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Archive for May 7th, 2008

Branded Entertainment, Online Video, Search and the Power of Digital Media Assessed by Marketer, Media Agency and Digital Media Execs

Posted by Mort Greenberg on May 7, 2008

Article Source: http://jackmyers.com

 

Social networking and the means by which digital technology has empowered consumers of media and merchandise alike were the dominant themes at the JackMyers Future of Media discussion earlier this week. The auditorium at the Helen Mills Theater was filled to capacity as Aegis North America’s Sarah Fay, Colgate Palmolive’s Jack Haber, blip.tv’s Dina Kaplan, Worldwide Biggies’ Albie Hecht and former Coca-Cola executive Shane Steele engagingly discussed the Realities of Dealing with the Changing Media Marketplace with moderator Jack Myers. (When was the last time you found yourself in an auditorium full of media executives and did not see faces all around you unflatteringly illuminated by Blackberries?) The room was largely filled with digital media executives, or at least those who are digitally inclined: When Jack Myers asked audience members how many of them spend 75 percent or more of their time on digital media, almost every hand in the room went up. When he asked how many spend 75 percent or more of their time on traditional media, only a handful of hands were raised.

Myers and his panelists offered fresh and diverse insights into the changes that are sweeping through all areas of media during the digital era, but throughout the session the overall message remained largely the same: consumers are still king, free to devote their time to whatever they desire. But they now hold more power than ever before – including the power to expand a brand.

New Aegis N.A. CEO Fay set the event tone commenting, “The focus is around the consumer. Content is created to be distributed wherever the consumer can be reached.”

Haber, Colgate Palmolive’s Vice President of Global Advertising and eBusiness, said that the new opportunities inherent in digital media “are absolutely terrific for marketers like us. [Digital media] gives us incredible new ways to connect with the consumer; new ways to connect and new ways to advertise. Unlike the mass marketing that our business was built on with lowest common denominator methods, now we can really target messages to people.”

That’s good news but there are concerns, said digital media and marketing consultant and former Director of Emerging Media and Online Advertising at Coca Cola, Shane Steele. “You have to remember that the users are in control and they will figure out ways to get around the advertisement,” she warned.

Advertising today “is about creating great content and great experiences for consumers in a way that you’re not taking away value but adding value,” Steele continued. “[It] is becoming participatory. It isn’t just about creating an ad and putting it out there and people leaning back and watching it. Now people can extend the campaigns within their networks and social media. That social participatory component of what’s happening in digital media is one of the most exciting things happening today.”

Fay reflected on recent successful campaigns that illustrated the power of consumer interaction through digital platforms, among them one for Adidas, in which a community was created on MySpace “because it was right for the brand, not because we understood fully the value of the program,” she explained. “We had creative elements people could take away and put on their own home pages. We would give people a spinning shoe, or a backdrop for their MySpace site. So we could get 600,000 people to the community on a monthly basis, and maybe 75,000 would take something from that and put it on their own site. Not a big number, right? But if you actually added up all the impressions of people who then visited their friends sites with the creative elements it was 21.5 million!

“We think [a] big opportunity [today] is to use offline media to drive toward a more engaging experience,” Fay continued. “We’ve done it with Sony, Reebok, Adidas, brands that are more about someone’s identity — higher involvement brands where you do have to be focused on building equity over time. It’s been a really phenomenal experience when we’ve been able to make it happen. If you can drive toward something and kick start a community to get involved with a brand you can get your media dollars to carry a lot farther. We built a social networking space for Reebok where you could use Google maps to post your run, connect to iTunes and tell people what you’re playing when you run, and use Flickr to upload photos of yourself during your run. That was [in 2007]. The TV, print and outdoor runs ran from April-June, but the site is still going strong today. There’s more authenticity to that, too, when you get the consumer to talk about your message.”

