Online Marketing Performance » Online Advertising

Where’s the online marketing community?

Scott McAndrew — Wed, 07 May 2008 04:14:46 +0000

I know two places: Sphinn and gooruze. Both are created by online marketers for online marketers. Sphinn takes a Digg-like approach whereas gooruze takes a more social route. If you’re in the industry, both are worth a look.

My gooruze page: smcandrew.gooruze.com
My Sphinn profile: smcandrew on Sphinn

Yahooooooo! Check out the big brain on Ballmer.

Scott McAndrew — Fri, 01 Feb 2008 17:54:15 +0000

With neither Microsoft or Yahoo able to approximate the success Google has engineered in the online services space, Microsoft made a move some saw coming and some didn’t. This morning Microsoft put its war chest of cash into play, bidding $45 billion for Yahoo. The bid represents at 62% premium over Yahoo’s share price at the time of the offer.

With both companies online efforts consistently marginalized by Google’s dominance in search and online advertising and a premium price on the table, it is hard to envision this not happening.

Excerpts from Steve Ballmer’s letter to Yahoo’s board:

While online advertising growth continues, there are significant benefits of scale in advertising platform economics, in capital costs for search index build-out, and in research and development, making this a time of industry consolidation and convergence. Today, the market is increasingly dominated by one player who is consolidating its dominance through acquisition. Together, Microsoft and Yahoo! can offer a credible alternative for consumers, advertisers, and publishers. Synergies of this combination fall into four areas:

Scale economics: This combination enables synergies related to scale economics of the advertising platform where today there is only one competitor at scale. This includes synergies across both search and non-search related advertising that will strengthen the value proposition to both advertisers and publishers. Additionally, the combination allows us to consolidate capital spending.

Expanded R&D capacity: The combined talent of our engineering resources can be focused on R&D priorities such as a single search index and single advertising platform. Together we can unleash new levels of innovation, delivering enhanced user experiences, breakthroughs in search, and new advertising platform capabilities. Many of these breakthroughs are a function of an engineering scale that today neither of our companies has on its own.

Operational efficiencies: Eliminating redundant infrastructure and duplicative operating costs will improve the financial performance of the combined entity.Emerging user experiences: Our combined ability to focus engineering resources that drive innovation in emerging scenarios such as video, mobile services, online commerce, social media, and social platforms is greatly enhanced.

Emerging user experiences: Our combined ability to focus engineering resources that drive innovation in emerging scenarios such as video, mobile services, online commerce, social media, and social platforms is greatly enhanced.

While Microsoft’s move does imply a failure in its online services venture, Yahoo’s position isn’t much more impressive. This may very well be the best things for both companies efforts as well as for the end consumer. Having a strong, motivated, mature competitor to challenge Google’s dominance will ultimately lead to more innovative, end-user directed efforts. I’d prefer to see a Micrsoft+Yahoo model scrap with Google in the online services arena than for Google to set its agenda without looking over their shoulder.

Impact

The impact is substantial. This will create a formidable rival to Google in not only the search and online advertising space, but in the broader, increasingly important online services ecosystem in which all three companies currently jockey for position.

Integration

Insofar as Integration of the two companies, it will not be easy. While Microsoft and Google clearly have common goals, they do not have common cultures. I would suspect that Microsoft would handle it not unlike their acquisition of aQuantive, allowing offerings which previously represented distinct companies and offerings to largely continue to function somewhat independently while clear integration strategies are defined. Both companies are massive, and the transition would take years to be complete.

What’s in it for Microsoft?

Yahoo’s excellent online brand-reputation.
Search and online advertising assets and exposure – For search volume alone, the merger would propel them to (just under) a combined 30% search market share, leapfrogging them into a competitive position with Google.
Online services customer/visitor base (ex: Yahoo Mail, Yahoo Messenger) – Yahoo represents the most trafficked properties on the web.

What’s in it for Yahoo?

Microsoft has the bankroll to finance an all out David and Goliath battle with Google. Yahoo simply does not. If they did, Yahoo would hold a much different position in the marketplace today.
For Yahoo, search, online advertising, and online services is the basis of their entire business. Failure in this space hurts Microsoft. Continued marginalization in this space risks Yahoo’s existence in the long term.

