1 00:00:04,440 --> 00:00:12,360 Speaker 1: Welcome to tech Stuff, a production from iHeartRadio. Hey there, 2 00:00:12,360 --> 00:00:16,040 Speaker 1: and welcome to tech Stuff. I'm your host, Jonathan Strickland. 3 00:00:16,079 --> 00:00:19,880 Speaker 1: I'm an executive producer with iHeart Podcasts and how the 4 00:00:19,920 --> 00:00:24,599 Speaker 1: tech are you. I've often said that Google is not 5 00:00:25,079 --> 00:00:30,240 Speaker 1: a search engine company. It's an advertising company. And of 6 00:00:30,240 --> 00:00:33,320 Speaker 1: course these days, when I say Google, you could argue 7 00:00:33,320 --> 00:00:35,479 Speaker 1: that I really mean Alpha, that you know, the parent 8 00:00:35,520 --> 00:00:39,199 Speaker 1: company that owns all the various Google companies. But to 9 00:00:39,200 --> 00:00:43,599 Speaker 1: be clear, I am not the only person who says this, right, 10 00:00:43,640 --> 00:00:45,400 Speaker 1: I don't mean to say that I'm some sort of 11 00:00:45,400 --> 00:00:47,879 Speaker 1: guru who I did not come up with it. I'm 12 00:00:47,920 --> 00:00:50,800 Speaker 1: not the first person to say it. I also say it. 13 00:00:50,880 --> 00:00:54,320 Speaker 1: That's all. I agree with those who say this. But 14 00:00:54,400 --> 00:00:57,120 Speaker 1: here's something that I find interesting. So, once upon a time, 15 00:00:57,760 --> 00:01:02,360 Speaker 1: Google was a search company. It was not an advertising company. 16 00:01:02,720 --> 00:01:07,440 Speaker 1: In the very early days, Google didn't generate revenue through advertising. 17 00:01:08,200 --> 00:01:12,800 Speaker 1: So let's set the clocks back quite a bit. In 18 00:01:12,880 --> 00:01:16,039 Speaker 1: nineteen ninety five, a guy named Larry Page was mulling 19 00:01:16,080 --> 00:01:18,840 Speaker 1: over the idea of enrolling in Stanford University in order 20 00:01:18,840 --> 00:01:21,120 Speaker 1: to go to grad school. He was at the campus 21 00:01:21,360 --> 00:01:22,880 Speaker 1: in order to get the lay of the land, and 22 00:01:22,920 --> 00:01:25,240 Speaker 1: there was a student who was assigned to him to 23 00:01:25,319 --> 00:01:29,200 Speaker 1: show him around, a Stanford student named Sarah gay Brinn, 24 00:01:29,440 --> 00:01:32,839 Speaker 1: and the story goes that the two got along kind 25 00:01:32,880 --> 00:01:36,560 Speaker 1: of like oil and water. They apparently didn't agree on 26 00:01:36,640 --> 00:01:41,480 Speaker 1: practically anything, but a year later, when Larry Page was 27 00:01:41,560 --> 00:01:44,640 Speaker 1: in the graduate program, the two decided that they would 28 00:01:44,680 --> 00:01:47,520 Speaker 1: work together on what would turn out to be a 29 00:01:47,640 --> 00:01:52,320 Speaker 1: truly huge project. So their goal was to build a 30 00:01:52,360 --> 00:01:55,680 Speaker 1: new kind of web search engine. So at the time, 31 00:01:56,000 --> 00:01:59,520 Speaker 1: the dominant search engines that were still working off the 32 00:01:59,720 --> 00:02:05,760 Speaker 1: very young Worldwide Web primarily used keywords as their guide. 33 00:02:06,080 --> 00:02:08,360 Speaker 1: So you would pop into a search engine. The one 34 00:02:08,440 --> 00:02:10,639 Speaker 1: I used all the time was web Crawler, but there 35 00:02:10,639 --> 00:02:12,920 Speaker 1: were lots of them, and you would type whatever it 36 00:02:12,960 --> 00:02:15,360 Speaker 1: was you were searching for, like let's say it's the 37 00:02:15,360 --> 00:02:19,800 Speaker 1: word tractor, for example. The search engine would return results 38 00:02:20,280 --> 00:02:24,480 Speaker 1: of web pages that featured that keyword somewhere in the page, 39 00:02:24,919 --> 00:02:28,480 Speaker 1: and they might have different ways of prioritizing the web pages. 40 00:02:28,480 --> 00:02:31,720 Speaker 1: Maybe if the keyword appears in the title of the page, 41 00:02:31,760 --> 00:02:32,799 Speaker 1: it might rank higher. 42 00:02:32,800 --> 00:02:33,480 Speaker 2: That kind of thing. 43 00:02:33,919 --> 00:02:37,120 Speaker 1: But the problem was there was never a guarantee that 44 00:02:37,160 --> 00:02:40,320 Speaker 1: the search results you got would actually be relevant to 45 00:02:40,400 --> 00:02:44,799 Speaker 1: the search query that you put in. They might include 46 00:02:45,240 --> 00:02:48,400 Speaker 1: the search term, but it may not turn out to 47 00:02:48,400 --> 00:02:52,160 Speaker 1: be useful. Maybe the page just mentions tractors off handedly, 48 00:02:52,600 --> 00:02:55,919 Speaker 1: like as a joke or as a reference, and it's 49 00:02:55,960 --> 00:02:58,280 Speaker 1: not actually about tractors, it just happens to have the 50 00:02:58,320 --> 00:03:02,000 Speaker 1: word tractors in it. Or maybe it's a web page 51 00:03:02,040 --> 00:03:05,840 Speaker 1: run by a real scumbag who just crams the bottom 52 00:03:05,919 --> 00:03:09,400 Speaker 1: of the page with a ton of random keywords, ones 53 00:03:09,440 --> 00:03:13,240 Speaker 1: that they've determined are really popular, and it's on an 54 00:03:13,280 --> 00:03:16,520 Speaker 1: effort to capture as much traffic from search engines as possible. 55 00:03:16,560 --> 00:03:19,839 Speaker 1: They don't care that this isn't what you were looking for. 56 00:03:20,280 --> 00:03:23,800 Speaker 1: They just want to get you onto that page. The 57 00:03:23,840 --> 00:03:27,080 Speaker 1: search experience could be really a frustrating one. It often 58 00:03:27,160 --> 00:03:30,280 Speaker 1: involved users going to a page, taking a quick look, 59 00:03:30,320 --> 00:03:33,800 Speaker 1: saying oh, this isn't what I need, backing out, and 60 00:03:33,840 --> 00:03:37,400 Speaker 1: then doing it all over again. And it wasn't very 61 00:03:37,520 --> 00:03:41,200 Speaker 1: satisfying or helpful page. And Brend wanted to create an 62 00:03:41,240 --> 00:03:44,200 Speaker 1: engine that would return much better search results. 63 00:03:44,520 --> 00:03:45,600 Speaker 2: So how would you do that? 64 00:03:45,960 --> 00:03:49,480 Speaker 1: Well, their solution was to take a broader approach to search. 65 00:03:49,760 --> 00:03:53,040 Speaker 1: Their search engine would assign a rank a page rank 66 00:03:53,160 --> 00:03:57,119 Speaker 1: if you will to each result, and higher ranks would 67 00:03:57,160 --> 00:03:59,960 Speaker 1: appear higher in the search results page and lots of 68 00:04:00,240 --> 00:04:04,320 Speaker 1: factors would go into determining what page rank a page 69 00:04:04,360 --> 00:04:07,360 Speaker 1: would receive. For example, let's say that you've got a 70 00:04:07,400 --> 00:04:10,120 Speaker 1: web page and you notice that there are tons of 71 00:04:10,280 --> 00:04:13,760 Speaker 1: incoming links pointing to this web page. Well, that could 72 00:04:13,800 --> 00:04:16,800 Speaker 1: end up being a boost to that page's rank, because 73 00:04:16,839 --> 00:04:19,000 Speaker 1: the thought is, if a lot of other web pages 74 00:04:19,000 --> 00:04:22,159 Speaker 1: are pointing to this page, it must be good, right, 75 00:04:22,240 --> 00:04:24,440 Speaker 1: if you've got a lot of different pages. Of course, 76 00:04:24,440 --> 00:04:26,360 Speaker 1: you can game that too, right, You could create a 77 00:04:26,400 --> 00:04:28,880 Speaker 1: whole network of pages that just link to each other 78 00:04:29,320 --> 00:04:31,400 Speaker 1: in an effort to try and boost page eranks. So 79 00:04:31,480 --> 00:04:35,839 Speaker 1: another part of this ranking system would take into account 80 00:04:35,839 --> 00:04:40,680 Speaker 1: the quality of those incoming links, the idea being well, 81 00:04:41,200 --> 00:04:44,760 Speaker 1: if the incoming links are coming from really established websites, 82 00:04:44,800 --> 00:04:48,880 Speaker 1: maybe they belong to a known entity like an important company, 83 00:04:49,480 --> 00:04:51,799 Speaker 1: or maybe it's a web page that has been around 84 00:04:51,800 --> 00:04:53,880 Speaker 1: for a while and has sort of proven itself, any 85 00:04:53,960 --> 00:04:57,440 Speaker 1: links that that page has are going to be worth more. 86 00:04:57,680 --> 00:05:00,760 Speaker 1: Plus those pages themselves, the ones that been around or 87 00:05:00,800 --> 00:05:03,200 Speaker 1: from known entities, those would have a higher rank because 88 00:05:03,240 --> 00:05:06,240 Speaker 1: they were thought of as just being higher quality. Now, 89 00:05:06,279 --> 00:05:08,880 Speaker 1: this is just a couple of examples of factors that 90 00:05:08,880 --> 00:05:11,200 Speaker 1: would determine a web page's page erank. 