Promoted Tweets are a form of advertising on Twitter, in which an advertiser pays Twitter to display tweets at the top of a Twitter search results page or even within a user’s tweet stream.

These ads will now also appear at the top of the relevant Google real time search results page – when a user filters searches to show only “Latest” results.  However, these ads or Promoted Tweets as they are called, will not show up on a regular Google search results page.

Google realtime search results showing Promoted Tweets

While this is the first time that Google has ever displayed ads from another network on their search results page, it may not be the last. According to Danny Sullivan of Search Engine Land, who first blogged about these ads, Google has issued a statement saying, “Twitter is pioneering advertising against short-form content, so it was a natural starting place for us. We’re certainly open to continue exploring other advertising models and systems, including those we might develop in-house.”

The revenue generated by these ads will be split between Google and Twitter on a 50/50 basis, according to sources at Twitter.

Other Social Networks To Follow Suit?

If Google is true to its word and starts allowing ads from other networks, could we soon see more real time ads from Twitter, and then maybe Facebook ads and even promoted stories through Digg Ads?

While such initiatives would see a short-term increase in revenue by monetising products that previously weren’t monetised, they’re rather unlikely to really happen except in situations where Google AdWords has failed to monetise a service.

The appearance of Promoted Tweets on real time search results is probably a result of the original deal that Twitter forged with Google. When the deal was forged, Google was in a race against Microsoft to launch a real time search product. Twitter most likely used their favourable bargaining position to require Google to only show ads from Twitter alongside real time search results that were pulled from the social news site. The absence of regular AdWords ads on these pages, when compared to Google search results pages for all other time-range searches corroborates that this was the most likely scenario.

Twitter ads on real time search / AdWords ads on past 24 hours filter

In effect, people visiting a website with the intention to buy are more likely to do so from a sponsored link than from an organic link, and thus more conversions are expected from sponsored links.

This pattern may vary to some extent, depending on the type of search being conducted.

For instance, searches related to news, sports or entertainment, which are not very likely to end in a purchase transaction may originate from an organic link.

On the other hand, searchers looking to purchase specific items are more likely to be attracted to a paid links, and a conversion is more likely to occur when a price tag or model name are available. According to Nick Drew, a researcher who works for Microsoft Advertising, this is largely down to the searcher’s frame of mind.

Someone looking to buy a product is likely to be drawn towards selling phrases such as “buy now”, “sale”, “discount” and prices, which are usually found on sponsored links, as again general information that can be found on organic results. Such a person would not find an organic result from a site such as Wikipedia very helpful when buying.

Conversely, someone looking for information will most likely be turned off by the salesy language on sponsored links, and will instead focus on the organic search results.

Both comScore and Nielsen’s research has found that in any given category of searches, a paid link is more likely to end in a purchase than an organic link. Hence, it is of great importance for marketers to promote their brands through sponsored ad listings.

The bid simulator can be accessed in the new AdWords interface by clicking on a CPC value to adjust it, or clicking on the tiny graph-like icon next to the current bid value, as shown in the screenshot below:

Accessing AdWords’ bid simulator

When the tool opens up in a new layer (on the same page), it shows a simulation of the estimated clicks, cost and impressions that particular keyword will get if the bid values are increased or decreased. The tool also includes a graph to illustrate the change in number of clicks as CPC changes.

AdWords bid simulator in action

Documentation provided by Google describes the function of the Bid Simulator: “It doesn’t predict the future, but it estimates the click, cost and impression data that your ads would have received over the last seven days had you set different keyword-level bids. ”

The tool does not work for all keywords, and the graph does not show up for all keywords that have the bid simulator enabled. Search volumes are the determining factor for whether or not the simulator and the graph within the simulator are enabled or not.

According to Google, “The bid simulator requires historical information in order to provide click and cost data for different bids. If a keyword didn’t receive many clicks in the last seven days, it isn’t possible to simulate clicks and cost.”

Values for the bid simulator only apply to the search network – that is, Google search and other search partners.

Microsoft Live Search had been losing market share in the last quarter of 2008 and first quarter of 2009, but Bing seems to be changing that situation now.

Reports from Efficient Frontier show that ROI received by advertisers has gone up by 43% for Google, and by 24% for Microsoft Bing, but has dropped by 8% for Yahoo!

This is in spite of the fact that the over all expenditure by advertisers on search marketing has gone down by 21% compared to the same time last year.

The amount that advertisers spent on Bing has gone up by only0.1 percentage points compared to last year, but has gone up by 0.7 percentage points when compared to the first quarter of 2009.

In the second quarter of 2009, Bing received 4.5% of ad spend of the clients of Efficient Frontier, while Yahoo! received 20.5% and Google received 75%. At the same time, Bing had 4.1% of the total clicks while Yahoo! had 24.3% and Google had 71.6%

Bing has been doing especially well in the travel and financial services sectors.

The report by Efficient Frontiers also shows that the amount which its medium spenders (between $50,000 to $2,00,000 per month) are spending on SEM has gone up by 5% in Q2 of 2009, compared to the amount spent at the same time last year, but small advertisers (below $50,000 per month) spent only 59% of what they spent last year, and large advertisers (above $2,00,000 per month) spent 78% of what they spent last year. Over all, the budgets have gone down by 21%.

On the other hand, another SEM company reported that large spenders (over $1 million per year) spent 18.77% more than they did last year, while small spenders (below $1 million per year) spent 25.33% less than they did last year.

comScore reports that Microsoft had 8.4% of market share soon after the launch of Bing in June 2009, compared to 8.02% in May 2009. but that figure is still less than the 9.2% which they had in June 2008. This may be the effect of the recession though.

The latest reports received from users seem to be very favorable for Bing.

The reports sent in last week, generally gave the impression that this new effort by Microsoft, was nothing great, and Microsoft would not be able to hold its own, against Google in the search engine market, no matter how hard they tried.

In fact one enterprising blogger even coined an acronym for Bing. ‘But It’s Not Google.

The more recently received comments and reviews are a complete turn around, when compared to these earlier reports.

