Online Advertisers Start to Think Locally

AUGUST 30, 2007

Who you gonna click?

eMarketer projects that local online advertising spending in the US will reach $2.9 billion in 2007.

Interestingly, that is still only 13.4% of the total Internet ad market.

"The promise of local online advertising, at this stage, surpasses the reality," said David Hallerman, eMarketer senior analyst and author of the new report, Local Online Advertising: Measuring the Market.

"But a number of factors are set to accelerate growth in the market: the wealth of small and midsize companies potentially available as online advertisers, the increased use of local Internet sites and services by individuals and the development of local online ad networks connected with local media, such as newspapers," he said.

Local online advertising's share of total media ad spending has fallen slightly, year over year, according to Universal McCann.

By 2011, eMarketer estimates that less than one-third of all US ad spending will be locally targeted.

Spending will not match the time spent online. In four years' time, the Internet will account for only 7.6% of all local ad spending.

"Nevertheless, as audiences continue to migrate online and away from traditional local media, such as newspapers and radio, it is only a question of time before online local ad spending catches up," Mr. Hallerman said.

Social Networking, So What?

Print All Articles Letter to the editor

on 29 August 2007, 13:41
by Leah Messinger

Social network providers build highly engaging Web sites that have managed to rope in the majority of U.S. Internet users, but they still haven’t managed to find a way to turn those millions of users into a steady influx of greenbacks from advertisers.

That’s according to a report released Wednesday by IDC.

Karsten Weide, the IDC analyst who wrote the report, pointed out that despite their current status as tech media darlings, social networks are still a work in progress. “Few offerings generate an income that would be in a sensible relation to the media attention they receive,” wrote Mr. Weide.

By social networking, Mr. Weide refers to publishing sites, such as YouTube; destinations such as MySpace and LinkedIn; and service-oriented sites, such as Craigslist, Wikipedia, and Amazon.com

Mr. Weide predicts that over time the networks will settle on a business model that includes both subscriptions and e-commerce, but said brand advertising is the only approach that will bring in enough revenue to support a large social network. First, however, the networks must figure out how to get their advertising to scale and ease the concerns of advertisers who remain uncomfortable with the prospect that their ads will appear next to unpredictable user-generated content.

Though leading social network MySpace already focuses most of its money-making efforts on advertising—on its home page, through brand-specific campaigns, and through banner ads on profile pages—Mr. Weide said the Fox Interactive Media-owned company’s earnings pale next to those of tech companies in other sectors.

Rupert Murdoch, Chairman and CEO of News Corp., which owns the Fox properties, said earlier this month that Fox Interactive Media brought in an estimated $550 million in the last fiscal year. Mr. Weide pointed out that Microsoft’s Online Services Business earned $624 million in Q4 of last year alone.

Industry experts say Fox Interactive Media has had a difficult time selling ads for many MySpace pages because it simply has too much inventory. The head of one interactive ad agency said companies wanting to advertise on more coveted properties such as Fox Sports, often must agree to fill space on MySpace as well. Other MySpace inventory can sell for less than $0.10 per thousand views, according to the ad agency head.

Facebook trails far behind MySpace in both the size of its user base and the revenue it brings in, but it continues to expand its audience rapidly. Despite its recent growth spurt, Facebook has run into trouble with some advertisers. Earlier this month the British government, Vodafone, the British automobile association, and Virgin Media all pulled their ads from the site after they appeared next to a group page for the racist British National Party. In response, Facebook said it would let advertisers in the U.K. limit which groups their Facebook ads appear alongside.

The Wall Street Journal has reported that Facebook is also planning a new ad network, which would allow advertisers to better target users. Facebook tends to have more personal and demographic data on its users than networks such as MySpace because it allows users the option of keeping their profiles private and in that scenario users tend to share more personal information. Such data is highly sought after by advertisers.

Mr. Weide said social networks would do well to encourage reluctant advertisers by considering additional tools such as peer review of content (via a flagging system) or software that would filter out offensive content, but warns that the social networks could go too far in limiting online speech.

"You can control what users upload, but you have to be careful," said Mr. Weide. He said if you crack down too hard, "Your service will become less attractive to users."

Nielsen, ComScore Taking A Measure Of Their Web Metrics

August 28, 2007: 08:05 PM EST

Aug. 28, 2007 (Investor's Business Daily delivered by Newstex) --

Companies in the business of tracking online usage are searching for measurements that reflect new technologies and ways people interact with Web sites.

Tracker comScore SCOR has introduced a slew of metrics this year that measure everything from site visits to time spent and what kinds of hardware and software users have. ComScore this month introduced qSearch 2.0, a service that expands the company's measure of online searches beyond leaders such as Google GOOG and Yahoo (NASDAQ:YHOO) YHOO to include searches on commerce sites, via downloaded toolbars and through local desktop search.

The idea is to give clients -- companies that operate Web sites and/or advertise on sites -- a clearer picture of user behavior and into how to best to spend their search marketing budgets.

"When we see there's a better way to be tracking something, we're going to go out and do it," said comScore analyst Andrew Lipsman.

ComScore rival Nielsen/NetRatings, a unit of privately held Nielsen Co., last month added a total-minutes metric to its measurement service. It also added a service called GamePlay that measures use of console and PC video games.

ComScore and Nielsen/Net-Ratings provide research that helps Web site publishers set ad rates and helps advertisers get more for their money. The trackers hope their metrics will boost revenue. That will likely happen only if the metrics help sites gauge their worth to advertisers, help provide better online ad pricing and more effectively get ads in front of the right viewers.

What's driving the changes?

One factor is ways Web sites are created. A rising number of sites use Asynchronous Javascript And XML, or Ajax, a way of using Java, XML and other technologies. Ajax makes it possible for pieces of Web pages to be updated on the fly without refreshing the whole page. One result is visitors call up fewer Web pages -- and the site falls in rankings based on standard page-view measurements.

The rise of video is stripping additional relevance from the page-view metric, as people spend long periods viewing a single site page.

Another change in Web viewing, says comScore, is that up to one-third of Internet users regularly delete their cookies, the bits of software that many sites inconspicuously store on users' computers so users can be identified on future visits. That's how sites greet you by name, for example.

Without the cookie identifier, users will then be counted as new, or unique, visitors the next time they come to a site. That artificially inflates another standard measurement of Web site popularity, the number of unique visitors a site gets per month. (A person who enters the site once and another who enters the same site 1,000 times should both count as one unique visitor.) Cookie deletion is causing sites to overstate their audience by as much as 150%, estimates comScore. That can lead sites to overcharge for advertising.

Alas, many people in this field concede there is no ideal way to measure online audiences. For instance, it's pointless to compare the audience that flocks to YouTube, which strives to hold onto visitors as long as possible, with that of a site like Google that's trying to get people in and out of its search engine as quickly as possible -- preferably by having users click its search ads to link to an advertiser's site.

