Yahoo Pitches New Ad Network To Battle Google’s AdSense

From my Forbes.com blog The New Persuaders:

Search ad giant Google grossed about $10 billion last year from AdSense, the program that syndicates text and display ads to thousands of websites from the New York Times to the tiniest niche publishers. So it’s no wonder that more than two years after shutting down its own AdSense competitor, a struggling Yahoo is taking another crack at it.

Today, it’s announcing a partnership with Media.net, an under-the-radar provider of contextual advertising like AdSense’s that runs ads on websites matched to the site audience’s interests. The program, called Yahoo! Bing Network Contextual Ads, will allow websites to run text ads (like those pictured on the top right) from the Yahoo! Bing Network, the recently renamed search alliance between Yahoo and Microsoft.

The awkwardly named program has the potential to be a badly needed boost in revenues for Yahoo, which have been stagnant for a long time. Despite Yahoo’s weakened state, it still has a valuable brand, worldwide audience of a half a billion, and search ad deal with Microsoft. Those factors will lend the venture instant credibility in an online ad industry that’s an increasingly crowded, competitive morass of ad networks (perhaps including a likely new one from Facebook), ad exchanges, an alphabet soup of ad tech providers, and, of course, Google’s AdSense.

Talks have been underway between Yahoo and Media.net since 2010, even before the Yahoo Publishing Network was shut down, according to Divyank Turakhia, founder and CEO of Media.net. And Turakhia’s other related ad companies had worked with Yahoo for a couple of years before that. So don’t get the idea that this is a big new idea from Marissa Mayer, Yahoo’s relatively new CEO. …

Read the rest of the post at The New Persuaders.

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Google Research: No Mobile Site = Lost Customers

From my Forbes.com blog The New Persuaders:

Google has increasingly pushed its advertising customers to create special mobile websites because, as we know all too well, most conventional websites look awful on a smartphone. Now, Google’s providing more research to back up its advice.

The search ad giant is hoping, of course, that the better mobile experience people have, the more they will use Google search to find sites and products. A poor mobile experience reflects badly not only on the sites but on Google searches that sent them there. That’s especially worrisome today as Facebook, to name one rival, and Twitter, to name another, double down on mobile advertising. And it happens that Google has some relatively new mobile ads to hawk as well.

So in a survey of about 1,100 U.S. adult smartphone users (not tablets, in this study) conducted by  market research firms Sterling Research and SmithGeiger and released this morning, Google offers advertising folks ammunition to get their laggard information-technology and marketing chiefs moving. A few of the highlights (or, in some cases, low points):

* Two-thirds of smartphone users say a mobile-friendly site makes them more likely to buy a company’s product or service, and 74% say they’re more likely to return to the site later. “Mobile is creating massive opportunity,” says Jason Spero, head of Google’s global mobile sales and strategy.

* 61% says that if they don’t find what they’re looking for (probably within about five seconds), they’ll click away to another site. Half say that even if they like a business, they’ll use its site less often if it doesn’t work well on their smartphone. “This is a wakeup call,” says Spero. “You will lose customers at the moments that matter” without a site specifically made for mobile devices.

* 72% of users say a mobile-friendly site is important to them, but a nearly unanimous 96% have visited sites that aren’t. “When you offer users a desktop experience on mobile,” Spero notes, “it’s kind of crap.”

Google’s advice: Create a fast mobile site with big buttons and text, keep steps to complete tasks to a minimum, and–you knew this was coming–promote the site with Google mobile ads for the two-thirds of people who use search to find a site. That last may be self-serving–though one Google mobile advertiser, online discount perfume merchant FragranceNet.com, told me that the ads were a significant factor in a 48% jump in mobile sales following its creation of a mobile site. But it’s hard to argue with the rest.

Beyond Search: Google Tunes Up Display Ad Machine

Image representing DoubleClick as depicted in ...

Image via CrunchBase

From my Forbes.com blog The New Persuaders:

Just a few months ago, Google sketched out a plan to bring together a wide array of its display ad buying technologies into a more coherent, easier-to-use offering. On Wednesday, it’s announcing that it has put some meat on the bones of what it now calls the DoubleClick Digital Marketing platform.