Now people are not only appreciating Bing, and saying that it is good, some of them are even saying that it is better than good old Google and they may now switch loyalties to Bing. A few others who are not quite so effusive in their praise, still grant that Bing is as good as Google, and the only reason they will continue to stick to Google is habit.

It is not to be expected of course that Google will or should take these comments lightly, and continue to rest on past laurels. Maybe this is the wake up call they need to innovate and further improve their own search engine.

As the name of this feature clearly suggests, ads will now be delivered to users depending on the interests of the user.

User interest will be judged based on Google’s previous interactions with the user. This will not be limited only to direct interaction with Google Search and Google Software but will also extend to tracking sites that the user visits frequently.

Each users will be segmented under one or more categories, based on the web pages visited. Users will be able to view, edit or opt out of the interest categories through the Ads Preference Manager (shown below), which is available on most AdSense ad containers.

AdSense account holders will not need to change their ad code but they will need to make some changes to the privacy policy of their website in order to use this new facility. Google requires AdSense publishers to make all necessary changes to the privacy policy need to be completed before the 8th of April 2009. Publishers will have to make these changes in accordance with the laws of the country they operate from.

Google has made a point of addressing privacy issues that will definitely arise as a result of this announcement. They say they will continue to use user information in accordance with their privacy policy, i.e. they will not use the information to identify the user personally or display ads based on personal or sensitive information unless the user has opted in.

Opting out of the Interest-based Advertising service is not as obvious as Google makes it out to be. This could turn into a point of contention with privacy advocates.

Publishers will obviously benefit from this service as they will be able to better suit their website by increasing the value for advertisers. If the beta test phase of this service goes well, it will be expanded to others later in the year.

Microsoft adCenter Analytics was designed with the intention of providing website owners with detailed reports of the activity of their users and also to let them track the performance of their advertisements.

While the service has been closed with immediate effect to new customers, it will continue to be available to existing users till the 31st of December 2009. On that date, all hosted services, data collection and technical support will cease. Those who wish to save any historical data have been advised to download reports through the export feature before that date.

The Microsoft adCenter Analytics team claims that the aim of undertaking this project was to fulfil the needs of small and medium size self-service customers, and to evolve a strategy for web analytics. They claim to have achieved this objective. Their blog states, “It enabled us to most confidently determine that we can be of most value to advertisers and publishers by offering a tailored solution that meets more specialized needs.”

The adCenter Analytics blog will now be called ‘Insights and Analysis’ and it will focus on research and best practices helping online marketers navigate better and improve market optimisation.

Strangely, Microsoft has suggested some alternative analytics services that their clients can now turn to, and the list includes Google and Yahoo!

Two of these new products are meant for display ads while the third is for sponsored search ads.

Search Retargeting

Search retargeting allows advertisers to display ads to their target audience, based on the user’s search activities. For e.g. when a user types in the keyword ‘Sandals’, the advertiser can display ads for different types of footwear, encouraging the user to make his purchase online.

According to reports from the University of Phoenix, Search Retargeting allowed them to reach their targets at 50% lower costs than required in regular display retargeting efforts.

Enhanced Retargeting

Enhanced retargeting enables the advertiser to put up dynamically generated display ads across the entire Yahoo! network, depending on the user’s activities on the advertiser’s site. For e.g. when a user visits a page on the Yahoo! network, looking for details about flights from one destination to another, the advertiser can make a personalized offer to that customer for that specific flight.

A leading online travel company reported a 230% increase in the total bookings and a 651% increase in the click through rate with enhanced retargeting, compared to the traditional retargeting methods.

Enhanced Targeting

This is a combination of ad scheduling and demographic targeting within search. With this product, advertisers can control where and when the ad is shown, at the campaign as well as ad group levels. They can decide the time of day and days of the week when ads should appear. Advertisers can also decide the demographics (gender and age group of the user) that their ad should reach. The advertisers will be able to vary bids according to the different segments to increase the ability to reach a desired audience.

These announcements were made at the Interactive Advertising Bureau’s annual conference, as part of Yahoo!’s keynote presentation. During their presentation Yahoo! urged advertisers to stop the “artificial boundaries” being put up between display and search ads and make optimal use of search targeting products reach maximum users.

Rich Ads on Yahoo! Search results pages are being tested by a handful of advertisers since the end of 2008, and so far the results are encouraging. In fact, Yahoo! claims their advertisers have reported a rise of 25% in the click through rates for these ads. Not only that, the brand exposure and conversion rates have also reportedly increased significantly.

This new service allows the advertiser to add video, images, custom links and custom search boxes within their ads. These ads are placed in a separate box than the regular “Sponsored Results” and are labeled as “Promotional Results“, as shown below:

Click on the image to see a live Rich Media ad on Yahoo! search

Advertisers will also now be able to customise the ad to suit their needs. It will also be possible for them to decide the day, time and other demographics, for when the ad should appear, as is seen with TV and radio ads.

Google tested video ads in search results last year, but they have not gone mainstream with the feature. Yahoo! seems to be following in Google’s footsteps, but seems determined to beat them to the punch in delivering a rich media ad solution first.

Ads with the video and images embedded within the search results would certainly increase the impact that the ad has on the user. Yahoo!’s Rich Ads also allow the creation of deep links to the relevant pages and they can also contain boxes to enter data or select from lists of products, allowing customers to search for the product without having to navigate away from the page. Brand logos can also be incorporated into the ads.

While these features help advertisers and agencies to increase brand recognition and advertiser conversion rates, making them attractive to advertisers, it is not doubtful that they will make Yahoo! any dearer to end users. The company is desperately trying to lure advertisers, and could be shooting itself in the foot by alienating end users in the process.

Michael Walrath, Yahoo!’s senior vice president advertising marketplaces group says, “As the economy continues to put pressure on advertising budgets, marketers are looking for increased accountability for every dollar they spend. Yahoo!’s new targeting products significantly improve the ability for search and display advertisers to reach their target audience providing increased efficiency and accountability.”

Don’t they ever learn? Google had it right to start with – forget advertisers – concentrate on getting users and the advertisers will automatically follow.

