The IAB is estimating that Q3 online advertising spend hit $5.865 billion, an increase of 11% YOY. Overall, we’ve been seeing a slow down in growth for online advertising, yet, this is still a growth industry, especially compared to other industries.
With total yearly U.S. ad spending at around $190 billion or so for 2007, internet marketing is only a bit above 12% of total ad spend. Being such an active and profitable medium, I’m surprised to see growth slowing as much as it is. At the same time, as companies are cutting budgets, it seems they’re making cuts across the board.
Source of graph, SeekingAlpha.com
Looks like there are already some other posts about this as well:
Traffick
MarketingPilgrim
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It’s been over a year since I had the privilege of meeting with a few Yahoo engineers who gave a presentation of Yahoo’s Campaign Builder Tool - their AdWords Editor-like product. Yet, to this day, I haven’t heard any more about it. Where is it?
If you haven’t yet heard anything about Yahoo’s Campaign Builder Tool, it basically works like AdWords Editor - allowing advertisers to easily make changes to their search campaigns without using import sheets or having to manually go into the account. It basically looks as though they were working off of AdWords Editor to create their version which is a good thing. From the preview I saw, the tool looks pretty impressive and would make using Yahoo much more user friendly and quicker than it currently works. Also, their keyword tool, while I don’t remember the specific features, had filtering options that made it look much better than other keyword tools I have used.
I asked my account manager the other day if he knew anything about it, but was just told that there is no established date for the release. If anyone has any more info, please share.
Oh, and if you for some reason haven’t yet heard…Yang is out. (Traffick, MarketingPilgrim)
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About a year or two ago, Yahoo began allowing advertisers to block certain domains from showing any of their ads. This was a step in the right direction that has helped advertisers trim the fatty, non-converting traffic sources from their Yahoo accounts. Now, Yahoo has increased the limit from 250 up to 500 domains that can now be excluded.
Like I said, this was a step in the right direction, but Yahoo is still not taking enough steps to provide a great marketplace for its advertisers. Excluding domains is good if 1) you’re tracking the domains your traffic is coming from and 2) the source of the traffic is consistent. Many advertisers are not tracking Yahoo to the domain level and therefore don’t have the information to exlcude the worst domains. Secondly, it seems like the worst offenders for Yahoo’s network are sites that are running arbitrage or control their traffic and can easily create a new site and divert the traffic if they notice clicks or CPCs going down.
I’m not saying that arbitrage or these other types of sites are all bad, but it seems like a disproportionally high percentage of the poor converting Yahoo sources end up being these types of sites. I think that there is a place for arbitrage sites as long as they can provide value to the advertiser.
Search Engine Roundtable highlights a webmasterworld member’s comment that there should be the option to exclude all Yahoo Search Partners. This was exactly my thought when I first read the headline. With Yahoo’s current situation, I can’t see Yahoo giving its advertisers that option as they’re always too worried about a big decrease in revenue, but I think they’re missing out on the big picture. As an advertiser, over the past year I’ve been spending less on Yahoo and more on Google. With Yahoo, I’ve been finding that my keywords can have drastically different results from day to day and week to week. They could be bringing in consistent traffic volume at a positive ROI and then all of a sudden, I’d see a spike in traffic - without the expected increase in conversions. Their new minimum bids don’t seem to help either since it’s basically just an added tax for the same quality and volume.
In terms of time management, I’d rather spend my time optimizing and growing my Google account rather than always making changes on Yahoo and having to watch the account like a hawk. I’m still holding out for them to make their network quality better, but I’m not holding my breath.
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A Barclays Capital analyst, Douglas Anmuth, has announced today that he believes Google’s revenue will be about the same for Q4 as it was in Q3.
Anmuth says that there are indications that the search environment has deteriorated, “perhaps materially,” so far in the fourth quarter. He now sees Q4 revenue of $4.05 billion, flat with Q3, down from $4.18 billion previously, and below the Street consensus at $4.31 billion. He sees profits for the quarter of $4.81 a share now, down from $4.93, and below the Street at $5.17. For the full year, he now sees $19.20, down from $19.32. And for 2009, he now expects EPS of $20.74, down from $21.70, well below the Street at $22.67. He now sees top-line revenue growth for the company in 2009 up 13.2%, down from 18.5% previously.
