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Posts Tagged ‘Online Advertising’

Facebook Poised to Assume Top Spot in Web Advertising

Posted in Facebook Commerce, General News / Technology, tagged , , , , , on June 22, 2011 | Leave a Comment »

Don’t look now, but Facebook’s takeover of the world continues!

According to a new report by research firm eMarketer, the social networking giant’s web advertising revenue is growing at such a clip that it will overtake both Google and Yahoo this year and become No. 1 in online display ads.

eMarketer’s data projects that Facebook will generate $2.2 billion in U.S. advertising revenue in 2011, which equates to roughly 17.7 percent of all display ad revenue across the industry.

Just last year, Facebook only accounted for a little more than 12 percent of total online advertising revenue.  Such profound year-over-year growth shows that more and more businesses of every size are adopting Facebook’s package of banner ads, web page sponsorships and video ads to reach consumers.

“Facebook’s supreme popularity—both in terms of numbers of people and amount of time they spend there—creates a plethora of display ad impressions, mainly for its unique form of banners,” said eMarketer’s David Hallerman.  “And that popularity is also boosting what advertisers will pay for its display ads.”

The data paints a picture of a rapidly changing landscape in online advertising, one in which Facebook is gobbling up more of the pie while Google and Yahoo are both failing to keep up.

Google appears to be in better shape than Yahoo, at least.  eMarketer forecasts that Google’s 2011 U.S. advertising revenue will total $1.15 billion, an increase of more than 34 percent from 2010 and a figure that gives the company 9.3 percent of all online advertising revenue.  Yahoo, meanwhile, despite an increase in overall advertising revenue this year, will see its share of total revenue fall from 14.4 percent to 13.1 percent.

That trend is expected to continue into next year as well. In 2012, eMarketer estimates that Facebook will handily increase its dominance in the U.S. display market, relegating Google and Yahoo to fighting for the second spot.  Facebook is expected to garner 19.4 percent of the market in 2012, while Google and Yahoo will be in a near-deadlock at 12.3 and 12.5 percent respectively.

Leave us your thoughts and comments!

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Google Buys Online Ad Firm Admeld

Posted in General News / Technology, tagged , , , , , on June 14, 2011 | Leave a Comment »

Reinforcing the notion that the advertising business will bee an important part of its overall future growth, Google yesterday announced that it will buy the online display advertising firm Admeld.

Admeld’s CEO Michael Barrett first announced the acquisition in a company blog post late last week.  Though neither party confirmed the dollar figure affixed to the purchase, it is believed to be somewhere in the neighborhood of $400 million.

“Providing better ad management services to publishers is an area that has seen a huge amount of investment in recent months,” said Google’s vice president of display advertising, Neal Mohan.  “By combining Admeld’s services, expertise and technology with Google’s offerings, we’re investing in what we hope will be an improved era of flexible ad management tools for major publishers.”

Overall, the online display advertising game can be a complicated one.  Publishers can either sell ad space directly to firms or ad agencies using third-parties to record and track metrics or indirectly through advertising networks that aggregate ad inventories.

In Barrett’s blog posting, he expressed a shared belief of the two parties that acknowledges the complexities within the display advertising landscape, particularly with regard to publishers, and said that the acquisition will make the process of advertising management a more efficient one.

“Though we have no specific integration plans yet, we imagine our combined offerings can help publishers make more informed, efficient, and profitable decisions across all tiers of their inventory,” he said.

Admeld, like several competitors, provides what’s called yield optimization data that empowers publishers to maximize the potential revenue of their advertising inventory.  The company offers real-time analytics about a publisher’s particular audience and appeal to advertisers.

This is not the first investment Google has made in display advertising assets.  Its acquisition of DoubleClick a mere three years ago has resulted in Google’s display network growing substantially.  Google has seen outstanding growth in markets such as Brazil, Japan and the United Kingdom especially and its internal research estimates that the global display advertising market is worth as much as $700 billion.

Leave us your thoughts and comments!

