Why search engine advertising should be ‘opt-in’
As of 2017 more then 55% of all emails sent are spam. The California legislature detemined that email spam cost United States organizations more than $13 billion a year in lost productivity, software, and manpower. As a consquence California and other States have passed spam laws which enables the prosecution of offenders. But since most spammers are outside the jurisdiction of California or the United States for that matter, the measure has not made a dent in the amount of spam that is being pushed into inboxes of corporations and individuals.
But what about advertising assaulting Internet users outside of their email inboxes — in search engine results and on websites? How much time do employees spend on scrolling past advertising and/or getting side-tracked by ads during work hours?
According to several studies, search engine users spend a minimum of 1/2 second and as much as 3 seconds scanning through advertising before their eyes arrive at the wanted result. This may not seem like a lot of time until you multiply these numbers with the number of total searches performed, which is almost 55,000 per second. So, it could be said that search engines cause productivity loses of 23 hours each second of the day. At average hourly wages of $25, this amounts to total daily productivity losses of almost $50 Million. But of course, this number is disregarding any time wasted by employees from ads not relevant to the searchers intent and the fact that ads on YouTube easily take up twice as much time.
Google — as the main offender — could actually afford to pay for these minimum productivity losses and still make a healthy profit. Alphabet Inc. — Google’s holding company — reported operating income for Q1 2017 of $17 Billion. Almost all of this income is generated by Google ad revenue — in fact: all other ‘activities’ Google engaged in lost $855 Million during that time.
Notably, Alphabet Inc. also spent some of its cash on hand in March 2017 on buying Kaggle. Kaggle community members work together to utilize machine learning for everything from essay marking to diagnosing heart failure. Last August, Kaggle launched an open data platform in which scientists have contributed a range of datasets relating to everything from credit card fraud to H-1B Visa petitions and tsunami wave rates. As Google announced to integrate Kaggle into its Cloud offering, many contributors left the platform in search for independence. Or as one member expressed: “Another one bites the dust!”.
One counter-argument to the Google advertising model often cited by defenders of the company is competition in the search market and everybody not liking Google’s advertising scheme shall be free to use Yahoo, Bing or any of the lesser known rivals such as knowledge engine Wolfram Alpha. To those remembering the Microsoft anti-trust law suits, these excuses will sound both familiar and hollow.
But just answer this question for yourself: do you feel like you have the choice to not use Google for search? Or, do you think that for most Internet users Google de facto constitutes the Internet?
No one denies that there is value in structuring large volumes of information and make it available for consumption. You want answers, and Google is providing them. It is not really the companies fault that even if you search for “objectively best bicycle” the first thing the searchers sees is Google ads for $1,000-$3,000 bikes. Supposedly it is what the users want. At least this is what the company keeps repeating when the topic of search quality is brought up.
The core of what Google is about is bringing information to people.” Sundar Pichai, Google CEO
This statement would make sense, if Google was not a profit center of a publicly traded company whose shareholders are mostly comprised of institutional and mutual Funds (73%). And, even though Google CEO Pachai reportedly orchestrated the ill-conceived acquisition of NEST — loosing Alphabet Inc. and its shareholders several Billion dollars — his personal net worth doubled to more than $200 Million since becoming Google CEO. Just bringing information to people sure seems lucrative.
One might get a more truthful statement about the company’s objectives from Ruth Porat. Mrs. Porat is a professional money manager who until May 2015 held the position of Chief Financial Officer at investment banking firm Morgan Stanley, before picking the CFO position at Google’s holding company — which came with a $70 Million pay day — over a position at the Treasury.
So, where is all this money coming from? How can Google afford to pay more than banks?
Pay a Quarter to Search?
Would you pay a Quarter (25 Cents) for each search you perform on Google? No? Well, Google on average makes more than $0.25 for every search performed. The average cost per click in 2016 was a staggering $2.14 and more than 12% of all searchers clicked on an advertising — often without knowing that the text they were clicking on was not in fact a ‘search result’ but a paid advertising. A 2016 study found that more than 57% of search engine users were unable to identify ads in search results.
In addition to these questionable methods of ad placement, critiques have re-discovered the term ‘attention economy’ as being at the heart of minting money from user time. In some technologist circles the line ‘if you are not paying for it — you are the product’ has become part of regular discourse.
Opt-In for Search Advertising?
Email advertising is not considered spam if the email owner has opted to receive commercial messages from the advertiser. There are several ways this paradigm could be applied to search advertising depending on who is being exposed to the advertisement. — Searchers can be divided into one of four categories:
- Commercial searches on private time.
- Non-commercial searches on private time.
- Commercial searches on company time.
- Non-commercial searches on company time.
Commercial searches are relativly easy to identify. A search term “buy latest iPhone cheap” from a shared IP address will usually identify a private individual looking to purchase a new phone. Showing advertising to this searcher seems not only justified but might even be helpful.
However, combining organic results with a search for “objectively safe SUV 2017” with advertising for cars based on the the willingness of advertisers to pay for the exposure seems at a minimum questionable. No clear buying intend is being expressed by the user, and he/she was clearly looking for unbiased information.
Finally, shouldn’t — at least — every company be able to chose whether it wants to opt-in to search advertising or could there be a nominal amount be paid (i.e. cost + 100%) for searches performed?