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  • Facebook Ads Reportedly Destroying Google Ads In CPCs

    Facebook and Google are competitors. Make no mistake. It’s easy to view one as a social network and one as a search engine, but it is much, much more complicated than that. Both companies make money from advertising, and that is one major area where the competition will heat up more and more. Ultimately it’s the main area that matters from a competitive standpoint, outside of perhaps of web identity and engineering talent. They’ve competed plenty in both of those areas too.

    Last week, when Google released its earnings report for Q1, the company revealed a 12% decline YoY in CPCs. SFGate.com ran an article from Business Insider talking about how things are basically moving in the opposite direction for Facebook. Author Matt Rosoff talked to a rep from marketing firm TBG Digital, who said that Facebook CPCs rose 28% over the same amount of time.

    It’s going to be really interesting watching this battle once both companies are public. Facebook’s IPO is coming on May 17, based on recent reports. They’re saying the company could be valued at $104 billion.

    Of course, Facebook is doing a lot of other things marketers will be attracted to. The recent release of the brand timelines is an obvious one (though not every brand is crazy about them). On that note, you might want to take a look at this infographic about what brand pages are posting and how it’s being shared:

    Pandemic Labs Facebook Brand Ads Infographic

    As far as regular Facebook ads, there are certain things you’ll want to consider when running them, beyond just CPC. We recently looked at a study from TBG showing CTR based on days of the week. Check out Saturdays.

    Clickthrough rate, Facebook ads,

    Facebook’s sponsored story ads may be unavoidable for brands relying on their own Facebook updates to drive sales or even engagement. Facebook has not made visibility in the news feed any easier.

    Last week, however, Facebook did make its new Offers product available for local businesses. The service lets businesses put special offers in their fans’ feeds. I wonder how those will stack up compared to video and photo content in terms of likes.

    Facebook is expected to launch mobile ads in the near future, which could be a major new revenue source for the company, though it is mobile, which many believe has been a key factor in Google’s CPC decrease. It will be very interesting to see how that impacts Facebook.

    In terms of the two companies competing for ad dollars, it seems fairly obvious that if Facebook were to launch a proper search engine, which could happen, it could be a major competitor to Google’s bread and butter AdWords business. For some reason, given the fact that Facebook already has so much integration with the rest of the web, it seems just as likely that Facebook would launch its own AdSense-like ad network putting Facebook ads on third-party sites as well. Both the search engine and such a network are only speculative possibilities at this point, but it just makes too much sense for them not to happen if you ask me.

    What do you think? Would you like to see a Facebook search engine? How about a Facebook AdSense?

  • Tumblr Ads Soon To Be A Reality

    Earlier this week, we talked about the reasons you should be using Tumblr for business. We didn’t really go into Tumblr advertising, but it’s not really been an option. They recently launched highlighted posts, where you can pay a dollar to promote certain posts, but that’s not really much of an ad model.

    Now, it appears things are changing at Tumblr, which could help drive some significant revenue from the company, while giving brands a real way of generating interest on the increasingly popular social blogging network.

    On May 2nd, advertisers will be able to pay to be featured in a “Featured” section on the Tumblr dashboard, reports Mashable’s Sonia Paul, citing an announcement made by Tumblr Founder and CEO David Karp at the Ad Age Digital Conference. This space reportedly gets 120,000 impressions a day.

    According to a recent AdAge interview with Karp, Tumblr itself gets 4.5 million impressions a week. In January, he said it had hit the 15 billion pageviews per month mark. That’s likely grown in the meantime.

    This month, Tumblr launched some new integration with the Facebook Timeline. Judging on how that has worked for some other social sites, it’s likely to have a significant impression on Tumblr growth as well. Facebook announced last month that timeline integration had lifted Pinterest’s daily active Facebook user base by as much as 60%.

    Earlier this week, we reported that Gnip and Tumblr have teamed up to make Gnip the exclusive data firehose provider for Tumblr, which could benefit marketers greatly too.

  • Cross-Screen Ads on TVs, Mobile Devices Increase Ad Potency

    People who grow up with mobile technology might not be able to pay attention to anybody else or anything for a sustained amount of time, but there’s certainly one thing they’re noticing when they’re juggling between electronic devices: ads.

    A new Nielsen study reveals some boggling insights into how we technology-loving people absorb advertisements we see on both mobile devices and televisions. Participants were asked to watch a 30-minute TV show while toying around with a smartphone or tablet simultaneously. During commercial breaks, people saw a 15-second television ad for the upcoming Mark Wahlberg vehicle, Contraband. The teaser was followed up with a 15-second spot served up on the smartphone or tablet being used by AdColony’s Instant-Play HD Video Ad technology.

    Curiously, ads people saw only on television didn’t have a terribly strong impression on consumers, but when that ad achieved “cross-screen viewership,” meaning that it was seen on both televisions and some sort of mobile device (smartphone or tablet), the impression the ad left on the consumer was much more effective:

  • Purchase intent for Contraband spiked by 72% for cross-screen viewers from 18% to 31%.
  • Brand recall for the movie was 69 percent higher for cross-screen viewers compared to TV only viewers. Ad recall on TV only was 55%; Cross-screen viewership increased recall to 93%.
  • Cross-screen viewers also were 160% more likely to recommend the movie to a friend or family member.
  • Cross-screen was 5.5x more effective at driving search. Only 4% of TV only viewers intended to search for Contraband after seeing the ad; that rose 22% for cross-screen viewers.
  • “To date, mobile has been the wild, wild west for advertisers,” said Will Kassoy, CEO of AdColony. “This research was designed to assess the incremental impact of complementing TV with mobile video advertising, and measured key brand metrics including recall, purchase intent, brand favorability and desire to search. With upwards of 80% of consumers multi-tasking while they are watching TV, a cross-screen video advertising strategy is paramount.”

    “We expected this study to be high-impact and it was,” said Frank Stagliano, General Manager of Nielsen Entertainment Television. “There’s a growing trend towards simultaneous usage of media across platforms, and reaching consumers during those times can dramatically improve the effectiveness of an ad campaign. That’s because cross platform campaigns give an immediate call to action that’s not always available when advertising on TV alone.”

