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Archive for April, 2008

Cox Enterprises to buy online ad company

Posted by Mort Greenberg on April 29, 2008

Article Source:

The Atlanta Journal-Constitution
Published on: 04/29/08

Adify Corp., a 3-year-old company that knits together many Web sites into large audiences that are attractive to advertisers, is being bought by Atlanta-based Cox Enterprises Inc. for $300 million.

Adify began as a startup idea by a trio of people sitting around a cabana in Silicon Valley, but it represents “the next step in advertising,” said John Dyer, Cox Enterprises’ executive vice president of finance. Cox announced the all-cash deal today.

The purchase means Cox properties will be better positioned to take advantage of a growing online marketplace, said Dyer. The company is buying Adify at a time of shrinking newspaper and television advertising revenues. The Atlanta Journal-Constitution is owned by Cox Enterprises.

“This gives us the opportunity to participate in the growth of online advertising,” Dyer said. “We think this will work.”

Adify, based in San Bruno, Calif., allows media companies to extend their advertising sales beyond their own Web sites, said Adify Chief Executive Russ Fradin. It identifies prospective Web sites with common subject matter — for instance, parenting or travel — and offers them as a package to advertisers wanting to reach their readers without having to buy ads from each site individually.

“If you’re a media company, you need to deliver advertising to a larger audience,” he said.

Fradin, one of Adify’s co-founders, likened the company’s business model to one created more than two decades ago when TV networks faced competition from cable channels. As cable fragmented their traditional audience, said Fradin, the networks responded by acquiring specialty networks to keep advertisers from fleeing.

The principle also is comparable for national magazines, which offer sales packages to regional advertisers, he said.

Adify debuted Oct. 31, 2005, and was based on a business model Fradin and two others developed on a whiteboard while sitting at a Silicon Valley cabana.

Adify quickly secured two clients and now has more than 130, he said. The company has about 80 employees.

The customer list includes entrepreneurs and established media outlets, such as Forbes, The Guardian, HotChalk, Houseblogs, Martha Stewart, NBC Universal, Reuters, Time Warner and Washington Post Co.

Adify started with $3 million in investments, said Fradin. In less than two years, it had added nearly $24 million from investors confident the company would keep growing.

Then Cox offered it more than 10 times that amount to become part of a diversified company that owns the Journal-Constitution as well as other newspapers, television and radio stations, cable TV and high-speed Internet systems, and auto auctions.

Joining Cox, said Fradin, allows Adity to pay its investors. “They’re getting a good return on their money.”

It also means Adify doesn’t have to worry about raising more capital, he said.

The transaction should be complete in May, officials said. Cox plans to let Adify remain a stand-alone unit run by Fradin.

Posted in Ad/Behaviroral Targeting, Marketplace Trends, Media Company Stocks | Tagged: , , , | Leave a Comment »

Take a Picture of an Ad, Earn a Reward

Posted by Mort Greenberg on April 28, 2008

Article Source:

April 28, 2008



Two men’s magazines are trying to engage their readers more — by increasing their cellphone bills.

Rolling Stone and Men’s Health are both testing programs in which readers can take cameraphone pictures of icons on ads, then send them to a certain number. In exchange, they’ll receive more information or an offer from the advertiser.

In Rolling Stone’s current issue, five advertisers are running these offers. They include a motorcycle ring tone for Allstate’s motorcycle-insurance program and a video preview of The Discovery Channel’s new season of “Man vs. Wild.” Men’s Health is going even further, saying each full-page advertisement in its July-August issue will have the added feature.

An image-recognition company called SnapTell is behind both magazines’ efforts. Technology from the company, based in Palo Alto, Calif., can differentiate the icon on one advertisement from that on another and text back the appropriate offer.

For the magazines, it’s a way to make print products interactive.

“We’ve got a product made of paper and ink sent out every two weeks,” said Ray Chelstowski, the publisher of Rolling Stone. “We’re always in the market to find other ways that we can work with our advertisers in providing empirical data in showing how readers engage and interact with our ads.”

Although advertisers could use the readers’ cellphone information to do further marketing, some said that was not the plan. “We will have some cellphone data, and if they opt in to receive something from Discovery, we can obviously send something back to them,” said Brad Feinberg, director of media planning for Discovery Communications, but “the purpose of this really isn’t to collect data per se as it is to give the readers some value.”

For the advertisers, the effort is low-risk. Neither Rolling Stone, published by Wenner Media, or Men’s Health, published by Rodale, is charging advertisers extra for the feature. SnapTell, too, is charging the publishers only a promotional price, “but the end business model here is we hope the magazines convince their advertisers to pay a little more for this extra feature, and we would then participate in the upside of the revenues,” said SnapTell’s chief executive, Gautam Bhargava.

Advertisers said they were happy to give it a whirl, especially given the cheap price tag, even if they did not see an overwhelming response.

