I was asked to contribute to a fascinating article in the National Journal, a leading US political magazine, on Friday in response to the initially surprising news that John McCain is actually outspending Barack Obama on Google. Figures released by Nielsen Online show that McCain’s campaign purchased just over 7 million impressions via Google AdWords in June, compared to just over 1 million for Obama.

However, the really interesting stats are for spend on traditional banner advertising, where Obama is trouncing McCain. Obama invested in over 80 million impressions compared to just 16 million for McCain. Nielsen’s analysis shows that Obama’s banners have been deployed on popular portals such as Yahoo! and MSN and news sites such as CNN. The campaign also bought almost 2 million impressions on allrecipes.com, perhaps in an attempt to reach more of the women who voted for Clinton.  McCain, who is still distrusted by much of the Republican base, seems to have focussed his banner spending on conservative sites such as the National Review and Lucianne.com.

As pointed out in the article, the discrepancy in the investment between banners and search advertising by the two campaigns is most likely a result of financial expediency rather than deliberate strategy.  McCain has fewer resources and is therefore focusing these on more targeted and cheaper ads on Google. It’s difficult to tell from the outside the real degree of targeting by the Obama campaign in its use of banner advertising. It could be various ad-networks are being paid millions of dollars to simply get as many eye-balls as possible.

What is true is that the Republican campaign had had to play catch-up in effectively using the Internet as a campaigning tool and is learning fast.  McCain’s recent adverts portraying Obama as both Moses and a blonde bimbo and the now famous response by Paris Hilton, has meant McCain has overtaken Obama’s lead for YouTube viewers for the first time.

Analysis from Tubemogul.com shows McCain’s videos attracted more viewers than Obama’s for seven days in a row last week, and on 11 of the previous 14 days.  Maybe it’s time for Will.i.am to pen another ditty…perhaps featuring Paris’ much under appreciated musical talents?

Rupert Murdoch’s $580million acquisition of MySpace may have seemed a steal compared to the $240m Microsoft paid for a 1.6 per cent stake in Facebook, but all is not well with Murdoch’s plans for his social network, and it is being felt in its stock price after Fox Interactive Media (where MySpace sits in the News Corp empire) reported it would miss its 2008 revenue goal of $1billion. News Corp’s stock price has slipped 9.9 per cent this year alone.

Sure, Murdoch is throwing money at MySpace to expand into India and South Korea and add a music downloads service, but the social network is struggling to attract and retain advertisers in the volumes it needs because of the risk of their brands being shown next to inappropriate user-generated content. It is precisely the freedom and flexibility MySpace user love so much, which is causing the company problems with advertisers.

Bloomberg reports that Fox Interactive’s costs will rise a massive 46 per cent this year as they bid to open new channels for MySpace - almost as much as revenue is expected to grow. The bottom line with investors is that while MySpace continues to try to grow its audience in different markets - it is still failing to fully monetise the vast audience it already has.

However, today MySpace launched a new ad platform to give advertisers more control over where their ads are being run. It is a small step - arguably long overdue - but whether it will solve the site’s short-term adveritsing issues remains to be seen, when rival networks have already stolen a lead. While Facebook wrestles privacy issues, today enabling an ad system opt-out, it is at least driving strong advertising revenue.

MySpace’s hope has to be in the medium term, beating Facebook into new markets where advertiser sensitivity to site content is far less pronounced, doesn’t it?

Google’s surprise decision to change its trademark policy will effectively remove protection brands have from rivals, or impersonators bidding on their trademarked paid search terms. It’s also expected to have an impact natural search, but that will, naturally, take longer to be felt and may not be quite as obvious as you first think.

Google has justified the move as simply reflecting users’ behaviour, and that it will give the person searching access to far more choice, thereby improving the overall quality of results. However it will present a new brand protection nightmare for companies already facing more, evolving online brand threats than they can shake a stick at.

Having worked with a number of companies, specialising in various aspects of the online brand protection picture I can see a major similarity in what Google is allowing to what has existed in the ICANN governed domain names industry since year dot. There are currently over 150million registered domain names around the world and estimates I’ve heard suggest that around 25 per cent of all those registrations are speculative or opportunistic (by cybersquatters, domain name warehousers and those engaged in kiting). If that’s the scale of the threat, you can only imagine the scale of defensive registrations being made by brand owners where easily more than two-thirds of your portfolio of names could be purely to stop a rival or speculator acquiring it and doing your brand damage.

The domain names industry is that way for a reason - and that’s the relatively loose ‘first come first served’ principle of registrations (for search read: ‘highest bid, first listed’) but until now, with one very major difference - in domain names there is very little practical or enforceable protection for brand owners beyond being first up, whereas in search there was always Google’s common sense.

