According to video ad network AdoTube’s second-quarter 2011 In-Stream Ad Format Index, 84% of consumers who selected their pre-roll advertisement via AdoTube’s Ad Selector format watched the ad all the way through. All-in-all, the view-through rate was 63% (some viewers didn’t choose one of the Ad Selector options) while the click-through rate was 5.8%. Back in July, AdoTube found that its Polite Pre-Roll ads — which allow the viewer to skip an in-stream video ad and account for 30% of AdoTube’s served video ads — had a view-through rate of 45%.

Video network Metacafe has opened a new vertical of short-form video content aimed at males, appropriately titled M.E.N. — that is, Metacafe Entertainment network.

And the 2011 OMMA Award for best SEO campaign in the Online Advertising Creative category goes to… Search marketing agency Covario shared and client Nikon!

And the 2011 OMMA Award for best “Rich Media: Single Execution” in the Online Advertising category goes to… Glow Interactive for its campaign for USA Networks’ “White Collar.” The same campaign picked up the 2011 MOBI Award for “Best iPad/Tablet Advertising Campaign.”

Following its acquisition by Resource Nation (with a hand from JMI Equity), B2B affiliate network Business.com has relaunched with five marketing products: pay-per-click, pay-per-lead, pay-per-download, display advertising and directory advertising.

Google has launched AdWords for video in private beta across YouTube and the Google Display Network.

Omnicom Media Group’s trading desk, Accuen, has signed up with TubeMogul, which reconfigured itself as a video DSP back in April.

Of course, Google knows that the web is a slightly better place if there’s a result crafted for every significant long-tail query. But they don’t want it to be easy to arbitrage their traffic that way.

Let’s look at some other signals search engines consider positive:

• Having a unique physical location listed on your site.
• Registering a domain for five or ten years, rather than one or two.
• Having a local phone number.
• Having the kind of brand name mentions and searches that indicate lots of brand advertising.

What do these actions have in common?

1. They’re great indicators of site quality: any time you find out that a site is doing one of these things, it’s a good sign that they expect to stick around (and stand to lose a lot if they don’t).
2. They cost money.

Search engines are in an interesting situation, here. They like to make sure that the marginal dollar spent on search traffic goes to them, not to, say, someone selling links (or even someone building links the old-fashioned way, by pestering people). And yet, these signals are too valuable to give up.

One way to look at this is to argue that search egines essentially earn a royalty on the value of the Internet as a whole, and these activities wildly increase the value of the Internet, to the point that Google profits more from this than it does from an extra few dollars in AdWords revenue. Or search engines might (correctly) assume that what they’re subsidizing is putting your address on the web, not getting an office. (They are technically subsidizing both equally, but the former is far cheaper.)

But what happens when more of the economy goes virtual? Does anyone refuse to buy from Amazon because their office’s address and phone number aren’t prominently displayed on the site? Hardly.

In the short term, search engines can use these branding signals. But in the longer term, they have a strategic interest in ignoring the signals that correspond to a physical location, and promoting the ones that imply a stronger virtual presence (e.g. brand queries, expensive web infrastructure, long-term web registrations).

Because all-virtual businesses are more beholden to search engines. A company like Target would certainly miss Google if Google stopped delivering traffic to their site—but an all-online business would probably have to come up with a completely new business model, or face liquidation.

Google in particular is willing to take the long view: the few sacrifices they make to user experience involve making it hard to have an online and offline experience when you could have one solely online. And Bing is an expression of the long view: Microsoft is willing to lose a whole lot of money to make sure search is still competitive.

In the future, don’t be surprised if search engines look for all-digital signals that a non-physical business is in it for the long haul. Imagine a world where raising a VC round rockets your site up in the search results because there’s suddenly a lot more money at stake if you do something short-sighted. That’s not necessarily where we’re headed, but we’ll be getting close.

Reprinted from the Digital Due Diligence newsletter.

But a few documents emerged over the weekend that suggest Google agreed to the sizable fine (potentially the biggest the DOJ has ever levied) so cofounder and now-CEO Larry Page could avoid federal prosecution — and Google itself could avoid major public persecution.

According to a non-prosecution agreement, the government had warned Google back in 2003 about foreign pharmacies using AdWords to geotarget American users; apparently Google stemmed this practice for every country except Canada. Internal emails collected by the DOJ show that executives were aware that Canadian pharmacies were targeting U.S. users in their advertising, but the government alleged that Google did nothing to end the practice until the company learned of the DOJ investigation (or rather a DOJ sting operation).

