Wednesday, July 26, 2006

Online Gambling Busted

The CEO of BetOnSports was arrested last weekend on 22 counts of racketeering, money laundering, etc... I find this extremely interesting, especially in terms of my little world in search.

Since the inception of paid search, analysts, pundits, and insiders have talked about how big paid search could be if the "vice" verticals (sex, gambling, booze, etc) were monetized significantly.

With the arrest of the head of the biggest gambling site in the world, I wonder, "what's next?" The US gov't is using a 1961 law making it illegal to use the US Mail for purposes of gambling. The

Google Opens Its Komono

If you haven't noticed, Google has started to expose "invalid clicks" in its ad words interface. This is a big deal, as it's a big effort on Google's part to give it's advertisers some insights into potential click fraud.

Go check it out...maybe the Google moniker "Be nice" really is true....

Tuesday, July 25, 2006

Advertising on Instant Messaging and SMS

I have heard more "hype" in the last two months about IM based advertising models. VC's are throwing money at anyone with a business plan containing IM or SMS revenue models.

The basic idea for many of these businesses is to insert ads (marketing messages, offers, etc...) into IM/SMS conversations based on demographics, or possibly even "keywords" that are used in the conversation.

I just don't get it. This sounds more intrusive than even pop-ups or spam to me.

I heard Kanoodle (a second or third tier search engine) has created such a platform/product for MSN, and then there's these guys too. Who knows, maybe "these guys" are really Kanoodle in sheeps clothing. Check it out and let me know why oh why this is a good idea.

IMing is free for consumers today, and there's so many free platforms (Google, MSN, AOL, Yahoo, Skype, etc, etc...), I can't imagine why consumers would tolerate such an intrusive type of marketing.

Secondly, with SMS, the consumer is already paying for a data plan (SMS) via his/her carrier. I pay $30/month! Why would I allow Cingular to insert ads into my text messages when I am already get raked over the coals with my monthly fees?

A little help here...please....!!!

Friday, July 21, 2006

Good Industry Stats

I am here in Keystone, Colorado attending the Search Insiders Summit. The keynote this morning was given by Chris Sherman, one of the editors on Search Engine Watch. His talk was informative – he sited some great stats that I will reproduce here:

A paltry 10% of consumers say they "trust" ads.

Percentage of consumers who say they "mistrust" ads:
94% mistrust pop-ups/spam/telemarketing
79% mistrust infomercials
66% mistrust SEARCH ADS!!! What? How could this be?
53% mistrust tv/radio

Jupiter research says that:
83% of search advertising spend goes towards SEM, YET
87% of the clicks go to organic search

More later...more speakers to listen to...

Tuesday, July 18, 2006

Some Google Stats and Additional Google Features to Be Added

Recently, Google has added a number of new features, including:
  1. Keyword Planner
  2. "New and improved" Traffic Estimator
  3. New and Improved Reporting,
  4. The ability for advertisers to bid content and search separately

In the near future, Google will be adding the following features for advertisers:

  1. Developer sandbox (7/1),
  2. Zero-impressions
  3. New AdWords features (position preference, ads scheduling, timezone, local business address batch operations)
  4. Revised quota system
  5. Application token (api calls must include developer token and application key)
  6. Localization

AdWords Product/Feature Roadmap
  1. Position preference (in API in 3Q)
  2. Ad Scheduling (day parting, in 3Q)
  3. Budget controls (accelerated delivery, monthly budget, customer periods (in 3Q)
  4. Average target CPC Bids (campaign level, in end of 3Q; max clicks available today)
  5. Adwords Editor (beta for 3 mos.)
  6. Local time zone (end of 6/06)
  7. MCC alerts

Google Netowork and Site Targeting Updates

Three Billion daily pageviews across 1000s of sites

  1. Product Roadmap: IP-based reach (in Q3),
  2. Attribute targeting (in Q3),
  3. Different ad formats (in Q3/Q4),
  4. CPA of some inventory (in Q4), S
  5. ite-level reporting (Q3),
  6. CPC site-targeting (Q3)
  7. User targeting available on content network
  8. Site targeting at vertical (page-level) and home-page-level (in beta)

Friday, July 14, 2006

How Search Engines Rank

I work for a company called Efficient Frontier. We manage almost $250 million in paid search advertising - by some accounts that's about 1.5% to 2% of all US paid search. Not too shabby. So, we've got a pretty good handle on traffic, we have lots of aggregated data, and we get a good overview on what's happening with conversions.