Americans carried out 13.5 billion searches in the month of January 2009. This figure is 7% higher than the corresponding figure just one month ago, in December 2008.

Expectedly, Google sites were the leaders in the number of searches conducted with 59% share of the market, followed by Yahoo! sites having 15% market share and Microsoft sites having 6% share of the market. AOL and the Ask Network had 3.9% and 3.7% respectively.

Of the 11.7 billion (up 5% from December 2008) searches conducted across all Google sites in January 2009, Google Search accounted for 75% while YouTube and other Google sites contributed to 25% of the volume.

Yahoo! and Microsoft’s search metrics are much more heavily skewed towards their main search properties, with both contributing to 99% of their individual total volumes.

AOL and the Ask Network, on the other hand, had a much more even distribution. 58% of AOL searches coming from the search network while 42% came from MapQuest and other AOL properties. Less than half (49%) of the Ask Network’s searches came from Ask.com while 51% came from MyWebSearch and other properties.

A comparison with the same period a year ago shows that Google’s market share grew 6% points between January 2008 and January 2009, while that of Yahoo! fell 2% points and Microsoft fell 1% point.

Yahoo!, though, has actually gained market share for the fifth consecutive month now, at the expense of Microsoft and Ask.com mostly, but also at the expense of Google last month.

Google SearchWiki was launched only last year to all users signed in on a Google account. The programme allows users to re-rank organic search results and comment on them. Now, adding SearchWiki to AdWords will mean that users have the ability to delete or reposition an ad as per their choice and requirements.

This is a good feature, as far as individual users are concerned. What is worrying to advertisers, however, is the fact that if several users delete or lower the ranking of a particular ad, it may eventually affect the Quality Score of the ad.

It is a fact that Google already knows a lot about user preferences towards various ads based on the click through rates of any given ad. This data allows Google to reward sites with higher click through rates and hence higher quality scores by lowering their costs per click.

SearchWiki on AdWords does the reverse in some ways. It will allow Google to identify which of the ads that weren’t clicked were especially irrelevant or offensive to the user.

Such a system could leave Google SERPs open to manipulation akin to what happened in the early days of PPC advertising - unscrupulous companies hired low-pay workers in third-world countries to click on competitor ads, making them bleed through their budget.Such companies could now hire rogue teams to vote down competitor ads repeatedly.
On the other hand, genuine users who do not like a particular ad might just not bother to waste their time deleting or re-ranking it. They might just ignore it.

A Google spokesperson is supposed to have replied to Peter Young, an advertiser from the UK, saying, “This is a small experiment to show the SearchWiki “X” next to AdWords ads on Google.com search results pages … The experiment triggers for a small number of SearchWiki users. SearchWiki is launched to most (but not all) signed-in US English users … Ads that users remove will no longer trigger for that user on that query … At this time the experiment does not affect Quality Scores, CPCs, ranking, or anything else … It it too soon to say how we will use the data in the future … Any time an ad is shown to a user, an impression is counted … [advertisers cannot opt out of this experiment] … [advertisers cannot see reports on ad removal].”

Google’s response to Search Engine Land was more typical of the tight-lipped search giant: “As part of our ongoing commitment to innovation, we are currently running an experiment in which users can customize the ads that appear in the Sponsored Links section of the search results page by deleting ad results. This experimental feature is only visible to a small number of users and we have no news to announce at this time regarding developments in our AdWords product offering.”

It goes without saying that since AdWords is a major source of income for Google, they will definitely think long and hard before making any move that their advertisers might not like.

In September 2007, Google launched AdSense for Mobile Content, to enable publishers to monetise their sites on the mobile networks, with Google text ads.

With this new service, carriers and mobile site owners will be able to embed a Google search box on their portals or websites, thus allowing users to search Google from within the site.

Revenues generated from these searches will be shared with the mobile operator and website owner. Publishers will be allowed to co-brand the search results page with their own logos and insert links back to their site at the bottom of the mobile search results page.

This service is currently in beta, and testing is available to only a few network operators and website owners. Those interested in this facility can apply for it by filling out this form.

AdSense for Mobile search is aimed squarely at mobile operators and large publishers that have not yet joined forces with Google on mobile. While most larger carriers have already chosen sides – either playing along with Google or Yahoo! or trying to take on the giants by offering their own search service or partnering with search services such as Taptu and Medio, this product caters to smaller networks and those that Google has not deemed important enough to woo individually.

On Internet Explorer

When seen on an Internet Explorer (IE 7+) window, with no toolbars installed, ads now cover 49% of the screen area for Live Search results when seen on a monitor with 800 x 600 resolution, 44% of the results area at 1024 x 768 resolution and 37% of the results area at 1280 x 1024 resolution.

Ads seen on IE 8 with no active toolbars on an 800 x 600 monitor

On Firefox

With just one active toolbar installed, on Firefox the ads now cover 55% of the screen area for Live Search results when seen on a monitor with 800 x 600 resolution, 46% of the results area at 1024 x 768 resolution and 38% of the results area at 1280 x 1024 resolution.

Ads seen on Firefox with one active toolbar on an 800 x 600 monitor

According to Tina Kelleher of Microsoft, these changes have been made taking into consideration the feedback sent to Live Search by adCenter advertisers. This alteration will enable the generation of more clicks for pay per click campaigns being run on adCenter.

A recent report from analytics firm Covario found that global technology firms increased their ad spend on pay per click ads on Microsoft adCenter by 45.7% in the last quarter of 2008, compared to the same period in 2007.

The placement of a fourth mainline ad was introduced by adCenter last September in the U.S.A; and has shown very encouraging results in that market since then.

There is no mention of any consideration for how this change might be received by users and the impact it might have on the perceived quality of Live Search results.

The updates are supposed to make account organisation more intuitive and help users find the right tools on the right account screen. Navigating through accounts will be faster, editing keywords, ads, bids and placements will be easier and users will get more detailed statistics and in-context reports within the campaign management screens.

Some of the updated features are as follows:

• Easier account navigation
  New tabs have been added in the main navigation bar providing direct access to AdWords Tools and Billing. Secondary navigation between active campaigns can be done via a menu on the left – paused and deleted campaigns are not represented on this tree.
  
