Dave’s Take

In announcing a new ten-year joint venture, search engine leader wannabe Yahoo and computer giant Microsoft hope to finally put a dent into the search advertising market dominance of Google. In releasing the details about the deal that was negotiated over the past 18 months, Yahoo stated they are now on track to make the search ad biz more competitive.

The new venture gives Microsoft access to the second largest search engine audience on the planet and provides Yahoo with an estimated uptick of $500 million a year in ad revenue. While that sounds terrific on paper, the reality is somewhat less than revolutionary. The new venture, while promising, has a long road to hoe as demonstrated by industry experts, who sent Yahoo stock down over 11% on the news. Investors were simply reflecting the reality of the impact the merger might have on the industry, which appears to be minimal. Currently, Yahoo handles a mere 28% of the search market, leaving Google with an almost insurmountable 67% market share.

Google hopes to use the joint endeavor to establish its new search engine “Bing” as the preferred consumer search engine. Why they believe their product is unique enough to make surfers change SEs is a mystery to me. I have experimented with Bing and found it to be okay, but nothing astounding. As most humans are creatures of habit, I fail to see what would make anyone switch from something they’ve used successfully for over a decade to a new copycat. One could argue that the consumer appeal will be found in the old “David vs. Goliath” routine, pitting Bing against the Starbucks of the web, Google. I say could argue because in reality, the battle is framed around two Internet giants, leaving neither to hold the title of the “little engine that could.” To further illustrate the massiveness of the players involved, a similar merger between Yahoo and Google was denied by regulators last year due to antitrust issues. So much for the myth of the competitive little guy.

The bottom line on search engines appears to be, “Why fix what ain’t broken?” Internet users are satisfied with the accuracy and speed of Google and seem to care little about new entries that offer nothing in terms of uniqueness. Perhaps if Bing offered a free fix for Vista it might gain market share.

In what may be the most amusing (and ineffective) attempt at damage control, Hollywood movie studios are doing their best to minimize the “Twitter Effect.” What is the Twitter Effect? It’s the latest method movie viewers are employing via Twitter and other social media channels to get the word out on new movies. As anyone who follows box office receipts knows, if a flick doesn’t make it in its opening weekend, it’s damaged goods. This is especially true for movie franchise blockbusters, like Harry Potter or Star Trek. Prior to Twitter, studios could at least count on a few days of decent box bucks, even when the picture was a dog. With instant messaging, what took days for word of mouth to catch up to reality is now down to hours. “If people don’t like a movie on Friday, it can die by Saturday,” said Paul Dergarabedian, president of the movie-tracking firm Hollywood.com Box Offfice.

How much influence does the social media world influence today’s box office? The summer movie season is by far the most important period for the movie biz. As much as 40% of the annual box office receipts are generated during these three months, so strong openings are a financial necessity. Normally, a weak movie drops 40% in gate totals from week one to week two. This summer however, Twitter and other instant messaging systems have contributed to the average movie dropping a whopping 51% during the same time frame.

So how are the studios attempting to reduce the damage done by instant critics? Why by sending out their own tweets, supposedly from average moviegoers like yourself. They are texting quick one-liners about how great a new release is, regardless of the truth. Case in point – Bruno. While up-front buzz about Sacha Baron Cohen’s latest slag fest was huge, word of mouth via Twitter et al. revealed just how bad of a follow-up to Borat it truly is. Bruno opened with a respectable Friday, earning a total of $14.4 million. But by Saturday, its gate dropped 39% to a mere $8.8 million, hardly the kind of sales the studio expected. And it just got worse as word of mouth caught up to the Twitter effect. How many “bogus reviews” the studio tweeted to combat public opinion is unknown, but obviously they weren’t enough to overcome the legitimate tweets of unimpressed viewers.

Hopefully, social media channels will be one more iron in the fire for better movies. Hollywood needs more flicks with solid storylines instead of the CG studded special effects laden monsters that rule the summer theater fare. Movie studios would be wise to realize that in a free society, honest public opinion rules.

