Google Right Side Sponsored Link Thumbnail Images

Today is the first time I noticed thumbnail images in the right side sponsored ads in google search results. Perhaps Google is taking some lessons away from Facebook’s success using the thumbnail + text for sidebar ad delivery.

Check out this example (click for fullsize)

Notice how many of the links on Google’s search results are now sponsored? They have taken 80% of the first page results for themselves.

BING should have an easier time growing market share if Google can annoy their surfers enough with the sponsored listings.

ReachLocal Expects More Financial Losses

In December, ReachLocal filed for a $100M IPO and released a few interesting numbers about their operations.

The company has a $6.1M debt obligation after acquiring the remaining shares of it’s Australia operations (in Sept ReachLocal bought the remaining 53% of shares it did not own). Somehow after this deal was completed ReachLocal reported a “non cash” gain of $16.2M on the transaction, but that the operations had already ran a deficit of $3.3M.

If you back out the one time non-cash gain and operating losses from the Australian acquisition, ReachLocal lost about $500,000/mo over the last 9 months on $143.3 million in revenue. In a pre-IPO regulatory filing, the company stated it “expects to report net operating losses in the foreseeable future”.

It was shocking to read about how much ReachLocal employees dislike their own company. This JobVent Poll shows reach scored at 14.5 out of 100 employer rating. Unhappy customers are likely to follow this trend.

More Money For Bloggers in 2010?

Web publishers are reaping huge profits as the 2.0 bubble heats up. Google has become better at weeding out spam, allowing higher quality sites to rise to the top and finally starting booking some serious revenue. As the popularity of adwords increases, so does the balance of blogger’s bank accounts enrolled in the adsense program.

Even sites focused on small towns and small communities are able to make a substantial amount of money because local service businesses are one of the most expensive online advertising niches, especially for high dollar items. I have recently seen prices as high as $50 CPM for specialized local service content oriented sites. .

A gigantic spike in click prices is likely to occur over the next 24 months. Google’s recent string of acquisitions plus the price for local service clicks exceeding eight dollars tells me Google anticipates Adwords Advertisers seeking cheaper advertising solutions on smaller networks and is working to combat it by buying them. Bring on the antitrust.

Payouts to blog and website publishers are likely to continue to increase as advertisers abandon social networks because of increased cost, lower quality and volume issues. The fact is, Facebook advertising prices have increased faster than the number of accounts on their network. Businesses that built successful advertising campaigns on MySpace, Facebook and Google are rediscovering comfortable margins on smaller, third party ad networks (Etology, Adbrite, Bidvertiser etc) as these networks continue to improve their targeting capabilities and provide much cheaper traffic and easier ad approvals.

The end result, higher cost per click = good for publishers. Adsense publishers on average receive approximately $0.50/click for their traffic, the highest amount in history. Specialized sites focusing on medical, dental, and insurance are seeing well above $1.50/click as advertisers are finally learning how to properly target sites in the adwords content network. Expect your banner spots to pay more than just your hosting bill in the near future.

Affiliate Networks: Optimized Rotators Fail

Banner optimizers on affiliate networks feel more like a meat grinder than optimized rotation. If you’re like me, you’ve checked out all these “optimized” banner rotators at Clickbooth and other networks. You’ve probably also seen that these “optimized” rotators are the worst performing adverts you’ve placed since those affiliate banners for fire places in 1995 (if you remember these, you are a ninja).

Most ad networks rely on your assigned Affiliate Manager to optimize the ads in said rotation and this is where the ball gets dropped. We’ll never know if the technology is any good because it’s bombarded with unproductive offers that no one would run on their site if they had the choice (feel like turning your computer in a TV tuner, lolz).

If you do not run volume and have a great relationship with your Affiliate Manager you are already dead in the water on optimized rotation.

Clickbooth has a small advantage because they allow webmasters to choose which offers are in rotation (if your AM ever gets back to you, some are good there, some you will never hear from for years, hope you got a good one), but their interface is not very intuitive. Most campaigns you select take a few days for approval, then a few days to see if it works or not for whatever GEO you’re showing it in, then the process keeps repeating and weeks go by before you nail down the right offer, and then it goes stale in 5 days.

Anyone with a wordpress plugin that rotates and geo target ads can generally outperform these rotators by 100 to 1 margin. There is a huge void right now someone could fill with an intelligent adserver. Unfortunately, none exist that I can find.

If you’re using optimized rotation and it’s working well for you please contact me 812.480.8889

MySpace Advertising Performance Improves

MySpace Advertisers already know, performance at the social network giant has increased by leaps and bounds over the past several months, while prices continue to drop.

Is the performance boost because younger kids are abandoning the network in exchange for more niche driven communities? Perhaps the new ad placements and improved interface have finally combined to form the special sauce for conversions. Maybe all the other advertisers just left (haha)!

This past year MySpace ran into a ceiling on traffic, the year over year growth digits aren’t as exciting (in fact traffic is down year over year, 10% just last month) as past years and the site looks doomed from almost every angle. Maybe just the realization they would go out of business forced MySpace to start acting like a business.

While Twitter and many other newer social networks will likely hit a ceiling then deflate, MySpace may just survive long enough to buy the guys who are in the spotlight today. As ad rates continue to drop, MySpace continues to step up and work harder.

At the end of the day, traffic prices and conversions are all that matter and MySpace is running away with the lead for advertisers no matter how you slice it.