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.

To begin with, Microsoft adCenter will start providing paid search results to Yahoo! sites in France, Ireland and the U.K.

Ranked second and third most popular search providers in the UK, Yahoo! and Microsoft hope to be able to achieve this in the first trimester of 2012. Advertisers and marketers will accordingly be informed about actions they can take with regards to their adCenter accounts and budgets.

Testing of the paid search results is expected to begin by mid January itself, but will be limited to a small percentage of Yahoo! traffic. Marketers have been advised to closely monitor their campaigns and prepare to increase their budgets, especially if the budget is currently depleted more than 80% daily.

Location targeting capabilities of adCenter are also being improved in order to help advertisers reach a more relevant audience, with new language and location targeting options. This will help European advertisers to reach users in various locations where the same language is spoken. They will also be able to decide which location they wish to target via choices ranging from a bundle of countries to individual cities. They will also be able to apply bid-boosting to focus their spending more effectively.

Testing and adjustments will continue until the second quarter of the year, by which time, Microsoft and Yahoo! are likely to be ready for a full-scale roll out of these services.

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.

A vulnerability in the Website Optimiser’ control script makes it possible for hackers to break into any site using the code and then make use of the site to launch a cross-site scripting (XSS) attack.

In other words, hackers can exploit the Google code vulnerability to send out malicious material in the form of email spam or embedded viruses from any site that is using the code, which could then destroy important data on the computers of visitors to those websites.

The good news is that this can be done only if the website or browser has been previously compromised during an earlier attack. Moreover, Google have detected the issue and are proactively informing webmasters about the potential problem. The Website Optimiser team suggests that the possibility of such a thing happening is low. Nevertheless, it would be wise to take appropriate precautions before it is too late.

The bad news is that Google could potentially drop the affected website from its organic rankings for hosting the malicious code that was introduced in the first place via a vulnerability in Google’s own programming!

Any Website Optimiser experiments that may have been created before the 3rd of December 2010, even if they have been paused or stopped, should either use new code provided by Google or should stop the experiment completely. remove all the old code from the site and create a new experiment in its place. It would be easier to create a new experiment than to update the code directly on the site.

New experiments created after the 3rd of December 2010 are safe from the possibility of an XSS attack as the Website Optimiser team has already patched the vulnerability to protect new experiments.

Until now, Google provided most AdWords specialist agencies, with a dedicated contact person or account manager, who would provide support to the agency and act as a single point of contact to answer questions regarding Google AdWords campaigns that may arise from time to time.

Some of the most commonly asked questions are about payment options, quality score, the reason why an ad did not show up and AdWords advertising policy. Whenever a supported agency faced any problem with the AdWords accounts they managed, they could contact their account manager and the account manager would personally attend to these queries and help solve them.

The number of agencies using Google AdWords is increasing rapidly. While this is a good thing for Google, it also means that they have to improve their infrastructure in order to provide support to all of these agencies.

It is becoming increasingly difficult for Google’s current agency management team in Dublin to provide each agency with a specific contact person. So, instead of investing money into recruiting more account managers, Google has decided to take a giant step backwards and return to their previous model of poor support.

Making Cuts Without Making A Big Deal Of It

As with any negative development, Google has not made a big announcement about this change to their agency support structure. Instead, they’ve sent an email and when questioned about the change, have provided scripted answers about “striving to improve the way agencies are supported” and having “invested heavily in improving” the agency online support resources.

Effective 1st January 2011, the AdWords Support System will work in a call centre like manner, where the caller from any agency will be assigned to any one of many agents. The agent should be able to answer most of the questions raised by callers but will not have any history or prior understanding of the agency’s client accounts.

Low Level Support

An Agency Help Center has also been created to provide agency-specific self-service. Educational materials to help agencies manage their client accounts have also been devised. A Google Agencies programme will also be launched soon. Those who sign up for it will receive educational information and newsletters in this context.

From January onwards, most agencies will have to visit the Contact Us page in the AdWords Help Center. The technical support team will provide responses in due course. As in the past, this could mean waiting for days before getting any sort of response back from Google. The support numbers will also remain active, except that instead of dialling an account manager’s extension, the caller will only have the option to enter their MCC (My Client Centre) account number.

Microsoft adCenter provides paid search results for Yahoo! Search and Bing, and their premium partners in the U.S. and Canada. Bing supplies the organic search results for Yahoo! Search.

The combined offering allows advertisers to reach a far greater audience with a single ad buy than they could before the alliance took place.

Since this arrangement has been successful – as successful as it could get in the presence of Google – in the U.S. and Canada, Microsoft and Yahoo! are now contemplating a similar formula in other regions. They intend to start this facility early next year in certain markets within Europe, such as the U.K., France and Ireland. They hope to be able to extend this service to all of Europe by the end of 2012.

Advertisers have been advised to continue to manage their Microsoft adCenter accounts with their existing support contacts as the holiday season approaches.

Once Microsoft and Yahoo! are ready to roll out their new facility in Europe next year, they will inform advertisers about the changes 3 months before the transition actually takes place.

While the combined market share of Yahoo! and Bing in the USA is more than 25%, the two search engines account for almost nothing in most of Europe. Most advertisers do not even consider advertising on either platform, and even when they do, impressions and click volumes are found to be dismal. The search alliance might get some interest, mostly out of curiosity and the hope for a serious Google replacement, but it is unlikely to make any significant impact.

Nevertheless, advertisers who do use the service have been advised to keep their contact preferences in ‘My Settings’ up to date, in order to receive regular updates and avoid inconvenience of any kind.

Enhanced CPC is an automated bidding feature that will make use of the keywords’ historical conversion rates to adjust the Max CPC bids on various keywords within a campaign. The Max CPC bids will thus be based on the likelihood of an ad actually converting into a sale.