The data he is using seems to be from IAC and Infospace along with talking with Search Engine Marketers. I’m not sure how much stock I’d put into data from IAC or Infospace - comparing their numbers to Google’s would be the same as comparing Yahoo’s to Google’s - they don’t match up. On the SEM side, even if SEMs had a worse than expected October (even though with the growth of Search, it’s difficult to compare Oct 2008 to Oct 2007 to Oct 2006…etc.) Finally, it’s even more difficult to make predictions about Q4 due to most of Q4 volume and revenue starting on November 28th and ending somewhere around December 20th or 22nd.
Maybe I’m just having high hopes for Google, but I know where I put my dollars and I’ve also seen that that percentage has been increasing more and more. I also think that profit numbers won’t be including the entire amount of cost cutting Google has recently been doing.
Still, I’m merely speculating while I’m hoping that Mr. Anmuth is using solid data that is more solid.
More from Reuters
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Do you know who your competitors are? They’re not always the ones you think. Say for instance you’re HP. When most people are asked to name the competition, the typical responses will include Dell, Sony, Apple or similar big brands. While this is true from an overall business perspective, when talking about online marketing, and more specifically, paid search, it’s not the best or most complete answer.
HP’s competition in paid search falls into a few different categories listed below.
- Manufacturers: HP, Acer
- Retail Sites: Best Buy, Tiger Direct
- Comparison Shopping Sites: NexTag, Shopping.AOL.com
- Affiliates: HPoffers.com, anycoupons.com
- Others: Microsoft, uBid.com, 4allmemory.com, eToys.com
…and these are just some of the advertisers I’ve found bidding for laptop related terms.
While these are all the businesses that are competiting against them in paid search, they shouldn’t be looked at the same way. They each have different goals their trying to reach that most likely aren’t the same as each others and thus their strategies and tactics will differ from one another.
When defining your competition, you need to be specific to the keywords your going after. The competitive landscape looks different for the word cheap laptop than it does for HP laptops. For the terms that are most important to you, you should be taking a look at each of the ads listed, examining their creatives, landing pages and business model. With the creatives and landing pages, you want to look at what the selling points are, how your products compare to theirs and if they’re targeting the same market as you. The business model part of this is also very important. Each keyword will be profitable for a certain group of advertisers. If there’s a keyword you’re thinking of bidding on that doesn’t have a lot of your true competitors listed in the results, then that is one indication that the term may not be profitable for your campaigns.
Sometimes, Dell and Apple might be the biggest competitors, other times, it might be your own affiliates. Whoever they are, you should be using different strategies against each.
Many times, advertisers will just throw in a bunch of keywords and make changes based on the metrics they see for their account. While managing an account this way can work, it’s wasteful and won’t lead to the best results. Defining who your competitors are will help you determine which keywords you should be bidding on, what positions you should first test and what type of creatives/landing pages appeal to users. You’re also able to keep an eye on them to see what changes they make that provides insights as to how their campaigns are performing or if their strategies are changing. Overall, making sure you know who your true competitors are and being able to analyze them properly will give you an edge over advertisers who are not looking at this information.
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It’s sometimes surprising to find large companies running affiliate marketing campaigns. Today, I was looking over my Citi credit card statement online and noticed for the first time that they have little advertisements within between transactions. The first one I saw offered $30 off $150 at Office Depot and when clicked, provided a few more details. After I clicked the first link, there’s a notice that I’m leaving their site and going to a 3rd party website. When selecting yes, I wasn’t able to see the actual affiliate URL, but I saw at the bottom of my browswer window that it was going through linksynergy.com, a LinkShare domain.
It makes me curious as to how much they make off these links.
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From numerous financial news sources, Steve Balmer is quoted as saying “We are not interested in going back and re-looking at an acquisition,” however, he also stated “I’m sure there are still opportunities for some kind of partnership around search.” Does this make the outlook bleak for Yahoo?
