While some in the search marketing industry debate the linkability of even the most unsexy Web sites—and by "unsexy", they often mean "small business"—there's an important element missing from the discussion: return on investment.
The Investment: No one debates that an investment is required; viral marketing through social media demands a big chunk of your time, your money, or both. But we've already established, in What's So Different About Being Small?, that time and money are two things many small businesses have in short supply.
The Return: No one debates that there are legitimate returns from social media marketing. These returns often come in the form of a short burst of traffic and/or an increase in links. That can improve your search engine visibility, but small businesses, in particular, still have to ask: Is the return greater than the investment of time and money?
For what it's worth, I agree that nearly every business, big or small, unsexy or not, can come up with something that's unique and linkworthy—something that will play well on Digg, YouTube, or whichever social media site offers the best audience fit. I also think it's imperative that small businesses use social media marketing in order to decrease their reliance on traffic from one or two search engines; you have to diversify to survive.
With that in mind, here are seven ways small businesses can jump on the social marketing bandwagon with a moderate investment of time and/or money.
1a. Start a blog. Blogging is old news to many (Web 1.5, perhaps?), and it's certainly not as sexy as chasing a link from the front page of Digg. But it's still a great way to open up a dialogue with your customers, and that connection is the reason social marketing exists. WordPress is free, open source software—so the price is right. The time investment is completely up to you, but this truism applies: The more you put into it, the more you'll get out. Still, it's okay—and I'd even say it's recommended—to start slowly and increase your time investment as you get comfortable with using a blog.
1b. Comment on other blogs. You can't blog into a vacuum. Blogging is about creating and joining conversations, and that includes reading what others in your industry are saying and joining the discussion on other blogs. It's free, and again, the time investment is up to you. You'll be able to supply your name and URL when leaving a comment, and there's no debate that intelligent comments on other blogs helps build traffic to yours.
2. Get active at Yahoo Answers. If you're a service-based small business, you already know that your expertise is your No. 1 marketing tool. Yahoo Answers is a great way to share your knowledge with people who are looking for it—a direct connection with potential customers. I spend about 1-2 hours a week answering SEO and marketing questions there, and that small investment of time never fails to bring more traffic to my blog. Never. (It helps that I have a blog to refer people wanting more information, so don't skip #1 above.)
3. Make and share videos. Good video cameras are cheap these days, and a short video needs little editing/production. Even if you do decide to add some sizzle to a video, the required software won't break the bank. How-to videos are an obvious choice. "Tour" videos—tours of your business, restaurant, the homes you build or sell, etc. are also a good idea. In addition to using them on your own Web site or blog, YouTube is an obvious sharing destination. Local search is also embracing video: CitySearch recently announced that local video ads will be added to its listings, and YellowPages.com is also pursuing video opportunities.
4. Take and share photos. I'm a longtime believer in using Flickr as a marketing tool. The time and cost investment is minimal. And thanks to Flickr's incredibly active photo groups, you can share photos of your products with people who are interested. A pet store owner could share photos with the 2,000+ members of the pet parade group, which is one of dozens of animal-related groups. A company that makes iPod accessories could post nice product photos in the Apple group, with its ~2400 members. And a construction company that makes custom homes could post photos in the appropriate city group, like San Francisco or Chicago. For more on this, I invite you to read How to Market on Flickr on my blog.
5. Try StumbleUpon. Of all the discovery-type of social sites (Digg, Reddit, Netscape, etc.), I believe StumbleUpon requires the lowest time investment. Joining groups related to your industry and adding friends from those groups can be done quickly. Once you do that, as you add pages to StumbleUpon—including your own great content—other users will "stumble upon" what you've added. As those visitors give it the "thumbs up", your content is then shown to even more users. Unlike Digg or del.icio.us, you don't need to spend several months building up a great user profile. StumbleUpon was the No. 1 referrer to my blog in 2006, and that's without spending a lot of time working it. I should note that the main benefit of StumbleUpon will be traffic, more so than links, sales, etc. So rather than hope it becomes a direct source of revenue or higher rankings, you should hope that it increases awareness, blog readership, feed subscribers, and the like.
6. Join groups & mailing lists. Social marketing is about finding your customers where they are. There's a good chance at least some of your customers are using Yahoo Groups or Google Groups to share interests. Much like the Flickr examples above, there are probably groups/lists that are highly related to the products or services you offer. And much like the Yahoo Answers suggestion, being able to help others in this community setting can be a great marketing tool.
Every social marketing opportunity will have its own rules to follow, and you should make sure you know those rules. But here's one general rule for using these sites as marketing tools: Don't spam the system. Flickr doesn't want your entire product inventory posted, and they have rules against doing so. But a few high-quality photo submissions that add to the community are fine. Whatever social marketing you do, be an active contributor. Add to the signal, not the noise.
When you do that, you're on the road to social marketing success.
Matt McGee is the SEO Manager for Marchex, Inc., a search and media company offering search marketing services through its TrafficLeader subsidiary. The Small Is Beautiful column appears on Thursdays at Search Engine Land.
Saturday, March 31, 2007
Social Media: A Business Social Media: A Business
Marketer's Guide
Four questions a marketer should ask before determining if social media will improve performance.
To many business marketers, social media is a big question mark. Some are unsure if social media constitutes a new, largely untested advertising medium, or if it's simply a variation of traditional online advertising. Others question how a serious brand would work in the sometimes unpredictable environments of popularized consumer-oriented online communities. And some are uncertain about creating campaigns for social media, perhaps mistakenly believing that it requires a radical change from their current online advertising approach.
As a result, some marketers are not capitalizing on social media and the opportunities it provides for making high-quality connections with business consumers. Regardless, social media has a real impact on consumers' purchasing decisions. According to a recent report by market research firm Compete, Inc., more than 71 percent of consumers who use social media are more influenced by user-generated content when making purchasing decisions than by information from brand advertisers and marketers.
Join the conversation
Marketers can leverage the unique aspects of social media to achieve their goals by becoming part of the conversations taking place within online communities. This doesn't mean actively participating in the dialogue but engaging in the context of the community's interactions. At the same time, marketing messages must be highly relevant and placed so that they appear at the critical moment when community members are considering a purchase.
While some marketers have been experimenting with social media via MySpace and other online communities, business marketers are finding it more difficult to reach relevant audiences through these mass market environments. Enter professional or business-oriented communities such as ITtoolbox and LinkedIn. These communities provide marketers with the opportunity to reach consumers in the workplace as they seek experience-based peer advice to make important decisions and stay current. Users typically visit their professional community of choice several times a day to access knowledge and request feedback from other professionals. To them, the community is a utility; a desktop tool that is part of their daily workflow.
Four questions a marketer should ask before determining if social media will improve performance.
To many business marketers, social media is a big question mark. Some are unsure if social media constitutes a new, largely untested advertising medium, or if it's simply a variation of traditional online advertising. Others question how a serious brand would work in the sometimes unpredictable environments of popularized consumer-oriented online communities. And some are uncertain about creating campaigns for social media, perhaps mistakenly believing that it requires a radical change from their current online advertising approach.
As a result, some marketers are not capitalizing on social media and the opportunities it provides for making high-quality connections with business consumers. Regardless, social media has a real impact on consumers' purchasing decisions. According to a recent report by market research firm Compete, Inc., more than 71 percent of consumers who use social media are more influenced by user-generated content when making purchasing decisions than by information from brand advertisers and marketers.
Join the conversation
Marketers can leverage the unique aspects of social media to achieve their goals by becoming part of the conversations taking place within online communities. This doesn't mean actively participating in the dialogue but engaging in the context of the community's interactions. At the same time, marketing messages must be highly relevant and placed so that they appear at the critical moment when community members are considering a purchase.
While some marketers have been experimenting with social media via MySpace and other online communities, business marketers are finding it more difficult to reach relevant audiences through these mass market environments. Enter professional or business-oriented communities such as ITtoolbox and LinkedIn. These communities provide marketers with the opportunity to reach consumers in the workplace as they seek experience-based peer advice to make important decisions and stay current. Users typically visit their professional community of choice several times a day to access knowledge and request feedback from other professionals. To them, the community is a utility; a desktop tool that is part of their daily workflow.
Thursday, March 29, 2007
Marketers Warm Up to Social Media
Marketers Warm Up to Social Media March 28, 2007 By Brian Morrissey
NEW YORK Advertisers are increasingly willing to try social marketing, with growing plans to tap user-generated content, blogs and social networks. Forrester Research, in a survey of over 90 marketers, found social media is gaining broader acceptance, though it still trails far behind Web mainstays like e-mails, search marketing and display ads.
Many marketers are waiting for concrete proof these channels work before diving into them, Forrester found. Of those not using social media channels, "proof of use" was the No. 1 factor that would encourage trial. "Consumers are moving so quickly into emerging media that marketers can't keep up," Forrester analyst Brian Haven concluded in the report. "We bet marketers calling for 'proof of use' really need to increase their own familiarity with the medium and its application for their customers." Despite the hesitancy from a sizeable percentage of marketers, the research firm reported a large increase in use and plans for emerging media compared to a year ago. For instance, 13 percent of respondents reported active blog programs in 2006, which rose to 34 percent this year. By the end of the year, over half of the marketers expect to have blog initiatives up and running. Social networks should see a larger jump. While just over 20 percent of marketers are using social networks now, nearly 60 plan to do so by the end of the year. In 2006, just 13 percent of respondents said they were using social networks. The user-generated story is similar. About 22 percent said they have initiatives in place, while over 65 percent plan to by the end of the year.Other emerging media tactics, like RSS and podcasts, are also expected to gain widespread adoption by the end of the year, with more than two out of three respondents planning to use them. Forrester found that not all emerging channels are catching on as quickly.Despite much hype, marketers are still wary to jump into mobile marketing and gaming. Just 13 percent reported using text messaging for marketing and 11 percent have mobile Web sites. Virtual worlds were used by just 7 percent of respondents, with about 25 percent expecting a presence in 2007.
NEW YORK Advertisers are increasingly willing to try social marketing, with growing plans to tap user-generated content, blogs and social networks. Forrester Research, in a survey of over 90 marketers, found social media is gaining broader acceptance, though it still trails far behind Web mainstays like e-mails, search marketing and display ads.
Many marketers are waiting for concrete proof these channels work before diving into them, Forrester found. Of those not using social media channels, "proof of use" was the No. 1 factor that would encourage trial. "Consumers are moving so quickly into emerging media that marketers can't keep up," Forrester analyst Brian Haven concluded in the report. "We bet marketers calling for 'proof of use' really need to increase their own familiarity with the medium and its application for their customers." Despite the hesitancy from a sizeable percentage of marketers, the research firm reported a large increase in use and plans for emerging media compared to a year ago. For instance, 13 percent of respondents reported active blog programs in 2006, which rose to 34 percent this year. By the end of the year, over half of the marketers expect to have blog initiatives up and running. Social networks should see a larger jump. While just over 20 percent of marketers are using social networks now, nearly 60 plan to do so by the end of the year. In 2006, just 13 percent of respondents said they were using social networks. The user-generated story is similar. About 22 percent said they have initiatives in place, while over 65 percent plan to by the end of the year.Other emerging media tactics, like RSS and podcasts, are also expected to gain widespread adoption by the end of the year, with more than two out of three respondents planning to use them. Forrester found that not all emerging channels are catching on as quickly.Despite much hype, marketers are still wary to jump into mobile marketing and gaming. Just 13 percent reported using text messaging for marketing and 11 percent have mobile Web sites. Virtual worlds were used by just 7 percent of respondents, with about 25 percent expecting a presence in 2007.
Wednesday, March 28, 2007
Calculating the perfect affiliate CPA - Super Affiliate Comment at bottom!
Calculating a competitive CPA is an incredibly important part of any successful affiliate programme and yet it's one of the first hurdles merchants fall at.
With more and more companies launching affiliate programmes, there is a huge amount of choice for affiliates, and if you expect them to promote your programme over your competitors, you need to set the right CPA and continually review it.
Continuing on from the trend in my last post , here are your seven tips for this week, this time on the subject of how to set the right CPA for your affiliate programme....
1) Forget CPA, think EPC – Good affiliates aren’t blinded by a big flashy CPA; it has to translate into a competitive Earnings Per Click (EPC). If your site doesn’t convert it won’t matter how high the CPA is, you still won’t be competitive.
2) Align your channels – If you see affiliate marketing as an opportunity to get sales at a discount CPA you will never realise its true potential. You should always compare your affiliate CPAs to those you are achieving in display and search activity.
If, for example, you run a search campaign, it’s worth bearing in mind that search affiliates will keep an eye on your bid prices. If they see huge discrepancies between the price you’re willing to pay per click, and the effective EPC they earn on your affiliate programme, expect to receive a call demanding a higher CPA.
3) Communicate with affiliates – These are the people you are trying to motivate so speak to them directly. If you’re just about to launch a programme, then ask your network to connect you with strong affiliates in your sector. If your goal is to offer a compelling CPA then most affiliates will be happy to give you their feedback.
4) Understand the true value of a sale/customer – This sounds obvious, but to be able to offer the best CPA possible you need to understand exactly what the customer or sale is worth to you. The best affiliate programmes are often those where the merchant has factored in the lifetime value of the customer and passed this onto the affiliate.
