In his book “Predictably Irrational,” Dan Ariely recounts one of his most famous observations regarding the prevalence of organ donors across different countries. You can read more about the organ donation phenomenon on his blog, but the basic gist is that countries with an opt-out model have significantly more citizens registered as organ donors. Compare this to places like the United States, which has an opt-in model (you have to check a box on the back of your license to become a donor). The proof is in the pudding- people are lazy. That’s oversimplifying it a lot, but the bottom line is that the path of least resistance is usually the most appealing to the majority of people. Making that extra check mark or reading every line on a form is not worth those precious seconds of mental processing.

Why do I bring up this study? Because the propensity to gravitate toward inaction cuts both ways. By changing the options, you can influence how users opt in or opt out of actions/services at drastically different rates. But to quote Spider-Man’s fictional uncle, “with great power, comes great responsibility.” As I’ll explain later, the ability to affect actions doesn’t always help in the way you might have hoped.

Let’s start with a simple example: consider your typical eCommerce shopping cart system. Buyers reach a registration screen, where they have the option of signing up for a free, optional newsletter. There will be a percentage of people who completely glaze over the option. There will also be a percentage who will actively check or uncheck the box to indicate whether or not they want it. If you only care about more subscriptions, a pre-checked box is the way to go.

Where can a pre-checked box go wrong? Just ask all the people who, at one point or another, ended up with a Yahoo or Ask toolbar on their computers by accident simply because they wanted to install a program or browser plugin. While it is perplexing to novice users who can’t figure out why they’re losing web browser real estate, it is downright infuriating for computer savvy individuals who impatiently click the “Next” button waiting for installation to begin. This is where you can hurt your brand. Your service can be labeled spammy or adware. Some will view it as an underhanded (and downright desperate) tactic to have people use your product. It also violates people’s privacy (as users did not explicitly give permission to install, which is, in a way, kind of like the opposite of organ donation).

So back to newsletters. Everybody wants to believe that they have the best, most useful, awesome newsletter; but this simply is not the case. For example, I used to subscribe to Flavorpill, but realized it consisted mostly of thinly veiled advertisements and self promotions. On the other hand, I know many people who swear by Gilt Groupe’s newsletters on daily deals and spend inordinate amounts of money as a result. If you actually do have a good newsletter, then you’re fine. You might get some accidental subscribers who recognize the quality of your work and its utility, and you’ll also have subscribers who receive exactly what they were expecting.

But take for example concert ticket e-mails. I subscribe to Ticketmaster and LiveNation for the off-chance that I’m unaware that a band I like is playing in my area. Both do DMA-style targeted newsletters which are also genre-specific. But I also end up randomly getting single e-mails about a Nickelback or Jonas Brothers concert. Every time I get one of those, I want to unsubscribe.

There are many ways to create a bad newsletter: be too text-heavy; be too generic in your content offerings; don’t include any accompanying visual aids/pictures; don’t make your links readily available and clickable; don’t include a call to action; include important information below the fold, etc. Those are mostly design aspects, but there’s also an important marketing piece- who do you actually want subscribing to your services?

There are so many ways to demo target: retarget users and a serve popup ads; run SEM campaigns on specific keyword phrases that indicate who a person is likely to be; utilize social media channels for awareness campaigns to reach certain types of readers, etc. With all of these other, much better, tools at one’s disposal, is it really prudent to automatically opt everybody in every time? Are you even using the best metrics? That is, do subscription events matter when 75% unsubscribe after their first email? What if the people who stay subscribed never click through to the site? Retention rate would be a lot better KPI, but still not the most efficient. If you’re not sure who wants your content delivered to their inbox, then let users opt in, and also do a better job of targeting them across different interactive media.

Also, stop trying to make us install your resource-hogging toolbars!

My next blog post will single out a particular company that follows the opt-out model (and alienates a lot of users in the process). Are they too big to fail? Are they doing evil? Stay tuned to The Frequency to find out!

Link: Microsoft Blasts Google’s Ad Policies

Here’s a synopsis of the article: Microsoft denounces Google AdWords policy for hindering online advertising competition. Specifically, Microsoft execs feel that Google intentionally makes it unnecessarily difficult to transfer account/ad information from Adwords to other search engine advertisers, such as Microsoft AdCenter (for bing) or even Yahoo Marketing Solutions.

I’m going to cry foul on this one: Microsoft doesn’t have a leg to stand on in its accusations. From personal experience, I know for a fact that users can export Google bulksheets and upload them to both Yahoo Marketing and Microsoft AdCenter to be converted. I’ve also found it easier to do through Yahoo than Microsoft. So what is this difficulty that Microsoft execs are citing? Is it within their own ad platform? If their argument is that AdCenter doesn’t make converting Google PPC account data as easy as Yahoo does for the end user, then I agree. Microsoft would also be shooting themselves in the foot with this argument though. Consider it Microsoft cutting off their own nose to spite Google.

From my talks with vendors in the past, I know that Google has forbade third party SEM/PPC management platforms (such as Clickable, SearchIgnite, etc.) from including a native feature to automatically port Google AdWords campaigns to other advertisers. It’s still easy enough to do with step-by-step instructions though. Here are Yahoo’s instructions for importing Google AdWords data, and here are Microsoft’s instructions for uploading AdWords accounts. Not exactly a secret.

Considering the anti-trust suits against Microsoft (here’s one from last year that led to EU users being given the option of not installing Internet Explorer with Windows 7), this is essentially the pot calling the kettle black. What is Microsoft’s strategy here? The people who are familiar with PPC Advertiser platforms will know that Microsoft is over-exaggerating their claims. Perhaps Microsoft is counting on other people to use their statement as a talking point against Google? It does seem like it’s all the rage to criticize Google’s policies these days…

Microsoft is just being incredibly petty.

