With both Google and Microsoft now prove to be trialling the use of imagery in their paid search listings it appears it should just be a matter of time before they become common place on the SERP.  Well, it should make for a more decorative and visually appealing search results page but, as mentioned in my Google post, I don’t envisage it affecting CTR in the long run as it will appear on all paid results once advertisers get the hang of it.  As a result, after the first few searches with the new results, users will become blind to the logos.  That is unless the great and the good of the search engine marketing world kind find ways of standing out from the crowd.

As reported in media post, Yahoo has come out on top in a case brought against them by Heartbrand Beef, of Yoakum Texas.  Heartbrand, who claim to be the only seller of Akaushi beef in the US, didn’t believe Yahoo! should allow their competitors to appear on the keyword “Akaushi” as it was misleading to their searchers and of the products their competitors provided.  This would have been an interesting judgment had it gone the other way.  It is different to other trademark disputes of past or present as it wasn’t actually a trademark or brand term owned by Heartbrand, just a product exclusive to them.  I can’t honestly see how Heartbrand thought they were going to win this case but the result does go to show that the search engines are covering themselves for any such cases through their practices and T&Cs.  Google, Yahoo and Microsoft aren’t stupid, they aren’t going to open themselves up for potential legal backlash through the changes they make to policies, they are going to be pretty sure they aren’t liable before making such as Google’s most recent changes to trademark bidding.

This is not the first time the search engines have come out in battles such as these, and it certainly isn’t the final say in the argument over brand and trademark infringement in paid search.  But the more cases like this which come out in the search engines favour, the less chance there is of one going the other way, which in turn means less companies will be tempted to try their luck in the courts.

I predict in 12 months trademark and brand bidding in PPC will just be a common practice, give it 2 years and search engine marketers will be reminiscing about the good old days when there was no competition on brand terms and you got all the clicks for next to nothing.

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.

It looks like the only way anyone is going to mount a serious challenge to Google and a combined effort, either through partnership or purchase would see the search experience of Yahoo combined with the technical know-how and product development and of Microsoft. It will be a big challenge to catch Google and it will take number of years to get there but if a deal goes through in Q1 it is set to be an interesting 2009!

NMA news story

In Yahoo’s response via email to it partners they reassured PPC advertisers that, whilst they were disappointed by the announcement, it would not prevent them becoming an “ever-stronger player in online advertising”.  and reaffirm their strength in certain sectors by quoted their positioning across selected news verticals.  A clear attempt to say “don’t give up on us yet!”

In a further twist, Yahoo! CEO Jerry Yang has come out and reverted on his original defiance on a sell out to Microsoft by claiming that he was open minded about a potential deal with Microsoft having been bitterly opposed to such a deal when originally proposed.  Its funny how he has changed his mind immediately prior to the Google announcement!

So its back to square one in the search engine battle for supremacy with no deals on the table and everyone working independently.  But for how long?  Yang’s announcement is bound to start the Microsoft-yahoo rumour mill off again and it is probably more likely to go ahead after yesterday but who knows?  I’m sure there will be more twists in the tail before the saga ends.

True branding connoisseurs I’m sure would argue that it isn’t possible to build a brand experience, and certainly a significantly positive one, through 3 lines of text.  But the fact of the matter is that a searcher on a generic term will scan the paid search listings (as well as the natural search results) to see who is appearing before deciding which PPC ad to click.  So there is surely some conversion attribution to be had from PPC impressions which could then ultimately result in a brand term search and conversion.

This is what Microsoft are aiming to prove.  Presumably using similar technology to that which is used by adserving software, placing a cookie on the users computer upon impression which remains in place to allow the tracking of future actions.  This technology wont be able to track through to conversion without placing code on the advertisers sites but some may be willing to do this for greater visibility of the impact of paid search impressions on the buying cycle.

The timescales of such a cookie can be all important in this form of tracking in order to gauge its accuracy.  Adserving softwares track post impression conversion up to 90 days after the original viewing which is pretty excessive in my view.  this is far longer than the normal buying cycle even for a considered product and so it will be important for Microsoft and any advertisers participating to set a realistic timescale in which the impression could have an impact.

The results should be interesting and could lead to more emphasis on PPC if a branding impact can be proven.  By allocating both a direct return and a brand impact Microsoft will be hoping that advertisers will be willing to increase CPCs and inflate the cost of sale they are willing to pay, obviously resulting in more revenues for the search engine.  I’m sure most advertisers will take some convincing though so the results will have to be pretty impressive.

The figures which have come out of the Microsoft report show a 2x improvement in website visits through a combined approach along with a 54% increase in likelihood of a user conducting a brand search if they had been exposed to a display advert.

You have to take into consideration the producers of these pieces when reviewing the results they show you.  Atlas earn their money based on the amount of activity you are undertaking so have a vested interest in increasing it (plus they earn off both impressions and clicks with display).  Yahoo have seen a downturn in the last quarter in the premium CPM display advertising and so it is in their interest to get you buying more.  And similarly Microsoft need something to prop up their lack of progress in paid search.

So you have to take what they say with a pinch of salt, but that’s not to say there is nothing at all in it.  i do believe an effective online plan involves a balance of all elements.  Search as the flexible, movable return based feast, affiliate marketing as the finite guaranteed return and display advertising to boost the brand and increase awareness.  That said I am an advocate of flexible solutions for display advertising and don’t think that any placement is worth more than £10 CPM, there isn’t enough branding to warrant anymore than this amount.

