Wednesday, 22 July 2009

CLOUD COMPUTING AND THE DIFFICULTY WITH PAY PER CLICK MODELS

I feel that advertising and marketing are on the sidelines of a huge battle that will impact on their futures. Last week Microsoft announced a full assault against the two current leaders in cloud computing: Google and Amazon. Azure, its cloud operating system is designed to challenge Amazon, and it also plans to launch a free, stripped-down online version of Office to rival the free Google Apps service. More about Azure another time.

Cloud computing is getting very hot, very quickly, and the battle between Microsoft and Google turned from being a cold war to an all-or-nothing nuclear war in the last week or so. And although the consequences of the cloud will have a huge impact on advertising, it feels a little like the tech industry adults are arguing, and when they finish they'll let the advertising and marketing kids know what the conclusion was.

The free version of Office will have an advertising business model - probably a pay-per-click model with some display advertising thrown in as well. PPC models are ideal for search but when people are in task orientated cloud applications, like when they are viewing photos, dong email, using word processing or spreadsheet applications, then they are not in a browsing and consequently PPC interrupt mindset. The lower clickthrough rates in the Google content network, or on social networks is testament to the single-minded mindset that sometimes militates against high clickthrough rates on PPC (even when the targeting is precise).

Our whole lives are going to be stored in the cloud soon, and consumers will visit their cloud applications on a daily basis. New formats might emerge to cater for these valuable eyeballs, but the sheer gravitational pull of PPC will mean that agencies will need to rethink how they plan, brief, and monitor campaigns. Google has reluctantly but successfully used pre-roll advertising, and and other display formats on YouTube, and might use more of these for cloud applications, but the PPC model has been so successful that Google and Microsoft are going to export it as far and wide as possible. Marketers must prepare for this future. It's a transparent future with an emphasis on performance, and return on investment.

2 comments:

Anonymous said...

I do consider all of the ideas you've presented to your post. They are really convincing and will definitely work. Nonetheless, the posts are very quick for newbies. May just you please extend them a bit from subsequent time? Thanks for the post.
Also see my webpage: Free Annual Credit Report

Blogger said...

DreamHost is definitely the best web-hosting company with plans for any hosting requirements.