Digital Signage: The Fallacy of a Superior Software

Posted by on Mar 14, 2011 in Advertising

Recently I met with Conrad Saam, a highly intense and capable search marketing expert. We spoke at length about some of his work at AVVO, a comprehensive directory for Lawyers and Doctors. He is currently their head of marketing and is an avid writer on some of the Internet’s most trafficked sites and blogs. Recently he wrote a post which hit the blogosphere and created an intense amount of buzz and chatter (you know, the who tweet and retweet type of stuff). The title of his post was: “Google vs. Bing: The Fallacy of the Superior Search Engine.” His argument is similar to the last point I tried making: Google and Bing have reached a point in their evolution where there the differentiation between the two search providers is negligible.

Last week when I met with Conrad in downtown Seattle, we discussed the post a little bit. He said, “Search Engine Land was busting my chops to get them some content before week’s end, so I cranked out that post and sent it on to their editor without delving into it more than at a surface level.” Little did he know the impact the post would have. Comments galore and mentions not a few. Another interesting thing he mentioned was that, “because I’m in Seattle there was a bunch of speculation that I was in collusion with Microsoft.”

Saam further iterated that he wished he had spent more time on the article had he known it would have the impact it did. While he may not be 100% correct in his assumption, his argument rings true, over time it is difficult to differentiate between competing products, especially when software development is involved. I like to consider myself an equal opportunity searcher, especially because I am a Seattle native. However, I must admit I use Google much more often. An interesting observation which I have noticed: here in Seattle Bing seems to be used more than in other areas–however it still doesn’t make up for the amount that use Google.

The Bing vs. Google argument is interesting. Recently some very close friends of mine did an elasticity of demand test on Google to find out whether they had monopolistic power. It turns out that for advertising companies, who are Google’s primary source of revenue, that the elasticity is >4. What does this mean in simple terms? It means Google does not hold much market power.

And while there have been accusations by Google that Microsoft is a copycat of its algorithm, the company still seems to doing okay on market share. I would say that Microsoft is to Google in search what Pepsi is to Coke in cola: a highly divested competitor with deep pockets who can help by acting as a competitor to keep the company in check.

What does this mean for digital signage software?

Competition is good. Eventually most software becomes a commodity and differentiation is difficult as product testing has been performed and thousands of users have been working with the product for years. But competition will always force innovation and drive positive change. Capitalism at its finest.

Over time, the quest becomes a race for market share, a question of value and a drive for the best and greatest economies of scale possible. Google has been able to capture this in search. Certainly there is an opportunity in DOOH as well.

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