The latest changes help, many say. Page views aren't "a very good gauge anymore of user behavior," said Scott Ross, product marketing director for Nielsen/NetRatings' NetView service. "Time spent (per site visit) is a much better common denominator."

Peter Daboll, chief of insights for Yahoo and former CEO of comScore, agrees.

The page view "does seem a bit archaic and doesn't seem to measure anything well," he said. "We're making progress in trying to understand what matters."

What matters is a combination of getting users to a site in the first place along with the extent to which those users are engaged once they get there.

That is best measured by time spent on a site, says Jack Wakshlag, chief research officer for Turner Broadcasting. "If people spend lots of time on a site, then it's an engaging Web site," Wakshlag said.

But relying on time spent on a site isn't perfect. Time Warner's (NYSE:TWX) TWX AOL family of sites moves up in the rankings because of its instant messaging service. It inflates measurements of time spent because it registers as site engagement while users have it running, and many users keep it running in the background.

Conversely, Google ranks low in time spent on a site, per session, because the site is designed to move people to other sites fast.

Such differences in what sites try to accomplish is why comScore plans further changes to its metrics.

It's preparing to launch a service that will measure ad impressions, or how many times an ad is "served" to a Web surfer.

It's also looking to refine its measures. If a user has an IM window open, along with streamed video of a baseball game and a text-based news site, comScore wants to measure how much time each application is in the foreground.

The new measurements from comScore and Nielsen/NetRatings could help online advertisers who face a confusing market of wildly fluctuating prices.

"The advertisers are going to see less variability in the prices they see from sources A, B and C," said Bill Cook, senior vice president of research and standards for the Advertising Research Foundation.

Advertisers strive to track the effectiveness of online ads.

The goal, says Yahoo's Daboll, is to best gauge the impact of advertising. "There's nothing worse," he said, "than throwing money at an ad campaign and not knowing how well it works."

Internet groups brace for subprime fallout

By Richard Waters in San Francisco

Published: August 27 2007 20:30 | Last updated: August 27 2007 20:30

Internet companies are bracing for a possible fall-off in one of their biggest sources of advertising following the meltdown in the subprime mortgage market.

Besides mortgage advertising specifically directed at less credit-worthy borrowers, the ripples from the financial upheaval could extend to other forms of credit as well as the credit scoring agencies that are also big advertisers online, analysts warned.

Pricing could also be hurt more broadly on some classes of advertising on web search engines, because fewer advertisers are expected to be competing in the advertising auctions run by companies such as Google to have their messages displayed next to specific keywords.

“A lot of the subprime [advertising] has gone away,” said David Jakubowski, general manager of Microsoft’s MSN service.

This loss had yet to have a broader effect in the search business, he added.

“I haven’t felt a pricing hit because of it,” he said. “We haven’t seen anything crazy happen,” though he added that the company continued to keep a close eye on this area for more fallout.

Many online companies depend for a disproportionate amount of their income on financial services advertising, with subprime in some cases accounting for a large part of it.

Sixteen per cent of all online advertising comes from financial services companies, making it the second biggest source of advertising behind the retailing sector, said Sandeep Aggarwal, an internet analyst at Oppenheimer.

Companies that lent to subprime borrowers relied heavily on the internet to attract customers, concentrating the effect of the meltdown, said Rick Sizemore, an analyst at Multimedia Intelligence.

According to data from Nielsen/NetRatings, mortgage lenders Countrywide and Low Rate Source were two of the 10 biggest online advertisers in the US in July.

Experian Group and Privacy Matters, which advertise to consumers who are concerned about their personal credit scores, also numbered among the top 10.

Others, such as Lending Tree, the mortgage company, and Capital One, the credit card group, regularly rank among the biggest US advertisers on the web.

YouTube Introduces Ads in Videos

AUGUST 28, 2007

Users will also pay a one-time fee for some content.

Times are good for ad-supported online content. YouTube has put transparent ads on the bottom one-fifth of videos from its content partners. And The Wall Street Journal, one of the few paid-content success stories, is considering making its online version free.

Most consumers think that viewing ads in exchange for quality content is fair, according to IBM's "The End of Advertising" report, published in August 2007. More than six in 10 consumers IBM surveyed said they preferred ad-supported online content, while 28% preferred paying for ad-free media.

However, "don't expect consumers to spend incrementally on different devices," said Bill Battino, study co-author and communications sector managing partner at IBM Global Business Services, in a Brandweek interview. "People want to pay for content once and then move it" to whatever device they like.

An Associated Press-America Online study conducted with Ipsos Public Affairs noted that 71% of US online video viewers polled would rather watch online videos free in exchange for pre-roll ads.

As for YouTube in particular, a December 2006 Wired magazine reader poll estimated that 63% of US Internet users would tolerate banner ads there, and only 14% would stomach a short pre-roll ad before each video clip.

Pre-roll ads were not favored by most users. YouTube may also have felt that banners were not the way to go, with viewer attention on the videos themselves and not necessarily on other parts of the page. The transparent ad overlay at the bottom of the video is likely a good compromise. It doesn't delay video playback like a pre-roll, and it's directly on the video, not dependent on viewers looking to other parts of the page.

Further, these ads appear on videos only those of partners, since YouTube does not own the copyright to many user-posted pieces. Given the limited scope, size and intrusiveness of the ads, YouTube viewers may well accept the ads.

Don't count on the transparent ad being the final form, however.

"Let's put YouTube's new video ad format into context—while it's likely a good experiment, it's still an experiment," said eMarketer senior analyst David Hallerman. "At this stage, what sorts of advertising the audience will accept and what formats appeal most to advertisers remains an open question. However, the more experiments the better."

Users will pay for some types of content. Please read eMarketer's Online Video: Making Content Pay report to learn more.

Will Internet Kill the Radio Star?

AUGUST 28, 2007

Unfortunately, for traditional radio operators, someone is touching that dial.

"Internet radio, satellite radio, podcasting, high-definition radio and mobile audio services are revolutionizing a radio industry that had remained virtually unchanged for a century," said Ben Macklin, eMarketer senior analyst and author of the new report, Radio Trends: On Air and Online. "Traditional radio is rapidly being subsumed into a new, broader sector called 'audio.'"

One key indicator of the change is advertising.

"Few factors are more important in analyzing media trends than looking at where the ad dollars are going—or not going," Mr. Macklin said.

By 2008, online advertising spending in the US is projected to surpass radio advertising spending for the first time.

eMarketer estimates that US online ad spending will reach $21.7 billion this year, while radio spending will grow only slightly to $20.4 billion.

Of course, the radio audience is still huge. According to Bridge Ratings, terrestrial radio commands a weekly cumulative audience of nearly 283 million Americans.

