Tuesday, September 30, 2008

Online Shopping—in the Store



SEPTEMBER 30, 2008

Using e-commerce to expand physical store offerings

"But the price listed on your Website was lower!"

Statements like this may not be heard in retail stores for much longer. Some stores have maintained Web-exclusive pricing or acted as if consumers never researched on the Internet before making a trip to pick up their products.

Yet nearly six out of 10 consumers in the US now use the Internet as their first choice for researching items purchased in a store, according to Nielsen Online, and smart retailers are bringing the e-commerce element to brick-and-mortar.

Some retailers are providing in-store kiosks and wireless devices to let shoppers access a store's Website for product information or to place an online order, according to AMR Research.

More than four out of 10 retailers surveyed said they offered such services, and nearly three-quarters said they planned to do so by 2010.

Store kiosks can save the sale for retailers by creating "an endless aisle of products" when the store is out of stock or space limitations prevent the retailer from displaying its full selection.

The loss of sales to competitors due to stockouts measures $93 billion, according to the 2008 "Store Systems Study" produced by RIS News and research partner IHL Group. Another application of store kiosks is to provide customers with supplementary product information available from the retailer's Website.

Agencies and brands from all verticals rely on eMarketer Total Access for analysis and data. Daily articles are just the tip of the iceberg. Find out what you are missing. Learn more about Total Access today.

Contextual advertising platform - now in Spanish. - Advertising - BizReport

Contextual advertising platform - now in Spanish. - Advertising - BizReport: "BizReport : Advertising : September 24, 2008

Contextual advertising platform - now in Spanish.
A new offering from Lucid Media could help marketers targeting the Hispanic population. This week, Lucid Media released a Spanish-language version of it's ClickSense contextual advertising platform. In the US, Hispanic Internet users are expected to reach more than 20 million by 2010 and researchers have found that a bi-lingual approach is the way to go.

by Kristina Knight

lucidmedia.gifThe ClickSense platform incorporates more than 14,000 categories, giving marketers the ability to highly target display ads to consumers. In addition to display, the platform allows marketers to use direct marketing and gives brand advertisers a better chance to engage this growing demograpic.

'The online buying power and growth of the Spanish speaking demographic cannot be ignored,' said Ajay Sravanapudi, President and CEO of Lucid Media. 'Given that the growth of Spanish speaking Internet users is outpacing the rest of the world's usage growth, we felt that it would be in our clients' best interests to be among the very first to market with highly targeted contextual advertising capabilities.'

According to a recent report from CommuniSpace, Hispanic consumers prefer to be active in online comm"

Monday, September 29, 2008

Ad Age's Media 100 List Gives Glimpse of a New Order

Google Catapults to 12th; Time Warner Prepares to Cede Top Spot to Comcast

NEW YORK AdAge.com) -- Old-media guardians might find some solace in Ad Age's annual list of the 100 Leading Media Companies, which can be found on AdAge.com starting this week. Not a single company in the top 10 has budged even one spot since last year. Nineteen of today's top 20 were last year's top 20 too. And we thought there was a media revolution going on.

But linger a little, and there's enough to give any media seller the willies. Google, a company that wasn't even on anyone's radar a decade ago, has cut past former giants like a hot knife through butter to land at No. 12. Time Warner, the country's biggest media company every year since 1995 and once more this year, is poised to cede its top spot to Comcast with the pending spinoff of Time Warner Cable.

Sign of the times
So Time Warner steps from its throne to concentrate on creating great content, and Comcast, essentially a distribution company, rises in its place. That's surely a sign of the times. And as Time Warner Cable spins out from its parent in mass media, it is working with Comcast and four other cable providers to build Project Canoe -- the high-profile effort to make addressable and interactive TV ads easier to buy, sell and measure. Microsoft, 31st in this year's media-company ranking but nowhere on the list 10 years ago, just bought Navic Networks, an addressable-ad-technology provider.

Google -- whose leap to 12th from 19th last year was the only big gain in the top 20 -- has just won a deal to sell some commercials on NBC Universal networks. That deal will allow NBC Universal to share in the second-by-second viewer data Google gets from the Dish Network. Dish is No. 9 in our media ranking this year, up from 73rd 10 years ago.

"This is a changing of the guard," said Rishad Tobaccowala, CEO of Denuo Group and chief innovation officer for Publicis Groupe Media. "If you look back 20, 30 years ago, the major companies would probably be print-based. Then they move to basically be broadcast based. Now we're looking at companies that have basically digital or technology underpinnings."