5) Watch the competition – Checking out your competitors' CPAs is an easy job as the information tends to be readily available. Because of EPC’s significance, it is important to dig a little deeper. Make sure you speak to your affiliate network, who should be able to provide you with average EPCs for your sector.
6) Watch the paid search space – Affiliates have more choice than ever when it comes to where they send their traffic, and it’s not just confined to CPA-based models. More and more affiliates are comparing the returns available from contextual advertising options such as Google Adsense to those available through affiliate networks.
If the keyword prices on generic terms are incredibly high, and your CPA does not reflect this, then you may see your affiliates switching to the more profitable contextual advertising.
7) Consider hybrid models – These are becoming more popular and often work by providing affiliates with a CPC rate for all traffic sent and a CPA. Under this model the merchant shares more of the risk in terms of their site converting by guaranteeing the affiliate income on the click, and then a higher bounty if their traffic converts to sales.
Duncan Jennings is the managing director of eConversions, a specialist paid on performance search marketing company.
1. Great points. As a super-affiliate, I often don't care about the things you think I care about.
Your payout means nothing if your product is not competitive. Your competitive product means little if your website is all flash or has dozens of conversion leaks. If you don't pay me fast and accurately, even once, you are likely to lose my trust forever. Don't give me any reason to distrust you.
I do not want to jump through your hoops. I want to market and get paid. I am probably going to be your highest cost leads/sales, but I am also going to be your highest volume driver. Don't approach me and then make it seem like it is an honor for me to work with you.
Super affiliates don't need you. So act like you need them. Concessions like limited creative control or even white label hosting made early in the discussion are more likely to bear fruit than taking the tact of "lets see how things go". I already know how things are going to go. I am never going to put any effort into impressing you for the sake of impressing you.
As a super affiliate. I am making a really good living already. If you cannot significantly add to my profits, then I do not need the headache of helping to grow your business.
It might be an elitist attitude, but the reason you want me on your team is because I am one of the elite. Recruit me like you would a prized employee or even a spouse. I am going to be selective about who I work with, and I like the idea that you too are selective about who you work with....
Posted 22:22 28 Mar 2007 by diorex
With more and more companies launching affiliate programmes, there is a huge amount of choice for affiliates, and if you expect them to promote your programme over your competitors, you need to set the right CPA and continually review it.
Continuing on from the trend in my last post , here are your seven tips for this week, this time on the subject of how to set the right CPA for your affiliate programme....
1) Forget CPA, think EPC – Good affiliates aren’t blinded by a big flashy CPA; it has to translate into a competitive Earnings Per Click (EPC). If your site doesn’t convert it won’t matter how high the CPA is, you still won’t be competitive.
2) Align your channels – If you see affiliate marketing as an opportunity to get sales at a discount CPA you will never realise its true potential. You should always compare your affiliate CPAs to those you are achieving in display and search activity.
If, for example, you run a search campaign, it’s worth bearing in mind that search affiliates will keep an eye on your bid prices. If they see huge discrepancies between the price you’re willing to pay per click, and the effective EPC they earn on your affiliate programme, expect to receive a call demanding a higher CPA.
3) Communicate with affiliates – These are the people you are trying to motivate so speak to them directly. If you’re just about to launch a programme, then ask your network to connect you with strong affiliates in your sector. If your goal is to offer a compelling CPA then most affiliates will be happy to give you their feedback.
4) Understand the true value of a sale/customer – This sounds obvious, but to be able to offer the best CPA possible you need to understand exactly what the customer or sale is worth to you. The best affiliate programmes are often those where the merchant has factored in the lifetime value of the customer and passed this onto the affiliate.
5) Watch the competition – Checking out your competitors' CPAs is an easy job as the information tends to be readily available. Because of EPC’s significance, it is important to dig a little deeper. Make sure you speak to your affiliate network, who should be able to provide you with average EPCs for your sector.
6) Watch the paid search space – Affiliates have more choice than ever when it comes to where they send their traffic, and it’s not just confined to CPA-based models. More and more affiliates are comparing the returns available from contextual advertising options such as Google Adsense to those available through affiliate networks.
If the keyword prices on generic terms are incredibly high, and your CPA does not reflect this, then you may see your affiliates switching to the more profitable contextual advertising.
7) Consider hybrid models – These are becoming more popular and often work by providing affiliates with a CPC rate for all traffic sent and a CPA. Under this model the merchant shares more of the risk in terms of their site converting by guaranteeing the affiliate income on the click, and then a higher bounty if their traffic converts to sales.
Duncan Jennings is the managing director of eConversions, a specialist paid on performance search marketing company.
1. Great points. As a super-affiliate, I often don't care about the things you think I care about.
Your payout means nothing if your product is not competitive. Your competitive product means little if your website is all flash or has dozens of conversion leaks. If you don't pay me fast and accurately, even once, you are likely to lose my trust forever. Don't give me any reason to distrust you.
I do not want to jump through your hoops. I want to market and get paid. I am probably going to be your highest cost leads/sales, but I am also going to be your highest volume driver. Don't approach me and then make it seem like it is an honor for me to work with you.
Super affiliates don't need you. So act like you need them. Concessions like limited creative control or even white label hosting made early in the discussion are more likely to bear fruit than taking the tact of "lets see how things go". I already know how things are going to go. I am never going to put any effort into impressing you for the sake of impressing you.
As a super affiliate. I am making a really good living already. If you cannot significantly add to my profits, then I do not need the headache of helping to grow your business.
It might be an elitist attitude, but the reason you want me on your team is because I am one of the elite. Recruit me like you would a prized employee or even a spouse. I am going to be selective about who I work with, and I like the idea that you too are selective about who you work with....
Posted 22:22 28 Mar 2007 by diorex
Monday, March 26, 2007
On Madison Avenue, A Digital Wake-Up Call
Firms Take Notice As Nike Demands More Web Savvy ![[D W]](http://online.wsj.com/public/resources/images/HC-GJ730_Wieden_20070325180450.gif)
By SUZANNE VRANICA
March 26, 2007; Page B4
March 26, 2007; Page B4
In recent years Oregon independent Wieden + Kennedy has been the firm to beat in the ad world, its creative smarts and agility helping it capture clients as powerful as Procter & Gamble and Coke. So this month's decision by Nike, Wieden's longtime star client, to look for a new agency to handle part of its business sent ripples across the industry.
The reaction wasn't so much because Wieden has been Nike's lead agency since 1982, a connection cemented by a close relationship between Nike Chairman Philip H. Knight and Wieden principal Dan Wieden. What really unnerved Madison Avenue was that one of the main reasons for Nike's move was dissatisfaction with the agency's digital expertise, according to people close to the account. Despite its top-notch ability in every other department, Wieden has been slow to adapt to the Internet -- an important arena for a marketer as focused on the youth audience as Nike.
Up for review is Nike's running-shoe account, say people familiar with the situation. "We are looking for expertise in different mediums, different creative directions for various areas of U.S. business," a Nike spokesman said when the review was disclosed earlier this month. Wieden will continue to handle the bulk of Nike's ad account, including its basketball, men's training and women's fitness businesses.
Industry executives say the move was a wake-up call to Madison Avenue. The message is clear: No matter how talented an agency's creative team or how well the client's management likes the firm's executives, the agency is of limited value unless it embraces digital media.
"We have to be thinking about ideas in all the channels and not just the [traditional] advertising channels," says David Murphy, former president of the Los Angeles office of Publicis Groupe's Saatchi & Saatchi who recently left to open his own shop.
Many traditional ad agencies, with roots in television and print, have been slow to grasp the impact of the Internet. In the past couple of years, as consumers and advertisers have begun shifting to the Internet, some agencies have responded by beefing up digital talent through both hiring and acquisition. But many firms don't have enough digital talent to meet client demand, and those that do often have kept the digital department separate from the rest of the firm.
Wieden had hired some digital thinkers, but they were scattered through its offices around the globe. It wasn't until earlier this year, when it hired Renny Gleeson, a digital expert who had a top job at Aegis Group's Carat Fusion, that the shop began to take digital more seriously and teach digital know-how to the rest of its troops.
Even so, Wieden could be doing more, people at the firm admit. Digital has long been "an afterthought here," says a person at the agency. "We do it but haven't done it to the level we need to."
A spokeswoman for Wieden referred calls to Nike, which declined to comment beyond the statement it issued earlier this month. Mr. Wieden, through the spokeswoman, declined to comment.
About two years ago, Mr. Wieden passed on what may have been a golden opportunity to digitally remake his firm. Prominent digital ad firm AKQA proposed to Mr. Wieden that the two agencies create an informal alliance to pitch business and work collaboratively on shared accounts, according to several people familiar with the matter.
On paper, the two made a good fit. Both are at the top of their respective areas, and they share major clients such as Coca-Cola and Nike. But after several meetings to discuss the idea, Mr. Wieden couldn't be persuaded. People familiar with his thinking say the executive has long been fearful of tying up with other firms for fear of spoiling Wieden's culture. Instead, he believes in broadening the agency's skill set by hiring people with different types of expertise -- as he did with Mr. Gleeson.
Mr. Wieden may now wish he had made a bigger move. AKQA has gone from strength to strength; last month a private-equity firm bought a majority stake in the firm, giving it the resources to expand further.
Meanwhile Nike, which has long used several digital specialist firms such as AKQA and Interpublic Group's R/GA in addition to Wieden, has been sending signals that it wanted a different approach. "Gone are the days of one shoe, one advertising campaign. Now you've got to engage consumers on every level," Trevor Edwards, Nike's vice president of global brand and category management, told The Wall Street Journal last summer.
Nike's marketing campaigns have reflected a shift in emphasis towards the Web. Last year it worked with Google to create joga.com, a successful online community for soccer fans tied to the World Cup. The attraction of the site for Nike is that people who check out joga.com -- because of its subject matter -- are guaranteed to be exactly the kind of consumer Nike wants to speak to, which isn't the case when the company buys TV or print ads. "We get right to the center of the consumer," Mr. Edwards said last summer.
Nike now believes digital thinking should be at the heart of ad strategy, according to people familiar with the marketer's thinking. To make digital more central, it needs its main ad agency to be better skilled at digital techniques because the agency is developing ad strategy at the very early stages of a marketing campaign.
Ad executives say more mainstream ad firms could lose business unless they figure out how to better integrate digital media. "If people aren't embracing digital they will get left behind; clients are already there and they are gravitating to agencies who get it," adds Mr. Murphy.
Some agencies have tried to foster better collaboration between traditional and digital advertising. WPP Group's Ogilvy & Mather in 2005 named Jan Leth, executive creative director of the North American operations of its digital arm, OgilvyInteractive, to the additional post of co-chief creative officer for Ogilvy's New York office.
Publicis Groupe, similarly, is considering merging Modem Media, a digital firm that it acquired as part of its recent $1.6 billion purchase of Digitas, into its Publicis ad agency, according to people familiar with the matter.
Still, even with the best intentions, collaboration can be difficult to pull off, ad executives say.
"The thing is all these things look good on paper but so did communism," says Matt Freeman, chief executive officer of Tribal DDB, the digital arm of Omnicom Group's DDB Worldwide. "At the end of the day it's all about who is in charge. ... Traditional ad people are in favor of integration as long as they are in control. It still comes down to who reports to who and egos."
Google, affiliate networks can and will co-exist: Zanox’s Kamin
Google, affiliate networks can and will co-exist: Zanox’s Kamin
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obfuscate('reprints', 'dmnews.com', '1', 'Reprints');
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By Giselle Abramovich
March 26th, 2007
Since Google announced the beta test of pay-per-action advertising — which allows advertisers to pay only when predetermined actions are completed on their Web sites — there’s been a lot of talk on how the PPA model might adversely affect the affiliate networks.
However, Holger Kamin, regional and country manager at Belgium-based Zanox, believes Google and the affiliate networks can and will co-exist.
“The affiliate market is completely different than simply PPC or PPA models,” Mr. Kamin said. “It is by no means obvious that Google will be a serious challenger here — or that it even wants to [be].”
The pay-per-action model gives advertisers the option of paying when a customer makes a purchase, signs up for a newsletter or completes any other clearly defined action the advertiser chooses. Advertisers have the freedom of defining the value of a completed action, ultimately giving them more control over their advertising costs.
Mr. Kamin said that Google's PPA offering is a good deal for smaller publishers who are likely already using AdSense anyway.
“Larger advertisers and affiliates want much more control and support than Google is offering,” he said. “That's where affiliate networks excel and are clearly superior.”
But making affiliate marketing victorious depends on more than just technology. It takes hard work and a hands-on approach and hands-on is not “Google's style,” Mr. Kamin said.
Affiliate networks have developed tracking systems that cover the majority of possible scenarios and make sure partners and affiliates get paid for every qualified lead and sale.
“Another point here is the scalability of various channels called multi-channel marketing,” Mr. Kamin said. “The sophistication of today’s affiliate networks enables some players to manage all possible online marketing partnerships. This alone differs significantly from Google's overall objectives. Here I see them indeed making a play for an affiliate network, not only to get the horizontal reach, but also to benefit from its overall know-how.”
E-Mail to a friend Print this article
obfuscate('reprints', 'dmnews.com', '1', 'Reprints');
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By Giselle Abramovich
March 26th, 2007
Since Google announced the beta test of pay-per-action advertising — which allows advertisers to pay only when predetermined actions are completed on their Web sites — there’s been a lot of talk on how the PPA model might adversely affect the affiliate networks.
