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May 11, 2008 - May 17, 2008

May 16, 2008

State Governments Not Letting Up on Online Ad Players

State governments are becoming thorns in the side of the digital ad industry, and Texas is the latest state to wrangle an online ad player. Indeed, Texas is the reason World Ave is Out $800K. The lead gen services firm World Avenue will cough up the cash to the state as part of a deal to settle the case against it. According to the Texas Attorney General's Office, the state took legal action because the firm didn’t disclose that users would need to weed through a chain of sponsor offers (and register for them) before getting through to a promised iPod or other so-called "free" gift.

World Ave. works with clients including Blockbuster, Netflix, credit card companies, and others, offering products in exchange for customer data.

"World Avenue USA has agreed to develop and implement standards and best practices to ensure that proper disclosures are included in the future," according to the AG's press release. The company also has to abide by rules about using the word "free" that are becoming commonplace in such settlements. For instance, "when a purchase is actually required, that disclosure must be in close proximity to the word 'free' so that customers are adequately informed about costs associated with acquiring the 'free' item."

Like Florida's AG Office, which settled with World Ave in January (they agreed to pay $1 million), Texas seems active in investigating online ad companies. Back in November 2007, the Federal Trade Commission held a forum on behavioral targeting that featured a panel with Brad Schuelke, chief, Internet Enforcement Unit Office of the Texas Attorney General. He indicated state governments would be involved in inspecting that sector.

"I think in general right now the states are looking at a couple of things," he said. Yeah, it's vague, but the guy was on a panel at an FTC conference (I believe a representative of NY's AG Office was also present). That's indication in itself.

It's unclear whether Texas is investigating other firms for alleged fraudulent online ad practices. An AG Office spokesperson told me they don't reveal that information. "I will have to tell you that this office does not acknowledge investigations of any kind, but we welcome complaints from consumers at any time, particularly if they believe they are being defrauded or misled, as was the case with the World Avenue USA matter," he wrote in a later e-mail.

We know Florida is going after the big fish – companies that enable payments for alleged fraudulent mobile content offers. In February, AT&T Mobility agreed to pay $2.5 million to the AG's office in addition to refunding customer payments for ringtones and other cellphone content advertised as free.

It's my understanding that Attorney General's Offices often collaborate. When I spoke with Office of Florida Attorney General Bill McCollum in February, he told me state operations do talk from time to time because they're dealing with the same problems.

"There's communication," he continued, "but in reality, they have their own cases and we have our own efforts."

State approaches vary as much as the practices of the online ad industry firms they seek to regulate. Still, it's interesting to note Internet ad firms also work together to stave off unwanted government intervention. For instance, just last month, a once-loose collective of companies including Google, Yahoo, AOL and eBay finally incorporated officially after four years of collaborating to influence state policy.

Posted by Kate Kaye at 11:24 AM | Permalink | Comments (0) | TrackBack

May 15, 2008

Curley to Leave WPNI

Washingtonpost.Newsweek Interactive's VP Product Development Rob Curley is leaving the firm. I've confirmed this with a source close to Curley, but no more info is available.

Classified Intelligence reported that Curley is taking on a gig with the Las Vegas Sun. Here's what they had earlier this afternoon:

Curley is attending the Editor&Publisher and MediaWeek Interactive Media Conference in Las Vegas, wearing his Post polo. But folks here are saying he's soon to join the Las Vegas Sun and its online properties. The Sun is owned by the Greenspun Media Group and has always been known for racy and edgy publications.

Posted by Kate Kaye at 3:42 PM | Permalink | Comments (0) | TrackBack

Yahoo Taking It From All Sides

Yahoo's having a rough go of it today, with the official emergence of a threat to its board led by investor Carl Icahn, and the usurpation (according to comScore) of its U.S. Web traffic leadership by Google.

In a letter to Yahoo chairman Roy Bostock, Icahn alleged the board "acted irrationally and lost the faith of shareholders and Microsoft," and proposed an alternate board that includes Marc Cuban, Adam Dell and himself. "It is unconscionable that you have not allowed your shareholders to choose to accept an offer that represented a 72 percent premium over Yahoo’s closing price of $19.18 on the day before the initial Microsoft offer." Wall Street Journal has more coverage. TechCrunch has the letter to Bostock.

The goal of a proxy fight would be to consummate a deal with Microsoft, but for that to happen Microsoft would have to go along. That it will is far from certain. Some of the post-collapse speculation and rumor has held that Ballmer & his cohorts had become unsure about the deal were secretly relieved to see it die. However many in the investment community continue to maintain a deal is still possible, if only because Icahn would not have undertaken this move without some indication Microsoft would still be receptive.