"Ten or 20 years from now, I think what you will find is half of the existing players will still be around," Mr. Tobaccowala added. "They may be under different ownership. And we may see people like a Cisco and an Amazon."

New entrants
For the record, neither Cisco nor Amazon has crashed our list -- yet. But the ranks include many companies that weren't always considered media ventures. And there are plenty of brands that didn't exist when cable was the hot new technology.

"If you look back at the advent of the printing press, newspapers, telegraph, radio, TV, cable and then the internet, these are all seminal periods of change," said Patrick Quinn, president-CEO of PQ Media, a research company that's charted plenty of change itself. "Now we've gone beyond launching new platforms based on new technology to actually improving their efficiency, targeting and usability."

The newcomers are slowly but relentlessly taking the place of companies once considered the bedrock of American media. Ten years ago, newspaper owners including the New York Times Co., Gannett and Advance Publications held half of the top 10 slots on our leader board. Now it's down to two: News Corp. and Cox. That's probably a lasting phenomenon too.

"Their position in a listing is the least of their problems," said Lauren Rich Fine, a longtime newspaper analyst for Merrill who now teaches at Kent State.

"What's interesting from a historic perspective is seeing companies that pursued diversification by adding divisions are now the ones spinning them off," Ms. Fine said. "The pendulum is swinging."

Content/distribution splits
Conglomerates are indeed simplifying their stories to investors. Distributing content is easier than ever, so content companies are less determined to own the means of distribution. Companies including E.W. Scripps are splitting their newspaper operations from their broadcasting businesses. Barry Diller has been breaking IAC/InterActiveCorp into pieces.

What's less clear is how far back the pendulum will swing -- and who the buyers will be.

"When we do it in 2018, how many companies will have a significant mobile presence?" asked Leo Kivijarv, VP-research at PQ Media. "Will Verizon be No. 9? Will they buy a TV station in the next 20 years as mobile becomes more important in the U.S.?"

Increasing numbers of international players, particularly from India and China, are likely to climb the ranks here too, according to Mr. Tobaccowala. Bollywood's Reliance Big Entertainment has just agreed, for example, to invest some $550 million in DreamWorks.

"You've already seen the digital players, you've already seen the technology players," Mr. Tobaccowala said. "You're also going to see the global players."

'New paths to big-ness'
Not only does this list reflect the shifts taking place in the industry, it is perhaps itself being rendered irrelevant by them. "You're making the wrong list," said Jeff Jarvis, author of "What Would Google Do?" and director of the interactive journalism program at the City University of New York. "There are new paths to big-ness. And those paths are not necessarily through ownership and corporate control."

Witness the astounding reach of ad-network operators such as Glam Media, Mr. Jarvis said. It reaches millions without owning the content or the distribution. Advertisers can put together ad hoc networks anytime they're will to put in the effort.

"The mass market is dead, replaced by the mass of niches," Mr. Jarvis said. "Advertising people roll their eyes at me and say, 'No, no, no.'" They cite big draws such as "American Idol," he said. "But we all know how inefficient that's been. And what's artificially propping it up has been the advertising industry, because they like one-stop shopping. They're not built to find these highly targeted networks."

B2B Marketers Ready to Spend Online



SEPTEMBER 29, 2008

Growth will be low, but at least it will be growth.

B2B marketers in the US plan to increase spending on Internet marketing more than traditional marketing, marketing hires or overall marketing through July 2009, according to a study by Duke University's Fuqua School of Business commissioned by the American Marketing Association.

B2B services marketers surveyed said they would bump up their Internet marketing spending by nearly 18%, compared with less than 6% for traditional marketing. B2B product marketers planned to be even more conservative, increasing Internet marketing by less than 13% and traditional marketing by less than 2%.

Any increase will be welcome.

Total B2B ad spending was down 2.9% in 2007, according to an analysis of TNS Media Intelligence data by BtoB Magazine. The B2B Internet ad spending category, which did not include paid search or online video ads, declined by 0.4% in 2007.

“B2B marketers are increasing their online spending, particularly for customer acquisition, because they can measure it and determine quickly whether it is working,” said Carol Krol, senior analyst at eMarketer. “In an age of heightened accountability, the ability to measure is critical.