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Online Ad Spending Expected to Balloon this Year

Posted in General News / Technology, tagged , , , , , on June 13, 2011 | Leave a Comment »

Online advertising budgets experienced wave after wave of decreases as the recession wrecked havoc on overall marketing strategies, but new data from eMarketer suggests that period of cooling off is likely over and ad spending will increase across the board over the next four years.

eMarketer predicts that online advertising will total $31.3 billion here in 2011, a 20 percent increase over the roughly $26 billion spent on the medium last year.  It will be the start of an overall return to pre-recession growth levels that should continue through 2015.

eMarketer had originally projected 10.5 percent growth.

“The internet has become as fundamental as television to advertisers,” says eMarketer’s principal analyst David Hallerman.  “As consumers continue to increase their time spent online and as a resurgent economy continues to bolster ad budgets, we’re going to continue to see an influx of dollars toward the Internet.  More ad formats, such as video, and more channels, especially social media and mobile, are also key contributors to the spending gains.”

The data further reveals that display advertising has already exceeded expectations for the year:  advertisers are expected to increase display ad spending to $12.3 billion in 2011, a 24.5 percent increase.  Search advertising is also expected to grow by almost 20 percent to $14.4 billion.

However, as marketers increasingly view online ads as a branding tool, display ads will continue to see better growth than search advertisements.  And eMarketer predicts that by 2015, display ads will overtake search ads completely in terms of market share.

Reflecting emerging trends with regard to the waning effectiveness of traditional advertising programs like television, eMarketer further estimates that Internet ads will account for one-fifth of the entire U.S. advertising market this year and that by 2015, 28 percent of all U.S. ad spending will be online.

And further adding to the woes of traditional TV advertising is the fact that video is the fastest-growing online ad type, particularly as Google builds on its advertising offerings through the promotional arm of YouTube.  eMarketer expects video ad spending to total $2.16 billion this year and by 2013, they are expected to evolve into the third-largest ad format.

Banner ads are still relevant as well, and are expected to total $7.61 billion this year.

Leave us your thoughts and comments below!

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Will the FTC Protect You from Pesky Online Ads?

Posted in General News / Technology, tagged , , , , on August 23, 2010 | 1 Comment »

Here’s an interesting question for a Monday.  Which annoys you more: telemarketing phone calls to your home and cell or unwanted pop-ups and other internet ads that seemingly appear out of nowhere when you’re browsing the web?

Well the Federal Trade Commission, for one, doesn’t think the two are all that different and is considering some sweeping action that would help protect your online privacy much the way the federal “Do Not Call” registry shields you from unwanted phone solicitations.

At issue is the behavioral tracking that many marketers and advertisers employ to dump targeted web ads on users based on their preferences, geographical locations and a host of other background information. Often, this is data that individuals have no idea they’re sharing and would likely want to keep private.

While these ads are a major nuisance to many (if not all) web users, the FTC has had little to no recourse in curbing them.  An aggressive and effective lobbying effort by online advertisers who like the status quo and don’t want to lose the ability to mine the data they use to implement such ads has become a major obstacle for any reform in the area.

But that could be changing soon.

Last month, FTC Chairman John Leibowitz indicated during testimony before the Senate Commerce Committee that his agency was exploring the viability of “kill-switch” option that would let individuals opt out of any behavioral tracking across the entire web.  While many websites already offer users an opt-out feature to avoid ads, the measure being considered by the FTC would certainly be more effective and easier on users themselves, letting them avoid behavioral targeting on any browser they’re using rather than being forced to manually opt out on their own.

“To this end, one idea we may explore in the context of behavioral advertising is a do-not-track mechanism that’s more comprehensive and easier to use than the procedures currently available,” Leibowitz told members of the Senate Commerce Committee.  “Under such a mechanism, users could opt out of behavioral advertising more easily rather than having to make choices on website-by-website basis.”

The Senate testimony by Leibowitz came as the FTC is in the midst of preparing a large-scale report on guidelines for increasing the protection of consumer privacy online, with behavioral targeted advertisements one of the key components.   The agency has conducted a number of workshops on the issue of privacy in general as part of its report research and overwhelmingly heard from consumers that they wanted simpler privacy controls.

Is the “kill switch” option the answer? We’ll find out in the coming months as the FTC’s report should be unveiled at some point this fall. In the meantime, as always, leave us your thoughts and comments below!