    So while you might not be able to exactly focus all of your attention onto any one of the screens you see before you, it’s good to know that, at least subliminally, you’re absorbing the content of cross-screen advertisements.

    [Via Forbes.]

  • Nielsen Awards Chevrolet’s Soldier Car Commercial

    Leading auto makers assembled at the New York International Auto Show for Nielsen’s annual Automotive Advertising Awards on April 4th. Nielsen’s winner for most effective auto advertisement was Chevrolet.

    Executive Vice President of Nielsen Global Automotive, Ian Beavis, also presented awards to Acura, Ford, Lexus, and Toyota.

    Kevin Mayer, Director of Global Chevrolet Marketing, says “it is very exciting to win Nielsen’s best in show award.”

    Ian Beavis said it won because it was, “a very emotional ad — clearly cut through — appealed to people on an emotional level — but it had a message of frankly, Chevy being part of the fabric of life.”

    Beavis went on to say that he believes the quality of advertising has gone up and that there is more variety. What he finds troubling about advertising is that “cut throughs are at about 20%” which means that people do not remember 80% of all the ads out there correctly.

    Effective advertising does not usually come naturally and requires considerable effort and strategic placement of brand icons.

    Mayer stressed that it is important for companies to be consistent in their message and the way media strategies are employed. He added that Chevy listens to their viewers to determine what their winning concepts are.

    Beavis hopes that Nielsen will continue to teach the automotive industry how to make quality ads through their collaboration.

    AOL is also partnering with Nielsen in their attempt to mirror TV advertising.

  • Facebook’s Cost Per Impression Rate up 41%

    According to TBG Digital’s Global Facebook Advertising Report, Facebook’s average CPM, (cost per thousand impressions), is up by 41% since Q1, 2011. The study, which was validated by the University of Cambridge, also shows that Facebook saw a 192% increase in click through rates (CTR), regarding its news clients, i.e. the Washington Post, demonstrating that Twitter is no longer the only go-to source for news content via social networks.

    The study, based on data from 372 billion impressions in over 190 countries for 235 clients from Q1 2011 to Q1 2012, shows that Facebook is making more profit off of marketplace ads, and that its cost per click (CPC) rate is up 23% in the top five territories since Q4, 2011. While Facebook’s new usership might have slowed, the data indicates that the social network is becoming more attractive to advertisers – though average CTR, a measure of how engaging a user finds an ad, based on creativity, targeting relevance, etc., is down 8% this quarter in the top five territories. This might have something to do with Facebook’s Sponsored Stories, with users being annoyed by their activity basically being turned into ads.

    Facebook’s retail segment made up 23% of all impressions in Q1, up 10%, and the most expensive ads were in the finance segment, being 3.5 times more expensive than the cheapest ads, which fell in the food and drink segment. Finance ads prompt 91% of users to go outside of the Facebook environment to subscribe to services, out of an average of 38% for all other sectors. Cost per fan is up 43% this quarter, with brands working harder to garner more likes on their Facebook pages, a practice referred to as earned media. Facebook has likewise given advertisers incentives to stay on the site by offering reduced CPCs of up to 45%.

    Simon Mansell, CEO of TBG Digital, states, “The recent Facebook Advertising Report unearthed some compelling trends as it relates to how brands are using the site to engage customers. One amazing finding is that Facebook has seen an increase in pricing at the same time when it has also grown the number of ads per page, sometimes up to seven, which you would naturally expect to actually deflate prices. Additionally, the rapid increase in CTR for news clients is promising for Facebook as it demonstrates that the platform works well for sharing news as well as gaming and photos, an offering which other social networks, such as Twitter have dominated to date.”

  • Microsoft /Yahoo Search Alliance Nearly Final In UK, Ireland, France

    In February, Microsoft and Yahoo announced that they were expanding their “search alliance” in the UK, France and Ireland. Today, they announced they’re about to enter the final stage of its implementation in these countries, and will start combining Bing and Yahoo search audiences on the Microsoft adCenter platform.

    The ad transition officially begins on April 18.

    “Next week, we begin to shift ad serving for Yahoo! Search over to Microsoft Advertising adCenter,” says Microsoft’s Cedric Chambraz. “This means that adCenter ads will gradually be displayed on Yahoo! Search result pages in the UK, France and Ireland. This process will begin as early as the 18th of April and is expected to conclude during the last week of the month when 100% of the Yahoo! traffic will be made available in adCenter and Yahoo! Search Marketing accounts will go in read-only mode.”

    “As Yahoo! ad serving moves to adCenter, and your clicks and impressions in that account begin to increase, you’ll see a corresponding decrease in clicks and impressions in your Yahoo! Search Marketing account,” he adds. “It is thus important to continue managing your campaigns across both platforms throughout this transition phase, in order to avoid missing out on any potential clicks. To help you prepare, I wanted to share the following guidance to assist you through this transition.”

    There’s a “transition portal” in the adCenter tab when you sign into your Yahoo account, which you can use to complete the transition, which the companies are urging you to do sooner rather than later, if you’re in one of these countries.

    The companies also suggest increasing your adCenter budget (go figure) to prepare for increased traffic, once Yahoo search traffic starts to flood adCenter.

    According to Microsoft, Germany, Austria and Switzerland will be getting the search alliance treatment in the coming months.

  • Google’s Mobile CPC Message: Give It Time

    Google released its Q1 earnings report on Thursday, which included another quarter of decline in cost-per-click, an area which has drawn concern from shareholders and analysts since this happened last quarter. In Q4, the decline was 8%. This time it was 12% (year-over-year).

    There has been lot of concern with mobile in particular. People are searching with Google using mobile devices more than ever, but the CPCs have not been as good as for desktop.

    “I see this as less of a shifting market and more as an expanded opportunity to reach consumers,” Brian Kaminski, COO of digital agency iProspect, tells WebProNews, regarding what CPC means for advertisers in an increasingly mobile market.