Nevertheless, data from a number of researchers indicates that traditional radio is losing its significance in people's lives. US adults are spending more time each day on the Internet and watching TV than listening to the radio.

Figures from Arbitron and Edison Media Research also show that Americans regard radio as less important in their lives than TV or the Internet.

"It is for this very reason that the radio industry must quickly and comprehensively come to terms with how to adapt to this changing environment," Mr. Macklin said.

Mr. Macklin also has advice for advertisers.

"There are in fact many synergies between radio and the Internet, and for the most part they complement rather than compete with each other," he said. "Marketers should not abandon radio in favor of the Web—they should combine both mediums to take advantage of the unique attributes of both."

To find out more about how digital and interactive technologies are altering the distribution of audio content, please read the new eMarketer report, Radio Trends: On Air and Online, today.

A New Way to Create Buzz

As Web Users Post Icons on Personal Pages, Marketers Move In

By Sam Diaz
Washington Post Staff Writer
Saturday, August 25, 2007; D01

Washington Redskins fans don't mind shilling for their favorite team by wearing a jersey, just as some people are willing to show their allegiance for a school or radio station with a bumper sticker. Marketers are trying to harness that impulse for brands on the Web.

Slide, an online photo-sharing company in San Francisco, has been offering tools that allow users to create custom photo slide shows with images and animations for their blogs or social-networking pages. Now, the company is cutting deals with studios and video-game makers so users can decorate their free online photo viewer with official logos and characters.

It plans to add tools that allow viewers of these slide shows -- friends with similar interests -- to buy games, order movie tickets or download soundtracks directly from the slide show window. The new form of advertising appears on Web tools called widgets. When installed on a Web site, a widget looks like a picture-in-picture photo viewer, video player or news ticker. They are designed to display information in a way that keeps users on the same site.

As Internet advertising evolves beyond text, banner and pop-up ads, companies are looking for ways to home in on specific audiences -- an age group or fan base that is interested in its product or service. They're also trying to translate those ads into sales.

Widgets have become good vehicles for advertising because they've become popular over the past year. Professional football and basketball teams, Hollywood studios, and cable channels like Discovery see widgets as a way to market their brands or drive traffic to their sites. Some companies, like Slide, are adding vanity features that explicitly promote products or services within the widget. A site called Rock You, for example, promotes music by allowing users to add popular tracks to their photo slide shows.

In April, ComScore of Reston started to monitor widget traffic separately from Web traffic. In June, widgets caught the attention of more than 239 million unique visitors, up from 177 million in April, according to ComScore. Slide ranked as the most popular with 134 million visitors in June, up from 117 million in April. Rock You trailed with 101 million in June, up from 82 million in April.

Because friends, co-workers and families are already networking online, these tools act as a kind of word-of-mouth advertising, said Lisa Weinstein, Chicago-based managing director for Mindshare, a media-marketing firm. When people select the brands they want to champion, their colleagues are more likely to pay attention, she said.

"Every brand is looking to tap into the power of their own evangelists," she said "What people's friends think or say to each other is a leading channel of influence."

One recent such campaign involved Universal Pictures, which launched a widget through Freewebs that promoted the upcoming film "Mr. Bean's Holiday." Freewebs helps users build their own Web sites. Freewebs also used widgets to sponsor campaigns for Adidas, AT&T and others.

This summer, the Bebo social-networking site posted ads for the movie "Bratz" on a widget. Slide made a "Bratz" online photo frame available to Bebo members and incorporated songs from the movie's soundtrack into the slide show viewer.

"We build something that makes your site a more interesting place to be," said Slide chief executive Max Levchin, who co-founded PayPal, an online payment company. "Until now, all of that [widget] traffic has been there to entertain the users. . . . Here's a way for widget makers to make money."

And marketers are looking for alternative ways of advertising online.

"They're becoming more and more savvy," said Mindshare's Weinstein. "They know what widgets are, and they're starting to understand the potential impact."

Discovery Networks is launching a Slide widget campaign around the "Shark Week" TV show and an upcoming program called "Last One Standing." It also has mini-versions of Web sites for popular shows like "Deadliest Catch" and Animal Planet's "Meerkat Manor," which users can add to their sites.

Chris Schembri, a senior vice president with Discovery, said it's too soon to gauge the success of its widget campaign but said it could shape how the cable channel thinks about future advertising campaigns.

"Learning how to work in this space is more important that reaching a bajillion people," he said. "If you took the time to post it on your page, your interest level is much higher than someone flipping through a magazine and seeing an ad."

Google Ads Could Go the User-Generated Route

from Mashable! by Kristen Nicole

It’s been noted that Google has filed a series of patent applications that hint at the company’s move into more user involvement for its ad distribution programs.

With three different patents, it’s clear that Google would like to leverage a very large user base for the purpose of providing more targeted ads in a more effective manner. Let everyone else to the targeting and delivering for Google. The first patent application describes User Distributed Search Results as a system for enabling you to find and share search results in an easy manner. I imagine this could be done by adding an “email this” link below Google search results, alongside the “Cached,” “Similar Pages” and “Note This” options.

The second patent would make sharing search results easy as well, by “Facilitating manual user selection of one or more ads for insertion into a document to be made available to another user or users.” Put simply, Google will make it easier to put search results into documents like email, bulletin boards, discussions, forums, blog posts, etc. An example provided outlined a book club organizer sharing pertinent information like an image of the book cover, and a link to amazon, where the book can be purchased.

These user-generated search results build on existing ways in which information is shared amongst people that communicate online, so I imagine that if this could be incorporated into some sort of grouped search result offering that would hold the most relevant information (i.e. local search results for a venue, along with contact information, map, hours of operation, parking guide, menu, other things in the area, and reviews) and could be inserted into an online document would be most helpful for a broad range of people. This particular patent seems to have a plan of being leveraged for the delivery of second-hand targeted ads, as the end user would click on the provided search results and receive the typical Google side-bar ads as well.

Google’s third application highlights the reward system by which users will be encouraged to utilize the new options that may become available to them. With this, you may get money, a credible reputation, or credit. I imagine that credit would somehow be involved with other Google products, like Checkout, and that any monetary rewards would operate under the same design as AdSense and AdWords, which overwhelmingly benefit Google.

Should these new options become available to the public, it could provide a great incentive for more businesses to sign up for Google Ads, knowing that the company is facilitating better sharing of search results. If the user base can be leveraged successfully, then these new options could work very well as a supplement of Google’s algorithms, granting a useful level of passive feedback and ultimately making online search easier across the board.

[via roughtype]

Google Image Search Now Has Contextual Adsense Ads

from Digital Inspiration by Amit Agarwal

Google now has contextual advertising embedded in Google Image Search results - each page has two horizontal sponsored link sections. See screen capture below.

