For a number of years I have been meaning to interview Andrew Goodman (and thank him for how his original ebook helped me out back in the stone ages (circa 2003, when I was first getting online).
He recently finished the second edition to his popular Winning Results with Google AdWords book, so I figured now would be a good time to interview him.
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Hi Andrew,
I remember when I bought your ebook way back in 2003. You introduced me to Seth Godin, Rob Frankel, and many other clean parts of Internet marketing vs the sleazy stuff someone could waste years and 10s of thousands of dollars on, while getting nowhere …so I just wanted to say thanks for that. 
That’s great to hear - you certainly took the ball and ran with it. Godin is a boundless phenomenon. Frankel on the other hand I have rarely given a thought to in all these years!
How would you compare your old ebook with your physical books?
The old ebook was a bit reminiscent of this post I just made on my blog, Traffick: Lietzke vs. the Clones.
Back in the day you could just come out with stuff and try out big ideas, and find an audience. You didn’t have to get it all perfect. Time was of the essence. I had no “coaches” save for a few small voices in the wilderness… luckily they were intelligent voices talking about how to go about producing and pricing an ebook, and writers like Godin and Emmanuel Rosen talking about how to promote something like that.
The print book is more systematic and more professional with a prettier cover. And I have learned not to discount the human touch of handing a book (even a signed copy) to someone I meet. The memento aspect of a print book is indeed significant.
Fortunately, my publisher (McGraw-Hill) saw things my way enough to let my ragged, “unprofessional” personality come through… especially in the 2nd edition. I think we still got most of the stats right and the headings and stuff make sense.
How many copies of your ebook did you sell?
Tens of thousands, at various price points. The exact number is classified.
What caused you to shift from an ebook model to writing a physical book?
The opportunity. There is a hole in the capabilities of an ebook, even though it makes you more money typically (directly anyway). You can’t be introduced as the author of “x ebook” that you self-published, if you want to be taken seriously on the global speaking circuit, just to use an example. It depends on the audience but it’s basically fair to say that a print book is a better long term lead generator for a company like mine.
I think you have to be wary of piling on into a crowded category, though. Seems everyone is writing a book right now. You want to be the category leader. I don’t have to explain this to you. Most people have heard of your ebook for example. You’re not the fifth name that comes to mind when people think “SEO book.”
Winning Results with Google AdWords, Second Edition was quite a major update from the prior version that was about 3 years old. What are some of the biggest changes you have seen from AdWords in the last couple years? What might be coming soon from Google?
In many respects, the complexities of Quality Score are a huge challenge — mainly because they are difficult to understand. But the system was clunkier before with too many hiccups in how principles were being put into practice. So it’s actually an improvement in many ways.
The algorithm there is just a fascinating piece of work. Google is not content to stop at CTR’s as a factor for ad ranking; nor are they content to stop at landing page and website quality. They are looking at relevancy signals in quite a radical way, in my opinion. New accounts and new campaigns are especially vulnerable to the algo’s predictive data, and must be managed meticulously.
In terms of incremental improvement, the Content Network, reporting options, and so on, have continued to improve as Google responds to advertiser concerns. The search-based keyword tool, Google Insights for Search, etc. are all better than ever. And now we wonder what Google intends to achieve, if anything, with Google Ad Planner.
There are numerous small and large policy changes behind the scenes that largely don’t make it into the book because the book is pitched to Intermediate (not Advanced or agency level) strategy. Those who do this full time know it pays to be inquisitive and to use negotiating skills and diplomacy to make the most out of the Google relationship.
Campaign supports, such as Google Website Optimizer for landing page testing, are great strides for the industry — requiring equally significant commitment and expertise to take maximum advantage of them.
In the “coming soon” area, we can talk about sexy stuff like expansion into print, mobile, radio, TV, etc. — but what’s remarkable is that Google has actually stalled in some of those areas - especially print.
Most of the big things that come out of Google are completely separate, new products/software, that don’t directly relate to search or monetization. It seems like they’ll be attempting to cross a few chasms. Hard to say if they’ll get there from a business sense in many of their new categories. Certainly Google Search (PageRank and other innovations that made it great), and Google AdWords were remarkable exercises in soft innovation that taken all together, come across as Big Ideas and Great Leaps Forward. From a financial standpoint, some analysts insist that they remain a one-trick pony.
The argument goes: what if Google’s many other soft innovations, Big Ideas, and Great Leaps Forward don’t turn into business? It’s possible. Luckily they have the resources to wait it out as many pieces of their grand vision are developed. Since the costs are so enormous, you really wonder if they can pay for all of it with advertising revenues. If not, what are the new business models going to look like? How will they make money giving away an operating system, etc.?
What made you become attracted to the AdWords model so early in its existence?
