Vinny Lingham's Blog

So, I’m finally back in Cape Town and after this trip, I realised that this year has been most productive for me with regard to consumption of printed matter! I have a very select group of books that I’m currently reading and have read over the past 12-18 months, so I’m going to share this list with you. I will post reviews from time to time, but this is a nice consolidated view, with links to the books on Amazon:

The Long Tail – Chris Anderson

The long tail covers the impact of the Internet on the costs of production and distribution and what the future might hold for niche products vs mass consumerism. I’ll be posting a full review of this book over the next weekend – I found it fascinating, and a must read, although certain portions of the book are slow, as the point is reiterated.
Blink & The Tipping Point – Malcom Gladwell

These two are a must read, two totally different pieces of work, however they do correlate. Blink discusses the ability of experts to instinctively deduce conclusions by thin slicing data (a skill that many of us would cherish) and the Tipping Point discusses how when society begins to embrace a product/servce/website, it needs to achieve a certain critical mass in order to go mainstream.

The World is Flat – Thomas Friedman

incuBeta is a South African based company which delivers world class software solutions and services, and where we earn all of our revenues in foreign markets and create jobs locally using the world as our playground. This book discusses how companies like ours is now able to participate in the global economy, regardless of our geographic location and slant. We obviously do have smaller offices in other countries, however the bulk of work is done in Cape Town.

The Widsom of Crowds – James Surowiecki

I have only just begun reading this book, however it’s quite apparent that the insights provided so far are very advanced. The sub title says it all: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations.

The Search – John Battelle

This is the quintessential “State of the Search Nation” book which, if you’re a newcomer, is a must read. It basically explains how we got to where we are today, and what a hypothetical path forward is. Well researched, although, John has come under criticism lately for admitting to never having even used Google Adwords until recently, after the book was published. Nevertheless, still a great book.

Freakonomics – Steven D. Levitt and Stephen J. Dubner

This was a seriously open view of the world! Examining things like, why drug dealers live with their Moms and the social ramifications of Roe vs Wade – this is a highly recommended and easy read.

Ahh, fantastic news – now everyone can just shut up and get on with things. Google just announced that they will now provide advertisers with data about how many clicks are credited back. In our experience, we see about 5%-10% invalid clicks across all our campaigns from Google – it’s very low, and we factor it into our ROI calcs – and in most cases, this range is possibly server errors, not relating to Google. I honestly believe that people make too much of a fuss about it.

The other thing about this reporting is that is doesn’t do an impact calculation on the higher CTR’s on the ad, and how much discount the merchant received on good clicks. Confused? Here is a scenario:

You get 100 “good clicks” on 1000 impressions – 10% CTR – at $1 CPC the bill is $100.
Click “Fraud” occurs and you get another 50 clicks within the next 1000 impressions – (100+50=150=15% CTR).

Higher CTR=Lower CPC = 75c (example) = $112.50 = Net cost impact of $12.50.

So in the scenario above, Google’s CTR discounter allows you to only pay $12.50 – so a 50% increase in clicks from “fraud” would only lead to a 12.5% increase in costs which is negligible, given the ratios.

For this reason, I’m not convinced that Advertisers are out of pocket as much as they claim. Any other views?

Although these are sample numbers – we have similar data to back it up.

A friend of mine is doing his Masters research into why most companies ultimately never last due to social networking inhibitors (or something like that). I highly recommend that you follow his blog and keep up with it as he unveils more and more research and also contribute where possible. He is looking for people to comment and provide ideas and concepts, similar to what has been done with guys like John Battelle & Chris Anderson, when they wrote their books.
He is clearly one of the most intelligent people I’ve ever met, and a Co-Founder of incuBeta (who subsequently exited to further his studies with this Masters Thesis).

His blog is located here.

There is much consternation over Google’s latest changes to their algorithm with many affiliates and merchants alike complaining as much as they complained in the Florida update of 2004!

I’ve had quite a few emails and chats requesting my views on the topics, so without further ado, here it is!

I’m going to cut to the chase here and shoot from the hip – and if I offend anyone – well, I guess you just need to face hard facts!

Who is being affected by the latest changes?

1. Merchants who have an affiliate strategy of having affiliates use multiple display URL’s with single page landing pages, designed to take up extra ads on a designated set of keywords.

2. Affiliates using these landing pages with thin content on their site.

3. Click arbitrage sites (buying Adwords clicks and landing them on Adsense Pages).

4. Merchants who are using close minded, uninformed, poorly equipped internal SEM teams and/or external SEM companies who insist that affiliates should not bid on display URL’s.

5. Advertisers which use poor quality landing pages, which are not relevant to the keywords, to buy thousands of clicks at low CPC’s.

Probably some others there that I haven’t even though of! So who is not being affected?

1. Companies that focus on relevancy.

2. Paid Search Affiliates who drive traffic directly, using direct links from Google.

3. Merchants who understand search and consider Paid Search Affiliates as part of the search channel.

4. Affiliates who are not reliant on thin sites & low quality landing pages.

5. Search marketers who are able to manage large portfolios of keywords and deep link within sites.
I’m currently in San Jose, having just returned from Affiliate Summit & CJ UK. What struck me the most out of the conferences was that the market is slowly shifting back to letting high performance search marketers who are capable of managing far more keywords than any traditional new media or search agency (1m+) on a risk basis, receive the same status as the search agency in terms of payout, trademark usage & display URL usage. It’s pretty well known that when Google released the affiliate display URL policy, the market took a knee-jerk reaction and blocked the usage of the display URL from affiliates – however the smart companies that did not, like eBay, Amazon, RealNetworks, etc, benefited tremendously from their paid search affiliate programs over the past 18 months – to the detriment of their competitors. The market is moving to PERFORMANCE SEARCH MARKETING!

Every time I meet with an online merchant – I practically always hear complaints about their Search Agency not marketing the tail adequately and just relying on brand bidding. I’m halfway through the book, The Long Tail, by Chris Anderson and I’ll post a review shortly, but the crux is that traditional search marketers which focus on less than 10,000 keywords, tend to under-deliver the potential of search marketing for their clientss.

Google’s recent changes around rebates in foreign markets (Europe, AU), will see a number of search agencies go under, in my opinion, as the loss of this important source of revenue for them will lead to them having to bill the client even more. This really pushes the search marketing affiliates into the game, as they offer a far better value proposition – no risk for the client and a will to succeed because it’s their own money at risk.
It’s time that people take a step back and observe. Google is making changes in the best interest of the user. They want one ad per page per merchant – not a lot of jump pages leading back to the same merchant. Rather use a few trusted high powered search affiliates and/or an agency and try to get to #1 on every keyword, than trying to dupe Google to get more landscape – you will always lose in the end if you try!

I attended CJU UK yesterday (after that Red Eye flight from Orlando on Tuesday) to attend the Commission Junction UK Conference in London, with Joanne Shapiro, who runs our UK operations and account management. I’m very pleased to annouce that we received the Commission Junction UK 2006 Award for Leadership in Innovation.

I also spoke at the final session on “The Future of Online Marketing”, and Linus from e-Consultancy covered this topic and more from the event on their blog.