Not necessarily. Microsoft and Yahoo used to have a partnership before Microsoft went out on its own. Yahoo would dispaly paid ads on Microsoft search properties and everything was going well. Granted, this is at least a few years ago now and many things have changed - Yahoo has lost much of it’s quality traffic, Google has been growing and securing its dominance, and Microsoft is still trying to become a true player in search. Still, a deal, whether it be an actual acquisition or just a partnership still helps create much needed competition in the marketplace.
I’m not sure I completely believe Steve when he says an acquisition won’t happen. I’m sure his ego isn’t helping the situation, but with Yahoo all of a sudden coming back and begging to be bought by Microsoft, he might just be playing the waiting game hoping to get a very attractive price. It isn’t like either of the two companies have had any major changes since they were last looking at a deal, the economy is worse, but the sticker price would also be a lot lower.
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I’ve always thought that the business of offering guaranteed clicks was only relagated to those shady companies that you’ve never heard of before. I saw a banner from Network Solutions and being that their main business is domain registrations and web hosting, I decided to see their “solution”.
The link takes you to a page offering two PPC services, one guaranteeing 50 clicks per month with the other, the “Plus” solution offering 100 guaranteed clicks per month. They will write your creatives, select keywords for you, “analyze” site traffic patterns and buy PPC ads on Google and Yahoo.
In the fine print, it says that they guarantee the clicks after a 3 month period too which is either them covering themselves or moreso probably just a way to get the customer to stick around for 3 months.
I can understand that they will “manage” the account for you, but there’s no way most small businesses could justify paying $2.50 per click. Anybody who actually signs up for this is most likely better off fumbling through AdWords for a month or two by themselves.
One of the best parts is that by signing up for their PerformanceClicks Guaranteed Plus program, you get to save exactly $0.00 per visitor they get to your site.
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Partnering up with one or more people on a project or business venture can have various advantages and disadvantages. A good partnership can create value to the endeavor that is greater than the sum of its parts while a bad partnership can lead to failure. Deciding on whether or not to take on partners can be just as much of a personal decision as it is a business decision and should be thoroughly thought out before moving forward.
First some of the benefits:
- Shared Risks and Liabilities
Having a partner allows you to take on less risk than going at it alone. First, you are able to share costs with your partner and also are able to have support with any problems that arise.
- Diversified Expertise
Even partnering with someone in the same field as you brings to the table their own experiences in the industry and usually at least slightly different ways of thinking. Many times, your partner(s) may have the added benefit of being experienced in an area in which you are not. Being able to combine talents with other individuals allows a business to grow faster and more efficiently by being unrestricted from learning curves and bottlenecks.
- Extra Resources
Having one, two or more people just adds to the available manpower your project has in general. Getting the project ready to launch can take much longer if you’re doing it on your own.
- Added Flexibility
With diversified expertise also comes the ability to be more flexibile and agile as a group. It allows a group easier access to new markets or overall direction.
- More Eyes & Minds
Having more than one person involved allows for mistakes or problems to be detected quicker and thus corrected much faster than if only one person is involved. You also gain the benefit of having more eyes looking out for opportunities and coming up with ideas.
…and the downside…
- Trust
This is probably the biggest. Before you can partner with anyone, you need to make sure you can trust them. Many factors affecting trusting another person can be helped through a strong contract between partners, but having words on a peiece of paper may not keep one person from breaking them and causing the business to fail.
- Shared Profits
Sharing costs means that you’re also sharing profits. This isn’t always bad if the profits are large, but if the business can’t scale to high enough levels, each individual in the partnership suffers.
- Different Styles or Values
Clashes with one another due to differences in management styles, personal values, work ethic, etc. can all lead to poor cooperation and can split a partnership apart. Differences in work ethics can create anomosity between partners is one or more starts to feel that they are doing all the work.
- Inbalance of Expertise
Not everyone will have the same experience, but if one partner is much more experienced than the other(s) or vice versa, this can lead to parts of the project lagging behind or being of inferior quality compare to the rest - creating a poor product overall.
- Leadership & Direction
It’s been said that a ship can’t have 2 captains. A partnership can completely fall apart if all partners aren’t trying to acheive the same goal.
Before deciding to partner up with somebody, you should look at your own situation and weigh the pros and cons against each other. This is especially true if you are looking to partner up with friends or family as a failing business can lead to a failing personal relationship and the same holds true the other way around.
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