| Wednesday, Mar 22, 2006 |
What's inside:
Today's Online News
1. Yahoo Readies Response To Google Finance by Gavin O'Malley
2. Claria Gives Up Adware Business by Wendy Davis
3. IAB Floats Broadband Video Measurement Standards by Gavin O'Malley
4. Study: Most Search Conversions Occur Offline by Shankar Gupta
5. AlmondNet Patents Method To Compensate Publishers by Shankar Gupta
Commentary
6. Performance Pricing For Interactive Agencies by Jonathan Ragals
News Briefs
7. Nielsen//NetRatings: March Madness Boosts Sports Traffic
8. SortPrice.com Offers Flat Rates To Curb Click Fraud
9. Treffiletti Leaves Carat Fusion
10. NBC Creates All-In-One Shopping Site
11. Correction: Broadband Enterprises To Distribute AP Content To Niche Sites
Today's News
1. Yahoo Readies Response To Google Finance
by Gavin O'Malley
Not to be outdone by Google's newfangled finance site unveiled Tuesday, Yahoo is about to add new information, multimedia, and style features to its existing finance offering, according to a Yahoo source. Among other changes, Yahoo--currently the market leader in the finance category, with 12 million unique visitors last month, according to Nielsen//NetRatings--will make the stock charts more dynamic, and the site will start incorporating sound, motion, and video.
One of the most distinct features of the new Google Finance site is its incorporation of Flash technology to create more dynamic stock charts than those that are currently on Yahoo Finance. Google Finance visitors can chart the daily ups and downs of a particular market just by scrolling over its name. Likewise, they can chart a stock's trajectory over one to five days, one to six months, or several years by dragging a slider, which also determines related news headlines that appear next to the charts.
Google's site is also unique for its absence of any advertising--for the moment. "Text ads are definitely a possibility when we're sure we have the right product," said Katie Jacobs Stanton, a senior product manager at Google. "Rich media is not something we're considering in the short term."
By contrast, Yahoo Finance considers its marketing partnerships an essential part of its offering. "Along with balancing our relationships with users and advertisers, the most important thing for us is making sure we're relevant to marketers," said Richard Kosinski, category head for business and finance at Yahoo. "We have to provide marketers with the best solutions, and part of that is helping them understand user behavior on our site."
Google also offers users the ability to search for stock quotes either by a company's name or ticker symbol, while Yahoo requires users to use the ticker symbol. Google Finance users also have access to information on privately held companies, as well as blog posts from Blog Search and Google Group posts.
"We consider the inclusion of blog posts to be a major added value for readers, helping them to understand why stocks are performing the way they are," said Google's Stanton.
Google Finance is licensing company summaries, excerpts from financial reports, and management lists from Reuters, Hoover's, and Morningstar, among other source companies. But, contrary to various media reports on Tuesday, this is not the first time that Google has licensed content, Stanton said.
2. Claria Gives Up Adware Business
by Wendy Davis
Claria, once one of the largest adware purveyors in the business, intends to leave the adware space for good by the end of June, the company said Tuesday.
The company hired Deutsche Bank Securities earlier this year to help find a buyer for some of the products it bundles with adware, such as screensavers and Weatherscope, a desktop program that displays local weather information on users' personal computers.
Claria already ended relationships with distribution partners including Kazaa, the file-sharing service. Claria now intends to focus on building out its behavioral targeting service--officially announced in February 2005--which will send targeted ads to consumers based on their surfing activity.
The service will rely on detailed--but anonymous--profiles about consumers gleaned by combining information from cookies that track behavior across a limited number of commercial Web sites with information about the surfing habits of people that install Claria's software. The service is expected to launch with "PersonalWeb," a program that allows participating publishers to serve different pages to different visitors, based on their online behavior.
Claria also will soon announce a major distribution deal that will potentially expand its consumer base; last spring, the company said it was seeking a distribution partner that offered a downloadable toolbar or an instant messaging program. Claria software resided on around 40 million desktops at the end of 2004--the last time the company publicly disclosed the number of its subscribers.
3. IAB Floats Broadband Video Measurement Standards
by Gavin O'Malley
The Interactive Advertising Bureau on Tuesday called for comment on a set of guidelines for broadband video commercial measurement. The proposed guidelines address online browser or browser-equivalent based Internet activity that involves streaming video and audio advertising content.
At issue is when a broadband video commercial should be counted as being displayed, said Greg Stuart, the IAB's CEO. "The big issue here is determining at what point an ad should be measured," he said. "We ... have decided it's the start of the commercial, and that's a big deal in moving our world towards accountability."
Stuart said that while he considers video ads to be small potatoes compared to other categories the IAB reviews, their potential merits plenty of attention early on. "It's still not that large a category, but it's important to address early because it will be so big."
