Thursday, February 26, 2009

The coming explosion in mobile media Ad spending is forecast to soar to $3.1 billion by 2013

By Diego Vasquez Feb 26, 2009
The iPhone isn’t just boosting Apple’s bottom line. By ushering in the era of the smart phone, cells that are able to perform multiple tasks like surfing the web, taking and sending pictures, watching movies and listening to music, the iPhone and other devices like it may finally help deliver on the long-held promise of mobile advertising. It’s one of the few areas of media poised for big growth over the next few years, according to a report released this week by the Kelsey Group, a research and analysis firm that's part of BIA Advisory Services. The report predicts that U.S. mobile advertising revenues will balloon to $3.1 billion by 2013 from $160 million last year, with local search generating roughly one-third of the total revenue. Advertisers will be attracted by the huge jump in mobile data consumption, driven by the adoption of smart phones with those multitasking abilities. Michael Boland, senior analyst at the Kelsey Group, talks to Media Life about why local search is hot, how small businesses will help drive growth, and why mobile is rising while other sectors are falling.

What did you find most interesting or most surprising about this forecast?

I guess one top line data point is that the growth of the mobile web will be tied to increased smart phone penetration. Smart phones outpaced the rest of the mobile device market in the fourth quarter and will continue to do so.

This has correlated to more data consumption overall and the growth of the mobile web, which currently stands at about 54 million users, or about 25 percent of mobile users in the U.S. This will drive the mobile ad revenues we project, and the fastest-growing portions will be those that are tied to the capabilities of these devices.

Search, for example, will grow at a faster rate than SMS (short message service, or text messaging)-based mobile advertising, which is the current leader. Local search will grow at an even faster rate due to the ties between local search and the mobile use case. Locally targeted ads will also demand higher premiums, meaning that local search growth will outpace overall search growth in both query volume and revenue.

What's the most important thing media buyers and planners can take from it?

In quantitative terms, the growth of the mobile web holds promising opportunities to reach tens of millions of users in a targeted way over the next five years.

In more qualitative terms, mobile users are much more engaged than online users. This has been proven out with higher click-through rates for all forms of mobile advertising when compared to online equivalents.

Lastly, the location awareness and portability of the mobile device opens up lots of opportunity for local targeting, which likewise sees higher engagement due to greater relevance.

Just about every other segment of media is forecasting big ad spending declines in the coming year or two. Why is mobile different?

Mobile is still seen as experimental by lots of advertisers, so we won’t see large volume increases in mobile marketing until 2010 or 2011. But it is still gaining some advertiser interest in the face of recessionary ad budget cuts because it is measurable.

Ad spending is not just decreasing in the current economic environment, it is shifting to ad formats that are more efficient and measurable. This is why the ad formats with the largest projected growth for the next five years are search and mobile.

What makes mobile search such a hot category?

Right now, the larger opportunity is in SMS marketing because the primary inputs for the majority of mobile users are voice and text. However as smart phone penetration continues to grow and this correlates to the growth of the mobile web and mobile data consumption, search will gain share.

Among all of the ad formats in our survey, search is the fastest growing with triple digit compound annual growth rates. If you drill down to the local portion of search, it will grow at an even faster rate, both in query volume and in ad revenues.

The latter results from a higher premium being placed on advertising that is locally targeted and thus more actionable.

Why are you forecasting such strong growth for local mobile marketing and how long will that continue?

This local portion of the forecast grows at a faster rate because of the inherent qualities of the mobile form factor. The location awareness and portability of mobile devices make them a natural fit for local search.

The volume of online searches that have local intent are about 20 percent. In mobile, this local intent will be higher. Conversely, all the other things we do online like search for images or video, research for term papers, social networking, etc., will represent a smaller share of mobile search activity – due again to the form factor.

How important will small business advertising be to the growth of the mobile ad market?

Right now it’s a very small share because of the lack of tools available for small and medium sized business (SMBs) to advertise with mobile. It’s also seen as experimental by many SMBs, which doesn’t bode well in times of economic uncertainty.

