EQUTE — Researchers say the benefit of good organic SEO rankings may also contribute to people clicking on paid ads.

Researchers Sha Yang and Anindya Ghose at the New York University — Leonard N. Stern School of Business wrote up their findings in a really long paper, luckily WebProNews distilled the juicy bits for everyone.

Basically, the research shows that when both organic results and paid ad results appear on a search results page, the paid ads perform better.

It’s almost surprising how synergy the study suggests.

Positive interdependence leads to an increase in expected profits for the firm ranging from 4.2 % to 6.15 % when compared to profits in the absence of this interdependence.

The study showed that the he positive association is strongest when advertiser-specific keywords are used and weakest when brand-specific and generic keywords are used. When the two combine, click-through rates are 5.1 percent higher than when only organic listings are present and 11.7 percent higher when both are shown together.

Overall, the researchers said that profit from the paid search can shoot up by as much as 54 percent.

So those SEM marketers that completely ignore organic search should take note to spread their efforts around. Whether the search listing adds credibility to the ads or vice versa, it’s an interesting synchronicity

So all you SEM marketers should work on those organic rankings, and those SEO experts should work to get their ads displayed alongside their high-ranking search results.

EQUTE — Google and European advertising regulator Advertising Standards Authority are going into business to investigate advertising complaints. ASA said that without the Google funding, it wouldn’t have the resources to adequately regulate digital media from viral videos to banner ads and e-mail marketing.

Google said it was only happy to help.

Matt Brittin, Google’s UK managing director, told the Telegraph that, “if people have a complaint about a claim made on a website it’s important that it is properly investigated. We support the ASA’s aims of providing consumer protection and are happy to help get this up and running for the benefit of UK consumers and businesses.”

One lawyer says the funding raises some ethical questions and competition questions inside of Europe, and for good reason.

Jo Farmer, a partner at law firm Lewis Silkin, told the Telegraph that, “Consumer groups will be delighted that the ASA is looking to close down this gap in their regulatory regime. But, important questions remain — such as what is going to happen to websites that are hosted outside of the UK but are aimed at UK consumers? Will the ASA be looking to its funding partner Google to impose any additional penalties for non-compliance, such as blacklisting offenders from Google’s search pages?”

The changes are scheduled to go into effect in the second half of 2010, but more announcements form ASA and Google will likely come before then .

EQUTE — The guys over at Adotas uncovered a note from the American Association of Advertising Agencies.

In the note, AAAA says the merger is a good thing and must be completed as quick as possible.

“We believe that Yahoo! and Microsoft’s proposal to combine their technologies and search platforms is good for advertisers, marketing services agencies, website publishers and consumers.
These benefits are too important to wait for. As leading members of the advertising and marketing services industry, we urge the Department of Justice to bring its antitrust review to a speedy conclusion. This pro¬posal enhances competition, and should be allowed to take effect as soon as possible.”

The open arms the AAAA has for the Yahoo-Microsoft deal is in stark contrast to their view of the proposed deal between Yahoo and Google; which the association saw as an even bigger monopoly for Google. Google gave up on the deal when the Department of Justice threatened suit.

Once the merger is complete, there may really be an alternative ad space to Google, and one that is finally an actual competitor.

EQUTE — Advertisers are finding out that local ads are well worth the price.

New numbers from comScore show that despite the higher cost, advertisers are figuring out the fact that their money is being spent efficiently.

“Locally targeted ads are an increasingly important component of the digital ad landscape because they represent a more efficient allocation of ad dollars,” said comScore vice president Brian Jurutka. “comScore’s new capability allows us to identify and quantify these opportunities to deliver additional value to both advertisers and publishers alike.”

That efficiency does come at a price.

“Our research indicates that advertisers understand the value of locally targeted ads and are willing to pay a premium for them — anywhere from 20 to 100 percent — depending on the geography and vertical,” said Matt Booth, senior vice president and program director, Interactive Local Media, BIA/Kelsey.

comScore found that advertisers in Washington, D.C., Atlanta, Chicago and San Francisco put about 10 percent of their ad dollars into local ads.

