Google Educational Webcast on Search and Search Advertising (September 2009)

>> SHIM: Hello every--hello everyone, this is Maria Shim from Google Investor Relations.
Welcome to Google's first investor webcast. Instead of holding an Analyst Day we are kicking
off our educational webcast series. So please give us your thoughts once we are through
today. Please note also that we are not talking about our current quarterly performance so
we will not be taking questions about that today. If you want to ask a question you will
need to submit your question on our Google moderator page which can be found our website
at inverstor.google.com/webcast. You can also vote for the questions you believe should
be asked. So please go to our moderator page and vote. Before we get started let me quickly
cover the safe harbor. Some of the statements we make today maybe considered forward looking
and these statements involve a number of risks and uncertainties that could cause actual
results to differ materially. Please note that these forward-looking statements reflect
our opinions only as of the date of this presentation and we undertake no obligation to revise or
publicly the results of any revision to these forward-looking statements in light of new
information or future events. Please refer to our SEC filings including our annual report
on Form 10-K for the year ended December 31st, 2008. As well as our earnings press release
for a more detailed description of the risk factors that may affect our results. Copies
can be obtained from the SEC or by visiting the investor relations section of our website.
For that I'll turn things over to Patrick Pichette, Google's CFO.
>> PICHETTE: Thank you Maria and welcome everyone. Thank you for joining us today. As Maria mentioned
we're trying something new today. Instead of having these traditional day long analyst
day later this Fall. We thought instead we would try something new in typical Google
fashion. That makes better use of your time, covers more topic, in more depth and in fact
cover multiple topics over the course of the next year. Each webcast will focus on a different
part of Google's business and operations. Again as a reminder this is an educational
webcast series designed to give you more insights into our business. This is not about our quarterly
performance which we till talk about in October on our next earnings call. Today, we're starting
with our core business, our search and monetization business. We have a great team here in Mountain
View to talk about it. We'll start with Susan Wojcicki. And for the people who don't know
Susan she is employee number 16 at Google. She's also managing our ads product for the
last three years and had been or has been managing our AdSense product from its inception
seven years ago. She is the executive who leads our ads team product today and will
provide an overview of the topics we'll cover. We'll also hear from Johanna Wright to talk
about our search quality but also from Ariel Bardin, Amy Chang and Nick Fox from our ads
monetization team. We'll end up with some Q and A as Maria Shim mentioned, which will
be--will take from the Google moderator as well as on the phone. So there's a lot of
ground to cover in the next hour and so with that I'll turn it immediately to Susan.
>> WOJCICKI: Thank you Patrick. Good morning and good afternoon to everybody. I'd like
to begin by first talking about our Search business. This Search has been Google passion
and focus since Day 1. For us a good search experience means showing the right result
to the right user at the right time. And although we've made a lot of improvements in search
over the last 11 years, we still think there is a lot of room for improvement and for us
to continue to improve the results and to innovate. We often say here that we believe
that Search is just in its infancy. A few trends that I'd like to talk about today,
which we see as impacting the future of Search. The first is there's been an explosion of
information online. There are more Internet users coming online. And with all of the web
publishing tools available to everybody anyone can be a publisher, a blogger or a video producer.
And as a result we need to search over even more information and we have the opportunity
to connect the right content to the right user. We've always strived to be as comprehensive
as possible in order to make sure that we're always finding the right information for the
right user. We've summed up this trend by saying there's been no recession in information.
We're also focusing on continually integrating new kinds of information into our search results
and serving the exact right kind of information at the right time. For the last few years
we've been integrating video, books, maps, products, blogs and all kinds of other information
into the search results and improving our algorithms to serve the right kind of information
at the right time. Just as a reminder, when we type in a hotel today, we are not surprised
when we seen it shown on the map. But a few years ago, just to remind you, this did not
exist. And some people at that point thought it was just a dream. There's a lot more that
we can continue to do and a lot of different ways that we're innovating information, that
we're--that we're showing the right information at the right time and we're continuing to
innovate in the algorithms with lots of different kinds of information. We're also continually
working to make our search more global by allowing any of our searches to happen in
any of the languages and we're enabling translations, with the goal that anybody should be able
to read anything on the Web. We're also with the--with the continued proliferation of mobile
devices worldwide we want to enable our users to be able to search on any kind of device.
Mobile phones also enable us to do a lot of new cool things that we weren't able to do
in the past. For example, this morning on my BlackBerry, I was able to be able to do
a voice search for doughnuts and find out that there was a Krispy Kremes located just
across the street. And lastly, we're always focusing on improving our search algorithms
making our search faster and offering it the freshest results possible. All of this, we're
searching over all kinds of information in all locations on all devices in all languages.
So as you can see we're going to be busy for a while. But ultimately we believe that the
future of Search is about continuing to innovate. Every quarter we have about 90 or so innovations
to our search quality, which is approximately one a day. At any given time we're running
anywhere between 50 to 20 search experiments to test new ways of continuing to improve
our search. Our pace of innovation is accelerating. We see more opportunities to continue to improve
our search experience. We've made a lot of exciting advancements and we'd like to show
some of them to you today. So I'd like to turn it over to our Director of Search Qual--Search
Experience and Search Quality, Johanna Wright, who will be talking about some of these ex--some
of these new things for release and then I will come back and talk about innovation in
advertising and we'll have demos in the search advertising area as well. With that let me
turn it over to Johanna. >> WRIGHT: Hello, I'm Johanna Wright. I'm
the Director of Product Management here at Google responsible for Search. I've been at
Google for about four years now. They just gave you a sense of who am I. One project
that I've been involved deeply in at Google is Universal Search. And that's our effort
to integrate all of our different types of content and media such as news, books, blogs,
maps, images into the main search results lists on google.com. Search is important.
Everyone searches and they're always looking for new information. Search is also challenging.
Twenty percent of the queries that we get are ones we've never seen before. Now let's
step back and think about this fact. That means that one in five queries that a user
types into the search box is a query that Google has never seen before. And that means
our algorithms have to be pretty tiptop to understand all of this new information and
new user requests that come at us every second. It's also challenging because there's an explosion
of data right now. Another pretty interesting fact is that every day approximately 10 petabytes
of new information is generated. That's more than eight times the information stored in
all of the libraries in the United States. There's a proliferation of devices and users
expect more. It used to be that you were delighted when a search engine got you the right result
because you didn't expect it. But now, the search engines are so good at giving you the
right answers. It's much more frustrating and the situation is flipped when we don't
give you the right answer it's a frustrating experience. We have thousands of engineers
working on these challenges in Search. But today, I'm only going to be able to give you
a glimpse of the features that we are working on. So when--instead, I'm hoping is that you'll
take away from this, how we think about innovating in Search. And the key theme I want you to
remember while I'm talking and it should be available in all of my demos is that one thing
that we do is we've focused on getting you the right answer in a shortest period of time.
