Social network ad spend has been rising steadily over the last few years with marketers extending their online pay per click and banner advertising beyond the seach engines to include the social networks as well. It is estimated that during 2011 marketers in the US alone will spend £3.08 billion on social network advertising. eMarketer predicts that US ad spend will be up 55% on 2010 when marketers spent $1.99 billion, and that worldwide social network spend will be up 71.6% in 2011 to $5.97billion.



Facebook, by far the largest social network, is clearly having the greatest impact on this growth through a year-on-year increase in Facebook advertising. Facebook therefore contributes up to 65% of the 2011 prediciton. eMarketer predicts that advertising spend on facebook will hit $2.19 billion in the US alone in 2011 and over $4 billion worldwide. That's more than double the total spent in 2010!


So as we move further into 2011 social networks are poised to absorb an even greater percentage of all online spending making them difficult to ignore for any business serious about their online marketing. We will be watching eagerly to see what developments Facebook has planned for the forthcoming year.

In a clean-up of its services, Yahoo! is about to remove a number of “underperforming” websites, including a few very well known brands.

Those of us who have been involved in search engine marketing for years will remember when Altavista was the Google of its day. Anyone involved in social media marketing will undoubtedly have spent time on the bookmarking website, Delicious.

In addition to these two sites, AlltheWeb (another search site), Babelfish (a translation service), Buzz (a news aggregation site) and MyBlogLog (a social media network, similar to Facebook) are all also likely to be taken off the web.

For the sake of posterity, here’s a screenshot of Delicious:

 

A Yahoo! spokeswoman said “Part of our organizational streamlining involves cutting our investment in underperforming or off-strategy products to put better focus on our core strengths and fund new innovation in the next year and beyond...We continuously evaluate and prioritize our portfolio of products and services, and do plan to shut down some products in the coming months...We will communicate specific plans when appropriate."

The company is also planning on cutting its workforce by 4%, which equates to about 600 jobs.

If your website receives traffic or has links pointing to it from any of the Yahoo! properties that are going to disappear then put measures in place to limit the impact. Start taking advantage of other social media, bookmarking and blog sites ASAP, to strengthen your link profile and the number of referring sites.

Whether you are a fan of Google's new Instant search or not, if you are running a PPC campaign then this post will be of interest to you.

There appears to be a glitch in Instant search that could be costing top spot advertisers dearly. Whilst Instant search is turned on, if a search returns Adwords ads above the organic SERPs and you hit enter twice in the search field you will automatically open the number 1 Adwords result. This costs whoever is in the top spot, but the user won't have made the choice to click the ad, so what will they do? Click back, because they were expecting a Google search results screen.

This will have a detrimental effect on top position bounce rates and could be wasting a great deal of advertiser's budgets.

Currently running in Beta test mode, Google are testing video extensions that will be shown with their Adwords ads.

The plan is to have an "expandable plus-box" directly beneath the normal PPC text ad in which video extensions will play. Users will be able to watch the video before deciding whether or not to click-through. This sounds interesting for users, but the current cost of this service for advertisers is less appealing.

Once viewers reach the 10 second mark the advertiser will be charged the same maximum cost per click as if their ad had been clicked, regardless of whether it is clicked. So will this lead to a flurry of 10 second ads or are the search results becoming more and more cluttered, as with Google Preview?

Google has suggested that video extensions could be of particular use for product demonstrations, previews and trailers.

At present, there are no plans to roll this service out in the UK.

Google has now launched “Instant Previews”, which provides a preview of the organic search results without a searcher having to click through to the site itself. These previews appear on the right hand side of the Google search results screen when you click the little magnifying glass icon next to the search results.

This new addition comes hot on the heels of Google's launch of Google Instant. Unlike Google Instant search, Google Instant Preview is by default turned off, the magnifying glass must be clicked to activate this new feature. The preview istself is a graphic overview of a search result that highlights those sections which are most applicable to the search term used making it easier to see whether a site is worth visiting or not.

Google Preview will start showing up from today, 9th November 2010 and should be available in 40 languages and to all users within a couple of days. Google claims that during the testing of Google Instant Preview, those using Instant Preview stated that they were about 5% more likely to be satisfied with the results they clicked. This new visual comparison seems set to change the way visitors evaluate websites and choose whether or not to visit them.

