In an effort to increase the usefulness of it’s link-sharing services, Pinterest announced it would allow users to add private message boards whose content remains hidden from other Pinterest users. Members would be able to create up to three “secret” boards per profile, for use as private birthday lists, gift ideas or other information that a user would not want to advertise in advance of their use.

Pinterest removes core functionality to increase engagement?

The move comes at the request of users, but works counter to the main purpose of the service, which encourages the open sharing of products and links within its community. These new “secret” boards may increase engagement with individual users, but would limit sharing between users, so the company is restricting use of private boards at first by limiting it to three boards per user, and minimizing the functionality by placing links to it at the bottom of a user’s profile.

Pinterest relies on user engagement and sharing of images and links through visual lists, organized by “pinning” them to “pinboards”, and has become a popular social media tool since it’s launch in 2010. With more than 10 million users, it is especially popular among women (80% of Pinterest users), the DIY crowd, young families and collectors.

Companies have already leapt to Pinterest to organize and promote marketing efforts, increasing buzz about products and creating call-to-action promotions. It is this activity that Pinterest will likely focus it’s own revenue generation efforts on when it runs out of investment capital. Private pinboards obstruct this functionality, but will probably have a positive impact on engagement, as users share their private pins after the event they’re planning for occurs.

In response to concerns about where paid advertising appears on its search engine results pages, Google announced that it would fully disclose whether AdWords ads were appearing above or beside it’s organic search results.

Beginning this week, Google AdWords reporting interface will now allow you to segment advertising performance data using “top vs. side” metrics to better help visualize where ads are appearing for specific keywords. Prior to this update, ads showed an “average position” against specific keywords without indicating whether or not the ad appeared on the side or above the organic search results.

It’s good CTR to be Number 1!

The change is significant because Google has publicly admitted that there is a tremendous difference in click through rates (CTR) between larger ads appearing above organic search results and the smaller ads appearing to the right. In addition to their larger size, top-position ads closely mimic the layout of organic search results, and many users may confuse them with organic results, further increasing CTR. According to Google Chief Economist Hal Varian:

This distinction is important, since, on average, ads that appear above the search results tend to get substantially more clicks than ads that appear on the right-hand side.

As Google has blurred the line between paid and free search results, advertisers need to be even more careful about ad quality and landing page relevance in order to secure top positioning. But organic search results still enjoy better reputation and CTR than paid advertising, regardless of position, so SEO is still as important as ever.

With Yahoo close to ceding second place to Microsoft Bing, and now sharing ad revenue with its former competitor, many search analysts predict a swift decline for the former web content powerhouse. In the waning days of September, both Nielsen Media and Comscore report Bing has surpassed Yahoo in search share, and it will likely continue to take over Yahoo's share as more Windows 7 computers come online (Bing is the default SE in IE8, hastening the process).

Bing introduced many innovations in search results last year, placing Google in the improbable position of playing catch-up in its search results pages. Bing's consolidating results onto a single page was quickly copied by Google for its image search, and Google's latest innovation, Google Instant predictive search results, is receiving mixed reviews after producing incoherent, and sometimes offensive, results. The AJAX-enabled search results are also reducing the number of clickthroughs on Google itself, although this has little impact on PPC revenue for Google.

With ad revenue spiraling downward at Yahoo, however, the company has positioned its portal as more community-oriented than Google or Bing, fighting it out with AOL and other classic content portals providing "unique" content. But web communities are coalescing around social networks, not search portals. My prediction: Yahoo will be fully absorbed by Microsoft in less than two years.

Anchor Intelligence, in it’s quarterly traffic report, reports that click-fraud has reached an all-time high in the first quarter of 2010 for affiliate marketers using its services.

Unsurprisingly, the highest click-fraud rates are coming from countries with historically lax controls on internet traffic and PC security. Vietnam has the highest rate of detected click-fraud (mainly through botnets installed on trojaned computers), at 35.4% of all measured clickthroughs.

What is surprising, however, is that click-fraud in the U.S. is running at 35.0%, which represents the lion’s share of all click traffic by volume, followed closely by Australia, Canada and the UK. Click-fraud in the U.S. is predominantly committed by sophisticated organizations usually hired by competitors to increase a company’s PPC advertising costs.

What is most disturbing is that major PPC providers such as Google and Yahoo clearly have the means to identify concerted click-fraud attacks, which have obvious signatures such as automated high-volume traffic from distinct IP ranges, yet they have little incentive to address it, as cracking down on click-fraud just takes money from their pockets. While Google some time ago published an independent report of its fraud-detection techniques,  the conclusion by that researcher was that Google’s effort to filter invalid clicks was “reasonable”, however he adds that the CPC model “is inherently vulnerable to click fraud.”

What to do if you suspect Click Fraud

It’s up to the advertiser to track the clicks and identify fradulent behavior, and then petition the network to adjust the CTR billing. The only way to do this is to monitor your server logs and identify PPC traffic, and then look for patterns in the originating IPs. For websites with high traffic and PPC volume, it can be difficult to separate valid traffic from fraudulent clicks, and even more difficult to “prove” to the network.

In an effort to compete with Google's dominance in search marketing, Yahoo! and Microsoft announced today that they have received regulatory clearance by the Federal Trade Commission to form a search alliance. The announcement means that the entire webiverse of PPC marketing will now be controlled by two large players, but for advertisers it will be somewhat easier to manage PPC budgeting across two major services instead of three. 

Yahoo's revenue from and share of the PPC has been steadily eroding over the past year, mostly due to inroads by Microsoft with the introduction of its new search engine, Bing. Yahoo cited increasing losses from its affiliate-marketing sites, from which it generates a great deal of its search-marketing revenue, in seeking the merger.

Google's share of the PPC market has been flat at about 80% of all PPC revenue over the past year. For Microsoft, the merger will provide a big boost to its relevance in the paid-search market, although the combined PPC revenue for both companies is still only about a fifth of the market.

Yahoo says there will be no immediate changes for its Yahoo! Search Marketing advertisers, and will probably wait until after the all-important 2010 holiday season is over before migrating to a shared platform with Microsoft.

Twitter...how is it being used profile you for search marketing? I signed up a new Twitter account and within an hour had a dozen mysterious "followers" of whom I'm sure I'm not acquainted with, all beguiling young women if you believe their avatars...hmmm.