PlanWebs Web Design, Online Media & Marketing

Despite earlier speculation that the online ad space may be spared the effects of a downturn, the fallout from the soft economy appears to have reached the online advertising industry, dragging down monetization rates across many segments.

According to the May edition of the PubMatic AdPrice Index, publisher monetization across the board has dropped by 23% during the past month. The reason? The growth in online advertising is slackening, causing ad network payouts to fall.

The index shows that eCPMs for large Web sites (more than 100 million page views per month) dropped 52%, from 38 cents in March to 18 cents in April. Medium Web sites (1 million to 100 million page views per month) were nearly flat, with monetization dropping from 34 cents in March to 33 cents in April. Small Web sites managed to weather the storm, increasing monetization from $1.17 in March to $1.29 in April. Continue Reading »

San Jose Mercury News
The “R” word may be looming over America’s economy, but Internet commerce continues to grow apace, and Google’s chief economist and several analysts, speaking at a forum on the state of the Web economy, believe it will continue to defy broader economic trends. During the conference, Ed Garrubbo, chairman of the Electronic Retailing Association, reported that while the overall economy tanked, online sales jumped 17% in the first quarter of this year. Meanwhile, e-commerce has grown 22% in the past two years.

“The lesson here is that the economic slowdown is not an Internet slowdown,” said Hal Varian, Google’s chief economist. “The Internet is looking pretty strong compared to other sectors.” Robert Atkinson, president of the Information Technology and Innovation Foundation, a tech think tank, predicted that e-commerce would continue to grow as high-speed connections proliferate and e-commerce technologies improve. “The absolute growth has been steady now for several years. The Internet economy is almost counter-recessional,” Atkinson said.

Garrubbo cited data from Forrester Research, which said that more than two thirds of all Internet users have bought products online; 53% of all computer and hardware sales take place online along with 30% of sales of toys, video products and auto parts. In fact, Garrubbo said that the looming recession may actually contribute to e-commerce growth.

BusinessWeek
Microsoft CEO Steve Ballmer has said the company is prepared to walk away from its $44.6 billion bid for Yahoo, but BusinessWeek thinks Ballmer is bluffing. The business journal says Microsoft needs Yahoo, as first quarter results again exposed the persistent downward trend in the software giant’s online services division.

As Brent Thill, Citigroup’s director of software research says, “it wasn’t a spectacular quarter by any means,” especially in online services, where losses widened to $228 million. The division, which relies almost exclusively on online advertising, went a further $43 million into the red from a year ago, although revenues grew 43% to $843 million. Yahoo, meanwhile, reported first-quarter sales of $1.35 billion.

Ballmer said Yahoo’s results, which slightly beat analysts’ estimates, won’t cause Microsoft to raise its offer. But Microsoft has to make this deal soon-if it’s going to make it at all. As UBS analyst Heather Bellini wrote in a research note, “Microsoft must get this acquisition right to remain relevant in the Internet age,” because as Thill says, “There’s still a runaway train they’re trying to catch (Google). And (Microsoft and Yahoo) are two little trains trying to hook up.”

Hamlet Batista
As Hamlet Batista notes, a solid link-building strategy involves equal parts link-baiting and link-conquesting–and he delves into the pros and cons of each tactic.

“Chasing links is the traditional way of building links,” Batista says. “This includes things like submitting your site to directories, creating press releases, submitting articles and comments with your site link and anchor text, and other strategies.”

Aggressively pursuing links gives you the ability to pick and choose which kinds of sites you get them from–meaning you can stick to high authority, highly relevant Web sites and reap the benefits. The only con is that it can take hard work–and it isn’t a tactic that you can readily outsource, “because it requires personal rapport,” Batista says. “It necessitates having your own voice and building a connection with representatives of other sites. Clearly, it also takes a whole lot of time and patience.”

On the other hand, getting people to link to you without asking them is the idea behind link-baiting. This tactic is based on developing exciting, interesting content–be it an article, a video, a widget–and enticing the influencers in your niche to pick it up.

“When successful, a good link bait will yield a massive amount of links,” Batista says. Outside of crafting the content, link-baiting is less labor-intensive and more cost effective, and your link profile will be flush with lots of different kinds of anchor text and many different Web sites. The cons stem from the fact that you aren’t in control of where the links come from, or what they’ll look like (you’re aiming for targeted, keyword-rich text, aren’t you?), and there’s no guarantee that you’ll be successful.