Are agencies rising to meet the challenges and opportunities inherent in the growth of digital media and the social change it brings? “It’s tempting to sit here and say the agencies don’t get it,” observed blip.tv co-founder and Chief Operating Officer Dina Kaplan. “The digital side is used to buying display ads, which everyone’s eyes just gloss over, and the TV arm is so locked into making 30-second ads and then wanting to stick them before or after a video. The infrastructure to support Web video advertising just is not there yet. We need metrics. We need a way to tell advertisers what they need to know. How many seconds into a video people have watched? How many ad impressions have been watched?”

Worldwide Biggies Chief Executive Officer Albie Hecht agreed. “It’s a challenge to get those metrics out there,” he said. “A lot of it is still voodoo.”

Fay also supported a change in traditional metrics. “You can’t have five different strategies,” she asserted. “We’re still in a phase where a lot of people feel that their campaigns are very integrated as long as everybody is sticking to the same time table and targeting the same audiences. In reality if you want a true holistic strategy that is all about the consumer, somebody has to own the strategy. There is a lot of confusion about who should own the strategy. What is it when you create a community on MySpace? Is that a creative strategy? Is that a media strategy? I would argue that it is both of those things together.”

All of the panelists agreed that the burgeoning growth online of short-form videos, viral or otherwise, is beginning to change the way business is done, and that the full extent of its influence has yet to be felt. “Right now the vast majority of viewing is happening in short form,” Fay noted. “The big opportunity is how do you take advantage of short form? That’s a whole new challenge in how you develop messages.”

There are new challenges in how short-form programming is conceived and developed, as well. “There is a big distinction between redistributing content and taking it from someplace and sticking it someplace else and creating something that’s authentic to the Web and reaching a consumer the way the Web reaches a consumer, which is through an engagement level,” Hecht declared. “You have to be a little bit careful when traditional companies say, ‘we are digital and have multi-platform stuff. That’s like my old colleagues saying SpongeBob is now a podcast for digital. That’s not digital.” [There is a difference between that and what we do] which is purposely create something that is innovative and different and has a different DNA to it, and the way it reaches its audience for advertisers as well as for the consumer.” (Hecht is the former President of Nickelodeon Entertainment.)

“I feel like the networks do have an advantage,” Kaplan admitted. “They have scale and put that behind their content. There are thousands and thousands of people that are creating great shows on the Web, all sorts of production companies coming out of New York, L.A. and San Francisco delivering high quality Web shows. Do they have millions of dollars? No way. I think the networks would be at an advantage if they invested more in their content so that their content is more differentiated rather than less. Whether it’s blip.tv or [somewhere else] we have thousands and thousands of shows that are going to rise and fall. How do you compete against that unless you make a really strong investment in your content?”

Search was also a vital topic for the panelists. “It’s all about making your product or campaign searchable,” Steele said. “Everything is a search engine – YouTube, MySpace. Peer networks are search engines.”

“We use search in a number of ways,” Fay explained. “We have very active search clients that are trying to drive toward an e-commerce solution. Search is a highly efficient way to do that. It is becoming part of the branding campaign. It’s important how you present yourself in a search capacity. You think about your target audience. The center of the target is people who are most interested in your brand or product or surrounding areas of interest. I think search is set to grow consistently probably more than any other medium.

“We believe the brands that will win are the brands whose consumers tell each other the best stories,” she concluded. “There has to be a way to get your brand message out to consumers in a way they care enough about it to talk about it.”

Posted in Ad Agencies, Ad Products, Brand Advertising, Consumer Behavior, Demos & Audiences, Jack Myers, Marketplace Trends, Multi-Channel, Television & Video | Leave a Comment »

Mobilenet Promises to Be the Next Big Medium

Posted by Mort Greenberg on May 7, 2008

Article Source: http://adage.com

But Don’t Get Sidetracked Into Third-Screen Thinking

Published: May 06, 2008

We are on the verge of witnessing the birth of a new mass-communications medium. It’s the second new mass medium to appear in the last two decades.

