Archives for the month of: January, 2009
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Are newspapers heading online?

January 22, 2009 //
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The migration of news and newspapers online has been steadily happening over the past 5 years.  I personally no longer feel the need to buy a newspaper on a week day as I know I can get all the news I need from me Google homepage, and also more recently twitter, without the need to payout for it or scour through pages of uninterested garbage to get to the useful stuff.

RSS readers and social news forums bring the best, most important news stories to my attention in an instant and give people access to such a vast amount of news that there is no way that once a day, physical publications can keep up.

But for the newspapers, print is important.  It has traditionally been where they earn their money.  Print advertising is still big business and it is these offline placements and inserts where the publications have traditionally cashed in.

News stories earlier in January however indicated that a shift change could be coming.  Reports on the Guardian website announced that US newspaper the LA times, was earning enough revenue from its online advertising programme to cover its entire editorial payroll, without taking account for offline advertising.  This is pretty huge news in the newspaper world as, even though all the publications use online advertising as an additional revenue stream, this has never, to my knowledge, been such a significant percentage of revenue.

In the same week it was reported that the financial times were making 80 staff redundant as they looked to streamline their business and invest more heavily in online and digital channels.  Whilst these two stories alone are not enough to suggest the future of newspapers is online, are they representative of a shift change in the newspaper market and indicative of the path the industry is set to take?

Whilst I think it would be difficult to build a mainstream news brand and publication purely online, it would be less difficult for an existing well known newspaper as they will already have a readership.  And with the revenues reported by the LA times a purely online presence could be very profitable.  It would also remove a lot of the overheads associated with offline media and make for a much more streamlined organisation.

Of course the advertising model would need to be sound.  Much of the premium CPM placements are dying a death as people look for more accountability from their online marketing spend but so long as the publication can keep innovating and offering flexible advertising programmes then there is no reason they couldn’t see the same success as the LA times has done.

Guardian Article – History in the making in LA

Digital Bulletin – Financial Times accounce 80 redundancies

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Categories Display Advertising

Search Engines Feeling the Pinch

January 16, 2009 //
3

Although much has been said about digital marketing and more so, search engine marketing, being recession proof and the one area of the marketing plan which is set to actually benefit from recession, recent news stories indicate that this may not be the case.  It appears that Google, Yahoo! and Microsoft, the three major players in the world of PPC, are battening down the hatches for a tough 2009 in search.

Yahoo!

Yahoo! announced this week that it is shutting down its content network, a move which was met with nothing more than a shrug by the search engine marketing community, but one which could signal that Yahoo! is looking to cut back on its less profitable areas.

Yahoo shuts down content match in the UK

Microsoft

Rumours are rife that Microsoft are set to announce job cuts in the next week, with some expected on the search side of the business.  This is unsurprising considering the disappointing growth of Live search and the perceived lack of focus in this area, perhaps they are set to rely on the Yahoo! workforce and are giving away something about the merger rumours!?!

Microsoft Job Cuts May Come Next Week

Google

Surprisingly it is Google that appear to be making the most cuts, with the announcement it is cutting 100 recruitment positions (1% of the company) and shutting down 3 engineering offices.  The staff on the engineering side will be given the option to relocate but you would think a large proportion of them will also end up redundant.

Google have also announced the removal of a number of their product offerings and the discontinuation of development of a number of others as they look to focus on the products that earn them direct revenues in these difficult times.  The affected Google products are:

•    Google Video
•    Google Catalogue Search
•    Google Notebook
•    Dodgeball
•    Jaiku
•    Google Mashup Editor

Google to lay off 100 recruitment staff

Google closes a number of products

So what does this say about the confidence of the three biggest suppliers of paid search advertising?  It could be seen as good business sense on their part, sorting the wheat from the chaff so to speak and focussing on profitability in tough economic times.  Moves like this however can only result in Google extending their lead in the race for search engine supremacy.  The optimist in me would like to see Yahoo! or Microsoft being aggressive in a  push steal market share in the downturn, but maybe they are both resigned to the fact the only way forward is to join forces.

2009 is set to be a tough year for us all; some will fall, while others will prosper at their expense.  At the moment it appears even the search engines are jockeying to be in the best position as it appears things are going to get worse before they get any better.

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Categories Search Engine Marketing

Click Arbitrage – a worrying sign of Yahoo! in decline

January 14, 2009 //
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I thought click arbitrage had died a long time ago.  3 or 4 years ago it was reasonably common for affiliate sites to buy cheap clicks from one search engine, display search results from a more expensive keyword on another, and make a profit based on the partner revenues they received.  But then Espotting/Miva began to die out, a major source of both the cheap clicks and the partner programme used to make money, and the search engines began to apply quality score metrics which penalised this practice on the basis it didn’t produce a positive user experience.

