Internet Marketing Trends 2007

Slide 1: The Latest Trends in Internet Marketing 2007

Slide 2: Panelist Introductions • Andy King, founder, Website Optimization & author “Speed Up Your Site” • Daniel O'Neil, Alchemist & Lead Analyst, Pure Visibility • Abbey Beardslee, Sale Planner, MySpace.com/FOX Interactive

Slide 3: Search Engine Marketing Trends - The Shift to SEO Andy King websiteoptimization.com

Slide 4: SEM to nearly double by 2011

Slide 5: Why more SEM? Advertising budgets shifting to Net • PPC prices rising (Google auto-pilot) • More measurable metrics • TV, radio, newspapers, yellow pages down • More companies entering the market •

Slide 6: Shift from offline to online marketing

Slide 7: Shift from Traditional to New Media

Slide 8: Shift from PPC to SEO • PPC/SEO from 2.4 to 1.1 from 2007 to 2012 • PPC costs rising – ~6 times $1+ keywords in Jan. 2007 vs. Jan. 2006 – Ave CPK rose 33% each month in Q1 2006 – Ave CPC rose 55%/month Jan. 2006 to Jan. 2007 DoubleClick, “DoubleClick Performics 50 – Search Trend Report Q1 2007,” (New York: DoubleClick Inc., June 2007), 1, http://www.doubleclick.com/insight/research (Nov. 17, 2007).

Slide 9: PPC Costs Rising Over Time “DoubleClick Performics, “Q1 2007 Search Trends Report,” (DoubleClick, 2007), 2. http://www.doubleclick.com/insight/pdfs/DoubleclickPerformics50_Q1_2007.pdf.

Slide 10: How to boost ROI? Make ad spend more efficient • Optimize PPC campaigns • Long term SEO equal to PPC (trend) • Optimize everything with web metrics • Optimize conversion rates • – Web site optimizer (Google) – A/B/C split testing – Test, try, and retest

Slide 11: Search ROI vs. Other Tactics

Slide 12: Measuring Metrics • 43% of marketers don’t/can’t accurately measure ROI from SEO (Jupitermedia, 2007) • Only 6-15% of companies are fully integrated (eMarketer, 2007) • Basic metrics most used (traffic,impressions)

Slide 13: Web Metrics Integration

Slide 14: Measuring SEM Firms Amount of Web Traffic (58%) • Total sales (50%) • ROI from search marketing (49%) • Search engine ranking (48%) • Number of clicks (43%) • Return on advertising spend (42%) • Jupiter Research SEM Executive Survey, 2/07

Slide 15: Measuring Meta Tag Usage

Slide 16: Meta tag trends • Keywords (34.2%) description (31.8%) used most • Title, metadata Title, Subject, and Description fields most important for SEO rankings • 7.4% use Dublin core, less effective for SEO • Only 1.7% use metadata Title, yet impacts SEO Zhang, J., and I. Jastram, “A study of the metadata creation behavior of different user groups on the Internet,” Information Processing and Management 42 (2006): 1099–1122. Zhang, J., and A. Dimitroff, “The impact of webpage content characteristics on the webpage visibility in search engine results (Part I),” Information Processing & Management 41 (2005): 665–690. Zhang, J., and A. Dimitroff, “The impact of metadata implementation on the webpage visibility in search engine results (Part II),” Information Processing & Management 41 (2005): 691–715.

Slide 17: Search Query Trends Bogatin, D., “Yahoo: ‘Searches more sophisticated and specific,’” (San Francisco: CNET Networks, Inc., May 18, 2006). http://blogs.zdnet.com/micro-markets/index.php?p=27 (July 17, 2007). Pasca, M., “Organizing and Searching the World Wide Web of Facts - Step Two: Harnessing the Wisdom of the Crowds,” WWW 2007, (Banff, Alberta, Canada, May 8–12, 2007): 101-110. Google statistics. Oneupweb, “How Keyword Length Affects Conversion Rates,” (Oneupweb, 2005). (accessed June 15, 2007).

