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Legal action launched by Australia’s competition watchdog against Google and TradingPost.com has shocked the online advertising industry, but could ultimately improve the fast moving sector’s integrity and transparency, industry observers say.
The Australian Competition and Consumer Commission yesterday filed a case in the Federal Court in Sydney alleging misleading and deceptive conduct by Google and classified publication Trading Post, which had purchased sponsored links on the search engine.
According to the ACCC, Trading Post acted illegally when it paid for sponsored links to come up in the name of two of its competitors when they were searched for, but which linked through to the Trading Post website when clicked.
Google has been roped into the action because it displayed the misleading Trading Post links and because the ACCC alleges that it does not clearly distinguish organic links from paid for sponsored links, which appear at the top and down the right hand side of the search results page.
The case could have implications for the entire online advertising industry, however, because many search engines allow advertisers to purchase sponsored links in a similar way to Google.
But Chris Thomas, chief executive of online search engine marketing firm Reseo and SmartCompany Online Sales blogger says while the case may cause some short term stability, it could be a boost to the industry in the long term.
“It really is the wild west,” he says. “It is a real problem online with brands being taken over by clever internet marketers. You can put anything in a Google ad and while they will step in and take down a misleading ad if you make a complaint, there is still a week or two window when you can do what you like.”
Thomas says the problem arises because the web address that displayed sponsored links can be different to the destination address that it links to. This means that online viewers may believe they are linking through to a particular business website but actually end up at a competitor’s website.
“This case shouldn’t have a big impact on online advertising because it still allows the instantaneous marketing results and feedback you just don’t get anywhere else. If anything it will provide some protection for the vast majority of advertisers and marketers that do the right thing,” Thomas says.
Australian Interactive Media Association president John Butterworth agrees that the case could provide some greater clarity and transparency for the industry, but he questions whether litigation was necessary to bring that about.
“The ACCC has a perceived problem, but what we don’t know is why they didn’t come and talk to the industry about it. A lot of search engines will be affected by this and if they feel consumers are being deceived it would seem natural to talk to the industry, and they haven’t done that at all,” Butterworth says.
He questions whether many consumers are really deceived by the placement of sponsored links at the top of each search result page, given that they are labelled “Sponsored links” and visually separated from organic search results.
And while he accepts the practice of businesses buying sponsored links in competitors’ links needs to be looked at, he questions whether practical solutions to the problem can be found.
“Search engines like Google take many thousands of ads from around the world, so how are they supposed to know that an ad taken out by a small suburban drycleaner is actually in the name of their competitor around the corner. It’s just impossible.”
– Mike Preston
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The Queensland Government is planning to rationalise its $81 million grants program for business. Programs such as the Women in Business Coaching and Regional Business Development Scheme and the Leadership and Management Program will be scrapped to save money on administration of the grants, according to a report in The Australian Financial Review.
The Government plans to give more money to fewer businesses. This must mean more businesses will miss out. If the little grants are to go, will the small recipients of small grants miss out?
– Jacqui Walker
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News Corporation’s MySpace yesterday launched a political channel. But the problem with getting on MySpace for politicians is that many of them are already there – unofficially. There are a large number of fake sites for the pollies that could well confuse the voters.
Big news this morning was Kevin Rudd’s official MySpace page and Joe Hockey and Malcolm Turnbull have pages as well. And the Prime Minister and Treasurer are sharing a page – called howardgovernment.
But before shadow minister for climate change, environment, heritage and the arts Peter Garrett launched his official site he had a highly active unofficial fan site. And Victorian Premier Steve Bracks has an active unofficial blog not linked to the Premier. Queensland Premier Peter Beattie has a strong blog presence and there is a campaign for him to go federal on MySpace.com.
The politicians will have to watch they don’t fall into the traps that companies can also fall into with blogs and social networking. Some helpful hints include:
- If the blog is not updated constantly, it dies.
- Use images and video on the blog to attract more readers.
- Forget the hard-sell; instead spark a conversation, invite feedback from your audience, inject personality into the blog.
- Connect and link with as many other blogs and sites as possible.
- Remember that the blog is a reflection of your business and reputations can be spoiled in seconds.
- People want to interact and participate in the web, not just read websites. Inspire that interaction and networking at every opportunity.
Read our story on blogging for business for more.
– Jacqui Walker
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It just got a lot cheaper to get to Perth and Alice Springs from Melbourne. Newcomer low-cost airline Tiger Airways yesterday announced $59.95 flights from Melbourne to Perth and $49.95 one-way tickets to Alice Springs from 1 December.
These cheap deals follow the company’s announcement earlier in the week of $49.95 flights between Melbourne and the Gold Coast, and between Mackay and Rockhampton.
Jetstar has responded to the competition by offering 10,000 tickets at $1 each to subscribers to its email alerts. Get on board!
– Jacqui Walker
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The Reserve Bank of Australia’s meeting in the first week of August is widely seen as the most likely date for an interest rate rise this year.
Yesterday’s softer jobs data will do very little to ease the speculation. Although unemployment crept up 0.1% to 4.3% in June and the 2500 new jobs created were well below market expectations of a 15000 job boost, and there was always going to be some consolidation after a huge 78,000 new full time jobs were created May.
Part of the reason for this is recent strong job ads data, which is considered an advance measure of jobs growth. The ANZ job ads series for June declined by an insignificant 0.8% after a 10.3% rise in May, leading ANZ head of Australian economics Tony Pearson to say that “demand for labour remains at record highs.”
The key question, however, is whether the tight employment market will filter through into higher wages. The test of this will come next on 25 July when the Australian Bureau of Statistics releases June quarter Consumer Price Index (CPI) data, the key measure of price inflation in Australia.
Any signs of inflationary pressure in the CPI will put the RBA under intense pressure to increase interest rates before campaigning in lead up to the federal election, which could be held as soon as September, really hots up.
– Mike Preston
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Australia’s Workplace Ombudsman, Nicholas Wilson, is prosecuting Canberra business, Dogma Enterprises, trading as Video Ezy Charnwood, alleging a massive single worker underpayment of $9954, reports InsideRetail.
The Workplace Ombudsman alleges Video Ezy Charnwood employed the worker below the minimum rate of pay despite the matter being brought to their attention by the then Office of the Employment Advocate in October 2004.
The Workplace Ombudsman is seeking full recovery of the $9954 in unpaid entitlements and penalties for six breaches of the Workplace Relations Act 1996, which can be as high as $33,000 per breach
Wilson says the case serves as a warning for all rogue employers trying to avoid their obligations. “We recognise that most employers are not rogues, and when underpayments are brought to their attention they voluntarily rectify the situation,” Wilson said.
But he said the community found it absolutely intolerable when an employer deliberately underpaid a worker their legal entitlements, then continued despite being made fully aware of the unfairness of their actions.
– Jacqui Walker
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The rate of broadband growth in China is slowing dramatically; leaving a digital divide between city and rural areas of the world’s most populous nation, and challenging the operators to find new sources of revenue growth, according to research group Ovum.
The easy gains for China’s broadband providers may soon be behind them. After 114% in 2004, broadband growth slowed in 2005 and 2006 to 57% and 38% respectively. Ovum expects double-digit growth to continue for the next two years, but at lower rates than we have seen before.
But Ovum still expects China to surpass the US in terms of broadband subscribers in 2008. “Household broadband penetration in China stood at 13% by December 2006,” says Kevin Lee, an Ovum analyst based in Hong Kong. “We forecast that the steady broadband growth will push household penetration to 21% by 2010, equivalent to 106 million subscribers. This is nowhere near market potential”.
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