Search Engine Use Increases Sharply, Edging Towards Email as the Primary Internet Application

Search engines have become an increasingly important part of the online experience of American internet users. The most recent findings from Pew Internet & American Life tracking surveys and consumer behavior trends from the comScore Media Metrix consumer panel show that about 60 million American adults are using search engines on a typical day.

These results from September 2005 represent a sharp increase from mid-2004. Pew Internet Project data from June 2004 show that use of search engines on a typical day has risen from 30% of the internet population to 41%. This means that the number of those using search engines on an average day jumped from roughly 38 million in June 2004 to about 59 million in September 2005 – an increase of about 55%.

comScore data show that from September 2004 to September 2005 the average daily use of search engines jumped from 49.3 million users to 60.7 million users – an increase of 23%.

This means that the use of search engines is edging up on email as a primary internet activity on any given day. The Pew Internet Project data show that on a typical day, email use is still the top internet activity. On any given day, about 52% of American internet users are sending and receiving email.

These findings have considerable consequences for the way people gather and use information online and the way e-commerce is conducted.

“Most people think of the internet as a vast library and they increasingly depend on search engines to help them find everything from information about the people who interest them, to transactions they want to conduct, organizations they need to deal with, and interesting factoids that help them settle bar bets and backyard arguments,” said Lee Rainie, Director of the Pew Internet Project.

“The evolution of search engines as everyday consumer Web tools has made them a vital resource for marketers,” said James Lamberti, vice president of comScore Networks. “Search engines are obviously a critical vehicle in reaching consumers during the buy cycle, but they also offer a rich source for consumer profiling, segmentation, and measurement of product demand. To-date, we have only witnessed the preliminary impact of search engines on e-commerce.”

The latest data from comScore show that Google was the most heavily used search engine in October 2005 with 89.8 million unique visitors, followed by Yahoo! Search (68 million unique visitors), MSN Search (49.7 million unique visitors), Ask Jeeves (43.7 million unique visitors), and AOL Search (36.1 million unique visitors).

The Pew Internet Project findings cited in this report come from a nationally representative telephone survey of 2,251 American adults (age 18 and older), including 1,577 internet users, between September 13-October 14, 2005. The margin of error on the internet user portion of the survey is plus or minus 3%.

The comScore data cited in this report come from comScore Media Metrix, an internet audience measurement service that uses a massive cross-section of more than 1.5 million U.S. consumers who have given comScore explicit permission to confidentially capture their browsing and transaction behavior, including online and offline purchasing.

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Pay For Action Adsense – A Fundamental Problem

Ever inventive, Google has been sending out emails to select Adsense publishers regarding a new pay for action program. This is bad news for publishers promoting Adsense.

Pay For Action Adsense

If you are reading this, you probably know what Adsense is and are using it. If not, it is a program whereby Google allows sites to place ads from the Adwords program on their site. When a visitor to your site clicks one of the ads, you get a cut of the bid price from Google. It is a simple program that surprisingly generates a significant amount of revenue.

Google is now beta testing a new version of Adsense it is calling pay for action. While Google is not providing much information, the program apparently is an attempt to convert Adsense into one giant affiliate program. Instead of paying publishers for clicks on ads, the program will only pay a commission if a person clicks on one of the ads on your site and takes the relevant action on the advertiser’s site. In this case, it appears the action is buying whatever is offered or becoming a lead. In exchange for killing the click revenue aspect of Adsense, you apparently get a cut off the commission for whatever revenue is generated by the advertiser from your traffic.

There are a number of problems with this approach. First, Google offers no explanation of how it will account for sites that list phone numbers for orders, a method used by customers that Google can’t hope to track. Second, Google has offered no indication of how revenues will be generated from sites offering services such as lawyers, doctors and so on. A vast majority of people clicking onto these sites will telephone or email the business, which makes tracking a very difficult game. Admittedly, the program is in beta testing, so Google may come up with solutions for all of these issues. There is, however, a more fundamental problem.

The pay for action program contains one inherent flaw. It eliminates the motivation of the advertiser to have a good, fast site that converts and proper customer service. All indications are the advertisers will be able to use the platform for free and only pay commissions to Google which are split with us, the publishers. If so, what motivation does the advertiser have to improve their site? What motivation does the advertiser have to satisfy customers? In my honest opinion, the answer is very little. Yes, they want to get more sales, but what do they really care if they are getting a bunch of free traffic?

y for action program contains one inherent flaw. It eliminates the motivation of the advertiser to have a good, fast site that converts and proper customer service. All indications are the advertisers will be able to use the platform for free and only pay commissions to Google which are split with us, the publishers. If so, what motivation does the advertiser have to improve their site? What motivation does the advertiser have to satisfy customers? In my honest opinion, the answer is very little. Yes, they want to get more sales, but what do they really care if they are getting a bunch of free traffic?