It is expected that this new feature will help clients to lower their overall CPA, while at the same time increasing the number of conversions they receive.

When a client uses several different keywords within an ad campaign, as most advertisers do, the Enhanced CPC tool will consider which of these keywords have converted well in the past. The CPC for these keywords will be hiked by a maximum of 30% over the set Max CPC. On the other hand, keywords that have not performed too well will have their CPC lowered accordingly.

Unlike CPA bidding, where the advertiser sets a target cost per acquisition and AdWords then adjusts Max CPC bids without any CPC restrictions, the average CPC that the advertisers will pay for various keywords through Enhanced CPC will remain more or less the same as before, but the likelihood of conversions will increase, thus improving the ROI and also making it easier for the client to manage Max CPC bids more easily.

The Enhanced CPC feature will take into account various factors while deciding the new CPC. In addition to adjusting the CPC based on past performance of a keyword, the tool will also recognise variations or modifications to the keywords. Factors such as the user’s location, language settings, browser and operating system will also be taken into consideration while deciding the possibility of an ad converting into a sale.

Enhanced CPC bidding will be available to all advertisers without any restrictions such as the minimum number of conversions required per month to qualify for CPA bidding.

Bid management software providers face yet another threat from this new tool. The Enhanced CPC tool has the advantage of knowing a lot more information about the searcher than any bid management system could possibly know. However, as with all Google AdWords tools, this one too will eventually be aimed at driving more business for Google AdWords – albeit by making advertising on their system more profitable for the advertisers.

In keeping with the basic concept of Skype, which has always been to allow users to make phone calls at no or minimal costs, this new service will allow users to call advertisers for free. The advertisers in turn will also be charged at very nominal rates.

The service has been called Click & Call Advertising With Skype.

Advertisers who choose to use the service will get their phone number highlighted wherever it is displayed online, with a blue button, saying “Free Call”.

A Click & Call ad from Skype

If any user clicks on the button, the Skype software is activated and the user is automatically connected to the advertiser for free. The new service is based on technology by Marchex.

Skype’s Director of Advertising, Andy Sims says, “Working together with Marchex, our objective for Click & Call Advertising with Skype supported by Marchex is to deliver a performance advertising tool that turns the Web surfing behavior of Skype users into calls to advertisers.”

Marchex COO Pete Christothoulou says, “Today, we are seeing a shift in the way consumers find phone numbers, the way they place calls and how those calls are paid for. As a result, coupling Skype’s reach with Marchex’s call advertising technology, sales team and service, we believe we can offer a high quality solution to large and small advertisers.”

Businesses have been known to use the names of their competitors to advertise through AdWords, and some companies have taken quite a strong exception to this practice and have gone to court to appeal against it, and prevent Google from selling their brand name as a keyword.

Earlier, this month, Europe’s Court of Justice the highest legal authority in Europe has ruled in favour of Google in one such case.

The specific case being referred to was between two competitors who made temporary or portable cabins. The names of the companies concerned are PortaKabin and Primakabin respectively. Primakabin was using the words, Portakabin, Portacabin, Portokabin and Portocabin among its keywords to advertise on Google.

The competitor Portakabin has objected to this.

The judges have finally ruled that, companies, using the names of competitors as Internet Advertising keywords, is not an infringement of Trademark laws in the European Union.

This judgment will be a big victory for Google as it will indirectly boost the revenue they can generate through advertising.

This judgment also upholds another ruling passed earlier in a similar case between Louis Vuitton and Google. The court maintains that as long as the internet service provider is neutral about the content they display, there is no infringement of trademark laws.

The French Supreme Court where the case between Google and Louis Vuitton was first heard, has also sided with the ruling given by the European court according to sources from Google.

Sources from Louis Vuitton however, have claimed that the French Court has held Google ‘liable for the sale of trademarks as AdWords on the grounds of civil liability.’

Clearly it looks as though there will be some more debating required in such cases.

The company is paying for sponsored placement in search results for several phrases such as ‘oil spill’, ‘Gulf oil spill’ and their own brand name on Google, Bing and Yahoo!

BP are paying enough per click to secure the top spot on the search engines for these search terms. It has been estimated that they could be spending over $10,000 per day to retain the top position on all the search engines.

Sponsored link from BP on Google SERP

BP’s explanation for this move is that they would like to guide people to the “correct information” about the incident and the efforts they are putting in to clear the mess, as well as to help people to file claims where applicable.

The description placed alongside the ad reads, “Learn more about how BP is helping.”

Spokesperson for BP, Toby Odone says, “We have bought search terms on search engines like Google to make it easier for people to find out more about our efforts in the Gulf and make it easier for people to find key links to information on filing claims, reporting oil on the beach and signing up to volunteer.”

While the money spent on these searches may be money well spent to protect their brand reputation, it would not help if it is used to just pull wool over the eyes of the public. If the public feels that BP are not doing enough to correct the damage they have done, and are just trying to send out a ‘positive message’ they could damage their reputation even further.

Users on Facebook and Twitter are already sending out messages calling the spill an act of ‘accidental terrorism’ and are asking for the boycott of BP.

Data from the Yahoo! Toolbar across 50 million page views generated in March 2009 was analysed. Rsearchers, Ravi Kumar and Andrew Tomkins found that users now spend only 21.4% of their online time on search activities.

The total time spent searching included 6.2% time spent on Web searches, 1.4% on multimedia searches, 1.4% on databases of items such as those found on eBay and Amazon.

In contrast to this, users spent 50% of their online time browsing and one-third of the time on communication.

5.3% of all pageviews were found to have a referral from Web searches, 1.4% from multimedia searches, 0.6% from database item searches, and 1.5% from other search query types. Thus, each category of search pageviews tends to result in around one follow-on click on average.

Experts at Yahoo! surmise that in the future, search needs to focus on gathering and understanding, and when appropriate, serving structured information.

