Web publisher KinderStart, launched as a parents' advice site in 2000, spent five years growing its business--until it reached a point at which it had more than 10 million visitors each month. Then, on March 19, 2005, traffic plummeted by 70 percent. The site, which participated in Google's AdSense program, saw revenue from those placements dive as well. The company thinks it knows who's to blame: Google. The Norwalk, Calif.-based KinderStart late last week filed a lawsuit against the search giant, charging it with unfairly degrading the site's placement in the organic search results. KinderStart is also seeking to represent other Web publishers--at least 100, by KinderStart's estimation--that have seen their sites drop in Google's organic results pages. Google said in a statement that the suit is without merit, and it intends to fight the case. The gist of KinderStart's complaint is that Google dropped the site's Page Rank to zero and refused to reconsider, or explain its reasoning; the ultimate result was a drop in both traffic and ad revenue. When the term "KinderStart" is typed into the query box on Google, the Web site KinderStart.com doesn't appear in the organic results; MSN and Yahoo's search engines still display the company Web site as the top result. Despite KinderStart's obvious frustration with Google, industry experts say the company's chances of prevailing appear to be slim-to-none--especially since Google previously won a similar suit brought by another company several years ago. What's more, they say, if companies could sue Google whenever their placement in organic listings dropped, Google--and other search companies--would no longer be able to function. "It would be really unfortunate for the industry in general, if sites were going to sue Google every time they lost a ranking," said Peter Hershberg, managing partner at search engine marketing firm Reprise Media. Greg Sterling, an analyst at The Kelsey Group, and former business litigator, agreed. "The implications of ruling for KinderStart in any way on this would be disastrous," he said, adding that the suit itself seemed to stem more from KinderStart's confusion about search rankings and dependence on Google than any viable legal theories. "There's a certain kind of childish rage that comes through with this--a sense of entitlement," he said. In its complaint, KinderStart proposed that Google is liable under several different legal theories, including a claim that Google "possesses monopoly power." Additional theories include the proposition that Google curtailed KinderStart's free speech rights under the California constitution, and that Google libeled KinderStart by dropping its page rank to zero. Google previously won a similar lawsuit brought in 2002 by SearchKing, an Oklahoma City-based online ad network. In that case, a federal district court found that Google had a free speech right to include or exclude whoever it wished from its search results. Gregory Yu, KinderStart's lawyer, said the SearchKing case had different facts than KinderStart's, and that the decision wasn't legally binding in federal courts within California.
Internet companies will increasingly rely on TV networks to provide online content, Yahoo Executive Vice President Greg Coleman predicted Monday at a panel in New York hosted by the Advertising Research Foundation. "They do have the content," Coleman said of the major TV industry players, adding: "the answer is going to be partnerships of all different kinds." Michael Barrett, executive vice president of AOL Media, agreed that TV and Web companies need to work together. He said that online journalism had flourished, but added: "the stuff that's really early on still is the entertainment offerings." Seeking an explanation, Barrett pointed to TV executives' fear of losing control over their content: "There are a lot of rates issues--a lot of protection issues." Nonetheless, he too predicted much greater cooperation in the near future. Joanne Bradford, corporate vice president of global sales and trade marketing and chief media revenue officer for Microsoft, said that even though the Internet and television are melding, TV isn't likely to dominate the smaller, fledgling Internet advertising market. "The industry is not at a place where you can just turn over what we do to television," she said, stressing that online ad sales are driven by data. "It's a very different sell--it's bought in a different way; the back-end reporting structure is different." Still, Bradford noted that online agencies' capacity to place premium inventory still lags far behind demand--meaning that a huge pot of ad dollars are being lost every year. "Until we're at the place that we have operational scale and ease of use as an industry, we're always going to be behind," Bradford warned, concluding: "[TV's] not as efficient as we are, but we don't have the scale that they do." As the two industries collide, and possibly combine, many questions clearly remain--among them, what will the content landscape look like? Although panelists were for the most part reluctant to make sweeping predictions, Clark Kokich, president of Avenue A/Razorfish Worldwide, did offer one bold forecast, saying: "In three years, the content offered by these companies will be virtually identical." Kokich cited competition for consumers who are increasingly in control of their media consumption as the driver for this convergent evolution: "I think that's just a natural outgrowth of the maturation of the business."
