In case you haven’t heard, Google is going to offer a Pay-Per-Click video ad product. They’re going to run it through AdSense and we can’t opt out — we’re going to get video ads whether we like them or not.

I think video ads are a dumb idea. Mook-Jon thinks they’re only going to annoy people, like the banner ads that make noise. I think he’s right.

In fact, I agree completely with Michael Arrington at TechCrunch. Here’s what he says:

1. Google’s not putting these ads on its own sites. As Michael says, Google needs to eat its own dogfood. If we have to, they have to.

2. You can’t tie a video click to something else that measures ROI. I think this is very significant. Clicking on a video won’t take you to another web site where you can take some sort of action that can be measured. It’s just video.

3. Normal TV ads are plentiful and cheap. Why make an ad for Google when you can advertise on your local (or national) TV system for $25? Michael cites Spotrunner, a company that produces and distributes TV commercials for small business, and there are tons more of them out there.

4. People don’t want to click on video ads. The great pieces of video are usually spread virally and don’t need Google or anyone else to get them trafficed.

5. It’s a lot harder and more expensive to produce a video ad, and Michael thinks this will result in fewer advertisers producing vide ads. Again, I think he’s right.

6. There’s going to be a low PPC and low clickthrough. Video ads are a pain to make, and there’s going to be a low clickthrough rate, which means we’ll make less money on the ads.

Michael thinks that video ads will end up on the Google ashheap like click-to-call and their print experiment.

The least they can do is let us opt out like they did.

The report is split up into Budget Strategies, Bidding Strategies, Keyword Strategies and Ad Copy Strategies. I’m going to go over a few below.

In Budgeting Strategies Joe covers Day Parting, where you might want to change bid strategies throughout the day and possibly turn off bids at different times of the day, and Day Excluding, where you may want to turn off your campaign during certain days or even seasons.

Beginners might want to take a look at Bidding Strategies, where Joe puts into words the typical strategies people use intuitively, including Maximum Cost-Per-Click (self-explanatory), and Bid to ROI, where bids can automatically be adjusted based on pre-defined performance metrics. I liked Maximize Clicks for the Given Spend - If the daily budget is stable and being reached every day, a very quick optimization technique would be to lower the max click rates to find the sweet spot where the daily budget is just met each day. This optimization drives more clicks at a
lower rate. Sounds good.

Joe also covers other strategies for keywords and ad copy. The report is worth a read, though it may result in a sales call from morevisibility.com.

Here’s the table:

Our old friend Structured Settlement Alliance is at the top spot. Here’s their number one banner with just over $4.00 in EPC:

I would imagine you need a certain type of site to have this banner pay off, but why not give it a shot anyway?

I also find it interesting that there are five loan offers in our top 10 considering that the loan rush is supposedly over (this according to the Federal Reserve). A newcomer to the list is Merrick Mattress, makers of the Angel memory foam bed. Interestingly enough they show a 7 day True EPC of $2.88, and all of the individual creatives that I saw show N/A as the 7 day EPC. Wierd.

If I had to pick the best pulling ad it would probably be Structured Settlement Alliance or Get Smart, but it’s difficult to tell this time around and the EPCs seem low to me.

On the whole, the average EPC across all of the categories is .21, which is definitely lower than I’m used to seeing. The gap between average Pay-Per-Lead and Pay-Per-Sale has also widened considerably, with PPS at .23 and PPL at .46, double for Lead over Sale. Take PPL over PPS in a heartbeat.

The top category in EPC is Investment with $1.02 EPC, followed by Loans at .74 and Financial Services at .72.

His article starts with a reference to Jeff Molander’s ThoughtShapers blog where Jeff cites data that shows the big retailers are spending less on affiliate marketing and directing the money toward search engine marketing.

This is what I would call disintermediation, or basically squeezing out the affiliates by going after customers directly via search engine marketing. Jeff puts it this way:

Retailers are pro-actively shrinking their affiliate marketing programs while concurrently ratcheting up search marketing spending.

