Archive | April, 2008

Court Rules Competitor Must Use ‘negative keywords’

30 Apr

 Orion Bancorp of Florida recently won a  court case  in which it received a competitor’s domain (not new) but also that if its competitor, Orion Residential Finance, ever engages in paid search advertising, it must include  negative keyword-Orion in all campaigns (very new).

This might be the first court case that mandated negative keyword parameters in a ruling. It looks like deep pocket, litigious companies now have an additional weapon with which to bludgeon its competition.

From Ars technica:

” Orion Bancorp took its rival to court, arguing that the name was confusingly similar to its own. Orion Residential Finance apparently sent a lawyer to court but never filed a response of its own, and the judge eventually issued a default judgment against it. The judgment contained the usual prohibitions on using the name “Orion” in signs, promotional materials, and slogans, but it also included domain names and online advertising.

The judge prevented Orion Residential from “purchasing or using any form of advertising including keywords or ‘adwords’ in internet advertising containing any mark incorporating Plaintiff’s Mark, or any confusingly similar mark, and shall, when purchasing internet advertising using keywords, adwords or the like, require the activation of the term ‘ORION’ as negative keywords or negative adwords in any internet advertising purchased or used.”

The “negative keyword” ruling means that Orion Residential advertising would be explicitly prevented from showing up after searches for the term “Orion,” but could appear for any other keyword searches.

 The decision was handed down at the end of last month but recently noted by technology lawyer Thomas O’Toole. O’Toole points out that the judge’s decision goes far beyond what a company would be able to get simply by pursuing a domain name dispute and sees it as a “good example of the sweeping relief possible when the defendant defaults in an online trademark infringement case.”

Law professor Eric Goldman expects to see more such requests in these kinds of cases, saying, “I think it’s a logical addition to any injunctive relief request in a trademark infringement case.”

Companies, judges, and regulators alike have grown increasingly aware of the power of online advertising and the ways that it works, and in large portions of the world, this means that people have become increasingly aware of Google. (In this case, the judge repeatedly refers to “adwords,” for instance.) But as online advertising increases in importance, Google’s ad practices—such as allowing companies to take out keyword ads on competitors’ names—have come under scrutiny.

Australian regulators expressed discomfort with the practice last year and accused Google of “misleading and deceptive conduct” in the way it sold and displayed its ads. Just this month, a US appeals court considered the case of Rescuecom, a company that also sued Google over its keyword searches. And last year, the Utah legislature passed legislation prohibiting search engines from serving ads linked to trademarked search terms to Utah residents. The legislation provoked so much controversy that last month the Utah legislature reversed course and repealed the most controversial portions of the law.

If judges show a willingness to shut down this sort of keyword advertising in particular situations, we might see legal action in this area shift towards cases between the parties involved in disputes, rather than attempts to force change upon Google. Search Engine Watch calls the judge’s decision in the Orion case a “dangerous precedent,” but it could prove a popular one for companies that want to play hardball with rivals. “

Yahoo 2.0

28 Apr

Yahoo Inc is looking to revamp itself and improve its position in th emarketplace, and not so co-incidentally insulate itself from a $44 billion MSN buyout offer. Yahoo plans on leveraging its content and portal so that users can manageinformation about themselves in a single place and share it 2.0 style.

“We are not building another social network,” Chief Technology Officer Ari Balogh told more than 1,000 attendees at the Web 2.0 Expo conference in San Francisco on Thursday. “We are building social into everything we do.”

 “Yahoo Open Strategy” due out later this year, is Yahoo’s plan on positioning themselves in light of Myspace and Facebooktremendous growth. Yahoo’s plan would give users simple privacy controls to limit what data users reveal about themselves.

“We are going to unify all profiles throughout Yahoo,” said Balogh, whose appointment as Yahoo’s CTO was announced on January 29, a day before Microsoft first proposed its $31 per share cash and stock offer to merge with Yahoo.