GigaOm
In a memo to employees about the Yahoo saga, AOL CEO Randy Falco underlines the problem facing social networks: “But despite drawing large, engaged audiences, other social networks have not been able to make the experiences relevant to users and marketers alike.”

Falco hits the nail on the head: social nets want marketers to foot the bill for content that’s specifically tailored to an experience where the user is completely disengaged from marketing messages. Falco thinks that by combining Platform A and Bebo, AOL could fix the problem.. But lumping another company into AOL’s portal and then using an ad network, even a highly targeted one, to serve it ads won’t solve the social networking question. Someone still needs to come up with a way to make social networks more relevant for advertisers.

It’s more than likely going to be a technology solution from a company like ScanScout, whose technology is able to break up, say, a video into tiny segments that it lumps into advertising categories, making sure the piece of content is both advertising-friendly and relevant. Social media sites need technologies like this to extract ad friendly inventory for reticent advertisers.

The Economist
Social networking is definitely the next big thing, but it’s not necessarily the next big moneymaker. Like Web-based email before it, social networking will evolve as a feature tied to the Web portal experience. However, like email, it’s not (really) a business.

Meanwhile, as media companies bid up the value of social networks like MySpace, Facebook, and Bebo, the industry is still searching for a suitable revenue model. Recently, Google co-founder Sergey Brin admitted that “social networking inventory as a whole”–which includes its own offering, Orkut, as well as a search advertising deal with News Corp.’s MySpace–was performing worse than expected. Facebook has done even worse. The company recently admitted that it “simply did a bad job” with Beacon, an advertising program that tracks online activity and informs users of their friends’ purchases or actions taken on third-party sites.

The bigger question is whether users should really have to visit a specific Web site to make use of those connections. As Forrester Research analyst Charlene Li said in a recent report, “We will look back to 2008 and think it archaic and quaint that we had to go to a destination like Facebook or LinkedIn to be social,” because social media services “will be like air. They will be anywhere and everywhere we need and want them to be.”

by Mark Walsh
Bullish financial projections released by Yahoo Tuesday could lead Microsoft to boost its original $44.6 billion bid for the Web portal, according to Internet analysts. That was certainly Yahoo’s intention in disclosing a plan detailing Yahoo’s financial and strategic goals–initially presented to investors in December 2007–to back up its claim that Microsoft’s proposed offer “substantially undervalues” the company.

Joe Mandese
HOLLYWOOD, Calif. — The Internet has already surpassed television based on one significant statistic–the number of gross advertising impressions served. And if online publishers can figure out how to properly measure the worth of those impressions, they ultimately will overtake television in an even more important statistic: share of marketers’ advertising budgets. That was the conclusion of Gian Fulgoni, executive chairman and co-founder of comScore, during a keynote here at the opening of the OMMA conference Monday.

Information Week
Later this month, Google will begin weighing new factors in determining its search Quality Scores, which influence the placement and pricing of ads on across Google’s vast network. Excessively large Web pages, or Web pages served by slow servers will cost more to advertise. Also, ads leading to landing pages that take a long time to load will perform worse than ads linked to easier-to-load pages.

In a blog post, a Google AdWords team member explained the changes. “Interstitial pages, multiple redirects, excessively slow servers and other things that can increase load times only keep users from getting what they want: information about your business. Second, users are more likely to abandon landing pages that load slowly, which can hurt your conversion rate.”

In an email response, Google said the changes are only relevant to advertisers and would not influence organic search placement.

TechCrunch
Yahoo is preparing to launch a new search platform that would allow third parties to modify results by adding images, data and links. Listings can be modified, but the order of results cannot. Codenamed “SearchMonkey”, Yahoo execs say the effect is supposed to be similar to that of Greasemonkey, a Firefox add-on that lets users see modified versions of Web sites. Similarly, SearchMonkey would be a series of search add-ons that users could turn on and off (though some will be turned on by default).

Open search would certainly open the door to more information for a given result. Yelp, a user generated local business review site, is one of the launch partners. Its listing will now include a photo, review information and the address and the company’s contact information.

This is yet another example of Yahoo’s “open” push. Third parties would benefit from modified search results by driving more traffic to their sites, and more calls to their businesses. When the platform launches, anybody will be able to modify and promote any Web site, adding reviews, information, video, etc.