Now, the first feature I want to talk about may seem obvious but it's also invisible and
that is speed. A search engine needs to be fast. In fact, we've studied this and when
we artificially slow down search, we saw that people searched less. Another thing we've
seen at Google is that when we speed up our applications, people search more. So here's
an example on the screen right here of a tradeoff that we've made in the Maps product. On the
left, you see uncompressed Maps style, and on the right, you see a compressed Maps style.
Now this difference, in uncompressed version, it's slightly degraded but the difference
is barely perceptible to the human eye. However, when we compress the Maps style, this led
to a two to three X increase in speed. Now, so what, it sped up. But what we actually
saw was that on average, users who had done four pans within the Maps application, now
did the media pan--a median of seven pans. Which means that by adding this invisible
feature we practically doubled the usage of Maps. Now let's turn it back to the computer
for let me--for me to take you through a couple of other examples. So these next examples,
you'll be able to see, but they're still going to be subtle, because when we're done our
job right, it appears simple. And the next two examples I'm going to take you through
show the concept of exposing relevant information and getting you to your results more quickly
than you would've been--when then you would've previously. So let's say we're looking for
train schedules and we do the query, metro north. Now what our algorithms tell us is
that even though you didn't type the word schedules, it's quite likely that you were
looking for schedules. And so we print this link right here on the page and give you a
deep link right into the Metro North site to the schedule section. And what does that
for our users is it gets them to what they're looking for and it removes a step in the process.
Another feature that we've added recently last spring is something that we call Rich
Snippets. This enables our webmasters to add to their page information such as rating,
reviews and other metadata about authors. Now, one challenge users have is figuring
out which result is the one that they should click on. So I've heard of this Pixma Pro
9000 photo printer and I'm interested in reading reviews because I may be interested in buying
it. But first, I want to find out how it's been reviewed. So what you can see here on
this result that I'm hovering over is our rich snippet feature where we have stars and
we can tell that CNET has had a review by Philip Ryan. So this result may be interesting
to me. But as I scanned on the page, I also see that there's the other site, Bazillions
that includes 137 reviews. And so if I'm interested in reviews this metadata about the site gives
me a lot more information that this link may be more relevant to me when I'm making this
decision. Now you've probably seen this feature and it's kind of entered your consciousness
subtly but, these kinds of things that we take for granted didn't even exist a year
ago. So, we talked about surfacing information and getting users one step further in the
process but what about when it's just hard to type in your query at all. So that's the
challenge that users have, is figuring out how to type, express their information need
in terms of keywords. So one example that I have right now is a couple of years back,
there was a story in the New York Times about honeybees. And apparently, honeybees are going
extinct and we may not have honey in the future. And then this came up again last week because
there was an op-ed piece about this. So now I want to go back and find this op-ed and
see what people are saying about this now. So let's go ahead and try and find this article.
I'll search for New York Times, honeybees and what Google gives me are these more authoritative
articles when the story broke from 2007. So how can I tell Google--actually, I want to
get this op-ed piece from last week. What we've added is the search option panel which
allows users to slice and dice based on type of content, time and related queries. So now
I can just go ahead and say past week. And right here at the top of the page, we can
see that this op-ed piece from the New York Times from six days ago is right there available
to me. And previously, this would've been quite challenging for me to figure out how
to ask--how to ask for. And we think that slicing and dicing data is going to be extremely
important for our users across all kinds of content types, so we're also rolling out our
search options panel on image search. So here, I'll go ahead and do a query for planets.
But what about if I am interested in the red planet, I can just go ahead and specify a
color and now all of my results will be focused on--will give me red planets which I think
is pretty neat. Okay. So let's go back to the slides. What the search option panel did
is it showed us how to get information when it's hard to express that in words. But now
what about the situation where you know exactly what you want. You know how to express it
in words but it's just challenging to actually write those words and input them into your
device. And we see this to be true on mobile phones. So the feature I'm going to talk about
now is something that we call Google Suggest. And what you see is below the query box, what
we do is we add potential query completions. You see this on the desktop and it's very
useful to you on the desktop but on the mobile phone, it's a life saver. And what we've seen
is once we launch Google Suggest on the mobile phone the number of characters that a user
had to type in to get their results was halfed. Let's pop back to the computer. So, location
is something that's important in getting you the information that you want. And Susan mentioned
this, but say; tonight I am looking for a restaurant in Brooklyn. I can go ahead and
type in "Restaurants in Fort Greene." And here Google will surface for me a map and
a listing of all those business homepages. So I can see right where the restaurants are
located or I can click through to see the menus or get the home--or get reviews of those
sites. This information has now surfaced and much closer me on right on the web results
page. And location's really important when we're thinking about the neighborhood that
we're in but is also important when we're thinking globally. And Google is a global
company. So, this next example, I just always--it never ceases to amaze me and it's pretty awesome.
So, let's head on over to Google Egypt. By some estimates Arab countries constitute 5%
of the world population but only 0.5% of the web pages. And so this means that for people
in these emerging markets there's a lot of content online that's unavailable to them
because it's not written in their language. So this next feature I want to show you is
called cross language information retrieval. And what I've typed here in the query box
is the query Bob Marley. So, I'm going to go ahead and search for it and you've seen
our interface is translated and is now in right to left and when I scroll down, what
I see at the bottom of the page is this universal search result that tells me there are other
results for Bob Marley but they're actually available on the English web. So, what I can
do is just go ahead and click on this. And what Google does in the background is it translates
my Arabic query into English. Does the query Bob Marley in English on the English web,
returns and ranks those results and then translates them back into Arabic. And now I have all
this content that was previously unavailable to me now available to me in my language.
Translate we think is going to be extremely important to getting users the information
they need and making information that was previously unaccessible to people accessible
now. We have Google Translate available in 51 languages at this point. And let me show
you another application of Translate which is awesome. So say I--so I don't speak Japanese
but I want to buy my friend in Japan an Aibo and have it shipped from a Japanese store.