But like the web six or seven years ago, the barriers will be lowered for SMBs to engage mobile marketing. This will happen through tools that are integrated with Google’s Adwords to run mobile search campaigns as an adjunct to online search campaigns. Google has already started to do this.

Another factor is that local mobile marketing is currently confined by a lack of inventory. In other words the relatively small amount of mobile search activity is spread thin when you divide it into lots of specific search terms and locations for specific locally oriented businesses (i.e. hardware store, Omaha).

There are only so many searches happening for these types of queries, which limits the available inventory against which to apply locally targeted advertising. This is worse in the U.S. compared with places like Europe, where you have a greater portion of the population living in urban areas. Here we’re more spread out, which increases this effect.

This will be alleviated over time as mobile web usage and search volume scales up. Right now, we’re not quite there though.

What factors will drive mobile web growth over the next four years?

The iPhone was the catalyst for the growth of the mobile web, and it will continue based on the availability of devices inspired by the iPhone, which have full web browsers. The market will flood with such devices that will compete on price.

Carriers will also see the hunger for mobile web use and will continue to subsidize the front-end costs of these devices in order to drive longer-term data contracts. This is already being seen with smart phone sales outpacing the rest of the market.

Beyond the hardware will be great mobile apps that will drive the utility and appeal for these devices. Apple’s opening up the market to third-party innovation will be huge and will compare to the level of open innovation that we see on the web. There is finally a system that incentivizes this innovation and gives it a hospitable environment.

This is contrasted with the carrier control that previously stifled this innovation from reaching the market and caused the subpar mobile products that kept the mobile web stuck in early-adopter phases for years. That’s all starting to change -- Apple came first and many others are following, including application marketplaces from Microsoft, Nokia, Palm and RIM.

Starbucks vs. McDonalds

Mickey D's or Starbucks? What your coffee choice says about you
BY MICAH MERTES / Lincoln Journal Star
Tuesday, Feb 24, 2009 - 12:17:34 am CST

Turns out, where you get your food and drink says a lot more about you than you might think.For example: If you stopped by Starbucks this morning, you’re likely an upper-middle-class liberal with a college degree.In an absurdly thorough report, Pew Research Organization surveyed more than 2,000 people, asking them the question: “Would you prefer to live in a place with more McDonald’s or more Starbucks?”

A Pew Research Organization study shows that if you prefer Starbucks to McDonald's' coffee, you probably are more liberal, make more than $75,000 a year, have a college degree and live in the Western U.S.


A Pew Research Organization study shows that if you prefer Starbucks to McDonald's' coffee, you probably are more liberal, make more than $75,000 a year, have a college degree and live in the Western U.S.

The home of Ronald won, with people preferring McDonald’s 43 percent to 35 percent (the remainder had no preference).Even more interesting, though, is how Pew broke up their sample by ideologies and demographics. Bring on the false dichotomies!Political ideology: Self-described liberals prefer Starbucks 46 to 33 percent, while conservatives prefer McDonald’s 50 to 28 percent. Moderates fell in the middle.Gender: Men prefer McDonald’s 16 percent more than Starbucks. Women like both equally.Income: People with annual incomes of $75,000 and above are likely to choose Starbucks, while those with incomes below $30,000 go with the Golden Arches.Education: People with college degrees prefer Starbucks 47 to 32 percent. Those with a high school degree or less prefer McDonald’s 50 to 26 percent.Region: Westerners prefer Starbucks by a wide margin. But folks in the East, the South and the Midwest all like McDonald’s more.Religion: Protestants and Catholics prefer McDonald’s. The religiously unaffiliated are predominantly Starbucks patrons.

