Search engine marketing remains Google's primary revenue source, but executives dropped a bomb Thursday on the corporate structure of the company before diving into fourth-quarter 2010 earnings. Co-founder Larry Page will replace Eric Schmidt as chief executive officer in a reshuffle of senior management. The moves, effective April 4, were made to "streamline decision-making and create clearer lines of responsibility and accountability at the top of the company," which makes some think that projects or platforms weren't getting pushed out as quickly as they had hoped. Being first to market will become even more important in the future as the mobile, operating system and tablet markets heat up with Apple and others. During the Q&A section of the earnings call, Jonathan Rosenberg, senior vice president of product management at Google, explains how all employees -- especially engineers -- will be pushed to do more, faster. In the new structure, Schmidt relinquishes day-to-day operations to become executive chairman. His focus turns to an advisory core for Page and co-founder Sergey Brin, along with deals, partnerships, customers and broad business relationships. The company reported Thursday during Q4 2010 earnings that paid clicks -- the amount of times consumers click on ads -- grew 18%, compared with a year earlier, and 11% sequentially. On average, advertisers paid Google 5% and 4% more per click, respectively. Google's revenue in the quarter jumped 26% to $8.44 billion in the fourth quarter of 2010, compared with the year-ago quarter. Revenue from company-owned sites rose 28% to $5.67 billion in revenue, compared with the year-ago quarter. Partner sites generated revenue, through AdSense programs, of $2.50 billion, or 30% of total revenue. That's a 22% increase from fourth-quarter 2009 network revenue of $2.04 billion. Traffic-acquisition costs, the commission paid to marketing partners, came in at 25% of revenue. International revenue from outside the United States totaled $4.38 billion, representing 52% of total revenue in the fourth quarter of 2010, compared with 52% in the third quarter of 2010 and 53% in the fourth quarter of 2009. The U.K.'s $878 million represents 10% of revenue. A growing digital economy, continuous product innovation that benefits both users and advertisers, and momentum of newer businesses such as display and mobile continue to drive revenue and profits, according to Schmidt during the earnings call. Profits jumped to $2.54 billion, or $7.81 a share -- up from $1.97 billion, or $6.13 a share, a year earlier. Google also expanded its employee head count 4.6% to 24,400. During the earnings call, Google execs told analysts and investors that employees across the board received a salary increase. Quality improvements provided the biggest boost to revenue, according to the company. More than 20 updates led to gains nearly double what the company would typically see in a strong quarter. Several new businesses started to see momentum. One business -- display -- now has more than 2 million publisher partners. The number of transactions on the DoubleClick ad exchange tripled, and publishers that sell their ad space through the exchange nearly triple revenue when the exchange wins the auction. In 2010, YouTube's revenue more than doubled. Google began adding features like live streaming to monetize content. Enterprise added customers such as the U.S. government's General Services Administration, and expanded a partnership with Japan's Softbank. Android activation hit more than 300,000 phones daily in 2010, driving a 10-times year-over-year rise in the volume of searches from these devices. In 2011, expect Google to "double-down again on the core of search and search ads, feed the 2010 winners display, YouTube, enterprise and Android, and do it all with even more financial rigor and cross-functional coordination all over the world," Rosenberg says. Local and commerce will become areas of focus for Google this year, he added.
