ChasNote

From eWeek:

“We’ve all seen ads on the Web that were designed to deceive us: The popup browser window that looks like an error message from Windows, or the box that looks like an e-mail program and says ‘You have 3 messages waiting.’ To begin with, just in case you’re unclear on the matter, yes, these ads are illegal.

“Lots of advertising networks run ads like these. Often they sneak through a genuine vetting process in a company that has standards and tries, imperfectly, to enforce them. Then there’s Yahoo’s Right Media. A study by Ben Edelman of Harvard shows that deceptive ads such as these are common on Right Media and that the company appears to do nothing to stop them.”

Can the dark days at Yahoo get any darker?

Among the list of 14: Apple and Google have peaked (though Google’s stock will spike later in the year); Yahoo and AOL will merge and will cut a deal with Microsoft to monetize Microsoft’s traffic; and Twitter will continue to gain momentum. And two of particular interest to ChasNote fans:

“The online media space will be hit hard by the economic downturn in the first half, but by year’s end, will have chalked up moderate gains over last year in terms of gross spend. I think it’s possible that Q1 09 will be lower than Q1 08, marking the first time that has happened since 01, if I recall correctly. This will cause all sorts of consternation and hand wringing, but in the end, it won’t matter. The web is where people are spending their time, the web will be where marketers spend their money.”

And:

“Major brands will continue to struggle with the best way to interact with ’social media.’ They will take budget reserved for media spending (IE buying banners and building out branding campaigns) and start to become publishers in their own right. This is not a new tactic (many marketers, in particular technology companies, have published magazines, for example, and many consumer brands create or co-create television series), but given the plastic and social nature of online media, many marketers will see these efforts fail, in particular when the efforts are executed in partnership with major media companies. The reason has to do with putting the cart before the horse: in order to truly succeed in conversational media, the company must itself be fluent in that conversation. A partner with tons of traffic, but who is not fluent, will not be the ‘translator’ major brands need.”

His final prediction is that he’ll finish that next book. I’m betting against that one. His FM colleagues (myself included) have plans to keep him busy with his day job.

A few weeks ago, in partnership with Mashable, Yahoo rolled out the BOSS Mashable Challenge:

“The BOSS Mashable Challenge pits developer against developer to compete for the grand prize of $2,000 and an article on Mashable about your winning entry. How do you win? Build a kickass mashup — search engine or any other Web app — using the BOSS API and any other data sources/technologies.”

What I like is the timely applications that can be built overnight, such as this 2008 presidential buzz tracker.

According to AdWeek, Yahoo’s new head of revenue Joanne Bradford has her work cut out for herself, most of which is staving off FM:

“Her task won’t be easy. Yahoo!’s corporate turmoil has damaged morale, according to agency executives, leading to a high churn of reps and inconsistent attention. Upstarts like Federated Media and others have proven more agile at constructing the kinds of deep integrations brands covet. Yahoo!, meanwhile, has been consumed with trying to stave off Microsoft and assuring Wall Street it can compete against Google.”

I couldn’t agree more, Brian.

Hey, it’s my site and I’m allowed to write snarky headlines.

Officially the news is this, as reported by Bloomberg: eMarketer plans to cut its 2008 and 2009 year-over-year growth forecasts for online advertising by a few more points, which currently stand at 23% and 16%, respectively.

“Google Chief Executive Officer Eric Schmidt said for the first time last month that the company, the biggest seller of online ads, faces a more challenging economic environment. Google’s ads tied to Internet search results are still faring better than much of the graphical banner ads sold by companies such as Yahoo and Microsoft.”

I have no doubt that the online advertising market, across the board, will feel the pain of the broader recession. I also agree that Yahoo, Microsoft and AOL will feel greater pain than Google. But it’s not because Yahoo, Microsoft and AOL — which sell mostly graphical banners instead of text ads — are used by advertisers for online brand-building, and brand advertising suffers more on economic downturns.

