Online Business

Forbes.com CEO Thinks Publishers are Killing Web Ad Potential

Jim Spanfeller, President and CEO of Forbes.com, who also happens to be treasurer of the Online Publishers Association and Chairman Emeritus of the Interactive Advertising Bureau spoke his mind on the state of the online advertising industry in a guest post at PaidContent.org.

He had some interesting things to say, with his main point essentially being that online publishers are driving down the prices of ads by adhering to a similar model that the airlines have used by offering lower rates when they need to fill spots. Naturally, in that industry, consumers wait as long as they can to get the lower rates, and it has not worked out the best.

Spanfeller says that as publishers have adopted a similar model with advertising, they have changed the success of metrics from ones based on “demand creation” to ones driven by “demand fulfillment.”

“Until recently, we had seen the growing use of ad networks to ‘liquidate’ the unsold remnant inventory that was [the] result of people spending more and more time online while the ad-dollar migration from offline failed to keep pace,” said Spanfeller. “The IAB (where I’m chairman emeritus) and Bain Consulting did a study on this about a year ago that showed a huge increase in the percentage of inventory sold via ad networks on a sample of seven member sites (5% to 30% increase in just one year).”

“What this study also showed, though, was the incredibly low amount of revenue that these impressions garnered as the pricing for inventory sold in this manner was outlandishly low (less than 2% of total ad revenue was generated by these impressions and the pricing from ad networks has fallen even further since this study was done),” he continued.

Spanfeller’s piece should prove to be an interesting one to publishers and advertisers alike, but some think it is just simply too late for the industry to adopt a different model. Publishers that try to go a different way face the very real possibility that their advertisers won’t follow them, when they can simply get lower rates elsewhere.

Local Video Display Ads On the Rise

Online video advertising platform Mixpo is sharing some stats regarding the growth of local video and interactive display ads.

“Year-over-year, Mixpo has seen, primarily, local TV advertisers, extend their broadcast strategy and campaigns to the Web by more than 300 percent,” a Mixpo spokesperson tells WebProNews. During that time, according to Mixpo, over 1.2 million minutes of video display advertising have been watched. That translates to over two years of 24/7 non-stop TV viewing.

In addition, over a third of these user-initiated views have resulted in additional clicks and interactions. Really these types of ads cater to more than just the click though.

Video Display Ad on One of Our Own Sites

“Pre-roll ads are not the right solution for local advertising.  They’re expensive and have limited availability, interactivity and targeting, to drive effective local promotion. Video display ads are more affordable, can be targeted to the right customer, and allow viewers to interact as they wish, rather than being forced to watch an ad,” said Mixpo President and CEO Anupam Gupta. “This new ad unit – takes the static banner to the next level with higher engagement and local response.”

“We are seeing a trend unfolding and that is an extension of local TV advertising strategies to the Web, with the benefits of measurement and interactivity,” Gupta added. “Advertisers have already spent tens of thousands of dollars to produce high quality TV creative. Leveraging that is the easiest way to take advantage of online video advertising.”

Last week Mixpo and the National Cable Communications, which is comprised of major cable companies Comcast, Cox, and Time Warner, launched an initiative to let cable advertisers extend their TV commercials to the web. These are treated as banner ads, rather than pre/post roll.

Yahoo Messenger Goes Video with New Version

Yahoo Messenger Version 10 is now available in beta. New features include enhanced video calling, courtesy of GIPS, friend updates from Yahoo, Flickr, Twitter, and others through the new updates view, and improved language support.

GIPS has provided the underlying voice technology for Yahoo Messenger for the last three years. Now GIPS is providing its VideoEngine to add the video element to the messenger.

“With the launch of Yahoo! Messenger 10, we’re allowing people to instantly communicate with friends and family around the world through new interactive and social features like video calls,” says Dave Merriwether, senior director of Yahoo! Messenger. “The GIPS VideoEngine enables us to provide the Yahoo! Messenger community with the best video experience possible. Now people can enjoy full-screen, face-to-face chats with friends and family at no cost, in the familiar Yahoo! Messenger environment.”

“Yahoo! Messenger is the leading communication platform that provides people with the greatest choice to stay connected to one another through text IM, PC-based calling, mobile text messaging and now video calling,” says Emerick Woods, GIPS’ CEO. “”We’re proud to work with Yahoo! to deliver a truly differentiated high quality video experience for the hundreds of millions of people on Yahoo! Messenger around the world.”

