Tesco takes moral stand against Google Awords?

Jonathan Bowers, May 9th 2008, 11:19AM

UK supermarket titan Tesco has announced that it is not bidding on rivals’ names despite the introduction of Google Adwords changes. If true what are Tesco’s motivations?

Immediate reactions have been that Tesco does not want to dance to Google’s tune and that the move is designed to keep the cost of search engine advertising down. And Tesco would not be the only company in the UK commercial sector showing defiance to the US goliath.

Or does Tesco have something else on its mind. Naturally, if it appears to take the moral high ground and does not bid on names such as Sainsbury’s or Asda, it will want them to do the same. Just maybe, the market leader’s concerns of rivals diverting its intended online customer base are the real motivation.

This falls in line with Asda’s belief. According to Brand Republic , Rick Bendel, marketing director at Asda, said: 'Tesco believes everything is for sale, except when it doesn't suit it.' This supports the view that Tesco thinks it will ultimately lose out from the adoption of Adword changes and is trying to manoeuvre to prevent it. However, Asda is not playing ball as it has not ruled out bidding on rival trademarks.

Search engine traffic diversion has become a major issue. The new rules allow companies to bid on rivals’ trademarks for the first time. While advertisers are not allowed to pass themselves off as their competitors, they can now appear quoting their own URL at the top of a search for a rival if they are the top Adwords bidders.

For example, a searcher who wants to do some online grocery shopping puts Tesco in as their search criteria. Asda has top bid on the Adword ‘Tesco’, so its advert appears top of the Google search list. This online shopper just wants groceries and is happy to click on the first link. The searcher looked for Tesco but ended up shopping with Asda. Tesco has lost out despite being the initial front runner.

It is surprising that Tesco would be that concerned about a price war on Adwords. It is the dominant supermarket in the UK and most likely to have the resources to win an Adwords price battle. However, as it operates in a convenience retail sector where customers are likely to opt for the path of least resistance, the possibility that Google’s new Adwords system will divert custom away is a serious concern.

This is also backed up by brand new research suggesting that under the new system search engine users get to their original search destination 8% less often compared to the old system.

I believe that Tesco’s true concern with Google’s new rules is not that it will have to spend more but that its competitors will now profit from piggybacking on its hard fought brand positioning.

Tags: adwords, brand, e-commerce, google, search_terms
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Google now the top global brand

Jonathan Bowers, April 28th 2008, 12:23PM

Google is once again the biggest brand in the world, well according to one report at least. Admittedly, the said report is from highly respected market research agency Millward Brown and it has the online search engine titan as top dog in the corporate branding stakes for the second year running.

The new Millward Brown list of top 100 brands is once again dominated by technology companies with 6 of the top 10 coming from the IT field. However, previous brand king Microsoft has fallen to third to leave Google as the undisputed brand leader. Or has it, according to an alternative list by Interbrand Google ranked only 20th in 2007.

The discrepancy seems to be down to just how rapidly the Google brand is growing. While the Interbrand 2007 list has Google in 20th place it also says the brand had grown by 44% over the previous 12 months, a figure that blows all of the other top 100 brands out of the water. It is therefore perhaps understandable that a year on Google would be the top brand worldwide.

The Millward Brown list is compiled by evaluating both tangible financials and intangible customer opinion. In terms of the tangibles, Google certainly made big waves last year. Profits were up 40% to $4.2 billion in 2007.

Meanwhile, what about the intangibles? Well ask a random person on the street to name an online search engine and chances are they will say Google. Similarly, ask them to describe the Google logo and, again, the likelihood is they can.

It certainly seems Google is king at the moment. Its impressive profits, extremely recognisable profile and market sector dominance undoubtedly makes it the Tiger Woods of brands.

Meanwhile, looking just at the UK sector, Vodafone has taken over as the top British brand and in doing so has provided a useful example that brand success and profits are not necessarily mutual. In fact, ironically Vodafone's bottom line has taken a bit of a beating lately partly because it has been pursuing an aggressive acquisition policy to expand its brand strength globally. Time will tell if boosting its brand will work for Vodafone.

Also of interest is the continued recovery of Marks & Spencer. The British retailer has had an iconic brand for a long time, however its value has fluctuated a great deal in the last few years. Happy for it, the brand is looking in good shape again as M&S is the top British retail brand and the fourth highest overall.

