Delicious was part of the Yahoo! network and used to be one of the most popular sites in its category. In December last year, there was news that Yahoo! intended to shut down the website.

Following this, Chad Hurley and Steve Chen, who had earlier developed and then sold YouTube, decided to buy it over from Yahoo! Delicious was taken over as part of their new company called Avos, which they had formed in April 2011.

Both Hurley and Chen had been thinking about the fact that there is always a flood of information on the Internet, and it is very difficult for users to go through all of it and reach the information that they are really looking for. With the revamp of Delicious, they hope to be able to simplify this process for users.

The new Delicious is supposedly a place where users can see the most recent links shared around topical events. On the homepage, users will now see browseable “stacks”, which are collections of images, videos or links to a particular topic.

Stack on Delicious about the TV programme, Merlin

Speaking about the newly launched site, Chad Hurley sa, “We want to simplify things visually, mainstream the product and make it easier for people to understand what they’re doing.” If this idea catches on, Delicious could soon become far more popular than it ever was in the past.

However, the first mover advantage that Delicious once had is no longer the case. Sites like Facebook and Google+ already have far more viewers and are extremely popular for social sharing. StumbleUpon has steadily grown in popularity as a social discovery tool.

Since the demise of Delicious a number of bookmarking sites have stepped in, but none have become quite as popular. While the organisation of information that the new service offers is great, conceptually, the new owners of Delicious might find that their absence from the market has cost them dearly and that they’ve missed the boat to become a social media powerhouse.

One of the interesting details provided by these metrics is that the use of rich media ad formats has doubled. Simple flash ads accounted for 54% of all global formats through the DoubleClick for Advertisers platform. This same metric accounted for 74% in 2009.

On the other hand, image ads account for 28% of the ad formats used in 2010, up from 17% in 2009. However, the response and engagement rates have remained more or less steady at 0.09% in the last two years.

Interaction rates have also remained more or less steady between the last quarter of 2009 and 2010. Expansion rates, which had fallen in 2009 now show an upward trend. Video completion rates on rich media ads have also remained generally remained consistent.

Display ad response and engagement rate benchmarks by month

Quite surprisingly, it has been found that larger ads do generate a better response from users. The half-page ad unit has been found to generate the best response in terms of CTR, interaction rates as well as expansion rates.

The U.S. market shows the lowest expansion rate, but the highest expansion time.

Auto advertisers were found to have the highest click through ratio, but they had the lowest interaction and expansion rates. On the other hand, telecom and B2B advertisers had the highest interaction rate and B2B advertisers had the highest expansion rates.

Until now, ad targeting was done by adding specific target sites to a list of Managed Placements or with the help of keywords. Whenever a keyword appeared on a webpage, ads from advertisers targeting that keyword or related keywords were displayed. But now, it will be possible to target ads not only in relation to particular sites or  keyword themes, but also in relation to a much broader topic or category.

The new AdWords targeting option will look at all the words on the web page in order to decide what the topic is about, rather than depending on a single keyword. Ads will now be displayed more often and will reach a wider audience.

Google already provides a list of 1,750 topics and sub-topics for advertisers to choose from.

Google AdWords choice of topics for ad targeting

Even if ads displayed in relation to a broad topic do not result in a direct sale, they can build awareness of the product being advertised, which is the first step towards making a sale. This display advertising option makes it a lot easier for advertisers to target wide audiences for branding, rather than having to list thousands of placements or rely on contextual keyword targeting.

Advertisers can use both the keyword and topic-based targeting methods. They can also specifically exclude certain topics or sub-topics from their campaigns.

This method of targeting is available for all ad formats including text ads, banner ads and video ads. Advertisers will also be able to decide, whether they wants to pay on a cost-per-click (CPC), cost-per-thousand-impressions (CPM) or cost-per-acquisition (CPA) basis.

