Two things caught my eye in the news today:

1) Yahoo is reporting that man has eaten a 15 pound hamburger:

A related search turned up some interesting facts.  A regular 100 gram hamburger patty has 259 calories and 16.3 grams of fat.  Now, I’m no math expert, but it seems to me that 15 pounds of the stuff contains roughly 17,612 calories and 1,108 grams of fat.  That’s more than a large movie theater popcorn.

 2) Google has launched a new WYSIWYG Display Ad Builder:

Yes, this is far more on topic for this blog.  But, come on, that hamburger was pretty impressive, wasn’t it? 

The new Display Ad Builder comes at an interesting time when the perceived value of online display inventory is on a huge upswing.  Typically a branding move with expected low rates of directly resulting conversions, banner ads are nevertheless coming back into vogue. 

In my opinion, this is only further evidence of the declining value of vanity websites for commerce.  Let’s face it, most internet users are past falling for a fancy web design, a flashy animation, or a sparkling logo.  They want information.  For small businesses in particular, the more concise that information is displayed the better.  Look at Google/Yahoo to see that this is true.  Up to 50% of a search results page for most every local business search is occupied by local business ads.  That’s because this is primo inventory.  It gets clicked (makes the search engines money) and converts (makes the advertiser money, too).  That’s partially because it is so local in nature, and specific to the search query.  But, it is also because the resulting pages are well formatted for conversion— prominently featuring the phone number, email address, etc.  Vanity websites typically aren’t so well formatted for conversion, that’s for sure.

So, with less emphasis being put on developing fancy websites, more budget is becoming available for other marketing.  There are only so many explicit searches happening for “Seattle Electrician”, but there are literally thousands of contextually relevant sites where a banner ad might display to get some extra eyes on your business.  It may not convert all that well, but it may have long term benefits including driving up your CTR and conversion rates from other media.

And, don’t forget, Google has long been looking for ways to better utilize all of this available inventory.  Content match has had a terrible reputation— mostly because advertisers failed to understand the idea of it being “CPC-priced CPM inventory” rather than more typical click-to-conversion trackable traffic. 

So, what do you think?  Would you use it?  Google’s betting on it and will do everything in their power to help you get around any roadblocks preventing you from trying.  Too cheap to pay a graphic designer?  Try the banner builder.  I did, and it is pretty cool.

Google Display Ad Builder

For anyone unfamiliar with the term, ‘avatars’ are those graphical computer representations of users you find around the net.  You’ve definitely seen them by now.  Some people try to make them as realistic as possible, while others make them as fantastical as they can.  Some avatars are static, two-dimensional images, and some are animated 3D.  Mine (on Yahoo, at least), is an angry version of myself with a weiner dog and a fishbowl:

Avatars can have a number of uses.  Some of the most common places you will see them applied are:

• in Video games
• on Internet forums
• as a part of Internet chat (including instant messenger programs)
• on Blogs (although, I don’t use them here)

In the early days of the internet, it seemed possible that everyone would have their own avatar, which would travel with them as they navigated around the web (ever see Tron or The Lawnmower Man?).  In many ways, it made a lot of sense.  Creating a digital representation of the real world (a la Second Life) provides many possible benefits, and maybe some new and interesting opportunities for monetization of non-ecommerce websites. 

But, that isn’t the way that things have evolved.  Instead of a bunch of Max Headroom’s surfing through pages of the net, the primary method of navigation has become search engines.  While it is a more utilitarian way to get around, and certainly much more anonymous, it may be a little more boring compared to what else is possible. 

Finally, however, there seems to be a resurgence in some of the ideas that may lead us further in the futuristic-direction of avatar-based web navigation.  Google has now launched a new beta, named Lively.   

Lively looks to be pretty cool stuff.  It not only lets users create their own avatar, but allows them to build a “space” for them to “exist” within.  That space can include links to other “rooms” containing videos, photos, even games.  Avatars visiting these rooms can interact through chat or IM.

