A company that sells instructional videos and CD-ROMs has sued e-commerce giant Amazon for trademark infringement stemming from ads on Google. The complaint, filed this week by Lakewood, Colo.-based Video Professor, alleges that Amazon uses the phrase "video professor" to trigger pay-per-click ads that direct people to a site that sells instructional CD-ROMS made by the company Professor Teaches. Video Professor argues that the ads trick users into believing that its videos are being sold on the landing page. "It is highly likely that a user that googles the words 'Video Professor' searching for products sold by VPI (Video Professor, Inc.) might click on the Amazon.com link," the complaint alleges. "It is equally likely that once directed to the Amazon webpage having the name Video Professor at the top of the page, the user would purchase the CD-ROMs offered under the name 'Professor Teaches,' believing VPI to be the source of the products." But a court might find Video Professor's argument problematic, because it relies on assumptions that might not be right, said cyberlaw expert Bennet Kelley. "There's a premise here that a consumer who types in video professor is looking for Video Professor," Kelley said. "But sometimes you type something in and want to see what else comes up." An Amazon spokesperson declined to comment, stating that the company does not speak about pending litigation. The complaint also alleges that the "first six products" listed on the landing page are Professor Teaches CD-ROMs, while an exhibit attached to the complaint shows that the seventh through ninth listings were for Video Professor programs. (On Thursday, the top listing on the Amazon.com landing page associated with "video professor" was for a Video Professor product.) Because Amazon sells both Video Professor and Professor Teaches merchandise on the same landing page, the online retailer can argue that it's only using the "video professor" trademark to facilitate legitimate product placement -- or the placing of competitors' items near each other, said false advertising and trademark law expert Norman Simon, a partner with Kramer Levin Naftalis & Frankel. In the last several years, a host of other companies have filed lawsuits over the use of trademarks to trigger search ads. In one closely watched case, Google prevailed in a lawsuit brought by insurance company Geico after a federal district court judge ruled that consumers weren't confused when they entered "Geico" as a search term and the results page included paid ads for Geico rivals. (Google and Geico reached a settlement about another portion of the case.) But Google also settled a lawsuit brought by American Airlines after a judge declined to dismiss the lawsuit before trial. Recently, a U.S. District Court judge in Texas ruled in Yahoo's favor in a search-related lawsuit brought by retailer Heartbrand Beef. There, a rival used the term "Akaushi" to trigger ads. Heartbrand unsuccessfully argued that it was the only U.S. seller of "Akaushi" beef -- or beef from cattle that were descended from a breed originally from Kumamoto, Japan -- and that Yahoo shouldn't have allowed any other companies to use the term as a keyword.
Google said Thursday it will cut about 200 jobs in sales and marketing, citing an overlap in responsibilities across the organization that could complicate the "decision-making" process and make teams less effective and efficient. The cuts will take place globally and employees will have an opportunity to apply for other posts throughout the company, Google said in a blog post. "We over invested in some areas in preparation for the growth trends we were experiencing at the time," the Mountain View, Calif. company said. Google has been cutting jobs since January, when it cut 100 recruiting positions. In February, the company said it would shutter its radio biz that eliminated about 40 jobs. "Making changes of this kind is never easy -- and we recognize that the recession makes the timing even more difficult for the Googlers concerned," wrote Omid Kordestani, Google's senior vice president of global sales and business development. "We did look at a number of different options but ultimately concluded that we had to restructure our organizations in order to improve our effectiveness and efficiency as a business." The job cuts announced affect less than 1% of the 20,200 workers employed. Mark Simon, VP of industry relations at Didit.com, New York, doesn't believe Google will report revenue numbers as strong as they have in the "zillion" past quarters. "We don't know what they will report, but I think (the layoffs are) probably a good move in light of the economy," he said. Google has a "set and forget" product, Simon said, which has allowed them to own about 72% of market share among advertisers and marketers. "Sales and marketing are probably areas they can do with less people," he said. "Google has earned industry status among customers, who will come back tomorrow because they no longer need the daily details from a sales and marketing crew."