“There really aren’t any benchmarks yet, and we are a test-and-learn company,” said Lisa Cochrane, vice president of marketing for Allstate. “It’s cool, it’s innovative and it’s not a really big risk to us because there’s no additional cost.” STEPHANIE CLIFFORD


Posted in Ad Products, Ad Spending, Ad/Behaviroral Targeting, Demos & Audiences, Digital Out of Home, Local, Marketplace Trends, Mobile | Tagged: , , , , | Leave a Comment »

Why Marketers Love Small Social Networks

Posted by Mort Greenberg on April 28, 2008

Article Source:


April 27, 2008

By Betsy Cummings

Marketers who think bigger is better may want to reconsider, at least when it comes to social media. Ad spending on those sites is predicted to top $1.6 billion this year, according to eMarketer. However, much of it will be plunked into smaller, emerging social networks.

While My Space and Facebook get all the attention, social media focused on topics as remote as knitting or bird watching can be a strong branding target these days, said Anthony Acquisti, strategy supervisor with emerging media at OMD, New York. His running tally of emerging social networks, now up-wards of 7,000, is evidence of an explosive market.

These more focused audiences should be popular with brands because “relevance,” he said, “trumps size.”

By 2011, eMarketer estimates, half of all adults in the U.S., and 84% of online teens will use social networks. That’s both a golden opportunity and a colossal headache for brands trying to nail down the best new network for their campaigns.

Sites like imeem, an emerging market leader, are carving out their niche now, making their case for advertising dollars. The site, dedicated to music, videos and photos, works with Burger King, Scion, Nokia and T-Mobile, which sponsored a “content capture” in the fourth quarter of 2007. This involved artist Jay Holiday texting his thoughts on tour to imeem members through his T-Mobile sidekick. “We tend to skew younger and edgier,” with a demographic of 13-24, said Steve Jang, imeem CMO.

That these sites are so segmented means they can offer unique campaign opportunities to brands. But how brands execute social media campaigns is as important as where they do it. And keeping new sites hip and unencumbered by advertising is a balancing act for both the brands and the networks.

At Twitter, a site that integrates text messages with social networking, companies like shoeseller are jumping on board. The footwear e-tailer is sending its own text messages to the site about products and “tweepstakes,” giveaways the company offers to Twitter members.

“The real way of getting into social media is you don’t advertise, you participate in the community,” said Pawel Szymczykowsky, Zappos’ software engineer.

Up and coming networking sites are also forming alliances through programs like OpenSocial, Google’s common API program that allows brands to build applications, like games, to engage users. Currently more than a dozen emerging sites belong.

Hi5, an OpenSocial affiliate with 25 million unique users a month, is heavy on international members, particularly the Hispanic market, which is 40% of its demographic, said Ramu Yalamanchi, Hi5’s CEO. “The benefit of OpenSocial is to get your application on other networks as well,” he said. “If you want to repurpose it for MySpace, you can do that easily.”

New sites also tout the viral spread of information from one site to the next. But skeptics say users on niche networks keen on that site’s focus aren’t likely to jump around. “I think ‘viralability’ gets spun a bit,” Acquisti said. In fact, a 2007 InVision study of emerging media by Initiative found that 47% of those who visit social networks visit only one site actively.

Plus, going viral isn’t always of value. “Social networks offer consumers the unfettered ability to write what they want,” said Debra Aho Williamson, senior analyst at eMarketer. “Sometimes [they write] about the brand, and sometimes it’s not very good.”

Instead, “a lot of social networks have been embracing letting companies and brands become users of the site where users can choose to be friends with them,” said Leah Culver, founder of Pownce, a social network created in June 2007.

That’s true at Last quarter, the Renton, Wash.-based company worked with Applebee’s to create a profile for the “talking apple” seen in TV spots. Through the profile, users could engage with videos, photos and a link to Applebee’s site, said Jeremy Helfand, executive vice president and chief sales officer for

With creative messaging on “profile pages, we see significant increases in response rates.” Helfand said in certain cases the response was ten-fold.

Subtle branding messages are key and a big part of what emerging sites are offering to brands, said Kelly Twohig, senior vice president and digital activation director at StarCom USA.

“Especially in a community environment where the bulk [of content] is provided by users,” Twohig said, “people want it to remain pure.”

Posted in Ad Products, Ad Spending, Social Media, UGC, Widgets/Distributed Content | Tagged: , , , | Leave a Comment »

The Real Threat to Google

Posted by Mort Greenberg on April 28, 2008

Article Source:


As more consumers browse the Web on their cell phones, the No. 1 search engine must cope with less space to place ads

Google’s biggest threat may not be Microsoft (MSFT) or Yahoo! (YHOO).

No, one of the most formidable challenges facing Google (GOOG) is likely sitting in your pocket or purse. It’s your cell phone, and it will put added pressure on Google and other Internet companies to revamp the way they handle online marketing.

As more people use cell phones and their tiny glass screens to gain access to the Internet, Google and its fellow online advertisers will have less space, or what’s called ad inventory, to place marketing messages for customers. Google makes money selling ad inventory. And its ad inventory is diminished on a cell phone.

iPhone as Tipping Point

Google can now fit about 10 ads on a standard computer screen. (If you look at Google search results on a PC monitor, paid ads are the listings at the very top and along the right.) But on your cell phone, if you type in a search query at you get only one or two paid ads in response.