I think it was one of those experiences where you sign up and try it and immediately get it. I’d tried GoTo/Overture, of course. With AdWords, you saw yourself rising up to the top as you tested your ads for CTR. You got to play with matching options. You got much nicer reporting. And the beat kept going on from there.
Just the simple game of watching two ads “race” each other for CTR at first, and then ROI (right in the interface) after the Conversion Tracker was released, was addictive in the extreme. Many of us didn’t even know we had a little direct marketer inside us waiting to come out. We were hooked immediately.
Keep in mind that along with Overture, this was the first monetization platform for search that didn’t end up killing the audience for the search engine or discrediting the company implementing it! It was a huge step for our industry. When companies like Infoseek pondered the monetization issue they were just plain naive.
What did you do before you got into search?
I was close to finishing a doctorate in Political Science. I was doing research and teaching courses in Political Philosophy, Public Policy, etc. There are a lot of great people in those fields, but they produced too many of us by a factor of 5-10X over the available jobs. I like to say I sacrificed my academic career to watch my wife go on to thrive in hers, but it was also the pull of the dot com bubble and everything it represented (both good and bad). I found myself living online and finding new passions and new friends. Life began moving at a different pace. So on my own, I’d been dabbling with Internet businesses, reading Business 2.0, and all of that stuff, prior to making the move.
When does it make sense to create an ad that gets a high CTR? When does it make sense to disqualify most potential visitors?
Savvy question. The literal interpretation of testing ads would have us look only at ROI or CPA numbers, right? But Google so strongly rewards CTR that we need to keep testing and maybe tip our hat to CTR in the overall mix… especially as the account gets established.
A CTR bias is not a terrible thing - you just need to refine carefully from there, to move towards a variant that has a relatively strong ROI among several high-CTR candidates (what I like to call a “double win”). Sounds impossible, but it isn’t. That’s one way to approach it, anyway.
5 to 10 years down the road, do you still see Google being the center of the web in the US, Canada, and many European countries?
Yup.
Need a longer answer?
They will face some hurdles globally as regulators won’t like some of what they try to do. As long as their cash flow remains as strong as it is now, they’re determined to build powerful, fast applications and systems that keep us locked in, that outdo similar offerings from competitors. That’s not going to be good for their profitability, but it’ll be nice for market share and generalized dominance.
Google has grown more aggressive with adding shortcuts (maps, flight search, real estate search, etc.) directly in the organic search results. Do you see them eventually monetizing these?
They’ll turn up the heat on monetizing a proportion of their successful properties. They’ve definitely started doing this on YouTube - if successful, imagine the revenue growth there. We’ve only seen just the beginning of what they’re likely to attempt in the local and classifieds space.
In the UK Google did a merchant search beta test where they basically put a lead form inside a house AdWords ad. Do you see Google eventually shifting the AdWords product away from a CPC model to more of a CPA model?
I think a lot of that is experimental. Some of their little experiments don’t lead much of anywhere. A CPA model would be damaging to Google unless carefully controlled. The CPC or effective CPM methods of payment are juicier.
In September of 2003 Nick Denton wrote “Imagine a web in which Google and Overture text ads are everywhere . Not only beside search results, but next to every article and weblog post. Ubiquity breeds contempt. Text ads, coupled with content targeting, are more effective than graphic ads for many advertisers; but they too, like banners, will suffer reader burnout.” Do you see any indication of ad burnout from web users yet?
Jakob Nielsen also wrote about text ad blindness potential, on April 28, 2003, so he beat Nick to the punch. Well, iPods are ubiquitous. Gillette spent billions of dollars on TV ads over the years. Are they held in contempt? On the other hand, eBay still shows up way too much on generic queries, with those lame text ads. I think that does breed contempt and has hurt eBay’s brand, much as people auctioning off their toenails has done.
So the answer is definitely that it’s highly situational. Users look at this as navigation, not advertising, and as long as there’s full disclosure and they aren’t annoyed by the ads, I find it hard to believe that clicking on a link to Kayak.com or Hilton Hotels when I’m searching for travel information is going to be associated with “burnout.” It’s efficient and the ads aren’t shouting.
Is the content network a good buy? What sorts of business models and markets do well with it? Which ones perform poorly?
The content network has made huge strides judging by the ROI numbers in our campaigns.
It’s tough to generalize about verticals. As long as there are some quality content sites, discussion forums, or even parked domains in the relevant vertical, the links do convert a certain amount of the time, so it’s a matter of bidding right.
High ticket, complex services and hard-to-find or high-tech products seem to do better in general, though. If you’re selling cashmere sweaters there just aren’t enough sites where people are high enough up in the purchase funnel to be swayed by ads for cashmere sweaters. People buy from recommendations in content, but those tend to be direct recommendations or reviews, right?
Some advertisers are using the network for brand reasons, in concert with more of an integrated campaign. In general advertisers need to be trying more banner creative sizes and types - and more publishers should be more open to them. The system began with text ads only and there is a certain inertia in that.
