I'm currently on a short holiday in Phuket, Thailand. Walk around Patong Beach in Phuket for a half-hour and you'll be mobbed by vendor after vendor trying to sell you one of three things: tailored suits, Thai massages, and tuk-tuk (little taxi) rides. The local t-shirt sellers have caught on to how annoying this can be, as you can now buy a t-shirt that says "No, I don't want a f*cking suit, massage, or tuk-tuk."
Now I don't really need a suit, but I do admit that the concept of getting a custom-tailored suit for under $100 is pretty attractive to me. Problem is, I have no way of telling all the suit-hawkers apart. They all start with the same come-on ("Hello Boss. Where are you from? How long have you been in Phuket? Please come and have a look at my store"), they all have nice looking suits in the window, and they all charge about the same amount. I could probably spend a week researching the subject, interviewing tailors, asking locals for recommendations, and I doubt I would be any closer to really differentiating any of these tailors.
In short, it's a commodity market, where price is really the only thing that separates the different choices. I suspect, however, that at one point in time, Phuket's tailor (and massage, and tuk-tuk) markets were not so commoditized and saturated. Maybe 20 years ago, some tailor from India decided to give Phuket a try and had amazing success. Every week he had a new crop of Australian and Singaporean tourists who loved the idea of coming back with a nice wardrobe.
And maybe in his euphoria about his business success, he told a few fellow tailors in India and Hong Kong. A few of them came over and were successful too. Then a few more. And so on. Suddenly, there's a tailor on every block. I wonder if that original tailor is still in business anymore.
Back in 2002 - the early days of paid search - a similar thing happened. Overture started really doing well, so a bunch of would-be Overtures entered the market - Google AdWords, Sprinks, Ah-Ha, BlowSearch, 7Search, Kanoodle, FindWhat, ePilot, Mamma.com, Infospace, GenieKnows, and many more tried to make some bank on the PPC gold rush.
For a while, a lot of these companies did quite well. As this was a pretty new concept, few advertisers were savvy enough to differentiate the quality traffic from the crappy traffic. It seemed pretty cool to get 10,000 clicks from Kanoodle for a few cents a click - surely that was a good marketing buy.
But unlike the tailors and tut-tut drivers of Phuket, the paid search market is not a black box. Over time, it became clear to advertisers that some search engines had great traffic (Google, Overture) and most had horrible traffic. Slowly but surely, the Overture-wannabes packed up and went home.
Google, of course, has remained. Why - because it has the quality traffic (the GlenGarry leads!). Having quality traffic is like having a tailor store or tuk-tuk stand in front of the biggest, fanciest hotel, with no competition for miles. You just sit back and watch the money come in.
Interestingly, it took Google a while to realize that they should actually promote the quality of their traffic. Google use to provide advertisers with little more information than the number of clicks and impressions they'd received. From that information, it's hard to tell Google apart from ePilot.
In the last few years, however, Google has lead the charge toward PPC transparency. They make it easy to bundle Google Analytics with your paid search campaign, they offer conversion tracking, negative keywords, site exclusion, and most recently "search query" and "placement" results (so you can block bad AdSense publishers and bad broad-match keyword extensions).
This is not Google's attempt at advertiser altruism - it's a smart, calculated business move. If you have the best traffic, you should flaunt it. And that's what Google is doing.
Somewhere on Phuket Island, there are some tuk-tuk drivers who are truly amazing. They could probably give me an Insider's tour of Phuket Island that I would never forget. If I could find them, I'd pay double or triple the going rate. Unlike measuring online advertising quality, it's next to impossible to add transparency to the tuk-tuk market.
David Rodnitzky is Vice President of Advertising at Mercantila. Read this post and others on his blog: http://blogation.blogspot.com