Wednesday, February 18, 2009

Advertising - The Body as Billboard - Your Ad Here - NYTimes.com

The Body as Billboard: Your Ad Here

By ANDREW ADAM NEWMAN
Published: February 17, 2009

TERRY GARDNER, a legal secretary in California, returned home from work recently to find two police officers waiting. They said her brother had told them he thought she might be having a breakdown because she had shaved her head.
Skip to next paragraph
Enlarge This Image
Edward Carreon for Air New Zealand

Rita Thomas and Rob Powers were among 30 people who agreed to advertise Air New Zealand on their bald heads last November. They were paid in cash or free tickets to New Zealand.

Ms. Gardner, 50, said in a telephone interview that she had told the officers that she was fine and had shaved her head for an advertising campaign by Air New Zealand, which had hired her to display a temporary tattoo. She turned around and showed them the message, written in henna on the back of her head: “Need A Change? Head Down to New Zealand. www.airnewzealand.com.”

Tuesday, February 17, 2009

Why Should Brands Own Their Social Media Profiles?

By Chris Lake, Editor in Chief at Ecoconsultancy
Follow him on Twitter or connect via Linkedin.

Brand managers are paid handsome salaries largely to optimise and protect their brands. This means raising the key brand metrics (reach, awareness, favourability, etc) and avoiding brand damage.

In today's multichannel environment I argue that brands need to be monitored, represented and protected online. I wrote an article last week that generated some interesting discussion around whether or not companies should be climbing onboard the Twitter train. Some argue that there's no point ('it isn't big enough' / 'how would you use it?') and others think that it is ripe for engagement.


My own argument can be boiled down to this: even if you don't actively use these sites today, you might as well make sure that you're in a position to use them tomorrow.
This means owning the brand names...


Influence counts
Brand and marketing folk tend to follow crowds, but they also understand the power of influence. If you want a product to be perceived as cool, then you need to know who the cool cats are. Influence and the network effect can pay serious dividends.


I’ve seen this in action. One company had a few samples to giveaway, and a young male demographic in mind. They took the product to London’s South Bank, a haven for skateboarders, and asked the kids to point out the best skaters. She then handed over the free schwag to the dudes with the best tricks, who all the other skaters looked up to. Smart stuff…

The T Word
In the internet industry we know that Twitter is all about influence, largely because it has achieved a high level of penetration among internet professionals. Relatively speaking, we are early adopters, and there’s a lot of activity on there.


Right now Twitter won’t work for all brands, but that’s not to say that all brands shouldn't be taking part. A contradiction? Nope. What I mean by this is simple: you don’t have to devote large resources to social media sites, but you do have to protect your trademarks.

This should be hardwired into your marketing strategy, since there are serious brand and SEO considerations. On top of that, Twitter will become influential in other sectors too. It is an echo chamber, and it is just a matter of time.

Last week I wondered why Coca Cola, the world’s number one brand, ignores Twitter. A common argument against my question is another question: ‘why should they?’. And it’s a fair point, since not all brands are going to find a use for Twitter, though in my view Coca Cola isn’t one of them. It could be using it as a feedback channel, for competitions, for exclusive content, or even for ad creative.

I do think that all brands should at the very least own their own trademarks. Yet the Twitter accounts for Coke and Diet Coke have already been claimed by others. It seems bizarre, given that these accounts can be set up for free (perhaps Twitter can make money by introducing a variant of the domain name resolution system?).

Another argument is that ‘it’s just bandwagon jumping’, and I agree that there’s too much slack thought going on in some social media strategies. But even if Twitter doesn’t become a massively popular website, there’s enough reason to register a brand like ‘Coke’, isn’t there?

All I see is upside
For starters, if you do this then nobody else will bag your brand name, so there won’t be any brand abuse on such a guessable location. This is important, unless you have a thing for headaches. All I did on Twitter to see if Coke had an account was visit
www.twitter.com/coke. If everybody else does that then there’s going to be a potential problem for Coke’s brand managers, if the owner of that account doesn’t happen to like Coke.

Secondly, there’s always the chance that the social media site ‘does a Facebook’ and becomes huge. In that case the above problem would be exacerbated, or alternatively, if you owned your brand names, you would start receiving plenty of attention.