While Google’s move may help address the slow in growth of clicks on paid Google ads, perpetrated by the search engine’s bid to ensure more relevant, better quality results, it could all too quickly degenerate into the free-for-all model of the domain name industry.

Marketers are already struggling to keep rising paid search costs in check and if this plays out the way many fear it might then likely two things will happen:

1. The current increased interest in natural search will swell dramatically and impact investment in paid search - after all an increasing number of voices are joining the chorus that natural search delivers better quality leads at a fraction of the CPA

2. Major brands will need to agree a code of conduct between themselves to avoid needlessly burning budgets trying to outbid the other’s trademarks and instead focus on dealing with the far more serious threat posed to their brand value by counterfeiters, cybersquatters and impersonators who won’t think twice about taking advantage of the new system.

My post yesterday about web TV got me thinking about online video in general which is when I came across this piece on Press Gazette inspired by a study from researchers at City University into the use of video on UK news websites.

Online video is an interesting proposition for newspapers in particular. The success of any online video venture - whether on a news site, or a dedicated web TV service - comes down to the quality of the content. That’s something newspapers have plenty of. The FT in fact recently relaunched its video player and that channel is a key focus for the paper’s online ambitions, and has become one of its most popular sections, broadcasting hundreds of its own in-house made videos online each month.

So on the face of it the newspapers have a winning forumla to give readers what they want. And that’s what it’s really about for the audience - not the novelty of being able to watch a video online, but being able to actually get the content they want, through the medium they prefer. The companies that succeed will be those who give readers the content they want, the way they want, and not the way the newspaper thinks they should consume it.

Bearing that in mind, monetising Internet video is not a major challenge. Speaking to media buyers, pre-roll blindness and associated issues are not as big a problem as some might have you believe. If the Internet video content is worth watching, most viewers are willing to endure a reasonable (apparently up to 15 seconds is optimal) of pre-roll or equivalent advertising.

Google endured a second straight month of poor growth in paid search clicks, and that has brought out the usual scaremongers (the same that were predicting the end of social networks earlier this year when traffic growth plateaued) are saying it’s bad news for the market and showing that fears of a recession have truly hit online revenues.

Lets take a look at the facts:

1. The actual figures from Comscore show a 3% year-on-year rise during February in paid search clicks. The slowdown comes after Google began implementing a new system to cut down accidental clicks on paid search listings

2. Google’s move to stamp out irrelevant clicks is good news for the long term as it will increase the relevance of paid search and make it an even more efficient format.

So is the (non)recession having an impact? Well, traditionally in a time of recession marketing spend gets cut back to tried and tested methods that deliver strong and measurable ROI, such as direct marketing. Search marketing falls into that same category and certainly many of the people I’ve spoken to in the first quarter of this year can see certain aspects of their budgets being cut if times get tighter, but search isn’t one of them.

But beyond what Google has done, and all the scaremongering, there are still some changes afoot. Paid search costs continue to inflate and speaking to some search marketing firms, they are beginning to find - and some scared to find - that clients are looking more seriously at natural search, and increasing their investment in search engine optimization.

There is an ongoing threat to the paid search market - not to its existence, but to the way it’s used - there has for some time been a growing school of thought that natural search delivers better quality leads to your site and Google’s latest moves can be seen, in part at least to be a clear attempt to arrest that movement and safeguard the quality of clicks on paid search. The short-term blip is nothing to worry about - a blip is all it is - and if there is a recession, it’s not search that should be worried about budgets.

Online display advertising and online sponsorship will hold up advertising market and take the lion’s share of ever-increasing online spends. That bold assertion is the key finding of a report from Convera, a US-based vertical search firm. It cuts clearly against the rest of the industry consensus that paid search and social media will take a greater share of the online budget.

So what’s the real beef? Well as CPM and PPC costs continue to swell, they occupy very specific niches. CPM for brand awareness and paid search for leads. But social networks lilke Facebook, MySpace and Bebo are all carving out ever larger slices of the online spend as marketers begin to understand how they can make them work to generate quality leads that are more likely to become paying customers.

Will publishers earn more from display ads and sponsorships in 2008? The larger players, namely portals such as MSN, AOL and Tiscali will continue to cream revenue off channel sponsorships. But as social networks account for an increasing volume of overall Internet traffic (and in November accounted for over 5 per cent of UK internet traffic, overtaking webmail sites) the money will shift in line with where the lion’s share of the available advertising inventory is, meaning publishers will need to become more creative and go beyond simple display and sponsorship opportunities that were the bread and butter of the glory days of 2000.