However, Holger Kamin, regional and country manager at Belgium-based Zanox, believes Google and the affiliate networks can and will co-exist.
“The affiliate market is completely different than simply PPC or PPA models,” Mr. Kamin said. “It is by no means obvious that Google will be a serious challenger here — or that it even wants to [be].”
The pay-per-action model gives advertisers the option of paying when a customer makes a purchase, signs up for a newsletter or completes any other clearly defined action the advertiser chooses. Advertisers have the freedom of defining the value of a completed action, ultimately giving them more control over their advertising costs.
Mr. Kamin said that Google's PPA offering is a good deal for smaller publishers who are likely already using AdSense anyway.
“Larger advertisers and affiliates want much more control and support than Google is offering,” he said. “That's where affiliate networks excel and are clearly superior.”
But making affiliate marketing victorious depends on more than just technology. It takes hard work and a hands-on approach and hands-on is not “Google's style,” Mr. Kamin said.
Affiliate networks have developed tracking systems that cover the majority of possible scenarios and make sure partners and affiliates get paid for every qualified lead and sale.
“Another point here is the scalability of various channels called multi-channel marketing,” Mr. Kamin said. “The sophistication of today’s affiliate networks enables some players to manage all possible online marketing partnerships. This alone differs significantly from Google's overall objectives. Here I see them indeed making a play for an affiliate network, not only to get the horizontal reach, but also to benefit from its overall know-how.”
NBC Universal and News Corp are teaming to distribute free TV shows and movies via the three large portals -- AOL, MSN, Yahoo -- and social networking
NBC Universal and News Corp are teaming to distribute free TV shows and movies via the three large portals -- AOL, MSN, Yahoo -- and social networking site MySpace. The initiative will launch this summer, with what the networks say are "thousands of hours" of full-length TV programs and movies.
With this deal, NBC and News Corp take aim at Google's YouTube, as well as at companies hoping to enter the burgeoning Web TV field. Just several weeks ago, Joost -- a start-up from the creators of Kazaa and Skype -- announced it will soon start offering ad-supported versions of a host of Viacom programs. Similarly BitTorrent Vice President and General Manager of Consumer Services Eric Patterson said at OMMA Hollywood that the company plans to start offering ad-supported TV programs by the end of the year.
The move also comes around six months after NBC launched its own Web syndication service, National Broadband Company, or NBBC --which appears to compete with the new venture. At the time, Randy Falco -- then president and chief operating officer of NBC Universal Television Group, now AOL's chairman -- said, "In short, we're getting back into the broadcasting business, on the Internet."
But NBBC was focused -- at least initially -- on short clips of less than seven minutes, while the new joint NBC/News Corp service aims to distribute full-length shows. At launch, shows that will be available via the joint venture include "Heroes," "24," "House," "Saturday Night Live," and "The Simpsons." Movies slated for free distribution include "Borat," "Little Miss Sunshine" and "The Devil Wears Prada." Cadbury Schweppes, Cisco, Esurance, Intel Corporation and General Motors have signed on as charter advertisers.
With this deal, NBC and News Corp take aim at Google's YouTube, as well as at companies hoping to enter the burgeoning Web TV field. Just several weeks ago, Joost -- a start-up from the creators of Kazaa and Skype -- announced it will soon start offering ad-supported versions of a host of Viacom programs. Similarly BitTorrent Vice President and General Manager of Consumer Services Eric Patterson said at OMMA Hollywood that the company plans to start offering ad-supported TV programs by the end of the year.
The move also comes around six months after NBC launched its own Web syndication service, National Broadband Company, or NBBC --which appears to compete with the new venture. At the time, Randy Falco -- then president and chief operating officer of NBC Universal Television Group, now AOL's chairman -- said, "In short, we're getting back into the broadcasting business, on the Internet."
But NBBC was focused -- at least initially -- on short clips of less than seven minutes, while the new joint NBC/News Corp service aims to distribute full-length shows. At launch, shows that will be available via the joint venture include "Heroes," "24," "House," "Saturday Night Live," and "The Simpsons." Movies slated for free distribution include "Borat," "Little Miss Sunshine" and "The Devil Wears Prada." Cadbury Schweppes, Cisco, Esurance, Intel Corporation and General Motors have signed on as charter advertisers.
Sunday, March 25, 2007
Watch AO Media Archives! | About AlwaysOn
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Saturday, March 24, 2007
Local Broadcasters Deliver Digital Ads, Drawing From New Revenue Pools
After taking knocks from upstart digital media, local broadcasters are starting to receive sizeable benefits from next wave of new media development, said speakers at the Kagan Radio/TV Values & Finance Summit in New York City on Thursday.
Kagan Research forecasts that radio and TV stations will generate $1.7 bil. in 2007 revenue from online media sources—which will deliver double-digit growth in the years ahead. That covers station-owned websites, multicast channels in digital broadcasting, podcasting and station content monetized on third party platforms, including budding wireless broadband media.
"It's a pretty positive outlook for radio from my perspective," said John Blackledge, senior analyst covering radio, TV and outdoor at JPMorgan. Summit speakers noted that selling digital platform ads and drilling deeper for local advertisers that never bought broadcasting before brings completely new ad money, as the accompanying table indicates.
"The pie expands," said Tom Castro, president and CEO of radio group Border Media Partners. "It's not a zero sum game" anymore.
Tapping new-to-broadcasting advertising money is crucial because ad revenue from traditional advertising is trending flat to slow-growth. Excluding online/digital, TV stations' $44.9 bil. in 2006 total ad billings and—to a lesser extent—radio stations' $20 bil. in ad billings ride a see-saw of ups-and-downs based on election and Olympic years.
Last year, Kagan estimates new media revenue contributed 2.7% of all ad revenue at radio and TV stations. Local advertisers can create their own ads using the self-serve tools available via websites, which relieves stations of time consuming account service and ad creation work for the smallest advertising accounts.
"Broadcast stations—both TV and radio—are ideally positioned to be leaders in their local online markets due to their strong ties to the community, leading local content, and seasoned sales teams with strong ties to area advertisers," said Kagan Senior Analyst Robin Flynn. "According to Kagan Summit speakers, TV station owners are at most in the very 'first innings' of developing the local online opportunity—if not still in Spring training."
Digital media is not a cake walk to riches because operating websites and enlarging local content creation raises broadcast station expenses. But speakers said broadcasters seemed to have turned a corner by holding their own amid the bombastic arrival of fast-growing new digital media rivals, such as subscription satellite radio and the Internet.
There are worries ahead. New digital media revenue streams can't be automatically counted on to lift profits, given spotty weaknesses in conventional radio advertising, particularly in the automotive category. However, political ads seem to have morphed into a non-stop business, not just an election year windfall in even numbered years, broadcast executives said.
Friday, March 23, 2007
Five Thoughts on Google PPA
Filed under: Affiliate Marketing - March 23, 2007
In my last post I expressed some concern about Google's recent Pay-Per-Action entry into affiliate marketing network space. Since that writing, I've had more time to think about things and consider other angles. Here's five thoughts on Google and affiliate marketing in general that help me put Google PPA into perspective.
1. Google covers the bases by offering lots of tools.
I see this as savvy business planning and investing. I don't blame Google for entering other spaces and competing. Competition is a good thing and produces better products and more options. Bring it on. This is nothing new and Google has many excellent competitors in this space. Google's actions in any area tend to spawn new service providers as well and that's great news.
2. Google is heavy on technology but light on service.
Unlike Google, successful affiliates are heavy on service. They offer value-added benefits that consumers want. In many ways Google needs the creativeness of affiliate publishers and advertisers more than affiliates need the technology of Google. In short, Google would not be needed if there was nothing new of value to search for.
Customers go where the services are. I don't think there's a lot of deep loyalty to Google since there's not a deep relationship with Google. However, many affiliate publishers have created long-lasting relationships and loyalty brought about by their services.
3. Google PPA is really nothing new.
Paying per action is not much different than paying per click via Google AdWords. Savvy advertisers already factor into their profitability equation the cost of clicks needed to get the desired action when using AdWords. I predict that Google PPA will not amount to any significant cost savings over Google AdWords since competition continually pushes things to an equilibrium. (I could be proven wrong if PPA is applied to Google's content network since the majority of fraud occurs here. In this area it could be an effective tool for combating click rings.)
4. Just because Google is doing it doesn't mean Google will dominate that sector.
The only area right now that Google really dominates outright is search (organic and paid). Even here their reach is just over half the market. You could also argue that they now dominate video with their acquisition of YouTube but I don't think they're anywhere close to a lock in this new playing field.
So I started thinking about Google products along these lines. I see strong competition for everything Google does (including search). For example, there's a lot of competition to Blogger, Gmail, Google Maps, and Google Analytics to name a few. Their entry into these areas didn't end competition from MovableType, WordPress, Yahoo!, MapQuest, ClickTracks, and many other companies. True, in some cases these companies had to alter their course a bit to respond, but that's nothing new for a dynamic business.
5. There's lots of opportunities for everyone!
LinkShare, Commission Junction, Performics, ShareASale and others who provide affiliate marketing network services really have nothing to fear. Sure, they may have to alter their way of doing things a bit but they're in the business of providing service and that's something that Google doesn't do much of. That's a huge home court advantage for them.
I feel that instead of suffering, successful affiliate marketing network providers will end up experiencing growth from this as many merchants try PPA on their own, get no traction and seek professional help from the experts. That's great news for the whole industry -- including affiliate publishers like me.
In conclusion, instead of worrying, I see this move by Google as validating the affiliate model. It means that affiliate marketing is strong, viable, and growing. That's very exciting!
In my last post I expressed some concern about Google's recent Pay-Per-Action entry into affiliate marketing network space. Since that writing, I've had more time to think about things and consider other angles. Here's five thoughts on Google and affiliate marketing in general that help me put Google PPA into perspective.
1. Google covers the bases by offering lots of tools.
I see this as savvy business planning and investing. I don't blame Google for entering other spaces and competing. Competition is a good thing and produces better products and more options. Bring it on. This is nothing new and Google has many excellent competitors in this space. Google's actions in any area tend to spawn new service providers as well and that's great news.
2. Google is heavy on technology but light on service.
Unlike Google, successful affiliates are heavy on service. They offer value-added benefits that consumers want. In many ways Google needs the creativeness of affiliate publishers and advertisers more than affiliates need the technology of Google. In short, Google would not be needed if there was nothing new of value to search for.
Customers go where the services are. I don't think there's a lot of deep loyalty to Google since there's not a deep relationship with Google. However, many affiliate publishers have created long-lasting relationships and loyalty brought about by their services.
3. Google PPA is really nothing new.
Paying per action is not much different than paying per click via Google AdWords. Savvy advertisers already factor into their profitability equation the cost of clicks needed to get the desired action when using AdWords. I predict that Google PPA will not amount to any significant cost savings over Google AdWords since competition continually pushes things to an equilibrium. (I could be proven wrong if PPA is applied to Google's content network since the majority of fraud occurs here. In this area it could be an effective tool for combating click rings.)
4. Just because Google is doing it doesn't mean Google will dominate that sector.
The only area right now that Google really dominates outright is search (organic and paid). Even here their reach is just over half the market. You could also argue that they now dominate video with their acquisition of YouTube but I don't think they're anywhere close to a lock in this new playing field.
So I started thinking about Google products along these lines. I see strong competition for everything Google does (including search). For example, there's a lot of competition to Blogger, Gmail, Google Maps, and Google Analytics to name a few. Their entry into these areas didn't end competition from MovableType, WordPress, Yahoo!, MapQuest, ClickTracks, and many other companies. True, in some cases these companies had to alter their course a bit to respond, but that's nothing new for a dynamic business.
5. There's lots of opportunities for everyone!
LinkShare, Commission Junction, Performics, ShareASale and others who provide affiliate marketing network services really have nothing to fear. Sure, they may have to alter their way of doing things a bit but they're in the business of providing service and that's something that Google doesn't do much of. That's a huge home court advantage for them.
I feel that instead of suffering, successful affiliate marketing network providers will end up experiencing growth from this as many merchants try PPA on their own, get no traction and seek professional help from the experts. That's great news for the whole industry -- including affiliate publishers like me.
In conclusion, instead of worrying, I see this move by Google as validating the affiliate model. It means that affiliate marketing is strong, viable, and growing. That's very exciting!
TV points to Web
SAN FRANCISCO Traditional advertising plays a key role in prompting consumers to search for merchandise online, according to a study by the Retail Advertising and Marketing Association (RAMA) and BIGresearch.
Roughly half of the consumers told researchers they take cues from TV, magazine and newspaper ads to determine when and where to shop online. In order of preference, 47 percent said they turned to magazine ads, followed by TV commercials and newspaper ads at 43 percent each. (Respondents could choose more than one medium.)
In-store promotions motivated 27 percent to search for products online. When it came to coupons, far more women than men used them for online guidance, at 42 percent of women versus 29 percent of men.
The survey findings seem to reinforce the evidence that many marketing agencies are collecting, which indicates online and offline marketing programs work better than online-only or offline-only campaigns. "When it comes to advertising, retailers always need to be careful not to put all of their eggs in one basket," said Mike Gatti, executive director of RAMA.
"While search engine marketing continues to be a popular strategy, retailers should not lose sight of traditional advertising channels to promote products and services," Gatti said.