Update: Yahoo fired back late yesterday, accusing Icahn of misunderstanding the facts about Microsoft's proposal and how it imploded. Its letter restated Yahoo's position that its board was always open to negotiating a deal and that Microsoft has stated clearly it's "moving on."

Meanwhile the traffic report from comScore is largely symbolic but still painful to Yahoo, which for years has enjoyed the right to call itself the leader of the pack in terms of U.S. reach. According to the measurement firm, both companies possessed about 141 million visitors on their owned and operated sites during the month of April. However it claims Google has an edge, for the first time, of about 466,000 users. Of course comScore's numbers are notoriously shaky and for that reason the finding means very little. For all purposes the companies are locked in close combat for rights to say they have the biggest audience.

Posted by Zachary Rodgers at 2:21 PM | Permalink | Comments (1) | TrackBack

YouTube Adds Demographics Tab to Analytics Tools

YouTube has added a demographics tab to its Insight analytics platform for video uploaders. The feature makes it easy for creators to break down viewer patterns by age, gender or a combination of the two. The data come from birthday and gender data people are asked to share when they set up YouTube accounts.

The feature addition was announced in a blog post today from product manager Nick Jakobi. That post also notes many creators are altering their upload schedules based on learnings from the analytics tools, including insights about exactly when users are tuning in. In previous conversations with marketers, ClickZ learned that many agencies have used the platform to glean some new insights from old videos.

Posted by Zachary Rodgers at 2:14 PM | Permalink | Comments (0) | TrackBack

May 14, 2008

IBM Predicts Decline in CPM-Based Ad Sales

In a report titled "The End of Advertising as We Know It", IBM has predicted significant changes for online advertising, forecasting "greater disruption for the advertising industry in the next five years than occurred in the previous 50."

Of the 80 "advertising experts" surveyed, more than half expect open advertising exchanges to take 30 percent of current revenues commanded by traditional media in the next five years.

In addition, two thirds expect 20 percent of ad revenue to move away from impression-based sales, in favor of action-based within three years, says the report.

The report goes on to imply that the balance of power in the ad market may move away from the provider, and towards the consumer, with individuals gaining increased control of how and where they view advertising.

As the report states, "Traditional advertising players - broadcasters, distributors and advertising agencies - may get squeezed unless they can successfully implement consumer, business model and business design innovation."

"Consumers are forcing marketers to experiment and make advertising more compelling, or risk being ignored."

IBM also surveyed more than 2,400 consumers, with results suggesting that the public now spend more time at their PCs than they do in front of their TV sets. More than 70 percent of respondents claimed to use the Internet for more than two hours a day, compared with just 48 percent spending the equivalent time watching TV.

Posted by Jack Marshall at 11:48 AM | Permalink | Comments (1) | TrackBack

Euro Agency Mergers: iProspect Enters Germany, MRM Grabs Starsky in Stockholm

There were a couple noteworthy overseas agency acquisitions yesterday. Aegis has acquired Germany-based rmsarcar.com and will merge it with its iProspect search marketing unit. The firm's clients include Scout24, Skyeurope and TUI.com. It'll be rebranded iProspect Germany.

Meanwhile McCann Worldgroup-owned MRM Worldwide swallowed Sweden-based Starsky, merging the smaller firm with its operation in Stockholm. The new entity will be called MRM Starsky Worldwide and have clients including Scandinavian Airlines, Vattenfall, SEB, TeliaSonera and Scania. Starsky founder Anders Nyström becomes deputy managing director of MRM Starsky. Starsky's 18 employees brings the MRM Stockholm staff total to 65.

Posted by Zachary Rodgers at 9:41 AM | Permalink | Comments (0) | TrackBack

Quote of the Day: Ian Schafer on YouTube Buzz Targeting

"Isn’t advertising on the most pre-viral videos on YouTube (and using that as your inventory pool) sucking all of the demographic and contextual targeting out of it? It just feels to me like such a blatant attempt to lure advertisers into the ‘flavor of the minute’ [is] setting the effort up for failure in terms of ad performance.

Here’s the question I’m left asking: Is this going to be an effort that can command and justify higher CPMs? Or is this just another shortcut to associating ads with ‘cool’ content? We all know the ‘coolest’ videos on YouTube are created by non-professionals…"

-Ian Schafer, writing in his blog about YouTub'es new Buzz Targeting feature.

