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Google profits jump on increased Pay Per Click advertising spend

April 16, 2010 By: Dr Search- Principal Consultant at the Search Clinic Category: Uncategorized

Google has reported double digit gains in first quarter profit and sales, indicating that it is an early beneficiary of the rebound in online advertising.

Google's logo as ppc income grows
The company posted net profits of £1.31 billion, or £4.04 a share, an improvement of 38 per cent on the same period last year. The performance exceeded analysts’ expectations.

The company, which controls around two thirds of the US search engine market, said that revenue in the first quarter totalled £4.51 billion, up 23 per cent from last year.

Net revenue, which excludes sums paid to partners, stood at $5.06 billion, up 2.2 per cent from the seasonally strong fourth quarter and above analysts’ average estimates of $4.95 billion.

Patrick Pichette, Google’s chief financial officer, said that an improving economy and a return of large advertisers helped the company to a “very positive” start to the year.

Mr Pichette said the company expected to hire aggressively through the year. In the last quarter it had increased its workforce by nearly 800 employees, the biggest growth since the first quarter of 2008.

Despite the results Google shares slid 3.1 per cent to $576.92 in after-hours trading last night, reversing a 1.1 per cent gain notched up earlier in the day and reflecting continuing uncertainty over the company’s acquisition of the mobile-advertising company AdMob, as well as concerns over its censorship dispute with China and its ability to add revenue from new formats or platforms.

The company’s shares have fallen by nearly 5 per cent this year, against a 10 per cent rise in the Nasdaq index.

Mr Pichette said last night that the company was still working on the AdMob deal, despite a review of the acquisition by the Federal Trade Commission.

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Twitter expands Twitter101 to generate ad income

April 14, 2010 By: Dr Search- Principal Consultant at the Search Clinic Category: Uncategorized

Twitter has said it will rollout it’s Twitter101 service and allow advertising on its site for the first time.

The social networking site said advertisers would be able to buy “Promoted Tweets” that will appear on Twitter’s search results pages.

Twitter to start ad revenues
It has been reluctant to allow advertising in the past.

However, co-founder Biz Stone said they would not be traditional adverts. They must be Tweets that “resonate with users” and be part of conversations.

Twitter is growing fast. Currently, the world’s Twitter users tweet about 50 million times a day 600 times a second.

Twitter’s management hopes to apply the Google advertising model to its own micro-blogging service.

Companies using the service, however, will be looking closely at the return on investment that the service will generate. Should they pay per tweet read, per click-through, or per sale-after-click?

Commercial tweets to build brands and create buzz are probably the most promising application of Twitter ads. For ad copy writers, it will present a new challenge: how to hook customers with 140 characters or less.

Twitter has already signed up a raft of big name organisations such as Sony Pictures, coffee chain Starbucks and US retailer Best Buy.

It describes the Promoted Tweets as “ordinary Tweets that businesses and organisations want to highlight to a wider group of users”.

Initially, Promoted Tweets would only appear in Twitter search results, the company said, and only one Tweet would show up on each search results page.

It is the first toe in the advertising water for the social networking site, which has yet to make a profit and has only just begun to do deals to raise revenue from the high profile service.

It is an approach that the company described as a “stubborn insistence on a slow and thoughtful approach to monetisation”.

It follows Twitter’s announcement over the weekend that it will buy Atebits, the developer behind iPhone application “Tweetie”, which is one of the main user access points to Twitter.

The acquisition means that Twitter will for the first time be able to control directly the service they deliver to iPhone users, instead of relying on third party application developers to do this for them.

However, analysts say it also means that Twitter is turning the remaining applications developers that it has partnered in the past into direct competitors.

This raises the possibility that if Promoted Tweets prove unpopular with users, rival application developers may offer products that filter them out.

The advertising and Tweetie moves are not the first revenue-raising initiatives by Twitter – in October the company announced tie-ups with Google and Microsoft’s Bing under which the two search engines pay Twitter to include Tweets in their search results.

Twitter’s latest initiative is the first phase of its advertising plans. In future, Promoted Tweets will appear in users’ stream of posts, not just on Twitter search results pages.

Keen not to alienate his members, Biz Stone said that if users did not interact with Promoted Tweets by replying to them, “favoriting” them or retweeting them, they would “disappear”.