Shoppers use the Internet as a resource before determining which items to buy and where. According to the survey, 92.5 percent of adults said they regularly or occasionally research products online before buying them in a store. Products that are most often researched online are electronics, apparel and appliances. Men were twice as likely as women to shop for automobiles online, 20 percent to 10 percent, respectively.
"Retailers must realize that online communities are now producers and are able to extend the distribution of traditional media with a trust and truth not even approximated by mass media," said Joe Pilotta, vp at BIGresearch.
The study surveyed more than 15,000 consumers in November and December 2006. RAMA released its analysis of the survey last week.
Roughly half of the consumers told researchers they take cues from TV, magazine and newspaper ads to determine when and where to shop online. In order of preference, 47 percent said they turned to magazine ads, followed by TV commercials and newspaper ads at 43 percent each. (Respondents could choose more than one medium.)
In-store promotions motivated 27 percent to search for products online. When it came to coupons, far more women than men used them for online guidance, at 42 percent of women versus 29 percent of men.
The survey findings seem to reinforce the evidence that many marketing agencies are collecting, which indicates online and offline marketing programs work better than online-only or offline-only campaigns. "When it comes to advertising, retailers always need to be careful not to put all of their eggs in one basket," said Mike Gatti, executive director of RAMA.
"While search engine marketing continues to be a popular strategy, retailers should not lose sight of traditional advertising channels to promote products and services," Gatti said.
Shoppers use the Internet as a resource before determining which items to buy and where. According to the survey, 92.5 percent of adults said they regularly or occasionally research products online before buying them in a store. Products that are most often researched online are electronics, apparel and appliances. Men were twice as likely as women to shop for automobiles online, 20 percent to 10 percent, respectively.
"Retailers must realize that online communities are now producers and are able to extend the distribution of traditional media with a trust and truth not even approximated by mass media," said Joe Pilotta, vp at BIGresearch.
The study surveyed more than 15,000 consumers in November and December 2006. RAMA released its analysis of the survey last week.
RSS, Blogs, Podcast and Social Media Experts to Share Knowledge at PR Online Convergence Conference
(LOS ANGELES/March 21, 2007) Experts on the use of RSS, blogs, podcast and new media in public relations and corporate communications campaigns are converging at a premier conference in Los Angeles May 16-18, 2007. PR Online Convergence 07: Deploying Social Media for Business Advantage, a 3-day event set for the Universal Hilton in Los Angeles, will address critical issues facing PR and corporate communication professionals in the age of social media.
"The way people get media, information and entertainment has and continues to change. It?s become strategically unwise for PR and marketing to let online presence be handled exclusively by the web guys down the hall. For those executives who have accepted that denial is not a business strategy, we?re bringing this professional development opportunity to Los Angeles," says Eric Schwartzman, PR Online Convergence Conference Chair and founder and chairman of iPressroom Corporation, which helps organizations extend the reach of their PR and marketing campaigns using the latest new media tools and services integrated into one powerful, online dashboard. ?
"Corporate communications, public relations and marketing is being forced to make the seismic change from controlling messages to facilitating conversations," says John Gerstner, President of the Communitelligence Learning Academy, which is producing the event. "We?re challenging the most knowledgeable and experienced PR and new media pioneers to connect the dots for business executives needing to adeptly deploy the new media tools and services for competitive advantage.?
Sessions:
Integrating the Web into Conventional PR Campaigns ? Building Public Awareness through Social Networking ? Integrating Blogs and News Feeds into Corporate Communications ? How to Drive Traffic and Transactions Online ? Building a Business Case for New Media through Measurement of Results ? How Organizations are Integrating Their Web Presences into their Organizational Outreach Agenda ? Benefits of Podcasting: Beyond the Press Release with Sound and Picture ? Generating Word of Mouth through Peer Marketing Initiatives ? Practical Applications of Real Simple Syndication for Marketing and Public Relations
Keynotes:
Adapting to a Fragmented Media Landscape: Integrating the Web into Conventional PR Campaigns, by Eric Schwartzman, Conference Chair ? Bloggers and PR People: Why Can't We Just Get Along?, Stowe Boyd, Editor, /Message ? PR in the Age of Blogging -- How to stop spinning and be authentic, Jason Calcanis, CEO and co-founder, Weblogs Inc.
In addition, there are four pre-conference half-day workshops scheduled for May 16 on effective business podcasting, strategizing social media, establishing a social media dashboard and keeping up-to-date about conversations online.
About Communitelligence: Communitelligence is a knowledge-sharing portal aimed at improving organizational and interpersonal communication.
Thursday, March 22, 2007
Internet Display’s 6.5% Of Advertising
Averaged From Wide Spending Range
Display advertising on the Internet carved out a 6.5% slice of total U.S. advertising in 2006, although spending proportions differed widely by advertiser classes to yield that average, according to TNS Media Intelligence.
Last year, Internet display stood at 5.7% of total U.S. ad spend. As a digital new media, Internet display takes a growing a slice of the pie that used that used to be devoured only by traditional analog media such as newspapers, magazines, broadcasting and outdoor.
"It's been growing at eight or nine tenths of a percentage point a year over the past three years," says Jon Swallen, senior VP of research at TNS MI. "That's striking because that's just for display advertising, which is a slower growing segment within Internet advertising."
The data survey doesn't include ad spend for fast-growing "paid search" such as on Google, which is analogous to non-display direct response and classified ads in analog media. Internet display covers banner ads, and encompasses some innovations such as rich media ads with moving graphics or audio.
As the accompanying table indicates, the advertiser allocation to Internet display is distilled from a wide range of percentages from various advertiser categories. At the high end, the Health and Fitness advertiser category channeled a well-above average 26.1% to Internet display. At the other end of the scale, Restaurants at 0.9% and Apparel at 1.4% were well below average.
Swallen notes advertisers with information-intensive messages—such as selling mortgages and credit cards—are big proportional spenders on Internet display. The Financial Services category averaged a 17% spend on Internet display.
Below average users are image-oriented marketers such as Apparel and Non Alcoholic Beverages. There's not a lot of intricate new information to convey about a soft drink, for example.
Display Internet's 6.5% slice came out of a $149.6 bil. total U.S. advertising pie last year, which TNS MI estimates grew 4.1%. The Internet display category itself soared 17.3% in 2006 to reach $9.7 bil. That growth rate eclipsed all other categories except a 25.5% spike in free standing inserts (loose inserts in print publications), a smaller category on a total dollar basis.
As for traditional media sector ad spend in 2006, outdoor climbed 8.6%, TV rose 5.3% (benefiting from an election year), magazines 3.8% and radio 0.3%, while newspapers fell 2.4%. Internet display's slice of pie gains came at the expense of a shrinking newspaper slice. Advertisers are embracing new media, despite its uncertainties (see Jan. 19 Kagan INSIGHTS free at kagan.com).
Why most of the CPA/Brokerage industry will not be around in 5 years.
from Digital Moses March 22, 2007
by Adrian Bye
Many people currently involved in the CPA industry feel that this industry is rock solid and not likely to change anytime soon. They may be in for a shock. There are developments coming from technological, business and legal areas which are going to have huge ramifications on the industry. One of those just happened.
Specifically I am referring the brokerage fees that CPA networks and brokers charge (around 20%) to push offers to fill the internet demand for remnant inventory, and the inefficiencies and expenses that are put in place by having so many humans involved in making web advertising work. Over time these people will be replaced by technology, just as many industries have been overturned in the past by modernization causing blue collar workers to lose their jobs.
The three biggest sources of traffic for a typical network are:
a. Email marketing
b. Pay per click traffic
c. Web inventory such as banners and text links
We’ll talk about these one by one.
CPA search marketing
Pay per click marketing is changing. Google has just announced it is going to offer a CPA model. At the moment it is possible to make a decent living by being good at PPC arbitrage of CPA offers. This works right now because Google and Yahoo have focused their business model around selling clicks, rather than selling actions. They do this because this is their version of branded CPM advertising – they can generally get more for it.
However, this causes huge inefficiencies in the system, because it is time consuming and complicated to figure out how to drive lots of PPC traffic, enabling therefore arbitrage opportunities.
Since Google has now started offering a CPA system, and Yahoo certainly will, this will change dramatically. Advertisers will be able to add a bunch of creatives into the system, along with a list of keywords and a CPA they are willing to pay. The system will then automatically test the base keywords you inserted, along with an extra list of keywords google generated itself. It will test them all against the various creatives you made; keeping pricing under a certain CPA you have set. The entire system will be fully automated, and the current arbitrage which is possible today will go away. Google and Yahoo can make quite a lot of money by making this change, given the average network commissions and the money made by PPC arbitrage players. Google has already switched and it is just a matter of time before Yahoo does as well.
Notice I don’t mention clickfraud – I don’t believe this impacts Google and Yahoo moving to a CPA model.
Email marketing
Email marketing is an area which is going to change on two fronts. CANSPAM is a law with many loopholes, one that allows people to send as much mail as they want under certain (not very restrictive) limitations. A lot of mail is being sent which does not provide true value to consumers, its simply mass market monetization that is driving volume, a process I really disagree with. At some point a new email law will be passed which requires something like "at the time of sign up, the sending FROM address must be displayed clearly so the consumer knows where they will receive mail from". And brokering of email data will be exclusive only. You join one list, you unsubscribe from that list, period. It’s only a matter of time until something like this is legislated. Don’t think so? A few years ago the telemarketing industry was doing great – now its been decimated with the FTC’s do not call rules. This kind of thing can happen literally overnight – look at how the online gaming industry has been affected recently.
Secondly, deliverability is going to get much more difficult. Right now, most ESP’s can get mail delivered almost anywhere except major ISP’s such as Yahoo and Hotmail. Reputation management is a new trend in email which will change this dramatically. Reputation management means that every IP address which is sending email is certified by an independent third party as to how that IP address is being used to send mail. It provides a lot of data to email receivers on exactly how that IP address is being used. If you’re certified and your reputation is positive, a lot of your mail will automatically be delivered. If you’re not, you’ll get blocked as spam.
Right now reputation management is being used by the major ISPs to confirm mail delivery – but once this is rolled out more widely across internet mail servers, mail blocking will improve dramatically, and those who are sending bulk co-reg data will find their deliverability falling through the floor.
Behavioural targeting
Thirdly, behavioral targeting is going to get much better. This has been talked about in the past, and never seems to truly work properly but it is starting to get much better now. Networks like Blue Lithium and turn.com are making a lot of progress with targeting and collecting a lot of data on their userbase. Reports I hear about Blue Lithium in particular are that it performs extremely well.
Impressive things are being done on the advertiser side to take advantage of behavioural targeting. For example, Think Partnership has a new product called Second Bite which saves shopping cart abandoners. If you decided not to buy a product and half completed your shopping cart, Second Bite will work to get you to finish your purchase. Think Partnership is just starting to buy banner inventory to save the cart purchase. What this means is that you can be browsing the web and you’ll see a banner saying "hey – come back and finish your purchase on and get a 10% discount". Once this kind of inventory is brokered out to major behavioural networks, no general interest CPA offer will be able to compete with the CPM’s they will be able to pay to save a purchase. Sure, this is a narrow application, but many more clever targeting applications of behavioural targeting will appear, increasing CPM’s across the board.
In addition, client side behavioral targeting will increase. By this I mean that users will allow more data to be mined from their computers locally, and some of it will be passed back to the network. In an extreme case, imagine if Microsoft made its Windows OS completely free – but in return for being able to mine behvioural data from your machine. This data would be fed back to online targeting networks such as Blue Lithium, to target web advertising more accurately. No popups or any other nasty applications would be included. That could be a huge value add for consumers – with free software AND better advertising. Yes, this has huge privacy implications, but over time these will be worked out – the ECPM increase from accurate targeting will be too valuable, and consumers will not mind their data being mined in aggregate.
That’s not to say that everything is bad. Some areas of the CPA and brokerage industry will continue to work well. These include:
1) Coupon and affiliate sites. Publishers that are actively going out and finding links to promote on their site for consumers will continue to make money and want to use CPA networks. The human interface in this instance provides tremendous value to consumers since the publishers truly understand what their market wants.
2) Newsletters. This will become the standard for email marketing as the more aggressive forms of email marketing will be made illegal. This is similar to coupon and affiliate sites where publishers will actively seek out links to target their audience due to their understanding of their market.
3) Web and chat spam is going to increase. Right now we’re seeing quite a bit of spam on myspace, and given the progress people are making on defeating CAPTCHA mechanisms, this will only increase. If the postings cannot be effectively blocked by computers, then more of it will be done. Unfortunately CPA networks will see more volume from various forms of aggressive webspam as time goes on.
The branding industry will have some impact on these, but it likely won’t change much from the way it is now – some inventory will be sold at higher ECPM’s for major brands, and the rest will be remnant inventory. Of course the big question is how high the ECPM’s can get for behavioural targeting and whether they can beat branded advertising.
Some people will read this article and be thinking to themselves "no, he’s wrong, this has always worked, and it will continue to work". The reality is that the internet marketing industry has been around for a very short time, and we really don’t have any data points to compare against long term. The right way to think about it is "where is the true value for consumers and advertisers". If your business model doesn’t provide true value to all stakeholders, then at some point what you are doing will stop working.
If your business model depends entirely on brokering, you may want to consider how you will operate in a few years time once the above become reality.
