Microsoft Tells Advertisers “Engagement” Is More Important Than Clicks, But Is Vague on Details

from TechCrunch by Erick Schonfeld

Online advertising executives love talking about “engagement”: It is not the impressions or clicks that count, it is how many people who saw your ad and actually ended up doing something about it. In a speech today Brian McAndrews, Microsoft’s senior vice president of Advertiser & Publisher Solutions, announced the beta of a new way to measure the effectiveness of ad campaigns that Microsoft is calling “Engagement Mapping.” Instead of measuring clicks or impressions, engagement mapping aims to track how many times a person comes across an ad on the Web, and correlate that to actions taken down the line. So if you see an ad on Facebook for a Visa card, and then on three other sites before you click through to sign up, Microsoft will give Facebook some credit for that eventual customer engagement.

In theory, it sounds good. We all know that clicks can be gamed. But at least clicks are a straightforward measure. Microsoft is vague about what exactly its unit of engagement will be—some combination of “the impact that recency, frequency, size and ad format (such as rich media and video) have on a consumer’s online path to action.”

It sounds complicated. Why not just measure the action you want the ad to trigger? Charging advertisers for engagement is certainly the right direction, but advertisers need to know what they are buying. In practice, measuring “engagement” may be nothing more than a way to justify the value of under-performing ads. “See, that Facebook ad actually worked—three weeks later.”

In the end, it doesn’t really matter what tortuous path a customer takes before deciding to buy something. Either Microsoft’s advertising platform will produce a better return on investment than the competition (Google) or it won’t. Advertisers won’t care how it does it. They will just care whether Microsoft’s ads measure up to Google’s.

Crunch Network: MobileCrunch Mobile Gadgets and Applications, Delivered Daily.

Google Now Selling SEO Services Via Performics

from TechCrunch by Duncan Riley

As we reported yesterday, Google has now successfully acquired DoubleClick after receiving EU approval for the deal. While the focus has been rightly on display advertising, many have missed one part of the deal that will raise eyebrows: Google now owns SEO service Performics.

DoubleClick’s Performics offers search engine services that include “natural search solutions” such as “link building.” Some highlights from the Performics service

Our experts methodically optimize copy and content for each page to boost page rankings…

Addresses external ranking factors and new business opportunities

Now there is nothing wrong with what Performics offers; SEO and SEM are legitimate businesses. The catch is that Google is now offering paid services that promise improved search engine listings in Google itself, a 100% conflict of interest. Danny Sullivan at Search Engine Land calls for Google to divest itself of Performics, and it’s a call that should be supported.

Crunch Network: CrunchBoard because it’s time for you to find a new Job2.0

Google Enters The Ad Management Game

from TechCrunch by Duncan Riley

Google has soft launched Google Ad Manager, an ad tool that allows publishers to manage ad placement on their sites.

The service primarily competes with OpenX (previously PHPAds then OpenAds). Users add their ad codes to Google Ad Manager then include the Ad Manager generated code on their sites. The service then tracks the page views and CTR on each ad unit, complete with statistics and the ability to geotarget or other break downs on each unit. Google Ad Manager also supports locally sold ads, for example Ad Manager like OpenAds supports direct sale advertising as well.

The key for Google is that Google Ad Manager offers Adsense units for fallback and remnant site inventory. The service supports formats including graphical display, video and text ads.

What isn’t immediately clear is whether the service can link into third party sites and provide dollar returns natively. The FAQ for the service says only that users can “Easily track ads from a third-party network, affiliate provider, or other URL you provide” and screenshots show dollar figures. If it does link in to third party providers for financial tracking, the service will also compete with startups like TechCrunch40 finalist Pubmatic.

OpenX is due to launch a hosted solution later this year, but despite $5 million in funding will find the market tough now the Google Borg has now entered the space. In terms of Google, the service looks appealing and when it eventually opens up will no doubt find a willing user base. It’s yet another example of Google knowing no bounds in its quest to know everything about every person and site.

(via WSJ, thx to Razvan Antonescu

Rogue Lead-Generators Can Tarnish Your Good Name

How Illegitimate Players Dupe Consumers by Associating With Trusted Brands

By William Hupp

Published: March 10, 2008

NEW YORK (AdAge.com) -- It seemed like a good offer -- a little too good to be true.

When Heather Miceli went online to redeem $100 worth of L.L. Bean coupons, she Googled the company name to find its official website, and a paid search ad caught her eye: "L.L. Bean (official site): get a $250 gift card." She clicked on it and was taken to Llbgiftcard.com, which read that if she took a survey, she would receive a free $250 gift card.

Ms. Miceli, who lives on Cape Cod, Mass., was lured in by an online lead-generation offer, part of a $1 billion industry. Llbgiftcard.com calls itself an "independent rewards program not affiliated with any of the listed products or retailers," and it makes money by generating leads for its sponsors. It's unclear whether Ms. Miceli ever would have gotten the proffered $250 L.L. Bean gift card, but what is clear is the offer wasn't actually "free" at all.