This is a little inside-ad-tech-baseball, so bear with me. But essentially, Google is gradually refining the pieces of what it hopes will be something of an operating system for online advertising, not just the search ads it dominates but the picture- and video-based ads that support most websites:

* It’s close to integrating key pieces of ad buying and creation systems that it built or acquired in recent years. For one, the ad buying system DoubleClick Bid Manager–the “demand-side platform” formerly known as Invite Media that Google acquired two years ago–will move out of beta test mode and become available to all customers next month. Google says improvements in the underlying technology infrastructure have reduced the time it takes to connect with various ad exchanges, allowing beta customers to access 16% more ad inventory on the thousands of websites that use DoubleClick. …

Read the complete post at The New Persuaders.

Cease Fire! Google Debuts YouTube App For Apple’s iPhone–With Ads

From my Forbes.com blog The New Persuaders:

So much for that thermonuclear war.

When Apple removed its YouTube app from its App Store last month, a lot of folks assumed it was one more battleground in an escalating war between it and Google. That seemed like the wrong narrative at the time, and today, it appears there wasn’t much to the supposed skirmish after all. Google has just introduced its own YouTube app for Apple’s iOS devices, specifically the iPhone and the iPod Touch. It’s available in the App Store this morning.

That means that the YouTube app, the previous version of which was created by Apple, no longer will be a default app on the devices, so people will have to manually install it. But given how popular YouTube is, millions of people no doubt will. And the upside is that the app is faster, has features such as an easier guide to channels, and allows you to share videos more easily on Facebook, Google+, and elsewhere.

Most of all, you can now watch tens of thousands more videos, in particular music videos like Taylor Swift’s above. That’s because the new app, unlike the old one, can run ads. The inability to run ads on the old one was a reason many content providers didn’t let them be viewed on the app.

More to the point for Google, this means it can now earn some serious coin from mobile visitors. That’s crucial as mobile devices become the default way people are reaching content on the Web. Google says a quarter of YouTube views, more than a billion a day, are from mobile devices.

There’s no iPad app yet, which seems like a serious shortcoming. Google says it will have one in “coming months,” but obviously sooner would be better, especially with the iPad Mini due out by next month.

Of course, Google and Apple have plenty else to fight about, from patents to mobile operating systems. So don’t expect to see Larry and Tim hugging onstage or anything. But they won’t be fighting over this particular issue anymore.

The Early Bird Gets The Worm: Twitter Beats Facebook In Mobile Ad Sales–For Now

Twitter is stomping Facebook when it comes to selling ads on mobile devices, according to a new study out this morning.

According to eMarketer, Twitter grossed $129.7 million in mobile ad sales in the U.S. vs. Facebook’s $72.7 million. To some extent, that’s not saying much, since Google and even Pandora, each selling mobile ads for at least a couple of years now, beat both of those companies. In particular, Google dominates thanks to its mobile search ads, which constitute more than half of all mobile ads, though for display ads alone, Google is just barely ahead of Pandora.

Overall, according to eMarketer’s crystal ball, mobile ad sales will total $2.61 billion this year, rising to $12 billion by 2016 (though you’d do well not to put too much stock in forecasts that far out). These are net revenues after paying distribution partners. This year’s tally is still only about 1% of overall online ad sales.

eMarketer’s capsule analysis of Facebook’s and Twitter’s mobile results and prospects indicates the latter company won’t keep its lead for long. …

Read the complete post at The New Persuaders.

Google Shuts Off TV Ads Business

From my Forbes.com blog The New Persuaders:

After five years of trying to sell ads on television using the automated buying system that works so well for its signature search ads, Google has finally given up. In a blog post this afternoon from Shishir Mehrotra, VP of YouTube and video, the ad giant said it will shunt the group’s staff to other projects:

Video is increasingly going digital and users are now watching across numerous devices. So we’ve made the hard decision to close our TV Ads product over the next few months and move the team to other areas at Google. We’ll be doubling down on video solutions for our clients (like YouTube, AdWords for Video, and ad serving tools for web video publishers). We also see opportunities to help users access web content on their TV screens, through products like Google TV.

