The report, released by online marketing company, Efficient Frontier, states that during Q4 of 2011 search spend continued to increase in both the U.S. and U.K.

Increase in search spend in the UK by quarter. Source: Efficient Frontier

Retail spend in the U.S. grew by 18% year-on-year and 40% quarter-on-quarter, indicating that the spend increases substantially during the last quarter of the year. Retail growth in the UK was not as good, and this was reflected in the search spend too, which grew by just 10% year-on-year in the country.

Although Google accounted for 80% share of spend in Q4, Yahoo! and Bing clicks were found to be 14% more valuable and showed 9% higher return on investment than Google. The click-share of Google has, however, gone up by 2.5%.

Search CPCs dropped by 5% overall, mainly due to an increase in mobile advertising and better ad delivery.

Mobile ad spend now accounts for 7-8% of all ad spend compared to just 2% a year ago. Of this, tablets account for 50% of the share. Google drives 96% of mobile search ads while Yahoo! and Bing have just 4% share of the market.

In 2012, mobile search spend is expected to account for 16-22% of all paid clicks as users gradually shift from desktops to mobiles. For the same reason, search CPCs are also expected to fall by 4%.

Projected mobile search spend forecast by the end of 2012. Source: Efficient Frontier

Facebook accounted for 2.7% of biddable online spend in Q4, as marketers now spend a larger amount on social networks. Yahoo! and Bing are set to increase their ad inventory, while Facebook is expected to reach 5% of all online ad spend in 2012. Other social networks, such as Google+ and LinkedIn are also set to grow further and deliver more ad impressions.

However, in order to make optimal use of this opportunity, the marketers must stay up-to-date with the changes taking place, not only on the web, but also in user behaviour.

Microsoft Advertising has conducted a study on this subject in conjunction with Mindshare and MEC. The study is called Living with the Internet: A Global Study of What’s Driving Web Behaviour

The study was conducted in two stages. The first part of the study was conducted in 2007 and the second part was conducted three years later, to see the changes in behaviour of web users over a period of time.

It was found that the basic motivations of web users viz. information, communication, creation, transaction, entertainment and surfing remain the same, but the difference between communication and creation is gradually diminishing.

As the internet grows, users try to get the maximum benefit out of it, without spending more time on it and hence each session on the internet is becoming more organised than it used to be.

In the past, planned internet use accounted for 61% of the sessions, but now it is 79%.

Even today email continues to be the most popular internet activity accounting for 23% followed by general browsing at 10% and social media activity at 6%.

Considering these facts, it is essential that marketers and advertisers should present their ads in such a way, that the ad is well assimilated with the content, so that it is appreciated by the user rather than being a distraction from the primary activity of the user.

The study was conducted between July 2009 and March 2010, and analysed 103 campaigns under 39 advertisers and covered 7 industries.

The different forms of online display ad targeting methodologies studied were:

• Audience targeting – based on the users past interest and interactions on the internet
• Contextual targeting – Ads related to page content
• Efficiency pricing – Click-Per-Cost engagement
• Premium pricing – High visibility placements on premium publishers
• Retargeting – To users who have already visited the advertisers site before
• Run-of-Network (RON) – Ads appearing anywhere in the network.

Comparison of brand lift for various targeting strategies

Each of these strategies has its own pros and cons, and marketers require accurate information in order to judge the performance of each strategy and optimise the ad campaign.

The average reach and cost of each strategy was compared to the baseline run-of-network strategy.

While retargeting had the highest lift (1046%), by a very wide margin, and it has moderate costs, it has low relative reach.

Audience targeting also has moderate costs with a good degree of brand lift but it also has low reach.

On the other hand, premium and contextual strategies are both very expensive. While premium strategies have a high average lift (300%) their reach is very low, and contextual ads have a lower lift but higher reach.

Run-of-network and efficiency based ads are both low cost with fairly high reach but show low brand lift (126% and 100% respectively).

The study has, however, found that when different placement strategies are used concurrently, they generated a better overall performance than any individual method.

A recent report from Econsultancy indicates that email still is a powerful medium for targeted advertising.