    “Most of mobile queries are either incremental or with different intentions than desktop,” he adds. “The growing mobile market means that consumers will be looking for information,products and comparisons in a number of different places only underscoring the need to be present, competitive and consumer focused.”

    Google CEO Larry Page discussed this in the company’s earnings call, saying he’s “very, very bullish” in the mobile CPC department, suggesting that things are looking rather positive for the long term.

    Mobile is “exploding in query growth,” Page said, adding that the formats are just adapting a lot from a “relatively crude base.”

    “Right now, they don’t monetize well,” Page said, comparing it to how desktop search was in 2002 and 2003. People always spend most of their efforts on the major source of traffic, which is desktop, he said. But over time that will reverse, and CPCs may actually get better, he said.

    “In addition to CPC spending within Mobile, the growth of investments made in Mobile Display has increased,” Kaminski tells us. “Additionally, when speaking of mobile, Tablet usage is generally lumped into ‘mobile’. The experience on a tablet is similar to a desktop in terms of display, along with how consumers are leveraging tablets – in the evening and for shopping. This has provided another opportunity for advertisers to leverage display in order to grow their businesses.”

    Page indicated that Google is investing heavily in areas that could eventually make mobile CPCs better. He cited Google Offers and Google Wallet as things that could have a significant impact, as the company works to integrate its various products in more ways.

    Nikesh Arora, Google’s Chief Business Officer, made the following point during the call: Advertisers are only interested in ROI. They’re not as interested in whether it’s coming from mobile vs. desktop or other means. Google, he says, is working to dynamically allocate across different channels to help advertisers maximize ROI.

  • Google Cost Per Click: Larry Page “Very Bullish” On Mobile

    Google released its Q1 earnings report today. Average cost-per-click, the company reported (which includes clicks related to ads served on Google sites and the sites of Network members), decreased 12% over the first quarter of 2011 and 6% over the fourth quarter of 2011.

    This has been an area of concern for shareholders, with Google’s mobile business doing well, but with the revenue from mobile ads not being able to keep up. Things will change, however, if you believe what CEO Larry Page had to say during the company’s earnings call.

    He said to think of it as there being “so much upside”. Mobile is exploding in query growth, he said, adding that the formats are just adapting a lot from a “relatively crude base.”

    “Right now, they don’t monetize well,” he said, comparing it to search in the early 2000s.

    People always spend most of their efforts on the major source of traffic, which is desktop, he said. But over time, he said, that will reverse. Over time, CPCs may actually get better,” he said. “We’re very bullish.”

    He added that Google is making lots of investments in that area, such as Google Offers and Google Wallet.

    He said we just haven’t seen the focus on it, and that Google is moving toward more focus on it. “I’m very, very bullish on that,” he reiterated.

    Page also noted during the call that we’ll see more and more integrations of Google products with one another. It’s “definitely a big area of focus,” he said.

    That’s right in line with everything we’ve been seeing from Google lately.

  • Ad Targeting With Google About To Get Better With Near Match Types?

    Update: Google finally returned our request for comment, only to say, “We actually haven’t announced anything on this and don’t have any more info to share at this time-we frequently beta test new features with agency partners.”

    Chris Copeland, CEO of GroupM Search, wrote a piece for AdAge, saying that Google is about to push “near match” ad targeting from beta to mainstream. There is virtually no other discussion about this feature currently happening, as far as I can tell.

    We reached out to Google, who readily responded to questions about the new Google+ redesign (though vague in their answers as usual), but they have so far been silent on questions related to Near Match.

    “The beta, Near Match, is designed to ‘enable you to safely extend the reach of your Exact and Phrase Match keywords to cover plural, misspelling, close rewrite, abbreviation and acronym variants only,’” explains Copeland. “In previewing the beta for advertisers, Google has suggested a 6.5% increase in click volume and a 9.8% increase in impression volume. Appealing for marketers, but at what cost? We know that digital auctions and publisher revenue thrive, in part, due to a lack of data to inform smarter bidding.”

    There was a bit of discussion about the “near exact” and “near phrase” match types back in November, which would reportedly be offered alongside of broad, broad match modified, phrase and exact. Agenda21’s head of PPC, Matt Holland, wrote at the time, “From the 14th November Google will be running this new beta test match types that will slightly broaden the reach of Exact and Phrase match keywords with syntactic variants including; plurals, misspells, acronyms and abbreviations but not synonyms. The idea being that this will be for advertisers who wish to increase their coverage and volume on Exact and Phrase match keywords and help them find incremental traffic with minimum effort.”

    J. Prentice Parton spotted this several days ago:

    You can tell that advertisers are already getting excited about it:

    With #Google creating Near Match, could this be the end to Broad Match as we know it? #AdWords http://t.co/soE8xF8N 3 hours ago via LinkedIn ·  Reply ·  Retweet ·  Favorite · powered by @socialditto

    According to Copeland, Google is “changing the game” as it prepares to reports its earnings on Thursday, following a report in January, which disappointed shareholders with an 8% decrease in CPCs. We talked about this earlier this week, as there seems to be concern about mobile becoming a revenue problem for Google, as the CPCs aren’t increasing enough to keep up with the mobile clicks.

    Google will release its Q1 earnings report on Thursday. Between CPCs and the new Google+, there should be plenty to talk about. I’m hoping Project Glass is brought up at least once. Of course there’s plenty of ad revenue opportunities there:

  • IAB Reveals New Video Ad Standards Update

    IAB Reveals New Video Ad Standards Update

    The Interactive Advertising Bureau (IAB) made a couple of noteworthy announcements today. The first is release of an update to its in-stream video ad standards; the second, the kickoff of a “Rising Stars” video competition devoted to digital video.

    “The ‘IAB Video Suite’ is [a] new and updated specification designed to deliver a variety of enhanced video advertising experiences while simplifying technical execution,” a spokesperson for the IAB tells WebProNews. “This includes critical updates to its key specs — VAST and VPAID — and the establishment of a new protocol, VMAP.”