I have been seeing a lot of AdWords ads about “free trials” and “only $1″ government stimulus secrets packages with fine print that mentions that the “service” is a subscription that costs $50 a month. Should Google be responsible for cleaning up such ads? Why do they let some such ads run when they spend so much capital policing the organic search results & creating quality scores?
I agree. The website quality side is policed more on the search end of things, so these kinds of come-ons tend to leak over into content, where there is more of a dearth of advertisers for some of the inventory.
On the whole, it’s very hard to police unscrupulous come-ons. Many if not most legitimate businesses in some fields are built around lead generation, free trials, free samples, free downloads, etc.
I’m sure it’s on Google’s to-do list. They’re working very hard on policing the search side (mostly algorithmically). The standard will always be more lax on the content side, but it seems like it should be beefed up some.
You wrote an interesting post on Search Engine Land about the potential for business models to be banned. Is there any way of predicting what might lose out next? How can a business stay competitive in PPC in the long run?
Google will tell you it’s largely user driven. I would love to know if, beyond panel testing, Google actually maintains a sort of “user advocacy” “ripoff squad” in house these days. The problem is, once you start to go down that path, it’s hard to stop. You start making all these value judgments. So anything that is going well past what the law actually says is suspect, especially when it seems to be Google taking issue with direct competitors, such as directories, media companies, etc.
I wish I had an easy answer. But the short answer is, AdWords loves conventional businesses with physical presences, whether they ship physical goods, services, or software, and whether they are B2B or B2C. They are harder on online pure plays, especially those that buy ads to sell ads, and to a significant degree, affiliates.
That’s not all that hard to figure out at the end of the day. Google’s job in the ad program is to connect customers with businesses, not to connect customers with another couple of clicks through that may or may not result in a satisfactory search experience.
Searchers just respond better to “conventional” businesses - be they brands or reputable small businesses. And people have valid concerns about privacy policies and the identities and legitimacy of the businesses they are dealing with. So of course they are freaked out by appearances, poor disclosure, affiliate codes, and other “weird-looking” stuff. They’re being asked to provide their information and credit card numbers, so they have every right to expect some protection against those who operate in the shadows.
Are you seeing small players pushed out of the ad market? Has the downturn shifted the make up of the types of ads Google is showing?
No, small players in niches that fit the above profile (conventional businesses) do very well if they’re optimized and know their customers.
Of course the downturn is affecting things in areas you might expect: the ecosystem around finance, real estate, and much more besides. Advertiser behavior is odd, though. Many companies don’t seem to have the wherewithal to deal with economic slowdowns through bid adjustments, so the auction may remain hostile to marginal players (bids still prohibitively high to reach the top 4-5 ad positions). Companies seem to overbid their way through an economic cycle, then get cold feet and shut things off completely. That’s not how you do it!
So smaller companies actually have nimbler decision-making and don’t “budget” in these all-or-nothing ways, as some large bureaucratic companies still have to do.
Yahoo!’s recent change in terms of service were ugly. Do you see them getting bought out by Microsoft? Or what can they do to get back in the search game and stop bleeding market-share?
What are they waiting for? Consolidation here would be healthy. I bled purple for a few years. But as Air Supply once sang (paraphrasing slightly), “I’m All Out of Blood”. With both Microsoft and Yahoo we all feel the need for clarity in our industry; a sense of who we are buying from, what the future holds, and so on.
Can you share a surprising PPC secret that you thought you wouldn’t share with anyone in a public interview?
I’d be happy to. An old AdWords account of mine, mainly aimed at selling my ebook, was slapped with low Quality Scores. It’s been dormant for a couple of years. Trying to revive it just to point to the page on the Page Zero site that talks about the nice, happy, white hat print book (that you can buy at Amazon.com for all of $17)… no-go, Landing Page Quality is still deemed Poor. We’re working on the problem, but if it’s an arbitrary call, what are you going to do?
Some days it does seem that it would pay to turn “black hat” and just work for “Google Cash” instead of clients. After all… if they’re willing to slap the “good guys”…
But really, I can’t see myself just sitting on a beach half naked year round, snorkeling and windsurfing and making millions of dollars spamming the system. That would be so dull!
Saving the most important topic for last, what makes peanut butter taste SOOO good? When does your line of premium luxury gourmet peanut butters hit the shelves at the local grocery store?
I think mainly what makes it taste good is the jam, rye toast, and milk you have it with. Which just goes to show, we always need a little help from our friends. Peanut butter is no exception.
But honestly, organic cashews are where it’s at now. You’ve gotta go where the puck is going, Aaron. Thanks & best wishes.
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Thanks Andrew. To learn more about Mr. Goodman you may want to read his blog at Traffick.com, buy his book at Amazon.com, and visit his SEM firm at PageZero.com.
Source:Interview of Andrew Goodman, the World's #1 Google AdWords Expert
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