The intended purpose of advertising is to reach out to and create customers. Companies spend millions to produce ads aimed at besting their competitors, capturing market share, and communicating a message. Every so often, however, there are ads so bad they turn people off from a brand, even to the point of potential customers going out of their way to not buy the advertised product or service. Below are some of the most noteworthy examples of poorly executed and horribly Photoshopped ads, which should act as a ‘what not to do’ guide for potential advertisers:

Race-Changing

source

This specific ad became famous when Microsoft executives decided the Polish market was not ready for a black male to be prominently featured in one of its ads. When they swapped the man from the original ad’s head (above) for that of a white male (below), the angle was off, and, the hands were not adjusted to reflect the change. To top it off, it looks like the subject of the change is using a MacBook with the logo removed. This ad has been widely distributed online as a an example of what not to do with ads in Photoshop, and it’s safe to assume a lot of people got fired for this.

Read more…

An article published in The Australian yesterday announced the recession appears to be over for the online advertising industry. The claim: online advertising effectively bottomed out last month, and is expected to return to normal by Q4 2009. Author Lara Sinclair cites forward booking by larger publishers in boasting that Q4 revenues could be as much as 20% higher than the same period last year — during what some would refer to as the initial onset of the recession in this industry.

This echoes the optimism of a recent News Corporation investors meeting, where Rupert Murdoch was quoted as saying that US markets were, “…much better than they were fourth months ago.” According to the commercial director Kerry McCabe of online market leader Ninesmsm, growth, ”…will be in line with projections: double-digit and then some.” A recent study by Interactive Advertising Bureau, found that the collective revenue of the world’s top publishers dropped by 11% last August. This is cited as the worst performance since IAB collecting data in 2002.

According to Sinclair, online was the only form of advertising with significant growth rates prior to the recession. Consequently, online is recovering more easily than traditional forms of media – television and print are not expected to rebound until sometime next year. For online, the travel and retail categories are expected to lead the recovery. Industry experts such as Yahoo7 Chief Robert Lund, predict that the coming months will witness a major upswing in behavioral targeting.

via Lara Sinclair @ TheAustralian

Thursday, InternetRetailer published an article featuring the recent findings by research and advisory firm, Forrester Research, Inc. The research, presented at this week’s Shop.org summit, concluded many retailers were able to maintain double-digit growth rates during Q2 2009. Retailers included in the research reported an average year-over-year growth of 18% in 2008. While growth slowed down, to 11% Q1 ‘09, Second Quarter growth rates rebounded slightly at 12%.

Sucharita Mupuru (Forrester’s Sr Research Analyst) stated that online retailers have been able to grow during the recession because of their ability to respond to a dynamic and competitive environment. Mulupru cited the value of social sites and mobile commerce as examples of the dynamism many online retailers have been able to employ. Mulpuru also has mentioned that online retailers can focus on seemingly minor factors more easily than their brick-and-mortar counterparts, which tend to improve customer satisfaction – these include letting choose multiple shipping options, and focusing on the ease with which a transaction is carried out.

But what is the most underutilized tool by online retailers? To Mupuru, it’s live chat, as, “…only 24% of survey respondents said they used proactive live chat even though 80% recognized the value of live chat in general.” Whether or not this is the case, it is important to note that retailers have only begun to realize the tools at their disposal. This alludes to widespread commentary on customer relations; retailers that find new ways to engage customers and improve customer experience are those most likely to experience further and sustained growth, as the economy continues to regain.

via InternetRetailer

1. What is your background and how did you make it over to Permuto?

Navdeep Saini: I have been working in the online advertising industry for about 12 – 13 years now. At DoubleClick we recognized that the web, as an emerging publishing medium, could not sustain the wide availability of free content without some form of monetization opportunity for publishers. DoubleClick pioneered solutions for both publishers and advertisers.  The platform we built back then today still handles a significant percentage of the Web’s online advertising traffic. After DoubleClick, I moved over to Yahoo’s Search Marketing division, where I participated in building Panama, Yahoo’s successful effort to integrate and re-engineer the Overture Search Marketing technology that Yahoo had acquired, and today generates the majority of Yahoo’s revenue. After working in both display and search advertising extensively I recognized that there was an enormous opportunity to combine the best parts of each of these into a completely new advertising model, bringing together the economics and effectiveness of search marketing with the reach of display advertising. Shaukat (Shamim, CEO), Stanley (Wong, VP of Product Marketing), and I discussed opportunities around this new model and decided to form the company Permuto to bring this powerful vision to reality. Read more…

The Permuto team has just returned from the Shop.org Annual Summit held in Las Vegas where the company just launched the ShopperConnect™ Network.  Permuto sponsored a booth at the Expo for the launch.  The Permuto team was out in force at the show, including the engineering team who made the trip to the show.