At this point Google Preview doesn't extend to Google Ads, even though every Google Ad ends up at a web page. Google has thought about the option, but isn’t including it in the initial launch. Although incredibly fast and powerful, Google Preview still finds including sites created in Flash difficult with the majority of flash sites not yet being turned into a preview. Unlike Google Instant, which shuts off when your web connection slows, Google Instant Previews is available even on poor internet connections.

With Microsoft Advertising adCenter now providing all paid search results for Yahoo! Search and Bing in the US, and Bing supplying the organic search results for Yahoo! Search, they have just announced that this will be rolled out in select markets across europe and the UK in early 2011.

The european transition will begin with the UK, France and Ireland with all of europe expected to be completed by early 2012.

Current advice is to continue using adCenter as normal but to expect further information regarding the pending changes approximately 3 months prior to any changes taking place.

In a report published today it was revealed that the internet in the UK alone is worth £100 billion to the economy, representing more than a 7% share of total national income.

The study, carried out by the Boston Consulting Group on behalf of Google, the internet’s most successful company, places a value on the UK internet market for the first time.

If it were an industry in its own right the internet would be more than twice the value of the UK hotel and restaurant market and nearly as big as the financial sector, which accounts for 9% of Gross Domestic Products in 2009.

However, the research did find that there is a digital divide in the UK, with certain parts of the country – namely Scotland and Northern Ireland – lagging far behind London and the south-east.

In an interesting twist in the report, it turns out that British consumers are more willing to spend money online than can be typically seen elsewhere. E-commerce drives a large section of the internet’s expansion; as a proportion of retail sales, online transactions in the UK are high.

To emphasise this point, the UK has the largest e-commerce market in the world when measured by the amount spent per capita. The popularity of buying goods and services has also fueled a boom in the amount companies are prepared to pay for online marketing as heavy spending can help attract users to their sites.

The online advertising market in Britain is worth £3.5 billion and is the biggest anywhere outside the US.

It is forecasted that the internet economy is to continue to boom with 10% year on year growth projected for the next 5 years. If this trend comes to fruition then the internet economy will contribute up to 13% of GDP by the year 2015. For an idea of scale the current internet economy is already larger than the utility and transport industries put together.          

The report also highlights the success of small firms using the internet to increase global sales. The UK now exports goods and services which are worth £2.80 for every £1 it imports. Google’s annual turnover was £23.6bn last year which encompasses very nearly a quarter of the £100 billion contribution the entire internet made to the UK economy in 2009.

The first half of 2010 has seen a dramatic rise in the total spend by British organisations on online advertising, up 10% from last year to £1.97 billion.

The bi-annual online advertising expenditure study produced by the Internet Advertising Bureau (IAB), in partnership with PricewaterhouseCoopers, puts the increase down to a large surge in the video and social network advertising budgets of many small and medium sized companies.

With a current market share of 24.3% of the total UK advertising spend; online advertising is now becoming a major consideration for many businesses. The 10% increase in online advertising is within a context of a 6.3% rise in total UK advertising spend to £8.1 billion, which shows positive signs relating to the increasing confidence in the economy.

The highest spending could be seen in the entertainment and media sector, which has always relied heavily upon advertising within the digital sector. This accounted for 14.4% of total online advertising spend in the UK, followed by finance and fast moving consumer goods.  

In what was a largely positive study, figures reflected a sense of optimism in the industry which has not been seen for the past couple of years. Even retail, a sector which has been hit disproportionately severely by the economic collapse, experienced an increased online advertising spend from 7.1% in the first half of 2009 to 8.4% in the same period of 2010.

The chief executive of IAB, Guy Phillipson, commented: “The return to double digit growth in UK online advertising spend is characterised by increased investment by major brands, particularly in fast moving consumer goods and entertainment. The effectiveness of social and video ads for classic brand building is reflected in these formats enjoying exponential growth”.

The report indicates a number of drivers for the recent surge in growth, one being the increase in online users within the UK, mainly due to the proliferation of devices such as Smartphones.

The way people spend their time on the internet is also changing with the IAB claiming UK internet users are currently spending 23% of their time online using social networks and blogs.

