Sponsored Search: Question 1 - Future of Advertising

People have grown to tune out and ignore many radio and television commercials. What is the future of sponsored search ads? Will advertising evolve into something else?

Can you clarify a bit about "the future of sponsored search ads?" Do you mean the current sponsored search ads may evolve into a different format, the auction pricing mechanism may change, or others?

this is an open ended question to all aspects of how sponsored search ads may evolve in the future. This includes in the short term, whether different pricing mechanisms may be better than auction pricing, validity of keyword effectiveness, etc.

However, I would like to also encourage deeper thought into the long term. Radio, print, and tv ads have constantly evolved. Where is this industry headed? Social space? Will each individual one day be paid for recommendations? Will people be paid to create buzz?

When you see the price of the advertissement on TV, even if people pay less attention to the ads (turn the sound down or switch channel), price are still very high. But the point of our question was more about the format which can evolve with the advertissement online rather than the price mechanism. How can you touch people, what are the new tools that you could use to arouse interest from your customers on the internet?

The two questions are distinct. The first one talks about Internet advertising, and the second one refers to mass media advertising. Whether and how the two types of media advertising will come across is an interesting issue. However, I think first one may be more relevant to this week's reading.

Regarding pricing mechanism, I personally consider that keywords bidding requires substantial time and effort from the advertiser's side. The uncertainity level is high as well. Alternative pricing mechanisms should be developed and offered.

Regarding the ad format, what will be the next generation of keyword ads, other than display them alongside organic Web search results?

I agree traditional online advertising is becoming less effective, tabbing into social space is certainly the way to go in my opinion. Consumer have a much higher propensity to buy if something if it recommended by other users or friends. Tablets make way for richer interactive and more engaging advertisements, so does HTLM5, widgets etc.

Ming,

there are several new ad formats emerging in the social space, as Esben mentioned. Bloggers are paid to post information on products. Companies like IntoNow automatically what tv show you are watching using an app, which can then help you interact with friends who are watching the same show. This gathers marketing information for advertisers. Facebook also displays advertisements based on what clubs or interests you have. Do you think sponsored searches are here to stay? Or will they become extinct in favor of social advertisements? Will they be evolve due to technology like IntoNow? When you search in the future, will you search the internet or social commentary?

When bloggers are paid to post information on products, they are media, not advertisers. The key idea of sponsored search ads is that the ad that a "searcher" exposed to is personalized based on his/her search. This is similar to displayed ads on Facebook. Which ad to be displayed is based on users' online social activities. In this line of reasoning, I think sponsored searches (or we can rephrase them as "sponsored recommendations" or "sponsored interests"...) are here to stay.

Here I try to propose few ideas about future online ads.

Which kinda methods would possess higher arrive rate & actual purchasing rate? Information searching or online ads?
Obviously, I think the answer would be information searching instead of online ads.
They have different motivations as there behaviors appearing.
I don't think lots of people be aware of or attention to the ads in the side for gmail & the cfs before streaming for youtube.
(mostly, I choose to switch my screen to another as waiting the films....)

But there's still a huge gap between information searching & real purchasing behavior.
Why don't google try to put more links about "where to buy"(with google map) or some online markets (ex. Yahoo, Amazon..etc) as doing search engine optimization?
And they can charge more fees from it more than traditional ads I think.
(though this idea might be more relevant to another topic..)

I agree in a few points but for example when you look at the Google heat map: http://fruition.net/images/content-writers/heat-map.jpg
I think it is obvious that most of the users only consider the first 5 or 6 searching results on google. And for example in companies sometimes it really makes sense to use Google adverts, so you are higher ranked and btw it is not so expensive, you only have to pay by click and you can also set an limit of the maximum budget you want to spend.

I really like this picture because it represents the user's behaviour in search engines, so I think the best is to use both and diversify the adverst referring to your products.

