Archives for the month of: October, 2008
« Older Entries
Newer Entries »

Premium Display Advertising Slowdown Evident in Yahoo Announcement

October 22, 2008 //
1

Yahoo have disclosed their Q3 revenues and they aren’t good, a measly 1% increase on the same period last year and down $20 million on Q2.  The announcement comes hand in hand with them announcing they would be cutting 10% of their workforce to improve cost efficiencies.  This is no great shock in the current economic client but it is the breakdown of revenues which shows the most interesting facts.

Paid Search and performance based display advertising, such as Right Media and their Yahoo Direct Programme, were actually up a much greater percentage than the overall picture with the drop in revenues coming from “premium display advertising”, i.e. the CPM based placements across the Yahoo portal.  This ties in with what I have spoken about before regarding the future of digital media buying being a more flexible, reduced cost environment with many more placements being bought on an auction model or at the very least on a CPC basis.

There are two main causes for me believing this is the way digital display advertising needs to go:

1. The Global Economic Climate: advertisers cant afford to be paying premium CPM rates in the name of “brand building” when the economic climate is so fragile.  The next 12 months for advertisers, both on and offline, is about making sure a return is gained on advertising spend, and £20+ CPM, is never going to bring about a direct return no matter who you are.

2. Advertisers are Getting More Savvy: being from a paid search background and working for a results driven agency, when I spent some time media buying I was astounded at the stunts that some publishers tried to pull with their CPM’s.  Just because it is a high traffic or niche area of the site does not mean that anybody is paying anymore attention to the ad on that page than they are on the less popular pages.  An ad is an ad and 99% of Internet users can spot them a  mile off.  Thankfully more and more companies and media buyers are now beginning to think this way too and not buying the expensive slots thus meaning prices fall.  The old model of media buying also doesn’t play to the strengths of online, they make no sense.  So I am advertising online, where I can review performance real time, change ads real time, but your telling me I have to book for a minimum one month period no matter how it performs? It just doesn’t add up.  Publishers need to start operating in the online world rather than the offline media buying world.

So even more evidence from Yahoo that traditional media buying online is on its way out, but who can be the first to capitalise from it with an effective flexible ad platform?

Tags , , , , ,
Categories Display Advertising

Google’s Gambling Uturn – whos does it affect?

October 22, 2008 //
2

as you all should be aware Google made uturn on their gambling policy at the end of last week and now allows gambling advertisers, who can produce a valid gambling license, access to the Google Adwords programme.  I thought Id produce a quick list of the people this is going to have a major impact on as the change takes hold and more gambling websites start to go live on Adwords.

Google: Obviously this going to have a slight impact the company which made the change!  This is a massive market for online and is bound to generate a large amount of revenue for Google with some stories quoted figures as high as £300 million.

Gambling Companies: Google has opened up a huge new revenue stream for gambling advertisers which had been frustratingly out of their grasp in the past.  Having to make do with traffic and registrations from Yahoo and MSN had meant that these companies, who were willing to spend large amounts on new sign ups, were unable to reach all the available users.  This has all changed now and gambling companies are rubbing their hands together at the prospect of all the new sign ups they are set to receive from this new channel.

Affiliates: Affiliates willing to push the rules had for a long time been making the most of Google’s ban by employing out of hours bidding and trademark bidding to cash in through the gambling affiliate programmes.  With the new changes, and the requirement of a gambling license, affiliates will find it harder to bypass the system, but will also be priced out by the gambling companies as their returns are lower and so they wont be able to compete on CPCs.

Search Engine Optimisers: I’m not sure how big an impact this will have but I just wondered how the introduction of PPC listings is going to reduce the SEO volume in gambling on Google.  In theory it should remove about 20-30% of the available traffic which could impact the time and money invested in SEO by the big gambling companies.

Agencies: If you have gambling clients, rejoice!  Their value has just increased 10 fold.  So long as you are quick off the mark and get them live you could be looking at a good Q4.

Yahoo and MSN: Gambling has been a large part of Yahoo’s revenues for a while as they have made the most of the Google ban.  Now this is lifted they could see a large dent in their revenues from this channel as gambling marketers allocate more of their spend to Google.  The affect will be two fold, with advertisers looking to free up budget for Googled so reducing overall spend, and a natural reduction of competition on Yahoo and MSN which will  bring the market CPC levels down, so its a double edged sword for them.

The market is yet to settle down, and we wont know the full extent until it does but it is certainly one of the biggest announcements google have made in a while and should help their share price a little!