Link: Google expands ad targeting methods

Google is toeing a fine line between efficiency and being totally creepy. Like I mentioned in a previous post, Google is a business. It wasn’t built by the people for the people, despite all the happy feelings associated with the company. I love Google products as much as the next guy (unless the next guy works for Apple), but I also understand they can’t side with the public on every issue. So what this new change boils down to is pleasing advertisers versus not alienating its user base.

I’ll play devil’s advocate for both sides. Advertisers can spend a significant monthly budget on Google’s ad networks (e.g. AdWords, Content). So wouldn’t it make sense to please the people paying your bills? Being able to target ads to the right people benefits all parties involved. The advertisers’ ROI should increase, whether from higher CTR (click-through rate) or lower CPC (cost per click). Google’s ad network comes out of this as the most efficient platform for online ad spend. And the user doesn’t get bombarded with as many irrelevant ads and might actually find something useful.

So it’s win-win-win, right?

Maybe not. As I’ve referenced in a previous post, Google seems to be ethically lax with regard to privacy policy. And I know there is a bevy of Internet users who believe tracking cookies are evil and online advertisers are Big Brother. Obviously, this new move by Google doesn’t help to alleviate that feeling.

It’s a delicate balance, and at the moment, I can’t answer how this new policy will affect Google’s brand image. What do you think?

Link: The Time Has Come To Regulate Search Engine Marketing And SEO

Here’s a quote from the article that speaks volumes to me (with my emphasis).

“Here’s where the parallel to free trade breaks down. There are no perfect paradigms looking at free trade and import/export laws that exactly define or address this challenge.”

And now my thoughts regarding the rest of the article:

1) I believe that the article is most definitely written by an employee of a competing search engine challenging the Google model.

Google is the gold standard of online search, which means they are and have been doing something right. If users didn’t find results to be consistent and relevant, then Google would not be as dominant as it is. This may come off as common sense statement, but I think a lot of users just take it for granted that Google exists and is as powerful as it is.

2) It’s true that the Internet marketplace is incredibly saturated. And unlike the real world, where people choose a store based on location, personalized customer service, and visual appeal, the Internet doesn’t work that way. Google will tell you which sites are the most relevant based on what your keywords say you’re looking for. The overlap between Internet and real-world shopping is word-of-mouth. Where the Internet trumps real life is that word-of-mouth travels at lightspeed over the Net. Think about how many times customer service horror stories have made their rounds on the Web. The Internet is both the best tool for PR and its worst enemy.

3) Google is not the be-all and end-all of online commerce. Certain specialty “watchdog” sites that compare products, prices and merchants (the latter two of which Google has a market share) via user reviews are really where experienced buyers will look to first. Seasoned Internet shoppers know how to find the best prices for goods, the best sites for individual product reviews, and ratings for online stores. I feel that the author of the article underestimates the ingenuity of the Internet populace.

4) Wikipedia probably has the best model of collaborative effort on the Web. But how would you apply this paradigm to the search industry? First and foremost, you would need community moderation- the staple of Wikipedia. You would need people willing to spend their time in order to improve results, eliminate biases, and ultimately convey the “truth” behind the SEO smoke and SEM mirrors. I am certain that Google believes that those they employ can do a better job than the combined efforts of the Internet community. And who can blame them? Look how far their trust has brought the company.

5) Google pretty much singlehandedly drives the SEO/SEM industry. The ever-changing and evolving secret algorithm keeps these marketing and optimization companies in business while also helping to prevent abuse.

I interned for a successful search marketing agency, and I can tell you that results can be delivered for new companies without using black-hat tactics. It takes hard work and real insight (which is why so many companies outsource).

And here’s one of the most important lessons I learned while working there: You have to believe in your clients. If you don’t, then your chances of improving pagerank will certainly diminish. On the other hand, if your clients believe in their goods and/or service and your SEO/SEM company informs them of changes they should make to improve both content and User Experience, then you’re already many steps ahead of the competition.

6) Google does not police the Internet. Google polices its own service. The article’s main analogy is flawed in that it doesn’t consider other continents. I suppose comparing Google to a country is more apt. The country imposes its own laws on its citizens the same way Google moderates search results. And there are smaller continents with their own sets of rules for those who don’t wish to become citizens of Google. Google is not a monopoly. Of course, it would be ignorant to state that Google is not a huge factor in online business success, but there is definitely room for improvement. Do you think Microsoft would sink upward of $100 million into Bing had they not done their market research? If Google doesn’t give the people the kind of search engine they want, then there is definitely room for another company to develop one. Bing offers a somewhat fresh search model based on their own laws. But only time will tell how big and powerful Bing country becomes.

7) Google is not a malicious dictatorship. I firmly believe that both profit and user experience are equal drivers of development and innovation for their products. It’s true that Google will pull site listings that are, for lack of a better word, ‘fishy.’ SEO/SEM veterans have warned me about how to avoid angering Google moderators, but have also told me about how Google can be merciful. There exists an appeals system and Google will consider reviewing your infraction. You just have to make a case that you’re above using sneaky methods and that you really deserve a spot on Google.

That last part is so important that I’ll repeat it: You have to make a case that you deserve a spot on Google. The search spiders and Ad buying will only take you so far. User behavior will let Google know which sites people like the most and how accurate meta descriptions and keywords really are.

At the end of the day, it’s the users who have the most power, and not a single search engine.

Is this the future of web advertising?

Is the next big thing these gigantic banners (if you can even call them banners, they seem more like docks at this point) that take up a third of page real estate? Is this a good or bad thing? Will people just continue to ignore them? Or will the message subconsciously seep into people’s brains? Will this bring forth new ways of blocking ads?

The future is exciting!