Ren and I are attending WordCamp in San Francisco, the Automattic-sponsored one-day event dedicated to WordPress, the popular blogging platform (and the one we use here at YieldBuild). This is the fourth anniversary of the SF-based WordCamp—the event has spread to more than a couple dozen around the world in 2009.

Forgive the choppy style – I’m semi-liveblogging. It’s also a bit geekier than your usual YieldBuild blog post, but hey, this is a blog platform conference.

Highlights so far:

• 730 registered attendees, and 2900 blogs (double the number of attendees in 2008)
• Tim Ferriss offered tips on blogging: how long posts should be (both long- and short-form can work), how much time you should spend on a post (as much time as you enjoy) and how to outsource your dating (can have bugs–beware!)
• Google’s Matt Cutts offered his SEO advice: modifying your default and specific blog entry URLs, doing some decent keyword research (esp via the Google keyword tool), using Google Webmaster tools, writing backlink-worthy posts, whether you should post videos or podcasts (HotOrNot score <6? Podcast) etc.
• Social media PR whiz Tara Hunt, doing a conference junket for her book The Whuffie Factor, talked about social capital. (see slides here) Establish connections and build reputation/credibiity. #1. Turn the bullhorn around (listen instead of shout to your customers). Direct2Dell example. #2. become part of the community you serve. #3. create amazing customer experiences (“automagicness”-seamless experience; “throwing sheep”-fun social frivolousness that makes customers comfortable to do more; “lighten up” – defuses business seriousness) #4. embrace the chaos (benefits of openness, transparency and daring) #5. find your higher purpose (gift-giving to build social capital)
• WordPress creator Matt Mullenweg – about 3.5 million WordPress blogs, 11 million downloads, 22 billion pageviews, 4.9 billion spam comments killed by Akismet; history of WordPress from its b2 beginnings, through the various versions and updates. Announced GPL-compliant Theme Developers Page. GPL-compliant business models – Alex King founder Crowd Favorite. Ajaxy Twitter-like P2. Facebook-like BuddyPress. New cool plugin overview. 42% WordPress downloads outside the US – dotSUB for subtitling WordPress.tv videos. Localization/translation of plugins. Blackberry application coming, along with an iPhone app update. Announced that WPMU and WordPress.org code bases are merging. WordPress.org profiles coming (integrating BuddyPress functionality), including WordPress service provider marketplace.

I’ve got to say, by the way, that the WordCamp organizers are really spoiling us with the grub and swag. Omnivores enjoyed barbecue, while we veggies got grilled veggies, collards and mashed potatoes and cornbread. Got great swag, including a blue WordCamp American Apparel t-shirt, buttons, pens and decals galore, and a temporary tattoo. Keep in mind the conference registration cost $20!

Q&A with Matt:

• glotpress.org – open-source translation framework, better porting into plugins and themes
• Blogger import feature does exist to pull in Blogger blogs into WordPress (at least for the content)
• which Ajax library are you using? Started with Prototype and Scriptaculous; now using JQuery, very happy with it.
• anti-plagiarism: plugins to detect? Not yet (but report to WordPress and Google to take down or remove from index)
• plugins for WordPress.com blogs: plugin integration across 5 million blogs tricky. WP team does try to develop towards parity between the .org and .com platforms. Some plugins developed for VIP clients like CNN.com might be released to the .com blogs as options.
• Intense Debate: how do you decide what goes into core? Answer: What is fast, secure and what can we commit to update forever?
• PHP5 over 80% now (~20% remaining PHP4, still supported)
• using WP as a CMS for larger purposes: probably won’t scale up to the level of functionality like Drupal or Joomla because want to keep the code base light. Possibly spin off to CMSPress?
• improving search functionality. Sphinx-based technology might be a solution; in the meantime, Google search is even used on Matt’s blog.
• Revision post & versioning: can customize this via config file. Possible future improvement might be more efficient storage, even though text-heavy revision storage is fairly trivial nowadays

paidContent’s David Kaplan shares Bernstein Research’s updated Ad Tracker, which, for the first time since it began in 2003, showed a decline (-4%) in online ad spend in Q1. Just in case you suspected a particular weakness with online relative to its more traditional brethren, the 18.4% drop in non-online advertising should put that to rest.

