Showing posts with label internet advertising. Show all posts
Showing posts with label internet advertising. Show all posts

11/30/08

US Public Affairs - 30/11/08

In Peer-to-Peer File-Sharing Case, "Distribution" Does Not Mean "Making Available"

"At trial, the plaintiffs sought to prove that the defendant, a single mother in Duluth, had willfully infringed 24 of the plaintiffs' recordings by downloading and distributing them via the peer-to-peer program Kazaa. Finding that the defendant had infringed, the jury awarded the plaintiffs statutory damages of $9,250 per song, for a total of $222,000. The defendant filed a motion for a new trial or, in the alternative, for remittitur, calling for a reduction of excessive damages; the plaintiffs filed an unopposed motion to amend judgment, seeking an injunction. Instead, the court elected sua sponte to address the possibility of granting a new trial because of an incorrect jury instruction." [CyberLaw]


Music Sampling Does Not Infringe on Copyright, But…

"The German Supreme Court (BGH) clarified last week that sampling does not infringe on copyright in the work from which samples were taken for the purpose of creating a new work. There is a catch hiding in the details, though. According to the official press release (in German), the highest judicial authority in Germany ruled that a certain statutory exception principally covered instances of sampling. The relevant exception is anchored in section 24 to the German copyright act, known as “free use” (freie Benutzung). Free use is not fair use, but you can think about it as an extreme version of the transformativeness element familiar from the U.S. fair use analysis. Accordingly, the new work must transform the work of which elements it uses into something independent and wholly different. While using the copyrighted elements taken from the prior work, such use should be so transformative that the first work becomes hardly recognizable as the source." [CyberLaw]


Digital Copyright Issues and the Ubiquitous iPod

"The advent of new technologies has resulted in Copyright law having to adapt to new situations and infringements. These technologies, including music formats that contain compression, as well as the reduction in cost and size of hard drives has created significant new challenges and markets for digital content. Even in the short life of the iPod, it has gone from a music device, to a multimedia device. This article examines some of the issues and case law that is relevant to the content revolution created by the iPod." [SSRN]

The Dangers of the Digital Millennium Copyright Act: Much Ado about Nothing?

"In 1998, Congress passed the Digital Millennium Copyright Act (DMCA), a landmark piece of legislation aimed at protecting copyright holders from those who might manufacture or traffic technology capable of allowing users to evade piracy protections on the underlying work. At its core, the DMCA flatly prohibits the circumvention of technological protection measures in order to gain access to copyrighted works, with no safety valve for any traditionally protected uses. While hailed as a victory by the software and entertainment industries, the academic and scientific communities have been far less enthusiastic. The DMCA's goal of combating piracy is a noble one, but lurking is the danger that it comes at the expense of public access to protected works and future innovation. Despite America's long history of fair use protections in copyright law, many commentators have warned that consumers now find themselves unable to do many of the same things with copyrighted works that they previously could - anyone who might sell them the technology to access a protected work and enable fair use would find themselves in violation of the DMCA. Worse, early litigation dramatically expanded the definition of what constitutes a technological protection measure deserving of the law's respect. As the definition broadened, scholars feared that even modest innovations - ones that would never qualify for patent protection under existing law - could wind up receiving perpetual patent-like protection through the backdoor of the DMCA. Despite the experts' dire predictions, however, subsequent common law interpretation of the DMCA has reigned in many of its potential dangers - the judiciary's focus is rightly on the need to balance innovators' interests with the equally important goals of public access and enhancing overall social welfare. Nonetheless, coherent and uniform protection of fair use under the DMCA is likely best achieved through Congressional action." [SSRN]


Why Emerging Business Models and Not Copyright Law are the Key to Monetising Content Online