“They are also simply following customers," Ms. Krol said. "Their customers are researching and evaluating products and services online, particularly in the early phases of the purchasing cycle, so it makes sense to be where they are congregating.”

Agencies and brands from all verticals rely on eMarketer Total Access for analysis and data. Daily articles are just the tip of the iceberg. Find out what you are missing. Learn more about Total Access today.

Saturday, September 27, 2008

Book Review: Neuromarketing THE FUTURE

Book Review: Neuromarketing

September 10th, 2008 by Karlyn Morissette

Neuromarketing I breezed through a bunch of marketing books this weekend, but the one that really stood out as useful was Neuromarketing by Patrick Renvoise and Christophe Morin. If you do marketing in any way, shape or form this book should be on your “to read” list. It describes how the brain makes decisions and how you can hone your designs and messages to give your organization a competitive advantage.

Neuromarketing discusses the three parts of the brain and their function:

  • New Brain: Processes rational data. This part of the brain may not be fully formed until you are 24-years-old.
  • Middle Brain: Processes emotions and gut feelings.
  • Old Brain: The real decision maker. This is the first part of the brain to develop and makes all decisions. It’s sole concern is the physical survival of the body. The old brain is 45,000 times older than the written word, which means that written words don’t impact it.

When the old brain makes decisions, it consults with the new and middle brain. This leads to emotionally-led decisions, which are then justified rationally.

So how do you reach the old brain, since it doesn’t understand words? The authors offer several suggestions to appeal to the old brain in terms that it recognizes:

  1. An Audience-Focused message: The old brain is not concerned with anything not related to its own well-being. Therefore your messages must be 100% audience focused. They don’t care about your organization. They care how your organization can help THEM.
  2. Contrast: Use contrasting examples, such as before/after, risky/safe, with/without, fast/slow, etc.
  3. Tangible Input: Ideas should be simple and easy to grasp. Make sure your audience can easily recognize and process your terms (such as dollar value).
  4. Focus on the Beginning and the End: Put the most important points at the beginning of a message (this can also apply in a presentation). The once the old brain has assessed that there is no immediate danger, it will try to conserve energy by paying less attention to the middle of the message.
  5. Visual Stimuli: The old brain responds to visuals before the new brain has time to process what they mean.
  6. Emotion: We remember events better when we’ve experienced them with strong emotion. If customers can’t remember your message, why would they choose your product?

Now that we know what the old brain will pay attention to, the authors offer a four-point plain for integrating these strategies into our marketing plan:

Diagnose the Pain: You have to figure out what “pain” your audience is experiencing - what do they really want/need? What benefits do you have that relieve that pain? For example, when Dominoes found out that the real reason customers weren’t utilizing delivery was that they were worried about the time it would take for the pizza to get to their house, they implemented a 30-minute guarantee. The pain of your audience falls into three categories: financial, strategic or personal. Marketing efforts should focus on the things that cause the MOST pain, rather than things that your audience doesn’t really care about. Finally, your audience must acknowledge that they have a certain pain in order for your offer of relief to appeal to them.

Differentiate Your Claims: The old brain responds to clear, solid contrast. How are you different than your competitors? How are you different than doing nothing? What’s UNIQUE about what you’re selling? Don’t just say that you’re one of many companies that offer basically the same thing. You may have to be creative about your claim of differentiation but if you aren’t different, you’re basically selling your competitors products for them.

Demonstrate the Gain: Now that you’ve differentiated yourself from your competitors, you have to demonstrate through a tangible message that your audience will benefit from your product. You can do this through stories, an actual demo, data that relates back to tangible value or a vision statement (though this tactic is the least affective because it requires faith.

Deliver to the Old Brain: It’s critical to deliver this message in the way that the old brain will understand, which you can do by grabbing the user’s attention right off the bat, using big picture analogies, making sure your claims are clearly articulated and using phrases that appeal to our self-centered nature by using key words like “you”.

Overall, this book is definitely worth the $22 I paid for it. It’s full of practical and applicable information that can be incorporated into any marketing campaign.

