Microsoft have emailed PPC advertisers to notify them of changes to their trademark policy in North America, and have also posted updates online. Microsoft says that 'to come in line with search industry practices' - i.e. Google - they will cease editorial investigations from 3rd March into complaints about trademarks used as keywords to trigger ads on Bing & Yahoo! Search in the United States and Canada.

This change removes the involvement of Microsoft from the practice of bidding against trademarked terms, and they now say that if there is concern that an advertiser may be using a trademark keyword inappropriately, the trademark owner should contact the advertiser directly.

Microsoft will still investigate complaints relating to alleged trademark violations in advert text, but will continue to allow fair use of trademarks in ad text. They say that advertisers are responsible for ensuring that their use of keywords and ad content, including trademarks and logos, does not infringe or violate the intellectual property rights of others.

The Media Post blog has covered the story about the ongoing integration between Yahoo! and Microsoft search and in particular, the impact on their respective paid search (PPC) services. This follows blog posts by both companies, including answers to questions raised on the Yahoo! blog.

Microsoft and Yahoo have recognised the concerns expressed by existing advertisers of their two services as progress is being made towards moving all customers to Microsoft's ad platform adCenter. Both services currently offer different features and although the general consensus is that the adCenter platform is more user-friendly, the changes could take longer than expected.

The article outlines the type of issues being discussed, such as style issues regarding how singular and plural words that YSM sees as one word, but Bing does not. Also, whether liquor advertising keywords - which are allowed on Yahoo - will work on MSN, which does not allow liquor keywords like scotch. One key question is also whether advertisers will have the option in Microsoft adCenter to choose which search engine to run campaigns on - either Yahoo, Bing or both - although the current response seems to be negative.

These minute, but important, details could hold up any project this size. The two companies announced an alliance back in February, that would provide advertisers with the potential to reach more consumers through one account. Yahoo would sell the search ads through the adCenter system, but not the display ads for both companies.

The plan has been to transition US and Canadian customers to adCenter before the start of the holiday 2010 search period, but in a recent blog post to advertisers this is now expected to take longer - probably into the early part of 2011.

A report by MediaPost claims that the highest-priced keyword in the US during September was $99.44 per click on Google. This data comes from the AdGooroo Search Engine Advertising Update, which has begun to track the click costs for search terms for the first time. According to their analysis, the term 'mesothelioma' was the highest-selling keyword, which was also sold on Yahoo! for $60.68 per click to get the top ranking position. The search term 'auto insurance comparison' was the highest-cost phrase on the Bing search engine, at $55.20 per click.

Of course, the search engines themselves will know this data but keep the information confidential, and it's not clear how the figures revealed by AdGooroo are obtained, other than by estimates and market feedback. It seems that the term 'mesothelioma' has become highly expensive due to legal firms pursuing new lawsuits related to the asbestos-causing lung cancer.

The report also says that the search engines served up on average between five and six ads per keyword during September. In the US market, Google moved to 5.45 adverts in September 2009, up from 3.06 a year before. Yahoo! dropped to 5.35 from 7.53 and Bing also saw a decrease to 3.10, from 5.12.

The PCWorld website reports on the new guidelines published in the US by the Interactive Advertising Bureau (IAB) to help define what 'click fraud' is within pay-per-click (PPC) advertising and to lay down basic procedures for determining when an advertiser should or should not pay for a click. Promisingly, Google, Yahoo and Microsoft all collaborated with the IAB on the production of these guidelines.

Click fraud remains a controversial area of PPC advertising, with different % levels claimed by various interested parties. The search engines say they have this issue largely under control but advertisers are often concerned about how effective these controls might be. The new guidelines - which can be downloaded here - now provide "the detailed definition of a 'click' and the standard by which clicks should be measured and counted, including the identification of invalid and/or fraudulent clicks".

This is a good move by the IAB and participants who created these guidelines and they should start to help the debate about, and the tackling of, the problem so that the PPC advertising market can move forward on a clearer understanding of the issue.

The New York Times covers the trial that Yahoo! is currently running with a new form of PPC advert, which integrates images and video. This is something Google already offers, but only for selected advertising with their third-party content network, whereas Yahoo!'s new test is targeting their main PPC channel on the Yahoo! search network.