Perspectives on Microsoft’s bid for Yahoo from around the web:

Microsoft Unveils $44.6 Billion Bid For Web Ad, Search Rival Yahoo (WSJ)
Why Microsoft’s Yahoo bid makes sense (CNNMoney/Fortune)
MSFT + Yahoo: What Would Microsoft Yahoo Look Like? (Search Engine Land)
Paid Search Advertising Drives Microsoft Bid for Yahoo (Search Engine Watch)
WOW. Microsoft Offers $44.6 Billion To Acquire Yahoo (TechCrunch)

Making money how?

Scott McAndrew — Wed, 11 Apr 2007 19:03:35 +0000

At the SXSW Conference, one of the sessions I attended was a panel discussion called Turning Projects Into Revenue Generating Businesses. There were representatives from various online web sites who had tried various ways of making money with their web sites. A good amount of the chatter was to be expected:

If you think you’re going to get rich off of Google AdSense ads, good luck—you’re going to need a hell of a lot of traffic (and most likely a web site about asbestos lawsuits) for that to pan out. By the way, if you see any Google Ads on my web site, feel free to click on them.
Selling and managing your own advertising space is another option. It sounds kind of cool—you’re in the driver’s seat of your own advertising outlet. It stops being cool and exposes itself as work when you realize you must serve as the (a) marketer, (b) sales person, (c) bill collector, (d) accountant, and (e) customer service extension of this cool new facet of your web site.

And of course there were the usual suspects (you can sell your own merchandise, you can sell others’ merchandise, etc.). And then… the not so to-be-expected topic…

Virtual Gifting

Virtual gifting is exactly what it sounds like: One web site member sends a virtual gift to another web site member. The gifts are virtual. The price to purchase them, however, is not. In the U.S. market the runaway sophomoric hit turned dating site Am I Hot or Not is widely credited for bringing virtual gifting to the table. Other popular web destinations including Facebook, Dogster (and Catster) are also offering virtual gifts.

Send a Virtual What?

On the “Am I Hot or Not” site, the virtual gifts are flowers. The prices aren’t that different than the real variety.
On Dogster and Catster, there are free virtual gifts that are awarded to members to hand out, but one can also purchase ‘Zealies‘ (Dogster and Catster’s currency) which can be used to send virtual rosettes to their favorite pets (Dogster and Catster are social networking sites for dogs and cats—er, I mean, dog and cats’ owners).
Facebook, who implemented virtual gifting this year, allows users to send various virtual gifts to one another.

Is This a Viable Way to Make Money?

I would have thought not. How many people would send someone virtual flowers? According the the panel, quite a few. Ok, but how many people would buy and send virtual kitty chachki from their cat to another? There can’t be volume there-or could there be? In our virtual worlds, we have virtual places and virtual identities; maybe virtual ways of expressing ourselves isn’t that far fetched after all.

Google pay-per-action for AdWords

Scott McAndrew — Wed, 21 Mar 2007 22:50:58 +0000

Yesterday in a press release Google announced the launch of a beta program to begin testing a new pricing model based not on clicks, but on conversions. The “Pay-Per-Action” model allows advertisers the ability to set up specific actions (or conversions) along with how much they are willing to pay for that action.

The new ads are for Google AdSense for content sites. AdSense publishers can decide if they want to participate in the program or not. Participants will be able to review details of the advertisements which will appear on their site and decide if the ads are appropriate for their site or not.

One would assume that the amount paid for an actual conversion will be far higher than what one gets for a click under the current PPC model-especially as the amount will be able to be determined by the Advertiser, setting up a affiliate-like relationship, brokered by Google.

The program introduces new challenges for those managing a web site with the ads. With PPC, the user had little control over what went on their site and only had to rely on ad copy driving a click. Now, they’ll have to consider if the web site the user will visit as a result of a click has the potential of closing the deal.

Update: Google’s Inside AdWords blog has a post specifically about the Pay-Per-Action beta.