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Apple to battle Google in mobile advertising

April 12, 2010 By: Dr Search- Principal Consultant at the Search Clinic Category: Uncategorized

Apple is to rival Google in the mobile advertising market with a new iAd advertising platform to be rolled out this summer.

Apple iPad mobile advertising Google PPC Pay per Click

The announcement follows Apple’s purchase in January of mobile advertising network Quattro Wireless for £196m, demonstrating that Mr Jobs is happy to put his money where his mouth is.

Yet the mobile advertising market is currently tiny, so the acquisition price paid for Quattro is small change for a company currently valued at over £145 billion.

However, analysts say that the potential for mobile advertising is huge and it could transform mobile commerce. Investment firm Piper Jaffrey is predicting a total in-application market for advertising of £450m by 2013, of which iAd could capture £250m.

Mr Jobs’s rationale is that mobile advertising can be tailored to the individual users needs and interests, in much the same way that Google has been able to use data from users of its search engine and gmail accounts to target advertising.

Apple could use the mobile phone user’s physical location as a hook for advertisers – for example Mr Jobs cited a Nike advert incorporating a nearest store locator. But information about a user’s interests can also be gleaned from the applications they choose to purchase.

Steve Jobs’s announcement comes at a time when rival Google’s own mobile advertising initiative has become hamstrung by the US anti-trust authorities.

In November, Google outbid Apple to purchase leading mobile advertising company AdMob for £500m.

“Google came in and snatched them because they didn’t want us to have them,” said the Apple head. Admob already operates on Apple’s handsets.

However, Google’s plans immediately ran into trouble as the Federal Trade Commission chose to review the deal. Months later, a decision is still pending.

The iAd initiative also seems designed to provide a fillip to the growth of new applications for Apple’s handsets.

The Apple chief executive said that 60% of the advertising revenues raised will be passed onto the application developers, creating a major new financial incentive for programmers to generate new functionality for the iPhone, iPad and iPod touch.

“The revenue sharing opens the floodgates for a lot more free applications,” says Mr Wood. “This is an extremely astute move by Apple. I would expect both the number and the quality of applications to grow much more rapidly because of this.”

The rivalry between Apple and Google will partly be decided by the direction that mobile phone technology takes in the future.

Apple stakes its future on the continuing development of applications as the main forum for mobile software, whereas Google expects applications to be supplanted by a web browser that gives users access to the entire internet.

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New red tape for social media marketing proposed in UK

March 11, 2010 By: Dr Search- Principal Consultant at the Search Clinic Category: Uncategorized

The Advertising Standards Authority is to start policing social media and microsites in order to plug a regulatory gap that means it has no authority to act against two thirds of the online marketing complaints it receives.

The Advertising Association (AA), an industry body that represents the UK’s advertising and media industry, has just agreed proposals to tighten non-paid-for digital advertising practices and ensure that the ASA has the right to enforce the new rules in the same way that it currently does for TV, press, poster and radio adverts.

The ASA currently regulates all paid-for digital advertising such as online banner and display ads as well as paid search, but does not police advertising on a company’s own web site, a campaign microsite or profiles on social networking sites such as Facebook or Twitter.

The AA has now submitted its plans to both the Committee for Advertising Practice (CAP) and the ASA for ratification, with a public consultation due to be held in the interim. 

The new rules are expected to come into force in the third quarter of this year at the same time as the CAP publishes its freshly revised broadcast and non-broadcasting advertising codes.
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Now it’s the Germans turn to attack Google

January 19, 2010 By: Dr Search- Principal Consultant at the Search Clinic Category: Uncategorized

Coming hard on the heels of France’s attempts last week to curb Google’s activities (See France considers extra tax on Google, Yahoo and Facebook ) now the Germans are considering anti competitive legal rulings.

Last week, in a German magazine interview, government minister Sabine Leutheusser-Schnarrenberger suggested that Google was “becoming a giant monopoly.” She casually asserted that government action might be coming at some point if Google didn’t become more “transparent” and responsive to government concerns.

Almost on cue several companies have filed diverse complaints with Germany’s Cartel Office about Google.