It was observed that users are now much more dependent on social networks, location-aware smartphone applications and voice or images to find the content that they are interested in.

Last month, Facebook had more site visits than Google in the U.S.A. Search ads, which are the main source of revenue for the search engines, could potentially lose user attention to an extent.

More importantly, search and display advertisers now have a greater choice and must decide on the best way to reach their target audience and the best channel to maximise the return on the money they spend advertising.

Google, Microsoft and Yahoo! already recognise this change in online user behaviour and have been forging partnerships with social media sites like Twitter and Facebook for over a year now, in addition to building social networks around their own products.

Click the link below to read the full white paper:

A characterisation of online search behavior (144kB PDF)

The current Google Advertising Professionals qualification, which was launched in 2004, will be discontinued. It will be replaced by the Google AdWords Certification programme.

Google Certification Programme

Google AdWords Qualified Companies will now be called Certified Partners. Individual qualifications will be offered to professionals, irrespective of their association with an agency, making it easier for employees to port their qualifications when they change employers. 

The single qualification exam will be replaced by an Advertising Fundamentals exam and three advanced-level exams – Search Advertising Advanced Exam, Reporting and Analysis Exam, and Display Exam. In order to qualify, each individual must pass the fundamentals exam and at least one of the advanced exams.

Agencies will need to have at least one qualified individual associated with their AdWords My Client Centre account and a minimum spend of U.S. $10,000/quarter. Previously, the minimum spend figure for Qualified Companies was $100,000/quarter. This lower number will make it easier for small businesses to qualify.

Agencies that fulfil the required criteria will be given a ‘Google AdWords Certified Partner‘ logo or badge that they can display on their site. This will include the words ”Click To Verify”, which will prompt visitors to click on the logo in order to verify the company’s actual qualified status, thereby reducing the number of false qualification claims.

Google has also made it easy for advertisers to decide which agency they would like to work with through the Google Partner Search platform. This platform will provide information about the agency’s experience, location, budget spend etc.

Lastly, Google has also introduced a Preferred AdWords API pricing model that will allow Certified Partners free access to the AdWords API, based on the client spend they manage. To avail of the free API credits in this pricing model, agencies must have an active agency profile page, their tool must satisfy the minimum functionality requirements for third-party bid management tools and they must, of course, agree to the terms and conditions required by the AdWords API.

This new feature will allow advertisers to reach visitors that had already shown an interest in their product, service or brand by accessing their ad or website in the past, but did not proceed to actually make a transaction or purchase.

This service is not the same as retargeting, as it does not require any data from Google.com.

To make use of remarketing, the advertisers can tag pages and use cookies to identify a visitor or a category of users who can later be shown an ad or offer, based on their interests.

Google AdWords explains this system, by giving an example of a basketball team wanting to sell tickets. By putting a code on the tickets page, they can later show relevant ads to all visitors to their site. The relevant ad could be in the form of discounted tickets or could be an offer for VIP hospitality or team merchandise and so on.

Even though, in essence, this new feature uses behavioural targeting to show ads to users, Google has chosen to call it “Remarketing” rather than simply “behavioural targeting” in order to avoid any controversy involving user privacy and the FTC.

Users can still opt out of personalised or behavioural targeting  via the Ad Preferences Manager. Alternatively, users can specify ad categories, which they would be interested in, on the Ad Preferences Manager.

The remarketing feature was run in a limited beta test for the past one year. It has now been opened up to all AdWords advertisers. It could be a very effective way for advertisers to reach consumers who showed an initial interest in their content, but stopped short of making a purchase.

www.searchalliance.com

According to the official press release from Yahoo! and Microsoft, this alliance will enable their business users to connect with a larger audience of potential customers, thus saving them valuable time and money.

Users will now be able to search ad inventory from both the sites simultaneously, by using the Microsoft search engine, Bing, which presently has a combined audience of about 577 million users worldwide.

Advertisers will be able to use Microsoft adCenter to advertise to the combined client base of Yahoo! and Microsoft.

The alliance will obviously help both the companies concerned to improve monetisation for their partners, eventually helping the companies to generate more revenue for themselves.

Though both companies will continue to have different consumer search experiences, Microsoft will manage the technology for both of them through Bing. Yahoo! will support high volume advertisers, SEO and SEM agencies and resellers and their clients. Microsoft on the other hand will support self service advertisers. All ads will go through the Microsoft ad-Center.

This alliance will be implemented across the U.S. Canada, U.K. and France. Elsewhere in Europe, Latin America and Asia, Microsoft is already a partner of Yahoo!

At present, ads will continue to show up on Bing search results, just as before, and advertisers will be informed about the alliance once it actually begins. They aim to be able to implement the new setup before the 2010 holiday season, but may delay it to early 2011 if needed.

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.

AdWords Comparison Ads

As the name suggests, this new service will make it possible for users to compare offers provided by various advertisers.

Google Comparison Ad unit

The basic Comparison Ad allows users to specify what they are looking for, in a bit more detail than is normally possible on a regular search query, and then delivers a comparison of different offers side-by-side.

Users that engage with a comparison ad will now have to click on a promotion listed within the comparison table that they think is of interest to them. If they are not satisfied, they can provide some more details about what they want, to see better targeted ads.

When the user identifies a satisfactory offer, the advertiser can be contacted directly on the phone – making it a pay per call ad – or a quote can be requested.

Google will anonymise the user’s number with a unique code, through which the advertiser can then contact the user. Advertisers will not receive any user information unless the user wishes to release it. Advertisers will pay Google only if a user calls on the phone number allocated for that advertiser or if the user fills out a form requesting a quote.

The comparison ads feature is very speedy, as it provides relevant offers in less than one second, and the ads will only be for real products. There will be no teaser rates or bait and switch offers.