The advocacy group Center for Democracy and Technology Monday issued a new report that named more than a dozen companies that market their goods and services via adware company 180solutions. The move comes several weeks after FTC Commissioner Jonathan Leibowitz said the agency was considering exposing companies that use adware. "A little shaming here might go a long way," Leibowitz told attendees at a February conference organized by the Anti-Spyware Coalition and the Center for Democracy and Technology. The CDT maintains that 180solutions uses "deceptive" measures to install its adware; earlier this year, the organization accused 180solutions of turning a blind eye to distributors that installed the adware without consumers' consent, and filed a complaint with the FTC. 180solutions President Dan Todd disputed that the company's installation practices were problematic. He said that the company offered programs that consumers wanted in exchange for their agreement to view ads, and that 180solutions has undertaken a variety of initiatives designed to ensure that its ad-serving software doesn't end up on desktops without the owners' permission. "Our consumers," Todd said, "install us to see all the free content we provide them." In the report, "Following the Money," the CDT characterized unwanted adware as a "serious threat to the future of Internet communication," and called on marketers to take responsibility for how their ads are displayed. "One of the most troubling aspects of this phenomenon is that the companies fueling it are some of the largest, best-known companies in the world," stated the report. For the report, the CDT worked with spyware researcher Ben Edelman to determine which marketers were appearing on pop-up ads served by 180solutions. The CDT then contacted 18 such companies and seven responded, including dating site eHarmony and online movie rental company Netflix. eHarmony reportedly told the CDT that it set policies in accordance with the Interactive Advertising Bureau--which apparently does not have a policy about adware. The IAB did not respond to a request for comment for this article. The CDT said that Netflix told the organization it expressly prohibits displaying ads on adware or software, yet its ads apparently continued to be served by 180solutions while the CDT was investigating. "It is important to note that Netflix is one of the largest online advertisers that CDT contacted. To CDT, this illustrates the difficulty large companies have in enforcing their policies," stated the report. The other 11 marketers contacted didn't respond to the CDT. They include True.com, PerfectMatch, and eHarmony; comparison shopping site LetsTalk.com; travel company Club Med Americas; e-commerce/auction sites uBid.com, ProFlowers, GreetingCards.com and Altrec; Internet service providers NetZero and PeoplePC; and Web publisher Waterfront Media.
When it comes to finding local listings, Baby Boomers and older Gen-Xers still prefer print Yellow Pages to other media, according to data that the Kelsey Group is expected to release next week. Overall, more than six in 10 consumers--61 percent--of 1,000 adults and 500 teens surveyed last month said they turn to the phone book first when looking for local listings. Just 12.5 percent of that overall group went to search engines first, while 11.8 percent said they turned to directory assistance, and 7 percent reported using online Yellow Pages. But the survey revealed a major divide between younger and older consumers--with just 44 percent of respondents between the ages 18 and 34 favoring print Yellow Pages, compared to 72 percent of respondents between 45 and 54, and 85 percent between 55 and 64. At the same time, only 28 percent of teens said they would turn to print Yellow Pages first, while 47 percent said their first choice would be search engines. "There's a very clear age factor," said Kelsey Group analyst Neal Polachek. He added that younger Web users' propensity toward online sources heralds a sea change in the way businesses will be prioritizing their local ad spends in the next several years. Polachek said that as consumers who are most accustomed to using the Web begin to enter their 30s, when they have more disposable income and are making bigger purchases, so too will businesses in their local advertising. "All of a sudden, you're looking for schools, you own a house, you're looking for mortgages--big purchase decisions. Those people will never have had the built-in habit of picking up the print Yellow Pages."
