Google unveiled Google Instant Search, which displays results as the user types in the search query. So what is Google Instant Search really about and what are the implications for users, advertisers and web site operators.

First and foremost it is not a new innovation. It is simply an extension of the keyword suggestion feature that was on the search query box for ages. It is on hundreds of sites as well. Yahoo had it back in 2006. However, the difference is that Google displays the results corresponding to that keyword as search results. Google claims that Instant Search leads to 2-5 seconds of time savings per query.

Less Control for Users and More Control for Google: From a user perspective Google Instant Search gives the user less control and gives Google more control. For instance: typing “a” returns results for Apple, Amazon, AOL, ATT etc. Essentially Google is controlling the popularity of the keywords and redirecting traffic to sites potentially spending money on Google (as opposed to sites that don’t spend money). By controlling the keywords and distribution of traffic to a handful of sites, Google is treating content differently by favoring sites that pay for popularity. This is similar to the Google-Verizon partnership that allows Verizon to speed some online content to Internet users more quickly if the content’s creators are willing to pay for the privilege. Thus with Google Instant Search, search is no longer open but highly controlled – if not closed. Users loose because they are no longer in control and their choices are determined by Google. Google wins and sites that pay win.

Google Instant Search favors SEM over SEO: For web site operators and advertisers the implications are similar but more complex. By controlling the popularity of the keywords, Google is now is a position to control distribution of traffic to sites that pay more for those keywords than sites that don’t. This changes the entire SEO and SEM game. Simply optimizing your web site will not cut it anymore. Increasing your ad spend on Google will.

By predisposes users to select keywords that Google suggests and displaying results for those keywords, Google Instant Search is telling users what is “best” for them. Whereas previously users would have completed the query and selected the best result. With Google Instant Search the “best” result is not necessarily best for users as it is “best” for Google.

It also will increase the impression count and affect the click through rate (CTR). Google counts any result displayed for 3 seconds as an impression. So a slow typists will record multiple impressions. This will increase reported impressions and hence lower click through rates (CTR) from Google. Hence advertisers and marketers will have to spend more to increase their CTR. This will favor paid advertisers, particularly advertisers willing to outbid each other.

When I type “hotels” in Google currently, I see the following results (the following examples are from Efficient Frontier).

When I type the same with Instant Search turned on, I get:

Google is showing me ads for hotels near Disneyland. This will increase the impression volume of “hotels near Disneyland” keyword and reduce that of “hotels”.

Quality Score implications: I have noticed in my tests that many times, Google prefers showing brand over generic keywords. When I typed tr, Google showed ads for “Travelocity”. Given that travel is far more popular than Travelocity (based off Google’s own Trends data) we should expect the impression volume for Travelocity to shoot up. This would drop the Click Through Rates  of “Travelocity” and could impact its quality score adversely. Our research has shown that CTR explains about 90% of Google’s QS formula. Hence, to prevent advertisers like Travelocity from suffering with higher CPCs,  Google would have to adjust its quality score formula to account for the effects of the instantaneous mapping.

Your Brand Name Matters: Let us take my Travelocity example. If I were another competing OTA like Priceline, I would expect significant traffic from the “travel” keyword. However, now with Google’s Instant suggestions potential Priceline traffic could be diverted to Travelocity. Your brand name matters ! The open question is which brands would come on top ? Brands with unique names like Cisco would still get targeted traffic as you need to type “Cis” to get Cisco specific ads while brands like “travelocity” will get a lot of untargeted but high volume traffic from words like travel. Will all this additional traffic convert ? Unlikely. So, is all this additional traffic welcome ? It remains to be seen. On the flip side, I have to believe that Priceline will be unhappy about them not being able to compete on a level playing field for the “travel” keyword.