Entries Tagged 'Advertising' ↓

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There were quite a few posts  the last couple of days about the Google Yahoo deal. The powers against the deal (a.k.a Microsoft) organized many advertisers to talk loudly about their fear that such a deal will bring with it price fixing from Google side.

But as Danny Sullivan from Ad Age and Marshal Sponder wrote, Google is already fixing prices from day one.
Google has two very big black boxes under its belt.
The first one is the quality score algorithm that determines which ad will appear for each search and also how much the advertiser will pay for it.
Although they give some general guidelines about how this quality score is calculated, Google never really told the world how it is really done.
The second black box is the revenue share Google gives the publisher. As a publisher you have no idea how much of the advertising money is going to your pocket and how much into Google. There is a big chance that even if Google will change this number, you will never really know.
This fact combined with the huge number of publishers and advertisers using their services, gives Google great flexibility in its operations. When times are bad, they can always just add 0.01 cents to their part of the rev share and keep show wall street the growth they need.

With that in mind, you can start to understand why if the deal with Yahoo will take place, Google will have full control over the future of Yahoo. With small tweeks they can control exactly how much money Yahoo will make, how much ads they should give them, and how much money will advertisers will have to pay for these ads.

So is this deal really that bad for the advertisers, the publishers and the market? Maybe… And maybe not. It’s all in the hands of Google two black boxes.

In the last year we have done a lot of work with our customers, helping them targetting their users with product recommendations. You know the drill - the idea of giving a user the experience of “If you purchased this, you might want to purchase also…”.

Recommendations are a great way to enahnce the user expericne and drive your sales up. We saw some hugh imporvements in ROI from email campaigns as well as user satisfaction.
To be honest, we always had Amazon as our role model here. As a loyal customer of Amazon, I alwyas admired their work on deliverin this superior targeting experience.

This is why I was su surpise to get theis email from Amazon…
A month ago, I purchased there my first DSLR camera. A few days ago I got an email from Amazon, stating that they have some recommendations for me based on the fact that I showed interest in cameras.
What were their recommendations? Cameras.
This is a waste of a marketing message. As I already purchased a camera, what I should have been targeted with was other products like lenses and bags.
This is an error we see a lot of vendors do, but I was surprise to see it also from Amazon.

I have to agree with Michael Arrington. The new move by Microsoft, Cach Back, seems like a desperate move, but it could also turn out to be a game changing one.

Until we will see more brand advertising money goes into digital, search will still be the king. And Microsoft is in big trouble in this field. Google is the de facto ruler of web search and because of that also of the search advertising money.
In recent years Microsoft worked hard on developing better search algorithms and products, but even when they were successful (I’m saying for a long time that some of the Live properties are much better than the Google competitors) it wasn’t enough to push users to do the switch.
It’s a psychological issue. Too many people are fixed on the notion that Google is the web. That Google results are the only result.
So how cachback can change this?
By giving money to the users.

What brilliant here is that Microsoft finally realized that they actually don’t have to completely convert people to Live from Google. All they need is just the last ad click.
We have written about this in this blog a couple of times - the current way advertisers are measuring ROI is very wrong. But it is the way used these days and it can play into Microsoft hands.
Currently when advertisers are trying to attribute a purchase to a campaign, they look at what ad (or referrer) the user clicked on to get to the site in the session in which the purchase was made. They basically attribute the all purchase just to this ad or campaign. This means, that it doesn’t matter if you used Google to do all your price comparison, if you used Google to search for the product for a week. If in the end you will go to Live, do a search (when you already know exactly what you want)an buy the product, Microsoft will get the all glory.
And this situation is exactly what could happen. Users will use Google to do the hard research as they trust it more than Live, but in the end will go to Live and make the purchase in order to get the cachback discount.
Simple but brilliant.

And of course Microsoft is hoping that if you will use Live for this for enough time, you will start to use it also for other searches and maybe in the end even convert totally from Google.

Ironically, Atlas that is now part of Microsoft is one of the leaders in trying to push a new attribution and measurement model (that I think is much more accurate) that called “Go beyond the last ad click”.

So will this work? Will Microsoft will win the last search battle? Hard to say, but it is probably their best move so far.

Nice article from Ad Week about advertising in social networks, and how the model there is going toward building experiences instead of just display ads.
This fits well with what I wrote last week on the same subject.

