On Wednesday Google announced separate trademark policy changes in that affect the UK, Ireland and Canada and the rest of Europe differently.

Reading about the changes on the web, I’m really surprised how many articles have got this one wrong. Mostly it seems to stem from an inability to distinguish that different policies have applied, and will apply, between UK and Ireland, and the rest of Europe. (Google has a helpful list of which countries it considers to be in Europe. To add to the confusion, some places on the list are in South America or the Antartic.)

Anyway, here’s a couple of charts that hopefully explain what’s changing.

Policy before September 14th 2010

Policy after September 14th 2010

The change happening to Europe (excluding UK and Ireland) happened in the UK in May 2008. Chaos was predicted, but failed to materialise. I wrote about it before the change and made some observations after it was implemented. I think the comments I made then still stand.

Permit me a little self aggrandisement this morning so I can point you to some stuff around the web that features me.

Yesterday Netimperative published my thoughts on Google’s acquisition of ITA. That site doesn’t seem to allow comments, so please leave a message here whether you think it’s bullshit or not.

Also I dug up the full interview I gave to Microsoft’s Mel Carson at Cannes. In the video are the more intelligent thoughts of Howard Nead and Tom George.

Finally back in April I attended the inaugural and excellent SASCon. Whilst there, I did a quick interview with video company Little Orchard about the event.

This week I was kindly taken to the Cannes Lion Advertising Festival by Microsoft Advertising. Had a great time, here’s a short video from Mel Carson summing up the week.

So Google’s Q1 results came out over a month ago, so this post is quite late. Nevertheless, here the usual UK analysis. I’ve tweaked the chart to give the USD change too.

Quarter	USD (millions)	GBP (millions)	FX
Q1 07	578	296	0.5117
Q2 07	600	302	0.5037
Q3 07	661	327	0.4948
Q4 07	692	338	0.4891
Q1 08	803	406	0.5056
Q2 08	774	393	0.5071
Q3 08	776	410	0.5282
Q4 08	685	437	0.6373
Q1 09	733	510	0.6959
Q2 09	715	463	0.6474
Q3 09	765	466	0.6093
Q4 09	772	473	0.6127
Q1 10	842	540	0.6411

FX rates are taken from oanda.com.

Here’s the chart of the data table:

Here’s the year-on-year percentage growth:

And finally the quarter-on-quarter percentage growth:

There we have it. Google UK’s biggest quarter, no matter which currency you look at, not something that could have been said last year.

It’s SMX London on Monday and Tuesday next week. I’m speaking on both days. Monday it’s about Advanced PPC Tactics, Tuesday is about making sense of all the data that SEM creates. If you’re attending then come along to say hello!

“Control your own destiny or someone else will.”
Jack Welch

If there’s one thing we’re not short of in London’s media hub, it’s bullshit. Plenty of it has been generated in the last few days following on from i-level’s quick but not painless death. So here’s three things I understand about what happened:

The Good
I-level had a decent business and they did great work for their clients. Even though they weren’t the same machine they were a few years ago, it doesn’t mean their capabilities had vanished. It’s true that larger agency networks have made great strides over the last few years in their digital expertise, but to say they’d overtaken i-level, or other digital specialists, isn’t true. For all the talk of integration you might hear, the reason most clients go with a large agency network is to save money on fees.

The Bad
The elephant in the living room of course is the COI. Any company that counts one client as nearly half its business is sitting on a time-bomb. Plan A is to aggresively pitch for as much business as you can to right the ship. Plan B is to get acquired by that client. Plan C, which you hope you never have to resort to, is to be able to ruthlessly reduce costs (i.e. sack a lot of people) if that client decides to move on.

I-level was already trying Plan A. Even if Dennis Skinner became PM, he wouldn’t nationalise i-level, so Plan B is a non-starter. Did they execute Plan C? I’m not sure.

The Ugly
In April 2008, ECI, a private equity group, bought 60% of i-level. Part of that deal placed a large amount of debt, around £32m, on the books. Turnover had already started to reduce just after that deal, and with the loss of the COI, the original valuation of £46.5m looked ridiculous. So the private equity people decided to call time on their investment, get back what they could then get out. A large amount of cash was in the business in the form of media billings from clients, still to be paid out to media owners.

Private equity investors always get first dabs on their debt when a company is put into administration, so they took the money that should have gone to pay for media. Thus the coffers were empty with i-level still owing millions to media owners. Liquidation was the only option that remained, and some media owners will be scaling back their summer parties.

A Fistful of Dollars
So there we are. An unglamourous end to a pioneering business. Don’t criticise ECI; they place bets, and when they don’t look like paying off they make sure they limit their losses. Your pension probably has a stake in them.

Perhaps the original founders could have used their payoff to step in, but either didn’t want to or they didn’t have the liquidity to move quickly enough.

As ever, Bob Willott wrote a great financial analysis last week. Mark Palmer has come to the same conclusion as me, but put in the effort to find a footballing simile. Stephen Rust, out-going CEO, has blogged on the good and the bad already. Hopefully we’ll get the ugly later this week.