Slide 18: How to boost SEO rankings? Fully optimize Title tags (up to 3 keywords) • Build backlinks baby • Build PageRank (see #2) • Use Web 2.0/Social Media • Fresh keyword-optimized content • Stay out of Google “sandbox” • Longer to reach top rankings 6 -> 12 months •

Slide 19: Spread of news in Blogistan • Takes about 1 week for the average story to peak in links in the “blogistan” • Staged release may be more effective • Blogs and RSS feeds are powerful for backlinks • Press releases guarantee links Cohen, E., and B. Krishnamurthy, “A short walk in the Blogistan,” Computer Networks 50 (2006): 615–630.

Slide 20: SEM Resources MarketingSherpa.com - research firm • SEMPO.org - SEM industry professionals • eMetrics.org - marketing conferences • FutureNowInc.com -conversion rate optimization • SEOMoz.org - ranking factors survey • SearchEngineLand.com - Danny Sullivan • WebsiteOptimization.com/presentations •

Slide 21: Metrics for the Masses - How improved metrics will redefine what we sell and how we sell it! Daniel O’Neil Pure Visibility Inc.

Slide 22: Metrics and Marketing have been uneasy bedfellows “I know half of my advertising is wasted; I just don’t know which half.” -- John Wannamaker, ca 1910 “The time has come when advertising in some hands has reached the status of science.” -- Claude Hopkins, 1923 85 years later...

Slide 23: Market Measurement has grown explosively thanks to Google Analytics A free tool that allows detailed traffic profiles • at a level of quality second only to high-cost products like Omniture’s SiteCatalyst or WebTrends Business-oriented data, not geek-oriented data • Can be used to to make non-intrusive inquiries • into your clients and visitors’ needs.

Slide 24: The short-term trend: analytics will be as common as Outlook Terms that are becoming more and more common: • – ROI – Cost per Lead – Cost per Conversion – Sales Funnel considerations – “Stickiness” Web marketers that don’t promise metrics -- and • the ability to explain metrics -- will not do as well as those who do.

Slide 25: The long-term trend: Analytics will be used to create sustained, detailed user profiles Company Product Line Books, some Media DVD Media, some Movie Consumer Goods (Deep) Downloads (Deep) (Broad, Deep) Business Model Brick and Mortar Online Subscription Online Commodity Commodity Purchase Service Purchase Knowledge of Customer Low High High Preference Degree of Customer Low High Medium Feedback Number of Customer Very Low High Medium - High actions captured Length of Transactional 0-1 ongoing, changes daily per login/purchase or history and weekly browse

Slide 26: How will the business model change? • Increasingly commodities become monetized through services. The Amazon and Netflix web properties are services that contribute to the sale of commodities. - Amazon’s customer retention in 2002 was 60%; in 2004 it was 78%. • Increase in measurable “Micropurchase” business models – Subscriptions and Serials – Tracked sampling offerings and price-reduced to get data – Attribute bundling (enrich what a product is by adding reviews, friend recommendation, etc.)

Slide 27: These ideas are not new, but they have been slow to grow. Netflix’ model has been mature since about 2003; • Amazon’s model continues to evolve, but reached Netflix’ standard around 2005-2006. Then they surpassed it! Traditional merchandising companies have been slow • to catch up because in order to make it work, a measurable, superior SERVICE has to be the core goal of any website. It doesn’t have to be “High Tech”, but the vision has • to be clearly defined and supported by the organization -The Ann Arbor District Library gets it, but Target doesn’t!

Slide 28: Resources and links http://www.purevisibility.com http://recsys.acm.org/program.html http://analytics.google.com http://www.aadl.org Competing on Analytics: The New Science of Winning. Davenport, Thomas H.; Harris, Jeanne G.

Slide 29: Branding and Positioning – Be Something No One Else Is Abbey Beardslee, Sale Planner, MySpace.com/FOX Interactive

Slide 30: What Is MySpace? OUR CORE VALUE PROPOSITION: MySpace is the most effective platform to reach the youth market, offering unparalleled reach and composition among trend-setting young adults.