Right now, it doesn’t really look like all that much more than a scaled-back version of Second Life.  But, there’s a reason that Google has chosen to get involved in the avatar game— and, it is possible that they see the potential for evolving the foundation of internet navigation, and are not just looking to get more into the internet chat pickup scene.

Imagine, if you will, each space containing all of the internet properties associated with a particular user.  My own space would contain rooms for my photographs, videos of my baby girl, each of my other websites, IM programs I use, my social networking pages on other sites, and even this blog.  Some rooms would be available by invitation only, and some would be open to the public to browse.  My space would be linked to other spaces, much like hyperlinked navigation works today.  Heck, my space might even include ads for products and services I promote (yeah, come to think of it, it probably would).  People would find my space because it would be linked to other people’s spaces with similar topics, ideas, or themes.  Popular spaces would be easiest to happen upon, while unpopular spaces would be obscure. 

Doesn’t seem so far-fetched, does it?  In fact, it sounds quite a bit like the way PageRank works today.

Well, the future all starts with an avatar.  I guess I’ll build mine on Lively when I get the chance, and while it is still free.

This morning, while catching up on reading everything I missed over the 4th of July weekend, I happened upon an interesting story about gas prices across the country.  A site (certainly appearing to be a MFA (’made for Adsense’) appeared on Digg because it had mapped gas prices by US county, and put up a cool heatmap illustrating the range of prices:

This got me to thinking.  It did strike me that this map seemed remarkably similar (swapping red with blue) to another color map we have all seen (over and over again) this election season.  You know the one, red states and blue states:

On first glance, this looks like grounds for a conspiracy theory.  Blue states, on average, have higher gas prices.  But, there is sure to be a lot more to it.  Blue states are: typically higher in population density, have more of the country’s larger cities, might impose larger taxes on gas stations, and are generally located on the coasts and not in the center of the country.  These are all factors that could account for the prevalence of red and orange on the gas-prices heatmap in so many of the “blue” states.  There are certainly a few things that don’t make any sense at all— Illinois (blue) is Orange on the heatmap, while neighboring states like Indiana (red) is Yellow, and Missouri (red) is Green. 

Take that for what you will.  I’m going to leave it to the political blogs (for either party) to argue if there’s an issue there or not.  That’s not what we’re here for, we’re here to discuss internet marketing.

So, I decided to see if there were any noticeable similarities in the price of clicks for keywords associated with “gas prices”.  I loaded Google’s Traffic Estimator with the same geoqualified keywords (gas prices, gas stations, etc) for each of the 50 states and District of Columbia.  I analyzed the results in Excel, and found some interesting things. 

I assigned estimated CPCs of $0.00-$0.25 a score of 1 (for low), CPCs of $0.25-$0.50 a score of 2, CPCs of $0.50-$1.00 a score of 3, and CPCs over $1.00 a score of 4.  That gave me the opportunity to make my very own fancy map (thanks to tamu.edu for the utility), a heatmap of Gas Prices CPCs in Google.  There were some surprises, like the high competition in Georgia and Texas:

 
Then, I gave Gas Prices from the heatmap similar scores: Green got a 1, Yellow got a 2, Orange a 3, and Red got a score of 4.

Lastly, I averaged the scores for Blue states and Red states to see if there were any noticeable trends:

In conclusion, it appears that there isn’t much ground for a conspiracy theory, afterall.  Both the average CPC scores and average Gas Price scores that I calculated seem pretty consistent when viewed in aggregate.  There are aberrations, but they don’t favor either the red states or blue states, and virtually cancel each other out when viewed in total.

So, I guess in the end we are all in it together.  We’ve got high gas prices, and internet marketers in both red states and blue states are paying for the increased competition they create. 

On June 30th, Google announced that it is “retiring” its Adsense referral program.

As posted on the Adsense Blog (and also sent in an email to all users of the referral program):

“We’re constantly looking for ways to improve AdSense by developing and supporting features which drive the best monetization results for our publishers. Sometimes, this requires retiring existing features so we can focus our efforts on the ones that will be most effective in the long term. For this reason, we will be retiring the AdSense Referrals program during the last week of August.”