According to the guidelines, "a valid broadband ad impression may only be counted when an ad counter (logging server) receives and responds to an HTTP request for a tracking asset from a client. The count must happen after the initiation of the stream, post-buffering, as opposed to the linked broadband content itself."
The IAB defines a "broadband video commercial" as a commercial that appears before, during, and after content including streaming video, animation, gaming, and music video content in a player environment. This definition includes commercials that appear in live, archived, and downloadable streaming content.
4. Study: Most Search Conversions Occur Offline
by Shankar Gupta
Sixty-three percent of consumers who made a purchase after conducting an online search closed the deal at a brick-and-mortar store, according to a report issued Tuesday by comScore Media Metrix.
For the study, which was sponsored by Google, comScore examined searches in November and December conducted by 100,000 consumers, and then surveyed a sample of 800 individuals.
James Lamberti, comScore vice president of marketing solutions, said the results show that Web-only metrics--such as click-through rates and online conversions--don't tell the whole story of how a search campaign is performing.
"The ROI being realized here is significantly higher than the analytics packages can pick up," said James Lamberti, comScore vice president of marketing solutions. "The vast majority of marketers are not linking the fact that search is actually pushing people into the storefront as it is."
The split between online and offline conversions varied between the categories, but in each, the majority of conversions were made offline in physical stores, the study found. comScore looked at searches and purchases in a variety of categories, including consumer electronics, movies/videos/music, clothing, jewelry, and video games, among others. The highest rate of offline buyers came in the video games and consoles category; 17 percent of searchers in that category converted, but fewer than one in 10--7 percent--did so online. In apparel and accessories, by contrast, 43 percent of searchers converted, but more than one in three--35 percent--made purchases on the Web.
Lamberti added that many marketers have yet to realize that the majority of their return on search investment come from offline buyers. "The critical thing is that it changes the ROI equation. There's still a tremendous amount of headroom in the ROI, given that so much of the conversion is related to the store itself," he said. "If you're lacking a physical store, given the consumer behavior we witnessed here, you're going to be at somewhat of a disadvantage on your return on investment."
David Berkowitz, search marketing firm 360i's director of strategic planning, took another view. He contended that many marketers were indeed aware of the ROI gleaned from offline conversions, but said the major challenge was figuring out how to measure the offline conversions stemming from search. "There's still more room in terms of improving the measurement of offline channels for interactive campaigns," he said. "That remains a significant challenge for marketers."
5. AlmondNet Patents Method To Compensate Publishers
by Shankar Gupta
Behavioral targeting firm AlmondNet has obtained a patent for a system of paying publishers based on the amount of demographic and psychographic information they provide about their users.
AlmondNet founder and CEO Roy Shkedi said the technology will enable it to sell advertisers highly specialized audience segments. "Usually an advertiser just buys a whole profile," Shkedi said. "We're trying to make the advertiser's life very easy, by letting him pay for each individual attribute of the audience."
For example, Shkedi said, a click from someone who has been searching for "mortgage" might be worth $3, but if that person is also known to have a household income of $70,000, his or her click might be worth more.
"As the market evolves, we know different amounts of information about different people," Shkedi said. "The direction the market is going is further monetization of profiles."
Dave Morgan, the CEO of behavioral targeting firm Tacoda, said that several other companies have received patents in similar areas, including his own firm, Google, Omniture, and Engage.
Morgan added that targeting firms could face a consumer backlash, as consumers become increasingly aware of how their data is being used. "We're in a world where consumers will increasingly take more control of their data, and they're going to be more careful of with who and how they share it," he said. "In the short term, now that everyone realizes there's an economy in targeting data, we're going to see a flood of people trying to build businesses there, but in the end the consumers are going to decide there are a certain number of people they're going to be willing to trust with this data."
Commentary
6. Performance Pricing For Interactive Agencies
by Jonathan Ragals
With interactive media becoming increasingly more accountable and marketers changing ad agency partners ever more frequently, the time has come to assess whether the traditional client-agency model needs to be replaced with a strategic partnership built upon a mutual alignment of interests.
The root of the problem lies in the standard agency compensation system and its impact on the client-agency relationship. While there has been talk for years about moving to a performance-based partnership model, marketers and agencies have not taken the necessary steps required to effect this type of change on a broad scale. Ultimately, a model combining the traditional agency retainer with a performance-based upside will drive the best long-term results for marketers and agencies that can adapt to this new paradigm.
Traditional Agency Models
The most prevalent models among interactive media agencies have been adapted from traditional advertising agencies. Pricing is usually some combination of a monthly retainer and a commission based upon media spend. This predictable pricing structure allows the agency to plan for business growth and staff accordingly. The agency can focus on providing value and strategy to its clients.