Peter Neronha, the attorney general in charge of the DOJ’s probe, told The Wall Street Journal that Page himself knew about what was going on, and that enrolling two pharmacy verification companies was merely a distraction because the ad revenue was too sweet.

Unfortunately, we won’t get to hear the evidence behind those allegations or read the contents of those juicy emails because of the settlement. If you were wondering why Google would agree to such a lofty fine, consider that a public case would center around the company ignoring the law and consumer safety concerns (which is why the DOJ and other government agencies are so vehement in pharmaceutical investigations) in the pursuit of revenue.

Just imagine how loud the “Google IS evil!” cries would get then.

It would be one thing if this was a civil suit, but doesn’t this whole settlement stink of a payoff? That Google negotiated a fee to make sure Page didn’t face prosecution? I guess it’s common practice with the U.S. government — must be nice to be able to pay your way out of a criminal trial.

But even if Google is a special case because it could buy its way out of federal prosecution, Younger is right that the settlement sets a scary precedent for the rest of the industry; the DOJ could cite this case in prosecuting any advertising technology firm for both the ad revenue and the advertiser’s sales revenue.

As Younger commented on Friday: “So I guess this ups the ante; not only do you need to watch out who you allow to advertise, but also what it is that they’re selling.”

Usually.

But there’s a twist: sometimes, the economics of accumulating links will swamp the economics of monetizing them. This shows up in a weak form in plenty of affiliate-dominated verticals: AdWords ads point to a product page, but organic results point to a review that then pushes the searcher to a product page.

There’s one vertical where this model used to work quite well, but broke down in the late 2000s: searches for people’s names. A few years ago, nearly any name search would lead to an affiliate page promoting one of these services:

• Background checks.
• Family tree information.

Now, a search for most names will yield a different mix:

• A smattering of high-tier social networks (likely Facebook and Twitter).
• A paid social network like MyLife.
• LinkedIn, which will often be #1.

What happened?

LinkedIn is not a natural top result, in the sense that it monetizes far worse than background checks or family trees. But it’s a natural top search result in the sense that LinkedIn has relentlessly focused on SEO for names.

Their entire site architecture is focused on passing link equity from the homepage to as many profiles as possible, and their homepage naturally accumulates links (LinkedIn is a newsworthy topic). Moreover, their embeddable widgets create targeted links pointing directly to an individual user’s profile page. And the most common place to embed one of those links is on a domain that the user controls—which will be authoritative on the topic of that person’s name.

Essentially, LinkedIn has learned to arbitrage vanity in order to replace high-monetization clicks with high-interest clicks. The revenue is a fraction of what their older competitors would get; things look better from a lifetime value perspective, but probably not by much.

The paid social networks are an interesting exception. They monetize well, but aren’t especially linkable. The answer here may be advertising: MyLife runs banners and TV ads, cranking up their name recognition and thus their click-through rate. The margins are tighter and the revenue is front-loaded compared to LinkedIn, but in a sense it’s a similar strategy: their are linkable enough and clickable enough to get by without monetizing quite as well.

Could LinkedIn’s and MyLife’s competitors implement these strategies? It’s unlikely: LinkedIn has accumulated a massive head start, and the value proposition for embedding a link to a generic social profile is weaker than the value prop for embedding a link to a professional profile.

MyLife is in a weaker position, but there’s a paradox here: their strategy requires more care, investment, and fine-tuning to run profitably. A competitor would have to take bigger risks with more capital, just for a chance to be even. As with Groupon, doing a land-grab and then making the business worse can be a good way to build a competitive moat.

Cross published at the Digital Due Diligence blog. Sign up for the Digital Due Diligence newsletter here.

In comparing your campaign against peers spending the same amount on PPC campaigns, the Grader quickly breaks down the basics such as click-through rates and quality score as well as the more complicated: long-tail keyword optimization, wasted spend, landing page optimization, etc.

As founder and CEO Larry Kim explains in a detailed blog post, WordStream aimed to build a fast, intuitive and free alternative to costly and slow PPC audits. Of course, if you like what you see, you might be into other WordStream products such as its SEM platform or its keyword research suite.

“We built this free tool to provide advertisers with an easy to digest snapshot of how their ad campaigns are performing and to tutor them on how to make changes that will boost their performance and save money,” Kim said.

Check out a sample report below:

Here are the top 10 most expensive keywords on AdWords for June 2011.