Imagine the horror that would befall your business if a large slice of what you sell suddenly disappeared. A similar fate could befall companies that depend on online advertising, as small screens become the gateway to the Internet.

Of course, no one’s suggesting that consumers will abandon standard computer screens overnight. And early research shows that mobile advertising may be more effective than standard online advertising, suggesting that it will be more lucrative for the companies that rely on it. Still, the shift is coming fast enough that Google must get prepared.

It was Apple (AAPL), a frequent Google collaborator, that tipped the trend. Consumer use of mobile Internet in the U.S. has longed trailed Asia and Europe, where standardized cell networks made it easier for handset makers to produce gadgets that tap the Web at blazingly fast speeds. But in the summer of 2007, Apple rocked America by launching the iPhone. The computer maker wasn’t the first to put the Web on phones, but for many consumers, the iPhone made the experience more robust.

Almost two-thirds of Americans have had some experience with mobile Internet use, and the adoption trend is most pronounced among teens and young adults, according to Pew Research Center. About 60% of adults 18 to 29 use text messaging every day, compared with only 14% of their parents. Nearly one-third of young adults use mobile Internet. This is the future, because people take their media habits with them as they age.

Why Google Wants In on Cell Phones

So, as Apple and demographic trends thrust the mobile Internet upon us, how will advertisers and we consumers of electronics respond?

Google will try to expand ad “shelf space,” especially by redesigning cell-phone software. In November, Google announced it was launching an Open Handset Alliance to design a new operating system, code-named Android, which would provide a “truly open and comprehensive platform” for cell-phone users. A few scratched their heads as to why Google would get into the cell-phone interface business. But now it’s clear; Web screens will soon be two inches wide, and Google wants a say in what fits on that tiny screen.

Our bet is that the new Android interface will encourage mobile device users to flick through multiple layers or pages, similar to the iPhone album-art menu. This will create more room for ads. Expanding the visual ad inventory will be crucial for Google, as evidenced by the recent announcement that it will begin selling small display ads on cell-phone screens.


Another implication is that consumers may have to start paying for “free” stuff. Sure, there’s a lot that’s free on the Web now, as many, including Chris Anderson of Wired, have noted. Yet, even Anderson notes that most “free” content models really just transfer the hidden cost from you to third-party advertisers, who subsidize your content in hopes of getting attention. If online social media such as Twitter, Facebook, or Digg can’t figure out ways to entice money from advertisers, they’ll have to grab it from you.

More Personal Ads on the Way

Our hunch is that free content systems may stick to the big Web pages, where more ads can fit. For tiny screens, systems such as Twitter that work well in small detail will eventually have to charge, make money some other way, or go away. Consumers push back on paying for something that is already free, so the only solution we see is to keep ads very minimal—and very personal.

Which brings us to one of the biggest implications of wider use of the mobile Web. Advertisers will increasingly rely on personalization. Today, collections of Web sites known as ad networks track consumer behavior across multiple sites, and then shoot targeted ads to users. This behavioral targeting approach, found via WPP Group’s (WPPGY) 24/7 Real Media, Blue Lithium, Tremor Media, and other Web networks, often results in ad response rates 5 to 10 times higher than standard banner ads.

Personalization works, and several companies are working on ways to make it work better. Microsoft recently filed a patent application that would use offline data such as credit-card transactions, estimated physical location (from cell-phone towers), and TV viewing habits to serve you a customized ad the next time you go online. The fact that you bought cleats for your kids this morning, went to a high school football game in the afternoon, and turned on ESPN when you got home would conceivably trigger a personalized sports ad on your cell phone.

Better Marketing Through Profiling

ComScore (SCOR), the Web site ranking service, is taking a different approach, using “biometric signature” profiling to match the keystrokes and mouse-click patterns of different users on a single computer. The idea here is to get beyond the gadget to the individual user who touches it. The system can identify whether Dad or Mom or Sis is sitting at the keyboard, and then match the individual user with a rich profile of demographic data to improve ad targeting.

Pondering all this, we called Marc Rotenberg, executive director of the Electronic Privacy Information Center, to see what concerns privacy groups might have about a future where marketers track your every move. “Personalization is actually a great idea,” Rotenberg said, “but it should be done in a way that doesn’t require detailed data collection” about an individual.

It’s a nice hope, Rotenberg’s, that advertising and Google can survive in a world where the ways to reach consumers via glass screens grow smaller and smaller. But we suspect hyperintrusive data profiling is coming fast.

After all, Internet screens will soon be a lot smaller. And no one as rich or as smart as Google gives up so crucial a slice of sales without fighting back.

Kunz is director of strategic planning for Mediassociates, a media planning firm.

Posted in Ad Spending, Ad/Behaviroral Targeting, Consumer Behavior, Mobile | Tagged: , , | Leave a Comment »

Facebook’s Insatiable Hunger for Hardware

Posted by Mort Greenberg on April 27, 2008

Article Source:

Updated: Facebook these days is doing everything in its power to imitate Google, recruiting the search giant’s sales people, poaching its senior executives and — most importantly — using infrastructure as a competitive advantage. Like Google, Facebook has figured out that the right web infrastructure is the difference between user delight and dismay. And like Google, Facebook is finding out that it isn’t cheap.