Mobile gives Google "long-term growth insurance." That's how iSuppli's research group IHS Screen Digest describes one of three pillars enabling the Mountain View, Calif. tech company to continually grow revenue. Search, the cash cow, and video/display, which generate short-term revenue growth, remain the other two pillars. When Google releases year-end and Q4 earnings Thursday it will report a 20.2% lift in search ad revenue to $25.4 billion compared with the prior year, according to IHS. Revenue from display advertising will rise by an estimated 61% for the year. But some believe it's mobile that could become the cash cow in the future. On mobile, Google benefits from revenue generated by the increasing popularity of the Android operating system and the company's acquisition of AdMob. But the tech company isn't the only one profiting from mobile. The Partnership at Drugfree.org, a nonprofit organization that helps parents prevent and find treatment for child drug and alcohol abuse, launched a mobile advertising campaign on ChaCha. The campaign, which ran during the last three weeks in December, yielded more than 9.8% engagement rates from the best-performing ads. The Partnership at Drugfree.org measured success by the percentage of consumers clicking through the text message to the non-profit's Web site. SMS text user response rates had an average of 4%, according to Hilary Baris, digital media and marketing director for The Partnership at Drugfree.org. The campaign ran during the last three weeks in December, supporting SMS text messaging and mobile video advertising (MMS). It provides answers when asking about drugs, medication, alcohol and related topics. The goal is to prevent teens and tweens from abusing medicines through messages sent to teens and parents based on age and topic, aimed at helping educate them about the health risks posed by teen medicine abuse. ChaCha users ask more than 20 million questions per year related to medicine, drugs, alcohol and treatment. They range from "What is the most addictive drug in the world?" to "What is one of the best drug rehab centers in the U.S.?" to "What does marijuana do to you?" to "Can you get high from cough medicine?" Baris wants to keep running the mobile campaign, but doesn't have a marketing budget. All campaign media for the organization is donated to the non-profit. Last year the team of three at The Partnership at Drugfree.org managed to scrape up $80 million in advertising support. "We worked last year with Hulu, ValueClick, Women's Health," she says. "Mobile is just one of those things we're all tethered to, so it makes sense to reach out to parents through this type of campaign." Traffic to ChaCha's Web site grew 116% in 2010, according to comScore. ChaCha also closed $3 million of additional funding including $900,000 of outstanding warrants from new investor Qualcomm Ventures. This extends the round led by Silicon Valley investors VantagePoint Venture Partners and Rho Ventures in October 2010. In December, ChaCha.com hit 28 million unique Web visitors and mobile users, according to Omniture reports. It is estimated that more than 32 million unique users will visit the site by the end of January. In December, the company announced that it answered the billionth question: How do you say friend in Elvish according to the Lord of the Rings? The response: "'Mellon' is the Elvish word for 'friend' in Lord of the Rings."
In a surprising development, demand for digital media and advertising services appears to be ebbing among some clients of major advertising agencies, according to a recent survey conducted by media buying processing firm Strata. After reporting steady growth over the past two years, digital advertising demand has decreased for the first time between two consecutive quarters, falling to 21.1% of respondents in the fourth quarter of 2010 from 26.0% of respondents in the third quarter of 2010. Strata, which is based in Chicago and owned by Philadelphia-based media conglomerate Comcast Corp., said it also found that demand for mobile media services is "not yet living up to industry hype." "Agencies expressed the predominant obstacle with digital advertising is the lack of channel effectiveness," the Strata report said, adding, "Nonetheless, within digital advertising, social media continues to be a hot medium of advertising: 79% of agencies are looking to use Facebook as the dominant social media platform in their clients' campaigns, with Twitter second at 46%." Strata President-CEO John Shelton, noted that advertisers and agencies are "more confident" about the economy, but that most of that recent momentum is being reinvested in demand for traditional media services, especially TV, which has experienced the greatest uptick. "Concurrently, we see that the focus on digital has fallen off a bit. While still hot, it is used more in a solid media mix than more dollars heading its way," Shelton stated. The Strata survey also found that while mobile advertising is a hot subject in the industry, advertising budgets have not followed. Of all interactive advertising, mobile was a distant fourth in advertisers' minds (at 29%), behind online display (80%), social media (61%), and search (60%). The iPhone remains the top mobile device of interest to advertisers, with more than 80% expressing they are most interest in placing ads on the Apple device. Blackberry outpaces Android, at 51% to Android's 45.8%. Apple's iPad is slowly gaining momentum in the advertising realm, where 31% of advertisers say they are interested in placing ads on the new device - a 22% increase from the previous quarter. Over the past three years that Strata has been tracking demand for advertising and media services among the agencies it services, it has seen a steady uptick in overall demand, which grew from a low of 22.5% in 2008 to 51% in the fourth quarter of 2010.