Facebook is aging fast. The number of U.S. users over 35 has doubled in just the last 60 days, according to new data from Inside Facebook. The burgeoning crowd of older users means that the majority of Facebook members are now over age 25. Those ages 18 to 25 still make up the biggest proportion of users, at 35%. But people ages 26-44 now account for 41% of the Facebook audience. Women over 55 remain the fastest-growing demographic in the last three months, hitting 1.5 million. Does this mean that ads for the Clapper and denture cream will soon proliferate on Facebook? Maybe not. But "developers and marketers want to think about how to serve this group of new users," wrote Inside Facebook founder Justin Smith. Indeed, Facebook appears to be catering more to families as all ages become drawn into the social network. Another Facebook blog -- AllFacebook -- points out that the company has created a new landing page for creating private groups specifically targeted to their family. It also notes the particular trend of moms going on Facebook. "I can't tell you how many friends of mine have complained about their mothers registering in the past couple weeks," wrote AllFacebook's Nick O'Neill. He acknowledges that "younger individuals" may not find that so cool. With its user base extending to parents as well as children, however, brands are taking note. "In recent months, marketers have started to explore more opportunities to engage new audiences via Facebook beyond its traditional base of teens and college students, though the site still offers a lot of value in terms of that audience," said Art Sindlinger, vice president and social activation director at Starcom USA. Adam Kasper, senior vice president and director of digital media at Havas Digital's Media Contacts unit, emphasized that many marketers are still getting their feet wet on Facebook. "While the growth of Facebook reflects an important demographic shift and it is now an established cultural phenomenon, placing ads on Facebook is still far from a must-have for advertisers," he said. "More interesting for many of our clients is user activity on Facebook -- looking at how messages travel generationally from one person to another and the quantitative of the value of that pass-along." While the demographic data highlighted by Inside Facebook focuses on U.S. users, its fastest growth has been internationally, with 70% of its more than 175 million active members in other countries. To keep up with its torrid expansion, the company is seeking to raise another $100 million in debt financing to lease more servers, according to a BusinessWeek report Thursday.
Despite the "really dire shape" of the global economy, online media and marketers have good reason to be optimistic about the future -- "except the newspaper industry," according to Imran Khan, J.P. Morgan managing director and Web analyst. "Advertisers realized that the newspaper model was flawed," Khan said during a presentation organized by lead-generation company Pontiflex on Thursday. "They didn't change their business model to adapt to the new reality." That new reality, Khan explained, is made up of several trends all working against the newspaper business, from dramatic audience fragmentation to consumers relying less and less on print resources for breaking news. Yet, according to Khan, newspapers' loss is potentially the industry's gain. "It's a $40 billion ad market, and that should move somewhere," he said. Giving Web professionals still more hope, Khan noted that broadband penetration and e-commerce continues to increase, and grab market-share both domestically and abroad. Indeed, in the U.S., ecommerce represented a mere 3.9% of all commerce last year -- a percentage that will continue to grow, and, notably, give an added boost to online advertising along the way. Additionally, Khan said that while marketer's increasing focus on performance-driven media was sound, the industry as a whole support the shift in branded ad dollars online. "We should talk as an industry about how to bring in brand advertisers," he said. What's ultimately going to attract big-time brand advertising? "Assurance of the quality of the content" where their ads appear, said Khan. In a 2009 industry outlook report, which Khan released earlier this year, he predicted that while online ad spending would continue to expand, the contraction of the general economy would place even greater downward pressure on the price of both online display and search advertising. Khan also predicted that ad models would fail for two of the Web's hottest emerging platforms -- online video and social media -- and that it would take longer than expected for a substantive mobile advertising marketplace to emerge.
With all kinds of marketers dabbling with the likes of Facebook, Twitter, and YouTube, one group of advertisers reluctant to join the social media fray has been big pharmaceutical companies. That's mainly because of concerns that embracing emerging Web 2.0 tools could run afoul of Food & Drug Administration regulations governing the advertising and promotion of branded drugs. The FDA hasn't squarely addressed the role of social media in drug advertising to date. But an agency official offered some insight on the subject in a recent interview with Mark Senak, a Fleishman Hillard executive in Washington, D.C. who separately runs the EyeonFDA blog. The upshot is that the FDA doesn't categorically prohibit pharmaceutical companies from engaging in social media. "It's not the medium, it's the message," explained Dr. Jean Ah Kang, special assistant to Tom Abrams at the FDA's Division for Drug Marketing, Advertising and Communications, in charge of Web 2.0 policy development. In the interview with Senak earlier this month, Kang emphasized that the key to advertising in any medium is for drug makers to present labeling information prominently and accurately and communicate all material risks. Asked about original promotional material posted to a social site that might be subsequently altered by users, Kang said the agency takes into account third-party involvement in social media. A key consideration would be whether the marketer, or any companies working with it, had