Earlier this week, Comscore released some data on Google paid click numbers that caused Google stock to take a nosedive, based on reports from a variety of news sources that this was a sure indicator that Google was vulnerable to a recession.

Today, in a blog post, Comscore gave its take on the data - “Why Google’s surprising paid click data are less surprising.” The main point? That the data that Comscore released may have been incorrectly analyzed by almost everyone who read it:

“The information triggered a flurry of reactions in the media and the financial community that centered on two concerns: 1) a potentially weak first quarter outlook for Google, and 2) an indication that a soft U.S. economy is beginning to drag down the online advertising market.

“While we do not claim that these concerns are unwarranted, we believe a careful analysis of our search data does not lend them direct support. More specifically, the evidence suggests that the softness in Google’s paid click metrics is primarily a result of Google’s own quality initiatives that result in a reduction in the number of paid listings and, therefore, the opportunity for paid clicks to occur.”

I continue to be of the opinion that the drop in click-through rates isn’t a negative thing and is primarily the result of Google’s ongoing efforts to combat click-fraud and accidental clicks to its ads. 

I also think that Google is likely going to have slower growth if the entire economy goes into a recession. Afterall, what media company isn’t vulnerable in a recession?

Popularity: unranked [?]

The news is just out today that About.com’s CEO Scott Meyer is leaving the company.

I have been following About.com for years, primarily because I have been in the business of building content networks and About.com has been around in this space for a long time. At this point, About.com is one of the saddest sites on the Web. I mean, it’s owned by the New York Times Company, one of the most venerable content producers EVER, and what has About.com done in the past few years? It has just about maintained the status quo with its network of Web sites – About.com gets traffic, but that’s about it.

Do you know anyone who loyally follows About.com? Can you name an About.com guide?

About.com should be doing something more, different and interesting. They have traffic, they have a strong parent company, they have a solid brand name, they have expert content producers in every niche…but yet, they are so, well, boring.

From the NYT annual report, courtesty of paidContent.org:

“We estimate that approximately 70% of About.com’s traffic is generated through search engines, while an estimated 25% of its users enter through its home and channel pages and 5% come from links from other Web sites and blogs. Our other Web sites also rely on search engines for traffic, although to a lesser degree than the Web sites of the About Group. “

Yawn.

Perhaps Scott Meyer is moving on in hopes of doing something a little more interesting.

Popularity: unranked [?]

Google’s stock price is dropping, and people are freaking out. Yesterday’s stock price drop was in response to a recent report from Comscore indicating that January 2008 showed only flat growth year-over-year versus a 25% increase in Q4. This apparently is the result of lower click-through rates on paid search ads, and people are worried that this means that Google is exposed to a slowdown if there is a recession in the U.S.

The near-panic is somewhat understandable considering that the overall U.S. economy isn’t doing all that great, the tech folks are scared of another bubble, Microsoft is talking about taking over Google, Apple’s stock is dipping, and everyone is looking for someone – anyone – to believe in. Google has been the obvious choice for a long time, and no one wants the tech darling to falter.

But the thing that I take issue with is the notion that this decrease in clicks is a result of consumers clicking less because of a coming recession. These numbers from Hitwise show that there has been no decrease in overall search traffic to shopping sites – meaning that consumers are still clicking.

And if consumers are still clicking on search links, why would they suddenly not be clicking on paid search ads? Could this be because consumers suddenly have become more discerning about what is a “paid” result vs. what is a “organic” result? No way.

My question for Google would be about how much of this decline comes from the dip in clicks on AdSense partner sites. My bet is that the clickthrough rates have dipped significantly on partner pages. Why? Primarily because of the click fraud prevention that Google has been implementing, as well as the “accidental clicking” measures that Google took back in November.

Remember, this was the second change that Google made to its ads; the company first changed the paid results on its main search pages in April, a move that many advertisers said led to a decline in the number of clicks, but not in the amount of revenue that they were earning.