    The organization says it has been working for over a year crafting the suite, with help from over 45 member companies.

    VAST, the IAB says, is a universal protocol for serving in-stream video ads, permitting ad servers to use a single ad response format across multiple compliant publishers/video players. VPAID is described as a common communication protocol between ad units and video players that enables rich ad experiences and detailed event reporting back to advertisers. Finally, VMAP, is described as a new protocol that allows content owners to describe where ad breaks should be placed in their content when they do not control the video player or the content distribution outlet.

    “The IAB Video Suite gives advertisers new canvases where they can tap the power of video to create real brand stories in the digital space,” says the IAB’s VP of Ad Tech, Steve Sullivan. “These specs help creativity flourish by making it easier for companies to buy and sell video ad inventory while allowing marketers to deliver in-stream interactive video ads with the confidence that consumers will always receive a consistent viewing experience across different media players.”

    These standards support skippable video ads, “pods” of multiple ads to be displayed in a single ad break (TV-style), the display of in-ad privacy notices, and the ability for singular ads to play across various devices.

    As far as the contest, the IAB wants companies (as well as individuals) to submit digital video ad units, to be evaluated based upon: user experience, branding, functionality, integration and adoption.

    “Like the previous IAB Rising Stars contest for display and mobile ads, the Digital Video Rising Stars competition is designed to foster digital advertising creativity and boost larger ad spends across multiple screens,” the spokesperson says.

    The deadline for submission is June 30. More details here.

  • Groupon Kidz Club Launches With Some Questionable Characters

    Groupon has launched a new kids site called Groupon Kidz Club with games and a really weird song. One character apparently doesn’t love his parents, one hates stray dogs, one is some guy the kids “took in” after finding him on the beach with no recollection of his identity, and one is an escaped swarm of bees who are “attracted to the smell of school kids who like Groupon,” and can form the shape of sharp stabbing weapons.

    I’ve confirmed with my calendar that it is not April Fool’s Day.

    I made the mistake of listening to the song before I got to know the characters, which made it even weirder. A couple of lines:

    “Email loves technology. Glasses needs glasses to see.”

    “The days are long, the nights are cold, when you’re less than twelve years old. But when things get really rough, piles is just piles of stuff.”

    It started to make more sense once I realized the characters were being named. Well, sense may be as strong word.

    There’s a character named E-Male, one named Glasses and one named Pyles. There’s also: Blade, FopTop, Roll, and Swarmy. As you can see, “Pyles” is just piles of stuff:

    Pylez on Groupon Kidz club

    He also hates stray dogs, according to Groupon. Also notice that he has a cricket bat.

    The character bios are fascinating. Glasses is “always wearing her signature glasses,” which she got with a Groupon. Blade always has his ice skates. According to Groupon, he loves two things in this world. “my blades and the funtacular Kidz Deals at Groupon.com.” Groupon says his parents are both dentists. Apparently that means he doesn’t love them. I wonder how that sits with Groupon’s dentist clients.

    FopTop’s description: “The kids found FopTop asleep on the beach and took him in. He doesn’t remember who he is.” That’s the description straight from the site. Sounds like a good message to send to kids: take strangers you find on the beach home with you. Especially if they don’t even know their own names. At least he has a sense of style:

    FopTop on Kidz Club

    Roll loves math, go-karts and hanging out on Groupon.com, according to his bio. “But most of all he loves his mom’s croissants. When Roll grows up, he wants to be an astronaut or a game show cameraman.”

    Roll from Groupon Kidz

    Fair enough.

    E-Male has a rich stepdad who “loves Groupon and some other sites.”

    Just to reiterate…”some other sites.”

    Finally, Swarmy is a swarm of bees that escaped from a science factory (possibly killer bees?), and “is attracted to the smell of cool kids who like Groupon.” He can apparently also form the shape of a sword.

    Thea, on the Groupon blog, says, “At Groupon, we love kids. In fact, we love them so much that we wanted to give them a cool “zone” on the ‘Net where they can hang out with brand new ‘cyber-frenz’!”

    “Not only is there a designated zone for young minds, but parents can also peruse deals they think will best suit their offspring,” says Thea.

    The games section has one where kids can “help Roll get his croissant back,” a brain scramble consisting of three mixed up words, and the following “Tips To Get Involved In Your Community:”

    HELP elderly folks cross the first part of the street and then encourage them to get across the rest of the way on their own!

    DON’T desecrate that statue even though you’d gain tons of street cred!

    START a lemonade stand but immediately go “Out of Business” to draw attention to wealth-destroying minimum wage laws!

    Groupon stock is down as of the time of this writing (13.54 -0.35‎ [-2.52%‎]). Granted, I don’t think that can be attributed to the Kidz Club. There is that whole matter of the revised earnings.

  • FCC Pushes for Web Disclosure of Political Ads

    FCC Pushes for Web Disclosure of Political Ads

    Local television stations make big bank during election seasons running political ads. Used to be, you could count on ads from the opponents themselves. Nowadays, in a world where money equals protected free speech, many other concerns have an axe to grind on the airwaves. That leads to even more revenue for televisions stations as they run ads paid for by third parties and “SuperPACs”.

    The public deserves to know who is speaking to them on any given political topic. If an ad is not endorsed and approved by a given political candidate – those are easy to spot now – then who aired it? Televisions stations are required to keep a list of organizations that spend for political advertisements. This listing is available for the public to peruse at the station office.

    But who drops in to a television station and asks to see the listing anymore? Generally speaking, if we want to know something like that, we jump on the Internet machine. Only, television stations are not required to publish those lists online. Even though it may make sense to you and me that they should, they generally don’t. And they don’t want to. The FCC thinks they should. The television stations are fighting it tooth and nail. The last time it was brought up,lawsuits rained down on the FCC. But here it comes again.

    The commissioner of the FCC are convening later this month, and they will take up this topic again at that time. They want the stations to upload those records to an FCC-maintained site. The stations say that would cost them too much to do.