Balogh estimated there are more than 10 billion latent social connections that exist between Yahoo’s 500 million monthly users in the form of e-mail addresses, instant message buddy lists, address books and other shared connections.

Dept. Of Justice Reviewing Yahoo & Google Test

24 Apr

From Reuters:The U.S. Justice Department is investigating possible antitrust implications of Google’s two-week test with Yahoo to combine some of their Web search and advertising business, a source informed about the matter told Reuters on Wednesday.

Google and Yahoo separately told Reuters they had informed the Justice Department about their test before it was launched.

 

In the test, which ends this week, Yahoo uses Google’s advertising system to show ads to Yahoo users based on their searches.

 

The Justice Department is concerned the test may violate antitrust law, the source said, adding that authorities “have initiated an investigation” of it.

 

The source, who spoke on condition of anonymity, said some of the government’s concern focused on a telephone call from Google Chief Executive Eric Schmidt to Yahoo Chief Executive Jerry Yang to offer help in thwarting Microsoft’s bid worth around $44 billion.

 

The test was one of a series of efforts by Yahoo to fend off Microsoft’s unwelcome bid.

 

A second source said the Justice Department was concerned about a longer-term deal between Google and Yahoo, and had an initial inquiry underway into the matter.

Consumers More Likely to Return to Sites That Include Community Aspects

17 Apr

From: http://www.marketingcharts.com/direct/consumers-return-to-online-shopping-sites-that-embrace-web-20-4265/?camp=newsletter&src=mc&type=textlink

With consumers continuing to spend briskly online, and social websites aggregating ever-larger numbers of participants, the twain – online shopping and social networking – may finally be meeting, according to a nationwide survey from Guidance and Synovate.

In the new survey, more than 60% of respondents report being drawn to online retailers that employ Web 2.0 tools and techniques.

The Guidance/Synovate eNation study of some 1,000 online consumers, conducted in March, asked: “When thinking about shopping online, what is most likely to make you return to a given shopping website?”

Among the findings:

guidance-synovate-online-shopping-why-return-to-website.jpg

  • 35% of respondents say they’re most likely to return to a shopping website if it makes recommendations on products or services for sale.
  • 26% say they want “a unique experience each time” they shop.
  • 18% say they’re more likely to return “if the site solicits their feedback” on its products and services.
  • 16% say “a welcome when they arrive” at the site is the factor most likely to make them return
  • 6% say  they’re most likely to return “if the site makes them feel part of a community” with other shoppers/site visitors.

Drilling Down: Social Shopping Online

Other key findings:

  • Fully 41% of those age 18-24, the prime demographic for the social web, say they’re most likely to return to a site that makes recommendations. Only 29% of those 55-64 say so.
  • Women are far more likely to be influenced by a welcome greeting – with 20% saying it’s the feature most likely to get them to return, compared with 12% of men.
  • The older you are, the more you want to give feedback: The upper three age groups were more likely than the bottom three to say that a site that solicits their feedback is most likely to make them return.
  • A few groups went against the overall trend by not selecting “recommendations” as their No. 1 choice: non-whites (they chose both “unique experience” and “feedback” ahead of recommendations), those with post-grad education (”unique experience” was slightly higher), and those with incomes under $25K (first choice was the “welcome”).
  • There’s a wide gap between the lowest-income bracket and all others:
    • Only 26% of those who earn less than $25,000 per year chose “recommendations,” 10 percentage points below all other income categories.
    • Respondents in the lowest income bracket were far more likely to prefer a “welcome” – 27% said it was the feature most likely to make them return, at least 13 percentage points higher than the other income categories (14% of those earning $25K-$50K and those earning $75K+, and 12% of those earning $50K-$75K agreed). 

“The economy is fragile and the competition for the consumer dollar is fierce, but as these findings make abundantly clear, online commerce is now a two-way street – and retailers need to embrace that reality, ” said Jason Meugniot, Guidance president and CEO.