I’ve been trying to get a handle on Facebook’s infrastructure for some time, but so far have been unable to get the company to open up. The last time I reached out to them, back in January, I was hearing that they had between 1,200 and 1,500 servers, along with storage and switches from EMC Corp. and Force 10 Networks respectively. As it turns out, those server numbers weren’t even close to the total servers used by them.

The company is running around 10,000 servers, according to Data Center Knowledge, citing comments made by Facebook VP of technology, Jeff Rothschild, at a recent MySQL user conference. (See video of the panel.) Of the 10,000 servers, 1,800 are from MySQL and around 805 of them are memcached servers. In order to house its sprawling infrastructure, Facebook has leased data center space from DuPont Fabros in Ashburn, Va., and Digital Realty Trust in Santa Clara, Calif., DCK reports.

How much is Facebook spending on its infrastructure? The company isn’t going to tell us, but there are clues. Server and storage company Rackable today reported first-quarter 2008 sales of around $69 million. Facebook is one of its largest customers, accounting for around 10 percent of Rackable’s sales (that number could be higher, but we’ll have to wait for Rackable’s 10-Q to get a clearer picture), so some quick, back-of-the-envelope math reveals $7 million in spending by the social networking company. A well placed source of mine just let me know that Facebook is going to spend over $9 million more on servers this year. That should be good news for Rackable. Next on my list is an estimate of Facebook’s bandwidth and data center costs.

The hardware spending by startups like Facebook will be a topic of discussion at our Structure 08 conference, where we are hoping to learn more about the infrastructure secrets of all of today’s top (and fast-growing) web players.

Posted in Data & Metrics, Marketplace Trends, Social Media | Leave a Comment »

WPP’s Q4 organic revenue grows 4.8 percent

Posted by Mort Greenberg on April 27, 2008

Article Source:


Friday April 25, 5:32 pm ET


WPP Group reports first-quarter organic revenue growth 4.8 percent


PARIS (AP) — WPP Group PLC on Friday reported first-quarter organic revenue growth of 4.8 percent, missing analysts’ expectations of 5.4 percent.Still, the British advertising holding company’s revenue was strong in the period, boosted by strength in emerging markets and by new business wins.

On a reported basis, WPP, which owns agencies including JWT, Young & Rubicam and Group M, said revenue rose 14 percent to 1.56 billion pounds ($3.08 billion) in the three months to March 31, compared with 1.37 billion pounds a year earlier. The latest figure beat analysts’ forecasts.

The world’s second-largest advertising and marketing services group by sales, also confirmed its full-year margin target of 15.5 percent.

WPP said Asia Pacific, Latin America, Africa and the Middle East remain its fastest-growing regions, with constant currency growth of over 15 percent.

WPP released strong first quarter revenue numbers but organic revenue growth, a closely-watched industry metric which strips out the impact of acquisitions, disposals and currency movements, was slightly disappointing, Lehman said.

Posted in Ad Agencies, Media Company Stocks | Leave a Comment »

BlackBerry’s Quest: Fend Off the iPhone

Posted by Mort Greenberg on April 27, 2008

Article Source:



Published: April 27, 2008

STEVE JOBS, Apple’s chief executive and field general, has Napoleonic dreams of global conquest for his 10-month-old wonder gadget, the iPhone. So it may be fitting that he’s encountering his most serious resistance in a city called Waterloo.
J. P. Moczulski/Reuter

Jim Balsillieleft, and Mike Lazaridis are co-chief executives of Research In Motion, the maker of the BlackBerry.

Tony Cenicola/The New York Times

The company had focused on e-mail-craving executives, but with Apple’s iPhone breathing down its neck, it is trying to lure more consumers with phones like the Pearl, left, and the Curve.

That is where, 70 miles west of Toronto in Ontario, 19 nondescript, low-rise office buildings comprise the headquarters of Research In Motion, maker of the BlackBerry.

R.I.M. is the North American leader in building smartphones, those versatile handsets that operate more like computers than phones. But R.I.M. may have trouble dominating the market’s next phase. Once the exclusive domain of e-mail-obsessed professionals, smartphones are now prized by consumers who want easy access to the Web, digital music and video even more than an omnipresent connection to their in-boxes.

Since the iPhone went on sale last summer, amid long lines of shoppers and media adulation, the contours of the smartphone market have begun to shift rapidly toward consumers. An industry once characterized by brain-numbing acronyms and droning discussions about enterprise security is now defined by buzz around handset design, video games and mobile social networks.

That means R.I.M., which has historically viewed big corporations and wireless carriers as its bedrock customers, needs to alter its DNA in a hurry. While business is booming in Waterloo, analysts are raising an important question about R.I.M.’s future: Can a company that defined mobile e-mail for a generation of thumb-jockeys with bad posture also dominate the new consumer market for smartphones?

“The vultures are circling,” says Roger L. Kay, president of Endpoint Technologies Associates, a research firm in Wayland, Mass. “There is this sense that the R.I.M. franchise is under assault.”