    I have mentioned in past articles that I used to work in radio for a bit. The old-timers there told me of all kinds of archaic regulations, hopps to jump through, etc. that existed in the time before Reagan deregulated that industry. Nowadays, it is wondrously easier for them to do their jobs. Of course, two companies now own almost all stations with any power and we have to listen to the same music everywhere we go, but some consider that progress.

    My point is this, things have gotten way better for the broadcast industries over the years. Their employees will likely waste more on Facebook each hour than it will take to maintain the FCC-proposed listing of political ad buyers. It’s even going to be an FCC-maintained site, likely with an easy upload interface. 5 minutes a day to upload the already-required public ad buyer list is a pretty decent regulation to have in place to keep the public suitably informed in a 21st-century world.

  • Google Earnings This Week: Will Mobile Be A Problem?

    There is concern among investors that Google is generating too many mobile ad clicks, but not enough revenue from them. Google will release its earnings report this week, and it seems Wall Street isn’t sure how much improvement to expect in that department.

    Google CFO Patrick Pichette said in an earnings call in January (transcript via SeekingAlpha), “Our aggregate cost of click growth was down 8% year-over-year and quarter-over-quarter. Remember, too, that this is an aggregate number, which includes both google.com and our AdSense properties. On this, it’s important to look at CPCs and clicks together.”

    Mobile costs per click are often lower than desktop CPCs, which is what has investors and analysts worried.

    The Wall Street Journal brings up the topic ahead of this week’s earnings release, and mentions a Marin Software report, which showed the percentage of clicks Google gets from mobile search ads will grow to 25%, with prices remaining lower than their desktop counterparts. “Increased demand is a good thing for Google, but it also means the company must make up for declining prices with more volume,” the Journal’s John Letzing assesses.

    It’s clear that Google is passionate about mobile. Google CEO Larry Page put out a letter to investors last week, in which he described Google’s focus and sense of direction. He talked about a lot of things, including mobile.

    “Android is on fire, and the pace of mobile innovation has never been greater,” Page said in the letter. “Over 850,000 devices are activated daily through a network of 55 manufacturers and more than 300 carriers. Android is a tremendous example of the power of partnership, and it just gets better with each version. The latest update, Ice Cream Sandwich, has a beautiful interface that adapts to the form of the device. Whether it’s on a phone or tablet, the software works seamlessly.”

    Meanwhile, Google is pushing heavily for sites to “Go Mo” (mo means mobile).

    Later in the letter, Page said, “We understand the need to balance our short- and longer-term needs because our revenue is the engine that funds all our innovation. But over time, our emerging high-usage products will likely generate significant new revenue streams for Google as well as for our partners, just as search does today. For example, we’re seeing a hugely positive revenue impact from mobile advertising, which grew to a run rate of over $2.5 billion by the third quarter of 2011—two and a half times more than at the same point in 2010. Our goal is long-term growth in revenue and absolute profit—so we invest aggressively in future innovation while tightly managing our short-term costs.”

    That explains that right?

    Still, it doesn’t mean the quarter will necessarily be where investors want it to be. We’ll find out on Thursday.

    Increasing mobile device usage doesn’t only concern Google. Rival Facebook, for example, cited mobile use among its key risk factors in an IPO filing earlier this year. With the IPO expected in May (on the NASDAQ), Facebook has been doing plenty of its own work trying to create a better mobile experience for its users.

    Clearly, Google has a significant lead in terms of mobile integrations (and ads) in mobile, over Facebook, simply by having Android and Motorola Mobility. And if these two companies compete on more and more fronts, as many think they are likely to do, strong mobile showings are going to be imperative.

  • Project Glass: What If Google Fills Our Eyes With Ads?

    Parody videos about Project Glass have been coming out of the woodwork. Some of them are disturbingly realistic. They include things like people running into telephone poles or falling off balconies and whatnot.

    Some may find this one startlingly realistic as well, but for other reasons:

    In case the title didn’t give it away, it’s all about Google sprinkling ads all over the interface, giving the user constant exposure to ad campaigns. Advertisers would likely salivate over this. Perhaps Project Glass will one day become a real money maker for Google.

    I wouldn’t expect any ads at launch. We’re still waiting for ads to make their way to Google+.

    More Project Glass goodness here.

  • Premium Ads Drive Brand Awareness According To Microsoft

    You may have noticed some Web sites these days are using premium ads that encourage user interaction or have dynamic animations. It would seem like advertisers would jump on board using this new kind of ad. As it turns out though, there seems to be some hesitation on the part of advertisers to buy into these more expensive premium ads.

    The Microsoft Advertising blog hopes to dispel some of the hesitation surrounding these ads that are in the IAB Rising Star format. They claim that the market “needs evidence to justify that price premium and discover their true value in brand storytelling.” Microsoft found that evidence and the research is very compelling for anybody in online marketing.

    The study took three groups of 600 people. The first group was exposed to the premium interactive ad format. The second group was exposed to the same ad campaign, but in the standard MPU format. The third group was exposed to a completely different campaign in the MPU format. The subjects then tested a few premium format creatives that were running on the MSN UK homepage. The ads included three Billboard ads, four Filmstrip ads and one Pushdown ad.

    The test itself was pretty interesting. It was split into two sessions with the first session just being about the user experience. They were then brought in three days later and given a survey about the subject in the ads they saw. It wasn’t explicitly clear that the second session was about the ads as the study was more about what they remembered from what they saw.

    The results found that traditional ads still perform well, but new premium ads perform even better. At some points, they even two times better. It also seems that the premium format ads tend to do much better after the three day delay.

    Premium Ads Brand Awareness Microsoft

    It was also found that premium formats outperformed standard formats in creative valuation. Once again, not by a whole lot, but enough to show there’s reason to invest in these new types of advertising.

    Premium Ads Brand Awareness Microsoft

    What may interest advertisers the most, however, is that premium ads capture attention more so than standard ads within the first 8 seconds of a person’s visit to a site. In fact, 73 percent of respondents claimed to have noticed the premium ad within the first 8 seconds, compared to 41 percent of respondents for the standard ads.