On a semi-related note, Google just recently launched a new voice/video chat application for the iGoogle homepage. You can read more about that here.

Yahoo Unveils New Search Design

Yahoo discussed the future of Yahoo Search today. They are launching a new search design that goes along with the new look of the Yahoo Home Page, which was recently launched itself.

The new search has a three-column layout (Search Engine Land has a bunch of screenshots), with most of the changes occurring in the left-hand column. This is where filters and search applications reside.

Image from Search Engine Land

One interesting aspect of the new Yahoo Search is that they are going after Google (apparently calling them out by name) with regards to searching for people. When you search for a person you will get their Facebook, Twtitter, LinkedIn, and FriendFeed profiles when applicable.

“When we launch this, you’re going to come to Yahoo to search for people,” Larry Cornett, VP Search Products and Design is quoted as saying. There appears to be a heavy focus on personalization with the new Yahoo Search.

As you are probably well aware, Yahoo has a deal in the works with Microsoft that will have Bing delivering the search results for Yahoo searches, should the deal get through regulators. Yahoo says it will still compete on the front-end. They want to give users the best front-end search experience, which they will build themselves, based on Bing’s back-end technology.

When asked how different search results will look on Yahoo from those on Bing, Yahoo said, “We are not a version of Bing. We are the Yahoo search experience.” They also said that they will have freedom on the advertising side, but that some would be provided by Microsoft as well. That’s interesting.

Yahoo also announced the new version of Yahoo Messenger today with a focus on social networks and video. Read more about that here.

Here’s some more on the new Yahoo Search from the press release:

Demonstrating its commitment to continued innovation in the search experience, Yahoo! is testing a new search results page, aligned with the design of the new Yahoo! homepage and aimed at making Web search more personally relevant. The test, available randomly to millions worldwide, delivers a differentiated search experience that lets people better explore the things, people and websites that matter to them most. New functionality being tested includes:

• Results Filtering Options – The page provides new tools for refining search results including exploring related concepts, displaying only results from popular Yahoo! and third-party sites, and narrowing results by different types of content such as people, videos and discussion forums.
• Intelligent Search Results – Enhanced assistance creates a more personally relevant experience that better understands what people are looking for based on prior searches. It is powered by search session science that detects intent by looking at search behavior over time. For example, a search for “Paris” followed by searches for “flights” and “cheap hotels” helps Yahoo! Search understand that someone is seeking travel-related content versus gossip about a Hollywood heiress.
• Easy Access to Search Controls – The new site provides quick access to Search Scan/SafeSearch, which helps protect users from viruses, spyware and search spam, and Search Pad, the personal research assistant that lets people capture, organize, save and share information they find while researching online.
• Search Assist Expansion – Yahoo!’s popular real-time query suggestion engine, Search Assist, has been introduced to the search box on every Yahoo! page in the U.S. with the launch of a new universal header. This new header unifies key design and navigation elements, with links to popular Yahoo! destinations such as My Yahoo!, Finance, News, Sports, Mail and the Yahoo! homepage.

Short URL Spam a Big Threat in August

Spammers are taking particular advantage of the heightened interest in health-related issues like swine flu and healthcare reform to distribute large shortened-URL spam runs using the Donbot botnet, according to Symantec’s MessageLabs.

“In August, the ongoing abuse of shortened-URLs as a delivery mechanism resulted in a number of legitimate URL-shortening services being forced to close their businesses due to their inability to handle the malicious use of their tools,” a spokesperson for MessageLabs says. Here are a couple of screenshots from such services:

Shortened URLs have created a huge breeding ground for spammers, but cybercriminals have plenty of other methods of spreading ill will. MessageLabs shars a few other threats from August that they say should be on your radar:

- Cutwail’s nine lives: On August 1st, Latvian ISP Real Host was shutdown, causing Cutwail’s activity levels to drop by 90 percent. However, it only took Cutwail a matter of days to recover, demonstrating just how powerful and intelligent this botnet has become.