Stefan Tornquist, Econsultancy’s US Research Director says, “Despite the current hype surrounding social media, social network adoption and its influence on e-commerce is far from maturity. More than a third of consumers (37%) do not use a social networking site, while those who have recently become a ‘fan’ or ‘friend’ of a company or brand online are still in the minority.”

In fact it has been found that communication through email and even snail mail is more effective than the newer marketing efforts via delivery notices, notifications, vouchers and special offers on social networks.

What Is The Best Way To Receive Ads For Sales & Specials?
(Image courtesy of Econsulting)

Econsultancy’s report, titled How We Shop In 2010, has separate findings for the U.S. and for the U.K. as there are some differences in the online shopping habits of both places.

In the U.S. the study was conducted across a cross section of 1,400 respondents and about 1,000 in the U.K. Detailed demographics concerning age, sex etc were used to better understand and interpret the results.

The study does confirm that it is essential to target your ads at the appropriate audience as 53% of users felt that irrelevant information devalues the mail and 54% felt that the emails had no special advantage.

In the U.S. 55% of respondents said that high product ratings increased the chances of a purchase and 56% said that consumer generated reviews increased chances of using an online store. Two thirds of those under 24 check emails on mobiles and search is the primary source of information for most purchases. Men are more likely to use search engines and women are more likely to have discussions online or off. Those between 25-38 years of age are most likely to rely on e-commerce.

In the U.K. 57% appreciate ad messages which provide discounts and other special offers, 365 say email helps them make online purchases and 38% do not use social networks. 61% use search engines to study products, while 75% of those between 18-26 years use social networks to research products.

The survey, which was conducted in Oct – Nov 2009by by Creston plc, found that 80% of the respondents felt that social media does not have any impact on their brands at the current moment.

Surprisingly, it was also found that so far, almost two-thirds of marketers surveyed had no plans to introduce social media into their marketing strategy.

Only 14% of those interviewed, agreed that social media has an important role to play in marketing at present, and affects their brand reputation. The same attitude to social media was also seen with respect to product development and gaining new customers.

Two-thirds of those surveyed also felt that their company’s board of directors did not understand social media, and 88% said the board chooses not to support social media mfarketing efforts.

While a third of the marketers felt that they should take the lead regarding social media, others were not clear about who should lead.

Surprisingly, though, 88% believe that it will have an effect on their business in future. 71% believe it will affect market share. 79% believe it will affect customer retention and acquisition and 70% believe it will last in the long run and is not just a passing fad.

Don Elgie, CEO of Creston plc said, “80% of UK’s online population are now using social media, and the concern is that many marketing professionals are ignoring the impact social media activity could have right now on both their business and their own careers.

This new technology ‘keeps track of’ the websites that users visit, if their ISP has signed up with this service.

Feedback: The representative says, “Phorm does not view or store the sites users visit. Phorm uses technology that has been built from the ground up to avoid any information that might identify a customer personally. Phorm’s system stands out from other online advertising systems in that it does not store your browsing history, IP address, or any personally identifiable information. The unique design of Phorm’s technology ensures that consumer privacy is protected and that, even under compulsion, no personally-identifying data or detailed browsing data can be retroactively provided to anyone.”

While it is a good thing that Phorm does not, at present, identify users individually, that does not change the fact that it tracks user activity, which many would consider to be spying.

But this is being done without the express consent of the users. BT admitted to using this technology without asking for its users’ consent initially. The BT trial, called Webwise, ended in 2008.

Feedback: According to them, “Phorm offers a clear consumer choice. Before any ISP launches Phorm’s service they will evaluate several different approaches to opt in and opt out and decide what best suits their customers. Whatever the format, users will be provided with clear details on what the service offers, and how it works, so that they can make an informed choice as to whether to participate. The most recent BT trial was conducted on a completely opt in basis.”

Tracking user interests helps the service provider to serve better targeted and more relevant ads to the customer in future, thus keeping the customer happy and helping the service provider to generate more revenue.

Phorm’s service is not very different from Google’s own ad and organic search results delivery service. Google can track a lot more sensitive information, including content not found directly through a Google search. However, Google is a much loved brand and hence gets away with a lot more “evil”.