    While the study itself paints a rosy picture for premium advertising, Microsoft does offer some caveats. They say that many consumers notice premium ads just because they’re newer looking, and therefore not familiar enough to start ignoring. The interactivity and size of the premium ads also play a role in driving attention.

    Microsoft does caution that advertisers hoping to jump on the premium ad bandwagon still need to use creativity in their advertising. They found that some campaigns failed to “transform higher attention levels into strong brand uplifts.” This once again proves that a creative ad can always trump the latest interactive, yet soulless ad.

    You can check out the entire study here. It contains more information including eye tracking stats of Web pages with premium ads.

    Do you prefer premium, interactive ads? Or do you like standard ads? Let us know in the comments.

  • AdWords Gets Big Location Targeting Improvements

    Google announced some new AdWords features designed to help advertisers targeting local searches.

    First, is the ability to target over 30,000 US Zip Codes. Advertisers will be able to add up to 1,000 at a time in a given campaign. Stats are provided at the postal code level under performance statistics.

    Second, is local insertion for location extensions. This, Google says, is aimed at helping advertisers easily create custom ad titles, text, display URLs, and/or destination URLs for all locations at scale.

    “You’ll no longer need to create multiple ads for multiple locations–this new feature automatically inserts the city, phone number, or zip code of your local business into your ad text,” says product management director Richard Holden. “For example, if your ad text says: ‘Find a {lb.city:Local} Store or Shop Online,’ a user viewing your ad in Chicago would see: ‘Find a Chicago Store or Shop Online.’ This new feature cuts out all the work to building out ad text featuring local information for all your locations.”

    “You must have location extensions set up and running in order to enable location insertion,” he notes. “Location insertion will work even if your location extensions don’t show because of other extensions. We detect location based on where your customer is physically located or by the geographic locations she may have shown interest in.”

    Local insertion

    Finally, Google says it is providing better clarity and control over how you target your ads geographically, with four key improvements. For one, they’ve reworded options to make them easier to understand. The advanced location options used to be:

    – Target using either physical location or search intent (recommended)
    – Target using physical location: Device-based location signals
    – Target using search intent: Location terms in user queries

    Now, they say:

    – People in, searching for, or viewing pages about my targeted location (recommended)
    – People in my targeted location
    – People searching for or viewing pages about my targeted location

    The second improvement is that when you target using physical location, Google will now show people ads in your targeted location with exception, whereas before, they would show them to people in your targeted location as long as they weren’t searching for something related to a different location.

    Third, both the location extracted from the content of the page and the likely physical location will be used for targeting on the Google Display Network.

    “Let’s say a customer in Atlanta is planning a trip to Hawaii and she’s looking at websites about fun things to do in Hawaii,” explains Google Local Ads product manager Smita Hashim. “A coffee plantation tour service from Hawaii would like to show ads about its offers to such a user. Similarly, an airline would like to advertise flight services to this user. The new targeting enhancements give the tour service and airline such capabilities, as both an ad targeted to Hawaii for a coffee plantation tour and an ad targeted to Atlanta for flights from Atlanta may now both show on the same page.”

    The last thing is that Google has made it easier to avoid getting impressions for excluded areas. They’ve done this by changing the advanced location exclusion methods.

    “Previously, the less restrictive option, ‘Exclude by physical location only,’ was the default,” explains Hashim. “Based on feedback from advertisers, we have re-worded the exclusion options and made the more restrictive option, ‘People in, searching for, or viewing pages about my excluded location,’ the default. This way you avoid getting impressions for excluded areas regardless of whether your customers are located or interested in those areas.”

    In other AdWords news, Google has followed up the addition of the Display Network tab and the big upgrade to its contextual engine with the launch (out of beta) of the Google Display Campaign Optimizer.

    The company has also been talking about the ingredients of Quality Score, which you might find useful in planning your campaigns.

  • Mobile Apps Drain Battery Because of Free Ads

    Mobile Apps Drain Battery Because of Free Ads

    Recently, we talked about how there are security risks associated with some mobile apps, not because of the app itself, but because of the ad module that runs within free apps to generate revenue. Now, we find that these same modules are also the biggest battery users in an otherwise efficient app.

    When I switched from a Blackberry to an iPhone, two things immediately irked me: lack of a raised QWERTY keyboard; and lousy battery life. Soon, friends clued me in to the fact that GPS and 3G were the biggest drains on my battery. So I learned how to better manage my location services, and how to get on Wi-Fi whenever possible. That, and how to carry a cord with me everywhere and plug in anytime I am not walking.

    These two principles – GPS and 3G – are at the heart of ad module problems. Researchers have shown that popular free smartphone apps spend up to 75 percent of their energy tracking the user’s geographical location, sending information about the user to advertisers and downloading ads.

    “It turns out the free apps aren’t really free because they contain the hidden cost of reduced battery life,” said Y. Charlie Hu, a Purdue University professor of electrical and computer engineering.

    Because smartphone batteries must be small and lightweight, power consumption is a major issue, the researcher said. He has led work to create a new tool called Eprof – for energy profiler – to analyze how much energy a smartphone app consumes. New findings show that 65 percent to 75 percent of the energy used to run free apps is spent for advertising-related functions.

    “We performed an in-depth case study, the first of its kind, of six popular smartphone apps, including Angry Birds, Facebook and Android Browser,” said Purdue doctoral student Abhinav Pathak.

    The free Angry Birds app was shown to consume about 75 percent of its power running “advertisement modules” in the software code and only about 25 percent for actually playing the game. The modules perform marketing functions such as sharing user information and downloading ads.

    “We believe it is mainly to provide information about the user’s geographical location so the ads can be more targeted or customized to that location,” Hu said.

