Online Marketing Blog by FoundPages

The Sky is Not Falling on Online Advertising

During economic slowdowns, business spend more carefully, yet need to increase revenue to offset a loss of business from it's existing customer base. So it's always a contradiction to see companies cut back on marketing, when they likely need it the most.

No so for online advertising according to the Rubicon Project. They indicate that more global advertising dollars will actually increase the online advertising market, helping to increase the total amount spent online.

According to their report, millions of dollars are being taken from traditional mediums such as newspapers and television. Why? It's not the usual easier to track and ROI arguement. It's because their researchers have found that online advertising has better reach globally than TV or newspapers.

Their researchers have found that out-of-country visitors make up about 40% of traffic to U.S. based websites, and more than 50% of traffic to international websites come from the U.S. So much for thinking that the traditonal broadcast mediums have more reach.

So with online advertising being lower cost, more effective, easier to buy, and now with better reach, it's easy to see how online advertising will continue to grow, even in the slower growth economy. And guess what? Afterwards, the advertisers will stick with it having tried it.

In other developements, comScore reports that there has been large jumps in traffic to financial websites, due in part to the financial markets. Put that together with what I mentioned above and you know one of the best places to advertise right now during tougher times is online, and on financial websites.

The sky is definitely not falling on online advertising.

Labels: advertising growth, online advertising, Rubicon project

Yellow Pages Advertising to Decline by 40%?

According to a new report from Borrell Associates, printed classified ads will be virtually dead within the next 5 years. And in fact Yellow Pages advertising will begin turning to online versions at a rate of 38%. So although it will lose dramatically on the traditional end, Yellow Pages sales representatives will sell online ads at about the same rate to offset the revenue loss.

This apparently amounts to a loss of $5 billion over the next 5 years, and accounts for 39% of its annual revenue size.

The change is due the fact that online mediums are becoming the most popular with marketers and business owners. Online ads, video and paid search offer more bang for the buck, and allow changes even after the ad is bought. Add in campaign tracking and interactive capabilities, and you can see how online has a tremendous advantage.

Although traditional advertising is learning to switch to online, like the above example with the Yellow Pages, the question is: has the buyer? Yellow Pages online is not used nearly as extensively as Google or Yahoo, even with local search. Most people use online directories ONLY after not being able to find it using a major search engine. And with more and more advertisers understanding the value of being found in a search engine, they tend to ensure they are in Google so where does that leave the directories like Yellow Pages?

Get a download summary copy of 'Say Goodbye to Yellow Pages' by clicking here. It's a massive change that marketers and business owners should stay on top of, to get the most out of their limited advertising budgets.

Keep all this in mind when your Yellow Pages rep calls you next time. The directory industry has over 34,000 local sales reps, so you can bet you will getting a call.

Labels: online advertising, online directories, yellow pages

Google Ad Planner and Google Trends

Online advertising just got even easier with Google's new tools for planning your online media buys. Google Ad Planner help advertisers match what they sell, with the demographic that is most suited for what they sell, on the websites that most likely has that demographic. So what that all means is you/we can easily find and advertise on the websites most likely to be interested in what you're selling

You may think you already know what they are, but with millions of websites out there, it is a lot of work going thru them, and figuring out if this is an appropriate website (and adding more). The info includes gender, income range, and education, that can make your ad planning much easier by being able to target exactly who you want to see your ad. It will also make finding those kind of websites very easy.

This had been a problem with Google's contextual ads before, which were keyword based, but could show on almost any website, unless you spent a lot of time specifying which websites you wanted to show the ad on. Most people didn't, and as a result, the click thru rates for contextual ads were usually very poor, especially compared to search ads. Google Ad Planner fixes that, and you will see contextual ads really start to take off as a result, if you know how to take advantage of it.

Google Trends is related, and pertains more to being able to 'loosely measure' the website traffic of a particular URL. Similar to Alexa and Compete, it uses a 'trend' to give an idea of how much traffic a website gets, relative to another similar website. You may seen Google Trends in another format, as a way to find the most searched keywords for the week, like 'Angelina Jolie'.

With tools like this, you can see why Google is going to continue to dominate online advertising and search engine marketing for the foreseeable future. The others have alot of catching up to do to keep up!

Labels: ad buying, Google ad planner, Google Trends, media buying, online advertising

Future of Print Still Being Threatened

According to a report by Eloqua, entitled 'State of the Marketer', which has been widely reported, print spending will continue to decrease. 55% of 200 U.S. marketers surveyed expect to decrease their print ad spending.

In addition, a large number of these same marketers (90%) intend to continue increasing their direct online ad budgets, with 15% 'radically' increasing their online spending.