As always, I apply my smell test rule to that statement. It seems intuitively possible, right? But the statements have apparently elicited some seriously negative comments toward Jeff Molander. So along comes one of the best internet researchers around, Anne Holland of MarketingSherpa, and here’s what she says:

”… folks that were super, super heavy search marketers… tended to be spending a lot less on affiliate marketing. In fact, they were spending about half what the average marketer was spending on affiliate marketing.

So it seemed like if you ratcheted up your search marketing it sort meant you were taking away affiliate marketing from the affiliates. You were in a way taking it in-house. So that has real implications for the future of affiliate marketing.”

That’s a serious statement. Stefan Tornquist of MarketingSherpa adds more:

That retail marketers, especially while the model of a few years a go might have been to use their affiliates essentially as an outsourced search provider because so many affiliates are quite advanced in using search marketing so retailers were willing to allow them to use trademarked and branded terms.

And really with the incredible growth in search and so much research coming out on the efficacy. I think a lot of marketers saw those sales as really being redundant.

What does this all mean?

Well, for large, multi-channel retailers (Wal*Mart, Sears, etc), affiliates are becoming less important. So what.

Wayne Porter:

However, smaller or mid-sized businesses, or businesses in a highly specialized niche or businesses with a new concept or service can certainly benefit from affiliate programs. I speak from experience here. Also businesses who sell commodity items like inkjets where there is no true “market leader” or powerful brand equity benefit as well.

There are some ideas in there for those of you looking for niches. Commodity items, or businesses with a new concept or service over the Wal*Marts of the world. Sounds like Capitalism to me.

Wayne also brings up the same thing that went through my mind as I was reading that Wal*Mart thinks they can do it without us. When I’m looking for a product, I never go right to Wal*Mart or Sears or anyone else — I go to a comparison shopping engine like shopping.com and see who has the best price. Most of you probably do as well.

Wayne thinks we search marketers created that behavior. That statement also seems intuitively correct.

Does it seem like the big guys are trying to squeeze us out so they can do their own search marketing and customer acquisition? The evidence is there. Do I think this effects the future of affiliate programs in general? Maybe — but we will always be able to do it better than the behemoths, so I’m not all that worried about it.

It’s interesting to think about, though.

This arrangement obviously favors the networks over the advertisers — they sell the best spots first for the most money, since everyone is gathered at the upfront, and whomever wants the best spots had better get their wallets out.

There was an interesting phenomenon at this year’s upfront, starting with Johnson & Johnson, the big health care products company that makes everything from Band-Aids to Accuvue contact lenses. J&J decided that they weren’t going to spend one penny of their $500 million annual tv ad budget at the upfront. This was first reported in the Wall Street Journal, then picked up by Ad Age.

&J’s confidence that it can wait until later in the year to commit seems to be another effect of proliferating advertising options and marketers’ increased desire for precise and efficient spending. [Emphasis added]

Proliferating Advertising Options? Hmmm…whatever could that mean?

Coca Cola is doing something similar at this years’ upfront…they are sending people to watch, but not committing to spend any of their $180 million tv ad budget. I don’t know about you, but I am very curious about where they plan to spend their money. Ad Age did not disappoint:

According to people who have spoken with J&J executives, the company plans to shift more of its marketing spending to nontraditional media — 20% or more of the budget, according to one of the executives. The J&J spokesman declined to comment on that, but said: “As the media landscape changes and consumers adopt new media technologies, we do recognize the need to adopt new media communications strategies to connect with our customers. With that in mind we’re working with our partners in broadcasting and advertising to help develop these new approaches. And it’s really important that all of our communications both online and offline are seamless. And we’re working with our partners to synchronize our messaging across media.”

So that means that J&J is going to spend $100 million on what sounds like Internet- and online-based media this year.

It looks like J&J and Coke actually get it. Here’s some more interesting news from Kagan Research, as reported by our friends at Clickz:

The Internet remains the strongest-gaining sector in advertising, averaging 57 percent growth per year over the past 10 years. In 2005, the channel increased by 24 percent. New channels experiencing the most growth last year include satellite radio (235 percent) and interactive TV (116 percent).

