Amazon launches Context Links

Amazon has launched a new product called Context Links which automatically links phrases within a Web page’s content to relevant products on Amazon.com.  Amazon touts the value of this product as unlocking “new ad inventory…by identifying new linking opportunities [affiliates] previously had not identified.”  Add a block of JavaScript to your Web page, and relevant links will automatically be generated within your Web page.  Seems like a very good, very easy opportunity for affiliates to make more money without doing any more work.  I wonder how it handles existing links…?  I would imagine it ignores them.  Anybody know?

This brings to mind a much earlier version of the Google toolbar that automatically linked addresses and package tracking numbers within a Web page and puts Amazon directly in competition with the likes of Kontera, who has a similar product called “ContextLink,” and Vibrant Media’s IntelliTXT.

It’s an interesting move for Amazon.  Together with their aStore, Amazon has now made it trivial for anyone to become an Amazon affiliate.  With the proliferation of blogs, this could turn out to be a fantastic incremental revenue source for Amazon - and for the average blogger.  I wonder if the Amazon script will end up being blocked by MySpace, Blogger or other blogging services so that the service owners can control the monetization of the content on their blogs?

Until I start paying for my blog space, I can’t add the script to my page.  Until then, here’s a couple of regular affiliate links to Amazon.com - ones I added all on my own…

30G iPod

80G iPod

Chicago - 2016

Hopefully Chicago’s bid for the 2016 Olympics will be as creative as its logo, which nicely integrates the city’s skyline into the Olympic torch (check out the flame).  Baseball’s out for the 2012 games, but could be back in 2016.  Can you imagine Olympic baseball at Wrigley…?

The Cell Phone is Dead. Long Live the Cell Phone

After years of speculation, the iPhone is finally here, and there’s nothing else to say but, “wow.”  Apple has reinvented the phone, iPod and handheld Web browser, all in one device.  Nicely done, Cupertino.  June can’t come soon enough. 

Just one complaint…EDGE?  HSDPA seems more appropriate for such a next-gen device.  Let’s hope they bump the speed before the iPhone comes to market.

Click here to see an interview about the iPhone with Apple’s VP of iPod Product Marketing.

Amazon Associates Moving to “Monthly Payments”

In December, the Amazon Associates Program announced that they will finally begin paying affiliates monthly instead of quarterly.  This should finally put Amazon on par with other major affiliate and ad networks - all of whom pay their members on a monthly basis.  Read the fine print, though, and you’ll see that earnings for a given month will actually be paid 60 days after the end of the month (to allow for returns).  Here’s the quote from the Amazon announcement:

“Beginning January 1, 2007, standard Amazon Associates payments will be monthly instead of quarterly, paid approximately 60 days after the end of each month. For example, referral fees earned in January will be paid at the end of March, and payment of referral fees earned in February will be paid at the end of April.”

Contrast this with one of Amazon’s competitors, Google AdSense, which pays qualifying Web site owners in its network 30 days after the end of the month, and something seems wrong.  Amazon’s at a disadvantage, since they have to account for returns, but I’d be hard pressed to believe that that’s any consolation to its affiliates.

Microsoft Ships the Big Three

November 30th marked one of the biggest days in Microsoft history. For the first time in over ten years, we launched both an operating system and office suite at the same time. Congratulations to my colleagues on the Vista, Office and Exchange teams.

It’s About Quality *and* Quantity

When Microsoft inked a deal in August to sell ads on Facebook, many analysts scoffed at the partnership. Facebook, with its 9 million users was clearly second fiddle to MySpace with its 100 million subscribers. Phil Leigh, president of Inside Digital Media, a market research firm specializing in digital media, called the deal “a consolation prize” next to Google’s $900 million search and advertising deal with MySpace.

Perhaps Microsoft knew something Phil didn’t. According to a recent study from market researcher Youth Trends (via eMarketer), Facebook is the favorite Web site for both men and women ages 17-25. Youth Trend’s Josh Weil tells us that “Facebook is more then likely to be their first visit of the day.” MySpace is second among females and sixth among males.