So here I am at Amazon Japan. I type in Aibo. It runs a query. I get these results and they're
all in Japanese and somewhat hard to read. But I can go ahead and click on the Translate
button that we've added to the Google tool bar. And now I can see that this Aibo is in
stock, while others are not. And I could even go ahead click on this Aibo, translate the
resulting page and even buy this product and have it shipped to my friends even though
I do not speak a word of Japanese. Sp hang on a second while this translation goes. And
this feature we think is going to be extremely important and is pretty exciting for getting
users access to content that are previously not available to them. And as we role this
out in the tool bar we imagine that we're going to get about--we're going to get hundreds
of millions of translations per day. So in closing I'd like to take you through. I'd
like to summarize the things that I've shown you and why they all focus on getting the
users the information as quickly as possible and how important this is to Search. So the
first thing I talked about was speed. Then I talked about [INDISTINCT] some rich snippets,
where these features surface information for users within the results page and get you
one step closer to your information task without having to wade through other sites. And then
talked about the challenge of query input. Sometimes it's challenging because you don't
know how to formulate a query but sometimes it's also challenging because the device you
have, it makes it not easy to enter a query. And so speeding up this processes and making
them available improves your ability to get your answers and to get them quickly. Finally,
we talked about location and translation. And now the theme is user's information that
they want more quickly, but sometimes one component of this is getting users information
that was previously not even available to them. And this is where we see things like
translate and cross language information retrieval having a huge impact. So, with that I just
want to say, that it's a really exciting area to work in Search because of all of the challenges
that we're facing and also because every day is a new opportunity to delight our users.
With that I'll turn it back to Susan who will talk about our ads business.
>> WOJCICKI: Thank you. Thank you, Johanna. So, as you just saw there's a lot of incredible
innovation going on in Search. We think about ads as just another form of information. It's
commercial information. And sometimes the best search result on the page is an ad. Just
like in Search we are always trying to show the right information to the right user at
the right time. It just happens to be commercial information. So today I'd like to talk with
you about a few big areas that we're working on in our search ads business. And then I'll
give an overview and there'll be three different presenters that will come up and that will
give demos in their respective areas. The first big area of innovation for us is new
ad formats. As you can see, our search is no longer just about text results. Our ads
have not made a lot of changes over the past years in terms of format. But we see this
as a big opportunity for us to be able to serve the right ad to the right user at the
right time. For example, if you're a movie producer the right ad for your movie could
be a trailer. If you are the owner and seller of a specific product the right ad can be
an ad that has product information and pictures of that product. We've been in the process
of testing a lot of new ad formats here and you're going to see some of those today. But
we're still early in this process and over the coming year you'll see a lot of innovation
and new ad formats that will be rolling out. As we also think about new kinds of inventory
like mobile, product or map and local information, we're also thinking about how can we serve
the right ads specific to that kind of user experience? We think that there are new formats
and ways that we can show information that will benefit both the users and the advertisers
as we develop our ad products in these emerging areas. Another big way that we are innovating
is in an advertiser ease of use. We just released our new AdWords interface which was the biggest
overhaul of our UI in six years. I'm very pleased to say that we have successfully rolled
this out to all advertisers at this point. And we are going to show some of those improvements
to you today. Many of these features enable our advertisers to make better decisions,
to more effectively manage their campaigns and there's accounts and the new infrastructure
that we rolled out enables us to innovate faster and to be able to role out more features
to our advertisers. We are also very active in helping our advertisers improve the effectiveness
of their campaigns. We want to make sure that for every dollar that an advertiser spends,
we can help them get higher ROI and that their ROI is able to increase over time. Some of
the tools that we have in this area that we'll be showing you today are keyword tools like
our search based keyword tool, this some of our search technology that enables advertisers
to find more keywords. If you've managed an AdWords campaign, you know that there are
a lot of keywords out there. The keywords are changing all the time and that it's essential
to have the right keywords to get your campaign to perform. We are also in the process of
releasing better pricing tools. We want to enable advertisers to have more insights about
how they should be pricing their keywords. For example, if you bid more, how many more
clicks will you get? If you bid less, how many more clicks will you get? We want to
be able to show these curves to our advertisers and show them what these tradeoffs are. This
is actually a lot like finance, so I'm sure everyone on the call understands the benefits
of this feature. Our goal is to expose these tradeoffs to our advertisers so they know
how to bid and they can run more effective campaigns. We also want to enable our advertisers
and website owners to have a lot more insights about what happens once those users actually
get to their site. Do they convert? What do they do? How long do they stay? What are the
size of the purchases that they make on their site? We're going to be showing you our Analytics
product which has been very widely adopted across the Web. This gives both website owners
and advertisers a lot more insights into what's happening and lets them better optimize their
campaigns. These are just a few of the many, many projects that we have in Ads. All of
which are designed to enable our advertisers to run more effective campaigns and get in
front of the users that are the right users for them which is a benefit for the users
too since often the right result on the page is an ad. Now, I'd like to turn it over to
Nick, who's a Director of Product Management, managing Ads Quality as well as new ad formats
and he'll be showing about some of the new formats and some of the--talking a little
bit about Ads Quality. >> FOX: Thanks, Susan. Hi, everyone. I'm Nick
Fox; I'm the Product Management Director, responsible for Ads Quality. I've been at
Google for about six years; a little bit over six years and I've been working on Ads Quality
for roughly five of those years. Before I get into some demos, I'm mostly going to spend
my time talking through some demos of new ad formats. But before I do that, I thought
it would be good to talk a little bit about our philosophy here. So Johanna spoke about
many of the ways in which we're improving the users experience by innovating in Search
and search quality. But going back to day one, one of the things that's made AdWords
unique is that we've taken that same leader focus on user experience and applied it to
our advertising products as well. If you go back to when AdWords first launched, we incorporated
a click-through rate into how we rank our ads and how the action works and ultimately
how we decide which ads to show. We did this because we knew it's critically important
to show only high quality ads to our users so that our users would continue to trust
our ads, look at the ads and ultimately click on those ads. One thing we often say in my
team is that we want our users to love our ads and that's really the high level goal
and the cornerstone of our approach in AdWords. And I personally think that this focus has
been one of the secrets to our success here. Jonathan often talks about the dozen or so
launches. Jonathan on our earnings calls often talks about the dozen or so launches we do
in Ads Quality in any given quarter. I thought it would be helpful to give a little--a little
bit more context on what these launches actually are and more generally what we can do in Ads
Quality to influence the user experience and the ads that we show. There are five areas
that we think about. And there are really five areas that can--that we can--that we
can adjust to impact the user experience. The first of those is targeting and this is
figuring out the set of ads that match a query. So I've had the query flowers and I'm have
figuring out whether I should show flowers, keyword ads, florists, targeted ads, et cetera.
The second is ranking. This is the order of the ads that we show where that we show the
highest quality ads at the top of the page and go from there. The next question is promotion.
Promotion is the--is how we figure out which ads to show in the yellow region above the
search results. And we do this when we have the very highest quality ads and we want to
give those ads additional prominence, we--what we do as we promote them to the top of the
page. On the flipside, if we have lower quality ads that we think are not an improvement to
the user experience we'd rather not show, we disable those ads so that we don't show
them to our users at all. And finally, the format, this is what the ad actually looks
like. One of the efforts we've talked about over the--over the course of the past year
is our efforts to--is the fact that on the set of commercial queries, we thought that
in some cases, we weren't showing all the high quality ads that we could be showing.
