Web companies are collecting personal data about web surfers to predict relevant online content and advertisements.

The next time you’re searching for information on vacations or purchasing prescription drugs on the Internet, keep in mind that your habits are being watched and tracked.

 

On Monday March 10th, The New York Times (NYT) reported that a new analysis of online consumer data, conducted for the NYT by research firm comScore, shows a considerable amount of consumer data is landing in the hands of large Internet companies, such as Yahoo, Google and AOL.

 

Audience size is a measure of a website’s success. The larger the audience and the more a Web company knows about them can translate into more advertiser dollars. Microsoft and Yahoo, for instance, have acquired a number of companies within the last year to enrich their consumer data. Since many advertising deals are about data, the richer your data, the more relevant the ads are for online consumers.

 

Web companies can easily capture specific data about consumer behavior, such as tastes and preferences, by following consumers as they move around the Internet. In turn, the information is used to charge advertisers a higher price for customized ads that will return a higher response rate. 

 

However, amassing this data is not all about getting advertising revenue. According to Executives at the largest Web companies, collecting this data benefits consumers who in return see ads relevant to their interests. 

 

Michael Galgon, Microsoft’s chief-advertising strategist says “You’re getting content about things and messaging about things that are spot-on to who you are” as reported in the NYT.

 

In December 2007, comScore studied 15 major media companies and how they collected consumer data online. The analysis captured the number of searches, display ads, videos, and page views that occurred on those sites and estimated the number of ads shown on their ad networks. These are also known as “Data transmission events,” or the times when consumer data was sent back to a Web companies’ servers. ComScore recorded at least 336 billion transmissions each month from Yahoo, Google, Microsoft, AOL, and MySpace, not including their ad networks. 

 

The information transmitted might include the person’s ZIP code, a search for jobs or vacation information, or the purchasing of personal items. 

 

Yahoo won out with the most instances of data collection within a month on its sites – about 110 billion collections, or 811 for an average user. Yahoo also has partner sites, such as eBay, that allow for other opportunities to learn about the average person.

 

MySpace followed close behind.

 

Google also has a lot of data collection events, but the company feels it is different because it mostly uses only current information rather than the past actions of web surfers to choose ads.

 

As pointed out by the NYT, Yahoo’s large database explains why AOL and Yahoo have discussed a possible merger and why Microsoft is willing to pay $41.2 billion to buy the company. 

 

Regardless of how much data Web companies already have, they will continue to find new ways to obtain more data and thereby increase their leverage in the advertising world. Google, for instance, only yesterday received the go-ahead from the European Union to purchase DoubleClick, an ad delivery company with a wealth of consumer information.

 

By Kathleen Clark

Google acquires the online advertising giant DoubleClick after receiving green light by the European Union.

 

Google Inc. completed its $3.1 billion acquisition of online advertising colossus DoubleClick on Tuesday after approval from the European Union, which dismissed critics’ antitrust and privacy concerns. The merger significantly strengthens Google’s dominance in the online advertising business 11 months after its initial bid.

 

DoubleClick, a New York-based internet advertising company, makes much of its revenue by placing banner ads on third-party websites. Tracking users from website to website and recording what advertisements they view allows advertisers to better target consumers.

 

Privacy militants argue that these methods will enable Google to collect too much information about Internet users by obtaining personally identifiable information.

 

Such privacy issues, combined with Google’s top spot in search engine advertising, prompted an intense campaign from critics and rivals such as Microsoft to prevent the acquisition.

 

Their fear is that the company will unfairly dominate the internet advertising business, though the U.S. Federal Trade Commission in December and now the European Commission concluded that the two companies are not business rivals and therefore do not pose such a threat. These commissions stated that there is still a healthy competition among Google’s rivals Microsoft, Yahoo! and Time Warner Inc.’s AOL.

 

Recognizing that it is losing ground to Google, Microsoft has been trying to buy Yahoo! Inc., offering an unsolicited $44.6 billion bid. Google’s new acquisition only strengthens Microsoft’s need to merge and keep up with the competition.

 

Google’s proposal in 2007 prompted their rivals to team up with other Internet advertising companies—Microsoft bought aQuantive; Yahoo bought BlueLithium and the rest of Right Media; and AOL bought several smaller companies.

 

Google’s big business just got bigger, and the ramifications will be seen for years to come.

 

For more detailed information about the acquisition, visit Google’s Press Center.

 

By Danny Scuderi

China’s web portals are a major part of the country’s quickly expanding Internet.  Sites thrive on scandals and controversy in order to drive traffic to their sites.