A good way to think about whether your business will be around in the future is simply by answering two questions:
1) By running my business, am I creating true value for all my stakeholders (customers, employees, consumers, partners)
And
2) Am I keeping up with the very latest trends that might affect my business, including industries that are not directly related to my daily focus?
For number 2, you can say you’re doing the right thing because you’re reading this. J
Does this mean that all CPA advertising and lead generation will go away? Of course not. These are very fundamental models and the backbone of internet commerce.
Just watch out if your business model is entirely focused around brokering remnant advertising. If this is your primary business, make sure you stay on top of your strategy. You don’t want your company to be made irrelevant like has happened with generations of blue collar workers in the past.
by Adrian Bye
Many people currently involved in the CPA industry feel that this industry is rock solid and not likely to change anytime soon. They may be in for a shock. There are developments coming from technological, business and legal areas which are going to have huge ramifications on the industry. One of those just happened.
Specifically I am referring the brokerage fees that CPA networks and brokers charge (around 20%) to push offers to fill the internet demand for remnant inventory, and the inefficiencies and expenses that are put in place by having so many humans involved in making web advertising work. Over time these people will be replaced by technology, just as many industries have been overturned in the past by modernization causing blue collar workers to lose their jobs.
The three biggest sources of traffic for a typical network are:
a. Email marketing
b. Pay per click traffic
c. Web inventory such as banners and text links
We’ll talk about these one by one.
CPA search marketing
Pay per click marketing is changing. Google has just announced it is going to offer a CPA model. At the moment it is possible to make a decent living by being good at PPC arbitrage of CPA offers. This works right now because Google and Yahoo have focused their business model around selling clicks, rather than selling actions. They do this because this is their version of branded CPM advertising – they can generally get more for it.
However, this causes huge inefficiencies in the system, because it is time consuming and complicated to figure out how to drive lots of PPC traffic, enabling therefore arbitrage opportunities.
Since Google has now started offering a CPA system, and Yahoo certainly will, this will change dramatically. Advertisers will be able to add a bunch of creatives into the system, along with a list of keywords and a CPA they are willing to pay. The system will then automatically test the base keywords you inserted, along with an extra list of keywords google generated itself. It will test them all against the various creatives you made; keeping pricing under a certain CPA you have set. The entire system will be fully automated, and the current arbitrage which is possible today will go away. Google and Yahoo can make quite a lot of money by making this change, given the average network commissions and the money made by PPC arbitrage players. Google has already switched and it is just a matter of time before Yahoo does as well.
Notice I don’t mention clickfraud – I don’t believe this impacts Google and Yahoo moving to a CPA model.
Email marketing
Email marketing is an area which is going to change on two fronts. CANSPAM is a law with many loopholes, one that allows people to send as much mail as they want under certain (not very restrictive) limitations. A lot of mail is being sent which does not provide true value to consumers, its simply mass market monetization that is driving volume, a process I really disagree with. At some point a new email law will be passed which requires something like "at the time of sign up, the sending FROM address must be displayed clearly so the consumer knows where they will receive mail from". And brokering of email data will be exclusive only. You join one list, you unsubscribe from that list, period. It’s only a matter of time until something like this is legislated. Don’t think so? A few years ago the telemarketing industry was doing great – now its been decimated with the FTC’s do not call rules. This kind of thing can happen literally overnight – look at how the online gaming industry has been affected recently.
Secondly, deliverability is going to get much more difficult. Right now, most ESP’s can get mail delivered almost anywhere except major ISP’s such as Yahoo and Hotmail. Reputation management is a new trend in email which will change this dramatically. Reputation management means that every IP address which is sending email is certified by an independent third party as to how that IP address is being used to send mail. It provides a lot of data to email receivers on exactly how that IP address is being used. If you’re certified and your reputation is positive, a lot of your mail will automatically be delivered. If you’re not, you’ll get blocked as spam.
Right now reputation management is being used by the major ISPs to confirm mail delivery – but once this is rolled out more widely across internet mail servers, mail blocking will improve dramatically, and those who are sending bulk co-reg data will find their deliverability falling through the floor.
Behavioural targeting
Thirdly, behavioral targeting is going to get much better. This has been talked about in the past, and never seems to truly work properly but it is starting to get much better now. Networks like Blue Lithium and turn.com are making a lot of progress with targeting and collecting a lot of data on their userbase. Reports I hear about Blue Lithium in particular are that it performs extremely well.
Impressive things are being done on the advertiser side to take advantage of behavioural targeting. For example, Think Partnership has a new product called Second Bite which saves shopping cart abandoners. If you decided not to buy a product and half completed your shopping cart, Second Bite will work to get you to finish your purchase. Think Partnership is just starting to buy banner inventory to save the cart purchase. What this means is that you can be browsing the web and you’ll see a banner saying "hey – come back and finish your purchase on
In addition, client side behavioral targeting will increase. By this I mean that users will allow more data to be mined from their computers locally, and some of it will be passed back to the network. In an extreme case, imagine if Microsoft made its Windows OS completely free – but in return for being able to mine behvioural data from your machine. This data would be fed back to online targeting networks such as Blue Lithium, to target web advertising more accurately. No popups or any other nasty applications would be included. That could be a huge value add for consumers – with free software AND better advertising. Yes, this has huge privacy implications, but over time these will be worked out – the ECPM increase from accurate targeting will be too valuable, and consumers will not mind their data being mined in aggregate.
That’s not to say that everything is bad. Some areas of the CPA and brokerage industry will continue to work well. These include:
1) Coupon and affiliate sites. Publishers that are actively going out and finding links to promote on their site for consumers will continue to make money and want to use CPA networks. The human interface in this instance provides tremendous value to consumers since the publishers truly understand what their market wants.
2) Newsletters. This will become the standard for email marketing as the more aggressive forms of email marketing will be made illegal. This is similar to coupon and affiliate sites where publishers will actively seek out links to target their audience due to their understanding of their market.
3) Web and chat spam is going to increase. Right now we’re seeing quite a bit of spam on myspace, and given the progress people are making on defeating CAPTCHA mechanisms, this will only increase. If the postings cannot be effectively blocked by computers, then more of it will be done. Unfortunately CPA networks will see more volume from various forms of aggressive webspam as time goes on.
The branding industry will have some impact on these, but it likely won’t change much from the way it is now – some inventory will be sold at higher ECPM’s for major brands, and the rest will be remnant inventory. Of course the big question is how high the ECPM’s can get for behavioural targeting and whether they can beat branded advertising.
Some people will read this article and be thinking to themselves "no, he’s wrong, this has always worked, and it will continue to work". The reality is that the internet marketing industry has been around for a very short time, and we really don’t have any data points to compare against long term. The right way to think about it is "where is the true value for consumers and advertisers". If your business model doesn’t provide true value to all stakeholders, then at some point what you are doing will stop working.
If your business model depends entirely on brokering, you may want to consider how you will operate in a few years time once the above become reality.
A good way to think about whether your business will be around in the future is simply by answering two questions:
1) By running my business, am I creating true value for all my stakeholders (customers, employees, consumers, partners)
And
2) Am I keeping up with the very latest trends that might affect my business, including industries that are not directly related to my daily focus?
For number 2, you can say you’re doing the right thing because you’re reading this. J
Does this mean that all CPA advertising and lead generation will go away? Of course not. These are very fundamental models and the backbone of internet commerce.
Just watch out if your business model is entirely focused around brokering remnant advertising. If this is your primary business, make sure you stay on top of your strategy. You don’t want your company to be made irrelevant like has happened with generations of blue collar workers in the past.
Making Cents of Local Ads
Yahoo and Google say local businesses just don’t understand.
Santa Clara California , a conference for providers of online advertising.
March 20, 2007
By Leah Messinger
The little guys just don’t get it. Online advertising leaders say mom-and-pop ad buyers are stuck in the newspaper age, when ads were designed to prompt a direct response to a specific offer. By the same logic, a mouse click should lead to an immediate sale. But it doesn’t always work that way.
“These folks base success not on ad clicks, but on cash in the register at the end of the day,” said Hilary Schneider, Yahoo’s vice president for local markets, on Tuesday. Despite the frustrating naïveté of local advertisers, Ms. Schneider said her company is more than willing to pursue them. Google also wants in on what promises to be a highly lucrative market.
The current
The untapped “regional local” online ad market consists of 85,000 businesses with an adspend potential of $48.3 billion, said Ms. Schneider. The “local local” market is estimated at 22 million businesses with a total of $33.6 billion to spend. “I would say we have a long way to go,” Ms. Schneider said.
Tools that Yahoo uses to attract local advertisers include the “smart module,” which is based on ZIP-code-specific information. These modules, for example, could direct people searching for new cars to a page that directs them to local dealerships and allows them to make test-drive appointments.
Educating Merchants
Google senior manager Chris LaSala said a key challenge was to find ways to educate merchants that people using Google are often researching products and won’t actually make a purchase right away. A main function of online advertising then becomes branding, a concept Mr. LaSala reluctantly described as “unGoogle-ey.”
Analysts agree that some online advertisers are stuck in the ’90s, but some say the big guns aren’t giving the small fries the benefit of the doubt.
“They want to sort of dummy-down their products so that the small business gets it,” said Neal Polachek, an analyst with The Kelsey Group. “I think there’s a segment that already gets it and there’s a segment that you’ve got to really hold their hand to get them there.”
And if they don’t go willingly, Mr. Polachek said, they might miss the opportunity altogether. “I think if you’re not online by 2010, you either serve an incredibly niche audience or you’re going to be hard-pressed to survive.”
Agencies Warned: In Digital Media, Change Or Die
http://publications.mediapost.com/index.cfm?fuseaction=Articles.san&s=57452&Nid=28566&p=424232
by Tobi Elkin, Thursday, Mar 22, 2007 6:00 AM ET
DEVELOPMENTS IN DIGITAL MARKETING AND media are happening at such breakneck speed that marketers must prepare to navigate them--or be left behind. The same goes for the agencies that advise them. But the consensus among a panel of experts appearing at OMMA Hollywood earlier this week is that they're not ready, not by a long shot.
"Agencies aren't prepared for where things are going," said Tim Hanlon, senior vice president-Ventures Group, at Publicis Groupe's Denuo. Hanlon was, by far, the most strident of the group. Agency silos, he said, remain the order of the day, referring specifically to the relationship between brand and direct response media.
"Consumers, especially younger ones, if they see something in any form of media, they're going to want to go further with it," Hanlon said. "Agencies should be de-siloing to make that TV expression both a branded and DR vehicle," whether it's a TiVo vehicle or a telescope unit, "a little TV with a DR component," adding: "Is that the direct marketing agency's responsibility or the brand agency's? I think it's both, so why do have two separate groups?"
Good question. The role of the agency will need to change, given the rise of online-based ad auctions, hyper-local media planning and buying services, like SpotRunner and Spotzer, and other emerging media planning platforms.
"Google showed us that search and targeted ad messaging is not only a viable business, but a gargantuan business," Hanlon said. "The holding company model missed it. Now they're scrambling to be experts or to acquire this skill." Hanlon noted Publicis' acquisition of Digitas late last year.
With mobile and search engine optimization, "the reality is that you still have to have integrated agencies and teams. It's a big challenge. People have to be aligned differently. The way we hire and [provide incentive] needs to change, and it can't happen quickly enough," Hanlon noted.
Holding companies are licking their chops at digital investments. However, "making the investments is definitely the easiest thing we do--the hardest thing is to take an investment of any size and integrate it into the agencies and to deliver a powerful offering," suggested Bant Breen, president, Interpublic Futures Marketing Group. "That requires more holding company involvement--or a new [kind of] holding company involvement."
Nick Grouf, co-founder, chairman and CEO of SpotRunner, maintained that agencies, media companies and providers are morphing all the time: "Agencies change but they don't go away."
Breen suggested that the idea that creative and technological solutions stand at polar opposites no longer applies. "It's a messy landscape today ... Digital media staff is working two and a half times longer and harder than the traditional media staff," he noted, citing thousands of media channels and different data feeds. "We need systems to coordinate that process. Truly personalized creative could be very, very exciting."
"The media agency needs to reinvent its business model so that it's much more of a polyglot," Hanlon said. "Agency holding companies risk marginalizing themselves to just focusing on the big stuff. And then it becomes nothing more than a share-shift game. That's not a growth business; the growth is at places like Google."
"The big part of what agencies do is to empower consumers to make a purchase decision, foster relationships, enable transactions and deliver information," added Sean Gold, senior vice president marketing, MySpace. "Traditionally, they've been great at delivering information, but the fostering relationships/enabling transactions needs to improve."
by Tobi Elkin, Thursday, Mar 22, 2007 6:00 AM ET
DEVELOPMENTS IN DIGITAL MARKETING AND media are happening at such breakneck speed that marketers must prepare to navigate them--or be left behind. The same goes for the agencies that advise them. But the consensus among a panel of experts appearing at OMMA Hollywood earlier this week is that they're not ready, not by a long shot.
"Agencies aren't prepared for where things are going," said Tim Hanlon, senior vice president-Ventures Group, at Publicis Groupe's Denuo. Hanlon was, by far, the most strident of the group. Agency silos, he said, remain the order of the day, referring specifically to the relationship between brand and direct response media.
"Consumers, especially younger ones, if they see something in any form of media, they're going to want to go further with it," Hanlon said. "Agencies should be de-siloing to make that TV expression both a branded and DR vehicle," whether it's a TiVo vehicle or a telescope unit, "a little TV with a DR component," adding: "Is that the direct marketing agency's responsibility or the brand agency's? I think it's both, so why do have two separate groups?"