The other popular Google properties that are yet to be monetized include Google News and Google Blog Search.

Related: Batch Download Pictures from Google Images

© 2007 Digital Inspiration by Amit Agarwal | labnol | Message Board

Print and Digital Need Not Compete

AUGUST 27, 2007

The Web is effective, but some find it intrusive.

The printed word still holds a strong pull for many consumers, according to Deloitte & Touche's "State of the Media Democracy" study, conducted by the Harrison Group in March 2007.

Nearly three-quarters of respondents said they would rather read the printed version of a magazine even if they could get the same information online.

"Old media is surprisingly resilient," said Deloitte technology specialist Ed Moran in an interview with eMarketer. "Many people use magazines to keep up with apparel and other trends. Asked about their top-five media intentions for the coming year, No. 3 overall was to read a book."

The preference for print carried over into consumer attitudes about advertising. More than three-quarters of respondents said they found Internet advertising to be more intrusive than print ads. Nearly two-thirds said they paid more attention to ads in print.

These findings are a strong argument for using several media in campaigns. However, they are hardly cause for abandoning digital efforts. For a start, search advertising was more much more effective than print ads at driving Web site visits.

Also, print simply doesn't deliver the same bang for the buck as digital, according to an Intellisurvey-Radar Research study commissioned by the Search Engine Marketing Professional Organization.

Mr. Moran said the overall results of the study emphasized the need for integrated marketing.

"There should be no distinction between online and offline," he said. "There is no conceptual reason these days why marketers wouldn't consider using multiple media with campaigns.

"The idea that one is a threat to another is a knee-jerk reaction," he said.

CONFIRMED: Web Users Ignore Ads (and Newspaper Users Don't?)

Henry Blodget | August 24, 2007 6:59 AM

Jakob Nielsen offers another eye-tracking analysis (via Don Day at Lost Remote) that confirms what most people have long assumed: web users gravitate toward content, not ads. Thus, to make your ads more effective, make them look more like content, etc.

Such findings are usually cast as bad news for the online advertising industry--proof, finally, that it's just a sham, that the Internet is a terrible medium for advertising, that advertisers will soon come to their senses and rush back to...well, that's just it, where will they rush back to, exactly? What is less often mentioned in "web ads are ineffective" reports are the results of comparable eye-tracking studies for, say, newspapers.

You've never heard of such studies? Well, neither have we. Maybe that's because "eye-tracking studies" for newspapers would be putting the cart miles ahead of the horse. After all, what's the use of an "eye-tracking study" if a user's eye never settles on the section in question, let alone the page or area of the page? What's the use of studying what ads readers pay attention to when 90% of the paper ends up un-glanced-at on the rear stoop?

We spend a lot of time talking about the impending death of the print newspaper industry, but what is far more startling is that advertisers still spend $50-plus billion a year on a medium in which only a fraction of the ads are ever seen, let alone paid attention to.

UPDATE: We had never heard of newspaper eye-tracking studies but that was evidently because we were web-provincial morons. As Kim Gregson points out in the comments, they've been around for at least 15 years. Here's a Poynter Institute story on the latest one. And here's Poynter's summary of them.

We will add this, though: When trying to assess whether your message has been delivered, the web can at least tell you whether a page has been viewed. A newspaper (or TV set) can't. And eye-tracking research doesn't make a bit of difference if papers are left on front steps or tossed in the recycling bin.

YouTube Users Respond Schizophrenically to New Ads

A number of YouTube users have spoken out with their frustration and disappointment over the ads now appearing on their videos, reports ComputerWorld.

Some respondents have voiced their opinions in the comments on the blog post announcing the appearance of the ads. One person made a video wherein he shared his opinion.

Reasons cited by those against the ads range from a lack of creativity to the loss of control the uploaders now have. At least a few people did point out that YouTube hosts their videos for free but it still has to pay for the server space, so ads aren't all that bad.

Across the pond, tolerance was more forthcoming. Conchango's latest New Media Landscapes study found users are happy to deal with advertising as long as they get free content along with it. And one in five are prepared to pay for premium content if they must, with a strong preference for video-based content because it is faster to absorb than text.

Keeping Up With Complexity: Matching Google At Its Algorithm Game

by Ellen Siminoff, Friday, August 24, 2007

SEVERAL WEEKS AGO, I HAD the pleasure of speaking on a panel at the RBC Capital Markets North American Technology Conference with several online marketing experts. Our group acknowledged that paid search is becoming increasingly complex, requiring search engine marketers to use more sophisticated methods to manage their campaigns.

It was little surprise when later that day Google announced yet another change to its AdWords program, this time to the way it generates "top placement" ads, which appear above the search results instead of in the righthand column. Google said in its blog: "Advertisers often aim for top placement because they find that their ads perform the best when they appear above Google search results. We have, however, been working on an improvement to the top ad placement formula that will soon offer advertisers more control over achieving top placement while increasing the quality of our ad results for users."

Google didn't give details of the changes to its system, which normally generates top placement ads via a two-pronged formula based on the ad's Quality Score -- which measures variables like click-through rate (CTR), ad relevance, landing page quality and the cost-per-click (CPC) of the keyword. Up until now, Google considered the actual CPC when generating top placements, but will now use the maximum CPC. This means Google will bump more ads to the top placement based on the maximum an advertiser is willing to pay for the keyword -- instead of the actual cost paid. Google says this will give advertisers more control over getting their ad into the top spot, but, of course, it also encourages them to raise their maximum CPC bids, which will generate more revenue for Google.

It will take weeks for advertisers to determine the impact, if any, of the change for their overall paid search budgets and individual keyword performance. But what is immediately obvious is that Google is playing an algorithm game to maximize revenue per page. Advertisers need to act now to develop a strategy that takes advantage of this new top placement system -- and be ready in the future when Google implements further changes.

Search engine marketers who use a rules-based approach to campaign management have their work cut out for them. This strategy -- which relies on manually setting specific rules for groups of keywords (for example, "Don't bid more than $2" or "Ensure placement higher than position #3") -- requires advertisers to spend hours poring over spreadsheets and reports to determine the impact of any changes to their paid search spend. Even after they've figured out the impact, they have to devise ways of reacting to losses.

A better approach to maximizing the return on your paid search spend is to match Google at its algorithm game. Marketers should seek out solutions that automate bid management using algorithms that optimize against the variables determining Google's quality score. In addition to providing a higher ROI, effective bid management algorithms should be able to detect and self-adjust to AdWords changes in a matter of days -- automatically bidding accordingly on the right keywords and optimizing campaigns to get the best placement.