Print isn't taking it on the chin only from online spending. Direct mail spend, social media spend and mobile ad spend will be increased.

The report also goes on to say that 64% of marketers believe their marketing programs are more effective now than three years ago. This is so much the case, that marketing budgets are actually increasing, and even in the down market in the U.S., that they will maintain or increase their marketing staff.

This leads me to believe that a) online marketing and advertising is continuing to grow b) because it is more effective c) leading to higher marketing spending d) and more satisfaction with the marketing department.

It's not a foolproof hypothesis, but I bet any of you out there using online marketing (like our clients) know this is likely closer to the truth than not!

Labels: marketing budgets, online advertising, print advertising

Microhoo Deal Dead

Over 3 months after making a $44.6 billion bid for Yahoo, Microsoft has decided that 'clearly a deal is not to be done'. Microsoft's latest bid which upped the total price to $47.5 billion over the weekend, was rejected as inadequate.

So what does that mean? For one, it means I was wrong to expect that a 80% premium would be enough to convince Yahoo. And more importantly, it may mean that both sides didn't want to do the deal - which may be a good thing. Both sides have had over 3 months to get feedback from analysts, employees and even competitors as to the value of the merger, and if the point was to take on Google - they may have both figured out that this might have been a disaster.

From an online advertising standpoint, it will mean:

Google will get even stronger, especially in the short term
Yahoo might get better and be willing to change dramatically because of the scrutiny
Microsoft will have to grow this part of their business themselves, and get better at it.

For us and advertisers, I think this will mean we will have a more vibrant search engine marketing and online advertising industry. More competition usually means more innovation, choices and lower pricing. It will take some time to get there and it may hurt these industry giants but in the longer term, the rest of us should benefit.

One thing is certain. Online advertising and marketing is BIG, and getting bigger. If you haven't already, hitch your wagon to it.

Labels: deal, Microsoft, online advertising, yahoo

Microsoft Buying Yahoo

Well, it's finally happened. After a big dip in the markets, and Yahoo ready to layoff 1,000 employees, Microsoft made its move and offered $44.6 billion for Yahoo. That's Microsoft biggest bet yet, that the Internet advertising business is a large part of their future. Remember they spent $6 billion not long ago to buy Aquantive. So just those two now represent a $50 billion investment in online ads, search engine marketing and online marketing by MS.

You're probably thinking that this is a bid, not a done deal, which it is. I'm talking like it's a done deal because it will be - there is no way that the shareholders will turn this premium done, and there is no one else out there (save Google), who can beat this bid. And the anti-trust hurdles aren't there, because it's Google that needs to worry about that nowadays, rather than MS.

So what does this mean? Well for one, MS has finally admitted that they can't build a significant enough search and online ad business, because they are a band of techies who build software. And Yahoo, who is floundering because they depended more on display ads and portal content (like a media company), needs more Goog-like technical savvy. Does this mean it will work to catch Google? Only time will tell for sure, but I for one don't think so. The culture and mentality is too different. Googles need to be built by tech guys who ALL know they are in the advertising and media business.

Certainly Microsoft and Yahoo will both continue to do reasonably well, given the growth in online ads, search engine marketing and online media. But as for knocking down the big dog in this space - no.

I am hopeful that the combination will make the industry more competitive. Online ad pricing is starting to get expensive, and less effective. More competition will keep innovation up and costs down.

Labels: consolidation, Google, Microsoft, online advertising, yahoo

30% Increase in Online Ad Spend Expected from Local Search and Online Video

According to a forecast from ZenithOptimedia, marketers should expect to see a 30% increase in online ad spend in local search and video. This will help online advertising go over $33 billion next year. And by 2009 online ad spending will account for almost 10% of total ad spend worldwide.

While this is going on, they predict that newspaper ad spend will decline by 29%, with magazines and radio declining as well. Only TV and outdoor advertising will have small increases in the traditional marketing side.

This doesn't go near as far as what Steve Ballmer at Microsoft was quoted recently as saying. He stated that sometime in the next decade, all advertising will be digital. He's predicting that as much as 25% of Microsoft's revenue will come from advertising, and likely with ad-supported Microsoft products.

30% per year is a big number. That means, the spending will double every 2.1 years, which means maybe Microsoft isn't so crazy after all. We use online ads, in addition to helping people use it, and we can honestly say it is by far the lowest cost, most effective medium that our clients use. If you haven't tried it, you'd better, or you might be using a horse and buggy when everyone else is using a new fangled horseless carriage known as the automobile.

Labels: ad-supported, digital advertising, Microsoft, online advertising

Yahoo Stays in the Online Ad Game

Yahoo became the latest Internet search engine to make a big move into online advertising networks. By buying BlueLithium for $300 million in cash, Yahoo counters somewhat similar moves by Google (DoubleClick) and Microsoft (Aquantive).