any role in prompting user-made changes. While brands like Skittles may have fully embraced the consumer-in-control movement, the drug companies are inherently more conservative when it comes to a category that invites consumer participation and self-expression. In September, the FDA sent a warning letter to Shire Pharmaceuticals in connection with a video promotion on YouTube for the drug Adderall XR. The agency said both the video and a Web page for Adderall overstated its efficacy of and that the video omitted important risk information. But the FDA did not specifically object to the use of YouTube itself as a promotional vehicle. While Kang wouldn't discuss the FDA's process for better defining how pharmaceutical companies can use social media, she said: "We do recognize the importance of social media, like Web 2.0, and we recognize that it is reality and it is here to stay." Even so, it's likely that big pharma will remain reticent about plunging into social media marketing, barring more explicit guidelines from the FDA. "We've found most pharmaceutical advertisers have been sitting on the sidelines and asking us not to pitch social media in our programs," said Michael Keriakos, co-founder and president of Waterfront Media, parent of health portal Everyday Health. He estimates that packaged goods companies are spending about 10% of budgets on social marketing initiatives, while pharmaceutical companies may devote less than 2%. Chris Schroeder, CEO of competing health site HealthCentral, agreed. "We've had several advertisers who have and are experimenting here, but most are still being very cautious --'most' meaning the legal departments," he said. "I've not see folks rush to it yet, even with this statement, but we've been viewed as a 'safe' group that really works with them." Beyond social media, pharmaceutical companies are also bracing for possible new restrictions on direct-to-consumer advertising under President Barack Obama's administration. During the presidential campaign, Obama proposed regulating DTC advertising specifically as part of broader health care reform. But interest in expanding into social media remains. In a post this week about Kang's comments on EyeonFDA, Nielsen Online analyst Melissa Davies, who covers the pharmaceutical industry, wrote: "I have had several conversations recently with clients who are ready to move beyond social media listening and are wondering how they can engage in the environment."
Start-up Web video analytics firm Visible Measures on Thursday announced that it has secured a Series C round of financing of $10 million, led by new investor Northgate Capital with participation from existing investors General Catalyst Partners and MDV-Mohr Davidow Ventures. To date, Visible Measures has raised over $29 million in total financing. This latest round is expected to help the company continue to build out it technological infrastructure, further bolstering its market position. "This funding will help to support our growth," said Brian Shin, founder and CEO of Visible Measures. Specifically, the company intends to use this new financing to accelerate its product development efforts, expand its customer relationships, and sustain expansion of its online video data coverage. Formed in 2005, the company's current product portfolio includes VisibleCampaign -- a service powered by its Viral Reach Database, a constantly updated repository that tracks video performance over 80 million unique videos across 150 of the Web's most popular video-sharing sites. This ostensibly enables it to report on campaign reach metrics no matter where the campaign goes or how the online community responds. VisibleCampaign also provides measurements to show how audiences engage with video-based campaigns, so advertisers and their agencies can see both how many times a particular ad is viewed, and whether or not the central brand message is being delivered. The company's other core product, VisibleSuite, gives video publishers and aggregators insights into Web video audience behavior. The company, which did not officially launch until January 2008, also recently announced a series of joint research projects with market research firm Dynamic Logic.
Backing the record labels, President Barack Obama's administration has recently filed court papers in two file-sharing lawsuits arguing that damages of up to $150,000 per song are constitutional. "Awarding statutory damages authorized by the Copyright Act in this case would not be so severe and oppressive as to be wholly disproportioned to the offense and obviously unreasonable," the Department of Justice argued in a lawsuit against Pennsylvania resident Denise Cloud. That case is pending in U.S. District Court in the eastern district of Pennsylvania. The Obama administration also argued that damages of up to $150,000 per infringement are reasonable because it's hard to calculate how much money is lost due to file-sharing. "It is impossible for a copyright owner to calculate actual damages when an online media distribution system is used to illegally distribute its copyrighted sound recordings because the number of subsequent acts of infringement by computer users who download illegal copies of the sound recordings from the original infringer is simply unknowable." The Justice Department likewise intervened on behalf of the record industry in the pending case against Massachusetts grad student Joel Tenenbaum. The Bush administration also supported the record industry's argument in favor of damages in the lawsuit against Minnesota resident Jammie Thomas. A jury found her liable for copyright infringement and ordered her to pay $220,000 for sharing 24 tracks. She argued that award was excessive, given that iTunes sells tracks for 99 cents each. U.S. District Court Judge Michael Davis declared a mistrial on other grounds, but he also said the damage award was "wholly disproportionate" to any harm suffered by the record labels in the case. The Recording Industry Association of America said late last year that it intended to stop bringing new cases against suspected file-sharers, but that lawsuits already in the pipeline -- like the cases against Cloud and Tenenbaum -- would continue.
