I've noticed lately that Google has been allowing ads for the search term "nicotine pouches". I just searched and there were four sponsored results before the first organic result, Onnicotine, Nicokick, Rogue Nicotine and Black Buffalo. Has there been a change in Google's stance on this search term or are these just getting through. Seems this could be a change in the thesis if it persists. Any thoughts?
Hey, Philip. Thanks for the thoughtful question. When talking with management, I actually brought up the same question regarding the limitations of paid advertising. As it appears, the pool of permissible ad spots is quite small but is not zero. Within the paid ad space, Haypp does engage to a degree, but overall it is very minimal amount of spend and is more used to keep a pulse on paid channels and help better aid understanding the efforts of competitors. When I discussed Haypp Group on YAVB, Andrew asked the same question! You can see the full interview here:
Thanks, I just relistened to it. Can you expand on what you mean by the pool of permissible ad spots is quite small? Does that just mean that you nearly all the ad spend is focused on search/Google because social media doesn't allow it? Trying to wrap my head around how they are going to continue to win organic search when there are four sponsored results ahead of organic results. In the search I did for "nicotine pouches" the first organic result was WebMD page in the fifth spot and you have to scroll down to find a Haypp site that isn't sponsored.
I would presume that most people who think of buying pouches online will turn to Google rather than seeking a specific Haypp site. Perhaps a significant portion of people don't like to click on sponsored results? I know that I avoid sponsored results. I am long Haypp by the way, just trying to explore this part of the model deeper. Thanks!
I messaged IR regarding this issue and here's what they said:
It is unlikely that Google is knowingly allowing adwords for nicotine pouches, rather, as you surmised, for whatever reason for the time being the terms you tested are working. As you saw, one of the sponsored results was Nicokick, this is because Haypp has a team that constantly tests adword viability and then flags gaps to Google and other platforms. So I would expect these adwords to be shut down in the next few weeks.
Haypp expects to continue to generate the vast proportion of its traffic organically.
Spot on, Philip. I should have been more specific when I said they engage to “keep a pulse on paid channels and help better aid understanding the efforts of competitors,” but meant they do so to flag non-compliant behavior. Haypp has very strict standards, which I expect to be of great benefit over time.
I've noticed lately that Google has been allowing ads for the search term "nicotine pouches". I just searched and there were four sponsored results before the first organic result, Onnicotine, Nicokick, Rogue Nicotine and Black Buffalo. Has there been a change in Google's stance on this search term or are these just getting through. Seems this could be a change in the thesis if it persists. Any thoughts?
Hey, Philip. Thanks for the thoughtful question. When talking with management, I actually brought up the same question regarding the limitations of paid advertising. As it appears, the pool of permissible ad spots is quite small but is not zero. Within the paid ad space, Haypp does engage to a degree, but overall it is very minimal amount of spend and is more used to keep a pulse on paid channels and help better aid understanding the efforts of competitors. When I discussed Haypp Group on YAVB, Andrew asked the same question! You can see the full interview here:
https://www.yetanothervalueblog.com/p/devin-lasarres-thesis-on-haypp-group
Thanks, I just relistened to it. Can you expand on what you mean by the pool of permissible ad spots is quite small? Does that just mean that you nearly all the ad spend is focused on search/Google because social media doesn't allow it? Trying to wrap my head around how they are going to continue to win organic search when there are four sponsored results ahead of organic results. In the search I did for "nicotine pouches" the first organic result was WebMD page in the fifth spot and you have to scroll down to find a Haypp site that isn't sponsored.
I would presume that most people who think of buying pouches online will turn to Google rather than seeking a specific Haypp site. Perhaps a significant portion of people don't like to click on sponsored results? I know that I avoid sponsored results. I am long Haypp by the way, just trying to explore this part of the model deeper. Thanks!
I messaged IR regarding this issue and here's what they said:
It is unlikely that Google is knowingly allowing adwords for nicotine pouches, rather, as you surmised, for whatever reason for the time being the terms you tested are working. As you saw, one of the sponsored results was Nicokick, this is because Haypp has a team that constantly tests adword viability and then flags gaps to Google and other platforms. So I would expect these adwords to be shut down in the next few weeks.
Haypp expects to continue to generate the vast proportion of its traffic organically.
Spot on, Philip. I should have been more specific when I said they engage to “keep a pulse on paid channels and help better aid understanding the efforts of competitors,” but meant they do so to flag non-compliant behavior. Haypp has very strict standards, which I expect to be of great benefit over time.