Microsoft Offers $45 Billion for Yahoo!
Filed Under Adsense, Affiliate Marketing, Google Adwords, MSN, Pay Per Click, Search Engine Marketing, Search Engine Optimization, Yahoo Publisher Network, Yahoo Search Marketing, adCenter | Comments Off
In a surprise unsolicited bid this morning, Microsoft offered $44.6 billion for the purchase of Yahoo! Inc. This comes out to just over $31 a share, and it seems that Microsoft is attempting to take advantage of the soft stock market. As the news hit, Yahoo! stocks were immediately up almost 50%, but what does this all mean to the affiliate marketer?
Let’s take a closer look at the deal being offered first. Microsoft’s press release states:
Microsoft Corp. (Nasdaq: MSFT) today announced that it has made a proposal to the Yahoo! Inc. (Nasdaq: YHOO) Board of Directors to acquire all the outstanding shares of Yahoo! common stock for per share consideration of $31 representing a total equity value of approximately $44.6 billion. Microsoft’s proposal would allow the Yahoo! shareholders to elect to receive cash or a fixed number of shares of Microsoft common stock, with the total consideration payable to Yahoo! shareholders consisting of one-half cash and one-half Microsoft common stock. The offer represents a 62 percent premium above the closing price of Yahoo! common stock on Jan. 31, 2008.
   “We have great respect for Yahoo!, and together we can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market,” said Steve Ballmer, chief executive officer of Microsoft. “We believe our combination will deliver superior value to our respective shareholders and better choice and innovation to our customers and industry
partners.”   “Our lives, our businesses, and even our society have been
progressively transformed by the Web, and Yahoo! has played a pioneering role by building compelling, high-scale services and infrastructure,” said Ray Ozzie, chief software architect at Microsoft. “The combination of these two great teams would enable us to jointly deliver a broad range of new experiences to our customers that neither of us would have achieved on our
own.”
Let’s discuss how this all affects affiliate marketers. If this deal goes through it could decrease the competition within the search market, which is generally a bad thing in my mind. This means that the impact of one company’s change in policy could more severely damage affiliate marketers, as Google did with Google Slap #1 and Google Slap #2. No one knows if there will continue to be further slaps from Google.
That said, I would much rather see Microsoft purchasing Yahoo! Inc. than Google. At least there would still be 2 very large players in the search market. Microsoft would be able create a balance to the power of Google. Yahoo’s Publisher Network would enhance Microsoft’s attempts to expand it’s content network and technology.
One question that comes up on the practical side of things is whether Microsoft would attempt to consolidate it’s own search under the Yahoo brand or vice versa. Since Yahoo has a much larger market share than Microsoft, I imagine that would be the case. This makes less work for affiliate marketers who spend a good deal of time modifying campaigns for three separate search engines at present. The downside to this is increased competition within the PPC sphere driving costs up.
It still remains to be seen whether Yahoo! Inc. will take the unsolicited offer made by Microsoft, but they sure did try to make the deal pretty sweet! – a 62% premium on the current stock price will be a hard offer to decline. We will just have to wait and see.
Affiliate Marketing deemed “most cost-effective”
Filed Under Affiliate Marketing, Internet Marketing, Online Advertising, Search Engine Marketing | Comments Off
E-consultancy just released a research piece on the cost effectiveness of affiliate marketing. E-consultancy is a UK based internet marketing research firm. Their research is held in high regard by all, while their particular market is in the UK. They surveyed 700 merchants who were actively using the affiliate marketing channel and this is what they found:
Sponsored by buy.at, the UK’s largest independent affiliate network, the comprehensive research into how UK brands use affiliate marketing found that the majority of UK advertisers (merchants) say that it is either ‘very cost-effective’ or ‘quite cost-effective’ for acquiring customers. 44 per cent of merchants named it as ‘very cost-effective’ for driving customer acquisition compared with 34 per cent for paid search and just seven per cent for display advertising. (Release Date: 26 September 2007)
Internet marketing is changing the way people market their brands, because of the very detailed analytics allowed by marketing online. Advertisers are able to track their advertising spend in more detail than they ever could before. Every dollar can be tied to very specific returns. As more and more information and research is done, it is becoming clear that affiliate marketing is THE most cost effective way to market a business online for one very simple reason. It is performance based!
If an advertiser doesn’t get the volume or the sales expected they don’t have to pay a penny. They only pay when they get what they want. I am taking it for granted that an advertiser will know what they want. With customer acquisition it is very important for the advertiser to know the value of each customer and to pay affiliates appropriately, while making a strong profit.
Paying a percentage of sales makes things simple for smaller companies, because they already know their profit margin, and they just allocate a portion of that to affiliate sales. This is my preferred method of earning, because it is cut and dry. I generate $100,000 in sales. The commission rate is 10%. I earn $10,000. With this revenue sharing performance based marketing it is impossible for an advertiser to lose money. That is the beauty of affiliate marketing. A team of professional internet marketers who are only paid when they drive the conversions established by the merchant.