According to the BBC, the UK Home Office has been accused of ‘colluding’ with Phorm.

A spate of messages have been exchanged between the Home Office and Phorm since August 2007, in which Phorm asked the Home Office if they have no objection to this technology, while the Home Office asked for more information about it, ostensibly to better understand public safety considerations and legal obligations. They have denied giving any advice to Phorm about possible criminal liability.

Baroness Sue Miller, Liberal Democrat Spokeswoman on Home Affairs however, says, the Home Office was interested in this technology to help with their agenda of counter terrorism.

Phorm’s Chief Executive, Kent Ertugrul however, says, the Home Office has only given an ‘informed opinion’ on the matter.

In the meantime, the BBC reports that the European Commission has started legal action against Britain, for allowing the use of this technology, following complaints about this service being used on BT, without user consent.

Feedback: Their spokesperson points out, “Phorm’s technology can be operated in a manner that is legally compliant with UK legislation and relevant EU directives. This has been confirmed by BERR and by the UK regulatory authorities. Consistent with UK and EU legislation, and in anticipation of any changes that may be made to the law in the future, our system offers unmissable notice and clear and persistent choice to consumers, a choice that is head and shoulders above current internet standards. The EU Commission announced infringement proceedings against the UK Government concerning the alleged failure of UK legislation to conform in certain respects with EU e-privacy and personal data protection rules. This is a matter for the Commission and the UK Government to discuss.”

The results of this matter, of course, remain to be seen.

British officials had said, last year, that Phorm conformed to European data laws. As can be seen in their feedback above, Phorm says its technology is “fully compliant with U.K. legislation and relevant E.U. directives.”

EU’s Telecom Commissioner, Viviane Reding however said, “Britain needs to change its laws to ensure proper sanctions to enforce E.U. confidentiality rules.”

If the UK does not voluntarily do so, Reding could take matters to the European Court of Justice, which would then have the final say in the matter.

Several individuals and organisations that advocate user privacy have approved of the European Commission taking an active interest in the matter.

To tell their side of the story, Phorm has created a website that attempts to rebuild its reputation, demistify the technology and clarify rumours that are currently being spread against the company.

Stop Phoul Play

The new application, called ROK Promoter, will enable advertisers to not only create and transmit their ads directly to their customers, but will also let them monitor the effectiveness of their campaigns without requiring any outside help.

www.rokpromoter.com

Through the ROK Promoter, videos and images will automatically adjust themselves to fit the size of different mobile screens. It will also be able to handle several different Bluetooth transmitters in various locations and will provide statistics regarding the impact of various ad campaigns on the audience.

“Opt-in, one-to-one marketing, through mobile phones and, in particular, being able to reach customers at that crucial point where buying decisions are being made, is becoming ever-more important and valuable to advertisers, says Laurence Alexander, Group CEO of ROK, “so we set out to make the process of creating, delivering and monitoring such campaigns as easy as possible for advertisers.”

As the initial set up cost of proximity marketing via Bluetooth is relatively low, it has become quite an attractive proposition for advertisers. Licenses will be available to advertisers on a weekly, monthly and long term basis as per their requirements. Advertisers can interact with consumers on their mobile phone by setting up Bluetooth transmitters in locations where they believe they can catch their niche audiences.

Bluetooth marketing had taken a back seat in the past as it required specialised companies to provide services, but with the launch of ROK Promoter things could change quickly.

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.

Comparisons are bound to be made with Alexa, comScore, Quantacast and others, who are already into that field, but so far have not been very accurate with their analysis.

However Google’s results are expected to be better, because of their huge database of Internet user statistics and websites crawled and advertised via AdWords.

Through this website it will be possible for one to increase his contacts, and build links with others in the same, parallel or complementary fields, and to study the popularity of certain sites over others.

If a user wants to build contacts, he has to simply go into Google Trends, type in the appropriate URL, look for sites that are related to that URL and ask each of them to provide further links. Eventually this can turn into quite a vast chain of links. One can also enter multiple URL’s and see their popularity compared on charts.

According to some people, this could lead to a misuse of technology, as users can use Google’s vast database to snoop around, and gain an unfair edge on ones competitors. However, larger companies have done this sort of competitive research long before the advent of Google, by paying a fee to sites like Hitwise, and comScore.

