What Google's Earnings Jump And CPC Sequential Revenue Slide Tell Advertising Industry

Google reported Thursday that revenue rose 23% to $6.77 billion for the quarter ended March 31, 2010, compared to the first quarter of 2009. And while earnings continue to improve, profits fell short of analysts' expectations, and sequential cost per clicks had a rocky ride.

Net income rose 37% to $1.96 billion -- or $6.06 a share -- from $1.42 billion, or $4.49 a share, in the year-ago quarter. JP Morgan Analyst Imran Khan had estimated net revenue growth of 2.4% versus Google's 2.2% sequentially.

Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of AdSense partners, rose 15% in the first quarter of 2010 compared with the year-ago quarter, and 5%, sequentially.

For the most part, advertising held strong, but revenue generated from cost per clicks took a bit of a roller coaster ride sequentially. Average CPC -- which includes clicks related to ads served on Google sites and the sites of AdSense partners -- increased approximately 7% in the first quarter, compared with the year-ago quarter, but declined 4% sequentially.

Google reminded those on a conference call with investors that the company has been releasing tools that help advertisers find long-tail keywords, which might make CPCs vary. In time the tech tools should drive higher revenue from CPCs.

Traffic acquisition costs -- the portion of revenue shared with Google's partners -- rose to $1.71 billion in the first quarter of 2010, compared with $1.44 billion in the year-ago quarter. TAC as a percentage of advertising revenue came in at 26% in the first quarter of 2010, compared with 27% in the first quarter of 2009. TAC relates to amounts ultimately paid to Google's AdSense partners, which totaled $1.45 billion in the first quarter of 2010.

Patrick Pichette, senior vice president and chief financial officer at Google, attributed any declined to seasonal swings, and the company plans to move forward with hiring new people, as well as making investments in search, display and mobile.

Large advertisers have come back in force, Pichette says, which might explain some findings from the Interactive Advertising Bureau (IAB) for 2009, as the industry moved into 2010.

Gian Fulgoni, comScore chairman and co-founder, points to the recent 2009 data from the IAB to provide perspective on industry trends that began to emerge in the first quarter of 2010. "In the fourth quarter search only grew 4% from a year ago, while display grew 15%," he says. "Spending on display ads, for some reason, grew four times faster than search, which raises interesting questions on the types of advertisers that are spending money."

Search revenue rose 4% to $2.9 billion in the fourth quarter of 2009, according to IAB. The industry group reported that display-related advertising -- banner, rich media, video and sponsorship -- accounted for $2.3 billion or 37% of total revenue during the quarter of 2009, up nearly 15% from the $2 billion -- or 33% -- reported in the year-ago quarter.

The advertising industry went through the recession toward the end of 2008 and through 2009. Ad spending slowed. During this time display and search ads were basically flat, Fulgoni says. "Then companies started spending more on advertising as the economy began to improve, but we came out on the other side of the downturn to see display outsell search," he says. "It struck me as odd because search had been growing faster."

Fulgoni says that perhaps the search industry has begun to reach maturity, pricing has become an issue for advertisers, or they realize clicks on ads don't produce relevant metric, so more advertisers have begun to sink money into display.

Another hypothesis points to the fact that smaller companies typically rely on search marketing. But if small companies are not doing well financially, they're likely not buying ads.

French Ad Retargeting Co. Brings CPC And Privacy Model To U.S.

The U.S. officially gains another retargeting company Thursday. Criteo has moved its headquarters from Paris, France to Palo Alto, Calif., bringing with it a performance-based cost-per-click (CPC) advertising model and advanced European privacy features.

JB Rudelle -- chief executive officer, who cofounded the company in 2005, along with two ex-Microsoft "technical geniuses" -- supports more than 400 customers worldwide, including several hundred ecommerce brands. The company, which just began supporting companies in the U.S. like AllPosters.com, boasts serving up about 4 billion retargeted ad impressions per month. In Europe, Criteo retargets ads for Expedia and Dell, and U.K. retailer Marks & Spencer.

Experience gained in Europe puts Criteo ahead of the U.S. market in terms of protecting consumer privacy, Rudelle says. "We have been working in countries like Germany, which is probably the most demanding country in the world when it comes to privacy," he says. "We put a direct opt-out link on all retargeting display banners in Europe, and hope to bring this feature into the U.S. market."

More than 95% of consumers leave ecommerce Web sites without making a purchase, taking an average of five visits before becoming a spending customer, according to data from Criteo.