91 00:05:11,560 --> 00:05:12,600 Speaker 2: As it turned out, there were. 92 00:05:12,560 --> 00:05:16,359 Speaker 1: Lots of them, and the formula would change frequently, and 93 00:05:16,400 --> 00:05:19,760 Speaker 1: it was always kept secret so that pages couldn't try 94 00:05:19,760 --> 00:05:22,400 Speaker 1: to game the system. Although they didn't stop anyone from trying, 95 00:05:22,920 --> 00:05:24,640 Speaker 1: it just meant it was hard to do because you 96 00:05:24,680 --> 00:05:29,159 Speaker 1: didn't exactly know which factors were the most important. The 97 00:05:29,200 --> 00:05:32,800 Speaker 1: PageRank approach meant that you were far more likely as 98 00:05:32,839 --> 00:05:35,599 Speaker 1: a user to come across a search result that was 99 00:05:35,640 --> 00:05:38,440 Speaker 1: relevant to whatever it was you were actually searching for. 100 00:05:38,920 --> 00:05:39,080 Speaker 2: Now. 101 00:05:39,120 --> 00:05:44,040 Speaker 1: Originally, the pair called their search engine BackRub. I think 102 00:05:44,440 --> 00:05:47,039 Speaker 1: we could all agree that it was a fortunate thing 103 00:05:47,080 --> 00:05:49,880 Speaker 1: that they decided to change the name to Google. The 104 00:05:49,920 --> 00:05:53,000 Speaker 1: two received a healthy one hundred thousand dollars check from 105 00:05:53,000 --> 00:05:57,599 Speaker 1: an investor in nineteen ninety eight, and they launched Google Incorporated, 106 00:05:58,000 --> 00:06:01,640 Speaker 1: and for the first couple of years, Google existed primarily 107 00:06:01,680 --> 00:06:06,360 Speaker 1: off of influxes of cash coming from investors. Everyone could 108 00:06:06,360 --> 00:06:10,279 Speaker 1: recognize that Google was providing a valuable service, one that 109 00:06:10,400 --> 00:06:13,599 Speaker 1: was becoming increasingly important as the web was getting more 110 00:06:13,960 --> 00:06:16,880 Speaker 1: complex and larger, and it was doing so at a 111 00:06:16,960 --> 00:06:20,040 Speaker 1: level that really set Google apart from the competition. Google 112 00:06:20,120 --> 00:06:22,400 Speaker 1: was quickly making a name for itself as being the 113 00:06:22,440 --> 00:06:25,880 Speaker 1: best of the web search engines at that time, but 114 00:06:26,040 --> 00:06:28,960 Speaker 1: investors were also starting to get a little concerned, and 115 00:06:29,040 --> 00:06:31,359 Speaker 1: the reason for that was that the powerful Google search 116 00:06:31,360 --> 00:06:35,080 Speaker 1: engine didn't have an equally powerful way to generate revenue. 117 00:06:35,480 --> 00:06:35,640 Speaker 2: Now. 118 00:06:35,680 --> 00:06:38,920 Speaker 1: Initially, one strategy was to try and form partnerships with 119 00:06:39,040 --> 00:06:42,600 Speaker 1: portal sites. And these were websites that acted kind of 120 00:06:42,640 --> 00:06:45,080 Speaker 1: like a homepage, like this is the page that you 121 00:06:45,120 --> 00:06:49,040 Speaker 1: would see when you started up your browser. This was 122 00:06:49,120 --> 00:06:50,800 Speaker 1: kind of a gateway to the rest of the web. 123 00:06:50,839 --> 00:06:54,080 Speaker 1: They might host a few articles. Maybe some of those 124 00:06:54,160 --> 00:06:57,480 Speaker 1: articles were written in house by an editorial staff that 125 00:06:57,520 --> 00:07:01,160 Speaker 1: worked for the website. Maybe some of the articles were 126 00:07:01,160 --> 00:07:03,479 Speaker 1: really generated by a third party and they were just 127 00:07:03,520 --> 00:07:07,400 Speaker 1: being linked to on this landing page. And many of 128 00:07:07,440 --> 00:07:11,520 Speaker 1: them would also include a search tool. So Google would 129 00:07:11,560 --> 00:07:15,520 Speaker 1: try and make deals with these different sites to be 130 00:07:15,760 --> 00:07:18,640 Speaker 1: that search tool. But Google with small potatoes in those days, 131 00:07:18,920 --> 00:07:21,200 Speaker 1: so these deals were few and far between, and they 132 00:07:21,240 --> 00:07:25,200 Speaker 1: certainly weren't enough to make Google look like it was 133 00:07:25,240 --> 00:07:29,680 Speaker 1: going to be arousing success financially, So clearly Google would 134 00:07:29,720 --> 00:07:31,880 Speaker 1: have to come up with a different approach if the 135 00:07:31,920 --> 00:07:34,800 Speaker 1: company was to stay in business, and someone else had 136 00:07:34,800 --> 00:07:37,160 Speaker 1: to come up with an idea that, with a little tweaking, 137 00:07:37,600 --> 00:07:42,080 Speaker 1: would work just fine, and then Google would take that idea. 138 00:07:42,160 --> 00:07:45,080 Speaker 1: To say they stole it would probably be too harsh, 139 00:07:45,360 --> 00:07:49,080 Speaker 1: but they certainly emulated an idea that someone else came 140 00:07:49,160 --> 00:07:52,400 Speaker 1: up with for a totally different site. Now that's someone 141 00:07:52,440 --> 00:07:55,840 Speaker 1: else was a guy named William Bill T. 142 00:07:56,160 --> 00:07:56,640 Speaker 2: Gross. 143 00:07:57,040 --> 00:07:59,920 Speaker 1: He graduated from the California Institute of Technology with the 144 00:08:00,120 --> 00:08:03,440 Speaker 1: degree in mechanical engineering, which would not make you think 145 00:08:03,480 --> 00:08:06,760 Speaker 1: of someone who would go on to create a web 146 00:08:06,800 --> 00:08:09,560 Speaker 1: search engine, but he became known as something of a 147 00:08:09,600 --> 00:08:13,800 Speaker 1: serial entrepreneur. He would launch lots of different companies across 148 00:08:13,840 --> 00:08:17,720 Speaker 1: his career as soon as he was graduating, essentially, including 149 00:08:17,760 --> 00:08:21,040 Speaker 1: a video arcade and a couple of software companies, and 150 00:08:21,080 --> 00:08:25,200 Speaker 1: an audio equipment company and more. But in the late nineties, 151 00:08:25,560 --> 00:08:28,400 Speaker 1: Gross wanted to solve the same problem that Page and 152 00:08:28,440 --> 00:08:31,040 Speaker 1: Brinn had been working on or would be working on, actually, 153 00:08:31,080 --> 00:08:33,920 Speaker 1: because Gross's solution would come out first. He wanted to 154 00:08:34,000 --> 00:08:36,720 Speaker 1: be able to create a search engine that would return 155 00:08:36,840 --> 00:08:40,240 Speaker 1: better search results than a lot of the competitors that 156 00:08:40,280 --> 00:08:42,880 Speaker 1: were on the market. But he took a different approach 157 00:08:42,880 --> 00:08:45,720 Speaker 1: from what Brin and Page were looking at. So instead 158 00:08:45,760 --> 00:08:49,319 Speaker 1: of building out a system meant to assess the value 159 00:08:49,440 --> 00:08:53,080 Speaker 1: of every page that's on the Internet, he figured he 160 00:08:53,120 --> 00:08:57,280 Speaker 1: could deliver better search results by having companies pay him 161 00:08:57,440 --> 00:09:00,760 Speaker 1: in order to have their search result rank higher on 162 00:09:00,800 --> 00:09:03,760 Speaker 1: the list. So here's the basic idea. Now, as I 163 00:09:03,800 --> 00:09:06,400 Speaker 1: mentioned earlier, one of the big problems with early search 164 00:09:06,400 --> 00:09:09,360 Speaker 1: engines is that a lot of web administrators were trying 165 00:09:09,400 --> 00:09:12,240 Speaker 1: to game the system. So it really wasn't unusual for 166 00:09:12,360 --> 00:09:16,400 Speaker 1: web designer to just stuff a page full of keywords 167 00:09:16,400 --> 00:09:20,720 Speaker 1: that didn't actually apply to the page's content itself. So 168 00:09:20,840 --> 00:09:23,160 Speaker 1: clever designers would do this in a way that wasn't 169 00:09:23,200 --> 00:09:25,720 Speaker 1: obvious to the visitor, right because otherwise you would just 170 00:09:25,840 --> 00:09:28,080 Speaker 1: like I said, you would scroll down a page and 171 00:09:28,080 --> 00:09:31,000 Speaker 1: you see like a word jumble of a bunch of 172 00:09:31,240 --> 00:09:34,400 Speaker 1: unrelated words at the end of a page, and it 173 00:09:34,480 --> 00:09:39,160 Speaker 1: just looked like a mess. Clever web administrators would choose 174 00:09:39,200 --> 00:09:41,880 Speaker 1: to make the text the same color as the page's 175 00:09:41,920 --> 00:09:44,439 Speaker 1: background at the bottom, so you wouldn't even see it 176 00:09:44,480 --> 00:09:46,959 Speaker 1: like it might be that the page seems unusually long 177 00:09:47,040 --> 00:09:50,080 Speaker 1: with no content toward the bottom of it, but in 178 00:09:50,120 --> 00:09:52,520 Speaker 1: fact there would be content. It's just it was the 179 00:09:52,559 --> 00:09:55,440 Speaker 1: same color as the background, so you couldn't see it. 180 00:09:55,720 --> 00:09:57,240 Speaker 2: However, while you. 181 00:09:57,160 --> 00:10:00,600 Speaker 1: Couldn't see it, a search engine could. The search engine 182 00:10:00,600 --> 00:10:03,200 Speaker 1: would still see the keywords there even though you wouldn't, 183 00:10:03,320 --> 00:10:06,320 Speaker 1: and that's why this page that doesn't seem to be 184 00:10:06,360 --> 00:10:08,319 Speaker 1: related at all to the thing you were searching for 185 00:10:08,360 --> 00:10:12,240 Speaker 1: would pop up in search results. Meanwhile, you had legitimate 186 00:10:12,320 --> 00:10:16,600 Speaker 1: sites out there, some connected to established brands, that would 187 00:10:16,720 --> 00:10:19,079 Speaker 1: very much like to rank high in search in order 188 00:10:19,080 --> 00:10:21,400 Speaker 1: to drive more traffic to their sites, but with all 189 00:10:21,440 --> 00:10:24,600 Speaker 1: these junk sites out there, that could be hard to do. 190 00:10:25,120 --> 00:10:27,920 Speaker 1: So they might be in a position where they're able 191 00:10:27,960 --> 00:10:30,600 Speaker 1: to and willing to pay to jump to the head 192 00:10:30,600 --> 00:10:32,760 Speaker 1: of the line if it meant that folks would actually 193 00:10:32,840 --> 00:10:37,320 Speaker 1: find their stuff online. And so Gross launched a company 194 00:10:37,360 --> 00:10:42,640 Speaker 1: called go to dot com Incorporated. His strategy included a 195 00:10:42,760 --> 00:10:46,840 Speaker 1: pay per click arrangement, which is exactly what it sounds like. 196 00:10:47,120 --> 00:10:50,560 Speaker 1: The advertiser agrees to pay a certain amount every time 197 00:10:50,640 --> 00:10:55,320 Speaker 1: someone clicks on the ad, so typically you aggregate clicks 198 00:10:55,360 --> 00:10:58,079 Speaker 1: by the thousands, so each click is really just worth 199 00:10:58,160 --> 00:11:02,280 Speaker 1: you usually fractions of a penny. Gross's logic was that 200 00:11:02,400 --> 00:11:05,960 Speaker 1: the garbage sites out there couldn't and wouldn't pay for 201 00:11:06,080 --> 00:11:10,240 Speaker 1: positioning because their entire strategy relied on using keywords in 202 00:11:10,360 --> 00:11:13,600 Speaker 1: bulk that had no application to the actual site. So 203 00:11:13,800 --> 00:11:15,800 Speaker 1: if they wanted to try and do that the same 204 00:11:15,840 --> 00:11:18,480 Speaker 1: way with Gross's strategy, they would have to pay for 205 00:11:18,600 --> 00:11:21,280 Speaker 1: all these different keywords that didn't actually apply to them, 206 00:11:21,800 --> 00:11:24,440 Speaker 1: and it would bankrupt them because people would be clicking 207 00:11:24,520 --> 00:11:27,400 Speaker 1: on those sites over and over again on the search results, 208 00:11:27,559 --> 00:11:30,880 Speaker 1: and they'd have to pay every time that happened, or 209 00:11:30,920 --> 00:11:34,240 Speaker 1: at least every time every thousand times it happened. So 210 00:11:35,200 --> 00:11:37,040 Speaker 1: you would be paying go To for all this traffic. 