What many are, no doubt, wondering is if this past quarter’s drop indicates the nadir of online advertising fortunes, or if there’s more room to fall. The Ad Tracker doesn’t have data before 2003, so it misses the dot-com bubble pop and its effect on ad revenue during 2000-2002. Although there are several reasons why the online advertising market is generally better positioned today than it was 9 years ago, the graph to the right suggests online advertising will continue to be dependent on overall ad spend, and for the latter to grow, we’re all still waiting for an economic recovery.

Google has just opened up a substantial swathe of inventory for AdSense, most of which will be filled with local advertising. AdSense has just announced the Maps Ad Unit for mashup developers using the Google Maps API.

The default implementation serves up 2 AdSense text ad units in a box somewhere along the perimeter of the map; tweaking a parameter in the code can serve up only 1 ad unit instead (for smaller maps). You can see an example of the 2-unit at ZipMaps, and a 1-unit at Acme Mapper. In the example to the right, we’ve pinpointed YieldBuild’s ZIP code; the ad served up is to Roy’s, a Hawaiian restaurant not even a block away.

Google Maps mashups are popular—1688 using the API at last count—and are probably a great way to build local advertiser inventory when mobile map advertising, where the real money is, becomes viable.

My favorite iPhone app, surprisingly, is the New York Times app.
I know, I know.
It’s kinda boring and marks me as a fuddy-duddy.
Which I am.
But it is a great little app. It’s well organized, fast and very usable.  And it has some of the better iPhone app ads that I have seen.

These little ads slip up from the bottom of the article viewer and tend to be on the cleaner, less obnoxious side—low use of images, heavy on the branding, and unobnoxious colors.  IMHO, they do it right.  When you click on an ad, it keeps you in the app—it simply takes you to another page still contained within the app and its controls, so you can go back to what you were just reading.  What would be bad is if clicking on an ad opened a webpage; this would close the app down and launch a browser window.

As some of the more creative ad network players out there like AdMob and VideoEgg dabble with various models such as Cost Per Engagement (CPE) and begin to evolve their offerings, it makes me wonder how much the success of advertising on the iPhone depends on the evolution of the system and not just the networks.  The evolution of the iPhone and its app platform will certainly impact the effectiveness of these ads.  Click metrics and performance measurement capabilities of iPhone ads are certainly two vectors that will change as the system and platforms evolve, but also what an ad and its creatives can do and can be will change.

A new app SDK is coming out in a few weeks rumored to offer microtransaction capabilities in it, and the new iPhone and software release are due out sometime this summer, rumored to support background processing for apps.  This will change what the user can do with ads and likely bring the user app experience to a whole new level.  If a browser can be launched without shutting down the app (and, even better, if it can “pause” the app) that’s a whole new set of advertising opportunities.  If an ad can offer something that you want to buy right there, tempting you to burn a few of your digital dollars on an MP3 or video, or whatever—and if it can do so through a seamless microtransaction payment to your cell phone bill—that’s frictionless, fast and awesome.  Now my head is swirling with ideas like a QVC app, or an auction app that connects with in-app advertising, but alas, that’s crazy talk at this point.

Now if I could only get my iPhone to not drop calls, and deliver me voicemails within 6 hours of when people leave them, I would be a happy boy.

In today’s performance-focused ad market, CPC, CPE and CPA pricing models have dominated as marketers have striven to justify ad spend in a down economy. Display’s value in promoting brand awareness and presence has been something advertisers have invested relatively little lately; better to focus spend on consumers further in the sales cycle, instead of casting such a wide net.

However, recent research released by iProspect suggests that advertisers shouldn’t dismiss the value of those visitors who view a display ad but don’t click: many of them will still be impacted enough to actively search for more information on their own.

For those respondents who said they had seen display ads over the past 6 months:

• 31% said they had clicked on a display ad
• 37% said they hadn’t done anything
• 27% said they had done a search on the company, brand, or product

I have to admit personally that I fall into the third category. Often because I don’t want to disrupt my browsing experience, or because I want to know about the company before looking at a specific promotion, I’ve made a mental note about an intriguing product or ad and searched later. I’m currently in the market for a new car, but don’t want to see a flashy splash page for a car I hadn’t thought about—but I do want to learn more about it.

