Monday, 30 July 2007

Search engines update privacy policies

Following growing concerns about privacy and data collection, both Microsoft and Yahoo! announced last week that they will be keeping information on search usage for a shorter period of time. At the same time, Microsoft and Ask have proposed new voluntary standards to be developed by the search industry to protect consumer data.

The main search engines are now competing with each other to be transparent about the data they collect and how long they hold it for. Earlier this month Ask announced that they would no longer retain a web user's search history, unless they requested it to be kept as part of their search preferences. Even in this event, the data would only be kept for a maximum of 18 months and no IP address information would be recorded alongside the search terms being used.

Google has also recently announced that their 'cookies' placed on a user's computer to record search activity would expire after 2 years, rather than 2038! IP data would also be made anonymous within the cookies. Google is also coming under focus due to their acquisition of DoubleClick, which potentially gives it access to online advertising data as well as search usage.

So Microsoft and Yahoo! have also responded to this privacy trend. Microsoft will only hold search usage data for a maximum period of 18 months and there will be no connection with IP addresses or other account information, such as Hotmail - unless the user requests that the information is retained to enable personalised search. Yahoo! is also setting up similar controls on their cookies used to track search history.

Most web users probably have no idea that the search engines retained this information, although the highly publicised case in the US last year when AOL inadvertently revealed the search activities for more than 650,000 users raised concerns. The new personalised search services being offered by Google and others do require historical data to be used, so users need to be aware of the implications of this, plus the PPC targeting data used by Microsoft is based on extensive search activity data, from which users will also now be offered the chance to opt-out.

These new moves are therefore a realistic response by the search engines to take control of their own privacy policies before laws are imposed and they will need to establish a balance between data that is still being collected and how it can be used for their search services. However, this publicity and the more open approach to data collection may also slow the uptake of personalised search by web users.

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Thursday, 26 July 2007

New Google AdWords report options

Google has recently been adding new options within the reporting function on the AdWords PPC system that can help advertisers achieve different insights into the way the campaigns are performing.

Some months ago Google started to include data at the Campaign and Account level on the number of invalid clicks that had been identified and removed from the campaign. This was to counter the increasing concerns about click fraud although figures for these will continue to vary depending on the source of data and the interpretation of click fraud.

More recently, Google has just added 3 new pieces of data at the Campaign level, which look at Impression Share (IS). This figure is equivalent to the 'share of voice' metric that many offline advertisers will use and essentially indicates how many times an advert appears to be seen out of the total possible opportunities, or what share of advertising one campaign may have against a competitors.

With Google Adwords, this means that if x number of people search for a term over a certain time period, the Impression Share will show advertisers how many times their advert will have appeared to this audience. So, if an advertiser has limited competition or is bidding at the highest level, the IS is likely to show 100%, but if the advert appears on the 2nd page of results, this figures is likely to be lower since all searchers won't necessarily click onto the second page of results.

Two other figures that Google provides are Lost IS (Rank) which will indicate how many ad impressions may not have been seen due to the ranking position of the advert/s, and Lost IS (Budget) which indicates whether a daily budget or other spend control criteria may have prevented adverts showing for all searches.

Together, these IS figures help advertisers to see how good their coverage of the potential market has been and indicates what changes could be made to improve this. Of course, the IS figures shouldn't be used in isolation and other factors like clickthrough rates and Quality Scores will be important, but they can provide more summary information on a campaigns performance and clues to ways that it could be made to work better.

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Tuesday, 24 July 2007

Microsoft's annual revenues grow

Microsoft has just reported their 4th quarter results which have seen annual revenue up 15% and exceeding $50 billion for the first time. Microsoft's core business sectors are performing well, with sales of the new Windows Vista operating system are on target and corporate technology sales are strong.

However, within the Internet-related sector, Microsoft's quarterly results show a more gloomy picture, with a $239 million loss posted in the last quarter, due to the company hiring more employees and building data centers to compete with Google and Yahoo. Yet Microsoft's new AdCenter PPC tool helped to post a 33% increase in online advertising sales.

They still have a long way to go against their arch-rivals though. Microsoft's quarterly advertising revenue of $544 million was overshadowed by Google, which posted more than $3.8 billion in advertising revenue as part of its quarterly results, also published last week!

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Friday, 20 July 2007

Blog 'buzz' driven by ad spend

An article in Media Week reports on a new survey undertaken by Nielsen which looked at new brands and concluded that there is a strong correlation between advertising spend and the 'buzz' generated by blogs, discussion forums and other social networking sites.

Marketers tend to that treat traditional advertising as a different form of media to 'word of mouth' promotion, which is usually harder to guarantee and to control. However, Nielsen's results say that these two forms of marketing are actually closely connected and should be handled as apart of one overall campaign strategy. In their research, Nielsen looked at such factors as buzz volume in blogs, ad spending, purchase intent among consumers and actual sales and found that a big advertising budget is actually the best predictor of a significant level of 'blog buzz', rather than tactics that attempt to specifically influence such online world of mouth.