The internet arrived in the 1990s, joining the other four mass media: 1) The book 2) The periodical 3) Radio 4) TV. Each new mass medium has created enormous upheavals in society.

  • The book ignited the knowledge explosion.
  • The periodical furthered the growth of democracy.
  • Radio created a celebrity-oriented society.
  • TV homogenized the culture.

The internet, the latest and newest mass medium, continues to make waves. “We are not witnessing the beginning of the end of old media,” Advertising Age’s Bob Garfield wrote recently. “We are witnessing the middle of the end of old media.”

“Both print and broadcast — burdened with unwieldy, archaic and crushingly expensive means of distribution — are experiencing the disintegration of the audience critical mass they require to operate profitably,” Mr. Garfield continued. “Moreover, they are losing that audience to the infinitely fragmented digital media, which have near-zero distribution costs and are overwhelmingly free to the user.”

Fasten your seat belts. On the horizon, there’s another profound shift in media, consumer behavior and technology coming. In the near future we are likely to welcome the arrival of a sixth mass-communications medium.

And what is this earth-shaking new medium? It’s the Mobilenet.

The what? Surely you are joking, Al. The Mobilenet is just a subset of the internet. Just another way of going online. Just another way of surfing the net without using a computer. That’s why mobile devices are commonly called the “third screen.”

Third-screen thinking is going to cause you and your company to miss the boat. Which big brands were created by moving content from one medium to another? Very, very few.

  • Moving The Wall Street Journal online didn’t save Dow Jones from the clutches of Rupert Murdoch for just $5 billion.
  • Moving ESPN onto cellphones didn’t take it to the big leagues.
  • So far, moving TV shows to the internet hasn’t created as much value as one internet site, YouTube.com. Less than 20 months after its launch, YouTube was bought by Google for $1.65 billion.

Google can afford to splurge. In the first quarter of this year, Google had net income of $1.3 billion. In the same quarter, The New York Times Co. lost $350,000. Moving the Times to the internet didn’t solve the company’s financial problems. Last year, NYTimes.com had estimated revenue of $27.6 million, pretty small potatoes for a site that was launched more than 11 years ago.

In spite of its dubious record, the content movement continues to gain momentum. The telecoms plus the TV industry are making massive efforts to move TV to cellphones, in spite of surveys that show, according to Yankee Group analyst Linda Barrabee, only 5% of U.S. consumers are willing to pay for mobile TV.

The software industry is also spending a fortune developing programs to permit these inter-medium transfers. Two weeks ago, Microsoft unveiled “Live Mesh,” a software program to link all internet-enabled devices. “Not just PCs and phones,” reported Ray Ozzie, the company’s chief software architect, “but TVs, game consoles, digital picture frames, DVRs, media players, cameras and camcorders, home servers … our car’s entertainment and navigation systems and more.”

That’s the wrong approach. A new medium calls for new brands, not for extensions of existing brands. The internet didn’t reward traditional brands like The Wall Street Journal, The New York Times, ABC, NBC, CBS, Barnes & Noble and Hallmark. It rewarded new brands created especially for the net. Dot-com brands like Amazon, eBay, Yahoo, Expedia, Netflix, MySpace, Facebook and AOL.

The Mobilenet will also reward new brands created especially for the medium. Like Loopt, a service that lets people with GPS-equipped phones share their real-time locations with friends.

A slimmed-down, warmed-over dot-com brand isn’t going to make it on the Mobilenet.

Laying the foundation
The Mobilenet, of course, isn’t going to become an overnight success. (The internet didn’t either.) A number of developments need to come first.

On the sending side, the missing ingredients are the dot-mobis that will make the receiving device a universal, carry-everywhere product much like the cellphone.

On the receiving side, the missing ingredient is a gadget that integrates telecom service with three technologies in an attractive and convenient package: 1) GPS, global-positioning-system receiver; 2) scanner; and 3) voice-recognition software.

