Web Search & Marketing Newsletter - August 2007

Welcome to the latest monthly edition of our newsletter, covering current web search and marketing issues that can have an impact on business websites.

In this issue we look at the new Smart Ads system announced by Yahoo!, which offers banner advertisers a new level of targeting based on user behaviour. Closely related to the way that this new advertising system works is the news that all the main search engines have been updating their privacy policies regarding the data being held on each user's search activities. We look at what's changed and how this may impact the services being offered by the search engines. We also look at some of the new reporting options that have been added to Google AdWords and what this data can tell an advertiser.

Read more about these stories below, or you can also browse through previous editions of the newsletter, either by month or by subjects covered.

On to this month's edition...

Yahoo! launches new Smart Ads option

Last month Yahoo! announced the launch of their new 'Smart Ads' programme, which enables advertisers to fine tune the delivery of banner adverts to a particular audience, based on their known interests and preferences.

Working in a similar way to Microsoft's targeting tools being used on their AdCenter PPC system, Yahoo!'s new Smart Ads system allows advertisers to present adverts to users based on their Internet profile, including data on their location, recent product searches and, in some cases, age or household income. Yahoo! says that this technology will allow advertisers a greater degree of targeting and make adverts more relevant to users, taking another step towards personalised web activity.

One of the main elements in this approach is behavioural targeting, where a user's web activity is tracked and profiled so that products can be suggested to them, based on their likely interests. The market for this form of targeted advertising is expected to nearly double from its current size to $1 billion in 2008 and to $3.8 billion by 2011, according to research firm eMarketer.

The new Smart Ads system is taking this method of targeting a step further by providing advertisers with a template for ads, using several variables that may be compiled 'on the fly' to suit the data on a specific reader. This is moving the traditional blanket banner advertising model closer to the targeting of search advertising and Yahoo! has said that they would merge their display and search advertising businesses to address client requests for campaigns that combine both types of ads.

The introduction of the Smart Ads system is in response to the massive growth in the search advertising business over recent years, which has demonstrated the popularity and effectiveness of targeted online marketing. Google is, of course, expected to launch a similar system once the acquisition of DoubleClick is finalised, although unlike the portals of Yahoo! and MSN, Google still lacks the depth of data for targeting web users. However, this is where the data they are collecting from personalised search and from other site acquisitions in the recent past will help to contribute to their targeting capabilities.

For more information on how Smart Ads and other banner advertising techniques could help your business, please contact us for details.

Search engines update privacy policies

Following growing concerns about privacy and data collection, both Microsoft and Yahoo! have recently announced that they will be keeping information on search usage for a shorter period of time. At the same time, Microsoft and Ask have proposed new voluntary standards to be developed by the search industry to protect consumer data.

The main search engines are now competing with each other to be transparent about the data they collect and how long they hold it for. Earlier in July, Ask announced that they would no longer retain a web user's search history, unless they requested it to be kept as part of their search preferences. Even in this event, the data would only be kept for a maximum of 18 months and no IP address information would be recorded alongside the search terms being used.

Google has also recently announced that their 'cookies' placed on a user's computer to record search activity would expire after 2 years, rather than 2038! IP data would also be made anonymous within the cookies. Google is also coming under focus due to their acquisition of DoubleClick, which potentially gives it access to online advertising data as well as search usage.

So Microsoft and Yahoo! have also responded to this privacy trend. Microsoft will only hold search usage data for a maximum period of 18 months and there will be no connection with IP addresses or other account information, such as Hotmail - unless the user requests that the information is retained to enable personalised search. Yahoo! is also setting up similar controls on their cookies used to track search history.

Most web users probably have no idea that the search engines retained this information, although the highly publicised case in the US last year when AOL inadvertently revealed the search activities for more than 650,000 users raised concerns. The new personalised search services being offered by Google and others do require historical data to be used, so users need to be aware of the implications of this, plus the PPC targeting data used by Microsoft and the new Smart Ads service launched by Yahoo! (see above) is based on extensive search activity data, from which users will also now be offered the chance to opt-out.

These new moves are therefore a realistic response by the search engines to take control of their own privacy policies before laws are imposed and they will need to establish a balance between data that is still being collected and how it can be used for their search services. However, this publicity and the more open approach to data collection may also slow the uptake of personalised search by web users.

If you'd like to find out more about how the main search engines use historical activity data, please contact us for more information.

New reports from Google AdWords

Google has recently been adding new options within the reporting function on the AdWords PPC system that can help advertisers achieve different insights into the way their campaigns are performing.

Some months ago Google started to include data at the Campaign and Account level on the number of invalid clicks that had been identified and removed from the campaign. This was to counter the increasing concerns about click fraud, although figures for these will continue to vary depending on the source of data and the interpretation of click fraud.

More recently, Google has just added 3 new pieces of data at the Campaign level, which look at Impression Share (IS). This figure is equivalent to the 'share of voice' metric that many offline advertisers will use and essentially indicates how many times an advert appears to be seen out of the total possible opportunities, or what share of advertising one campaign may have against a competitors.

With Google Adwords, this means that if x number of people search for a term over a certain time period, the Impression Share will show advertisers how many times their advert will have appeared to this audience. So, if an advertiser has limited competition or is bidding at the highest level, the IS is likely to show 100%, but if the advert appears on the 2nd page of results, this figures is likely to be lower since all searchers won't necessarily click onto the second page of results.

Two other figures that Google provides are Lost IS (Rank) which will indicate how many ad impressions may not have been seen due to the ranking position of the advert/s, and Lost IS (Budget) which indicates whether a daily budget or other spend control criteria may have prevented adverts showing for all searches. Together, these IS figures help advertisers to see how good their coverage of the potential market has been and indicates what changes could be made to improve this. Of course, the IS figures shouldn't be used in isolation and other factors like clickthrough rates and Quality Scores will be important, but they can provide more summary information on a campaigns performance and clues to ways that it could be made to work better.

Google has also added a new Placement Performance Report, which offers more transparency for advertisers who use the third-party content targeted network. We'll be covering this option in more detail in a future issue of this newsletter, but if you'd like to know more about the range of reporting options for your Google AdWords account, please contact us now.

Recent articles from The Marketing Workbench

The Marketing Workbench is our regular blog covering news and comment on Internet marketing events and trends. If you want to keep track of current stories you can visit this section of our website on a regular basis, or set up an RSS feed. These are just some of the items posted over the past month:

• Blog 'buzz' driven by ad spend
• Yahoo! rolls out 'Panama' in Australia
• European Internet spending to double by 2012
• Google faces Australian court action
• New measure of web popularity
• Facebook shakes up social networking

We hope you've found this month's issue useful. Please contact us if you need any more information on the items covered, or our advice on any aspect of your website's performance. Also, if there are any issues you would like to see in future editions of this newsletter, please submit your suggestions to us.