• Easier Account Monitoring
  Users can easily check on the performance of all the elements in a campaign by clicking on Keywords, Networks or Ads, thus displaying all the keywords, placements and ads in a single table. Graphs provide a quick overview of the performance of the segment being viewed. Users can then decide how much to bid on specific keywords or placements.
• Details and Filters
  Dynamic roll-ups give a broad view of the overall performance of a campaign within the same page. It is also possible to set up filters to display only certain ads or keywords by clicking on ‘Create Filter’ under ‘Tab Options’, thus focusing on selected parts of the account only. Detailed information about particular ads can be viewed by clicking ‘Show Query Report’ or ‘Automatic Placements’ on the ‘Networks’ tab.
  
• Dynamic Keyword, Bid and Ad Updates
  Users will now have more flexibility to expand accounts. They can create ads, add keywords and set bids in any order on the same tabs used to manage campaigns or ad groups. Users can also use a one-page creation process to build new ad groups. Fast, in-line editing by clicking on any bid or keyword enables users to make quick changes in the account.
  
• Networks and Placements
  The old ‘Placements’ tab is now the ‘Networks’ tab. It summarizes the performance of ads on Google Search and Partner sites. Domain and URL level reports for content network placements are also visible here. Users also have the option to have ‘Managed placements’ or ‘Automatic Placements’.

Google is still working on certain updates, such as campaign settings, position preference, demographic bidding and certain specialised ad formats.

Google has forged into a new deal with online video advertising company, SpotMixer, that allows advertisers to use SpotMixer’s video creation technology to create television commercials for their products free of cost, and then air them on TV as well as online.

Ads can be made either in the form of images, audio and / or video content selected from a vast database provided by Google, or from the advertisers’ own uploaded content. There is also an adjustable soundtrack so that advertisers can record the ad in a voice of their choice if they so desire.

The service can be accessed from the “Submit Ad” page when creating a Google TV ads campaign. Google has provided the short video clip shown below to teach advertisers how to use this service.

Creating a new TV ad with the tool is quite a simple procedure really. After logging into the AdWords account, users have to select an appropriate categories for the industry concerned or the type of product to be advertised and then select from relevant images, audio or video content using a drag and drop interface. Advertisers can customise the ad to their requirement by clicking the link to “Add more images and video”. They can also dynamically change the templates to give the ad a more personal look. Completed ads need to be downloaded and then added to the TV Ads Campaign.

This is a great idea for a cheap, do-it-yourself system to advertise products and service to a wide audience. It should help start-ups with limited budgets advertise on television alongside big brands without needing to spend a lot on ad production. The service was launched in beta back in September 2008, for a few clients and they are already reporting positive feedback.

According to the terms of the agreement, Live Search will now be the default search engine for most of the new consumer and small business PCs that Dell ships globally. Considering the fact that Dell is the largest provider of PCs in the U.S. and the second largest OEM worldwide, a lot of new clients will now have the chance to use Live for their searches, without any trouble. All these new PCs will also have a Live Search-powered toolbar.

This agreement between Dell and Microsoft will be applicable across 23 countries worldwide ranging from Australia, Brazil, India, Japan, U.K. U.S.A. and many others and will come into effect from February 2009.

HP and Lenovo PCs shipped within North America already include Live Search as the default search engine.

The other interesting announcement made by Steve Ballmer is to the effect that Microsoft beat Google to acquire a five-year deal with Verizon, the second largest mobile carrier in the U.S.A. Thanks to this deal, users of Verizon Mobile in the U.S. will be able to use Live Search Mobile as their default search service.

Google is probably unhappier about the deal with Verizon, as mobile continues to be one of their top priorities for future growth and losing out to Microsoft in this relatively nascent market does not bode well.

However, no matter how many deals Microsoft can muscle in with providers and OEMs, it is the consumers who will finally decide, and far as consumers are concerned, Google is undoubtedly firmly entrenched in their hearts and minds.

This move comes as something of a surprise to users familiar with Google’s advertising ethics, because during an interview in 2004, Google co-founders Sergey Brin had said, “One thing that’s important to us is the distinction between advertising and pure search results. We make it clear when something is paid for. Our advertising is off to the side and in a couple of slots across the top. Ads are clearly marked. There’s a clear large wall between the objective search results and the ads, which have commercial influence.”

Of course, in order to make sure that users can still differentiate between the ads and the organic search results, Google Mobile Search is using a different coloured background for the ads.

To be fair, the ads are not interspersed within the regular organic results. They are, instead, placed at the end of the plain text results on a universal search results page.

Mobile search advertising has still not found its groove. Google continues to test various ad placements to find the right solution. Google started by placing ads at the top or one at the top and one at the bottom of the mobile search results page. Recently, this changed and ads were placed only at the bottom of the Google Mobile Search results page.

Given the fact that the mobile screen is very small and there is really no place available to demarcate the page into a separate column at the side or at the top for displaying the ads, the only choices really are to place ads atop, below or in between organic results. Google already tested the first two options. They are now taking tentative steps towards the third option.

A really bold move, though, would be to intermingle sponsored links within the organic text-based results on the mobile search page. Will Google go back on its own word and implement such a system in order to get more money from mobile search?

The advertisers will not be required to create special mobile landing pages, or ads in mobile formats as the ads will be pointed to the desktop landing pages, thus saving the advertisers a lot of time effort and money.

These ads will continue to have the advantages of the standard mobile ads. For instance, they will have delivery of mobile specific calls-to-action. In addition, they will reach users who are conducting related mobile searches, which is an activity that is fast gaining in popularity.

Earlier, Google Search was running desktop results pages, which were modified to suit these phones. Now Google has launched results pages, which have been specifically formatted for the iPhone. Hence, it will now be possible for advertisers to create ad campaigns for mobiles only, and these ads will receive separate mobile performance reporting.

The advertisers will have the right to choose, whether they wish to start displaying their ads on mobiles, or continue advertising only on desktop and laptop computers.

