ve in essence broken out our account by geographies. Each campaign has
a set of ads and you can see that there could be hundreds of ads here. I’m specifically
interested in the notebook because I’m going to wow my boss. So within each ad you can
see that there are a bunch of keywords and there could be hundreds of keywords. In this
case, I’m interested in the Google notebook keyword. And what’s interesting here is that
by looking at the account, we can see two of the important features of AdWords that
our advertisers are very excited about. The first is the accountability of AdWords. You
can see that there’s a lot of statistics so, I don’t know if everybody can read this but,
the Google notebook keyword has received 302 clicks, 10,000 impressions. You can see the
cost per click, the total cost, et cetera. We have the statistics for every keyword for
different date ranges. There’s a lot of optimization that can be done with this advertising medium.
The second aspect of AdWords is control. I can pause a campaign. I can pause an ad. I
can pause a keyword at anytime. And let me show you how I can do that. I literally paused
a keyword. Within moments, this keyword will no longer participate in the auctions when
users search for Google notebook. So it’s very easy for me as an advertiser to control
my spend. Let me just turn that back on because our real marketers will be annoyed at me if
I forget to do that. Another aspect of control is the ability to bid for keyword and make
changes rapidly. So you can easily click on any bid and make a change. So right now I’m
bidding a $1.52, I can bid a $1.53, save it, and within moments, that’s what I’m going
to be bidding. Now the question comes up and this is what my boss is asking me, “Am I bidding
correctly for Google notebook?” In the previous interface, I would have to try different bids
and try to answer that question with experimentation, which obviously with all of these keywords
is rather hard to do. What we’ve recently introduced is what we’re calling the Bid Simulator
which Susan mentioned. And what the Bid Simulator lets me do is see what would have happened
in the past for different bid levels for each keyword in my account. So in this example
I’m bidding a $1.52 and I’m getting 315 clicks, I could bid a $1.83 and get 354 clicks for
a total cost of $188. I can certainly lower my bid as well to 69 cents and it would only
cost me $82 to get 281 clicks. So as you can see, the Bid Simulator is a very powerful
tool and very exciting for our advertisers that allows them to bid optimally based on
the tradeoff between clicks and the right price. Now you’ve seen that the building blocks
of an AdWords account really are keywords. And Susan mentioned that we work a lot to
try to help advertisers find new keywords. So as a marketer, what I’d really like to
do is figure out–you know, when people search on Google for these different products and
our pages show up, what are those keywords so that I can see what users are doing on
Google? And this is what the search-based keyword tool does. It allows me to see what
people are–what users are searching on Google and how I stack up when those searches happened.
So let’s think about this for a moment what will–Search is all about. We have a search
index that accepts queries from users. So for example, somebody could search for wireless
headsets and we return a bunch of pages we feel are relevant. What the team did and this
is a team of search and ads engineers, they basically reversed the process. Instead of
going from the user queries to pages, why don’t we go from pages to queries? So you
can see here that I’ve run this tool against my Google Store and these are all new keywords.
There are about 400 of them that I don’t have in my account currently and some of them are
very unintuitive. So for example, you can see here a keyword called beanbag beans. I
would never have guessed to add that to my account, but I can see that this query happened
660 times. I can also see what percentage of time my ad’s shown. So obviously it was
zero because I don’t have that keyword but also how many times my page showed up on the
first page of the Google Search results. I can see it’s only 2%. So now I’ve found the
keyword that seems relevant to what the user is searching on. It’s only costing 60 cents
per click to get on the first page. I might want to buy that keyword. So advertisers are
obviously very excited about this tool, the search-based keyword tool which provides a
new level of transparency into the inventory that we have in the user queries so that advertisers
can improve their ROI. So we talked about two tools that allow advertisers to improve
their ROI but the net changes are changes to the account. So in one case I might change
the bid for my keyword, the Google notebook keyword. In other case I might add a few new
keywords. And obviously I may want to monitor these changes and make sure that the impact
is actually positive in my account. In the past I’d have to actually login to my account
daily and kind of move around in the account try to find the keywords that I’ve added,
the bids that I’ve changed, see what the impact has been. That’s obviously not ideal. With
the new interface, what we’ve done is introduced a whole new alerting system which basically
changes the game when it comes to monitoring my account. So you can see in this example
we have a few alerts set up already and they’ve triggered. For example, I’ve set up an alert
that triggers if a keyword has a change in impressions of at least 20% compared to the
previous day. So if there are any spikes I can quickly chop that. What’s nice about alerts
is instead of advertisers logging in and looking around and trying to figure out what’s going
on, advertisers just tell us what they care about and we’ll notify them when the events
happen. So let me just show you how easy it is to set up an alert. And again put on your
advertising hat here. So I can alert on different attributes, for example cost that we talked
about. I can also alert on the average positions. So if I–I’m concerned about competition for
my ad and I want to make sure that my ad stays in a competitive position I can set up an
alert for that. So we’re talking about cost though. I can say cost changes 20%. I can
compare it to a previous day, maybe a previous week. I can do it for selected set of keywords.