Not having an ability to integrate even 1% of leads from incoming traffic through retargeting kept many of the older retargeting platforms in mothballs. As expected, U.S. online ad spending dipped last year for the first time since the 2001-2002 recession -- dropping 3.4% from $23.5 billion in 2008 to $22.7 billion in 2009, according to year-end data released Wednesday by the Interactive Advertising Bureau and PricewaterhouseCoopers. After running flat for most of last year, ad spending in the fourth quarter saw a seasonal lift, increasing 14% from $5.5 billion in the third quarter to $6.3 billion -- the most in any quarter to date.

Criteo's technology can scale quickly, and integrates with Google's ad-server technology, either Doublick for Advertisers, or Doubleclick for Publishers. Rudelle says Criteo's technology drops a cookie in the Web browser to find them when they return. Advertisers only get charged if someone clicks on the banner that brings them back to the company's Web site. It takes about half a day to integrate the technology for a client, he says.

Rudelle says the industry offers three different types of retargeting models, pointing to Google's retargeting platform as a simple "plug-and-play" solution that could augment Criteo's offering. Google recently announced a retargeting offering.

Driving the company's U.S. expansion plans, Karen Dayan comes to Criteo as vice president of marketing from Microsoft. She has 14 years of international experience in data-driven product marketing and program development. Jeff Mills assumes the role of vice president of strategic partnerships, bringing more than 13 years of marketing, sales and leadership experience at leading internet companies, including Yahoo and SideStep.

Computer Retailer Gets 92% ROI On Behavior-Targeted Data

Marketers have begun to realize that paying more for targeted ads supported by behavioral data can gain higher return on investments. XA.net, formally CPMatic, along with data company eXelate, will share results Monday from an ad campaign that yielded 92% ROI on a data-targeted campaign. The data and non-data campaigns used the same ad inventory and site.

XA.net's advertising platform, CPMatic, provides an interface to inventory on ad exchanges, publishers and ad networks based by data from eXelate and others such as BlueKai, AlmondNet and TargusInfo. Partners also include Yahoo's Rightmedia, Google's DoubleClick and AdWords, AdX 2.0, Facebook, AOL, Rubicon Project, Pubmatic, OpenX, AdBrite, AdMeld and others.

For several months, XA.net's unnamed computer retailer had access to the CPMatic platform supported by eXelate's data across multiple media exchanges. The campaign ran from Jan. 1, 2010 through March 15. The increase in the 92% ROI includes the cost of the data and media. The shopping data and frequency optimization led to long-term advertising results for the client.

Rob Leathern, chief executive officer at XA.net, attributes the "significant" increase to data from eXelate, as well the as the ability to test lots of different audience segments quickly. "In the online ad space, this enables you to test what works and what doesn't," he says. "We were able to test a variety of data types, placements, and frequency caps. The system determined what worked best for the computer retailer."

Advertisers now have access to tap into data defining identity, interest and purchase intent on more than 150 million monthly U.S. users across multiple media exchanges and receive centralized billing and analytics on CPMatic.com related to eXelate data.

"We have done data tests where the data hasn't worked," Leathern says. "You have to buy enough media and data that you know what works. If you know the data's good you use it to determine good media. It's about isolating the variables."

Working with eXelate gives XA.net clients the ability to test a revenue share model, since the segments already have been created. There's no need to create segments by buying cookie placements and building the campaign. Having the ability to work on a model based on revenue share as a percentage of media versus paying upfront CPM also can help. It allows clients to scale the cost of the data along with the cost of the media. Leathern says this can make some campaigns successful that might not have otherwise had the chance.

The computer retailer's ads sold laptops, notebooks and desktops. The ads, which ran from January through March, were not related to after- holiday sales. The eXelate data related to computers, but Leathern says XA.net's clients have seen success in other categories, too.

XA.net has seen success in targeting ads to new parents and moms, along with the more standard audience segments, such as travel and automotive.

Leathern says the industry has challenges to overcome. "There's a lot of work to be done in the media space to understand and test valuable data," he says. "Fragmentation is another challenge. There's a lot of data, but you need companies need a systematic way to reach marketing goals."

Harvard Study Finds Typos Give Google $500 Million a Year

A small part of Google's $23 billion in revenue comes from typos, Harvard researchers have found. Tyler Moore and Benjamin Edelman of the Harvard School of Engineering and Applied Sciences and Harvard Business School, respectively, studied the most popular .com sites, finding that each had about 280 registered typo domains associated with it, a "typo domain" being a domain that could feasibly be created from attempting to type the actual domain name (blogpot.com is one of our favorite examples). The researchers looked at the advertising practices on these sites, and extrapolated from average advertising revenue for Google pay-per-click (PPC) ads to estimate the amount of revenue that Google gets from ads on these "typosquatting" sites.