If you think paid search is complicated now, just wait until display and video ads become biddable, dozens of new auction-based ad marketplaces appear, and the data generated from campaigns becomes even more mountainous. In this not-so-distant future, it will be almost impossible for any advertiser to use rules to keep up with the complexity and data overload. Only by taking on the Google algorithm with an algorithm will advertisers be able to create and execute effective campaigns.

Study: TV is taking a back seat

By Georg Szalai

Aug 22, 2007

NEW YORK -- Personal time that consumers spend on the Internet is rivaling their TV time, with user-generated content and networking sites among the most popular destinations for entertainment seekers. Plus, people seem more open to mobile content and are looking for more traditional entertainment offerings on their mobile devices than previously thought.

These are among the findings of a new IBM survey of consumer behavior in the digital age, which suggests that studios, advertisers, ad agencies, content distributors and other industry players must continue to adjust their business strategies amid changes in media usage and consumers' increased expectations for control and community.

Among key lessons for studios: Make your content available everywhere, but don't expect to get paid for every platform. And keep an eye on key influencers on the Web to succeed in creating word-of-mouth.

The survey is part of an IBM study on the future of advertising, set to be released in the fall, and it showed that consumers are divided over their preferences for free online content with ads or subscription fee-based content without commercials. About a third is for free content, but about 20% are willing to pay for the HBO-style model, according to IBM.

"Given the rising power of individuals and communities, media and entertainment industry players will have to become much better at providing permission-based advertising and related consumer-driven ratings services," said study co-author Bill Battino, communications sector managing partner at IBM Global Business Services.

In the latest sign of television's decline as the primary media device, 19% of respondents said they spend six hours or more each day on personal Internet usage. That compares with 8% who said so about the TV. One to four hours of TV usage was reported by 66%, compared with 60% for the Web.

"The Internet is becoming consumers' primary entertainment source," said Saul Berman, IBN Media & Entertainment Strategy and Change practice leader. "The TV is increasingly taking a back seat to the cell phone and the personal computer among consumers age 18-34."

The number of TV viewers using DVRs continues to expand, with 24% of U.S. respondents saying they have a DVR and watch 50% or more of TV programming in replay mode, IBM found. Of those viewers, 33% said they are watching more TV since owning a DVR, in line with other recent studies.

Australians show opposing trends from the U.S., with most respondents preferring live TV and replaying less than 25% of programming, according to IBM.

Watching video content on the Web is a popular activity these days. An average of 67% of consumers surveyed by IBM globally said they have watched or want to watch online video.

For video content online, the most popular destinations are user content-generated sites like YouTube, with 39% of respondents saying that's where they go most frequently. TV network sites (33%), search engines (32%) and social-networking sites (28%) are the next most-popular locations for Web video offers, according to the IBM study.

In the U.S., 26% said they have contributed to a social-networking site, and 7% have done so to a user-generated content site, compared with Australia, which has a leadership position in these areas with 36% and 9%, respectively, the survey found.

As far as mobile video is concerned, an average of 35% surveyed globally by IBM said they have or want to watch mobile video. Seven% report having a video-content subscription for their mobile phones. Nearly a third of U.K. users said their mobile consumption ate in their TV viewing time, according to IBM.

Battino said his team was surprised that shortform content tailored to the mobile device was less popular than they had expected. About half of users said they prefer to access traditional video offers like TV shows on their mobile.

Could this lead consumers to one day watch more movies in mobile form as well? "We think that will be a natural progression from watching TV shows currently," the IBM expert said, adding that the under-20 age demographic especially loves portability of content. "They may start a film at home and then watch it on a laptop or cell on the go," he said. "And they like to watch in discreet time segments," meaning they might watch a movie in several 20-minute sessions.

The lesson of the IBM survey for studios is to continue making content available on various platforms. However, "don't expect consumers to spend incrementally on different devices," he warned. "People want to pay for content once and then move it" to whatever device they like.

Also, online ratings, reviews and word-of-mouth continue to emerge as key drivers of boxoffice success in the digital age, he added.

"Magnets," or online opinion leaders, are fast emerging as key influencers that media and entertainment companies must keep in mind when promoting their content, the IBM expert said. "Some companies have started putting such people on their payroll," he added without providing examples.

Battino said he thinks there is "very strong" consumer interest in day-and-date VOD releases by cable operators, which are testing such offers with studios. Hybrid purchases like allowing a movie buff to buy a ticket for a film plus get it on DVD at a theater as well also will be a wave of the future, he predicted.

Among key digital age gadgets and services, portable music offers are among the most popular, with 23% saying they are using them, according to the IBM survey. Also, 11% reported using a PC-based music service, and 18% reported an online newspaper subscription.

The online survey was conducted between mid-April and mid-June by the IBM Institute for Business Value and generated 885 responses in the U.S., 559 in the U.K., 378 in Japan, 338 in Germany and 263 in Australia.

Techdirt: NY Times Launches My Yahoo Clone A Decade Late

NY Times Launches My Yahoo Clone A Decade Late

from the 1996-is-calling...-it-wants-its-idea-back dept

We were just wondering why the NY Times doesn't seem to understand the basic workings of the internet, and perhaps the answer is just that they're still a decade behind the rest of us. The company's digital unit has now launched an offering called "My Times" which just about every observer is noting seems remarkably similar to MyYahoo, just more than a decade after Yahoo launched MyYahoo. The NY Times is hyping up the fact that the site will have NY Times reporters recommend their favorite sites, but that's hardly compelling since it's really not that difficult to find popular sites these days. I think there are some really fantastic reporters at the Times, but it seems that the people figuring out the company's digital strategy need to update themselves to the current decade.

Facebook Gets Personal With Ad Targeting Pla

By VAUHINI VARA
August 23, 2007; Page B1

Social-networking Web site Facebook Inc. is quietly working on a new advertising system that would let marketers target users with ads based on the massive amounts of information people reveal on the site about themselves.

Eventually, it hopes to refine the system to allow it to predict what products and services users might be interested in even before they have specifically mentioned an area.

As the industry watches the Palo Alto, Calif., start-up to see if it can translate its popularity into bigger profits, Facebook has made the new ad plan its top priority, say people familiar with the matter. The plan is at an early stage and could change, but the aim is to unveil a basic version of the service late this fall.

A news-feed ad from Facebook's current program

People familiar with the plan say Facebook wants to accomplish what Google Inc. did with AdWords, which lets anyone place ads next to search results by buying "keywords" online. It brought in the majority of the search engine's $10.6 billion in revenue last year. A Facebook spokeswoman acknowledged the company is working on an ad system, but declined to provide details.

Most users of Facebook treat it as a sort of online scrapbook for their lives -- posting everything from basic information about themselves to photos to calendars of events they plan to attend. They create a social network by linking their own Web pages with the pages of other users they consider online "friends." Facebook already uses some information from users' pages in a rudimentary system that allows advertisers to go online, and starting at $10, buy simple "flyers" that run as boxed ads on the left-hand border of Facebook pages. But for targeting, advertisers are limited to age, gender and location of the user.