So who is BlueLithium and what do they do you ask? BlueLithium has a user base of 120 million, and has the 5th largest advertising network on the Internet. In other words, 120 million users visit the website network they have strung together from many hundreds of highly trafficked websites.

What this means to an online marketer, is that the big 3 search engines, are also the big 3 online ad networks for display ads, contextual ads etc. Just as FoundPages has evolved from mostly search marketing to online marketing, the search engines have as well.

Does that diminish search engine marketing? Absolutely not. Search is still usually more effective than any other online marketing and is our calling card. However, online advertising is a natural follow on from search marketing and uses similar talents, tools and assets.

We have found in some cases than contextual advertising is more effective than even search advertising. Contextual ads are displayed beside related articles, blogs, videos and even email (like Gmail). This is similar to traditional advertising whereby an ad is 'placed' articles that will be welcomed by the audience reading the article. eg. ads on 'victoria condos' beside an article on retiring in Victoria.

You can expect to hear more from us (and Google, Microsoft and Yahoo) about online ads - all types of them.

Labels: bluelithium, online advertising, online marketing, search engine marketing, yahoo

Online advertising rates: Rip-off or Deal of the Century?

Just read an interesting article from MediaBrains, one of our online advertising networks, titled 'Online advertising rates: Rip-off or Deal of the Century?'. Basically, it suggests that advertisers have a perception that because online doesn't have printing, paper and distribution costs, it should cost a fraction of traditional advertising. It then argues that online ads should cost the same or even more, because the hard costs are replaced by different costs, such as web designers, search engine optimization, web analytics, real-time reports, spam compliance, servers etc.

Our take on this is that it falls in the category of Deal of the Century. Consider the facts:
- online ad spending is 10% of a typical marketing budget, but has 46% impact (based on time online)
- it reaches buyers with a level of efficiency and measurability that is unmatched
- growth ranges between 30-40% (showing that it works)
- it gets interested buyers to your website better than any other method (more clicks per dollar).

Imagine, advertising that helps brand you, tells you if its working, gets you direct response, and can almost instantly be distributed to a targeted market. It's almost too good to be true. To us, that makes it a steal of a deal.

U.S. online advertising spend will reach $152.3 billion in 2007, according to the Interactive Advertising Bureau (IAB). A significant increase from 2006, so besides the market growth, there has been increases in online advertising rates. Google's rates alone have increased 30% on average with no drop off in demand. It seems the market agrees that it is a steal of a deal.

MediaBrains sums it up with 'The moral of the story is, don’t expect online advertising rates to decline. Rather, make sure you’re getting the best possible results from your efforts. Embrace the medium that opened a new channel for reaching prospects and forever changed marketing as we know it.'

We couldn't agree more. Instead of comparing the costs, compare the effectiveness.

Labels: marketing, marketing ROI, online advertising

Search Engine Marketing to Grow to $18.6 Billion

According to the Search Engine Marketing Professional Organization (SEMPO), search engine marketing is in for an impressive growth spurt, growing to almost $19 billion in 2011. For an industry that didn't really exist until 2001, that fairly impressive growth in 10 years.

We think this is low, and does not reflect all the various spin-offs from search engine marketing, including search based video ads that are coming, display-based ads and keyword driven marketing. Also contextual ads are not included by SEMPO as they are not technically 'search-based'. Online ads are becoming contextual in nature, so even if the ad is not search driven, it is displayed based on what you are reading or viewing which is increasingly driven by keywords.

We're still at the 'beginning of TV' for online advertising. Meaning there are variations we haven't even thought of that are still to come. Speaking of which, there are agencies that specialize in combining TV commercials and search engine marketing. This is very effective marketing, creating interest on a large scale, and then ensuring that interest can be directed to a website via a search.

Sure we're biased but if you only saw a bit of what we see coming down the pike in online advertising and marketing, you'd be impressed too. Expect a sea change in the advertising and marketing industries in the next 10-20 years.

You don't really think Google is giving away free wireless high speed Internet in major cities just for the heck of it do you? Or the iPhone to be the last of its kind?

Labels: online advertising, search engine marketing

Online Video Starting to Sprout for Advertisers

After years of waiting, online video is starting to make a move into online advertising. This is no surprise, other than the time it took Google to finally make it available. Online video advertising has always been a natural for search and contextual advertising, given the richer and more compelling message that video can usually offer. And with the success of YouTube, and Google purchasing this website for $1.8 billion, you had to know video was coming to you, brought to you by Google.