"The multimedia Internet is here to stay. Rich media - including videos, music, podcasts, and flash animation - is already a key feature of the Internet experience, and will only grow in diversity and importance. As Internet users increasingly crave - and technology increasingly enables - multimedia content delivered on demand over broadband connections, the number of songs, videos, and other media online will increase exponentially to feed the demand. As online media consumption increases, so will expectations for its capacity to generate revenue for content owners and creators. Analysts boldly predict a bright future for the entertainment industries, especially in Asia, with broadband Internet cited as a key growth driver. Yet, to date, the vast majority of music and video acquired or consumed online is free and uncompensated. Despite the rising expectations for monetizing content on the Web, no clear sustainable, scalable model for monetizing content has emerged that compares to the level of revenues copyright owners have enjoyed in the "physical" (as opposed to online) market." [SSRN]

10/10/08

Music News Bulletin - 10/10/08

Music Week
YouTube plans music sale
YouTube will start to sell music and video games and experiment with new advertising formats to grow revenue. The Google-owned business is reportedly taking steps toward building an e-commerce service through which it will sell music, films, TV shows, video games, books and other media-related products featured on YouTube.
Visitors to YouTube.com can buy songs from music videos they watch by clicking on buttons that take them either to Amazon.com’s store or iTunes.
It is expected Amazon and iTunes will share revenue with YouTube when users buy content through the partnership.
YouTube had 330 million visitors in August 2008. [MusicWeek]

Digital radio summit to reconvene
Key players in the commercial radio industry are expected to reconvene last Friday’s (October 3) digital radio crisis summit within the next few weeks after the initial day of talks failed to produce a resolution.Global Radio CEO Ashley Tabor has suggested that broadcasters pool their services to reinforce the existing digital radio multiplex, and he has appealed to Channel 4 to reconsider its plans to launch a second multiplex.
But last Friday’s all-day meeting, called by Tabor and reportedly attended by executives from Channel 4’s 4 Digital Group, Bauer Radio and UTV Media, failed to move the matter forward. A date for follow-up talks has yet to be announced.

BILLBOARD
9/10 Editorial: MySpace Caters To Majors, Not Indies
As president of Koch Records, the No. 1 independent in the United States, it is my obligation to counter MySpace's effervescent statements that patronized the independent labels and informed us that we were being offered the same deal as the majors. In a nutshell, MySpace has given equity to the majors in what appears to be an unhealthy and anti-competitive arrangement while treating the indies as second-class citizens. [BillBoard]

Popkomm Day 1: Delegates Debate Rights
Rights issues were at the top of the agenda at the first day of Popkomm in Berlin.
A total of 15,000 exhibitors and trade visitors are expected, according to managing director Ralf Kleinhenz, although the opening day was a fairly relaxed start to the event.
Popkomm comprises an international music and entertainment business trade fair, conference and live music festival. Organizers say they are expecting 843 exhibitors from 50 countries, while the festival will feature 400 artists from 30 countries. [BillBoard]

Popkomm Day 2: Digital Drives Forward
The development of digital music was the major topic of debate at day two of Popkomm in Berlin, with delegates discussing the need for users to be able to synchronize their music collections between their computers, phones and even automobiles. [BillBoard]

European Labels Back Streaming Service Spotify
New music streaming service Spotify launched today in Europe with the support of all four major labels, as well as independent rights body Merlin and independent digital music distributor The Orchard.
The service is available in the United Kingdom, Germany, France, Italy, Spain, Finland, Norway and Sweden. It plans to roll out in further territories through the remainder of 2008 and into 2009. [BillBoard]

In The City: Digital Will Deliver
A bright future for artists, consumers and the music industry was the general prognosis at the second day of Manchester's In The City (Oct. 6) -- the U.K.'s biggest music conference -- but only after several more years of struggle and dwindling revenues. "It's going to be tough for a time to come," stated Barney Wragg, who exited as EMI Music's global head of digital in January. Speaking at the event's digital music panel "the Digital Buffet," Wragg said: "I think it's going to be hard for labels and that's going to make it hard for artists. The change that [the industry is going through] is going to make it very difficult." [BillBoard]

RECORD OF THE DAY
SPOTIFY ANNOUNCES LICENSING DEALS AND UPCOMING LAUNCH
Spotify announces a series of licensing deals with music companies including Universal Music Group, Sony BMG, EMI Music, Warner Music Group, Merlin and The Orchard for their content to be included in the new digital music service. Spotify offers instant access to a world of music via a service that enables on-demand streaming of audio content.

