Snap Speaks: CEO and COO talk CPA and Making it in Mainstream Search
Hi! This email interview with Snap's CEO, Tom McGovern and COO, Fred Walti, is 1700 words (well, more now with this introduction - dang!) and will take at least seven minutes of your time to read.

Of course it's more than worth it.

Attn. Snappers: I've marked certain areas of the interview with "++please elaborate" tags and further questions. Either post in comments or shoot me an email :)

If you, dear reader, are unwilling to commit 7 or so minutes of your life for some blissful brilliance you should read the 90 second Snap CEO/COO interview overview.

Loren Baker's Google AdSense Testing Cost-Per-Action Payments provides an interesting context for reading - news of which may have lit a fire under someone's rump to get this interview finished perhaps?

++please elaborate - how would you rate Google's CPA experiment at this stage?++


Without further ado I give you Tom McGovern and Fred Walti of Snap:
***key people***
Tom, what past business experiences do you find yourself drawing on the most as the CEO of Snap?

Both you, Tom, and your COO Fred Walti have strong media backgrounds. How do you think this influences the direction of Snap?

FW: I’ve spent more than 15 years working with advertisers and their agencies. As a result, I’m pretty familiar with their world, their needs, and what they want. Perhaps most importantly, I’m very sensitive to the issue of “client service.”

We intend to be good business partners with our advertisers in every way possible, including offering a very distinctive advertising product, pricing it right, and making it easy to do business with us.

++please elaborate: this is marketing fluff, which I think shows disrespect to my readers. *I'm* the only one allowed to disrespect my readers on my blog ;)

what companies did you work for? how are *you personally* going to be sensitive through an ad buying console?

are you personally working with clients? if so, in what capacity?

how, in Snap's sensitivity to "client service," are you different from or similar to GYMA?++

TM: Contrasting Fred, my background has been less about branding and more about data driven marketing.

We use that combined approach both in our decisions on how to spread the word about Snap as well as the product itself. We strive for both form and function.

What is the core strength that Gladys Kong brings to the search team?

TM: Gladys, our VP Engineering, is a technologist with an expertise in large scale distributed databases as well as technical management. I think she has been involved in more start-ups than anyone here.

Gladys was happy to see the arrival of our new CTO, Mike Agostino.

Mike joined us recently from Symantec. Before Symantec, he was in venture capital working at Vulcan and prior to that he was an early Infoseek team member. He goes by the nickname Spiderman so you get the idea of what he is all about.

***the tech***
Do you have a crawler or use other indices? Do you have your own algo? If so, how would you say it differs from the algos we may be familiar with from Google, MSN, Yahoo and Ask?

TM: Yes, we have our own index. I can not tell you how we differ from the others as we have not seen their algos.

Our approach is to combine traditional text based IR and the use of behavioral data to deliver results ranked on user satisfaction rather than words and links.

++please elaborate: what are your thoughts on creating methods for users to contribute to the search results, or perhaps to import their own personal usage data from projects like Attention Trust? What will be Snap's answer to social search?++

***the design***
who came up with the split screen concept? where has it been done before? what makes yours better?

FW: The inspiration for the split screen came from our founder, Bill Gross. We first applied the Results-Left/Preview-Right concept in our News section which received a lot of positive feedback from our News users.

We then built a beta search engine using this concept last summer and launched our GA product on May 15th of this year.

No other company that we’re aware of has a similar results left/preview right interface.

The advantages are numerous, but can be grouped into three areas:

(1) We believe it’s easier to SEE what you’re looking for rather than READ what you’re looking for. Hence, using our site previews allows visual pattern matching which is much quicker than reading text;

(2) Because we’ve seamlessly integrated the preview into the interface, it makes it very easy to fast browse lots of results. Try going to one of the Big Search engines and look at 10 results from any search. You’ll have to go through the hunt and peck method for viewing results. Now go to Snap and fast browse those ten results using your up/down arrow keys. Essentially, we’ve created the search engine version of channel surfing on your TV;

(3) We allow the users to directly interact with the actual site if they want. Either through clicking on the preview, using your right arrow key, or downloading the Active X plug in, Snap users can quickly interact with each search result’s site.

++please elaborate: what data are you gathering with the plug in? what is the advantage to the user for downloading the plug in? how will you be driving downloads?++

What are your metrics for determining if the split screen UI is a success?

TM: We believe the strongest metrics for measuring the success for any search engine are user loyalty measures (repeat rates, for example) and search usage metrics (searches per visit, for example).

++elaborate please: well... what have the results been so far?++

***the model***
What is biddable for marketers within the Snap CPA system - it's my understanding marketers set the CPA themselves, so how do you determine where they appear in the SERPs?

FW: An advertiser’s ranking is based on primarily two things:

(1) The bid amount of the action they’re looking for: download, subscriptions, a sale, etc. Each advertiser places a bid on what they’re willing to pay for an action and their bids are placed in an auction similar to other search engines; and…

(2) Their ranking will also be moved up/down based on how well they convert. We believe that an advertiser’s conversion rate is a very good measure of relevance since a higher conversion rate implies a better offer/product/sales environment.