    Findings will be detailed in a research paper being presented during the EuroSys 2012 conference on April 10-13 in Bern, Switzerland. The paper, written by Pathak, Hu and Ming Zhang, a researcher at Microsoft Research, also suggests a general approach for improving the energy efficiency of smartphone apps. An application may contain tens of thousands of lines of code, broken down into many components called subroutines, threads and processes. Eprof maps how much energy comes from each component, representing a new way for researchers to study smartphone energy consumption without using a power meter, an expensive and cumbersome piece of laboratory equipment.

    “This is the first tool of its kind ever developed for modern smartphones,” Pathak said. “We’ve seen around 1 million apps written since smartphones emerged roughly five years ago, but there has been no systematic way for the developer to see how much energy the different components consume. Using this tool, you can see what should be changed to improve energy efficiency.”

    The smartphone power drain is caused by a combination of factors including inefficient programs and software glitches called “energy bugs,” Hu said.

    “Eprof tells you how much energy is spent where,” he said. “This may be due to energy bugs or other reasons.”

    In one case, a piece of advertising software embedded in a free app failed to turn off its connection to the Internet, a function called a socket, requiring another piece of code to resolve the problem and wasting energy. Inefficient power usage is most likely to occur in interactive programs, which are prevalent in smartphone apps such as games and applications that heavily use built-in phone gadgets like GPS, the camera, compass and “proximity sensor.” A particular source of power inefficiency is a phenomenon called “tails.” In principle, after an application sends information to the Internet, the “networking unit” that allows the phone to connect to the Internet should go to a lower power state within a fraction of a second. However, researchers found that after the advertising-related modules finish using the network, the networking unit continues draining power for about seven seconds.

    “The past assumption has been that, whenever you see usage you have power consumption, and when there is no usage there is no power consumption,” Hu said. “This does not hold true for smartphones.”

    The tails are a phenomenon of several smartphone hardware components, including 3G, or third-generation wireless systems, GPS and WiFi, not flaws within the app software itself. However, software developers could sidestep the problem by modifying apps to minimize the effect of tails, Hu said.

    “Any time you use the 3G network, there will be a tail after the usage,” Hu said. “The ad module in Angry Birds obviously uses 3G for network uploading and downloading, while the game itself did not, which is why we blame the ad module for the tail.”

    Battery drain in smartphones has emerged as a fundamental problem.

    “We’ve been hearing about major problems lately in power usage,” Hu said. “A smartphone battery is generally expected to last a day before recharging, but we’re hearing about mysterious instances where the battery runs out in a few hours. Users have been complaining about this on Internet forums.”

    Findings in the paper suggest a way to improve energy efficiency with a technique that has been shown to reduce the energy consumption of four apps by 20 percent to 65 percent. The ultimate goal is to develop an “energy debugger” that automatically pinpoints flaws in software and fixes them without the intervention of a human software developer, Hu said. Eprof mirrors a tool created three decades ago called Gprof, which tracks how much time is consumed by software components.

    “If a program runs for three hours, Gprof tells you how much time is spent on each subroutine,” Hu said. “We’ve taken this to a whole new level with Eprof to show how much energy is consumed.”

    The same researchers first created a model making the new profiler tool possible and presented a paper about the model at last year’s EuroSys conference. The model estimates how much power a smartphone is using while an app is running.

  • Google Display Campaign Optimizer Now Available to YOU

    Last month, Google added the Display Network tab to AdWords and announced the biggest-ever upgrade to its contextual engine, which enables it to optimize Google Display Network campaigns down to the keyworld level.

    Now, Google has announced that its Display Campaign Optimizer is out of beta and available to all through AdWords. It was previously only available to big advertisers with high conversion volumes, but now anyone can use it.

    “The new and improved Display Campaign Optimizer now has the same low conversion requirement (15/month) as Conversion Optimizer,” Google says. “This means you can simply opt-into DCO on any campaign running on Conversion Optimizer and take advantage of the added benefit of more conversions!”

    Google, as it makes a name for itself in the self-driving car space, considers the Display Campaign Optimizer the “GDN’s Self-Driving Car”. The company says that since launching the beta in 2010, it has become one of its most popular automation tools for those who had access to it.

    “In addition to fully automating your targeting and bidding, it uses a variety of signals like context, demographics and interest categories to find additional conversions across our vast AdSense publisher network – all at your desired CPA,” Google explains.

    Google points to a mini-case study of Dale Carnegie, which was able to increase conversions by 308% in six months, using the tool.

    On a semi-related note, Google has been talking about the ingredients of AdWords quality score.

  • Google AdWords Quality Score: What’s In The “Sauce”

    Google calculates Quality Score every time a search is performed for one of your keywords. Google says the score can affect your ad auction eligibility, your keyword’s cost-per-click, your keyword’s first page bid estimate, your keyword’s top of page bid estimate and your ad position.

    Google’s Tanmay Arora posted a big explanation of Google’s “Quality Score sauce” in the AdWords Community forum, offering a bit more perspective (hat tip to Barry Schwartz).

    “First, the relevance of a keyword is not entirely determined by its presence on the landing page or the number of times it’s been mentioned on the landing page,” says Arora. “It’s not about how appropriate we find the keyword to the product/landing page but how appropriate the users find it. In other words, the number of users clicking on your ad when they search for that keyword.”

    “Second, when we add fresh keywords, initially, they’re awarded a historical Quality Score based on their previous performance on Google.com,” says Arora. “And only once the keyword starts accruing statistics, the system then evaluates its Quality Score based on its recent performance. This doesn’t happen dynamically but is a gradual process.”

    Arora talks about one more key ingredient: “We take into account the exact match CTR of the keyword, as it’s a better indicator of the effectiveness of the keyword. (The exact match CTR refers to the number of times the keyword has triggered an ad when the search term exactly matched the keyword.) For example, if our keyword ‘red shoes’ is in broad match, it triggers our ad even for search terms like ‘red shoe’, ‘formal shoes’, ‘horse shoe,’ etc. However, the exact match statistics point out exactly when the keyword ‘red shoes’ triggered our ad and was clicked on by the user when he searched for the exact search term ‘red shoes’.”