Consumers are turning to the Internet to search local listings on branded yellow page sites for businesses, products and services more often, according to a study by the Yellow Pages Association (YPA) industry trade group. The research shows that local Internet search grew 58% last year, reaching 15.7 billion searches. The industry group, which contracts with comScore to conduct the research, had suspected that local search increased dramatically, but didn't know how the trend related to core search practices by consumers. Overall, core searches in the U.S. grew much less -- 21%, or nearly 137 billion searches in 2008, according to the study. Local search is 12% of core searches on the top five search portals. Internet Yellow Page (IYP) companies such as yellowpages.com and superpages.com, as well as other locally focused online business directories, also saw double-digit growth in the same period, totaling 4.6 billion searches in 2008, compared with 3.8 billion in 2007. Nearly 45% of searches result in sales. The study aims to prove that IYP remains a viable product with solid return on investments (ROI) for advertisers, according to Larry Smith, director of research at the YPA. "We wanted to make sure we could back up our qualitative information with quantitative information," he said. Smith had not expected the percentage of local search to far outgrow overall search. Nor did he expect that 75% of the top 100 keywords searched on IYP sites were not branded. "That's important because both the Internet and paper Yellow Pages are used mostly by people who search on a variety of generic words, as opposed to one specific name like Home Depot," he said. Users access IYP and local online business directories several ways and for numerous reasons. Some visit related sites through search engines, directly typing in the URL, bookmark, Google Maps, Yahoo Local, and CitySearch. The increase in use has also seen a 50% rise in sponsored links to 353 million in December 2008. Smith said this demonstrates the need by consumers for local information. The biggest challenge that Smith noticed from the study is that IYPs don't get the credit for connecting the consumer with the product and the sale. In one-on-one focus groups, consumers searching online for products and services typically started their search at Google, Microsoft, Yahoo or AOL and clicked through to an IYP site that led them to the product. But when asked how they found the product or service, the consumer noted through the search engine such as Google. The comScore study measured real-life Internet browsing, buying and transactional activity of approximately one million U.S. Internet users who provided permission to be monitored from December 2007 to December 2008.
Some days I think I am sitting in a 1925 courtroom listening to Clarence Darrow and William Jennings Bryan debate creationism as the online ad industry turns itself inside out trying to decide if its fate will be decided by creative or technological evolution. Which comes first the ad or the ad server? Did God really toss Adam and Eve out of the Garden of Eden for approving an AT&T banner ad to run on Hotwired in 1994? Was there Flash 5 million years ago, but no codex to run it? It is true that Michael Arrington is the last surviving Neanderthal? Or isn't Jason Calacanis proof that aliens arrived thousands of years ago and walk among us today? Clearly none of this will ever be resolved since at some point one side always wimps out and tells the other, "Well, it's a matter of faith" just when things get interesting. So who am I to put the chicken before the egg? Those matters will be decided in the wee, dark hours of after-dinner cocktails at ad conferences and summits only to burst into forgotten flame under the dawn's early light. There are those who maintain that technology has gotten out of hand, that the Cylons we created have turned on us and are plotting our destruction. These of course are the same folks who ask their 14 years-olds to help them program their new cell phones and think that there are just too many useless buttons on the flat panel remote, so they figure if you have to bring in ad ops, it is a lost cause to begin with. To them Jesus was nailed on the cross with behavioral targeting, optimization and predictive modeling. They can't remember a time when it was a mystery how each TV network would get the right regional ads to their right O&Os. The opposition worships at the altar of David Ogilvy, convinced that when the moon is in the seventh house and Jupiter aligns with Mars, the perfect ad can be created as long as a VCU graduate is somehow involved and the various elements are not drawn from a database by some quant-driven algorithm. After all, the biggest financial meltdown since the Great Depression was a product of a piece of financial technology that allowed hugely complex risks to be modeled with more ease and accuracy than ever before. And yet who is to say that somewhere, somehow there wasn't a pissed-off greater power who just said fuck it one day, dropped some orange sunshine and started shorting the market and making margin calls. Then there is the guy on the other end of the screen who doesn't give much thought to why (or how) a hotel ad shows up three days after he's been to a travel site. When pressed, his best guess is the Easter Bunny. Or Kara Thrace. Me? I'm kinda leaning toward the advice of that great Madison Avenue Techno-theologist John Prine who said: Blow up your TV, throw away your paper Go to the country, build you a home Plant a little garden, eat a lot of peaches Try and find Jesus on your own.