Axandra news archive: 27 March 2007

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Google is testing a new advertising system that allows businesses to advertise on a cost per action basis. You can find Google's own announcement here.

How does Google's new product work?

Until now, Google has primarily sold pay-per-click (PPC) ads, so-called AdWords ads: advertisers pay when someone on Google or a Google partner site clicks on the ad.

Google AdWords has one big advantage and one big disadvantage: You only pay for clicks of potential customers, but you risk paying a lot of money for nothing because of click fraud.

There has been a lot of debate around click fraud because Google has a short term financial incentive to promote it. Google's new advertising product is "pay per action" (PPA). You don't pay per click anymore but you pay when a customer takes further action, such as requesting a catalog, signing up for a newsletter or buying a product.

PPA advertising is meant to mitigate the risks of click fraud.

How can Google track the action?

If you use Google's PPA advertising product, then you must use Google's conversion tracking code in the HTML code of your web pages.

Of course, the advertiser has an incentive not to confirm the action, but cheating does not make sense. Like PPC ads, PPA ads will likely be ranked by profitability to Google.

What are the consequences for the market?

Google will be able to better maximize revenues on its advertising network, and it also should allay the concerns over click fraud.

Google's new PPA program is in direct competition to affiliate marketing networks such as Commission Junction and LinkShare. Publishers could leave those affiliate marketing networks and concentrate on Google's PPA program.

Yahoo und Microsoft will certainly offer similar PPA programs in the future. The current players on the PPA market Snap and Turn now face heavy competition.

What are the consequences for you?

If you already track the return on investment (ROI) on your PPC ads, then you won't be affected much. If you don't track the ROI yet, take a look at ROI tracking tools such as AxROI which can save you a lot of advertising money.

If you are a smaller advertiser, then PPA advertising could mean that you will pay less for better results in the future, and that you will never worry about click fraud again.

Note that Google's pay per action program is currently in beta test. This means that there are some limitations:

• participation is by invitation only, you must fill out a web form to request participating in the program
• the PPA program is currently only available to US customers
• ads are limited to Google's content network of partner sites (Google AdSense)

comScore February U.S. search engine rankings

"In February 2007, Google Sites captured 48.1 percent of the U.S. search market, gaining 0.6 share points from the previous month.  Yahoo! Sites maintained its second place ranking with 28.1 percent of U.S. searches, followed by Microsoft Sites (10.5 percent), Ask Network (5.0 percent) and Time Warner Network (4.9 percent)."

More statistics: Nielsen/Netratings February U.S. Search Engine Rankings

Google tests a new design for the homepage

"The links to Google's services were detached from the search box and were moved in the top left corner. Because there's no visible connection between the links and the search box, this move allowed Google to add non-search services: Gmail, Google Calendar and Google Docs."

A new type of Google bomb caused anti-Microsoft image

"Intentional or not, this could be a serious problem just waiting to happen. From what I can tell, nothing can prevent people from uploading any image for any company they want. I'm not certain how easy this is to actually exploit, or how long the image would last if someone was successful — users can easily report inappropriate photos through the Google Maps interface. "

Search engine newslets

• A canonical update from Matt Cutts.
• MSN/Live.com link command currently offline.
• TimeSearch is a new search engine that searches the web through time.
• ZipLocal is a new Canadian local search engine.
• KML and GeoRSS support added to the Google Maps API.
• Yahoo! India content head quits.
• Google admits project in Goose Creek.
• Google canvasses for political ads. (reg. required)
• Google offers bikes for pedaling commuters.

"Is Google becoming the new Microsoft? On one level, the question is preposterous, as the two companies do different things. Google is the most widely used internet search engine and dominates online advertising."

Where is Microsoft Search?

"When it comes to developing a viable Internet strategy, Microsoft may be running out of time. It has long trailed Web leaders Google Inc. and Yahoo! Inc., in the use of its search engine and in search-ad sales. Now it's losing ground."

Panama likely to boost Yahoo Search revenue more than 20 percent

"The gains may boost Yahoo’s revenue growth from searches to more than 20 percent in the second half of this year, instead of his previous estimate of 15 percent.

So far, Semel is making good on his promise to close the gap on search ad revenue with Google, which is on tap to post net sales of more than $12 billion this year compared with $5.47 billion at Yahoo, according to a Bloomberg survey of analysts."

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