• asbestos attorney delaware       $101.88
• utah mesothelioma attorney      $94.79
• delaware asbestos lawyer           $90.15
• asbestos attorney washington   $87.89
• causes of mesothelioma               $87.68
• mesothelioma                                 $87.68
• connecticut asbestos attorney   $87.00
• asbestos lawyer delaware           $86.01
• colorado asbestos attorneys       $84.88
• washington asbestos lawyer       $82.82

In addition, he also broke down Google keyword data based on narrower subcategories to find the highest average keyword category — it’s an interesting perspective.

• Health: Mesothelioma  $34.52
• Health: Umbilical Cord Bank  $21.57
• Financial Services: Commercial (Trucking) Insurance  $14.38
• Financial Services: Student Loans $14.05
• Financial Services: Debt Consolidation  $13.73
• Financial Services: Mortgage Insurance  $13.13
• Financial Services: Home Insurance  $12.89
• Legal: Auto Accident Attorneys  $12.07
• Financial Services: Insurance Brokers and Lead Gen Sites  $11.85
• Financial Services: Auto Insurance  $11.81
• Financial Services: Mortgage  $11.27
• Financial Services: Life Insurance  $10.63
• Business: Teleconferencing  $10.09
• Financial Services: Stock Advice  $9.40
• Financial Services: Credit Reports/Repair  $9.28
• Financial Services: Unsecured Loans $9.21
• Financial Services: Mortgage Lenders $9.14
• Lifestyle: Pet Care  $8.94

And for those of you who like bar graphs, Stokes has a special treat for you:

However, “Cancers” is not one of the categories in Wordstream’s top 20 most-expensive keyword groups study, which weighted the most expensive keywords against search volume by category. Mesothelioma appears along with cancers in “Treatments,” no. 19.

The insurance segment owns about a quarter of the most expensive CPC keywords on AdWords, including “ca automobile insurance,” which I imagine is very lucrative. The top CPC comes in $54.91, which isn’t that much more expensive than the $44.28 top CPC for category 2, Loans, which boasts 12.8% of the most expensive CPCs. No surprise, mortgage came in third with 9% and a top CPC of $47.12.

Attorney-related keywords represent 3.6% of the most expensive keywords (top CPC: $47.07) while Lawyer accounted for 3% ($42.51).

Check out this handy infographic for more interesting data:

Following the big Epsilon breach, the Online Trust Alliance reported that 84% of the Internet retail 100 have adopted email authentication, meaning you can trust what’s sent to you.

MediaBank has partnered with TRA to enable clients to match TV planning data to purchase data.

Undertone has introduced the PageSkin ad unit, which transforms the borders around web content into space for advertising creative.

The real secret to Facebook ads? It’s all about the image. (All Facebook)

Digital agency Tribal Fusion has opened offices in Jeddah and Riyadh, Saudi Arabia.

After introducing free phone support for advertisers in April, Google apparently is “testing additional phone support” for AdSense publishers. (Search Engine Land)

Google has also enabled AdWords to allow five My Client Centers to manage a single AdWords account, simplifying networking between clients, agencies, SEM companies, AdWords API developers and/or other third-party services.

The most credit can be given to the Financial services industry, which spent close to $300 million on AdWords. That’s about $100 million more than the next vertical, computers and Internet.

However, the top-spending AdWords advertiser was not a financial services company, but lovable old Amazon with $17.9 million. Capital One was the second biggest spender with $15.7 million doled out.

Check out this breakdown of AdWords spending by vertical, courtesy of AdGooroo:

These rogue pharmacies, apparently based outside of the U.S., may have been selling prescription medication without a prescription as well as expired or counterfeit drugs.

A $500 million fine could be one of the largest ever doled out by the U.S. government, which doesn’t goof around with drug advertising. That’s why many pharmaceutical firms approach online advertising like stepping on egg shells. Apparently Google attempted a crack down on illegal drug supplies, filing a civil lawsuit against suspected advertisers in September, but the DOJ is looking into whether Google looked the other way as the rogue pharmacies handed over their cash and put up naughty ads.

The U.S. government has become quite vigilant in its crusade against online fraudsters (particularly when the advertisers in question boast false health claims). The Federal Trade Commission recently cracked down on “flogs and farticles,” though I question how that’s going as I still see ads for “one trick to a flat stomach” and “work at home exposed!” all over the likes of Huffington Post, Salon.com and other supposedly liberal news sources. (If the publication doesn’t demand the aristocrats be guillotined before the redistribution of wealth, it’s not left enough for me. Disclosure for stray right wingers: that is a joke.)

I’m most curious about how self-serve online advertising platforms will be affected by this ramped up regulatory diligence. Should such companies be looking at new measures to protect themselves from the government’s wrath?