And this might just be the bottom line. If there is no growth in the number of clicks, but revenue is growing, Google may have figured out a way to increase ROI for advertisers. Like this Businessweek article says, we’ll have to wait for earnings in April to find out for sure.

Popularity: unranked [?]

In October, I posted the Internet Advertising Bureau’s estimates for U.S. online ad revenue for 2007; at the time, they were predicting $20 billion to $21 billion.

According to the numbers released today (which I saw first in TechCrunch), the IAB’s preliminary estimate for 2007 is that Internet advertising hit $21.1 billion in the U.S. – just slightly higher than they initially predicted.

TechCrunch also reports on the estimated numbers from a couple other sources:

Kelsey Group: $22.5 billion
IDC: $25.5 billion

Popularity: unranked [?]

This is happening in Sweden, not the U.S., but still. This is just the beginning.

And this article from PaidContent U.K. says that Britian and Denmark will be next.

“Sweden will this year become the first country where internet ad spending will surpass that given over to TV ads, according to the This Year, Next Year 2008 forecast from WPP’s heavyweight Group M ad buying agency, released quietly last month. The UK will fall just short of the same watershed this year, finishing 2008 with online accounting for 24.8 percent of ad spend, just shy of the 26 gobbled up by TV (in Sweden, it will be 19.5 percent to the web, 19.2 percent to TV). But online will overtake telly in Britain and Denmark early in ‘09, the group predicts.”

Popularity: unranked [?]

I have been thinking about this post from Robert Scoble since I read it yesterday. (Go read it now.) In the post, Scoble makes three pretty strong points:

First,

“In the past few years I’ve had some success building audiences, but I found that that’s not really what’s important. It’s not what advertisers REALLY care about.”

He goes on to ask ”What do they really care about?” and answers his own question by saying that advertisers care about content: that you get content that no one else does, that it causes conversations to happen, that your content gets noticed in the niche that you’re covering, and that it gets the most authoritative links back to it.

His second point:

“It’s not the size of your audience that matters. It’s WHO is in the audience that matters.”

And his third point:

“I never talk…about how large my audience will be. No, instead, we’re talking about who we want on the show for the first week. How can we make the quality better? Who is out there who is doing innovative stuff that we can learn from?…How can we take our art further? How come bloggers never obsess about THAT?”

There is a lot going on in this article, but first and foremost I have to disagree that advertisers don’t care about audience size. All you have to do is look at how advertising is sold online to know that they do, in fact, care very much about audience size. CPM (cost per thousand) is the standard measurement for online media sales. Just check out the advertising pages for CNET or PCMag.com  or CMP (all technology publishing companies). What is the first statistic that’s listed? Unique visitors per month. Second statistic? Unique page views per month.

Having worked for both Ziff Davis and IDG, two of the biggest technology publishers in the world, I know that when technology marketers are buying online advertising packages, the easiest question to ask – and the first one out of their mouths – is size of audience. They always want to know traffic stats and reach. In that market, advertisers do care about how big the audience is. And I think that this is only magnified in the consumer markets (with audiences like the one that Perez Hilton reaches), where there is no way to measure audience except by size.

And (this is still hard for me to swallow even though I’ve believed it for a long time), most advertisers do NOT care about how good the content is. I am just being honest here. Most technology marketers and advertisers do not pay attention to the content, or know how good or not good it is in and of itself. Instead, they measure content “goodness” quantitatively – by how big the audience is that is reading the content, and by who that audience is.

Which leads me to the part of Scoble’s article in which he was dead on accurate - advertisers do care about how targeted the audience is, WHO is in the audience. I believe that this is actually the statistic that matters the most to online advertisers.