Wednesday, September 24, 2008

Yahoo! Launches Transformative Digital Ad Platform


San Francisco Chronicle and San Jose Mercury News First Customers to Go Live

NEW YORK, Sep 24, 2008 (BUSINESS WIRE) -- Emmy(R) Award nominee and Golden Globe(R) Award winner Jon Hamm of AMC's original drama series Mad Men(R), today joined Yahoo!'s Chief Executive Officer Jerry Yang, President Sue Decker and Executive Vice President of Yahoo! U.S. Hilary Schneider for the 5th annual Advertising Week conference in New York to announce the launch of APT from Yahoo!. Formerly known as AMP!, APT from Yahoo! is an intelligent innovation in online media, a digital advertising solution that streamlines the process of planning, buying and optimizing display advertising. APT is designed to simplify the process of buying and selling ads online while connecting all the market players -- publishers, advertisers, agencies, networks, partners and developers -- from a unified platform to do business more efficiently and effectively. The platform is rolling out as planned in phases beginning with publishers the San Francisco Chronicle of Hearst Newspapers and San Jose Mercury News of MediaNews Group.

"The advertising landscape has changed dramatically since the days when Don Draper was roaming the halls of Sterling Cooper," said Jerry Yang. "While Mad Men celebrates the Madison Avenue of 40 years ago, APT from Yahoo! clearly represents the future."

As a Web-based solution with the potential to allow unprecedented ease of cross-selling across the largest open network of publishers, advertisers, ad networks and agencies from a single integrated interface, APT is a single platform for connected digital advertising, including ad serving, ad network and ad exchange. It is designed to streamline advertisers' ad-buying process for multiple accounts across multiple publishers, and enable creative testing and campaign optimization. It is also intended to help advertisers precisely yet easily identify audiences through geographic, demographic and interest-based targeting while enabling publishers to better monetize their content as well as making better connections across the Web.

"One of the major benefits of APT from Yahoo! is the fact that it's an open system, designed to enable advertisers to reach their audiences in their favorite places across the Web, and publishers to monetize inventory across the broadest possible demand channels," said Sue Decker. "As we transform the advertising marketplace, we're excited to have key members of the Newspaper Consortium, the San Francisco Chronicle and San Jose Mercury News, lead the way in this historic journey."

For publishers like the San Francisco Chronicle and San Jose Mercury News, APT is designed to improve monetization capabilities and increase advertising revenue with solutions targeted at accelerating the ability to take advantage of premium brand and performance-based advertising. Key benefits include:

-- Fostering a more transparent marketplace through the ability to connect to new business partners for cross-selling;

-- Providing ad selection and inventory management tools to match relevant ads to marketers' target audience; and

-- Allowing publishers to manage their own private networks.

"The Newspaper Consortium's open, collaborative and exciting partnership with Yahoo! is enabling a crucial transformation in the newspaper industry," said George Irish, President, Hearst Newspapers. "With this next-generation platform we can realize the powerful combination of Yahoo!'s technology innovations, national reach and partner network with the Consortium's rich local content, sales forces and local market expertise."

"When Yahoo! showed us the platform's potential in February this year, the Newspaper Consortium was impressed by Yahoo!'s commitment and investment in a game-changing technology that would significantly advance our efforts to monetize the Web," said William Dean Singleton, Vice Chairman and CEO, MediaNews Group. "Seven months later, I am very proud to announce that Yahoo! has executed, and we are jointly accelerating toward fully using the platform to aggregate inventory, target relevant audiences and drive revenue growth."

Some of the initial capabilities featured in the new platform include:

-- Guaranteed cross-selling with pre-defined selling rules

-- Ad Exchange for non-guaranteed inventory

-- Advanced audience targeting techniques based upon behavior and geography

-- Inventory lookup and forecasting across individual and partner sites

-- Creative workflow automation and personalization

-- Powerful rate card tools for improved yield management

-- Filters for better controls around creatives

-- Flexible and powerful APIs

-- Federated ad call to support multiple ad formats

Yahoo! has developed a systematic integration plan for adding other Newspaper Consortium partners onto APT throughout this year and into next year. APT is a significant component of the unique and deep collaboration between Yahoo! and America's newspapers. Launched in 2006 with 176 newspapers across the United States, the strategic partnership to create one of the largest and most comprehensive advertising networks in the online industry now comprises 35 media companies spanning 784 newspapers.

Yahoo! will start to make the platform available to other parties including advertisers, publishers, networks and agencies in 2009.

Additional information on APT is available at http://apt.yahoo.com. For press materials including executive bios, APT screen shots and images visit http://apt.yahoo.com/newsworthy.