 

Sites like Sohu.com, Netease.com, Sina Corp., and Tencent Holdings Ltd.  perpetuate such controversies as doctored photos, sometimes organizing debates with academic experts and government officials.

 

The most recent example, dubbed “Tigergate,” involved a farmer’s photograph of a South China tiger, a critically endangered subspecies believed to be extinct in the Shaanxi Province where the photo was allegedly taken. After exciting an Internet craze, the photo drove Netease.com to conduct a debate with the China Photographer Association, the Huxia Evidence Identification Centre, professors from Zhongshan University, the Forensic Science Association of China, a zoologist, and a detective.

 

Unlike American web portals like Yahoo.com and Google.com which rely on advertising revenue, China’s portals rely on an array of revenue, from messaging systems to online games. The lack of a defined revenue flow pushes these portals to jump on internet crazes and drive much needed traffic to their site. In contrast, Yahoo and Google are economically driven by advertising, freeing them to deliver more credible news and content.

 

Though currently small, business for China’s portals is growing quickly. According to the Data Centre of the China Internet, the portals’ total 2007 revenue reached 12.35 billion Yuan ($1.73 billion), up from 10 billion Yuan in 2006. The top four web portals accounted for a little over three-quarters of the 2007 revenue, a sum expected to reach over 16 billion Yuan this year and 21.33 billion Yuan next year.

 

Instead of taking a passive approach to internet scandals, China’s web portals fan the flames of controversy, pulling in traffic until the fire burns out.

 

By Danny Scuderi

L’Atelier

The technological rivalry between Microsoft and Google Inc has entered a new forum—website publishing. While Microsoft has SharePoint, a hardware and software program businesses buy and maintain, Google is launching Google Sites as its free, user-friendly competitor. Companies and schools will be able to easily create, edit, and maintain personalized websites wherever there is an internet connection, an important feature SharePoint lacks, but the service is not as comprehensive as that of Microsoft.

 

Targeted at the business and educational market, Google Sites is a simplified version of SharePoint, scaled down in size and cost. It is designed for people in the same company or classroom to easily share digital information without the need for tech-savvy geniuses. Users are able to search and edit information on the website by invitation only, and the service is free or carries a small per-user fee depending on whether the organization has purchased a fuller version of Google Apps. It means that “IT (Information Technology) departments don’t have to do anything except enable users to serve themselves,” says Dave Girouard, general manager of Google’s Enterprise unit.

 

Google Sites is the newest product the company has employed to challenge Microsoft’s dominance in software sales. Over the last two years, Google Inc. has introduced free word processing, spreadsheet, and calendaring programs to rival those of Microsoft. Such programs have compelled Microsoft to bid on Yahoo Inc., Google’s biggest online search and advertising rival.

 

Though easy to use, Google Sites still lacks management features to control poorly maintained or out-of-date websites. Nonetheless, it is attractive to the average consumer or business looking to share information, pictures, or video within a closed network…and free is always a good thing.

 

Danny Scuderi

L’Atelier

Internet advertising may be showing itself more vulnerable to a consumer slowdown than many in the industry had hoped, according to new search-ad data released this week.

The report from research firm comScore Inc. showing a decline in the number of consumer clicks on Google Inc. search ads in January amplified existing concerns about the effect of a broader economic slowdown on the Internet. Many online-ad experts have played down such worries, predicting any economic weakening will be offset by a continued shift in ad spending from traditional media to the Internet. Google Chief Executive Eric Schmidt said the company hadn’t seen any impact from macroeconomic softening when the Internet company reported earnings Jan. 31. But some investors and analysts have grown anxious in recent months that any pullbacks in consumer spending would hurt online ads.

ComScore released data to clients Monday showing a 7% decline in the number of times U.S. consumers clicked on ads appearing alongside Google’s search results in January compared with December; clicks were 0.3% lower compared with January 2007. That follows a 7% decline from November to December. Google charges an advertiser only when a user clicks on one of the small text ads for, say, digital cameras, that appear when a user searches for "digital camera."

ComScore also reported a 1% decrease in U.S. search-ad clicks for Yahoo Inc. for January from December, with clicks increasing 4% for Microsoft Corp. over the same period.

Google shares were down 4.6%, or $22.25 on the news, falling to $464.19 in 4 p.m. Nasdaq trading yesterday, having dipped more than 8% lower earlier in the day. Google is trading 38% lower than its 52-week intraday high. (Please see Options Report.)

Some analysts say comScore’s latest numbers may exaggerate any slowdown in clicks. J.P. Morgan Internet analyst Imran Khan in a research note pointed to divergences in the comScore click data and Google’s reported results in the past.