“Online consumers and merchants are in dialogue as never before, and consumers are counting on each other for insights in making purchase decisions. Recommendations have become the new currency of online commerce, along with their corollary, the opportunity to give feedback to the e-Commerce site.”

Yahoo Serving Up Limited Adsense

9 Apr

Yahoo released a pres release with details regarding their new (old) relationship with Google.”it will begin a limited test of Google Inc.’s AdSense for Search service, which will deliver relevant Google ads alongside Yahoo!’s own search results. The test will apply only to traffic from yahoo.com in the U.S. and will not include Yahoo!’s extended network of affiliate or premium publisher partners. The test is expected to last up to two weeks and will be limited to no more than 3% of Yahoo! search queries.

As previously announced, Yahoo!’s board of directors is exploring strategic alternatives to maximize stockholder value, including exploration of potential commercial business arrangements. The Company noted that the testing does not necessarily mean that Yahoo! will join the AdSense for Search program or that any further commercial relationship with Google will result. The Company further stated that it would not comment on the nature or timing of any potential relationship.”

Interesting Ecomm Data

8 Apr

Blatantly stolen from my boss’ blog and edited for my own nefarious purposes.  Just so much good data that is so hard to find normally…WARNING: some ChannelAdvisor horn tooting to follow.

“We spend a lot of time at ChannelAdvisor following the various datapoints and thoughts around e-commerce and today Forrester research (Sucharita Mulpuru is the analyst) came out with a joint report/survey with the great folks at Shop.org (I/we are an active member FYI).

The headlines of the report are good news for internet retailers:

  • Forrester sees e-commerce growing at 17% y/y in the US (This is good because comscore is starting to talk about 14% and maybe lower).  I’m an optimist and think that in early 09 the pundits will update the data to be more like 20%
  • This puts e-commerce at $208B for 2008, up from $174 in 07
  • e-commerce represents 7% of retail.
  • search engine marketing (what I call paid-search) drove 35% of sales and is still the top channel for retailers
  • 65% of retailers are experimenting with social networks
  • Forrester is predicting that growth will be driven by the computer, CE, auto and apparel categories.
  • Retailers spend $.50/click on average for paid-search and see $8.47 in incremental revenue (that’s a weird metric)

I downloaded the report and what’s neat is that shop.org/Forrester are finally seeing and reporting on the multi e-commerce channel trends we’ve been talking about for years.  For example, they have this figure from the survey section that covers the top channels for retailers (note these would be larger retailers, primarily with brick-and-mortar operations as well I would assume):

Shop_org2

Another interesting datapoint they have from the survey is they asked retailers for a variety of e-commerce channels what the cost per order for the channel is and the average selling price.  I’ve found that most retailers like to look at channel costs either as a ROAS (return on ad spend) or an ‘Effective Take Rate’ (ETR), which is more of a cost of sales kind of model which helps for margin-planning/forecasting.  So I took the Forrester data and splatted it into a spreadsheet to calculate the ETR.  I also added eBay and Amazon as marketplaces with their ETR’s and ordered the channels from lowest ETR to highest and this is the result: (Amazon/eBay are highlighted to indicate I added them)

Shop_org

The only datapoint on here that looks unusual to me is the CSE data, usually we would see this more in-line with paid-search so I’m going to go look at our data and see if there’s anything noteworthy there. ( editor’s note: while that percent does seem high to me, I would expect it to be in the 20-22% range)  Not to toot our own horn here, but my guess is the retailers surveyed aren’t watching their CSE programs very closely or using ShoppingAdvisor to optimize their CSE channel.

If you’d like to learn more, there are several news items out today covering the report:

U.S. Searches Up, Google Continues To Increase Market Share

8 Apr

Google accounted for 67.25% of all US searches in the four weeks ended March 29, 2008 – the highest proportion of searches it has ever achieved, and up some 5% from a year earlier, when it accounted for 64.13% of searches, according to Hitwise. Continue reading

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