We look at these 2 elements in connection with our algorithmic determination of relevancy to score and rank the results with a goal of maximizing user satisfaction. That is a bit different than other search companies that want to maximize revenue per pixel.

Do you think that if Gross had presented CPA instead of PPC with GoTo that it would have caught on in the same way?

TM: I personally think so. CPC associated with search really took off once we had the bust in CPM’s so I think that the market condition was ripe.

But at the time, CPC was radical and no one imagined click fraud would be as big of problem as it has turned out to be. But as most change is, it’s an evolution and the industry will embrace CPA over time.

Joseph Sarmiento has a strong background in inside sales - does Snap have this kind of structure in place, and do you see inside sales as a means of encouraging CPA adoption?

FW: Snap is committed to building a strong advertising sales force, some of which will be inside and some of which will be aimed at national accounts.

++elaborate please: so who's the target market for this sales force? why do you require a sales force - is it because you're not targeting smbs with a console-based ad offering? and is there CPA advertising live yet?

Which major companies have been most interested in CPA thus far? Who do you think would most benefit from CPA vs. PPC?

FW: We don’t release information about our advertisers to protect their competitive advantages.

++please elaborate: what *kinds* of companies? What industries or sectors are best suited for CPA? If you say "everyone" then you get detention ;)++

TM: One thing that’s important to note about CPA is that it fosters sharing of information, in particular conversion rate information. As Fred mentioned, we use that information as an element in scoring results.

So, all advertisers like CPA but the ones that are going to really benefit are those that serve users well and have a high conversion rate. They will move up in results based on user satisfaction rather than having to out bid their competitors.

And what about looking for AdSense-type CPA syndication?

FW: We will look for these type of opportunities in the future.

And what about video ads - is CPA a possible model there? Is Snap looking at media outside of text?

FW: Once we’ve established our core mission, building a great general purpose search engine, then I’m sure we’ll look at other opportunities.

***the vision***
In The Search Battelle mentions that Gross had a hard time deciding whether to make GoTo an ad syndicator or a search destination. Your innovations with SERPs display indicates to me that you're headed in the destination direction. Are you?

FW: Yes, we’re building a search engine equally targeted to users and advertisers.

TM: Creating another Overture would have been kind of boring.

If so, can you outline the steps it will take to gain marketshare against Google, Yahoo and Ask? Because I think it's going to take ALOT more than changes in SERPs display...

FW: We believe that Snap.com can garner a significant place in the search market by offering a very differentiated product that represents a true alternative to today’s Big Search engines. Our differentiation today revolves around three significant areas:

(1) A totally different user experience resulting from a fast, interactive, visual search UI;

(2) Improvements in relevance through the use of behavior data in the ranking algo; and

(3) An advertiser proposition that includes CPA and a very impactful advertising environment.

While we would certainly agree with your assessment that it’s going to be tough to compete with the large players, we think it is possible to compete with an alternative approach.

Beyond product differentiation, our marketing approach is differentiated as well. Rather than spend millions of dollars on traditional advertising, we are generating a dialog amongst the search community with people like yourself.

Right now, more than 1050 blogs have links to our blog. Many people in the industry have noticed that the Snap blog is one of the most active blogs in the search community right now.

Part of this excitement is the result of our “Snap the other way to Search Contest” which we launched when we re-launched the product on May 15th. The contest called for ideas on how to market Snap. More than 200 ideas were submitted with over 3000 votes were cast for the favorite idea. We’ve received more than 30,000 visitors to our blog alone. We’re going to announce the winner on June 29th via a web cast.

TM: One other point, we don’t intend to out-Google Google.

This market is growing and users are becoming more sophisticated and their tastes and preferences are becoming less mass market. So while not everyone will like the Snap method of search, there is a role and opportunity for Snap for those that are more visually oriented and are tired of clicking on blue links to see the real search results.

What's the point of developing a "better search experience" at this stage in the game? Why not be happy with developing a CPA search marketing console add-on for the major search players?

FW: Because users tell us that they want a better search engine.

Our research and analysis shows that people still can’t find what they’re looking for a lot of the time; that they’re frustrated with the amount of time they spend looking for things on today’s search engines; and that they feel that there isn’t any difference between the GYM offerings.

So, with our history of innovation and leadership in the search business, we’ve set out to build the next generation search engine that changes the ball game once again.

TM: Thanks for your time!

No no! Thank you guys! I appreciate *your* time and look forward to your answers to my request for elaboration in the next few months ;)

JUST KIDDING TOM AND FRED - I know you're busy. Thank you, seriously.

And if you, dearest reader, have questions please send them in or leave them in the comments section of this post.

And, if you read ALL the way through you likely spent around 8 1/2 minutes.

It's time for a break: enjoy 5 minutes or so of the latest Yacht Rock episode on Channel 101 or join my clan on Kingdom of Loathing and spend the next 5 hours doing really stupid things for meat.
Garrett French - MarketSmart Interactive | permalink | +marktd |