Archive for July, 2007

Internet advertising company ValueClick has announced that its profits increased substantially over the second quarter - but still fell short of analyst estimates.

Profits for April through June stood at $17.6 million - up by 22 per cent on the $14.4 million profit registered a year ago. This represents an increase of $0.17 per share, which falls just short of the $0.18 per share profit forecast by analysts.

In market trading, the company’s share value dropped by 19 per cent, after it lowered its earning per share forecast for the full year to $0.74 to $0.76 per share, down from $0.79 to $0.81 per share.

"The promotion-based sector suffered a downturn that began in late May and became more pronounced in June, which negatively impacted our quarter," said chief executive Tom Vadnais.

"We have reassessed our outlook on the promotion-based business and have taken aggressive steps to bring its costs in line with the changes occurring in this part of the industry. We expect to see the full impact of this cost-cutting initiative in the fourth quarter."

Exposure to display and paid search advertising dramatically alters the way consumers behave while shopping on the internet, a new report claims.

A study carried out by Yahoo and comScore showed that consumers who have been exposed to search or display ads tend to carry out online research, or ‘pre-shop’, before making their purchase. This, in turn, leads to increased in-store sales.

The study claimed that pre-shoppers, primed by internet ad exposure, tend to spend 41 per cent more in-store compared to those who have not looked at online ads.

"Although recent research cites 89 per cent of consumers shop for information about products online, less than seven per cent of retail sales actually take place online," Amy Vener, senior director of retail category at Yahoo, commented.

"This means retailers have a prime opportunity to engage this audience of ‘pre-shoppers’ through online advertising to capture incremental sales in-store."

Internet advertising revenues are continuing to spiral, reaching new heights in the first quarter of this year, a new report reveals.

A study carried out by the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers claims that revenues over the first quarter of 2007 reached a record of $4.9 billion.

This represents an increase of 26 per cent over the equivalent figure for the first quarter of 2006, when sales totalled $3.8 billion. They were also up by two per cent on the fourth quarter of 2006, despite the fact that that quarter contained a busy shopping holiday.

"The continued growth of online ad revenues clearly illustrates marketers’ increased comfort with the extraordinary vitality and accountability of this medium," IAB president and chief executive Randall Rothenberg commented in a statement.

"It reaches consumers with an unprecedented level of efficiency and measurability that provides marketers with actionable data."

Microsoft says that it is "hell bent" on success in the online advertising realm - identifying it as a critical sector if it hopes to deliver "superior financial returns in the future".

The company’s chief executive, Steve Ballmer, made the claims at Microsoft’s annual financial analyst meeting in Washington state.

He defended the company against claims that its forays in digital devices and online advertising were costly and unnecessary, saying that it is committing the manpower and money necessary to give it equivalent levels of dominance in the two sectors as to that it currently enjoys in the PC and server software industries.

"We’re bringing the same kind of vision and tenacity that are in our DNA and drove us into the enterprise business into consumer devices and online services," Mr Ballmer commented.

"We need to have this business outlet for our software creativity to continue to grow, to continue to innovate and to continue to be relevant."

Microsoft is currently a distant third behind Google and Yahoo in online advertising - and so it has focused on acquisitions, such as a $6 billion deal to acquire aQuantive, to make up ground.

Women between the ages of 50- and 70-years-old, long ignored by marketing companies, will soon become the richest demographic in US history, it has been claimed.

Author and chief executive of Chicago’s Trend Sight Group Marti Barletta states that over the next ten years females will come to the fore - with the baby-boomer generation set to become a particularly important marketing target.

Indeed, the boomer generation’s leading female edge will transform the US market in the vast majority of product categories, she argues.

But, despite this emerging trend, purveyors of internet advertising techniques such as paid search links will continue to use outdated research and target much younger generations - and exclude older females from their marketing campaigns - Ms Barletta claims.

MediaWhiz has bought up eBay affiliate marketing company AuctionAds.