In a newly released study, comSCORE who bills itself as a global leader in measuring the digital world (whatever that means), the effectiveness of online advertising is broken down with some surprising results. Utilizing input compiled from over 170 studies, encompassing over two million users, comSCORE has come to some substantial realities regarding online campaigns.

Their first conclusion is that total online spending for 2008 was up over 8%, compared to a drop of over 6% in traditional display advertising spending. This statistic is yet another harbinger of the declining relevance of old school ad placement. The old CPM campaign, based simply upon the number of people exposed to an ad is being replaced by CPC or CPA (pay for performance) based campaigns, which require payment when the consumer performs a prompted action such as clicking on a specific ad, etc.

While this sounds great for the future of online ad placement, the study goes on to point out some glaring problems that are beginning to percolate. According to DoubleClick and eMarketer, click-through rates on static display ads dropped to the incredibly low percentage of 0.2%. I don’t know about you, but I never click on any online display ads. The reason for my lack of trust in online display advertising is multifaceted, but basically I believe the ads will not only take me to some remote web page, but that the pricing won’t be as competitive with ads that come up during a straight product search.

Surprisingly, their findings conclude that rich media ads fair little better, with only 1% of those exposed to media rich ads taking the time to click. Like myself, more than two-thirds of Internet users never click on display ads. Overall, 16% of all Internet users account for over 80% of all click-throughs. Not only are they a small total number of users, but their demographic breakdown proves their ages are concentrated, with the overwhelming number of online clickers aged between 25-44 years old. Even more alarming is their average income is less than $40,000. Even search ads, the most effective form of online marketing, are only garnering a measly 4% of click-throughs on Google and an even less impressive 2% at MSN and Yahoo.

Why are click-throughs slowly dropping thru the basement? One reason is cookies — you know, those little nuggets of code inserted into your computer in an attempt to track your online activities? Well, it seems that a combination of anti-spyware software combined with easy delete features for users, have led to more than 30% of all users deleting their cookies monthly. This has led the industry to realize that the use of cookies can no longer be considered an accurate method of tracking online viewer response to online advertising.

Besides the difference between static and media rich display ads, comSCORE’s study does show a distinct difference in not only the products or services that are advertised, but in the actual industries as well. Automotive advertisements seem to do well in online campaigns, with Retail and Apparel, Financial, Media and Entertainment categories generating the greatest number of clicks. The reason for these specific industry success stories is complex, with the most obvious of reasons being the comparison-shopping they each invite. This comparison encouragement is great for single sells, but creates headaches for marketers searching for a way to increase branding success online. How do you build brand loyalty when price and ease of purchase make a name brand just another player? In a study commissioned by DoubleClick in 2005, the majority of pre-purchase search activity actually involved generic terms, not the merchant’s brands. Try building a GM or Proctor Gamble brand with those results.

What’s the final verdict in creating and placing moneymaking online advertising? The jury is still out, but one truth shines through all the confusion. Like traditional advertising, online campaigns work best when coupled with multiple programs. Team radio, print or TV with online ads and you increase your chances of success exponentially. Also, as with traditional advertising, it all depends on placement. Put your ads on the wrong page or channel and suffer the consequences. Never forget that advertising is a lot like real estate – location, location, location.

In this economy, media jobs are tough to find and harder to land. As someone who’s always on the lookout for a long term gig, I know the online job sites well. While all of them have taken a hit in this economy, some are better than others in offering a solid variety of industry opportunities. Of the more than a dozen advertising/marketing job sites I regularly visit, three stand out for their competence and usefulness in the job search. All three are great for finding jobs not listed elsewhere and between them, anyone in advertising, marketing or production should find some light at the end of the tunnel.