Nielsen studied 80 consumer packaged goods brands that were launched in 2005 and 2006 and the results showed that the top 10% of products that received with the most buzz spent nearly $20 million in advertising, whereas the products that received the bottom 50% of buzz generated spend of roughly $5 million (or a quarter of what the most buzz-generating brands spent).

However, Nielsen's report says that ad spending is not the only factor in play as certain brands simply lend themselves to more buzz. Just 10 percent of the brands studied accounted for 85 percent of total buzz generated, indicating that certain brands drove more than their share of interest because of their market or type of product. For example, Nielsen discovered that over-the-counter drug brands (due to consumers' high involvement with them) plus brands with an 'edgy' image drove a disproportionate amount of buzz.

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Thursday, 19 July 2007

Yahoo! rolls out 'Panama' in Australia

Yahoo! has been rolling out their updated PPC management system, initially known as Project Panama, to clients in Australia this month, following its earlier introduction in the US and UK. It's been a phased approach, with client accounts being contacted by email with an invitation to activate their upgraded accounts. Once upgraded, the PPC accounts come to resemble a cross between Google AdWords and Microsoft's AdCenter tool and takes some getting used to.

On the positive side, Yahoo! have supplied some good help documents to explain the new account management system to clients who may find the changes quite daunting. However, the new interface seems painfully slow at the moment although hopefully this will improve as the system gets more established.

Some clients will need to make quite extensive changes to their previous Yahoo! PPC campaigns to get them to 'fit' within the new system. The other main frustration with the new account structure is that there is no historical data carried over (which has admittedly always been an issue with Yahoo!'s PPC system) and therefore if the account is upgraded mid-month the activity data will start from zero again and users need to access the old system to see data prior to the swop.

It's also a shame that Yahoo!'s keyword suggestion tool has now disappeared. This has been very unreliable in recent months and what was once a good 'quick check' tool for search terms seems to have disappeared for good as the new tool lacks the detail of data found before and becomes yet another element that makes Yahoo! PPC little different, and maybe worse, than the other main PPC services.

Time will tell if this proves correct and how clients will respond to the new system.

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Wednesday, 18 July 2007

European Internet spending to double by 2012

Recent research from US company, Forrester, which has been reported by the UK Guardian suggests that Internet advertising spend in Europe will more than double over the next 5 years, to represent about a fifth of total media budgets by 2012. The predicted figures show online advertising growing from €7.5bn in 2006 to over €16bn by 2012. This spend covers email marketing, search, display and other online advertising, with the UK continuing to lead the market and to spend the most on Internet advertising.

Forrester's survey says that 54% of European companies have set their online advertising budgets higher for 2007 than for 2006. This predicted growth is being driven by rapidly spreading broadband access, with the number of European consumers using this highspeed Internet access expected to rise from 47m to 83m by 2012. As a result, Internet advertisers are increasingly expanding their campaigns into new formats, such as video or creative banner advertising.

This increasing spend is also in response to changing media habits, with more than a third of Europeans saying they watch less television because they are online, according to Forrester's research. A third of online consumers also said they do not mind seeing adverts if they relate to their interests, plus 40% of Internet consumers apparently trust price-comparison sites and 36% trust online product reviews from other users. This suggest that advertisers may look at ways to make more of online marketing, including email campaigns and blog advertising.

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Monday, 16 July 2007

Google faces Australian court action

It was reported at the end of last week that the Australian Competition and Consumer Commission (ACCC) is to take legal action against Google for allegedly deceiving consumers by blurring the difference between paid and unpaid search results.

This is believed to be the first lawsuit of its kind, although the issue of differentiating the paid (sponsored) results from the main search engine generated results has been around for many years, with all the search engines identifying these through separate colour bands and text wording. In some ways this action seems to be revising many of the issues that were addresses back in 2001 when PPC advertising started to become more mainstream.

This particular action taken by the ACCC is against Google and one of their paid advertisers, Trading Post (owned by Sensis). It dates back to adverts that were bought in 2005 and claims that Trading Post bid on the business names of several Newcastle car dealerships so that users who clicked on the ads were taken to the Trading Post site, believing that they were linked. The ACCC claims that Google didn't adequately distinguish the advert from their own objective search results.

We await more details to see how this case develops. There are suggestions that the outcome could have significant implications for the global search advertising industry and the way that ads are displayed or how keywords are used. However, there is also a strong feeling of deja vu here and that the case may just as quickly disappear once the parties discuss the action and realise that these issues have been adequately addressed in the past.

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Friday, 13 July 2007

New measure of web popularity

Nielsen/NetRatings, one of the leading online tracking services, have announced that they will be changing their method of measuring website popularity by moving from the rankings based on the page views to one that records how long visitors spend on a site. At a time when the measurement of web usage is under much review, this move comes as online video and other new technologies are making page views increasingly less meaningful.

