COGBLOG

Looks like MS AdCenter is clarifying it’s policy towards advertisers bidding on trademarked terms.

We are writing to alert you to some pending changes to the trademark policy within the Microsoft Advertising adCenter Intellectual Property Guidelines. Starting March 3, 2011, adCenter will no longer review trademark keyword complaints. However, adCenter will continue to investigate brand owner complaints related to trademark use in ad text.

We want to make it easier for you to manage your search advertising campaigns. By aligning the adCenter trademark policy with the current industry standard, we hope to help simplify your marketing efforts across the various online advertising programs. Please take a moment to review our updated trademark policy in the Intellectual Property Guidelines so that you may prepare for this change. If you have questions or need further assistance, please contact our support teams.

So, essentially their policy will be the same as AdWords. Go ahead and bid on the trademark, but don’t use the trademark in your ad text.

A few thoughts on the whole JC Penny link scheme news.

There is something fundamentally flawed about a system that relies on the good behavior of businesses in the system to function properly. Businesses who’s fortunes depend on their relative performance in that system.

If journalists are confused, CEOs are even more so. They want their performance to improve in search. And, most are not particularly impressed with an explanation about how lots of other sites might be more appropriate for the #1 spot than theirs. When their teams choose to use tactics like this, they generally will see their performance improve. And, very few (unless they attract the attention of a JC Penny) will suffer any negative consequences.

We had a client last year who hired an SEO firm to “improve their rankings”. They did EXACTLY what is described in the NYT article. And, their performance did improve. Their number of backlinks grew quite dramatically, from all kinds of junk blogs, comment spam, and other seemingly not-so-desireable sources. They were mixed in with supplements, penis enhancements, teeth whitening, and get rich quick schemes. We pointed this out, said we really can’t endorse this, and that someday (?) there may come a reckoning. And, they did stop after about six months. But, the truth is, they are still benefitting from that link base built on junk.

There are many business categories where this is standard practice. The local legal business is completely built upon link exchange schemes. You really can’t find a top-ranked (in search) firm that hasn’t done link exchanges of the sort that don’t exactly match up with the google webmaster guidelines. So, in this case you’re going to be doing some things that, depending on the strictness of your interpretation, will be leaning towards the black hat side of things. Of course, nothing is illegal, and in fact most of it is seemingly pretty benign. So it leaves you with a set of negative choices — remain in obscurity, or compete in the same way as everyone else with the risk of a penalty in the future (which would simply put you back in obscurity where you started).

The problem is with the system itself. The fact that it can be so easily gamed makes it an irresistible target. Punishing (very few) businesses who do based on arbitrary standards is just not sustainable.

I’m not sure what the answer is. You could give real negative influence to bad-neighborhood links in search, but that would just make it easy to target and harm competitors. Google places, with their business registration process, is clearly an attempt to add new legit signals to the process but at it’s core Google still functions primarily on analyzing link structures — and we’re seeing the limitations of that system.

Recently published this new website for Minneapolis, MN criminal defense lawyer Ryan Garry. If you need a defense attorney in Minnesota, look him up.

http://jasonputorti.com/post/595576857/10-things-ceos-need-to-know-about-design

Jason Putorti –lead designer for Mint.com, the first personal finance application I’ve actually been able to maintain an interest in–did this great presentation on “10 Things CEOs need to know about Design”.

Great if you build, design or market web applications.

Love this quote:

“The best marketing tool you can have is a well designed application”

That is the absolute truth. I feel like I need to watch this presentation every monday just to get my mind focused for the week. So good.

View it on slideshare here

Every morning I go out with a run/walk/bike with the dog for an hour. I usually listen to podcasts while I’m out, and this morning I listened to the first couple episodes of a new developer podcast called The Dev Show.

Great content, good mix of web app, open source topics, and just interesting discussion if you are that certain kind of web geek into that sort of thing — like me.

You can follow them on twitter here: http://twitter.com/devshow
And, here’s an iTunes link for The Dev Show.

Here’s my iphone/podcast listening tip (if you can call it that) : Listen to your podcasts at doublespeed. Twice the podcast goodness in half the time! It only takes a minute to get so used to the speed that it sounds normal.

And, here’s tip #2. Don’t do this while listening to a podcast:

I think this news that Google will be soon moving into the lead aggregation business is interesting.

Here’s the official Google AdWords blog post on the subject.

We’ve used a number of lead aggregators — companies that essentially sell quote requests to a pool of potential service providers. BuyerZone, and Resource Nation are two examples. These companies typically derive much of their traffic and leads from natural and sponsored search.

Often, the math works in their favor, allowing them to out-compete individual service providers in sponsored search. For example:

Say the Service Provider has a CPA (cost-per-acquisition) target of $75 for their search leads. That’s a level where they know they will be profitable. If their site converts 5% of search traffic to a lead overall, they could pay ~ $3.75/click in sponsored search.

The Aggregator however will take the leads they generate and re-sell them to anywhere between 3-7 individual Service Providers for typically $15 to $35. If they can sell these leads to six providers at $30ea, they’ll be able out-bid those same providers.