Good question. The role of the agency will need to change, given the rise of online-based ad auctions, hyper-local media planning and buying services, like SpotRunner and Spotzer, and other emerging media planning platforms.
"Google showed us that search and targeted ad messaging is not only a viable business, but a gargantuan business," Hanlon said. "The holding company model missed it. Now they're scrambling to be experts or to acquire this skill." Hanlon noted Publicis' acquisition of Digitas late last year.
With mobile and search engine optimization, "the reality is that you still have to have integrated agencies and teams. It's a big challenge. People have to be aligned differently. The way we hire and [provide incentive] needs to change, and it can't happen quickly enough," Hanlon noted.
Holding companies are licking their chops at digital investments. However, "making the investments is definitely the easiest thing we do--the hardest thing is to take an investment of any size and integrate it into the agencies and to deliver a powerful offering," suggested Bant Breen, president, Interpublic Futures Marketing Group. "That requires more holding company involvement--or a new [kind of] holding company involvement."
Nick Grouf, co-founder, chairman and CEO of SpotRunner, maintained that agencies, media companies and providers are morphing all the time: "Agencies change but they don't go away."
Breen suggested that the idea that creative and technological solutions stand at polar opposites no longer applies. "It's a messy landscape today ... Digital media staff is working two and a half times longer and harder than the traditional media staff," he noted, citing thousands of media channels and different data feeds. "We need systems to coordinate that process. Truly personalized creative could be very, very exciting."
"The media agency needs to reinvent its business model so that it's much more of a polyglot," Hanlon said. "Agency holding companies risk marginalizing themselves to just focusing on the big stuff. And then it becomes nothing more than a share-shift game. That's not a growth business; the growth is at places like Google."
"The big part of what agencies do is to empower consumers to make a purchase decision, foster relationships, enable transactions and deliver information," added Sean Gold, senior vice president marketing, MySpace. "Traditionally, they've been great at delivering information, but the fostering relationships/enabling transactions needs to improve."
Online Advertisers Bet on Video but Count on Display
MARCH 22, 2007
Web publishers' hearts are rectangular-shaped.
Web publishers' hearts are rectangular-shaped.
Nearly all Web sites with streaming content are monetizing it with video advertising, according to a survey of sites in the Advertising.com network.
While the network does not represent all Web publishers, its reach makes it a good indicator of overall trends. Not only did all video streaming sites surveyed say that they run video ads, 80% more sites plan to suppport video in 2007 than did in 2006.
Asked which online ad formats would lead revenue growth, respondents overwhelmingly chose large rectangles. Video was far down the list.
"Video carries great emotional impact like TV, yet it can be measured and can't be skipped," noted David Jacobs of Advertising.com. "That value means publishers can command higher CPMs — hence the rise of streaming content."
That explains why video will account for so much online ad spending going forward.
As we move into the next decade, eMarketer estimates that marketers will put more of their online budgets into video and other rich media advertising than they do into display ads, banners and other static placements.
Web publishers' preparation for video — while still believing in the tried-and-true large rectangle — makes sense given how video adoption is likely to play out.
As eMarketer senior analyst and video specialist David Hallerman puts it, "Spending increases on rich media advertising (most notably video) will lead the way in online ad spending, coming from a small base but with great desire among major brand advertisers for the format."
Wednesday, March 21, 2007
Online Widgets Booming in Popularity · MarketingVOX
Online Widgets Booming in Popularity · MarketingVOX: "Online Widgets Booming in Popularity
Whether from Twitter, MyBlogLog, or embedded YouTube videos, widgets are all the rage these days on blogs and websites. And as widgets become more popular, online heavyweights such as Yahoo and Google are starting to notice, Ad Age reports.
Yahoo will release the next version of its Yahoo Widgets 4.0 on March 22. It also recently purchased MyBlogLog, which has a popular widget that blog owners can add to their blog to show pictures of their recent visitors.
Google, meanwhile, claims to have created over 4,000 'gadgets' to date. Still, not all widgets are welcomed equally.
Twitter, for one, provides a widget that allows a user to post quick 140-character notes letting others know what that person is doing at the time of the post. The service has become wildly popular in recent weeks, but many people question the functionality and need for users to post about even their most banal activities.
Of course, this love/hate relationship has ensured that the widget receives even more attention both from supporters and from detractors. "
Whether from Twitter, MyBlogLog, or embedded YouTube videos, widgets are all the rage these days on blogs and websites. And as widgets become more popular, online heavyweights such as Yahoo and Google are starting to notice, Ad Age reports.
Yahoo will release the next version of its Yahoo Widgets 4.0 on March 22. It also recently purchased MyBlogLog, which has a popular widget that blog owners can add to their blog to show pictures of their recent visitors.
Google, meanwhile, claims to have created over 4,000 'gadgets' to date. Still, not all widgets are welcomed equally.
Twitter, for one, provides a widget that allows a user to post quick 140-character notes letting others know what that person is doing at the time of the post. The service has become wildly popular in recent weeks, but many people question the functionality and need for users to post about even their most banal activities.
Of course, this love/hate relationship has ensured that the widget receives even more attention both from supporters and from detractors. "
Online Widgets Booming in Popularity · MarketingVOX
Online Widgets Booming in Popularity · MarketingVOX: "Online Widgets Booming in Popularity
Whether from Twitter, MyBlogLog, or embedded YouTube videos, widgets are all the rage these days on blogs and websites. And as widgets become more popular, online heavyweights such as Yahoo and Google are starting to notice, Ad Age reports.
Yahoo will release the next version of its Yahoo Widgets 4.0 on March 22. It also recently purchased MyBlogLog, which has a popular widget that blog owners can add to their blog to show pictures of their recent visitors.
Google, meanwhile, claims to have created over 4,000 'gadgets' to date. Still, not all widgets are welcomed equally.
Twitter, for one, provides a widget that allows a user to post quick 140-character notes letting others know what that person is doing at the time of the post. The service has become wildly popular in recent weeks, but many people question the functionality and need for users to post about even their most banal activities.
Of course, this love/hate relationship has ensured that the widget receives even more attention both from supporters and from detractors. "
Whether from Twitter, MyBlogLog, or embedded YouTube videos, widgets are all the rage these days on blogs and websites. And as widgets become more popular, online heavyweights such as Yahoo and Google are starting to notice, Ad Age reports.
Yahoo will release the next version of its Yahoo Widgets 4.0 on March 22. It also recently purchased MyBlogLog, which has a popular widget that blog owners can add to their blog to show pictures of their recent visitors.
Google, meanwhile, claims to have created over 4,000 'gadgets' to date. Still, not all widgets are welcomed equally.
Twitter, for one, provides a widget that allows a user to post quick 140-character notes letting others know what that person is doing at the time of the post. The service has become wildly popular in recent weeks, but many people question the functionality and need for users to post about even their most banal activities.
Of course, this love/hate relationship has ensured that the widget receives even more attention both from supporters and from detractors. "
Nielsen: Last Year, 4.6% Increase in Ad Spending
March 20, 2007
By Katy Bachman, Mediaweek
NEW YORK -- Nielsen Monitor-Plus reported Monday a 4.6% increase in advertising spending to $139.07 billion, compared with 2005. Most of the 17 media experienced growth, led by the Internet with a 35% gain to $6.7 billion, followed by a 9.1% gain in Spot TV in the top 100 markets to $25.6 billion. Also showing strong gains were Spanish-language national TV, up 8.1% to $2.9 billion, and outdoor, up 8.1% to $3.7 billion.
Other media showing growth were: national Sunday supplements (5.6% to $983 million), local Sunday supplements (4.6% to $60 million), network TV (4.2% to $23.8 billion), national magazines (3.9% to $18.6 billion), local magazines (3.3% to $543.9 million), national newspapers (2.9% to $1.8 billion), national cable TV (1.8% to $23.7 billion) and spot radio (0.7% to $6.1 billion).
Media that ended the year with negative growth were: business-to-business magazines (-0.2% to $4.2 billion), coupons (-0.6% to $409.3 million), spot TV in markets 101 to 210 (-0.9% to $1.2 billion), network radio (-2.4% to $1.1 billion) and local newspapers (-3.6% to $13.9 billion).
Although ad spending among the major media grew in 2006, budgets among the top 10 advertisers were up only 1% to $17.9 billion. Six of the top 10 spent more in 2006, including top advertiser Procter & Gamble (up 1.1%), and both telecommunications companies, AT&T (up 44.4%) and Verizon Communications (up 16.2%).
Automotive advertisers were mixed. General Motors chopped its budget by 16%, as did DaimlerChrysler, which spent 6.1% less. Both Ford Motor Co. and Toyota Motor Co. increased spending by 10.2% and 14.2%, respectively.
Despite an uptick in spending among certain auto advertisers, in general both categories of automotive (automotive/auto dealers and automotive local dealers) were down 1.4% and 3.5%, respectively. In total, the automotive advertisers cut more than $374 million out of budgets.
The biggest growth categories for 2006 included pharmaceutical (up 14.9%), wireless telephone services (up 10.5%), and direct response products (up 10%).
Product placements in primetime network programming also leveled off in 2006 with a decrease in the overall number of placements to 79,701 from 102,793 in 2005. The shift "can be largely attributed to shifts in programming such as the airing of more dramas, which tend to carry less product placements than other program genres," said Annie Touliatos, director of marketing and strategy for Nielsen Product Placement Service.
Coca-Cola soft drinks was the top brand using product placement, followed by Chef Revival Apparel, Nike Apparel, 24 Hour Fitness Centers clubs and the Chicago Bears (NFL team). The top programs containing product placements were Fox's American Idol, followed by CBS' Amazing Race, ABC's Extreme Makeover Home Edition, NBC's The Biggest Loser and UPN/CW's America's Next Top Model .
More than 2.6 billion political spots aired on local TV, representing more than 93% of all political ad expenditures, up 24% from the previous midterm elections in 2002. A sizable percentage of the ads, 41%, were classified as negative.
By Katy Bachman, Mediaweek
NEW YORK -- Nielsen Monitor-Plus reported Monday a 4.6% increase in advertising spending to $139.07 billion, compared with 2005. Most of the 17 media experienced growth, led by the Internet with a 35% gain to $6.7 billion, followed by a 9.1% gain in Spot TV in the top 100 markets to $25.6 billion. Also showing strong gains were Spanish-language national TV, up 8.1% to $2.9 billion, and outdoor, up 8.1% to $3.7 billion.
Other media showing growth were: national Sunday supplements (5.6% to $983 million), local Sunday supplements (4.6% to $60 million), network TV (4.2% to $23.8 billion), national magazines (3.9% to $18.6 billion), local magazines (3.3% to $543.9 million), national newspapers (2.9% to $1.8 billion), national cable TV (1.8% to $23.7 billion) and spot radio (0.7% to $6.1 billion).
Media that ended the year with negative growth were: business-to-business magazines (-0.2% to $4.2 billion), coupons (-0.6% to $409.3 million), spot TV in markets 101 to 210 (-0.9% to $1.2 billion), network radio (-2.4% to $1.1 billion) and local newspapers (-3.6% to $13.9 billion).
Although ad spending among the major media grew in 2006, budgets among the top 10 advertisers were up only 1% to $17.9 billion. Six of the top 10 spent more in 2006, including top advertiser Procter & Gamble (up 1.1%), and both telecommunications companies, AT&T (up 44.4%) and Verizon Communications (up 16.2%).
Automotive advertisers were mixed. General Motors chopped its budget by 16%, as did DaimlerChrysler, which spent 6.1% less. Both Ford Motor Co. and Toyota Motor Co. increased spending by 10.2% and 14.2%, respectively.
Despite an uptick in spending among certain auto advertisers, in general both categories of automotive (automotive/auto dealers and automotive local dealers) were down 1.4% and 3.5%, respectively. In total, the automotive advertisers cut more than $374 million out of budgets.
The biggest growth categories for 2006 included pharmaceutical (up 14.9%), wireless telephone services (up 10.5%), and direct response products (up 10%).
Product placements in primetime network programming also leveled off in 2006 with a decrease in the overall number of placements to 79,701 from 102,793 in 2005. The shift "can be largely attributed to shifts in programming such as the airing of more dramas, which tend to carry less product placements than other program genres," said Annie Touliatos, director of marketing and strategy for Nielsen Product Placement Service.
Coca-Cola soft drinks was the top brand using product placement, followed by Chef Revival Apparel, Nike Apparel, 24 Hour Fitness Centers clubs and the Chicago Bears (NFL team). The top programs containing product placements were Fox's American Idol, followed by CBS' Amazing Race, ABC's Extreme Makeover Home Edition, NBC's The Biggest Loser and UPN/CW's America's Next Top Model .
More than 2.6 billion political spots aired on local TV, representing more than 93% of all political ad expenditures, up 24% from the previous midterm elections in 2002. A sizable percentage of the ads, 41%, were classified as negative.
Digesting Google’s New PPA Advertising Product
Posted: 21 Mar 2007 04:13 AM CDT
Google announced the testing of a new pay-per-action, or PPA, advertising product today. It’s important for a number of reasons, not the least of which is the fact that Google controls so much of the online advertising market that just about anything they do in advertising has real consequences around the Internet.
