Tag Archives: Advertising

Yahoo’s Mixed Finances

Right, so Yahoo beat the analyst expectations (GOOD!), but still posted a fourth quarter loss of some £212m (BAD!).

That’s a lot of money to lose, especially considering Google contiues to lead the pack – Last week they also defied analyst predictions, but still made a profits of £266m. Impressive amounts, but rather worringly for them, it’s a drop of 68% year-on-year.

Returning to Yahoo though, it’s even more depressing. Profits fell by 34% compared to the same period last year. Although they’ve got a new CEO at the helm, (Carol Bartz), who I’m sure actually do a great job in turning the company around, I’m not entirely convinced that her $19m YEARLY salary is going to help improve the revenue streams of the business.

MySpace Music

Big brands are being stalked by MySpace to attract support for its ad-funded music service, MySpace Music, which will apparently be the social network’s biggest launch to date.

MySpace has joined forces with four major record labels, offering millions of UK consumers the opportunity to stream their entire back catalogues for free.

The site is also topped to be the biggest ad-funded music service in the UK, when it goes it goes live next year… The likes of McDonald’s, Toyota and Sony Pictures are all being hassled by the social network giant, as it offers them a variety of ad spots including a skinned player, pre-roll and in-video ads, playlist sponsorship and old-school display.

Agencies seem to be making little worried noises about the fact that the rates are likelyto  rise – but I’m more bothered about the fact you can’t download anything. On top of this, especially with Amazon’s new MP3 download service, online music seems to be getting increasingly competitive. Which hopefully means either cheap, or free…

Apocalyptical Confusion

Ok, there seems to have been some confusion over my opinion that the digital industry will flourish as the economy takes a down-turn.

My original comments related to online marketing.

Alongside my otimistic agency views, I’m also of the opinion that other internet-functioning businesses could be hit pretty hard. Examples:

E-Bay issued a stark warning that profits could be down this christmas – this last quarter saw revenue rise by 12% ($2.12bn) which was lower than analyst predictions. A quick recalculation later and the number-monkeys expect total 2008 revenue to be between $8.53 – $8.68bn (still more money than most people will ever see). 

To be more competitive, Amazon has slashed it’s free delivery qualification costs from £15 to £5. This means that over 90% of their products will be delivered for free. I personally think this is just common sense – leading industry experts have long-advised companies to play around more with free delivery.

Google’s market-share has dipped a teeny-tiny bit. My cynical side says that this explains why they’ve suddenly backtracked on their long-standing policy not to allow gambling advertisements. Now, potentially generating £millions more with this hypocritical move, as we have already seen a quarterly increase on profit this year. I’m sure we’ll see Google beginning to strangle the competition again.

Social networks are struggling to generate viable income. Which is no big secret. Sadly though, this is directly affecting people working in the industry, as they become statistics in the economic downturn. The most recent victim is Hi5, the third largest global network, where it was announced this week that around 10-15% of the workforce would be laid off. Other companies being affected include start-ups and software; again, the most recent casualty being Jive.

When the whole world is suffering economic crisis, it’s obviously going to affect the world-wide-web. But to reiterate my original point; some parts of the digital industry will do well from the misfortune of others. Yes, it will get increasingly competitive, but with decent strategy and user-confidence, those who succeed will be very apparent. Whilst we’re seeing companies collapse every day, I hardly think this is the end of the internet.

Economic Highs, Not Lows

The wonderful thing about the digital world is that everything can be recorded. Inevitably, the usual privacy/infringement issues arise, but for marketing-men (and women) , this is brilliant. By recording user information, patterns, online data etc. almost instantly, advertisers can see if a campaign is working or not. Following the entire process from start to finish in such detail, they can indentify where users become disinterested or excited, they can tell how users react to specific offers, products, services and websites, they can collect and assess and conclude data like you wouldn’t believe.

Actually, that’s the theory. I’ve seen quite a lot of poorly-run campaigns over time (I’m not the only one); doesn’t matter what they are: PPC, Affiliate, SEO, Display… You could have the best campaign idea ever, but if the strategy isn’t right, I can assure you that it won’t achieve it’s full potential. Digital is about quick response – in this sense, it’s direct marketing at it’s finest: Ads targeted at relevent users, responses that can be traced and assessed, strategies that can be tweaked and fine-tuned for maximum effect. Because of this, it’s a total no-brainer that whilst the economy is down, digital is on the up.

From a marketing perspective, digital is inexpensive, trackable, changeable and direct. Far cheaper than TV, Radio, Press or Outdoor, in the current economic climate, it will practically guarantee money well-spent and yeild a return on investment. (Providing any campaign is well-run). It even enables SME’s to successfully compete with bigger players (all the more important right now). From a user’s perspective, the internet can provide more services, information and products than they would find offline – usually at cheap, comparable prices.

It’s a win-win situation for everyone and, with the slump we’re seeing offline, where people are opting to try and save money, it’s no suprise that the digital world has grown enormously these past few months. I’m seeing it everyday and I imagine that it’ll soon be pretty apparent to even the most digital-shy technophobes.

As an addendum, I found this. It pretty much proves my point.

Second Questioning

Right, well, it’s not often I get confused online – being a total geek, I can practically see binary code as a oil painting. However, I’m not fully understanding the concept behind The Second Web.

