Cashing Out: Week of March 20th-26th 2011 in Online Marketing News

Deals industry revenue expected to reach $2.7 billion this year, study says

Three years ago, you might have never heard of group buying or daily deals sites, but chances are you have by now, that is, unless you’ve been living under a rock.

The surge in popularity of such sites has now been confirmed in numbers. On March 22, TechCrunch and TechFlash reported on a new study by daily deals aggregator Local Offer Network that looked at 90,000 deals on 322 sites. The report indicates the industry will continue to erupt, with a prospected growth of 138 percent in 2011, which will see revenues hit $2.7 billion this year, compared to $1.1 billion last year.

The number of deals sites is expected to grow alongside revenues; the number of new sites that appeared in the first quarter of 2011 is about twice as high as that of sites debuting at this time last year. Also on the increase is the number of deals made. Throughout all of 2010, 63,000 deals were purchased. The figure for 2011′s first quarter alone is already at 40,000.

The study suggests that industry dominator Groupon is likely to experience the most growth in the next year – from $760 million in 2010 to $3 or $4 billion in 2011 – though data collected by LivingSocial has led that company to claim it will surpass Groupon by January 2012.

Judge deems record companies’ damages requests for $7.5 trillion “absurd”

After winning their copyright infringement war against LimeWire in court last May, record industry giants, including Warner Bros, Sony, and Capitol Records, now find themselves haggling over the damages. The trial to assess damages is set for May 2, and the victorious party has worked out an assessment of what they believe LimeWire owes them.

Their conservative estimate rests at a relatively tame $400 billion, though they also suggest the more-than-ludicrous sum of $7.5 trillion would make things right.

But in a March 10th document, U.S. District Judge Kimba Wood criticized the request as “absurd” and “contrary to copyright law.” This is not because the estimate contradicts the limits of the maximum statutory damage award (as multiplied by LimeWire’s 50 million users) but rather because the amount is clearly unpayable.

Wood concluded that LimeWire should not have to pay out more than once per work infringed, no matter how many of its users had committed infringement of that work, or how many times they had done so.

Google introduces Media Ads, vies for place beside traditional ad venues

Google’s AdWords received a new ad model March 24, with the introduction of Media Ads.

The new addition conspicuously places thumbnail video ads on the search page at the top of search results, below the search box. As a post on the official Google Blog states, the introduction of this “standalone format [is] designed to put your videos front and center.”

Google’s video ads, which use a Lightbox media player, will initially be used to promote films from major studios (with trailers), but the company is nonetheless considering the format for other media-centered industries as well.

In the case of Media Ads, keywords will be of less significance for targeting, which will be automated anyway and depends more on titles and variations of such.

This initiative could very well represent an attempt by Google to get their own share of the fortune spent by big media on promotion, which until now has gone mostly to more traditional means of advertising, such as on TV and radio, or in print.

Google’s DoubleClick updates search and display ad tool

Google announced March 22 that its DoubleClick Search, a tool for managing paid search campaigns, has been revamped, or as they put it, rebuilt “from scratch.”

A DoubleClick Search blog post says the updates will simplify the management of multiple campaigns on multiple search engines, and will help marketers compare performance of search and display strategies. The same post claims the new “enhancements” will make such activities “simpler, faster, and more effective.”

Among the changes are the introduction of an interface resembling that of AdWords, which streamlines navigation and allows changes from within DoubleClick Search or search engines, as well as new filters and labels to highlight keywords.

Google claims the tool’s new features will “enhance optimization” by allowing users to monitor performance on all major search engines and customize their reporting view to focus on the data they find most relevant.

There’s no doubt search professionals working on large-scale campaigns, across multiple platforms, will soon be putting those claims to the test.

Marketers willing to bet on social media without knowing the odds

According to a report by research firm Millward Brown and the World Federation of Advertisers cited on AdAge March 24, marketers are eager to increase their use of social marketing without even knowing what the resulting ROI would be.

Of the 24 marketers surveyed in the report, 23 said they would be willing to spend more time and money on social media in the coming year though they do not necessarily believe this would increase sales.

Oddly enough, considering the almost unanimous enthusiasm to spend on social marketing, a modest 23 percent said they thought their fan pages resulted in a “good” ROI and 18 percent believed their ROI from fan pages was “average,” while 9 percent even rated it as “poor.”

But perhaps ROI isn’t the most important factor in this sweeping sentiment, as those who were surveyed said they believe their fan pages resulted in “advocacy, loyalty, and engagement”.

Facebook uses members’ real-time conversations to target ads

This month, Facebook began experimenting with ads targeted using its members’ conversations and comments in real time. Ads considered relevant will appear as a user enters what they’ve been typing. For now, the ads are only being tested on 1 percent of the network’s users globally, a group made up of about 6 million people.

The site has been aiming to capitalize on members’ content in order to better target ads for a while now; Facebook launched Sponsored Stories in January and, this month, has undertaken trials of ads targeted using status updates or wall posts, as well as ads relying less heavily on key words.