At present, the service is only available to a few users in some states in the U.S.A and it is only for advertisers in the mortgage and refinance field.

Ad Sitelinks

Just like certain organic results include sitelinks, certain ads can now also feature sitelinks via a new feature called Ad Sitelinks.

Advertisers with extremely high quality ads will be able to specify up to 10 links to deeper pages on their site. These can be links to special offers, featured products, support pages or other popular pages on the site.

Up to 4 Ad Sitelinks will show up below the regular ads for keywords that meet certain quality requirements:

1. The ad should have the first position above the organic search results
2. The ad should have a very high quality score, typically 10/10
3. The Ad Sitelinks URLs must direct users to pages that are part of the main website, and allow users to navigate freely

The links can be updated without changing the ads, as frequently as desired. The option to add sitelinks shows up in the campaign settings tab, under the “Networks, devices and extensions” section, and is labeled with the text “Show additional links to my site within my ad”.

Advertisers can make use of Google Spreadsheets to make the necessary changes to the keywords in their AdWords accounts.

By making use of the copy and paste facility in an external spreadsheet, advertisers can make several changes in their AdWords accounts such as changing the bid, creating a list of keywords, editing destination URL’s etc.

Users can edit keywords within an Ad Group and also edit the keywords with external AdWords tools.

In order to make bulk edits with a spreadsheet within the ad group, the steps are as follows:

1. Sign in to AdWords and navigate to the Ad Group that needs to be edited
2. Next, select the ‘Keyword’ tab and then the ‘More Actions’ command, which is at the top of the ad group table
3. Select the ‘Spreadsheet Edit’ operation from the drop down menu
4. Make the necessary changes
5. Lastly, click ‘Save’.

After these changes are saved, errors occurring in any of the cells are highlighted. When the cursor is placed on such a cell, the error is shown and can be corrected. Once all the errors have been corrected, the changes can be submitted to AdWords.

While using a spreadsheet within the ad group, users can make employ common keyboard shortcuts as well as spreadsheet formulas, with the Formula Autocomplete feature. These formulae can be used to change bids based on the performance stats in the spreadsheet.

All the cells in the column can be modified, but only columns with text in black will apply the changes that are saved. These columns are ‘Keyword’, ‘Max CPC, ‘Destination URL and ‘Status’.

Bulk editing of keywords with external AdWords tools can be done using either the ‘AdWords editor’, which is a free downloadable application for managing the account or by using AdWords API.

Click fraud has reduced not only compared to what it was in the first quarter of the year, but also compared to what it was in the second quarter of 2008. At present it is 12.7%, while in the first quarter of 2009 it was 13.8% and in the second quarter of 2008 it was 16.2%.

According to Click Forensics this data has been collected from ad campaigns of large as well as small advertisers spread over all of the leading search engines and over 300 ad networks.

The president of Click Forensics, Tom Cuthbert says, “The increased diligence of online ad networks to detect and block invalid traffic sources has contributed to the decline in the over all click fraud rate this quarter. However increasingly sophisticated attacks, such as publisher collusion fraud, continue to be a concern. Ad networks should pay close attention to such threats in the coming months.”

Publisher collusion fraud is a lot more difficult to track as publishers make use of bots and rotating IP-addresses to click on their own ads, thus raising their rankings and also increasing the commission which they earn from the ad networks, which cannot easily detect such invalid clicks from the valid ones.

These ad networks consist of lesser known sites that still manage to reach large audiences, at a much lower cost than the bigger, well known internet sites.

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.

It would be great of course if they can achieve these figures.

A large part of this revenue is expected to come from small scale advertising. But lately there have been complaints from several small business advertisers that they are being billed for clicks they do not see on their trackers.

There have been complaints from various advertisers that a lot of click fraud has been occurring. In fact it ranges between 20 – 100%

The allegations also say that this is not a standard click fraud, where mischief makers click several times on an ad without making any purchases. Here the advertisers do not see any clicks on their tracking apparatus, but still they are being billed for these.

This is also not a network problem according to the advertisers as they have checked out on different servers at different DC’s.

Advertisers who have complained to Facebook about these discrepancies, and were asked to provide the appropriate logs were also miffed, that instead of owning up to the errors, Facebook has sent them a standard scripted reply.

A spokesperson from the Facebook communications team has said that Facebook is looking into the issue of suspicious clicks and has identified a solution, which they are implementing.

Facebook must remember that these allegations are serious, and if the matter is not resolved very soon, it may backfire on them if advertisers choose to leave them and use other networks instead.

The email sent out yesterday informs advertisers that if they wish to continue running ads on Google AdWords, they will need to use Visa, MasterCard or American Express credit cards or switch to direct debit payments before the end of the month.

In their own words…

“We are writing to inform you of an upcoming change affecting the use of Switch cards with AdWords. As of July 31st, 2009, we will no longer accept the use of Switch cards. Please select an alternative form of payment to fund your AdWords campaigns before July 31st, 2009 to keep your ads running. Google currently accepts Visa, MasterCard, and American Express credit cards. ”

No reason has been supplied for this change in policy.

The move could be to drive more advertisers to pay via direct debit, rather than credit cards. Google introduced the ability to pay for AdWords accounts via direct debit in the UK only in August last year. Current postpay users paying by credit cards can switch to direct debit.

Instructions for switching to direct debit can be found on the AdWords Help centre at:
http://adwords.google.com/support/bin/answer.py?answer=50328

Google still does not allow pre-pay users to switch to postpay or direct debit.

Just as users vote up or down the news stories on Digg as per their preference, they will now be in a position to vote up or down the ads displayed on the site.

If users like an ad they Digg it (vote it up). If they do not like the ad, it gets voted down. Digg will then decide the rates they charge their advertisers, depending on the number of votes an ad generates. If an ad is really popular, it will garner more votes. Such an ad will be charged at a lower cost per click rate, compared to ads which garner fewer votes and are relatively unpopular.