If I told you I would send you 100,000 visitors a day and you had to pay me a commission only on sales, how much would you work to improve the site? Be honest. Perhaps you would work on it for a month or so, but after that human nature would take over. We all know of sites out there that haven’t been touched in years because they have so many affiliates producing tons of traffic that they can just kick back and collect cash.

I fully understand that Google is trying to deal with click fraud, click bots and so on. Perhaps the pay for action program will be the solution when it is ultimately finalized. Perhaps it will be the greatest thing since, well, Google. My experience, however, is that a majority of affiliate programs are iffy at best, otherwise I would be promoting them instead of Adsense!

Again, it is to early to draw any conclusions regarding Google’s move, but people with Adsense ads on their site should take notice. This is a fundamental change that redistributes the risks and benefits of the Adsense program. I bet Yahoo is salivating about the prospects for its Publisher Network if Google goes ahead. Personally, I planned to stay with Adsense for as long as it was offered, but have my doubts now. If I wanted to partner with other sites, I would have done it a long time ago.

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Beyond the 30 Second Spot: Marketers Adding Alternatives to Television Advertising

Seventy-eight percent of marketers feel that TV advertising has become less effective in the past two years

New York, NY (March 22, 2006) - A new survey, released today by the Association of National Advertisers (ANA) and Forrester Research, Inc. (Nasdaq: FORR), found that 78% of advertisers feel that traditional television advertising has become less effective in the past two years. The survey also found that marketers are exploring emerging technologies to help bolster their television advertising spend.

The joint survey asked 133 national advertisers about their attitudes towards TV advertising and what impact new technologies, such as digital video recorders (DVRs) and video-on-demand, will have on their TV advertising budgets. Those surveyed represent more than $20 billion worth of advertising, including marketers from Charles Schwab, Colgate, Dunkin' Donuts, Johnson & Johnson, Mattel, Pfizer, and Verizon.

"As DVRs look to climb above 30 million households in the next three years, advertisers are finding themselves forced to reconsider their media mix," said Josh Bernoff, Vice President, Forrester Research, who presented the findings today at the ANA Television Advertising Forum in New York. "Television networks continue to publish research that traditional TV advertising is potent as ever, but national advertisers aren't buying it and are seeking alternatives to enhance their budgets and move them beyond the customary 30-second spot."

Key highlights of the ANA/Forrester survey include:

- Almost 70% of advertisers think that DVRs and video-on-demand will reduce or destroy the effectiveness of traditional 30-second commercials.

- When DVRs spread to 30 million homes, close to 60% of advertisers say that they will spend less on conventional TV advertising; of those, 24% will cut their TV budgets by at least 25%.

- While 55% say that their top executives are closely watching changes in TV advertising, most advertisers have not experimented with advertising on DVRs (49%) or video-on-demand (44%).

- Eighty percent of advertisers will spend more of their advertising budget on Web advertising and 68% of advertisers will look to search engine marketing.

- Advertisers are also looking at alternatives to traditional TV advertising and will spend more of their advertising budgets on: branded entertainment within TV programs (61%); TV program sponsorships (55%); interactive advertising during TV programs (48%); online video ads (45%); and product placement (44%).

- Ninety-seven percent of advertisers agree that the TV industry will need new audience metrics - other than reach and frequency - to report commercial ratings, not just program ratings to effectively measure TV advertising.

"The television industry as we have known it may be challenged on a number of fronts, but continues to attract a significant media investment by ANA marketers," said Bob Liodice, President and CEO of the ANA. "As new and traditional media alternatives compete more aggressively for a share of the media pie, and marketers look to improve consumer targeting, reduce costs and enhance accountability, television is aggressively responding. With technology-based advances in addressability, enhanced television options, Internet convergence (IPTV) and branded entertainment opportunities, television is likely to continue as the dominant part of the marketing mix."

A full report on the survey findings will be available in the near future through Forrester Research (www.forrester.com). This is the third ANA/Forrester Research survey of advertisers on this topic. Previous surveys were fielded in 2002 and 2004.