In the short term, Apple’s noisy entrance into the smartphone market has elevated the visibility of smartphones and enhanced the prospects of most of its rivals. Worldwide, smartphone shipments jumped 60 percent in the last three months of 2007 over the same period the previous year, according to IDC, the tracking firm. Of the two billion cellphones sold last year, nearly 125 million were smartphones — a share that analysts expect to inexorably grow.

R.I.M. added 6.5 million subscribers in its last fiscal year, twice the previous year’s amount, and its stock hit the stratosphere, more than doubling in value as investors anticipated the coming Age of the Smartphone. And R.I.M. has already introduced catchy mainstream gadgetry. The BlackBerry Pearl and Curve, two phones aimed explicitly at the consumer market, have sold well, particularly during the holiday season, and now account for a majority of R.I.M.’s device sales.

But there are also signs that R.I.M. faces steeper challenges. At the end of last year, BlackBerry had a 40 percent share of the United States smartphone market, down from 45 percent at the end of 2006, thanks largely to the 17.4 percent share the iPhone grabbed in its first six months.

In March, Mr. Jobs announced that Apple would take the rare step of licensing Microsoft’s corporate e-mail technology, to allow iPhones to connect directly to business computers — a dagger aimed at the heart of R.I.M.’s strength in the corporate market. In Apple’s quarterly conference call last week, Apple executives said that one-third of Fortune 500 companies were interested in giving iPhones to their employees.

Apple, meanwhile, in an effort to further increase its appeal to consumers, is also expected to introduce a new 3G version of the iPhone in June, which will work on speedier wireless networks and may further attract a new segment of customers to the iPhone in the United States and abroad.

In describing the threat that Apple poses to R.I.M., Charlie Wolf, an analyst at Needham & Company, describes his wife’s entirely common use of the iPhone, which she takes to bed with her each night to browse the Web.

“Some consumers who might have considered the BlackBerry, who don’t have the e-mail urgency of a mobile professional, are going to start selecting the iPhone,” Mr. Wolf says. “This isn’t going to stop R.I.M., but it is going to slow them down.”

Up in Waterloo, where the towering winter snowpacks finally melted this month, R.I.M. executives appear nonplused. Though they would not reveal details, R.I.M. itself is expected to unveil a new 3G phone sometime in May and deliver it to wireless carriers throughout the year.

R.I.M. employees and outside developers who are writing programs for the new phone, which has the internal code name “Meteor,” say that it will have faster processors, a larger screen and a better browser that more closely resembles the Web experience on a computer.

Photographs of the device, leaked to gadget news sites, also indicate that the new BlackBerry will have elegant curves suggestive of the iPhone. It will also have a physical keyboard like previous R.I.M. devices, as opposed to the glass touch screen found on the iPhone.

THERE’S a reason that R.I.M. is averse to the iPhone’s glass pad. “I couldn’t type on it and I still can’t type on it, and a lot of my friends can’t type on it,” says Mike Lazaridis, R.I.M.’s co-chief executive and technological visionary. “It’s hard to type on a piece of glass.”

Mr. Lazaridis thinks that e-mail-dependent BlackBerry owners demand the reliability and tactile feedback of a keyboard. But, despite his critique of the iPhone, he does not dismiss the possibility that R.I.M. may itself one day sell a touch-screen phone, aimed specifically at consumers without the e-mail demands of BlackBerry’s core users.

Indeed, two independent developers writing software for coming R.I.M. devices say that a touch-screen BlackBerry is in the works, and that R.I.M. engineers privately refer to it as the A.K. — for “Apple Killer.”

R.I.M. would not comment on future devices or media reports last week that at least one carrier, AT&T, was delaying its introduction of the newest R.I.M. phone because of problems with call quality. Those reports sent R.I.M.’s stock down nearly 3 percent in trading on Friday.

Mr. Lazaridis says only that “I wouldn’t underestimate the amount of research we’ve done on user interfaces and technologies. We are not afraid to reinvent ourselves.”

Keypads and touch screens aside, R.I.M. is facing a lot of competitors in addition to Apple in the booming smartphone market.

For years, Microsoft has tried to have manufacturers use its operating system for smartphones, Windows Mobile, which analysts generally think is overly complex and too difficult for consumers. The companies that license it, including Motorola, Palm and HTC, a Taiwanese manufacturer, have carved out only small fractions of the overall smartphone market.

Then there is Google. Later this year, phone manufacturers have promised to start selling smartphones running Android, Google software based on the open-source operating system Linux and backed by a coalition of 34 wireless-industry companies. Google’s idea is that Android can be a more open and a less expensive alternative to the proprietary mobile technologies of Apple, Microsoft, R.I.M. and Nokia in Europe.

Executives in Waterloo acknowledge these assaults but argue that R.I.M. is the only company that isn’t trying to leverage strengths in ancillary markets, and can therefore focus exclusively on mobile-phone innovation. They also seem to relish the prospect of savvy high-technology companies jockeying for position on their home turf.