TalentZoo.com: This free website features jobs from advertising, marketing and media companies. It is user friendly and offers a great base of jobs that are easy to search and apply for. By posting your resume on TalentZoo, you will allow advertising professionals from coast to coast to view your resume. It posts jobs that cover everything in advertising from management to media placement. Just as important are the discussions and articles posted on the site, covering everything from industry projections to interview techniques. Here’s the link to their site: http://www.talentzoo.com

GetCopywrtingJobs.com: Obviously as the name implies, this is a website dedicated to copywriters. While this free site may appear to be limited in its job offerings, it has a surprising depth of employment offerings for writers and editors. Whether you’re an SEO specialist, technical wordsmith or just a plain old copywriter, getcopywritingjobs.com has something for everyone who makes his or her living at a keyboard. Job openings are listed by state as well as position, so searches can be cross-referenced for best results. To visit their site, go to:
http://www.getcopywritingjobs.com

As a rule, I am leery of any paid job sites. I have learned the hard way that just because they charge, doesn’t mean they produce. Media-Match.com is one of the few subscriber job sites I recommend. Featuring hundreds of listings for production positions ranging from Grips and P.A.s to Directors, Writers and Line Producers; media-match.com is a job site worth the reasonable subscription rates they charge. With fees ranging from a monthly membership of $10 to an annual subscription of $60.00, they are worth the investment. They even offer a great deal for recent graduates – a mere $5.00 a month! Most film and video job postings found online are either outdated or incomplete, but the pros at media-match.com do an incredible job of screening postings, thus ensuring all their members of actual current offerings. As an added bonus, they even allow you to post your portfolio online. If you are looking for work in the film, video or television business, you need to check them out at:
http://www.media-match.com

Remember, the key to the successful use of any job site is persistence. Persistence in keeping your resume up to date and topical; persistence in writing specific cover letters for specific jobs; persistence in keeping your portfolio and other work samples available; and persistence in keeping your job log and contact list current. Always treat the search for a full-time job as a full-time job. I wish you the best of luck in your career quest.

Everyone in advertising knows firsthand how this economy is killing our biz. Excluding the big three, (real estate, construction and automotive) perhaps no other profession has been as hurt by this recession as the advertising industry. Just about every agency in the country is struggling to stay alive regardless of their cost cutting strategies. With a drop of 8.5% in total ad spending this year, things are looking bleak. Unfortunately for traditional advertising, the news just gets worse.

The latest quarterly forecast from Publicis’ ZenithOptima Group only confirms what we’ve all been witnessing—traditional ad spending is in the tank, while online outlays continue to grow. Their latest report predicts Internet ad spending will expand 10.1% in 2009, a jump of 1.5% over their April forecast. Based upon current leanings, industry projections are for a 12.6% increase in 2009 online ad budgets, totaling to more than a respectable $56.8 billion. This represents an amazing gain of over two full points of worldwide ad share, with trending only pointing to more gains.

Next year, they predict online ad expenditures to exceed 15% of ALL advertising monies spent. What’s driving this expansion? Three words — Paid Search Advertising. With consumers increasingly on the lookout for bigger and better bargains, paid search advertising is expected to grow by a shocking 20% in 2009 alone. In addition to bargain hunters, new competition from innovations like Microsoft’s Bing is only making paid search advertising more competitive…and profitable.

And just who is giving up market share to feed this online growth? Surprise – it’s traditional advertising. 2009 totals are expected to show a 7.1% drop in TV ad revenue, followed by outdoor (-7.0%) and cinema (-4.8%). While these drops in spending are bad for their prospective industries, they are positively marvelous compared to those in the print media. Newspapers are expected to suffer an incredible 14.7% decrease in ad revenues this year, topped only by the 16.7% of losses facing magazine publishers. Future trends predict a rebound for the slicks business, but only doom and gloom for the rags.

What this all means to the advertising industry is still unknown. Are these numbers sustainable or just anomalies? Will online ads really deliver the sales and brand loyalty that television and print have accomplished? Will savvy consumers embrace online ads as helpful instead of intrusive? Who knows? All I know is that in advertising, you either embrace the future or learn a new profession.