The big question of course is how you measure the success of such campaigns, and how you compare one to another. This opens up again the discussion about engagement metric which I won’t dive in right here, but feel free to read other posts in this blog which discussed this issue

This week I turned my back to Apple and went to buy a Microsoft Zune. The all process got me thinking about the importance of brands. iPods and iTunes importance for Apple is much more than the direct revenue stream.
People that the iPod has an important role in their life got to use iTunes. If you want to really enjoy iTunes you need to run it on Mac OS. In order to run Mac OS you need to buy a Mac. If you already have a Mac, good chances you will also buy some other Apple hardware like external hard drives, Apple TV, etc…
Same was true for Microsoft for years. If you use Windows, good chances you will use MS Office. If you use MS Office, you will probably use Office Live or Share Point Server in your office, and the loop continues.

It’s not just about the fact that it is easier to use other services or hardware from the same company, it’s also that we start to trust this company to give us a full experience around our digital life. We trust them to have the best service for us.

This is exactly why we see such a big war today in the social networks battlefield. Google, Facebook and MySpace are fighting for their brand and all of us trust.

So how does this will affect the future of advertising?
Maybe the way to monetize social networks is not to try and target ads that will take the user out to the advertiser site. Maybe the answer is to incorporate the advertiser content, interactions and brand into the already trusted and familiar environment of the social network (Anyone said widgets?).
If an advertiser can extend it’s messages and even build a “mini site” or experience into a trusted environment like iTunes, Facebook or your device, it can encourage users to interact with it much more. This could also be extended to other environments. WIll you be more likely to buy things from within iTunes, using the same one click mechanism you trust? Will you be more likely to register to a coke awards program from within your MySpace home page?

And yes, I think that this is another good example why brands should look for sites that has high engagement metric from its users. The reason is that those high engaging users are more likely to also interact with his brand and services.

We are living in an age when all media types starts to blend with each other. You can watch TV programs on your computer and you can access the web from your TV. Blogs are changing the newspapers business and let’s not even start with mobile.

During all of this, it starts to be confusing when you try to understand how you need to build your content and on what media it should run.

Last week I heard a great new way to look at this world.
Instead of trying to figure out the differences between TV and the web and who blends with who, all we need to understand is how the consumer is going to consume our content and messages.
Going with this, we can say that there are three ways you consume media:

• Leaning back - For example when you sit on the living room couch or your bed and watch the TV
• Leaning forward - For example when you sit on your desk chair and use your computer
• On the move - When you use your mobile device like the iPhone

If you think on the world like that, you will know how to design your content for the best user experience and easily adapt it to the changing landscape of the media devices.

On Thursday I had the pleasure of presenting NuConomy in the Under The Radar Conference (and may I add - we won both the Judges and audience awards).
After my pitch, Rafe Needlman (CNET) who moderated the event asked me a very interesting and important question: "Do I think that advertisers will start to use engagement as their buying currency?"

My answer was that I think it will happen eventually, but it will be a long process.
Coming back home, I thought that I gave just half the answer. The second half is all about why it is so important for the future of the web, that engagement will become the next currency for advertising.

Today most advertisers look on three metrics: Unique users, page impressions and time spent on site.
The number of unique users is no doubt very important and will stay like this. Let us focus on the two other metrics.
By measuring page impressions as a currency we basically encourage sites to create bad user experiences. You can argue that some sites use too much ajax today, but I believe we can all agree that page refreshes are simply bad thing. The best user experience comes from sites that use a smart combination of Flash and ajax. Instead of encouraging this, we actually punish those sites by paying them less money.
Same thing also for time spent on site. Again, we actually encourage sites to be slow. If the pages will take more time to load, if you will need to go through more steps to get what you want, if you won’t be able to get the data through RSS and other channels, you will spend more time on the site. Again, advertisers today encourage sites to develop bad user experience.

Measurement of engagement takes a different approach. In essence, it say that what’s important is not the quantity but the quality. By using engagement as currency, advertisers will say "We don’t want just a million people to watch our ads, we want the right people to watch and interact with our brand". Instead of paying for every joe that see or click on the ad, an advertiser will pay just for the audience he actually want to engage with.
If you advertise a sport product, you want to pay just for sports fans that interact with your brand and not for people who never watched a football game in their life. The more they are engaged in sport, you will probably be willing to pay more.

Using engagement as a currency, will not just encourage better user experience and adoption of new technologies, but will actually yield better ROI for the advertisers.

So if this such a great solution for everyone, why do I think it will be a long process until we will get there?
There are many reasons, but probably the number one reason is the fact that engagement is not a comparable metric. It’s easy to say that one site has more page views than the other. It’s much harder to say that one has a more engaged audience than the other.
We still don’t have any standards to how engagement should be measured. If you read this blog, you know that I believe that there is no just one engagement metric that fits all. Still, I do believe that we all can come up with different engagement standards for each vertical.
So we will have an engagement metric for blogging sites and another for video. Who should define them? It will probably be a joined effort of the community and the IAB. Yes, the world of engagement will be more difficult to navigate in but it is also the right way in order to take us to the next step in the evolution of the web.

