Today I spent some time at the Stanford AlwaysOn conference and the accompanying CEO Showcase. The conference had a few very interesting panels, one of which put together one researcher from Yahoo and another from Google to discuss the search paradigm. Normally, this would result in a fun panel where at the end, everybody thinks what a great company Google is. Not when the Yahoo representative is Dr. Usame Fayyad, who I've known for a number of years and come to have a great deal of respect, especially when it comes to makings sense out of data.
It was one of the rare instances where the Yahoo representative was more insightful and more importantly held the intellectual high ground. Question after question, Usama built the case that marketing is more than search. Having a portal, and content gives the media company a lot of rich information about the user that could be more important than what that person is looking for at an instant in time.
To drive this point home he gave an example of a marketing campaign that showed banner ads for a period of time, following text ads that referred to the banner ad. In this case there was material increase, I heard more than 200%, in click through rates. So you show some banner ads, educate the consumer, then you show a text and and voila! the click through rate goes up. Makes a lot of sense. This is a differntiating data point for Yahoo to show because Yahoo can offer both to their advertisers, and Google can't. You can do a lot better if you had a number of tools, as opposed to just search. This was the gist of his message.
All of this is true and interesting, but I think it misses something. Sacrificing simplicity for efficiency is a mistake. Google has some 100K credit card relationships with small businesses all of whom hate complexity. Adwords works because it's simple. How can you possibly have a self-service system where a small business has to optimize a number of banner ads following text ads? They have to build the banner ad, figure out frequencies. It would be a nightmare.
You can increase efficiency by lowering your price to the end user, but once you give up simplicity you lose the customer. So all the properties Yahoo, has and all the information they collect about their users, is irrelevant unless they make it absolutely simple. Yahoo needs to 'design the experience' for the advertiser around simplicity.
The moderator, Bambi Francisco, (who was unfortunately a lightweight to moderate this panel, and it showed) asked why Google didn't show historical frequencies of keywords, and the answer given was simply that it wouldn't make the solution simple. They get it.
So this panel showed clearly where Google and Yahoo are coming from. Yahoo knows a lot more about the consumer than Google, but needs to find a simpler way to bring that knowledge to the advertiser. Google may not know as much about the person putting in the keyword, but they sure make it easy for the advertiser to put an ad in front of the consumer. The catch is both companies have scale getting to customers, but the battleground is getting advertisers.