So this impacts area one here, targeting, as well as number four, disabling. Well, the
observation we made roughly a year ago was that there were--there were queries that we
thought should show ads but for one reason or another weren't showing ads. And the reason
we are worried about this was because from the users' perspective, we really saw that
this was, we are missing out on an opportunity to provide the user with the answer they might
be looking for within our ads. Which is--which isn't good for our businesses, not good for
advertisers but most importantly it's not good for users either if they're not getting
the answer they're looking for. So as a result of this observation we've invested a lot over
the course of the past year to figure out ways to find those high quality ads and make
sure that we're actually displaying them. And as we've said on our--on some of our recent
earnings calls, we've been able to return our coverage levels to what we think are more
historically appropriate level. The amazing thing is, what's amazing to me at least is
that despite increasing the number of ads that we've shown relative to say a year ago,
the quality of our ads has actually improved while we've done this. And this really goes
to the quality systems that we've developed, that we're able to have that kind of a dynamic.
An area that we've recently invested more in and increased our--basically increased
our level of investment in is new ad formats. And Susan spoke about this in some detail
and I'll go into a bunch of demos here. But, the key observation here is that our search
ads have largely looked the same over the course of the past seven or eight or nine
years. They've been a blue link followed by roughly 70 characters of text, followed by
a green URL. And as we've looked at what we've done in Universal Search and a lot of the
work that Johanna and her team have worked on and what Johanna talked about, we've seen
that users respond very well to showing results in a format that's appropriate for the information
they're looking for. Video, thumbnails for videos and apps for local, et cetera. So now
we're looking at how to apply the same philosophy to our search ads as well. So I'm going to
walk through a bunch of demos that give you a flavor of this today but I expect there
to be a lot more of this to come in the months and the years ahead. One thing I would point
out, one thing I would mention is that, um, the demos that I'm going to walk through today
are really the start of this and I think that we're going to see a lot more development
and improvements to this areas as well. So I'm going to do four demos today, I'm going
to start off with site links, then move to videos. From there, go to products and then
I'm going to wrap it up with local. So let's jump right in. I'm going to start with site
links which Johanna talked about from the organic perspective. As Johanna mentioned,
when we know the right site to show for a query the best thing we can do is help the
user figure out where within the site they should go. So let's take a look at this example
of Chevy. Let's say I'm looking to buy a new car. So I do a search on Google for Chevy.
What I can see now in the ad up here, this is the ad up here, but what I can see here
in the ad is that we now show four links below the--below the standard text ad, below the
title and the--and the rest of the standard text ad linking deeper within the Chevrolet
site. So I have a link to Silverado, Malibu, Traverse and Equinox. So say I'm entrusted
in buying the Chevy Malibu. Now what I can do is simply click on the Malibu link and
I can get right to where I want to go without needing to navigate around the Chevrolet site.
What you can see here is that Chevy has actually decided to show different set of links in
their ad than they're showing in their algorithm result below. For example they're showing
a Traverse link that they weren't--that they've--that they weren't showing. What we believe we can
do here is provide advertisers with an ability to really control the branding and promote
the brands that are most important to them by giving them this level of control. And
we've actually made this very easy to do within the new average interface. I'll flip through
another quick--a couple of quick examples here. Here's the example for Expedia Flights,
where Expedia is focusing on flights and vacation packages. Another example for Staples here,
where they're focusing on--for example ink and toner, office supplies, office equipment
et cetera. The business model here is that the advertiser pays a cost per click for any
of the clicks within their ad, whether it's the headline or any of the four deeper links.
And based on initial results we've seen here, we're really excited about the opportunity.
I'm personally particularly excited about the site links launch because we basically
took this from a decision we want to do it in June and then we're able to launch it two
months later in August. So I was--I was particularly happy to see how quickly the team moved to
get this launch out the door. So let's talk about video now. As many of you know the best
way to get information isn't always text. And I believe--my take is that the amazing
success of YouTube has really demonstrated for us that in many cases the best information
is a video. So I've heard a lot about the upcoming movie Fame, the revival of the 1980s
movie. It's coming out in a couple of weeks. So like many of you I may come to Google to
search for the video. So I'm here--here I am, I'm searching for Fame and I see an ad
that's an ad for Fame and now what I can see directly within the ad here is a link to watch
trailer. And if I click on that link right there on the results page, I see a trailer
for the movie Fame. >> You ain't seen the best of me yet. Give
me something now a face to for... >> FOX: So the trailer plays right then and
there in the--in the results page, which is really great because if I'm a user this is
the best thing I can see. This is the best possible piece of information for me if I'm
interested in finding out about the movie Fame. And similarly if I'm a movie studio
this is exactly what I want my audience to see. So it's really a win--it's really a win-win.
This isn't just for movies though. You can also see an example of the videogame Tiger
Woods PGA Tour 10. And again we show it--we show the videogame trailer as well, again
right within--right within the ad. This also works for products--for complex products for
example you might want to see a product demonstration and can work in other areas as well. The business
model here is that the advertiser either pays for a click to their website or more importantly
for a play of their video. So again it's really enabling the advertisers to show the information
that's most useful for them and then--and then also have a business model that aligns
the value that they pay based on the value that they get. So that's video. Let's move
on to products. Let's say I'm looking to go on a trip and I need to buy some luggage.
I need to buy some new--I need to buy a new suitcase. So I come to Google and I search
for suitcases. And for the most part our text ads don't provide all the information that
I really need if I'm looking to buy a suitcase. If I'm looking for a suitcase as Susan mentioned
I'm probably looking--I'm probably interested in a picture of--an image of suitcases, a
picture or maybe prices, maybe some rating information. But let's take a look at this
ad up here for Luggage.com. If I click on show products from this advertiser, I can
actually see right there pictures, prices and descriptions of various certain suitcases.
So I can see very easily which ones might be more interesting to me. Do I want to spend
$36 or do I want to spend $70 or $135 et cetera? I can see size et cetera, all the information
that's useful to me. Well, let's say I'm interested in a Samsonite suitcase. Very easily I can
search for Samsonite suitcases and see just Samsonite results, same thing with Red Luggage.
I can see just red suitcases. So this works very well. This really does provide the information
that the users' looking for, particularly if in the case of products and again we've
seen some very positive results, more early tasks and we're starting to role this out
more broadly. So let's jump to my final example, my final demo is local information. This is
a really important area for us because a lot of information is local. So from a user perspective,
local information is really important. There is also a lot of advertising spend in local,
particularly if you look at things like Yellow Pages et cetera. So there's a couple of things
we do in local that I think are interesting. The first--here's a query for a dentist in
San Francisco. We have this product called the map, a feature called the Maps Plus Box,
which in this local ad I can actually see where this--where this dentist is located
on the map. And I can also see the address and phone number and I can even click to get
directions to this--to this dentist. So it's really providing a much better experience
for this--for this local oriented query. Similarly, if I'm searching on Maps we can do even more.