-  DDoS attacks on social networks: A number of social networking websites were recently reported to be victims of DDoS attacks. MessageLabs found that the attacks may be linked with a spam run against an anti-Russian blogger. MessageLabs Intelligence suggests that this small but strategic spam run contributed to the DDoS attacks on these social networking sites. A botnet was also used to conduct the DDoS attack in parallel, with compromised computers under the botnet’s control commanded to open the page of the targeted social networking website.

- Old malware comes back to haunt us: MessageLabs Intelligence analysis highlights how cybercriminals are three times as likely to favor repurposing malware across numerous domains rather than developing new tactics. In August, analysis of malware being blocked each day highlights that only 11.9 percent was newly developed malware.

MessageLabs has a report covering the month of August in threat trends here(pdf). It talks about how one in 296.6 emails contained malware, but there have actually been decreases in spam, phishing, and blocked malware sites.

YouTube Reaches Out With Revenue-Sharing Program

YouTube’s Partner Program has, as a general rule, allowed in only content creators who produce original and heavily viewed clips on a consistent basis.  This was a smart and safe approach.  But it’s an approach that also excluded a lot of very popular one-off videos, and YouTube’s now seeking to correct the problem.

A post on the YouTube Biz Blog announced this afternoon, “[W]e’re extending the YouTube Partnership Program to include individual popular videos on our site.  Now, when you upload a video to YouTube that accumulates lots of views, we may invite you to monetize that video and start earning revenue from it.”

This move makes sense for several reasons.  First, you have to consider how content creators will react.  The ones who are contacted by YouTube will no doubt be thrilled to receive money.  The ones who aren’t will at least know that the possibility exists, and may make more and better videos as a result.  That, in turn, should benefit the average YouTube user.

Then there’s the corporate perspective.  Google has been trying to monetize YouTube for years, and by extending the Partner Program, should be able to sell more ads and bring the site closer to profitability.

Anyway, here’s one last detail that’s both a drawback and a hint at the next step: the YouTube Biz Blog post stated, “For now individual video partnerships are available only in the United States, but we hope to roll these out internationally soon.”

Today’s Content Relevant to Tomorrow’s Real-Time Searches

We all know that social media is “where it’s at” these days. People are spending more and more of their time on social networking sites. Many are checking their Facebook pages and Twitter accounts before even checking their email (or even getting out of bed in some cases).

Real-time search, while still in its infancy (if not in utero), is on the rise, and people are searching for up-to-the-minute, what’s happening right-now results for many of their every day queries. Real-time search isn’t a replacement for Google, its a compliment. That’s why Google knows it needs to gravitate in its direction and offer as fresh of results as possible, particularly when relevant.

Google already has a “sorted by date” feature (under “recent results”) in its list of search options that users can use to customize their search experience. The jury is still out on how frequently these search options are and will be used, but that option’s there, and chances are that it will get better at indexing fresh content. Chances are also that more and more people will realize that option is available. It hasn’t been around that long yet.

People aren’t just searching on Google and the traditional search engines. They’re searching on social networks too. You know about Twitter’s real-time search, and Facebook recently rolled it out too. Facebook also acquired FriendFeed, which utilizes pretty much every other social network out there.

I’ve already written about why social media is only going to become more important to search, but it’s not just about search. It’s about the way people obtain, absorb, and relay information. They’re doing it on Twitter. They’re doing it on Facebook. They’re doing it on MySpace, and they’re doing it on plenty of other networks (and believe it or not, they’re still doing it through email too).

These are the reasons your content should be as shareable as possible. If you want more people to see it, word of mouth is just as important as search. Social media is the word of mouth of the web.

Include buttons and icons that make your content easy to share on social networks. “Post to Facebook,” “Retweet,” “Digg,” etc. are all buttons that can put your content a click away from going viral. Obviously the content has to be up to par for this to work.

This can work in your favor on down the road as well as the present. Even if an article is a month or a year old, if it is still relevant, someone may happen across it and tweet it or share it some other way. This will not only place your content within the streams of that person’s followers/friends, but also on the radar of any related real-time searches taking place.

Real-time search isn’t just about what’s happening right now. It’s also about what people are talking about right now. It’s up to you to provide content that people will still be talking about later. Giving easy access to sharing features will only ease the way.

How important to you think real-time search is to the future of online marketing? Share your thoughts.