Paying for free
On Llbgiftcard.com, Ms. Miceli navigated through pages of survey questions and magazine-subscription offers and eventually learned she had to shell out money to get her gift card. The offer she chose was to buy a $20 coupon book from Yourfreegiftcard.com.

Nearly a week later, she hadn't received the gift card and sent an e-mail to Freeport, Maine-based L.L. Bean. A customer-service representative said L.L. Bean was being deluged with calls and e-mails from customers voicing similar concerns, and authorities were working on the problem.

Even though the fine print of the Llbgiftcard.com offer states it has no association with retailers such as L.L. Bean, the domain name shows it hopes consumers do in fact associate it with the retailer -- and that can be damaging to a hard-earned brand, said Jason Malo, senior manager of brand-protection services at Verisign. "Any kind of trusted brand is a potential target for them. ... The goodwill and trust that the company has built under that brand is what ensures that somebody will fill out the survey."

A spokeswoman for L.L. Bean said she couldn't speak about that story specifically but added: "We do understand that we need to protect our customers. It is difficult, but we try to make sure that occurrences like this happen at a minimum."

"To prove trademark infringement you have to prove likelihood of confusion arising from the use of the mark as to source, sponsorship or affiliation," said Mitch Stabbe, head of trademark practice at Washington law firm Dow Lohnes.

Rogue players
At its best, online lead generation can be useful for helping companies acquire highly qualified customers. But at its worst, rogue players tarnish the names of legitimate ones.

At the very least, the tactic used to lure Ms. Miceli was misleading; it was a search ad claiming to be the official L.L. Bean site, when in fact it was not affiliated with the brand. Google tries to confirm the veracity of every website associated with a paid search ad but acknowledged that there is a small window of time in which a false offer might appear.

The Interactive Advertising Bureau a month ago issued industry-written guidelines for best practices in lead generation, and the Federal Trade Commission has said free offers must be made "with extreme care so as to avoid any possibility that consumers will be misled or deceived." Joe Rosenbaum, partner at law firm Reed Smith, said in this case it sounds like L.L. Bean "could have recourse if they can find them."

Two weeks ago Verisign's Mr. Malo said LLBGiftCard.com was registered to KZ Group, but found as of March 2, it no longer was. Ad Age's attempts to locate contact information for the site were unsuccessful.

His advice for marketers: "Be aware of the problem and understand how your brand may be misused on the internet. Listen to your customers and make sure they have a conduit into you to report any issues, and also go out proactively look for brand abuses."

Upsales To Drive Retail E-Commerce

MARCH 12, 2008

The supply of online buying newbies is not infinite.

Since 2000, the USC Annenberg School Center for the Digital Future has tracked the percentage of Internet users who have purchased something online.

USC's researchers said that in the early days of the project, consumers worried about trusting unknown merchants, damage during delivery, buying without a live human being in the process and privacy and security.

Tracking those same fears, USC found that in 2007 almost all of them except for privacy and security had largely disappeared—and buying without a human became an asset rather than a liability.

Addressing consumer concerns was at least partly responsible for the steady rise in online buyer numbers since 2003, after the dotcom bubble burst.

eMarketer projected in November 2007 that the percentage of Internet users who have made an online purchase will continue to rise steadily but slowly, at least through 2011.

"Most analysts including eMarketer say that online sales growth has more to do with incumbent online buyers increasing their e-commerce spending rather than increasing new online buyers," said Jeffrey Grau, senior analyst at eMarketer.

"The market is maturing and most people who plan to purchase online are already doing so," he said.

The boom in online buyers has certainly been good for retail e-commerce. While retail industry sales growth has ranged from 2.2% to 6.4% during the past seven years, retail e-commerce growth as been as high as 32.6% (in 2002), according to eMarketer calculations of US Department of Commerce (DoC) data.

Retail e-commerce sales data from the DoC tracks the ascent of online buying. Since the US DoC began publishing annual e-commerce sales estimates in 2000, growth in online sales has far outpaced retail industry sales—the vast majority of which comes from stores.

Google's drop in paid clicks: Part of the grand plan

Posted by Richard Defendorf | Post a comment

After ComScore reported a recent decline in Google's paid clicks, the Net ratings service followed up, noting evidence that the drop was due to "Google's own quality initiatives that result in a reduction in the number of paid listings and, therefore, the opportunity for paid clicks to occur."

The reduction in listings, ComScore noted, was "offset by paid revenue per click."

On Monday, at a Bear Stearns media conference in Palm Beach, Fla., Tim Armstrong, Google's president of advertising and commerce in North America, offered essentially the same view on the matter.

As noted by ZDNet Editor in Chief Larry Dignan, Armstrong emphasized that the dip in paid clicks was intentional--part of a strategic plan designed to deliver better, more-precisely targeted ads. Thus, the market anxiety that hit Google's stock was, well, unjustified.

