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May 31, 2008

The Google Money Machine - A List of Backup Plans

Ed: Domestic paid click rates have hit a wall. Search and international growth hide the same store limits. 

Here is a list of Google's backup inventory, if global paid click growth slows:

Google CTR Down Due To Click Area Changes

...After Google’s stock took a hit based on reports that Google ads are not being clicked on as much as they use to be, comScore is reporting today that the market may have got it wrong the evidence suggests that the softness in Google’s paid click metrics is primarily a result of Google’s own quality initiatives that result in a reduction in the n... TechCrunch 

FeedBurner Finally Rolls Out AdSense

from TechCrunch by 

Nearly a year after it was bought by Google for $100 million, FeedBurner is finally going to roll out Google’s AdSense as an advertising option for blogs and Websites that use its service to publish their feeds. FeedBurner will start with a few select publishers next week, and then expand the option to all of its customers soon afterwards.

What took them so long? That seemed to be the whole point of the acquisition.

FeedBurner intersperses ads in blog feeds between every few posts. Integrating with AdSense will allow for publishers to tap into contextual ads for their feeds, in addition to the ads that FeedBurner already sells.

Hopefully, Google also found the time to integrate its automated back-end payment system into all FeedBurner accounts. Until recently, FeedBurner was still sends out paper checks to publishers participating in its ad network. At least, that’s how TechCrunch gets paid.

Google’s Home Page Could Get Them In Trouble With The Law (GOOG)

... We're also not sure how that makes Google any more or less interested in privacy than any of its competitors. But this isn't the only time that Google's been stubborn about keeping its front page aesthetics: More signifcantly, we figure they could be generating another $1 billion in annual revenue with just a handful of tasteful display ads.

Google's YouTube: Not Such A Money Pit After All?

/images/skateboard-dog.jpgThe old wisdom: YouTube (GOOG) dominates Web video but can't make any money from it. Forbes' wisdom: YouTube still doesn't make much money, but a bit more than people think.

The mag says YouTube will make $200 million in revenue in 2008 and $350 million in 2009. These are unsourced numbers, but also not denied by YouTube head of content partnerships Jordan Hoffner, who participated in the story.

If true, that about doubles everyone else's revenue estimates for YouTube, including the widely-quoted $90 million estimate from Bear Stearns analyst Bob Peck or Morgan Stanley analyst Mary Meeker's $75 million to $189 million estimate. How does YouTube get there?

  • Front-page YouTube ad: $175,000 per day plus a commitment to spend at least $50,000 more on YouTube or Google.
  • Branded YouTube channel: $200,000 apiece.

Even if Forbes is right and YouTube makes $200 million this year, let's step back a minute and consider what that means: YouTube accounts for 73% of all visits to video sites (Hitwise) and, depending on who you believe, serves either 48% (Nielsen) or 38% (comScore) of all video on the Web. Meanwhile, eMarketer estimates $1.35 billion will be spent on Web video ads in 2008. So even though YouTube serves up the most videos, most of the money is going elsewhere -- professional video sites like Hulu, TV network sites, etc.

If you look at YouTube’s numbers, one thing is clear: It completely dominates online video. YouTube accounts for 37 percent of all videos watched on the Internet and attracts about half of the audience, according to comScore. (And if you add in Google Video, that brings the total to 38 percent of videos watched). The No. 2 player, Fox Interactive Media (i.e., MySpace), accounts for only 4.2 percent of videos watched. And as the Forbes chart above shows, YouTube is still growing at a faster pace in terms of traffic than Google overall.


Yet when it comes to turning that market dominance into dollars, YouTube is holding back. Forbes estimates that YouTube will make $200 million in revenues this year, and $350 million next year. Although it never explains how it gets to those numbers, and they are higher than some Wall Street estimates, they are not unreasonable. (The home page alone is $175,000 a day, plus a commitment to buy $50,000 in Google ads elsewhere—that’s about $80 million a year right there. Plus each branded YouTube channel goes for $200,000. If someone from Forbes can lay out the math in comments, though, that would be helpful). Google does not break out YouTube’s revenues because, even at $200 million, it would be less than one percent of the company’s total.

emarketer-video.gifA $200 million business going to $350 million is nothing to sneeze at. But if you believe eMarketer’s estimate that online video advertising will reach $1.35 billion this year, that would mean that YouTube’s share of video advertising dollars will only be 15 percent (less than half of its share of videos watched).