A common pitfall of the traditional approach is that in this relationship, it's more difficult to build a relationship built on open dialogue and trust, when telling the client what it wants to hear is the safer route toward renewing the account. While all agencies don't employ the "yes-man" mentality to retain their clients, the mere concern can quickly become a barrier to bilateral trust between agency and client. Clients are cognizant of this and often feel that browbeating is the best way to get maximum performance from the agency. Unfortunately, this dynamic is neither healthy nor optimal for creating a long-term, mutually beneficial partnership.
Performance Compensation Model
In theory, interactive media's accountability has made performance-only pricing a possibility. In this model, the client only pays when the consumer conducts a mutually agreed-upon action, such as filling out a registration form or completing a purchase. While this model works as a component of a media plan, it is an ill-suited model for an agency. The client's long-term strategic interests can be jeopardized by the agency focusing entirely on day-to-day gains at the expense of a holistic long-term approach to the brand and the campaign.
Instead, alignment of interests or risk can be created through a hybrid model that combines a monthly retainer with strong economic incentives based on achievement of specific, measurable performance milestones. The client is charged a lower fixed retainer with incremental compensation tied to performance. The mutual benefit is that the client sees the agency working for every last dollar and the agency has a floor on income that covers most base costs. The framework for mutual trust is in place.
The biggest challenge is determining how success will be measured. Establishing a benchmarking period helps set realistic expectations. Some metrics, such as branding measures, are much harder to account for in such an arrangement. Also, the client must share detailed transaction and financial data with the agency. The performance model only truly works if the client is completely open.
Most agencies also have an organizational challenge in that their culture and their compensation systems are not set up to support a performance model. Closing the loop on the alignment of interests down to the account team level is a vital and often overlooked success factor.
When the agency and advertiser are ready to move to the hybrid model, there are significant advantages for both. The agency serves the client both as a strategic advertising advisor as well as an aggressive hedge-fund trader laser focused on delivering results. The agency is empowered to make changes on the fly to improve performance while accounting for the client's long-term goals.
This new model will not work for every advertiser, and most agencies are not yet equipped to shift toward performance-based pricing. The challenges will slow the emergence of this model as the de facto standard. However, agencies and advertisers engaging in the new model stand to form lasting partnerships, with tremendous upside for both parties.
News Briefs
7. Nielsen//NetRatings: March Madness Boosts Sports Traffic
Daily traffic to sports-related Web sites spiked on the first day of March Madness, March 15--21 percent to 9.7 million unique visitors, Nielsen//NetRatings reported Tuesday. The spike was due to Internet surfers, particularly at work, visiting sports sites to stream the live games. CBS SportsLine.com Network sites saw an 84 percent increase to 3.6 million unique visitors, followed by AOL Sports--Web-only--which rose 31 percent to nearly one million unique visitors. Fox Sports on MSN grew 29 percent to nearly two million unique visitors.
8. SortPrice.com Offers Flat Rates To Curb Click Fraud
Comparison shopping engine SortPrice.com Thursday began offering free listings with flat-rate, per-month fees for enhanced listings to combat click fraud. Eschewing a pay-per-click model, the firm hopes to attract marketers that are concerned about automated programs or individuals who are paid to click on their ads or product listings, driving up ad costs without yielding profitable conversions.
--Shankar Gupta
9. Treffiletti Leaves Carat Fusion
Cory Treffiletti, senior vice president and engagement architect at Carat Fusion, will exit the agency at the end of the month. Treffiletti, a MediaPost columnist, joined Carat in 2003 when it acquired the digital shop Freestyle Interactive, where he worked as media director since 2001. A spokesman for Carat said: "Cory has been a valuable contributor to the agency for years. He leaves on great terms and we wish him success on his future efforts."
10. NBC Creates All-In-One Shopping Site
NBC Universal Tuesday said it was re-launching and expanding its online store, offering online shopping for all existing NBC Universal consumer sites from one all-inclusive site. At the site--at www.nbcuniversalstore.com--consumers can find merchandise related to NBC Universal's network and/or cable television shows, Universal Pictures or Focus Features films, and the Olympics.
11. Correction: Broadband Enterprises To Distribute AP Content To Niche Sites
The brief in Tuesday's OnlineMediaDaily, "AP Taps Broadband Enterprises," incorrectly stated that Associated Press content will be syndicated to Broadband Enterprises' television and newspaper group affiliates. Instead, the deal provides that Broadband Enterprises will offer AP news programming, including national/international, celebrity, entertainment, and fashion news through vSyndicate, an affiliate network of niche sites.
Wednesday, Mar 22, 2006
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