Maybe the keywords I’ve recently added or for the whole account. And I can get emails
whenever a change in my account happens that I care about. So using alerts advertisers
can spend less time scanning their account and more time optimizing for their return.
So finally let me talk about how advertisers can use our formats. So, for the sake of discussion
let’s assume that I’ve done a really great job optimizing my account. Our products are
flying off the shelves especially those beanbags that I found that exciting keyword for. Now,
our management is aggressive and they want us to start opening physical locations, many,
many different locations. So I heard Nick talk about our local formats. They look really
nice. I can show up on the maps. I can get my address showing with addresses. Now, in
the past I’d have to actually go through every one of my ads and you can see here that we
have literally hundreds of ads in the account and link each one of these ads to an address.
So, that’s not the most efficient way of doing things in that would limit the adoption of
new formats. So we’ve recently introduced the notion of ad extensions which means that
I can pick any campaign I like. I can go to the settings tab. And in the same way that
I could target a specific country I can now link a set of addresses to my whole campaign,
to hundreds of ads at once. I can do this by providing a user name and password to link
to our free product called the Local Business Center where businesses can give us their
addresses to show up on Maps and the AdWords system can pull those addresses in. I can
also add addresses manually. You can also see that I can put an icon in and you saw
those icons on the map in Nick’s demo. So, it’s a very, very easy way of giving us information
that we can then leverage. So once the address information is given to us, at runtime we
will figure out based on the location of the user what’s the best address to show with
the ads. So for example if the user is searching from San Francisco and we have two stores
in San Francisco and New York, we’ll pick the San Francisco store and show that address.
Enhance the ad with that address at runtime. What’s exciting about the ads extension is
that we asked for a little bit of information, and you saw that, from advertisers and they
can leverage the formats with our ad system doing the heavy lifting. So advertisers win
because it’s very easy to set up and try out these formats, and users win because our ad
results become much more compelling. We love win-win situations. So I’ve talked a lot about
how we’re providing tools to help advertisers optimize their accounts, to provide the most
cost effective clicks. But as a marketer I really want to sell my notebooks. So I care
about what happens after the click as well. I want to improve convergence. And next, Amy
will tell us about the tools that we have to do just that.