This kind of network building facility has many advantages the biggest of which is the fact that it is absolutely free.

Demographic targeting will be enabled primarily via social networks using Google AdSense. These publisher sites collect user demographic data as part of the sign-up process. They will anonymise the personal data and make it available to Google in aggregate form, allowing AdWords to adjust which ads get shown to members of specific demographic groups.

Advertisers will now be able to specifically target certain demographic groups, e.g. females aged 18-24, by bidding higher for ads shown to that demographic or even preventing ads from being shown to certain groups altogether. For example, a cosmetics vendor might choose to deliver ads only to women, since most men are unlikely to buy their products.

Executives at Google are aware of privacy concerns raised by advertising initiatives recently launched by rivals Facebook, and are therefore being careful with this program. For starters, the data they use is supposed to be devoid of personal details that allow them to pinpoint individuals rather than broad demographic groups. They also prevent advertisers from targeting minors under 18 and individuals who have not consented to sharing their data with third-parties when signing on to the publisher sites.

A new demographic report will also be launched in the AdWords reporting center to help advertisers decide which demographic groups they should target. The service will be available for keyword targeted as well as placement targeted campaigns, with the added facility of demographic site selection.

Demographic bidding will be available on the following sites during the beta test:

• MySpace.com
• Friendster.com
• Hotornot.com
• Blackplanet.com
• imvu.com
• PlentyOfFish.com
• Miss34.com
• Aooa.de
• Gesichterparty.de
• Gazzag.com
• Wolke10.de
• Invisionfree.com
• Flodeo.com
• Picturetrail.com
• Beltrano.com.br
• Migente.com
• CupidBay.com
• Unister.de
• Asianave.com
• Glee.com
• FaithBase.com
• FlirtBox.com
• Sexyono.com
• Parperfeito.com.br

1. Beginners usually get carried away by the rankings of their ads. While it is surely advantageous to be #1, rather thanat the bottom of the page or worse, on the second page, where most potential buyers might not even look, advertisers must realize that rankings bear no significance to customers.Consumers buy from websites that offer good services, good prices and reliable products. Few consumers even remember whether the site they had clicked on was number 1 or number 5 once they are on it.

   Moreover, as Mike correctly notes, nowadays search engines offer personalized results in the paid and organic listings, so that people with different requirements get different results even with the same keyword. This just further necessitates focus on other measures of marketing efficacy than mere ranking.

   The only time when traffic without sales can be justified by an advertiser is when they are using search to build their brand. Then too, one must be mindful of the user. Consistently showing irrelevant ads to a consumer can put them off the brand. Companies like eBay have negatively impacted their brand image in the past by advertising on irrelevant keywords such as “Golders Green College”, which then delivered meaningless ads saying “Buy Golders Green College on Ebay”!

2. The next parameter that lures novice search marketers is traffic. While traffic does matter, it is important to differentiate between the window-shoppers and real buyers. For paid search operations, especially, it is a very costly error to have a lot of searchers but only a few buyers.Advertisers pay for every click. The revenue generated from each click may be negligible or even nothing. Hence it is important to focus on overall conversion rates rather than just traffic volumes. For this it is important to use keywords and ad copy that encourage sales and don’t just drive traffic.
3. The final common error that should be avoided is delivering a relentless sales pitch. While it is important to highlight the salient features of a product, advertisers must also provide a proper background to customers. Few consumer like being sold to all the time. It is important for advertisers to address consumer problems rather than just rattle on about product features or advantages or “fantastic prices” and “super deals”!

As a late entrant in field, the first step that Microsoft has to take is lure advertisers. This can be achieved only by showing relevant results which in turn will win users. And this is precisely what they want to do with their new search engine marketing tools.

In the past, they have faced complaints about lack of relevant search results and a lack of traffic. However, now with adExcellence Microsoft wants make its hold on advertiser tools stronger. Following the lines of the Yahoo Ambassador and Google Advertising Professional program, Microsoft intends to provide opportunities and recognise agencies and advertisers proficient with their adCenter platform through adExcellence. The Webmaster Center is going to further this proficiency by aiding organic search optimisers. Though comparisons between Webmaster Center and Google’s Webmaster tools seem inevitable, it should not deter Microsoft.

