Make No Mistake: Microsoft Called Carl Icahn
By dave_pasternack | May 15, 2008
So what do you do if you’re Steve Ballmer and you’ve had it up to here with the juvenile antics of your takeover target’s board? You call Carl Icahn and tell him to go to work. I’m completely convinced that Icahn (who will announce Yahoo’s alternate board today) has already gotten firm agreement from Microsoft that it will pay somewhere in the neighborhood of $33 for Yahoo. The media seems to think that Carl Icahn must somehow convince Steve Ballmer to close the deal. But guys like Icahn never buy 59 million shares of anything without having a guaranteed deal — a sure thing — already in place. I can only imagine the cackling that’s going on in Redmond right now: Microsoft gets to have it both ways now: it can pick up Yahoo for the money it was willing to pay for it, keep its hands from being bloodied in a proxy war, and wind up looking like the nice guys who just said no to an unreasonable deal. Now that’s a beautiful thing.
Topics: Online Ad Industry Foolishness | No Comments »
Social Networking Gets a Much-Needed Downgrade
By dave_pasternack | May 13, 2008
A blistering new report from EMarketer hammers a couple of much-needed nails into the coffin of social networks as ad media. The fact that advertising doesn’t work on social networks is obvious: users are too busy diddling around with some doo-dad to pay attention to marketing pitches. Here’s more bad news for social networking hype-meisters:
- Revenue projections fell 22.5 percent (from $1.6 to $1.4 billion) for all of $2.8. Why did EMarketer downgrade this medium this early in the year? Because expenditures for this junk are tanking badly!
- Growth figures have been cut in half (from 163 percent growth in 2007) to just 55 percent. This is more than a deceleration: it’s a downright crash.
- Myspace alone (a gaudy, obtrusive ad-laden nightmare) accounts for 55 percent of social network ad spend. And yet Fox Interactive’s revenue is DOWN 10 percent. This obviously means that whatever money its making is offset by huge costs.
Social networking is a dog as an ad medium. Expect to hear more about its doggyness as this fast-moving train wreck destroys the hopes of all the lunatics promoting it. This ridiculous waste of ad dollars must stop!
Topics: I'm Mad as Hell and I'm Not Clicking on It Anymore, Online Ad Industry Foolishness, Uncategorized | No Comments »
When Will We Finally Abolish the Banner Ad?
By dave_pasternack | May 6, 2008
Sean X Cummings, of Ask.com, writes a witty, well-reasoned article on how ad agencies consistently fall down when designing those horribly ubiquitous banner ads we see almost everywhere on the Web. According to Cummings, just about everything is wrong with ad banners, from their conception to final delivery. Unfortunately, he offers no real corrective remedy, in fact, some of his suggestions (especially that they always be animated) will simply add more visual clutter to a medium which feels more like a tawdry strip mall than the Library of Alexandria. Nobody notices them, nobody clicks them, and the reasons for this are quite obvious: human beings are very good at screening out irrelevant messaging — it’s a skill we’ve learned from millions of years of hunting and gathering — and this has been borne out by numerous eye-tracking studies proving beyond a shadow of a doubt that people almost never click on images. As a species we’re hard-wired to separate the wheat from the dross, banners are a throwback that deserve to be buried forthwith.
Topics: Online Ad Industry Foolishness | No Comments »
You Can’t Wake Up a Dead Man
By dave_pasternack | May 5, 2008
I don’t know about you, but I’m getting sick of hearing about conferences where the advertising industry is issued an urgent “wake up call” to become digitally competent and leave its glorious but completely irrelevant past behind. But this is exactly what happened this week at Dana Point, as reported in The New York Times and also in Advertising Age.
Talking “tough love” to an industry whose very DNA is based on opposing change (in order to preserve its fat margins on analog media) is great, and so is the call to “leave the past behind” and “stop your whining.” Substituting boring digital workshops with Eric Schmidt for free golf and tennis is a great way to torture the doomed, but even the toughest kind of tough love is too little and too late: if it happened ten years ago, or even five, Madison Avenue might have had a chance of surviving into the second decade of the 21st Century, but it’s far too late to save this archaic, ridiculously inefficient business, especially when the best advice given to agencies is to “hire young people and don’t tell them what to do: ask them what to do.” If this advice is followed, we’ll soon occupy a world of non-professionals with no competence at anything except playing the latest version of “Grand Theft Auto.”
Topics: And These People Still Have Jobs?, I'm Mad as Hell and I'm Not Clicking on It Anymore, Old vs. New Media | No Comments »
E-Commerce Will Take Big Hit as States Close “Amazon Loophole”
By dave_pasternack | April 29, 2008
Last Friday, Google’s chief economist pointed to figures suggesting that even a severe recession won’t dent e-commerce (which apparently has grown 22 percent in the past two years). The economist went so far as to claim that a recession helps e-commerce, “because cautious consumers are doing more research and comparison shopping online before making a big purchase.”
The real problem — and it’s an obvious one — is that e-commerce is about to get hit by several unstoppable factors which will inevitably slow it down. As my colleague Mark Simon noted last week, cash-hungry New York State, whose property-based revenues have been depleted by the subprime mortgate mess, has enacted a tax on Internet retailers, and it’s a sure bet that other states will follow suit. Online shopping will grow less attractive as fuel prices surcharges are added to the shopping bill. E-commerce will survive, but the kind of growth we’ve seen will plauteau and maybe even fall once states stop footing the bill for Amazon and its ilk. We’re still at the leading edge of the damage to state finances, and somebody’s going to have to pay for schools, roads, police, and other essential state services. Once New York’s bill goes into effect, look of other states to get on the “soak the merchants” bandwagon.