So in the case of Maps, if I'm searching for a hotel in San Francisco, I can see little
map heads with the advertiser's brand again. They have their own icon as well as--as well
as their--as their branding message there, again with the address and phone number information
and the ability to get directions through Street View and things like that. The other
interesting thing is, as I zoom in the results actually change based on--the advertising
results actually change based on the area that I'm looking at. You can see a hotel that
wasn't showing up before, that's now showing up as result of my--of me panning around on
the map. So that's local. I'm often asked about the opportunity in search advertising.
The typical question I get is, "How much headroom is there? And how we pluck all the low-hanging
fruit?" I believe that this industry, the search advertising industry is still very
much in its infancy and I hope these examples and demos give you a feel for the opportunities
in front of us to make our ads much richer and much better. For example, product information
like images and prices. Local information like addresses, maps and phone numbers, videos
and probably much, much more. And the great thing is, that as we make our ads better,
we actually make our search experience better as well. So in other words, I believe we're
just getting started. So I'm now going to hand it over to Ariel who's going to talk
about the new AdWords Interface. One of the things that's particularly exciting to me
about the new--the new interface is it makes it easier for advertisers to create all these
new formats that I've talked about. So with that, here's Ariel.
>> BARDIN: Thank you, Nick. So, name is Ariel Bardin and I'm a Product Management Director.
I've been at Google about five years now and I've always been working on trying to improve
our tools to help advertisers. Recently, my responsibility was for releasing the new AdWords
interface that Nick mentioned. I'll be talking about what we're doing in AdWords to help
advertisers make better decisions so they can improve their ROI as well as make the
system more efficient so advertisers can do more with less time. On the ROI side, I'll
talk about new tools that help advertisers understand how to bid as well as find new
keywords. On the efficiency side, I'll talk about how we allow advertisers to tell us
what they care about and will alert them when that event happens as well as ad extensions
which is our way of allowing advertisers to leverage all of the formats that Nick just
showed us. Let me start though by giving an overview of AdWords and it's important that
we all put on our marketing hats for a few minutes and think of ourselves as advertisers.
And for the--for this demo, let me pretend that I am the marketing manager for the Google
Store. So this is the Google Store at googlestore.com and as you can see, we have all kinds of amazing
swag here. If you'd like to buy a pen with our logo on it, you can do it here. For the
sake of this demo though, I'm going to talk about notebooks. And let's pretend like my
boss is rather concerned at the sales of our notebooks. So let's take a look at the AdWords
interface and how we use AdWords to actually market our products. So this is the new AdWords
interface. As Susan mentioned, this is the biggest release we've done in the AdWords
front end or the interface since 2003. It's built on completely new technology with two
goals. One is to make the application feel much more like a desktop. As you can see,
I can jump around my account and I'll talk in a moment about the key parts of an account.
But also to allow us to release features quickly. And Nick pointed out that we were able to
make a rapid change starting in June ending in August to support the site links ad format.
So let me just go quickly through what an AdWords account is, assuming that not everybody
on this call actually uses AdWords day in and day out. So as you can see, AdWords accounts
have campaigns. I know that the display's going to be a little bit small, so I'm going
to read what I see here. So we have a campaign for Europe. We've in essence broken out our
account by geographies. Each campaign has a set of ads and you can see that there could
be hundreds of ads here. I'm specifically interested in the notebook because I'm going
to wow my boss. So within each ad you can see that there are a bunch of keywords and
there could be hundreds of keywords. In this case, I'm interested in the Google notebook
keyword. And what's interesting here is that by looking at the account, we can see two
of the important features of AdWords that our advertisers are very excited about. The
first is the accountability of AdWords. You can see that there's a lot of statistics so,
I don't know if everybody can read this but, the Google notebook keyword has received 302
clicks, 10,000 impressions. You can see the cost per click, the total cost, et cetera.
We have the statistics for every keyword for different date ranges. There's a lot of optimization
that can be done with this advertising medium. The second aspect of AdWords is control. I
can pause a campaign. I can pause an ad. I can pause a keyword at anytime. And let me
show you how I can do that. I literally paused a keyword. Within moments, this keyword will
no longer participate in the auctions when users search for Google notebook. So it's
very easy for me as an advertiser to control my spend. Let me just turn that back on because
our real marketers will be annoyed at me if I forget to do that. Another aspect of control
is the ability to bid for keyword and make changes rapidly. So you can easily click on
any bid and make a change. So right now I'm bidding a $1.52, I can bid a $1.53, save it,
and within moments, that's what I'm going to be bidding. Now the question comes up and
this is what my boss is asking me, "Am I bidding correctly for Google notebook?" In the previous
interface, I would have to try different bids and try to answer that question with experimentation,
which obviously with all of these keywords is rather hard to do. What we've recently
introduced is what we're calling the Bid Simulator which Susan mentioned. And what the Bid Simulator
lets me do is see what would have happened in the past for different bid levels for each
keyword in my account. So in this example I'm bidding a $1.52 and I'm getting 315 clicks,
I could bid a $1.83 and get 354 clicks for a total cost of $188. I can certainly lower
my bid as well to 69 cents and it would only cost me $82 to get 281 clicks. So as you can
see, the Bid Simulator is a very powerful tool and very exciting for our advertisers
that allows them to bid optimally based on the tradeoff between clicks and the right
price. Now you've seen that the building blocks of an AdWords account really are keywords.
And Susan mentioned that we work a lot to try to help advertisers find new keywords.