This gap could mean one of two things. Either YouTube is unable to make money from a large portion of its user-generated video inventory (advertisers want to stick to the home page and the safety of their own channels). Or YouTube just hasn’t turned on the money-gushing hose yet. It has built an increasingly unassailable market dominance under the shelter of Google’s wing without the need to maximize revenues. That attitude, though, is obviously changing, with YouTube nowpushing AdSense for video and spreading that wealth with more content partners.

Which one is it?

Yahoo unlocks local advertising value online | Digital Markets ...

When will Google Local reap $39 billion local ad sales opportunity? ... You'll find it full of unique features like the new Image Packaging System (IPS), ...

Google Confirms Plans to Put Display Ads on Google.com

Posted May 09, 2008 10:15am EDT by Henry Blodget in Internet
From Silicon Alley Insider, May 9, 2008:

The most pressing question for Google (GOOG) shareholders is what product will drive the company's next growth boom as the search product cycle ends. Most likely candidate? Not sexy mobile or video. Just boring old display ads.

Google has been serving display ads on other sites for years, and the DoubleClick acquisition will accelerate that effort. Third-party display ads will only make a small contribution to the bottom line, however (10-20 cents on the dollar). So the key question here has been whether Google would deign to put display ads on its own sites.

We've argued that a full load of display ads on Google.com could add $3-$4 billion in annual revenue. Many SAI readers considered this estimate too optimistic, and it might be, at least over the next couple of years. But $1-$2 billion seems easily achievable.

Most importantly, Google itself is now talking explicitly about display ads on Google.com. It will start small -- placing display ads on, for example, image search results. But we imagine that display ads will gradually spread throughout Google.com over the next few years.

Here's Marissa Mayer (from Bloomberg, via John Battelle):

Matching graphical-display ads with image searches "represents a large opportunity, and there's lot of potential for advertising revenue there,' Marissa Mayer, a Google vice president, told Bloomberg Radio today. At the same time, the company must ensure such ads don't drive users away, she said...

"We haven't found a proper way to monetize image search to date,'' said Mayer, who oversees search products. "You may see us roll out an ads-image search in the future, but when we do you'll know that's because we found a way that ultimately enhances user happiness with the product.''

Google calculated in 2006 that it was giving up as much as $200 million a year by not including text advertisements with its image search results, and that figure has probably increased since, Mayer said. Trials showed that text ads drove people away from conducting image searches, and Google dropped that idea.

Display ads may work better with image searches because they seem more natural to people looking for pictures, Mayer said. While the company has done mock-ups of how it might present the ads, it hasn't tested them on users, she said....

"DoubleClick's strength in display advertising and their work in brand advertising we think ultimately may mean we'll have a better set of options in terms of image ads to run on image search,'' she said.

Billions of choices for growth.

AdNets Weekend

Disney Channel Works with Screenvision for Network’s First Cinema ...
Business Wire (press release), CA - May 28, 2008
The “Camp Rock” campaign marks Disney Channel’s first foray into cinema advertising. Screenvision’s cinema advertising network is comprised of more than ...
REVShare Ramps Distribution to Hispanic Markets
PR Newswire (press release), NY - May 29, 2008
With the nation's largest Spanish CPA advertising network, REVShare penetrates up to 90 percent of Latino households with fully accountable media that ...
Time Warner chief 'open to alignments' at AOL
MarketWatch - 2 hours ago
The Turner cable networks, including TBS Superstation, TNT and CNN, have seenadvertising sales "come back to normal," with double-digit percentage growth ...TWX
SocialMedia Networks' Co-Founder and VP of Engineering to Discuss ...
PR Newswire (press release), NY - May 27, 2008
Under Sourabh Niyogi's leadership, SocialMedia Networks has built one of the largest independent social advertising networks where developers can monetize ...GOOG
Granby, Connecticut and Granville, Massachusetts Residents To ...
FOXBusiness - 5 hours ago
... on network studies performed by real-life test men and test women throughout the country who inspired the "can you hear me now" national advertising ...VZ - OTC:CMTX
Internet Radio Networks Revolutionize Broadcasting
PR.com (press release), NY - 2 hours ago
“As more and more media is delivered via the internet, you’re going to see online radionetworks grow and become important channels for advertising and ...