RBC Capital Markets Internet analyst Jordan Rohan called investor reaction to the data "overblown," saying that it fails to take into account any increases from revenue per search because of factors such as higher pricing. Mr. Rohan said RBC checks with search advertisers indicated a pickup in spending in February after weakness in January. "It may not be a great first quarter, but it’s not going to be as bad as the numbers from comScore suggest," Mr. Rohan said in an interview.

The concerns about the online-ad outlook come amid indications that Internet advertising hit record levels in 2007. The Interactive Advertising Bureau trade group and PricewaterhouseCoopers Monday estimated that U.S. online-ad revenue hit $21.1 billion last year, a 25% increase from 2006.

Google declined to comment. When it reported fourth-quarter revenue and profit that fell short of Wall Street expectations last month, Google said clicks on ads increased 30% in the fourth quarter from a year earlier, compared with a roughly 50% average increase during the previous four quarters. At the time, executives cited Google changes that lowered the click growth rate, such as a modification to site design that makes it harder for users to click on ads accidentally.

But some analysts say new data suggest the trends in ad clicks indicate Google is feeling an impact from a consumer slowdown in the first quarter, so far at least. The risk is that if consumers are spending less overall, they are less prone to click on search ads. Google has said it could benefit from comparison shopping by price-sensitive consumers who conduct more searches and click on more ads to find the best deal. But, over time, such behavior could lead advertisers to rein in online-ad spending if they’re notching fewer sales for each ad click.

John Aiken, managing director of Majestic Research in New York, says his analysis suggests that’s exactly what’s happening, with small- to medium-size advertisers pulling back on search advertising as the return on their ad-spend investment drops. When that occurs, Google has fewer ads to display, generally reducing the likelihood a consumer sees one to click on. "It’s been a trend that’s been getting worse over the last four to five months," Mr. Aiken says.

Tepid electronic-commerce data have added to concerns, given a link between online sales and advertising. U.S. e-commerce spending in January fell 17% from December, and was up a modest 11% compared to January 2007, according to comScore. It had fallen 14% in January 2007 from December 2006, and risen 19% in January 2007 compared with a year earlier.

Some others say they aren’t seeing a consumer pullback in online data. Consumer visits to retail sites from Google.com have increased 11% so far this year compared with the same period a year earlier, according to research firm Hitwise, a unit of Experian. "I’m not seeing necessarily any signs of recession in terms of consumers’ curtailing their visits to retail from search," said Bill Tancer, general manager of global research at Hitwise.

The anxiety about online advertising comes as Microsoft is pursuing Yahoo with an unsolicited cash-and-stock offer valued at $41.7 billion based on Microsoft’s share price in Nasdaq trading yesterday. It’s unclear whether the concerns could affect the outcome of that takeover standoff, though a bleaker Internet-ad outlook could potentially increase pressure from shareholders on Yahoo to accept the offer, and decrease Microsoft’s willingness to raise its bid. Yahoo has rejected the bid on the grounds that it undervalues the company.

Source: Kevin J. DELANEY, W.S.J.

Kakul Srivastava, director of product management for Flickr, talks about why she gets a jolt of caffeine from looking at all the photos on the site.

 

Most casual Flickr users have never heard of “ambient photography” and they probably don’t think of themselves as “the eyes of the world”. But that’s what how the folks at Flickr think about the site. I got a chance to sit down for a quick conversation with Kakul Srivastava, director of product management for Flickr, a Yahoo property.

 

“With the advent of digital photography, the limit of 24 or 36 exposures went away. We started taking photos constantly. This is what we call ambient photography. The first round of photo-sharing sites was still event-based. You uploaded photos and sent the link to friends,” recounts Srivastava who was the first non-Flickr person to join the team after Yahoo acquired Flickr in 2005. She had been working on Yahoo’s Internet TV strategy after a stint at Adobe.

 

“Flickr is a stream of what’s happening in the life of the photographer. With two to three million photos uploaded every day including 50% to 60% which are shared publicly, it is the main public photo-sharing site. You can find a photo of the sunrise on Mount Fuji for every day of the week on Flickr,” Srivastava (right picture) says. This outpouring of images would be one big mess without some way to navigate through it.

 

Flickr has found several ways to make the cream rise to the top. For example, their Interestingness feature is based on an algorithm that aggregates three types of metadata: information downloaded from the camera (date, shutter speed, exposure…), the tags chosen by the photographer and viewers’ behavior (the number of times the photo was viewed, added as a favorite or posted on a blog). Not many photos of babies in there, but some stunning photos.

