June 2008 Entries

I'm a pretty "middle of the road" guy. I've spent most of my life trying to avoid being hated. And I remember when I first started writing this blog and other columns, someone said it would take awhile for me to find my voice. Now, there seems to be a convergence of sorts happening. I've spent a lot of hours lately trying to understand why we do the things we do. And as I've gained confidence in my understanding, I've ventured forth more and more often to provide my view of things. Generally I've had great responses to this writing, but every so often I get negative comment and I've noticed the tone of these has been more and more vitriolic as I've "found my voice".

I remember someone saying once you know you're hitting the right cords when you polarize your audience and people either hate you or love you. If you're in the middle, you're just boring. Having spent a lot of my life in the boring but safe middle ground it's a little shocking when someone takes the time to comment that your writing is "tripe", "long and extremely wind baggy" and "self serving". On the other side, numerous people have also commented that they find my writing "thoughtful" and "insightful". As hard as it seems to be for me to accept, this must mean I'm doing something right. At least people are taking the time to comment. I guess I just have to develop a thicker skin.

In the time since I wrote this column for Search Insider (May 15th), it appears that Google's dominance is even more complete with the Yahoo! deal. But my original sentiment still remains. We're in the first innings of this game yet, and we're not even sure which fields the game will be played on. Google has a huge head start, but I guarantee we're a long way from the finish line (if there is such a thing) and there's plenty of surprises ahead.

According to an article in the Financial Times, the search war is already over. Google’s won. Everyone else can go home now. Microhoo was the last potential challenger, and now that that deal is in shambles, the victory has been ceded to the search empire of Mountain View. Even fellow Search Insider Aaron Goldman has been searching for a Google Killer, and so far hasn’t found one. I myself said Google was going to be an extremely hard habit to break (in five parts, no less).

It’s true that these are dark times for desktop search. There is barely a whisper of resistance to the Google juggernaut. But to declare unconditional victory is a little premature. As Google itself is fond of saying, we’ve barely begun to play the search game. To declare it won now would probably be as myopic as awarding the crown to AltaVista in 1997. True, Google has a huge head start, but we’re not even sure which route the race will take.

Microhoo never could have won…

I’ve never been a fan of Microhoo. I think the acquisition would have been a huge mistake. The strategy seemed to be that by tying two sinking boats together, you could somehow catch Google. But the outcome was inevitable. Both Microsoft and Yahoo have fundamental issues in corporate direction and strategy, cultural cohesiveness and respect for their users. They have to get their own houses in order before they can challenge anyone. Putting two dysfunctional families together doesn’t make things any better. It just doubles the number of people yelling at each other. If the Microhoo deal had flown, it would have blown up in under a year. Google would have won regardless.

I’m not sure where Google’s competition is going to come from, but based on what I’m seeing (and the unfortunate Ballmer video that David Berkowitz made me aware of) it’s not Microsoft or Yahoo. In their hearts, they’ve already given up on Web search and are hoping to use ad networks as the next battleground.

Against the Rising Consumer Tide

Giving up on search and falling back on ad networks is monumentally stupid. I’ve said this so many times I can’t believe I have to keep repeating it, but I will. Ad networks are firmly rooted in yesterday. They’re an extension of an advertising mentality that’s based on disrupting prospects and keeping control in the hands of the marketer. Search propelled Google to its current status because it’s a discontinuous innovation. It’s customer-initiated marketing, marketing rooted in tomorrow, where the prospect is in control. By focusing on ad networks, you’re ignoring the voice of billions of consumers that have already spoken loud and clear. Yes, you can target. Yes, you can segment. Yes, it’s a whole new take on marketing, but it’s still marketing. It’s not innovative or paradigm breaking.