Hollywood Reporter
Bottom Line Economics: How Bad Will It Get?
MediaPost Publications, New York - 11 hours ago
... hardest hit by a 15% decline in upfront revenues (with 70% of total revenues coming from US advertising and 30% dependent on its broadcast TV network). ...
Sluggish economy hits Viacom ad sales Reuters
Soft Market: Viacom Forecasts Slower 2Q Ad Biz Mediapost.com
Dauman: Ad Downturn Hitting Viacom, MTV Networks Silicon Alley Insider
guardian.co.uk - Reuters
all 50 news articles »  VIA.B
CBS sees costlier season for prime-time TV ads
Reuters - May 29, 2008
... strike by screenwriters -- some advertising executives have forecast a tougher environment and lower prices for the broadcast networks for 2008-09. ...

Multichannel News
Moonves Pushes Retrans
Multichannel News, NY - May 29, 2008
CBS would be the first major broadcast network to seek cash for retrans—others usually opt to swap carriage of their less popular cable networks in lieu of ...

FCC auction stipulates free wireless access
VNUNet.com, UK - 7 hours ago
The edict is based on proposals presented to the FCC by M2Z Networks, CommnetNetworks (aka Seattle Community Networks) and Nextwave Broadband, among others ...
The FCC's Next Two Spectrum Auctions Washington Post
Read all '700MHz spectrum' posts in News Blog CNET News
Next Wireless Spectrum Sale Likely to Come With a Catch TechNewsWorld
TMCnet - ZDNet Blogs

Blog Weekend

Carnival Senior Cruise Director's Blog Reaches New Audiences on ...
FOXBusiness - 5 hours ago
MIAMI, May 30, 2008 /PRNewswire-FirstCall via COMTEX/ ----Although the popular blog of Carnival Cruise Lines' Senior Cruise Director John Heald has been ...
Celebrity Baby Blog is Acquired: People.com's Gain Is FM ...
Washington Post, United States - 5 hours ago
It's nice to see blogs growing up, even if they are about babies. People.com has bought Celebrity Baby Blog, a fast-growing blog started four years ago by ...

Wall Street Journal Blogs
Law Blog and Scalia, Part III: When Clients Win in Spite of Their ...
Wall Street Journal Blogs, NY - 3 hours ago
Editor’s note: This is the third of three parts of the Law Blog’s interview Thursday with Justice Scalia about his new book, “Making Your Case: The Art of ...
Law Blog Chats with Scalia: On Knowing Your Audience, and Italian FareWall Street Journal Blogs
Law Blog Chats With Scalia, Part II: ‘Master of the Dissent’ Wall Street Journal Blogs
John Mayer gushes over Pete Wentz in blog
NME.com, UK - 6 hours ago
“I could have easily written this to you in an email, but you've been so cool to write positive things about me on your blog(s) that I want to respond in ...
Weiss Lawyer Responds to Law Blog Posts on Support Letters
Wall Street Journal Blogs, NY - 2 hours ago
Editor’s Note: In the past week, this blog posted about letters in support of plaintiffs lawyer Melvyn Weiss in anticipation of his sentencing, ...

Ottawa Citizen
Weekend Blog: Hey, Sex and the City, Sex and the Ivy is where it's at.
Sofia Echo, Bulgaria - 2 hours ago
Just log on to Sex and the Ivy, the bleeding heart nympho's guide to Harvard life, for example, a blog by a 20-year old Harvard student who majors in ...
The Show That Shall Not Be Named Baltimore Sun
Those dirty girls Salon
Surviving 'Sex': A primer for the guys Sioux Falls Argus Leader
Arizona Republic
all 1,463 news articles »
Blog star ends up in self-made black hole
New Zealand Herald, New Zealand - 5 hours ago
Yet the blog that gave Gould such power would also burn her. "I had made my existence so public in such a strange way, and I wanted to take it all back, ...
Not a Cowboys' blog item
Dallas Morning News, TX - 4 hours ago
Just to show we are a well-rounded blog, here's an item not related to the Cowboys. Green Bay has decided to ship Brett Favre's locker to the (ahem) retired ...