Posted by Zachary Rodgers at 9:33 AM | Permalink | Comments (0) | TrackBack

May 13, 2008

Entrepreneurs: Random Musings on Web's Past and Future

A group of top tech entrepreneurs paneled in New York tonight. Talk was lively, if not deep, given the audience ofINSEAD alums hailed mainly from the relatively distant shores of Wall Street.

Discussion encompassed online media and marketing. Some highlights:

Start-up vet Kevin Ryan was anything but bullish on mobile. "Not one single company in mobile is valued at $1 billion. The carriers are blocking all the innovation."

Moderator Henry Blodgett asked the panel how to fix newspapers. Bain Capital Group's Daniel Allen thinks they ought to capitalize on their relationships with local advertisers and teach them the ropes of online marketing.

What's hot that should be not? The Ladders co-founder Alexandre Douzet thinks Ning's value lies primarily in co-founder Marc Andressen's name. Indeed's Paul Forster votes for Twitter's lack of a business model.

And while there was general agreement things are about to get a little grim, none of these entrepreneurs believe online is on the verge of a recession that even approaches the severity of the last bubble, or dot-bomb. Ryan laughingly reminisced about a week in 2000 when he went skiing and DoubleClick's market cap soared $1 billion while his out-of-the-office e-mail auto-responder was, essentially, running the company.

Posted by Rebecca Lieb at 9:25 PM | Permalink | Comments (2) | TrackBack

FTC Clarifies Single Sender CAN-SPAM Rule

The Federal Trade Commission amended four CAN-SPAM Act provisions. The new rules stipulate that companies don't charge users to opt-out of receiving e-mails. They also alter the definition of the term "person," according to the FTC press release, "to clarify that CAN-SPAM’s obligations are not limited to natural persons."

The term "sender" was also redefined in an effort to clarify who's responsible for enabling opt-outs when multiple parties advertise in a single e-mail. According to the Act's full document:

The final Rule provides that multiple 'senders' of a commercial email, under certain conditions, may identify one among them as the 'sender' who will be deemed the sole 'sender' of the message (the 'designated sender'). Thus, under the final Rule, the designated sender, but not the other marketers using the same email message, must honor opt-out requests made by recipients of the message. Moreover, under the final Rule, the physical address of the designated sender, but not the addresses of the other marketers using the same email message, must appear in the message.

Apparently, the FTC received nearly 60 comments regarding this proposal.

Posted by Kate Kaye at 4:33 PM | Permalink | Comments (0) | TrackBack

Epic Intros View-Through-Like Metric

You've heard of induced labor. Now there are "induced visits!" At least that's what Epic Advertising, formerly Azoogle Ads, claims it can measure with its new Performance CPM metric. According to the company, an “induced” site visit is one resulting "in any way from an ad," even if there's no direct click-through. The metric also considers CPC, CPM and CPA tracking and brand impact.

Being a performance marketing firm, Epic serves direct-response advertisers who pay on a cost-per-click or per-action basis. It looks as though the company may now want to branch out by better serving brand marketers, or perhaps by demonstrating that there's value even if an ad isn't clicked.

This "new" metric reminds me quite a bit of something developed by DoubleClick years ago, called view-through. That metric gauges user activity after a user has been exposed to an ad but hasn't clicked on it.

Posted by Kate Kaye at 3:32 PM | Permalink | Comments (1) | TrackBack

Yahoo Political Ad Guy Moves to Westwood One

It's official: Richard Kosinski, former VP of political advertising for Yahoo, is moving to Westwood One. As SVP, Chief Digital Officer, Kosinski will head up Westwood's digital products such as news, sports and talk as well as all digital product and business development. While the Westwood name is synonymous with radio, the company is branching out to all platforms.

As I reported in April, Kosinski is replaced by Yahoo vet Diane Rinaldo, who apparently had done some work with political advertisers before taking the new role.

A source of mine -- a big name in the online political ad space who is responsible for planning online media buys for advocacy groups and candidate campaigns -- told me after Kosinski's departure was made public, "I miss him already."

Posted by Kate Kaye at 2:51 PM | Permalink | Comments (0) | TrackBack

Quote of the Day: Monster.com Chief Sal Iannuzzi

"I think the ad business has slowed down because we slowed it down. We took a lot of ads down... I think there is bigger opportunity putting the ads on a wider band of sites. Suppose I create a Military.com [a Monster site in the U.S.] for France, for the U.K., for the Netherlands, Germany, etc. Not only is it growth in my recruiting businesses, but that's where I can get a lot of growth for my advertising business."

-Monster.com Chief Sal Iannuzzi, responding to a question from the Wall Street Journal about the outlook for advertising on its sites.

