Hershberg.org

Often when an online start-up’s revenue model is unclear to some or most people, the immediate assumption is that the answer must be corporate licenses or professional accounts. This has been the discussion around Twitter for some time and now I’ve been reading the speculation about Bit.ly as well.

This came into focus for me recently when I re-read a Business Week article from 2000 about Google. I was at Ask.com at the time and, like Google, we had two sides of the business, corporate licenses and a consumer site. The belief (and reality) was that Wall Street valued B-to-B revenue potential more highly than consumer revenue potential, so that side of the company received the bulk of the resources. Ask went so far as to position the consumer site as a showcase for the corporate technology. Some execs simply didn’t think there would ever be a business there because the rev opportunity wasn’t obvious. (Eventually Ask sold the B-to-B component for 3 or 4 million bucks, while its consumer business went for billions.)

When reading the Business Week article, it’s obvious that everyone — including Sergey Brin — thought that Google’s opportunity was in corporate search. But management luckily proceeded with developing AdWords and the rest is history.

This isn’t to say that corporate deals can’t be lucrative, but companies ought not to limit themselves to bigger opportunities, if recent history holds true. It’s like 2000 all over again and we’re going to look back in 10 years and laugh at how people viewed Twitter and others — and laugh at how they were blind to the bigger picture.

There is lots of talk today about Ad Age’s article “Media Giants Want to Top Google Results” which focuses on big media companies being annoyed that they aren’t getting higher rankings in Google.  While I agree that Google generally does a pretty poor job of ranking news stories, I think the issue isn’t Google’s so much as it the result of poor SEO. But that’s a topic for another day.  What is far and away the most significant aspect of the story is embedded in this passage:

“Search results for “Gaza” on March 20 began with two Wikipedia links, a March 19 BBC report, two video clips of unclear origin, the CIA World Factbook, a Guardian report and, most strikingly, a link to Gaza-related messages on Twitter.”

The “link” is to Twitter Search and you can still see it in the results today: http://bit.ly/4pssNi

I decided to search for some other keywords specific to time-sensitive events and information and found that Twitter Search is being indexed in a number of instances:

March Madness: http://bit.ly/12z9wB

SXSW: http://bit.ly/CH9Q

If Google doesn’t think Twitter provides any real differentiated or valuable benefit in search and is in fact, “poor man’s e-mail” as their CEO Eric Schmidt put it, they have a funny way of showing it. It’s weird to see them featuring links to another engine’s search results on their own search results page.  The twist here is that Twitter has generally not done much to make their content followable or easily indexed by Google’s spiders. This explains Google’s use of Twitter Search to generate results.

As we’ve pointed out before, Google clearly hasn’t addressed “real-time” search on its own, so this is a way of laying the groundwork to deal with it near term.  Whether that means simply using Twitter as their real time search or studying them to initiate their own rival (perhaps based on FriendFeed, which is stocked with ex-Googlers) Google is showing that they are keenly interested in how to incorporate real time results into their search service.

Keep in mind that it still takes Google over an hour (compared to first mention on Twitter) to get a breaking story like Lance Armstrong’s crash on the front page of Google News (Sports section, even) or on the main SERP’s page in connection with searches for “Lance Armstrong.”

UPDATE:

TechCrunch alliteratively reports today that Twitter has tweaked it’s title tags (try saying that 5 times fast) for user profiles, allowing them to better rank on Google search results. It’s a step closer to opening up a users influence beyond the number of followers they have, as I predicted:

“To this point, the “Twitterverse” has pretty much been living in a bubble – one where all updates are made and consumed within Twitter and its associated applications alone and where some believe that having 10,000 followers means that you are an authoritative or influential figure.  While I believe that is, in fact, the case for some (and I won’t diminish the value in having a large following), the volume of traffic some individual Twitter updates will receive from organic search will dwarf what they are typically able to generate from Twitter alone.  It also means that Twitter accounts with fewer followers – but with something important and to say on a given topic – will start to see some increased attention as well.  Much like many of the early bloggers did.  And when that happens, the whole question of influence and authority will once again be turned on its head.”

Why Social Media is Complementary to SEM

I’m a big believer in the notion that search marketing and social-media marketing go hand in hand with one another. I’ve seen firsthand how they interact on search results pages and how insights from one channel can have an impact on the marketing efforts for both. What does seem odd to me is that some marketers and observers seem to view search and social media as oppositional either-or propositions.