211 00:11:37,080 --> 00:11:39,360 Speaker 1: You wouldn't be making that money back through the ad 212 00:11:39,400 --> 00:11:42,600 Speaker 1: revenue you generated on your site. There's no way you'd 213 00:11:42,640 --> 00:11:46,000 Speaker 1: be making more money through say, web advertising, than you 214 00:11:46,040 --> 00:11:48,640 Speaker 1: were paying out to go To. So whamo, you end 215 00:11:48,720 --> 00:11:51,439 Speaker 1: up with a search engine that delivers better results, or 216 00:11:51,440 --> 00:11:54,599 Speaker 1: at least more relevant results. Since you can't guarantee that 217 00:11:54,640 --> 00:11:57,280 Speaker 1: the entities that actually do pay for their positioning are 218 00:11:57,320 --> 00:11:59,520 Speaker 1: in fact the best ones out there, but chances are 219 00:11:59,559 --> 00:12:03,079 Speaker 1: there better than the junk sites. Gross launched goo to 220 00:12:03,240 --> 00:12:05,760 Speaker 1: dot com in nineteen ninety eight. In fact, he launched 221 00:12:05,760 --> 00:12:08,120 Speaker 1: it before Page and brend got Google off the ground. 222 00:12:08,320 --> 00:12:10,800 Speaker 1: And while go to only saw modest success in the 223 00:12:10,800 --> 00:12:14,720 Speaker 1: grand scheme of things, that revenue generation model stood out, 224 00:12:15,200 --> 00:12:18,360 Speaker 1: and when it came time to determine a way for 225 00:12:18,520 --> 00:12:22,920 Speaker 1: Google to make money, the go to became well, well, 226 00:12:22,920 --> 00:12:28,000 Speaker 1: it became the go to model. So Google would introduce 227 00:12:28,040 --> 00:12:31,400 Speaker 1: a pair of strategies in two thousand that would bring 228 00:12:31,440 --> 00:12:35,280 Speaker 1: the company into the advertising space. Now, according to a 229 00:12:35,400 --> 00:12:39,560 Speaker 1: Google SEC filing from two thousand and four, quote, in 230 00:12:39,600 --> 00:12:42,800 Speaker 1: the first quarter of two thousand, we introduced our first 231 00:12:42,840 --> 00:12:47,599 Speaker 1: advertising program through our direct sales force. We offered advertisers 232 00:12:47,600 --> 00:12:51,160 Speaker 1: the ability to place text based ads on our websites 233 00:12:51,400 --> 00:12:54,600 Speaker 1: targeted to our users search queries under a program called 234 00:12:54,640 --> 00:12:58,480 Speaker 1: Premium Sponsorships. Advertisers paid us based on the number of 235 00:12:58,559 --> 00:13:01,760 Speaker 1: times their ads were displayed on users search results pages, 236 00:13:02,080 --> 00:13:05,280 Speaker 1: and we recognized revenue at the time these ads appeared 237 00:13:05,640 --> 00:13:06,320 Speaker 1: end quote. 238 00:13:06,760 --> 00:13:08,079 Speaker 2: So with this. 239 00:13:08,080 --> 00:13:11,200 Speaker 1: Strategy, Google would collect a certain amount of money every 240 00:13:11,240 --> 00:13:15,160 Speaker 1: time someone saw a particular ad in their search results. 241 00:13:15,400 --> 00:13:18,600 Speaker 1: Clicking on the ad wasn't necessarily a requirement. Just getting 242 00:13:18,600 --> 00:13:20,760 Speaker 1: the ad in front of folks was enough to warrant 243 00:13:20,920 --> 00:13:24,360 Speaker 1: to the charge of the ad. As for how much 244 00:13:24,400 --> 00:13:27,920 Speaker 1: the advertisers were actually paying, I saw one site where 245 00:13:27,960 --> 00:13:31,000 Speaker 1: a client said their rate was around forty dollars per 246 00:13:31,080 --> 00:13:36,400 Speaker 1: one thousand impressions or views, so every thousand times this 247 00:13:36,520 --> 00:13:40,320 Speaker 1: ad was seen they would pay out forty dollars. And 248 00:13:40,400 --> 00:13:43,360 Speaker 1: Google was rapidly rising in popularity, and when you think 249 00:13:43,400 --> 00:13:46,080 Speaker 1: of all the different potential ads the company could sell 250 00:13:46,120 --> 00:13:50,840 Speaker 1: against different search terms, it really starts to add up. 251 00:13:51,679 --> 00:13:55,120 Speaker 1: The premium sponsorship ads would appear at the top of 252 00:13:55,200 --> 00:13:58,200 Speaker 1: the search results, so the very first search result would 253 00:13:58,200 --> 00:14:01,559 Speaker 1: actually be an AD, so there was a decent chance 254 00:14:01,640 --> 00:14:04,880 Speaker 1: that unobservant folks would just click on the ad, assuming 255 00:14:04,880 --> 00:14:06,920 Speaker 1: it was the best result for their query. Because it 256 00:14:07,000 --> 00:14:10,040 Speaker 1: was at the top of the search results page. Google 257 00:14:10,120 --> 00:14:13,760 Speaker 1: did have the foresight to place a shaded background behind 258 00:14:13,880 --> 00:14:17,960 Speaker 1: the link, which set it apart from the actual search results. 259 00:14:18,640 --> 00:14:21,040 Speaker 1: I suppose folks of the company understood that unless they 260 00:14:21,040 --> 00:14:24,960 Speaker 1: made the effort to differentiate the paid advertising spot from 261 00:14:25,000 --> 00:14:28,560 Speaker 1: the legitimate return results, they could get into some real 262 00:14:28,640 --> 00:14:33,359 Speaker 1: trouble there with regulators like the FTC, which absolutely demanded 263 00:14:33,360 --> 00:14:38,600 Speaker 1: that search engine companies make differentiation between sponsored results and 264 00:14:38,680 --> 00:14:39,480 Speaker 1: search results. 265 00:14:40,000 --> 00:14:41,760 Speaker 2: All Right, we're gonna talk. 266 00:14:41,600 --> 00:14:45,720 Speaker 1: More about how Google did that, plus other strategies Google 267 00:14:45,800 --> 00:14:48,600 Speaker 1: got into in the advertising space, but first we actually 268 00:14:48,680 --> 00:14:51,320 Speaker 1: need to take a break for our own advertisers. 269 00:14:51,600 --> 00:15:02,280 Speaker 2: We'll be right back, okay. 270 00:15:02,360 --> 00:15:05,680 Speaker 1: So when we broke off for ads, we were just 271 00:15:05,720 --> 00:15:11,800 Speaker 1: talking about how Google needed to separate their sponsored results 272 00:15:11,840 --> 00:15:14,800 Speaker 1: from their actual search results, and to follow along that 273 00:15:15,040 --> 00:15:16,040 Speaker 1: for a second. 274 00:15:16,160 --> 00:15:17,480 Speaker 2: This is going to just be a little bit of 275 00:15:17,520 --> 00:15:18,040 Speaker 2: a tangent. 276 00:15:18,440 --> 00:15:21,320 Speaker 1: Over the years, Google has changed up how it tags 277 00:15:21,440 --> 00:15:24,880 Speaker 1: or labels ads versus search results. So example, in two 278 00:15:24,880 --> 00:15:27,360 Speaker 1: thousand and seven, the company changed the background color from 279 00:15:27,400 --> 00:15:31,640 Speaker 1: being blue to yellow. In twenty ten, it went to 280 00:15:31,720 --> 00:15:35,040 Speaker 1: a very kind of light green background. Actually in the 281 00:15:35,080 --> 00:15:37,680 Speaker 1: example I saw it looked more teeled to me. But 282 00:15:37,720 --> 00:15:40,040 Speaker 1: then it went back to yellow. And going back to 283 00:15:40,120 --> 00:15:42,560 Speaker 1: yellow became kind of a thing. Over the following years, 284 00:15:42,560 --> 00:15:45,480 Speaker 1: Google would experiment and changed to different colors, but would 285 00:15:45,480 --> 00:15:48,520 Speaker 1: come back to yellow over and over again. In twenty thirteen, 286 00:15:48,960 --> 00:15:51,680 Speaker 1: Google went with a very pale yellow, which, depending upon 287 00:15:52,080 --> 00:15:53,920 Speaker 1: how your settings are on your mind or you may 288 00:15:53,920 --> 00:15:56,440 Speaker 1: not even be able to see, but that same year. 289 00:15:56,520 --> 00:15:59,760 Speaker 1: That was when the US Federal Trade Commission really issued 290 00:15:59,760 --> 00:16:02,720 Speaker 1: a war learning to search engines in general about a 291 00:16:02,840 --> 00:16:07,840 Speaker 1: quote decline in compliance end quote with those rules that 292 00:16:08,040 --> 00:16:10,120 Speaker 1: all search engines were supposed to follow, that they were 293 00:16:10,160 --> 00:16:13,120 Speaker 1: supposed to make it clear that certain entries were ads 294 00:16:13,200 --> 00:16:16,880 Speaker 1: versus legitimate search results. So Google would end up placing 295 00:16:16,920 --> 00:16:21,160 Speaker 1: an AD tag next to ads in search results to 296 00:16:21,200 --> 