>>CHANG: Thank you, Ariel. My name is Amy Chang and I’ve been with Google for four years
now. I’ve been leading the Google Analytics Product team for the last three. So Nick has
explained what we’re doing to continuously improve our ads quality. And Ariel has shown
you where we’re really pushing the envelope on the campaign management side. Let me now
round things out by telling you about the tools we offer advertisers to give more transparency
into their ROI. Both Google Analytics and Google Website Optimizer have come a long
way in the last year and we’re really seeing widespread advertiser adoption across geographies,
spend and sophistication levels. We’re seeing ad spend also increase as result. So Google
Analytics is about what happens after the click. Once people arrive at the site, what
brought the visitor to the site, where did they go, how long did they stay and finally
did they convert? Let’s use the Google Store account which sells Google merchandise to
take a closer look. So as you jump into the interface you see this left-hand side bar
which allows you to navigate quickly to the major areas of reporting. Everyone starts
in this customizable drag and drop dashboard and a lot of people we find come here daily
to get a pulse on the health of their site. The first major section of reporting is about
visitors. Who was it that came to your site? How long are they staying? What language are
they using? What browser did they come in through? Now, this first report here benchmarking
gives you more context around the spikes and the dips in your traffic and tells you, were
they specific to your particular site or were they a more general trend that was seen across
your industry vertical for sites of similar size. The second report here, map overlay,
is a critical one because it tells you where geographically visits are coming from. So
you can see here in this heat map coloration that the densest traffic originators are the
United States followed by Mexico, Brazil and Russia. Now, if I scroll down to the table
view here I can see that as a percentage view. I can see that about 31% of my traffic is
coming from the United States with about 10% from Brazil. Now, if I’m the e-commerce site
which the Google Store site is, I’m going to be curious about revenue. And here I can
see the breakdown of revenues, about 86% from the United States. This would indicate to
me under monetization in these other regions. So I have opportunities for Brazil, Russia,
Mexico, India, et cetera to take a look at the shopping cart and take a look at my translations
to figure out where am I losing these people and why, because obviously there’s more sales
to be made there. This second major area of reporting, traffic sources, is a critical
one for marketers because it tells people where their traffic is sourcing from. Is it
coming directly to their site or from referring sites? And if referring sites, who should
they be partnering more closely with to drive more traffic? Or is the traffic coming from
Search? And if so, paid or organic search? If we dive in more closely for a moment to
page search, there’s a whole AdWords section here for advertisers who’ve opted in to pulling
their data into the analytics interface. They’re now able to see their campaign matrix like
cost per click, click-through rate, et cetera, against their site engagement metrics and
this allows them to better see once the click arrives at their site how people are engaging.
One of the advertiser favorites is this Keyword Positions Report. And what we’ve got here
is keywords on the left-hand side. I’m going to choose one and it displays here on the
right-hand side of the page the search results page on Google and the ad slot positions.
So I can see here that the top one slot from the photos that Nick showed is driving 1865
visits. Now, again I’m going to be curious as to the average time on site, how well are
people engaging? And finally the revenue or transactions and I can see that for each of
my keywords here. Moving to the content section, we don’t have time today to jump into this
but this is all about what’s going inside of your site. The goals macro section focuses
on conversion tracking. The most interesting report here is likely the Funnel Visualization.
For any site that has a shopping cart or any kind of multi-flow, multi-step flow, we have
this Funnel Visualization and what this is telling me is 207,000 people entered the flow.
Half of them left after the first step, after viewing product categories. But at the very
end of the day only 340 actually completed an order. This is a fairly low conversion
rate and it shows us that there’s a lot of opportunity to figure out where people left
and where exactly they were going to. Now, the e-commerce section offers reporting on
revenue, average order value, product sales by skew by product category and much more.
If with all in this reporting you still haven’t found precisely what it is you’re looking
for you can easily drag and drop and create your own. I’ve taken the liberty here of starting
a template for this–the purposes of this demonstration. And we can see here, it’s really,
really simple, just to drag and drop. I can then go down and preview the report. I can
export it; I can email it myself, whatever I like. The real innovation here though is
the ease of use. The feedback that we very often get from advertisers is we’ve taken
analytics out of the IT department and really placed it in the hands of marketers and the
product folks. And that they’re making real decisions on their campaigns and on their
products themselves based on this data. But we often tell advertisers that all of this
analysis isn’t enough. You really need to test and experiment to get the most out of
the tools we have to offer. Google Website Optimizer is the sister product to Google
Analytics. With Website Optimizer, advertisers can test pretty much anything, from layout
of the page, different images, headlines, product descriptions et cetera. Here in this
particular test, we’ve run 30 different variations on your original landing page. And the original
had a conversion rate of about 21.7%, which is not bad. But we see that the top four combinations
here in green yielded between a 43% to 28% better conversion rate for the advertiser.