Tuesday, September 23, 2008

Two-year countdown to massive growth: Online Video

Two-year countdown to massive growth

If eMarketer’s original estimate of $1.3 billion for video ad spending in 2008 appears to have been off the mark, the question is more a change of methodology than of perspective. That is, the basis has changed, but eMarketer’s prognosis for online video advertising has not.

It now appears that the market will take until 2010 to surpass the $1-billion mark. Beyond 2010, huge additional sums will go to online video advertising each succeeding year. Two essential factors will support that growth: more trusted video content to sustain advertising and more large advertisers (brand marketers, mainly) seeing enough scale to enter this market in a big way.

While only 2% of total Internet ad spending will go to video in 2008, that share will be nearly five times higher by the end of 2013.

Further, as total Internet ad spending approaches total television ad levels in 2013, it will become commonplace for TV network ad sales to be a two-way play, with media buyers looking to both online and TV for most campaigns, even in the upfront market.

Saturday, September 20, 2008

Home Shopping 2.0: ERA INNOVATION


Download a PDF version of Jeff’s PRESENTATION here!

Download a PDF of Jeff’s HANDOUTS / REFERENCE MATERIALS here!

I recently lectured at the Electronic Retail Association (ERA) Europe’s Electronic Home Shopping Conference 2008, Monte Carlo, June 22-24. What a great time I had presenting along side of the likes of Livemercial’s Johnny Mathis Jr., Elie Boudara of ID SIDE (who presented a remarkable, pioneering case study on how product placement strategies can intersect with long-form, video generated, Web-based selling!), Andreas B├╝chelhoffer (who is pioneering auction-based DRTV models in Germany), Anders Hjorth of Relevant Traffic, Rok Hrastnik of Studio Moderna, Rodrigo Sep├║lveda Schulz of vPod.tv and many others.

I focused my lecture on how DRTV (direct television/infomercial) marketers can, should be and are transferring existing best practices into their Web-facing business units to drive increased sales. Like “magalogers” (catalogs that take a magazine-like, content rich approach), direct TV companies are the hands-down masters of the “long-pitch” sell technique involving info-tainment but need to look out for the likes of newcomers, HoneyShed.com, who are mixing the old (same approach to video-based selling) with the new (interactive EXPERIENCES that consumers crave).

How can DRTV marketers take the Internet bull by the horns? They’re compelled to address the multi-channel shopping problem that Rok Hrastnik addressed so well. That is, capturing consumers who are interrupted on their way from TV to purchase via the Web (interrupted by sellers of knock-off products, etc. etc.).

Rok (who puts Studio Moderna’s money where his mouth is) and I see eye to eye — it’s all about becoming a publisher of content that customers crave. It’s not about the short-term sale; rather, about a long-term, trust-based relationship with a customer that keeps your brand “top of mind” when they’re considering making a purchase. Rok’s social marketing case study focused on his Dormeo.com brand. The secret sauce? Sex-related articles for men + weight loss content for the ladies = sales. Such an approach also supports word of mouth marketing given how the content is extremely shareable (easily syndicated) and presented to consumers based on their own consumption preferences (ie. email, RSS feeds, etc.).

Thursday, September 11, 2008

The Agency Of The Future Is...

from Six Pixels of Separation - Marketing and Communications Insights Blog and Podcast - By Mitch Joel at Twist Image

The Agency of the future is the Digital Marketing Agency of today.

(but that's not how they spin the news).

MarketingVox released a news item today titled, Marketers' Top 10 Wish List for Agencies of the Future. The results of a Sapient-sponsored national online survey in the United States of two-hundred CMOs (Chief Marketing Officer) revealed that what really keeps Marketers awake at night is the fact that they are spending more and more in the Digital channel and will continue to do so within the next twelve months. In fact, more than a quarter of the CMOs surveyed indicated that 50% of their marketing efforts are currently done in the digital channels and close to forty percent said that within the next twelve months from 50% to 100% of their marketing will make the digital shift.

The Top 10 Wish List for Agencies of the Future:

1. Greater knowledge of the digital space. With more than a third of marketers surveyed revealing that they are not confident that their current agency is well-positioned to take their brand through the unchartered waters of online digital marketing and interactive advertising, it’s clear that agencies need to have a greater knowledge of the digital space in order to thrive. In fact, nearly half (45 percent) of the respondents have switched agencies (or plan to switch in the next 12 months) for one with greater digital knowledge or have hired an additional digital specialist to handle their interactive campaigns. Further, when it comes to an agency’s area of expertise, 79% of respondents rated “interactive/digital” functions as ‘important/very important.’