An illustration of how click arbitrage works is below.  Basically the website owner buys low cots clicks from long tail search works such, for example uk secured loans company, then displays to the user a page of search results for a similar, bu more expensive keyword, e.g. secured loan, as the publisher they get a percentage of click cost from the search engine whose results they dispay, and so long as CTR is at the right level, they make a profit.

Clicks from uk secured loan company

CPC

Cost

CTR to new search results

Clicks on secured loan

CPC

Rev share

Money in

Profit

100

£0.15

£15.00

15%

15

£10.00

50%

£75

£60

Apparently though, it is still around, and some people are still able to make it work.  In a list of the December 2008 top advertisers by search engine, ranked by ad impressions, the number one Yahoo! Advertiser was business.com, the business directory site who’s direct source of income is the Adsense links it displays in each of its categories.

If business.com are making a profit on this activity, and you would assume they must be to appear in the list, they have got to be one of the last click arbitrage sites out there.  Many companies use PPC to drive page impressions and ad revenue but very few are still acting as middle man in this way and selling on the inbound traffic for a profit.

It also bring into question the solidarity of Yahoo!’s client base.  If their top advertiser, admittedly by impressions and not spend, is a business is built on this model what does it say about their future as a PPC provider.

The changes in Google’s gambling policy have already removed Yahoo!’s one advantage in the PPC stakes, and no doubt significantly hit its PPC revenues as gambling companies shift funds across to their Adwords accounts.  And now this announcement saying that one of their biggest advertisers is an affiliate!  It doesn’t fill me with confidence that they are going to be providing any sort of stiff competition to Google in the near future.

For me this is further evidence that a partnership/merger between Yahoo! And Microsoft is the only way true competition for Google is going to materialise.

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Categories Search Engine Marketing

Social Media – Making us all a bit less sociable

January 14, 2009 //
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I read a worrying post on the BBC the other day which discussed the evolution of social media and how it spanned the age demographics.  The author described a scene in his house on Christmas day in the living room.  With the TV showing the Christmas special of choice, for the family you had dad (the author) sat on an arm chair laptop on lap, twittering and blogging away.  Mum, similarly adding comments to her forum of choice whilst checking her news feeds for updates and the two children, iPod Touch in hand, using Facebook and messenger to chat with friends and engage with their own private networks.

Now I’m as big a geek as the next man.  I love finding the latest social tool to have a play around with.  I Twitter, use messenger, have a Facebook and a MySpace account (although the latter as been redundant for a long time).  But the thought of a family sat around on Christmas day silently tapping away on iPods and laptops depressed me slightly.

I don’t think I’m being too old fashioned when I say that Christmas should involve spending time with the family and actually engaging in some form of non-digital communication!  And it is not just in this scenario I see this happening, the workplace is just the same.  People emailing and messaging colleagues a question when they are sitting on desks less than 5 yards apart.

It seems strange that the ability to engage and communicate with people thousands of miles away means we communicate less with those closest to home.  Is this the way of the future?  Digital chat and social media replacing old fashioned speech and face to face engagement?

I sincerely hope not.  As much as I love using online social media tools I’m also rather fond of meeting and speaking to people face to face.  I have technophobe friends who refuse to have a Facebook account or personal email address giving the response, “If I want to speak to someone Ill just ring them.”  Whilst I am not going to go to that level of extreme as I see the benefits of social media tools away from connecting with friends, I hope for all our sake that the picture painted by the BBC reporter is not a sign of things to come.

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Categories Social Media

Google Timeframe Budgeting – To Make Sure You Spend Every Penny!

January 13, 2009 //

According to news reported last week on Search Engine Land Google is trialling a new budgeting option for Google Adwords to be known as timeframe.

Early reports indicate that, when selected, Google timeframe will automatically increase your Adwords daily budget if you are under spending against a budget allocate for a set timeframe.  How nice of Google!  They have invented an option to make sure you spend every last penny possible with them!  Doubtless this idea came from some senior member of the Google team looking at the total unspent budget allocations within the Adwords system.  Initial indications are unclear but I think you can be sure the system does not work the other way, reducing daily budgets when you are overspending against a monthly budget.  After all, if you budget runs out sooner, there’s a chance you will add more!

This new option will make little difference to the educated search marketer who should be using CPCs and not daily budgets to manage their campaigns (other than in exceptional circumstances) but it could mean that a lot of direct advertisers find very little left in their Google pot at the end of each month if they enable this new option.

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Categories Google
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