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Consumer Privacy Bill Gaining Momentum in Nation’s Capital

Posted in Ecommerce, General News / Technology, Merchant Tips, tagged , , , , , , , , on May 5, 2010 | Leave a Comment »

News out of Washington, DC this week is that lawmakers are hard at work on legislation that wouldsignificantly expand consumer privacy online.  The proposed bill would definitely have ramifications for retailers and the manner in which they collect information from online shoppers.

The U.S. House Subcommittee on Communications, Technology and the Internet unveiled a discussion draft of the proposed federal legislation earlier this week.  It’s comprised of several rules, all of which would be enforceable by the Federal Trade Commission and state attorneys general, dictating how online retailers collect visitor data and employ that information in targeted advertising.

Proposed by Reps. Rick Boucher (D-Va.) and Cliff Stearns (R-Fla.), the rules would also give consumers the choice to opt out of behavioral targeting.

“Our legislation confers privacy rights on individuals, informing them of the personal information that is collected and shared about them and giving them greater control over the collection, use and sharing of that information,” said Boucher (D-VA).  “Our goal is to encourage greater levels of electronic commerce by providing to Internet users the assurance that their experience online will be more secure.”

Among the proposed rules in the new legislation:

–Companies that collect personal information about individuals must display a clear privacy policy that explains how information about individuals is collected, used and disclosed;

–Companies may collect information about individuals unless they affirmatively opt out of that data collection.  Opt-out consent also applies to those companies that rely third parties;

–Companies need an individual’s express opt-in consent to collect information about their medical records, finances, Social Security number, sexual orientation, government-issued identifiers and geographic location;

–Companies must receive full consent from an individual before sharing their information with third parties for other than operational or transactional purposes.

Privacy watchdogs and consumer rights advocates have long been lobbying Congress for this kind of action, particularly to address the behavioral targeting that many advertisers, web marketers and e-commerce sites employ.  They argue that advertisers cannot be allowed to self-regulate when it comes to privacy matters.

Nevertheless, there is a fine line in protecting consumer privacy without impeding business on the whole in an industry that generates in excess of $20 billion annually.  Boucher stressed that the legislation’s aim is not to stifle the use of advertising content and e-commerce services.

“Online advertising supports much of the commercial content, applications and services that are available on the Internet today without charge, and this legislation will not disrupt this well-established and successful business model,” he said.  “It simply extends to consumers important baseline privacy protections.”

You can expect representatives on both sides of issue to become more vocal in the coming weeks as this draft bill moves closer to being considered for law.  And we’ll keep track of it as that process unfolds. Leave us your thoughts and comments below!

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Final 2009 Click Fraud Data Released

Posted in Click Fraud, Merchant Tips, tagged , , , , , , on January 19, 2010 | Leave a Comment »

Anchor Intelligence unveiled new data on click fraud rates for the fourth quarter of last year in conjunction with an overall report on click fraud throughout 2009, and the picture remains an ugly one.

Anchor, the California-based traffic quality provider that Ecommerce Junkie regards as the most reliable industry source of click fraud information, states in its 2009 Year in Review that click fraud rates jumped by nearly 40% between the third (18.6 percent) and fourth (25.7 percent) quarters last year—meaning that by the end of 2009, one out of every four ad clicks across the web constituted some attempt at click fraud.  That’s a percentage that should make all online advertisers very nervous.

Now, to be fair, some increase in Q4 rates probably should’ve been expected.  After all, it’s a time period that includes Cyber Monday and the holiday shopping season at large, when more ads are being bought and placed, and millions are using the web for holiday shopping.

But with that increase in ads and traffic came an even more expansive effort from fraudsters. Botnets, the automated ring leaders of click fraud activity, continue to grow in number, are increasingly hard to track, and are getting even more devious.  Anchor noted that newer advertisers, for example, saw an even higher rate of fraud towards the end of the year as these botnets and click fraud farms expanded to every corner of web advertising.

The report also noted that the U.S. and Canada continue to be the largest sources of attempted click fraud by volume, while warning that 2010 could be even worse as cyber criminals look to exploit the growth and popularity of social networks like Facebook and Twitter.