“There’s no question the level of focus and intensity on wireless platforms has gone up an order of magnitude,” says Jim Balsillie, R.I.M.’s wiry, jargon-slinging co-chief executive and strategic brain. “The stakes are so very high, not only in the size of the market and market share, but in who has the important position in the ecosystem.”

Mr. Balsillie thinks that R.I.M. is in the best tactical position for the coming fight. He points to its close relationships with 350 carriers around the world — like Verizon and AT&T — that sell, often at steep discounts, BlackBerry phones and the accompanying monthly e-mail service.

Apple and Google, on the other hand, are vocally trying to dislodge the carriers from the nexus of the North American wireless market. Unlike other phone makers in the United States, Apple sells iPhones from its own stores and has negotiated relatively stingy contracts with the carriers, in exchange for limited periods of exclusivity. Google, for its part, unsuccessfully bid for wireless spectrum this year in an effort to force carriers to be more open to allowing various handsets and Internet services on their networks.

R.I.M. makes its alliances clear. “We are sort of polite and amiable and we gently interrelate with the carriers and try to find compatibility,” Mr. Balsillie said. “It may be a better strategy to fight the carrier. We may be wrong. The carrier may get disintermediated, in which case we fade with them.”

R.I.M. is also betting on security, which hinges on the fact that its handsets and e-mail systems are relatively impervious to hackers. Mr. Lazaridis predicts that corporations will not give iPhones to their workers because they have already proved vulnerable to hackers eager to pry iPhones off AT&T’s system and make them work on other wireless networks.

“It’s not that simple for an I.T. manager to give up security,” he said.

INDEED, R.I.M.’s allure to carriers and corporations may be irresistible and impossible for Apple to weaken, even if Apple improves iPhone security. But some analysts still wonder what will happen to the BlackBerry’s dominance when everyday consumers start driving growth in the smartphone market.

R.I.M. has always moved deliberately in embracing new handset technologies, in order to reassure corporations anxious about possible security breaches. For example, it added digital cameras and slots for removable memory cards to its phones only at the end of 2006, years after they became popular in other devices. Companies feared that these features would leave confidential corporate data vulnerable, but consumers demanded them and R.I.M. ended up providing them.

Consumers also want to choose from a growing pool of entertaining software programs to buy and load onto their devices. On this front, R.I.M. may be falling behind. Apple released a set of programming tools for outside developers in March, and recently said that 200,000 programmers had downloaded the tools.

The BlackBerry has been open to developers since R.I.M. started using the Java programming language in 2001. But for now, those programs are simpler and more primitive than what’s coming on the iPhone. For example, some of the new software available for the iPhone will take advantage of its support for 3-D graphics and innovative features like its motion sensor, which allows users to rotate their screens. The BlackBerry does not support 3-D graphics; it also doesn’t have a motion sensor. If motion-sensitive gaming — like that found on Nintendo’s popular Wii console — finds a home on smartphones, R.I.M. may be at a disadvantage.

Analysts say that R.I.M.’s greatest challenge in a consumer-driven smartphone industry may simply be creating devices that people admire and covet as much as the iPhone. Despite the faithfulness of its flock, R.I.M. is not there yet.

In a survey this year of 3,600 professionals by ChangeWave, a research company, 54 percent of BlackBerry users said they were very satisfied with their devices.

Even so, the BlackBerry was a distant second in the survey: the comparable figure for the iPhone was 79 percent.

Posted in Marketplace Trends, Media Company Stocks, Mobile | Leave a Comment »

MoComment: The Money in Mobile Advertising CPMs

Posted by Mort Greenberg on April 22, 2008

Article Source:


By Rafat Ali – Thu 14 Feb 2008 07:36 PM PST

[by Chetan Sharma] At least half a dozen press releases popped up during the writing of this book claiming a $50 or $60 and higher CPM rate for mobile ads. A brief look back at Internet advertising from 1998 to 2002 shows that a $50 CPM, or anything near it, is not defensible for very long. For the CPM model to work at any price point, even in the short term, these networks need a critical mass of advertisers willing to spend branding (versus direct marketing) dollars on a new, untested medium that will appear in a wide range of content. That is going to be difficult, if not impossible, to find. Since the agency ecosystem is rooted in print and TV, it is also anchored in CPMs and GRPs (gross rating points). For the near-term future, CPMs probably will determine the ratio of dollars spent in mobile. But the ecosystem is being yanked into the digital world with more transparent ROIs that gauge new levels of consumer interaction and impact. Outcomes need to be tied to more than just the theory of eyeballs in the living room. Lots more in extended entry….

Assuming for a moment that the mobile ad networks can find enough advertisers, it will increase the attraction for publishers to run ads on their networks, adding more inventory and depressing prices. In addition, web-based interactive agencies were already burned once by ad networks with prices above a $30 CPM. It is likely that the entire mobile CPM model will shrink, as it did on the Web. In both the PPC (pay per click) and CPA (cost per acquisition) models, more responsibility is put on the content providers, insulating advertisers from some risk until the consumer clicks toward a transaction or sale. However, the implementation and success of CPC and CPA models rely on huge impression volumes, an ad sales system more scalable than is required for CPM models, and a mobile infrastructure capable of monetizing consumer clicks or actions. All these are a long way off for mobile advertising. As noted by Larry Shapiro, VP of Disney; “We might have 10 percent to 20 percent of click-through rates (CTRs), but 90 percent of unsold inventory and CPMs are high indicating the early stages of the market and all of this will trend down like the way you had on Internet when we had $30 CPMs, 10 percent CTRs, and 95 percent unsold and all those numbers changed in the mature market.”