Now, knowing the growing impact of social media, it was only a matter of time until we started seeing headlines like the recent Ad Age article titled “Facebook Sending More Traffic Than Google to Some Sites.” It’s an interesting article and well worth reading, but what really got my attention right off the bat was this sub-headline, “Will Search-Marketing Dollars Also Shift to Social Media?”

The answer to that question is no, they will not — at least in the short term. However, SEO may become a bigger factor in maximizing social media’s impact in a search environment as the channel begins to mature and find a way to successful monetization through marketing.

Granted, the massive number of consumers using social media platforms presents a huge opportunity for marketers. The problem right now, however, is that most social networks currently offer advertising programs that do little, if anything, to align the interests of consumers, advertisers and the platforms themselves.

Social networks do drive huge amounts of traffic, but the campaigns we — and many other marketers — run typically don’t involve paying a site money, largely because the paid ad programs they have offer no real incremental benefit to our clients (through data, targeting, etc.) above and beyond what we’d get for reaching out to people in a more direct fashion.

It’s a phenomenon that can be seen in the latest Forrester Research report on social media. Forrester found that social media marketing budgets are currently incremental at best (though they are expected to increase substantially.) The real spend on social media occurs in places that can’t be measured by looking at money coming into social platforms. Rather, it’s in budget that’s used to optimize brand profiles, initiate and monitor conversations, and to spread access to other assets like television ads on sites like YouTube.

To see just what I mean, I think it’s illustrative to add context that tells us why some sites are benefiting from visibility on Facebook in comparison to Google. The specific sites the article highlights are PerezHilton.com, Dlisted, CafeMom, Evite and video site Tagged.com. As the article notes, there are a variety of reasons why Facebook has turned into a big traffic-driver for each of them compared to Google.

CafeMom has a Facebook fan page, which undoubtedly drives traffic back to its site. As for Evite, it seems fairly obvious that people don’t typically visit a search engine like Google or Yahoo to see what events they’ve been invited to. More likely, Facebook is being used to bring a group of people together around a single event (there are currently 413 of them that show up when doing a search for “Evite” on Facebook events) and then clicking-through from Facebook to an Evite page to RSVP after they’ve learned about the event. Lastly, Tagged.com benefits from the popularity of video clip posting and sharing within Facebook – many of those users ultimately end up visiting the site where the original video was posted.

I suspect Perez Hilton and Dlisted appear on this list for similar reasons. People who are fanatical about celebrity gossip know what sites they’re going to visit every day (or many times a day) for the latest news. And when they see something of interest, they’re undoubtedly sharing links across Facebook, which ultimately drives some of the people they’re connected to back the original site to read the full story.

In comparison, when it comes to generating organic search traffic, gossip sites suffer from the same problem as other news tabloids do — specifically, witty headlines that resonate with users (e.g. “Life’s a Beach” headline for a post about Paris Hilton and some guy named Doug Reinhardt on the beach), but mean nothing to search engines trying to determine relevant content. As a result, these stories typically struggle to rank well organically on sites like Google which in turn does not send significant volumes of visitors to these sites.

With all that in mind, if you agree that the Facebook traffic the article is referencing was primarily driven by shared links, then Facebook isn’t benefiting from it in any way. There is no paid media component to talk about and therefore, no dollars currently being spent in search that could possibly go towards this effort in social media. Outside of fees that could have been paid to an agency, it’s basically free traffic. I don’t believe that Perez Hilton, for instance, is making media buys on Facebook, but people share links to his stories like crazy and significant traffic is being driven to his site as a result.

I would also bet that there is some percentage of traffic that was ultimately driven by Facebook, but actually originated from a search engine. In other words, someone went to Google, found a link to a Facebook profile, and then clicked on a posted link and ultimately through to a company’s website. In this instance, search and social media are complimentary, not competitive.

Ultimately social media properties like Facebook and Twitter will be indexed by the major search engines on a more regular basis, filling the need for “real-time” search and offering more relevant content. As this happens, the traffic these sites drive across the web will be much, much greater than what we’ve seen to date. In the short term, I don’t believe that will ultimately equate to media dollars being reallocated from search to social-media properties, but you could make a case that it leads to a greater investment in initiatives like SEO to tie these together in an more meaningful way.

In the long term, all of this might change as social media platforms discover ways to monetize that brings marketers and users together to the benefit of all of the parties involved.

Follow me on Twitter: @hershberg