So as a marketer, what I'd really like to do is figure out--you know, when people search
on Google for these different products and our pages show up, what are those keywords
so that I can see what users are doing on Google? And this is what the search-based
keyword tool does. It allows me to see what people are--what users are searching on Google
and how I stack up when those searches happened. So let's think about this for a moment what
will--Search is all about. We have a search index that accepts queries from users. So
for example, somebody could search for wireless headsets and we return a bunch of pages we
feel are relevant. What the team did and this is a team of search and ads engineers, they
basically reversed the process. Instead of going from the user queries to pages, why
don't we go from pages to queries? So you can see here that I've run this tool against
my Google Store and these are all new keywords. There are about 400 of them that I don't have
in my account currently and some of them are very unintuitive. So for example, you can
see here a keyword called beanbag beans. I would never have guessed to add that to my
account, but I can see that this query happened 660 times. I can also see what percentage
of time my ad's shown. So obviously it was zero because I don't have that keyword but
also how many times my page showed up on the first page of the Google Search results. I
can see it's only 2%. So now I've found the keyword that seems relevant to what the user
is searching on. It's only costing 60 cents per click to get on the first page. I might
want to buy that keyword. So advertisers are obviously very excited about this tool, the
search-based keyword tool which provides a new level of transparency into the inventory
that we have in the user queries so that advertisers can improve their ROI. So we talked about
two tools that allow advertisers to improve their ROI but the net changes are changes
to the account. So in one case I might change the bid for my keyword, the Google notebook
keyword. In other case I might add a few new keywords. And obviously I may want to monitor
these changes and make sure that the impact is actually positive in my account. In the
past I'd have to actually login to my account daily and kind of move around in the account
try to find the keywords that I've added, the bids that I've changed, see what the impact
has been. That's obviously not ideal. With the new interface, what we've done is introduced
a whole new alerting system which basically changes the game when it comes to monitoring
my account. So you can see in this example we have a few alerts set up already and they've
triggered. For example, I've set up an alert that triggers if a keyword has a change in
impressions of at least 20% compared to the previous day. So if there are any spikes I
can quickly chop that. What's nice about alerts is instead of advertisers logging in and looking
around and trying to figure out what's going on, advertisers just tell us what they care
about and we'll notify them when the events happen. So let me just show you how easy it
is to set up an alert. And again put on your advertising hat here. So I can alert on different
attributes, for example cost that we talked about. I can also alert on the average positions.
So if I--I'm concerned about competition for my ad and I want to make sure that my ad stays
in a competitive position I can set up an alert for that. So we're talking about cost
though. I can say cost changes 20%. I can compare it to a previous day, maybe a previous
week. I can do it for selected set of keywords. Maybe the keywords I've recently added or
for the whole account. And I can get emails whenever a change in my account happens that
I care about. So using alerts advertisers can spend less time scanning their account
and more time optimizing for their return. So finally let me talk about how advertisers
can use our formats. So, for the sake of discussion let's assume that I've done a really great
job optimizing my account. Our products are flying off the shelves especially those beanbags
that I found that exciting keyword for. Now, our management is aggressive and they want
us to start opening physical locations, many, many different locations. So I heard Nick
talk about our local formats. They look really nice. I can show up on the maps. I can get
my address showing with addresses. Now, in the past I'd have to actually go through every
one of my ads and you can see here that we have literally hundreds of ads in the account
and link each one of these ads to an address. So, that's not the most efficient way of doing
things in that would limit the adoption of new formats. So we've recently introduced
the notion of ad extensions which means that I can pick any campaign I like. I can go to
the settings tab. And in the same way that I could target a specific country I can now
link a set of addresses to my whole campaign, to hundreds of ads at once. I can do this
by providing a user name and password to link to our free product called the Local Business
Center where businesses can give us their addresses to show up on Maps and the AdWords
system can pull those addresses in. I can also add addresses manually. You can also
see that I can put an icon in and you saw those icons on the map in Nick's demo. So,
it's a very, very easy way of giving us information that we can then leverage. So once the address
information is given to us, at runtime we will figure out based on the location of the
user what's the best address to show with the ads. So for example if the user is searching
from San Francisco and we have two stores in San Francisco and New York, we'll pick
the San Francisco store and show that address. Enhance the ad with that address at runtime.
What's exciting about the ads extension is that we asked for a little bit of information,
and you saw that, from advertisers and they can leverage the formats with our ad system
doing the heavy lifting. So advertisers win because it's very easy to set up and try out
these formats, and users win because our ad results become much more compelling. We love
win-win situations. So I've talked a lot about how we're providing tools to help advertisers
optimize their accounts, to provide the most cost effective clicks. But as a marketer I
really want to sell my notebooks. So I care about what happens after the click as well.
I want to improve convergence. And next, Amy will tell us about the tools that we have
to do just that. >> CHANG: Thank you, Ariel. My name is Amy
Chang and I've been with Google for four years now. I've been leading the Google Analytics
Product team for the last three. So Nick has explained what we're doing to continuously
improve our ads quality. And Ariel has shown you where we're really pushing the envelope
on the campaign management side. Let me now round things out by telling you about the
tools we offer advertisers to give more transparency into their ROI. Both Google Analytics and
Google Website Optimizer have come a long way in the last year and we're really seeing
widespread advertiser adoption across geographies, spend and sophistication levels. We're seeing
ad spend also increase as result. So Google Analytics is about what happens after the
click. Once people arrive at the site, what brought the visitor to the site, where did
they go, how long did they stay and finally did they convert? Let's use the Google Store
account which sells Google merchandise to take a closer look. So as you jump into the
interface you see this left-hand side bar which allows you to navigate quickly to the
major areas of reporting. Everyone starts in this customizable drag and drop dashboard
and a lot of people we find come here daily to get a pulse on the health of their site.
The first major section of reporting is about visitors. Who was it that came to your site?
How long are they staying? What language are they using? What browser did they come in
through? Now, this first report here benchmarking gives you more context around the spikes and
the dips in your traffic and tells you, were they specific to your particular site or were
they a more general trend that was seen across your industry vertical for sites of similar
size. The second report here, map overlay, is a critical one because it tells you where
geographically visits are coming from. So you can see here in this heat map coloration
that the densest traffic originators are the United States followed by Mexico, Brazil and
Russia. Now, if I scroll down to the table view here I can see that as a percentage view.
I can see that about 31% of my traffic is coming from the United States with about 10%
from Brazil. Now, if I'm the e-commerce site which the Google Store site is, I'm going
to be curious about revenue. And here I can see the breakdown of revenues, about 86% from
the United States. This would indicate to me under monetization in these other regions.
So I have opportunities for Brazil, Russia, Mexico, India, et cetera to take a look at
the shopping cart and take a look at my translations to figure out where am I losing these people
and why, because obviously there's more sales to be made there. This second major area of
reporting, traffic sources, is a critical one for marketers because it tells people
where their traffic is sourcing from. Is it coming directly to their site or from referring
sites? And if referring sites, who should they be partnering more closely with to drive
more traffic? Or is the traffic coming from Search? And if so, paid or organic search?