Display ad on Image Search

Google Image Search was redesigned a few months ago. At that time, they introduced a new ad format called Image Search Ads. This format included a thumbnail image accompanying a basic text ad. The feature has performed well and advertisers have reported satisfactory results. Users of the feature also have reason to be happy as the search results to their queries are accompanied by relevant commercial content.

In order to extend this service further, Google has now expanded the image ads format. Advertisers will now be able to reach a larger audience with engaging ads that would help to create both brand awareness as well as improve sales.

Display ads on Google Image Search will work in the same manner as they do elsewhere on the Google Display Network. Depending on the search being conducted, “relevant” display ads will be shown to users.

To start using this facility, advertisers have to use the AdWords Placement Targeting Tool to target Google Images and then select the category of searches on which they would like to advertise. Advertisers can either upload their own leaderboard ads (sized 728 x 90 pixels) or create new ones with the help of Google’s ad builder.

According to comScore, the average Internet user in the U.S. has seen about 6,000 display ads in the third quarter of 2010 alone. This new feature will add a significant volume of ad impressions to that number. Advertisers won’t mind, though, as it will help them reach a new potential audience.

At present, display ads on Google Images are shown only on a few queries in the U.S. and U.K. but the service will be expanded in due course.

When the company recently announced their earnings for the third quarter of 2010, they disclosed earnings from the display advertising, YouTube and mobile sectors of their business. CFO, Patrick Pichette, clarified that this may very well be a one-time disclosure that they are making, and they do not intend to do this on a regular basis.

The breakdown of earnings was not provided for any altruistic reasons. In fact, it was meant to prove to their detractors that search is not the only revenue-generating section of their business and that other sectors are making money as well.

Display advertising has had an annualised run rate of almost $2.5 billion. Google had earlier referred to display advertising as their next billion-dollar business, and it looks like they have already achieved that. Of course, a large part of the display ad business has come from DoubleClick, which Google acquired fora hefty price tag of $3.1 billion.

As far as YouTube is concerned, specific revenue numbers were not made available, but it was clarified that YouTube is now monetising 2 billion page views per week, which is an increase of 50% compared to the previous year. Based on some recent reports, Ben Parr at Mashable concludes that YouTube should now be generating approximately $1 billion per year in revenue.

Google’s mobile business has had an annualised run rate of $1 billion this year, which is a very positive sign, and it is the mobile ad business which has been responsible for this growth, rather than the Android system which is available for free to companies.

In what can also be interpreted as yet another sign of growth, Google has also employed about 1,200 additional staff members, including about 300 through acquisitions and executives. They also intend to continue hiring more staff.

All of this extremely positive news has give the company’s stock a good boost of over 10% on the day following the earnings announcement. Share prices for GOOG went past the $600 mark today, reaching their highest point in the past 6 months.

GOOG stock value 12 – 18 Oct 2010

It had been reported about a year ago that billboards that could tell whether the face in front of it was male or female were being developed. This project is now being tested at subway stations in Tokyo.

NEC is developing a facial recognition system that will be inserted into these billboards. A pilot project has been undertaken by 11 railway companies and it will run for a year. They will set up 27 such billboards in total.

The Digital Signage Promotion Project, which is running this project, says that the billboards contain a camera that can determine the approximate age and sex of a person standing in front of it for a minimum of 1 second. The longer the person stands in front of it, the more accurate the data available is. The information is then relayed to an internal computer, which will pick appropriate ads to display to that person.

This system is called the Next Generation Digital Signage Solution. The project aims to collect data about the type of people most likely to stand in front of billboards and then show ads in accordance with the data available.

For instance, young women may be shown ads about cosmetics or designer apparel; whereas elderly women may be shown ads for household and kitchen equipment and men may be shown ads about sporting goods. This project is meant to help marketers and advertisers reach their target audience.

IBM’s Smarter Planet campaign developed an interactive billboard that provided a simple and engaging virtual demonstration of how a smarter retail system can work. The video below shows this “smart” billboard in action:

Color Sensitive Interactive Billboard from IBM Smart Planet

One big problem that the project currently being tested in Japan is definitely bound to face in the West concerns user privacy. Officials of the Digital Signage Promotion Project have said that the images of users will not be stored in the computers.