    There’s plenty more to be said…

    “Quality Score is an estimate of how relevant your ads, keywords, and landing page are to a person seeing your ad,” Google explains in its AdWords help center. “Having a high Quality Score means that our systems think your ad, keyword, and landing page are all relevant and useful to someone looking at your ad. Having a low Quality Score, on the other hand, means that your ads, keywords, and landing page probably aren’t as relevant and useful to someone looking at your ad.”

    “Suppose Sam is looking for a pair of striped socks,” Google says. “And let’s say you own a website that specializes in socks. Wouldn’t it be great if Sam types ‘striped socks’ into Google search, sees your ad about striped socks, clicks your ad, and then lands on your web page where he buys some spiffy new striped socks? In this example, Sam searches and finds exactly what he’s looking for. That’s what we consider a great user experience, and that’s what can earn you a high Quality Score.”

    Google says it calculates quality score by looking at your keyword’s past clickthrough rate, your display URL’s past clickthrough rate, your account history (the overall CTR of all ads and keywords in your account), the quality of your landing page, your keyword/ad relevance, geograhpic performance and your ad’s performance on a site.

    Google Chief Economist Hal Varian gives a good explanation of quality score in this video from 2 years ago:

    In another help center article, Google discusses how to improve your ad quality by creating “very specific” ad groups, choosing your keywords carefully, including keywords in your ad text, creating simple, “enticing” ads, using strong calls-to-action, testing multiple ads, and regularly reviewing campaign performance.

  • Samsung Has A Mobile Ad Platform To Compete With Google, Apple

    Samsung’s throwing its hat into the ring of mobile advertising and has announced that it’s partnering with OpenX Technologies, a prominent digital advertising firm. By partnering with OpenX, Samsung’s new AdHub Market looks to develop an ad exchange that will be specific to businesses wishing to advertise smartphones and tablets, though don’t be surprised if this also doesn’t eventually include web-enabled televisions.

    Of course, Samsung AdHub Market will be directly competing with Apple and Google in the advertising arena. In the case of Google, I imagine Samsung’s foray into advertising on mobile devices – and Samsung makes many devices powered by Google’s Android platform – could twist a kink or two into the company’s relationship with Google.

    This mobile-specific ad strategy is the first of its kind but that a company has realized the potential value in targeting the mobile market isn’t exactly a surprise given how the mobile market is growing so rapidly. Samsung described the strategy as such:

    The new exchange enables advertisers worldwide to purchase mobile inventory from mobile developers and Samsung Electronics within a closed marketplace environment, allowing easy targeting of desired audiences. By offering Real-Time Bidding capabilities, the exchange enables application developers to maximize their ad revenue by selling their inventory to buyers who compete for each impression in a real-time auction with a minimum floor price. Additionally, the private exchange offers developers superior levels of control, including the ability to approve all demand sources, in order to maintain the high quality of ads.

    It was only earlier this year that Samsung formally launched its AdHub for SmartTV advertising. By partnering with OpenX, Samsung is stretching their advertising umbrella to cover smartphones and tablets.

    “Samsung is empowering both the developer and the advertiser by creating a win-win solution in which the app developer is able to achieve higher revenues and advertisers are able to reach their marketing goals,” said Daniel Park, Vice President of Samsung’s Media Solution Center. “To this extent, we believe Real-Time Bidding can play an important role in motivating all players and we’re delighted to partner with OpenX and use its excellent technology as the foundation for it.”

    Tim Cadogan, CEO of OpenX, added enthusiasm to his company’s new deal with Samsung and added, “The partnership will provide advertisers with access to a new pool of high quality mobile inventory at scale. Helping both publishers and advertisers maximize the value of online advertising regardless of the device on which it is displayed is core to our mission at OpenX.”

    [Via 9to5Google via WSJ.]

  • How Google’s Drug Money Has Been Divided Up

    Yesterday, we reported that the $500 million Google forfeited last year as the result of a settlement with the Justice Department in relation to ads for Canadian pharmacies, would be divided up among the law enforcement agencies involved in the large investigation, as DoJ attorney Peter Neronha (pictured) would hold a press conference in Providence.

    The Justice Department announced that $230 million would be divided among Rhode Island-specific agencies. $100 would go to Federal agencies and $170 million would go to the DoJ’s own Assets Forfeiture Fund. Search Engine Land provides the exact breakdown:

    East Providence PD: $60 million (12%)
    North Providence PD: $60 million (12%)
    RI Attorney General: $60 million (12%)
    RI State Police: $45 million (9%)
    RI National Guard: $5 million (1%)
    US Postal Service: $40 million (8%)
    IRS: $35 million (7%)
    US Secret Service: $15 million (3%)
    ICE: $10 million (2%)

    “The result of this investigation has been a fundamental transformation of Internet pharmacy advertising practices, significantly limiting promotion to US consumers by rogue online pharmacies,” said Martin-Weis, acting director of the U.S. Food and Drug Administration’s Office of Criminal Investigations, in the initial DoJ announcement of the settlement. “This accomplishment could not have been possible without the resourceful commitment of the Rhode Island United States Attorney’s Office, as well as the tireless efforts of our law enforcement partners detailed to the OCI Rhode Island Task Force.”

    Assistant U.S. Attorneys Andrew J. Reich and Richard B. Myrus of the District of Rhode Island, and FDA/OCI Special Agent Jason Simonian led the investigation. As the DoJ discussed in the announcement, the FDA/OCI Rhode Island Task Force is comprised of law enforcement agents and officers from FDA/OCI, the IRS, Immigration and Customs, the Postal Inspection Service, the Rhode Island State Police, the Rhode Island National Guard, the Rhode Island Department of the Attorney General;, the East Providence Police, and the North Providence Police.

    There was also assistance from Corbin A. Weiss, Senior Counsel with the Criminal Division’s Computer Crime & Intellectual Property Section, and Sarah Hawkins, FDA Senior Counsel.

    The investigation involved the tracking of a fugitive to Mexico. He had advertised the unlawful sale of drugs through Google’s AdWords.