Tags , , , , , ,
Categories Google, PPC

US Online Display Rates Hit Year Low

October 20, 2008 //
0

Mediapost has reported that online display advertising rates have hit the lowest point this year in the US with the average display ad page generating just 27 cents CPM in Q3 of 2008.  This is no great surprise if you follow the trends in the market or work in this arena, but the article’s commenter seems a little less certain of the cause;

“It’s not surprising that it’s been trending down, but what is surprising is the size of the drop,” says Rajeev Goel, president and co-founder of PubMatic. “What we don’t know yet is whether the trend is due to increasing capacity on the supply side, or to the fact that the economic malaise is beginning to find its way into the online ad industry.”

Well, Im pretty sure I can tell you what has caused it.  Firstly advertisers are tightening their belts, no risks are being taken in such an uncertain time.  And secondly, they are channelling their ad spend into channels with a better return, like paid search and natural search engine optimisation.  A recession is no time for elaborate brand awareness campaigns, it si a time for keeping things tight, keeping profitability solid and riding the storm.  There is a time and a place for online display advertising but unfortunately for publishers, now isn’t it.

The net affect of this is with less advertisers booking space, and those that do driving a hard bargain, publishers are forced to take what they can get, and sell of the remnant inventory cheap.  There will still be exceptions to the rule, but not too many, and most advertisers will be driving a hard bargain for anything they do buy.  Good news for the media buyers (if your clients still have a budget that is!) but not so good for the publishers.

Tags , , ,
Categories Display Advertising

MySpace AdPlatform – will it work?

October 20, 2008 //
1

The launch of Myspace’s new ad scheme myAds into Beta last week opened up the social network as an advertising option for businesses of all sizes.  With a 4 step, simple campaign set up there is no doubt this is aimed at small businesses with little or no experience of online advertising.  And with the super low minimum commitment of £25 they have reduced all barriers to entry for small businesses.  No doubting that this is an attempt to follow in Facebook’s footsteps in attracting direct advertisers and allowing self service and flexibility on ad campaigns (its the future, remember?) but is Myspace in a position to make a go of it in the same way Facebook has?

It certainly has the audience for it, with nearly double the unique user figures of Facebook there is an audience there to be tapped into, but impressions are what the modern day advertiser is after.  It is also most certainly not what the small business advertiser is after, I know from experience that if a small business is investing £100, then they sure as hell want £200 back.  They do not have large marketing budgets and they don’t give a hoot about brand building, they want a return on investment.  And I’m not convinced Myspace can give it.

For a start on Myspace there is less browsing involved.  On Facebook you are looking at news feeds, checking out updated status’ and searching for groups, and this is the time when you are most likely to be tempted to click and ad.  With Myspace there is less of these type of actions involved, at least there is how I use it.  And you are generally there to view a particular persons profile or catch up with a contact, and when you have a purpose, you are less likely to be tempted to click an ad, no matter how well targeted.

Also, the garish nature of Myspace profiles means that it will take something special for an ad to look right on the page, this will make users opposed to the ads and less likely to accept them as useful.

I suppose the idea of the ads, much like Facebook’s similar programme, is to utilise the profile information to target your audience effectively and I buy into this, use all the information you can to show the right ad, to the right person, at the right time.  I’m just not sure Myspace has the layout and the typical user actions to support such a programme.  And certainly my experiences with Google Placement ads on Myspace haven’t shown me anything to suggest otherwise.

Tags , , ,
Categories Display Advertising

The Battle for US Presidency Enters the Digital Age!

October 17, 2008 //
0

The battle to become arguably the most powerful man on earth has entered the digital age this time around as both candidates for the US presidency look to utilise digital channels to gain votes in the election race.  The BBC reports how both Barack Obama and John McCain have used the web as a medium for the election campaigns.  Both candidates have used the power of YouTube to broadcast debates and speeches from their campaign creating their own channels with Obama going as far as integrating Google checkout for charitable donations! Barackobamadotcom johnmccaindotcom

Barack Obama has even gone as far as using in game advertising to try and reach the youth audience taking out ads in 18 video games including Guitar Hero, Burnout Paradise and Madden 09!  The ads were to promote his website, vote for change, and are an openly stated as an attempt to “reach young males 18-34″.  How successful these campaigns are remains to be seen, I suspect YouTube is a far more useful medium than Guitar Hero!  I can’t say that I’m concentrating on anything more than rocking out the next big riff and thrilling the crowd with some smoking solos! But maybe that’s just me!

Tags , , , ,
Categories In Game Advertising, Online Video
« Older Entries
Newer Entries »