I tend to watch most of my favorite TV shows on the web. Mainly because it’s much more convenient but also because it allows me to see how the different networks experiment with online video ads.

From all the networks I got to say that with no doubt ABC has the best experience. I would love to see their numbers and see if it also translate to better conversation for the advertisers.
It start with the fact that during each advertising break (there are a few of them, each one 30 seconds) instead of just having a video add, the video itself get smaller, and the advertiser gets a full interactive page to use when interacting with the users. Some advertisers like Epson used that to add dynamic navigation and information around the video.

Second of all, it’s the choice of ads.
I’ve been writing about this for a long time - what advertisers need to do is go back to the basics. Understand that the best ads are the ones than enhance the experience of the user instead of irritate him.
A great example is what ABC has done with their own ads. Instead of just show you a 30 seconds trailer for one of their TV series, they chose to show cool humorous interviews and behind the scenes footage of the series. This is great thinking. This is content that people actually like to watch. I found myself sometimes don’t even notice that the 30 seconds have gone and that I can click to continue watch the the show. I actually wanted to keep watching the ad.

Going forward with this concept of more interactive page and cool ads can bring us to some really cool (and crazy :)) ideas.
For example: Why not broadcast the episode live on a specific time (even during the TV broadcast) and let people chat with each one, or write to an interactive message board while they watch the ad?
Why not put an interactive sign for a coupon which you can add to your favorites for later use with one click?
Why not do a one question survey about your product while you show the video ad?

If you want to capture your audience, you need to understand that it is all about the experience.

I guess that all of you gave a lot of attention this week to the free fall of the Google stock, after a report showed a big decline in the number of people clicking on their text ads.

There were a lot of speculation running around about if this is a sign of recession or does the cute little text ads simply lost their magic to the public.

But today, Duncan Riely from Techcrunch came with a very interesting (and quite frankly amazing) twist on the story.
Last November Google has made a small change to their text ads. Instead of counting every click on the surface of the ad, the started to count just clicks on the text itself. The idea was of course to stop counting clicks the users have done by mistake.
Duncan bring testimonies from Adsense users that say that since that change their CTR plumbed into the toilet. Markus Friend, the guy behind the successful dating site plenty of fish claims a drop of %60 in CTR rate!
All I can say is - WOW!

Don’t get me wrong, Google done just the right thing when they made this change. The digital advertising industry should be much more transparent and affective in order to continue getting the advertisers to pour their money in.
But I do think this tells a very grim story about our little industry…
Just think about it - Just last week we all saw a new report claiming that the rate of click fraud on near search results ads is %28.3. That’s almost one of every 3 clicks that the advertiser pays on for nothing.
Now add to that the number of clicks that we were counting by mistake and there is not too much left.
Does advertisers really understand the ROI they get from their digital campaigns?
I guess this is a question that we will all need to answer in the next year. If more stories like that will come out, advertisers will start to lose trust on today ways of advertising.
Maybe it is really about time to go beyond of the click model of measuring value of a customer (anyone said engagement? :)) or maybe we simply need to find a better way to make people engage with the brands campaigns.

Microsoft announced today an important new tool that will help advertisers to measure an engagement metric for their online ads.
This is a great step forward for the industry when a giant like Microsoft (that owns aQuantive and Atlas) admits that the old way of measuring impressions and clicks is just not good enough.

The new "Engagement Mapping" tool will allow you to measure the different interactions consumers had with an ad as a way to understand its effect on the buying decision.
Basically it will take into account how may times an ad was shown across sites, and hopefully also the different interaction the users had with it, when deciding on whether it contributed to the final sale.

This is a great step forward, but you probably would not be surprised if I say MS didn’t went all the way with that.
What they are missing is also the ability to tie the different interactions, across sessions, the users had inside the advertiser site to the final decision process about the ad ROI.
Even going further, the goal of an advertisers is not always a one time sale. You actually want to measure the user interaction with your brand across time.
For example: for Amazon "Acquiring" a user that will buy one item is not as valuable as a user that will register to Amazon prime and buy at least two items every week on the course of a few months.
Also, some advertisers goal is not a sale on their online shop. A social network want to get users that will not just register to the site, but will also use it as much as possible, will have many friends in their list and upload as many photos as possible.

Still, this is a welcome step forward for the Analytics and advertising industries, and it will probably start to move other companies in the same way.