Called Rich Ads in Search, Yahoo! is hoping that the higher profile and better clickthrough rates shown from the initial tests will attract more advertisers to use this format of advertising, and will also drive more clicks and therefore revenue from their search results.

Although Yahoo!’s traditional strength has been in display advertising, as the current economic recession has deepened in the US, many advertisers have shifted money to search, which gives them direct, measurable results. Yahoo!’s recent fourth-quarter results have reflected this trend, with search revenue showing an 11% growth and display revenue falling by 2%.

The article reports that Yahoo! has been testing these new adverts in a number of formats, with dog-food company Pedigree displaying a small video for a commercial when a user searches for the company name. The video opens up into a larger format and plays once clicked. Similarly, a search for Staples displays in a similar light-blue box with the company’s logo on the side, which is also a link to the corporate site. Alternatively, retailers can include a search box within the advert panel to enable searchers to enter a ZIP code, which will then take them to the advertiser’s website that lists the nearest stores or branches nearby.

Yahoo! is currently charging a monthly fee for the service, compared to the traditional auction-based pricing of search advertising. It is reportedly only allowing only a selected number of large, brand-focused advertisers to test the program. According to Yahoo!, some advertisers in the pilot program saw an improvement by as much as 25% in click-through rates, although an independent agency reported lower results, around 5-10% higher than the regular text adverts.

Yahoo! clearly hopes that this new type of search advertising will prove attractive to companies who pay high prices to develop their commercials and logos and want to be able to show those wherever they can. It may prove an important development for Yahoo!'s search performance as the company remains under pressure from financial analysts to consider selling its search business to Microsoft, who continue to express an interest in such a deal to grow their share of the search market.

A recent survey published by Microsoft's adCenter service in the US claims that small businesses who have built an online presence are failing to invest in search marketing. Apparently 73% of small business owners would rather do their tax returns than start a search marketing plan!

Of course, Microsoft is trying to promote their adCenter PPC service and therefore the survey results are not entirely surprising with an underlying movtive! The study of 400 small businesses in the US revealed that 59% of those with websites don’t currently use paid search marketing, and of those, 90% have never even attempted it.

The Microsoft press release for this survey says that 'despite the lack of investment in paid search marketing, the weakening economy and increased competition, nearly nine in 10 (86 percent) small-business owners surveyed felt that they could be missing opportunities to grow their business, while three in four believed prospective customers could be searching online for the type of service their business offers'. Of those companies that do use PPC advertising, most are very satisfied, as 72% reported an increase in sales enquiries and 68% consider their paid search marketing efforts successful.

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 Official Google Blog has posted an overview of the Quality Score system used within the AdWords pay-per-click advertising system. It explains in simple terms how and why this system is used and what it means for advertisers, with the underlying issue of relevancy and value of a keyword or advert providing more benefit to the searcher and the advertiser.

As Google states in the post: "The quality score gives search engines a way of aligning the incentives of the buyers, the sellers, and the viewers of ads. The search engine wants to sell ad impressions, but advertisers want to pay for clicks. The solution is for advertisers to bid on a cost-per-click basis, while the search engine estimates the total value of the ad over time: bid per click times the expected number of clicks."

The post finishes by asking why quality scores are important - to which the answer is that "they lead to a better auction by allowing advertisers to buy clicks, publishers to sell impressions, and users to see relevant ads".

Google have launched a new online tool in Australia called '10 Steps to Promote Your Business Online'. The new Flash website has subtle branding so that it doesn't appear to be a mainstream Google product and is mainly intended to be used as a promotional tool and guide for small businesses to introduce and encourage them to use Google AdWords to market their website.

It's a simple to use and cleverly designed site that helps to lead new online marketers through the process of setting up a marketing plan and an online marketing (PPC) campaign for their own specific business, all linked closely to Google's products and services. Users are led through the 10 steps with simple stages to read and input their own requirements, with the option to save their plans at any point (and therefore a good data collection tool for Google).

It can take some time to work through but can be a good starting point for small businesses who have little knowledge or experience of this sector and want the 'hand-holding' to develop a campaign for themselves.