 

Another way is the Places feature which makes a whole corpus of photos about a particular location, including the most iconic among them, come together. To this day, 50 million photos have been geo-tagged on Flickr.

 

Debunking the idea that Flickr’s 23 million registered users only post photos for their friends and family, the site comes to life off the Internet when some of the most passionate members gather for Flickr Meetups. On March 15, some of them will be coming together to celebrate the site’s 4^th birthday (here is the invite of sorts to the San Francisco event). Flickr has even launched a few professional careers for photographers who were discovered on the site. Eric Lafforgue was one of the lucky ones.

 

So what did Flickr bring to Yahoo three years after the acquisition? “Flickr is a fast-growing, very engaging service. It has a different user base than Yahoo,” Srivastava says. For one thing, everybody who wants to use Flickr has to create a Yahoo account. “As an entity, we make money,” she says. How? Through the Flickr Pro accounts ($24.95 a year, but Flickr won’t say how many have signed on), through advertising and through deals with print partners who sell photo-enhanced personalized products.

 

What about working for a company that Microsoft is courtly so boorishly? “We hear about it. But regardless of what happens, it will be fine,” says Srivastava diplomatically. Some Flickr users are being more outspoken and are using photos to express their opinion. One thing her engineers are working on is adding video. “It will not be You Tube, it will be like Flickr.” Coming to your screen sometime in 2008.

 

By Isabelle Boucq, for Atelier

 

 

 

 “The difference in consumption levels was astounding. The usage differences are reminiscent of the early days of the Internet,” said Jarvis Mak, VP of Research and Insight at Media Contacts. “However, the networks’ online distribution of first-run content will go a long way to bridging the gaps between heavy, moderate, and light viewers.”

YouTube is the common thread among the heavy, moderate, and light segments – it is the top video site for all three and reaches the most overall video viewers (54 percent reach). Distinctive behavior for heavy video viewers is found by looking at the top indexing sites for this audience, revealing mostly niche video-sharing sites, each reaching less than 1 percent of the total U.S. Web population.

*Composition Index = Site Reach of Heavy Video Viewer/Site Reach of Typical Video Viewer x 100; Index of 100 represents parity

By contrast, moderate viewers show a high propensity to view specific video content on broadcast TV sites, including WorldNow (ABC), CBS TV Local, ABC Daytime, Scripps TV, and CMT, rather than frequenting more general video-sharing sites.

*Composition Index = Site Reach of Moderate Video Viewer/Site Reach of Typical Video Viewer x 100; Index of 100 represents parity

The conventional wisdom says that the heaviest users of the digital channel are likely to be the heaviest consumers of media in general. However, the study found that light online video viewers are actually heavier TV consumers, with 46 percent of this group indicating they watch more than 13 hours of TV per week. By comparison, just 39 percent of moderate video viewers and 30 percent of heavy video viewers watched the same amount of TV.

“To discover how best to reach and message online different kinds of video viewers, we used the comScore data to further develop proprietary segments: ‘Content Explorers,’ ‘On Demanders,’ ‘Sight & Sounders,’ and ‘ Television Devotees,’ ” Mak continued. “Capitalizing on the explosive growth of online video, especially as consumers have started exploring media and entertainment options due to the recent writers’ strike, requires a deep understanding of the viewing audience driving the demand.”

View source

 

Firms seeking to advertise their green credentials should shun generic images associated with climate change such as polar bears and melting ice floes, according to a major new survey of green advertisements and consumer attitudes.

The study from picture agency Getty Images assessed 2,500 advertising campaigns from last year for its annual “What Makes a Picture” (MAP) report and concluded that many of the conventional images used to promote green campaigns were in danger of becoming visual clichés.

Practically, this means giving people solutions to real problems, not trying to force upon them products and messages decided by wannabe green marketers. The ‘Green‘ magic can only go so far.

A recent study reveals the important role that had the Internet on the Super Bowl last Sunday, saying “viewers go online for stats, updates and Super Bowl ad”. The two days Internet survey gives “several insights into Americans opinions and expectations for Super Bowl XLII.

Three-quarters of respondents said that they intended to log onto the Internet on the day of the Super Bowl. Of those who planned to go online, most said they would do so before the game (82 percent) or after the game (61 percent). Nearly three out of ten also indicated they would log on during the game itself (29 percent) or during halftime (28 percent).

 

Of those who planned to go online on Super Bowl Sunday, the most common reason was to monitor stats and stories related to the game (17 percent of respondents), followed by looking for recipe and party ideas (16 percent). Super Bowl ads will also drive viewers to the Web, with 16 percent of respondents saying they would go online to visit the Web sites of Super Bowl advertisers, while 13 percent said they intended to watch Super Bowl ads or video clips online.

