ISM Signpost #19
SIGNPOST is the monthly executive summary of the
internet search marketing industry.
06.07 ISSUE 19
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SIGNPOST, please email m.daly@isearchm.com
*** The Game of Life
*** A Marriage of Convenience
*** A Newer Model
*** Web Wars
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+++ The Game of Life +++
Google tracks gamers to analyse behaviour
It reads like science fiction but Google has filed a patent to compile psychological profiles of web users by covertly monitoring the way they play games. The search engine thinks it can glean information about individuals’ preferences and personality type by tracking their online behaviour. It even says that details such as whether a person is more likely to be aggressive, hostile or dishonest could be obtained and stored for future use. Google hopes to customise ads shown to gamers by tailoring them to specific tastes and interests.
Google is especially interested in targeting players of online role playing games like Second Life and World of Warcraft as they interact with each other and may make decisions that reflect their behaviour in the real world. For example, players who spend a lot of time chatting to each other might be shown ads for mobile phones, while players who spend a lot of time exploring maybe shown marketing for holidays.
There are reams of possibilities for targeting ads within online games, and they don’t all rely on psychological profiling. For example, a gamer who has been playing for over two hours could be shown ads for Pizza Hut, coke or coffee.
Understandably privacy campaigners have expressed concern that Google could be compiling and storing such detailed information. Games publishers would have to agree to the integration of Google technology, but they’re continually looking for new ways of making money. Unless the privacy lobbyists voice is heard, Google’s Icarus-like ambitions could soon transform the search engine into Big Brother.
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+++ A marriage of convenience +++
Microsoft and Yahoo discuss merger
Microsoft and Yahoo discussed a possible merger as the two search engines struggle to compete with Google’s growing dominance. The merger discussions have progressed no further but the two companies may still co-operate in order to milk the potential of the booming online advertising market.
Microsoft has become increasingly frustrated by Google’s spiralling control of online advertising, say industry insiders. This was confirmed when Microsoft lost out to Google in a deal to buy DoubleClick, the online advertising specialist. Google currently controls 32.1% of the online advertising revenue, compared to Yahoo’s 18.7% and MSN’s 6.8%, according to eMarketer.
The deal would combine two of the largest online audiences, comScore estimated the combined company would have 634m users, compared to Google’s 528m. It would also enable the combined company to dominate online display advertising. Microsoft and Yahoo have worked in partnership before. Until last year Yahoo provided search technology and advertising to Microsoft.
However, the deal has limited benefit for Yahoo, which is hoping its new advertising system, Project Panama will boost its future performance. Similarly, a joint venture between the two search engines would be messy. Integrating brands and management would be difficult and could in fact enable Google to gain even more ground as the merger distracts the two search engines.
Microsoft and Yahoo have tried just about everything in the past to close the gap with Google in the online advertising search business. It hasn’t worked. While a defensive partnership may be messy, complex and time consuming, drastic measures may be the only hope.
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+++ A Newer Model +++
Google updates search
Google has upgraded its search engine in order to present a multi-media results page for users. Universal Search integrates search results from its services to include images, video clips, book information, news headlines and local business data.
For example, a search for Steve Jobs, the CEO of Apple would include pictures, video and news from Google Images, Video and News alongside its regular text links. The upgrade helps Google users find the most relevant information without having to consider its separate specialised search services like image or news search.
The embedded video in Google’s Universal Search pages will be one of the most appealing aspects for users. Relevant clips from Google Video and YouTube can now be watched alongside the text links. It demonstrates that YouTube is increasingly being valued as a significant search tool as well as pure entertainment channel.
It’s only a matter of time before Google is able to introduce new types of advertising, such as video ads on the search results page, which to date has only carried text ads. Watch this space.
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+++ Web Wars +++
Scrabble to acquire online advertising firms
A flurry of deals to acquire online advertising firms has confirmed the growing conviction that brokering automated advertising will play a large role in how online and traditional ads are sold.
Within 24 hours of one another, Microsoft acquired online ad specialist aQuantive for $6 billion, while advertising giant WPP bought 24/7 Real Media for $649 million. Meanwhile, Yahoo announced it was buying the remaining 80% of Right Media, which operates an online ad exchange for $680m. The catalyst for the wave of deals was Google’s $3.1bn acquisition of DoubleClick last month.
Ad services companies like DoubleClick, 24/7Real Media and aQuantive sell and place internet ads. Brokering these ads is increasingly being regarded as the business model that will fund almost everything on the internet – from search portals, news sites and video downloads to web-based software like word processing.
Similarly, these deals confirm that automated advertising could play a significant role in how TV, radio and print ads are sold. It’s bad news for traditional media agencies which have always been the link between advertisers and TV, newspapers and radio.
Indeed, Google’s intrusion onto the traditional turf of agencies is a real threat to Madison Avenue. And in some cases it’s eliminating the intermediary role of ad agencies, which is why WPP, which owns traditional advertising shops like Young&Rubicam and JWalterThompson has joined the consolidation rush. It marks the most aggressive step yet by the advertising industry to take a piece of the technology part of the online ad business.
SIGNPOST is published monthly by Internet Search Management Ltd.
The opinions expressed are those of the Editor and not necessarily those of Internet Search Management Ltd.
All material Copyright 2007 Internet Search Management Ltd. All rights reserved.
ENDS