Those complaints, which have not yet been publicly released, involve the following, according to Deutsche Welle:
* German newspaper and magazine publisher associations the VDZ and BDZV have reportedly filed their complaints about uncompensated use of article snippets. There are also complaints about how publications are ranked in Google search and news results
* Shopping site Ciao, now owned by Micrososft, is upset about its AdSense contract (entered into before the Microsoft acquisition): “The Frankfurter Allgemeine Zeitung (FAZ) reported that Ciao believes the contract to be overly restrictive, while not offering enough transparency on advertising revenues generated by AdSense.”
* Finally mapping site Euro-Cities asserts that the availability of Google Maps to third party sites for free is “is destroying its business model.”

These descriptions are based on second hand information and so it’s impossible to evaluate the merits of the respective parties’ claims.

While there may be merit to some or many of these claims, one gets the sense that there is lots of frustration being expressed in Europe and thrown at Google in the form of various legal theories to see what sticks. 
However, as a general matter, Google’s size and market power is alarming many European regulators and they seem intent on finding ways of asserting more control over the company.
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Google’s top 10 philosophy part 2

January 05, 2010 By: Dr Search- Principal Consultant at the Search Clinic Category: Uncategorized

Search Clinic continues it’s review of Google today.
4. Democracy on the web works.
Google works because it relies on the millions of individuals posting websites to determine which other sites offer content of value. Instead of relying on a group of editors or solely on the frequency with which certain terms appear, Google ranks every web page using a breakthrough technique called PageRank™. PageRank evaluates all of the sites linking to a web page and assigns them a value, based in part on the sites linking to them. 
By analysing the full structure of the web, Google is able to determine which sites have been “voted” the best sources of information by those most interested in the information they offer. This technique actually improves as the web gets bigger, as each new site is another point of information and another vote to be counted.

5. You don’t need to be at your desk to need an answer.
The world is increasingly mobile and unwilling to be constrained to a fixed location. Whether it’s through their PDAs, their wireless phones or even their cars, people want information to come to them. Google’s innovations in this area include Google Number Search, which reduces the number of keypad strokes required to find data from a web-enabled mobile phone and an on-the-fly translation system that converts pages written in HTML to a format that can be read by phone browsers. 

This system opens up billions of pages for viewing from devices that would otherwise not be able to display them including Palm PDAs and Japanese i-mode, J-Sky and EZWeb devices. Wherever search is likely to help users obtain the information they seek, Google is pioneering new technologies and offering new solutions.

6. You can make money without doing evil.
Google is a business. The revenue the company generates is derived from offering its search technology to companies and from the sale of advertising displayed on Google and on other sites across the web. However, you may have never seen an ad on Google. That’s because Google does not allow ads to be displayed on our results pages unless they’re relevant to the results page on which they’re shown. So, only certain searches produce sponsored links above or to the right of the results. Google firmly believes that ads can provide useful information if, and only if, they are relevant to what you wish to find.

Google has also proven that advertising can be effective without being flashy. Google does not accept pop-up advertising, which interferes with your ability to see the content you’ve requested. We’ve found that text ads (AdWords) that are relevant to the person reading them draw much higher click-through rates than ads appearing randomly. 

Google’s maximisation group works with advertisers to improve click-through rates over the life of a campaign, because high click-through rates are an indication that ads are relevant to a user’s interests. Any advertiser, no matter how small or how large, can take advantage of this highly targeted medium, whether through our self-service advertising program that puts ads online within minutes or with the assistance of a Google advertising representative.

Advertising on Google is always clearly identified as a “Sponsored Link.” It is a core value for Google that there is no compromise on the integrity of our results. We never manipulate rankings to put our partners higher in our search results. No one can buy better PageRank. Our users trust Google’s objectivity and no short-term gain could ever justify breaching that trust.

Thousands of advertisers use our Google AdWords program to promote their products; we believe AdWords is the largest program of its kind. In addition, thousands of web site managers take advantage of our Google AdSense program to deliver ads relevant to the content on their sites, improving their ability to generate revenue and enhancing the experience for their users.

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Search Clinic wishes you a Happy, Healthy and Wealthy New Year

January 04, 2010 By: Dr Search- Principal Consultant at the Search Clinic Category: Uncategorized

The Search Clinic starts 2010 by looking at the oganisation that will statistically send the most traffic to your website- Google.
Google has a 10 Things Philosophy. Over the next few day we will be covering them all. But the Top 3 below are key for any online business:

Never settle for the best
“The perfect search engine,” says Google co-founder Larry Page, “would understand exactly what you mean and give back exactly what you want.” Given the state of search technology today, that’s a far-reaching vision requiring research, development and innovation to realise. Google is committed to blazing that trail.