OK then, but Dignan also cites Armstrong's acknowledgment that "search is changing overall in general" and tends to reflect macroeconomic conditions--an acknowledgment, Dignan points out, that suggests Google isn't recession-proof.

Google also told conference attendees that it won't be developing its own content, that it will increase the number of videos and ads on YouTube, and that the company's system won't differentiate between search and display ads over time.

Google's general theme is to offer advertisers a complete dashboard with multiple forms of advertising. Armstrong also noted that Google will deliver ads on social networks via widgets and social-networking apps.

Where Online Advertising Fails: The Future of Web Advertising

Posted by Cyndy Aleo-Carreira on February 25th, 2008

antique advertising imageA huge proportion of tech news has to do with online advertising: studies on its efficacy, technologies for serving ads, ad revenue ups and downs, and acquisitions having to do with any of those. The reality, however, is that we don't know much about how to really leverage online advertising, and we have a lot to learn.

What set me off to begin with was an opinion piece on WSJ.com by Esther Dyson, which hovered near getting it, but ultimately missed by a mile. Ms. Dyson made the point that the "traditional" online advertising is fading, but asserts that advertisers' audience members are best accessed in social communities, and that data will ultimately be compiled and disseminated to advertisers by ISPs. As much as I think any ISP would love to get their hands on that sort of ad revenue (as noted by the newish hijacking of my URL typos by Time Warner Roadrunner), it's impractical. How can you assume that the same person is always using the same IP? Are all ISPs going to move to a static IP addressing scheme? What about VPN clients and WiFi access points and mobile browsing? There are too many holes in this concept for it to work until they can track me by serial number on the plug in my head. Three UK ISPs are willing to give it a try, however.

The formation of quadrantONE completely misses this boat, and somehow thinks that trying to compete with Google in the blanket-your-ad model still makes sense. The main problem with newspapers as they exist now is that they are still in the business of trying to have something for everyone, and aren't able to sort content for readers. I'd be far more willing to subscribe to an online newspaper that customized content specifically according to my needs (and feel free to subsidize part of the cost with targeted ads) than I am for a paper copy that arrives in my box every morning with last night's news and ads I never even see. Of course, quadrantONE took some of their advice from Nielsen, who can't even manage to figure out if advertising actually accomplishes anything, so that may have been their first problem.

Ms. Dyson was right, however, when she said that the current model is losing ground. Google themselves saw a dip in their share of the U.S. ad market last quarter, and while they are still performing well, there is already a trend to head more toward niche marketing. Vertical ad/content networks like BlogHer and Glam.com are already eating into Google's model in small bites. What makes more sense as an advertiser? Buying your AdWords and splashing them over how many thousands of sites where people are already immune to seeing the same ads (yelling smilies, anyone?), or focusing your efforts on a specific area of content that appeals to your target demographic?

Here's what we do know: the people who are clicking through on ads aren't the people advertisers really want to go after. A joint study by comScore, Starcom, and TACODA recently discovered that over 50% of click-thrus are from 6% of the online population, and that 6% skews toward a household income under $40,000. In other words, not the people who are going to be doing a lot of online shopping.

The traditional ad folks like Google and Yahoo are trying something new in going to video, with Google testing video ads and Yahoo snapping up Maven. Other ad companies like Gorilla Nation also think that video ads are the next wave in advertising. And of course, we have the social networking idea, which is being flayed virtually everywhere. People don't go to social networks to shop; they go to socialize.

The reality, however, is that if users aren't clicking through ads as they are now, why on earth would they click to sit through a video ad? This is old-school advertising, designed for a time when television also served all things to all people and you sat through commericial breaks instead of fast-forwarding with your DVR. Niche cable networks have found success providing a smaller, more concentrated market for advertisers, and online companies are following suit. GoFish has launched an ad/content network geared at children and teens, while MTV Networks (which also owns Nickelodeon) acquired a whole parenting content network in Babunga.

But even in a combination ad/content network model, an assumption is made about the audience. Fashion and gossip web sites must be read by women. Tech sites must be read by a predominantly male audience. The ads are still going to be fairly predictable, and ignore those outside the "typical" demographic. So who really has the right idea?

Amazon has the right idea, that's who. With their latest move, testing ads, I'm convinced that Jeff Bezos is a genius. Amazon has all the information at its fingertips that Beacon went so very wrong with, and they have been very upfront about collecting it. They have your purchase history dating back to your very first purchase on the site, and display it for you right in your account. They have a wide variety of products from nearly every possible retail market, from groceries to media to electronics, and with the addition of merchant storefronts through the Amazon system, they increase that data set. Who knows you better than Amazon, and who could target you better? They already show you what other people who've purchased what you purchase. The make product suggestions based on your purchase history. Serving the ads will only take it a step further, providing advertisers with as targeted an audience as they could get, and reducing the amount of ad noise you are subjected to. They may or may not succeed, but at least they are on the right track. Imagine Amazon tied into your content network. It may be a little Big Brother-esque, but it's an advertiser's dream.