Two major groups are using mobile for advertising today. First are the companies that want to advertise on mobile to get consumers to click to their point of sale to buy a game, mobile music, ring tones, or video. For these advertisers, mobile advertising is about accelerating the process of acquiring a new customer. Their ad spending will be measured and driven by the lifetime value of that new customer. Mobile CPM rates above that are not sustainable for this group. For lifetime economics in these scenarios to make sense, CPM rates must drop to between $5 and $10. As mobile search-based keyword auctions appear, these advertisers may well move their budgets over. But is this type of advertiser really going to scale mobile advertising revenues? No. It will basically be capped by the marketing budgets of these smaller companies. Beyond the CPM and economic issues, aren’t all mobile application providers essentially competing with each other for the same time and service spends from the same consumers? How do mobile portal managers feel about semicompetitive mobile media advertising on their prime real estate with the goal of stealing a customer’s attention? Will every ad have to be preapproved? Will this really be the market force that drops CPM rates? No, it will not.

The second group of mobile advertisers consists of companies outside the mobile industry looking to increase the awareness of their products and services in a high value, personal scenario. These companies are just beginning to understand the unique value of mobile advertising for relevant, targeted, effective presentations to their audience. Selling these companies on the concept of mobile advertising and getting them to spend more than just their trial budgets is a long, arduous cycle. And the high CPM rates are often confusing to this group. Compared with $10 for a run on an untargeted network to $20 for a targeted web site group, there is still a question of cost and value of the $50 CPMs in mobile. Part of this high mobile CPM rate is driven by lack of mobile inventory today. Once the inventory arrives, that pressure will force the CPMs down in mobile.

Similar to the Web, the mobile CPMs will bifurcate into a lower cost, less targeted run-of-network (off deck) with CPMs between $2 and $9. The higher tier will be targeted mobile sites with specific audiences, where CPM rates will be around $12 up to $20 on the high side. The CPM rates simply follow the degree of targeting value. Better targeting equals higher CPM rates. In mobile, these will be mostly on-deck with high degrees of targeting based on proprietary mobile data being exposed anonymously for the ad campaign. Today’s mobile press releases touting costly, untargeted inventory is absurd and won’t last. Off-deck mobile ad networks, with less well-defined targeting approaches, will turn into the equivalent of the Web’s run-of-network buys, where inventory should always be inexpensive. CPMs will be tied to a certain size of advertising buy, but it won’t be an unreasonable premium for smaller buys.

But with the potentially higher value of mobile targeting into niche audiences in a fractured mediascape, is there another level of ad targeting rates, metrics, and value beyond the tried-and-true CPM of yesteryear? Yes, there is!

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Olay Translates Killer Online App to Retail Aisles

Posted by Mort Greenberg on April 21, 2008

Article Source:

P&G Looks to Enhance Real-World Wal-Mart Shopping With Web Tools

By Jack Neff

Published: April 21, 2008

BATAVIA, Ohio ( — Procter & Gamble Global Marketing Officer Jim Stengel ranks it among the company’s best digital initiatives, and Chairman-CEO A.G. Lafley called it out to analysts in February as a prime example of innovation.

Kiosks are taking info from online to in-store.
Kiosks are taking info from online to in-store.

But it’s not just P&G that’s impressed with Olay for You, an online product- recommendation program that’s attracted more than a million visitors since January, 80% of whom completed an involved question-and-answer process and spent an average of eight minutes on the site.

Wal-Mart Stores has begun testing an in-store version of Olay for You via kiosks in stores, marking the latest of several efforts in which offline retailers are looking to tap the convenience and functionality of online tools, such as search and recommendation engines, to improve the often-annoying offline shopping experience.

It may not be a bad idea. Even as overall retail sales started tanking late last year, online retail sales were growing at healthy double-digit rates, according to ComScore and Nielsen Online.

Ease in the aisle
For the growing number of consumers who prefer the online experience to traditional shopping, the ease of finding products and getting recommendations clearly is a draw, said Carter Cast. Mr. Cast, a former CEO of and head of strategy for Wal-Mart Stores in the U.S., became CEO of fledgling specialty online retailer Netshops late last year.

Because of expectations created by web shopping, consumers increasingly expect offline stores to have the goods they want and make them easy to find, Mr. Cast said. “So the ante is raised in the physical world.”

Unfortunately, stores aren’t always anteing up. “I’ve read statistics that show a surprisingly high number of people [more than 10%] will go into a big-box and leave without [buying anything] because they haven’t found what they want,” he said.

Though he hasn’t seen some of the newer systems in stores, such as the Olay system being tested by Wal-Mart and P&G, he said they have potential. Mr. Cast also said more retailers will look to mimic the online experience by porting inventory data from their stores to their websites to give consumers real-time information about product availability.