In turn, an advertiser is likely to display a popular ad for a longer length of time, than he would display an unpopular ad, as he would have to pay a higher amount for the unpopular ad.

The ads will appear alongside the main stories and will be clearly demarcated as sponsored content. They will be linked to the main story, trailer or product review.

It will still be quite some months before this platform is launched as it is still in the early planning stages.

Even after it is launched, Digg will look out for user feedback, to further modify the platform as required.

tapMatch

Companies can now advertise their products on this service by bidding on keywords and categories. The ads will then be displayed on mobile web pages and above mobile search results.

Jumptap claim that the service uses technology to relay ads very selectively, so that advertisers do not waste their money.

The service allows advertisers to target ads to certain handset models such as the Blackberry and iPhone. Google AdWords mobile ads do not currently provide device targeting. Like Google, other targeting options such as location, mobile carrier and language are also be available on tapMatch.

In the past pay per click mobile ad services have not been able to target audiences too well, in spite of the personal nature of the medium. TapMatch will allow advertisers to select their target audience by building client profiles through various sources such as search queries, context and previous click-through history of the client. Accordingly only appropriate and relevant ads will be shown to the mobile user.

Additional levels of audience demographic targeting present in the ad delivery system are expected to produce high levels of user engagement, which should eventually translate to high a conversion rate for advertisers.

Signing up for tapMatch is easy. Advertisers who are used to Google AdWords will find the process of signing up and setting up campaigns to be remarkably similar.

Pricing of these ads will be auctioned just as it is for Google AdWords. Advertisers will be required to pay only if the user carries out one of the click actions the service offers, which include:

• Sending users to a website
• Displaying an SMS landing page that includes a title, 250 character description, an image and instruction to text something to a short number
• Capturing an email address via a landing page that includes a title, 250 character description, an image and a text box with a button to capture user email addresses
• Showing a phone number on a landing page with a title, 250 character description and an image – this would have worked better as a pay per call action
• Delivering a 250 character marketing message along with a title and image.

In theory, all these features seem very interesting. However, reality might show that tapMatch has a long way to go before it provides serious competition to the likes of Google, mainly due to the higher volume of mobile users that default to the search giant even for their mobile search needs.

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.

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.

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.

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.

Microsoft and several advertisers and publishers had objected to this deal, citing anti-trust laws and raising concerns about the possible rise in ad prices for advertisers.

At the time, both Google and Yahoo! had maintained that this was neither a merger nor an acquisition, and hence there was no question of violating the anti-trust laws. They also said that ad prices would continue to be determined by the usual auction process, so there was no need to worry about increased ad rates.

Their stand obviously did not pacify their opponents, who continued to lobby against the deal, and eventually, in September, the Justice Department appointed Sanford Litvack, the ex-Vice-Chairman, of Walt Disney Co. to look into the matter and prepare an anti-trust case if applicable. This development not only generated a lot of publicity regarding the issue, but also caused the stock prices of Google to fall.

Even though Google and Yahoo! maintained that their deal was not subject to government approval, they decided to cooperate voluntarily with the Justice Department. They even decided to put the deal on hold for a while. The two companies have been holding meetings with the Justice department in this regard but so far they have not reached any solution. One of the major stumbling blocks here is the reluctance of these firms to sign a consent decree, stating the terms of the partnership. Agreeing to sign such a decree would, in effect, mean agreeing to be constantly monitored by a judge, which they would not like for obvious reasons.

In their withdrawal statement Google said that a protracted legal battle and the possible estrangement of relationships with other partners were the main factors influencing their decision to end their relationship with Yahoo!
Google has seen a further fall in their share prices, but contrary to expectations, Yahoo! shares jumped up. The rise in YHOO stock could be due to announcements from Microsoft and Yahoo! saying they were now open to merger talks as well as Wall Street’s expectation that with Google out of the way, Microsoft is bound to step in and acquire Yahoo!

Until last week, click summaries were divided into two parts – Search, which included Google and its search partners and Content, which included all sites in Google’s content network that featured contextually targeted and placement targeted display ads from Google.

The change is expected to benefit advertisers, as it will provide a more detailed account of the performance of the ad campaign on different channels. Advertisers will now be able to see track performance on each of the channels from which traffic flows, and advertisers can then decide which partners they should continue advertising on.

A drop down menu on the top right corner of the box allows advertisers to review the campaign summary or ad group summary with any combination of results that they choose. Users can opt to split Google, search partners and content results, split just search and content results or view Google, search or content results only.

Reports providing separate Google and aggregate search partner statistics will also be made available in the near future.

Search Partners v Google

For the first time advertisers and everyone interested in search is able to accurately and easily gauge the contribution of search partners to the total number of clicks, and the numbers are pretty significant in some cases.

• Depending on the industry, the search partners can contribute anywhere from 15 to 50% of the total number of impressions.
• Click through rates from the search partners seem to be consistently lower across all verticals.
• Mobile traffic on the search partners seems to be very low compared to Google Mobile – accounting for less than 5% of total mobile searches on our accounts.

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.

www.google.com/ads/games

In February 2007, Google acquired AdScape Media for a sum of $23 million, which will now be put to use for this latest venture called AdSense For Games.

During the beta phase, Google will concentrate on different ways of placing the ads in the games. The test will incorporate video ads, as well as text and image ads into online games.

To start with, Google will work with PlayFish, Mochi Media, Demand Media and Komani. The games will first be placed in Frogger and Dance Dance Revolution. Companies like Sony Pictures Entertainment, Sprint and eSurance have already signed up to promote their brands via AdSense for Games.