The $500 million figure they came up with is impressive enough, but Moore and Edelman also found that typo domains that feature only ads, no other links, have higher click-through and conversion rates, suggesting that the half-billion estimate may be too low. The full study of typosquatting and its implications found no relationship between the difficulty of spelling a word and the prevalence of typo sites, but did determine that "high PPC prices spur typosquatting registrations in the corresponding categories." Still, the study emphasizes "the feasibility of significantly reducing typosquatting" due to its high concentration among specific IDs and servers: nearly 76% of typosquatting sites were registered to the same 10 advertiser IDs.

The ACPA was created in 1999 to protect organizations from online imitators, but Moore and Edelman's research suggests that barely 5% of typo domains are being prosecuted under this act or UDRP. As a result of the ineffectiveness of these measures, the researchers feel that online advertising platforms are in the best position to launch an effective crackdown on typo domains: "Because ad platforms are the primary or sole source of revenue for these typo domains, we believe ad platforms are well-positioned to substantially reduce typosquatting." Identifying ad platforms as "least-cost avoiders, able to prevent typosquatting with less e ffort than any other party," Moore and Edelman essentially ask Google to put an end to the practice of typosquatting by enforcing stricter advertising regulations. But with $500 million coming in from the practice, why would Google want to stop it?

Google's dominance has always been scary, but the fact that typos can create more revenue for the company than what as many as a dozen countries are worth is even scarier. If you'll excuse us, though, we need to check our gmail now.

Webtrends Gives Marketers Facebook Analytics Tool To Measure Investments

Gaining qualified leads and measuring return on investments (ROIs) in social networks hasn't been easy. Webtrends Thursday will release a tool in its analytics package that tracks and measures activities in Facebook.

Webtrends Analytics for Facebook lets users see tabs, applications, and share features. Marketers can see Twitter activity driving to Facebook Fan pages, Facebook Fan page activity that overlays with corporate blog posts, and conversions in Facebook. It also provides a view into custom applications, Facebook page tabs and click performance.

"Facebook tends to cache all their information, including images, and that has rendered a lot of traditional data collection inept," Jascha Kaykas-Wolff, vice president of marketing at Webtrends. "We have found ways to work with Facebook's language to communicate directly into our core analytics product by a data collection API. This means we don't have to use image-pixel pushing, which is a pretty flawed technique."

The method allows marketers to see tons of data related to interactions on tabs and in applications, along with the Flash version that runs on Facebook. Kaykas-Wolff says Webtrends' early investments in microsites failed, and that's one reason the company has begun to move investments into Facebook.

Some of those investments have been in building Webtrends Analytics for Facebook. The platform relies on Webtrends Analytics 9, which combines the real-time analytics engine and user interface. It enables users to track custom tabs and applications, allowing marketers to measure Facebook campaigns alongside other digital marketing campaigns, such as Web sites and mobile applications. An RSS overlay feature also lets marketers see the impact of promotions.

Custom tabs and applications in Webtrends Analytics collect data differently because of Facebook's privacy regulations and Terms of Service. Brands can't use traditional methods for tracking custom tabs because the social network does not allow JavaScript.

Bringing Facebook data into Webtrends Analytics meant developing a method to bypass existing limitations. Webtrends did this through a data collection API. Aside from tracking tab views, the application also measures tab views segmented by fans and nonfans, as well as clicks on buttons and links, such as Share.

Before releasing it to customers, Webtrends tested the platform in a campaign called the "Great Data Giveaway." The company set out to demonstrate the new capabilities to show marketers that social channels, such as Facebook, can generate qualified leads.

The campaign is a drawing for prizes that appeal to Webtrends' target market. The application placed it on a custom tab on Facebook explains contest details. The person becomes a fan first, called a "fan-gate," and then allows the application to install.

Once the app installs, the user can enter the contest through a form driven by the company's marketing automation system, Eloqua. The key performance indicators are the entry, follow-up email opens, and follow-up email conversions. Webtrends allows users to post the contest info to their Facebook wall. The application measures the number of times the post is shared. Hopefully, the contest gets mentioned on Twitter and in blogs.

Kaykas-Wolff says in the next couple of weeks, Webtrends will start talking with marketers about how to track things in Facebook's version of Flash. Soon the company will launch analytics tools for Google Buzz and Twitter.

Paternity Test or Legal Paternity Test? 100 Keywords

Below is a list of the top 100 Keywords people use when looking for paternity tests and legal paternity tests, sorted by keyword popularity.

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Source: Lazworld.com

Superbowl Keywords - 151 Keywords People Are Using

The big game it was, congradulations to the New Orleans Saints for winning their first superbowl. People are searching for superbowl and superbowl related keywords, below is a list of 151 keywords being used by superbowl fans. Keyword searches  sorted by popularity with over 3.3 million searches for "superbowl" in the last 7 days.

1. superbowl
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Source: PPC Menu