Oddly enough, the most heavily hyped new product of the 21st century (Apple’s iPhone) doesn’t include any of those three technologies. Too bad. With all of Apple’s brilliant design and technology skills, the company could have pioneered and dominated the Mobilenet for decades to come.

Instead, Apple perfected the smartphone, a convergence device destined to remain a niche product. The first smartphone (the Nokia 9000) was introduced 12 years ago. Yet today the smartphone accounts for only 10% of the global cellphone market.

In the last quarter, Apple sold 1,703,000 iPhones, about 6% of the global smartphone market. Not exactly earth-shaking results. In the same quarter, Apple sold 10,644,000 iPods, about 70% of the MP3-player market.

Besides market share, there’s another striking difference between the two products. The iPod, a divergence device, pioneered a new category. The iPhone, a convergence device, was not designed to create a new category, but to improve on an existing category, always a risky strategy for a would-be market leader.

Dawn of a new device
If the Mobilenet is a new mass medium, what would you call the receiving device? The logical name is “MobiPhone,” to reflect the millions of dot-mobi websites sure to come.

Names don’t always describe what a device is really used for. Most people do little “computing” on a computer. (I do my computing on a printing calculator.) A MobiPhone may not necessarily include a cellphone. Many people might like a separate device to make telephone calls.

Obviously some people are thinking along similar lines. To me, the most interesting news item of the month was Nokia’s purchase of Navteq, a firm that collects map data from around the world, for $8.1 billion.

Eight-point-one billion? That’s one and a half Wall Street Journals for a company with revenue of just $853 million last year. That mind-boggling number tells you what the folks in Finland are thinking about. It ties in with the thought that the GPS receiver will be the key function of future telecom devices.

The global positioning system, like every technological change, creates the conditions for a product or a medium to diverge in the same way that environmental changes create the conditions for a species to diverge.

Mobile marketing would snowball
First the internet; now the Mobilenet. That’s how divergence works. Furthermore, the Mobilenet promises to make the dream of mobile marketing a reality.

Up till now, mobile marketing has captured a trivial slice of the advertising market ($708 million last year) even though the cellphone predates the worldwide web.

The potential Mobilenet marketplace dwarfs the internet. Last year more than 1.15 billion mobile phones were sold worldwide, compared to only 271.2 million personal computers. In other words, more than four times as many mobile phones were bought than PCs. And, in my opinion, most consumers will find a GPS-equipped MobiPhone to be a device they can’t live without.

The MobiPhone is not just another device, of course. It’s the receiving end of another medium, one that is unique and different from the internet. And one likely to be larger and more universal than the internet. Companies that want to take advantage of this new medium will quickly register their company and brand names as dot-mobi domain names.

Furthermore, each dot-mobi website should be considered separately from the company or the brand’s dot-com website. Two different media demand two different approaches. (You wouldn’t run a radio advertisement on TV, so why would you run a dot-com program for a dot-mobi audience?)

Long-term, “mobile” is going to become a very important part of the overall marketing environment in America. What kinds of advertising approaches are best suited to the new mobile medium?

Consumers empowered
In my opinion, there are two types of advertising: one that might be described as “passive” advertising, the other as “active.”

Passive advertising is conventional advertising found in newspapers, magazines, radio and TV. It interrupts the reader, listener or viewer in order to present “a message from the sponsor” of the medium.

Active advertising, on the other hand, is initiated by the consumer. Search advertising on the internet is a typical example. But there’s active advertising in conventional media, too. In particular, classified advertising in newspapers and telephone directories. Roughly 40% of all advertising on the internet is “active.” This is what has made Google such a big success.

The Mobilenet is going to be an even bigger medium for active advertising than the internet. That’s why there is a golden opportunity for a Google-like brand specially designed to search dot-mobi websites and coordinate with the user’s exact location.

But that’s only the beginning.

A MobiPhone with a 2D barcode scanner will enable consumers to get a wealth of information by scanning products in supermarkets, drugstores, clothing stores.

MobiPhone users might be able to arrange to be notified when certain things occur; for example, when a celebrity shows up at a restaurant or nightclub.