If we dive in more closely for a moment to page search, there's a whole AdWords section
here for advertisers who've opted in to pulling their data into the analytics interface. They're
now able to see their campaign matrix like cost per click, click-through rate, et cetera,
against their site engagement metrics and this allows them to better see once the click
arrives at their site how people are engaging. One of the advertiser favorites is this Keyword
Positions Report. And what we've got here is keywords on the left-hand side. I'm going
to choose one and it displays here on the right-hand side of the page the search results
page on Google and the ad slot positions. So I can see here that the top one slot from
the photos that Nick showed is driving 1865 visits. Now, again I'm going to be curious
as to the average time on site, how well are people engaging? And finally the revenue or
transactions and I can see that for each of my keywords here. Moving to the content section,
we don't have time today to jump into this but this is all about what's going inside
of your site. The goals macro section focuses on conversion tracking. The most interesting
report here is likely the Funnel Visualization. For any site that has a shopping cart or any
kind of multi-flow, multi-step flow, we have this Funnel Visualization and what this is
telling me is 207,000 people entered the flow. Half of them left after the first step, after
viewing product categories. But at the very end of the day only 340 actually completed
an order. This is a fairly low conversion rate and it shows us that there's a lot of
opportunity to figure out where people left and where exactly they were going to. Now,
the e-commerce section offers reporting on revenue, average order value, product sales
by skew by product category and much more. If with all in this reporting you still haven't
found precisely what it is you're looking for you can easily drag and drop and create
your own. I've taken the liberty here of starting a template for this--the purposes of this
demonstration. And we can see here, it's really, really simple, just to drag and drop. I can
then go down and preview the report. I can export it; I can email it myself, whatever
I like. The real innovation here though is the ease of use. The feedback that we very
often get from advertisers is we've taken analytics out of the IT department and really
placed it in the hands of marketers and the product folks. And that they're making real
decisions on their campaigns and on their products themselves based on this data. But
we often tell advertisers that all of this analysis isn't enough. You really need to
test and experiment to get the most out of the tools we have to offer. Google Website
Optimizer is the sister product to Google Analytics. With Website Optimizer, advertisers
can test pretty much anything, from layout of the page, different images, headlines,
product descriptions et cetera. Here in this particular test, we've run 30 different variations
on your original landing page. And the original had a conversion rate of about 21.7%, which
is not bad. But we see that the top four combinations here in green yielded between a 43% to 28%
better conversion rate for the advertiser. So when we first started looking at these
variations, our intuition or our gut instinct around which variations would win were actually
dead wrong and you'll find in a lot of cases Website Optimizer is able to take the guesswork
out of the whole campaign management. To summarize then, it really is our goal with all of these
tools to continuously improve transparency and give advertisers the insight they need
to improve their businesses. In helping advertisers figure out what users are looking for we also
help make the Web a better place for all users more generally. It's a virtual cycle that
we plan to continue supporting for a long time to come. And now, please allow me to
return your attention back to Patrick. >> PICHETTE: Thank you Amy. I had promise
you at the front end of this that we had a lot of ground to cover. I think we've done
quite a good job at it and I just want to thank all the presenters for a terrific set
of materials to present to you today. Look, as you can see, it's clear that we are very
excited about our initiatives in Search and in search monetization. I hope you understand
better how Search--it looks easy, but I hope this has helped you understand the complexity
of the entire ecosystem that's at work here. And this is why Google continues to dedicate
an important team of very talented engineers and scientists all working behind the scenes
to put those right results so fast in front of users. In addition, the tools we're building
for our advertisers help us put the right result in front of the--our users when the
right result happen to be an ad too, because an ad is simply another search result but
for a full commercial query. And I also hope that you got a better sense of what we mean
when we say, you know, that Search is a space that's still in its early days and why you
should expect us to invest even more in our core business going forward. So with that,
I'll turn you over to Maria to help us navigate the Q&A section.
>> SHIM: Hi everyone. So as Patrick said, we're going to take a--about a half dozen
questions and if there are any more follow up questions after that I can have circle
back with you. So, I'm looking at the Google moderator page, we're going to take the top
rated questions. So the first question--actually there are two questions here about mobile
monetization and mobile search. So the first question--let's take from Mark Mahaney.
>> PICHETTE: So with that, I'll turn you over to Maria to help us navigate the Q&A section.
>> SHIM: Hi everyone. So as Patrick said, we're going to take a... Oh sorry, I think
we're having some issue. I think--can we--operator, can we turn it over to Mark Mahaney's line?
The Google moderator page, we're going to take... Okay. Maybe we just have some issue
here so I'm going to read Mark's question for him. When can mobile search be a material
part of Google's total queries? What needs to happen for mobile queries to be meaningful?
And then this--the second part which is submitted by Jeff Lindsay is, is mobile search monetization
as effective as it hoped? Today how does it compare with desktop search monetization?
I think we're going to have Susan answer that question.
>> WOJCICKI: Hello? Mobile for Google has been a small but very fast growing segment
that we think is going to be an important part of our monetization and search story
going forward. There are a couple key drivers enabling it to be--to grow in queries and
in revenue and one of them is smart phones. So as smart phones have emerged and are growing
quickly, we see a lot of behavior on the smart phones very similar to on desktop. Google
can also leverage a lot of--some of the--can use the ad formats and some of the targeting
that we've developed for desktop also for mobile. One of the trends though that we've
seen with smart phones is that the usage is different from desktop, so someone who's on
the road can do a search. So it's very complimentary to the desktop experience and it opens up
a new type of queries and new times for searches that we didn't previously have with desktop.
We also see opportunity to really innovate with the format, for example, we just released
Click-to-Call as part of the ad format. So if you're on a phone, you want to--might want
to call the advertiser that has advertised there. So we see opportunity to innovate on
both the ad formats and the targeting. So our advertisers have seen solid results and
we see an opportunity for this to become an important part of our monetization story.
>> SHIM: Okay. Okay. So, the next question is from Doug [INDISTINCT] and I'm wondering
if Doug can actually ask the question on the--on the phone. Doug are you there?
>> We're not showing a Doug connected. >> SHIM: Okay. Okay. That's fine. So the question
is, what did Google see to make it move paid ads more towards the middle of the page from
the right rail? So maybe, Nick can take that question.
>> FOX: So the key observation here--it's a good question but the key observation here
was that--well, actually let me actually [INDISTINCT] by describing the change that Doug is talking
about here. So we made a change a middle of this--in the middle of this quarter where
we had--where we moved the ads from the right-hand side of the page basically just providing
us the right-hand side of the page, more towards the middle of the page, closer to the search
results. And the key observation we had here was that as screens have become wider and
screen resolution has increased our results page had a very large white gulf in the middle
of it, between the search results and the ads. And this appeared to us to be a poor
user experience because users really needed to sort of move back and forth their eyes
between the left and the right to really see the whole page experience. So we thought it
would improve the user experience to move all the content to be closer together. And
we ran our usual battery of tests and analysis on it and it actually turned out--and all
the numbers sort of panned out and confirmed our intuition and it turned out to be a good
launch. And we actually refer to this internally as the hug because the ads are sort of hugging
the search results. >> SHIM: Okay, great. Thanks Nick. Thank you
for bearing with us. This is our first time doing this so, hopefully we're going to get
things right. I think Ben is actually on the line, so third time's a charm. Can we have
Ben Schachter ask his question about coverage levels?