2. More use of “pull interactions.” When trying to engage consumers with their brand, 90 percent of respondents agree that it is becoming increasingly important that their agency uses ‘pull interactions’ such as social media and online communities rather than traditional ‘push’ campaigns.

3. Leverage virtual communities. An overwhelming 94 percent of respondents expressed interest in leveraging virtual communities (public and private) to understand more about their target audience.

4. Agency executives using the technology they are recommending. Ninety-two percent of respondents said it was ‘somewhat’ or ‘very’ important that agency employees use the technologies that they are recommending. For example, it is important that agency executives regularly use Facebook, Flickr, wikis, blogs, etc. in their personal social media mix.

5. Chief Digital Officers make agencies more appealing. Forty-three percent of marketers surveyed said that agencies with chief digital officers are more appealing than those without.

6. Web 2.0 and social media savvy. Sixty three percent of marketers surveyed said that an agency’s Web 2.0 and social media capabilities are ‘important/very important’ when it comes to agency selection.

7. Agencies that understand consumer behavior. Seventy-six percent of respondents deemed this as an ‘important/very important’ aspect of their agency’s online digital marketing and interactive advertising area of expertise.

8. Demonstrate strategic thinking. Seventy-seven percent of marketers surveyed ranked strategy/brain trust capabilities at the top of their agency wish list.

9. Branding and creative capabilities. Sixty-seven percent of respondents ranked branding at the top of their agency wish list while seventy-six percent ranked creative capabilities as‘important/very important.’

10. Ability to measure success. It’s no surprise that marketers want an agency that can report on where campaigns succeeded, fell short and where they should be fine-tuned. Sixty-five percent ranked analytics at the top of their agency wish list.

(the above list and commentary was pulled from this press release: Sapient - Survey Reveals Brand Marketers’ Top 10 Wish List for Agencies of the Future).

The only challenge to calling the agency of the future the Digital Marketing agency of today is that we're not seeing enough interactive shops take the lead on points #8 (demonstrate strategic thinking) and #9 (branding and creative capabilities). More often than not, most Digital Marketing shops are adapting current/existing Marketing initiatives and are not taking the (or being given) opportunity to drive the over strategy in regards to the brand, marketing goals, outcomes and marketing optimization. It's happening is some instances, but for the Digital Marketing agency of today to really take full ownership of this list from the future, strategic thinking and becoming the guardian of the brand are essential.

What kind of agency are you working with and would you agree that this list looks strikingly similar to the core competencies of the Digital Marketing agency of today?

Tuesday, September 9, 2008

US Hispanic Media Usage - eMarketer

US Hispanic Media Usage - eMarketer: "US Hispanic Media Usage
Summary

Table of Contents

Sources
According to Advertising Age, to reach Hispanic consumers, last year advertisers spent 64% of their media budgets on Spanish-language broadcast and cable TV networks, while Internet display ads garnered less than 5%.

The US Hispanic Media Usage report dissects the question of why advertising dollars have been so slow to follow Hispanic eyeballs online.

Hispanic consumers under the age of 35 are spending more time online than watching TV—and are often doing both at the same time.

In general, Hispanics are heavy users of all digital media, embracing innovations more rapidly than non-Hispanic whites.

Yet Hispanic-targeted ad dollars remain locked in TV budgets. Why?

US Hispanic Advertising Spending, by Media, 2007 (millions and % of total)

Key questions the “US Hispanic Media Usage” report answers:

* How much time do Hispanics spend online in relation to other media?
* How do Hispanics multitask among media?
* What types of digital media do Hispanics consume?
* What does the “Hispanic digital home” look like?
* What do Spanish-speaking Hispanics do online?
* Why is it so hard to measure ad spending targeted to this audience?
* And many others…

eMarketer"

Sunday, September 7, 2008

Our industry is on the defensive at Performance Marketing Alliance

Our industry is on the defensive at Performance Marketing Alliance

I attended an interesting session at Affiliate Summit today, conducted by four attorneys who discussed litigation and legislation activities around internet marketing. Bennet Kelley, an attorney for the Internet Law Center, made what I thought was a very relevant comment, after describing several industry lawsuits. He said that as an industry, we don’t pay attention to legislation, certainly not at the state level (as the NY tax law demonstrates), which puts us constantly on the defensive. And we’re often outmaneuvered as a result.

