“bottoms-up” approach to search engine marketing and ad campaign management. In contrast to the top-down approach that AdWords offers—an overview of all the campaigns you’re running on all of your sites and pages—the AdWords GrokBar follows you around on the Web, giving you a picture of how well your AdWords campaigns are performing at the level of individual Web pages.
This bears a bit of explaining. Say you sell furniture online and you’re running AdWords campaigns designed to garner visitors for your catalog pages on tables, chairs, and sofas. If you go to your sofas page and open the GrokBar—a Firefox browser extension that slides out from the left side of the screen and is otherwise visible only as a tab (see screen shot on page 1)—AdGrok will connect to AdWords behind the scenes and show you a summary of the sofa-related keywords you’ve been bidding on, how much you’ve spent on each, and how much traffic they’ve sent to your sofas page. You can add new keywords to your sofa campaign or change the wording of your ad, right from the GrokBar.
From within the GrokBar, you can also pop up a level or two for a top-down summary of your AdWords spending on all of your furniture pages. If AdGrok’s algorithms see an opportunity to improve the performance of a specific campaign, you’ll see suggestions. To take a simple example, the maximum bid you’ve specified for the keyword “sofa” might not be high enough to get your ad on the first page of search results—so the program would suggest raising your bid, and tell you how much you need to raise it to win. Or it might suggest, based on the editorial content of your ad, keywords that you hadn’t considered bidding on, such as “chaise” or “divan.” All changes are transmitted back to Google. In fact, once users install AdGrok, they “never have to log in to AdWords again,” Garcia-Martinez says.
During its beta testing period, AdGrok isn’t charging for its service. And for small spenders, those who put less than $100 a month into their AdWords campaigns, it will probably stay free. But Garcia-Martinez says the company will eventually start charging bigger spenders fees. The team hasn’t decided yet whether to charge on a percentage basis or simply levy flat fees, but in the long run the cost of using AdGrok will probably average out to about 5 percent of what users spend on AdWords, he says. (That’s a lot less than the 20 percent that ad agencies typically charge for handling campaign management.)
Interestingly, AdGrok might never have gotten off the ground if Garcia-Martinez, McEachen, and Zymnis hadn’t gotten into Y Combinator. “We had been kicking around the idea during our lunch hours [at Adchemy], and we applied to Y Combinator on a lark,” says Garcia-Martinez. “We were surprised when we did get in. Y Combinator was the kick that gave us the nerve to quit.”
But while Adchemy probably wasn’t happy about losing three young programmers, they and other ad agencies shouldn’t worry too much about competition from AdGrok, Garcia-Martinez says. The “Fire your agency” slogan on AdGrok’s home page is really more of a “rhetorical flourish” than a serious suggestion, he says. In fact, some of AdGrok’s early users are agencies, which are using the service to manage some of their low-budget accounts more efficiently.
How should Google, the great disintermediator, feel about being disintermediated by a company that wants to put its own software, rather than Google’s, in front of AdWords users? It ought to be pretty happy, if you think about it. Small and medium-sized businesses make up only about 10 percent of Google’s AdWords market, according to Garcia-Martinez. But there might be more of those advertisers—and they might spend more—if the AdWords platform weren’t so forbidding. “There is all this money sitting on the side that is not coming in because you are not empowering them,” says Garcia-Martinez. “We’re the Charles Schwab of AdWords.”
Which begs the question of whether AdGrok is building its system simply in order to get acquired by Google. If you follow the tech blogs in Silicon Valley, you know there’s a meme going around—started by TechCrunch’s Michael Arrington—about the unnamed venture capitalist who allegedly laments “an entire generation of entrepreneurs are building dipshit companies and hoping that they sell to Google for $25 million.” I couldn’t help asking Garcia-Martinez whether AdGrok is, in essence, one of those dipshit companies.
“Is that what we’re trying to do? No, I think the idea is bigger than that,” he answered. For one thing, the startup already has plans to branch beyond AdWords to other advertising venues, starting with Facebook and Microsoft’s Bing search service. For another, Google might not even be interested. “If Google wanted to do this, they could do it themselves,” Garcia-Martinez points out. “The AdWords interface has been unchanged for going on eight or nine years now. If they haven’t improved it, it’s not for lack of resources—I think they just don’t care about the long tail.” Which is fine with AdGrok, because the long tail at Google is voluminous enough to hold at least a few profitable startups.
