Skip to main content

Site ranking changes to impact online ad spending?

As reported by the AP news service, Nielsen/NetRatings, a leading online measurement service, will discontinue ranking web sites based on page views. They will now begin tracking how much actual time visitors spend on web sites.

What effect will this have in the ongoing battle between Internet heavyweights like AOL, Yahoo and Google?

The following quote describes how this new approach will reorder how these sites are ranked against each other:

"Ranking top sites by total minutes instead of page views gives Time Warner Inc.'s AOL a boost, largely because time spent on its popular instant-messaging software now gets counted. AOL ranks first in the United States with 25 billion minutes based on May data, ahead of Yahoo's 20 billion. By page views, AOL would have been sixth. Google, meanwhile, drops to fifth in time spent, primarily because its search engine is focused on giving visitors quick answers and links for going elsewhere. By page views, Google ranks third."

Under the new approach, sites where users play games (Second Life, anyone?) or watch videos will also move up in the rankings since they tend to keep visitors busy on their sites for longer durations.

There has been some discussion on other sites and blogs about the relevance or significance of the new measurement method, variations of which other web traffic measurement companies are also adopting.

My interest is financial. What happens to ad dollars in this new environment? Who gets more and who gets less? Will this new approach chip away at Google's ability to drive prices higher for search advertising keywords? Will it allow Yahoo and AOL to boost revenue by charging more for placement of banner ads?

In the case of Yahoo, this could eventually be a net positive. Yahoo is weaker in search advertising than Google and this will not help it any. Fortunately, Yahoo has some things going for it. Yahoo has enhanced its potential returns from the banner advertising business via their recently announced "smart ads". Yahoo also has more pure content and web properties that cause visitors to linger on the site (did you know that in terms of unique visitors they dominate the online game category?). In combination with these factors, a higher overall site ranking via the new measurement approach might help to boost ad revenues and get Yahoo (which was recently downgraded by ThinkEquity) out of its slump.

As for Google, their purchase of YouTube now looks even smarter. It is known that visitors to YouTube spend considerable time on the site. Naturally, Google is working to place advertising and otherwise monetize the site. The new measurement model should serve to boost YouTube's ranking nicely. Increased ad dollars from YouTube should offset any weakness in the pricing for search advertising keywords that may occur. On the other hand, since advertisers bid on key words, Google may not see any weakness at all. Advertisers know that Google is still the primary site where users go to find products, companies, services, etc. and those vendors want their web pages in front of customers' eyeballs. Google search is often the best way to accomplish that.

Unfortunately for the sites that stand to gain, it will not be an overnight process, as advertisers will need to get used to the new metrics and develop a comfort level that advertising dollars are getting expected ROI based on any new pricing and site ranking data.

Comments

Popular posts from this blog

Unlock Stock Market Profits - Key #1

This is the first in an ongoing series of articles where I discuss what I feel are keys to successful investing. It is based on a post that provides a summary of the ten keys that individual investors should use to identify profitable stock trades. (Click here to read the original post)

There are two basic steps to investing. First, you need to find stocks that seem to have some potential. Then you have to determine whether these stocks are actually good investments. There are many stocks that at first glance look interesting, but further research reveals that there are too many negatives to warrant taking a position.

This first post in the series starts at the beginning: getting good investment ideas.

Key #1: If something special is happening to a stock, it will be reflected in some kind of unusual activity in the markets.

As individual investors, we will never be the first to know; however, unusual activity can be an early sign that allows us to follow the Wall Street professionals and …

Unlock Stock Market Profits - Key #4

This is the fourth article in a series of posts describing 10 tools to help you identify and evaluate good investing ideas. It is based on a post that provides a summary of the ten keys that individual investors should use to identify profitable stock trades. (Click here to read the original post)

With this fourth post, we will continue another step along the path of finding stocks that seem to have some potential. The first post in the series discussed how to use unusual activity to identify investing ideas. The second post described how to use stock screeners. The third post described how to use lists of new highs and new lows. This post will focus on identifying social or business trends in order to find investing ideas.

Information on new trends might turn up anywhere. In conversation with friends or business associates, in newspapers or magazines, on TV or though your work. The key is to be aware of trends and how they start, stop or change. We'll start by describing what to lo…

Free stock alerts, Trend Leaders, Bollinger Band Breakouts and Cash Flow Kings for Jan 16, 2009

This post is to announce that the latest list of free stock alerts is up and available at Alert HQ. Each week we scan over 7400 stocks and ETFs looking for fresh BUY and SELL signals. We apply a combination of proprietary and standard technical analysis techniques to identify those stocks that are beginning to move. Our goal is to identify stocks or ETFs that are undergoing reversals, either to the upside or to the downside.

Wait, there's more...

We also use the Alert HQ process to generate more free lists of stocks and ETFs

The first byproduct of the Alert HQ process is the Trend Leaders list, our collection of stocks in strong up-trends. These stocks are registering strong signals using Aroon analysis, DMI and MACD. They are also above their 50-day exponential moving average. This week's list is now available at the TradeRadar site on the Trend Leaders page.

As another byproduct of the Alert HQ process we have generated a list of stocks that have broken either above their upper…