SAN FRANCISCO (AdAge.com) -- It's hard to believe that search ads barely existed 10 years ago. Today, some of the biggest global brands spend millions every month just to have their ads appear in Google search. As Ad Age reported earlier this year, companies that spend more than $1 million each in a month on Google search include AT&T, EBay, Amazon and Expedia.
For most of the last decade, Nick Fox has methodically run the search ads operation and worked on the algorithm that provides relevant ads to users. His team is also responsible for ad quality and hands out the dreaded "Google slap" -- a legendary ban on using AdWords if a marketer breaks too many rules. A geek's geek with a keen sense for numbers and an aversion to hyperbole, Mr. Fox graduated from Harvard with an economics degree in 2001 and works closely with colleague Hal Varian, one of America's top economists.
Born in England and living in the U.S. since age 6, Mr. Fox gracefully avoids the precious fascination with his own nerdiness that many of today's young geekstars have. He is a true Googler, dedicated to the bottom line as well as the party line of "our users come first." Ad Age had a chance to speak to Mr. Fox on the occasion of the 10-year anniversary of AdWords.
Ad Age: Does advertising ever influence organic search results?
Mr. Fox: Absolutely not. Google's organic search results are focused solely on showing the best results to our users and are completely independent of Google's advertising relationships. And we always clearly label what is advertising and what is not.
Ad Age: With search moving all over, and new competition from Microsoft's Bing, how do you evolve the ads to keep up?
Mr. Fox: The explosion of content on the web makes search interesting. So if you are searching for a product -- let's say a Blu-ray player -- you want to see prices, pictures and features, so we are trying to make the ads much richer. In some way, that fact changes what we need to do for a quality perspective. Are there different behaviors we should understand in terms of when the user is telling us if this kind of ad is good or not? But the building block and the core of all our quality systems [i.e., capturing the voice of the user] -- that building block is the click-through rate. If they click, the ad is good. If they don't click, the ad is not good.
Ad Age: What happens as search grows on mobile devices, like phones or tablet computers?
Mr. Fox: Search advertising on the Android is similar to the desktop, but there are some additional opportunities. The big thing we found on Android is how the "click to call" feature has taken off. You click the ad and make a call and speak directly to the advertiser. It works incredibly well on the mobile phone. If you look at some of our top queries for cable TV or security systems, the user want to get on the phone as quickly as possible with those kinds of advertisers. Click to call is great for users, and it's great for those advertisers -- a live person talking on the phone is the most effective way for the advertiser to make a sale.
Ad Age: Has Google made any changes to quality scoring recently?
Mr. Fox: We're constantly improving our ads quality systems to make them more accurately reflect what users are telling us about our ads. The majority of these changes are individually quite small. A fairly large recent change was related to how our algorithms determine which ads to show on "next" pages [the search pages that show results 11 and on]. We now enable extremely high-quality ads from page one to show again on page two and thereafter, whereas previously, perhaps lower quality ads would have been displayed instead.
Ad Age: It appears there are still many arbitrageurs on Google, which seems to hurt the search experience. Will there be any moves to improving the weight of branded results?
Mr. Fox: A few years ago, we received many complaints from our users about low-quality AdWords arbitrage. These were ads that would simply link to another page of ads, with no value-added content. Since then, we've implemented policies against the practice, and these ads are now far less common. But we continue to be vigilant about it. We don't provide any artificial boost to brand name advertisers in AdWords. However, brands do tend to resonate with our users, so these ads tend to have higher click-through rates and therefore higher rankings. We prefer that our users decide how important a brand is, and our system will simply respond to that.
Ad Age: How does real-time information like Twitter or Facebook updates factor into search in new ways?
Mr. Fox: We've made two huge improvements in this realm this year; one, called Caffeine, a system improvement that made our index of web content 50% fresher. The other was the launch of Realtime Search, which gives people access to the vast array of content that's being produced every second as it goes live. If you're looking for information on a breaking news story or new trend, the last thing you want is dated material, so these are both big advancements in relevance.
Ad Age: Google Instant has been live for over a month now. What kinds of changes have you seen in people's search behavior?
Mr. Fox: What's been great about Instant is that it helps users get the right answers to their questions, just a lot faster. The mix of searches we see has stayed extremely stable since we launched in September.
Ad Age: What are the important metrics for measuring the impact of Google Instant?
Mr. Fox: We've been measuring the effect on a number of metrics, such as how long it takes a user to complete a search and various metrics of how users are interacting with the search box and the search page. We're very happy with what we're seeing with Instant and believe it's a huge leap forward in search.
Ad Age: Is Facebook your competition?
Mr. Fox: Users come to Google saying "I'm looking for flowers." Users will continue to do that. There's clearly a value to the social signal, and that value comes from recommending things -- so knowing that my friends like a certain thing is valuable. What you're likely to see is Google incorporating this notion of recommendation into the advertising perspective. For example, if we let you know that among people who search for flowers 90% of them clicked on this ad or 10 people you know clicked on that ad. The core of all this is to do it with a user's permission.
Ad Age: Does Google have a monopoly on search advertising?
Mr. Fox: The competition is always just a click away. If we don't provide the best experience. Our view is that search is highly competitive.