Take another look at those advertising pages that I linked to earlier. There are some pretty strong arguments made by the publications that they have the specific audiences that advertisers are looking for. I believe that this trend of advertisers trying to reach the specific individual – with the right title, job function, industry and size of company – instead of reaching just a whole lot of people and hoping that the message has an impact, will continue. This desire to reach the RIGHT audience is why new models of online advertising are emerging, such as lead generation, in which a company will pay $100 PER LEAD as long as they are targeting the right person with their message. Scoble is reaching the audience that his advertisers want to reach – so the size of his audience isn’t as important. And this is why sites like Perez Hilton, which have to rely on audience size (because they are reaching a disparate consumer market) are going to have a hard time selling advertising by any measurement except audience size.

As far as content is concerned, I have already made the point that I don’t believe that advertisers care as much about quality content as Scoble claims that they do. I wish that they did, but I’ve been in this industry long enough to realize that they really just don’t. They like the latest and greatest thing – because it’s good for their brand to be associated with that innovative content – but advertisers aren’t content specialists and just really don’t have a good understanding of quality content.

HOWEVER – and this is a really big however - I think that Scoble is writing from the perspective of a content producer, not an advertiser. And his point is RIGHT ON that content producers MUST CARE MORE about their content than their audience size. Because without good, innovative, cutting-edge content, content producers will never draw the type of audience that they need to get advertisers. Scoble says that the right question is “how can we take our art further?” And I agree that is the right question for a content producer.

Popularity: unranked [?]

Search engine optimization or SEO is the practice of trying to get your Web site to appear higher in a search engine’s organic search results for the keywords for which you want to be listed. The idea is that if someone is searching for a term that is related to your business, you want to be listed at the top of the search results page because that person will be more likely to click on your listing and come to your Web site. Organic search results are the “natural” search results, or the listings that are free. More about organic vs. paid listings below.

There are many factors that contribute to where sites are listed in organic search results – the combination of these factors is called the “algorithm.” Only some of these factors can be impacted with SEO tactics:

• Domain name - If your keywords are listed in your URL, you’ll have a better chance of being ranked higher in the search results for those terms.
• Duration - The longer your site has existed, the higher you’ll be ranked.
• Content – If you have high-quality content on your Web site, and the content matches the keywords for which you’re trying to rank, you’ll have better luck getting listed. It’s also beneficial if your site has frequently updated content.
• Metadata – This is data that allows you to describe your Web site with a title, description and keywords. Metadata sits behind the scenes on your Web page and plays a factor in organic search results.
• Incoming links – If your site has a number of other sites pointing to it, the search algorithms will determine that it’s of higher value and will list it higher in the search results. You will get an even bigger benefit from incoming links if the text that links to you contains the keywords for which you’re trying to rank.

SEO may sound like a relatively simple concept, but there are SEO experts who execute these tactics full-time and trust me – it’s more complex and difficult than it sounds. This post is just meant to be a starting definition of the term, and not a how-to or training guide in any way. For that info, follow the resources links below.

One quick comment about organic vs. paid search listings: All the various search engines display both free and paid listings on their search results pages. For example, if you type the term “SEO” into Google, the results that you get back will be a combination of organic (or natural) search results and paid search results. The screenshot below has the paid search results areas circled in red.

Let me say again that SEO can be fairly complicated and I am just scratching the surface with this definition. I definitely recommend checking out some of these additional SEO resources:

• Wikipedia’s SEO definition
• SEO Chat – articles and insight into SEO
• Search Engine Strategies – Conference series that covers SEO in great depth
• Search Engine Watch

Popularity: unranked [?]

There was a huge protest when Google debuted paid search ads in Gmail. People are still debating whether this is a violation of privacy, or just good business practice.

Personally, I don’t mind too much that Google peers into my inbox to read my messages and serve me relevant ads. Partly this is because I make my money through Internet business models and appreciate the forward-thinking (and money-making) brains behind Google, and partly because I just don’t have any secret e-mail that I want kept private. Yes, for you privacy advocates, I understand (and agree) that we have a right to privacy. But Gmail is a free, commercial service and no one is being forced to use it. So I don’t mind the ads.

Until today when I opened my inbox and found this:

Isn’t Google supposed to be reading my e-mail and delivering me relevant advertising? How is this relevant? Do they suddenly have a camera on me, too? Am I fugly?!