It’s easy to visualize what a useful device a MobiPhone could be if it is served by appropriate dot-mobi websites.

  • What’s the speed limit? (Maybe we can avoid those huge pileups that sometimes occur in heavy fog by automatically lowering speed limits when visibility is impaired.)
  • How far is the next exit and what facilities can be found there?
  • Without stopping to read them, what do those historic markers actually say?
  • Location of the nearest hotel/motel and the price of a room?
  • Location of the nearest gas station and the price of gasoline?
  • Location of the nearest restaurant by type and price level?
  • What’s the Parker number on that bottle of wine? (One of the many facts that might be available by simply scanning a label.)

What consumers can do with the receiving device is not the most significant aspect of the Mobilenet. More significant are the changes in structure the new medium will facilitate.

For example, taxicab dispatch systems are likely to disappear, since a consumer will be able to see the location of the nearest available cab and call one directly. Similar changes are likely in all types of dispatching systems.

Consumers will find many other ways to use a MobiPhone. Every August for the last eight years, my wife and I have driven around the scenic areas of the Southwest. Every afternoon on those trips, we would keep an eagle eye out for a Dairy Queen in order to snare a couple of their chocolate-dipped cones.

Hopefully, next year we’ll check DQ.Mobi instead.

~ ~ ~
Al Ries is the author or co-author of 11 books on marketing including his latest, “The Origin of Brands,” which discusses how the Darwinian concept of “divergence” applies to the world of business. He and his daughter Laura Ries are partners in the marketing strategy firm Ries & Ries. Their website: http://www.ries.com.

Posted in Brand Advertising, Consumer Behavior, Content, eCommerce, Local, Marketplace Trends, Mobile, Multi-Channel | Leave a Comment »

Do-It-Yourself Display Ads

Posted by Mort Greenberg on May 7, 2008

Article Source: http://wsj.com

 

By SHIRA OVIDE
May 7, 2008; Page B3B

Much of the valuable online-ad real estate is sold the old-fashioned way: through a salesperson.

But now start-ups and major Internet players such as Facebook Inc. are giving advertisers the option of planning, buying and tracking online-ad campaigns all on their own. Just as the ability to buy plane tickets online steered business away from travel agents, the self-service options promise to shake up the $20 billion online-advertising market.

Google Inc. built a $185 billion company largely thanks to its self-service model for buying the online text ads that show up in Web searches. The next front in do-it-yourself is the display-ad market. Display ads are expected to be 40% of the online-ad market in coming years. Until recently, such ads were too expensive to buy and too difficult to create for many companies.

“In order to really move into large masses of advertisers, display advertising has to be easier and simpler,” said Ajay Agarwal, managing director of Bain Capital Ventures. “Google did this with search advertising. We think the same thing has to happen with display.”

The self-service options have the potential to bring huge numbers of new advertisers and sites into online advertising, including small firms that currently find it too difficult or expensive to advertise online, or to advertise at all.

 

Andy Dunn is one of the new do-it-yourself-ers. Mr. Dunn is chief executive of Bonobos Pants, an online clothing company that says it makes “pants for real guys,” aimed at men who want well-tailored and fashionable clothes but hate to shop in stores. The company, which the 29-year-old Mr. Dunn launched last fall with a classmate from the Stanford Graduate School of Business, initially didn’t do much to market its wares. “We think advertising is pretty wasteful for a company like ours,” Mr. Dunn said.

But for a pants line aimed at Chicago Cubs baseball fans, Bonobos took a chance on Facebook’s new self-service ad system. In less than five minutes, Bonobos created ads that would be seen only by young men in the Chicago area who identified themselves on their Facebook profiles as Cubs fans. With a picture of the “Cubbie blue” pants — named Clarks, after one of the streets surrounding the Cubs’ home of Wrigley Field — and simple ad taglines like “pants for Cubs fans,” the ad was seen more than 250,000 times. Quickly, Bonobos sold out of Clarks, at $120 a pop. Total cost for the ads: about $63.