00:16:24,840 Speaker 1: make it more clear that they were in fact advertisings. However, 297 00:16:24,920 --> 00:16:28,520 Speaker 1: this AD tag actually appeared below the hyperlink text, so 298 00:16:28,560 --> 00:16:31,480 Speaker 1: you'd get the hyperlink text first, and then that little description, 299 00:16:31,640 --> 00:16:34,040 Speaker 1: that block of text and stuff that would describe the 300 00:16:34,120 --> 00:16:36,480 Speaker 1: link that appears below it. Next to that, you would 301 00:16:36,520 --> 00:16:39,560 Speaker 1: have this little AD tag. The company switched up how 302 00:16:39,600 --> 00:16:42,480 Speaker 1: that looked a few times. They would use different shaded 303 00:16:42,520 --> 00:16:45,320 Speaker 1: backgrounds on the tag and whatnot in an effort to 304 00:16:45,320 --> 00:16:48,760 Speaker 1: comply with the rules, while you know, not complying too hard, 305 00:16:49,080 --> 00:16:52,680 Speaker 1: because ideally you still get people clicking on those ads, 306 00:16:53,080 --> 00:16:56,000 Speaker 1: and it's easier to do that if the people don't 307 00:16:56,040 --> 00:16:58,080 Speaker 1: notice at first that it is an AD, which has 308 00:16:58,160 --> 00:17:00,160 Speaker 1: certainly happened to me. I know, I've been guilty of 309 00:17:00,160 --> 00:17:02,880 Speaker 1: it a few times. So I did a search just 310 00:17:03,000 --> 00:17:06,120 Speaker 1: now to see what looks like these days, And depending 311 00:17:06,119 --> 00:17:09,040 Speaker 1: on what I'm searching for, it may bring up different things. 312 00:17:09,080 --> 00:17:11,560 Speaker 1: Like I searched for a refrigerator, and in that case, 313 00:17:11,960 --> 00:17:14,920 Speaker 1: it brought up a bunch of sponsored links to where 314 00:17:14,960 --> 00:17:17,960 Speaker 1: I could buy a new refrigerator. But then I did 315 00:17:18,000 --> 00:17:22,119 Speaker 1: a different search and what I got were a couple 316 00:17:22,160 --> 00:17:25,320 Speaker 1: of search results at the top that had the label 317 00:17:25,480 --> 00:17:29,680 Speaker 1: sponsored appearing before the hyperlink. So you had a little 318 00:17:29,760 --> 00:17:33,080 Speaker 1: highlighted sponsored and then the hyperlink and then the text. 319 00:17:33,119 --> 00:17:36,120 Speaker 1: And I feel like that's fairly clear that it's an 320 00:17:36,200 --> 00:17:39,760 Speaker 1: advertisement as opposed to just a regular search result. So 321 00:17:40,040 --> 00:17:43,359 Speaker 1: props to Google in that case, because I think that's 322 00:17:43,400 --> 00:17:46,920 Speaker 1: a reasonable approach. It's not beating you over the head 323 00:17:46,920 --> 00:17:50,800 Speaker 1: with it, but I feel like it's noticeable. Anyway, Premium 324 00:17:50,880 --> 00:17:55,199 Speaker 1: sponsorships really started Google's ad revenue journey, but as mentioned, 325 00:17:55,200 --> 00:17:58,760 Speaker 1: Google's direct sales team was responsible at this time for 326 00:17:58,800 --> 00:18:02,120 Speaker 1: selling that adspace, and that means that the sales team 327 00:18:02,240 --> 00:18:05,640 Speaker 1: was reaching out to advertisers with this offer and trying 328 00:18:05,680 --> 00:18:08,280 Speaker 1: to convince them to agree to plunk down cash in 329 00:18:08,320 --> 00:18:12,080 Speaker 1: return for thousands of impressions per ad So it was 330 00:18:12,119 --> 00:18:15,280 Speaker 1: a strong start, but not nearly the strategy that would 331 00:18:15,280 --> 00:18:18,480 Speaker 1: propel Google into becoming one of the largest, most powerful 332 00:18:18,520 --> 00:18:22,159 Speaker 1: tech companies out there. Instead, that development would wait a 333 00:18:22,160 --> 00:18:25,960 Speaker 1: whole two or three months because that same year, in 334 00:18:26,000 --> 00:18:30,360 Speaker 1: two thousand, Google would not just introduce premium sponsorships, they 335 00:18:30,400 --> 00:18:33,520 Speaker 1: also introduced a little offering that at the time was 336 00:18:33,560 --> 00:18:39,840 Speaker 1: called AdWords. So unlike premium sponsorships, prospective advertisers could actually 337 00:18:39,880 --> 00:18:42,879 Speaker 1: sign up for AdWords at a link, you know, self 338 00:18:42,920 --> 00:18:45,919 Speaker 1: service style. They didn't have to be reached by a 339 00:18:45,960 --> 00:18:49,240 Speaker 1: direct sales representative. They would just go to a link 340 00:18:49,280 --> 00:18:51,840 Speaker 1: and say, okay, yes, I want to purchase some AdWords. 341 00:18:52,119 --> 00:18:53,120 Speaker 2: And that wasn't the only. 342 00:18:52,920 --> 00:18:56,760 Speaker 1: Difference between AdWords and premium sponsorships. Another was that adword 343 00:18:56,800 --> 00:19:00,720 Speaker 1: results appeared not at the top of search results. Instead, 344 00:19:00,720 --> 00:19:03,760 Speaker 1: it would appear to the right of search results. Originally 345 00:19:03,960 --> 00:19:06,080 Speaker 1: in what we used to call, or still call, I guess, 346 00:19:06,119 --> 00:19:08,600 Speaker 1: the right hand rail. I just don't hear much about 347 00:19:08,600 --> 00:19:11,359 Speaker 1: it anymore because I'm not in those meetings anymore, which 348 00:19:11,400 --> 00:19:14,159 Speaker 1: is fine by me. But the right hand rail is 349 00:19:14,280 --> 00:19:16,200 Speaker 1: you can think of that as like the right margin 350 00:19:16,480 --> 00:19:19,679 Speaker 1: of a web page. So in the old web banner days, 351 00:19:19,760 --> 00:19:23,040 Speaker 1: not that web banners are gone, but they certainly aren't 352 00:19:23,080 --> 00:19:26,240 Speaker 1: the dominant form of advertising anymore. In the old web 353 00:19:26,280 --> 00:19:28,640 Speaker 1: banner days, there were a few places where you would 354 00:19:28,640 --> 00:19:32,160 Speaker 1: typically put a web banner, and you might charge different 355 00:19:32,200 --> 00:19:35,720 Speaker 1: amounts depending upon the location. So the really popular one 356 00:19:35,800 --> 00:19:37,560 Speaker 1: was at the top of the page, right like at 357 00:19:37,560 --> 00:19:39,000 Speaker 1: the very top of the page you have a web 358 00:19:39,160 --> 00:19:42,639 Speaker 1: banner ad that advertises for something, But another would be 359 00:19:42,680 --> 00:19:45,080 Speaker 1: in the margins, either along the left or the right. 360 00:19:45,640 --> 00:19:47,640 Speaker 1: Very rarely you might put one at the bottom. Those 361 00:19:47,680 --> 00:19:50,800 Speaker 1: were often the least valuable ones, or at least the 362 00:19:51,000 --> 00:19:54,879 Speaker 1: least expensive ones, because the common thought was that people 363 00:19:54,920 --> 00:19:56,399 Speaker 1: just didn't scroll all the way to the bottom of 364 00:19:56,440 --> 00:20:00,040 Speaker 1: the page. But anyway, the right rail is where the 365 00:20:00,080 --> 00:20:03,920 Speaker 1: adword results originally would appear, So starting in August two 366 00:20:03,960 --> 00:20:06,600 Speaker 1: thousand or so, searching for something on Google would bring 367 00:20:06,680 --> 00:20:09,840 Speaker 1: up premium sponsorship ads at the top of your results 368 00:20:10,000 --> 00:20:12,760 Speaker 1: and a couple of AdWords ads set off to the right. 369 00:20:13,200 --> 00:20:17,080 Speaker 1: The AdWords ads also had a sponsored link label on them, 370 00:20:17,160 --> 00:20:20,360 Speaker 1: so they did indicate to the user that they were advertising. 371 00:20:20,400 --> 00:20:23,959 Speaker 1: They were not an official search result, so that label 372 00:20:24,200 --> 00:20:27,200 Speaker 1: was there from the beginning. From the advertiser side, buying 373 00:20:27,240 --> 00:20:31,280 Speaker 1: AdWords was pretty straightforward. The advertiser identified which keyword or 374 00:20:31,359 --> 00:20:36,040 Speaker 1: keywords they wanted, They then submitted the ad and bammed. 375 00:20:36,080 --> 00:20:39,280 Speaker 1: Their ad would show up wherever anyone searched for that 376 00:20:39,320 --> 00:20:41,960 Speaker 1: particular keyword. It was pretty simple stuff, and of course 377 00:20:41,960 --> 00:20:45,000 Speaker 1: they also paid a certain amount of money. They were 378 00:20:45,080 --> 00:20:47,320 Speaker 1: kind of doing a pay per click as opposed to 379 00:20:47,760 --> 00:20:51,000 Speaker 1: pay per impression, meaning that in this case, it wasn't 380 00:20:51,119 --> 00:20:53,560 Speaker 1: enough that someone saw the ad, they needed to have 381 00:20:53,680 --> 00:20:56,680 Speaker 1: clicked on it for it to count toward how much 382 00:20:56,760 --> 00:21:00,879 Speaker 1: Google would charge the advertiser. Things held steady for a 383 00:21:00,920 --> 00:21:04,560 Speaker 1: couple of years, but in two thousand and three, Google 384 00:21:04,680 --> 00:21:07,280 Speaker 1: made a decision that would shake things up. They decided 385 00:21:07,320 --> 00:21:12,720 Speaker 1: to phase out premium sponsorships and actually replace them with AdWords, 386 00:21:13,480 --> 00:21:16,840 Speaker 1: and the direct sales angle wouldn't be necessary anymore, at 387 00:21:16,920 --> 00:21:20,159 Speaker 1: least not for this, and AdWords would migrate from the 388 00:21:20,200 --> 00:21:24,679 Speaker 1: right hand rail to being above the search results. So essentially, 389 00:21:24,680 --> 00:21:27,159 Speaker 1: they were saying the AdWords approach seemed to be the 390 00:21:27,200 --> 00:21:30,600 Speaker 1: most successful, most lucrative, the one that was giving the 391 00:21:30,640 --> 00:21:34,760 Speaker 1: most