CheezeDMG Blog

In the wake of Facebook’s announcement of its first profit generating quarter and recent improvements to its self service advertising platform, signs are beginning to emerge that Google may finally have a serious contender on its hands for online marketing budgets.

In recent years, as Google’s search market share has risen above 80% in the UK and 65% US, many internet marketers have come to rely exclusively upon Google’s Adwords platform for running their internet marketing campaigns. During this period Google has also established its Content Network as the largest online display advertising network and cemented this position by a string of acquisitions including DoubleClick (the world’s largest ad trafficking platform) and YouTube (also the second largest search engine on the web).

However, there are signs that the days of Google’s advertising hegemony may be over.

With the high CPCs common in many niches on Google, marketers are starting to look at alternative channels and many are choosing Facebook. Although Google can usually boast higher conversion rates stemming from the intent of users to purchase the products they search for, Facebook’s enormous reach can now potentially offer higher sales volumes. Add in the value of the brand exposure gained, something which can now be quantified with multi-variate tracking solutions such as Digital Brain:Search, and Facebook DR campaigns often a compelling rate of return. Indeed, at CheezeDMG, Facebook DR is now a core channel for many clients, successfully building both a brand presence and driving sales for companies such as Canterbury of NZ.

In addition, Facebook has been investing heavily in its self service Direct Response (’DR’) platform, which offers reach and targeting on a par with Google’s offering, but until recently only a fraction of the functionality of the Adwords platform. Bulk advert uploading is now being trialled which will enable advertisers to execute much larger and more targeted campaigns. In addition, a host of companies are developing bid management systems to plug into the new API, which is also under limited release.

Conclusion

Facebook has taken its time to build a viable self service advertising platform, but now it is seriously adopting the formula that has worked so well for Google, it is beginning to make up ground in market share. Although Facebook still has a way to go before it can match the net revenues recorded by Google (£1.64BN in their recently announced Q3 2009 results), Facebook’s huge inventory and low CPCs have already tempted many marketers to begin shifting budgets.

Is widespread advertiser adoption of its DR platform what Facebook have been waiting for before entering into a much anticipated IPO? Only time will tell, but having won the war of the social networks Facebook now appears to be readying itself for a final showdown with the search giants.

When Google Wave was released at Google’s I/O Developer’s Conference at the end of May it sparked considerable excitement. Now the novelty factor has worn off it’s time to start considering the potential of this revolutionary communication tool.

The application itself is impressive, but the use of its API in allowing the possibility to create bots/extensions is what could really pave the way for a new ’wave‘ of web applications, and even the advent of Web 3.0.

Google Wave screenshot

Google Wave is a real-time collaboration tool, where you can experience changes to a conversation, character by character, by multiple users and with added functionality through extensions. It falls into the ‘collaboration tool’ category due to the many uses it offers - from straight communications such as email and instant messaging - to installing the wave on sites like wikis, forums and blogs, creating content and encouraging interaction. So rather than having a set of emails, threads or instant messages; there will be just one ‘wave’.

A good way of describing how you would interact with these waves would be to imagine you’re sharing a word document with friends simultaneously, where you can edit an itinerary, decision or line-by-line conversation with them - in real-time. Doesn’t sound too revolutionary does it? Google has put their own spin on it though, by introducing intelligent formatting, real-time translation, and integrating external tools like Google Maps, images, and soon, developer’s own creations.  It wasn’t so much of a product launch, but rather an API launch so they could educate the developers that will be producing these extensions for when Google Wave is officially released later this year.

With these extensions, users will be able to simultaneously run a ‘wave’ on a blog/forum/site and see changes made both in the application and the external locations simultaneously. If the take up of Google Wave is as substantial as expected, the way that content is delivered to web pages will be completely changed and with potentially dramatic repercussions elsewhere.

For search marketing, with Google Wave providing updates within a conversation on external sites in real-time, the content will no longer be reflective of the last time it was indexed, thus rendering search results and even text ads irrelevant. If a destination page’s content changes, the ad will be less relevant and subsequently affect detrimentally the quality score and CPC price. Advertisers that would be susceptible to this would need to commit to increased levels of budget to ensure they maintain their positions if their quality score does fluctuate.