Performance based marketing is substantially more cost effective and safer than paid search. An advertiser could spend their entire marketing budget on search campaigns and not earn a penny if they don’t know what they are doing. This is why I advocate for outsourcing search engine marketing into the affiliate channel. This is a cost-effective way of doing paid search without any of the risk. If you are an advertiser with a closed search affiliate program, you don’t know what you are missing out on. Stop wasting your marketing budget on paid advertising and let the affiliates do it for you. It is safe, it is easy and according to this E-consultancy research it is “very cost-effective”.Â
 It is no wonder that most advertisers are planning on increasing their spend in the affiliate marketing channel this year. They will continue to do so in years to come, as affiliate marketing establishes itself as the most cost-effective way of doing business online.
Google Adwords Changes Top Position Formula
Filed Under Google, Google Adwords, Pay Per Click, Performics, Quality Score, Search Engine Marketing | Comments Off
Google announced this morning to Adwords advertisers that they are going to change the formula used to determine whether your ad is placed in the top positions above the search results. Up until now, this has been determined by “Quality Score and your actual CPC, which is determined in part by the bids of advertisers below you.”
Ads that are placed above the search results generate a much higher volume of clicks when compared to those placed on the right side of the search page. The clickthrough rate is also much higher if your ad takes the top position, but the conversion rate is not always as good. Top positions generate a lot of impulse clicks that are less likely to convert into a sale. Is Google planning on moving more people into the top positions? They describe the change as follows:
With this new formula, instead of considering your actual CPC, we’ll consider your maximum CPC bid, which you control. This means that your ad’s eligibility to be promoted is no longer dependent on the bids of advertisers below you. Therefore, if you have a high quality ad, you now have more control to achieve a top position by increasing your maximum CPC.
Your actual CPC will continue to be determined by the auction, but subject to a minimum price for top spots. The minimum price is based on the quality of your ad and is the minimum amount required for your ad to achieve top placement above Google search results. As always, the higher your ad’s quality, the less you will pay. And you will never be charged more than your maximum CPC bid. [read more]
The mention of “minimum price” says it all. Google is going to start setting a baseline max CPC for all ads that get listed in top positions. This is possibly as a result of the new information that Google now has access to with it’s recent purchase of DoubleClick/Performics. Many fear that as Google is able to follow each search all the way to the checkout process they will want to raise prices to compensate for those earning an extraordinary ROI. Could this be happening already?
It is not likely that they have already integrated conversion and ROI data into what they demand for click prices, but that situation might not be too far off. Click prices are going to continue to rise as they have for the last several years.
Kris Jones of Pepperjam to Speak at Affiliate Summit
Filed Under Affiliate Marketing, Pay Per Click, Search Engine Marketing | Comments Off
Kris Jones, the CEO and founder of Pepperjam, has been innovating affiliate marketing since the founding of Pepperjam in 1999. He was one of the early affiliates to get that search engine marketing was the way affiliate marketing was moving a few years back. He has been an innovator in how affiliates use PPC to promote their partners. This makes him especially qualified to speak on the topic of Affiliate Marketing Search Arbitrage at the Affiliate Summit in Miami. (PRWEB)
“I am honored to be invited back to Affiliate Summit to address the convergence of search-engine and affiliate marketing. As the internet marketing industry continues to evolve there are new and exciting opportunities emerging that involve the very important interplay between search-engine and affiliate marketing. I look forward to discussing a range of issues, as well as providing some real world tips for how affiliate marketers can generate significant income using proven affiliate marketing search arbitrage techniques,” said Kristopher B. Jones, President & CEO of Pepperjam.
Pepperjam is now the fastest growing full service internet marketing and technology agency in the country (Inc. Magazine, 2006). The company has been segmented into affiliate program management, search engine marketing and online media planning departments. These departments are called pepperjamMANAGEMENT, pepperjamSEARCH and pepperjamMEDIA respectively.
Yahoo Search Marketing Launches Quality-Based Pricing
Filed Under Affiliate Marketing, Internet Marketing, MSN, Quality Score, Search Engine Marketing, Yahoo, Yahoo Search Marketing, adCenter | Comments Off
Yahoo just announced that they will begin offering discounts on clicks from their Sponsored Search and Content Match network of websites. They are going to discount clicks based on the quality of traffic their search affiliates and content network websites provide. They are calling this “quality-based pricing“.
“Quality” is calculated based on conversion rates and other measurements of the ability to deliver more interested and valuable customers to you from particular distribution partner sites. Discounts will be automatically applied to your account.
Apparently click discounts will start taking place today and they will be automatically credited. No changes by the end user are necessary. We will all begin receiving a discount on clicks. Who can complain about that? How significant that discount will be remains to be seen, but I hope some readers will post their experiences in the comments.
Those who extensively use the content network and Yahoo search affiliates will likely see the lion’s share of the discounts. Yahoo is recognizing that their search affiliates and content network do not provide the same level of quality that the standard search results offer.
Everyone who has done any significant search marketing already knows this, but it is interesting that Yahoo would come right out and admit it. I think it is a good move in the direction of greater transparency. Yahoo is continuing to roll out improvements to their Panama platform. Preliminary results are good, but whether or not they will increase market share remains to be seen.
I find myself thankful that Google is not the only game in town. Competition is good for everyone. Now if MSN could just get their search marketing platform in order, we might see some serious innovation.