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Google Less Reliant on Advertising Partners

As Google’s popularity grows, they rely less on advertising partners than ever. Here’s a case in point. CNNMoney.com reports that the advertising deal between Ask.com and Google is about to expire. Ask.com has Google’s sponsored links on its site but the contract will end at the beginning of next year. At first the company was confident they could renew the contract, but it hasn’t happened yet.

How things change. Google used to pay Ask.com and others to be their partner. Now Ask.com is doing the asking and Ask.com has more to gain than Google does on the deal. Here’s the data: in the second quarter, Google earned $997 million from ads on “partner sites.” Ask.com was responsible for about 10% of that, according to Barry Diller, CEO of IAC. That’s about $100 million. Google’s own sites brought in more than that—with $1.43 billion. Google shares in that revenue, maybe 80 to 85% of it. So the profit margins aren’t that thick—perhaps near 1%.

Using Fashion Blogs to Sell High End Handbags

Andy just wrote about how the majority of people in the US trust blogs for product recommendations. Smart entrepreneurs and businesses are noting that and finding ways to sell their products by getting some blog publicity.

I’m a big fan of the Unusual Business Ideas that Work blog. A recent post showed how blog publicity works well for a fashion designer named Sang A.

Celebrity blogs need fresh content and pictures of stars. Whatever fashions they are captured wearing can quickly become the rage. Sang A was savvy to the fact that bloggers are impacting the fashion industry.

So when Jessica Simpson was spotted in West Hollywood with Sang A’s “jade” purse in blue python, bloggers posted the picture. And her $1576 handbag started selling. That’s a low end model because prices for the bags can go to $15,000.

Yahoo Addresses Quality, Click Fraud

Yahoo paid search is adding some new features for advertisers. In a few weeks they will launch Blocked Domains. Like Google AdWords, you’ll be able to block specific domains that you do not want your ads to appear on. You will be able to block up to 250 domains per account. That includes blocking an entire domain, a subdomain or a directory in a particular domain.

You’ll also be able to block by continent. By default your ads will only show in North America. You can change the default in the administration.

Yahoo is also launching discounts for quality advertisements.
It’s a twist on Google’s quality score. Rather than rewarding advertisers whose ads are clicked on and offer higher quality, you get an automatic discount if your ads generate quality traffic. So those of you who don’t think search engines should have a say in what kind of ad you write, this seems to be the trend. You will be either rewarded or penalized.

Google Stops Running AdWords on Orkut

Google’s social network Orkut pulled ads from their site after getting complaints about questionable content on the site. A Wall Street Journal article last week said Google ran ads on just 1 percent of Orkut pages and they ran the ads as a test. The ads haven’t been running since August. A nonprofit group in Brazil named SaferNet says Orkut that some people using the service have child pornography and other illegal content on their pages.

Google says they remove offensive or illegal content. Google is not the only social network facing this issue. There has been a lot of negative press about pedophiles on MySpace and Facebook. Advertisers, especially big brands, are rightly concerned about the content of the ads. They’re afraid of offending their mainstream users. Plus, their advertising often doesn’t perform well.

The Most Enticing Banner Ad Ever?

It seems that banner ads continue to get a bad rap. But if you have a great offer–and clever message–you can still attract attention.

Endless.com is ahead of the pack with this banner ad running on Amazon.com.

endless

(Actual ad is animated)

I’m online all day, which means I’m conditioned to ignore ads. I also have no interest in women’s shoes. Still, credit to Endless for getting my attention with their offer to pay me $5 to ship their shoes overnight.

Have you spotted any great ads recently? 

30% Increase in Online Advertising in 2008

As I noted in a previous post, forecasts say holiday spending will be down, except online. The US housing market is affecting advertising spend too. But again, online advertising is the bright spot. This is according to ZenithOptimedia. They downgraded its 2007 forecast for offline advertising which was already in the single digits. Online advertising is projected to rise 30% in 2008.

The upside is TV advertising sales globally should be at a record high next year because of the Olympic Games in China. You can see how markets outside the US are still growing, especially Central & Eastern Europe and the Middle East.

Here are some other findings:

  • The drop in ad prices isn’t a freefall, but it has been downgraded to 2.5 percent growth in 2007. It was estimated to 3.3 percent, before the housing market woes.

Netizens Trust Each Other for Product Recommendations

Nielsen has released a survey of 26,486 web users from around the world and discovered that we all prefer the recommendations of others over advertising. Shocker! ;-)

  • 78% of survey respondents trust recommendations from other consumers.
  • Newspapers came second with 63%, and online opinions third with 61%.
  • Search engine ads (34%), banner ads (26%), and mobile text ads (18%) made up the least trusted.
  • American’s trusted blogs more than any other country, with 66% of us trusting blogs for product and service recommendations.
  • The countries most likely to trust advertising? The Philippines (67%), Brazil (67%) and Mexico (66%).
  • Meanwhile the Danes don’t trust any advertising (28%).

Read the full report for more juicy stats.

Hat-tip E-consultancy.