AuctionAds displays relevant eBay auctions on web pages and then pays the publisher 100 per cent of the eBay fee. The company currently has 20,000 publishers on its network.

MediaWhiz has previously bought out TextLinkAds - but it has now swallowed up AuctionAds, even though the company was founded just this March.

AuctionAds managed to get 17,000 publishers to sign up to its service in just 90 days, becoming one of eBay’s largest affiliates. It recently won a star developer award at the eBay Developer’s Conference, held this June.

“We saw there was a service needed,” Jeremy Schoemaker, the company’s owner, told auctionbytes.com recently, as he explained its success.

“It’s not easy to get up and running with the eBay affiliate program. With us, you can be running and making money within a minute.”

TradeDoubler has announced that it has acquired The IMW Group, which owns the UK’s largest independent search engine marketing company The Search Works.

The deal is worth around £56 million and should make TradeDoubler one of the largest online marketing firms in Europe.

Swedish-listed TradeDoubler runs a pan-European network of affiliate marketing websites. Privately-owned IMW has a wealth of expertise in the paid search market, and a desire to join these two areas of expertise is thought to be behind TradeDoubler’s purchase.

IMW’s principle business is the Search Works agency, which is believed to be one of the largest users of search engines such as Google and Yahoo in Europe.

It is thought that the takeover should establish TradeDoubler as one of Europe’s premier online marketing firms - expanding the range of services it can sell to merchants and affiliates.

Reader-powered news site Digg has ditched Google as its online advertising partner, choosing to align itself with Microsoft instead.

Microsoft will deliver mostly small, contextually-relevant links on Digg.com for the next three years. Over 9.5 million people visited Digg last month (June) as they read stories, voted a favourite on a list of top news reports and suggested other articles that the search engine should include, statistitcs from comScore reveal.

Microsoft signed up Facebook to its adCenter platform last summer and Digg is the first high-profile customer to join up since then. Microsoft hopes that this deal, alongside the impending purchase of online advertising company aQuantive, should help to boost adCenter’s appeal and raise its customer level against Google, the market leader in paid search advertising.

“We actually now are in the forefront of what we believe is going to be the next generation of advertising,” Steve Berkowitz, a senior vice president in Microsoft’s online services group, commented.

Microsoft has announced that it is buying out fledgling online advertising exchange AdECN, as it attempts to catch up with rivals Google and Yahoo.

Although Microsoft has not released details on the acquisition, it is believed that the deal was worth between $50 million and $100 million. AdECN runs a system where website owners can tender advertising space to publishers, with the highest bidder winning out.

It offers a similar service to Right Media, which was bought out by Yahoo for $680 million earlier this year.

AdECN specialises in so-called “remnant” inventory - which comprises of less-desirable web advertising space that would otherwise go unsold.

The deal allows the company to “move forward with all of the core components that we need to enable this ad platform” Kevin Johnson, president of Microsoft’s Platforms and Services Division, commented.

The larger search engines are fighting to gain advantages as they look to become leading purveyors of both paid search and display advertising.

Microsoft recently lost out to AOL as both companies bid to acquire behavioural targeting advertising firm Tacoda.

A new search engine that specialises in online people searches is attracting 30,000 new users a week during its beta testing period.

Spock, as it is known, trawls all publicly available data on the web from sites such as News Corp, MySpace, Wikipedia, Flickr and LinkedIn, to return results on people arranged into biographies. It searches for anyone from old school buddies and ex-neighbours to sports stars and celebrities.

Jaidepp Sing, chief executive of Spock, said: “Thirty per cent of all internet searches are people related. We have created the most relevant, accurate, and largest search application focused on people.

“To date we have indexed over 100 million people representing over 1.5 billion data records. We plan to eventually index everyone in the world.”

Users are able to add feedback and correct or update information returned by searches. They can add pictures, write descriptions and add tags to profiles for search engine optimisation.