In order to start displaying ads on the iPhone, G1 etc, advertisers will have to access their AdWords account where they can go to “campaign settings”. From there they have to go to “Networks and Bidding”, which has the option “Device platform”. Lastly, they select “iPhones and other mobile devices with full internet browsers”.

This will mean that as and when newer mobiles with full internet browsers are released, the ads will be launched on these handsets as well.

For further assistance, advertisers can visit the AdWords Help Center.

Beer manufacturers will be allowed to directly advertise the sale of their products.

Manufacturers of hard alcohol and liqueurs, on the other hand will not be able to directly advertise the sale of their products. They will only be allowed to provide information about the hard alcohol or liqueurs, such as providing the recipes, which are available on their websites or sending brand messages.

To give an example of this new policy, AdWords explains, that hard alcohol and liqueur can be marketed to people who are on the lookout for relevant alcohol related information. In other words, search advertising will be allowed. They can suggest ideas for cocktails to be served during the holiday season and the calorie content of these drinks etc.

While beer manufacturers have been given a free hand to market their commodity, even the manufacturers of hard alcohol and liqueur will be able to take advantage of the upcoming holiday season, to reach their target audience.

These changes to the policy have been made keeping in mind, the feedback received by Google AdWords, from their advertisers over the years. It is obvious of course, that it will also help AdWords to generate some much needed revenue.

In the coming weeks Adwords will also expand this new policy to cover other countries, keeping in mind the local rules and regulations regarding alcohol.

For further details on the alcohol policy, interested users may visit AdWords’ Advertising Policies Page.

Back in 2007, Google had announced that they were missing out on as much as $200 million per year because they were not monetising their Image Search product. After that, there was no report of anything being done about this till some users spotted a single Sponsored Links result among the images, as reported on TechCrunch.

Today, though, a full line of three Sponsored Links are showing for most searches carried about by a handful of user accounts that have been selected to participate in the test.

The paid search listings that appear on Image Search results are not the same as those on the Web Search results page. The reason behind the difference in ads delivered is not yet clear. The ad copy of the ads that are common to both is the exact same, which makes one think that Google has some other selection criteria for delivery of these ads.

The presentation of the Sponsored Links above the organic search results here is different from that on the Web Search pages. The 4-line ad format with 3 ads placed side-by-side in the images results looks better than the 2-line format with 3 ads placed one below the other on regular search results as the organic image results are also shown side-by-side rather than one after another.

Why Google hasn’t done this earlier is a question worth asking.

Automatic matching uses Google’s language processing capabilities to identify other keywords associated with the account, based on their analysis of the current keywords, ads and landing pages. The advertisers ads will then be shown for these keywords as well, even though they are not actually listed among the advertiser’s target keywords.

Keywords queried on Google and the Search Network will triggered ads through automatic matching. The new system will not affect ad delivery on the content network.
Cost per click for automatic matched keywords will approximately match the Ad Group’s current average CPC. Traffic delivered through automatic matching will not affect the Quality Score.

Advertisers can view the exact keyword queries that triggered their ads by running a Search Query Performance report in the AdWords reporting centre.

The new system has come under a lot of criticism since it went into expanded beta in May 2008. The main criticism being that Google is once again trying to make advertisers spend more money in ways that they’re not clearly aware of. While the feature requires users to opt in, not all AdWords advertisers are savvy enough to understand what it could imply and how they can keep track of which keywords are triggering their ads.

www.google.com/yahoogooglefacts/

Google has tried to prove that this deal will not only be harmless, but will actually be beneficial for the industry. They have highlighted various details of the deal, which they feel should be of interest to advertisers and publishers and should lay any doubts to rest.

According to Google, this deal does not violate antitrust laws of the U.S. constitution in any way, as it is similar to several other deals in industry, such as the deal between Toyota and Ford – Toyota provides hybrid engines for Ford – or the deal between Canon and HP – Canon provides laser printer engines for HP.

Regarding the fear of ad prices going up, Google keeps using the same old argument that the prices of ads are not manually set, but are decided by an auction process, whereby prices are never fixed and an advertiser will never bid to pay more than a keyword is worth. However, as Silicon Alley Insider points out, they have stopped short of actually saying that ad prices will not go up as a result of this deal.

In a market where there is only one dominant player, all advertisers will end up competing for the same ad spots and this will drive up bid prices, whether one likes it or not.
Consumers will will benefit from this deal as they will see more relevant ads while searching on Yahoo! and the interoperability between Yahoo! Messenger and Google Chat will mean better communications.

In theory, website publishers too should be pleased with this deal as better ad matching technology could increase their revenue and advertisers could find new ways to reach their target audience. However, if the publishers have only one supplier controlling almost all the traffic volume, this puts them at a great disadvantage when bargaining for better rates.

The serch giant keeps reminding users and litigators that this deal is not a merger and does not remove Yahoo! from the field and that since the deal is non-exclusive, Yahoo! can continue to make similar deals with others. It is true that Google’s share of search traffic will not increase with this deal, though, they fail to mention that the share of search traffic their ad platform serves will definitely be increased.

This news comes in spite of the fact that the total amount of money being spent on advertising across the various forms of media, such as print, television and radio is expected to go down.

Media communications company, Carat, has estimated that the budgets allocated to online advertising will go up, by 23.7% in this fiscal year, and 18.6% next year. In other words, the Internet will account for 8.6% of the total revenue allocated to advertising this year, and 9.8% next year.

An important cause for this could be the change in loyalty of consumers, from the older forms of media to Internet and mobile. However, it is more likely that the increased level of accountability offered by search marketing makes it more attractive than other media formats, especially during times of economic uncertainty.

Another report released by StrategyEye Digital Media also indicates that in spite of the general down-sizing in advertising, Internet and social media advertising will continue to remain strong.

StrategyEye surveyed over 200 decisionmakers in dominant companies across the digital media sector. The survey found that 60% and 56% of respondents are likely to invest more in social media and mobile respectively. 87% of those surveyed felt that online advertising gave better results than other form of advertising.