Now consider Microsoft adCenter paid search. Microsoft doesn’t have Google or Yahoo’s query share, but word on the street is that adCenter click quality (conversion after a click) tops both Google AdWords and Yahoo Sponsored Search.

Perhaps this points to a trend in the making. Want a lot of lower-quality impressions and traffic? Advertise with Google. Want more for your money? Advertise with Microsoft.

I think Google recognizes this, and it’s no more evident than in their top secret display ad network (currently in beta). With guaranteed buys at fixed CPMs, Google is targeting the Fortune 1000. The beta is invite-only, and Google is making sure that both the participants and their creative are top notch. Some participants report that Google’s ads are the best-performing ads on their site.

Today, Microsoft offers quality; Google offers quantity. The question is, who will be the first to offer both?

Google Content

Earlier this week, in an interview with CNN, Google CEO Eric Schmidt, referring to a successful recent experiment that used AdSense to deliver MTV content, subtly suggested that advertising is just the tip of the AdSense iceberg. Lurking below the surface is a massive content distribution platform.

Nearly everyone these days has something to say, and with the advent of blogs, vlogs and podcasts, it’s easy to share your message. Whether you’re Saul Hansell or Mark Jacobson, publishing is just a click away. The Internet is the ultimate equalizer, but it also creates incredibly fragmented consumption, making it virtually impossible to separate the wheat from the chaff.

Enter Google. Combine some of the most sophisticated optimization algorithms this side of Wall Street, a massive search index and burgeoning relationships with top-tier content providers (Blogger, MTV and YouTube - just to mention a few) with reach near 75% of Internet users, and Google just may be positioning themselves as the universal TiVo. It’s one thing to build the pre-eminent advertising OS; it’s yet another to dominate content delivery as well.

Speaking of TiVo, might they be Google’s next big acquisition? Deals with the likes of Comcast will give TiVo a respectable footprint in the next couple of years, and their video discovery technology fits very nicely with Google’s mission of organizing and making accessible the world’s information. Google needs a way to get into TV. Is TiVo the answer?

Why did Google Buy YouTube?

So why did Google buy YouTube? There are lots of reasons floating around the press and the blogosphere. I’ll pile on my thoughts…

Massive ad inventory
Between MySpace, Fox Interactive’s remnant inventory, YouTube and AdSense, Google now has one of the largest ad networks in the world. With Microsoft and Yahoo making serious investments in paid search and syndication, it’s only a matter of time before they start to become serious competition. But, just as it’s going to be an uphill battle for Google to unseat Microsoft’s dominance in the office market, Google is the big dog in online advertising. The more inventory Google has, the harder it is for Microsoft or Yahoo to get in the game.

They’re gonna make silly money
Did anyone see Google’s quarterly report? They’re making ridiculous amounts of money from paid search. YouTube’s got tons of page views. Add Google search to YouTube’s pages, and Google captures even more query share and makes even more money off paid search. And with their bid density and broad advertiser coverage, Google can monetize ad space alongside each video really well.

User Profiling
One of the disadvantages Google has vs. Yahoo or Microsoft in the online advertising world is that they have little to no demographic information about their users. It’s been suggested that you can pretty accurately predict the age and gender of a user based on knowing what music or videos they watch. Now, Google will know what videos you watch (both on YouTube and through their relationships with the likes of MTV through Google Video), they’ll be able to fill out their user profiles with age and gender information, as well as create rich user behavioral profiles. YouTube will also give Google vast amounts of content they can use to improve their algorithms for understanding video, which they’ll use both in profiling and in providing more relevant contextual advertising.

Video’s the next big thing
Remember that song, “Video Killed the Radio Star?” With broadband available on every kind of device you can imagine, video will soon be pervasive - not just as an entertainment medium, but as an advertising one. Combine YouTube’s massive audience with Google Video’s content, and Google may quickly become your entry point to all the video you watch. Google doesn’t have a presence in the living room; perhaps they’ll get theirs through other people’s devices with Google as the front-end. I can see Google providing personalized channels, recommendations, etc. a-la Amazon, except for all your media consumption.

