The rapid growth of social networking sites such as Facebook and MySpace over the past few years has been a significant online success story and one that advertisers have been looking at closely as a potential new channel. However, two new research studies have placed some doubt on the role that these sites have for marketers.

MediaWeek has published a story reflecting this growth in web traffic but indicating how advertising on these sites has been very poor. It reports that over half the US now actively uses social networking sites, but so far advertising on these properties has been very limited. Sites like Facebook and MySpace are seen to significantly under perform when compared to overall online advertising, according to research firm IDC. Just 57% of social network users say that they clicked on an advert over the past year, compared to 79% of all web users.

MediaPost also reports that, possibly related to this trend, marketing departments are certainly intrigued by the possibilities of social networking sites but are still thinking twice about using them. Research commissioned in the US shows that 27% of senior marketing executives identified social networking and word-of-mouth as the tools they would most like to introduce to their marketing mix to compensate for anticipated budget cuts, but 55% also indicated a low current interest in actually incorporating the networking sites into their plans.

These results probably reflect the uncertainty of using a new form of media without seeing proof of the results that could be achieved. In addition, the social networking sites still need to develop an advertising model that will be appealing to advertisers and not antagonise users who may be concerned about the privacy issues of targeted advertising.

The recent decision by Yahoo! founder and CEO Jerry Yang to step down from the position has lead to much speculation about who might now replace him and what options are open to Yahoo! in the future. Advertising Age has published a good summary of the potential candidates for the job and the task that awaits them.

Yahoo! has had a tough year - repelling the advances of Microsoft, attempting a closer advertising deal with Google which hasn't paid off, and facing a declining market share and growing business pressures against its main rivals. The decision on who will lead the company into 2009 and to potentially turn the business around into a more effective market competitor will be an immensely important one. The outcome will determine whether Yahoo! survives in any meaningful way over the next 12 months.

The Google AdWords blog has announced another new tool for advertisers, although at this stage it's one that is only available in the US and UK markets. The Search-Based Keyword Tool links into PPC advertiser accounts and provides some better data on what potential customers may be searching for and which keywords should be targeted by the advertising campaign.

This new tool is currently in beta phase and initially looks to be very similar to the current keyword research tool offered by Google. However, the advantage of this tool is that instead of starting with the searcher's keywords, this one begins in the opposite direction by analysing the advertiser's landing pages and identifying keywords that potential customers are searching on to find their products or services.

The new tool therefore claims to display better search query data relevant to a website's content, thereby identifying highly relevant keywords that are not currently part of the existing AdWords campaigns and so potentially allowing advertisers to take advantage of missed opportunities. Early tests of this tool have not revealed notable differences to existing campaigns and the suggested keywords have been quite broad, but with further development by Google this could become an essential tool for all advertisers to help refine their PPC campaigns.

The Google Analytics blog has published more information about the new Advanced Segmentation function available within the statistical package provided for websites. It outlines how users can now compare different data segments and key performance metrics within Analytics reports and how these segments can be saved and then applied to any future report. The blog entry also reports how users of Analytics can now select from predefined custom segments such as "Paid Traffic", "Visits with Conversions"or "New Visits" as well as use an auto-complete function and a drag and drop interface to easily create segments.

The new blog entry provides a useful introduction to segments and how these Advanced Segments can now be created. It describes how a segment is, simply, a subset of data and - for example - may refer to a subset of visitors whose behaviour users may like to analyze or compare with another segment. With Advanced Segmentation users can create segments whilst browsing reports and then the segments that are created can apply to historical data as well as current and future traffic.

As reported previously, these new features within Google Analytics provide even more powerful tools to analyse and interpret data and then test alternative changes to a website or marketing campaign. This article offers a good overview of how this data can be selected and used.

The Interactive Advertising Bureau in Australia has just published the latest quarterly report on Internet advertising spend which shows further growth in the market, despite the impending economic slowdown. The third quarter of 2008 recorded the highest revenues yet, at $450m. Advertisers spent over $100m more in Q3 2008 than they did in the same period in 2007, which was a year-on-year growth of almost 30%.

This new IAB report has again been compiled by PriceWaterhouseCoopers, based on information from advertisers and leading Internet properties in Australia, although Google continues to withhold their data on search advertising. Despite that, the estimates for the quarter show that the Search & Directories category continues to lead market growth, with a 33% year-on-year growth and a 13% growth on the previous quarter in 2008, accounting for $212m of the total Q3 revenue. General Display grew 29% year-on-year and 10% on the previous quarter, reaching $125.5m for the quarter, whilst the Classifieds category grew by 25% year-on-year and 2% from Q2 to total $113.75m.

Following the announcement back in June that Google was to provide search advertising through Yahoo!'s content network, the deal has been facing government review for anti-competitive concerns. After some delay and increasingly negative feedback from the regulators, as well as from some advertisers, Google has finally decided to step back from the deal and has announced an end to the agreement.

The origins of this arrangement followed Yahoo!'s aborted takeover by Microsoft and came at a time when Yahoo! was looking for support against this move. Now, however, Yahoo! is looking increasingly isolated as Microsoft are saying they are no longer interested in a deal except possibly a more limited search partnership Yahoo!'s stock has also fallen lower than when the takeover was in discussion and they look to be in an increasingly fragile position.

The new November issue of the monthly Web Marketing newsletter has been published, covering some of the recent stories on web search and online marketing trends.

This month's edition looks at the ways to optimise video content for search and how this increasingly popular online medium can be used to generate website traffic and new business leads. It also considers the 'bounce rate' metric available within Google Analytics and how this can be used to improve the marketing performance of a website. Finally the newsletter reviews the recent data published by the Australian Bureau of Statistics on the use of the Internet and websites by businesses in Australia.

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