So when we first started looking at these variations, our intuition or our gut instinct
around which variations would win were actually dead wrong and you’ll find in a lot of cases
Website Optimizer is able to take the guesswork out of the whole campaign management. To summarize
then, it really is our goal with all of these tools to continuously improve transparency
and give advertisers the insight they need to improve their businesses. In helping advertisers
figure out what users are looking for we also help make the Web a better place for all users
more generally. It’s a virtual cycle that we plan to continue supporting for a long
time to come. And now, please allow me to return your attention back to Patrick.
>>PICHETTE: Thank you Amy. I had promise you at the front end of this that we had a
lot of ground to cover. I think we’ve done quite a good job at it and I just want to
thank all the presenters for a terrific set of materials to present to you today. Look,
as you can see, it’s clear that we are very excited about our initiatives in Search and
in search monetization. I hope you understand better how Search–it looks easy, but I hope
this has helped you understand the complexity of the entire ecosystem that’s at work here.
And this is why Google continues to dedicate an important team of very talented engineers
and scientists all working behind the scenes to put those right results so fast in front
of users. In addition, the tools we’re building for our advertisers help us put the right
result in front of the–our users when the right result happen to be an ad too, because
an ad is simply another search result but for a full commercial query. And I also hope
that you got a better sense of what we mean when we say, you know, that Search is a space
that’s still in its early days and why you should expect us to invest even more in our
core business going forward. So with that, I’ll turn you over to Maria to help us navigate
the Q&A section.>>SHIM: Hi everyone. So as Patrick said,
we’re going to take a–about a half dozen questions and if there are any more follow
up questions after that I can have circle back with you. So, I’m looking at the Google
moderator page, we’re going to take the top rated questions. So the first question–actually
there are two questions here about mobile monetization and mobile search. So the first
question–let’s take from Mark Mahaney.>>PICHETTE: So with that, I’ll turn you over
to Maria to help us navigate the Q&A section.>>SHIM: Hi everyone. So as Patrick said,
we’re going to take a… Oh sorry, I think we’re having some issue. I think–can we–operator,
can we turn it over to Mark Mahaney’s line? The Google moderator page, we’re going to
take… Okay. Maybe we just have some issue here so I’m going to read Mark’s question
for him. When can mobile search be a material part of Google’s total queries? What needs
to happen for mobile queries to be meaningful? And then this–the second part which is submitted
by Jeff Lindsay is, is mobile search monetization as effective as it hoped? Today how does it
compare with desktop search monetization? I think we’re going to have Susan answer that
question.>>WOJCICKI: Hello? Mobile for Google has
been a small but very fast growing segment that we think is going to be an important
part of our monetization and search story going forward. There are a couple key drivers
enabling it to be–to grow in queries and in revenue and one of them is smart phones.
So as smart phones have emerged and are growing quickly, we see a lot of behavior on the smart
phones very similar to on desktop. Google can also leverage a lot of–some of the–can
use the ad formats and some of the targeting that we’ve developed for desktop also for
mobile. One of the trends though that we’ve seen with smart phones is that the usage is
different from desktop, so someone who’s on the road can do a search. So it’s very complimentary
to the desktop experience and it opens up a new type of queries and new times for searches
that we didn’t previously have with desktop. We also see opportunity to really innovate
with the format, for example, we just released Click-to-Call as part of the ad format. So
if you’re on a phone, you want to–might want to call the advertiser that has advertised
there. So we see opportunity to innovate on both the ad formats and the targeting. So
our advertisers have seen solid results and we see an opportunity for this to become an
important part of our monetization story.>>SHIM: Okay. Okay. So, the next question
is from Doug [INDISTINCT] and I’m wondering if Doug can actually ask the question on the–on
the phone. Doug are you there?>>We’re not showing a Doug connected.