So I couldn’t resist, I clicked the link because I had to find out if I am fugly, and the link took me to the World Of Quizzes, where I had a chance to take the “Are You Ugly Quiz.”

I know you are dying to find out the verdict, but I can’t tell you because the quiz was all a front for some terrible co-registration marketing service.

WARNING: Do not be sucked in by this quiz even to attempt to discover if you are ugly. I actually took the quiz (as part of my research for this post, really!), but I was subjected to AT LEAST 50 ads, and I never saw the results of the survey. I am not exaggerating. I quit before it was over when I started having to click off 20 check boxes saying “no I am not interested” on each page.

It appears that Prospectiv is the source of this site – and the nightmarish number of ads. (At least according to the logo on the quiz pages.) I would love to hear some stats from them on how many people actually become leads as a result of this lead capture methodology – and if anyone that takes the survey actually makes it to the end to find out their results. I am all for creative marketing, but this example seems to take it too far.

Popularity: unranked [?]

This is an update to the Q2 statistics on Internet advertising that I posted awhile back. Today the Internet Advertising Bureau (IAB) and PricewaterhouseCoopers released the Internet advertising numbers for the third quarer. According to the release:

“Internet advertising revenues exceeded $5.2 billion for the third quarter of 2007…a $1.1 billion increase, or 25.3%, over Q3 2006. The results…are nearly 3% higher than Q2 2007, itself the last record-setting quarter. Revenues for the first nine months of 2007 totaled $15.2 billion, up nearly 26% over the $12.1 billion recorded during the first nine months of 2006.”

Popularity: unranked [?]

I just read an article called “The Trust Issue” by David Morgan in the Online Spin blog. In the post, Morgan is referencing a report from Nielsen that shows that consumers don’t trust Internet advertising. Here’s an excerpt:

A global study from Nielsen … found consumers don’t trust Internet advertising nearly as much as they trust traditional forms of advertising. The Nielsen study, based on an online survey of more than 26,000 consumers, asked respondents their perceptions of different forms of advertising. The results? Consumers rated Internet advertising at the bottom when it comes to trust as compared to offline media. Specifically, 63% said they trust newspaper ads, 56% trusted TV spots and magazine placements — while search ads got a trust thumbs-up from just 34%, and banner ads were trusted by just 26% of the respondents.

He goes on to talk about some ways to help change consumer perception about online advertising. It’s a good article, go read it. But as much as I am an advocate for the Internet and Internet advertising, and as much as I would like us to work at changing negative perceptions about the Internet, I actually agree with the consumers – they are right to not trust Internet advertising as much as they trust TV or print.

TV and print advertising is obvious. You can tell – with close to 100% accuracy – when something is an advertisement and when something isn’t. And I think that this is the main reason why Internet advertising got such low marks – not necessarily because the ads themselves weren’t trustworthy (although that is probably part of it), but because consumers are unsure when they are being shown an ad, and when it’s “real content.”

There are so many ways that Internet advertising is fuzzy. Just think of Google, the second most popular Web site in the U.S., according to Alexa. On the Google search results page, ads run at the top and along the sides – and they are clearly labeled – but many consumers still don’t realize that they are looking at ads because the results look very similar to the organic search results. And what is listed in those ads is sometimes misleading. And that is just one example – there are many others. Bloggers are paid by companies to write reviews of their products with services such as ReviewMe. Parked domains gather advertising revenue from direct navigation (when keywords are typed directly into the search bar), the sites seem like they are providing information, but they are really just collecting PPC dollars. Pop-up ads arise from nowhere and refuse to disappear.

I love the Internet and I am a fan of these new and exciting business models, but there just aren’t the same standards online when it comes to the separation of “editorial” and “marketing” – it is sometimes hard to know what is an ad and what isn’t. In my opinion, at this point, the consumers are right to mistrust.

Popularity: unranked [?]