Spotify users will have unlimited access to millions of tracks from a vast music catalogue, with the opportunity to create and share playlists with each other and explore music through a wide range of discovery and social features. Spotify will launch on October 7th 2008 in UK, Germany, France, Italy, Spain, Finland, Norway and Sweden. Throughout the remainder of this year and into 2009 Spotify will be rolled out to further markets. Spotify will be marketed both as a premium monthly subscription service and a version which is free for consumers to use and supported by advertising. Consumers will also have the option to purchase a day pass that gives access to Spotify without advertising. Advertisers that have signed up to be included from the launch include Ford, T-Mobile and Xbox. Daniel Ek, founder and CEO at Spotify says: "We believe that everyone loves music, and we're thrilled to partner with all major content owners already at launch. This is an exciting step forward in our mission to provide the best possible music experience by allowing people to listen to whatever they want, whenever they want." [RecordOfTheDay]

Record of the Day press releases of the week
[RecordOfTheDay]

9/11/08

Music News Bulletin - 11/09/08

The Great Circular Award Ceremony 10/09/08
"What a strange world it is, the world of "digital rights" activism. Campaigners pause only to pat each other on the back. Last week, anti-copyright campaigners Public Knowledge held their annual awards. The group's president Gigi B Sohn proudly announced the winners: fellow campaigner Carl Malamud of PublicResource.org, fellow campaigner Ben Scott of FreePress... and fellow campaigner Fred Von Lohmann of the Electronic Frontier Foundation, the EFF." [TheRegister]

Sony Ericsson apes Nokia's 'Saw You Coming': Bundles music with phones 09/09/08
"Sony Ericsson is imitating market leader Nokia and will bundle "free" music with its handsets, the FT claims today. As with Nokia's "Comes With Music" program, selected Sony Ericsson handsets will come with a year's worth of unlimited liability downloads. Apart from suggesting a launch date of next month, no further details were disclosed by the FT." [TheRegister]

Classical downloads service hits right note on DRM 11/09/08
"If you prefer Bach to the Beastie Boys and Mozart to Madonna, then you’ll be pleased to hear that an iTunes rival’s been created that panders only to the desires of classical music fans."[RegHardware]

Google bulges old time news archive: More papers, more ads 08/09/08
"Google is redoubling efforts to offer a digital archive of the world's newspapers. Two years ago, the search giant began indexing the existing digital archives of papers like The New York Times and The Washington Post, and today, with a post to The Official Google Blog, the company said it's now working with other publishers to bring a much broader range of old newsprint into the project." [TheRegister]

9/2/08

Operation Ringfence

The Internet poses interesting challenges to independent music. On the one hand it enables non mainstream musicians to gain ‘long tail’ exposure, through global communications assisting the search for new audiences and develop larger communities on a minimum budget. On the other hand, the plethora of opportunities to circumvent copyright and the ongoing concentration of the music market because of oligopolies such as Universal and Sony-BMG highlight how vulnerable independent music labels are in the digital music age. To ensure that the development of the Internet revolution works to the benefit of independent labels and its artists, a diverse net of organisations need to look towards developing or at least guiding Internet platforms to ensure that artistic creativity flourishes.

One Stop Shops: An Introduction
One stop shops are portals to other websites that help to draw pieces of information, data or Internet locations into one easily accessible forum, usually to unite numerous fragments into common themes, approaches or purposes.

Organisational benefits include being able to focus the strategic direction of policymakers, through encouraging the examination of purpose and competitive advantage (whether cooperative or competitive) improving knowledge share, as a result of increased levels of information and reducing the overlap of specialties.