So, if we ignore search for a minute, and think about other ways that customers can exercise this control, we start to understand how vast the potential is. Mobile is often touted as The Next Big Thing, and I tend to agree. But really, mobile is just one channel. The really big thing is that now the masses have control, and they will exercise it. The winners will be the ones that figure out new and innovative ways for consumers to do so — and that requires a different kind of thinking. That, first of all, requires acceptance of the power shift. Ironically, Google started here, but the user-side focus is becoming a little blurry with the acquisition of DoubleClick. There is a mix of religions now in Mountain View, so even the Googleplex is starting to have signs of dysfunction.

Just When You Least Expect It

I think Google’s competition will come from the same place Google did. It will sneak out of nowhere. It won’t come from the stuck-in-yesterday mind ruts of Microsoft. It won’t come from the desperation of Yahoo. It will come from someone small enough, visionary enough, obsessive enough and ballsy enough to still do great things, without those great things being picked to death at the boardroom table. But, even here, Google might still win. Google’s greatest success came from not being swallowed by one of its competitors too soon, because no one was smart enough to recognize the threat. Despite Google’s not insignificant hubris, I think its executives are still able to recognize when their lunch is in danger of being eaten.

Another catch up post from Search Insider. This one marked a bit of a epiphany for me. It's one of those thoughts that makes sense when you hear it, but it took me awhile to get there. This was originally posted on May 1.

All you who have Google stock, take a moment to thank Larry and Sergey. You who have fallen in lust with your iPhone, stop and say a silent prayer for Steve Jobs. And you parents who spent many a peaceful hour thanks to your kids being glued to a Disney movie, face towards Disneyland and bow to Walt himself, may he rest in peace (or a freezer, as rumor has it). Thank God for product-centric leaders, because they are few and far between.

Customer-Centricity: More Than Just Words

I have spent many an hour in conference rooms listening to the new “religion” of customer-centricity that has suddenly taken hold of the mega-corporation X, Y or Z. The scripted lines are typically “We are here to serve our customer. We will find optimal strategies to maximize customer experience and revenue opportunities. We embrace good design.”

It may sound good in the annual report, but it’s not that easy. When you talk about balance, I hear compromise. Somebody is losing, and it’s almost always your customer. Because as Sergey, Larry, Steve and Walt will tell you, there can only be one person driving this bus. Either it’s your sales manager, or it’s your customer. Come to any intersection and one will tell you to turn right and one will tell you to turn left. Who are you going to listen to?

Now, obviously, Apple, Google and Disney have been known to make a buck or two, so customer-centricity can be profitable. It depends on which route you want to take to get there. If you take the customer’s route, it means having the courage to say no to a lot of people inside your company (and out) along the way. And really, the only person who can say no and get away with it is the leader of the company.

The Product-Centric Leader

Here’s a shocker, coming from me. The more I think about it, the more I don’t believe customer-centricity is the key. It’s not a goal, it’s a by-product. It comes as part of the package (often unconsciously) with another principle that is a little more concrete: product-centricity. Product-centric leaders, the ones that are obsessive about what gets shipped out the door, are customer-centric by nature. They understand the importance of that magical intersection between product and person, the sheer power of amazing experiences. The iPhone is amazing. Disney classics are amazing. My first search on Google was amazing. Steve, Walt, Larry and Sergey wouldn’t have it any other way. They focus attention on the importance of that experience, and know, somewhere deep down inside, that if they get it right, the revenue will take care of itself.

The other thing about product-centric leaders is that they don’t have to do extensive customer research. They may, and many do, but they already have a gut instinct for what their customers want, because they are their own customer. Larry and Sergey invented a new search engine because the old ones were fundamentally broken and they were fed up with them. Walt built Disneyland because he was tired of sleazy, grimy amusement parks. And Steve knew that some people need a lot more than a beige, generic box because he’s one of them. They have user-centricity baked into their core, because they’re building products they want to use. They don’t compromise in the drive to create a product that’s good enough for them. It’s a happy coincidence that there are lots of other people who also love the product. It’s an intuitive connection that 99.9% of corporate leaders can’t imagine, let alone do.