We've been predicting it for as long as we've been in the online marketing business. We've even been on local TV (CityTV with Judy Gibbons) talking about it recently, having been asked about the impact. What they picked up on, is the same as many other pundits - that it will be great for local advertisers, especially those who would not otherwise advertise on TV, due to cost or because they were in a niche where a commercial would just not make sense.

Google is currently piloting AdSense for video so that publishers can sell ad space on their websites to run online video ads that may be of interest to their readers. Adbrite has had something in place for about a year.

According to the Kelsey Group, online video may make inroads where online ads, and even search may not, because of the familiarity that advertisers have with video ads and commercials. It is easier to sell this because it is less abstract than say something like pay per click. In addition, it plays to the vanity factor, which is important to many advertisers - whether or not the ad is even effective.

The only drawback for many will be cost and skill required to produce the ads. Besides the creative, the technology required for a professional online video ad, is beyond what most ad agencies and website designers usually have in-house. There will be line-ups to get this done at a cost commensurate to the cost of running the ad, as online marketing companies gear up for this onslaught. Of course, expect companies such as ourselves to fill that gap :-)

Labels: local advertising, online advertising, online video advertising

Bill Gates Says Future of Advertising is Online

This week, Microsoft Chairman , Bill Gates stated that he will spend the remainder of his employment at Microsoft, focused on advertising and marketing services.

Speaking at Microsoft's annual Strategic Account Summit, Bill Gates said that his main focus before he left his full-time position would be on 'search, buyers and sellers'. While that will only be about a year since he is leaving in mid-2008, his comment, 'That will be my biggest thing', is fairly telling.

'We're saying newspapers will go online, and there will be massive innovation that comes out of that,' he said 'We're saying that TV, the biggest ad market in the world, will completely go online and have the kind of targeting interaction that you only get out on the Web today.'

According to BizReport, the shift to online, with its associated lower costs and enhanced user experience will, Gates said, contribute to the shift of advertising online over the next five years and beyond.

This is important announcement in the online marketing world. First, he is predicting Microsoft's future, and the future is online advertising, particularly search. Not a small change, considering their business has been primarily Windows and Office. And secondly, he is admitting that their future is to catch up to Google.

In my opinion, this is a watershed moment - and one that may define the future of the Internet. Microsoft has $50 billion cash in the bank to make the shift.

Labels: Bill Gates, Microsoft, online advertising, online marketing

Internet Advertising Passes $1 Billion in Canada

It sounds repetitive but it's worth noting that online advertising has grown substantially again in Canada. This time the report from the Interactive Advertising Bureau of Canada said online advertising spending totaled $1.01 billion for 2006, up a whopping 80% from 2005.

Furthermore, it's expected to grow another 32% in 2007, to $1.4 billion. IAB president Paul Gignac predicts that 'it may only take us another 2-3 years to reach the second billion'.

These findings were confirmed in a separate survey by the Institute of Communications and Advertising and Canada Post. This survey of 270 senior marketing executives reported that Internet advertising will grow at the fastest rate, which they are estimating at 25%. Traditional, albeit much larger, is growing at 5.9% according to them.

The U.S. has similar growth trajectories reporting a 23.1% increase over the same period last year from 'interactive agencies', while traditional down there is growing at 4.2%, according to Advertising Age.

The shift is not a fad, having been the case for the past 5 years, with year after year increases in interactive agency revenues and online advertising. What's more important I think is the following quote:

"Interactive is huge," says Chris Weil, chairman-CEO of Momentum Worldwide, a promotions agency owned by Interpublic Group of Cos, via AdAge.com. "If anybody in marketing is not a big part of interactive, they won't be around much longer."

Labels: Canada Post, IAB, Interactive marketing, online advertising

Offline Media Prompts Online Search

A new study by BIGresearch shows that over 47% of respondents are motivated to search online after seeing a print ad in a magazine. That jives with what we know about search behavior and actual search keywords results for our clients.

Although typing in the exact URL does NOT translate well from a print or TV ad, searching for the brand (or variations of it) does. We expect search engines to figure out what the website URL address is. A couple of things come out of this. The first is that search complements other marketing such as print ads, and the second is make sure your website is found under your brand keywords so that you get much more value out of your advertising. To top this off, the research goes on to say that many searchers go on to SHARE their search results, multiplying the effect of the advertising.

For B2C businesses such as retailers, an additional comment comes from BIGresearch in that retailers must realize and understand that online communities, through their content are able to distribute their findings with 'a trust and truth not even approximated by mass media', said Joe Pilotta.

Food for thought in the new (online) world order.

p.s. Another (likely useless) statistic - the global Internet population has grown another 10% last year. Interestingly, the comScore report said Canadians spent the most time online (39 hrs/week). Must be the cold...

Labels: Canadians online, internet population, online advertising, search behavior