Google is not the first company to incorporate advertising in games, and will have to compete with others like Double Fusion, IGA, and Microsoft’s Massive. Google’s entry into in-game advertising confirms that this market has huge untapped potential. Speaking to CNet, Jonathan Epstein, CEO of Double Fusion, said, “Google does not enter into markets that don’t have billion dollar-plus potential for them.”

Christian Oestlien, the senior product manager of AdSense for Games, explains that Google will establish a presence in this market with the help of their vast network of advertiser partners and effective placement of print, image and flash-based ads.

The success of Google’s venture will depend largely on their ability to integrate the ads appropriately into the games. If the ads are placed in a relevant and non-obtrusive manner, they will be appreciated. Otherwise, users may show their displeasure. Results would also depend on how well users interact with the ads, especially for click-through ads.

While pessimists may also wonder, if this is the right time to invest in a new advertising medium, given the insecurities in the current financial markets, many believe that gaming is a pretty resilient industry and game players tend not to let economic worries stop them from playing.

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.

More Accuracy to Quality Score: So far the per-query Quality Score was a static pre-determined factor, but will now be made variable. The ad’s quality and relevance will be adjudged each time it matches with a search query. Through this system, AdWords will be able to select the most appropriate and relevant ads for display. This should be a win-win situation for both users as well as advertisers, as users will get to see only the ads which are most accurately matched with their keywords, while advertisers will receive highly qualified leads.

Keywords will no longer be inactivated: With this new quality scoring system, keywords will not be marked as “inactive for search” in the advertisers account. All keywords will now be capable of relaying the ad on Google web Search and the search network, unless the advertiser chooses to pause or delete a particular keyword from his account. However since it is likely that the previously inactivated keyword did not have a very high Quality Score and bid, it is doubtful if it would now be capable of generating much traffic.

Minimum Bids to be replaced by First Page Bids: It is expected that first page bids, will be a more effective tool than minimum bids. As the name suggests, First page bids would give advertisers an indication of the amount required to get their ad to reach the first page of search results. The bid will be based on the closeness of the match with the keyword used the Quality Score, and the extent of competition on that keyword. The first page bid should help advertisers to get a good idea of the bid required to get the ad placement they are looking for.

The effectiveness of this new system will of course vary between advertisers. While some may find a substantial change, others may find no significant change. At present Google is working to update the AdWords API and AdWords Editor, to support first page bids, and till that is done, minimum bids will continue to show up, based on the per-query Quality Score.

Google will inform advertisers when these changes are finalised.

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.

Google, the parent company of DoubleClick, also announced that they have reached an agreement with DoubleClick, to launch Silverlight 2 based ads.

DoubleClick already has ad deals with Flash, RealMedia, and Windows Media, so it seems like a good idea for Google to also add Silverlight to their portfolio. Google and DoubleClick will begin this new partnership by monetising 2,500 hours of Silverlight’s NBC Olympics content. NBC Olympics.com will be among the first to offer Silverlight 2 to their advertisers with DoubleClick In-Stream ads.

“Microsoft has always had a strong commitment to working closely with partners and the industry to enable them to leverage our tools and platform to deliver great user experiences. With Silverlight, we’ve extended that commitment to the advertising space,” said Scott Guthrie, Corporate Vice President, .NET Developer Division.

What hasn’t been clarified is why Microsoft had to turn to its biggest rival, Google, to sell ads on their own platform, rather than using Microsoft’s own adCenter advertising!

The exact date for the launch of this new project is yet to be decided, but is expected to be by the end of this year.

Microsoft already has strong ties with Facebook, since the company bought a 5% stake in the social network last October, and has been providing contextual advertising on Facebook. The deal cost them $240 million at the time, but there had been no mention about whether search operations would be a part of the deal or not.

Facebook, which is believed to have over 100 million users worldwide, is expected to be of great help to Microsoft in gaining more exposure, and eventually improving their market share in the field of search.

Google and MySpace have a similar agreement in place, which guarantees MySpace an annual income of $900 million. However, the partnership has not done as well as expected, and Google has indicated that they are looking for ways to better monetise the deal.

While it is obvious, that people will continue to conduct their primary searches through the site of their preference – Google, it is expected that at least a few users will make use of the search functions on popular partner sites such as Facebook, which could boost Microsoft Live Search numbers over time.

Targeting site placements is an option that AdWords advertisers can choose to enable. If not, the ads will continue to run as before.

When an advertiser uses a keyword in his ad campaign, with a contextual target in mind, Google will match it to relevant pages across all of the sites on the Content Network.

Using this new facility, advertisers can bid more, or less, on specific content network placements that they are targeting. They will also be able to make ads for specific groups of pages, which they find highly relevant.

Advertisers will therefore be able to decide to show their ads only on contextually relevant pages, and set specific bids for the different sites, depending on the response they have been receiving from each site. An advertiser can now set a higher bid for placement on a site that has driven good business, and lower the bid on sites where the ad has not been doing too well.

It will also be possible to write ads that highlight specific features of a product, and display the ad only on sites that are relevant to these specifications. This way the advertiser is better assured of reaching his target audience, with greater control on placements and over ad budget.

To accomodate these changes, the AdWords interface has been updated considerably. When creating new campaigns, advertisers are given the option to start with placements or start by targeting keywords.

The Ad Group summary view now includes a search clicks, with an indication of whether the Google and search partner targeting options are on and content clicks with a breakdown of placements that have been specifically targeted and other placements on the content network.

A ‘Placements’ has been added alongside the Keywords and Ad Variations tab, and clicking on it reveals details specific to the targeted placements within that Ad Group.

In fact Google believes that by 2010, the internet advertising market in Russia alone could touch the $1 billion mark. In 2007, the Russian market was worth $200 million, but Google hopes that this spend will seem insignificant in the next few years.