satisfaction to advertisers as well as to Google, so 392 00:21:35,080 --> 00:21:36,639 Speaker 1: that was what they were going to switch to. They 393 00:21:36,640 --> 00:21:39,280 Speaker 1: were going to make that the dominant form of ad 394 00:21:39,320 --> 00:21:44,359 Speaker 1: revenue generation. In addition, adwards clients would receive charges based 395 00:21:44,359 --> 00:21:46,879 Speaker 1: on those number of clicks the ads got, Like I said, 396 00:21:46,880 --> 00:21:49,359 Speaker 1: not the number of impressions, which is nice, right, because 397 00:21:49,760 --> 00:21:53,760 Speaker 1: someone just seeing your ad that might not mean very much, 398 00:21:54,200 --> 00:21:56,720 Speaker 1: but if they click on your ad, that's a much 399 00:21:56,760 --> 00:22:00,240 Speaker 1: bigger deal. However, this also meant that Google would like 400 00:22:00,440 --> 00:22:04,199 Speaker 1: the cost of those ads. They wouldn't charge that forty 401 00:22:04,280 --> 00:22:08,800 Speaker 1: dollars per one thousand impressions. Now it'd be much higher now. 402 00:22:08,800 --> 00:22:12,720 Speaker 1: I'm not sure how much more Google was demanding, because 403 00:22:12,760 --> 00:22:15,359 Speaker 1: when I was looking at discussions of this online, no 404 00:22:15,359 --> 00:22:18,399 Speaker 1: one was really giving hard figures, but based on some 405 00:22:18,480 --> 00:22:21,679 Speaker 1: fairly obtuse articles from the time, it sounds like it 406 00:22:21,720 --> 00:22:24,800 Speaker 1: was a pretty significant increase, and I'm sure it more 407 00:22:24,840 --> 00:22:28,760 Speaker 1: than balanced out the shift from impressions to clicks. Also, 408 00:22:28,800 --> 00:22:32,840 Speaker 1: in two thousand and three, Google launched ad Sense. Now, 409 00:22:32,880 --> 00:22:37,080 Speaker 1: this product works within websites that belong on the Google network. So, 410 00:22:37,160 --> 00:22:40,640 Speaker 1: for example, a blog on Blogger, which Google also acquired 411 00:22:40,640 --> 00:22:43,359 Speaker 1: in two thousand and three, would count. It's part of 412 00:22:43,400 --> 00:22:47,360 Speaker 1: the Google network. So you create a blog on say Blogger, 413 00:22:48,200 --> 00:22:51,240 Speaker 1: your blog would belong to the Google network and you 414 00:22:51,280 --> 00:22:54,760 Speaker 1: could enroll in ad sense. And the way ad sense 415 00:22:54,800 --> 00:22:59,159 Speaker 1: works is that Google will place ads on websites and 416 00:22:59,200 --> 00:23:03,480 Speaker 1: those ads will be contextually relevant to whatever the content 417 00:23:03,600 --> 00:23:07,360 Speaker 1: of the site is itself. So let's say that you 418 00:23:07,400 --> 00:23:11,239 Speaker 1: write a blog about travel and it's a pretty popular blog. Well, 419 00:23:11,280 --> 00:23:13,919 Speaker 1: Google could serve up ads that relate to stuff like 420 00:23:14,000 --> 00:23:18,480 Speaker 1: travel agencies or airlines or hotels, and it would be 421 00:23:18,560 --> 00:23:20,600 Speaker 1: less likely to serve up ads about you know, I 422 00:23:20,640 --> 00:23:24,480 Speaker 1: don't know, underwear or kitchen appliances. Ad Sense was viewed 423 00:23:24,520 --> 00:23:28,280 Speaker 1: with some skepticism early on because a few advertisers voice 424 00:23:28,320 --> 00:23:31,199 Speaker 1: concerns that a consumer would be far more likely to 425 00:23:31,400 --> 00:23:35,080 Speaker 1: act on an AD if they're actively searching for information 426 00:23:35,240 --> 00:23:38,240 Speaker 1: through a web search rather than if they are just 427 00:23:38,440 --> 00:23:41,800 Speaker 1: casually visiting a website, Because, as it would turn out, 428 00:23:41,840 --> 00:23:44,439 Speaker 1: ad sense would end up making Google a hang on, 429 00:23:44,560 --> 00:23:47,080 Speaker 1: let me let me look up this figure. Yeah, a 430 00:23:47,119 --> 00:23:52,119 Speaker 1: butt load of money. So this was a really popular 431 00:23:53,040 --> 00:23:57,000 Speaker 1: offering once you get past the initial launch phase, and 432 00:23:57,119 --> 00:24:00,960 Speaker 1: content creators get a cut of that cash. By the way, 433 00:24:01,280 --> 00:24:04,119 Speaker 1: so choosing to monetize a site means the person creating 434 00:24:04,119 --> 00:24:07,439 Speaker 1: the content gets some of that money. Google gets some 435 00:24:07,560 --> 00:24:11,080 Speaker 1: of it and the advertisers get eyeballs. It's not that 436 00:24:11,240 --> 00:24:14,439 Speaker 1: different from the way advertising works on YouTube, which no 437 00:24:14,480 --> 00:24:17,479 Speaker 1: big surprise, you know Google owns YouTube as well, right Like, 438 00:24:17,560 --> 00:24:21,720 Speaker 1: you can choose to monetize your channel and you get 439 00:24:21,800 --> 00:24:24,679 Speaker 1: some of the money from the commercials that run on 440 00:24:25,040 --> 00:24:28,520 Speaker 1: your channel, and Google gets all the rest of it. 441 00:24:28,960 --> 00:24:33,040 Speaker 1: So very similar in that way. So Google was officially 442 00:24:33,040 --> 00:24:36,080 Speaker 1: in the ad business starting in two thousand, really ramping 443 00:24:36,160 --> 00:24:38,200 Speaker 1: up by the end of two thousand and three. Beginning 444 00:24:38,240 --> 00:24:40,760 Speaker 1: of two thousand and four. In two thousand and six, 445 00:24:41,320 --> 00:24:46,320 Speaker 1: it tried an experiment. Google made a proposal to newspapers 446 00:24:46,359 --> 00:24:50,760 Speaker 1: in the United States suggesting that Google would offer Internet 447 00:24:50,800 --> 00:24:55,800 Speaker 1: based clients the chance to bid on unsold newspaper ad space, 448 00:24:56,080 --> 00:24:58,720 Speaker 1: So the newspapers would be able to sell inventory that 449 00:24:58,800 --> 00:25:01,680 Speaker 1: otherwise would just go to way, and the ad clients 450 00:25:01,760 --> 00:25:05,840 Speaker 1: would potentially reach a new audience that traditionally they might 451 00:25:05,920 --> 00:25:09,840 Speaker 1: not have because they just weren't in the newspaper advertising business. 452 00:25:10,160 --> 00:25:14,040 Speaker 1: So around sixty six newspapers agreed to the pilot experiment. 453 00:25:14,520 --> 00:25:16,919 Speaker 1: Google would put up the ad space for each newspaper 454 00:25:17,160 --> 00:25:19,119 Speaker 1: and then open it up to bidding, and around one 455 00:25:19,200 --> 00:25:22,760 Speaker 1: hundred different advertisers would compete with one another to bid 456 00:25:22,840 --> 00:25:26,800 Speaker 1: on that ad space, and so the winning bid would 457 00:25:26,880 --> 00:25:29,440 Speaker 1: fork over the cash and then place whichever ad they 458 00:25:29,480 --> 00:25:32,480 Speaker 1: wanted in that slot. Google said the experiment was a 459 00:25:32,520 --> 00:25:37,280 Speaker 1: smashing success, but newspaper said, we're not really sure how 460 00:25:37,440 --> 00:25:40,960 Speaker 1: this really benefits us just yet. It seemed really good 461 00:25:40,960 --> 00:25:44,200 Speaker 1: for advertisers and their clients, It seemed great for Google, 462 00:25:44,440 --> 00:25:48,480 Speaker 1: but newspapers weren't totally sold on it. In fact, The 463 00:25:48,520 --> 00:25:50,840 Speaker 1: New York Times said that their plan was to forge 464 00:25:50,880 --> 00:25:55,359 Speaker 1: relationships with these smaller advertisers and ultimately to create a 465 00:25:55,440 --> 00:25:59,520 Speaker 1: direct relationship with them, eventually cutting Google out of the equation, 466 00:25:59,680 --> 00:26:01,800 Speaker 1: and that they were very upfront about this, like it 467 00:26:01,840 --> 00:26:04,159 Speaker 1: wasn't even on the slide. They're like, no, this was 468 00:26:04,160 --> 00:26:07,480 Speaker 1: our plan, We've told Google. Google was actually doing something 469 00:26:07,520 --> 00:26:11,720 Speaker 1: similar with radio stations. Like with the newspapers, the strategy 470 00:26:11,840 --> 00:26:15,960 Speaker 1: was to secure unsold ad inventory on radio stations and 471 00:26:16,000 --> 00:26:20,520 Speaker 1: then auction that space off to advertisers who otherwise wouldn't 472 00:26:20,560 --> 00:26:24,080 Speaker 1: have the opportunity to secure radio spots. And no big 473 00:26:24,119 --> 00:26:26,520 Speaker 1: surprise here. Google would then go on to try and 474 00:26:26,560 --> 00:26:29,720 Speaker 1: do the same thing with television. In two thousand and seven, 475 00:26:30,160 --> 00:26:33,879 Speaker 1: Google would secure an agreement with clear Channel Communications to 476 00:26:33,960 --> 00:26:37,320 Speaker 1: sell ads across their stations. And here's a fun fact. 477 00:26:37,560 --> 00:26:42,480 Speaker 1: Clear Channel Communications would eventually transform into iHeartMedia, So I 478 00:26:42,520 --> 00:26:45,160 Speaker 1: figured I should mention that since you know I worked 479 00:26:45,200 --> 00:26:49,800 Speaker 1: for iHeart podcasts. But the radio experiment would only last 480 00:26:49,880 --> 00:26:52,640 Speaker 1: for about three years because in two thousand and nine 481 00:26:52,680 --> 00:26:56,240 Speaker 1: Google pulled the plug on it, and the print advertising 482 00:26:56,440 --> 00:27:00,359 Speaker 1: experiment as well. The push to extend web advertising strees 483 00:27:00,400 --> 00:27:03,920 Speaker 1: to the quote unquote real World appeared to be mostly 484 00:27:04,000 --> 00:27:08,280 Speaker 1: a bust. It just didn't have a level that was sustainable. 