“As botnets become more flexible and resilient, click fraud will be increasingly difficult to identify without a collaborative and systematic, network-based approach,” said Ken Miller, Anchor’s CEO.  “By releasing this report, we hope to provide a barometer by which the industry can assess the level of threats to online advertising while also conveying the importance of advertising with ad networks and search engines that partner with third-parties to certify their traffic quality.”

As we said, a 25-plus percent rate of click fraud, as well as Anchor’s warning that things may not improve anytime soon,  should concern any web advertiser.  Many industry insiders privately say that click fraud will never completely be abolished and suggest that perhaps, budgetingfor losses because of click fraud will become standard practice.  While we’re not willing to give in quite that easily, it’s obvious that click fraud perpetrators are adapting and evolving faster than wecan counter.

That means that ultimately, the burden for dealing with click fraud is on you, the advertiser.  We’ve said time and again that it’s vital to educate yourself how click fraud works and keep constant tabs on your click logs to learn the signs consistent with botnet activity.  Doing so will put you in a better position to spot instances of fraud, and thus help you better determine which web advertising optionsare the safest.

As Anchor Intelligence’s report proves yet again, click fraud is not going anywhere anytime soon. Are you prepared to deal with it here in 2010 and beyond?  Feel free to leave us questions or tips in the comment section below.

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Merchant Tip: New Click Fraud Threat Emerges

Posted in Merchant Tips, tagged , , , , , , , , on January 14, 2010 | 1 Comment »

You may have noticed that some news outlets this week have been covering a story on a new, and particularly devious, model of click fraud that has been discovered by a Harvard Business School professor named Ben Edelman.  (Find the Forbes.com article here).  As regular readers of Junkie well know, click fraud is a major source of interest to us, as it should be to anyone involved in e-commerce.  And as far as click fraud schemes go, this one is a doozy so it certainly necessitates some attention from us.

So what makes this version of click fraud so dangerous?  The scheme not only simulates valid Google ad clicks, it also simulates a real customer and an actual sale on that advertiser’s site, a combination that many industry experts once thought was unimaginable

How does it work?  According to Edelman, the perpetrators of the fraud, believed to be a site called TrafficSolar.com, make deals to host Google PPC ads through an extensive network of Google affiliate partners.  Each of those partners place their ads on other sites in exchange for a slice of the revenue. TrafficSolar then infects web users’ computers with spyware by exploiting a security loophole in Windows XP or Internet Explorer when that user visits a site that they have compromised.

If someone with an infected machine visits one of any number of popular shopping sites, the spyware on their machine produces up a large pop-up window that covers the entire browser and obscures the legitimate shopping portal.  The pop-up is created by TrafficSolar simulating a click on one of those ads in its network of Google partners, an ad for the exact site the user intended to visit in the first place.  Unsuspecting shoppers complete a transaction on that pop-up window thinking they’re on the correct site.  The result is TrafficSolar and its ad partners get a share of the PPC fee paid by the original advertiser while the shopping site logs the visit and transaction as legitimate, with no clear reason to suspect otherwise.  Later on, because these transactions appear to be legitimate evidence of traffic conversion, an advertiser may be inclined to raise their bids in Google’s ad auction system.

Ok, we know that this is dizzyingly complicated so don’t feel bad if it’s making your head spin.  It certainly had a similar effect on us.  But while knowing every nitty gritty detail of this scheme isn’t particularly necessary, what IS important is that you’re aware this threat exists and that it is operating through an ad network (Google) that many of you probably already use.

So what can you do? As we always recommend, educating yourself on the issue of click fraud is vitally important.  Acknowledge that, as an online advertiser, you are in the crosshairs of people who are constantly using new and stealthy ways to carry out their click fraud schemes.  And if you’re using Google as an advertising network, pay very close attention to your conversion rates and data.  Look for discrepancies and when you find them, notify your Google representative immediately.

For retailers and e-commerce entities in particular, we strongly recommend that you utilize sites that do not use CPC or PPC pricing models at all.   Sortprice.com is one such price comparison site that employs a monthly fee pricing structure instead.  You get unlimited clicks for all of your products and no possibility of click fraud.