In the month of May, here's how well various websites performed - in terms of driving transactions (the ultimate measuring stick).

  • Search Engines rank this way: Google, AOL, MSN, Ask, and then Yahoo! (kind of surprising, huh?)
  • Google content is about a 1/4 as effective as Google search (not too surprising, but maybe even higher than I would have thought)
  • Shopping engines are very effective in delivering good clicks (remember, these are syndicated listings on their page)
  • Other comparison engines also work very well (kayak etc) on syndicated ads

Thursday, July 13, 2006

Google and Yahoo! in Europe

I came across some great data on the progress of the Google and Yahoo in Europe that is worth passing along:

  • A full 42% of Google gross revenues are from outside the US with Europe representing the most of that.
  • The second quarter is seasonally slow in paid search - Q2 suffers from a deeper seasonal slow down in Europe while Q1 is, far and away, the strongest quarter of the year in search spending.
  • The travel, finance, and retail categories make up a larger percentage of total search spend. Of those, travel and finance categories have significant seasonal strength in Q1 and a lull in Q2.
  • As a result, the upside to existing Google estimates, which range from 5-11% quarter/quarter growth, is not likely to come from Western Europe. Last year Google was only able to acheive 10% quarter over quarter growth in Q2, with the US and International at the same quarter/quarter growth rate.
  • Yahoo Panama is lagging in Europe even more than in the US. An early 2007 shift towards a click-yield monetization effort is realistic for the UK and other major European markets, but not in 2006.

Your PPA Kro take away: Europe has growth but for Google to grow like they have, it's going to need to come from somewhere else - ie Asia.

Wednesday, July 12, 2006

After All These Years, There's Still HUGE Upside in the Local Search Space

For the last three years we have all been talking about how the pot of gold at the end of the "search rainbow" is to conquer the local market - to somehow attract and effectively monetize local search traffic.

I read the article below and was shocked to find out that today, only 14% of local Yellow Page advertisers are advertising online. Even more shocking was that by 2010 that percentage will only increase to 30%!

Whomever can effectively and seemlessly allow for small businesses to advertise on keywords in the SHORT TERM (ie before 2010) will big winner. Web Visible? Or some other, currently unknown, player? There's still a lot of gold at the end of the search rainbow!!!

Now for the article from the Wall Street Journal:

Yellow-page publishers are searching for ways to stay relevant in a new-media world

By JULIA ANGWIN July 10, 2006; Page R5 WSJ

When Jackie Mitchell was launching her doggie day-care business in Tacoma, Wash., two years ago, she spent most of her limited advertising dollars in the local yellow pages. Now her business, Bark Central, is booming -- but she says more customers have found her through her Web site than through the phone directories.

This isn't the usual tale of new media overtaking old media, however. In a new twist, Ms. Mitchell is paying the nation's third-largest publisher of yellow pages, R.H. Donnelley Corp., to both run her Web site and distribute online ads on search sites like Yahoo Inc.'s.

The yellow pages are finally getting Internet-savvy. After years of fruitlessly trying to sell ads on their own Web sites -- which get relatively few visitors -- many of the directories have begun reselling ads to their customers on bigger, high-traffic Web sites such as Yahoo and Google Inc.
"We're media agnostic," says Simon Greenman, senior vice president of digital strategy, innovation and products at R.H. Donnelly. "Our strategy is to connect our customers with their customers wherever they may be."

Clicks by the Bundle

Only about 14% of U.S. print yellow-page advertisers -- about 600,000 -- are currently purchasing online ads from the yellow pages as well, according to estimates from Kelsey Group, a local-advertising research firm in Princeton, N.J. By 2010, the number is forecast to hit 1.2 million advertisers, or about 30%.

