In recent years, as Google’s search market share has risen above 80% in the UK and 65% US, many internet marketers have come to rely exclusively upon Google’s Adwords platform for running their internet marketing campaigns. During this period Google has also established its Content Network as the largest online display advertising network and cemented this position by a string of acquisitions including DoubleClick (the world’s largest ad trafficking platform) and YouTube (also the second largest search engine on the web).

However, there are signs that the days of Google’s advertising hegemony may be over.

With the high CPCs common in many niches on Google, marketers are starting to look at alternative channels and many are choosing Facebook. Although Google can usually boast higher conversion rates stemming from the intent of users to purchase the products they search for, Facebook’s enormous reach can now potentially offer higher sales volumes. Add in the value of the brand exposure gained, something which can now be quantified with multi-variate tracking solutions such as Digital Brain:Search, and Facebook DR campaigns often a compelling rate of return. Indeed, at CheezeDMG, Facebook DR is now a core channel for many clients, successfully building both a brand presence and driving sales for companies such as Canterbury of NZ.

In addition, Facebook has been investing heavily in its self service Direct Response (’DR’) platform, which offers reach and targeting on a par with Google’s offering, but until recently only a fraction of the functionality of the Adwords platform. Bulk advert uploading is now being trialled which will enable advertisers to execute much larger and more targeted campaigns. In addition, a host of companies are developing bid management systems to plug into the new API, which is also under limited release.

Conclusion

Facebook has taken its time to build a viable self service advertising platform, but now it is seriously adopting the formula that has worked so well for Google, it is beginning to make up ground in market share. Although Facebook still has a way to go before it can match the net revenues recorded by Google (£1.64BN in their recently announced Q3 2009 results), Facebook’s huge inventory and low CPCs have already tempted many marketers to begin shifting budgets.

Is widespread advertiser adoption of its DR platform what Facebook have been waiting for before entering into a much anticipated IPO? Only time will tell, but having won the war of the social networks Facebook now appears to be readying itself for a final showdown with the search giants.

This is not something that has happened over night, and many industry gurus will surely be quietly thinking ‘I told you so’ and perhaps even a sigh of relief after years of trying to convince advertisers to take social networking seriously. It’s no longer ahead of the curve, it’s mainstream now and the fact that the search giants are now actively looking to add Twitter tweets to their search results is evidence of that.

In recent years we have seen ideas such as desktop search and search content ads fall by the wayside as search companies try and increase revenues and improve user experience. I think this latest Twitter deal will be different as it offers an aspect to search results that are incredibly useful to users, for example opinions, real stories and useful snippets of information. This could help inform people to navigate the web better, purchase products/services that are right for them, and warn them off anything that perhaps sounds too good to be true.

On the flip side, the integration of tweets into the search results needs to be done properly otherwise there could be negative implications. Quality of search results could be diluted. ‘Bing’ especially, has spent a lot of time improving relevancy with some success, Microsoft I’m sure will not let these improvements be impacted. Also, brands need to be careful as more and more users will be exposed to user opinion which may not always look favourably upon them.

At CheezeDMG we are excited to be running several integrated social networking campaigns for clients which include campaigns on Twitter. Please contact Mike Groves on 01473 236893 who will be happy to discuss any of these campaigns in more detail.

It is important to recognise here that the drop in CTR does not equate to a drop in the value of display advertising, but a shift in how advertisers use display advertising, how it’s performance is measured and how consumers interact online.

Advances in the way display advertising can be tracked, as part of an integrated online campaign for example, means that display campaigns are increasing in value in terms of how it influences the results of other mediums such as search marketing. For example, it can now be tracked when a consumer goes onto a search engine and searches for a brand having seen a display ad. Thus whether the consumers clicks on the display ad or not has no real importance.

This drop in CTR also marks the change in the way consumers are using the Internet and how they spend their time online. The rise of social networks for example has massively increased inventory levels, and the targeting opportunity until recently has been pretty poor. Thus, the drop in CTR isn’t actually that much of a surprise. Also, consumers are spending more time online, and consuming more content rather than just looking to purchase products and services which could contribute also to this drop in CTR. Additionally, the rise of the Google Content Network for example, which has expanded the number of smaller, less commercially based websites that display banner feature on, will also have contribution to this drop in CTR.

Another factor is that with online taking over TV as the largest advertising medium, it is clear more and more brands are running ‘Branding’ campaigns where once again, the click isn’t always that important.

The important things for advertisers who are running display campaigns are to make sure that they are targeted, that media owners are displaying their ads properly and that they are tracking at impression level as part of an integrated campaign, so that the real value of their display ads can be determined. The click through rate nowadays is more nice to know information than a necessity for running effective online campaigns.

Just what are Google’s plans for its Chrome operating system?

In July Google announced Google Chrome OS. It is expected to be a more advanced version of Android that will be pre-installed on net books initially.  So, as Google rarely does anything unless it generates revenue, how will it make money from Chrome OS in its continued quest to organize the world’s information?

Computing in the Clouds

It does indeed look very similar stylistically to Android, with a focus on Google’s core products - and why not? This OS isn’t going to allow us to produce complex image rendering in Adobe PhotoShop.  This is net book territory, designed to run internet-related applications, which Google has in abundance, as well as other projects such as Google Drive - still a closely guarded secret apparently, that will surely come to light as the release of the operating system descends.

In short, people shouldn’t expect too much from this operating system, it’s an expanded version of Android which is completely built around its own internet applications such as Reader, Search, Mail, Docs, Picasa.

But the future of computers is in the cloud isn’t it? And Chrome OS could be the real start of cloud computing, where hardly anything is held on the hard drives of our computers.  Google has created an impressive software suit of applications that cover the majority of users needs in today’s Internet- oriented society.

What exactly will be required to be stored on the hard drive of a Google Chrome OS net book?  Not much if all your photos, documents, contacts, emails, notes and files are held on Google’s servers.

The only major complication to the success of this product is, if all our data is stored on Google’s servers, how much of it will be accessible to them? No doubt this could be why Google is producing Chrome OS in the first place - if it has details on all our search behaviour, as well as our personal documents and photos; this would surely enhance its advertising targeting on the Google Content Network and help advertisers and their Adword’s campaigns with market research.  Chrome OS allows Google to satisfy its mission statement as well as use the data to increase its advertising revenues.

With Internet speeds and accessibility becoming faster and more reliable respectively, full cloud computing is ready to be properly supported and will allow the potential for it to flourish.

This article has come full circle - from straight operating systems, to cloud computing - but eventually back round to the Google’s main and primary strategy in whatever it does – making money.

by James Glick (@jamesdglick)

Media Account Manager

CheezeDMG (@cheezedmg.com)

www.agencydmg.com