Nielsen's user panels do already measure the average time spent and average number of sessions per visitor for each site, but it is now expected to start reporting total time spent and sessions for all visitors to give advertisers and analysts a broader picture of which sites are most popular.

The traditional measure of page views reflects the number of web pages a visitor sees from a site, although sites like Yahoo are increasingly using Ajax software to improve users' experience by updating data automatically and continually, without users needing to pull up new pages. As a result, page views decline and don't necessarily represent site usage, plus sites like YouTube where users watch online videos can affect the data on site usage.

This new measure will still have problems, since time on a page may not necessarily reflect the user devoting attention to the site. Google is also expected to drop down the rankings since its main objective is to get people off the search engine as soon as possible!

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Wednesday, 11 July 2007

Google buys email security service

Google has announced that they are to buy Postini Inc for US$625m, adding a range of email security programs to its offering for small businesses. Postini is a California-based company that operates data centers to process and protect customers' e-mails and instant messages, with a reported 11 million users at 35,000 firms.

This acquisition will help to bolster Google's Gmail service and make it more attractive to businesses, with Google taking another step to challenge Microsoft on the email front and to broaden its web-based applications. This is Google's second largest purchase this year after the Doubleclick acquisition in April.

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Monday, 9 July 2007

Are social networkers promiscuous?

A recent survey reported in the UK Times newspaper indicates that as social networking sites gain popularity, the loyalty of users is questionable. The research was undertaken by Parks Associates, who tracked user behaviour on some of leading social network sites like MySpace and Facebook and found that half of users regularly used more than one site (most of which are free) and one in six actively used three or more sites.

Much of this behaviour will depend on contact circles and the way the sites are used, yet it indicates that branding may be less important than the band-wagon effect, and that first-mover advantages may not be so strong in this sector. However, as a relatively young phenomenon, many users may still be testing out these sites before establishing some degree of loyalty where they find the best networks or online tools.

Facebook is quickly becoming the new 'darling' of the social network circle, having grown substantially in the last 3 years to contain more than 25 million members. It apparently accounts for 1% of all Internet traffic and is the 6th most visited site in the US. It's also taken over from Flickr as the most popular photo-sharing site with over 8 million images uploaded each day.

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Friday, 6 July 2007

Yahoo! to offer targeted banner advertising

Yahoo! is expected to launch its new 'SmartAds' programme next week, which will enable advertisers to fine tune the delivery of banner adverts to a particular audience.

In a similar way to Microsoft's targeting tools on their AdCenter PPC system, Yahoo!'s new advertising system allows advertisers to present adverts to users based on their Internet profile, including data on their location, recent product searches and, in some cases, age or household income. Yahoo! says that this technology will allow advertisers a greater degree of targeting and make adverts more relevant to users, taking another step towards personalised web activity.

One of the main elements in this approach is behavioral targeting, where a user's web activity is tracked and profiled so that products can be suggested to them, based on their likely interests. The market for this form of targeted advertising is expected to nearly double from its current size to $1 billion in 2008 and to $3.8 billion by 2011, according to research firm eMarketer.

The new SmartAds system is taking this method of targeting a step further by providing advertisers with a template for ads, using several variables that may be compiled 'on the fly' to suit the data on a specific reader. This is moving the traditional blanket banner advertising model closer to the targeting of search advertising and Yahoo has said that they would merge their display and search advertising businesses to address client requests for campaigns that combine both types of ads.

Google is, of course, expected to launch a similar system soon, although unlike the portals of Yahoo! and MSN, they lack the depth of data for targeting web users. This is where the data they are collecting from personalised search and from other site acquisitions in the recent past will help to contribute to their targeting capabilities.

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Wednesday, 4 July 2007

Web marketing newsletter for July

The new issue of our monthly newsletter was published this week and contains a number of articles on some latest research results. The first assesses the effectiveness of search advertising in creating online sales and the role of brand awareness in this process. The second reviews the Internet advertising spend statistics for Australia in the first quarter of this year. We've also looked at the new search interface on Ask and how their changes are providing users with integrated search results for each query.

To view back issues of this newsletter you can see the archive by date or by subject. To subscribe to future editions, please complete the form at the bottom of this page.

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Monday, 2 July 2007

Facebook shakes up social networking

The recent announcement by Facebook, the social networking site which has attracted millions of users worldwide, to provide API access to programmers means that its inner workings can now be adapted by individuals or companies to provide additional features and services. This will potentially shake up the social networking market by creating new business opportunities and a huge captive market.

Companies are now falling over themselves to offer new features for Facebook users and to take advantage of the extensive connections available in the network - a good review of this whole process is covered by a recent Financial Times article. MySpace has also just announced that they will be offering similar services as they consider this move to be a significant threat to the future of their service.

The whole Web 2.0 market is developing at an incredible rate and looks to become the new battleground for companies to grow market share and new business from social activity on the web.

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