This innovation could very well be an example of real life being inspired by reel life. The film Minority Report had shown billboards that could similarly recognise people by name and then shout suggestions about which products they should buy!

Facebook has, for the first time, overtaken Yahoo! and Microsoft in delivering display ads in the U.S. They served 176.3 billion display ads on their website in the first quarter of this year, which accounts for 16.2% of the total display ad impressions delivered to U.S. home, work and university locations.

The world’s largest social network, Facebook, has grown by 52% between the last quarter of 2009 and the first quarter of 2010. During the last quarter of 2009 they showed 115 billion ads, compared to the current 176.3 billion.

Yahoo! on the other hand, has actually dropped from serving 140 billion ad impressions to 132 billion during the same period. Microsoft served 60.2 billion impressions in Q1 2010.

While the numbers indicate that Facebook is now far ahead of Yahoo! and Microsoft in serving display ads, the figures do not take into consideration the number of ads that Yahoo! and Microsoft display on other websites, which accounts for a large portion of the revenue they generate through advertising.

Also, display ads counted here only include static and rich media ads. The numbers exclude video ads, house ads and very small ads less than 2,500 square pixels in dimension.

Moreover, while Facebook may have the volumes, the actual revenues earned by Yahoo! and Microsoft through advertising on their Web properties are much higher.

Last year, Facebook generated $ 500 million from advertising and expects to earn $1 billion this year. In contrast, Yahoo! earned $6.5 billion last year and Microsoft earned $3 billion.

In spite of being far behind in terms of revenue generated, Facebook’s growth is worth noting, as the number of people on Facebook continues to grow and users continue to spend more and more time on the social network. It will most likely be just a matter of time before they establish a more effective way to monetise all this traffic.

Brands such as Verizon, Toyota and Ford were among the top advertisers on Facebook this year, but were nowhere on the list of top 25 advertisers on Facebook last year. This indicates that Facebook is becoming an important platform for advertising, and marketers are probably diverting their ad spend from other sites towards Facebook.

Reports from Nielsen corroborate Facebook’s growth in display advertising – they found that Facebook’s share in the U.S. display advertising market grew from 2% in April 2009 to 20% in April 2010. However, according to Nielsen, Yahoo! is still the U.S. display market leader with 34% share of the market in April 2010.

Chitika recently conducted a study that revealed that users of Microsoft browsers and operating system have a tendency to click on advertisements more than users of other services such as FireFox, Safari, Chrome etcera. Not only that, even users of Windows click on ads far more frequently than users of other operating systems such as Mac OS or Linux.

The findings of this study are significant as it was conducted using a sample of over 130 million impressions across 80,000 sites.

The details emerging from the study are as follows:

• Internet Explorer users on average have a click-through rate (CTR) of 1.05% compared to 0.66% for Firefox users, 0.50% for Safari users and 0.21% for Chrome users
• Windows users have a CTR of 0.92%, while Mac users have 0.52% and Linux users have 0.46%

These findings have been indirectly validated by TechCrunch, where reports that users of Microsoft’s search engine Bing have a higher CTR than users of other search engines. Bing users have a CTR of 1.74% as opposed to 0.98% for Google users and 1.37% for Yahoo! users.

TechCrunch insinuates that the higher CTRs from Microsoft users is because these users are more gullible and easier to dupe than others, which has ruffled a few feathers, even though it is probably true.

Microsoft users don’t click the most, though. AOL, which is a much smaller network has the highest CTR of 2.5%.

The initial version of the Ad Review Center allows publishers to block ads from certain categories or from certain Google certified ad networks and lists all ads that are placement-targeted to their sites, with the option to block them individually.

Google is now making it easier for publishers to find and manage the ads that are shown on their sites.

As a first step in that direction, Google is in the process of making it possible to search for ads that are placement targeted to their site. They have already started offering this facility to a few of their publishers, and will make it available to others in the future.