OTC offline
Another take on the online-to-offline phenomenon is Evincii, which began installing kiosks offering a mix of search and recommendation-engine capabilities in the over-the-counter-drug sections of Longs pharmacies in California in 2006 and is looking to roll out the concept nationally.

Johnson & Johnson is an initial advertiser on the system, which allows advertisers to place ads similar to online display ads, including video, around search results.

But like Google or other search engines, Evincii looks to return “organic” results only based on the criteria shoppers input, such as their symptoms, said Charles Koo, CEO of the private-equity-backed venture. Then, once they’ve selected a product, the kiosk helps them locate it on the shelf.

Not only does Olay for You appear to have had unusual success — consumers like the site so much that about 7% have contacted P&G’s consumer-relations staff to say so, more than double the average for online initiatives — it also comes from an unusual source. It was created by Talk Me Into It, a digital agency founded last year by Marie McNeely, a former global equity director on P&G’s fabric and home-care business for Saatchi & Saatchi, which handles creative duties both for Tide and Olay. It’s the first project for Talk Me Into It, which has offices in New York and New Zealand.

Helping hand
The idea was largely to help Olay, and consumers, cope with a downside of the brand’s success over the past eight years: A proliferation of products and product ranges has made it difficult, particularly for newcomers to the brand or category, to know what they should buy or even where they should start in making a decision, a P&G spokesman said.

While P&G has tried in-store kiosks before with such brands Clairol and Millstone coffee, Olay For You’s combination of a highly graphic, iterative interview process and a soothing female voice may come closest to actually simulating a customer-service rep.

But while all the systems sound like good ideas, James Sorenson, exec VP-retail and shopper insights for TNS Sorenson, said getting consumers to search online in the store may be a nonstarter. While consumers might be willing to spend the time to do search queries from the comfort of their homes, doing it in stores is another matter, he said.

Mr. Koo, however, said Evincii’s research at Longs indicates that 15% to 18% of visitors to OTC-drug departments use the kiosks, numbers similar to those that ComScore found last year of consumers who use online search to research package goods. Stores using the kiosks, he said, had category sales lifts of 3% to 6%.

“That was a surprise to everybody, because we thought initially it was just a good vehicle for advertisers,” Mr. Koo said. “But it certainly helped retail sales, too.”

Posted in Ad Products, Ad/Behaviroral Targeting, Brand Advertising, Consumer Behavior, Demos & Audiences, Digital Out of Home, Direct Response/Email, eCommerce, Local, Marketplace Trends | Leave a Comment »

21-April-08, News Highlights: Consumer Packaged Goods

Posted by Mort Greenberg on April 21, 2008

AHAA Review: Growth Despite Economic Difficulties
Portada Magazine, NY – 24 minutes ago
Covkin noted that it is vital for the CPG (Consumer Packaged Goods) industry to understand the factors that are driving growth in this consumer segment,
Glossy malls, retail chains enter rural areas
Chandigarh Tribune, India – 7 hours ago
All consumer goods such as pulses, refined oils have also been kept in these bazaars. “People from the rural areas also like well-packaged stuff,” said a
Investing in Consumer Packaged Goods: A Global View
Seeking Alpha, NY – Mar 31, 2008
The consumer packaged goods [CPG] industry has undergone and will continue to undergo significant changes as consumers become more differentiated, TPE:3040
Consumer Packaged Goods Producer Deploys Printronix SLPA7000e
IT Reseller Online (press release), PA – Apr 1, 2008
As a successful, $15-billion-plus producer of consumer packages goods (CPG) ranging from food and beverage to apparel and household products, the company is
Moving Up The Food Chain – Apr 18, 2008
The food, beverage and consumer packaged goods industry brings in more than $2 trillion in sales globally each year, the Grocery Manufacturers Association
Grocery Manufacturers Association: Canadian Risk Assessment
FOXBusiness – Apr 19, 2008
The $2.1 trillion food, beverage and consumer packaged goods industry employs 14 million workers, and contributes over $1 trillion in added value to the
Google Study Finds Packaged Goods Spots Perform At ‘Parity’ Online, NY – Apr 1, 2008
by Joe Mandese, Tuesday, Apr 1, 2008 8:00 AM ET IN AN EFFORT TO CONVINCE big consumer packaged goods marketers once and for all that online media is just as GOOG

The Packer
Dole unveils salad kits, adds product strategist
The Packer, KS – Apr 17, 2008
Kocovski has more than a decade of experience in the consumer packaged goods industry, most recently as associate trade marketing manager for Church
Food and Drug Administration Globalization Act of 2008 Draft
FOXBusiness – Apr 19, 2008
The $2.1 trillion food, beverage and consumer packaged goods industry employs 14 million workers, and contributes over $1 trillion in added value to the
IRI and Europanel Partner to Form the World’s Largest Consumer and
FOXBusiness – Apr 8, 2008
the leading global provider of enterprise market information solutions for the consumer packaged goods (CPG), retail and healthcare industries,

Posted in News Highlights | Leave a Comment »