The show was a rousing success with a huge amount of interest from merchants and potential partners.  The buzz in the air was infectious.

Here are some pictures from our launch on the show floor and our launch dinner event in New York City.

Updated:  Here are some more pictures from our launch.  Enjoy!

According to a recent report by the Nielsen Company, the time an average American spent on social networking and blog sites such as Facebook and Myspace nearly tripled in 2009. This study, which cites the company’s research from August ’09 found that social networking and blogs account for 17% of all time spent on the internet, up from 6% a year earlier.

Perhaps not surprisingly, advertising spending on these sites has also surged. Accordingly, the estimated $108M spent on sites such as Facebook and Myspace signaled a 119% increase from a year before. In terms of total online advertising spending, social networks and blog sites now account for 15% of total online ad spending. This is significant given the global recession.

According to Jon Gibs, VP of Media and Insights at Nielsen:”This growth suggest a wholesale change in the way the Internet is used…while video and text content remain central to the Web experience – the desire of online consumers to connect, communicate and share is increasingly driving the medium’s growth.” This echoes recent findings by Netpop Research, which claims people have replaced time spent on traditional entertainment, with time spent communicating online (contributing to social media, social networking, blogging), and that out of the 105 Million American broadband users, 76% now contribute to social sites.

via NeilsenWire

Yesterday, Sharon Gaudin wrote an article about comScore’s most recent report, which lauded Bing’s 9.3% share of the search market. This report reflected Bing’s position at the end of August, and illustrates a significant increase from 4.8% of market share in early July. Consequently, Google’s share slipped 0.1%, with the search behemoth now holding onto 64.6% of the search market. Also included in this report was notice that Yahoo! has maintained its position of second most-search engine with 19.3%; AOL, however, dropped by 3%. Similar reports by Neilson Co., reported that Bing had reached 10.7% of total market share for search advertising. According to Ezra Gottheil, of Technology Business Research, Bing’s recent success has positioned the new search engine to become, “…the other search engine.”

According to this study, there are two further developments that are expected to increase Bing’s clout:

• Microsoft’s beta release of Bing Visual Search (similar to Google Image Search).
• Yahoo! and Microsoft’s recent alliance, which will see Yahoo! using Bing as its primary search engine.

According to Dan Olds, an analyst at Gabriel Consulting Group, Inc.:

“I think it will be another couple of quarters before we can tell if Bing will be a serious competitor for Google search,” he added. “Google is definitely taking the Bing threat seriously, despite its still-overwhelming market position. Google understands just how important this battle is. More importantly, they know that Microsoft and Yahoo are determined this time to grab a big slice of the market. The resources that Microsoft and Yahoo can devote to the battle, along with their determination, make them a serious threat to Google. And Google knows it.”

While Olds has it right in saying that Bing has not significantly affected Google’s position as the world’s foremost search engine, it is safe to say Bing’s recent success is nothing less than impressive. Further, these new findings are sure to lead to more resources being used by each of the major players, as they compete to further (or retain) their market reach.

via Sharon Gaudin@ computerworld.com

Wayne Freidman wrote a recent post at Media Daily News that featured the findings of a recent study by Group M. The study estimates that global online advertising will grow by double-digits next year – 11% to $64.7B. In terms of reach, this would mean online advertising is expected to increase from 13% to 15% of total ad spending. Of this, mobile advertising is expected to increase by 19%, which would then constitute 6% of global ad spending, or $3.3 Billion.

According to this study, while many forms of media have experienced poor performance during the recession, Internet businesses have been on the vanguard of earning. In terms of the US ad spending, Internet advertising is expected to represent 17% of all media spending, or about $24.4 Billion. This is a rather optimistic post, given the doom-sayer commentary of late 2008, and much of 2009.

via Wayne Freidman @ Media Daily News

We recently published a graphic that illustrated the contribution of the top 100 AdWords spenders to Google’s total daily and monthly revenue. Today, we decided to use complementary data in order to determine ad volume, by industry, for these top spenders. Perhaps intuitively, ‘Retail ‘constitutes the largest percentage of AdWords ads at 54%, followed by ‘Search Engines’ and “Travel and Accommodation”, which are both at 14% respectively. We have also included a list of the the top 100 advertisers, and figures on industry-wide ad volume:

1. What is your background, and how did you make it to Shopping.com?

Tomer Shoval: I’m actually a veteran at Shopping.com. I’ve been with the company for nine years. I started as a Jr. Content Specialist 2000. Since then, I have been able to on take more responsibility and move up the management chain. After five years as head of content, I moved to the U.S. (about 3 years ago) to head up sales. Now I’m the Director of North America for the company.