LIVE Baseball Blog: NCAA Ann Arbor Regional, Arizona vs. Eastern ...
MLive.com, MI - 4 hours ago
Before we get going, I must inform you that because this is an NCAA-run event, we are restricted to one blog post every half inning. ...
Ann Arbor Regional Preview aka the longest blog ever Michigan Daily
all 66 news articles »
Georgia High School Baseball Blog: Championship Friday
Atlanta Journal Constitution,  USA - 38 minutes ago
By AJC | Friday, May 30, 2008, 06:41 PM Landmark Christian 6, Pacelli 3: Tanner Bryant hit a two-run homer to lead the War Eagles to the opening-game win. ...

Social Media Weekend

Social Media: How Much is Too Much?
Technosailor, MD - 10 hours ago
Social Times is one of those cool new social media blogs that just happens to be in Washington, DC It is a joint venture by Nick O’Neill and is backed by ...
Interview with the Entrepreneur: Jesse Thomas of JESS3 Technosailor
all 2 news articles »
Dems and GOP Reach Out With Social Media
Marketing Shift.com - 6 hours ago
Later, the media dissects what has been said and accuses said politician of flip-flopping on issues. It's a good system we've put together. ...
Online Community and Social Media Budgets Grow While Metrics for ...
PR Web (press release), WA - 16 hours ago
Companies continue to allocate large budgets to online community and social media efforts as they redefine ROI from standard reports to measuring ...
Social Media Tools Bring Success to 50 Cent
Marketing Vox News - 7 hours ago
50 Cent has built a loyal online fanbase by using free social media tools, which allow fans to connect with him and each other, reports ClickZ. ...
Interview: Social Media Fills the Need for Human Contact on the Net
Technosailor, MD - 10 hours ago
It was pretty fun as we talked about b5media and the technology challenges we’ve faced as well as broader social media and the best tools to use and in ...
Social media 'becoming popular among marketers'
Epiphany Search News, UK - 20 hours ago
Marketing professionals are increasingly spending their budgets on interactive platforms such as viral marketing and social media, new research shows. ...
SEO spending on the rise Business Feet
all 4 news articles »

The Daily Deal (subscription)
Media Maneuvers: Tweet week
The Daily Deal (subscription), NY - 6 hours ago
The authors then proceed to have a eureka moment when they decide to use social media to reach a "corporate honcho," BT Group plc technology chief JP ...
JustMeans - A Social Media Starting Point for Businesses
ReadWriteWeb, CA - 20 hours ago
Today, social media is one of those avenues that not many companies are pursuing. Social media can be a platform that's associated with many risks for these ...
Does social media bias reviews ?
ITvoir, India - 14 hours ago
Social networking is emerging as the new face of industries. The tools of Web 2.0 have given consumers the power which is making the industries to ...
Photos: Meet Minneapolis Launches Social Media Newsroom
PR Newswire (press release), NY - May 29, 2008
MINNEAPOLIS, May 29 /PRNewswire/ -- Meet Minneapolis, the Official Convention + Visitors Association, today launched its social media newsroom ...

Code is Mightier than the Political Sword

Code is Mightier than the Sword. Let's compare the code process to the political process.

Politics is Complex

The hot battle between Clinton and Obama has come down to contested delegate counts in Florida and Michigan; and the vote of super delegates. 

The process is engaging - pitting the voice of every voter with the rules set by governments and committees. Yet, the voters or their representatives elect individuals to serve legislative, executive, and judicial roles. Each role has fixed terms. 

For the Democrats, the DNC Committee sets the rules that may impact the selection of the party candidate. If the committee set rules against the interest of the voters, they will suffer the impact at the end of their term.

The process is slow. Voices and words count as individuals attempt to influence committee members and the public. The multi-year process also delivers stability.

Tuesday May Not End Democratic Fight

With just three more Democratic primaries and a rules committee meeting remaining, many expect the long race for the Democratic presidential nomination to end on Tuesday. But will it?