I dont think sponsored search would extinct, at least for next coming years. Because it is among the most popular and fast-growing platforms for ads (though its share of Ads is less than 10%), and as search engines' competition becomes fierce, more of them want to get revenue from such kind of ads, they will try their best to optimize the sponsored search, to find the balance point between the most relevant organic search results and the most profitable sponsored search results.
Regarding to its developing trends, in my opinion it will consider more about customerization and become more personalized, for eg., put different ads according not only to keywords, but also some other factors like user's ip, statistic data (history records. etc).
And for Google, if the Plus succeeds one day, maybe more friends recommendation should be considered for ads display.
Besides, the "alongside"(for display of the search results) should be diversified, ads could be put on the right side, top and bottom side, even "appear and then disappear" due to different regulars for different kinds of sponsored advertisers...
Finally, users could also choose to make some personalized settings, say, to choose different display styles for specific kinds of keywords, or even choose whether to close the ads.

i like Xiaowei's idea of making ads diversified, but probably not anywhere on the page! I think customization will definitely become the trend in the following years. Besides putting user's preference and history records into consideration, since mobile phone is another popular devices surfing online, user's location can also be put into recommending function. This is especially useful when someone is really hungry and want to find something to eat nearby, or is hurried in finding something.

Another crazy thought is that putting advertisement into the Siri system, so user can ask Siri for the suggestion in finding something!

I personally think that traditional online advertising solutions are nowadays outdated. As it is already the case for advertisements on tv or radio, customers will always find a way to avoid online advertisement. Instead of trying to spam customers with nonsense, let our customer be in charge for the advertisement. I know everybody is fed up of Apple's best practice examples, but why is this company so successful? Off course because they have a brilliant product, but even more important is, their customers are telling everyone "this iPhone is astonishing - buy it". What is more reliable and independent than a official recommendation from a customer? Some firms have really understood this system and they know how to engage fan's on their facebook page to participate on contests (like photo contest), new product launches etc. If you involve your customer and recognize them, they will thank you by not only buying your products, but also by posting recommendations on your product.

andykorn87 wrote:I agree in a few points but for example when you look at the Google heat map: http://fruition.net/images/content-writers/heat-map.jpg
I think it is obvious that most of the users only consider the first 5 or 6 searching results on google. And for example in companies sometimes it really makes sense to use Google adverts, so you are higher ranked and btw it is not so expensive, you only have to pay by click and you can also set an limit of the maximum budget you want to spend.

I really like this picture because it represents the user's behaviour in search engines, so I think the best is to use both and diversify the adverst referring to your products.

Thanks for the heat map. It wonderfully shows that only the first few hits are usually looked at. I am though rather surprised that the sponsored links on the right side get as many views as 5th or 6th hit on the left side. I barely look at the sponsored search results but always scroll down a little. What about you guys?

Greetings,

Couple of comments on the on issue:

I do agree with Ming about the fact that alternative pricing methods are needed. When we consider the Pay Per Click (PPC) and the key words popularity, this will leave companies of small size out of the cyber game and benefits the big players due to their affordability of using higher budgets on PPC. The Google heat map added by Andy is a perfect illustration of how accurate the search by word is because most of the time at least one of the first 10 search results is utilized.

However, personally I do believe that social media is definitely going to be the next point of focus because it is a very effective way to marketing products due to the high number of users visiting there sites per time unit. For instance, I myself several times used my contacts through social media (Facebook, Blog, etcy) to recommend, sell and buy items. This was efficiently successful and worked fantastically fine most of the times.

For these, the essential element needed is the right "Twist" that hits the right consumers. One Argument of the key idea indeed does not sound very convincing to me. The question that always revolve in my head is about the fact that how accurate these ads can target the searcher (or buyer)?! From own experience, most of the time the customized ads accompanied with the search result do "miss" or don't match the purpose of the searcher. This in return will naturally create a sense of untrustworthiness toward these types of ads and thus deteriorate their effectiveness as a tool. The same will be in the social media! Do people really reflect their authentic interests in social activities? Couldn't the search made be merely an act of curiosity or the information added are an exaggerated identity reflection? How can one be sure about this?!

Cheers,

KaiCamenzind wrote:I personally think that traditional online advertising solutions are nowadays outdated. As it is already the case for advertisements on tv or radio, customers will always find a way to avoid online advertisement. Instead of trying to spam customers with nonsense, let our customer be in charge for the advertisement. I know everybody is fed up of Apple's best practice examples, but why is this company so successful? Off course because they have a brilliant product, but even more important is, their customers are telling everyone "this iPhone is astonishing - buy it". What is more reliable and independent than a official recommendation from a customer? Some firms have really understood this system and they know how to engage fan's on their facebook page to participate on contests (like photo contest), new product launches etc. If you involve your customer and recognize them, they will thank you by not only buying your products, but also by posting recommendations on your product.