One reason for this slow growth is the relatively low traffic that the yellow pages attract to their Web sites. The most popular yellow-pages site, Verizon Communications Inc.'s, attracted 17 million visitors in April, according to comScore Media Metrix, an Internet measurement firm based in Reston, Va. By comparison, Yahoo attracted 128 million visitors and Google attracted 108 million visitors to their search pages during the same period.

So the publishers of the top directories -- including AT&T Inc., BellSouth Corp., Verizon and Donnelley -- decided to offer small businesses a service that would allow the businesses to get their ads seen by consumers using those high-traffic sites.

The service, called click packages, works like this: The yellow pages, on behalf of advertisers, bid on search keywords like "carpet cleaner" in online auctions. The top bidders' ads -- typically a few lines of text -- then run on the right-hand side of a page with results of a search for the keyword. The advertiser pays a flat monthly fee for a guaranteed number of customer clicks on those ads, which link to the business's Web site. So the yellow pages will keep bidding for various keywords until the guaranteed number of clicks is reached. And the ads stay up as long as it takes to generate those clicks.

Micha Anderson, president of Chastain Chem-Dry, a carpet-cleaning service in Atlanta, spends $1,625 a month for 750 clicks from BellSouth -- meaning BellSouth will keep bidding on keywords until at least 750 people click on Chastain Chem-Dry's ads and land on the business's site each month.

BellSouth buys ads on Web sites including, InfoSpace Inc.'s and, and, which is owned by IAC/InterActiveCorp. BellSouth keeps a percentage of the monthly fee depending on how many clicks are purchased.

Mr. Anderson says he doesn't pay attention to what keywords have been purchased on his behalf. He just knows that the traffic to his Web site has nearly quadrupled since the program began. "I don't know what exactly are the mechanics of how they drive the traffic for us," he says, "but it's effective."

High Cost of Convenience

Charles Stubbs, chief executive of, a joint venture between AT&T and BellSouth, says, "Small-business people are busy people and they don't have time to spend two hours a day to manage their online advertising accounts."

There's a price for that convenience, however. Kirsten Mangers, the chief executive of WebVisible, the company that manages the bundle-of-clicks technology for Donnelley and others and trains sales representatives to sell those clicks, says that "if the average cost per click is 50 cents or a dollar, [the customer] may [actually] spend $2 or more for a click," but they are paying for the yellow pages to manage their accounts.

WebVisible, a unit of Atlanta-based SME Global Solutions Inc., buys between 300 and 600 keywords for each business and uses proprietary software to manage the advertising campaigns. Since some clicks cost more than others, WebVisible manages the bidding to allow its clients to offer flat-rate click packages.

Mr. Anderson of Chastain Chem-Dry pays top dollar for his clicks -- about $2.17 per click, based on a monthly fee of $1,625 for 750 clicks. The top bid recently for "carpet cleaner" on Yahoo was $1.20 per click, according to information available on Yahoo's Web site.

Yellow Book USA Inc., the leading independent publisher of yellow pages, says the markup of clicks can inflate costs for small businesses. "In the bundle-of-clicks model, there is an incentive for the middleman to maximize his profit at the expense of the advertisers," says Gordon Henry, chief marketing officer of Yellow Book USA.

Yellow Book says it's in the process of rolling out a product called WebReach, which won't charge a flat fee to advertisers. Instead, advertisers will pay according to the price of the clicks purchased -- so barbers will likely pay less per click than mortgage brokers. Mr. Henry adds that WebReach will only purchase ads on the top-tier search engines -- Yahoo, Google,, Microsoft Corp.'s and Time Warner Inc.'s -- unlike other yellow pages, which purchase across as many as 30 sites.

Mr. Henry says Yellow Book will still charge an undisclosed management fee for managing the account. "We're taking a small fee to track the advertising, explain it to the advertiser and take that worry and hassle out of his hands," he says.

Verizon also offers a pay-per-click account that charges according to the price of the click instead of a flat rate.

Building a Site

The click packages aren't the only services the yellow pages are offering. Most also will design and manage a Web site for small-business advertisers -- many of whom don't have an existing Web presence.