Providing the real-time ads can reach the right users in the very moment they express a desire for a relevant product or service, the ads may well become a permanent feature of the site. And there is a strong likelihood they can.

One possible hurdle Facebook may have to overcome with this strategy is the fact that, as users become more aware of ads that mine their profiles, they could grow to resent them, and might tailor their content accordingly. Though effectively targeted ads appearing in such an immediate manner have massive and undeniable potential, that potential could be completely undermined by any degree of self-censorship on the part of users.

ShopSquad raises money from high rollers

In a round of early-stage funding, new social commerce site ShopSquad has hooked $1.25 million from some notable investors, according to a March 23 TechCrunch article. Among the power players to invest are Skype CEO Josh Silverman, David Sacks of PayPal and Yammer, and StubHub founder Jeff Fluhr, to name a few.

The social shopping startup offers a service that uses video chat to link users, who are divided into groups of shoppers and advisors. Shoppers can ask advisors for free advice about products, and if they end up purchasing sponsored items, advisors get a commission.

Home Depot adopts mobile bar codes

In partnership with Scanbuy, Home Depot will begin using mobile barcodes in their shops, ads and signage this week, says a March 22 Mashable article. The scannable codes, which act like QR codes, allow consumers access to additional information about products, such as product guides and demos, and of course, enable purchases via mobile devices.

Apparently the home renovation retailer would like to get in on the small, but growing, number of consumers that have used similar technologies and join the ranks of companies putting QR codes to use.

Jumpscan reported recently that 57 percent of Facebook and Twitter members say they’ve “scanned a mobile bar code at least once in the past year,” and powerful outfits like Pepsi, Starbuck’s, Best Buy and Ford already include the use of such codes in their marketing strategy.

Facebook acquires Snaptu

The Israeli developer of apps for mobile phones Snaptu has been, well, snapped up by Facebook this weeks in a deal worth an estimated $60-$70 million.

Snaptu uses apps of its own design to mimic and reproduce features of smartphones on more basic devices, and enables web service, allowing such devices to connect to Twitter, Facebook and other popular sites.

The two companies are already familiar, having done business earlier this year, when Facebook asked Snaptu to create its feature phone application. Doubtless, Facebook’s continued its interest in the startup must be due, in part, to its versatility, as Snaptu works on over 2,500 mobile devices.

IBM caters to social marketers, launches two new products

There is a big difference between knowing that social media impacts your business, and knowing exactly how and why it does. But IBM hopes two new pieces of cloud-based software, released March 24, might help marketers better understand this link.

The company’s Coremetrics Social is a business analytics tool that studies publicly available information across social networks (like Twitter and Facebook) to assess the impact and effectiveness of a business’ social marketing, as compared to the campaigns of its competitors.

IBM’s second new product, Unica Pivotal Veracity Email Optimization Suite, is designed to help companies take advantage of cross-channel opportunities, by looking at email links that are shared between different social platforms.

The two products, which both offer analysis of data in real time, come as part of IBM’s recent Smarter Commerce initiative, which strives to address marketers’ need to “swiftly adapt to rising customer demands in today’s digitally transformed marketplace,” as a company press release puts it.

IBM seems optimistic about how useful the software will be to marketers, with its Chief Strategy Officer John Squire making claims that it “will help marketers develop more targeted, highly-measurable, and effective social media marketing campaigns.”

With threat of affiliate nexus tax, abandonment looms for Zoosk affiliates

California-based dating site Zoosk wrote its own Dear John letter this week – to its affiliates. The March 24 email told affiliates that, though their traffic “was very high quality,” Zoosk would be terminating its affiliate program entirely as of March 31.

The reason stated was “the burden of the state sales-taxes” and the need to shift “marketing focus elsewhere until there is more certainty in the industry.”

California is just one of the 17 states now facing legislation that would obligate online merchants to collect sales tax, despite lacking a physical presence in the state in question.

Nominees announced for first ever affiliate industry awards

The short list for the Affiliate Marketing Awards was announced March 24.

The awards, to be held during AdTech in San Francisco April 12 will see PayPerInstall, ShareASale, SponsorMob and XOSDigital vying for the role of best affiliate innovation. Other categories include best merchant campaign, best mobile campaign, best affiliate marketing blog, best third party tool, best merchant innovation, best use of social media and best use of data feeds.

For a complete look at the nominees, check out MurrayNewlands.com

About Emily Wilkinson

Emily Wilkinson is a Montreal writer and editor who recently joined ReveNews.com. Her experience comes largely from her work at print publications like La Scena Musicale, where she alternated between positions as content manager, copy editor and journalist.
She believes in the importance of strong writing, be it in journalism or in other media, like blogging or even social networking. Her prerogative: though language will and ought to evolve, a good writer need never sacrifice the communicative power of text that is written with thought and care, whatever the venue.
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