Despite organisations being run independently of each other information can be presented to website viewers in numerous format styles. This can be especially useful in complex situations where information is unnecessarily scattered across the Internet. As information is funnelled into an orderly fashion into one location one stop shops are not only highly useful at being able to assist in informing or directing users quickly and accurately to the information that they require but are also effective at introducing users to new information from previously unknown sources.

Examples of one stop shops include:
www.omvguide.com Portal to online films, documentaries and tv programmes (legal and illegal)
www.politicshome.com Portal to politics articles and blogs as they are published
www.yourlondon.gov.uk Portal for local government issues
www.directgov.org Portal to government and public sector websites

Operation Ringfence
To ensure that independent record labels win the fight against both the major record labels and illegal piracy it is important to guarantee that there are some initiatives in place on the Internet that encourage the proliferation of legal and independent music. Currently, individual record companies are competing using existing ‘silo mentalities’ making it more difficult to compete in the long run against the greater marketing budgets and economies of scale of companies such as Universal and Sony-BMG. Individually, record companies will not be able to explain to individual Internet users the importance of ensuring that artists receive direct financial reward for their work. Uncoordinated, individual record companies will not be able to create sufficient incentives by themselves to make music fans looking for information and content on artists find and make use of material that is both independent and legal. One stop shops should seriously be considered as one of the many necessary strategic solutions to shield independent music producers and their artists from the damaging effects of the music majors and illegal piracy.

A website which provides up to date information on independent record labels alone would be a huge resource that should create a considerable level of Internet traffic. With the right balance of governance and computing code it should be possible to create a site which highlights the majority of artist information, including discography, reviews, tour dates, sites where you can purchase songs and merchandise, as well as numerous other information through providing speedy and accurate links.

The purpose of such a one stop shop site is not to be the creator of music information or content but to be the first focus to direct visitors to other music websites. Through creating new alliances between the independent record industry and the online media press it should be possible to create immediate and feeds of news, reviews and releases as they happen. Such agreements should provide enough incentives for media sites to participate, as providing such information should generate significant degrees of Internet traffic to their own websites. Complementary media, such as legal online radio and podcasts can also be given opportunity for inclusion in any framework and should be used as a method to include material to increase exposure for the site, develop improve cultural interdependency and improve the positioning of independent music.

A key area of examination for any one stop shop should be the level of exclusivity. The envisaged one stop shop site would not necessarily succeed just as a result of having up to 4000 labels being included on it, as without a sense of belonging and attachment site visitors would be less motivated to move from using search engines or existing music platforms. As a result, the nature of such a site should also have as open and democratic a system in place as possible to create interest from normal Internet users.

A site is likely to succeed more if a wiki function is included to ensure that users are able to include their review of an artist or comments on as level a playing field as other commentators. Such additions would be directly tagged in regards to an artist, making it possible for record labels to be immediately updated when additions have been made, so that any illegal or malicious content can be removed quickly. There would be a clear financial benefit to record labels in the fight to protect copyright, as websites featuring pirated material would be frozen from the site. When discussing tactical elements of the site any governance structure should emphasise neutrality in the reporting of labels or music, so that the site does not become tarnished by bias as a result of negative reviews being removed by thin-skinned record labels.

Also, when examining governance, smaller labels and musicians should be heavily considered for inclusion. One option is to require a small one off fee (say €5) as a subscription to act as a method of partly funding the site, separating dedicated musicians from very casual amateurs and deterring most forms of spamming techniques.

It should be possible to recover some of the cost of this enterprise through payment per click fees on profitable activities such as ticket bookings, mp3 downloads and suchlike. Advertising related exclusively to independent music should also be included as a method of increasing revenues, as well as proving a cost effective way for music related organisations to reach a targeted audience with, with the added benefit of not having to compete with the marketing budgets of the major labels or various other companies.

