May 20, 2013: Edward Snowden computer analyst for CIA leaked classified information which revealed several global surveillance programs run by the NSA and the other agencies.
From that moment on, privacy became a significant concern on the web. Not by chance, a search engine, called DuckDuckGo, which focused on privacy started to grow even faster than it did in the previous five years since its foundation.
Before we move forward let me give you some basic notions of Google’s business model, which will help you understand why search engines work the way they do.
Google’s business model in a nutshell
When you search for something on Google, the search terms you input get sent over to the websites where you clicked through. A professional SEO knows how valuable those search terms are.
Those search terms you type, in SEO jargon, are called keywords. A keyword can make or break a business. In fact, keywords are used by companies to market their products or services. That is also how Google makes most of its revenue. In 2016 88% of Google’s revenues came from advertising.
Indeed, Google has an advertising network called AdWords, which allows businesses that want to sponsor their products or services to bid on keywords. Therefore companies pay to be displayed by the search engine when showing results to a user query.
Companies that advertise only pay when a user click on the sponsored link, the so-called cost-per-click (CPC). A click can cost as low as $2. However, some keywords such as “insurance” or long-tail keywords (questions-like queries) such as “auto insurance price quotes” can cost as much as $54.91. In short, AdWords is the place where businesses go to promote their products or services on the web.
However, there is another ad network, called AdSense that allows publishers to monetize their content. In fact, if those sites agree to be part of the AdSense network, they can host banners or ads from the companies part of the AdWords network.
Based on the audience of the site, Google displays targeted ads. Publishers get paid for every thousand impressions. That is called Cost Per Mille (CPM) or Cost Per Thousand (Mille is the Roman numeral for a thousand).
To summarise AdWords and AdSense are two advertising networks where businesses pay to get sponsored, and publishers offer their (web)space to monetize their content.
To use a euphemism, Google has transformed the web into a giant marketplace.
|Ad Revenues in bln $
|Google Network' Members Properties
|Total Ad Revenues
Source: Alphabet 10-K for 2016
A quick glance into Google's revenue breakdown shows us that 80% of the revenues come mostly from AdWords; while 20% of its revenues come primarily from AdSense.
Also, Google spent about six billion dollars as of 2016 as traffic acquisition costs for its properties; while it spent almost eleven billions as traffic acquisition costs related to the network' members properties. Therefore, its margins are about 81% on its properties and 30% on the network' members properties.
In conclusion, Google's margins are way higher on AdWords than AdSense. Yet we'll see why AdSense plays a critical strategic role.
After understanding Google's business model, we can also understand a few things regarding the future developments of the search engine.
Given the business model of Google. Its logic is simple and it follows three strategies:
- Make as many people click on those ads
- Offer search results quickly and reliably
- Guarantee that search results also include non-paid ads, the so-called organic traffic
The first two points directly affect the bottom line of the company. The third is more strategic yet as important as the first two. In fact, for Google to be credible as a brand it has to make sure to offer results which aren't sponsored.
However, as we saw Google also makes money from ads shown on websites part of the AdSense program. Even though the margins are way lower than AdWords (30% against 81%) the sites, part of AdSense play a key role in Google's overall strategy.
In fact, those websites produce content used by Google to answer users’ queries, therefore attract even more habitual users. That same content gets analyzed by the search engine (through Google Analytics) to see how users experience and engage with it. That makes Google search algorithms’ even better at understanding the difference between good and bad content.
After learning how the business model affects the product development, we can see also why for a search engine the Hooked Model is a bit counterintuitive.
A counterintuitive Hooked Model
We barely think of search engines as something that can hook us. They get built like a sort of middle world, which connects the real world to the places on the web where the answer we’re looking for is.
Google today is the most visited website in the world.
However, the logic of a search engine is a bit different from other sites. Websites, in general, want you to spend time on them. Google does not. In fact, as we saw the speed of results is one of the crucial aspects in Google success.