The recover has been multipronged. To rebuild its reputation M&S has revamped its stores, refocused on core product lines and, of course, delivered a highly successful ad campaign that reports suggest brought in £2.5 for every £1 spent. Other successful strategies included a remodelling of the company website, which resulted in a 78% increase in online Christmas sales last year. The morale of the M&S story seems to be: keep it fresh and current.

Tags: adwords, brand, google, internet, search_terms
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Yahoo too proud for Microsoft's advances

Jonathan Bowers, April 18th 2008, 4:07PM

What is it about Microsoft that it seems no one wants to play with them? The global computing giant has issued an unsolicited $43 billion offer to buy Yahoo but the online portal seems to be willing to do almost anything to avoid getting into bed with Microsoft.

The logic of the move is clear to me: by teaming up both Yahoo and Microsoft can, for the first time, realistically take on search engine leader Google. This is a strategic view that I'm sure is appreciated throughout the IT community with the exception of Yahoo's senior management it seems.

In fact Yahoo's tactics appear to be to go the opposite way completely, by teaming up with Google in a deal that can surely only strengthen the search engine king's grip on its throne. Yahoo has agreed to enter a trial of using Google AdSense, which will deliver relevant Google ads alongside Yahoo's own search results. Yahoo is also reportedly in talks to take over Time Warner's AOL internet assets. All this, it seems, to thwart Microsoft.

But why? Is it because Yahoo is fiercely independent? Or is it just fiercely opposed to being bought by Microsoft? Either way I believe that Yahoo has its sense of who is its biggest competition badly skewed.

By partnering up with Microsoft, Yahoo would have the ability to take on Google for the status of the largest online search portal worldwide (and the financial prizes that come with it). Instead, by teaming with Google and taking on its technology, Yahoo is effectively announcing that Google is better. This amounts to Google standing on the summit of Mount Internet Search Engine and then Yahoo handing it a Yahoo branded box to stand on.

Yahoo would no doubt argue that it is not just a search portal and that being number one in that regard is not the be-all and end-all. It may even add that a tie-up with Google will help drive traffic to its other portal services thus strengthening its overall standing. However, for me, it seems as though business sense has given way to good old-fashioned pride. Yahoo likes being a big fish in its own pond and it does not want to be a small fish in Microsoft's vast silicone sea!

And meanwhile, everyone else with a vested interest in the internet, from managed hosting providers to mortgage advisors , lose out. Google is already starting to throw its weight around by changing its Adword rules to glean higher profits and now Yahoo has demonstrated that it is safe to continue its anticompetitive policies.

Tags: adwords, google, internet, search, search_terms
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The .tk top level domain

Jonathan Bowers, September 19th 2007, 9:26AM

I have mixed feelings regarding the story about the little island of
Tokelau and the way an entrepreneur has boosted its GDP by 10% by
selling the top level domain name. Already there have been more than 1.6m
domain names ending in .tk sold. It brings about the question of whether
the people buying these names are diluting the search market for others.

If the dotcom, .net, .co.uk and others have gone for a word like
'guardian' should anybody be allowed to buy guardian.tk. We know that many entrepreneurs have tried to buy Italian top level domains in the past,
more for creative reasons than any other, but have found the process quite
stringent.

Should ICANN have allowed the rights to .tk domains to be bought and used
in such a liberal way? It's wonderful that the Pacific islanders in
question have gained great opportunities but what does it mean for search
if in the future there are many similar domain names. If Google responds
by putting less emphasis on the domain name within a search then many
businesses will suffer.

Tags: search_terms, top_level_domains
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Anita Roddick and the Papers PPC

Jonathan Bowers, September 15th 2007, 6:39PM

We were talking about how some of the national newspapers used pay-per-click tactics to appear on searches for Pavarotti in the days following his death. One paper in particular seems to be using this strategy on a weekly basis. Lawrence Jones has an insightful blog about Anita Roddick and The Telegraph, which is one of two papers that used her name as key words to drive traffic to their site and improve awareness of their brand.

I wonder how this will develop over the coming months and whether others media brands will utilise the same techniques.

Tags: newspapers, search_terms
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