We’ll continue to track this story for you as new details emerge.   But we want to hear from you on this issue.  If you have questions about this or any other version of click-fraud, post it below and we promise we’ll get you as comprehensive a reply as possible.

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Merchant Tips: Prepping for the Holiday Shopping Season

Posted in Ecommerce, tagged , , , , , , , on August 18, 2009 | Leave a Comment »

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It’s may be difficult to think about snow and mistletoe when the dog days of summer are still here but if you’re an online retailer, preparation is everything and now is the time to be readying yourself for the holiday shopping season in a few months.

Retail sales are still lagging some, but many experts believe more people than ever will shop online for the holidays in 2009, which is even more of a reason to solidify your marketing and sales decisions in advance of the most important time of the year. We’ve compiled a few tips that every online retailer can use to put themselves in the best position to succeed when the weather does turn cooler.

–Organize: first and foremost, take a look at where you’re at. Analyze what worked and what didn’t work in previous holiday shopping seasons. Where can you improve? Should you consider advertising this season? Are there effective marketing initiatives from the past that should be built upon? Be honest and objective and build a realistic plan of attack.

–Get your site ready: technical issues and/or a website crash in the days and weeks after Thanksgiving are akin to retail suicide. Make sure your site and accompanying technology is humming along well, capable of handling lots of visitors and processing multiple orders at a time. If you’ve had concerns about the platform you’re operating on, maybe now’s the time to upgrade. Aesthetically your site should be well organized and laid out, with easy access not only to products, but to customer support and help features.

–Branch out: there are plenty of ways to increase your online presence for little or no money, particularly in the social networking arena. One example would be Sortprice.com’s Merchant Store application on Facebook. If you’re a Sortprice merchant, you can build a store for your products right on your Facebook profile FOR FREE.  Tap into additional audiences by starting a Twitter feed or a Myspace page. The more people that know about you, the better!

–Consider your promotions: what promotions can you devise that will separate you from your competitors and ensure that shoppers keep coming back? This is a question that should be answered now. Think outside the box and offer coupons or special discounts for bulk orders. Free or discounted shipping during the holidays is always a popular choice as well. Regardless, set your promotional schedule in advance and make sure that ALL promotions are prominently displayed on your homepage.

–Advertising: while it’s great to have free or low-cost options to promote yourself, intelligent and targeted advertising is still a great way to get the word out about your store. But as we always say on this page, do your research and don’t pursue advertising options that will not pay off in the end. Consider a banner ad campaign starting as early as October to plant the seed in consumers’ minds about your site. If you have pages on social networking sites, take a look at their advertising packages as well. Even if you spend just a little on advertising now, the payoff at the end of the year could be great.

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Click Fraud Data Discrepancies

Posted in Click Fraud, tagged , , on July 27, 2009 | 2 Comments »

Those who read Ecommerce Junkie regularly know our position on the issue of click fraud. It’s not just a pesky nuisance. It’s a major problem and a tangible threat to the bottom line for anyone involved in online advertising and marketing. And to this day, despite calls for change from many in the industry, it continues to wreck havoc without much resistance.

Now, as if click fraud itself wasn’t a big enough problem, we’ve come across competing data on click fraud rates from two separate “watchdogs”, which leaves us wondering who is really paying attention to the issue and who could be sugar-coating data to make things seem better or worse than they are.

Click Forensics, whose click fraud reporting has been referenced here before, recently unveiled their data on Q2 2009 click fraud rates that indicate a decrease in instances of click fraud—down to 12.7 percent from 13.8 percent earlier this year. Meanwhile, Anchor Intelligence released some of their own data which puts the rate of click fraud so far this year at 22.9 percent in Q2 and 21.7 percent in Q1.

We’d probably be willing to look the other way if the margin of difference in data was a point or two. But when we’re talking about variations of 8 to 10 points, then it becomes clear that something is truly off here.

Click Forensics’ click fraud reporting looks very skeptical especially given the close relationships they have with certain industry giants who, despite their public statements to the contrary, actually benefit from click fraud. It’s tough to buy the 12.7 percent rate issued by Click Forensics when, in the big picture, their data also shows an overall decrease in click fraud over the past 12-18 months (their data for Q2 2008 had click fraud at 16.2 percent, for example).