The new service would let advertisers visit a Web site to choose a much wider array of characteristics for the users who should see their ads -- based not only on age, gender and location, but also on details such as favorite activities and preferred music, people familiar with the matter say. Facebook would use its technology to point the ads to the selected groups of people without exposing their personal information to the advertisers.

These ads would show up differently than the banner ads and boxed flyers that appear on the borders of Facebook pages, say people familiar with the plan. Instead, they would be interspersed with items on the "news feed," which is a running list of short updates on the activities of a user's Facebook friends. In addition, the ads would show up on Facebook pages that feature services provided by other companies, one person says.

Facebook has already had some success in getting users to notice similar ads created in a separate initiative. Under that program, launched last year, advertisers say they typically spend about $150,000 for a three-month campaign that gives them a special page on Facebook, as well as the news-feed ads. But customizing these campaigns can be a costly process for Facebook, which has to dedicate staffers to the efforts.

Facebook hopes allowing advertisers to buy customized ads online will be a less labor-intensive way to take advantage of the personal data people reveal on the site. A key part of this new plan is that Facebook would use an automated system to process transactions instead of requiring advertisers to work with a Facebook representative, people familiar with the plan say.

Next year, Facebook hopes to expand on the service, one person says, using algorithms to learn how receptive a person might be to an ad based on readily available information about activities and interests of not just a user but also his friends -- even if the user hasn't explicitly expressed interest in a given topic. Facebook could then target ads accordingly.

Getting this right is important for Facebook, which was founded in 2004 by then-Harvard student Mark Zuckerberg and which has become Silicon Valley's latest darling.

While the Web site had roughly 30.6 million visitors in July, the company says it needs to do a better job profiting from its huge user base.

That's because unlike other hot Web start-ups such as MySpace and YouTube, which were acquired by large Web and media concerns, Facebook wants to stay independent and potentially go public. Last year it stepped away from talks with Yahoo Inc. and Viacom Inc. to be acquired for close to $1 billion. The start-up's investors have publicly said they hope to take Facebook public at a valuation approaching $10 billion. That would require the company to generate far more revenues and profits than it currently produces.

Finding a way to use people's interests and personal connections to show them relevant ads has "always been the promise of social networking, but we're still waiting to see the big successes," says Debra Aho Williamson, an online-advertising analyst at New York-based eMarketer Inc.

Facebook is on track for $30 million in profit this year on $150 million in revenue, say people familiar with the matter. About half of that revenue is expected to come through an ad deal with Microsoft Corp. that lets Microsoft sell many of the major display ads on Facebook's U.S. site. The deal will likely bring in $200 million to $300 million for Facebook through 2011, and potentially much more if Facebook's traffic grows rapidly, say people familiar with the matter.

However, advertisers say the addictive quality of social networking means users are so busy reading about their friends that they hardly notice display ads and, even if they do, are loath to navigate away to an advertiser's site. Advertisers say the percentage of people that click on display ads is lower on Facebook, News Corp.'s MySpace and other similar sites than on other popular Web sites like Yahoo Finance and CNET Networks Inc.'s News.com site.

As a result, Facebook has needed to diversify its revenue sources away from just display ads. The new ad plan is being spearheaded by Matt Cohler, vice president of strategy and business operations, and Chamath Palihapitiya, vice president of product marketing and operations, with input from CEO Mr. Zuckerberg, say people familiar with the matter.

Facebook's plan, if it works, could be potentially powerful for advertisers. While Google's keyword-targeted ads aim at "demand fulfillment" -- that is, they are triggered by Internet searches conducted by people who are actively looking for something that they want -- Facebook's new ad plan could help advertisers address an area called "demand generation." This involves using available information -- not just from a user but also the activities and interests of his "friends" on the site -- to figure out what people might want before they've specifically mentioned it.

"It's about saying, 'We are going to take this information because you've acknowledged that you have an interest in X, Y and Z,'" says David Blum, who oversees the interactive division of Sausalito, Calif., ad agency Butler, Shine, Stern and Partners.

But Facebook's new plan faces hurdles. It could upset Microsoft, which is itself trying to build technology to make it easier for advertisers to place targeted ads on Facebook. A Microsoft spokeswoman declined to comment on this issue.

While Facebook plans to protect its users' privacy and possibly give them an option to keep certain information completely private, some Facebook users might rebel against the use of their personal information for the company's gain.

And the perceptions that targeted ads create can be as much of a problem as the reality. "Most people don't realize how targeting works; it becomes so good that even though it's anonymous, you feel like they know you," says Rishad Tobaccowala, CEO of Publicis Groupe-owned consulting firm Denuo Group. However, he says Facebook needs to be careful in implementing any targeted ad system, lest loyal users "find it creepy."

Shoperion = Advaliant + Advario innovation tools

Extremely interesting technology built by our technology partner ELC Technology ( they are building all our new systems with Joe M.) these are very interesting mini tools that we could have in the Advaliant system as tools for publishers and advertisers. They are the next wave of embedded mini apps or widgets that STAY embedded!! We need to have a section for these in Advaliant. Where clients can give us theirs like the mobile widget PlayPhone is giving us. Also for ones we can create based on needs we see in the market. These could also be inside Advario intext ads. This is VERY INNOVATIVE and hands down the direction the market is headed. www.shoperion.com

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rightcart"> RightCart fliplead"> FlipLead hoverpage"> HoverPage pushvote"> PushVote runcards"> RunCards Dashboard RightCart The in-page shopping revolution RightCart is helping reshape what people think about e-commerce. With the ability to add a complete shopping solution to your website in seconds. You can turn any web page into a store effortlessly. "RightCart is the end-game in shopping" -Amazon.com FlipLead Next generation, lead generation. Fliplead the a new way to deliver leads not just clicks to advertisers. Using our patented in-page technology we can expect more from our ad space and keep the audience on your website. HoverPage Bring your landing page to them. Unlike standard display ads, HoverPages use Ajax technology to allow users to visit and interact with your landing page without leave the site they are on. Allowing Publishers to retain the audience and advertisers to deliver more. PushVote Opinions matter Survey, polls and reviews help us to learn more about what people are thinking and guide our decisions. PushVote makes it easy to create, launch and review results from surveys while enhancing your site's experience for customers. RunCards Your site, your sale. Experiece is important when completing a sale on the web. RunCards is a mixture between RightCart and FlipLead and allows you to accept credit cards on your site to deliver and cohesive sales process easily. Dashboard One to rule them all. Mangaing web apps, creating new AdSpots and selling your ad space can be conquered using Dashboard. Brining innovation to help both novice and seasoned marketers to get more revenue out of their websites. Beyond Banners Shoperion helps advertisers, publishers and retailers engage customers through innovative web applications. Each application can be added to your website and help to add the ability to sell items, capture leads, take a survey and receive payments. Unlike traditional display advertising embed-able web applications keep the user on a publishers website to increase overall yield from the audience.