Background
Until now, Google has primarily sold cost-per-click, or CPC ads. Advertisers pay a fee when someone on Google or a Google partner site clicks on the ad and is delivered to a web page designated by the advertiser. Advertises like this because they only pay when a potential customer is in their hands. They don’t like it because of click fraud - publishers and advertiser competitors have an incentive to click those ads and generate revenue (or just cost to the advertiser). Since Google has a short term financial incentive to actually promote click fraud, there’s been a lot of debate around the subject over the years.
PPA advertising is meant to mitigate the risks of click fraud. Now the advertiser pays only if a customer has been delivered to a website and takes a further action, such as buying a product or filling out a web form.
Like CPC ads, PPA advertising wasn’t invented by Google. Search engine Snap has been selling ads this way for some time, for example. Another startup, Turn, is also in this business. As are others.
PPA requires an additional level of complexity in the ad network as well. Previously, Google delivered a user to a website, and sent a bill for the click. Now, Google needs to verify that an “action” has occurred by receiving confirmation back from the advertiser.
The advertiser will of course have an incentive not to confirm the action, but Google will be able to easily adjust for this. Like CPC ads, PPA ads will be ranked by profitability to Google. Google need only calculate the average value of a click to a PPA advertiser, and those ads can then be ranked by profitability. CPC and PPA ads could even be mixed, although Google isn’t doing that yet.
Consequences
This won’t affect big advertisers much, because they already track ROI on CPC advertising very closely. For smaller advertisers though, click fraud can wreak havoc. The ability to largely filter out click fraud will help them track ROI much more closely that they previously could. This will be a big help for them.
Affiliate marketing networks like Commission Junction and LinkShare are screwed. These networks also operate on a cost-per-action basis, mostly with online retailers. Even though some of them have scale, they will not have the ability to compete with Google on sheer size of network. Advertisers flock to volume, which drives average pricing up. When prices increase, publishers flock to the new platform because they’ll earn more. Look for serious publisher leakage from the big affiliate networks over time as this new product scales up. If you want to argue this point, note what happened to the stock price of Commission Junction’s parent company, ValueClick, today. And that’s even though the market has largely adjusted for this news already - this move to add PPA ads has been rumored for some time.
This should be good for Google’s overall market share and long term revenue growth. Anything that drives fraud out of the network will get advertisers to actually spend more money, not less, as their ROIs increase.
And Yahoo is now in the unenviable position of playing follow the leader again, even as they catch their breath from the massive Panama release earlier this year.
Oh Yeah, Google Also Released…
Google also announced a new “text link format” ad unit today. This was mentioned in the fourth paragraph of the blog post (not exactly highlighted), and is also discussed in the PPA product FAQs:
What is the text link format for pay-per-action ads?
Text links are hyperlinked brief text descriptions that take on the characteristics of a publisher’s page. Publishers can place them in line with other text to better blend the ad and promote your product.
For example, you might see the following text link embedded in a publisher’s recommendatory text: “Widgets are fun! I encourage all my friends to Buy a high-quality widget today.” (Mousing over the link will display “Ads by Google” to identify these as pay-per-action ads).
Though the maximum length of a text link is 90 characters, we’ve found that shorter links perform better because they allow the publisher use the link in more places on her/his site and in different context. The maximum length is 90 characters but less than 5 words is best. Even better, just use your brand name to offer maximum flexibility to the publisher.
No longer will Google ads need to be confined to their own space on the site - publishers can subtly embed ads right into hyperlinks within the main content of the site itself (see second paragraph of quote above). Other companies already do this, but Google has never tread into the “advertorial” space before.
They’ve crossed a hazy ethical line here. If this product was announced on its own, it would be heavily debated by the blogs and press. But by burying it in other, bigger news, they’ve mostly avoided the critical analysis that this actually deserves.
Crunch Network: CrunchBoard because it’s time for you to find a new Job2.0
Google announced the testing of a new pay-per-action, or PPA, advertising product today. It’s important for a number of reasons, not the least of which is the fact that Google controls so much of the online advertising market that just about anything they do in advertising has real consequences around the Internet.
Background
Until now, Google has primarily sold cost-per-click, or CPC ads. Advertisers pay a fee when someone on Google or a Google partner site clicks on the ad and is delivered to a web page designated by the advertiser. Advertises like this because they only pay when a potential customer is in their hands. They don’t like it because of click fraud - publishers and advertiser competitors have an incentive to click those ads and generate revenue (or just cost to the advertiser). Since Google has a short term financial incentive to actually promote click fraud, there’s been a lot of debate around the subject over the years.
PPA advertising is meant to mitigate the risks of click fraud. Now the advertiser pays only if a customer has been delivered to a website and takes a further action, such as buying a product or filling out a web form.
Like CPC ads, PPA advertising wasn’t invented by Google. Search engine Snap has been selling ads this way for some time, for example. Another startup, Turn, is also in this business. As are others.
PPA requires an additional level of complexity in the ad network as well. Previously, Google delivered a user to a website, and sent a bill for the click. Now, Google needs to verify that an “action” has occurred by receiving confirmation back from the advertiser.
The advertiser will of course have an incentive not to confirm the action, but Google will be able to easily adjust for this. Like CPC ads, PPA ads will be ranked by profitability to Google. Google need only calculate the average value of a click to a PPA advertiser, and those ads can then be ranked by profitability. CPC and PPA ads could even be mixed, although Google isn’t doing that yet.
Consequences
This won’t affect big advertisers much, because they already track ROI on CPC advertising very closely. For smaller advertisers though, click fraud can wreak havoc. The ability to largely filter out click fraud will help them track ROI much more closely that they previously could. This will be a big help for them.
Affiliate marketing networks like Commission Junction and LinkShare are screwed. These networks also operate on a cost-per-action basis, mostly with online retailers. Even though some of them have scale, they will not have the ability to compete with Google on sheer size of network. Advertisers flock to volume, which drives average pricing up. When prices increase, publishers flock to the new platform because they’ll earn more. Look for serious publisher leakage from the big affiliate networks over time as this new product scales up. If you want to argue this point, note what happened to the stock price of Commission Junction’s parent company, ValueClick, today. And that’s even though the market has largely adjusted for this news already - this move to add PPA ads has been rumored for some time.
This should be good for Google’s overall market share and long term revenue growth. Anything that drives fraud out of the network will get advertisers to actually spend more money, not less, as their ROIs increase.
And Yahoo is now in the unenviable position of playing follow the leader again, even as they catch their breath from the massive Panama release earlier this year.
Oh Yeah, Google Also Released…
Google also announced a new “text link format” ad unit today. This was mentioned in the fourth paragraph of the blog post (not exactly highlighted), and is also discussed in the PPA product FAQs:
What is the text link format for pay-per-action ads?
Text links are hyperlinked brief text descriptions that take on the characteristics of a publisher’s page. Publishers can place them in line with other text to better blend the ad and promote your product.
For example, you might see the following text link embedded in a publisher’s recommendatory text: “Widgets are fun! I encourage all my friends to Buy a high-quality widget today.” (Mousing over the link will display “Ads by Google” to identify these as pay-per-action ads).
Though the maximum length of a text link is 90 characters, we’ve found that shorter links perform better because they allow the publisher use the link in more places on her/his site and in different context. The maximum length is 90 characters but less than 5 words is best. Even better, just use your brand name to offer maximum flexibility to the publisher.
No longer will Google ads need to be confined to their own space on the site - publishers can subtly embed ads right into hyperlinks within the main content of the site itself (see second paragraph of quote above). Other companies already do this, but Google has never tread into the “advertorial” space before.
They’ve crossed a hazy ethical line here. If this product was announced on its own, it would be heavily debated by the blogs and press. But by burying it in other, bigger news, they’ve mostly avoided the critical analysis that this actually deserves.
Crunch Network: CrunchBoard because it’s time for you to find a new Job2.0
Comp Updates
GOOG – market share update from B. Peck – comScore #s out earlier Tues showed GOOG once again posting solid domestic share gains (60bp in Feb) to reach total domestic share of 48.1%. Google grew search queries by 36% YoY in February 07. While this growth level is significantly ahead of the industry growth at 19% YoY, it marked a meaningful deceleration from 44% in January 07. However, we think the deceleration could be a reflection of normal seasonality for Google. GOOG’s share gains came mostly at the expense of MSN, AOL,
and Ask.
GOOG – B. Peck’s thoughts on GOOG’s pay-per-action beta test. We think this is was widely discussed and anticipated by the St and we think GOOG will ultimately integrate pay-per-action platform w/its Checkout application.
YHOO – comScore market share data from B. Peck - market share stayed flat at 28.1% in February. We note that February marked the first time since August 05 where Yahoo's YoY growth rate outpaced the industry. Yahoo continued to be the second fastest growing search site YoY among the top five with growth in February 07 of 22% YoY, down slightly from the 23% reported in January 2007.
and Ask.
GOOG – B. Peck’s thoughts on GOOG’s pay-per-action beta test. We think this is was widely discussed and anticipated by the St and we think GOOG will ultimately integrate pay-per-action platform w/its Checkout application.
YHOO – comScore market share data from B. Peck - market share stayed flat at 28.1% in February. We note that February marked the first time since August 05 where Yahoo's YoY growth rate outpaced the industry. Yahoo continued to be the second fastest growing search site YoY among the top five with growth in February 07 of 22% YoY, down slightly from the 23% reported in January 2007.
Tuesday, March 20, 2007
Google Launches Pay-Per-Action; a Threat to Affiliate Networks?
Tuesday, March 20th, 2007;-- Andy Beal |
If you’re reading this post, then you can expect a flurry of news covering Google’s beta launch of its Pay-Per-Action (PPA) product for AdWords. Yep, after years of hinting, Google is finally ready to let us test their platform on a CPA (cost per action) model. (If this sounds familiar, reports surfaced back in June, that Google was offering a limited test of CPA)
The beta test is restricted to AdSense for content in the U.S., will run separate from the regular auction model, and you may not even get a chance to test it for a few weeks, while they roll it out. That being said, this is a significant expansion of the CPC (cost per click) model, with advertisers being given the option of paying when a customer buys a product, signs up for a newsletter, or completes any other actionable task on the advertiser’s web site.
On the publishing side, AdSense publishers will be able to opt-in to display PPA ads from Google and even whether they wish to display a single ad, a cluster of ads or match to a specific keyword that is relevant to their page content. Publishers also get to preview the ads, including company name, logo etc, before the ads go live.
As the broker between the advertiser and the publisher, Google will take its cut of any incentive offered. For example, if the advertiser offers $2 per sign-up, the publisher may see only $1.50 offered for the same sign-up. Google will pass on to publishers the net-incentive only.
Publishers also get a new “text link ad” format (I wonder what Patrick Gavin will have to say about that), which allows them to display JavaScript ads that appear as a single text link. Publishers will be able to search for text link ads that match their chosen text string. Perfect for bloggers looking to monetize their site, but would prefer to add embedded text links, rather than whole blocks of ads.
Now, here’s where my post title comes in to play.
A platform that allows advertisers to offer a reward based upon a sale or sign-up?
A platform that allows publishers to select text, flash or images when displaying advertisers incentives?
What does that sound like to you?
To me, it sounds like a clear threat to the likes of Commission Junction or LinkShare – or any other affiliate marketing network. Google, for all intents and purposes, has just entered the affiliate marketing arena, with the battle cry that they can do affiliate marketing better than the affiliate networks can.
Now, I feel obliged to inform you that when I posed this suggestion to Rob Kniaz, product manager for Google’s advertising products, he was very quick to deny any intention to compete in the affiliate network space. “We think this is different from the traditional affiliate marketing industry”, said Kniaz. “[It’s an] extension of the current AdWords product”. Oh really? Kind of like how Google doesn’t see itself competing with Microsoft’s office suite.
When I pushed Kniaz to explain why Google is so keen to distance itself from any associations with affiliate networks, his response was that the new PPA platform offered “more automation, more options, more control” than affiliate networks.
Sounds like fighting words to me!
BitTorrent, Joost To Create Competing TV Net Sites
by Wayne Friedman, Tuesday, Mar 20, 2007 7:00 AM ET
HOLLYWOOD, CA--BIG PEER-TO-PEER INTERNET COMPANY BitTorrent says it wants to join the race to create an ad-supported TV program Internet site.
During a panel session at the OMMA conference called "Big Media--Disintermediated," Eric Patterson, vice president and general manager of consumer services for BitTorrent, said the peer-to-peer technology company will be looking to launch a new Net TV service. Another peer-to-peer company, Joost, has already said it would launch a TV programming Internet service.
"We see us moving to an advertising-supported model at the end of the year so people can consume TV shows in the same way they consume programs on television," said Patterson, who didn't disclose any other details.
BitTorrent is a massive peer-to-peer technology company. Some 135 million people worldwide have downloaded files using BitTorrent, some one-third of all P2P traffic on the Internet. Last month, BitTorrent launched BitTorrent Entertainment Network, a new service that has compiled the rights to more than 3,000 movies, 1,000 games and 1,000 music videos from 34 participating content providers. The network has deals with Paramount Pictures, Lionsgate, Warner Bros. and MGM.
Like iTunes Music Stores, the BitTorrent business is a pay Internet service, where users can rent movies for $4 each, download-to-own TV shows and music videos for $2 each. BitTorrent also plans to add a digital-rights-management-free music download service in the near future.