The new search feature allows publishers to search for individual ads by keyword, display URL or destination URL. A publisher could, therefore, for example, search for all ads that link to a competitor.

It will also be possible for publishers to search for ads across multiple AdSense products such as AdSense for mobile content or AdSense for feeds. Publishers will also have the choice to view allowed, blocked and new ads.

Google is waiting for feedback on this service from the first set of publishers who have been given this facility. They will then make the required adjustments, according to the feedback received, before they release this service to other publishers.

Display ads have long been an important tool used by marketers to influence users and to create brand awareness. This new tool from Google will now enable marketers to measure the effect a particular ad on their target audience, even if it is not immediately clicked upon after viewing.

The new service will be able to measure the number of conversions that occur within 30 days from the date of viewing, even if no click was recorded at the time of viewing.

If a user sees an ad on a given site without clicking on it, but later visits the ad site within the next 30 days and converts into a lead or sale, this conversion will be reported in the AdWords campaign tab.

This facility will also allow marketers to better compare the performance of their ads on the Google Content Network, vis-à-vis its performance on any other content network. Marketers can then decide for themselves, which is the best place to advertise and thus get the best value for the money they spend on advertising.

To make use of this service, marketers will need to ensure AdWords conversion tracking works for their accounts. Google Analytics goals are not compatible with View-through Conversion reporting, and this service is not available for search campaigns and for text creatives.

Several advertisers have admitted that of late, the results they get from advertising on Facebook are better than those achieved from advertising on Google, and that is in spite of spending less on Facebook than on Google.

According to several advertisers and marketers, the response they have been getting from Facebook has improved substantially in the last 6 months, and due to this, more and more businesses are buying ad space on Facebook.

Tim Kendall, director of monetization at Facebook, however, maintains that the advertising growth curve at Facebook has maintained a steady pace and there has been no sudden jump in the demand for ad space on their site. It is true, though, that the number of advertisers on Facebook has tripled over the last three years.

One important factor for this growth surge at Facebook is the ability of advertisers to find their target audiences accurately from the profile data available about Facebook users. Facebook has always been very strict about users using real names and information on the site, and has often deleted profiles that posted false information. As a result, demographic data on Facebook is more reliable than on other networks.

When a Facebook user likes a product they are likely to recommend it to most of their friends, who are already on Facebook. This feature has certainly attracted a lot of marketers to Facebook.

While Google has not commented on this topic, Facebook has announced that they have logged annual sales to the tune of $500 million. Coupled with Facebook’s fast growing user base, it may only be just a matter of time before the social networking leader out performs Google on the advertising front.

One of the reasons for their low adoption rates could be the complexity involved with display advertising. Display ads are available in several formats, such as images, videos and interactive gadgets. It can be a laborious task to manage the organisation of such varied ads across thousands of Google Content Network sites. Hence, advertisers have not been too keen on this form of advertising.

Publishers on the other hand, are left with a lot of unused ad space on their sites.

To help simplify this process for both the parties involved, Google has now launched the new DoubleClick Ad Exchange. This ad exchange will be a platform from which publishers can sell and advertisers can buy the required ad space via their existing Google AdSense and Google AdWords accounts.

The exchange will function as a real-time automated auction market. Advertisers will try to get better ad space, while publishers will try to extract better rates from the advertisers and also sell more of their available ad space.

The exchange will also allow advertisers to measure the performance of their ads, thus offering a degree of accountability. It will also make display advertising more accessible to all advertisers.

In 2008, the total revenue generated from online advertising was $23.4 billion, while display advertising accounted for only $7.6 billion of that total. Hopefully, the new, better integrated Google AdWords / DoubleClick Ad Exchange will help to increase the revenue generated by display ads.

So far, Yahoo! remains the market leader for display ads ever since they bought RightMedia in 2007 for $680 million. Google, no doubt, hopes to be able to now overtake Yahoo!