Simply put, not enough has been done preventatively in the past year to justify a nearly 4 percent decrease in overall click fraud. We’re more likely to subscribe to the data put forth by Anchor Intelligence, a group that works with companies to actually fight click fraud. Their research on the issue also seems to be a bit more comprehensive and in-depth, as they looked at click fraud rates not only in the U.S. but around the globe as well. And frankly, after talking to one e-commerce leader, a click fraud rate in the low 20s seems much more realistic than the numbers Click Forensics is putting out there.

If you’re an online retailer, advertiser or marketer, it is in your best interest to pay close attention to data like this when it is released. However, after tackling the competing information put out by Click Forensics and Anchor Intelligence, we strongly advise that you rely on the latter more than the former. Either way, it’s highly advisable that you diversify your online advertising as much as possible to avoid cost-per-click programs that can be wrought with click fraud. In addition, carefully monitor traffic and analyze click logs on a regular basis to spot the fraud and trends normally employed by botnets.

Got questions or comments on click fraud? Leave them below.

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Opinion: Stemming the Click-Fraud Tide; Ramifications for Economic Growth

Posted in Click Fraud, tagged , , , , on March 1, 2009 | Leave a Comment »

While bailouts and stimulus plans have largely dominated the economic headlines in early 2009, another recently released batch of quarterly click fraud data underscores what many of us in the industry have been saying for quite awhile–the severity of the threat click fraud poses to online advertisers and by extension, broader economic recovery, is growing by the day.

The picture painted by the Click Fraud Index, the industry’s barometer of click fraud activity compiled by Click Forensics, is not a pretty one. The overall industry average click fraud rate for Q4 2008 was up to a record-high 17.1 percent, while fraud on the CPC advertisements utilized by many small-budget internet advertisers on content sites like Google and Yahoo increased again as well. Perhaps most alarming, click fraud from ‘botnets’ swelled for an eighth straight quarter and now account for more than 30 percent of overall click fraud, another record high for the CFI’s monitoring.

In the aftermath of the CFI report, a debate has emerged over the legitimacy of the CFI’s data. The discussion, fueled largely by Google itself, focuses on what exactly constitutes a fraudulent click. Though the CFI stands by its numbers and the methods it uses to collect them, there are some who openly question if the data includes clicks that Google and others already account for as fraudulent, thus inaccurately inflating the overall click fraud rate.

Now, while this may be pertinent to the click fraud issue on the whole, unfortunately, it distracts us from the bigger picture. We are losing the battle against click-fraud at a most inopportune time and the economic expansion we seek as a nation will be that much harder to realize without a broad, concerted effort to fight back.

Whatever the numbers may ultimately be, click fraud has evolved into much more than just a pesky nuisance. Simply put, it equates to millions of dollars in lost revenue for advertisers and marketers at a time when many of them are scrambling to simply survive. Many of those are small and mid-sized businesses, whose success is crucial to job creation and strong economic performance. But as click fraud continues to expand, those that are relying on internet advertising to grow are finding their bottom lines severely diminished as a result.

As the data indicates, the botnets are faster and smarter than ever, hitting from different IP addresses at varying times and evading the filters designed to stop them. Link farms, groups of people hired exclusively to conduct fraudulent clicking, are also back in full force. As a result, online advertisers are going to be forced to allocate even more budgetary dollars towards combating the problem this year. And it doesn’t take a seasoned economist to understand the domino effect such actions will have on consumers and spending.

Absent any outside or government intervention, the onus for combating click fraud still lies with the advertisers themselves. A diligent and concentrated approach is crucial—one that carefully monitors traffic and analyzes click logs on a regular basis to spot the practices and trends normally employed by botnets. Advertisers must maintain strong relationships with their network providers as well, keeping them abreast of possible fraud with periodic reports and requests for investigations into suspicious activity. Finally, some may benefit from diversifying their advertising budgets with the incorporation of CPA (cost per acquisition) and ‘monthly flat rate’ models that can be just as effective while offering less risk.

Though these steps will likely result in higher short-terms costs and a greater time commitment, the continued high rate of click fraud leaves no real alternatives—our economic future, and the viability of our status as world leaders in technology and innovation depends on strong and swift action.

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