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Online Ad Revenues, Retail Up

Here’s one story that makes at least one major search engine happy: the IAB announced yesterday that online advertising revenues continue to climb, setting a new record in Q3: $5.2 billion. This number is up 25% over the same period last year.

Online ad revenues have risen all year: in Q1, they were at $4.9B and $5.1 in Q2. Each of these record-setting periods has contributed to increasing the total year-to-date by 26% over this time last year (YTD). This also means we’re on course for the first $20+ billion dollar year.

eMarketer reports that this development is chiseling away at offline media’s budget share: they project that 7.4% of advertising dollars this year will go to online media. They report that television, newspapers and radio have taken the hit the hardest: all those media have lost their share of advertising dollar spent (comparing Jan-Jun 2007 to Jan-Jun 2006).

Radiohead Denies comScore’s Data

Earlier this week, comScore released data that said that 62% of Radiohead downloaders don’t pay. While plenty came to the band’s defense, we had no official word on the price people were paying.

Mathew Ingram reports that Radiohead has contradicted comScore’s report in an official statement:

In response to purely speculative figures announced in the press regarding the number of downloads and the price paid for the album, the group’s representatives would like to remind people that… it is impossible for outside organisations to have accurate figures on sales.

However, they can confirm that the figures quoted by the company comScore Inc are wholly inaccurate and in no way reflect definitive market intelligence or, indeed, the true success of the project.

Radiohead’s Experiment: People Taking Advantage

It’s been one month since we all started buzzing about Radiohead’s latest experiment: a downloadable set-your-own-price release of their latest album. I’m sure many people saw this as the band’s vote of confidence in the genuine goodness of humanity—although I’m sure they realized that not everyone would be willing to pay when they could get it for free.

And it looks like both sides are right. A few weeks in, it looked as though the average price being paid was £8 (about $16). However, immediately after that report came a second—in reality, the price paid was more like £2.50 (about $5)—less than Radiohead would have received from their record company per album had they gone the traditional route.

MySpace Dominates in the US

Datamonitor predicts that social networking sites will level off around the world in the year 2012. They also predict that the plateau will hit even sooner in the US. In the meantime, global active memberships in social networking sites are growing. They’re expected to reach 230 million at the end of 2007 (this includes multiple memberships by one person).The money is good and growing.

For example, my friend’s Facebook App that took two weeks to build recently sold for $25k. And marketers who are savvy are getting a lot of press for their social networking presence. There is a lot of money and creativity being exchanged. “Revenues from social-networking services should reach $965 million, growing to $2.4 billion by 2012, writes MarketingCharts.”

Searchers Are Tired–70% Experience Search Fatigue

A Kelton Research study, commissioned by Autobytel, reports that 72.3% of US adult searchers “experience ‘search engine fatigue’ (either ‘always,’ ‘usually,’ or ‘sometimes’) when researching a topic on the Internet.”

What should this statistic tell us?

  • 72.3% of Americans should definitely put down the mouse and step away from the keyboard. Permanently.
  • 72.3% of Americans are searching for the wrong things “always,” “usually,” or “sometimes.”
  • 72.3% of Americans have no idea how to operate a search engine properly.
  • 72.3% of Americans are frustrated with their search engine experience, and this probably reflects on the search engines and not the vast majority of American adults.

While I was leaning toward D, Greg Sterling on Search Engine Land highlighted some of the other findings from the study:

Ten Tips to Reduce Shopping Cart Abandonment

People buying online are an impatient bunch. No waiting in lines and the checkout lane is always open. But customers do abandon their carts, and it’s something online marketers want to prevent. e-Consultancy has some tips to help you get customers to finish the sale. Research from MarketingSherpa put abandonment rates at almost 60% (read MarketingSherpa’s tips).

abandoned-shopping-cart.jpg10 Tips to Reduce Shopping Cart Abandonment

1. Security – You’ve got to build trust with customers. One way is to put third party logos on your site and (of course) use a secure server address (https).

2. Keep the process short. Keep it to as few steps as necessary. Any longer and customers could change their minds.

Why Small Businesses Don’t Invest in Online Marketing

I just wrote about the story of Costco who continually expands online so it even eclipses their sales offline. Since the cost of doing business is so much less online, this is an opportunity for businesses of all sizes, including small businesses.

A new study by Opus Research shows why small businesses don’t invest in online marketing – even though it could have a large impact increasing sales. Many said (25%) the reason they don’t invest is because they think it will cost too much. Then another 20% think are intimdated by the technology or don’t have the staff to handle it.

What is the solution? Something I’m a big advocate of – education. Opus Senior Analyst Greg Sterling, wrote the report “Small Business Attitudes toward Online Marketing and Web 2.0.” The survey included responses from 1,200 businesses with 653 from North America.