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Showing posts with label online marketing channels. Show all posts
Showing posts with label online marketing channels. Show all posts

March 31, 2008

US Online Ad spends grows amidst slowdown

It seems not all is lost yet for those who could only see gloom and doom in US advertising spends. Amidst the sub prime crisis and the housing bubble, rising oil prices, another impending recession in making,Gold hitting records highs ,increase in unemployment data,tumbling NASDAQ and DOW Jones..and an increasing slow down in Offline advertising spends.. It seems Online advertising continues to show more resilience and even grow.

Emarketer reports that online advertising spends will contribute 10% of the total media spends in 2009.

US Online and Total Media Advertising Spending, 2006-2012 (billions and % of total media spending)

The biggest piece of good news for all online marketers is that even if internet penetration flattens out in US, or the growth rate declines through 2009, overall Internet ad spending increases will remain in positive territory—in the mid-teens or higher through 2011.In 2008 US Online ad spends will contribute around 8% of total US media ad spends.

One of the reasons why this is likely to happen is the growing realization among marketers cutting across industry, is that while traditional media ad spends tends to decrease in a market undergoing slowdown since marketers do not see the rational of increasing ad budgets in times of recession. However the internet provides an economic and value centric model that can target the right kind of audience with the perfectly designed sales pitch that is only possible through a pay per click/pay per acquisition marketing model.

Online ad spends definitely gives more value per cent specially in times of trouble with the economy. During these stingy times it makes more sense for marketers and advertisers to focus on online sales since they know precisely how their ad budgets are being spend. This online model also provides the advertisers to cut down their spending that is not being much productive.. something that is never possible with off line advertising.

March 30, 2008

Arresting Click Fraud :How Google prevents Click Fraud


In a recent post at Google blog. Google's Official Google Blog: Using data to help prevent fraud

Google basically uses three steps to ensure that advertisers do not pay for invalid clicks or clicks that have no intent ( of converting into actual sales )

The three stages are: (1) proactive real-time filters, (2) proactive offline analysis, and (3) reactive investigations.

Google uses sits logs to detect any fraduent activity and these logs acts like detective agents constantly sniffing out suspicious behavior.. These Logs serve as a huge repository of data which are used to detect patterns, anomalous behavior, and other signals indicative of click fraud.

Every single click is analyzed for click fraud by real time filters.They pore over the millions of impressions and clicks -- as well as conversions -- over a longer time period. In combing through all this information, our team is looking for unusual behavior in hundreds of different data points.
IP addresses of users also serve as important focus points for analysing user patterns in clickthroughs.

IP addresses of computers clicking on ads are very useful data points. A simple use of IP addresses is determining the source location for traffic. Google analyses if the traffic is originating from one country or city? Is that normal for an ad of this type? Although we don't use this information to identify individuals, we look at these in aggregate and study patterns. This information is imperfect, but by analyzing a large volume of this data it is very helpful in helping to prevent fraud.

Google says that the number of invalid clicks fluctuate constantly but they average less than 10% of all clicks.

Our invalid clicks rate – the activity rate – has remained in the range of less than 10% of all clicks every quarter since we launched AdWords in 2002. At Google’s current revenue rate, every percentage point of invalid clicks we throw out represents over $100 million/year in potential revenue foregone.

Further Google points that that every email received from advertisers for click fraud complaints are acted upon very promptly.

Our Click Quality team investigates every inquiry we receive from advertisers who believe they may have been affected by undetected click fraud. Many of these cases are misunderstandings, but in most cases where malicious activity is found, the clicks have already been filtered out (and not charged for) by our real-time filters. Because of the broad operation of our proactive detection, the relatively rare cases we find of advertisers being affected by undetected click fraud constitute less than 0.02% of all clicks.

January 23, 2008

Yahoo Set To Slash one Fifth Of its Workforce

In a move that aims to restructure Yahoo Inc bottomline, The company plans to slash upto 20% of its workforce globally.

"Yahoo plans to invest in some areas, reduce emphasis in others, and eliminate some areas of the business that don't support the company's priorities," spokeswoman Diana Wong told AFP.

"Yahoo has embarked on a multi-year transformation that includes making tough decisions about the business to help the company grow."

The company has been increasingly troubled by sluggish revenue growth despite launching a new online advertising platform and having hundreds of millions of users worldwide.

While posting respectable profits, Yahoo has seen its stock and image pounded because it is being overtaken by Google, who succeeded in raising lucrative deals and cash from Internet advertising.

"Yahoo is actually doing just fine; it is just that they are being compared to Google," said Silicon Valley technology industry analyst Rob Enderle.

"It is unfortunate for Yahoo that they are being compared to Google considering how different they are. Yahoo is an online portal company and Google is an advertising company with Internet search at its core."

Enderle is among analysts who believe reports of Yahoo possibly laying off 15 to 20 percent of its 14,000 employees are overstated and that the trim will be closer to five percent.

"These layoffs are done to make financial analysts think it is serious about improving the bottom line," Enderle said. "Tactically, the market tends to reward companies that do this. It is unfortunate, but true."

The latest figures from the Interactive Advertising Bureau, shows that in the first half of 2007 Google commanded a 39.8 percent market share of all online advertising in the U.S compared to a 34.6 percent share in the first half of 2006, based on IAB data for that period.

US Online Ad Revenues Minus TAC* for Google and Yahoo!, 2003-2007 (millions)

US Online Ad Revenue Growth Minus TAC* for Google and Yahoo!, 2004-2007 (% increase vs. prior year)

December 3, 2007

Affiliate Marketing : Tips for working succesfully with affiliates

Imagine a promotional tool, where you give money to your sales partners only when you are guaranteed a 20-30% increase in your sales. This is affiliate marketing in action. Affiliate marketing involves the publisher( generally the affiliate) and the advertiser( the merchant) comes together and partners in such a way,by which the publishers markets and promotes your site through links and your software tracking tool monitors the click through and the conversion rate and once a sale is made, you pay the affiliate a commission.