>>SHIM: Okay. Okay. That’s fine. So the question is, what did Google see to make it move paid
ads more towards the middle of the page from the right rail? So maybe, Nick can take that
question.>>FOX: So the key observation here–it’s
a good question but the key observation here was that–well, actually let me actually [INDISTINCT]
by describing the change that Doug is talking about here. So we made a change a middle of
this–in the middle of this quarter where we had–where we moved the ads from the right-hand
side of the page basically just providing us the right-hand side of the page, more towards
the middle of the page, closer to the search results. And the key observation we had here
was that as screens have become wider and screen resolution has increased our results
page had a very large white gulf in the middle of it, between the search results and the
ads. And this appeared to us to be a poor user experience because users really needed
to sort of move back and forth their eyes between the left and the right to really see
the whole page experience. So we thought it would improve the user experience to move
all the content to be closer together. And we ran our usual battery of tests and analysis
on it and it actually turned out–and all the numbers sort of panned out and confirmed
our intuition and it turned out to be a good launch. And we actually refer to this internally
as the hug because the ads are sort of hugging the search results.
>>SHIM: Okay, great. Thanks Nick. Thank you for bearing with us. This is our first time
doing this so, hopefully we’re going to get things right. I think Ben is actually on the
line, so third time’s a charm. Can we have Ben Schachter ask his question about coverage
levels?>>SCHACHTER: This is a question for Nick
and I’m just wondering, how do you quantitatively determine the appropriate coverage levels?
>>FOX: Hi Ben. The–I don’t think of this as a–as a target number. To be honest, I
think of it more as ensuring that we show the right ads on the right queries. So what
we look at isn’t just–we do look at certain numbers in terms of coverage, but what we
really look at is a whole bunch of metrics. The primary one is human evaluation of our
ads, which is–it’s really the percent of our ads that are good versus the percent of
our ads that are bad as rated by real humans. And the goal here is to make sure that we’re
showing as many high quality ads as possible and as few low quality ads as possible. And
that’s really the–and that’s really sort of what we look at there. We also look at
metrics like click-to-rate and we do look at coverage to some extent.
>>SCHACHTER: Can I–if I can follow up on that just for one second, you’d mentioned
that you’re sort of back to historical levels that you felt were more appropriate. So I’m
just wondering sort of how do you–why is the historical level the more appropriate
one and will it change in the future?>>FOX: I think the historical comment was–it’s
a comment we’ve made over the course of the past six months or so. And I think it was–it
was mostly intended as a way of helping folks outside the company sort of–sort of understand
quantitatively where this is, rather than sort of specifically saying sort of, “Here’s
how we tactically look at how we optimize these things internally.”
>>SHIM: Great. I think we’ll take the next question about Caffeine from George Askew
and we’ll have Johanna answer the question. So George, can you ask your question?
>>George, your line is open.>>SHIM: Okay. The question is, please discuss
the benefits at the Google Caffeine, the new search engine architecture, will bring to
Google Search. What is the timing of the broad introduction of Caffeine? Johanna?
>>WRIGHT: Sure. Caffeine, I think, is a great example of our investment and our commitment
to improving the search architecture. What this will enable for our search engineers
is more innovation in size, index speed, accuracy, and comprehensiveness. And as of the rollout
date, we’re going to roll this out when we’re ready.
>>SHIM: Great. Okay. There’s another question from Ben. I think in the interest of time,
I’m just going to read the question this time around. Do you expect non-text based ads to
become more meaningful within search results? I think that might be a question for Nick.
>>FOX: So this is Nick. I’ll take that question. I think the answer is yes and hopefully, the
examples and demos that I–that I walked through earlier showed this. I do expect, you know,
the–as I said, these are really in their infancy at the moment, and we’re really just
getting started with this, right? I do expect the portion of our ads to grow in terms of
the number that have things like videos in them as well as images and prices and local
information. So I really do expect this to grow over time. In terms of sort of trying
to quantify that, I’d rather stay away from giving sort of specific numbers, but I would
say you could sort of look at Universal Search in terms of sort of thinking about what portion
of queries might make sense to have non-text results because I think that could probably
give a fairly good benchmark there.>>SHIM: Okay. Let’s take the next question
from–well, I’ll read the question from Chris Quarles. How does the pricing work on these
additional ad features? Does it create more auctions with fewer participants? How do large
marketers use them compared to small marketers? Nick?
