Google has said that the company is witnessing a "significant inflow" of advertising spend from companies who are moving their budgets from mainstream 'above the line' media into more targeted and measurable forms of marketing like PPC advertising.

As reported by The Sydney Morning Herald, there are mixed reports about how the threat of a recession is affecting companies, but this trend does seem to indicate concerns from companies who want to make the most of their advertising spend when budgets are being tightened, either in response or anticipation of a market downturn. In light of this trend, the reported 30% growth in search advertising in Australia for the March quarter could be significantly underestimated.

At the same time as this continued growth in Internet advertising continues, another article in the SMH claims that, dollar for dollar, the Internet accounts for more carbon emissions than any other form of advertising. A study by consultancy P3 estimated the environmental cost of different forms of advertising and claimed that Internet advertising is the equivalent of junk mail, with high levels of water generated by large numbers of page impressions.

Perhaps this is good publicity for the green auditing division of the company publishing the research but it also raises many questions about the methodology of the research.

The New York Times reports that Google executives have expressed a desire to develop the advertising relationship with Yahoo! that was tested for several weeks recently with AdWords appearing alongside Yahoo!'s search results. This is partly a move to ward off any possible future attempts by Microsoft to make a bid for Yahoo! but could also be a lucrative development for both Google and Yahoo!

Any arrangement, should it go ahead, would face antitrust investigation in the US due to the dominance of the search advertising market by the two companies. It would also have serious implications for Yahoo!'s own PPC advertising system, which is still struggling to compete against Google, despite a facelift and relaunch in recent years. Such a move would also place even more power within Google's control and advertisers would have even fewer options to place search advertising so that bid rates would continue to rise.

An interesting article from The Boston Globe explains how more companies are starting to embrace the online community and include negative feedback from customers on their websites, as well as positive ones. The main example given is for the Bank of America who have now decided to be open to criticism on their products and services, however harsh it may be.

This trend reflects the growing use of consumer opinion sites, or comments made on discussion forums or blogs. The new attitude of these companies is that it's better to have some awareness and control of these negative comments as well as to balance off all the positive ones that it receives (although of course it's human nature to make complaints rather than pass praise).

Such a move provides a challenge to companies who want to protect their brand and implement reputation management strategies online. It does give them a chance to respond and may well attract more criticism directly to the corporate site rather than through other channels. Of course the same issues remain as always, with the opportunities for competitors to pitch in or for the company to provide their own positive reviews!

The latest quarterly figures for online advertising spend in Australia have been released by the Interactive Advertising Bureau, using data collected by Pricewaterhouse-Coopers. These show that online display advertising has lost further market share in this sector to classified and search advertising, although the sector as a whole continues to show good growth.

The figures just published for the quarter to March show that the total online advertising market grew by over 30% on the same period last year, up $90.5m to $384.5m. Display advertising's share of this spend fell from 25.5% to 24.6% year-on-year, whereas classifieds grew from 27% to 27.7% and search rose from 47.4% to 47.7% - although this latter sector is still dominated by Google who refuse to reveal actual figures, so this data is based on PwC's estimate.

However, the change in sector share between the March quarter and the previous quarter to the end of December shows that display advertising lost 3 share points while classifieds rose 1.8 points and search by 1.2 share points. This may be indicating the start of a slowdown in online advertising due to possible concerns in an economic slowdown, although overall the market is still growing at a much healthier rate than any other advertising sector.

A recent article by The New York Times reports on a research paper presented at the International World Wide Web Conference in Beijing by 2 Google scientists, which described the development of 'VisualRank' by the search engine. This is the prototype algorithm that combines image-recognition software techniques with the methods for weighting and ranking images that look most similar. Described as the equivalent of Google's main PageRank system adapted for digital images, it's being seen as potentially a big step forward for the quality of image searching on the web.

Image search has long been one of the most popular 'vertical' search options on the main search engines and more recently Google, Ask and the others have been 'blending' image results into the main search results list, when relevant, thereby giving image search results far more exposure to mainstream searchers. Up until now, image results are usually generated from information in the file name and surrounding page content, but Google - and others - are working on ways to analyse image form and shape similarities.

The article says that Google has been working on a sample of around 2,000 of the most popular product queries from Google’s product search - so items such as iPod and Xbox - and then sorting the top 10 images both from its main ranking system and the standard Google image search results. Using a team of 150 Google employees, the researchers then created a scoring system for image “relevance”, which is being referred to as VisualRank. The outcome of this development, according to the researchers, was to retrieve new image results that were 83% less irrelevant.