Selling to Machines: How Search Engines Twist Marketing Strategy

Search engine optimization (SEO) is the go-to business strategy for companies to attract people using sites like Google. Ranking number one on search engines is a competitive advantage, but can it happen without twisting both words and marketing strategy?

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“I don’t read the script. The script reads me.”

(a movie character played by Robert Downey, Jr.)

The first person to read this essay will be a machine. The machine will impudently, implacably, and insistently insert itself between you, human reader, and me, human writer.

Human writers who want to reach human readers need a strategy. That strategy must use a special language to pander to the machine. It is called SEO: search engine optimization. It is a dreadful language. It relies on keywords, i.e., words for which humans might search the Internet. It requires that I make heavy use of key phrases — I repeat, heavy use of key phrases — so that my essay appears particularly relevant, in the machine’s icy judgment, to those who are searching for those key phrases.

The more I please the machine with my heavy use of key phrases, the better my odds of reaching humans like you who want to know about heavy use of key phrases. On the other hand, the process of pleasing the machine with heavy use of key phrases makes my essay less attractive to you, due to its heavy use of key phrases. In other words, the way I help you find me might make you unhappy that you did.

Whether you pay to rank high or make heavy use of key phrases, your position on searches is important if you want people to click to you. A study from SearchEngineWatch.com shows that the top position in Google searches gets 33% of the traffic. Second place gets 18%. That’s almost a two-to-one advantage. Third place gets 11%.

Here’s what that could mean. If product A and product B were identical every way, and product A managed to get the top spot and product B got the second spot, we’d expect product A to get almost double the traffic of product B. That’s got to translate to a serious sales opportunity unless product A has a massively miserable website.

Because you’re either number one or you’re not, and because being number one is especially valuable due to the traffic advantage, SEOs effectively raise the stakes in the competitive-strategy prisoner’s dilemma known as advertising. The payoff for “winning” the dilemma is higher than ever, which makes it worthwhile — rational, in the game-theory sense — to spend more than ever. Just like your competitors.

(Speaking of winning: you can experience the heady thrill of competing in a competitive-strategy tournament. See details in the middle of Make Critical Business Decisions Quantitatively, 97.3% of Quants Say. Free, non-commercial, and confidential. Also, no heavy use of key phrases.)

Let’s illustrate how search engines twist marketing strategy relative to, say, television advertising.

Say BMW buys 51% of all car ads on TV and Mercedes buys the remaining 49%. If so, then a given person tuning in at a given time is slightly more likely to see a BMW ad than a Mercedes ad, but only slightly.

With search-engine rankings, everyone sees the companies in the same order, by definition. BMW might be ranked #1 by a tiny margin over Mercedes, the equivalent of 51/49, but it will get almost double the traffic.

Unless good data prove otherwise, it’s reasonable to conclude that squeaking into #1 with the search engines is worth a lot more than squeaking into being the #1 advertiser on TV. It would be as though you have to watch BMW’s ad before you can see Mercedes’. That’s why winning the search-engine dilemma is worth more than winning the TV dilemma.

By the way, non-SEO rankings exist in business. Formularies consist of the drugs covered by health insurers. Placement in a higher “tier” in the formulary is similar to ranking higher with search engines: the drug gets considered before, and more often, than those in lower tiers. You get into a higher tier through clinical advantages and low price, not heavy use of key phrases.

Those effects will creep up on us as human customers buy more from machines. Just for comparison, the 2013 Fortune 500 shows Amazon.com with $61 billion in revenue while Walmart pulled in $469 billion, of which only a small fraction came online.

As we bid farewell to the 51/49 gradations of analog-world marketing and live evermore with digital-world #1, #2, #3 rankings, we might ask:

  • Will search-engine traffic differences translate proportionately to sales differences? Maybe even more than proportionately?
  • Like the formularies, will it grow increasingly difficult to break onto page one and increasingly unlikely to fall off page one? (See also The First-Tagger Advantage.) How will market entrants overcome such an obstacle? Will markets consolidate and even ossify?
  • Will there be no place devoid of someone’s effort to catch your eye or ear?
  • Will machines learn what humans actually like, as opposed to what they look for? In other words, will search engines reflect what people buy, not just what they seek?
  • If humans are dissatisfied with what search engines feed us, what will we eat instead?

As for me, I’m not taking any chances. I’m cornering the market on the key phrase “heavy use of key phrases.” I’m not sure if that’s a joke or a defeat.

Who was the first vice president of the United States?

 

What other areas are currently changing because of SEO business strategies? Will the stakes get higher (and more expensive) for a competitive advantage through search results? Share your thoughts in the comments below.

About the author  ⁄ Mark Chussil

MARK CHUSSIL is founder & CEO of Advanced Competitive Strategies, Inc., and, with Benjamin Gilad, a cofounder and partner of Sync Strategy. He has conducted business war games, built custom strategy simulators, and taught workshops on strategic thinking for dozens of Fortune 500 companies on six continents, resulting in billions of dollars made or saved.

A pioneer in quantitative business war games and a highly rated speaker, he has 35 years of experience in competitive strategy. One of his simulation technologies has won a patent; a patent is pending on another. He has written three books, chapters for five others, and numerous articles.

He has been quoted in Fast Company, Harvard Management Update, The New York Times, The Wall Street Journal, and elsewhere. He received the Fellows Award from the Strategic and Competitive Intelligence Professionals society in 2013. He earned his MBA at Harvard University and his BA at Yale University.

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