While the second part of that sentence is true, the first part isn’t. Most marketers buy low cost graphical banners on Yahoo, Microsoft and AOL for the same reason they buy text ads from Google, to drive clicks and other DR activities. Because they are less efficient DR vehicles than Google, they’ll be cut from plans first. The online publishers that have spent recent years working with advertisers on relevant, high-value, integrated sponsorships (rather than chasing Google) are going to fare better — in relative terms — than those three portals.

From AllThingsD:

“CNET Networks will also announce a much expanded editorial and advertising relationship with Yahoo that will give the tech news site broad distribution on the highly trafficked Internet portal…..

“Under the new deal, sources at both companies said a large swath of CNET tech news and also reviews will be carried on Yahoo, making it the major supplier of tech news content to the site. Rather than just focusing on its owned-and-operated properties, Yahoo’s more recent strategy has been to partner with media companies.

“In addition, under the terms of the deal, Yahoo will sell some of CNET’s remnant inventory and also allow CNET ad sales staff to sell into some areas of Yahoo.”

Smart.

It suggests each company has begun to recognize its strengths — and begun to get comfortable with its weaknesses. Yahoo has enormous audience reach (it’s a portal) and sells lots of banners at low CPMs (it’s a giant ad network); it isn’t a leader in original content or high-CPM brand advertising. CNET has a great sales team that generates very high CPMs around premium tech content and an award-winning editorial team (it’s DNA is that of a niche publisher); it isn’t big enough to make the high volume, low CPM ad-network model work outside the core tech sites.

It’s a shame — given all the recent news at both companies — they didn’t do this sooner.

From Times Online UK:

“What’s surprising, though, is that the pure-play internet media companies that might have been expected to benefit from the tectonic shifts in the industry have done badly too. Yahoo!, CNET Networks and Interactive Corp all seemed to be in a great position three or four years ago, and yet all three look like they’ll soon cease to exist in their current form as investors express their displeasure with poor stock performance.”

“Part of the explanation for this is simple enough. Yahoo! and CNET could be considered new media versions of old media models; they aim to drive large numbers of people to their pages with expensive investments in content, and monetise that traffic via display advertising. But low-cost blogs — especially in the technology news space that CNET once led — have scooped up a lot of the audience.”

FM, Huffington Post, PaidContent, TechCrunch and others are called out as alternative models.

Avenue A’s senior VP for global media isn’t worried about Microsoft buying Yahoo. Or, as the Silicon Alley Insider headline puts it, “Microsoft + Yahoo = Irrelevant.”

“”There’s a perspective that going from three portals to two is bad for buyers. But spend is actually moving away from portals and much more broadly across the web, so I’m actually not concerned about moving from three to two, because we are really moving from 3 to 800.”

More at Ad Age:

“For the first time in the past four years, portals lost share of ad dollars year over year — at least from Avenue A/Razorfish, which releases its latest Digital Outlook report today. The shift comes after years of ad-dollar consolidation with the largest players online. In 2007, 19% of Avenue A’s media spending went to portals, down from 24% in 2006.”

Here’s a keynote quote from Sunday’s IAB conference in Phoenix, as reported by Battelle, “We must not trade our advertising inventory like pork bellies.”

Great line, and important sentiment. Google has ushered in an era of ad-networkification of online advertising. Even erstwhile media companies, like Yahoo, that used to sell brand-advertising experiences have lost their way chasing Google deeper into CPC-land.

Wenda Harris Millard, former sales chief at Yahoo, puts it succinctly (PaidContent):

“This is absolutely inevitable, entirely predictable and it is all about what happens when you lose sight of what business you’re in and who your customer is. Yahoo’s monomaniacal obsession with Google and its thinking that Google was its only competitor led to this. In fact, (in) a company where 90 percent of your revenue comes from advertising, it would seem the primary competitor would be broadcast networks.”

And Yahoo’s not alone. Google has made nearly every online media company forget what brand advertising is.