Introduction to the new, open Google Ad Exchange

comScore and DunnHumby recently conducted a study on the effects of online advertising versus television advertising, across 200,000 consumers, recording their behaviour through the use of supermarket loyalty cards.

Their research showed that the boost given by online advertising to offline sales was not only higher but also faster than the boost provided by TV advertising.

The comparative study showed that the sales lift achieved by TV ads was 8% over a period of 12 months, while the lift from online ads was 9% over just 3 months. In parallel terms, the percentage of sales lift achieved through TV ads was 36% and that through online ads was 80%.

In 2008, Google had commissioned Harris Interactive to conduct a study among 3 consumer packaged goods (CPG) brands, in order to study the effects of traditional TV ads versus the effects of online platforms.

Accordingly, the study was carried out by running identical ads on TV, on a computer screen replicating a YouTube video environment, and on a computer screen replicating a click-to-play video embedded in the content. The results revealed that all the platforms were equally effective in the ability to convey their message about the brand and its strength, and thereby encourage users to go ahead and make a purchase.

While these findings should encourage marketers to shift their ad spend towards online advertising, TNS Media Intelligence has found that the ad spend for TV ads remains static at 58% since 2005, while ad spend on online ads has grown in 2009 from 2% to 4%. And that additional 2% has come through relocation of funds from radio and newspaper ads, but not from TV.

Gian Fulgoni, the executive chairman of comScore says, “these early results confirm the ability of online advertising to successfully build retail sales of CPG brands on par with the impact of television advertising. It is likely that the more precise targeting ability of the Internet – especially in terms of accurately reaching the desired demographic segment – is a key reason for its effectiveness.”

The service will be called Yahoo! My Display Ads, and will initially be launched as a pilot project.

In the past, it has not been easy for small business enterprises to have display ads, as it required a very large budget and also the technical know-how, for which one had to hire specialized agencies, further adding to the costs. With Yahoo! My Display Ads, it will be possible to have display ads with budgets as low as $30 per day.

The Yahoo! My Display Ads will provide over 800 ready to use display templates, thus making the process of building display ads a do-it-yourself procedure. Of course advertisers can also bring in their own ads if they wish to do so. They will have a choice of selecting to pay for the ads on a cost per click basis or on a cost per thousand impressions basis.

The deals will be conducted through Yahoo’s! Right Media Exchange, and the ad inventory will be inclusive of both Yahoo! owned and network properties.

This simplified process of making display ads should be able to encourage marketers to change over from the traditional text ads to display ads.

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.

The larger ad will, of course, advantage advertisers as it will allow them to provide more information about the product or service to consumers, thus engaging more potential customers.

These ads can include rich media within the content. They can contain videos, flash content or social interaction. The ads are designed in such a way that they can automatically expand in that direction where maximum place is available on the screen.

Users must click on the ad in order to expand it and then click on it again to contract it to its original size. Accurate ad engagement metrics are provided to prevent accidental ad expansion by mouse-overs or rollovers. The user can decide to contract the page, which opens as a layer on the original page, at any time. Thus, these ads provide a more user-friendly interaction, which is good for the publisher, rather than ads that automatically expand and start playing video or audio on mouse-overs, which can be quite irritating.

Publishers can choose to block contextual ads by using the competitive ad filter. They can also use the Google AdSense Ad Review Center.

Advertisers using the CPC pricing model will be charged only when the users visit the site’s landing page, and not when they just expand the ad. Expandable Ads can also use CPM pricing.

At present these ads are in the beta testing phase in the U.S. and only advertisers and agencies that are part of the 3^rd Party Ad Serving Program have access to it. DoubleClick is one of them, and its clients can place their ads on the Google Content Network.

Expandable Ad Specifications

Google AdWords support guidelines state that Expandable Ads are currently available in 728 x 90 to 728×180 size, which expand up or down and 160 x 600 to 320 x 600 banners and 300 x 250 to 600 x 250 boxes that expand left or right. The size limit for the 50K, 1.2MB polite and expanded panels must contain a prominent “Close X”, in 16 point font or larger, on the corner of the unit. Audio for the ads can be user-initiated only.