At the end of last week the Google AdWords blog announced some significant improvements to their Quality Score system. The changes are that, firstly, Quality Score will become more accurate because it will be calculated at the time of each search query. Secondly, keywords will no longer be marked 'inactive for search' and finally the notification of 'first page bid' will replace 'minimum bid' in an account.

The first change is particularly notable in that Google is now replacing the static Quality Score system for each keyword with one that will evaluate an advert's quality each time it matches a search query. This means that AdWords will use the most accurate, specific, and up-to-date performance information when determining whether an ad should be displayed, which Google says will mean that adverts will be more likely to show when they're relevant and less likely to show when they're not.

In Google's quest for relevancy, this change should also mean that searchers are likely to see better ads and advertisers should receive leads which are more highly qualified. This is clearly going to be a very 'fluid' system that adds further calculations to the position and cost of each advert and will require further focus from advertisers to improve their campaign metrics.

Google had previously identified under-performing terms within each campaign and marked them 'inactive for search' - this is now changing so that terms will be available for advertisers to use and bid against, although they are likely to still have a low quality score and not perform particularly well, even with higher bid levels.

The final change is also notable in that the 'minimum bid' notification for each search term is now changing to a 'first page bids' figure, which is an estimate of the bid level required to place an advert on the first page of Google's search results. These figures are based on the exact match version of each keyword, the ad's Quality Score and current advertiser competition on that keyword. This will be a more useful figure for advertisers and give some better insight into the competitive nature of each search term as well as guidance on the necessary bid levels to achieve first place position - which is also likely to help Google push up the average bid levels across the market.

These notified changes to the Quality Score system are gradually being introduced to advertisers but are likely to be widely available within the next few months ready for the pre-Christmas peak of advertising for many e-commerce companies.

Google AdWords has pushed the Placement Targeting option to mainstream PPC advertisers by making this option a more prominent part of the AdGroup management panel. The development of placement targeting is also another way that advertisers can now gain more control of the content targeted network and target their adverts on other relevant third-party websites.

Placement targeting can either be included within existing AdGroups, or set up as a separate campaign. A new Placements tab in the AdGroup control panel provides advertisers with the option of including this feature and targeting specific domains, or even sections of large sites, through a number of selection tools.

The advertiser's advert will still appear within the content targeted network if this is selected, but with Placement Targeting there is now more control over bidding strategies on domains that are more relevant to their market. You can select sites by browsing subject categories, searching sites related to keywords, or by finding similar sites to known domains that are relevant.

The list of suggested sites that Google presents includes details on the ad formats available and the likely impressions per day. The focus of the tool does leave something to be desired in some markets, but by selecting specific websites and adjusting bid levels, advertisers can put more focus on this part of their AdWords campaign and combine targeted sites with specific keywords for greater focus.

Since the demise of the Overture Search Suggestion Tool into Yahoo!'s new 'Panama' PPC system, the best free keyword research tool has been Google's own tool which is provided as part of a PPC account as well as a free tool available to anyone to use. This tool is important because it reports search activity on Google over the previous month, but the main drawback has been that no volume data has been displayed - just a comparative bar chart for each term to indicate relative popularity.

However, Google's AdWords blog has announced the new change which has appeared this week, whereby Google is now displaying volume data for these terms, at least within a general range, so that more information can be gleaned on the popularity of each term and the likely search volumes that they attract. So although these are approximated figures, it helps to add an extra level of data onto this already useful tool and should benefit all online advertisers as one of the core research tools to use when looking for the best search terms to target, either through PPC or SEO.

A report by The New York Times claims that research undertaken over recent months by Piper Jaffray in the US has uncovered apparent ways that Google is now testing behavioural targeting for its PPC adverts. By using the huge amount of data that has been collected on search activity and patterns in the past, Google may be starting to display different adverts to people based on their previous search activity - so that the example given indicates that if a searcher looks for “scuba,” then something else, and then “vacations" could pull up ads for diving trips.

It's no secret that Google is using it's massive source of data to understand search activity and to target activity in different ways, such as through the personalised iGoogle tool and also the likely development with banner advertising that followed the acquisition of DoubleClick last year. Some of this data collection is using 'cookies', which are small files attached to web actions from individual users.