Mobile email use is on the rise even as Web-based email use continues to decline, according to new data from comScore. The Web measurement firm found that traffic to Web-based email sites dropped 6% to 153 million in November 2010 compared to a year ago, while the number of people accessing email via mobile devices increased 36% to 70 million. "From PCs to mobile devices, whether its email, social media, IM or texting, consumers have many ways to communicate and can do so at any time and in any place," said Mark Donovan, senior vice president of mobile at comScore, in a statement. "The decline in Web-based email is a byproduct of these shifting dynamics and the increasing availability of on-demand communication options." In addition to shrinking the number of Web email users, engagement in the category has also dipped, with time spent falling 9%, and page views dropping 15%. Young users -- those between the ages of 12 and 17 -- showed the sharpest decline in usage during the past year, with the number of visitors dropping 24%, and total minutes and page views falling 48% and 53%, respectively. The shift away from email among younger people has not been lost on sites such as Facebook, which emphasized newer communication tools like texting and chat over email in the revamped messaging system it unveiled in November. "We don't think a modern messaging system is going to be email," said Facebook founder and CEO Mark Zuckerberg at the time. That view appears to be borne out by the latest comScore figures, although the firm notes that email is far from washed up. It remains one of the most popular Web activities, reaching 70% of the U.S. online population each month. Usage among older users 55 and over rose 15% in November from a year ago. On the mobile side, the 36% overall audience growth was accompanied by a 40% gain in daily usage to 43.5 million users. Not surprisingly, younger age groups tend to be more active in mobile email. People 25 to 34 were 60% more likely to access email than an average mobile user, and those between 18 and 24 were 46% more likely to do so. Of course, text-messaging is the communication channel of choice among teenagers. A study earlier this year from the Pew Research Center found more than half (54%) of American teens were text-messaging daily in September 2009, up from 38% eighteen months earlier. Overall, 72% of teens are now text-messagers. When it comes to the growth of mobile email, comScore cited the proliferation of smartphones as a key factor. "In a relatively short period of time, adoption of mobile email has reached 78% of the smartphone population, which is very similar to the penetration of Web-based email among Internet users," said Donovan. "These findings demonstrate just how quickly channel shifts can occur and why it's now essential for media brands to have a strong presence in both arenas."
Following through on its threat to challenge net neutrality rules in court, Verizon on Thursday filed suit against the Federal Communications Commission. In court papers filed with the U.S. Circuit Court of Appeals for the D.C. Circuit, Verizon alleges that the FCC exceeded its authority by voting to promulgate open Internet rules. The telecom giant also argues that the new rules are "arbitrary, capricious, and an abuse of discretion." The FCC's controversial open Internet rules prohibit wireline providers from blocking or degrading traffic or otherwise engaging in unreasonable discrimination. The order also prohibits wireless providers from blocking sites or competing applications, but doesn't prohibit wireless carriers from creating fast lanes for companies that pay extra. The rules -- which the FCC approved by a 3-2 vote in December -- drew criticism from many observers, ranging from consumer advocates, who say the rules don't go far enough to telecoms, who say that regulation will discourage investment and innovation. Verizon immediately vowed to challenge the rules in court. The telecom giant isn't alone in trying to ax the new rules. The Republican leadership of the House Energy and Commerce Committee also aims to vacate them. An Energy and Commerce Committee memo circulated this week lists nullifying net neutrailty as among this year's priorities. Congress has the power to vacate the FCC's rules, but only if a majority of the House and Senate vote to do so within 60 days of the regulations' official publication. The FCC has not yet published its order in the Federal Register, but is expected to do so soon. The committee, now under the leadership of Fred Upton (R-Mich.), also intends to hold hearings "on the harm regulation of the Internet will cause to investment, innovation and jobs, as well as the FCC's abuse of authority and process," according to the memo. Some lawmakers also are gearing up to legislate against neutrality laws. Earlier this month, Marsha Blackburn (R-Tenn.) introduced a bill that would strip the FCC of authority to regulate the Internet. Her measure -- which has garnered support from 60 other Congress members -- would ban the FCC from issuing "any regulations regarding the Internet or IP-enabled services."