He then offered this quote by Carl von Clauswitz, an 18th century military historian:

“Superiority of numbers is the most common element of victory.”

I think that pretty well sums up motivation for forming the PMA. Collectively, we can be more effective than individually. Monitoring state, federal and international legislation is an excellent activity for the PMA to undertake, as well as providing education to help influence legislation. And perhaps we plan our strategy to grow to a size where we can actually employ lobbyists to have a direct impact on legislation that can help or hinder performance marketing.

Thoughts?

Thursday, September 4, 2008

Gap Widens in Online Advertising

Rivals Struggle to Catch Up to Google As Buyers Favor Search Ads Over Display

By JESSICA E. VASCELLARO
September 4, 2008

Spending on Internet advertising is climbing at a healthy clip -- rising 20% in the U.S. in the second quarter -- and growth forecasts are strong despite the weak economy. But that growth isn't being enjoyed by everyone.

The gap is widening between spending on simple search ads, Google Inc.'s core turf, and spending on flashier display ads, which companies such as Yahoo Inc. and Microsoft Corp. had hoped to use to gain ground on Google.

[Gap Widens in Online Advertising]

Faced with a slowing economy, advertisers are sticking to what they view as the safest way to reach online customers directly: the plain text ads that appear on search-result pages. Search-ad spending is on track to reach $10.4 billion this year, double what will be spent on display ads, according to research firm eMarketer.

That divergence of fortunes may be bad news for companies counting on a comeback for display ads, which ruled the Web in its early days. Though Yahoo and others say they have seen demand for these ads as they introduce technologies that better target the ads, they have been slow to regain favor.

CreditCards.com is typical. Jody Farmer, vice president of strategic marketing for the credit-card portal, says he has experimented with buying display ads. But as the economy tightens, the site, which spent $30 million on online marketing last year, is focusing on search ads. "We have to be a little more thoughtful about how we spend our money," he says.

The trend comes as Google rivals Yahoo, Microsoft and Time Warner Inc.'s AOL have invested billions of dollars in building and buying new display-ad technology to deliver more relevant and engaging ads to users on their sites and on the sites of other Web publishers. They hope to win back advertisers who have poured money into search ads.

Mark Scholz, global search manager for Hewlett-Packard Co.'s printer division, says that while his budget is relatively flat, he is spending more on search ads by pooling together funds from product groups eager for the extra lift they are accustomed to from search campaigns. "In the event there are budget cuts, I am one of the last ones they go after," he says.

[Gap Widens in Online Advertising]

Google, with more than 70% of the U.S. search-ad market, has much to gain from the trend. But the Mountain View, Calif., company also has made some big bets on the display business. Google is trying to tap brand advertisers to buy display ads on Google-owned properties such as YouTube and on other sites. Tighter display-ad budgets could hamper that expansion, which it fueled with its acquisition of DoubleClick last year for more than $3 billion.

The gap between Google and its rivals could widen as search grows faster than display. Search ads are forecast to represent 42% of overall U.S. online ad spending in 2008, according to eMarketer, up from 40% in 2007. Display is expected to stay flat, at about 21% of overall spending.

Google's rivals caution that there is a wide mix of display-advertising types and that some are performing well in the current environment. Spending on display ads is forecast to reach $5.2 billion this year, up from $4.5 billion in 2007.

Brad Goldberg, Microsoft's general manager of search, said the company has a number of advertising products for which the tough economic environment is a boon, including a new cash-back shopping search service.

Lynda Clarizio, executive vice president of AOL, says the company has the mix of ads that marketers are looking for in a downturn, even though it doesn't have a traditional search business.

A Yahoo spokesman says investments in new display technologies helped the company meet its financial goals in its most recent quarter, despite the tough economic environment. And he notes that Yahoo's U.S. search businesses is growing briskly as well.

There are signs that search may eventually take a hit too. John Aiken, managing director of research firm Majestic Research, says some smaller businesses have begun cutting back the number of keywords they are buying in recent months, although large marketers continue to spend freely. He says Google is "potentially stretching for dollars," noting that it has begun displaying more ads for some keywords.

Nick Fox, director of business product management at Google, says more ads may be showing up for some keywords because, as advertisers spend more on search, Google has more relevant ads to show. "We are not making any short-term trade-offs," Mr. Fox says.