IRC for Democratic Rules Committee Meeting

Fascinating stuff coming up during testimony at Democratic Party Rules and Bylaws Committee today in Washington. 
Coding is Complex and Powerful

Unlike words, coding is more complex, but carries great power.
  • Volunteer committees, like w3.org, set rules. Unlike the legislature, these committees only recommend. Their scope is global, not national or local.
  • Browser and operating system coders act as executive branches. Their interpretation of the rules is only influenced by users choosing their browser over others. Competition is the key for continued innovation.
  • There is no judicial branch to arbitrate disagreements. 
An application coder abides by the soft rules, cross-platform interpretations of rules, and the needs of public constituents. Like representatives elected by the public, coders navigate thousands of rules to define applications like widgets or websites. 

If an individual coder understands all the rules, hacks to overcome limits of browser imposed rules, and makes the right choices, the public rewards them with millions of votes. Without elections and fixed terms, the process is open to any coder and the benefits can be immediate. 

Is Code Mightier than the Sword?

Is it time to change the expression? Has code become mightier than the sword?

Ad Dollars to Platforms, Publishers, or Members??

Celebrity Baby Blog is Acquired: People.com’s Gain Is FM Publishing’s Loss


It’s nice to see blogs growing up, even if they are about babies. People.com has bought Celebrity Baby Blog, a fast-growing blog started four years ago by Danielle Friedland. She confirmed the deal earlier this week, after MediaWeek broke the story. The site has an editorial staff of 17 editors, contributors, writers, and reviewers (presumably, not all full time).

The blog is an obvious fit for People, which knows that stories about pregnant celebrities and their babies sell. (Doesn’t it seem like pregnant celebrities are on the cover of People more than anything else?). The price was not disclosed, but Friedland and staff will stay on to grow the site.

But People.com’s gain is Federated Media Publishing’s loss. With this acquisition, FM Publishing is losing yet another anchor blog from its advertising network. Last year, it lost Digg to Microsoft, and earlier this month it lost Ars Technica to Condé Nast. Now, Time Inc. (my former employer) has snapped up Celebrity Baby Blog.

Celebrity Baby is FM Publishing’s top parenting blog, and has recently started to pull in more pageviews (and thus advertising impressions) than FM stalwart BoingBoing. Since February its traffic has shot up—to 6.9 million pageviews and 720,000 unique visitors in April, according to comScore. That month, BoingBoing had more unique visitors (2 million), but fewer pageviews (3.7 million). See the chart below.

Deals like this point to the fundamental weakness of FM’s business model. When a blog in FM Publishing’s network gets big enough or gets bought, FM loses all or part of their advertising inventory. The more profitable a blog is for FM, the more likely it is to try to sell ads on its own or be taken away by a larger media company with its own ad sales force. (Disclosure: TechCrunch is also an FM partner site. They sell a portion of our ads, but we also sell our own)...

b5media Partners With PicScout For Free Licensed Images

b5media, a media network with over 350 blogs, has partnered with PicScout to obtain legally licensed images at no cost through their PicAppapplication.

PicScout originally started off as a content copyright enforcer, hunting down unlicensed images on the web with its flagship ImageTracker program. After realizing how ubiquitous unlicensed images were, the company launched PicApp, a flash-based image provider that offers legally licensed images from large databases for free. The company makes money by including ads as part of the embedded picture viewer.

b5media will use PicApp to complement a number of other image partners. Many high quality images from licensed catalogs can go for $10 and up, which can have a significant impact on a blogging network’s bottom line. The company says that using PicApp’s free content for some of these images should reduce licensing fees substantially. b5 has over 250 bloggers, which generate upwards of 10 million unique visitors monthly.

The partnership marks a big win for PicApp, but it’s hard to imagine a Flash-based image provider becoming commonplace on the web. Flash is clunky and slow compared to normal images, but at this point the plugin is a necessity for image catalogs to control their content. GumGum is another player in this space that uses similar Flash technology...

Ed: Ads on images delivered via Flash; ownership of websites. Bigger issue is value earned by whom?

  • Platform providers (Yahoo Mail, Gmail, Hotmail; Myspace profiles, Yelp reviews, social media; video at Youtube, images via PicApp, and PowerPoints at Slideshare; Flickr wants fees.)
  • Website publishers (Google AS affiliates, FM members, enterprise brands, RSS feeds, in-game ads)
  • Community members (blogger, Facebook apps, Microsoft CPA)

May 30, 2008

NEWS: What Google Looks For in Potential Acquisitions

What Google Looks For in Potential Acquisitions

Today I attended the XMediaLab event in Wellington New Zealand (my hometown). Tom Duterme, who is in the New Business Development group at Google in Mountain View, was here talking about innovation. Tom's job is to travel around the world looking for acquisitions for Google, so it was interesting to hear what things he looks for in startups.

