Healthy Blog Reviews

Google reported it’s results from Q1 of 2010 yesterday and the news was good for Google. Many feel that what is good for Google is good for the rest of us. Maybe it is, maybe it isn’t but at least Google is showing some of the signs of upward movement that we grew accustomed to (and were really spoiled by) in the days before the current economic doldrums we are experiencing. Before we get to the number,s there was the noticeable absence of CEO Eric Schmidt from the call. The call was handled by CFO Patrick Pichette and this is apparently going to be the protocol moving forward. A report of the “news” of Schmidt’s absence comes from the AP reporting on the question asked of Pichette during the call: QUESTION: Any other particular comments you could make around Eric not being on the call and anything else that we should read into that? ANSWER: Eric is everywhere. Eric is in every public … I mean I have seen him in Abu Dhabi and then fly across to (Washington) D.C. the next day. He is everywhere. So the fact that we just decided to streamline our process just for earnings does not mean that Eric is not available, and he is clearly leading as spokesperson for the strategy of the company. So he’s very transparent and everywhere. So on that point it was just simply an issue of kind of streamlining and making more focus on financial results for this call. We can all “read into that” anything we want I suppose. Now lets take a look at the real reason for the call: the company results from Q1. These come from Google investor relations . Revenues – Google reported revenues of $6.77 billion in the first quarter of 2010, representing a 23% increase over first quarter 2009 revenues of $5.51 billion. Google reports its revenues, consistent with GAAP, on a gross basis without deducting TAC. Google Sites Revenues – Google-owned sites generated revenues of $4.44 billion, or 66% of total revenues, in the first quarter of 2010. This represents a 20% increase over first quarter 2009 revenues of $3.69 billion. Google Network Revenues – Google’s partner sites generated revenues, through AdSense programs, of $2.04 billion, or 30% of total revenues, in the first quarter of 2010. This represents a 24% increase from first quarter 2009 network revenues of $1.64 billion. International Revenues – Revenues from outside of the United States totaled $3.58 billion, representing 53% of total revenues in the first quarter of 2010, compared to 53% in the fourth quarter of 2009 and 52% in the first quarter of 2009. Excluding gains related to our foreign exchange risk management program, had foreign exchange rates remained constant from the fourth quarter of 2009 through the first quarter of 2010, our revenues in the first quarter of 2010 would have been $112 million higher. Excluding gains related to our foreign exchange risk management program, had foreign exchange rates remained constant from the first quarter of 2009 through the first quarter of 2010, our revenues in the first quarter of 2010 would have been $242 million lower. • Revenues from the United Kingdom totaled $842 million, representing 13% of revenues in the first quarter of 2010, compared to 13% in the first quarter of 2009. • In the first quarter of 2010, we recognized a benefit of $10 million to revenues through our foreign exchange risk management program, compared to $154 million in the first quarter of 2009. Paid Clicks – Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our AdSense partners, increased approximately 15% over the first quarter of 2009 and increased approximately 5% over the fourth quarter of 2009. Cost-Per-Click – Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our AdSense partners, increased approximately 7% over the first quarter of 2009 and decreased approximately 4% over the fourth quarter of 2009. And of course, the envy of everyone who is in any business is the net income number which was $1.96 B as compared to $1.42 B in the first quarter of 2009. Not too shabby. Google also added 786 full time employees worldwide in Q1. Now that’s the kind of number we haven’t seen from anyone in quite some time. So Google is doing fine. That’s not a surprise. What will really be interesting is what we look back on at the end of this year. With expected investments and the recent attention being given to all things mobile, 2010 may end up being one of the most interesting years in Google’s short but illustrious history. Join the Marketing Pilgrim Facebook Community

Tags: adsense, foreign, marketing, network, news, over-the-first, represents, revenues, Search, the-first, united, United Kingdom
Posted April 16, 2010 by cgseo under Social Media

A few weeks ago Ken Fisher wrote a popular blog post about how ad blocking software can have devastating effects to the websites that you frequently visit. Mr. Fischer describes how ad blocking software is responsible for showing false page view data to ad networks. As a result each ad is priced at a lower rate because the number of impressions are significantly smaller. The number of page views is an extremely important metric for websites that sell advertising based on a CPM price model. So it’s only understandable that Mr. Fischer and other online publishers will hold a grudge against ad blocking software. While I can understand Mr. Fischer’s frustration I cannot sympathize. To be completely honest I use ad blocking software every day. In fact on at least one occasion add blocking software has been responsible for a pretty embarrassing moment. So you’re probably asking yourself why does someone who feels so strongly about marketing block advertisements? It’s simple really, I hate ads. What? You hate ads? How can you write for Marketing Pilgrim and hate ads? In my opinion marketing is fundamentally organizing people around information. Interrupting people with abrupt irrelevant commands isn’t how you organize people around information. Instead speaking to them on a unique and authentic level is more effective and genuine. Putting philosophy aside, in my opinion ads are the worst way to monetize content. Generally speaking an increase in on-page advertisements contributes to a degraded user experience. Which can lead to lower user retention levels and decreased page views. Online advertisements are also ripe with fraud and manipulation. Historically click through rates have been at around 2% for most online advertisements. All of these factors and more contribute to the extremely low return on investment. Online ads add to a decreasing user experience by taking attention away from the site’s primary content and placing it on the ads. This is not the actions of rogue spammers, this is the fundamental method to making any substantial revenue from ads. An excellent example of this in action, is taking a look at Google’s own recommendations for ad placement in the Adsense program. Here we see Google advises users to place ads on every available white-space on the page. This is a huge contradiction for a company that was so widely praised for starting with such a clean user interface. Most ad platforms have large potential for fraud and manipulation . This is is an issue that not many professionals in IM discuss publicly because, quite honestly, whether they are participating in the fraud or not they still stand to profit off of ad manipulation. To a great extent Google and some of the other larger ad networks have gone to great lengths to minimize the impact of this type of fraud. However, any potential for fraud creates an uneasy market place where advertisers and publishers are continually left wondering if they are being taken advantage of. Google doesn’t help matters by keeping the exact specifics of their pricing model a secret from both advertisers and publishers. What’s even more devastating about these fraud schemes is that they can manipulate entire ad markets not just the individual ads they are targeting. We reported back in January that the average click through rate for Google Adwords is around 2%. This means that 2% of the site visitors are clicking through on the ads. Most businesses off the Internet wouldn’t be able to survive with a 2% conversion rate. The only way to make substantial revenue from ads on the Internet is to completely dominate the market and control the flow of information. *cough* Google *cough*. Wow Joe what do you want me to do? Not make any money? Absolutely not! But I do think that more companies and content producers need to experiment with different business models that aren’t reliant on ad dollars. The mainstream media on the internet is already starting to experiment with pay walls and different premium membership options. While I generally agree with the old saying that information should be free, I do think there is substantial room to monetize parts of the web that are currently a free-for-all. For example there are many opportunities to monetize communities and forums that provide quality content and meaningful dialogue to its users. Another potential opportunity is product development. Content developers and publishers should work to create their own products aside from their content that they can offer to their regular subscribers for premium fee. So next time you see a drop in your ad revenue don’t blame the users, blame the ads. They got you into this mess and they aren’t going to get you out!

Tags: adsense, blame-the-users, fundamental, google-adwords, internet, marketing, online, opinion
Posted March 20, 2010 by cgseo under Social Media