An example Expandable Ad, provided by Google AdWords, is shown below:

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.

AdWords Display Ad Builder should be especially useful for small businesses and smaller advertising agencies. It facilitates the progression from simple text based advertising to display ads. At present the tool is only available to advertisers in the U.S. and Canada.

Presently the display ad builder contains forty templates that have been categorised as business, movies, games, travel and so on. AdWords account holders can click ‘Display Ad Builder’ on their ‘create an ad‘ page to access this new tool and make new ads or even to modify ads that are already loaded onto the system.

Ads will be charged in the usual manner, on a PPC or CPM pricing format, and will have contextual and placement based targeting options.

View the Display Ad Builder tutorial

While the launch message does not say anything about Google’s real motivation behind this, it is obvious that the Display Ad Builder has one purpose, that is to drive smaller businesses to use the content network even more and to improve Google’s position in the display advertising market.

Interestingly, Google is not the first to launch such a tool. MySpace beat them to it by just a few days when they introduced a similar tool called MyAds. The beta platform lets marketers bid between $25 and $10,000 for performance-based display ads on MySpace.

APT is a display advertising platform. Yahoo! believes that once the platform is made available, it will simplify the whole process of advertising, as it will help advertisers reach a larger target audience, provide better performance, give a lot of insight into user needs and most importantly simplify media buying.

According to CEO Jerry Yang, who envisioned this platform 18 months ago, APT will change the face of online advertising. He and President Sue Decker had earlier called it “Nirvana”. They believe that with APT, online advertising will be revolutionized in 2009.

Before preparing this platform, Yahoo! took the trouble to find out all the difficulties that their partners have to face in the process of advertising. They found that it takes over 30 manual operations from the stage of ad strategy to ad launch, and that the whole process can take weeks to complete. Also, it is extremely difficult to locate and understand ones target audience as they are spread out across hundreds of websites.

Perhaps they should have also taken the trouble to find out about the difficulties advertisers face when advertising on Yahoo! and dealing with Yahoo! Inc.’s internal inefficiencies!
With the release of APT, Yahoo! hopes to change all that. They promise to make the ad buying and selling process simple, open and fast – they claim it should be possible to complete in minutes. However, given Yahoo!’s history of failures where it comes to ad platforms, few in the advertising industry give any credit to such loud claims.

Yahoo! Is very confident that APT will be able to deliver on all these promises, because they have received a lot of feedback from their partners during the process of development and testing of this platform. APT will initially be made available to the Newspaper Consortium and then gradually to all advertisers and publishers over the next several months, running into the next year.

Yahoo! hopes that the new technologies used in APT will bring back some credibility to their advertising offering, especially since the fiasco with Microsoft and their current deal with Google, which has done nothing but put their own ad platform, Panama in very poor light.

Google hopes to gain better insights into how users interact with mobile video advertising. Advertisers will be able to use this as a new medium to promote their brand and expand their audience to target the millions of users that access YouTube on their mobiles regularly.

This move will be beneficial for both content producers as well as users, since content producers will be able to use this facility as a means of generating revenue, which will in turn allow publishers to make more content available for free, thereby bringing down costs for users who wish to access videos on their mobiles.

Product Marketing Manager for YouTube, Christine Tsai, says, “This is our first step, in testing mobile advertising for YouTube – it will give you a new way to interact with content on the go, while allowing us to learn.”

Video ads on YouTube are currently available in two formats – InVideo ads and placement targeted ads. Additionally, advertisers can create branded channels on YouTube and promote videos via click-to-play ads. It is not clear at present which formats will be made available when the mobile video advertising service goes live for all YouTube advertisers.

A line of text with the word “[AD]” attached to the banner will identify it as an advertisement to users. Google is not the first ad platform, nor the first search provider to offer this format of advertising. Yahoo!, Microsoft’s Screen Tonic, AOL’s Third Screen Media and AdMob already provide mobile display ads.