 

 

“Viewers have indicated that the Internet will be a more significant part of their Super Bowl experience than last year,” said Andrew Lipsman, senior analyst at comScore. “In particular, there seems to be a greater inclination to access advertisers’ content online, which highlights the increasing importance of a cross-media advertising strategy.”

For many Super Bowl viewers, the TV commercials are as important to the festivities as the game itself. Overall, 49 percent of the respondents said that the game was their favorite part of the Super Bowl festivities, but more than a quarter (26 percent) actually preferred watching the ads.  Males, in particular, were significantly more likely to prefer watching the game itself, while females preferred watching the ads.  Females were also more likely than males to prefer spending time with friends and family and watching the halftime show.

 

 

One of the key trends in Super Bowl ads last year was the inclusion of several customer-created commercials. Brands such as Doritos, Chevy and the NFL allowed customers to submit their own ads, the best of which made it on air. When asked to rate the expected entertainment value of this year’s customer-created ads, 25 percent thought they would be more entertaining than professionally produced ads compared to just 12 percent that  thought they would be less entertaining. In fact, when asked which ads from last year were the most memorable, Doritos rated as the second most memorable advertisers after Anheuser-Busch, which featured several humorous spots for Bud and Bud Light.

 

 

Respondents were also asked to pick 3 brand advertisers whose commercials they were most looking forward to seeing during this year’s Super Bowl. With 44 percent of respondents choosing both Coca Cola and Pepsi, it’s clear that consumers have a thirst for soft drink advertisers this year. Edgier advertisers also rated among the most anticipated, including Victoria’s Secret (21 percent) and GoDaddy.com (16 percent).

 

Nearly two-third of respondents (64 percent) predicted that the Patriots will emerge as victors in Super Bowl XLII and cap an historic undefeated season.  Despite the Patriots dominant 16-0 regular season, however, it should be noted that more than a third (36 percent) are actually expecting the Giants to pull off the upset.

 

Respondents were also asked to choose the most likely candidate for MVP from each team. The overwhelming choice among the New England Patriots was regular season MVP quarterback Tom Brady, who garnered 70 percent of the Patriots votes, while record-setting wide receiver Randy Moss grabbed 16 percent of the votes. On the Giants side, quarterback Eli Manning was the top choice with 47 percent of the votes, while his top receiving target, Plaxico Burress, collected 12 percent of the votes.

 

Last year’s survey respondents accurately predicted that the Indianapolis Colts would win the Super Bowl and that Peyton Manning would bring home MVP honors.

About comScore
comScore, Inc. (NASDAQ: SCOR) is a global leader in measuring the digital world. For more information, please visit www.comscore.com/boilerplate. 

SOURCE: comScore, Inc.

Feedback on an Article?
E-mail us at editorial@atelier-us.com

According to Nielsen Media Research, this Super Bowl was the most-watched ever, with a record 97.5 million viewers. This kind of audience does not get lost on advertisers, of course, and explains their readiness to spend $2.7 million dollars for a 30 seconds spot.

Fox tried to maintain a semblance of objectivity and declared early on that it would decline ads from political candidates. It should be noted however that about 15 to 20 percent of Super Bowl ads go towards promoting the network’s own programs, or an equivalent of $46 million in ad spending. . .

In true Super Bowl tradition, I thought I would join the lineup of adreviewers here and here and here, and provide my own rating of Super Bowl 2008 ads, based on an environmental scorecard. The results are not pretty. I was looking for heroes, but found villains mostly, and only one hero. Here is the list, nine altogether, of the Super Bowl 2008 Ads Environmental Villains:

 

• Audi: Power, speed, money, shoudn’t car manufacturers start selling something else?

• SobeLife Water: The Pepsi folks should know better than to sell bottled water masquerading as vitamins.

• Hyundai Genesis: More horsepower, macho advertising; you would not know global warming is happening.

• Toshiba HD DVD: No reason to cheer on my book. Does the world need yet another big toy?

• Toyota Al New 2008 Sequoia: What happens when only one person drives the thing? I am sorry but I can’t stand seeing one more SUV commercial, even from Toyota.

• GM Yukon: It’s a hybrid, but it’s still an SUV

• Shaq Vitamin Water: Coke, you are no better than Pepsi.

• Ford: Of course, you are part of the big guys’ club . . . Tough, your car can take anything.

 

FEEDBACK
For comments on this article,
email us at editorial@atelier-us.com