Mr. Dunn said that next time, he may spend thousands of dollars more on the Facebook ads. “It’s so economically compelling that we can’t ignore it,” he said. “This was five minutes of our time, and we sold through these very specific pants that otherwise we’d have a hard time finding our audience.”

Facebook is only one of a rising number of self-service ad options. There are new entrants such as AdReady Inc., AdBrite Inc. and AdItAll LLC. MySpace, like Facebook, is offering do-it-yourself ads that marketers can tailor to individual interests on the social-networking site. (MySpace, like this newspaper, is owned by News Corp.)

Time Warner Inc.’s AOL Internet unit and Google have new self-service ad options for the opposite side of the equation — for Web publishers who want to attract advertising to their sites.

The rising number of self-service options underscores the expanding market for display ads, the graphic- and video-heavy ads in fixed spots on a Web page. The market for display ads reached $5 billion in 2007, according to market-research firm eMarketer Inc. That is far less than the estimated $8.6 billion in spending for text ads tied to online search. But in coming years, the mix is expected to tilt in favor of display ads, thanks to the rise of online video and the increasing push of brand marketers such as car companies into the display market.

But for the majority of mostly small- and medium-size businesses, it remains too difficult and expensive to buy display ads. To create an ad, businesses have to navigate the 15 standard sizes and half dozen standard formats and design something that will be eye-catching. They have to pick which Web sites or networks to buy ad space from, test multiple ads, track which ones draw the best consumer responses and adjust marketing campaigns accordingly. Doing this alone is daunting, and paying an ad agency to do it might cost thousands of dollars. Sites such as Yahoo Inc. often require advertisers to promise they will spend tens of thousands of dollars a month on advertising.

“There’s no real solution for the smaller advertiser who wants to enter the display market,” said Aaron Finn, chief executive of AdReady, one of the new companies offering access to the market. Mr. Finn used to head marketing for Classmates.com, one of the biggest buyers of online ads, and launched AdReady last fall with backers such as Bain Capital LLC’s Bain Capital Ventures.

AdReady promises to ease the headaches and guesswork and to lower the costs associated with buying display ads. A Ford dealership in California can pick from a pool of templates and customize an image of a revolving Ford car with the dealership logo and contact information. Then, the dealer can buy ad space through AdReady on major Web sites targeted to reach only Web surfers in California. The system suggests tweaks, such as making the ad background purple rather than white, that have proven to draw more people to click on ads. Advertisers can spend as little as $20, and AdReady is paid a cut of the ad buy.

AdReady and other services also give advertisers the ability to tie ad spending to results. For example, an advertiser could see how many people viewed a car ad and how many people clicked on it. The car dealer could then decide it wants to turn off the ads that received the fewest clicks and run more of the ads that were more effective.

By drawing in new ad buyers, the self-service options also aim to address one of the nagging problems with the display-ad market: cheap prices.

As a flood of new Web sites compete for consumers’ eyeballs, sites such as Facebook are having difficulty raising prices for ads. The cost for reaching a thousand Web visitors can be as little as a few cents on Facebook or MySpace. Reaching the same number of viewers of a prime-time TV show can cost $30.

By widening the pool of advertisers vying for display space, sites believe they can increase the prices for their ads. Facebook Ads is seeing a huge influx of first-time Internet advertisers, according to Tim Kendall, director of monetization at Facebook.

Along with innovations such as ad networks, self-service options are hoping to do for the display-ad market what Google did for search: make it more accessible, cheaper and, ultimately, a much-larger business.

“There’s a huge market that’s still being untapped,” Mr. Finn said. “I think you’re going to open up the floodgates.”

Write to Shira Ovide at shira.ovide@dowjones.com1

Posted in Ad Products, Ad Spending, Ad/Behaviroral Targeting, Direct Response/Email, eCommerce, Local, Marketplace Trends | Leave a Comment »