So that’s my view. What happened doesn’t tell us much about specialist versus generalist, differentiation in the market or, heavens forfend, the future of digital media. David and Goliath continue to battle it out. But it does give us a sad tale of the perils of business finance. Perhaps you agree or think it’s more bullshit. Either way, let me know in the comments.

The IAB UK released its 2009 Internet Adspend report this week, declaring that £3.54bn was spent on online advertising last year.

Paid search took a whopping £2.15bn, 60.7% of the total. My previous analysis on Google’s financial results suggests Google made £1.912bn in 2009. That’s an 88.9% market share.

The share is broadly in line with Efficient Frontier’s quarterly reports too, which measured Google’s spend share between 85.9-87.6% last year. The EF report focuses on large scale enterprise advertisers who push their spend across Yahoo and Bing too. SME advertisers skew towards Google, which probably explains the difference.

From these numbers I also estimate that Yahoo took around £162m and Bing around £76m. Google’s domination continues.

SEM traffic is a bit like scotch whisky. You might think you’re getting a pure single malt from the glens of Google or Yahoo, when in fact you’re washing down a blend of different traffic sources. Sure, you’ll get the strong flavours of the world’s leading search engines, but often there’s an after taste of something else. And that’s not always pleasant.

Last week, New Media Age’s Will Cooper picked up on some unwanted after taste from Yahoo’s search partner network, prompted by Efficient Frontier’s latest quarterly search engine report.

Traffic Quality

The quality of SEM traffic from Yahoo has been under scrutiny for some time, in particular its network partners. So I’ve distilled the traffic from a campaign that runs on Yahoo and Google to see how they compare. Here’s the overall view:
The grey bar represents the percentage of clicks of the whole campaign that come from either the search engine itself or one of its partner sites. The diamond shows the relative quality (revenue per click in this case), where the search engine itself is always indexed at 100%. Note that above Google and Yahoo are indexed independently; I’m not saying they have equal traffic quality.

The first thing to note is that both Yahoo and Google’s partner networks deliver significantly worse quality traffic compared to the engines themselves.

The second is that Yahoo is much more dependent on its partner network for total traffic than Google is.

Yahoo’s Partner Network

Let’s look how Yahoo breaks down in detail:You’ll notice is that there’s not a lot of well known names. Those that are there don’t tend to convert as well as Yahoo does.

Aside from the unknown sites (which couldn’t be identified for various reasons), the largest partner is fastbrowsersearch.com, which is a toolbar. Surprisingly though, it converts better than Yahoo itself.

Google’s Search Network

Contrast this with the data taken from the Google campaign:There’s lot of well known ISPs and portals there. Many of them convert as well, or even better, than Google does.

But there are two sites, Ebay and Amazon, which convert very poorly compared to Google. This may be due to the particular data sample. However many SEM professionals argue (myself included) that they aren’t search sites in the original sense and shouldn’t be in the Search Network.

Improvements To Be Made

I often say that there’s no such thing as good traffic or bad traffic. It is either correctly priced or incorrectly priced. That’s improvement number one: let SEMs break out, filter and bid on these different traffic sources separately, just as we can between Google Search and Content.

Yahoo introduced domain exclusion some time ago, though it’s somewhat unweidly in the current form. But that’s still better than Google, which gives you no such flexibility (even though you can do it easily on the Content Network).

Finally, Yahoo needs to adopt Microsoft’s Adcenter platform as soon as possible. The reason Google has such high quality sites such as AOL, BT and Sky is that it monetises the traffic much better than Yahoo does. From all the data I’ve seen, Adcenter can do an equal job to Google. It will give Yahoo much better commercial clout when negotiating distribution deals.

It’s nearly February, so that must mean it’s not long until the Search Engine Strategies conference hits London. This year it’s 15th-19th February at the Business Design Centre in Islington (as you can tell from the enormous graphic at the foot of this post).

I’m speaking on Tuesday 16th on the keynote “State of the U.K. Industry Discussion Panel“. I think 2010 could be a year of significant change, so I’m sure we’ll have an extremely healthy debate.

If you want to attend, then get yourself a pass by the end of the week and you can save £100.

Google results came out yesterday, so here’s my usual look at the sterling version of the numbers.

Quarter	USD (millions)	GBP (millions)	FX
Q1 07	578	296	0.5117
Q2 07	600	302	0.5037
Q3 07	661	327	0.4948
Q4 07	692	338	0.4891
Q1 08	803	406	0.5056
Q2 08	774	393	0.5071
Q3 08	776	410	0.5282
Q4 08	685	437	0.6373
Q1 09	733	510	0.6959
Q2 09	715	463	0.6474
Q3 09	765	466	0.6093
Q4 09	772	473	0.6127

FX rates are taken from oanda.com as usual.

Here’s the chart of the data table:

Here’s the year-on-year percentage growth:

And finally the quarter-on-quarter percentage growth:

Perhaps the only concern is that QoQ, Q4 is only 1% up on Q3. You would hope it would be higher given all the additional retail activity during that time. But it’s a decent quarter all-in-all, up 8% YoY in GBP and 13% YoY in USD. Let’s hope there’s more of that to come in 2010.