The shutdown is clearly a disappointment for Google, yet another sign that its math-driven advertising systems don’t readily translate to traditional advertising. Back in 2009, the company shut down radio and print ad efforts for lack of interest.

Mehrotra’s not being entirely disingenuous when he says that Google’s efforts are better spent on online video advertising. After all, more and more TVs get connected to the Internet and more and more people watch TV shows on their laptops, smartphones, and tablets. With its Google TV project and its fast-growing YouTube video service, Google remains in a prime position to vacuum up ad revenues as big advertisers start to follow their audience onto the Web.

Indeed, YouTube especially has shown considerable traction in attracting new ad spending–$3.6 billion this year, by the reckoning of Citigroup analyst Mark Mahaney. As I wrote in a recent story, YouTube is where Google is placing its television-scale bets:

Now Mehrotra’s goal is to try to grab a big chunk of the $60 billion U.S. television business. But to do that, and fend off TV-content-oriented online rivals such as Hulu, YouTube has to become a bit more like conventional TV. To that end, it organized itself last year into TV-like channels, investing $100 million in cable-quality launches from Ashton Kutcher, Madonna, the Wall Street Journal, and dozens of others. More and more TV advertisers are being won over, says David Cohen, chief media officer at the media buying agency Universal McCann. “They’re getting marketers to think about YouTube as a viable outlet,” he says. 

Mehrotra, who last year became ­YouTube’s vice president of product, envisions millions of online channels disrupting TV, just as cable’s 400 channels disrupted the four broadcast networks. “We want to be the host of that next generation of channels,” he says.

In other words, Google’s strategy is to attack the TV ad business from where it’s strong instead of from where it’s not.

Why Do Programmers Hate Internet Advertising So Much?

Facebook ad question (Photo credit: renaissancechambara)

From my Forbes.com blog The New Persuaders:

Another week, another pontificating programmer slamming online advertising. What is it with these guys?

The latest example is a steaming heap of linkbait from software developer and entrepreneur Patrick Dobson entitled Facebook Should Fire Sheryl Sandberg. That would be the chief operating officer of Facebook, whose purported crime is that she steered Facebook toward being an ad-supported company.

In Dobson’s telling, while Facebook cofounder and CEO Mark Zuckerberg was off at an ashram in India, onetime Google ad exec Sandberg mandated that Facebook would henceforth be an advertising company. Proof of her folly? Facebook’s now worth half of what it was at its IPO three months ago as it “continues to flounder in advertising hell.”

This, despite the fact that Facebook will gross about $5 billion in ad revenues this year, despite the fact that its current market cap is still more than $40 billion less than eight years after the company’s founding in a Harvard dorm.

Thousands of Web developers would love to flounder this badly.

Dobson’s preferred alternative is that Facebook should gradually phase out advertising in favor of–and I have to get technical here, because the bigger picture he provides is fuzzy–selling access to its application programming interface. That way, developers can build businesses like Zynga did on top of the social network in the way personal computer software developers built applications atop Microsoft’s Windows. From his post:

… There is massive value in the social graph and the ability to build applications on top of it. I believe the value is greater than all of the advertising revenue generated on the web to date. … What is the best way to monetize the social graph? To sell access to the social graph! … Developers can then figure out if advertising, or micro transactions, or payed access is the best way to monetize the social graph.

I’m not really sure what “selling access to the social graph” would be, though it sounds like the result could make Facebook’s many privacy gaffes to date look tame.

But the bigger problem is the persistent implication by tech folks like Dobson that advertising is beneath them, and beneath any intelligent human being. Now, I’m no huge fan of most advertising, and all too often it is indeed lame. But there’s no doubt it can be useful at the right place and time, and even when it misses the mark, advertising is a small, remarkably frictionless price to pay for a whole lot of free Web services.

The notion that advertising is evil, to use a favorite term of Google critics, or at least useless is a longstanding meme in Silicon Valley. It goes at least as far back as Google’s founding, before it became–right–the biggest online ad company on the planet. Cofounders Larry Page and Sergey Brin famously wrote in their Stanford doctoral thesis describing Google that advertising could pollute search results.