A Russian executive of Google, Vladmir Dolgov, says that the online advertising market, has captured the imagination of people in Russia, and already 75,000 of Russia’s 3 million registered companies are advertising online. Surely others should follow soon.

While Google continues to compete with Yandex.ru and Rambler.ru, Russia’s leading search engines and ad networks, and is keen to get more and more searchers on their site, their operations will be controlled from Moscow and St. Petersburg, only, since both are close to the Eastern end of the European union, which makes accessibility to existing operations easier.

Google first entered the Russian market in 2006, with a meager 5 percent of the market share. It now holds over a third of the market according to a report by comScore.

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!

It is well known that Yahoo! ran tests with arch rivals Google, to show AdWords advertising on Yahoo! Search. What is not so well known, however, is their opinion on the same subject.

On 30 January 2008, just a day prior to Microsoft’s announcement that they intentended to acquire Yahoo!, the board of executives, led by Jerry Yang had dismissed the suggestion of a tie up with Google, stating that although such a tie up may result in short term gains, it would not be a good idea in the long run, as it would reduce Yahoo!’s chances of becoming a “must-buy” for advertisers.

This fact was revealed following a complaint, filed by lawyers representing shareholders of Yahoo!, alleging that the board of directors at Yahoo! purposefully acted to discourage the Microsoft offer. In fact, the papers reveal that even as far back as January 2007, the then CEO, Terry Semel, had rejected Microsoft’s offer of $40 per share!

The complaint further alleges that CEO, Jerry Yang, has not acted in the best interests of the company, or the shareholders, but rather out of personal hatred against Microsoft. The plaintiffs go on to say, that the tie-up with Google was only a means to deter Microsoft, as the situation would lead to a lot of legal complications that would deter Microsoft.

According to Eric Auchard at Reuters, Yahoo!’s sudden change of heart following Microsoft’s takeover bid seems to prove that the partnership with Google is just a desperate bid to keep Microsoft away at any cost.

Mr. Carl Icahn, who has already received permission to buy more shares of Yahoo!, just had his position strengthened by these revelations, as he tries to oust the current board of directors, including CEO Jerry Yang, through a proxy contest.

The big question at Yahoo!, however, is that even if Mr. Icahn is successful in replacing the board, will Microsoft still be interested in the deal, and if so at what rate?

Amongst the supporters, oil investor T. Boone Pickens, has bought 10 million shares, a hedge fund, Third Point, led by activist Dan Loeb, which had 1 million shares of Yahoo! in its possession on March 31, now has more than 5 million shares and may collect up to 10 million shares. And yet another hedge fund, Paulson, has 50 million shares of Yahoo!

It is believed that Icahn’s supporters now have over 80 million shares, that is more than 5% of Yahoo! between them, and Mr. Icahn himself has the option of purchasing another 49 million shares.

Although Microsoft has withdrawn its offer to acquire Yahoo! at $33 per share, the two firms are in talks with each other to arrive at a working relationship that would be mutually beneficial to both. The shareholders of Yahoo! are annoyed at the board’s decision because, according to a source, “they haven’t laid out a game plan that gets you to $33 to $34 per share on a stand–alone basis”.

Yahoo! is trying to fend off Icahn’s advances to replace the board by delaying their 3 July 2008 shareholders meeting to the end of the month. In the meantime the current board of directors at Yahoo! need to either fix an alternative deal with Microsoft buying only part of the company or an advertising agreement with Google that could inject $1 billion revenue per year.

Leading the pack is Carl Icahn, who purchased 50 million shares – about 4 percent – of Yahoo! at $1.3 billion, after Microsoft walked away from the deal. He is known to have a history of waging corporate battles against companies and pressurizing them into taking decisions they had earlier resisted.

Icahn has threatened to motion for an alternate board of directors to replace those who are currently on the board, during the next shareholder meeting, which has been scheduled for July 3. The deadline to nominate these directors is May 15.

According to the Wall Street Journal, he is not the only one baying for blood. There has been a lot of criticism from several shareholders over the board’s decision to refuse the Microsoft offer. Bill Miller of Legg Mason, Yahoo!’s second largest shareholder hopes Mr. Icahn can force the parties back to the negotiating table.

Although it is the majority shareholders who will determine the end result, a lot of small share holders are also upset with the present situation and feel that Yahoo! was wrong to turn down Microsoft. One of them, Eric Jackson, has decided to launch a ‘vote no’ campaign, to convince shareholders to out vote all 10 directors presently on the board. He wanted to wage his own proxy battle but realized that he could not afford the million dollar fight; hence the grass roots campaign. He feels the board has made several mistakes over the years, and Yahoo! shares have remained more or less steady over the last 4 years, in spite of the stock market rising 30% and Google stock going up by 440%.

According to Shirley Westcott, Managing Director of Policy at Proxy Governance, Mr. Icahn’s entry into the arena will put a lot of pressure on Yahoo! to renegotiate with Microsoft. She further adds, “if there is no progress, between Yahoo! and Microsoft, you could end up with enough angry shareholders and institutions voting the whole board out of office, and that would be a horrible scenario.” Robert McCormick at Glass Lewis and Company says that in such cases the company often negotiates with the main dissident shareholder and offers them a few seats on the board rather than risk losing a proxy battle which would be distracting, expensive and time-consuming for both sides.

Yahoo!, Mr. Icahn and Microsoft have all declined to comment.

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 minimum bid amount for each keyword may now be above or below $0.10. Account holders will be informed about the changes in due course.

Sources at Yahoo! explain that the new minimum bids will be like the reserve prices held at auction houses. This price will be based on a variety of features such as quality and value. If the quality of an ad is good and it receives more clicks than those of its competitors, it will receive a higher ranking and the minimum charge will be lower.

If the ad quality is poor Yahoo! will charge more by raising the minimum bid, but will still keep running the ad, which seems to show that they do not really care about quality if the advertiser can pay for it.