The change is set to go into affect at the end of August, 2008.

For those unfamiliar with the program, Adsense publishers had the option to select from a list of advertisers and choose specific ads (text, as well as varying banner sizes) to display on their site.  Included among these ads, and probably the most popular, were advertisements for Google’s own services:

Unlike Adsense content-matched advertising, or searchthis feature gave the advertiser control over which ads showed on their site— basically, acting like affiliate advertising.  Payouts varied by the advertiser, usually paid as a flat fee based on a selected action. 

In fact, it was the purchase of affiliate manager Doubleclick that ultimately led to the program’s demise:

“We are currently reevaluating the Google Referrals program to ensure that it is providing the best possible monetization opportunity for our publishers as well as meeting the needs of Google. At this time, we have suspended the Google Referrals program.”

This change should not come as a surprise to anyone who has followed Google’s acquisition of Doubleclick/Performics.  The industry has expected Google to incorporate Doubleclick’s affiliate management system into their own, to expand their content network (beyond text-based PPC ads, where the majority of usership has always been) and move towards a more action-driven model.  It remains unclear what Google intends to do with the rest of Doubleclick/Perfomics, namely the account-management side— which, Google has always stated represents something of a conflict of interests.  It also remains to be seen if Google will choose to advertise their own products on the system, including Adsense or Adwords (these products are not yet appearing on Doubleclick).  Perhaps the investment is no longer worth it, with Google being the defacto search advertising solution for such a broad usership.  Maybe it isn’t a cheap source of leads any more.

According to the latest Comscore data, Yahoo sites still generate the most unique visitors of any internet property (121,962,000 as compared to Google’s 85,685,000). 

This is no surprise, as Yahoo is a content play before anything else.  With thousands and thousands of pages of proprietary content, discussion groups, forums, email, and everything else under the sun, being a search engine has never seemed to be the biggest priority in Sunnyvale.  With all these page views— one would think that Yahoo would reap enormous revenues. 

According to Yahoo’s own finance page on their business, Yahoo posted gross revenues of $1,817,602,000 for the first quarter of 2008.  By dividing gross revenue by the latest Comscore data on unique visitors (extrapolated to be representative of the same 3 month time period), Yahoo appears to have grossed $4.96 per visitor per month.  And, using a 41.5% cost of revenue (calculated using data from the same balance sheet), that would effectively reduce Yahoo’s net profit to $2.90 per user per month.  Yahoo claims to average 3.4 billion page views per day.  That’s 102 billion page views a month.  So, if my math is correct, Yahoo makes about $0.017 per page view.

When you are talking about how much money you make per page view, less than 2 tenths of a cent per page isn’t too good.

Compare this with Google.  By the same calculation, Google posted gross revenues of $5,186,043,000 for the same period.  Divided by the number of users in the Comscore report, adjusted for time, that equates to $20.17 gross, or $11.90 net per user (profit margin being calculated in the same manner).  Good luck finding accurate page view per user data from Google— so, let’s just say it is 2.7B (thanks to SearchEngineWatch for the guess).  That means, by the same calculation, Google makes $0.52 per page view (that’s 30X more per page).

Now, I’ll be the first to admit that this math is absolutely and completely flawed beyond being in any way accurate.  It fails to take into account any variables that exist, including revenue from other sources (content network, partnerships to name a few).  But, I would argue that this analysis is “directionally correct” at the very least, if not true to scale.

Although terribly simplified, this analysis does illustrate the problem Yahoo has.  All the users in the world are worthless if they don’t generate revenue.  That’s why Yahoo’s stock is at $21.45 (as of June 22) and Google’s is $545.21. 

But, don’t count Yahoo out— it takes many years, millions of dedicated users, and billions of dollars to generate the depth of content Yahoo has across its properties.  Search is easy, serving ads is easy.  A recent deal with Google might finally give Yahoo the means to better monetize that traffic.  Combine that with true dedicated usership, and Yahoo still might have a chance to win in the end.

It is possible.