Five Internet marketing questions that keep me up at night

Did you see the joint CNN/YouTube debate with the Democratic presidential candidates last week? The questions, recorded by regular folks from all across the USA, were generally a lot more interesting than the candidates’ answers, providing a refreshing change from the usual “softball” questions lobbed in such debates.

In the same spirit, here are some “hardball” Internet marketing questions that are keeping me up at night. If you’ve got the answers, please send me some e-mail.

1. Why don’t mobile text ads fall under the junk fax law?
Back in the late 1980’s, when a large share of US business transactions were conducted over fax lines, junk faxes sent out by automated dialing machines threatened to bring the whole system to a screeching halt. The outcry from business users was so furious that it led to a 1991 Federal law, (47 USC Section 227) banning “junk faxes.”

Today, mobile marketers and telecom carriers are poised to blitz mobile users with unsolicited text ads. But mobile telephones, which are probably more critical to business people than fax machines ever were, fall within the language of the law, which forbids the automated delivery of messages “to any telephone number assigned to a paging service, cellular telephone service, specialized mobile radio service, or other radio common carrier service, or any service for which the called party is charged for the call.”

I’ve never heard a single mobile marketing spokesperson acknowledge that the entire mobile marketing industry may be illegal, according to 47 USC Keep that in mind the next time you read a glowing article on mobile marketing’s future.

2. When are micro-payments going to take hold so people can financially support the content they want?
It’s obvious that online advertising is the dominant mode of monetizing Web content today, but this doesn’t mean it’s necessarily the best mode for users, publishers, or anyone else besides the search engines. Surf around a bit and you can see that the intelligence of online advertising has barely evolved beyond that of a fruit fly in the past 10 years. For example, if you go to a Hip-Hop site you’ll find ads for Hip Replacement Services, or if you read a scathing article about Time-Warner you’ll see ads for RoadRunner. These ads aren’t “relevant” in any meaningful way: they’re just wasted opportunities both for publishers, users, and the ad networks that stupidly serve them.

It doesn’t have to be this way. In fact, micro-payments provide a much better way for publishers to monetize content than advertising. I don’t know a single business executive who wouldn’t pay a few dollars a day to obtain the content he/she needs to stay current, but the industry hasn’t moved beyond the clumsy subscription mechanisms of 1995. This stalled development has crushed the development of paid content and made irrelevant advertising ubiquitous. The result is that quality content providers are suffering, low-quality “AdSense Empires” are proliferating, and content mediocrity is rampant.

3. Why doesn’t somebody investigate Google’s Adsense revenue split?
Because micro-payments failed, online publishers have long been caught between a rock (revenue from affiliates, which puts all the risk on the publisher) and a very hard place (Google AdSense and the other contextual networks). Most publishers have chosen AdSense because it’s the biggest network, which is fine by Google, which reaped 35 percent of its revenue from these publishers in Q2 2007.

But most of these publishers are barely eking out a living with AdSense (although there are plenty of AdSense spammers making big bucks by gaming the system). These publishers are doing Google a big favor by extending its empire, but Google won’t even tell them how much of a cut it’s taking from their click revenue. Is it 60 percent? 75 percent? Does Google favor the big guys (for example the big newspaper sites) with a more advantageous split to curry favor with them as it pitches its other products?

Nobody knows and there’s no way to know, because Google refuses to come clean on the cut it takes. I guess Google’s mission statement to “organize all the world’s information” doesn’t extend to providing its poor partners with the information they need to survive.

4. Why don’t online agencies demand an “agency discount” for search spend?
Agency discounts are a normal practice in the advertising world, but not in the world of search engines. Google claims that it denies agencies a discount to provide “a level playing field,” even though agencies do their utmost to evangelize the benefits of Paid Search Marketing and bring millions of dollars into Google’s coffers. The attitude of search engines toward agencies is “my way or the highway,” and the only reason they can get away with this is that everyone goes along with it (so far). If the search marketplace were more competitive, agencies would have a better chance of being treated as partners, not lackeys, but it may take the FTC to restore competition to this market, and it’s anybody’s guess when this will happen.

5. Why does Google run a “real-time” auction and charge users to change bids?
When you buy something at an auction house, you don’t have to pay a fee each time you raise your bid. But that’s exactly the way it works at Google, which charges agencies an API usage fee that effectively penalizes marketers for making their campaigns more efficient. While it’s true that there are certain SEM (search engine marketing) agencies out there that abuse Google’s API ( a pplication p rogramming i nterface) by making far more calls to it than is reasonable, the imposition of onerous fees on agencies who don’t abuse the API is deeply unfair. Google, if you’re serious about providing a “level playing field,” please don’t paint all agencies with the same broad brush. Just charge the offending agencies a higher API usage rate, and leave the rest of us alone.

Got an Internet Marketing question that’s keeping you up at night? I’d love to hear from you. Send E-Mail to [email protected].

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