Bonnier made a splash last April when it unveiled an iPad edition of Popular Science, built with its Mag+ digital magazine platform. Since then the publisher has turned out iPad versions of 10 other titles including Popular Photography, Flying and Babytalk. Now Bonnier is turning its attention to advertising on the iPad and rival devices -- teaming with storied creative agency CP+B to develop new ad formats for tablet magazines. "In developing Mag+, we were first focusing on the needs of editors and designers and did a lot of work to make the reading experience terrific for users," said Megan Miller, Bonnier's R&D program director, who is leading the tablet ad project. "The next natural phase is to focus on advertising." With nearly 100 new tablets launching earlier this month at the Consumer Electronics Show in Las Vegas, she noted that the category is poised to expand rapidly in 2011 with new Android-based and other devices. "The tablet market is about to explode and when many more consumers have devices in their hands it's important that we're dialed in on the monetization side as well as on the editorial side," she said. Technology research firm IDC projects the tablet market will nearly triple to 44.6 million units shipped this year, with the U.S. representing nearly 40% of the total. By next year, worldwide shipments are expected to grow to 70.8 million. While Motorola, Research in Motion, Samsung and other manufacturers are launching new tablets, as of the third quarter 2010 the iPad was still dominant, with 90% market share, according to IDC. The initial stage of Bonnier's ad effort, already underway, involves research focused on how consumers use print and iPad versions of magazines as well as getting feedback from advertisers and individual publishers within the media corporation. By mid-February, the company expects to have research results to publish, followed by a series of ad concepts created by CP+B for the Mag+ platform across Bonnier titles, starting with Popular Science in late spring. Until now, the publisher has created customized iPad ads using Mag+ for advertisers including American Express, Sprint, and GE. The two features that marketers have been most focused on in iPad ads are video and embedded links back to their sites or for information on products, according to Miller. "But we don't think just adding a TV spot is going to be as good as adding features native to the platform," she said. That means creating units that take full advantage of digital interactivity, social media and APIs for online services from Google or other companies. Bonnier selected CP+B to partner with on the tablet project because of its track record for innovative digital work. That includes its Whopper Sacrifice campaign on Facebook for Burger King, its crowd sourcing of another client's logo and redesigning its own home page to be fully socially integrated. "[CP+B] always seems to push the boundaries with their campaigns. For every client they work with, they really go outside the box for new solutions," said Miller. Bonnier is hoping the agency does the same in inventing tablet ad formats. "Tablets have enabled publishers to re-imagine the magazine, and over the last year there have been newsworthy advancements in the space, but advertising has not kept up," says Winston Binch, partner/ managing director at CP+B, in a statement. Bonnier and other publishers including Conde Nast and Hearst are still trying to figure out pricing for iPad versions of magazines and how to balance up-front charges with advertising. A Knowledge Networks study released this week showed that 86% of iPad users preferred receiving magazine and other content free in exchange for viewing advertising. Only 13% said they were willing to pay. Bonnier's flagship Popular Science app for the iPad has averaged about 10,000 to 15,000 downloads a month -- only a fraction of its print circulation. After initially charging $4.99 per issue, the company in December lowered the price to $2.99 as part of its experimentation with publishing on the Apple tablet. Bonnier is also looking forward to when Apple will allow publishers to offer subscriptions more widely on the iPad instead of having to sell each issue separately -- a limitation that has frustrated magazine publishers for whom subscriptions are a crucial part of their business. "The subscription model, pricing and figuring out how best to serve ads is all part of the strategy," said Miller.