6 x $30 = $180 revenue/lead
assume 100% gross revenue return target, and 5% conversion rate

The aggregator can spend $4.50/click, while expecting to earn $9/click. To the Service Provider they are still getting leads significantly below their $75 target.

The Aggregators also often out-convert Service Providers because they have such a clear and simple goal and benefit proposition — complete this form and you’ll get six quotes from qualified providers.

You can see the impact conversion rates (and closing rates) have on the economics of this situation. It may be in your best interests as a service provider to pay a little more for that exclusive lead, knowing that you’ll close a larger portion of them.

Now, it looks like Google is going to get into the lead gen process themselves–which has the potential to totally disrupt the existing market, with the greatest potential losers being the Lead Aggregators.

Should be interesting to watch.

What does it say about Yahoo!’s sponsored search system that they could not make a profit from the 10MM visits/month that GeoCities sites were receiving before they pulled the plug last week?

I was reading this post yesterday, and it made me want to estimate how much the GeoCities sites were really costing Yahoo.

I tried to make some order-of-magnitude estimates of how much the hosting of these domains was costing Yahoo. Was it really a cash drain?

Hosting:
7.5 million hosted sites.
5 Megabytes of data/site (this is probably way high)

That’s 37.5 TeraBytes of data to store.
Using the highest tier Amazon S3 pricing (we know it would be cheaper than this) of $0.15/Gigabyte, that’s $5,625 in storage/month.

Bandwidth:
10 MM Visits/month.
Assume an average of 3.5 pages/visit (probably high).
Assume 100k transferred/page (also probably high).

That’s 3,500GB transferred/month.

Again using the highest S3 data transfer price of $0.17/GB, we’re looking at $595/month.

Add the per/request fees of $0.012/1000 requests. We’ll assume there were 15 objects/page, 35 million page views, that’s another $6,300 in request fees.

So, looking at storage and bandwith costs of serving the GeoCities requests we’re talking about somewhere on the order of $12,520/month. That doesn’t seem like a lot of money just to keep the geocities pages alive. To cover those costs you’d need to generate just 3.6 cents out of every 1,000 pageviews! It seems like some contextual links could have covered that?

I’m making a lot of assumptions, and to be conservative I’ve tried to estimate on the high side of things. They’ll also need to maintain some of their own infrastructure, or outsource the actual serving of the sites–but I’d think they probably have that down to a science. Yahoo would also likely need at least some staff to manage and support the service, and some staff to plan and manage marketing campaigns to your GeoCities audience. These salaries would far outweigh actual hosting costs—but still, seems like they could have made it work.

Ways they could have made money from that traffic:

1. Cross Sell other Yahoo! properties from the GeoCities pages. Use a small top-of page banner of some kind.
2. Serve their own PPC contextual ads on the Geocities pages
3. Remarket Yahoo’s hosting services to the Geocities site owners (they made a small effort in this regard at the end, but you could continue to market to your 7.5 million site owners month after month.
5. Add AdSense to the GeoCities sites — Heh, heh, just kidding but it would work

So, what do you think? What am I missing?

In the end they probably just decided the revenue upside was just not worth the effort. But it makes me wonder what other Yahoo! properties are in exactly the same situation.

IAC ranks right behind Yahoo in terms of skill in turning interesting web properties into web graveyards.

Four years ago IAC bought Ask Jeeves for stock worth 1.85 billion (at the time). But, since that IAC stock is now worth about 30% of its value back then that would place the deal’s present value at about 550 million—still way, way too much. Now it seems IAC is ready to put Ask (minus the Jeeves) on the block.

We were Ask Jeeves advertisers once upon a time. Back when they had their own ad management system instead of the horrible outsourced Looksmart clone they implemented in 2006—a decision I’ll never understand.

Back there in late 2005 there did seem to be a glimmer of hope that Ask Jeeves may grow their 3% search share to something bigger. They had a memorable brand with the Jeeves butler. But, IAC showed him the door in a rush to turn them into the next ho-hum online destination.

The butler didn’t fit with their rush to be just like Google. See, they’d upgraded their search technology so you didn’t have to do your searches in the form of a question. But maybe asking a question to the butler was the only fun thing about the site! I mean he was in the Macy’s day parade. Come on!

Interesting Utah factoid, one-time super-star Utah agency DSW created the original Jeeves brand (along with Intel Inside among others). DSW also gave COGBOX one of our very first jobs back in ‘97.

Good luck unloading Ask.com. I can’t imagine who would line up to buy it.
You had potential at one time, and it was squandered.

Here’s more on the topic.

If you watch just one of these videos, watch the one called “big dog”. Amazing!

Fast Company pulled all the videos of their other robots together here.

The company is called Boston Dynamics.

October 27th 1994. 15 years ago today, the first online banner ads were run on HotWired.com.

That first day also marks the zenith of banner ad click through rates. A banner with just two words, “Click Here”, achieved a 78% click-through rate. Each click was followed by the user sighing and saying “oh, it’s just an ad”.

Here’s an interesting account by Frank D’Angelo at AdAge.