>> SCHACHTER: This is a question for Nick and I'm just wondering, how do you quantitatively
determine the appropriate coverage levels? >> FOX: Hi Ben. The--I don't think of this
as a--as a target number. To be honest, I think of it more as ensuring that we show
the right ads on the right queries. So what we look at isn't just--we do look at certain
numbers in terms of coverage, but what we really look at is a whole bunch of metrics.
The primary one is human evaluation of our ads, which is--it's really the percent of
our ads that are good versus the percent of our ads that are bad as rated by real humans.
And the goal here is to make sure that we're showing as many high quality ads as possible
and as few low quality ads as possible. And that's really the--and that's really sort
of what we look at there. We also look at metrics like click-to-rate and we do look
at coverage to some extent. >> SCHACHTER: Can I--if I can follow up on
that just for one second, you'd mentioned that you're sort of back to historical levels
that you felt were more appropriate. So I'm just wondering sort of how do you--why is
the historical level the more appropriate one and will it change in the future?
>> FOX: I think the historical comment was--it's a comment we've made over the course of the
past six months or so. And I think it was--it was mostly intended as a way of helping folks
outside the company sort of--sort of understand quantitatively where this is, rather than
sort of specifically saying sort of, "Here's how we tactically look at how we optimize
these things internally." >> SHIM: Great. I think we'll take the next
question about Caffeine from George Askew and we'll have Johanna answer the question.
So George, can you ask your question? >> George, your line is open.
>> SHIM: Okay. The question is, please discuss the benefits at the Google Caffeine, the new
search engine architecture, will bring to Google Search. What is the timing of the broad
introduction of Caffeine? Johanna? >> WRIGHT: Sure. Caffeine, I think, is a great
example of our investment and our commitment to improving the search architecture. What
this will enable for our search engineers is more innovation in size, index speed, accuracy,
and comprehensiveness. And as of the rollout date, we're going to roll this out when we're
ready. >> SHIM: Great. Okay. There's another question
from Ben. I think in the interest of time, I'm just going to read the question this time
around. Do you expect non-text based ads to become more meaningful within search results?
I think that might be a question for Nick. >> FOX: So this is Nick. I'll take that question.
I think the answer is yes and hopefully, the examples and demos that I--that I walked through
earlier showed this. I do expect, you know, the--as I said, these are really in their
infancy at the moment, and we're really just getting started with this, right? I do expect
the portion of our ads to grow in terms of the number that have things like videos in
them as well as images and prices and local information. So I really do expect this to
grow over time. In terms of sort of trying to quantify that, I'd rather stay away from
giving sort of specific numbers, but I would say you could sort of look at Universal Search
in terms of sort of thinking about what portion of queries might make sense to have non-text
results because I think that could probably give a fairly good benchmark there.
>> SHIM: Okay. Let's take the next question from--well, I'll read the question from Chris
Quarles. How does the pricing work on these additional ad features? Does it create more
auctions with fewer participants? How do large marketers use them compared to small marketers?
Nick? >> FOX: I think the--in terms of how the pricing
will work, I walked through the pricing on some of these. So for--so for example for
the ad site links example, advertisers pay a cost-per-click within the same auction as
our existing ads. Same--sort of the same thing with the products as well as the videos, these
are all running within the context of the existing auction and the--and to the extent
that the user will use a video rather than click on the headline, that will be--that's
a chargeable event as well. So there aren't major changes in the--in the examples that
I've shown to the pricing model there. You know, it's possible that in the future, the--some
of the newer ad models that we're developing now could involve additional auctions and
things like that, but it is really too early to say what that might look like.
>> SHIM: And I think we'll take one more question. Mark Mahaney is--submitted a question about
what levers can Google pull to help improve CPC growth. I think Patrick will start.
>> PICHETTE: Yes. We'll do a one, two, punch on this one, myself and Nick. I think this
that this is a question that's always asked of us. And I think that the message that we
wanted to send to the audience today is the following. You know, remember that most of
our advertisers or many of them in any case have budgets that they, today, have a tough
time spending with us. They would like to spend more money on Google. And part of the
reason for today's presentation is to show the complexity of what's going on. There are
so many key words you can use. There are so many optimizing that you can do. There--it's
a dynamic world in terms of optimizing. So, what I hopefully demonstrated is the great
tools, the AdWords three tools that have been rolled out, plus all the issues around the
analytics that Amy showed us just demonstrate how much more upside there is for people that
take the time to actually going to the bowels of understanding the dynamics of what's going
on. And from our side at Google, there's obviously--you know, we continue to push for the education
because remember that what we're striving for is the ecosystem to be in balance. The
right ad at the right place and the right format with the innovation that Nick showed
today of what's coming online right--at the right price is a great ROI for the advertiser.
And for the user, it--there--it's answering the question that we're looking for in the
first place. So for us, I think there's--you continue to be tremendously optimistic with
all of what we've presented to you. And--but it's--so it's not only about the CPC but there's
so much more upside. Nick, maybe additional comments on it?
>> FOX: Yes. Just a couple of additional thoughts there. I think, number one is, I think increase
in CPC isn't necessarily a goal. We want advertisers to bid at the level that's appropriate to
them. So we provide tools that provide transparency into our auctions. So for example, the bid
simile that Ariel talked about which is focused on helping advertisers figure out the right
bid, and sometimes that might be an increase in their bid; sometimes it might be in a decrease
in their bid. And then again, what Amy talked about in terms of improving the performance
at their website to the extent that an advertiser can get a much better return on their site
once a click--once a user arrives to their site, they can have much more productive clicks.
And ultimately, if an advertiser can do a better job of converting a click into a conversion,
they're like--they will likely want to bid more for those clicks as well. From sort of
a systems perspective, and ads quality perspective, we don't look at increasing CPC as a goal
of our launches. And in some cases, some of the launches we might do may actually decrease
CPC. So for example, it may be that there's an ad that's a very high quality ad that just
has--that's only worth a penny to the advertiser. You know, take for example a sort of if someone's
selling an MP3 for example or selling a music download, that might just not be worth much
to the advertiser given their margins, but if that's a high quality ad, we want to show
that ad. So it's possible that sort of there are interesting mixed dynamics here. But if
we want to show an additional ad that's a low CPC, that could cost the average CPC to
go down, but it's absolutely the right thing for us to do. So I think it's important to
sort of think about some of the dynamics here with CPC when thinking about the movement
in those metrics. >> SHIM: Great. So, I wanted to thank everybody
for joining us today. I know that you all are very busy, and we'd love to get your feedback.
So please be sure to contact me about feedback, and we'll be talking to you again in October.
So I want to thank all our speakers and thank you all--all the participants today for joining
us and we will talk to you soon.