This is a win- win situation for everyone. However most merchants with the exceptions of the big shots like ebay and Amazon find it difficult to work with affiliates . lack of transparency, problems over affiliate commission, increasingly competitive business and lack of communication are some of the problem areas.

A visit to an affiliate site results in a click through to the merchant or destination site which is managed and tracked by tracking software. If a purchase, or other agreed action occurs on the destination site, a commission fee is paid to the affiliate site from the merchant. The tracking software places a cookie file on the visitors’ PC to prove they visited the site and this is set to expire after a period such as 30 days. Payment then occurs for any period after 30 days.

"The most obvious benefit, which is unique to affiliate marketing, is that the advertiser does not pay until the product has been purchased or a lead generated. It isreferred to as ‘zero risk advertising’. Contrast this with all forms of offline promotion where there is not a direct link between the cost of promotion and the revenue gained. The approach is also in contrast to Pay Per Click search engine marketing, where the retailer has to pay for the visitor irrespective of whether they purchase anything. As a result it is relatively easy to control affiliate expenditure and a company can readily ensure that spend is below the allowable cost of customer acquisition." ( Dave Chaffry in Introduction to Affiliate Marketing)

A further benefit for the advertiser is that the nature of affiliate sites enables them to expand their reach to a wider audience than is possible through larger portals such as news and magazine sites.

How To make a Affiliate work:

Pay good Commision:The key metric for the value of each merchant for the affiliate is Average Earnings Per Click (EPC). This will depend on the conversion rate to action on the merchant site and the average order value for retail products.

It is worthwhile for merchants to calculate their average order value and lifetime value for referrers from affiliates to see whether they can boost the EPC for their affiliates, if needed.

You can get an idea of commissions paid by searching on the client part of the Commission Junction site For example, a search on ‘Lingerie’ shows commission rates varying between 3 and 8%. Clearly affiliates will favour retailers offering 8% with more prominent placements (unless the merchant site has a significantly lower conversion rate). A search on credit card shows a fixed amount varying by lead or sale. Again, larger amounts will be more favourable to affiliates, dependent on conversion rates.

Be Flexible with your Commission Rates :Common generic products will have a low commission rate and niche products tend to pay well. Be reasonable with the structure of commission. You cant have a one size fit all policy. A new product that has a high profit margin and is volumes driven cannot have the same commission as a niche products that has a high cost.

Also try to have a weekend deal or a holiday offer for your affiliates . This is a great way for affiliates for bringing something new to their customers. Often you will see that the affiliates will go out of their way to promote you.Take Steven Rothberg, president of CollegeRecruiter.com, a career site for college students and recent graduates. He pays about 50% more than many other companies in order to attract the best affiliates possible. About 10% of his revenues come from his affiliate

Increase the Cookie expiry period: A affiliate will work more with a merchant that sets the cookie expiry for 20 days rather than working with someone who has set it for 5 days , because of the fact that he can drive more sales in 20 days.However when using an affiliate network, only the most recent affiliate is credited.

Remember the 20:80 Rule :This often quoted marketing rule works here too . your 80% of your sales will be made by the top 20% of your affiliates . Work closely with the super affiliates and pay special attention to them.

Optimise Your Creatives:Rich text media, Great copy, good color combination and site usabilty designs are as important in handling sales through your affiliates . Try to give frequent feedbacks to your affiliate in terms of managing campaign tracking and feedback control.

One Tier or two Tier Commissions:Some merchants use Multi-Level Marketing arrangements, where some affiliates use a referral network to generate more sales for the company and commissions for themselves. An affiliate that is working with a particular company’s program will attract other partners to join up. It, then, receives commissions from any activity those newer affiliates generate. The system ensures more income for partners throughout the chain and greater visibility for the small business.

Affiliates should Compliment , Not Compete : One the of the most debatable points in affiliate marketing often results from the fact that affiliate and the merchant often compete in the same space and this often results in higher prices, more competition and less of sales However, the single biggest problem of working with affiliates is competition on Pay Per Click networks (PPC). Imagine a situation where you have 100 affiliates promoting a retailer . Often these affiliates buys traffic via PPC which drives traffic to your site too .These may inflate the advertising cost of the retailer, even to advertise their own name and brand.

Sometimes they may place ads which offer to compare your deals to competitors. Fortunately, the PPC networks will usually stop what is effectively trade mark infringement as long as the merchant is aware of it and asks it to stop. Also with these affiliates compete with organic search rankings too and often this may result in one of your affiliates ranking above you in a particular keyword. if the affiliate promotes multiple merchants, your sales may not eventually increase even though your affilate may get good cuts in commissions.

Use of Sypware and Adware in Affiliate programs:
With the affiliate networks providing potentially thousands of affiliates there is reputational damage possible from less ethical affiliates. Some may have salacious content that a merchant does not want associated with their brand. Some may use spyware, adware or scumware software applications to get their links. Typically affiliate networks will exclude these practices in their terms of agreement, but it may be impractical to monitor some exceptions.

Watch out For Affiliate Scams and Spams:There are a variety of scams out there, so be careful. One common type works this way: An affiliate earns a commission on an order that they actually place themselves, after which they return the product. “The merchant ends up paying a commission on a product they didn’t really sell.”As for spam, you can be held legally responsible for the actions of your affiliates that send out junk mail on your behalf, thanks to the CAN-SPAM Act of 2003.

You can find more information on Successful tips on working with Affiliates at

(Special thanks to Dave Chaffry )