While almost 62% of advertisers using traditional media plan to cut down these budgets, 52% of advertisers using online plan to increase their budgets and only 13% of them will reduce online ad budgets.

Most advertisers are of the opinion that online advertising presents a great opportunity. Many companies plan to spend more on digital media at the expense of traditional media. Mobile advertising is doing very well presently, and is expected to continue doing so. Online TV is also believed to be a great opportunity in the future.

The most surprising result of the survey, though, was the general opinion that investing in social media is perceived to be a good move, in spite of the relative reluctance shown by most brands to invest in the space.

Having a well balanced mix of online advertising, mobile advertising, online TV and social media might be the most effective strategy for 2009.

Insights For Search adds to the bunch of new tools and features that Google has released in the past month. It is supposed to enable AdWords advertisers to understand search better. However, closer inspection makes it seem more like a repackaging of already available data with some pretty graphs.

An advertiser interested in selling a product or service, say SEO, could type in the search term “seo” to study search volume patterns across a given time period. The data can be compared for various geographical markets, as shown below:

The advertiser can also see the top and rising related searches and to compare search volumes across multiple local markets within each of the geographical locations being compared.

For the statistics and trivia buffs, Google Insights For Search also includes the ability to compare trends for multiple search terms…

… and the ability to compare trends for a search term over multiple periods of time.

Users can download the results from this service and view the numbers on the graph by signing into their Google account. The numbers on the graphs, though, are rather useless for most real purposes. In Google’s own words, “The numbers on the graph reflect how many searches have been done for a particular term, relative to the total number of searches done on Google over time. They don’t represent absolute search volume numbers, because the data is normalised and presented on a scale from 0-100″.

The same information, minus the pretty graphs and maps with hotspots, can be found from the Google keyword tool, with the added benefit of now including real search volumes. It seems rather unlikely that this tool will be used to a great extent by savvy search marketers.

Graphical representation of data, easy correlation of geographical distribution (in spite of rather dubious results in the UK) and comparison to other related terms might appeal to Internet marketing novices and traditional media executives who have begun dabbling in search, which seem to be Google’s new target market.

The new feature provides two sets of data:

1. Approximate search volume for the previous month, which gives the number of times that keyword has been queried in the previous month
2. Average search volume, which gives the average number of times that keyword has been used, each month, over the last 12 months.

The search volume of any keyword will keep fluctuating from time to time, as net traffic is greatly affected by factors such as seasonality and current events. The volumes that are shown could also change depending on where the tool is accessed from:

• If the keyword tool is accessed from within an ad group, the statistics available will include details regarding the ad campaign in that particular country and language. If a specific region or city are targeted, then only that region’s statistics are reflected.
• If the external keywords tool or any third party application built using the Google adWords API is used, then the statistics will vary according to the country and language selected.
• The statistics provided will also vary depending on whether advertiser selects broad, phrase or exact match when using the tool.

Data about search volumes is especially useful to search advertisers who wish to create new ads around a particular keyword. Knowing the amount of traffic generated by a keyword will help advertisers plan budgets appropriately. It will also allow advertisers to select the most effective keywords, so that the ad can reach a wider audience.

Google’s External Keyword Tool

Google has traditionally been extremely tight-lipped about specific search volumes, click through rates and so on. The past few weeks, though, have seen them opening up and revealing more than they have ever done. first they launched Google Trends for Websites, then the Google Ad Planner and now the search volumes feature on their Keyword Tool. These steps have most likely been taken to help traditional media agencies perceive them as a regular advertising channel rather than a digital oddity.

The two leading search engines have now decided to consolidate the deal, and extend the contract into a broad-based partnership. Under the terms of this agreement, Yahoo! will display Google ads alongside their own organic search results in the U.S. and Canada, and outsource a part of their search ad inventory to Google. They will retain the right to do the same with other providers as well.

Yahoo! will have the discretionary powers to decide which pages the Google AdSense for Search and AdSense for Content ads will be displayed on. This deal will not affect their actual organic search results in any way.

Though details of the financial transaction are not available, the deal is expected to generate an additional, $800 million in revenue for Yahoo! annually. In the first year itself, there is expected to be an increase in cash flow ranging from $250-450 million.

Yahoo! will follow the same open bidding system as Google AdWords, to deliver third party ads to their search results, thus making it possible to include Microsoft in the scheme of things.

In order to avoid any hassles with anti-trust laws, at a later stage, Yahoo! and Google have decided to wait for three and a half months, before implementing the deal, thus giving the U.S. Department of Justice, enough time to study the implications of the deal.

As of now, the deal will continue for a period of 10 years. An initial period of 4 years, followed by two terms of 3 years each, at Yahoo!’s option.

Both companies have the option to terminate the deal, in case of a change in management of either organisation. However if Yahoo! chooses to terminate the deal within the first 2 years, it shall be liable to pay Google a termination fee of $250 million less 50% of the revenue earned by Google through the deal.

As an additional incentive, the companies have agreed to allow interoperability of their instant messaging services.

Google’s chairman and CEO, Eric Schmidt, says “This commercial agreement, provides Yahoo! with the opportunity, to deliver more relevant ads to users, and provide advertisers and publishers with better, advertising technology.”

It is believed that this deal will further strengthen Google’s dominance in the search advertising market, while at the same time finally pulling down the curtain on the possibility of a deal between Yahoo! and Microsoft.,

Investor Carl Icahn’s reactions on the issue are yet to be known as his strategy to replace the board of directors at Yahoo! depended on Microsoft’s interest in buying over Yahoo!

Microsoft is now introducing an even better scheme for their Search and Give project, which will be easy to use even for novices, and will allow users a greater choice in terms of the charity they would like to donate to. Interested persons just have to sign up on the Search and Give site:

www.searchandgive.com/

For every search a user conducts after signing up for the programme, one cent will be donated to the charity of their choice. The list of charitable institutions included now covers over 100,000 schools and 900,000 non-profit organizations worldwide. More charitable persons can also elect to convert the tickets they may have earned while playing games on Microsoft’s Live Search Club into donations.