Keyword value is calculated using the number of advertisers bidding on the word and the amount they are willing to pay for it. Ads will be displayed for a keyword when the advertiser’s bid equals or exceeds the minimum bid fixed for it. If the advertiser’s bid falls below the minimum amount required the keyword will be inactivated.

Account holders will be informed via the Yahoo! Search Marketing dashboard about these changes and they will be allowed a grace period to make the necessary bid adjustments to keep their keywords active. The new system will be similar to Google’s and is likely to increase Yahoo!’s revenue at least in the short term, as it seems unlikely that the minimum bid for any word will be set below $0.10.

In the long run, however, it is possible that advertisers may go elsewhere rather than pay an exorbitant charge for ad placement on Yahoo!, in which case Yahoo! may end up being the ultimate loser. Advertisers will also have no way of knowing what their competitors are being charged and the level playing field that most advertisers liked about Yahoo! Search Marketing will now be completely lost.

A number of advertisers are already complaining that the new bids have overnight been increased by 2 to 4 times the earlier price and they think it is especially wrong to do so in the given market conditions.

Jim Phillips, one of the many unhappy customers that commented on this announcement, said “I will eventually pull ALL my business from Yahoo! if this is the same as Google. What they are really doing is punishing the advertisers for a slow economy and poor ad revenue from click through. So you pay a LOT more for the few clicks you might get vs. all the impressions you get.”

A number of advertisers also saw the move as a poor way to induce Microsoft to increase the amount they pay to acquire Yahoo! While that may not actually be the case, it has still left the few advertisers that still use Yahoo! Search Marketing quite unhappy.

Needless to say, if this deal does go through, it would help Yahoo! avoid Microsoft’s bid to buy them over. The benefits of such a deal for Yahoo! in the long run, though, are extremely limited. Yahoo! would be handing over control of its most important asset – Yahoo! Search Marketing – to Google and would turn into a sitting duck in the future.

Shareholders should be worried about the competency of Yahoo!’s board of directors if this information is true. They are either taking desperate measures to avoid being acquired by Microsoft at all costs or are trying some really poor tactics to get Microsoft to raise their bid. Either way, their actions seem puerile and selfish with little or no thought to raising shareholder value.

Analysts have reported that a Google-Yahoo! deal would increase Yahoo!’s revenues by about 33% and Yahoo! shares would likely gain $5. Such a deal could raise an additional $1 billion for Yahoo! annually, according to Citigroup Global markets analyst Mark Mahaney. However Microsoft’s offer of $45 billion might seem far more enticing to shareholders.

It is almost certain that if such a deal were to take place, Microsoft would make its displeasure known by invoking antitrust laws. Microsoft’s top lawyer Brad Smith has said, “Any definitive agreement between Yahoo! and Google would consolidate over 90 percent of the search advertising market, in Google’s hands. This would make the market far less competitive, in contrast to our own proposal to Yahoo.” Smith further mentioned that Microsoft would closely assess all its options.

ValleyWag suggests that in order to avoid antitrust issues, Yahoo could set up an ‘open market place’ and invite both Google and Microsoft to make bids for advertising there. This system could work well if Google were really interested in keeping Yahoo! out of Microsoft’s clutches which seems like a reasonable belief.

Conversion actions can be classified as:

• Purchase/Sale
• Signup
• Lead
• View of a key page
• Other

Actions can be used with pay per click as well as pay per action campaigns. Google launched the pay per action beta test just over a year ago in March 2007.

The new conversion tracking tool allows more sophistication for pay per click advertisers who have for the longest time only been able to track overall conversion volumes. Advertisers using the pay per action system will benefit much more, though, as they can now determine which keywords lead to more valuable actions and are worth bidding more for.

The ‘Campaign Summary’ page still shows the total number of conversions, cost per conversion and conversion rate. However, a new ‘Conversion Tracking’ page has been developed, which provides a breakdown of the number of conversions by conversion type.

Strangely enough, the various actions cannot be viewed for individual campaigns and Ad Groups just yet. The reports have not been updated either, so the Conversion Tracking page offers the best, albeit extremely limited, view of the types of actions visitors from AdWords have taken on the site.

Yahoo! recently announced that they have been working hard on this aspect of advertising and will shortly come out with a new format called AMP! (Advertising Management Platform) They believe that AMP! Will revolutionize the way the ad industry functions, and make it much simpler to advertise while saving a lot of time and effort.

Yahoo! Press Release for AMP!

Google launched a similar ad management system last month – Google Ad Manager. Yahoo!, as always, is lagging behind. Their new system is not even ready, but they have announced its launch to either give the market a reason to believe in their lofty goals or to give another reason for Microsoft to increase their acquisition bid.

In a statement released on 6th April, Sue Decker, president of Yahoo! blogged about how innovations have changed the world, from old-fashioned postal services to email and VCR to DVR. She believes that the ad industry is in dire need of an innovation to smoothen out the way it works, while cutting out the unnecessary “paper work” and clutter.

A team of dedicated engineers, strategists and managers from the online ad industry have been working to improve this system and Decker thinks that they have achieved their target of creating a system that allows advertisers to book inventory, negotiate pricing, seek approval, find the right audience, create test sheets, test ads and do even more in an efficient manner, without unnecessary faxes and phone calls.

AMP! has been designed to automate advertiser processes, allowing tasks to be completed in a few minutes, rather than weeks, by working through one interface, to buy, search, and display local, mobile and video ads. Yahoo! has already used this format with some of their partners from the Newspaper Consortium, with excellent results.

Yahoo! expects to release AMP! by the next quarter with some of their publishers, advertisers, ad networks and agencies, with the process gradually rolling out over the next year. A video demonstration of the AMP! system can be seen at:

advertising.yahoo.com/amp/