So whilst I would view the actual stats displayed with an air of scepticism, the general principal is sound in my opinion.  A balanced approach with a blend of channels means you get the best of each without placing all your eggs in one basket.

View Microsofts findings here

May 20, 2008

Microsoft to Launch “Live Search Cash Back” Tomorrow

The major Microsoft Live Search announcement scheduled for tomorrow will be the official launch of a new product: Microsoft Live Search Cash Back.

The program in partnership with eBay and its PayPal unit will offer cash back to consumers who search on Microsoft Live and make a purchase. The announcement will be made in conjunction with a taped message from eBay CEO John Donahoe. The technology is based on the acquisition of Jellyfish by Microsoft in September, 2007.

The announcement is expected to be made by Satya Nadella, SVP Search, portal & Advertising Platform Group, Microsoft, prior to Bill Gates’ presentation on “Connecting the Future.” The goal is to differentiate Microsoft’s vertical search experience for users while leveraging improvements in the core search algorithm.

Microsoft believes the Live Search Cash Back program will align the interests of consumers and the search engine, putting Microsoft “on the same side as the consumer.”

The job of Live Search will be to match the most relevant products with the most relevant consumers.

Microsoft will likely offer advertisers a CPA (Cost-Per-Acquisition) model rather than a traditional search engine Cost-Per-Click (CPC) auction.

Tony Hsieh, CEO of Zappos, said in a taped interview that the program would help overcome the barriers of first-time buyers of shoes online.

A Barnes & Noble executive stated that clickthrough rates and purchases had increased through the use of the Jellyfish pilot program.

The following message is posted on the Jellyfish.com Web site:

“As part of our pledge to save you money on the products you buy, our Cash Back rewards service is currently offline to perform necessary service upgrades and enhancements. Jellyfish Account holders will receive an e-mail notification when our Cash Back service is up and running again. Thanks for your patience.Using Jellyfish, consumers could compare prices of products from a number of online stores. Retailers paid Jellyfish fees to feature products. A portion of that fee was refunded to consumers who bought through the Jellyfish site.

Jellyfish also offered “Smack Auctions.” During each Smack show, Jellyfish would auction off new products in a unique price dropping format. Every second that ticks off the clock, Jellyfish would drop the price of the product, until the deal sold out.

Jellyfish founder Brian Wiegand is agroup manager at Microsoft. Last year, ye stated, Microsoft is “investing heavily in shopping and e-commerce.”

Microsoft closed the deal on Sept. 27, 2007 but didn’t announce it until Oct. 2, 2007.

This isn’t the first foray of Microsoft into the world of search engine incentives.

Microsoft Live Club is an ongoing experiment with incentivizing searchers but never on the Live Search Cash Back scale. For example, Microsoft Live Search Club lets users play games. A completed gives earns tickets toward prizes, such as Zune accessories, song downloads and ringtones.

Microsoft’s official statement on the announcement:

On Wednesday, we will be announcing a major new initiative that our search teams have been driving. We are getting better and better with our core algorithmic search, and at the same time, we are investing to differentiate in vertical experiences and to disrupt the current model. You’ll hear more about our plans Wednesday.

About Face(book): Microsoft Feels Out Social Network Acquisition

Though Bill Gates was out there telling people Microsoft is not interested in making non-Yahoo acquisitions right now (at least in the search/social world), word comes that Microsoft bankers have sent “feelers” to Facebook about a full acquisition.

Here’s why this is a solid move:

1. Microsoft already owns 1.6% stake in Facebook, worth $240 million
2. Microsoft formed a data portability partnership with Facebook and 4 other networks
3. At least two Google execs have jumped ship to Facebook in recent months

While Facebook has yet to “overtake” MySpace in the social media market, it is a viable competitor. And I’m sure Ballmer would love for Microsoft to own a social network that even Apple has used as a marketing ploy as of late. Recent commercials for the iPhone entice potential customers through the ability to access Facebook on the popular mobile device.

Additionally, internet users are turning to their social networks during their search process. Consumers want answers and reviews and social networks help them get opinions from trusted sources.

The Facebook move would likely be seen by many as a better fit than Yahoo. But expect just as many to see it as a negotiating ploy in their bid for Yahoo. Though Microsoft has officially withdrawn its bid for Yahoo, many analysts expect Ballmer and the team to return to the table for another stab at a grab for the search engine.

It concerns me what a future deal could mean for the search market as the it effectively means a consolidation of the market as opposed to the fragmentation we had seen coming over the past 2 years.  This simplifies the process and doesn’t necessarily bode too well for search marketing agencies.  From Yahoo’s perspective it may come down to purely monetary figures.  If they have decided that they are not going to get very far with challenging Google in the paid search market then displaying AdSense results would allow them to significantly reduce their staffing levels and technology costs.  Although it wont be nice for those people that end up getting the boot, the boardroom wont be concerned if the figures stack up.

It does make you wonder what sort of deal has been brokered for the trial and the possibilities beyond though.  A typical AdSense partner might be earning 40% of the click revenue generated but Yahoo! aren’t you standard partner! Could Google be willing to let Yahoo! keep all of the revenue for the sake of market share?