Managers Are Almost Never Product-Centric

The typical corporate manager has no special bond to the product. Along the line, too, many compromises have been made in the name of profitability. Whatever amazement the product may have once had has been sold off, bit by bit, along the way. The sales manager and the bean counters have taken over the steering wheel. They turn out bland, uninspiring products they wouldn’t use themselves. They are not product centric, they’re profit-centric, and profit really doesn’t inspire anyone.

I’ve spent a lot of time wondering how so many companies can preach customer-centricity, yet continually miss the mark by so much so often. Look at the ones who hit the bull’s eye regularly. It turns out that it’s not so much customer-centricity they’re aiming for, it’s delivering products the leaders are obsessed with because they can’t wait to use them themselves. That’s a key element “Good to Great” and “Built to Last” author Jim Collins missed in his Level 5 leadership. Steve Jobs would never be mistaken for Collin’s or Stephen Covey’s ideal leader, but if I were looking for someone who’s going to turn out a product that blows me away, Steve would be my guy.

Now that my travel schedule is slowing down, I'm trying to do some catch up posting. Here is the follow up to the blog post on the difference between strategy and tactics from my Search Insider column, originally written April 24th (wow, I am a little behind!)

Strategy Spotting: How To Tell When You Find One

Posted April 24th, 2008 - 11:30 am by Gord Hotchkiss

The difference between tactics and strategy can be monumental in the success of any marketing, and search is no exception. So, what are the telltale signs of a strategy? How can you tell when you're dealing with a basketful of tactics rather than a well-thought-out strategic plan? Here are some things to look for:

Strategies are immutable

They remain constant, and so are expansive enough to accommodate the inevitable tactical shifts that will be required. Strategies provide bearings for the team involved, providing a navigation point that everyone can refer to. Napoleon was one of the best military strategists that ever lived, but he said that he never once had a battle go according to plan. Life never rolls out exactly the way we plan it. But, if you know what your strategy is, you can make the necessary adjustments on the fly and not lose sight of your objectives.

Strategies are not objectives

Strategies are not the same as objectives, but the two are integral to each other.  Strategy needs an objective. And realizing objectives is a lot easier with an aligned strategy. But the two can't replace each other. A great primer in objectives, strategies and tactics is provided by this supposed quote from Colin Powell during Desert Storm.

In a press conference, asked what the objective was, he replied, "Liberate Kuwait."

"What's the strategy?"

"First we're going to cut it off, then we're going to kill it [referring to Iraqi forces).'

"What tactics are you going to use?"

"Tactics are Schwarzkopf's job."

Strategies are simple yet profound

The best strategies boil down to one absolutely crystal-clear concept that everyone can understand. The more people you have working on a strategy, and the more spread out they are, the clearer your strategic foundation has to be. Airlines provide a good example. Southwest's strategy? To be THE low-cost airline. JetBlue's? To make coach suck less. Those are clear strategies that everyone, from CEOs to pilots to baggage handlers, can understand. It also gives every team member the latitude to decide on the best tactical execution to achieve the strategic objective.

Strategies are customer-centric

Strategies have to be defined both from the outside, looking in, and the inside, looking out. Because of this, strategies have to begin with a clear understanding of your customers and their relationship not just with your company, but also your competition. You must be able to see how they differentiate you from your competitors, not how you believe you might be different. Then, you can use this external perspective to define your internal objectives, improving what must be improved and accentuating what is already good. It's this view from the outside that allows you to determine the things you should do, and more importantly, the things you shouldn't do. It helps you decide what the really important things are.

Strategically speaking, where do you begin?

So, if after this strategy-spotting primer, you decide you don't have a strategy, how do you start building one? It's no quick task. Strategies come from a lot of soul-searching, hundreds (or thousands) of really tough questions, and the courage to say no to things that seem really important. And strategies have to begin at the top. They come from developing a deep and honest understanding of your customers and, more importantly, your own company.

Strategy is hard. Really hard. But no company who has ever made the significant investment required has ever regretted it.