Slide 31: How We’ve Grown… In just 3 years, MySpace has achieved portal-sized reach… – 71 MILLION MONTHLY USERS¹ We’ve become the premier destination for young adults… – 26 MILLION 18-34 YEAR OLDS We’ve developed the highest composition of 18-34 year olds of all broad reach sites… – 37% COMPOSITION We provide both scale and coverage of the trend-setting young adult audience Source: ¹comScore Media Metrix, June 2007, US

Slide 32: MySpace is Home for Social Networking Users SOCIAL NETWORKING STARTS HERE… 62% of the Facebook 60% of the YouTube audience visits MySpace audience visits MySpace • 68.4 million monthly users • 82% of members are 18+ • 38% reach of the US online population • 45.2 billion page views per month • 14.2 billion total minutes per month • Average of 207.3 minutes per user per month 68,392,000 • 58% of Social Networking market share • 24.8 average visits per visitor • 43% reach against all adults 18-34 58% of the LinkedIn • 37% reach against HH Income 75k+ audience visits MySpace * Duplication between Social Networking sites not shown Source: comScore Media Metrix, US data – August 2007

Slide 33: The Most Efficient Way To Reach 18-34 Year Olds Online REACH, COMPOSITION AND CONSUMPTION AMONG 18-34 YEAR OLDS REACH Unique Visitors (000) HIGH-REACH, HIGH COMP HIGH-REACH, LOW COMP Size of bubble indicates page COMPOSITION views (MM) Percent LOW REACH, LOW COMP LOW REACH, HIGH COMP . . . .

Slide 34: The Momentum Effect In Action: Smart Media + Brand Community = Momentum MYSPACE MEDIA AND MOMENTUM DRIVES 6-15X THE IMPACT OF OTHER ONLINE MEDIA MySpace Campaign: EA Burnout Band Slam 2 Results: Momentum-Driven ROI* "Definitely Will Purchase" ROI: 350,000 People Impacted Per $100,000 Spent Extraordinary 300,000 250,000 200,000 15X 150,000 100,000 6X 50,000 0 • EA launched an international band competition to Online Advertising MySpace Advertising promote a video game release plus Momentum Effect • Winning band’s music is featured in Burn Out Game Momentum Effect plus a Virgin Record Label Advertising Effect • The brand community encouraged viral pass-along by allowing users to forward content to friends *** Close to 7,000 contest submissions!! • Standard media was also utilized to drive contest awareness and traffic to community Source: 1NEF study, April 2007, commissioned by MySpace, Isobar and Carat

Slide 35: MySpace Media Is Smart And Effective HIGHLY TARGETED MYSPACE MEDIA BENEFITS: • High-reach—The most efficient way to reach 18-34 year olds online HYPER TARGETING • Highly effective—MySpace media drives brand awareness ENTHUSIAST • High value—Cost-effective relative TARGETING to all broad-reach competitors PREMIUM CONTENT • Highly targeted—Segment users based on freely expressed passions USER HOMEPAGE MYSPACE HOME PAGE HIGH REACH

Slide 36: VIDEO - Competitive Landscape Poised for explosive growth, MySpaceTV will be a market-leading video destination. This Chart compares “total unique video viewers” YouTube MySpace Yahoo! AOL MSN Total Unique Viewers (000) 62,206 47,985 35,024 29,479 24,394 Videos (000) 1,715,068 635,036 386,724 184,722 171,155 Videos per Viewer 27.6 13.2 11.0 6.3 7.0 Viewer Penetration 47.2 36.4 26.6 22.3 18.5 Share of Videos 20.5% 7.6% 4.6% 2.2% 2.0% Minutes per Viewer 68.0 17.3 30.1 15.4 17.8

Slide 37: Thank you! Abbey Beardslee abeardslee@myspace.com

Slide 38: Next Month: 12.11.07 Smart Spending - How to Measure the Return on Your Marketing Investment Moderator: Debra Power, Power Marketing Panelists: • Archie Sader, Integrated Marketing Communications, EMU • Jon Boyd, The Home Buyer's Agent of Ann Arbor • David Bloom, Optimization Group