Effectively planned, such a one stop shop should encourage users curious about independent music to eventually consider it their first port of call for any music related enquiry. Later improvements to such a platform to improve interactivity, including personal profiles to generate custom made editorial based upon viewing habits, tools such as widgets or high interactivity with other platforms would do much to increase the interest and outreach of such a one stop shop.

Through the combination of providing an oasis safe from the whitewash of the major music players and key media platforms dependent on their success the aforementioned site would hopefully generate many advocates. Of course, there would be much effort required to initiate a scheme and there would be many hurdles that would need to be overcome. However, the development of such a platform would greatly protect and enhance independent music’s development in the digital age, strengthening independent music through developing a federation of empowered and financially remunerated cultural actors.


This article was written on 2nd September 2008 by Jonathan McHugh

8/29/08

Music News Bulletin - 29/08/08

Now Hollywood is chasing UK downloaders: And getting the wrong guy 29/08/08
"Tiscali threatened to disconnect a customer for illegally downloading a TV show last week, after receiving a copyright infringement notice from a Hollywood studio. The only problem was the customer had quit the ISP months before the alleged transgression was made." [TheRegister]

Pandora prepares to join titsup.com club: Web radio outfit struggling to cover royalties 18/08/08
"This weekend saw a cry for help from personalised web radio outfit Pandora. It blubbed that music industry royalties are too high for it to survive on meagre web 2.0 advertising revenues. In a Washington Post confessional, the firm's founder and CEO Tim Westergren said: "We're approaching a pull-the-plug kind of decision. This is like a last stand for webcasting."" [TheRegister]

World shocked (shocked!) by Legal P2P: Old news sinks in 13/08/09
"Why does the idea of legal P2P - something music fans have been clamouring for since the original Napster - still cause so much confusion? Britain is set to be the first country outside Korea where punters will be offered such services (as we revealed back in June), but the idea still seems too incredible for many journalists and bloggers to comprehend." [TheRegister]

EU Gives Green Light to Sony's Acquisition of BMG 16/08/09
"Yesterday the European Union approved Sony Music's acquisition of Bertelsmann's half of its Sony BMG joint venture. Last month Sony agreed to purchase BMG from Bertelsmann for around $900 million. The need for regulators' approval is a standard procedure and an especially potent topic in a recorded music market with such concentrated ownership. The EU approval effectively ends an appeal by indie trade group Impala that asked the EU to rescind its original approval of the merger. As I wrote last year, indie label sales in the US -- either because of or in spite of the merger -- fared well since the merger. From the time of the merger through October of 2007, a period of just over three years, Sony BMG's share of US album sales dropped to 21.76% from 29.78%. Indies rose to 20.55% from 17.58%." [Coolfer]

Another Case Against Long Tail Economics 15/08/09
"At Harvard Business School's Working Knowledge, John A. Quelch has a post titled "Long-Tail Economics? Give Me Blockbusters!" Quelch is the Lincoln Filene Professor of Business Administration at Harvard Business School. Quelch explains the benefits and lures of blockbusters and offers five characteristics that define a blockbuster. His bottom line is this:
More risky than pursuing blockbusters is not to pursue them, to condemn your enterprise to a lifetime of slave labor harvesting the long tail of micro-opportunities rather than imagining, pursuing, and marketing the global solution to an important, widely shared problem." [Coolfer]

3/1/07

Developments In The Internet 2007 (Notes)

  • The Internet is rapidly maturing but there still remain differing strategies for both new and more established websites. However, the major developments point towards:

One Way Information Websites

  • Point of information or service websites, intend to be first and only point of call or the main suppliers of content or exchange.
  • In the past there have been races to be seen as the largest and most dominant in their category, such as in books (e.g. Amazon); MP3s (e.g. iTunes); electrical goods (e.g. Empire Direct) or news (e.g. Guardian Unlimited). These tend to be examples of one way portal where people enter the website to navigate to the data they want and read it, purchase it, download it or not.