If advertisers can believe that CTR doesn’t capture the full value of a specific online display campaign, how can they measure its impact? Considerably difficult, but such is the case when advertising to early prospects no matter what the medium. Brand awareness studies are probably the best indicator of a campaign’s effectiveness at lining up future potential customers.

Advertisers might also be interested to know that display advertising working in concert with performance-based ads tend to boost the effectiveness of the latter. A few days after I saw an ad for the VW Rabbit, I filled out a lead form on Autobytel to get a quote from a dealer; I never clicked on the ad.

YieldBuild will be exhibiting at SES San Jose this coming August 10-14 (booth #516).

If you’re attending and are looking to save some money, feel free to use the following discount/promo/priority code when you register: 20YIHU

You’ll get a 20% discount on any conference pass!

I’ve attended SES for several years now, and found it to be a great show for its sessions, exhibitors and networking opps. It really is the definitive SEO conference series.

San Francisco startup SocialMedia has launched three new social media ad formats that portend what is likely to come, provided users are comfortable with the amount of personal information the ads share.

• Twitter Pulse integrates a live feed of tweets that match the advertiser’s filters, and also allows users to tweet their own. The ad unit can be integrated with a larger-form microsite, and targeted ads.
  
• Friend to Friend ads are similar to the “Your-friend is a fan of…” ads you might have seen on Facebook, which is where the data is drawn from. A product gets a picture and an endorsement from one of your Facebook friends.
  
• Community Poll and Community Stream prompt visitors for an opinion on a product or question, and either shares the community’s responses in the form of percentages, or a friend’s response to the same.
  

It’s not hard to imagine that the ads will perform well. Seeing a friend’s picture or name and implied endorsement of something has been the key to Facebook’s apps’ virality. Given social media users’ aversion to anything other than something bearing a friend’s face, and the explosive popularity of Twitter (thanks, Ms Winfrey), the new ad formats exploit novelty and social graph data to drive attention and engagement.

But are all visitors going to be enthralled? Some are likely to quickly draw some conclusions that they hadn’t anticipated: what I write on Facebook and Twitter isn’t limited to my friends and followers. The next question will probably be: who else has access to this data and what are they doing with it? And the next thought could be: how do I change my settings? or I’m never using Facebook/Twitter again or How do I contact my Congressman?

Maybe an exaggeration, but we all remember the uproar of Facebook Beacon, and in that case, we knew who had access to the data (Facebook only), and the data was shared within the private confines of one’s social graph on Facebook. My suspicion is that many don’t know that the Twitter firehose is publicly available, and that Facebook shares activity data with advertising partners. We’ll see how discomfiting users find this, and whether this is just another form of targeting that raises the ire of Washington.

Sanford C. Bernstein analyst Jeffery Lindsay has increased his price target 30% for GOOG to $600, on the back of increasing RPCs (revenue per click) that it expects to dovetail with the recovering economy. He estimates Google’s growth to reach 7% for 2009, almost double that of Reuters Estimates’ aggregate analyst prediction of 4%.

Lindsay, in a note to his clients, expects advertiser competition–reflected in RPC–to remain weak through the second and third quarters, but he expects a healthy rebound that will boost Google’s YOY revenue growth to 14% in the final quarter. His estimation completely depends on the recovery of the economy and advertisers’ zest for online advertising to grow their businesses.

Google’s ability to develop inventory has sustained through the downturn–click volume grew 17% YOY in Q1 2009. The weakness has been in RPC, which has taken the steam out of Google’s search revenues.

The market, maybe a bit hungry for some good news from The Google, increased $5.89 in afterhours trading from a Thursday night close of $396.61 to a Friday morning opening price of $402.50. At the publication of this post, GOOG is trading at $407.98 (a 20 minute delay, naturally).