Google on Online Ads Boosting Offline Sales

Google is talking about how online ads can boost in-store sales at a couple of its different blogs today. The first one looks at the relationship between POS (point of sale) and O2S (online to store).

“Online To Store research is transforming retail today based on the ability to test digital marketing during a specified period of time and measure exactly what happens to sales not only online through eCommerce, but possibly more importantly- in-store in the test markets,” says Jay Bowden of the Google Retail Team. “Test and control has never led to greater clarity of online efficacy.”

“This is the Holy Grail of advertising and marketing funding if you think about it,” he adds. “You have read on this blog before about Google partnering with Retailers to learn exactly what a dollar spent online can do for in-store sales, well now a number of the tests have been completed and the results are in! Online advertising drives in-store sales!”

The other post from Google looks at a recent study from comScore, which shows that online advertising is on par with television advertising in growing retail sales of consumer packaged goods brands. Over 12 weeks, online ad campaigns with an average reach of 40% of their target segment successfully grew retail sales of the advertised brands by an average of 9%. It was only 8% for tv ad campaigns over 12 months.

“In 2008, Google commissioned a study with Harris Interactive among three CPG brands to compare the brand building effectiveness between traditional TV and online platforms,” says Google on the CPG Blog. “Effectiveness was equated to impact and engagement.”

“Identical traditional TV ads were shown on three distinct platforms: 1) on TV, 2) on a computer screen replicating a YouTube video environment, and on a computer screen replicating a click-to-play video embedded in content,” Google explains. “The Harris Interactive results showed that :30 commercials on YouTube and embedded video ads performed at parity with TV. All three were on par with the ability to communicate key messages about the brand, strengthen likeability, and drive purchase intent.”

The research discussed above is positive news for online advertising in general. In fact, it makes helps make the case for unification of offline and online advertising efforts.

Acquisition Rumors (Re)surround Facebook

Facebook might soon be involved in another acquisition.  New analyses/rumors are swirling, anyway, with one person suggesting that Facebook should be bought, and another indicating that the social networking company could extend an offer to a smaller firm.

Let’s start with the idea of Facebook itself getting acquired.  Scott Moritz, a senior writer at TheStreet.com, appeared in a video this morning saying that both Google and Microsoft would be smart to acquire Facebook.  He then continued, “Yahoo really is the one, I think . . . it needs them the most.”

Moritz supported his argument by saying that both Facebook and Yahoo act as destinations and sell ads, and that Yahoo would do well to receive traffic from Facebook.

As for the possibility that Facebook will go on the prowl, Michael Arrington discovered that Mark Zuckerberg recently updated his status update with the message “Spotify is so good.”  Spotify is a music service similar to iLike, which MySpace is buying, so a move here would help Facebook keep pace.  Facebook and Spotify also happen to share an investor – Li Ka-shing.

Stay tuned, then, and we’ll be sure to report any movements on either front.

Poor Customer Service Holding Back E-Commerce Sales

Earlier this month comScore released its Q2 retail e-commerce sales estimates, which indicated that US online retail spending dropped from the same period from last year. This is only the second time that has happened.

Sure, you have to take the economy into consideration, but there are other factors that can keep people from making purchases online. A new poll from Harris Interactive found that a lack of human assistance is one of those factors, and a big one at that.

Here are some interesting findings from that poll:

- 4 in 5 online adults who have purchased items online in the last six months (77%) say they would be interested in getting help from a real person before making certain online purchases.

- However, over 4 in 5 (82%) say there have been times when they have not been able to get help from a real person.

- Over half (52%) of those who haven’t been able to get the help they needed from a real person say it’s affected their decision to not purchase the product.

Just look at the following graphs:

“No level of automation can replace the human touch. The results indicate that shoppers still want real people to help them purchase products, even in a digital setting,” said Prashant Nedungadi, CEO and founder of IMshopping, who commissioned the survey. “Many retailers have started taking steps in this direction and we believe it will be the single biggest push for the retail industry over the next several years.”

The following graph shows some of the types of items people really want human assistance with before making purchasing decisions.

Out of the people who have purchased items online in the past six months, the most commonly purchased items include clothing, books, music, health and beauty products, and travel-related items.

While it is a good idea to make the online purchase as easy on your customers as possible, from simply the design and usability standpoint, you may consider whether or not you are offering enough human assistance, and how easy that is for the customer to obtain.