Microsoft Offers Reward

Consumers Can Get Cash for Purchases Via Search Service

By JESSICA E. VASCELLARO and ROBERT A. GUTH
May 22, 2008; Page B3

Microsoft Corp. announced a plan to pay consumers who buy items they find through the software company's search service, the latest in a series of moves to gain ground on Google Inc. in the lucrative business of Internet search.

The idea to get consumers to use a search service by enticing them with financial rewards has been tried by companies before with little success. Microsoft, a relative latecomer to the search business, believes it can improve upon the concept by implementing it on a broader scale and by coupling it with new options for advertisers.

Microsoft Chairman Bill Gates announced the new service, Microsoft Live Search cashback, at the company's annual event for advertisers. The program includes products from 700 merchants, including Barnes & Noble.com and Overstock.com. Consumers who buy items from participating merchants after searching for them and clicking on an ad can get a cash rebate via an online Microsoft account they create.

The offering is designed to help attract a greater share of commerce-related queries.

Microsoft also is hoping the program will draw new advertisers seeking a more precise return on their investment and choices beyond traditional models, such as paying every time an ad is viewed or clicked on.

Merchants who participate in the program will be able to select a variety of options for buying advertising from Microsoft, including paying Microsoft only when a customer completes a sale. Google has begun testing a similar model that calls for advertisers to pay Google only when a consumer completes a specified action, such as buying a product or filling in a form.

The Live Search rebates are set as a percentage of the purchase price of an item and vary among merchants. Users can find a 5% rebate on a $60 coffee maker or 2% on a $120 digital camera, for instance.

Ellen Siminoff, chairman of search-marketing company Efficient Frontier Inc., said advertisers are eager to test new models that can help them spend their dollars more wisely, but that a variety of tools already exist to help them calculate spending on the likelihood it will result in a particular action, such as a sale. She predicts marketers will spend more money on the program if it increases the number of searches through Microsoft's search engine.

In April, Microsoft sites captured 9.1% of the U.S. search market, roughly flat from April 2007, according to comScore Inc. Google's market share in the period rose to 61.6% from 56.1%.

Microsoft withdrew an unsolicited offer to buy Internet giant Yahoo Inc. May 3 but has floated a proposal that includes acquiring Yahoo's search-advertising business, according to people familiar with the discussions.

The software company has tried to use financial incentives before to lift its share of the search market. In 2006, Microsoft tried a sweepstakes-like search service through which users could win prizes if their search terms matched those on a random list. Last year, it started its Live Search Club, in which users earn prizes for completing puzzles that involve searches.

The company's latest attempt is based on technology and partnerships Microsoft acquired by buying comparison-shopping site Jellyfish late last year.

Write to Jessica E. Vascellaro at jessica.vascellaro@wsj.com and Robert A. Guth at rob.guth@wsj.com

Pay Per Click Is Popular, But Results Vary

OCTOBER 31, 2007

Pay-per-click, but how much?

More than one-half of the US online retailers surveyed by NetElixir and the e-tailing group in October 2007 said that up to 40% of their orders now come from pay-per-click marketing.

As a result, nearly nine in 10 said they planned to increase their PPC budgets in 2008, with 30% planning increases of 26% or more, according to the survey results published in NetElixir's "E-tailer Pay-Per-Click Stress Study." "Although merchants are getting more seasoned and innovative, knowledge levels and sophistication required to maintain and grow this valuable area can be stressful," said Lauren Freedman, president of the e-tailing group, in a statement.

Nearly eight in 10 online merchants said they mainly used return on investment to decide how well PPC worked.

Still, many search marketers find that measuring PPC ROI is difficult. Nearly three in 10 US search marketers in a MarketingSherpa study, also published in October 2007, rated PPC as "highly variable" in its ROI, making it more of a question mark than any other marketing tactic in the survey.

Breaking News: Affiliate Marketers Finally Have a Way to Track All their PPC Ad Campaigns!

• KeyTrail - Discover which keywords lead to sales!
  PPC keyword performance tracking for affiliate marketers. Supports the affiliate networks CJ, LinkShare and ClickBank and the PPC services Google AdWords, Yahoo! Search Marketing and MSN AdCenter.
• www.keytrail.com

“Discover How You Can Use a Simple Software Tool to Find Out What Keywords are Driving Your Profits and Which Ones are Simply Wasting Your Money!”

