Sizing up the search marketing regulation debate

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Last month, TechCrunch published an anonymous post, "The time has come to regulate search engine marketing and SEO." The author — described as a well-known executive at one of the largest sites on the Internet — made an appeal to the government to regulate both Google and the search engine marketing industry. While general consensus was that the argument was flawed, the public response was significant. Statements and accusations flew back and forth in the comments section of the post, as well as across the Web. Now that the dust has settled a bit, contributing editor Sara Holoubek reached out to a few industry leaders to separate fact from fiction, with the end goal of informing direct marketers how best to interpret the key points.

The game of monopoly

To boil it down, the post asserts that Google is exhibiting monopolistic behavior, both the publishers and the agencies that offer SEO and pay-per-click services need to be regulated, and that algorithm transparency is the answer.

On the first challenge, AdAge and Wired magazines also raised the monopoly issue recently, albeit with a more macro lens. In the context of the TechCrunch post, the issue focused more specifically on the tactical aspects of search engine marketing. Interestingly, when asked to comment on whether Google is exhibiting monopolistic behavior, experts I approached were not terribly bothered by Google's dominant position. In fact, most perceived it as an earned share and not an illegal monopoly. 

“Google controls the fates of many businesses, as did the Hearst Publishing empire. It's a by-product of a free market,” said Gord Hotchkiss, CEO of Enquiro. Bill Hunt, founder of Global Strategies International responded in a similar fashion, “As they should, since they have earned the right to exploit it.”

Another executive, Rand Fishkin, CEO of Seomoz, also noted that “monopolistic behavior is hard to avoid given the incentives of public companies in the United States.”

Rules of the game

More controversial than a blanket monopoly statement was the author's rationale for publisher and agency regulation. The argument bundled multiple issues in a fashion that could cause confusion.

The first point, that organic ranking is determined by uncontrolled factors and is shrouded in secrecy, didn't seem to bother Fishkin, who noted, “I don't see how this ties to an argument for regulation. The weather forecasting industry also changes frequently and remains largely undefined - does it need more regulation?”

Hunt made a similar comparison, noting that stock traders also operate in a similar environment. He joked, “Let's hold a hearing to get Colonel Sanders in there to divulge the mix of 11 herbs and spices [KFC] uses too, and the formula for Coke while we are at it.” 

The second point, that “rules on each [PPC] account are arbitrary,” was considered a sweeping generalization by Melanie Mitchell, SVP of search strategy at Digitas.

“They are not arbitrary,” she said. “Google, Yahoo, Bing and other search engines have and do shut down accounts for a variety of reasons, mostly stemming from making sure they are delivering the most relevant results to their users.”

She suggests that poor-performing account holders examine their keywords and ad copy to see how relevant they really are for the query at hand.

The third point, that “any company that falls out of favor with Google, whether for reasons of bad practice or simple disagreement, can find itself at risk of going out of business,” is viewed as “fiction” by many experts.

“Plenty of companies that have 'fallen out of favor' succeed dramatically in both search rankings and financially," said Fishkin. “Examples include, but are certainly not limited to, Yahoo, Microsoft, Expedia, eBay, Text-Link-Ads and BMW, all of which have done things Google wished they had not and yet none of whom have been ‘put out of business' because of it,” he said.

Mitchell also pointed out the issue of consumer choice was absent from the post. “Yes, we know that Google is a dominant force in the search space today,” said Mitchell. “But it is not because they chose us. We chose them.” Mitchell noted that she personally uses multiple search engines.

Transparency

The final point, that algorithm transparency is the best response, elicited the same response across the board: the more transparent the algorithm, the more likely it is that “black hat” SEOs will engage in unethical behavior. It probably didn't help that the post was anonymous. Mitchell noted, “I want to comment on the obvious irony that this was an anonymous post in TechCrunch about transparency.”

Mitchell also gave the article some credit. “The ‘pro' of this article is that it brought about the discussion of ‘yes, there are flaws the search industry as there are with many industries, but does this mean it needs to be regulated?'” Mitchell's answer is no.

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