Bonnier and CP+B Brainstorm iPad Ads Searching for the most effective way of advertising with the iPad, Bonnier Corp. is joining forces with ad agency Crispin, Porter + Bogusky to develop innovative digital advertising formats for tablet magazines. Vowing to create "all-new advertising for all-new advertising platforms," the companies will begin by researching the specific needs and preferences of consumers, publishers and advertisers. CP+B will then create a portfolio of new ad formats which Bonnier Corp. hopes to introduce through its Mag+ digital publishing platform by late spring 2011. Bonnier was among the first major consumer magazine publishers to create digital editions tailored to Apple's popular new tablet computer. Now publishing 11 titles internationally, the Mag+ platform launched in April 2010 with Popular Science, which will also be the first title to integrate new ad formats developed by CP+B. A recent survey from Knowledge Networks found that 86% of iPad owners would be willing to see an ad in return for free access to content, including TV shows and articles from magazines and newspapers. That compares with just 13% who said they would be willing to pay for this type of content if they already have access to it elsewhere. These figures are roughly in line with the results of a custom survey of iPad owners by Nielsen released in September 2010. Nielsen found that 57% of iPad owners said they don't mind advertising if it means they get content for free. Thirty-five percent of iPad owners told Nielsen they actually "enjoy viewing ads" on their iPads (compared to just 17% for all such devices, including other tablet computers and e-readers). Publishing Group of America Grew in 2010 The Publishing Group of America, which produces newspaper-distributed magazines including American Profile, Relish, and Spry, outperformed the consumer magazine business overall in 2010, with total ad pages growing 11.1%, according to the Publishers Information Bureau. That compares with an overall decrease of 0.4% for the industry as a whole. This increase was based on strong results at American Profile, where ad pages were up 14.3%; Relish, up 9.5%; and Spry, up 1.1%. Earlier this month, American Profile increased its rate base from 10 million to 10.25 million, while Spry increased from 8.5 million to 9 million. Riley Scales Heights At Climbing, Urban Climber Kevin Riley has been promoted from advertising sales manager to associate publisher for Climbing and Urban Climber magazines, with responsibility for management of ad sales and events for both the print and online products. He will continue to report to Kent Ebersole, group publisher of Active Interest Media's Outdoor Group, which publishes the enthusiast titles. Source Interlink Promotes Bode John Bode has been promoted from his previous role as senior vice president of corporate strategy and finance to executive vice president and CFO at Source, one of the largest publishers of magazines and online content for enthusiast audiences. In his prior position, Bode was responsible for overseeing the divestiture of Source's CD and DVD distribution division, as well as the acquisition of GrindTV.com.
Internet radio service Pandora has hired a Draftfcb executive as its first director of mobile and emerging media, reflecting the company's growing focus on mobile platforms. Kim Luegers, who led emerging media strategy and planning for Draftfcb's Chicago office, will fill a similar, newly created role at Pandora. In the new post, she will be responsible for helping Pandora generate new revenues from mobile and emerging media; creating ad products for online, mobile and other digital media; and working with clients to develop effective mobile programs, among other tasks. At Draftfcb, Luegers worked on new media initiatives across mobile, interactive, Internet radio and advanced TV on behalf of clients including Miller Coors and State Farm. Before joining the agency, she handled buying and planning in traditional media in Chicago at both Mediaedge and OMD. In the last year, Pandora has ramped up its mobile monetization efforts through various initiatives including a new service launched with AdReady last fall allowing small and medium-sized businesses to run local ad campaigns on Pandora's mobile apps. In June, the company introduced its own iAd-like rich media ad units for the iPad with advertisers on board including Starbucks, Lexus and Budweiser. And as part of its effort to expand access to connected devices everywhere, Pandora this year expects to be more widely available through new in-vehicle media systems from automakers including Toyota, Ford, GM and Mercedes-Benz. More recently, Pandora's ad targeted practices were highlighted in The Wall Street Journal's series on online privacy. In an article last month, the newspaper reported that more than half the 101 popular apps it tested transmitted unique device identifiers to advertisers without a prompt. Some, including Pandora, also sent information including a user's age, gender and location. The company has said it uses listener data in accordance with its privacy policy, and that any advertiser programs (such as sweepstakes) that ask for personally identifiable information are opt-in. Pandora -- which says it has 75 million registered users, up from 50 million in March 2010 -- has raised about $56 million to date from investors including Greylock Partners, Crosslink Capital and Labrador Ventures.