Thus every time a person searches for something on Microsoft Search, he/she would be indirectly performing a good deed. It has been estimated that a person often conducts about 500 searches online per month, which could amount to $5.00 given to charity per Microsoft Search user.

Users can keep track of their donations and also of the total donations and other donors to that organization. This Search and Give incentive will help people to donate to causes that they care about. Users can also send emails to their friends and family to let them know about the scheme and further increase the donations generated.

While this seems to be a noble venture on the part of Microsoft, it cannot be denied that the ultimate aim behind this gesture would be to have more and more consumers using their search engine instead of Google, thereby improving their own position in the search market.

In order to improve their position, Microsoft had also launched a cash for search incentive just a couple of weeks ago, wherein users would receive a certain percentage refund on any item they purchase through Microsoft. While one program rewards the user directly with money, the other rewards the user with a good feeling for having done some charity. However, both the programmes ultimately benefit Microsoft as they both lure more customers to their Search engine.

Henceforth, mobile display ads will be shown to all Windows Live for mobile users across the U.S. U.K. France and Spain on both Windows Live Hotmail and Windows Live Messenger. The ads will have to follow guidelines set by the Mobile Marketing Association.

According to Chris Ward, Commercial Director of Microsoft Digital Advertising Solutions, the launch of Display Advertising on Windows Live Mobile is an important milestone for their business and demonstrates the progress they have made in the field.

Brian Arbogast, Corporate Vice President of Mobile Services at Microsoft says, “In today’s connected world, the mobile device is emerging as a prime opportunity for advertisers to reach their audience.” Since Europe is estimated to have over 220.5 million mobile users, mobile advertising has become a fast growing field and advertising on Windows Live Mobile platforms will help advertisers to reach target audiences at all times and places.

Paramount Motion Pictures will be among the first in the U.K. to advertise through this means. Mobile advertising on Windows Live is expected to also be available in Germany, Italy and Netherlands shortly.

Microsoft also plans to include Live Search in the mobile advertising mix, but at present, the mobile search advertising facility will be confined to the U.S. on a ‘by-invitation-only’ basis. Microsoft plans to expand the mobile search advertising service later this year.

Google’s mobile search advertising service has been live for more than a year now, giving them sufficient time to establish a solid presence in the mobile search market and gather enough data to provide a far more intelligent service than Microsoft will be able to.

The delays in incorporating technology from ScreenTonic into the Microsoft Advertising service and launching a good mobile ad product are Microsoft’s fault alone, and they are likely to pay a heavy price for it, just as they are in the Internet search market at present.

The policy change has been made following a change in U.K. legislation regarding advertising of gambling services. It used to be illegal to issue ads that contained any invitations for gambling, or a mention of the money, bonuses or prizes that could be won by gambling. Following the recent changes in legislation, any or all of the above subjects can be incorporated into an ad.

Yahoo! has decided to update its own editorial policy and allow gambling to be promoted in ads displayed through their search marketing platform. The email sent by Yahoo! says:

• Previously, gambling ad copy could not contain invitations to play or any mention of money, bonuses and prizes. Under recent UK legislation on gambling advertising, UK gambling ads may now include any or all of these. This new legislation does not however extend to gambling advertising in Northern Ireland or Republic of Ireland, and so the relaxation on ad copy restrictions applies only for advertising which is run in mainland UK.
• Advertisers are responsible for blocking any regions within the market where their ad copy is not compliant with local gambling advertising legislation. Because the laws on gambling advertising are different in Ireland and Northern Ireland, as an advertiser with gambling ads on UKIE properties, you must use your geo-targeting settings to block non-compliant ad copy in Ireland and Northern Ireland.
• The existing rules on responsible advertising continue to apply, and gambling ads may be rejected on the grounds that they:
• Lead people to adopt styles of gambling that are unwise
• Are socially irresponsible and/or encourage excessive gambling
• Exploit the young, the immature or those who are mentally or socially vulnerable.
• The existing rules on location and licensing of gambling advertisers also continue to apply.

Google currently prohibits any form of promotion of gambling, even if it is for play-for-fun websites. By relaxing their rules on gambling ads Yahoo! could be winning some money that Google has left on the table.

The United States government are buying AdWords units that link to a page on the America.gov portal,  telling America’s side of the story:

http://fpolicy.america.gov/fpolicy/security/

This page shows various subjects of international interest such as America’s foreign policy matters, the up-coming U.S. presidential elections, human rights stories, Middle East topics, peacekeeping, confronting terrorism and the US’s work with NATO.

The (rather unrealistic) intention might be to try and lure terrorists who show an undue interest in these stories and thus crack down on terrorism. The ads are visible to Internet visitor on the content network and to searchers looking for keywords such as “terrorism”, “Middle East peace”, “human rights”, “press freedom”, “renewable energy”, “food aid” and “US elections”. The ads are only shown to Google users in Canada, the UK and the UAE.

Jonathan Margolis from the Bureau of International Information Programs, which has released these ads says, “We are trying to engage, inform and influence foreign audiences. Before you can do either of the last two you have got to find some way to engage them . . . We found that when you launch a website and if you want to attract a target audience, Google ads are a very effective way of drawing people to the site.”

The U.S. government is spending $25,000-$30,000 per month on these ads and and additional $15,000 per month on ads in Farsi and Arabic, which have generated about 300,000 impressions per month.

Surely the US could have thought of better ways to spend that money rather than trying to buy a change in public opinion?

According to market research, 37% of people who conduct online searches, do so after seeing a new product being advertised on the TV. Pinny Cohen reports that television has a 98% reach across the U.S.A. and is watched by 112 million households across the country.

TV advertising services on Google AdWords will provide a higher level of accountability than most television advertisers are used to, but not as good as the level of accountability and ROI tracking that online advertisers using Google AdWords expect. The service will include tools to provide data and functionality such as:

1. Reports on the number of times an ad was aired
2. Setting CPM rates to out-bid others for a slot
3. Running national, local and demographically based TV ad campaigns
4. Selecting the time day and network to run the ad on
5. Estimates of the number of people who see the ad
6. Approximations of the average length of time for which the ad is seen, and
7. Determining at what point viewers lost interest in an ad.