Pingology - a Skill-Based Alternative to Pay-Per-Click Search Engines

http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=109&STORY=/www/story/07-12-2007/0004624397&EDATE=

GOLDEN, Colo., July 12 /PRNewswire/ -- Pingology,
http://www.pingology.com, is a new paradigm search engine. It allows Users
to find more relevant information in less search time. Webpage Owners are
offered a skill-based alternative to costly pay-per-click on a free or
fixed-price subscription basis.
Businesses are finding top placement of the best key words on pay-per-
click search engines very expensive. ROI can be variable to say the least.
A $1000 pay-per-click budget will often not purchase a week's worth of top
ranked placement. Key words can cost over $20 a click-through. No wonder
pay- per-click is a $10 billion a year industry.
On Pingology, skill and relevancy determine placement -- not how much
money you can spend!
Pingology offers a fixed-cost, skill-based alternative. Webpage Owners
"cloak" their pages by filling out a questionnaire designed to provide more
specific information to the User than is available from only key word text-
descriptors and simplistic bot IDs such as "image," "video" and "link."
Users fill out a corresponding questionnaire of what they seek. The
more closely those responses match cloaked responses by Webpage Owners, the
higher the webpage is ranked in the search results seen by the User.
Webpage Owners and Users effectively "ping" each other, engaging in an
anonymous, ongoing dialogue between needs of the User and content offerings
of the Webpage Owner. The more effectively Webpage Owners cloak their pages
in relationship to User wants, the higher will be their ranking. Users get
more relevant results and webpage owners get qualified click-throughs.
Users and Registered Webpage Owners will have access to short-form,
long- form and specialized questionnaires. A Reports area allows Webpage
Owners to monitor searches and realign webpage content to meet User needs.
Pingology User Rollout is set for October 16, 2007. Between July 6 and
September 16 during the Webpage Owner Rollout Pingology is offering webpage
owners free short-form cloaking of up to three unique URLs. Pre-rollout
discounts on long-form and specialty form questionnaires is also being
offered.
Advertising will be offered but will not affect rankings or placement
and space will be limited.
Pingology will be free to Users.

Contact:

Michael Archer
303-274-0515
marcher@pingology.com

Media Inquiries:
media@pingology.com

Investors:
investors@pingology.com
This release was issued through eReleases(TM). For more information,
visit http://www.ereleases.com.

Why most of the CPA/Brokerage industry will not be around in 5 years.

from Digital Moses March 22, 2007
by Adrian Bye

Many people currently involved in the CPA industry feel that this industry is rock solid and not likely to change anytime soon. They may be in for a shock. There are developments coming from technological, business and legal areas which are going to have huge ramifications on the industry. One of those just happened.

Specifically I am referring the brokerage fees that CPA networks and brokers charge (around 20%) to push offers to fill the internet demand for remnant inventory, and the inefficiencies and expenses that are put in place by having so many humans involved in making web advertising work. Over time these people will be replaced by technology, just as many industries have been overturned in the past by modernization causing blue collar workers to lose their jobs.

The three biggest sources of traffic for a typical network are:

a. Email marketing

b. Pay per click traffic

c. Web inventory such as banners and text links

We’ll talk about these one by one.

CPA search marketing

Pay per click marketing is changing. Google has just announced it is going to offer a CPA model. At the moment it is possible to make a decent living by being good at PPC arbitrage of CPA offers. This works right now because Google and Yahoo have focused their business model around selling clicks, rather than selling actions. They do this because this is their version of branded CPM advertising – they can generally get more for it.

However, this causes huge inefficiencies in the system, because it is time consuming and complicated to figure out how to drive lots of PPC traffic, enabling therefore arbitrage opportunities.

Since Google has now started offering a CPA system, and Yahoo certainly will, this will change dramatically. Advertisers will be able to add a bunch of creatives into the system, along with a list of keywords and a CPA they are willing to pay. The system will then automatically test the base keywords you inserted, along with an extra list of keywords google generated itself. It will test them all against the various creatives you made; keeping pricing under a certain CPA you have set. The entire system will be fully automated, and the current arbitrage which is possible today will go away. Google and Yahoo can make quite a lot of money by making this change, given the average network commissions and the money made by PPC arbitrage players. Google has already switched and it is just a matter of time before Yahoo does as well.

Notice I don’t mention clickfraud – I don’t believe this impacts Google and Yahoo moving to a CPA model.

Email marketing

Email marketing is an area which is going to change on two fronts. CANSPAM is a law with many loopholes, one that allows people to send as much mail as they want under certain (not very restrictive) limitations. A lot of mail is being sent which does not provide true value to consumers, its simply mass market monetization that is driving volume, a process I really disagree with. At some point a new email law will be passed which requires something like "at the time of sign up, the sending FROM address must be displayed clearly so the consumer knows where they will receive mail from". And brokering of email data will be exclusive only. You join one list, you unsubscribe from that list, period. It’s only a matter of time until something like this is legislated. Don’t think so? A few years ago the telemarketing industry was doing great – now its been decimated with the FTC’s do not call rules. This kind of thing can happen literally overnight – look at how the online gaming industry has been affected recently.