I think one should be careful in saying that traditional online advertisement as well as tv and radio commercials are outdated. Of course we close the advert that pops up on our screen and go to the toilet in the advertising breaks during a movie on tv. But still we subconsciously are influenced by those adverts (even if we claim not to be). That being said, I of course agree, that there is a shift in focus in the advertising industry. The users are becoming more and more important. User-ratings often count more that the expert's opinion (for example I rely pretty much on the customer reviews on amazon instead of expert comments on a book). Mouth-to-mouth advertisement has always been one of the most effective marketing tools and translated into our online world, mouth-to-mouth is very similar to user opinions posted on websites.

In Web 2.0 time, consumer power is very important. Consumers don't satisfy in getting information only, they want to share, want to give, want to have more power in communication.
So I think Ad may go to more interactive way, not only compliment the product or service, but give the power to consumers, let them find out how good it is by themselves.

Here is a link to an interesting article about the trends in search marketing. Social and mobile search as well as coordination of SEM and SEO are and will stay key focus point of firms' marketing strategies on the Internet, as mentioned in the above posts.

The graph below illustrates the growing trend to search marketing:



However, I believe the advertising linked with video on the Internet is not dead (at least in the short term). In fact, the importance of this medium is growing: analysts assess that video will account for 90% of online traffic by 2013 (source: IDATE 2010). Moreover, In my opinion video advertising can be combined with search advertising (it even may already be the case) for example on streaming websites such as Youtube or Dailymotion which users (those who post the videos) identify videos with keywords.
The graph below illustrates the growing trend to search marketing:



Source of the graphs: IDATE (2010), "DigiWorld Yearbook 2010"

I agree that customers or friends recommendations are quite powerful in the purchasing decision, though traditional advertising, such as banners will still exist.
Even if it’s not for creating a direct response sale, traditional advertising builds affinity with the brand or raise awareness.
Sure, banners are annoying and we never click on them. Advertisers know this. That’s why they’re spending piles of cash into display advertising.

About sponsored ad, I would imagine that it will become highly personalized.
As the case mentioned, search engines are already quite good at determining user intent, customer behavior can be tracked; and advertiser can display with confidence offers which will fit the perfect audience.
Perhaps it would be possible for advertisers to buy highly sophisticated products and packages of key words based on the kind of customers or industry you would like to reach. Besides, a derivative market of key words could also be created, following the same mechanism and products as the financial market. Let’s then just wait for a bubble creation and a new kind of “internet” crisis

I am the opinion that also Augmented Reality will become a bigger topic for future advertising. Hundreds of AR initiatives will be rolled out this year raging from iPhone applications to 3D print ads. It remains to be seen how successful these will be, many believe that AR is just a modern version of 3D glasses.

However, the best is certainly yet to come. Proximity advertising is already becoming a reality. Faster processors and wider bandwidth will do a lot to make the basic technology work better and nanotechnology promises to create new technologies that will further enhance capability. In Germany leading companies like Adidas are working on applications using Augmented Reality. It should be more exciting for the customers. I think AR sometimes is really a little bit to much playing around for an advertising, I prefer it funny and without so many gimmickry. What do you think about Augmented Reality in the future? I think many people are discussing about it and mention that most of is only a hype.


Attached you can watch a short movie about it, if you want to ;-)

https://www.youtube.com/watch?v=rRcognsyqNY

Greetings,

In my opinion,although we often turn the Pop-up ads off or change our window, these ads still make more people to know this product or brand.This make the advertiser achieve the effect(in a annoying way).

In the future, I also think the advertiser(or search engine service provider) should think about the customized ads. Nowadays, it's easy to track users on the internet. So the search engine could get the user's search behavior more easier. That can help the advertiser to target customer more accurately. When customers receive their own customized ads, they will be less likely to turn the ads off. So the Customized ads will be more efficient than the general ads.

