Posts Tagged ‘online-advertising’

Petsky Prunier: interactive ad industry dealmaking down in 2008, but not a bad year

Tuesday, January 13th, 2009

M&A activity and investments in the interactive ad industry
declined in 2008 according to a new report issued by Petsky Prunier.

Deals were down 29% and acquirers and investors spent five times less than they did in 2007.

As reported by ClickZ, Petsky Prunier counted 167 reported deals in 2008. The fourth quarter, not surprisingly, was the weakest quarter of the year. There were 31 deals worth $346m in the quarter; deal volume was down 18% from Q3 and total dollar value was down 29% from Q3. Compared to Q4 2007, deal volume was down 55% and total dollar value was down 77%.

But don’t let the numbers fool you. 2008 wasn’t exactly a bad year.

As Petsky Prunier managing director Scott Wiggins observed:

“The comparison to 2007 is probably unfair. 2007 was probably a high-water mark in the online advertising industry. By contrast, many years would look especially less active than 2007.”

So where did the money flow in 2008?

Ad networks and exchanges were big, as were interactive agencies. Both industry sub-segments recorded 40 transactions during the course of the year.

Petsky Prunier noted that most of the interactive agency dealmaking was “selective (and predominately small in value)” and designed “to accommodate the evolving needs of agency clients, moving away from disparate specialists and platforms in favor of agencies with broad capabilities and geographic reach.

Only subsegment received “more attention” later in the year - email providers. This was the only one that saw more dealmaking in Q4 than in any of the previous quarters.

As for where the money didn’t go, online lead generation had only one deal in Q4, down from 13 in the same quarter of 2007. No SEM & SEO and affiliate network deals took place in Q4, although deal volume for these sub-segments was light in 2008 overall.

Turning to 2009, Wiggins predicts that dealmaking might “normalize” in 2009 if the credit markets unfreeze. There is money on the sidelines, as many companies were able to raise capital before the financial markets fell, and sellers are also more realistic.

One fourth quarter trend that might extend into 2009 - international expansion. Petsky Prunier noted that “Large agency holding companies continued to acquire interactive agencies [in Q4], pursuing international expansion and focusing on targets outside of the United States.

An overview of Petsky Prunier’s report can be found here.

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Petsky Prunier: interactive ad industry dealmaking down in 2008, but not a bad year

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Is Yahoo’s proactive account ‘optimization’ legal?

Tuesday, January 13th, 2009

Many advertisers were disappointed and angered last week when it
was widely-reported that Yahoo has changed its ‘Sponsored Search and
Content Match Program Terms’ to permit Yahoo to automatically make
modifications to the campaigns of its advertisers.

Section 3 of the Yahoo terms and conditions dealing with the Sponsored Search and Content Match search advertising programs detail the change:

OPTIMIZATION. In the U.S. only, for those advertisers not bound by an Insertion Order, we may help you optimize your account(s). Accordingly, you expressly agree that we may also: (i) create ads, (ii) add and/or remove keywords, and/or (iii) optimize your account(s). We will notify you via email of such changes made to your account(s), and can also include a spreadsheet of such changes upon your written request. If you would like any of such changes reversed, please reply to such email within 14 days of the change(s), and we will make commercially reasonable efforts to reverse the change(s) you specifically identify. Notwithstanding the foregoing, you remain responsible for all changes made to your account(s), including all click charges incurred prior to any reversions being made. It is your responsibility to monitor your account(s) and to ensure that your account settings are consistent with your business objectives.

In other words, Yahoo has reserved for itself the right to proactively ‘optimize‘ Sponsored Search and Content Match campaigns as it sees fit. And it’s a bit of a worry, for some people.

The changes to the terms and conditions were apparently rolled out in mid-2008 but it appears that advertisers were only emailed about it this month.

Needless to say, the advertiser reactions to Yahoo’s changes have not been, by and large, overly positive.

From blogs to message boards, few seemed to express enthusiasm for Yahoo’s changes.

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Site review: TopGear.com

Tuesday, January 13th, 2009

TopGear.com, the sister site to the popular BBC motoring programme, has been trumpeting its relaunch with a series of viral videos seeded on sites like YouTube and Facebook.

The look of the site has been improved, while car reviews, and more blog and video content has been added. The redesigned TopGear.com also displays new and used cars from AutoTrader. This brings it into competition with sites like Autocar and Parkers, so I’ve been seeing how it compares.

Homepage

The homepage (below) with its wooden dashboard look, is well designed and laid out, making the page easy to scan for visitors. The previous site didn’t quite fill the whole screen and had a blank space on the right, but it is now centred and looks much better for it. The latest news articles, blogs and video content is well presented without being too cluttered.

Reviews

The reviews section compiles hundreds of car reviews from the Top Gear magazine. The verdicts are presented with a mark out of twenty for each car. Photos are good, while a 360 view of each car is shown alongside some detailed technical information on each car. Related videos from the TV show are provided, while cars for sale are shown.

The information is well presented and is a useful resource for people researching new car purchases. The reviews aren’t as detailed as on sites like Parkers, but the related video content is more appealing.

Used car search

Reviews link to an option to search AutoTrader for new or used cars, though this can be frustrating at times. A number of my searches for what should be common cars returned no results, which suggests a few teething problems with the new site.

Results are well presented when you can get some, but suffer from the same drawbacks as on the Autotrader site. Some of the data has not been organised too well, so you get five year old cars listed as having no mileage. There is no way of sorting the results also, which would be useful when searches return a large number of results.

The ‘advanced search’ options are pretty inadequate too, with just price range and four other options to choose from, which is far less than provided on the Autotrader website, and makes it harder to search effectively and find the exact model you are looking for.