New regulations mean that from March 2011 companies will be subject to strict advertising rules as the Advertising Standards Agency (ASA) extends its power over online marketing. In 2008 there were over 4500 complaints about internet marketing communications that the ASA did not have the authority to deal with. They will now be able to force marketers to remove any content or online advert found to be in breach of its regulations, giving the consumer much more protection.

False claims and misleading statements on websites, as well as untrue price comparison sites will be under the ASA’s control. These new regulations will give the ASA the capacity to position their own adverts in place of those of noncompliant advertisers. Companies that flout these rules will receive substantial negative publicity from the ASA which can damage an advertiser’s reputation.

Marketing statements on Twitter, Facebook and other social networking sites will also be covered by the new regulations. This means that marketers will have to be careful to ensure that no offence is caused and that no misleading statements are used. Using foul language or sending malicious comments from official company accounts will result in complaints and possibly fines from the ASA.

Internet giant Google has provided extra funding for this extended remit and is completely co-operating with the ASA to help make the Internet a much safer place for the consumer. These regulations will provide an interesting challenge for marketers as some will have to change their current practices to comply.

A SURPRISING trend has come to light as the internet continues to develop. Retailers that succeed online are rarely the same as the successful giants found on the high street. Conversely, in our city and town centres we visit familiar shops with long established brands whose digital presence are often significantly newer, smaller and – crucially – a lot more profitable.

Well over a decade ago when online shopping began in earnest, the vast majority of businesses at the forefront of their offline markets concentrated on where they were doing well, and perhaps failed to see the possibilities for the future. These days, when shopping for clothes on the high street, Top Shop and Marks & Spencer remain omnipresent, with an established footing in almost every city. But online, it’s ASOS.com and Net-A-Porter that shoppers prefer.

So why is it that Play.com and Amazon sit comfortably at the top of the ecommerce pile, enjoying huge market share, while Zavvi, which was formerly Virgin, went out of business in very quick time, and HMV’s foray into the online world in no way reflects its dominance of the high street?

The online and offline markets differ greatly. Many of these large, established, offline giants stumbled into the world of online retail assuming the transition would be simple. This has been far from the case. Offline businesses often have to push their message onto consumers and convince them of their need for such products, and convince them to visit stores in order to prove they are the best-placed supplier. The internet features a ready-made market and, so long as your business is at the top of the search engines for popular search terms, you can capture the individuals already interested in your offering.

In reality, it is often a lot less expensive and less risky to attract business via the web than it is in the physical world. Yet many firms really struggle to capture an online audience which is anywhere near as profitable as what they are used to. This is usually down to the adaptability and attitude of the management.

Not only are different skills needed to succeed in ecommerce, but a different attitude is key. Many offline businesses simply do not set themselves up to win online. Trying to transfer traditional customer service approaches and pricing onto the web just doesn’t work. While a consumer might be willing to pay more to browse around a department store and receive one-on-one service, more often than not, on the internet, they want lowest cost and quickest delivery. So long as your website looks reputable and you appear in the search engine results, or are well positioned within the social media networks, you will start carving up a share of the market.

The other factor holding these bricks and mortar organisations back is their ability to change direction quickly. Decision makers within the large retailers are often slower to adapt to new consumer trends, which simply doesn’t work in the digital world. This isn’t completely their fault as an online store can open a new department in a matter of days or even hours, but how long would it take for Marks & Spencer to open up a section of brand new products in just one of its stores? Whereas a 50% off sale can be orchestrated within hours and start impacting profits almost immediately online, a high street retailer has to plan such events well in advance and can’t produce the point of sale items and advertising campaigns in such a short timescale.

There is hope for the traditional retailers and a way they can fight back – by combining their offline brand power with the new online marketing strategies.

The advantage that offline retailers have over new internet start-ups is existing marketing budgets and recognisable brands. Where they fail is to put these two together in the same way as an online marketer would. If they were to fight their internet competitors on their own turf – the search engines – and price themselves more competitively they would be able to use their brand recognition to not only attract a far greater share of traffic, but also convert a lot more of it too. If this were to happen, then it wouldn’t take long for the lists of most popular internet retailers to start filling up with brands that we’ve recognised for decades.

Article originally published on WalesHome.org: http://waleshome.org/2010/06/why-do-high-street-giants-stumble-online/