I like d.alsafi's opinion that we often receive the mismatched result or ads which will decrease our trust and make us gradually are not willing to click the ads. But if there is a good mechanism like the Amazon's recommendation engine, I think it will make a big different from general ads to customized as.

Cheers,

One of the most popular movies released in 2010 was Inception, an futuristic espionage movie that centered around implanting "ideas" into the target's brain without the host realizing it himself. I believe that the future of advertising will take on a similar form and "inject" the idea of purchasing into the consumer in a highly subtle manner through social media. Having grown up in a digital age, consumers are very wary and highly sensitive to forms of spam. Sophisticated spam filters guard the inbox of all email accounts these days and it is no longer possible to simply bombard consumers with an avalanche of links and pray that they "accidentally" click on one and purchase a product. Rather, group think and trending on social media platforms such as twitter will capture the wallets if the consumers is convinced, just like the movie, that he is making the decision himself. Even still, a horde of consumers buzzing about a product will still come secondary to the persuasive power of one's inner circle of family and friends. It is here that Facebook wields an incredible advantage over other platforms by tapping into the direct network instead of faceless strangers on the internet. It is no wonder than that firms are clamoring over a chance to tap into facebook's rich potential but it has still proven quite difficult. Advertisers are entering an intimate circle and users do not want big corporations invading what they believe to be a private place (one's facebook account.) The key, again, is to move with stealth and introduce the product in an organic way through a person's friend-list, and even better yet, have the user stumble upon the idea and broadcast the information among his peers without him feeling the nudge from behind to do so.



One way to do this is to incentivize the user to proactively disseminate product information by reward points for reviews (ala Netflix and Amazon) or direct discounts for group purchases (groupon). Unsurprisingly, users are most proactive when confronted with something free and useful, as in the case of software such as gmail, google+, dropbox, which make users feel like a "hero" for introducing a product beneficial to the uninitiated while rewarding the user for signing up a new member.

A healthy rewards program and indirect "inception" must be in the arsenal of advertisers moving forward.

Piggybacking on what Romain and Andy said, I believe that judging from how advertising is evolving right now, I wouldn't be surprised if we see something similar to Minority Report in the near future. When people walk down the streets or drive on a highway, or even watch TV, all the ads will be personalized for the consumers. Databases full of consumer profiles will eventually be able to preempt what a consumer wants and tell them before they even know it. The traditional channels for distributing advertisements will all cater to individual consumers or even groups. One person that looks at up a billboard will see an ad designed for them, another person that looks up at the same billboard will see another ad completely designed for him/her. I like the idea of Augmented Reality being used as another platform for advertising, and am very excited to see the many different applications it has to offer, but I don't think it will REALLY take off until it becomes more pervasive and people are less averse to putting goggles on their faces that facilitate the use of AR, or they come up with a less intrusive alternative to wearing AR glasses

When we speak about the future of ads we should consider the fact that everything is moving mobile (tablet, smartphone) and i want to quote the Google CEO Eric Schmidt who said "The arrival of a truly mobile Web, offering a new generation of location-based advertising, is set to unleash a 'huge revolution". Following this, at the 2010 Mobile World Congress in Barcelona, Google presented their vision of a new business model for mobile operators and trying to convince mobile operators to embrace location-based services and advertising. With Google as the advertising provider, it would mean that every mobile operator using their location-based advertising service would be revealing the location of their mobile customers to Google.

Another breakthrough that makes advertising in online versions of videos more successful than commercials on television could be key in the transition of television to online viewing, and even if we are not in this situation yet, i think we are not far from that.

I like the "Inception" argument.

And as some of you've mentioned above, the future advertising may become more interactive and dynamic,
In fact I've work on a project last year to developed a location-based service app on smartphones,
and we also collaborated with some stores and restaurants.(There are two kinds of users in our app, the normal user and the business user)
Through GPS and AGPS and even Bluetooth, the store can send coupon or information to the people near them,
and consumers can also choose how large is the range around them that they want to be informed.

Between consumers and consumers, they can turn on our bluetooth sensor and receive the info dynamically,
and reply it or give comment right away, it is an interesting and possible way of future advertising or communication.