Why this antipathy to advertising? A lot of tech folks seem to believe they’re immune to the influence of advertising. More than that, they assume that no one else is much influenced by it either (despite ample evidence over many decades that ads do influence people’s attitudes and behavior). Therefore, the reasoning goes, ads are nothing more than an annoyance, an inefficient allocation of capital. Dobson accuses Sandberg of a “rampant lack of business creativity” that has “no place in centers of innovation,” later saying she should start an ad agency in Miami. …

Read the complete post at The New Persuaders.

Here’s How Badly Google Wants To Make Nexus 7 Tablet A Hit

From my Forbes.com blog The New Persuaders:

Only a couple of times has Google deigned to clutter its famously spartan home page with advertising. This is one of those times.

Today, Google is running an ad below its search box for the Nexus 7, the seven-inch tablet that it hopes will steal a march on Apple’s enormously popular iPads. Why now? Google hasn’t said, but it seems likely the ad push is looking ahead to Apple’s expected October release of the seven- to eight-inch iPad Mini, as well as to the expected announcement of Amazon.com’s new Kindle Fire next week.

As tablets take the computing market by storm, Google clearly views them as a critical device on which to make sure its search and other services, and the advertising that rides atop them, continue to be front and center. I remain doubtful about whether Google itself really wants to become a full-on maker of hardware, Motorola Mobility acquisition aside. But at the very least, a successful Nexus 7 could spark other manufacturers to pick up the pace of innovation in tablets.

That’s all the more critical in the wake of Apple’s big win in court last week, when Samsung was found to be infringing multiple Apple patents. Although Google’s underlying Android software was not directly involved, the jury’s ruling cast a pall on Android’s potential for further gains vs. the iPhone and the iPad.

The Nexus 7 spot marks a rare appearance of a Google ad on its home page, though not the first one. The company also ran ads for Motorola’s and Verizon’s Droid phone in 2009, followed by one for Google’s own Nexus One phone a few months later. It also has promoted other Google products, including the T-Mobile G1 phone in 2008. And just a few days ago, if you hovered over the “I’m Feeling Lucky” button, you got alternative messages that sent you to other Google services.

Still, don’t expect to see Google start splattering ads all over its home page. After all, then we’d all stop writing about how unusual it is and Google won’t get the free publicity it’s getting right now.

How To Advertise Without Really Advertising On Mobile Devices

From my Forbes.com blog The New Persuaders:

As more and more of us access online content and services via smartphones and tablets, it’s becoming apparent that advertising that works on the Web viewed on desktop and laptop computers just won’t work as well–or at all–on mobile devices. Just look at Facebook’s stock price, sitting at half its IPO level partly because investors can’t figure out how or even if the company can make money from advertising on mobile devices.

Indeed, many people in marketing are wondering if advertising is even the best way to market on mobile devices, where screen real estate is tiny and people view traditional ads as an interruption. The advent of truly mobile computing, says MediaPost columnist Steve Smith, may allow us to rethink the fundamentals of marketing.

What might work better than banners on mobile devices? A panel at MediaPost’s Mobile Insider Summit today in Lake Tahoe, streamed online, took at crack at it, and panelists had some pretty interesting answers. On the panel were moderator Anna Bager, VP and general manager of the Interactive Advertising Bureau‘s Mobile Marketing Center of Excellence; Lars Albright, cofounder and CEO of mobile engagement company SessionMBrent Hieggelke, chief marketing officer at Urban Airship, a mobile message company for apps; Jon Vlassopulos, CEO of mobile entertainment studio/agency skyrockit; and Brian Wong, founder and CEO of mobile rewards network Kiip. Here’s what they had to say:

Bager says this is the “non-banner” panel. The banner is not dead, she says, but we need to see an evolution of banners and how we advertise on different screens.

Q: How is a mobile user different from a TV, radio or Internet user?

Hieggelke: Mobile devices are much more personal. They’re never beyond an arm’s length from people.

