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Newspapers Herd Together for Protection Against Google

Have you ever watched a herd of buffalo or deer?

Ever seen hundreds of small fish school together and move in one fluid movement?

As you may already know, they do that in order to protect themselves from a single large predator. It often works, as the predator will mistakenly believe the prey is too large to consume, or get’s blocked out by a massive wall of bodies.

There’s a new herd on the traditional media landscape.

Four large newspaper companies–The Tribune Company, Gannett Company, Hearst Corporation, and The New York Times Company–have decided there’s safety in numbers and so have joined forces. Between them they’re creating quadrantONE and each will allocate a portion of its online advertising space to the new company.

As the NYT reports:

Why Branding Campaigns Can’t Rely on the 6% that Click Display Ads

Starcom, Tacoda and comScore’s “Natural Born Clickers” study suggests that advertisers looking to increase their brand awareness should dump click-through rates as a measure of success.

The study found that, when it comes to display advertising, 50% of the clicks come from just 6% of the total US online population. And while these 25-44 year olds spend four times the amount online compared to non-clickers, they earn less than $40k a year.

What does this mean for advertisers who buy display ads for branding purposes? Don’t focus on the click!

Further preliminary Starcom data suggests no correlation between display ad clicks and brand metrics, and show no connection between measured attitude towards a brand and the number of times an ad for that brand was clicked. The research presentation suggests that when digital campaigns have a branding objective, optimizing for high click rates does not necessarily improve campaign performance.

Online Marketers See High ROI from SEO

While paid search is still the top tactic for internet marketers, more competition and higher costs has dampened enthusiasm. However, SEO (search engine optimization) is more popular with marketers because of its lower cost and high returns.

“SEO continues to increase in popularity. Its low costs and high returns make it a leader among more than half (57%) of the marketers surveyed. Those numbers were 45% in 2006 and 33% in 2005.”

That’s according to MarketingSherpa’s 5th Annual ad:tech Survey. The survey received 421 responses from top internet marketers. These marketers decide how to spend large marketing budgets for well-known brands.

MarketingSherpa asked what worked in the past 12 months and how they plan to budget for the next year.

Here are some additional findings:

AOL Up for Grabs

Despite continuing to acquire other companies, including Goowy and Buy.At marketing network, it looks like AOL is seriously losing steam. Time Warner CEO Jeff Bewkes announced today that the company would be undergoing major restructuring.

Bewkes said that they’ve already begun to split AOL into two divisions, one focused on advertising (presumably still called Platform A, as announced in September). The other, which I think will retain the AOL brand and subscribers, will be spun off and possibly sold.

CNNMoney mentions some of the reasons that Time Warner is shedding the company it acquired eight years ago:

The company saw a 32% plunge in revenue at AOL, as it lost 29% of the subscribers it had a year earlier. Operating income at the unit tumbled 70% due to the sale of its Internet access business in Great Britain and France.

Will Social Networking Ever = Money?

Someone, somewhere is supposed to be raking it in from social media—but we never have figured out who that person is (unless it’s Mark Zuckerberg). We see the CEOs with their millions, and everyone wants in on the wave of the future, either in an IPO or working for the company behind the social network, or establishing their own.

But is there really any money to be had? Last week, social networking darling Facebook, still a privately-held and VC-funded enterprise, allegedly leaked its financial projections for the year. The outlook isn’t exactly what you’re hoping for in a company that is supposedly worth $15B:

2007 Revenues: $150 million

2008 Revenues: $300 to $350 million (projected)

2007 Headcount: 450

2008 Headcount: 1,000 (projected)

AOL Buys Goowy Widget Creator

After Yahoo got a bid from Microsoft, I wonder what will happen with AOL. Will they be next in line to be acquired? Today they were the ones acquiring. AOL has been partnering with widget making company Goowy since early last year. Now they have acquired the company. The purchase price has not been made public.

I keep wanting to say Groovy but I assume the name is really a way of spelling GUI as in “graphical user interface.” Goowy is best-known as the parent company of yourminis, a widget maker and widget search engine.

Goowy facilitated widgets for myAOL. They are based in San Diego and founded in 2004. In 2006 they got funding from blogger, billionaire, and Dallas Mavericks owner Mark Cuban.

For Online Advertising the Biggest Growth is Local

Online advertising will continue to grow for years to come, especially local business advertising. JupiterResearch. According to the US Online Local Advertising Forecast, by JupiterResearch local advertising will grow 13% in 2007 to 2012. Online advertising generally is expected to grow 12 percent during that time. Advertisers will focus on local display and search advertising the most.

Compound annual growth rates (CAGRs) are expected to be 18 percent and 16 percent, respectively, during the next five years.

Online advertising is taking a larger proportion of budgets than in past years, but won’t replace traditional advertising.

“Although traditional media such as newspaper and local broadcast are facing new challenges regarding their business models, local advertising in these media mainstays is not a dying market. The ability to assemble relatively larger general audiences will remain a principal advantage of traditional media.”
– Lead Analyst Barry Parr, Media Analyst for JupiterResearch