Thirdly, and something seriously worth factoring in, is that social media sites can rank very highly in the search engines. If you believe in universal search then you’ll know how news stories, images and video can play a part in claiming more page estate on the first page of Google. Well, you should also factor in profiles on social media sites.

I call this ‘social search optimization’ ('SSO', anyone?). An example: for the search term ‘Diet Coke’ there are links to four social media sites on the first page (Wikipedia, YouTube, Google Video and VideoJug). It proves that these sites can play a big part in capturing attention, and if you own or have influence over these pages then you should sleep more soundly at night. Twitter also ranks very highly for many brands with Twitter accounts.

Place your bets
If you don’t buy a ticket you won’t win the lottery, right? In this case the only cost is the time it takes to sign up for an account, which is something an intern can do and as such costs next to nothing.

  1. Here’s what I’d do:
    Set up some feeds
    to sites like Techcrunch, Mashable, even Econsultancy. Monitor new and upcoming social media sites.
  2. Sign up! If you can sign up for an account for free, then why not sign up? Claim your social media profiles for all your key brands. Sign up for all sites. You don't need a doctorate, 25 years experience and a six-figure salary to do this.
  3. Sit tight. See which ones take off (not all will, but what do you have to lose by taking a punt?). Wade in and engage if appropriate.
  4. Monitor the search results on Google and see which sites rank the highest. Consider social search optimisation - can you further boost these sites in the rankings?
  5. Make sure you have a strategy in place, and some guidelines. Coca Cola, to its credit, has a social media policy, and is figuring things out. Guidelines should be distributed to all PR, comms and marketing staff (or anybody that might use some initiative in this area). For bigger companies putting a structure in place will obviously be more challenging than for smaller ones. In this instance I recommend four gallons of gumption, three quarts of fortitude, plus a sprinkling of evangelism.

This isn’t rocket science, and it’s not about seeking board level approval to divert millions of marketing budget into fledgling social media sites.

Simply put, I think this is best practice, since it prevents brand damage on a prime domain (aka a guessable user / brand account). It will also ensure that companies are well-placed to make the most of these sites should they ‘do a Facebook’, or show promising results on Google.

MediaPost Publications Wachovia Forecasts Radio Doom In '09 02/17/2009

>Wachovia Forecasts Radio Doom In \'09
by Erik Sass, 4 hours ago

If anyone is still cherishing hopes of a radio turnaround in 2009, Wachovia analyst Marci Ryvicker\'s latest note to investors should doom that idea. The outlook is overwhelmingly negative, as Ryvicker sees a 9% decline in revenues in 2008 followed by a further 13% decline in 2009.

\"It\'s the same depressing story,\" Ryvicker noted. \"Advertisers are cutting back significantly, given rising unemployment and the general state of the economy.\"

The revenue trends would be bad enough. The real problem, Ryvicker said, is the considerable burden of debt carried by many big radio broadcasters, often as a result of mergers and acquisitions over the last decade. Flatly asserting that \"it\'s all about the debt,\" she warned that \"quarterly conference calls will be focused on de-leveraging events\"--that is, paying off debt by any possible means, including cost-cutting through layoffs and asset sales.

There may be a bright spot: Ryvicker noted that banks would rather not own radio stations, so they are more likely to agree to refinance.

Ryvicker\'s gloomy forecast follows a year of accelerating revenue declines. Although fourth-quarter figures are not yet available, the first three quarters of 2008 were already trending sharply downward, with a -5% decline in the first quarter, a 6% decline in the second and a 9% decline in the third.

The losses are the result of big declines in local advertising-traditionally the mainstay of radio revenues--as well as national. Both these trends are likely to accelerate as the economic downturn worsens.

Friday, February 13, 2009

Primetime Broadcast Ratings, February 12, 2009

Primetime Broadcast Ratings, February 12, 2009
from Global Advertising Up Slightly In Q2 2008 | Nielsen Wire by christine

CBS’s “CSI” claimed the top slot in Nielsen’s ranking of the top primetime telecasts on
broadcast TV for February 12, 2009. The show drew just over 17.9 million average viewers Thursday evening.