Wong: The person is no different. The usage is a lot more intimate. The smaller screen is seen (by marketers) as an impediment, which is frustrating.

Q: How can you use mobile devices differently from other channels?

Vlassopulos: We hope the differences will wash away. If mobile can be at the beginning of the idea channel, then the other ideas and creative will flow.

Albright: Too much marketing feels random on mobile.

Wong: One of the most exciting things we’re seeing is going beyond trying to spur actions. Tapping into streams of existing behavior has a lot more promise.

Vlassopulos: The notion of interruptive advertising in theory could go away and eventually will go away. If you start to think of advertising as content, and social media has helped here, then people might see it as something they like.

Wong: When you have an intimate relationship with someone, you don’t want to mess it up by constantly yelling at them. You can do that (intimate relationship) with mobile.

Albright: New formats such as rewards and opportunities to engage work better than banners. About 90% of people opt in and engage with these new formats, vs. 90% finding them annoying.

Wong: You need to let people maintain the activity they’re already engaged in. …

Read the complete post at The New Persuaders.

Stung By Click Fraud Allegations, Facebook Reveals How It’s Fighting Back

From my Forbes.com blog The New Persuaders:

It’s a question that has haunted online advertisers since soon after Google perfected pay-per-click search ads a decade ago: Are those clicks from real potential customers, or are they from scammers draining my ad budget?

Now the issue of “click fraud” has hit Facebook full-force. On July 30, Limited Run, which provides software to enable bands and music labels sell physical products like records, said it was closing its Facebook account after finding that some 80% of the clicks it got during a recent ad campaign on Facebook were likely generated not by real people but by bots. Those are coordinated groups of computers hijacked by scammers or spammers, so any clicks they generate cost advertisers money for no benefit. (In a separate issue, in fact the main reason Limited Run said it’s leaving Facebook, the company also said Facebook asked it to spend $2,000 on ads in order to change its Facebook page name, something Facebook has said is not its policy.)

Limited Run said it came to the conclusion that the clicks were fraudulent after running its own analysis. It  determined that most of the clicks for which Facebook was charging it came from computers that weren’t loading Javascript, a programming language that allows Web pages to be interactive. Almost all Web browsers load Javascript by default, so the assumption is that if a click comes from one that isn’t, it’s probably not a real person but a bot.

To be clear, Limited Run isn’t charging that Facebook itself is responsible for those apparently fraudulent clicks. Often the culprits in click fraud are small-time ad networks and other outfits that pay people to click on Google and other ads they run on their sites, though that’s unlikely to be an issue for Facebook, which does not yet run its ads outside its own site as Google and others do. Perhaps, Limited Run has suggested, rivals could be using the bots to cost the company money by forcing it to pay for useless clicks.

The click fraud issue has at times loomed large for Google and other companies because of the potential impact on advertiser trust, and Google continues to fight click fraud–as does Facebook. Indeed, the issue isn’t new for Facebook either, with complaints, including lawsuits, bubbling up since at least 2009.

But while click fraud doesn’t seem to have driven away a large number of Google advertisers, whether because the company has minimized it or because advertisers simply factor it in as a cost of doing business online, the issue is a particular concern for Facebook now. It’s trying to prove to skeptical advertisers and investors that its ads work, and claims that there’s rampant click fraud don’t help. At the same time, Facebook has said recently that some 1.5% of its nearly 1 billion accounts are “undesirable,” meaning “user profiles that we determine are intended to be used for purposes that violate our terms of service, such as spamming.

Facebook has declined to say much about the Limited Run situation, though the company says it believes it catches and filters out the vast majority of “invalid clicks” before they’re even charged to advertisers. Its own page on “click and impression quality” doesn’t reveal much detail about how it deals with click fraud, however, so I asked the company for more insight on what it’s doing about the problem.

Mark Rabkin, an engineering director on Facebook’s ads team, responded to questions by email. While at times he’s repeating what Facebook has said before, he also reveals that the company has a growing staff of 300 people working on security and safety and explains in more detail the various ways the company tries to catch bad clicks. Here are his answers. …

Read the complete interview at The New Persuaders.

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