Secondly, deliverability is going to get much more difficult. Right now, most ESP’s can get mail delivered almost anywhere except major ISP’s such as Yahoo and Hotmail. Reputation management is a new trend in email which will change this dramatically. Reputation management means that every IP address which is sending email is certified by an independent third party as to how that IP address is being used to send mail. It provides a lot of data to email receivers on exactly how that IP address is being used. If you’re certified and your reputation is positive, a lot of your mail will automatically be delivered. If you’re not, you’ll get blocked as spam.

Right now reputation management is being used by the major ISPs to confirm mail delivery – but once this is rolled out more widely across internet mail servers, mail blocking will improve dramatically, and those who are sending bulk co-reg data will find their deliverability falling through the floor.

Behavioural targeting

Thirdly, behavioral targeting is going to get much better. This has been talked about in the past, and never seems to truly work properly but it is starting to get much better now. Networks like Blue Lithium and turn.com are making a lot of progress with targeting and collecting a lot of data on their userbase. Reports I hear about Blue Lithium in particular are that it performs extremely well.

Impressive things are being done on the advertiser side to take advantage of behavioural targeting. For example, Think Partnership has a new product called Second Bite which saves shopping cart abandoners. If you decided not to buy a product and half completed your shopping cart, Second Bite will work to get you to finish your purchase. Think Partnership is just starting to buy banner inventory to save the cart purchase. What this means is that you can be browsing the web and you’ll see a banner saying "hey – come back and finish your purchase on and get a 10% discount". Once this kind of inventory is brokered out to major behavioural networks, no general interest CPA offer will be able to compete with the CPM’s they will be able to pay to save a purchase. Sure, this is a narrow application, but many more clever targeting applications of behavioural targeting will appear, increasing CPM’s across the board.

In addition, client side behavioral targeting will increase. By this I mean that users will allow more data to be mined from their computers locally, and some of it will be passed back to the network. In an extreme case, imagine if Microsoft made its Windows OS completely free – but in return for being able to mine behvioural data from your machine. This data would be fed back to online targeting networks such as Blue Lithium, to target web advertising more accurately. No popups or any other nasty applications would be included. That could be a huge value add for consumers – with free software AND better advertising. Yes, this has huge privacy implications, but over time these will be worked out – the ECPM increase from accurate targeting will be too valuable, and consumers will not mind their data being mined in aggregate.

That’s not to say that everything is bad. Some areas of the CPA and brokerage industry will continue to work well. These include:

1) Coupon and affiliate sites. Publishers that are actively going out and finding links to promote on their site for consumers will continue to make money and want to use CPA networks. The human interface in this instance provides tremendous value to consumers since the publishers truly understand what their market wants.

2) Newsletters. This will become the standard for email marketing as the more aggressive forms of email marketing will be made illegal. This is similar to coupon and affiliate sites where publishers will actively seek out links to target their audience due to their understanding of their market.

3) Web and chat spam is going to increase. Right now we’re seeing quite a bit of spam on myspace, and given the progress people are making on defeating CAPTCHA mechanisms, this will only increase. If the postings cannot be effectively blocked by computers, then more of it will be done. Unfortunately CPA networks will see more volume from various forms of aggressive webspam as time goes on.

The branding industry will have some impact on these, but it likely won’t change much from the way it is now – some inventory will be sold at higher ECPM’s for major brands, and the rest will be remnant inventory. Of course the big question is how high the ECPM’s can get for behavioural targeting and whether they can beat branded advertising.

Some people will read this article and be thinking to themselves "no, he’s wrong, this has always worked, and it will continue to work". The reality is that the internet marketing industry has been around for a very short time, and we really don’t have any data points to compare against long term. The right way to think about it is "where is the true value for consumers and advertisers". If your business model doesn’t provide true value to all stakeholders, then at some point what you are doing will stop working.

If your business model depends entirely on brokering, you may want to consider how you will operate in a few years time once the above become reality.

A good way to think about whether your business will be around in the future is simply by answering two questions:

1) By running my business, am I creating true value for all my stakeholders (customers, employees, consumers, partners)

And

2) Am I keeping up with the very latest trends that might affect my business, including industries that are not directly related to my daily focus?

For number 2, you can say you’re doing the right thing because you’re reading this. J

Does this mean that all CPA advertising and lead generation will go away? Of course not. These are very fundamental models and the backbone of internet commerce.

Just watch out if your business model is entirely focused around brokering remnant advertising. If this is your primary business, make sure you stay on top of your strategy. You don’t want your company to be made irrelevant like has happened with generations of blue collar workers in the past.