Towards the Attention Economy: Will Attention Silos Ever Open Up? ahhhhh YES! call MediaTrust

Written by Alex Iskold / July 30, 2007 / 14 comments

We have written extensively at Read/WriteWeb about Attention and the Attention Economy. As a concept attention makes sense to anyone who is online today. We know when we are paying attention and we know what we are paying attention to. The problem is that the information about our attention is not readily available to us afterwards. The premise of the Attention Economy is that people are in control of their attention information. This control lets them use the information to receive utility and services.

The reality is that our attention information is scattered all over the web, bits of it lying in different silos. Anytime we buy books, rent movies, click on pictures or listen to music the information is recorded and stored. Each vendor makes an specific effort to capture what we liked, but most do not make much effort to help us get this information out of their system. And why should they? After all, that consumer information is a competitive advantage for each business. Breaking existing attention silos and creating a real attention economy appears to be a complex, if not impossible task. In this post we will take at broad look at the problem in attempt to figure out what can be done.

The Basics of Attention

As we interact with information we reveal our attention. The attention can be explicit or implicit. A basic example of an explicit attention is bookmarking a page or rating a movie. An example of implicit attention is visiting the same page many times or spending time reading an article. Attention information is very valuable because it reveals our interests. People wrongly think of attention information as beings useful only for advertising and marketing. Instead, our attention information should be thought of as a personal filter than can be used in many contexts.

For example, a list of books that you purchased on Amazon can be used by a service that filters new book releases for you. Another example is a search engine that knows what movies you already rented on Netflix, so when you search for new movies it can show you only ones you haven't seen. Or perhaps, a shopping application that recommends electronic gadgets to you based on your previous purchases.

To learn more about modern recommendation engines, please read our previous post on the subject. The take away here is that filtering and recommendation are really two sides of the same coin. But the reason attention information is so important is because in our fast-paced world, having personalized filters can save us a lot of time.

Attention Silos

At a quick glance there maybe nothing wrong with the way things are today. For example, you can login to Amazon and see your order history, you can see what you rented on Netflix or what you bought on eBay. The problem is that the information is not readily portable and not readily available via a common interface. Because of this, managing your attention information is practically impossible.

Consider a different industry - banking. Each bank makes your recent financial transactions exportable in a few formats - pdf, comma separated, Excel, etc. An export in Excel is actually an interesting example, because it illustrates how your information can be leveraged. By exporting information from your bank and credit card into Excel you are able to take it to your financial adviser who can in turn analyze it. The point is that your financial information is portable.

On the other hand your Netflix rental history is not. You can argue that it is possible to copy and paste it out of Netflix, but the cost of doing this is prohibitive for individuals. In fact your Netflix rental history is a classic example of how all of today's attention silos deal with information. The information is available, it is just not easy to export it or direct to another service because of its format. Netflix and others likely store the information in the relational databases, but they expose it only as HTML. Effectively, this makes the information useless to individuals who would like to use it to receive other services.

Who Owns the Attention Data Anyway?

Before looking at what can be done to unlock the attention information, it makes sense to ask if this is even a valid thing to do. Consumers who are aware of the issue and want to participate in the Attention Economy feel strongly about ownership of personal information.

However, the matters are not simple, and likely less favorable to consumers that one might think. When we sign up for services like Amazon or Netflix in the fine print we are are agreeing to their terms of service. Typically, it is stated explicitely that the behavioral information belongs to business and not individuals. After all these companies are offering us a service.

On the other hand, this is a private information that they hold hostage. Clearly, in the case of the financial industry not being able to export information would be outrageous. So what is the difference between my bank and Amazon? Not much as far as I am concerned, since I transact with each and view each as a service.

An Attention Organization

Because the matters are so complex and unclear we need an organization and law makers to step in and define the rules of engagement. A non-profit called Attention Trust made an early attempt to define the principles of attention on behalf of consumers. The principles that it laid out ensure that the user is in control and, thus, made the Attention Economy possible. Unfortunately today the organization is stagnating and has not made much progress lately in getting adoption in the industry.

Assuming that Attention Trust can make a come back or another organization can take over the effort, the crux of the problem is not only to formulate the principles of attention, but also to lobby lawmakers and get the industry to reach a consensus. Even more importantly, there needs be a set of standards focusing on attention.

An early example of a standard is Attention Profiling Markup Language (APML), which focuses on making consumer attention portable. It is certainly a step in the right direction, but it is not rich enough to capture semantic attention. For example, there is no concept of a book or a movie, the attention is represented as a set of tags. Such approach would make it impossible to build specific filters for things like books and movies.

Attention Standards

The technical details aside, the fact is that it is better to have an incomplete standard than no standard at all. To get us to the real attention economy we need a set of standards that would facilitate it. First, each silo that captures a users attention needs to provide an interface to access it.

This can be done in two ways, either by storing information in proprietary format and implementing a standard way for other services to fetch it or by writing the attention information directly into a standard, outside attention store. The latter solution is much better technically, because it would uncouple attention capturing from attention services. However, it is unlikely that companies like Amazon and Netflix would go as far as storing their customer information in an outside web service.

Beyond the standards for storage, there need to be format standards which define attention metadata. The simplest example of such format is line-based format used by the Attention Recorder extension offered by Attention Trust. This format captures a timestamped click stream with the user's browsing activity. The problem is that this format is not rich enough to capture complex interactions like buying a book or renting a movie. The format needs to be extensible to incorporate new kinds of objects. RDF is a natural choice but the challenge is to agree on specifics.

Conclusion

The Attention Economy is an interesting, intriguing concept that remains a fairly elusive in reality. To enable individuals to control the information which is currently locked in silos all over the web is a daunting and somewhat unapproachable task. Modern services like del.icio.us and Flickr recognize the importance and the benefits of being good citizens and letting other services access their information, but among older web players opening up this way is a taboo.

If the Attention Economy is ever going to happen, there needs to be a strong organization forcing it along. The organization needs to drive a set of technical standards and advocate the adoption both to the law makers and the businesses.

What do you think can be done? Is global Attention Economy on the web important to us or can we do without out?

Google Aims to Make YouTube Profitable With Ads

This is a a smart direction to go in. This form of video advertising is consistent with consumers behavioral interaction in watching TV today. They will now be able to interact with the content/ad overlays. Pre roll is more akin to consumers behavior in seeing ads in a movie theatre before previews.Interesting data for our version of this which will be created with vidQube.If you read the New York Times version it has the ads starting at a $20 CPM HAPPY TIMES!!!