The study found that between 9 and 11 percent of display ads in the four markets among all publisher sites were locally targeted. San Francisco (11 percent) and Washington D.C. (11 percent) had a relatively higher share of ads being locally targeted, while Atlanta (10 percent) and Chicago (9 percent) were slightly lower. Not surprisingly, in the regional/local site category — which includes sites like Yahoo! Local, Citysearch and Yelp — the share of display ads that were locally targeted was substantially higher at between 23-33 percent among the four markets.

These numbers give evidence to a growing personalization of the Internet. It’s no secret that consumers respond to personal messages, but new leaps in local advertising have made it much easier to craft those messages. Local and regional targeting takes longer, costs more and turns away from a national audience, but it simply works better. As Internet users get more and more used to online advertising, they are going to look for something that makes them feel less like one of a billion people online and look for ads and services that touch them closer to home.

Consumer still can’t see their advertiser, but it is easier to trust someone nearby — even if they aren’t.

EQUTE — A joint effort by the National Cyber-Forensics and Training Alliance and the FBI shut down the largest click fraud ring ever seen.

The fraud ring, dubbed DormRing1 because it was centered in dorms around China, racked up $3 million in fraudulent clicks in just two weeks.

A great infographic from Anchor Intelligence shows all the 200,000 compromised IP addresses (in red) that slammed some 2,000 advertisers.

“We have seen 200 fraud rings,” says Anchor VP Richard Sim, “and this one by far trumps them all. I think it is indicative of how sophisticated the click fraud is getting. We are seeing the sheer scale and size of these rings growing.”

The ring is now closed, and the money was never paid, but it serves as a good reminder for any advertiser to keep track of their stats and watch for any strange spikes in clicks. Anti-fraud software can do most of the work for you.

What Is Click Fraud

The click fraud ring brings up a few questions, notably the basic “how do these people make money.”

Click fraud occurs when someone sets up a web site, signs up with an ad network, and then clicks on the ads to generate ad revenues with false clicks. DormRing1 operated the same way, except it easily involved more than 1,000 people who set up more than 10,000 Websites to spread out the fraud.

TechCrunch reported that these fraudsters took a play out of the Google Money playbook.

Spreading the click fraud out across thousands of sites makes it harder to detect, but it also requires a lot more people to perpetrate it. DormRing1 recruited student click fraud workers on Chinese social networks where and forums participants would post images of checks they were getting for their activities. One drummed up interest by talking about his plans to buy a car with the proceeds. Just like with any criminal organization, people at the lower rungs had to do a lot of grunt work to move up the ladder of trust and money.

EQUTE — John McCarthy has an interesting article over at Adotas, and it makes one think about what SEO has become — a buzzword for cheap traffic.

McCarthy provides an interesting anecdote about a client of his who sought to use SEO to drive more leads to his technology company. A few competitors said they were getting good results with organic SEO, so he thought of trying it himself. He hired McCarthy and asked him to get the SEO train going.

But instead of leading him on with false promises, McCarthy told his client that SEO was not right because of the sparse content on his site and the long road to organic rankings.

So when should marketers tell their clients (or themselves) to try something else?

Simple, when time and money is of the essence and there is nothing for the search spiders to crawl.

Unless you or a client is prepared for a long wait for results, paid search rankings are a much better way to get things moving — while getting the SEO train moving as well, McCarthy said.

Ideally, sites are created and build up SEO either naturally or by design, but many sites are simply better designed for paid search. But with SEO becoming the buzzword it is, there is a slew of people looking to capitalize with little investment in the down economy. Site owners and business owners should think about whether or not they really need SEO help. With some examination, many people will find that SEO isn’t worth the money, and paid search or other tactics could get them over the recession hump without all the mess.

EQUTE — A new study from researchers at Berkeley and the University of Pennsylvania shows that Americans have quite the distaste for being tracked by advertisers. The research won’t stop tailored advertising, likely nothing will, but it’s interesting to see how those being targeted feel about it.