Imagination is key, he advised -- see the Einstein quote at the end of this post. But also there are three things which startups should take advantage of: hammers (tools), wires (broadband), rucksacks (storage).

For the 'hammer' category, he was referring to tools. In the Internet age, things like games (e.g. flash), video (e.g. hd camcorders), music (e.g. garage band), web (e.g. blogs, vlogs). These tools are all cheap and the distribution is open and free (e.g. youtube, social networks, rss).

The next concept was 'wires'. That is, broadband. It is getting faster and Tom said that "speed is not the barrier" (or at least that is the trend). He noted that there will be a generation soon that "will never know the concept of waiting" - streaming will be instantaneous, speed will be a non-issue.

The third concept was 'rucksacks', by which he meant storage. In 1992 a Gigabyte cost $4000, in 2000 it cost $20 and in 2008 just $0.30. So, he said, storage will become a non-issue too.

He said that in 50 years time this era of the Web will be thought of as a renaissance, an age of great creativity. The Internet itself is still very early, in it's 'startup' age.

It's obvious then that Google looks for acquisitions that will take advantage of the above 3 things. But how do startups commercialize those ideas? Tom had this advice:

* Collaboration - get the right people on your team.

* Fulfilling user needs should be the focus - 70-80% of ideas that fail do so because of lack of user focus. Google places a lot of emphasis on this, said Tom.

* Iterate often ("Big will not beat small anymore. It will be fast beating slow"; quote from Rupert Murdoch).

He ended by saying that imagination is better than knowledge, referencing a quote by Einstein: "We can't solve problems by using the same kind of thinking we used when we created them."

NEWS: Web Technology Trends for 2008 and Beyond: Update

Ed: Read, Write, Intelligence

NEWS: What Top Brands Spend on Advertising

Procter & Gamble, et al, Changing The Way They Buy Ads, "Wreaking Havoc" With Big Media

This week Viacom (VIA) CEO Philippe Dauman warned Wall Street that ad sales aren't going well: The 7% growth the company had in the first quarter will be more like 3% to 4% in Q2. Philippe singled out weakness in automotive industry, in addition to the already decimated financial/mortgage business

But Martha Stewart Living Omnimedia president Wenda Harris Millard (SA 100 #38) says that's just the tip of the iceberg. She says that in addition to a faltering economy, big media now faces a new problem: It can't see the future any more.

Why? Because a staple of the ad industry -- consumer packaged goods -- has changed the way it buys advertising, and the results have thrown the media business into chaos.

Earlier this year, CPG companies like Procter & Gamble (PG), under pressure from their own rising food, commodities and fuel costs, shifted ad planning from an annual to a quarterly basis and making shorter-term ad commitments. That means media companies that could once make reasonable projections for FY revenues now have to update their assumptions every few months. "The planning cycle has changed," Wenda tells us. "This is wreaking havoc on media company forecasting."...

What Top Brands Spend on Advertising

Tuesday, October 16th, 2007; -- Janet Meiners |

Want to know what top companies like Microsoft, Google, and even Coca-Cola spend on advertising? Here’s a breakdown by percent of revenues in 2006, starting with the most first (according to this article):

  1. Microsoft - more than 20 percent of their annual revenue or $11.5 billion
  2. Coca-Cola – more than $2.5 billion
  3. Yahoo - more than 20 percent of their annual revenue or $1.3 billion
  4. eBay - 14 percent to 15 percent of its revenue - which was $871 million, much of that to advertise on Google
  5. Google – In the millions rather than billions of dollars – with $188 million
  6. Starbucks - $95 million...

Zuckerberg: “Larger part of advertising is in traditional brand ...
By Nick Gonzalez 
Look at this Marketing Pilgrim post for an idea of how big the brand advertising business can be. Brand spending across our network (movies, music) seems like a test budget compared to the money that sits behind the dam. ...

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