Posted by Zachary Rodgers at 10:14 AM | Permalink | Comments (2) | TrackBack

May 12, 2008

Social Data Portability: Will It Affect Advertising?

Suddenly all the social networking majors are racing to see who can break down their own walls the fastest -- and in the case of Google, to make the switch from sheet rock to plumbing, if you'll forgive an overstretched metaphor.

Shortly after News Corp. announced its data portability initiative last week, Facebook chimed in with its own proposal to give users control over their identities. Called Facebook Connect, the initiative will launch in the next few weeks and allow Facebook users to carry their basic profile information, friends and privacy settings around with them. "We believe the next evolution of data portability is about much more than data," the company stated in a blog post Friday. "It's about giving users the ability to take their identity and friends with them around the Web, while being able to trust that their information is always up to date and always protected by their privacy settings."

Google meanwhile announced Friend Connect, a project to help any site owner add social capabilities. According to Google, visitors to any site using the service "will be able to see, invite, and interact with new friends, or, using secure authorization APIs, with existing friends from social sites on the web, including Facebook, Google Talk, hi5, orkut, Plaxo, and more." MySpace was not mentioned in the announcement, which is odd given it's part of Google's Open Social platform geared toward third party app developers.

What do these data portability initiatives mean for advertising? That may depend on who wins the right to host and manage large numbers of consumer profiles. If it's a private entity such as Google, MySpace or Facebook, profile portability will lead to new forms of contextual and behavioral targeting. For instance, imagine Facebook's Beacon and Social Ads programs reinvented to offer alerts and ads that take into account your interactions on thousands of sites. On the other hand, if a non-profit such as the Mozilla Foundation wins the right to manage your data in this fashion, such an outcome would seem less likely.

On another level, marketers who want to add more interactivity and social features on their Web sites may be able to work with Friend Connect to achieve that. Ning and MyBlogLog offer different services along similar lines. The former is a white label social networking platform. The latter is a system for tracking and publishing profiles of your site visitors, and allowing them to interact with each other.

Posted by Zachary Rodgers at 5:16 PM | Permalink | Comments (0) | TrackBack

U.K. Facebook Creatives Branded 'Illegal'

A range of ads promoting credit and loan facilities on Facebook are in fact illegal, according to U.K. debt charity Credit Action.

The charity has said that a number of companies advertising on the social networking site are not providing information on their products that is required to satisfy U.K. advertising laws set out by the Office of Fair Trading (OFT).

An article on the credit action website reads, "If you've been on Facebook recently, you can't miss the adverts for 'payday loans' and credit cards. What you may not have realised is that many of these ads are breaking the law!"

The offending ads fail to state the annual percentage rate of interest (APR) of the loans being advertised. According to Credit Action, this information must be clearly displayed if the ad offers an incentive or interest-free period, makes comparisons with other lenders' products, or provides services tailored for those with poor credit histories.

Malcolm Hurlston, the charity's chief executive, said that some of the companies are U.S.-based lenders who may not be aware of U.K. advertising rules, but that others are from big-name firms who have been active in this country for some time.

"We must be sure that such creative products concur with existing rules and regulations and offer customers the full protection of the law," he told the U.K.'s Guardian newspaper.

Credit Action has written to the OFT complaining about the ads, but says that users should also report them to Facebook.

Offending companies include Payday U.K., Payday Advance U.K. and My Payday Online.

Posted by Jack Marshall at 11:23 AM | Permalink | Comments (0) | TrackBack

Online Classified Ads, Another View

"Online Classifieds Have Grown Up," writes Brad Waller, VP, business and affiliate development of ePage, in response to my column that examines why more classified ad sites haven't incorporated more interactive features.

The online classified site, he says, has been around since 1994 and that consumers are the ones who've resisted change.

"We offered audio many years ago and it never took off. We have offered video for a few years and very few users have chosen to upload any," he writes.

So why aren't more people using audio and video in classified ads?

"Audio was and still is too hard for most people. Video is a harder question. Everyone seems to have video capability on the cell phone, most digital cameras have video, and now there is the relatively cheap Flip (and other) video cameras. I really did expect video to take off because the barrier to entry is so low. My best guess on the lack of video is the demographics of the average classifieds user. Classifieds is not the realm of the 18-34 who grew up with technology. Sure, they are users, but there are a lot of older users who feel comfortable with classifieds. They are simple and easy to understand."

Posted by Anna Maria Virzi at 9:52 AM | Permalink | Comments (0) | TrackBack

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