JumpFly Blog: AdWords, Yahoo & Microsoft Advertising

Now you can reach YouTube’s 74 million U.S. users with targeted pay-per-click (PPC) video ads. This recently launched YouTube advertising interface links directly to your Google AdWords Account for billing and reporting. In order to participate in this advertising medium, businesses need to have three things:

1) A company YouTube “Channel”
2) Video ad/ads production
3) YouTube campaign development, implementation & management

The newness of this platform provides early adopters an exciting opportunity to capitalize on YouTube’s massive user population as well as the current lack of advertisers and resulting very low cost-per-clicks (CPCs).

Founded in February 2005, YouTube was purchased by Google in November 2006 for $1.65 billion in stock roughly 1-½ years later. Today, YouTube is the #2 search engine and the #3 most visited website in the world. YouTube serves close to 1 billion videos every day and its users upload 13 hours of video every minute. According to HitWise, YouTube’s market share in the U.S. video sector is 73.18%.

Right now, advertisers can get started with really low CPCs before the advertising at YouTube gets competitive. I created a simple campaign for JumpFly as a test and was able to attain impressive first page results for as little as $0.15 per click. As YouTube’s growth continues and video becomes more mainstream, YouTube will likely represent a valuable advertising avenue for many advertisers who properly go after this new marketplace. Learn more about YouTube Sponsored Videos or consider having a professional PPC Management firm assist you in developing your YouTube Sponsored Video campaign.

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Earlier this fall, Google changed their alcohol policy regarding beer. For the first time, they allowed the U.S. AdWords advertisement of beer for sale. Monday, Google announced another update to the AdWords alcohol policy. Starting this week, Google now allows the advertisement of hard alcohol and liqueurs that target the U.S.

This is good news to hard alcohol and beer manufacturers who can now take advantage of the increased holiday traffic, as well as the new opportunities for branding in the online marketplace.

The biggest difference between the ability to market beer and that of hard alcohol, is that beer is allowed to be marketed for sale through PPC advertising, while hard alcohol and liqueurs must “promote the information about the hard alcohol and liqueur that their websites contain.” Any ads that directly promote the actual sale of hard alcohol or liqueur are still not allowed on AdWords. This means that the sale of hard alcohol and liqueur cannot be promoted in your Google AdWords ad copy or be the purpose of your website. Ads for the purpose of branding hard alcohol and liqueur are absolutely allowed to target the U.S.

In other words, you can sell beer with Google AdWords, however you can only brand or use the promotion of hard alcohol and liqueur for non-sales related websites.

Its important to note that Google considers beer, wine, champagne, hard alcohol, and liqueur to be products intended for sale to, and consumption by, adults. Therefore, any ads promoting these products will be given a Non-Family Safe status. From a PPC management aspect, this means that anybody who has activated their “Google SafeSearch filter” will not be able to see these ads.

Has the faltering economy finally caught up with Google and their lucrative AdWords platform?

Perhaps in the short-term, according to Merriman Curhan Ford analyst Richard Fetyko. Yesterday, Fetyko issued a release via Barrons stating, “Based on our checks, the decline in consumer and business purchasing is having a dampening effect on search-engine marketing (SEM) — keyword prices are down 5%-30% from the third-quarter of 2008, traffic to ecommerce sites is also down year-over-year and quarter-over-quarter, and click-through-rates on ad listings are declining as well. SEM is expected to be among the last places to see cuts, and we are there now. Advertisers are adjusting their keyword buys to protect their margins and returns on investment, which are under pressure as sales-conversion rates and average order value dropped, based on our checks. Google’s paid-click volume is also under pressure. Since consumers and businesses have reined in their spending, they are searching for fewer commercial items and are clicking on fewer ads (click-through rates dropped), which translates into slower growth in paid-clicks volume (key revenue driver). Weakness has also spread overseas. Domestic growth has decelerated in 2008, and we expect international regions to slow in the fourth-quarter of 2008 and 2009 as well. U.K. ad revenue was flat for the last three quarters, and the rest of Europe and Asia are seeing cutbacks in ad budgets as well.”

Not surprisingly, various research agencies are reducing their projections for online advertising growth going forward. Just last week, marketing research firm eMarketer reduced estimates for U.S. Internet advertising to $25.7 billion for next year, about $2.7 billion less than a forecast from just three months ago, but still a 9% increase over this year. EMarketer predicts U.S. search ads will generate $12.3 billion next year and that “display ads” will rise nearly 7% next year to $4.9 billion (less than the 14% growth previously suggested). Considering we’re in the midst of the worst financial crisis since the 1930s, I would say that any growth at all is pretty good! The reason for continued growth in PPC advertising despite this crisis is because it works.

While “decelerating growth” may be a sobering reality for Google, it will not bring them to their knees. In the near term, Google may have to make some adjustments, but they appear incredibly well positioned to potentially dominate multiple marketplaces going forward, including organic search, sponsored search advertising, online video & the wireless market. Organic search, PPC advertising and online video (via YouTube) are already in the bag, at least for now, and Google’s wireless Android platform is new but already creating a lot of buzz. Actually, I personally think that what Google has already accomplished is amazing and I look forward to witnessing their future innovations. They always seem to be one step ahead of the competition.

Holiday Reminder- The busiest shopping day of the year, Black Friday (this Friday) is followed by the biggest online shopping day of the year, Cyber Monday (next Monday). Happy Thanksgiving.

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