Topics: Online Ad Industry Foolishness | No Comments »
Apocalypse Yahoo?
By dave_pasternack | April 25, 2008
I spent some time this week watching Apocalypse Now (Redux), one of my all-time favorite films from the 1970s. I’ve seen this film at least 10 times, and it always has some new lesson to teach me about the state of the world, and this time around, a few scenes reminded me of Yahoo’s current death dance with Microsoft.
One such scene occurs when Willard, reviewing the secret dossier on Colonel Kurtz, notes that Kurtz claimed that “he only needed ten highly motivated divisions to win this war.” This observation unerringly describes Yahoo’s troubles.
Another scene (deleted from the original release) concerns Captain Willard’s encounter with a group of French colonialists holed up at a rubber plantation who refuse to face their inevitable fate. These die-hards aver that they will “never leave,” because their entire identity and family history is intrinsically bound to the land. Captain Willard leaves them before their fate is revealed to us, but it is clear that they are ultimately doomed. I’d hate to think that the Yahoo board’s apparent failure to reasonably negotiate with Microsoft is rooted in a similar, irrational emotional connection to the Yahoo brand.
Topics: Search Engine Marketing | No Comments »
Online Ad Network Bubble Will Soon Burst
By dave_pasternack | April 21, 2008
Remember, about a million years ago in Web time, when all the pundits were saying that the Net was going to “disintermediate” all of those obnoxious middlemen skimming pennies from every commercial transaction? Well, exactly the opposite’s happened, at least in the world of interactive advertising: today, we’ve got more than 200 ad networks, each of them incompatible with each other, each promising to provide some magic elixer of microtargeting powerful enough to convert dross inventory into pure gold through some proprietary alchemy.
The whole ad network as gold rush thing is sickeningly ridiculous. Every new ad network that comes along means another decision level for media buyers to perform, even as the whole industry is crying out for a simpler way to buy media. Just about everybody with a clue expects massive consolidation to occur in the online ad network sector, and it’s not going to be pretty. The last thing this industry needs is more middlemen, incompatible technologies, and new fly-by-night ways to buy crap inventory. What we all need is a way to buy media in a way that’s less, not more annoying than it is right now, and only the SE’s seem to be getting this right. As SE’s get better a
Topics: I'm Mad as Hell and I'm Not Clicking on It Anymore, Online Ad Industry Foolishness | No Comments »
Loyalty is Dead; Long Live Marketplace Amorality
By dave_pasternack | April 17, 2008
Loyalty, it’s said, is dead. Already buried is the traditional loyalty which corporations used to display towards those working for them and the reciprocal loyalty of workers toward these organizations. Loyalty towards brands is an illusion, especially in a recession, when consumers figure out that they can get the same value from a non-branded good as from an over-priced one with a fancy package. And in search marketing, loyalty has died a very hard death indeed, and yet nobody’s bemoaning it (except, it seems, myself).
The absence of loyalty from the search marketplace is a rude awakening for many old-school ad agencies. For years, being known as the guy who booked a million dollars a month worth of airtime on a network counted for something. Beyond the invitation to the glitzy upfront, such loyalty often translated into negotiating leverage. The guys who spent money were rewarded (even though it wasn’t really their money they were spending) with a volume discount. That was just the way advertising worked.
Today, there’s no loyalty at all. If you’re the guy spending a million dollars a month on Google or on one of the other engines, you’re treated the same as some shlub with a $10 per day PPC budget. You not only get bupkis as a reward but the SE’s do everything they can to undercut your position. For example, Google has a very active sales force recruiting competitors who will do everything they can to make your existing SEM strategy unprofitable. You’d think they’d show a little loyalty to the guy who’s spent a half billion dollars over the last two years, but that’s not the way these guys think. This isn’t bitterness, folks; it’s just reality. Why expect loyalty from anybody when we’ve selectively bred it out of our whole culture?
Topics: I'm Mad as Hell and I'm Not Clicking on It Anymore, Search Engine Marketing | No Comments »
Breaking News: Search Marketing Techniques Devised in 1930’s
By dave_pasternack | April 15, 2008
Excellent article by Alan Rimm-Kaufman on the fact that today’s search marketing best practices are inherited directly from traditional Direct Mail techniques devised 80 years ago. Especially relevant is the “List-Offer-Package Rule” holding that Lists (the segment you’re marketing to) are the most important variable, followed by Offer, and then Package (i.e messaging). This basic rule should inform everything we search marketers do; the amazing thing is that they were promulgated in the 1920s and 1930s. While the mechanics of marketing have changed radically, the principles haven’t; if more people were familiar with them, we’d have far more effective search marketing campaigns today.
Topics: Good Stuff, Old vs. New Media, Search Engine Marketing | No Comments »
American Express Slams SEO, SE Spammers React With More Whining
By dave_pasternack | April 8, 2008
One of the most annoying things about the SEO crowd is how thin-skinned they are. They might come off all rough and tough on their Blogs, but this hard shell masks a quivering level of insecurity that’s clearly rooted in their own precarious and highly temporary status in the search economy.
All it took was American Express to mention in a marketing document that SEO isn’t worth paying for and the whining hit the 300 db level. Here’s what AmEx wrote:
Don’t waste money on so-called Search Engine Optimization (S.E.O.) specialists. Search engines are very quick to penalize sites that try to trick their filtering techniques, and once your site has been put on Google’s blacklist, it will take forever to get off.
What’s so controversial about this statement? It simply reflects the very obvious fact that most SEOers specialize in trickery that can and will blow up in your face. When did it become a crime to tell an inconvenient, but completely obvious truth?
Topics: I'm Mad as Hell and I'm Not Clicking on It Anymore, SEO, Search Engine Marketing, Shady Marketing Tactics | No Comments »
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