Along with the unveiling of the Android mobile platform in 2007 came the debate comparing the Andriod operating system head to head against Apple’s iphone operating system. Today, as more and more android powered phones come about, phones like Verizon’s new Motorola Droid, more people get wrapped up in this debate.

Regardless, to me, it really doesn’t matter which particular phone holds the crown today.  What I am more interested in is the tomorrow and the direction in which these open standard powered mobile devices are headed under the guidance of the Open Handset Alliance. Particularly, to what magnitude will these implementations affect Social Media, SEO, and PPC? (more…)

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This past quarter saw significant Year over Year LOSSES in Online Ad Revenue:

• Yahoo had revenue of US$1.58 billion, down 13 percent from the first quarter of 2008.
• Microsoft said that online advertising revenue had plummeted 16 percent to $521 million due largely to a fall in display advertising.
• AOL ad revenue dropped a startling 20% in Q1.
• Google’s first-quarter earnings showed the slowest revenue growth (6%) year-over-year since the company went public in 2004 – but it was growth none-the-less.

Google’s profits were boosted largely by cutting research and marketing costs, eliminating jobs, and shuttering its newspaper and radio ad units.  The reality about Google’s Ad revenues is that the first quarter of this year is the first time there was ever a Quarter over Quarter decline in revenues.

The Automotive Problem

Recent data from the IAB Internet Advertising Report states that in 2008 the Automotive sector accounted for the third-largest category of online advertising spending at 12 percent of 2008 full year revenues or $2.8 billion.  Obviously, the economic situation of automakers has changed in 2009 and a good share of that $2.8 billion dollar market is in serious jeopardy.

The Economic Reality of Automotive Online Advertising is here now:

• The Federal Government actually cut Chrysler’s advertising budget – including online as part of its bankruptcy
• 789 Chrysler Dealers will be CLOSED by June 9.
• 1,100 GM Dealers will be closed by the end of 2009 – there may be more coming
• It was reported in January that GM was cutting its advertising budget 20% for 2009. They have previously stated that half of their advertising budget was being spent online to the tune of $1.5 BILLION dollars.

The cumulative effect of all these issues on search engines is obviously huge.  We have an automotive OEM client and work pretty closely with Account Manager’s for each of the major search engines, at least the ones that haven’t been laid off…  The tone and the communication with the engines has definitely changed in recent weeks.  Some recent technical and legal changes also seem aptly timed with doing what it takes to get those ad revenues back up – or at least maintained:

• Google Account Representatives will now discuss the idea of “Conquesting” other Automotive OEMs trademarked terms – as long as you the client initiate the conversation. A year ago they were so scared of all the legal issues they wouldn’t allow discussing it at all.
• Google announced that retailers that sell other companies trademarked products can now use those trademarks in their ad copy. This will improve those advertisers’ impression shares and raise Cost Per Click bids for those trademarked terms.
• Yahoo is getting very EXSPANSIVE about its Advance Match Type for keywords to the point where its search quality is almost as bad as Google’s Advanced Broad Match. Both of which increase clicks for search queries not even close in relevance to the actual keyword being advertised on.
• MSN rolled out a new expanded Content Network that will show MSN Adcenter ads contextually triggered on sites like Wall Street Journal-WSJ.com, Runnersworld.com and Fox Sports. This should increase their ad impressions dramatically.
• An “un-named search engine” that used to give us incredible Quarterly competitive insights that showed how our client compared to the OEM Average for Quarterly Spend, Cost Per Click and Click Through Rate has chosen not to share that specific information anymore. In effect giving us a much cloudier picture of what reality in the Online Automotive Space really is.

The problem with almost all of the technical things on the above list is that they offer high impressions for low quality clicks from the perspective of conversion.  Conquesting other brands can offer high traffic and almost nothing in the way of actual conversions.  MSN Content Network can potentially get lots of traffic and impressions, but will likely have very low conversion rates for advertisers – just like Google and Yahoo’s Content Network.

Online advertisers need to examine what the search engines are offering them, but keep a close eye on conversion performance and quality – because the Search Engines REALLY need the money.

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The barrage of media about advertisers slashing their traditional media advertising (TV, Radio, Print) budgets for 2009 and re-allocating it to online advertising have been coming at a clip of almost a story per day on the subject of late.

As an online marketing agency, we obviously welcome the change and appreciate that our efforts are being recognized by our clients as being more efficient than other forms of advertising. We welcome the idea of finally having enough budget to get a fully budgeted impression share for our PPC Campaigns and trying to find out if the sky really is the limit to online marketing success.

But like everything else in life, there are “two sides of the coin”. Throwing more money at online advertising will also have its repercussions. Problems that I can for see with the shift in dollars to digital include:

• Treating PPC like a traditional “media buy”. Online banner advertising and PPC are not the same and need to be treated differently. PPC performance can be optimized down to the keyword level and should be. We work in the automotive sector and there are some advertisers that are obviously bidding on keywords without caring what results they get. They are optimizing to the media spend and not to the performance goals of the PPC Campaigns. These so called “Branding Clicks” aren’t achieving anything but improving Google, Yahoo and MSN’s revenues. The effect is that costs per click for everyone tend to go up when PPC advertisers aren’t spending with any eye towards common sense. (more…)

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