Google Ads To Appear On Social Networking Profiles

http://publications.mediapost.com/index.cfm?fuseaction=Articles.san&s=56452&Nid=27921&p=406600

by Tobi Elkin, Friday, Mar 2, 2007 6:00 AM ET
FRIENDS WITH BENEFITS? NO, NOT those kinds of benefits ... cash benefits.

Dada.net, an Italian-based provider of social networking and mobile community services, has partnered with Google's AdSense to launch the "friend$" program that offers bloggers and social networkers a way to earn some cash from their content.

Dada says friend$ attempts to leverage the viral nature of social networks and user-generated content by enabling ads, via Google's AdSense, to appear not only on blogs but around the profiles of consumers' social networking pages. Consumers are invited to opt-in to the program to enable placement of text and display ads on their blogs, profiles, and next to photos and videos.

"The really new thing is the viral aspect," said Max Pellegrini, Dada USA's CEO. "If you invite your friends to participate in this program, you can make money on the clicks and on the pages of your friends. You're incentivized to invite your friends." It's a kind of social networking loyalty program.

So if you're a music blogger and receive an invitation from someone in the friend$ program, you follow the link, opt-in, and wait for approval from Google. The program is not only for use with blogs, Pellegrini stressed, but on the profile pages of Dada.net. Users can rack up their own clicks plus clicks from friends' pages. So people can earn cash not only from Google ads that appear on their own pages, but also from messages that appear on the pages of friends they've invited.

Dada claims that the friend$ program is the first to enable the matching of the AdSense code of social network users which may already exist or can be created from scratch, with the registered Dada.net profiles via a relatively easy method using a single platform.

Google is supplying the ads and managing the inventory, while Dada will manage the real estate on which the Google ads appear and the relationship between "member friend$" on the Dada.net platform.

"Historically, AdSense has been something that publishers use, so this is a little bit unique in that individual people can place the ads on their own pages," said Debra Aho Williamson, senior analyst at eMarketer. "But what that says is the beauty of AdSense is the more traffic you get, the more likely someone will click on the ad and you'll get paid."

But will the clicks add up to something meaningful? "You've got to be pretty popular and have a whole lot of friends to make any significant money from this," Williamson said. "It sounds to me like a really interesting idea, but I wonder how big the revenue potential is both for the individual and Dada."

Social networks are struggling to monetize millions of pages of user-generated content.

"Everybody's trying to figure out what the best way is to generate revenue from social networking. It does make some sense that the individual profiles will start to become a place that social networks will want to tap into revenue possibilities, but I still think in this particular instance, the revenue potential has got to be pretty minimal," Williamson added.

News Corp.'s Fox Interactive Media last month announced that it bought Strategic Data Corp., an ad technology firm, to help it enhance the value of its ad real estate on MySpace, IGN, AskMen.com, and others among its properties. The company's technology is said to use yield optimization to help publishers squeeze more from each ad served.

Dada, which launched the program in Italy before extending it to the U.S., considers itself an online social networking platform for blogging, dating, mobile communication, and entertainment. The international Dada.net program counts more than 7 million users. Plans include launching the friend$ program in Spain, Portugal, and Brazil in the near-term.

Tobi Elkin is Editor-at-Large, MediaPost. Email her at telkin@mediapost.com

Click Fraud Reportedly Up

FEBRUARY 1, 2007

Click, click, click, click, click, click, click, click, click, click, click, click....

Major search engine sites do not want to hear about it, but new data from Click Forensics indicate that click fraud threat levels to online advertising campaigns running on search engine content networks are not only continuing, but also rising.

Fourth-quarter numbers from the Click Fraud Index show that the overall industry average click fraud rate was 14.2%, compared with 13.8% for the third quarter, 14.1% for the second and 13.7% for the first.

That averages nearly 14% for the year.

"The most interesting data points from last quarter's data was that the industry average click fraud rate climbed to its highest level in 2006, said Tom Cuthbert, CEO of Click Forensics.

He added, "The click fraud rate for affiliate sites was significantly higher than the overall industry average."

The average click fraud rate of pay-per-click (PPC) ads on search engine networks was 19.2% for the fourth quarter of 2007. At the same time, the average PPC term cost for the top key terms across the five largest search advertising industry categories was $3.50, an average that fell steadily from a first-quarter high of $4.75.

The industry average click fraud rate for high-priced search terms — defined as terms that cost over $2.00 — remained slightly higher than 20% through the latter part of the year. That is important to note because high-priced terms often make up the majority of an advertiser's total spend.

For more on this subject, read eMarketer's Search Engine Marketing: Players and Problems report.