"I know I am a bit of a creature of habit," I say offhandedly to my partner. She tries to keep from spit-taking her mouthful of seltzer in response. "Ya think? You sleep four hours and forty-five minutes a night -- precisely, have coffee made by 5:55 am and are writing by 6. Instead of lunch you spend an hour on a stair exerciser. You have a lean chicken breast sandwich every afternoon as you write and do those damned 'phoners' into the evening. Come up from your cave for a salad dinner at 8 as you catch up on email and browse your iPad. Jon Stewart and half of Letterman, then bed. If any one of these elements does not occur in a given day, you are insufferable. 'Habit?' Are you kidding me?" "I admit I am not very spontaneous... ." The seltzer is starting to gush through her nose at this point and she just begs me to stop. But apart from my own little behavioral ticks (she's starting to choke audibly now), habit is everything when it comes to media change. As the last decade and a half of Internet evolution has demonstrated, it is only when specific online features and platforms become reflexes that reliable business models can form around them. Online video in recent years has finally kicked in as an online habit. People now bring to most news and information sites an expectation of video elements that complement or replace text and image experiences. The product research reflex kicked in for a critical mass of users online long ago. On mobile, those habits are still forming for most of us. There are loads of cool technologies like 2D codes, visual or voice search, or even mobile Web browsing, that are not reflexes yet. When I read a magazine and with minimal thought realize I can use my phone cam to search on that print ad, then we have arrived as a "medium." I suspect that m-Commerce is going to become a habit with people sooner than we may think, because the smartest retailers are making a strong case for the superior convenience of interacting with them with a mobile phone. Yesterday eBay reported that it had moved $2 billion in merchandise in 2010 via mobile, and it expected that figure to double in 2011. But by m-commerce I don't mean simply buying things directly via your phone so much as letting the smartphone become an integral part of the product choice and purchase path. Last column I mentioned the ways in which mobile is fast becoming the medium of choice for me when deciding on a movie to see. It is also a fairly reliable ticket-purchasing mechanism for me. We can check ahead to see if a blockbuster is sold out and reserve a ticket. So far I have been pleasantly surprised at the efficiency of the three or four theaters where I just show gatekeepers the reservation code on my phone and get my tickets. The same holds true for Starbucks, which yesterday expanded its test program for mobilizing in-store payments. While we are not quite to the near-field-communications model some expect, the Starbucks experience I had yesterday came close. With a downloadable iPhone app, I can load my Starbucks payment card number into the iPhone and simply tap a button in the app at the store to bring up a 2D code the cashier can scan. The implementation of m-commerce at the retail level has been a perennial choke point. I have been testing in-store couponing for years just to see how well the clerks at register can handle what the central office tosses at them. I have had gaggles of managers mob around a register just to advise the poor check-out girl I handed my phone coupon to. I have seen thick training manuals plopped onto the register just so the staff can check on that latest directive from corporate on how to handle an SMS code. To Starbuck's credit, the cashier yesterday didn't bat an eye when I handed her my iPhone. She put it under the scanner and had me out of there is a minute. The next time I loaded the app, the new balance was evident. Yet what did Starbucks really save me by this process in the end? Well, I didn't have to carry another annoying loyalty/gift card with me. It tied the process into a store finder and card value tracker, which is nice. In the end the added convenience is not high here, but the process still has the potential to be habitual. Even more promising to me are the tie-ins between mobile and retail that really do solve a problem. I very much like Redbox's mobile reservation program for this reason. This brilliant breakthrough in cheap video rentals has some drawbacks. First, at my nearest location, a Walgreens, a line forms behind the one Redbox unit as everyone waits for people to peruse what is available. Many of the boxes are outdoors, and in the middle of the East Coast winter this makes video rentals a more painful experience than it should be. The iPhone app lets me key in my local kiosk and peruse available titles, even reserve one in advance so that a swipe of my card delivers it to me with little muss or fuss. If only the other 10 people waiting in the parking lot of Walgreens had the app. Retailers that find creative ways to streamline the purchase process through mobile are in the best position