To avail of this facility, though, advertisers will first need to create an ad for television. This in itself could automatically exclude a large number of small and medium businesses. Google has, however, set up an ‘Ad Creation Marketplace’, which offers professional help in various departments such as, script writing, editing, voice-overs and filming at reasonable rates. Advertisers can ask for quotations from the various specialists registered on the marketplace and then decide whom to work with. As a special incentive to promote this service, Google will subsidise costs, upto $2,000 per ad, for the creation of ads through the Ad Creation Marketplace initially.

Once the ad is ready the advertiser can choose the networks and timing for display of the ads. TV ads will offer information about audience demographics in order to help advertisers maximise the impact and reach their target audience. A free customised campaign will also be available on request. Advertisers will also be able choose to run the ads during broadcasts that are related to their products or services.

Advertisers who promote their products and services using Google TV ads will be able to decide the maximum cost-per-thousand impressions that they are willing to pay, and pay only when the ads are aired. Google will hold online seminars, featuring experts from TV advertising and AdWords speaking, to help advertisers to convert viewers into clients. Advertisers who have already worked successfully with Google TV Ads will also give tips on how to maximise advertiser earning potential.

Get started with Google TV Ads

The graph alongside holds few surprises. Google has consistently held its pole position in the ranking of search engines. In January 2008 alone the search giant received 7.7 billion search requests on its combined properties, which include Google Search (6.2 billion searches) and YouTube (1.5 billion).

Google’s market share in the US crossed 50% in September 2007, and it hasn’t fallen below the half way mark since then. Yahoo! continues to trail far behind with 2.5 billion searches, followed not as far behind by Microsoft with 1 billion searches. If the 2nd and 3rd ranking players in the market were to join forces, their combined search volumes would be 3.5 billion, accounting for 24% market share.

Over the past 6 months Google has continued to grow at the expense of its competitors. The graph below compares the growth in number of search queries received on each of the Top 5 ranked search engines.

Google grew 14% in terms of the number of queries received over the past six months. Even though all the providers grew in Jan 2008 compared to December 2007, the six-month numbers are not as good for anyone other than Google. Both Yahoo! and Microsoft have fallen, the latter by as much as 7% compared to August 2007 numbers.

Official Press Release

In a letter to the board of directors at Yahoo!, Microsoft CEO Steve Ballmer says, “Microsoft’s consistent belief has been that the combination of Microsoft and Yahoo! clearly represents the best way to deliver maximum value to our respective shareholders, as well as create a more efficient and competitive company that would provide greater value and service to our customers. In late 2006 and early 2007, we jointly explored a broad range of ways in which our two companies might work together. These discussions were based on a vision that the online businesses of Microsoft and Yahoo! should be aligned in some way to create a more effective competitor in the online marketplace. We discussed a number of alternatives ranging from commercial partnerships to a merger proposal, which you rejected. While a commercial partnership may have made sense at one time, Microsoft believes that the only alternative now is the combination of Microsoft and Yahoo! that we are proposing.”

The first thing that springs to mind when reading this is that the rumours were true – in 2007 and even back in 2006 the two companies were considering ways to partner or join forces!

Another post on TechCrunch UK discusses the regulatory implications of such a merger. Microsoft is no stranger to regulatory scrutiny. The new merger will just add to the heap of inquiries already underway in the EU. The dynamics of this merger will be quite interesting, though…

Yahoo! Search Marketing is the most desirable asset that Microsoft will obtain as a result of this merger. The combined popularity of Microsoft Live Search and Yahoo! Search in the UK and Europe will still amount to less than 20% (even less than 10% in many countries) of the total search market. So by no means could this be considered anti-competitive.

Email and instant messaging, however, are a different story. The combined popularity of Yahoo! Messenger and MSN Messenger as well as Hotmail and Yahoo! Mail would dwarf all the competition. While the services are free, they do represent significant ad inventory, which could irk Google greatly.

Kelkoo and MSN Shopping are both extremely popular shopping portals that were once competitors, but will now join forces. This could create minor issues from a regulatory stand point, but the greater likelihood is the eventual absorption of the Kelkoo brand in the larger MSN portal.

Microsoft’s offer could not have been better timed. Yahoo! recently announced poor results and a bleak outlook, causing their stocks to fall (NSDQ: YHOO). The news has been received well by Wall Street, with shares of both Yahoo! and Microsoft (NSDQ: MSFT) rising in early hours trading and the overall market receiving a much-needed boost of enthusiasm.

If the two Internet giants do merge, it is not clear what will happen to the workforce. Yahoo! will most likely go ahead with the layoffs announced earlier this week. And as the two companies align departments, more downsizing is likely to occur in order to minimize overlap in job functions.

An interesting question stemming from this latest piece of news is ‘what will this merger mean for the search and search marketing industry’?

Update:

An official press release from Yahoo! states that the board have confirmed receipt of the offer from Microsoft and are considering the offer.

Although the market does not seem to be growing as fast as it did last year, growth figures are higher in the search industry than most other industry verticals. The main driver for this growth is that an increasing number of companies and marketing personnel are recognising the value of search in the overall marketing mix.

The growth in the overall search engine marketing sector from 2004 to 2007 can be seen in the graph below:

According to E-consultancy’s report, trends within this market include:

• Increased focus on organic search
• Greater ‘savviness’ about paid search ROI
• More complexity and integration with other marketing channels
• Sector consolidates as agencies seek broader range of skills
• New platforms offer further growth potential.

Growth in paid search advertising is expected to slow down from last year’s 67% to about 56% this year, as seen in the graph below, due to increased competition and keyword price inflation. Paid search will, however, still account for 89% of the total search marketing spend.

An increased awareness of the importance of an organic search presence is expected to drive SEO to increase by 68%, which is much faster than PPC or than its own growth rate of 50% in 2006. The trend in SEO growth from 2004 to 2007 can be viewed graphically below:

The Buyer’s Guide for 2007 covers a lot more ground including the increased focus on ROI in paid search, pricing models and market positioning. It can be purchased at:

SEM Buyer’s Guide 2007