Web 2.0: The Next Generation In Two Way Information Points

  • The main races for market domination tend to be to update contemporary cultural outlets, in reference (e.g. Wikipedia) discussion (e.g. Blog); socialising and bands (e.g. Myspace); photography (e.g. Flikr); television (e.g. YouTube); music videos (Cmons) and animation (e.g. Newgrounds). These channels intend to replace existing media outlets, as can be seen be Newscorps purchasing of Myspace, MTV’s creation of Cmons and television channels’interest highlight the importance of these new mediums.
  • These leaps are made possible as a result of new and more popular methods of sharing information, such as Wikis, Blogs and Podcasts. Often they are merely facilitating processes which have been possible for a long time. However, the need for multitasking, peoples time pressures and the benefits of standardisation of content within these sites has increased users appetites for Web 2.0 websites.
  • These portals are investing heavily to encourage either free or subsidized usage as these companies recognise that if they become valued websites with customers constantly returning then they will have strong marketing potential. Like conventional newspapers and television services they intend for their main revenue streams to be from advertising.
  • More established websites such as Amazon now have a significant market share, enabling them to hold a very large amount of data on different users and their preferences. This is now enabling these companies to hold greater influence beyond the mere distributor level. For example, Amazon has recently invested in a film project and is assisting with marketing and positioning of its product. If successful we should expect a raft of Internet companies expanding beyond their current influence.
  • "It makes available to them computing capabilities that have been out of reach so far," he says. As such services are designed for home users, this makes them easy to adopt, and they work through web browsers or other freely downloadable software.
  • Web 2.0 services allow collaboration, both between staff and with the outside world: "The idea is to reduce the amount of control over the information you are creating and encourage participation and contributions that will help you plan, design, build, test or distribute," says Drakos.”[1]
  • “online services to create "mash-ups" of multiple data sources, although this may require some technical nous. Nikos Drakos says MashMap is a good example: it combines Google Maps with US cinema listings from Fandango.com, to display film times on a street map.”[2]

Search Engines

  • Search engines initially existed as gateways to other content hand, usually edited by the companies directly, such as Yahoo. Newer technology such as meta tagging and a greater application of algorithms enabled more sophisticated automated systems, notably Google to emerge.
  • Taking advantage of the ability to find users searches quickly and more accurately has given Google a significant foothold in the internet, with the term ‘Google it’ entering common language.

One Stop Shops

  • “Through a single Internet site, users will be able to conduct various transactions, regardless of whether the actual functions are the responsibility of other ministries, local government, law enforcement or even the private sector (such as car makers, dealers, financial institutions or insurance companies). With this extensive collaboration in place, the piloted system is targeted to go live in December 2005.” (ACC P41)
  • “The flagship electronic service Directgov (www.directgov.gov.uk) should help boost adoption of services significantly, by aggregating users and services in a single location with a user interface designed around the customer’s needs. Current examples of cross-government topics on Directgov (with more in the pipeline) include money, caring for someone, learning, employment, home and community, health and well-being, travel and transport, and Britons living abroad. Directgov also has links to the home pages of all county, district and unitary authorities in the United Kingdom within a dedicated area, and most of the local authorities are linked back. Directgov on digital TV gives access to local authority sites as well.” (ACC P95)
  • “The eGU successfully launched Directgov in 2004 and it is being well received by customers. Eighty percent of users state that Directgov gives convenient access to public services and information, and nearly twice as many respondents rated Directgov as “good” overall, compared to its predecessor, UK online. Even without any significant marketing yet, Directgov is regularly receiving 150,000 unique users per week. Plans to promote the product should increase eGovernment adoption further by aggregating more users and services in a single location.” (ACC P95)
  • “It soon became clear that the "network effects" of the internet led to a greater, rather than a lesser degree of concentration online, despite the openness of the internet's formal structure.

