YSM Blocked Domains: Hercules and the Hydra?

Yahoo recently introduced Blocked Domains, a feature within YSM whereby advertisers can block up to 250 domains from within Y!'s distribution network. All observers, myself included, are glad Yahoo's doing this as it shows their commitment to improving the quality of their search distribution network.

However, a one commenter on Webmasterworld noted today, for every crappy distribution partner he blocks, more pop up. 'Beren' writes:

Over the past six months or so, Yahoo seemed to be doing a better job getting rid of scam affiliates. There were still plenty of them, but after a complaint, the bad ones usually disappeared. There was always a rotation as the scammers just switch to other domains, but it seemed overall to be getting better.

Then in the summer YSM introduced Quality Based Pricing and things were even better. I started to think YSM was getting serious about quality control and giving a decent deal to advertisers.

Then they started allowing blocking of domains, and I hoped things would get even better. I put in the worst offenders on my list and waited. Immediately new affiliates sprang up. I put them on the list. New ones, more additions to the list. The rate of new YSM affiliates in my industry appears to have increased vastly in the past couple of weeks. It's like Hercules and the Hydra: cut off one head and two more spring up in its place.

I just wanted - for one day - to get the percentage of YSM clicks coming from yahoo.com to get as high as 35%. No matter how many affiliates I block that percentage doesn't change much.

One anecdote does not a trend make, but most people I've talked to on the AdSense/YPN publisher side have said they don't expect Blocked Domains to actually block crappy distribution partners.

Only time will tell, but let's hope for everyone's sake Yahoo does better than Hercules did with Hydra.

The Importance of Original Content

I was a literature major in college, so I had to share what my 10-year-old son Theo wrote in class the other day. The theme was "I am from...":

"I Am From"
I am from a place where red and white paintings come alive. Couch and flies bumping around.

I am from a place where there are noises and chirps. Cars and trucks coming and going. The sound of the creek as solemn as me.

I am from a place where souls descend and rise, just to say hello to me.

I am from a place where people say, "hi, how was your day" and "do this or that."

I am from a place where spaghetti and meatballs come alive. Mashed potatoes mashed up in my stomach.

I am from a bed of memories.

Facebook Fanboys & Naysayers Face Off, Future of Palo Alto Real Estate Market At Stake

One thing has become clear to me as I explore the Facebook world from an individual and business perspective: never, perhaps, in the history of Internet businesses has there been such a rapid and profound polarization of opinion on the prospects for a company.

Why, you ask, is a guy who's been bashing contextual advertising for years, even writing about Facebook? Quite simply, my wife & I are considering moving to Palo Alto (where I grew up) and how many Palo Alto-based Facebook millionaires there might be has a big impact on when we pull the trigger on a house in Palo Alto. If you think Facebook's a fad, then you have time to look for the exact right home in Palo Alto; if you think Facebook rockets to the moon, then you had better buy your Palo Alto home now because being in the middle of a Google/Facebook bidding war for a 3-4BR home in north Palo Alto could get pretty darn ugly.

[NOTE: the Google Map at the top of this post is of all the places I've lived in Silicon Valley; you'll note that I keep getting further & further from Palo Alto, which is not really what I had in mind.]

You literally have people who think Facebook is worth $500M all the way up to $100B, a full 2.5 orders of magnitude difference in opinion, despite the fact that everyone pretty much agrees on Facebook's current size and growth rate.

In case you haven't yet made up your mind, here are a couple key fanboy and naysayer arguments:

Fanboy: Lee Lorenzen, CEO of Altura Ventures, owner of the Adonomics blog which tracks Facebook application usage. Lee's VC fund invests solely in Facebook apps, and he makes the case for Facebook getting up to 200M users by end of next year as well as a $500/user valuation. Laugh all you want (I certainly did), but Google has a >$250/user valuation right now themselves.

Naysayer: Kara Swisher, who's been around long enough and has enough of an investment coverage background to have a legitimate argument for why even a $15B Facebook valuation is f$#%&ng crazy?

Fanboy #2: Vinny Lingham, whose Facebook valuation model is based on comparisons with Google's AdSense business. His model makes sense, but IMO he misses one critical point - people won't necessarily continue to use Facebook to the extent they do today. Remeber Geocities? Friendster, Excite@Home, Netscape, MySpace (a soon-to-be has-been)? You can't assign a $10B valuation to a company *today* based on what you think will happen over the next 4 years, certainly without several years of track record at your back. Vinny's counterpoint to that argument, though, is one that not easily dismissed: the consumer data Facebook has will allow for off-Facebook ad and offer targeting to an [ROI] extent never before seen, and that's ultimately why Facebook's worth $10B.

Facebook Advertising: Get With It?

One month into Facebook and I'm still trying to figure out what the hell I'm doing there. I go there regularly now, but don't really get the feeling it was built for people over 25. I'm not looking for a relationship, I don't really care what other people are listening to (I once did, but that was ~20 years ago), and I'm not specifically looking for friends.

But I go there nonetheless, probably because I'm interested in Facebook's rise to prominence, and definitely in order to figure out what this means for advertisers.

I've been running a couple tests of Facebook's two ad offerings - Facebook Flyers, and Flyer Pro. Flyer is a CPM-based offering ($2) and Flyer Pro is a CPC-based offering. With FlyerPro you can target specific networks, Male/Female, day of week, by country and/or city, relationship status and keyword. In my case, I'm targeting Google & Yahoo employee networks with an ad promoting my blog as indispensable to their SEM quest for knowledge.

My test campaign on FlyerPro is getting a 0.536% CTR [Oct 25 update: average CTR is now 0.35%]. I mainly wanted to run the test to see what CTR's Facebook can get from their contextual inventory, but also because it's early and I'll bet knowing how to advertise on Facebook becomes essential to any marketer's skillset.

I really don't know squat about Facebook as an advertising medium - and expect that very few people do - so I read a 60-page study tonight that Fox Interactive Media commissioned in conjunction with Carat and highly recommend it as does AdAge. The study is [I think] the first significant research into how creating a brand-related page impacts such measures as brand recall and purchase preference.