Although acknowledged as the world’s leading search technology company, Google’s goal is to provide a much higher level of service to all those who seek information, whether they’re at a desk in Boston, driving through Bonn or strolling in Bangkok.

To achieve this, Google has persistently pursued innovation and pushed the limits of existing technology to provide a fast, accurate and easy-to-use search service that can be accessed from anywhere. To fully understand Google, it’s helpful to understand all the ways in which the company has helped to redefine how individuals, businesses and technologists view the Internet.
Ten things Google has found to be true

1. Focus on the user and everything else will follow.
From its inception, Google has focused on providing the best user experience possible. While many companies claim to put their customers first, few are able to resist the temptation to make small sacrifices to increase shareholder value. Google has steadfastly refused to make any change that does not benefit the users who come to the site:

    * The interface is clear and simple.
    * Pages load instantly.
    * Placement in search results is never sold to anyone.
    * Advertising on the site must offer relevant content and not be a distraction.

By always placing the interests of the user first, Google has built the most loyal audience on the web. And that growth has come not through TV ad campaigns, but through word of mouth from one satisfied user to another.

2. It’s best to do one thing really, really well.
Google does search. With one of the world’s largest research groups focused exclusively on solving search problems, we know what we do well and how we could do it better. Through continued iteration on difficult problems, we’ve been able to solve complex issues and provide continuous improvements to a service already considered the best on the web at making finding information a fast and seamless experience for millions of users. 
Google’s dedication to improving search has also allowed them to apply what they’ve learned to new products including Google Mail, Google Desktop and Google Maps. As they continue to build new products while making search better, their hope is to bring the power of search to previously unexplored areas and to help users access and use even more of the ever-expanding information in their lives.

3. Fast is better than slow.
Google believes in instant satisfaction. You want answers and you want them right now. Who are we to argue? Google may be the only company in the world whose stated goal is to have users leave its website as quickly as possible. 
By fanatically fixating on shaving every excess bit and byte from our pages and increasing the efficiency of our serving environment, Google has broken its own speed records time and again. Others assumed large servers were the fastest way to handle massive amounts of data. Google found networked PCs to be faster. Where others accepted apparent speed limits imposed by search algorithms, Google wrote new algorithms that proved there were no limits. And Google continues to work on making it all go even faster.
Search Clinic points out that speed is a Google fixation. In 2009 they announced that it would effect a website’s ranking in Pay Per Click casino and it may start
to have an effect on free results ranking soon.
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Google pays no tax on £1.6bn sales in Britain

December 22, 2009 By: Dr Search- Principal Consultant at the Search Clinic Category: Uncategorized

Google was accused of “ducking its social responsibility” whose informal corporate motto is “don’t be evil”, as it emerged that it did not pay any tax on its £1.6 billion advertising revenues in Britain last year.

The firm, which has a substantial presence in London, diverted all its advertising earnings from customers in Britain to its Irish subsidiary.

The arrangement allowed Google legally to avoid paying more than £450m in corporation tax to HM Revenue & Customs in 2008.

The disclosure prompted politicians to criticise Google, widely lauded as a pioneer of the internet age, for “ducking its social responsibility” and for “tax avoiding”.

Accounts filed with Companies House in the past week show Google’s 2008 UK corporation tax bill amounted to just £141,519 — and that was tax on the interest generated by its cash pile in UK bank deposits.

Vince Cable, the deputy leader of the Liberal Democrats, urged the search firm to “pay its fair share” of tax.

“Avoidance like this is hard to stomach at the best of times,” said Cable. “But when the country is in recession and everyone is feeling the pain, it really sticks in the throat — it means higher taxes for the rest of us.

“Google’s reputation will be severely damaged if it continues to behave in this way. It is ducking its social responsibility.”

Google says its structure complies fully with UK tax rules and that the company makes a “substantial” contribution to tax receipts wherever it operates.

About 13% of Google’s global revenues now come from the UK, and 770 staff are based at its London offices.

Accountants said that if the firm’s £1.6 billion UK earnings were paid directly into Google UK Limited, the London operation, it would have been liable for UK corporation tax of between 28% and 30%.

This could have raised about £450m for the public finances— enough tax to fund three NHS hospitals, buy at least eight Chinook helicopters or pay the annual salaries of about 15,000 policemen.