This would obviously affect certain websites more than others though, and for search engines to produce relevant results, they will need to continually update and index sites. To take search to the next level, you would need the results to be switching positions in real-time, as sites become more relevant than others.

For website owners, Google Wave could cause a change in the way users view their content - for example, being able to view articles, comment, take part in polls and interact, all through a Google Wave but without even visiting the site.  Google wants Wave to not only be the hub of all their products and communication, but also the hub for experiencing and contributing to content from the rest of the Internet. This could have a grave effect on display advertising, a crucial source of income to the running of many websites - and would prompt a sweeping shift of business models towards subscription models where users pay for content.

Google Wave will prompt a notable change in the way search engines index sites and produce results, simply because they will have no choice. Obviously, currently channels such as forums and wikis are changed often, but as Google Wave becomes widespread, search engines will have to think about how to adapt to these constant changes.
With Bing taking a couple of bites out of Google’s market share and Twitter indexing updates, search technology over the next year could produce something of a cold war. Google has already started making changes to its search functionality including “search options” and Google Squared, and this will escalate between Yahoo, Google and Microsoft as the full launch of Google Wave approaches later this year. Bing’s “decision engine” has woken Google up from a distinctly average innovative few years on its search front.

All of this has ramifications for companies using natural search, since to optimize their “crawlability” on Wave, sites will need updating once a day or even more.

Of course the scale of these changes is dependant upon take up, though anyone who has watched the Google I/O developer’s conference video would be surprised if Google Wave doesn’t become the next focus of online communication and collaboration and have a huge impact upon digital marketing.

Our Client Services Director, Mike Groves, spoke at Internet World Expo yesterday with a presentation on “What’s going to be bigger than Google in 2009″.

Some of Mike’s points were being tweeted as he made them, see the resulting Twitter stream here http://bit.ly/vDz54

To all those that weren’t fortunate enough to be there to see it, please find the first 25 slides of the presentation below and you can download it in full by clicking here:

twitter.com/MikeGroves
twitter.com/CheezeDMG

Twitter should be about customer engagement, not broadcasting

Twitter’s here. You can’t visit a website or turn a page, digital or otherwise, without reading about it. Whether it’s Jonathan Ross’ banter or breaking news stories - Sky has a Twitter correspondent and CNN has the highest following of any user; yet it’s the user who’s breaking news first - the plane dumping in the Hudson River being the most high profile recent example.

Twitter’s being used as a news channel, an information hub, but the user has more power than ever. Of course brands are keen to follow this trend and harness it to their own benefit. So how can brands make their voices heard in a world where the user, your potential customer, doesn’t have to listen? It’s a level playing field, so your brand has to operate at the consumer’s level; don’t simply broadcast offers and ‘news’ - become part of the conversation.

Some brands have been active for a while - smaller ones like eSpares are doing a great job of harnessing the channel, larger brands like Canterbury of New Zealand are just starting; and then you’ve got huge global brands like Dell that have already seen over $1m of revenue from the channel.  Charities are at it too - Dogstrust are doing a fantastic job engaging with their ‘followers’, and PDSA are starting to get involved off the back of their Facebook success. All these brands are seeing success through engagement – involve yourself, provide advice, respond to questions, ‘react’ to your customers, and the proactive nature of marketing becomes flipped.

However, the effectiveness of building brand advocates, raising awareness and ultimately promoting your products and services by ‘stealth’ is huge – subtle branding, who would have thought it?

Set to grow even further, Twitter may also spin out with the associated growth of similar ‘tools’ like www.Identi.ca, www.plurk.com and www.jaiku.com - owned by Google. Having a presence on Twitter now will help you understand the medium and benefit your brand and the consumer.  So, if you’re looking to harness Twitter, where to start?

Here are five tips to get you going:

1. Get on there! Get involved! There’s no better place to start than with yourself. Sign up for an account, follow some people - you can start with me, I talk about digital marketing, rugby and music - and get tweeting a little. Find some people or brands in your sector and watch what they’re doing. You can gain a lot from interacting and watching before you reveal a brand presence.