Google had changed its privacy policy several years ago and indicated to users that it might record personal information about them for reasons that included “the display of customized content and advertising.” In 2007 Google also started looking at the immediately previous search when considering the display of PPC ads although Google did not need to use cookies for this because web browsers report the address of the previous site visited to the current site being visited and in the case of a search, that address contains the search terms.

This type of development in search targeting or behavioural targeting is becoming one of the main areas where the search engines will be competing to gain market advantage over the next few years and to improve the targeting services being offered to advertisers. Google, Yahoo! and MSN are all looking at tackling this issue with different approaches, although all of which are likely to raise privacy concerns, including possible legal cases in the future depending on the methods being used. However, it also should mean better relevancy for both searcher and advertiser if the balance between targeting and privacy can be achieved.

After much speculation, Yahoo! has now agreed a deal with Google to carry their search advertising in return for a revenue share. As reported by many news agencies, including Reuters, the deal forms a non-exclusive partnership and Yahoo! say they have made this move after failing to agree a deal with Microsoft who had revised their earlier acquisition approach to now buy just Yahoo!'s search business.

Under the new arrangement with Google (which follows an earlier trial period), Yahoo! will run Google's AdSense PPC adverts alongside its own search results and on some of its websites, but only in the United States and Canada for the time being. Yahoo! will also retain control over where the Google ads will run and which search terms will be used - there is more information published by Google on their official blog. The deal has been agreed to initially cover four years, with options to renew it up to a period of 10 years.

Yahoo! must see this as part of a rescue plan for its ailing business since it expects the deal to create an additional $250 million to $450 million operating cash flow within the first year. However, within the brief press release there is no mention of what impact this arrangement will have with Yahoo!'s own PPC service and for the advertisers currently running accounts in these regions, but it seems to indicate that Yahoo! expect to make more from this model than developing their own service. More on this should become clearer over the next few weeks or months.

Google has said that the company is witnessing a "significant inflow" of advertising spend from companies who are moving their budgets from mainstream 'above the line' media into more targeted and measurable forms of marketing like PPC advertising.

As reported by The Sydney Morning Herald, there are mixed reports about how the threat of a recession is affecting companies, but this trend does seem to indicate concerns from companies who want to make the most of their advertising spend when budgets are being tightened, either in response or anticipation of a market downturn. In light of this trend, the reported 30% growth in search advertising in Australia for the March quarter could be significantly underestimated.

At the same time as this continued growth in Internet advertising continues, another article in the SMH claims that, dollar for dollar, the Internet accounts for more carbon emissions than any other form of advertising. A study by consultancy P3 estimated the environmental cost of different forms of advertising and claimed that Internet advertising is the equivalent of junk mail, with high levels of water generated by large numbers of page impressions.

Perhaps this is good publicity for the green auditing division of the company publishing the research but it also raises many questions about the methodology of the research.

The New York Times reports that Google executives have expressed a desire to develop the advertising relationship with Yahoo! that was tested for several weeks recently with AdWords appearing alongside Yahoo!'s search results. This is partly a move to ward off any possible future attempts by Microsoft to make a bid for Yahoo! but could also be a lucrative development for both Google and Yahoo!

Any arrangement, should it go ahead, would face antitrust investigation in the US due to the dominance of the search advertising market by the two companies. It would also have serious implications for Yahoo!'s own PPC advertising system, which is still struggling to compete against Google, despite a facelift and relaunch in recent years. Such a move would also place even more power within Google's control and advertisers would have even fewer options to place search advertising so that bid rates would continue to rise.

Google is facing another lawsuit in the US, according to a report by CNet. The claim aims to take a class action status for many affected advertisers and has been filed by the same firm that previously won significant cases against both Yahoo! and Google for click fraud issues. The new claim accuses Google of deceiving its customers into paying for ads they didn't expressly request.

This is based on the sign-up process for a new AdWords account whereby advertisers are automatically included in the 3rd-party content network of adverts (Google AdSense). There is not an obvious opt-out option for this part of the advertising network and advertisers need to enter the campaign settings after the account has been set up in order to deselect this option.

It is likely that Google will need to revise this system in the future to make it more obvious to advertisers what they are selecting and how they can easily opt-out if required. It also seems to be the nature of being a big corporation now that Google will continue to face these types of action whenever a potential failure in their system can be exploited for money.