Video content

The site will doubtless become a popular destination for people looking for clips from the TV show, and TopGear.com does an excellent job of presenting video clips and making them easy to search for.

A series guide gives details of each Top Gear episode broadcast with links to videos from that programme. Users can also search for a clip by keyword, or choose from the categories on offer: outtakes, reviews, challenges etc.

Blogs

The site has four new Wordpress blogs, featuring frequent contributions from the three presenters, as well as the team from the magazine. The scrapbook design works well, and content is well presented. I like the boxes on the right which display the most commented and most popular posts, as well as the tag cloud.

Conclusion

The team behind the relaunch have done an excellent job with the site, it is well designed, easy to use, and full of good content. Unfortunately, according to the rate card, it will be offering advertisers the option of overlays, an intrusive and pretty lame ad format which can spoil the user experience.

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Site review: TopGear.com

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Another newspaper considers going all-digital

Monday, January 12th, 2009

2009 is shaping up to be an interesting year for the newspaper industry.

As the economic downturn accelerates the severe declines in print
revenue most major newspapers have been experiencing, the imperative
for change will only get stronger. Indeed, 2009 may be a make or break year for many of them.

The New York Times’ decision to sell advertising on its front page, something it had never done before in its 157 year history, is just one example of the significant changes many newspapers will likely make in 2009.

In October 2008, The Christian Science Monitor announced that it would be the first nationally circulated newspaper in the United States to go all-digital.

Now another may follow suit.

The Seattle Post Intelligencer (Seattle PI), which is owned by Hearst Corporation, is in dire financial straits. It lost $14mn last year alone, which represents just a fraction of the money Hearst has invested in it. Things are only expected to get worse this year.

Hearst is now looking to sell the Seattle PI within the next 60 days. Given the paper’s financial situation, the prospect of a buyer surfacing seems quite unlikely.

If a buyer is not located, reports are that Hearst will either shutter the newspaper altogether or it may go all-digital.

Such a move would obviously force Hearst to drastically restructure the Seattle PI’s operations to cut costs.

The $64,000 question, of course, is whether or not newspapers will be able to transition to an online-centric format profitably while maintaining a high level of quality.

As we’ve reported before, despite the fact that newspaper websites have done well traffic-wise, the revenue side of the equation is still problematic.

Thus, for an online transition to succeed, newspapers will have to face the challenge that all online publishers face - how to produce content that drives monetizable traffic for less than the amount of revenue that content brings in.

That’s no easy task, and it will likely be made more difficult as newspaper executives and employees adjust to their new realities. Content is content but there are significant differences between the world of print and the world of electrons.

As more and more newspapers consider the possibility of going all-digital and some inevitably make the attempt, I think it would be worthwhile for newspaper owners like Hearst to consider that bringing online publishing veterans and experienced bloggers into the fold as part of a restructuring might help make the transition easier.

I’m sure there are more than a few online publishing executives and bloggers who would jump at the opportunity to be a part of the historic shift in the newspaper industry and who could help shape it for the better. Given the economic downturn, I’m sure there’s no shortage of online talent willing to help an old industry renew itself online - if it’s willing to reach out to them.

The New York Times seems to be welcoming fresh minds and new ideas. Will it save the newspaper? It’s certainly worth a shot and hopefully other newspapers will leave nothing untried as they fight to survive.

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Another newspaper considers going all-digital

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Microsoft-Yahoo rumors surface (again)

Friday, January 9th, 2009

The on-and-off again rumors of a Microsoft-Yahoo deal are back in the news.

TechCrunch’s Michael Arrington, citing unnamed sources, reported on
Wednesday that a group of “well known Silicon Valley executives and top
investment bankers
” was working to arrange an acquisition of Yahoo that
would value the company at $20bn.

That would represent about a 20% premium to Yahoo’s value currently but still far less than the value Microsoft placed on the company before its original acquisition offer was rejected.

The interesting part of this rumor: according to Arrington, Microsoft would provide most of the financing for the deal “in return for a fixed return on the debt that is tied to Yahoo?s future cash flow.

Arrington’s sources indicated that Yahoo’s search business would be sold to Microsoft after the acquisition was completed and new management installed. Microsoft currently has a cash pile of $23bn and while it could finance a good part of a $20bn acquisition, the question is - why would it?

And so it is that like many of the Microsoft-Yahoo rumors before it, this rumor appears to be just that - a rumor.

Bloomberg cited sources close to Microsoft who are familiar with its plans as stating that Microsoft was not in discussions to finance a Yahoo acquisition.

AllThingsDigital’s Kara Swisher spoke to one of her sources close to Microsoft, who told her the same thing:

“We can deal directly with Yahoo, which is moving through a process to get a new CEO, and when the time is right, we will deal with their leadership. Getting involved in some convoluted deal with others in control?it?s idiotic.”

In short, this is one rumor that doesn’t make a lot of sense for Microsoft. And, as analysts quoted by Bloomberg pointed out, at this point such an offer wouldn’t make a whole lot of sense for Yahoo shareholders either. Most would probably demand a more significant premium given the hammering Yahoo’s shares have taken following Microsoft’s failed bid and the collapse of its deal with Google. And with a new CEO on the way, they have real reason to hope that change is on the way. After all they’ve been through, waiting to see what happens probably doesn’t seem all that bad.

In short, it appears that bloggers and the news media are still far more interested in a Microsoft-Yahoo hook-up than Microsoft and Yahoo are. My suspicion is that there’s still interest in some sort of marriage on both sides but given the circumstances and the economy, both companies realize that they need to spend some time apart before they revisit their relationship. That’s probably for the best.

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Microsoft-Yahoo rumors surface (again)

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