Blurring The Lines Between Websites

  • This advantage has been built up upon using advertising techniques such as promoting websites who pay to be promoted when certain words and phrases are included in searches or webs content. This method has made Google the largest advertiser on the Internet (then Yahoo and Microsoft).
  • Google is confident that although its first mover advantage with search based technology will decline that its creep into other areas of the Internet with its other products will counteract this.
  • There is heavy competition between the major three search engines to form partnerships with other major websites, particularly the larger social websites such as MySpace and YouTube. An integrated platform that combines both qualities seamlessly should be the most profitable vehicles, enabling low cost but high quality content and high levels of personal choice for users in return for greater information and targeted advertising.

Demand From Consumers

  • “Citizens today are more informed and have higher expectations than ever before. Many governments are responding to these pressures by investing in improving how they interact with citizens, businesses and other government agencies. They are adopting and implementing many of the services delivery and customer relationship management capabilities commonly found in leading-edge customer service organisations…. Citizens’ willingness to embrace a new generation of services outpaces governments’ ability to deliver them. Citizens want more from government, in terms of cross-governmental collaboration and outreach. In fact, most are willing to make available a wide range of personal data.” (Accenture 2005)

Filling A Niche

  • There is a lot of movement at the moment finding a niche covering contemporary culture on the Internet as sites such as MySpace, YouTube and Flikr are starting to reach critical market share points where it will become increasingly difficult to compete on a large scale, as these more established platforms will become more difficult to budge with better services (and more costly).
  • Therefore there is the choice between taking a highly niche role with less profit or updating an existing model that hasn’t already been developed enough on the Internet.
  • Preferably this product or service should be complementary with existing websites but also offer something not currently offered sufficiently.

Advertising

Britain leads the shift to internet advertising

  • “The internet has had a greater impact on advertising in Britain than elsewhere, according to Sir Martin Sorrell, chief executive of WPP, the world's second largest advertising and marketing company. WPP's media planning and buying arm, GroupM, recently forecast that by November the internet would account for 14% of advertising spending in Britain, overtaking the share for national newspapers.”[3]

Gates to open online ad conference

· “After a slow start and the setback of the dotcom collapse on 2000, internet advertising has grown explosively as a combination of cheaper technology, growing broadband penetration and better content drives consumers and advertisers online.

· Last year it overtook radio advertising in terms of overall share, reaching a level of nearly 4% in the UK - the IAB says it is on track to overtake the market size of outdoor by the end of 2007.

· Last year spending on ad searches, pop-ups and other forms of online advertising rocketed 62% year-on-year to hit £653.3m in 2004, from £407.8m in 2003.”[4]

Internet ad spending surges again

  • Advertising spend by US companies on the internet hit $3bn (£1.75bn) in the three months to September - the highest quarterly figure since records began.
  • Internet advertising revenues hit a record $3.1bn in the third quarter of 2005, nearly 35% up on the $2.3bn spent by advertisers in the same period last year, according to the latest report from the Interactive Advertising Bureau.
  • The figures, compiled by PricewaterhouseCoopers, show that US online ad spending has almost doubled in the last two years from just $1.75bn in the third quarter of 2003, as advertisers move more of their budgets online.”[5]
  • "The continued strength in internet advertising reflects in part the medium's unique ability to collapse the business cycle for advertising, marketing and branding, making it more attractive for traditional advertisers. The high percentage growth in revenues is more significant given the larger revenue base,"[6]
  • “"[Internet advertising] continues to prove itself as the most cost-effective medium in driving sales and changing consumer attitudes, providing a powerful competitive edge for these marketers."
  • Though the IAB only breaks out what sort of internet advertising is growing the fastest, search-based ads - where companies bid to have their ads placed against particular search results - have been the quickest-growing element of online advertising for some time.”[7]


Online advertisers change tactics
  • “Overlays cannot be blocked in the same way, because they are actually built in to the web page you are looking at. It is just a case of finding the close button, if there is one.”[8]

Search Advertising:

  • “But the largest area of online advertising does not involve fancy graphics or comic ideas - it is simply a case of paying a search engine to associate your product with search keywords.
  • "It's the dirty secret of online advertising," said Mr Phillips. "This is the stuff that really works, and the reason it works is because if you search for something on Yahoo! or Google then you actively want it, and these are the people you want to be putting your advertising in front of."
  • "Unfortunately, writing a cheque to a search engine is not terribly creative; this is not why advertising agencies have creative departments.
  • "So it does not really get talked about a great deal, but it really works and you can measure it works as well."
  • However, search advertising is becoming an overcrowded area, and ad agencies are looking for ways to get their clients turning up in the natural search results.
  • "Marketers can pay to be in the right hand side of the Google page. That's paid advertising, also known as pay-for-click," said Fadi Shuman of Pod1 Media Solutions, a web development company.
  • "However, the ideal place to be is in the centre of the search results, and the way to achieve that is through search engine optimisation. To optimise your site so it's as highly visible to search engines as possible requires a number of different skills - editing content, adding links, etc."”[9]

Social marketing

  • Search advertising is where most online ad money is spent, something which has helped Google negotiate a $900m (£470m) deal to become search engine of choice for social-networking site MySpace.
  • This will give advertisers access to that hard-to-crack youth market, which seems to be a law unto itself.
  • Users of MySpace typically ignore traditional adverts and meet to discuss the latest trends and fads, creating their own hype, something that has been credited with launching pop group the Arctic Monkeys without any other publicity.
  • "When it comes to online advertising you cannot underestimate the power of social networks," said Fadi Shuman.
  • "Millions and millions of users are building communities within communities on these networks. They're global, they're unstoppable, and they're big, big money to marketers if they know how to communicate with them."
  • The web is by far the fastest growing advertising medium, but with so many web pages out there, the chance of us happening upon a particular brand or website is pretty small.
  • Advertisers are hoping that search, and social networking, will help point us towards their carefully crafted ads.”[10]

Search ads drive up online spending

  • “The rising popularity of search-based advertising helped push up US online advertising spending by 26% in the first six months of the year.
  • Advertisers spent a record $5.8bn (£3.3bn) online in the six months to June, up from the $4.6bn they spent in the same period a year before, according to preliminary findings by the Internet Advertising Bureau and PricewaterhouseCoopers.
  • The growth in online spending was spearheaded by search-based campaigns - where advertisers bid to have their results displayed against keyword searches - the research said.
  • Though search ads made up 40% of online revenues - the same as during the first half of 2004 - the amount spent by advertisers rocketed by 27% to $2.3bn.
  • Display advertising accounted for 20% of turnover or $1.15bn, while classifieds made up 18% or $1.04bn.
  • David Silverman, a partner at PwC, said as increasing numbers of people spent more time online, so advertisers were upping their internet spending.
  • "The consistent growth in overall revenues shows marketers may be shifting more of their total advertising budgets to online," he said.
  • "This is a natural development as research shows more consumers are spending a larger percentage of their media time online, while the flow of advertising dollars follows."[11]

Search goes on for way to tackle Google

  • “Google, which makes a whopping 98% of its revenues from search adverts, has profit margins of more than 60%. Yahoo!, which makes use of its position as the web's most visited portal to sell display advertising while also trying to increase its share of search revenues, has margins of just over 40%.”[12]


Notes taken by Jonathan McHugh in March 2007


[1] Web 2.0: just kids' stuff? The Guardian 26/05/06

[2] Web 2.0: just kids' stuff? The Guardian 26/05/06

[3] Britain leads the shift to internet advertising The Guardian 19/08/06

[4] Gates to open online ad conference The Guardian 26/09/06

[5] Internet ad spending surges again The Guardian 22/11/05

[6] Peter Petrusky, PWC Internet ad spending surges again The Guardian 22/11/05

[7] Internet ad spending surges again The Guardian 22/11/05

[8] Online advertisers change tactics BBC 06

[9] Online advertisers change tactics BBC 06

[10] Online advertisers change tactics BBC 06

[11] Search ads drive up online spending The Guardian 27/09/06

[12] Search goes on for way to tackle Google The Guardian 21/07/06