An Interview with Amos Lee

I just came across an interview with Amos Lee on NPR from 2005. Gotta love digital archives. In the interview, Amos talks about his falsetto, his life as a school teacher and experiences as a bartender. He also touches on some of the inspirations for his music. The interviewer was decent - she didn’t seem to make a good connection with Amos and felt to me to be a bit disingenuous - but when talking about songs inspired by Amos’ time as a bartender, she brought up “Arms of a Woman,” a song in which Amos laments about the solitude of life without love. Gotta be a pretty common topic of bartenders’ discussions. I thought she should have talked about “Black River” as well - a song about whiskey “carrying my cares away.” Seems like another one that’s a regular part of the bartender’s arsenal.

It’s great to hear Amos in the interview just talking as himself. The man is humble, genuine and sincere. I just can’t get enough. If you want to check out the interview (it’s got a few musical clips interspersed throughout), visit NPR. Happy listening.

For lyrics to Amos’ tunes, check out amoslee.com.

The Amazon Ad Network

so i’ve had an amazon omakase link on one of my other sites for the past few weeks. so far, it’s been pretty good - mixing products that are relevant to the postings on this blog. that’s no small task, by the way - especially when you have a web page with such a wide variety of content on it. amazon was showing ads for cd’s from some of the musicians i’ve talked about, as well as ads for books about blogging and online advertising. to be honest, i think their ads were on the whole more relevant than the adsense ads.

now, i live in seattle. and as you probably know about seattle, it tends to get a bit gray here during the winter. so in preparation for that, i started looking for one of those full-spectrum lamps on amazon. and guess what - today, when i looked at my blog, my omakase link had ads in it for full-spectrum lamps! there’s no content on my blog about full-spectrum lamps, so that can only mean that amazon is using my search and/or browsing history on their site to provide me with personalized recommendations in ads on other web sites. is this amazon’s foray into behavioral targeting?

when advertisers buy behavioral targeting, they’re trying to reach users in different phases of a purchase cycle. in one instance, they’re trying to cement their brand with consumers who, based on their behavior, suggest they’re in the early stages of buying a product with a longer purchase cycle, such as a car. in another instance, they’re trying to reach in-market shoppers. these ads are more likely to generate a direct response. yahoo has addressed these two categories by offering two flavors of their bt product - engagers (”users who have recently displayed interest in a specific product category”) and shoppers (”consumers whose level of recent behavior indicates that they are more actively in market — and probably are close to purchase — right now”).

amazon.com sells millions of products from over 30 different categories. some have long purchase cycles (like HDTVs and high-end digital cameras), while others have short ones (like cell phones/plans). through partnerships, they even offer customers access to financial and travel products. and now with unbox, they know what kind of media programming you like. with their sophisticated analytics, personalization and recommendation technologies, amazon could very likely do an excellent job of understanding for what types of products you’re an “engager” or a “shopper” and show relevant ads in their associates (affiliate/publisher) network to recognized amazon customers. with tens of millions of amazon customers and an established publisher network, amazon could create an ad network to compete with google adsense, ypn, and microsoft’s forthcoming contentads. the only thing that seems to be missing is the advertiser network. amazon used to show sponsored links from google and overture in their search results, so it’s possible they could look to syndicate those types of ads in their publisher network. but looking at a9, amazon’s search subsidiary, their sponsored links seem to be provided by a9, with links like http://rd.a9.com/srv/redirect/?key=xyxyx. don’t forget, amazon has thousands and thousands of merchants, each of whom could be an advertiser as well. or amazon could go out and solicit separate relationships with all kinds of advertisers - not just those who sell on amazon.com.

so is amazon going to build an ad network to compete with the big three? and if they do, can they better monetize publisher inventory than the others? would advertisers trust amazon to show their ads when there’s a competing ad for a product sold at amazon.com? only time will tell, but let’s keep our eyes peeled…