2. See what people are saying about your brand using http://search.twitter.com - grab the feed and watch it for a while. Is the conversation positive or negative? This will help you define what your presence on Twitter needs to be. It may also help you quickly find brand ambassadors who can amplify your presence. Don’t forget the detractors - connecting with them on Twitter and helping them may create a rapid turnaround in their opinion.

3. Work out what you’re going to say, and who’s going to manage it. In some cases an agency can help get you off the ground and hand over the running once you’re familiar with the process. You can stick to a content theme, or a reason as to why you’re on Twitter, but don’t use it as a broadcast channel. All tweeting and no listening will lose you credibility - very quickly!

4. Get your brand onto Twitter. Grab a name - ideally www.twitter.com/yourbrandname, set up your logo and a template design and start twittering. If you can reference your brand on your own corporate page that will help establish credibility for the brand on Twitter. At this time there are no regulations or checks - it’s up to you to manage your brand on Twitter. Connect it to your other channels - you can feed your Twitter stream into a Facebook Fan Page or your own website.

5. Start talking - follow people you find interesting, have a conversation. If you’re sending links to your site, think about adding tracking tags. URL etiquette in Twitter’s 140 character dialogue is to use a shortened URL via tinyurl or similar, so add your tracking in before converting the url. This can help you understand what value this channel is delivering for you, over and above interaction, enabling you to track traffic from conversation through to conversion.

www.twitter.com/TomGriffola

www.twitter.com/CheezeDMG

Thanks to David Armano for the funny pic: http://darmano.typepad.com/

The Internet Advertising Bureau(IAB) released figures sighting a 17% rise in online advertising spend for the UK in 2008.  In total it came to £3.3bn and online marketing as a medium saw an increase in market share to 19.2% of all advertising.

While online saw this substantial growth, all other advertising saw a 3.5% drop in 2008.  This is not particulary surprising after the job cuts at ITV and Channel 5 while Channel 4’s long term future has continued to be of doubt with rumors of a merger with BBC WorldWide.

These increases are of no surprise to us here at CheezeDMG.  Online marketing provides the most accountable form of direct response advertising and our results prove that it offers significant value and potential return on investment.  Marketing budgets are increasingly being scrutinised in the current economic climate and the sesmic shift of spend towards online is clear sign that it’s the platform that can make every penny count.

The Governments online spend, for example, has tripled over the last two years as they quickly identifiy internet marketing as an increasingly effective method to communicate their messaging, services and campaigns to the public.  Figures from the Central Office of Information showed the Government spent £35.4 million last year on digital media, compared to just £12 million two years previously.

The IAB also stated within their report, carried out in partnership with PriceWaterhouseCoopers and the World Advertising Research Centre, that paid search grew by 22.7% to £1.987bn in 2008.  Another sign the accountability and responsiveness of advertising is quickly becoming a more established requirement.

Display too saw considerable increases, with rich media technology continuing to evolve, as the IAB article quite rightly points out, provides advertisers with the opportunity to effectively run TV style campaigns online within a more cost effective and direct response framework.

Martin Doyle, a TV buyer at one of the world’s largest advertising groups, mentioned this in response to the claim rich media advertising is eating into the budgets of conventional TV campaigns.

“You can claim to have effective direct response marketing through any medium, and whilst internet is most accountable and probably the best medium for that final call to action, without the strategic awareness that TV, press and radio provides, digital wouldn’t receive the traffic that it does.  I argue that digital is perhaps the most intrusive and irritating form of advertising due to its relative infancy as a medium - people are well conditioned to TV and radio ads in their everyday lives.”

I’ts a valid and thought provoking angle, though with pre-roll video, rich media ads and TV networks rolling out stimulating on-demand environments, I don’t think it will be too long before we’re as conditioned with online TV as we are offline.

Online is going from strength to strength and with the continued adoption of  and quick up take of new online platforms such as social networking and on-demand services, there is plenty of room for further growth.

www.twitter.com/cheezedmg
www.twitter.com/jamesdglick