The study [PDF] says that the more people know and the further they’re tracked, the worse they feel about it.

Contrary to what many marketers claim, most adult Americans (66%) do not want marketers to tailor advertisements to their interests. Moreover, when Americans are informed of three common ways that marketers gather data about people in order to tailor ads, even higher percentages — between 73% and 86% — say they would not want such advertising.

The researchers said their survey also showed that buyers seem to want unbiased information to look through, i.e. news, deals. They also

The survey uncovered other attitudes by Americans toward tailored content and the collection of information about them.

For example:

Even when they are told that the act of following them on websites will take place anonymously, Americans’ aversion to it remains: 68% “definitely” would not allow it, and 19% would “probably” not allow it.

A majority of Americans also does not want discounts or news fashioned specifically for them, though the percentages are smaller than the proportion rejecting ads.

69% of American adults feel there should be a law that gives people the right to know everything that a website knows about them.

92% agree there should be a law that requires “websites and advertising companies to delete all stored information about an individual, if requested to do so.”

63% believe advertisers should be required by law to immediately delete information about their internet activity.

Those last few statistics are especially noteworthy and should be telling to advertisers. Later in the paper, the researchers postulate that Americans are more worried about being “at a monetary or social disadvantage: some people might get more useful or interesting tailored content than others depending on the conclusions marketers draw about them.”

This is especially true in the era that has credit card companies cutting rates for Walmart shoppers because they fit into a stereotype that often misses payments or piles up debt.

The researchers also bring up the very valid point that consumers divide their internet time between shopping, work, play and education. Those advertising targets “may worry that tracking across those contexts may subject them to embarrassment (e.g. while using the computer in the work context, ads may be displayed that are relevant to play).” This is especially true if “play” involves illicit or taboo topics.

This is all interesting to note, but targeted advertising is still the ideal way to reach consumers without wasting a lot of advertising space and money. But these numbers should be a wake-up call to advertisers with obtuse targeted advertisements. They will have to be more subtle about how they advertise, those countless “find a date” ads on Facebook must be getting clicks from someone, but one wonders how much more they could do if they were crafted more subtly. Maybe advertisers will take note and move away from the obvious “you’re single, you like boobs” advertising.

EQUTE — Projections from the marketing research company Forrester say that affiliate marketing will continue to thrive in the down economy.

Their projections say that the affiliate business will grow in double digits in 2010 and become a $4 billion industry by 2014. Most of this revenue will be paid to affiliate marketers, though affiliate networks will continue to grow.

The research says that PPC and search marketing will continue to be the dominant venue for affiliate marketing campaigns — social media isn’t expected to grow much at all. Industries favoring affiliate marketers will be financial institutions, retail stores and online education, according to the Forrester report.

This shouldn’t be a big surprise to anyone in the industry, but such projections could help foster an environment where businesses will think more about letting their brand loose for affiliates. As the industry continues to work out the kinks — flogs, shady re-bills, garbage products — with help from Oprah and the FTC, it will be even more attractive to bigger brands.

So keep up with your affiliate marketing, this skill set could be priceless when big businesses figure it out and actually start spending good money on good affiliates.

Thanks a lot to Geno Prussakov over at AM Navigator for putting out some key numbers from the pricey ($499) report.

EQUTE — Google finally allows mobile marketers to see mobile search volumes with the beta Google Keyword Tool.

AccuraCast discusses the new turn of events, but thus far, the results are quite minute.

A quick review of the mobile search volumes shows that even in popular mobile search categories such as local information and gaming, the volume of mobile searches is a mere fraction — as low as 0.3% — 0.6% of traditional Web searches for the same 1-word keyword queries.

So it’s not quite a groundbreaking change, at least not yet. As more people turn to their smart phones as a viable search option, however, this data could be instrumental for marketers looking to tweak their campaigns toward mobile users. In the future, these numbers could show how mobile users vary in searches, especially when using different input methods like speak to search.