485 00:27:08,680 --> 00:27:13,040 Speaker 1: The initial success was really promising, but it didn't last. 486 00:27:13,560 --> 00:27:16,360 Speaker 1: Fun side fact, audio ads would actually make a return 487 00:27:16,880 --> 00:27:20,000 Speaker 1: many many years later in twenty twenty, but this time 488 00:27:20,359 --> 00:27:23,080 Speaker 1: the audio ads were not designed. 489 00:27:22,520 --> 00:27:23,960 Speaker 2: To play on the radio. 490 00:27:24,040 --> 00:27:27,879 Speaker 1: Instead, they were designed to play against YouTube. The idea 491 00:27:27,960 --> 00:27:31,200 Speaker 1: was that more folks were listening to YouTube content while 492 00:27:31,240 --> 00:27:34,879 Speaker 1: not necessarily actively watching it. They might listen to it 493 00:27:34,920 --> 00:27:39,520 Speaker 1: while they do other tasks like cooking or cleaning, or 494 00:27:39,720 --> 00:27:42,439 Speaker 1: trying to find out exactly what is making that eerie 495 00:27:42,520 --> 00:27:48,000 Speaker 1: whaling sound beneath the floorboards. You hear it right anyway. 496 00:27:48,240 --> 00:27:51,480 Speaker 1: In twenty twenty two, Google would open up audio ads 497 00:27:51,520 --> 00:27:54,439 Speaker 1: to all advertisers who wanted to take advantage of listener 498 00:27:54,440 --> 00:27:57,440 Speaker 1: habits as they used YouTube to listen to stuff like 499 00:27:57,520 --> 00:28:01,240 Speaker 1: streaming music or podcasts. So audio ads are back. Maybe 500 00:28:01,840 --> 00:28:03,640 Speaker 1: they're just not the same thing as they were back 501 00:28:03,680 --> 00:28:06,440 Speaker 1: in two thousand and six. But speaking of that, let's 502 00:28:06,560 --> 00:28:09,919 Speaker 1: get back into the history of Google advertising. So in 503 00:28:09,920 --> 00:28:14,400 Speaker 1: two thousand and seven, Google would introduce pay per action ads. 504 00:28:14,760 --> 00:28:18,360 Speaker 1: So pay per click is a type of pay per action, right. 505 00:28:18,840 --> 00:28:21,480 Speaker 1: The action in that case is clicking on the ad. 506 00:28:21,560 --> 00:28:25,320 Speaker 1: The advertiser only has to pay when users take the 507 00:28:25,359 --> 00:28:27,600 Speaker 1: action of clicking on the ad itself. If they just 508 00:28:27,640 --> 00:28:31,200 Speaker 1: see it, there's no charge. However, that's not the only 509 00:28:31,280 --> 00:28:35,280 Speaker 1: type of action you could monetize. The action could be 510 00:28:35,280 --> 00:28:37,960 Speaker 1: something else. For example, maybe you set up an ad 511 00:28:38,000 --> 00:28:42,160 Speaker 1: deal where you will only pay if the user not 512 00:28:42,280 --> 00:28:45,280 Speaker 1: just clicks through, but signs up to say, subscribe to 513 00:28:45,320 --> 00:28:48,480 Speaker 1: a newsletter, or maybe you only pay if the user 514 00:28:48,600 --> 00:28:52,760 Speaker 1: will click through and make a purchase on the target site. 515 00:28:52,920 --> 00:28:55,960 Speaker 1: As you might imagine, the ad rates on those types 516 00:28:56,000 --> 00:29:00,800 Speaker 1: of ads can get pretty expensive because very few people 517 00:29:01,200 --> 00:29:03,360 Speaker 1: in general, like in the grand scheme of things, are 518 00:29:03,400 --> 00:29:05,200 Speaker 1: going to take those actions, but the ones who do 519 00:29:05,240 --> 00:29:07,920 Speaker 1: are going to be very valuable. So the AD rates 520 00:29:07,920 --> 00:29:10,640 Speaker 1: are going to be much higher for those kinds of actions, 521 00:29:11,160 --> 00:29:12,800 Speaker 1: but at the same time, they're not going to happen 522 00:29:12,840 --> 00:29:15,640 Speaker 1: as frequently as someone who just say clicks on an 523 00:29:15,680 --> 00:29:19,480 Speaker 1: AD or just looks in an AD. Google also experimented 524 00:29:19,680 --> 00:29:22,200 Speaker 1: with a tool that could display how many times users 525 00:29:22,280 --> 00:29:26,600 Speaker 1: search particular keywords. Obviously that's really important, right, Like, if 526 00:29:26,640 --> 00:29:29,400 Speaker 1: you're sitting there trying to determine which keywords you want 527 00:29:29,400 --> 00:29:32,200 Speaker 1: to target for your ads, it's helpful to know which 528 00:29:32,280 --> 00:29:36,120 Speaker 1: keywords are really popular versus which ones aren't. Let's say 529 00:29:36,160 --> 00:29:39,719 Speaker 1: you're an advertiser representing a sporting goods company, and so 530 00:29:40,080 --> 00:29:44,080 Speaker 1: you take a look to see which keywords are really trending, 531 00:29:44,520 --> 00:29:47,240 Speaker 1: and you're looking at phishing rod and you see a 532 00:29:47,240 --> 00:29:50,200 Speaker 1: lot of folks are searching for phishing rod, but very 533 00:29:50,240 --> 00:29:53,479 Speaker 1: few are actually searching for rod and real. So if 534 00:29:53,520 --> 00:29:56,520 Speaker 1: you're only going to target one of those sets of keywords, 535 00:29:56,560 --> 00:29:58,520 Speaker 1: you're probably going to want to target the phishing rod 536 00:29:58,560 --> 00:30:03,280 Speaker 1: one because those are the folks who are targeting more people. 537 00:30:03,360 --> 00:30:05,560 Speaker 1: More people are going to see her ad because that's 538 00:30:05,600 --> 00:30:08,080 Speaker 1: what most people are searching for You could argue that 539 00:30:08,160 --> 00:30:11,480 Speaker 1: if more people are serious about phishing and they're using 540 00:30:11,520 --> 00:30:15,200 Speaker 1: rod and Real, maybe you want to target that one instead. Yeah, 541 00:30:15,200 --> 00:30:17,560 Speaker 1: there are fewer people who are searching for it, but 542 00:30:17,600 --> 00:30:20,520 Speaker 1: the ones who are searching are really serious about getting 543 00:30:20,520 --> 00:30:22,440 Speaker 1: into fishing. There are a lot of decisions that had 544 00:30:22,440 --> 00:30:24,440 Speaker 1: to be made, but in order to make those decisions, 545 00:30:24,520 --> 00:30:28,000 Speaker 1: you need the analytical tools in the first place. Okay, 546 00:30:28,320 --> 00:30:31,400 Speaker 1: when we come back, we're going to talk about probably 547 00:30:31,600 --> 00:30:37,160 Speaker 1: the biggest change for Google's advertising strategy, or at least 548 00:30:37,160 --> 00:30:38,880 Speaker 1: the most impactful one. 549 00:30:38,720 --> 00:30:39,520 Speaker 2: I would argue. 550 00:30:39,960 --> 00:30:42,240 Speaker 1: But before we do that, let's take another break to 551 00:30:42,280 --> 00:30:55,800 Speaker 1: think our sponsors. Okay, I would argue that the biggest 552 00:30:55,840 --> 00:30:58,280 Speaker 1: move Google made in two thousand and seven was a 553 00:30:58,400 --> 00:31:02,400 Speaker 1: three point one billion with a B dollar acquisition of 554 00:31:02,440 --> 00:31:05,680 Speaker 1: a little company called double Click. So Dwight Merriman and 555 00:31:05,760 --> 00:31:08,160 Speaker 1: Kevin O'Connor came up with the idea for double Click 556 00:31:08,480 --> 00:31:10,920 Speaker 1: way back in the nineties, and it had its humble 557 00:31:10,920 --> 00:31:14,640 Speaker 1: beginnings as a web banner ad business. They figured that 558 00:31:14,720 --> 00:31:17,360 Speaker 1: the web would give them the chance to track ad 559 00:31:17,400 --> 00:31:20,560 Speaker 1: performance in a way that other media just couldn't do. Right, 560 00:31:20,680 --> 00:31:24,200 Speaker 1: Like you can buy ads for television or magazines or whatever, 561 00:31:24,520 --> 00:31:27,640 Speaker 1: but you're never really sure how much of your audience 562 00:31:27,680 --> 00:31:31,320 Speaker 1: actually saw or paid attention to the ad that you've 563 00:31:31,360 --> 00:31:34,240 Speaker 1: placed in front of them. With banner ads, you could 564 00:31:34,280 --> 00:31:36,680 Speaker 1: tell how many people actually took action, right, because you 565 00:31:36,680 --> 00:31:40,000 Speaker 1: could count how many people clicked on the ad. Plus 566 00:31:40,040 --> 00:31:42,080 Speaker 1: you would also still know how many impressions the ad 567 00:31:42,120 --> 00:31:45,520 Speaker 1: got whether anyone clicked on it or not, so you 568 00:31:45,560 --> 00:31:48,600 Speaker 1: would have that information too. The co creators met up 569 00:31:48,600 --> 00:31:50,760 Speaker 1: with a bunch of other folks who got involved, and 570 00:31:50,840 --> 00:31:53,120 Speaker 1: they merged their idea with another company that was kind 571 00:31:53,120 --> 00:31:55,520 Speaker 1: of struggling to do something similar, and they got to 572 00:31:55,560 --> 00:31:59,360 Speaker 1: work and double Click forged a path by using online 573 00:31:59,400 --> 00:32:02,400 Speaker 1: cookies to track user behaviors, which meant the company could 574 00:32:02,440 --> 00:32:06,800 Speaker 1: do better paid advertisements. They could pair ads with specific users. 575 00:32:06,840 --> 00:32:10,280 Speaker 1: So targeted advertising was starting to become a thing, and 576 00:32:11,080 --> 00:32:15,120 Speaker 1: it was really onto something. Double Click was really kind 577 00:32:15,160 --> 00:32:18,400 Speaker 1: of zeroing in on what the future of online advertising 578 00:32:18,440 --> 00:32:20,880 Speaker 1: was going to be. So another company called Hellman and 579 00:32:20,920 --> 00:32:23,600 Speaker 1: Friedman bought double Click in two thousand and five. They 580 00:32:23,640 --> 00:32:26,320 Speaker 1: spent a cool one point one billion dollars, and it 581 00:32:26,360 --> 00:32:29,400 Speaker 1: was from them that Google would purchase double Click in 582 00:32:29,440 --> 00:32:33,000 Speaker 1: two thousand and seven for the three point one billion dollars. 