Any British individual or company who places an advertisement with the search engine pays a fee to Google’s European headquarters in Ireland, where corporation tax is levied at between 10% and 25%.

The Dublin operation’s latest accounts show that only €7.5m (£6.7m) of Irish tax was paid in 2008, even though the bulk of Google’s €6.7 billion (£5.9 billion) European earnings flowed into Ireland.

Austin Mitchell, the Labour MP for Great Grimsby, who campaigns against tax avoidance, said: “Google isn’t just sucking money out of local newspapers and other people who rely on advertising for a living — it’s also draining money out of the public finances.

“The search engine is a marvellous service, but the company is run by tax avoiders. If they are going to make so much money here they need to give more back to society.”

As well as paying little tax, Google UK Limited’s latest accounts disclose that it made modest charitable donations of just £5,662 during the year.

The document also reveals that Google’s highest-paid UK director earned nearly £1.1m — an 80% rise on the previous year.

The average British based Google worker earned more than £90,000 last year, with the company paying National Insurance and other social security contributions of £10m.

From the Sunday Times article at
http://technology.timesonline.co.uk/tol/news/tech_and_web/article6962880.ece

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Cyber Monday is coming- is your website ready?

November 20, 2009 By: Dr Search- Principal Consultant at the Search Clinic Category: Uncategorized

Cyber Monday (the first Monday after US Thanksgiving), marks the start of the online holiday shopping season for most retailers. 
With a flurry of online activity expected on this day, it’s important to ensure your website’s going to capture the attention of as many shoppers as possible.

In 2008, Cyber Monday spending hit a record high, with consumers spending a whopping $846 million online. 

The good news for retailers is that Cyber Monday is only the start – with strong online sales expected to continue right through until the New Year.

So the big question is: are you ready? The key to improving your sales during this period is to focus on marketing that can deliver instant results.

In the online world, this typically includes:
    * Google AdWords / PPC Advertising
    * Local Search Listings
    * Featured Listings on smaller search engines

Google AdWords (PPC) Advertising
Google AdWords advertising would definitely be the number one way to target holiday shoppers. It offers pinpoint targeting and instant exposure enabling you to get on the first page of Google when customers are searching for your products and services.

Key Benefits:
    * Campaigns can be live within hours.
    * Ability to target customers via keyword and location.
    * First page placement on Google.

Local Search Listings
If you’re targeting local customers, a local search listing across Google, Yahoo and Bing is another way to get on the first page of organic search results. It’s simple to setup and there’s no limit to the number of people who click on your listing.

Key Benefits:
    * Once verified, listings are live almost immediately.
    * Can be included on the first page of results.
    * Free organic traffic.

Featured Listings
If your customers use a search engine besides the top 3, there’s no harm in being found there either. Top 10 featured listings can help boost the efforts of your PPC and Local campaigns.

Key Benefits:
    * Listings are live within 48 hours.
    * Traffic is free – no click fee’s.
    * Keyword targeted traffic.

This year, Cyber Monday falls on the 30th November, so there’s only a few weeks now to get prepared. But don’t leave it to the last minute!

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Google’s major Caffeine update coming after US holidays

November 19, 2009 By: Dr Search- Principal Consultant at the Search Clinic Category: Uncategorized

Google blogger Matt Cutts has announced that Google’s “Caffeine” update will be going live after the US holiday period. 
Matt explains that this timing is good for webmasters who don’t want to deal with any unexpected updates during the busy holiday sales period.

“I know that webmasters can get anxious around this time of year, so I wanted to reassure site owners that the full Caffeine roll out will happen after the holidays. Caffeine will go live at one data center so that we can continue to collect data and improve the technology, but I don’t expect Caffeine to go live at additional data centers until after the holidays are over.”

Google’s caffeine update is a major upgrade to their search technology which is expected to improve speed and accuracy of search results. 

Google has said they don’t expect this to be a dramatic change to existing results; rather it is “the first step in a process that will let us push the envelope on size, indexing speed, accuracy, comprehensiveness and other dimensions.”

Users have been testing the caffeine-powered search results via the Google sandbox for the past few months, but this has now been pulled, with a message that Caffeine is ready for a larger audience.

We’ll be sure to update our blog as soon as this starts being pushed out across more data centers.

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