By MIGUEL HELFT

Published: August 22, 2007

Ever since Google bought YouTube last November, it has avoided cluttering the site and the video clips themselves with ads, for fear of alienating its audience.

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A demonstration of an ad for a movie on the bottom of a YouTube video. Real ads would not reflect the content of a video.

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Sample Ad Spot Video (youtube.com)

The strategy helped cement YouTube’s position as the largest video Web site but didn’t do much to justify YouTube’s $1.65 billion price tag.

Now Google believes it finally has found the formula to cash in on YouTube’s potential as a magnet for online video advertising and keep its audience loyal at the same time.

The company said late Tuesday that after months of testing various video advertising models, it was ready to introduce a new type of video ad, which it said was unobtrusive and kept users in control of what they saw.

The ads, which appear 15 seconds after a user begins watching a video clip, take the form of an overlay on the bottom fifth of the screen, not unlike the tickers that display headlines during television news programs.

A user can ignore the overlay, which will disappear after about 10 seconds, or close it. But if the user clicks on it, the video they were watching will stop and a video ad will begin playing. Once the ad is over, or if a user clicks on a box to close it, the original video will resume playing from the point where it was stopped.

“What we have come up with is a user-controlled ad format that is engaging,” said Eileen Naughton, Google’s director for media platforms. “We want our users to be able to accept and choose what type of advertising they engage in.”

For now, Google will place the ads only on video clips of its content partners — the more than 1,000 small and large media companies that have licensed their videos to YouTube. By doing so, YouTube will avoid the potential liability of having ads appear on copyrighted clips it is not authorized to display. And it will also prevent ads from playing on clips generated by users whose message may not be to the liking of advertisers.

The revenue from the ads will be split between the media partner and YouTube. Ms. Naughton said Google would charge advertisers $20 for every 1,000 times the ads were displayed. Google said the ads would begin appearing today throughout the site. Ms. Naughton also said advertisers would be able to take aim at specific channels and genres, as well as demographic profiles, geography and hour of the day.

If successful, the video ads could persuade more media companies to license their content to YouTube as a way to make money from it, analysts said.

“Today, YouTube is a sunk cost for Google,” said Darren Aftahi, a securities analyst with ThinkEquity Partners. “If they can couple the proper advertising with the proper content, there is a tremendous opportunity for the company.”

With 51 million users in June, according to Nielsen/NetRatings, YouTube now attracts an audience that is larger than the combined audiences of its three nearest competitors, MySpace, AOL and Yahoo. Its adoption of overlay ads for online video could turn the format into an industry standard, advertising executives said. The video ad market, which is expected to nearly double from last year to $775 million, has been projected to grow to $4.3 billion by 2011, according to eMarketer, a research firm.

But while Google may help popularize the format, it did not invent it. Smaller online video companies, like VideoEgg, a video advertising start-up in San Francisco, have been using similar overlay ads for nearly a year.

Troy Young, VideoEgg’s chief marketing officer, said the goal was to get away from forcing users to watch an ad before showing the clip they wanted to see. Those ads are known as “preroll” and are the most common form of online video advertising so far.

“On the Internet, you have a lot of short-form content, and preroll wasn’t going to work for short content,” Mr. Young said. Mr. Young said that preroll, and “midroll” ads that appear in the middle of a clip, may be appropriate for television shows, movies or other long videos. But overlays have proven effective at making money with short clips, he said. Viewers click on them at a rate roughly five times higher than banner ads, he added.

In tests, YouTube users had clicked on overlays five to 10 times more frequently than on banner ads that already appear on some YouTube pages, Ms. Naughton said. Yahoo has also been testing overlay video ads, creating further momentum for the format.

“We need to be in a place where we have standard overlays and standard measures of engagement across all portals, before the entire preroll industry can shift in any big way,” said Rebecca Paoletti, director of video strategy at Yahoo.

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Report: Offline Ads Are Heavy Drivers of Search

Report: Offline Ads Are Heavy Drivers of Search
By Kevin Newcomb, The ClickZ Network, Aug 20, 2007

While many search marketers understand that there is a connection between online and offline marketing, some may not understand its full extent. According to a new study by Jupiter Research and search marketing agency iProspect, a surprising two-thirds of searchers are led to search on a given keyword as a result of offline marketing.

Specifically, 37 percent of respondents said that in the last six months, a television ad prompted them to conduct a search on a particular company, service or slogan, while 20 percent said a magazine or newspaper ad led them online. Twenty percent said a company's store drove them online, and 17 percent were influenced to search by a radio ad. A smaller number were influenced by outdoor ads.

Only 33 percent of respondents said they had not been influenced to search by any offline media in the past six months. For daily searchers, the influence of offline media was even more apparent, with only 28 percent of searchers saying they had not been prompted to search by any offline media in the past six months.

"Today, it's incumbent upon marketers to integrate search with their offline efforts," said Robert Murray, iProspect's president. "Quite simply, their offline messaging needs to be memorable and facilitate search, and their search efforts need to echo that messaging and integrate those keywords. The bottom line is that integration is no longer optional."

The most common keywords searched were company names, or names of products or services mentioned in an offline ad. In 44 percent of cases, the keyword was the company name. To take advantage of this, marketers should prominently feature company and product/service names in their offline advertising, and make sure their sites are organically optimized for those keywords, and they are showing up in search ads on those keywords as well.

If an offline ad features a tagline or slogan, search marketers should also ensure they are showing up in either organic or paid results for that as well, Murray said. "Offline ads have a short window of time to get the message out to the audience. People often tune out ads, but remember snippets of them. That makes search even more important," Murray said.

Besides driving traffic, offline media tends to drive quality traffic, according to Murray. The study asked those users influenced by offline media if they had ultimately made a purchase at that site as a result, and found that 39 percent had done so.

That 39 percent conversion rate is generally higher than the rate achieved by either search or offline channels alone, Murray said. While the offline ad gets attention and creates demand, it's search that can harness that demand and drive the potential customer to the company's site and turn it into a sale, he said.

"Sure, offline channels can drive traffic, but at the end of the day, it's pretty much meaningless if a purchase isn't made," said Murray. "Marketers want to know the pay-off. And the data from this study suggests that search and offline produce extremely impressive results."

While many marketers are aware of the relationship between online and offline media, it can still be difficult in some organizations to coordinate online and offline campaigns, due to the siloing still present in many marketing departments, Murray said. Many offline marketers don't want to give up any control to their online counterparts, but Murray has found that laying out the situation clearly can help both sides adopt more of a team attitude.

"Search is no longer an add-on consideration for marketers," said Murray. "It is front and center. And while it is a powerful channel on its own, it's clear that its efficacy is multiplied when combined with offline channels."