It says it will be launching in November and seems to be, at it’s most basic, a web-browser within a web-browser. Fundamentally, not a bad idea – especially considering it’s apparently been dreamed up and built by a 16-year old – but huge problems come with it. Second Web has been built with the intention to find a new way of selling advertising space online, and already it’s become a nice little earner: With the option to buy .com-domain names (that already are being used in the REAL internet) for only $5, more than $25,000 has been made before Second Web is even online. This causes a real headache legally, as it can easily break copyright laws and potentially damage brands. For example, if you put www.google.com in the Second Web browser, you’re faced with a page that says nothing but “REMOVED FOR COPYRIGHT INFRINGEMENT”. What I can see here relates to an earlier post on this blog, where I commented about the ludricous amounts of money domain names can bring to their owners if they ever sell them on. It’s very likely that users have been snapping up big internet brands the (Myspace’s, Ebay’s and MSN’s of the digital world) in the hope that they can sell them back to these companies at an inflated rate.

I might have this totally wrong – maybe companies are happily buy up their domains for a second time in order to re-serve them on this second-level internet browser. In my opinion, it seems unlikely, as all sorts of issues arise; the fact that I doubt the sites will be indexed very well by search engines; the fact that to access this second-level, you need to have the browser-in-a-browser open; the fact that you could possibly be hounded by commerical lawyers for using someone else’s legally owned name. 

I’m also failing to see any solid advertising opportunity, due similar reasons that relate to what I’ve already mentioned – How would paid-search ads for a second-level-site be displayed in the top-level internet?! How (if at all) would top-level sites be advertised, second-level?! It seems to suddenly have a lot of issues and get very confusing when we start to talk about advertising. I’m also worried, it seems to have no relationship to any of the relevent monitoring bodies – eg. the IAB – nor does it appear to be a registered online business.

I might have this totally incorrect (can anyone enlighten me?) and I’m categorically NOT stating solid facts or making accusations. I honestly admire the thought and effort behind this project; there’s no denying it’s in the entrepreneurial spirit, but I can just see so many potential problems and pitfalls with the idea. It seems quite likely to me that established internet users, companies and advertisers will want to protect themselves as much as possible – probably through legal means and actively avoiding the site, but I’m happy to say that I could be totally wrong. All I can really say at this point is, let’s see what happens?

Don’t Be Evil

In case it’s escaped anybody’s attention – possibly those without a computer or any form of intelligenceGoogle are celebrating their tenth birthday.

So, from humble beginnings a decade ago, Google turns double-digits and simultaneously is recognised as the worlds most powerful global brand, as charted by research-consultancy firm, Millward Brown. Interestingly, out of the top-ten brands on this list, four are computing-based: Alongside Google (1), there sits Microsoft (3), IBM (6) and Apple (7). Furthermore, China Mobile (5) and Nokia (9) bulk up this techno-team. Unquestionably, this is a reflection on the importance of technology in modern everyday life, but perhaps any questions should be directed towards Google and the massive monopoly they’re building for themselves?

There are hundreds of articles and blogs floating around surrounding the ethics of Google, particularly in their data-collecting/retaining methods. Whilst I’m totally for companies being allowed to make profits, no matter how big the amounts involved, I like to try and understand the motivation behind the cash. When Google bought DoubleClick, I was worried – and partly, I still am – that the biggest search engine on earth was buying one of the biggest measurers of ad-trafficking and measurement. Not only does this possibly stamp out competition, but the issues raised surrounding data and the fact that Google will soon be Big-Brother-esque in their knowledge of users. (Therefore able to increase revenue even further). It just seemed to be a bit bullying when it happened, and a far cry from the informal Google “Don’t be evil” slogan. Other stuff happened this year, such as Brand-protection no longer being allowed on PPC-ads, so competitors could appear on each other’s terms; another money-maker for the company.

Whilst Google undeniably do a great deal of good, both online and off, (from free source coding and decent email through to setting up a $1bn charity fund and uniting knowledge-sharing), it nevertheless remains that some of it’s business practices can be viewed to sway slightly away from what the company preaches.

Changing.com

In an effort to improve it’s advertising revenue, Yahoo has decided to get a new image…
And about time too.

I’m actually quite a big fan of Yahoo – possibly because they seem to be an underdog, caught between the world domination battle of Google and Microsoft – but their fussy, over-cluttered homepage has always irritated me slightly. As web 2.0 continues it’s development, and with 3.0 already arguably upon us, site design is all about simplicity, with the user’s personal needs in mind. A great example large corporations realising this, and actually doing anything productive about it, is the BBC, where, to mark the beginning of 2008, they gave their retro 90’s site a complete (and long overdue) makeover. Worryingly, although the BBC has great digital content, it’s traditional core is hardly based online, so why is it often ahead of equally as huge, solely digital-based companies? For me, that’s not really a can of worms I want to open just yet; I merely wanted to share my genuine enthusiasm that Yahoo has finally decided to embrace the concepts surrounding usability.

It seems the basic idea is that Yahoo will “choose” random users, who will provide instrumental feedback, which will then be used for redesigning the site that allegedly 300m unique people visit each month. With their last foray into design change going back to mid 2006, Yahoo seem to have finally grasped the concept that to try and rival the likes of iGoogle, they need to step up the mark. Actually, I made that last sentence up – it’s what I want to believe. In reality, it seems that following the fiasco the world witnessed when Microsoft tried to unsuccessfully buy Yahoo for $44.6bn, Yahoo is going down the path of belief that by making their site and services more user-friendly, they will both capture more users and more prominently/directly be able to advertise. Therefore new site design = greater chance of increasing ad revenue. Logically, this will probably work, and although I’m happy that change is happening, I’m disappointed it’s mainly for revenue purposes, rather than aesthetic reasons.