>>FOX: I think the–in terms of how the pricing will work, I walked through the pricing on
some of these. So for–so for example for the ad site links example, advertisers pay
a cost-per-click within the same auction as our existing ads. Same–sort of the same thing
with the products as well as the videos, these are all running within the context of the
existing auction and the–and to the extent that the user will use a video rather than
click on the headline, that will be–that’s a chargeable event as well. So there aren’t
major changes in the–in the examples that I’ve shown to the pricing model there. You
know, it’s possible that in the future, the–some of the newer ad models that we’re developing
now could involve additional auctions and things like that, but it is really too early
to say what that might look like.>>SHIM: And I think we’ll take one more question.
Mark Mahaney is–submitted a question about what levers can Google pull to help improve
CPC growth. I think Patrick will start.>>PICHETTE: Yes. We’ll do a one, two, punch
on this one, myself and Nick. I think this that this is a question that’s always asked
of us. And I think that the message that we wanted to send to the audience today is the
following. You know, remember that most of our advertisers or many of them in any case
have budgets that they, today, have a tough time spending with us. They would like to
spend more money on Google. And part of the reason for today’s presentation is to show
the complexity of what’s going on. There are so many key words you can use. There are so
many optimizing that you can do. There–it’s a dynamic world in terms of optimizing. So,
what I hopefully demonstrated is the great tools, the AdWords three tools that have been
rolled out, plus all the issues around the analytics that Amy showed us just demonstrate
how much more upside there is for people that take the time to actually going to the bowels
of understanding the dynamics of what’s going on. And from our side at Google, there’s obviously–you
know, we continue to push for the education because remember that what we’re striving
for is the ecosystem to be in balance. The right ad at the right place and the right
format with the innovation that Nick showed today of what’s coming online right–at the
right price is a great ROI for the advertiser. And for the user, it–there–it’s answering
the question that we’re looking for in the first place. So for us, I think there’s–you
continue to be tremendously optimistic with all of what we’ve presented to you. And–but
it’s–so it’s not only about the CPC but there’s so much more upside. Nick, maybe additional
comments on it?>>FOX: Yes. Just a couple of additional thoughts
there. I think, number one is, I think increase in CPC isn’t necessarily a goal. We want advertisers
to bid at the level that’s appropriate to them. So we provide tools that provide transparency
into our auctions. So for example, the bid simile that Ariel talked about which is focused
on helping advertisers figure out the right bid, and sometimes that might be an increase
in their bid; sometimes it might be in a decrease in their bid. And then again, what Amy talked
about in terms of improving the performance at their website to the extent that an advertiser
can get a much better return on their site once a click–once a user arrives to their
site, they can have much more productive clicks. And ultimately, if an advertiser can do a
better job of converting a click into a conversion, they’re like–they will likely want to bid
more for those clicks as well. From sort of a systems perspective, and ads quality perspective,
we don’t look at increasing CPC as a goal of our launches. And in some cases, some of
the launches we might do may actually decrease CPC. So for example, it may be that there’s
an ad that’s a very high quality ad that just has–that’s only worth a penny to the advertiser.
You know, take for example a sort of if someone’s selling an MP3 for example or selling a music
download, that might just not be worth much to the advertiser given their margins, but
if that’s a high quality ad, we want to show that ad. So it’s possible that sort of there
are interesting mixed dynamics here. But if we want to show an additional ad that’s a
low CPC, that could cost the average CPC to go down, but it’s absolutely the right thing
for us to do. So I think it’s important to sort of think about some of the dynamics here
with CPC when thinking about the movement in those metrics.
>>SHIM: Great. So, I wanted to thank everybody for joining us today. I know that you all
are very busy, and we’d love to get your feedback. So please be sure to contact me about feedback,
and we’ll be talking to you again in October. So I want to thank all our speakers and thank
you all–all the participants today for joining us and we will talk to you soon.

1 thought on “Google Educational Webcast on Search and Search Advertising (September 2009)

  1. Thank you maria shim and Patrick Pichette. It's innovative and thanks to Google for all innovations. I like it.

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