One year ago, I may have mentioned that my fellow countrymen (or at least a select group of Canadian marketers) had their heads up a part of their anatomy at SES Toronto. Andrew Goodman afterwards promised to force feed me Canadian politeness serum before he put me in front of another Toronto crowd. And Andrew, I want you to know I tried. I really tried. But then Rogers missed the boat in an incredibly stupid way, and, well..I may have said something similar again. I'm sorry, I really am.

Last year, I tore up the Ontario Tourism Board for not using search effectively, prompting a multipart debate with them in my Search Insider Column. First, I said they weren't doing search. They said they were and I didn't know what I was talking about. I looked at what they were doing and amended my stance: they were doing search, just not doing it very well. I offered free advice. They declined my offer. We went home in seperate cars. I didn't get a card on Valentine's Day. I think this time, it's really over between us.

This year, having a hard time believing that Andrew was daring to put me in front of a Toronto crowd again, I decided to stay on safer ground and give a rather non controversial tour of why the Golden Triangle is the way it is, using results from several recent studies. But the main theme of the study was that relevance and the presentation of recognized brands are both critical elements in the Golden Triangle for commercial searches. I was finishing my slide deck on the day of the announcement that the iPhone was finally coming to Canada. Rogers would be the exclusive carrier. I just knew there would be a corresponding search spike and I thought this would be a great example of how to utilize search effectively. The following Google Trends Graph shows just how big this spike was:

I searched for "iPhone" and what did I find? Nary a mention of Rogers. No ad, no organic listing.

I went to their site and other than a mysterious and unusable link off their home page that went to a 3 line media release, there was no information. Surely, Rogers couldn't be this stupid, could they? But alas, they were.

So, I amended my slide deck to include the examples. And yes, I may have got a little hot under the collar at SES again, and I'm pretty sure I said something not so polite. But you know what? I'm getting sick and tired of going to the business capital of Canada year after year and seeing that the major Canadian brands are still miles behind the rest of the world in search. Do a search for any major consumer product in Canada and almost all the big brands are completely absent. They don't get it. Or in many cases, their agencies don't get it. Look, accept the reality. People search. People search because they're looking to buy things. On June 10, thousands of Canadians searched for information on the new 3G iPhone. I'm suspecting more than a few of them are intending to snap one up July 11. And not one advertiser had the foresight to buy a search ad on what was probably the biggest search day of the year for iPhone, including the exclusive carrier. Correction, one advertiser did...Research in Motion, the maker of the Blackberry.

Maybe being big and stupid worked in Canadian advertising up to now, but it won't work in the future. You have to understand that Canadian's aren't stupid when it comes to the internet. We're amongst the world's biggest Internet users. Our early lead in terms of high bandwidth penetration is slipping (another sign of sheer stupidity) but we still go online more than almost anyone in the world. Yet Canadian advertisers are avoiding search, turning the Golden Triangle into an advertising slum. Google, Yahoo! and Microsoft's Canadian offices are slamming their heads into brick walls, wondering when Canadians will finally get it. They've all asked me. And frankly, I'm tired of apologizing for Canadian marketers. Yes, we're a cautious country. Yes, we're deliberate. But it's gone beyond that. Now, there are no more excuses. Roger's absense from the search page on June 10 was inexcusable. It was either stupid or incredibly arrogant. It was one of Canada's best known brands telling thousands of Canadian's looking for information on buying an iPhone one of two things:

1. We're huge and we have a monopoly so why do we have to spend a handful of our advertising dollars actually giving you useful information? We know you're going to buy from us because you have no where else to go. And oh, by the way, we're going to charge you whatever we want, or;
   
2. Sorry, we just don't get this whole internet thing. You mean people actually search for information online? Huh..imagine that.

I'm passionate about being a Canadian. I am tremendously proud of my country. But I'm also passionate about search. And in this one area, Canadians are ridiculously behind the curve.