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IN THE JUNE ISSUE... Paid Search Advetising to Reach 5.6 Billion in 2005 Blogs Become Marketing & PR Stars Google Allegra Update – Five Important Changes Local Search Ad Revenue Gets Stronger PAID SEARCH ADVERTISING TO REACH 5.6 BILLION IN 2005 Chris Richardson, Webpronews.com Recently, the numbers for online advertising for the first quarter of 2005, and they did not disappoint. Yesterday, the same results specifically for search engine advertising were released and these numbers left little doubt about the strength of search engine advertising. The numbers for online advertising for 2005's first quarter reveal a comprehensive adoption of this method of promotion. First quarter results reveal $2.8 billion was spent in first quarter online advertising. Current forecasts, according to MarketingVOX, put total online advertising spending in an area of $12.4 billion for 2005 and up to $25 billion by 2009. After the forecast for search engine advertising was revealed, it becomes quite clear that almost half of 2005's forecast spending ($12.4 billion) will be spent on the search industry. According to numerous reports, experts from Merrill Lynch forecast 2005's search engine advertising spending to be between $5.1 and $5.6 billion, which is an increase of 47 percent when compared to 2004's $3.5 billion amount. Merrill Lynch's thinking on the forecast credits a great deal to broadband adoption by more and more homes in the US. This, in turn, will lead to more search engine queries, which will facilitate the increased ad spending on search. Merrill Lynch also forecasts search queries will increase by 16 to 18 percent in the first quarter. An increase of search users and queries means more people will be exposed to search engine advertising. And as any marketer knows the larger the audience, the better chance you have of getting exposure for your advertisement. BLOGS BECOME MARKETING & PR STARS Jason Miller, Webpronews.com A web log has become the next darling of marketing and public relations-a real time, two-way walkie-talkie, a bulletin board of instant feedback. Don't think so? It's always good to keep an eye on the industry pace setters. When blue chip behemoths begin to recognize the power of the blog, those who were barely aware of its existence begin to sit up and take notice. IBM, Microsoft, Yahoo, Google-not exactly small fries in the business world-all have/allow/encourage/regulate blogging from within their ranks. The blog has exploded. So much so that Merriam-Webster's Dictionary awarded it "the word of the year" in 2004. In that year, the percentage of Internet users who had read blogs spiked sharply from 17% to 27%. In the US, that translates to 32 million adults. Still in its infancy, blogging is easy to pick up and is surely being utilized to its corporate potential right? Not even close - eMarketer reported that just 4% of major US corporations have publicly accessible web logs. And that, dear readers, is a huge waste of resources. Just from a marketing standpoint, the demographic that blogs typically reach should be attractive enough. The highly coveted, proven-to-be-lucrative, unsettled in spending habits, frequently targeted 18-24 year-old age group is more than twice as likely to read blogs than the rest of the general population. Talk about a golden opportunity to build a relationship with future consumers! And that is what blogs can do so well-build relationships, the heart of marketing and PR. Better than broadcast, which is literally like fishing for an audience, a web log can target a precise and already interested user base, virtually free of charge. "What's fundamentally different about blogs is that you can be very successful if you find effective ways to get to the really precise audiences you want to reach," said John Lee, vice president of marketing at Hostway. "It's a way to reach the right people in ways you could not do before." Certainly caution is in order. People have already been fired for their blogs. Microsoft and Google both have pulled the trigger on their employees for blogging with poor foresight. Blogging will become indispensable as it grows and as audiences become aware. Web logs will become the human face of the machine, the moderator of the conversation. And better, he who starts the conversation usually gets the first and last word. GOOGLE ALLEGRA UPDATE – FIVE IMPORTANT CHANGES San Christopher, ClickZ News Sergey Brin, one of the founders of Google recently said, "Google has made five significant changes to its algorithmic formulas in the last two weeks.” 1. Increase in Index Size Google's spider, Googlebot, has had a busy few weeks -- at the time of the update, Google announced that it had massively increased the size of its index. 2. Latent Semantic Indexing (LSI) This is a very significant new technology that Google has always been interested in, and the incorporation of LSI has been on the cards for some time. If you are an insomniac, then Yu et al.'s paper is quite helpful in explaining the concept, but, in short, LSI is about using close semantic matches to put your page into the correct topical context. It's all about synonyms. LSI may see Google effectively remove all instances of the search keyword when analyzing your page, in favor of a close analysis of other words. 3. Links and Anchor Text Links have always been the essence of Google, but the engine is steadily altering its focus. The importance of Page Rank (PR), Google's unique ranking system, is being steadily downgraded in favor of the nature, quality, and quantity of inbound and outbound link anchor text. If PR is downgraded, and the wording of inbound links is boosted, this may explain, to a large degree, the position in which many sites currently find themselves. Google seems to be using outbound links to determine how useful and authoritative a site is. For example, directories that are doing well are those that direct link to the sites, rather than use dynamic URLs. 4. Neighborhoods Now, more than ever, has the question of who's linking to your site become critical. Links must be from related topic sites (the higher the PR the better); those links are seen to define your 'neighborhood'. 5. Downgrading of Traditional Tag-Based Optimisation Clever use of the title, h1, h2, bold, and italics tags, and CSS, is no longer as important to a site's ranking as it once was. It is very interesting to listen to Sergey (co-founder of Google) talk about this, because he's the one usually quoted about the ways in which people manipulate his index. Google has taken big steps to downgrade standard SEO techniques in favor of LSI and linking. LOCAL SEARCH AD REVENUE GETS STRONGER Paul J. Bruemmer, Pandia News In March, the Kelsey Group revealed that 70 percent of U.S. households use the web to research information when shopping locally for products and services. It's no wonder, as Kelsey Group reports that U.S. businesses spend $90 billion annually on local advertising. Online search portals are focused on monetizing search and want a piece of the pie. As broadband becomes prevalent, and consumers routinely use the web to research and buy products, the importance of local search becomes increasingly apparent. Current estimates say 40 percent of search engine queries are for local businesses and services. Couple this with research that shows 92 percent of local searches convert later offline, and you can see an emerging pattern of consumer behavior. This hasn't gone past the major search portals. They're out to win the hearts and minds of consumers and business owners alike by focusing on local search functionality. By now, most search portals have a yellow pages or local search component with access to local listings. There's Yahoo!! Local, Google Local, AOL Search, Verizon SuperPages and more. MSN just announced plans for a satellite mapping system to enhance their local listings.