ABC’s “Grey’s Anatomy-Thu 9PM” and “Private Practice” rounded out the top three with 15.2 and 14.1 million average viewers respectively.
Rank Program Network Viewers (P2+)
1 CSI CBS 17,938,000
2 GREY’S ANATOMY-THU 9PM ABC 15,159,000
3 PRIVATE PRACTICE ABC 14,097,000
4 SURVIVOR: TOCANTINS CBS 13,632,000
5 ELEVENTH HOUR CBS 10,941,000
6 OFFICE NBC 9,000,000
7 30 ROCK NBC 7,675,000
8 UGLY BETTY ABC 7,402,000
9 E.R. NBC 7,241,000
10 MY NAME IS EARL NBC 6,399,000
Source: The Nielsen Company (February 12, 2009).

Overall, CBS won the night with an average audience of almost 14.2 million viewers,
while ABC took second place with almost 12.2 million average viewers. NBC and UNI
claimed third and fourth places with roughly 7.2 and 4.6 million average viewers,
respectively. FOX and the CW followed in fifth and sixth places with average
audiences of roughly 4.2 million and 2.2 million average viewers, respectively.

Obama Makes DTV Delay Official

Obama Makes DTV Delay Official
As of Feb. 1, 5.1 percent of American homes were unprepared for the switch, per Nielsen

Feb 12, 2009

-By Katy Bachman

President Barack Obama signed legislation Wednesday (Feb. 11) officially moving the digital TV transition date to June 12. Obama pushed for a delay, arguing that too many Americans weren\'t ready for the original Feb. 17 deadline.

\"Millions of Americans, including those in our must vulnerable communities, would have been left in the dark if the conversion had gone on as planned, and this solution is an important step forward as we work to get the nation ready for digital TV,\" the President said in a statement.

As of Feb. 1, 5.1 percent of American homes were unprepared for the switch, per Nielsen.
The new law allows TV stations to make the switch before June 12. Nearly 500 full power TV stations have notified the Federal Communications Commission that they would like to stick to the Feb. 17 date. If the FCC gives the OK, they could join the nearly 200 that have already shut down analog signals.

Major market affiliate groups and the network owned-and-operated stations of ABC, CBS, FOX, and NBC, have indicated to the FCC that they would honor the new June 12 deadline.
The National Association of Broadcasters has already teed-up a new spot advertising the new date.

Congress will need to make sure it can unclog the coupon converter box program, which ran out of cash early in the year and was forced to put more than 3 million on waiting lists.

Wednesday, February 11, 2009

Report: Facebook Gains on MySpace

Report: Facebook Gains on MySpace
Facebook\'s internal metrics show significant U.S. growth

Feb 11, 2009

-By Adweek staff

MySpace is still the largest social network site in the U.S. But if Facebook\'s growth trajectory continues into 2009, it will surpass its rival domestically, per eMarketer.

Facebook\'s internal metrics show significant U.S. growth. In December 2007, the site had 21 million U.S. active users (members who had visited Facebook in the past 30 days).

In December 2008, the number of active users reached 43 million, according to data provided to eMarketer by Facebook.

Facebook is not the only fast-growing social network in 2008. LinkedIn grew 112 percent between November 2007 and November 2008, while hi5 was up 88 percent, according to comScore. Both sites, however, had far fewer users than Facebook or MySpace.

Monday, February 9, 2009

Starbucks Will Close 300 More Stores - NYTimes.com

Starbucks to Close 300 Stores and Open Fewer New Ones

By CLAIRE CAIN MILLER
Published: January 28, 2009

SAN FRANCISCO — Starbucks’s chief executive, Howard D. Schultz, told Wall Street analysts in November that the company’s worst times might be behind it. But as the economic doldrums persist and customers continue to cut back, Starbucks is being forced to make more cuts.