Microsoft might have low traffic but if they can provide pertinent information then it won’t be long before they start scoring on this front. Microsoft has definitely taken a step in the right direction but one important question remains, when will it launch something new and untried; instead of just playing second fiddle to its competitors in its quest to catch up on search engine marketing?

2.79 million small and medium businesses in the UK have a company website. However, 62% do not promote their site online, which means that with websites costing £1,750 on average, an estimated £3 billion is spent on websites that are not visible to customers!

• 34% of SMEs plan to use search marketing in the future
• 20% have ‘never got round to it’

Out of the 1.73 million (62%) SMEs who own websites but do not use search marketing:

• 92% have never even tried to set up a campaign
• 78% are aware of the online marketing channels available
• 56% claim they would be willing to set up a campaign themselves

Time, costs and lack of expertise seem to be the two main reasons why SMEs do not use search marketing. A quarter of the companies questioned thought that £50 would be a profitable cost per lead.

• 89% thought SEM is more complicated than online banking
• 39% think it is too complicated to do themselves
• 34% of SMEs surveyed believed it would take them a day or more to set up a PPC campaign
• 25% do not use PPC due to cost
• Whereas only 29% thought search marketing was not right for their business

A number of SMEs tried to run a search marketing campaign but gave up. Of these companies:

• 44% thought it was too time consuming
• 33% thought it was too complicated
• 56% thought it was too expensive

Of the SMEs that are currently running a search marketing campaign, 76% said it had increased their sales, which is  a good indicator of the value of SEM as a marketing method for small and medium companies.

Microsoft’s UK SME Search Marketing Report

The good news is that a separate survey of over 500 male consumers aged 18-35 years carried out over a period of 4 weeks found that brand awareness can be increased over 30 per cent through banner ads on mobile web portals.

Nielsen’s global survey found that the vast majority of consumers trusted recommendations from other consumers most all. This was followed by trust in newspaper advertising, consumer opinions posted online, brand websites and television. Text ads on mobile phones were trusted by only 18 per cent of users, ranking it lowest, below online banner ads and search engine ads.

To What Extent Consumers Trust Forms of Advertising
Source: The Nielsen Company

Press Release for Nielsen’s Global Ad Survey

Millward Brown and Aerodeon conducted the brand awareness survey in August. Conducted using mobile phone survey technology, the research measured how much ad awareness and brand consideration was generated for a global male grooming brand by a banner ad creative, produced by Aerodeon, on a UK mobile web portal.

Aerodeon’s research showed that branded ad awareness increased by more than 30 percent. Future purchase consideration also increased by 23 percent among users of the brand and 11% among non users.

While this is a mixed bag of news, one thing is clear: Mobile advertising is currently enjoying a honeymoon period where users are responding to ads at a much higher rate than they do on other media (compare 30% to 7% for regular Internet ads). For advertisers, this means that now might be the best time to start building mobile sites and advertising mobile content.

Jaiku was founded in February, 2006 by Jyri Engeström and Petteri Koponen from Finland. The Helsinki-based company released the service on the Web in July 2006. Google has just announced that they have acquired Jaiku. The financial terms of the acquisition and their intentions are unclear at present.
According to the founders of Jaiku, “Activity streams and mobile presence are important areas where we believe Google can add a lot of value for users. Jaiku’s technology and talented team are a great addition to Google’s current application and mobile teams.”

While Google’s acquisitions in the social media space have been erratic and mostly unsuccesful, this acquisition might not join the likes of Orkut or Dodgeball. Instead, if their acquisition of mobile social networking site Zingku is anything to go by, Jaiku’s mobile and SMS-posting technology was probably what Google was after.

Comparisons with Twitter have been favourable for Jaiku due to its mobile component and the blog-like posting method. Users can inform their friends about their activities through Twitter-style micro-blog posts as well as their exact current location via a cool mobile-enabled “presence” feature. However the number of phones supported is quite limited and posting via SMS requires a European number.