to modify our habits for the better. In just the last six months I have now made Amazon, Best Buy, eBay and Redbox habitual parts of my consumption patterns, because each is adding some real value in terms of information, convenience, time saved or (to a lesser extent) money saved. I am still not sure what value Starbucks is adding to the mix, so I can't tell yet whether it has earned a place in my mobile habits. I would urge merchants not to mobilize just for mobilization's sake. Bring a clear value proposition to the table in order to make a case with users that the phone delivers a better experience, and not just a gimmick. It takes a lot to alter someone's habits, and that is what mobile media is all about. If they can crack into my patterns of behavior, they can reach just about anyone. "Oh, we're calling what you have 'habits,' today, are we?" my partner chortles. "Honey, there are about 20 terms in medical journals that cover the kind of creature you are; 'habit' doesn't scratch the surface."
According to a new study from ForeSee Results, the US edition of the Report on Mobile Shopping indicates that 33% of all survey respondents had accessed a retailer's website using a mobile phone (compared to 24% in 2009), and an additional 26% said that they plan to use their mobile phone to visit a company's website, mobile website, or mobile application in the future. In other words, more than half of all online shoppers are either already using or plan to use their phones for retail purposes. The study found that the use of mobile phones to access companies' websites, mobile websites and applications for shopping purposes is increasing dramatically, indicating that any retailer who is not wholeheartedly embracing the mobile trend is leaving money on the table for competitors, says the report. Key findings include:
What if Google developed ad technology that would call the Web site, determine the ad the site should buy, and automatically purchase and place the ad in the unit? Would it eliminate the need for keywords? How would the ad bidding process work? Some ad execs already believe the Mountain View, Calif., company has begun to experiment with this or a similar feature. Of course, this scenario remains strictly hearsay, but in 2009 there were reports of eliminating keyword, and recently the topic has come up again. In fact, Alex Cohen forecasts the dawn of paid search without keywords. He reminds us marketers buy based on intent by paring keywords with match types and bids. He explains in paid search without keywords, intent becomes one of five ways marketers target ads to consumers. The other four include Audience, Business Type, Product, and Behavior. Cohen uses the remarketing model to demonstrate how it might work. Set the target audience, establish exclusion to weed out undesirables, and set preferences for the buy. It would include impression-based retargeting and automated-inventory product ads; hence, the idea in the lead of this article. Let's take this model of automating the ability to serve up ads without keywords one step further into display advertising. The Near Field Communications Forum released a white paper Thursday explaining NFC technology in public transportation, but the chip could just as easily serve up ads. In fact, aside from triggering marketing campaigns, I believe that's what Google engineers have in mind. Billions of mobile smartphones already in use could take advantage of NFC. The forum's white paper touts benefits for travelers such as paperless tickets and payment systems, but one feature of Google's Android Gingerbread OS is the inclusion of NFC that technically could automate the process of serving up targeted ads on mobile devices. A few other phones from Nokia also offer the chip. In December Google and NXP Semiconductors, known for developing NFC chips, inked a deal to integrate the radio frequency technology in Android 2.3. The NFC chip, along with other technology in the phone, makes it technically feasible for every Web site to serve up personally targeted ads to consumers without matching any keywords or content on the site. Google also is looking to hire a technical account manager with five years experience and knowledge of NFC and radio frequency identification technology. Both NFC and RFID work on radio waves, but the former has been known to support consumer applications, while the later focuses more needs of the business community. So, could this mean Google will enter a new market based on serving businesses by tracking inventory, or do the engineers have new plans for RFID technology? This should give you some things to contemplate. As for search and display, Google continually tweaks advertising tools. Last week it began rolling out a standard version of how URLs look on a Web page to improve metrics such as click-through rates. This update assures domain portions of the display URL shows in lowercase letters. If a display URL is MediaPost.MediaPost.com/Directory it will appear as mediaPost.mediaPost.com/Directory. Another improvement, negative keyword will become more scalable.