Social networking site MySpace has grown to 60 million members, adding 8 million to million new members in the last few months alone, and now accounts for around 12.5 percent of all online display ads. But major brand marketers continue to shun the site. That's according to executives at a panel on the "Revolution in Television" hosted by the Advertising Research Foundation Monday in New York. Of six panelists representing major advertisers and ad agencies, not a single one advertised with MySpace or other social networking sites. Reasons for avoiding MySpace include concern about its potential for criminal use, especially given recent well-publicized reports about sexual predators searching for victims on the site, as well as fears that user-generated content--including pictures and text with sexual overtones--will be offensive. "I wouldn't be caught dead in that kind of environment," said David Cohen, executive vice president for Universal McCann Interactive, with a client roster including Microsoft, Johnson & Johnson, Lowe's Home Improvement, Wendy's International, and Sony Electronics. "You only have to look around for five or 10 minutes to find something offensive." Dawn Hudson, president and CEO of Pepsi-Cola North America, echoed this sentiment, saying she was "interested" in sites like MySpace that feature user-generated content, but "we're being cautious because there's a blurring between advertising and content, and the content does rub off on your brand." The other executives on the panel were Giovanni Fabris, vice president and international media director, McDonald's; Randy Falco, president and chief operating officer, NBC Universal Television Group; Paul Alexander, vice president of global advertising, Campbell's Soup Company; and Tony Pace, senior vice president and CMO, Subway Franchise Association. Cohen added that sites like MySpace held some promise for advertisers, especially corporate-created pages. "There are areas where the content is generated by MySpace, and is totally sanitized and quite safe," he said, adding that he might consider recommending the site if marketers had the ability to pull ads when the surrounding content became too dicey. And at a time when advertisers and media companies are looking for ways to fill the demand for content in myriad micro-niches, the panelists agreed that sites like MySpace have an indisputable advantage in attracting user-generated content. On this topic, after noting that "marketers are not investing time and money to build custom content for a video-on-demand platform, for example," Cohen observed there is nonetheless "very high-quality content submitted by consumers."
In early 2005, Cannondale Bicycle Corp, a manufacturer of high-end bicycles, was looking for new ways to engage more directly and interactively with its customers to strengthen its brand and help drive sales. Cannondale saw an opportunity to take advantage of the inherently communal and devoted nature of cyclists, and use the Internet to foster and encourage that community. After evaluating a number of different options and technologies, the company turned to corporate blogging solution provider iUpload to make it happen. "In today's world of heightened customer involvement and immediate interaction, conversations about our industry, company and products are taking place 24/7, with or without us. So it's really important that we participate in a direct conversation with our customers and be viewed as the go-to source for hardcore cyclists seeking answers and time-sensitive information about their sport," said Janet Maurice, who heads up Cannondale's Web operations. "In taking advantage of this new social media and facilitating community, we are able to build on our brand's cult following, producing new products based upon consumer input, and, perhaps more importantly, promote cycling as a lifestyle." To get started, Cannondale created a company blog operated by "Brad," a pseudo-employee and longtime Cannondale Headshok icon, who would comment about company developments and respond to customer questions. The company saw this as a more personal and interactive way to interface with its "hard-core" customers and provide an alternative to its current customer service department. Brad has a cartoon logo and takes on a Dear Abby-like persona, but in reality represents a group of 15 or so experts that respond to questions that go beyond the basic consumer inquiries. "One of the key benefits that we've seen through the Brad blog is the ability to acknowledge and respond to technical, product-related questions directly and less formally, and post the answers in an open forum for others to see and comment on. It puts a face on our customer support function, allowing us to speak to our consumers as fellow bike enthusiasts, and, I believe it has had a direct impact on increasing sales," says Maurice. Targeting slightly different market segments, Cannondale also developed a race blog that addresses its road riders and triathletes with news and topics of interest. During a recent high-profile road race, Cannondale connected to a cyclist's race data, captured it in graphical format and integrated it into one of the blogs. The biking community immediately latched onto the information and shared the link around the Web, driving traffic to Cannondale's site. Cannondale is also using blogging technology to connect externally with its retail partners. The company has an e-commerce site where its retailers go online to order products, using iUpload's blogging platform to facilitate communications and discussion between the retailers and Cannondale's dealer service group. Retailers frequently discuss questions regarding pricing, supply chain issues, technical problems or merchandising with each other and with Cannondale. Cannondale has several future blogging initiatives on the table, including other audience/interest-specific blogs, as well as plans for using the iUpload platform for internal communications and information sharing. The company is also looking into generating regular podcasts and enhancing video content. Cannondale's foray into blogging has been more successful than the company first imagined, and has gone beyond the tangible benefits of improving relationships with its customers and retailers, increasing sales and improving the corporate brand. "Blogging technology is more simplistic in its set-up and much easier to use than traditional content management," says Maurice. "This is big news for us and it's exciting for us as a global company. It's gotten to the point where, whenever I'm thinking about a new project, my first thought is, 'I can probably use blogging to accomplish it.'"