583 00:32:33,400 --> 00:32:35,640 Speaker 1: The FTC took a look at this deal to make 584 00:32:35,680 --> 00:32:38,600 Speaker 1: sure everything was copasetic, and they said, it doesn't look 585 00:32:38,640 --> 00:32:39,480 Speaker 1: like a problem to us. 586 00:32:40,120 --> 00:32:41,720 Speaker 2: Now. I seriously wonder. 587 00:32:41,480 --> 00:32:44,240 Speaker 1: If the deal were to happen today, if our current 588 00:32:44,400 --> 00:32:47,320 Speaker 1: FTC would have objected to it, because I bet they 589 00:32:47,320 --> 00:32:50,440 Speaker 1: would have. But that was not how the world turned 590 00:32:50,480 --> 00:32:53,080 Speaker 1: back in two thousand and seven. Two thousand and seven, 591 00:32:53,120 --> 00:32:56,360 Speaker 1: if you wanted to get a massive merger through chances 592 00:32:56,400 --> 00:32:59,800 Speaker 1: are the FTC would be like, Yeah, it's fine. These days, 593 00:32:59,840 --> 00:33:02,240 Speaker 1: they FTC is more like, eh, that looks a little 594 00:33:02,280 --> 00:33:05,320 Speaker 1: scary to me. So double click became part of the 595 00:33:05,400 --> 00:33:08,360 Speaker 1: Google Empire, and Google began to take advantage of double 596 00:33:08,400 --> 00:33:12,880 Speaker 1: clicks technologies, and that would really accelerate Google's ability to 597 00:33:13,760 --> 00:33:17,120 Speaker 1: leverage ads. In two thousand and eight, Google introduced a 598 00:33:17,160 --> 00:33:20,160 Speaker 1: new dashboard to allow advertisers to buy ad space across 599 00:33:20,160 --> 00:33:23,120 Speaker 1: different types of media. Keep in mind, this was still 600 00:33:23,160 --> 00:33:26,880 Speaker 1: when Google was in print and radio and TV before 601 00:33:26,920 --> 00:33:28,960 Speaker 1: they would pull the plug on all that, but at 602 00:33:29,000 --> 00:33:33,480 Speaker 1: this time they were really selling ad space through AdWords 603 00:33:33,760 --> 00:33:38,080 Speaker 1: across multiple platforms, whether that was the Web or newspapers 604 00:33:38,160 --> 00:33:40,920 Speaker 1: or magazines. All the magazine thing really only lasted a 605 00:33:40,960 --> 00:33:45,560 Speaker 1: brief time, or radio or television. And we know that 606 00:33:45,640 --> 00:33:47,520 Speaker 1: this would start to collapse in two thousand and nine 607 00:33:47,560 --> 00:33:49,840 Speaker 1: because that's when Google would shut down its print and 608 00:33:49,960 --> 00:33:52,680 Speaker 1: radio ad operations. But in two thousand and eight, the 609 00:33:52,720 --> 00:33:55,959 Speaker 1: plan was to create a kind of integrated user interface 610 00:33:56,120 --> 00:33:59,120 Speaker 1: for advertisers, to give them all the options in the 611 00:33:59,120 --> 00:34:01,600 Speaker 1: world to have their ad place wherever they felt would 612 00:34:01,640 --> 00:34:05,080 Speaker 1: work best. So it was a neat idea. It just 613 00:34:05,120 --> 00:34:08,279 Speaker 1: turned out that Google really had not nailed how to 614 00:34:08,400 --> 00:34:12,759 Speaker 1: integrate with these other pre existing forms of media. So 615 00:34:12,880 --> 00:34:15,960 Speaker 1: Google also opened up the opportunity for advertisers to use 616 00:34:16,000 --> 00:34:19,840 Speaker 1: third party advertising tags to track their ad performance across 617 00:34:19,840 --> 00:34:23,000 Speaker 1: Google's content network. So again, this would only apply to 618 00:34:24,200 --> 00:34:27,160 Speaker 1: ad Sense ads. You know, ad sets only works on 619 00:34:27,280 --> 00:34:32,000 Speaker 1: Google's network of content sites. They weren't selling ad Sense 620 00:34:32,080 --> 00:34:35,320 Speaker 1: for just generic sites that weren't part of Google's network. 621 00:34:35,560 --> 00:34:38,440 Speaker 1: But it meant that advertisers didn't have to rely solely 622 00:34:38,600 --> 00:34:42,920 Speaker 1: upon Google's own integrated internal analytics to see how their 623 00:34:42,920 --> 00:34:46,320 Speaker 1: ads were doing. So that was good, right because you know, 624 00:34:47,200 --> 00:34:52,320 Speaker 1: you worry when Google is the only source of information 625 00:34:52,360 --> 00:34:54,080 Speaker 1: about how well your ads are doing, because you don't 626 00:34:54,120 --> 00:34:56,759 Speaker 1: know if they're telling the truth. But then with these 627 00:34:56,800 --> 00:35:00,319 Speaker 1: third party tags, suddenly the advertisers were able to to 628 00:35:00,560 --> 00:35:04,840 Speaker 1: monitor ad performance independently of Google and make sure that 629 00:35:04,960 --> 00:35:07,680 Speaker 1: everything is going well, or if it's something's not going well, 630 00:35:07,760 --> 00:35:10,800 Speaker 1: that they can swap things out. In two thousand and nine, 631 00:35:11,000 --> 00:35:14,359 Speaker 1: while shutting down print and radio advertising projects, Google made 632 00:35:14,360 --> 00:35:17,799 Speaker 1: another acquisition. This time it was a company called ad 633 00:35:17,840 --> 00:35:20,920 Speaker 1: Mob or ad Mob as it might turn out to be, 634 00:35:21,560 --> 00:35:25,920 Speaker 1: and this specialized in ads on mobile platforms. Now, in 635 00:35:25,960 --> 00:35:29,920 Speaker 1: my opinion, this was an incredibly savvy move on Google's 636 00:35:29,960 --> 00:35:33,080 Speaker 1: part because just keep in mind, in two thousand and seven, 637 00:35:33,239 --> 00:35:37,040 Speaker 1: Apple proved that there was a market for a consumer smartphone, 638 00:35:37,280 --> 00:35:40,880 Speaker 1: particularly in the United States, they launched an iPhone. It 639 00:35:40,920 --> 00:35:45,400 Speaker 1: starts to sell incredibly well. Google follows suit by introducing 640 00:35:45,400 --> 00:35:48,480 Speaker 1: the Android operating system several months later, and then we 641 00:35:48,520 --> 00:35:52,080 Speaker 1: would see habits shift dramatically as people began to use 642 00:35:52,120 --> 00:35:56,799 Speaker 1: smartphones more frequently to access the web. So entire websites 643 00:35:56,800 --> 00:36:00,520 Speaker 1: were scrambling to adopt new mobile friendly strategies they never 644 00:36:00,560 --> 00:36:03,080 Speaker 1: had to worry about before. So it stands to reason 645 00:36:03,120 --> 00:36:05,680 Speaker 1: that Google wanted to leverage a company that specialized in 646 00:36:05,719 --> 00:36:09,960 Speaker 1: mobile advertising, rather than having to reinvent the wheel themselves, 647 00:36:10,400 --> 00:36:12,920 Speaker 1: they went and got a company that was already focused 648 00:36:12,960 --> 00:36:15,160 Speaker 1: on this sort of thing, and they could kind of 649 00:36:15,160 --> 00:36:19,280 Speaker 1: get ahead of this growing trend of the mobile web 650 00:36:19,360 --> 00:36:23,160 Speaker 1: becoming the dominant form of people accessing the web. Google 651 00:36:23,160 --> 00:36:26,200 Speaker 1: would continue to refine its ad tools over the years, so, 652 00:36:26,280 --> 00:36:29,840 Speaker 1: for example, in twenty eleven, the company gave advertisers the 653 00:36:29,960 --> 00:36:33,799 Speaker 1: chance to optimize which ads to display based on conversion 654 00:36:33,880 --> 00:36:36,879 Speaker 1: rates rather than through click through rates. So if you're 655 00:36:36,880 --> 00:36:40,200 Speaker 1: wondering what does that mean, Well, first, most advertisers will 656 00:36:40,239 --> 00:36:43,200 Speaker 1: have a whole bunch of ads for the same client, right. 657 00:36:43,520 --> 00:36:46,960 Speaker 1: They might have twenty or thirty different ads they're running 658 00:36:47,320 --> 00:36:50,360 Speaker 1: that are all about trying to move the same product 659 00:36:50,440 --> 00:36:54,400 Speaker 1: or service for the same client. But they have different images, 660 00:36:54,640 --> 00:36:58,040 Speaker 1: or different wording or different calls to action, but they're 661 00:36:58,080 --> 00:37:00,680 Speaker 1: all designed to try and get the same resist right 662 00:37:00,760 --> 00:37:01,480 Speaker 1: to sell. 663 00:37:01,239 --> 00:37:02,360 Speaker 2: This product or service. 664 00:37:03,000 --> 00:37:06,719 Speaker 1: Ideally, as an advertiser, you want to see which of 665 00:37:06,760 --> 00:37:09,560 Speaker 1: your ads are having the best impact, and when you 666 00:37:09,600 --> 00:37:13,960 Speaker 1: see that, you might want to start shifting to rely 667 00:37:14,160 --> 00:37:17,080 Speaker 1: more on that ad versus all the other ones you're 668 00:37:17,120 --> 00:37:20,439 Speaker 1: running for the same product or service, and you could 669 00:37:20,520 --> 00:37:23,520 Speaker 1: optimize it a couple different ways. If you optimize via 670 00:37:23,640 --> 00:37:27,080 Speaker 1: click through rate, what you're prioritizing are the ads that 671 00:37:27,160 --> 00:37:30,399 Speaker 1: get the most clicks on them. But click through isn't 672 00:37:30,440 --> 00:37:33,920 Speaker 1: the same thing as conversion. A conversion is when you 673 00:37:33,960 --> 00:37:37,200 Speaker 1: get a user to become a customer, So it's when 674 00:37:37,239 --> 00:37:40,360 Speaker 1: you convince your user to take a further action, such 675 00:37:40,440 --> 00:37:43,560 Speaker 1: as to make a purchase. The ads that lead to 676 00:37:43,600 --> 00:37:46,960 Speaker 1: conversions might be the ones you want to emphasize. You know, 677 00:37:47,000 --> 00:37:49,160 Speaker 1: maybe they don't get as many clicks as the highest 678 00:37:49,160 --> 00:37:52,600 Speaker 1: click through rate ones do, but the important thing is 679 00:37:52,640 --> 00:37:55,080 Speaker 1: the people who are clicking on that ad are the 680 00:37:55,080 --> 00:37:58,960 Speaker 1: ones who are buying what you're selling. So Google gave 681 00:37:59,000 --> 00:38:02,880 Speaker 1: advertisers the chance to automatically optimize based on whatever criteria 682 00:38:02,920 --> 00:38:05,080 Speaker 1: they found to be the most important for their clients. 