Raise your hand if you have been to Starbucks in the last week. Now raise your other hand if you have an iPhone or BlackBerry. Now, drop everything, because whether you think of it this way or not, Starbucks launching mobile payments is huge news for location-based social -- even if it doesn't, yet, allow you to get an automatic check-in with your chai latte. In case you haven't read it already, as of today, Starbucks is launching mobile payments nationwide, thus changing, with one last swipe of an old-fashioned Starbucks card, the way we handle small amounts of money, and the so-far niche behavior of location-based social.< Think I'm exaggerating? Here's why I'm not. The ubiquity of Starbucks locations and iPhones (not to mention the near-term coolness factor inherent in saying, "I'll buy it with my phone"), make it so. Tens of millions of us both go to Starbucks and use an iPhone -often while in line at Starbucks -- every single day. Thus, an app that marries the two -- and builds on it with a layer of almost frictionless commerce -- is destined to reach critical mass. In turn, as Business Insider points out, this will spawn demand for mobile payments. If Starbucks has it, why can't McDonald's? This surge in mobile payments, in turn, will consummate another marriage, also in a more frictionless way: the union of where we are to our device. As Starbucks and Foursquare are already partners in commerce, imagine a default that automatically generates a Foursquare check-in when you transact a mobile payment. No work required. No having to append your location when you tweet, or anything like that. That's exactly what I've been looking for! Being able to check in without doing a damn thing! Maybe that sounds lazy, but we all know that the less work required by the user, the more palatable something becomes. Not only does the potential of marrying mobile payments to check-ins make this a more popular behavior (or non-behavior, since you're not doing anything), it also makes the road just a little smoother to my inevitable claiming of the mayorship of my local Starbucks, with all of the perks that come with it. Seriously though, making check-ins automatic with mobile payments, for those who opt-in, will obviously drive loyalty programs, including ones targeted to those who frequently publicize they are at a local store, becoming an ad vehicle, if you will. There are more ramifications, to be sure, but that's the primary one that jumps to my mind. Perhaps you see this as only so much exaggeration. But when I think about mobile payments in the context of the nonprofessional circles in which I travel, it doesn't seem so at all. Anecdotally, I would say that many, many of the adults in my community use iPhones and BlackBerries. They are fully versed in the world of apps. They can also be frequently seen with a Starbucks cup in hand, and probably, if they were to open their wallets, would display a Starbucks Card. What you won't see them doing very much is using Facebook Places or Foursquare. If they know such things exist, they don't see the rationale for the behavior. As I've said before, it's not as though a mom with three kids has time to hang out with friends on-the-fly. However, add in mobile payments, and the promise of rewards for checking in, and the whole thing starts to make sense. (BTW, I'll be moderating the panel "Mobile Social: Unlocking Its "Killer App" Badge" at the upcoming Social Media Insider Summit. Be there!)