BellSouth designed a three-page Web site for Chastain Chem-Dry, which includes a complete listing of its services, locations and contact information. It also manages the site.
Donnelley designed and manages the Bark Central Web site. Ms. Mitchell pays Donnelley $100 per month, which includes a clicks package of 240 guaranteed clicks and the design and management of the site. The Bark Central site includes contact information, a list of services, hours of operation, rates and requirements like vaccines. Customers also can send an email or make a reservation through the site.

The Direct Route

Some small businesses, however, say they don't need help from the yellow pages to make a connection.

Michael Jimenez of San Rafael, Calif., says sales at his upholstery business have risen 13% in the past 18 months. He credits the ad space he buys directly from Google. His ads run alongside some of the search results in Google.

To buy those ads, Mr. Jimenez bids on a bunch of keywords, such as "upholstery," "custom upholstery" and "upholstery shop" on Google. If his bid is among the top in a certain category, his ad will show up alongside the results for a search on that word. He only pays when someone clicks on his ad and lands on his Web page, Mr. Jimenez says he pays an average of $50 per month for clicks.

The small-business owner says Yahoo approached him about nine months ago with an offer to buy keywords. He now spends $15 a month with Yahoo, which bids on keywords such as "Marin upholstery" on his behalf.

Mr. Jimenez says about 70% of the traffic to his Web site now comes from Google and Yahoo. And business has increased so much that he has been having a hard time keeping up with the volume.

Executives at the yellow-page directories say they aren't worried that too many companies will follow in Mr. Jimenez's footsteps. "The vast majority of small businesses have neither the time nor awareness to effectively market their products on the Internet," says Bill Hammack, an industry consultant and former executive at Donnelley.

Mr. Jimenez still pays about $600 a month for several listings in the local yellow pages, which includes the online yellow pages. But he says the online yellow pages haven't yielded much traffic.

"The thing that keeps us from pulling from yellow pages," he says, "is that our clientele in Marin County is an older clientele and they still use the yellow pages."

Tuesday, July 11, 2006

Pay Per Connect

A friend of mine, Lincoln Silver, of Flycast, and fame, has landed a new gig at a company called FREE411.

FREE411 seems like a great idea. Like the web - it's an advertising-supported business model (aka Google for the phone). You dial 1-800-FREE-411 from any phone and get free directory service. If you are calling for a business, Jingle Networks (aka FREE411) will present you with a quick ad to listen to based on the type of business your calling. Additionally, you may be offered a "special" or a coupon from the advertiser.

Here's an example: you're calling for the local number for Domino's Pizza. FREE411 serves you a quick ad from, say, Round Table and RT offers $5 off for ordering from them. You comply and get connected with RT instead of that yucky 'ol Domino's. Sure, if you like, you can stick with Domino's but why turn down the $5?

Here's another example: someone calls up and asks for a Real Estate Agent (or a Loan Broker) in Palo Alto. Before she gets the number, she hears an ad for LendingTree. FREE411 could drive the caller to press 1 to receive a text message with the number she requested and a unique URL for LendingTree to be used for tracking purposes.

Apparently pay-per-connect is a hot, fast-growing space. is up to 3.5 million unique users per month, which netted around 12 million calls and they are projecting to be at 10 million uniques/30 million calls per month by eo 2006 .

FREE411 is seeing 5-15% response in some categories and they claim a strong branding element to the advertisers as well.

Check it out!

Monday, July 10, 2006

Remnant Inventory on TV for Advertisers

Here's a company that's selling remnant inventory on second and third tier cable channels in non "primary" markets (ie North Lake Tahoe, Berkeley, etc). Check out Spot Runner and see what they are up too.

A couple of things to check out/think about specifically:

1. Look at the map on the home page to see what's available in each geo.

2. Think about what Google, YSM or MSN could do with this type of offering in combination with their PPC ads. Cross media optimization is the holy grail for advertisers. Google has been talking about it, but I haven't seen anything in the market yet.

Perhaps Spot Runner is an easy acquisition for one of the big three.