683 00:38:05,320 --> 00:38:08,160 Speaker 1: So the advertisers could say, all right, well, if these 684 00:38:08,880 --> 00:38:12,320 Speaker 1: twenty ads are running and these three ads are getting 685 00:38:12,560 --> 00:38:16,919 Speaker 1: the most conversions, automatically, those three will get prioritized over 686 00:38:17,120 --> 00:38:21,320 Speaker 1: the other seventeen or whatever I think I said twenty. 687 00:38:21,080 --> 00:38:24,000 Speaker 1: So that would be the way that would kind of 688 00:38:24,040 --> 00:38:27,279 Speaker 1: work in a broad, high level sense. Now, I'm not 689 00:38:27,320 --> 00:38:30,440 Speaker 1: going to go over all the different features and changes 690 00:38:30,440 --> 00:38:33,720 Speaker 1: in Google's advertising business. That would require a mini series 691 00:38:33,760 --> 00:38:36,279 Speaker 1: of episodes, and I'm sure it would be interesting to 692 00:38:36,400 --> 00:38:38,640 Speaker 1: some listeners, but personally, I think I would find it 693 00:38:38,680 --> 00:38:41,560 Speaker 1: a little on the dull side to really go into 694 00:38:41,600 --> 00:38:44,759 Speaker 1: that deep detail. But we can hit a couple of 695 00:38:44,800 --> 00:38:49,400 Speaker 1: important points. For example, on July twenty fourth, twenty eighteen, 696 00:38:49,640 --> 00:38:54,759 Speaker 1: AdWords got a makeover, so Google rebranded AdWords and renamed 697 00:38:54,760 --> 00:38:58,120 Speaker 1: it Google Ads. So it's pretty much the same product, 698 00:38:58,200 --> 00:39:00,759 Speaker 1: just with a new name. If you're Cynicle, you could 699 00:39:00,760 --> 00:39:03,680 Speaker 1: say Google Ads is the product that lets an advertiser 700 00:39:04,000 --> 00:39:06,760 Speaker 1: buy the top spot in search results for particular keywords. 701 00:39:06,800 --> 00:39:09,440 Speaker 1: You just got to spend the money and suddenly you're 702 00:39:09,480 --> 00:39:11,600 Speaker 1: at the top of the search results. You do still 703 00:39:11,640 --> 00:39:15,360 Speaker 1: have that little tag that if people are paying attention, 704 00:39:15,680 --> 00:39:18,399 Speaker 1: they'll see it's an ad as opposed to the top 705 00:39:18,440 --> 00:39:21,560 Speaker 1: search result. But that same year, in twenty eighteen, Google 706 00:39:21,640 --> 00:39:25,319 Speaker 1: grouped its Google Analytics three sixty platform with most of 707 00:39:25,320 --> 00:39:29,880 Speaker 1: its double click properties and rename them the Google Marketing Platform, 708 00:39:30,440 --> 00:39:33,239 Speaker 1: the double Click Ad Exchange, and the Double Click for 709 00:39:33,280 --> 00:39:38,600 Speaker 1: Publishers products. Those became the Google Ad Manager so everything 710 00:39:38,680 --> 00:39:42,040 Speaker 1: was sort of getting rebranded and to new names and 711 00:39:42,080 --> 00:39:45,800 Speaker 1: collected together to have stuff that complemented each other become 712 00:39:45,840 --> 00:39:48,600 Speaker 1: a single platform. So let's finish up with a quick 713 00:39:48,640 --> 00:39:54,280 Speaker 1: talk about how much money all this advertising actually brings in. First, 714 00:39:54,920 --> 00:39:58,120 Speaker 1: keep in mind how Google has an incredible grip on 715 00:39:58,200 --> 00:40:01,280 Speaker 1: market share, particularly when it comes to stuff like online 716 00:40:01,360 --> 00:40:05,399 Speaker 1: video and online search. So I've pulled some stuff from 717 00:40:05,480 --> 00:40:08,720 Speaker 1: various statistic sites. Keep in mind everyone has their own 718 00:40:08,880 --> 00:40:14,880 Speaker 1: version of analytics, and there's probably a pretty wide range 719 00:40:15,000 --> 00:40:18,080 Speaker 1: of error margins here as well, but it gives us 720 00:40:18,080 --> 00:40:22,319 Speaker 1: an idea, right, So let's start with desktop search. Now 721 00:40:22,360 --> 00:40:27,400 Speaker 1: we're talking about laptops and like desktop computers. According to Statista, 722 00:40:27,880 --> 00:40:30,360 Speaker 1: Google search takes up more than eighty percent of the 723 00:40:30,400 --> 00:40:35,200 Speaker 1: market share for that, so eight out of ten web 724 00:40:35,239 --> 00:40:39,560 Speaker 1: search is being done on computers are using Google. That's 725 00:40:40,160 --> 00:40:43,399 Speaker 1: more than just dominant. But on mobile it gets even 726 00:40:43,640 --> 00:40:47,240 Speaker 1: more dramatic. Stat Counter estimates Google to have a ninety 727 00:40:47,400 --> 00:40:52,560 Speaker 1: five percent market share for mobile search. But even that 728 00:40:52,680 --> 00:40:55,719 Speaker 1: gets left behind when we look at online video like 729 00:40:55,760 --> 00:40:59,840 Speaker 1: streaming video. According to six Sense, YouTube has a ninety 730 00:41:00,160 --> 00:41:04,680 Speaker 1: seven point seven to one percent market share. The largest 731 00:41:04,719 --> 00:41:09,359 Speaker 1: competitor is JW Player, which has one point three five 732 00:41:09,440 --> 00:41:12,920 Speaker 1: percent market share, So no wonder the US government suspects 733 00:41:12,960 --> 00:41:15,960 Speaker 1: Google to have an anti competitive advantage. They do have 734 00:41:16,160 --> 00:41:20,919 Speaker 1: an insane market share in these areas. Keep in mind 735 00:41:21,000 --> 00:41:24,799 Speaker 1: that all of these are really just platforms upon which 736 00:41:24,920 --> 00:41:28,399 Speaker 1: Google can serve advertising. So all that market share means 737 00:41:28,400 --> 00:41:32,240 Speaker 1: that Google has ample opportunity to give ads to us. 738 00:41:32,400 --> 00:41:34,920 Speaker 1: And in twenty twenty three, the company made a whopping 739 00:41:35,080 --> 00:41:39,440 Speaker 1: two hundred thirty seven point eighty six billion with a 740 00:41:39,640 --> 00:41:43,919 Speaker 1: B dollars in AD revenue. That was about seventy seven 741 00:41:44,040 --> 00:41:47,359 Speaker 1: percent of all the revenue that the company generated last year. 742 00:41:47,680 --> 00:41:52,000 Speaker 1: That's a lot of princely sums, and it is why 743 00:41:52,520 --> 00:41:55,480 Speaker 1: I and lots of other people say that Google is 744 00:41:55,640 --> 00:42:01,160 Speaker 1: ultimately an advertising company, not a search company, search video. 745 00:42:01,640 --> 00:42:05,400 Speaker 1: These things are just methods by which Google can bring 746 00:42:05,440 --> 00:42:10,400 Speaker 1: advertising to us. And obviously Google's ad strategy goes well 747 00:42:10,400 --> 00:42:12,960 Speaker 1: beyond what I've covered today. As I said, to really 748 00:42:12,960 --> 00:42:14,680 Speaker 1: get into detail, we would have to do a full 749 00:42:14,719 --> 00:42:17,080 Speaker 1: mini series of it, but I thought it'd be interesting 750 00:42:17,120 --> 00:42:20,160 Speaker 1: to just kind of take a quick look and get 751 00:42:20,560 --> 00:42:24,360 Speaker 1: a surface level understanding of what's going on. It's also 752 00:42:24,760 --> 00:42:28,920 Speaker 1: a reminder that if the service you're using is free, 753 00:42:29,640 --> 00:42:34,160 Speaker 1: chances are you're the product, right. So like, if it's 754 00:42:34,239 --> 00:42:36,880 Speaker 1: free for you to use web search, well, the reason 755 00:42:37,160 --> 00:42:40,640 Speaker 1: it's free is because there's all this advertising that's playing 756 00:42:40,680 --> 00:42:44,440 Speaker 1: against that web search. Your behaviors are shaping what ads 757 00:42:44,440 --> 00:42:47,479 Speaker 1: are going to be sent to you, and the fact 758 00:42:47,560 --> 00:42:51,160 Speaker 1: that you are spending time using these services means the 759 00:42:51,200 --> 00:42:53,359 Speaker 1: services get to know more and more about you, which 760 00:42:53,400 --> 00:42:57,040 Speaker 1: means they can sell that information to advertisers or leverage 761 00:42:57,040 --> 00:43:00,880 Speaker 1: that information with advertisers in order to serve quote unquote 762 00:43:01,640 --> 00:43:06,400 Speaker 1: better ads to you. It just becomes this system in 763 00:43:06,440 --> 00:43:10,799 Speaker 1: which we, the users, are actually the products. So good 764 00:43:10,800 --> 00:43:13,360 Speaker 1: thing to recall, good thing to keep in mind. Doesn't 765 00:43:13,360 --> 00:43:16,719 Speaker 1: mean that you shouldn't use these things, but it's good 766 00:43:16,760 --> 00:43:19,560 Speaker 1: to be aware of it and not to just be 767 00:43:19,760 --> 00:43:23,520 Speaker 1: naive and think, oh, isn't it nice that Google offers 768 00:43:23,560 --> 00:43:27,880 Speaker 1: this service for free. Anyway, I hope you are all well. 769 00:43:28,360 --> 00:43:32,719 Speaker 1: I'm getting better every day, which is a relief, and I'll. 770 00:43:32,520 --> 00:43:34,640 Speaker 2: Talk to you again really soon. 771 00:43:41,040 --> 00:43:45,720 Speaker 1: Tech Stuff is an iHeartRadio production. For more podcasts from iHeartRadio, 772 00:43:46,040 --> 00:43:49,760 Speaker 1: visit the iHeartRadio app, Apple Podcasts, or wherever you listen 773 00:43:49,800 --> 00:43:54,719 Speaker 1: to your favorite shows,