AdWords, though, is the only integrated platform offering mobile display advertising alongside a host of other formats. Moreover, it is not too late for Google to enter this market, as mobile Internet usage is still not very widespread and advertisers are still testing the waters.

Mobile image ads on AdWords are currently only offered on a pay per click basis and not on the CPM basis where advertisers pay for ad impressions. Mobile text ads are also available on a pay per phonecall basis, but this option is not enabled for mobile display ads.

The mobile image ads are similar in principle to ads on the content network for PC users, but are smaller in size, in order to be accommodated on the mobile screen, and will run on mobile content network. The ads can be in JPEG, GIF or PNG format and will be in the following sizes:

• 305 x 64 Banner (3k max)
• 215 x 34 Banner (2k max)
• 192 x 53 Banner (2k max)
• 167 x 30 Banner (2k max)

Keywords will be used to contextually target the sites in the mobile content network. Google will only show one image ad per mobile page. Publishers will be allowed to maximise profitability by choosing between text ads, image ads or a combination of the two. Google will then automatically run the ad that is expected to best serve the user’s purpose.

Mobile image ads are currently functional in several countries including The U.K., U.S.A., Russia, Australia, France, India, Italy and Japan. The screenshot below shows how advertisers can use the new service.

Adding image ads to Google AdWords Mobile

The deal was cleared after almost one year of negotiations. Google shares rose by 6 percent or $26 on the day, stopping a continued slide that would have landed the stock at below $400 had it not been for the announcement from the EU.

Layoffs at DoubleClick in the U.S. and elsewhere are very likely after a process of job matching. The reductions will initially be carried out in the U.S. by April and elsewhere thereafter. According to CEO Eric Schmidt, “As with most mergers, there may be reductions in headcount. We expect these to take place in the U.S. and possibly in other regions as well.”

Performics, the search engine marketing part of DoubleClick should be spun off, since owning a search engine optimisation agency would present a direct conflict of interest. However, Google refuses to confirm that this will happen, especially since the EU legislators have not placed any conditions on the merger.

Sales and account management functions are likely to face the most reduction in workforce when the two companies align forces.
Google will now have access to one of the leading display advertising platforms. In additiona to the obvious use of Doubleclick’s inventory to offer even more ad space to Google AdWords advertisers, they will also use DoubleClick’s technology to improve effectiveness and measurement of performance of digital media for advertisers and publishers.

Engineers at Google report that some DoubleClick tags will also soon be allowed in Google AdWords, enabling better performance tracking for advertisers already using the platform for display advertising.

Announcements about the Google – DoubleClick merger nicely match the timing of the launch of Google’s Ad Manager tool, which according to Google Senior Project Manager Rohit Dhawan is “a free, hosted ad and inventory management tool that can help publishers sell, schedule, deliver and measure their directly-sold and network-based ad inventory.”

This information, however, does not apply to clicks on paid search links. People that typically click on display ads are not representative of the total US online population. It should be further noted that most heavy clickers on the net, are not very likely to provide much revenue generation for the advertisers as data reveals that these people are generally in the low income range (below $40,000 per annum), They are usually between 25 and 44 years of age and spend a lot of time on gambling and auction sites; in other words they do not seem to have much work to do.

It was found that more clicks on an ad do not necessarily imply that there is better awareness of that brand. A high click rate does not necessarily mean good performance by the ad.

Some advertisers may already be aware of these drawbacks of the pay per click display advertising system. What is important is that they should start focusing on other aspects like actual sales generated, or brand awareness created through the ad campaign, rather than worrying about how many clicks their ads receive. Based on the findings of this study, advertisers would be better off investing in CPA (cost per action) bidding rather than CPC.

Erin Hunter, executive VP at comScore says, “while the click can continue to be a relevant metric for direct response advertising campaigns, this study demonstrates that click performance is the wrong measure for the effectiveness of brand- building campaigns.”

Read the full press release from comScore