2. What makes Shopping.com different from other comparison sites?

Tomer Shoval: To be honest, it’s not very different. That’s exactly the realization we had as a company about two years ago. The shopping engine space brings value, but it’s very crowded. We all do good job of helping customers, but the challenge is to maintain a large, loyal group of users, as we are all dependent on traffic acquisition. About two years ago we decided to focus on customer support and selection. Two years ago we had 60% of the top 100 online retailers in our site. Today, we have 90% of the top retailers 100 retailers – and, eventually our goal is to have the top 500. Our focus is to create a new experience – engaging customers, helping customers. Most customers do not specifically know what they are looking, so we would like to develop a unique experience that is helpful for them to find what they’re looking for. Further, we are continually adding content and community – Shopping.com also owns Epinions, and this is a huge asset. The goal is to find as many ways to help our customers.

3. What are some channels in which Shopping.com is currently promoted?

Tomer Shoval: Shopping.com is a technology company foremost. We have built a robust platform have a strong presence in the SEO market, and our main goal is to drive return customers. One big draw we have is our ‘distributed commerce network’ that provides merchants’ offers to publishers. This is great for our merchants because it enables us to increase their reach, and by displaying their offers on a large network of publishers, we thus we are able to scale up their visibility.

4. What is the biggest challenge in generating new customers today?

Tomer Shoval: We need to create a unique value proposition: A) one that solves a pinpointed issue such as, “I know I want to buy a camera, now it’s where do I buy it;” and B) our presence needs to be something that is unique, not easy to replicate. We want to create the presence, for consumers, of the sales person who is there to help answer a few questions and give insight to help make the best purchase possible, as easy as possible.

5. The recession has affected every industry. How has Shopping.com responded to the changing marketplace?

Tomer Shoval: People are buying less and are buying less expensive items. It’s been a challenging year for Shopping.com, just as it has been for every site. One interesting aspect for Shopping.com is that, during challenging economic climate, people talk more about where they buy. Shopping.com has an advantage in providing lost-cost value. With that said, we have been able kept our position in the market. In addition, since we have a CPC monetization with our clients, we were able to introduce new promotions. This helps our merchants maintain a sustainable, cost-effective strategy, and we continue to innovate on our pricing mechanisms. Instead of charging the same CPC for, say, all watches, we have different rates that merchants are charged based on the unit price. This is one way we have been able to get our merchants to stay with us. We have been able to stay competitive, and our reach is continuing to grow despite the recession.

6. Do you plan to keep this value-based pricing in place?

Tomer Shoval: Value-based pricing is an innovative product we are very proud of. And the theory behind it is very simple: not all traffic sources and clicks are equal. Meaning, various publishers drive traffic with various conversion-rates. So, we expose our merchants to these different types of traffic in a cost-effective way. We adjust the CPC, based on which publisher is sending the traffic. We believe it is the best long-term approach because it is dynamic, and scalable. It gives the merchant the ability to scale their reach, without filtering through the thousands of publishers. We therefore say, “don’t worry about it, we will adjust the CPC for you.” So if one source is bringing in traffic but it’s low conversion traffic, they will be charged a lower CPC – then, in the future if the conversion rate changes, the CPC will adjust automatically. VBP is the future in our distribution; moreover, it’s good for publishers. If we charge merchants the same for all traffic sources, publishers with lower conversions can dilute the best publishers’ value. Our goal is for our high-conversion publishers to generate the best CPC as well.

7. What do you think the new areas of development are for comparison shopping engines space? What should we be expecting to see as customers?

Tomer Shoval: I can talk about what Shopping.com is doing – engaging consumers before purchase. And, we are always looking for finding new ways to help make this happen. The shopping comparison space has not been that innovative in the last several years, but those who figure out the ‘special sauce’ will reap the benefits. A lot more engagement, and interaction, which will lead to effective narrowing – this will help the customers.

8. With the recent consumer focus on finding the lowest prices, do you anticipate an influx of new comparison-shopping sites?

Tomer Shoval: To be honest, I think there already is a lot of competition. There are dozens of sites aiming at similar things. Some are more specialized in various areas. Value in this economy is important, but I don’t think this will be enough – customers want the end-to-end experience, with other aspects of value. I believe there will be some consolidation, actually.

9. How do you plan to differentiate yourself in the comparison-shopping marketplace?

Tomer Shoval: We have already started releasing major changes. As we near the holiday season, you will notice major changes to the display: more merchandising info, more images, and the introduction of ‘my shopping’, so customers can save their favorite items. This year we invested heavily in infrastructure, and we have upgraded our feeds system to increase selection. I believe in the next 6-9 months, you will see visibly better site, with better content, and with a much stronger community. In 2010, we will be able to show that we are no longer just a comparison site.

10. What will be the biggest challenge you face in growing your business?

Tomer Shoval: Finding a pinpoint, and effectively solving it in a unique way that will drive loyal audience – moving away from traffic acquisition tactics. Who ever can figure out how to do this, and even take short term hits on their P&L, and invest in this – will be able to stick around for the long term