Microsoft, Google – they’re in the media business now. Which is also the reason why the newspapers are fighting back, although probably too little, too late. These powerhouses are pretty much unstoppable.

Stole this one off Searchblog:

“At Advertising Week 2006 in New York, Microsoft is set to unveil a new unified global advertising initiative.  Under Digital Advertising Solutions, advertisers will be able to more easily reach customers by packaging Microsoft’s products, including Xbox, MSN, Windows Live, Office, Windows Mobile, and Microsoft TV under one advertising solution“

Yeah, but can they please get AdCenter sorted out soon, please?

UBS Analysts are scratching their heads as they try to advise investors about Google’s future:

“The world’s largest wealth management firm, UBS, issued a note this week advising investors that the unpredictable results of Google’s adjustments to ad systems and algorithms, combined with an expected 3Q seasonal downturn in online advertising, makes investing in GOOG a risky proposition in the short-term, at least until 3Q results are published.“

The black box is impenetrable. Smart pricing? Landing page scores? Minimum bids rising and falling? Historical factors? Algorithms? It’s not just Mom & Pop who can’t make sense of Adwords any more, the worlds top analysts are stumped as well.

“While some of the changes have increased minimum bids by at least 15%-25%,” read the note, “we simply do not know how many advertisers and how many keywords of the total Google ecosystem were impacted.“

The article goes on to describe common arbitrage techniques.

SEOMoz has a good on post on getting caught in an arbitrage loop. Clearly, this is getting ridiculous:

“Behind the veil is AdSense (and to a lesser extent, other contextual ad systems like Azoogle & Yahoo! Publisher Network). They could very easily shut down the practice of arbitrage (and thus, improve the quality of users’ experiences across the web), but they choose not to. Why? Because contextual ads like this are a huge source of revenue. Those millions of clicks purchased by ad middlemen drives up the cost of ads and the return earned by the ad providers.“

The thing about arbitrage markets is that they should eventually correct. The practice of arbitrage will eliminate price differentials between different markets.

However, I’m of the opinion that PPC is heading into very troubled waters. Ultimately, prices must top out, as a vendor cannot spend more than the cost of sale, and any abuse just compounds the issue. Any search engine that relies on a PPC revenue stream, and that’s all of them, could be highly vulnerable when the eventual tipping point arrives.

One wonders just how far away a Google CPA product is…

A bit behind the times, aren’t they? Article on Click Fraud, doesn’t contain much new, other than a few case studies about clients who are getting increasingly frustrated with the refund process:

“But as clicks from ZapMeta kept arriving, Fleischmann demanded in an Aug. 7 e-mail to Google: “You should be trusting us and doing something about [ZapMeta] as a partner, instead of finding more ways to refute our data or requests.” (BusinessWeek’s e-mail to ZapMeta’s site and its registered owner, Kevin H. Nguyen, elicited no response.)“

Interesting side note. V7N Blog got a hat-tip for helping spread the Click Fraud story. Not sure if we were responsible for the wider up-take or not, but it’s good to know the grass-roots media are breaking stories well before the mainstream media.

Interesting audio clinic on MarketingExperiments for those interested in exploring the small PPC search engines.

They give the results of a few tests, including comparing the cost per action across various small engines. Of note, one Miva result  found the cost-per-action was $66.58, which was 43% lower than Google, and 59% lower than Overture. However, they found that results across all engines were mixed and sporadic.

They also note that some small PPC engines are making use of domain traffic, which can be problematic, depending on the domain name and approach:

“Now, if this visitor looking for MySpace.com finds them self on a dating site rather than MySpace.com, they may stay and subscribe, though the likelihood of them being interested is far less than if they arrived at the site intentionally. This is an example of how domain traffic can be less qualified. Seeing as how the traffic from the small search engines was of such low quality, we can only assume this is the type of domain traffic these engines are utilizing.“

The comments in this blog post hit on a truth.

“The problem with AdWords is that it’s not a simple enough solution for most small businesses. John, you’ve experienced AdWords as a user. It’s constantly changing and the interface is geared more for technical people. Are most small business owners going to understand what to do when their keywords are marked inactive for search?“

I find when I talk to clients, that statement rings true. Adwords, and other PPC offerings, are far too complicated for the average website owner. The PPC systems change a lot, the rules seem arbitrary, and there is a learning curve which is getting steeper by the day.

That’s great for the search marketing industry, of course. When something is hard to do, or time consuming, people will pay us to do it for them. We see a lot of statistics on spend, but a lot fewer statistics on take-up rates for new accounts.

Perhaps that’s why Google introduced an Adwords starter edition back in March. And perhaps why they are looking for more integration into products such as Quickbooks. Are more people getting into PPC and staying, or is there a high attrition rate?

Anyone know of take-up rates on new PPC accounts?

Shoemoney posts that Google claim to be using conversion data to identify arbitragers:

“Kim explained that in many cases they are using Adwords conversion data to tell what MFA sites were actaully converting for advertisers. She said using this data helps them easily identify arbitragers. I think everyone in the room was a little shocked when Kim revealed that Google Adsense was using advertisers Adwords conversion data to actually keep track of what Adsense accounts were converting to sales and which ones were not”.

It’s conceivable that all Adsense payouts may work this way. If a Adsense listing provides a “return” (however that is measured – could be a visit of x seconds) to the advertiser, then the publisher gets paid a higher amount for placement than a page that just sends (back)clicks.

Of course, this depends on what Google considers a return and what information Google has available.

Jensense reports:

“Content Ads is Microsoft’s next product that allows advertisers to place content-targeted, text-based advertisements primarily on Microsoft-owned properties including MSN Money, Real Estate, and many others within the www.msn.com portal.”

So, it’s a first step for Microsoft, distributing their AdCenter listings outside the MSN search engine. It may be sometime before they have an Adsense-like partner program, however.

What Microsoft really needs to do is hurry that aspect along. Yahoo!, for inexplicable reasons, have been so slow on this front (Yahoo Publisher Network is still in beta). The opportunity to compete with Adsense is going begging.

Google, meanwhile, extends their lead…

Way too much information in Google’s hands, according to some webmasters.

The Google Analytics blog announces, in Googles usual “yay-team!” chipy manner that it’s “easy” to link your Adwords and Analytics account:

“If you already use AdWords to drive traffic, Google Analytics is the perfect instrument panel. ROI, Revenue per Click, and conversion rates correlated by search result position — all right in front of you”

And, not to forget, right in front of them, too!

What Google needs to do is be more transparent about how they are going to use that information, particularly as it relates to ROI calculations. Are they going to use this data to calculate Adwords bid prices? How is this sensitive data being used?

Hmmm…..

While the public release was recently pushed back, Yahoo took the opportunity to give people a look at what they can expect.

The new ad system boasts the following features and capabilities:

• new platform will be much more marketing focused
• advertisers will be able to choose sets of targets, creatives, and calls-to-action
• incorporate graphics and rich media, coupons, and phone calls. This will be very important in new channels such as mobile
• better targeting
• the advertiser can determine whether or not to manage contextual campaigns separately from paid search ads
• Advertisers can also set up A/B ad testing
• an option to receive account ‘alerts.’
  
• historical search data, such as original search terms high in the purchase funnel that lead to indirect conversions, based on search research and patterns

Can’t wait….