Guest post by Ryan Floyd

Ever since its debut, online’s share of advertising has lagged behind its share of usage. The impressive ROI of search and contextual advertising by Google and its competitors raised expectations even higher, with many saying it was just a matter of time before online advertising earned its share of total advertising spend. Strong double-digit growth online advertising rates through most of the mid-2000s, while traditional media advertising foundered, seemed to corroborate the conventional web wisdom. But can web advertising really continue to capture, dollar for dollar, the spend traditionally spent on television? I’m not so sure.

Even while the online advertising world weathers the current downturn, expectations for a rebound are common. Why? Usage patterns continue to shift, with more time being spent online (particularly watching video and on social networking sites). Online advertising consumes only 8% of total US ad spend, but Web usage comprises some 30% of leisure time among American Internet users (more than half of the entire population). The gap must be filled, right? And what better than an advertising medium that provides exceptional visibility into its value, in the form of impressions, clicks and conversions.

The problem is that the performance basis of evaluating the effectiveness of online advertising is really only the case for search/contextual, and indeed that continues to grow at a healthy clip. Lead generation and transaction-oriented advertising has proved remarkably efficient and cost-effective in many cases. Display advertising’s value relies on the promise of expanding brand awareness and engagement, and current display and rich-media advertising fails to deliver the same impact as a 30-second spot in front of a passive, captive audience. If you remove high quality online video, like Hulu, from the discussion, since it is simply replicating television’s advertising model through a different distribution medium, it gets harder to believe that engagement across social networking platforms or content sites has the potential to create the same market size as compared to dollars spent in traditional media with similar objectives.

It should come as no surprise that the IAB is championing more inspirational, creative online ads, and that startups like VideoEgg are introducing CPE (cost per engagement) and other revenue models that emphasize the depth of users’ interaction with online advertising. When it comes to delivering on its own objectives, the finest online ad creatives have to do a lot to catch up to your average Super Bowl TV ad.

It’s not difficult to imagine that the spend-usage gap will continue to close, but it is easier to imagine that ROI-driven search and contextual advertising will take a larger portion of that growth. Display and rich media will likely fare much worse, growing in dollar terms but far less than the 1:1 spend we’d expect to be flowing to the likes of Facebook and Google publishers from traditional media.

Ryan Floyd is a founding member of Storm Ventures, and sits on the board of directors at YieldBuild. 

The IAB, which announced a new task force to explore new online ad formats, has brought in nine agencies to the table for creative input. The agencies, including Interpublic’s Universal McCann and R/GA, Razorfish, and BBDO, join network heavyweights Google, Microsoft, Yahoo and AOL’s Platform-A and a host of media firms, including CBS Interactive, NYT Digital, and Turner.

The IAB has been pushing for more impactful advertising as a way to pull online advertising out of its current rut, arguing that upping the “creative magic” of online ads will forestall the commoditization of the media. When it comes to display and rich-media advertising, it’s a safe bet that publishers’ goal is for advertisers to recognize the value of “engaged eyeballs” online, paying out the same enviably high CPMs that television spots command. (How do you get website visitors to pay attention for 30 seconds?) Mesmerizing creative, an enticing engagement model, and formats that are harder to ignore enhance the value proposition of display and rich media advertising, and elevate the medium for premium advertisers and publishers above the muffin top ads publishers have been plagued by.

For publishers focusing on contextual text ads, the challenge is related but somewhat different. The value of the ad is related to its vertical and specific offer (RPC), a matter of the ad network’s breadth and advertiser bid ranges, as well as the likelihood that the ad will be clicked (CTR), which is a matter of the strength of the contextual targeting technology and formatting optimization. Publishers and ad networks have less convincing to do of their value to advertisers, since it’s measured in conversions rather than boosts to brand awareness and perception. But the need to overcome subconscious ad blinders is still there, and so the need for innovation is important here, too. (Incidentally, this is one of the values that YieldBuild gives to its customers)

Fighting ad blindness and inspiring a user to notice and engage with an ad is one of the central challenges to both types of online advertising. Innovation is necessary because novelty wears thin after a while, and predictability doesn’t give users any reason to pay attention to or click on ads. Creative types and technological innovators have to be one step ahead of the conscious threshold of the Web users they’re targeting.