We also want it to be reliable so that we know that the information we find through it is authoritative. That is why Google shows content from websites that are not paying it. Finally, even though Google makes most of its money from paid ads, users put up with it because in any case, the quality of results they get is far superior compared to many other search engines.
That is why till recently I thought that the Hooked Model for a search engine was a bit counterintuitive. The search engine able to make us spend less time in it won it all. Until I started to use and be hooked by another search engine, called DuckDuckGo.
Throughout the article, we saw how Google base its success on its ability to show targeted ads. Those ads are often based on the user search history. That causes a so-called search leakage. In short, information related to the user (like its HTTP referrer header) gets passed to third parties (governments and marketers, just to mention a few) that can use it to promote their products or services.
DuckDuckGo, instead, doesn't track its users by avoiding that search leakage.
I want to show you how this search engine is using, in my opinion, the Hooked Model to speed up its growth.
Internal Trigger: When privacy propels growth
Privacy is now a primary concern for everyone. That is how most of the people get acquainted with DuckDuckGo. In a way or another you see a tweet like this one:
Therefore, a tweet, post or email is the external trigger, which connects to an intimate worry, an internal trigger, about privacy on the web. That is how you feel compelled to try out DuckDuckGo.
Action: This ain’t Google but wait a minute
The first time you start using DuckDuckGo (DDG) the impression is clear, “this ain’t Google.” However, you realize that Google got us used so much to the way it works, that thinking about an alternative is hard. Not by chance when you’re looking for something through the web, you google it!
That is counterintuitive too. Because we think of a search engine as something that has a minimal UI so that you barely notice it. That is subtle because that minimal UI is designed to make the search engine more appealing.
However, before leaving DDG, you wait a minute longer. Privacy is something important. When you start submitting queries, you realize that the results you get are pretty good and in many cases as good as the ones you get from Google. In fact, DDG is a hybrid engine. In short, it uses APIs from other search engines mixed with its crawlers (mainly for maintenance purposes) and an additional layer of intelligence to give back quality results.
When you start using it something unexpected happens.
Variable Reward: Let me build my engine
DuckDuckGo has a set of built-in features that work pretty well. From instant answers (the equivalent of Google's featured snippet) to bangs (a feature that allows you to access sites without being tracked), those elements make DDG an excellent search engine. Also, while on Google results are organized in pages. On DDG there is an infinite scrolling that allows you to go from first to last search result like you're on the same page. Last but not least, DDG enables a level of customization of the UI, which makes you feel you own it.
Once you start using it more often, you almost feel hooked. In fact, you start investing more time to make it yours.
Investment: The open source model
DDG business model is peculiar to a search engine. In fact, while Google keeps most of its projects as secretive as possible. DDG leverages on the community of developers to let them contribute to its growth.
In fact, on GitHub (think of it as a social network for developers) you can give your contribution to fixing bugs, and improve features.
Thanks to the community of developers, DDG becomes better and better each day.
That is the Ikea Effect in action (a bias that makes you place disproportionately higher value on product or services you helped to build). In fact, those people become the most enthusiast supporters and ambassadors.
They also end up to invite more people. That is how the circle of the hook framework gets fuelled.
Connecting the dots
Usually, we think of search engines not in the category of products or services that can hook us. Why? The way they hook us is counterintuitive. In fact, the paradox is that Google hooks you by making its UI minimal. However, that is not what another search engine, called DuckDuckGo does.
In fact, DDG leverages on its community of supporters to spread the message. Usually, this message arrives in the form of a tweet, post, or email. It addresses a critical internal trigger: privacy online.
Once you’re in, you realize that DDG works pretty well. At the same time, you feel rewarded when you find out the level of customization that its UI allows you to build. You almost feel like it's yours too. That is how you start investing more time into the community and if you are a developer help to fix bugs and improve its features. You also become the most passionate ambassador. That is the Hook Framework in action.
Are you ready? Duck it!