CLICK by Jason Heller As time goes on and media consumption habits evolve, the lines between online media, marketing and PR are blurring en masse. Everything is media. The marketer is becoming more transparent. Your customers have never before been closer to your brand. Companies with multimedia assets are syndicating those assets as part of consumers' media experience, as opposed to just being another message around it. Beyond your "standard" engaging ad units, marketers are creating content that can be used as a conduit for engagement and influence. With a critical mass of broadband penetration, the last year has seen a lot of experimentation with new ways of exposing consumers to engaging video-based content. TV networks, publishers and content distributors have been trying to answer an interesting question that has equally as interesting ramifications. Is the increase in consumption of video content online and on mobile devices a new consumption trend or a means of sampling? Blurring the line between media and marketing is not a new concept. Some even call it good PR. However, we can now measure marketing effectiveness better than ever before, and during the era of ROI and bottom-line-driven management, the same old marketing investment approaches just don't cut it anymore. "The obstacle is the path." - Zen Proverb Marketers must embrace some changes in the way they approach media. In order to do so, we must let go of some degree of control in order to embrace the changing landscape. One way to look at the trends in viral marketing is that the new digital channels have created a symbiotic relationship of sorts between the consumer and the marketer. Thus, marketers provide content that entertains and informs consumers, and consumers "repackage" the content and deliver it to other consumers in the form of sharing it and talking about it. Each of the parties benefit from the existence of the other. Therefore, what many refer to as "viral marketing" --which by definition is single-sided--should perhaps be viewed as "symbiotic marketing," where the marketer actually becomes part of the consumer's experience, and such existence benefits both the consumer and marketer. When the solid line that defines media is crossed, we do lose some control over where, how and when our assets are sometimes displayed. Loss of control over media is a new concept for many marketers, and one that some are not ready to embrace. But hesitate at your own risk. What you lose in control, you gain back in droves in reach, exposure and buzz. Those who do not embrace the new media network, the consumer network, will be at a competitive disadvantage. Marketers have always yearned to understand how to truly engage and connect with consumers. The solution has always been messaging and creative based. That messaging would then be distributed through the "right" mix of media channels. As media consumption shifts into more dynamic and flexible media, marketers must develop creative assets based on the media and how consumers are interacting with it. We are held back only by the boundaries of our creative vision. It's time to embrace the blurred line between media and marketing, and give up just a little control. The ability to engage and connect with consumers is not emerging as a possibility for the future. The time is here and now. Ignore it at your own risk... Counter-CLICK by Paul DeBraccio In the broadest sense I must agree with Jason, but through this advancement (and I do see it as such) comes a tangled web. Taking the publisher's perspective, I guess I should say that this symbiotic relationship will end up costing us millions in lost revenue. Allowing an advertiser to run a video or even a full length-program on our sites under the guise of entertainment may help with traffic and time spent on our sites, but I think this situation will spawn turf wars among publishers and advertisers. For example, a trailer of a TV show or sporting event will help to generate awareness of said program, but publishers may be challenged in the scheduling. If we allow Advertiser A to run its video, do we let Advertiser B run a commercial adjacent to that? Publishers need to maximize revenue on every inch of virtual real estate, and the symbiotic program appears to limit that. If the trailer is perceived as a paid ad, then what advertiser would allow their commercials to run next to it. There will probably be enough varied advertisers on a broad site, but in the vertical marketplace this problem will be exacerbated. Hence--lost revenue. The front lines for competitive publishers may be just as heated. Would Maxim be content with running a video from ESPN and showcasing it on expensive real estate as a special program? Is FHM also running the same program? I think not. Giving up some control and allowing the message to become the ad, so to speak, is a nice utopian goal, but I am not sure the powers that be (i.e., money) will allow it. It seems that industries will be compelled to devise standards and unilateral agreements to facilitate this new symbiosis, or we will be back to 1997 again.