Revenues from more traditional channels experienced lower rates of increase. In 2005, total ad revenue, including traditional and interactive channels, grew by 3.9 percent to reach $240 billion. Ad revenues are expected to reach $400 billion by 2015, Kagan finds.

Looks like we’re all in the right business.

The idea is that you can increase your conversion rate by adding a human presence and voice to your sales page.

You keep the strong sales element, but you put it in the voice of a person, and add credibility factors like a photograph and signature.

The Marketing Experiments Journal conducted an experiement…they created two different offer pages. The changes made to the text were minimal. On the new page they made minor changes to have the text written in the first person.

They then added a photo of the writer, listed his qualifications and added his signature towards the end of the page.

Here are the results:

Human Presence Offer Page - 957 Visitors, 86 Sales, 8.99% Conversion Rate
Original Offer Page - 923 Visitors, 59 Sales, 6.39% Conversion Rate

The version of the page which included the author’s photograph, qualifications and signature improved conversion by 40.7 percent.

Their conclusion? As we have noticed elsewhere in previous tests, the addition of a genuine human presence to a page builds confidence, reassures the reader and often increases conversion rates significantly.

Here are a few highlights:

• 62 percent of search engine users click on a search result on the first search results page and 90 percent click on a result one of the first three pages.
• 41 percent of search engine users who continue their search when they don’t find satisfactory results on the first page do one of two things: change engines or change search terms. Four years ago, just 28 percent did.
• Even more determined are users who don’t find what they’re looking for at all on their first try. Fully 88 percent of these users change engines or change their search terms, up from 78 percent in 2002.

All of those findings are certainly interesting, but there’s nothing earth shattering. How about this one?

82 percent of search engine users relaunch an unsuccessful search using the same search engine used initially, adding more keywords to their query. Just 68 percent stayed with the same engine in 2002.

Remember The Long Tail? The concept is that since the Internet reduces or removes the cost of distribution, the aggregation of sales of less popular items can be more profitable and successful than selling the most profitable items. In other words, if you can sell the exact right item to the exact right person you can make a lot of money if you don’t have to worry about storage and distribution of that item. Amazon is a great example of The Long Tail, as is eBay.

If you examine the statement I bolded above, searchers are using more detailed search phrases, which makes for more narrow searches, and is what The Long Tail is all about.

Clikz comes to the same conclusion I did:

Searchers are increasingly going out on the long tail, using lengthier queries. For search marketers, this means if you’re not targeting both simple keywords and lengthier keyword-rich phrases, you’re likely missing out on a significant amount of traffic that simply wasn’t there a few years ago.

Check those keywords and see if you can throw in a few more narrow phrases.

Jonathan also worked hard on SEO, getting Mandy’s name and Purple 13 to the top of the most important organic search results for her keywords. His rationale was that people would not remember the URL if they saw it in passing somewhere or hanging next to one of Mandy’s photographs, so he wanted to be able to have people find Purple 13 or Mandy’s name easily in the search engines. He’s right, of course.

The family cat had four kittens. Jonathan’s friends and colleagues were constantly asking for updates on the kittens, and he had a terrific idea. Mandy snapped some shots of the kittens and he created an area of the website on the kittens that he updated regularly. There were, of course, links to the Purple 13 home page on the kitten page.

He sent an email around the office letting people know that the pics were on the website. That’s how he started the ball rolling.

He was soon receiving emails from friends of co-workers and friends of friends, offering suggestions for captions and asking for more pictures. In the first few weeks there were 200 visits to the page without any promotion.

I think its a perfect viral marketing idea, and its something anyone can do and build on. For example, I noticed that Purple 13 had no links to the kittens on their main site, which probably would have bumped up the numbers even higher.

You want to see the kittens, don’t you? I know I did. You can find them on the Purple 13 Kitten Page.

Nice work, Jonathan.