Recently, Joost announced it had a deal with Viacom. As part of the agreement, the big media company would provide Joost with hundreds of TV shows. Joost is in beta test right now, and will launch later this year.
Joost founders started up Kazaa, the peer-to-peer Internet music downloading Internet company, and Skype, the peer-to-peer technology Internet phone service. Like BitTorrent, Joost executives believe that using peer-to-peer technology averts the coming broadband capacity crunch.
Both Kazaa and BitTorrent have had a history of unauthorized digital-content distribution. Now the founders of both companies are setting themselves up to provide above-board digital-entertainment services.
HOLLYWOOD, CA--BIG PEER-TO-PEER INTERNET COMPANY BitTorrent says it wants to join the race to create an ad-supported TV program Internet site.
During a panel session at the OMMA conference called "Big Media--Disintermediated," Eric Patterson, vice president and general manager of consumer services for BitTorrent, said the peer-to-peer technology company will be looking to launch a new Net TV service. Another peer-to-peer company, Joost, has already said it would launch a TV programming Internet service.
"We see us moving to an advertising-supported model at the end of the year so people can consume TV shows in the same way they consume programs on television," said Patterson, who didn't disclose any other details.
BitTorrent is a massive peer-to-peer technology company. Some 135 million people worldwide have downloaded files using BitTorrent, some one-third of all P2P traffic on the Internet. Last month, BitTorrent launched BitTorrent Entertainment Network, a new service that has compiled the rights to more than 3,000 movies, 1,000 games and 1,000 music videos from 34 participating content providers. The network has deals with Paramount Pictures, Lionsgate, Warner Bros. and MGM.
Like iTunes Music Stores, the BitTorrent business is a pay Internet service, where users can rent movies for $4 each, download-to-own TV shows and music videos for $2 each. BitTorrent also plans to add a digital-rights-management-free music download service in the near future.
Recently, Joost announced it had a deal with Viacom. As part of the agreement, the big media company would provide Joost with hundreds of TV shows. Joost is in beta test right now, and will launch later this year.
Joost founders started up Kazaa, the peer-to-peer Internet music downloading Internet company, and Skype, the peer-to-peer technology Internet phone service. Like BitTorrent, Joost executives believe that using peer-to-peer technology averts the coming broadband capacity crunch.
Both Kazaa and BitTorrent have had a history of unauthorized digital-content distribution. Now the founders of both companies are setting themselves up to provide above-board digital-entertainment services.
Monday, March 19, 2007
IAB: Here's How to Measure Lead Quality
The Interactive Advertising Bureau, with the help of online marketers and ad networks, has laid out guidelines to help members determining the quality of online leads, reports ClickZ. The guidelines come in a new document titled "The Marketer and Agency Guide to Lead Quality" and are meant for those using the web for sales lead generation. The IAB is hoping to make it easier for marketers weighing ad buys and other decisions to determine the best placement for their dollars.
By providing a map of sorts for determining the quality of the leads, including weighing factors such as origin and exclusivity, the IAB hopes that members can increase the return on their ad spending.
Although most leads are validated by third parties, the IAB stresses the importance of manual verification of the data provided. Spending on lead generation online rose from $347 million in 2005 to $592 million in 2006.
By providing a map of sorts for determining the quality of the leads, including weighing factors such as origin and exclusivity, the IAB hopes that members can increase the return on their ad spending.
Although most leads are validated by third parties, the IAB stresses the importance of manual verification of the data provided. Spending on lead generation online rose from $347 million in 2005 to $592 million in 2006.
White Papers : Sales & MarketingMaking the Case for Social Media Strategy
BizReport : White Papers : Sales & Marketing
Making the Case for Social Media Strategy
There has been a revolutionary shift in the media world. Companies that listen directly to word-of-mouth (WOM) discussions will create compelling brands, products, and messages. This white paper will arm you with the information you need to convince your organization that they should begin to engage with consumers and provides answers to:
How widespread is the social media phenomenon? How will it evolve in the future?
How are consumers talking about brands in social media? How do these findings complement other sources of information about consumer attitudes and purchase intentions?
What new tools and techniques are there to effectively understand and measure how social media and WOM affect consumer behavior?
How are companies using social media successfully to strengthen their brands?
Click here to request your free White Paper!
Making the Case for Social Media Strategy
There has been a revolutionary shift in the media world. Companies that listen directly to word-of-mouth (WOM) discussions will create compelling brands, products, and messages. This white paper will arm you with the information you need to convince your organization that they should begin to engage with consumers and provides answers to:
How widespread is the social media phenomenon? How will it evolve in the future?
How are consumers talking about brands in social media? How do these findings complement other sources of information about consumer attitudes and purchase intentions?
What new tools and techniques are there to effectively understand and measure how social media and WOM affect consumer behavior?
How are companies using social media successfully to strengthen their brands?
Click here to request your free White Paper!
New Podcast/Blog ad network geared to boomers - Social Marketing - BizReport
New Podcast/Blog ad network geared to boomers - Social Marketing - BizReport: "New Podcast/Blog ad network geared to boomers
What do you get when you cross edgy content, blogs and podcasts from an expert panel and national advertisers? A new social network aimed at helping the boomer generation get more out of life.
by Kristina Knight
'Many of us suffer from a vague feeling of “is this all there is”? We have our house, we have our spouse, we manage our kids, our parents, and our career... but what about continued personal fulfillment? There's so much to explore to have a rewarding personal life as an adult,' said Susan Bratton, CEO of Personal Life Media (via the company website).
Personal Life Media officially launches today. It offers ten podcasts and blogs written by the podcast hosts. The current advertising model is similar to the way National Public Radio (NPR) sponsors their radio shows - the advertiser is mentioned at the beginning of each podcast in a short '. . .brought to you by. . .' segment.
'We are also trying to develop some new ad models around podcasting and experiment with integrating ads into podcasts that aren't 10- or 30-second spots,' said Bratton (via MediaPost).
The boomer demographic is the second largest demo in America. The group is more likely to shop and research buys online than any other demographic.
Currently there are 10 podcasts available, but Bratton hopes to expand up to 100 or more casts. "
What do you get when you cross edgy content, blogs and podcasts from an expert panel and national advertisers? A new social network aimed at helping the boomer generation get more out of life.
by Kristina Knight
'Many of us suffer from a vague feeling of “is this all there is”? We have our house, we have our spouse, we manage our kids, our parents, and our career... but what about continued personal fulfillment? There's so much to explore to have a rewarding personal life as an adult,' said Susan Bratton, CEO of Personal Life Media (via the company website).
Personal Life Media officially launches today. It offers ten podcasts and blogs written by the podcast hosts. The current advertising model is similar to the way National Public Radio (NPR) sponsors their radio shows - the advertiser is mentioned at the beginning of each podcast in a short '. . .brought to you by. . .' segment.
'We are also trying to develop some new ad models around podcasting and experiment with integrating ads into podcasts that aren't 10- or 30-second spots,' said Bratton (via MediaPost).
The boomer demographic is the second largest demo in America. The group is more likely to shop and research buys online than any other demographic.
Currently there are 10 podcasts available, but Bratton hopes to expand up to 100 or more casts. "
Saturday, March 17, 2007
How we doubled our conversions using the Google Web Optimizer
http://www.scrollinondubs.com/category/nerd/
How we doubled our conversions using the Google Web Optimizer
February 22nd, 2007 by sean
If there's one concept you learn this month that has the single greatest potential to improve the profitability of your site, the power of DIY multivariate analysis using the Web Optimizer is it. Let me explain.
What is Multivariate analysis and why should you care?
Multivariate analysis in the context of web sites is the science of changing elements on a page and studying the effect they have on your visitors' behavior. If you have a web site, presumably you already have a goal and your site facilitates a behavior from visitors that contributes towards achieving that goal. There is likely a desired outcome you're seeking on each visit - an action you want that person on the other side of the wire to take such as filling out a contact form or purchasing a product. This desired outcome is known as a conversion.
Improving your conversion ratio even one percent can lead to massive improvements in sales and profitability. This calculator is a simple way to run some what-if scenarios given your current order size, traffic and sales numbers. The easiest way to understand the benefit of improved conversion is to think about it as "miles per gallon" on a vehicle- think how much gas you would save if you doubled the fuel efficiency of your engine? But it's even better with web traffic. If your current cost per acquisition for a customer is $5 per customer given all your fixed design/development/hosting costs and marginal costs like advertising, converting twice as many visitors with zero additional cost can bring your cpa down to around a dollar. This has a dramatic effect on profitability of your operation - the effect on profitability is non-linear especially if you feed the savings back into targeted promotion.
How GWO works
So now that you understand the value of improving conversion, let's talk about how GWO specifically does it. Google Web Optimizer is javascript-based multivariate analysis tool that gives you the ability to test different versions of key pages on your site to determine the winning formula that produces the highest conversion. You set up experiments and GWO will dynamically serve different flavors of the same page randomly to different visitors and record the number of resulting conversions. The empirical data is then presented in a graph like the one below. Provided you have enough traffic to produce significant results, the tool reveals the winning combination along with the confidence level of the suggestion (ie. the statistical significance).
You can see that Graphic #4 outperformed the others and crushed the original graphic by almost double.
And the winner is…
So this is all nice in theory but let's take a look at a concrete example of how this helped us refine our messaging on the JumpBox site. A week ago I set up GWO on the JumpBox homepage and tested five different versions of the main graphic. Here's the five versions I tested:
Can you guess which one performed the best?
How we doubled our conversions using the Google Web Optimizer
February 22nd, 2007 by sean
If there's one concept you learn this month that has the single greatest potential to improve the profitability of your site, the power of DIY multivariate analysis using the Web Optimizer is it. Let me explain.
What is Multivariate analysis and why should you care?
Multivariate analysis in the context of web sites is the science of changing elements on a page and studying the effect they have on your visitors' behavior. If you have a web site, presumably you already have a goal and your site facilitates a behavior from visitors that contributes towards achieving that goal. There is likely a desired outcome you're seeking on each visit - an action you want that person on the other side of the wire to take such as filling out a contact form or purchasing a product. This desired outcome is known as a conversion.
Improving your conversion ratio even one percent can lead to massive improvements in sales and profitability. This calculator is a simple way to run some what-if scenarios given your current order size, traffic and sales numbers. The easiest way to understand the benefit of improved conversion is to think about it as "miles per gallon" on a vehicle- think how much gas you would save if you doubled the fuel efficiency of your engine? But it's even better with web traffic. If your current cost per acquisition for a customer is $5 per customer given all your fixed design/development/hosting costs and marginal costs like advertising, converting twice as many visitors with zero additional cost can bring your cpa down to around a dollar. This has a dramatic effect on profitability of your operation - the effect on profitability is non-linear especially if you feed the savings back into targeted promotion.
How GWO works
So now that you understand the value of improving conversion, let's talk about how GWO specifically does it. Google Web Optimizer is javascript-based multivariate analysis tool that gives you the ability to test different versions of key pages on your site to determine the winning formula that produces the highest conversion. You set up experiments and GWO will dynamically serve different flavors of the same page randomly to different visitors and record the number of resulting conversions. The empirical data is then presented in a graph like the one below. Provided you have enough traffic to produce significant results, the tool reveals the winning combination along with the confidence level of the suggestion (ie. the statistical significance).
You can see that Graphic #4 outperformed the others and crushed the original graphic by almost double.
And the winner is…
So this is all nice in theory but let's take a look at a concrete example of how this helped us refine our messaging on the JumpBox site. A week ago I set up GWO on the JumpBox homepage and tested five different versions of the main graphic. Here's the five versions I tested:
Can you guess which one performed the best?
Ad Spending on Social Networks to Reach $2 Billion by 2010
Ad Spending on Social Networks to Reach $2 Billion by 2010
eMarketer's New Report Says MySpace Will Continue to Dominate
NEW YORK, NY -- (MARKET WIRE) -- November 01, 2006 -- Just four months ago, marketers were sitting on the sidelines of social networks and watching the traffic surge. Now, advertising on social networks has become a top priority. In 2007, ad spending on US social networking sites is expected to spike to $865 million from $350 million in 2006, according to eMarketer's new report, Social Network Marketing: Ad Spending Update. By 2010, eMarketer estimates, spending will hit $2.15 billion.
MySpace will continue to dominate social networks, accounting for 60% of total US online social network ad spending in 2007. eMarketer estimates MySpace will generate $525 million in 2007, up from $180 million in 2006. Competitors such as Facebook, Bebo and Piczo will make up the second-largest chunk of revenue, followed by social networks offered by portals and "niche" networks.
International expansion remains a key area for audience growth and will shift into high gear in 2007. eMarketer estimates that worldwide social network ad spending will reach $1.1 billion in 2007, up from $445 million in 2006. By 2010, spending is expected to rise to $2.8 billion.
While many marketers are rushing to experiment with social networks, in order for serious ad dollars to continue, adequate measures of return on investment need to be in place, says Debra Williamson, eMarketer senior analyst and author of the report.
"The longer existing social networks take to develop adequate ROI metrics, the bigger the opening for a next generation of networks that are built from the ground up to accommodate advertising," Ms. Williamson says.
About eMarketer
eMarketer is "The First Place to Look" for market research information related to the Internet, e-business, online marketing and emerging technologies. eMarketer aggregates and analyzes e-business research from over 2,000 sources, and brings it together in analyst reports, daily research articles and the "eStat Database" -- the most comprehensive database of e-business and online marketing statistics in the world.
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