John Akerson's Thoughts

Business, technology and life

Harvesting Intent vs Harvesting Action

One of the most difficult things to do in business and in life, is to Sell. It doesn’t matter what, or why, or where, or in what context, or even to whom.  It is very difficult to sell because under almost all circumstances, when you sell something, you are getting someone to pay for something. They are paying with currency, with time, with attention, with something that they already value. That payment has existing and perhaps intrinsic value to them, but the thing they are buying, or buying into – it only has potential value.  At its heart, the act of selling, is giving someone the confidence that the value they will receive equals or exceeds the value they are voluntarily giving up. To sell someone requires that they have faith.  That is the singular reason why it is difficult. You are getting someone to give something that they know is already their hand for something that might be in a bush.

Mark Cuban recently wrote an insightful article asking “Why have so many internet people lost touch with reality.”   His point, distilled to a sentence was: “Content changes, the value of content changes, and those changes require reevaluations of where value comes from and  the business models that harvest that value  – and some executives don’t understand.”   He was discussing the value of search, the value of information, the value of aggregation – and how, when those values shift, it is important to keep up.  Competitive advantage and value is available for people who read the tealeaves of the changing internet accurately – with regard to content quality, information, aggregation search and sales. With regards to content, that means finding the value at the intersection of these qualities:

(a) timely, intelligent, reliable content
(b) thoughtful management of that content
(c) structure that is helpful, useful and functional
(d) interested users (information consumers)
(e) unique elements

I think that interesting, deep thought in people who can eloquently communicate is nearly extinct. So it is a winning formula to find a way that information consumers can reliably find useful, functional, intelligent unique content, services or products when they need it.  The reason it is important to give consumers that sort of information was aptly described by Jonathan Schwartz (the former Sun CEO who playfully resigned via haiku) wrote this in his blog:

“why is the search business so valuable? Because it’s an exceptionally efficient means of harvesting intentionality – if a consumer is searching for “flights to Cairo,” the odds are good she’s in the market for a trip to Egypt. That intent represents a ton of value for the airlines, hotel chains and car rental companies that serve travelers to Egypt. Whoever first recognizes that intent can broker a relationship between the traveler and those businesses, and charge a healthy toll for the privilege (that’s the heart of on-line advertising). A discount airfare to Cairo, presented alongside the results of a “flights to Cairo” search, has a far higher likelihoodof generating a ticket purchase than an unqualified billboard or ad in a newspaper. It’s easier to find needles in haystacks when the haystacks are sorted by needle count.”a big needle in a Haystack

I love his idea of sorting haystacks to find needles and his concept of harvesting intentionality… Search is a great business because it is constantly evolving and constantly producing value.  It is one of the many ever-changing things about the internet. There have been search leadership changes since the internet was created – and at various times the quantity of total search has gone to various search engines. I’ve personally gone from AltaVista, Yahoo, to Google, and over the years used at least a dozen other engines and aggregators – Excite, Hotbot, Dogpile, and many others.

There are two constants to search engines:

1) It is ENORMOUSLY easier to discuss and theorize about “sorting haystacks by needle count” than to it is to actually sort them. 
2) Although it is easier to find needles in haystacks when you can sort the haystacks by needle count – the easiest way to find a needle in a haystack is to have a great big powerful magnet in a world of great big metallic needles and non-metallic hay.magnet

For a consumer trying to find something, search gives an idea of which haystacks might have needles. But from the search engine company’s perspective, we live in a world where haystacks are consumers, and needles equate to a really nebulous “purchasing-intentionality.”   Jonathan Schwartz discussed harvesting them. Mark Cuban discussed harvesting them. Google, currently, is harvesting that as well as anyone because they have a sort of magnetic control. (and a >85% market share)

Mr. Schwartz was correct in pointing out that people searching for “flights to Cairo” are probably considering a trip to Egypt… but he could have gone further and added that people searching on weather forcast in Cairo might also be interested in that trip. There are long lists of haystack sort algorithms that come from search engine activity. Advertisers, marketers and SEO experts and savvy business people have analyzed tha for yars. How about “hotel reviews in Cairo” or Searches for Egypt Air CAI”. Getting access to this sort of intent enables Google and Bing to harvest the intent.

The intent, however,  is not the sale. The intent is not the trip, or the purchase.  So – what is MY point?

Harvesting intent has amazing value, but harvesting action is a more valuable objective. Harvesting interest is great, but businesses wants results. A business wants to harvest sales. The closer the intent is to the action, the more intrinsic value that intent has. Bing has named itself a “decision engine” because they want to be closer to the action than the intent. If they can produce on that, their data will grow exponentially. From the reverse perspective, if Google or any other SEARCH engine really wants to maximize the revenue from their search data (to clearly enumerate how organized their haystacks are)  they need to get more ingrained in the entire purchase process. Bing is investing in that process now, and Yahoo has had an internal shopping site for years.  It seems a missed opportunity that the data from years of running Yahoo’s shopping site doesn’t seem to have given Yahoo any significant competitive advantage.

Microsoft’s failure to acquire the complete Yahoo, although not necessarily a good thing for Microsoft if it would have been completed at the astonishing $44 billion that they first offered, ultimately means that Microsoft can’t use Yahoo’s internal data. As a condition of Microsoft’s agreement with Yahoo,

“The agreement protects consumer privacy by limiting the data shared between the companies to the minimum necessary to operate and improve the combined search platform, and restricts the use of search data shared between the companies. The agreement maintains the industry-leading privacy practices that each company follows today.”

Microsoft wants Bing to be a decision engine. Why call it that? To me, that subtitle suggests an engine for harvesting decisions –words for harvesting action. They probably wanted Yahoo’s data to provide magnetism to their Bing. Not having that data doesn’t mean they can’t give Bing that quality, that value, that ability – but they must still transparently, logically, clearly and reliably aggregate activity, and more clearly connect search activity to harvesting intent to predicting and facilitating sales. That will be serious paradigm shift.  I almost named this entry “When a piece of metal hits a magnet it makes a “Bing” sound.”  That may yet be a more appropriate title.  It will be important to keep up with the changes, going forward.

What do you think?  Drop me a note.

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February 5, 2010 - Posted by | Business, Competitive Advantage

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