I guess it was just a matter of time, but the Interactive Advertising Bureau (IAB) has determined that spending on web ads was more this year than for magazines, cable television, radio, or outdoor.
That said, the rich get richer... 89% of the total spend was on the top 50 web sites. Gotta get me a top 50 web site!
As an example of Brand Interactivism at its best, Daily Candy CEO Peter Sheinbaum told an audience at the Direct Marketing Assocation (DMA) Email Evolution conference that building community is the path to brand loyalty. Online Media Daily reports:
Companies that want to build brand loyalty should focus not only on communicating with their customers, but helping their customers communicate with each other, a wildly successful email newsletter targeting young women with fashion and lifestyle content.
In fact, Sheinbaum, speaking at the Direct Marketing Association's Email Evolution conference, said he thinks of Daily Candy as a community, although it might look like a broadcast medium....
Predicting that online populations will increasingly group themselves into "communities of interest," Sheinbaum advised the audience of marketers and publishers to mine their databases of subscribers and customers to discover commonalities, whatever they may be. Once these segments and subsegments are identified, he went on, the company should equip members of these groups to communicate with each other and form communities--all, of course, under the aegis of the company or brand.
Sheinbaum's advice seems to jibe with two studies from the United States and Britain which found that, respectively, 64% and 70% of online shoppers in those countries want consumer ratings and reviews on commercial Web sites. Respondents said these reviews would help inform both online and offline purchase decisions. The UK study was conducted by Jupiter Research and Bazaarvoice; the U.S. study by Forrester.
Note: You must have an account on MediaPost.com in order to read the full article.
Media Daily News reports that magazine web sites, against conventional wisdom, are truly thriving online. While article after article has been coming out suggesting that the magazine industry is dying, it appears not to be true - at least not today...
These figures mean that magazine Web sites reached almost 42% of the total U.S. online population of about 160 million in the fourth quarter, an increase of 7.1% over last year's reach.
These users generated 434.4 million visits in the fourth quarter--up 12.3%, while time spent increased 5.5% to an average 1.78 billion minutes per month, implying an average visit duration of just over four minutes.
We've been saying this for a long time, but traditional agencies are not really structured correctly for the online world. It's not that they CAN'T deliver strong digital solutions per se. It's just a lot more difficult for them. I'll follow up later with why I think that's true, and what I see as the opportunities for smaller, more nimble and creative interactive shops.
Silicon Alley Insider today posted an article entitled 'Ad Agencies Facing "A World Of Hurt"'.
The old way: marketers hire agencies to create mass-media campaigns. The new way: marketers want many messages targeted at individuals and communities. And they're getting antsy about traditional shops' inability to deliver. Forrester analyst Peter Kim quotes one marketing exec who calls the agencies "a necessary evil" to the process, rather than a partner. Which leaves the door wide open for new startups who can deliver...
A few months ago I wrote about how page views were not going to be around much longer as a used metric to determine the effectiveness of a website. Well, apparently Nielsen/Net Ratings is replacing the page view metric with "time spent", which they feel is much more valuable.
Frankly, this metric (IMO) can be tough to get accurate data on. For example, if I go to an article on NYTimes.com and spend 5 minutes reading it, my time spent should be 5 minutes. But how is the website supposed to know I spent 5 minutes if my next action is to go to Gmail in my browser? I never followed up with the NYTimes.com server, so it has no way of knowing if I was there for 3 seconds or 3 hours. The only way it can know is if I return a few minutes later and click on another article. But even then it's not terribly accurate since maybe I was on a page, read it for 20 seconds, went to the bathroom, and then a few minutes later came and clicked on a new page. Was my time spent 20 seconds? 5 minutes? As far as the web server is concerned, it was 5 minutes, but that's not really true, is it?
The nice thing about page views is that it's easy to measure and objective. However, with AJAX, widgets, etc., it has become suspect as an effectiveness measurement. Time spent is a lot more subjective, but if we can find a way to feel confident in the data, is more telling about actual site usage.
Last week I postulated a theory that simply by writing about the iPhone on my blog, traffic would pop up. I called this "The iPhone Effect".
The results? If there was any increase in traffic, it was negligible. Interesting.
That said, all I have to do is write something about Plone, and wow! My traffic goes up by 5 - 10 times. It's nice to be syndicated...
Steve Rubel writes about "The Imminent Demise of the Page View", pointing out that more modern websites with their fancy Ajax and Flash implementations don't require multiple page views in order to provide content and interactivity. In a world where the page view is the metric by which many (most?) online agencies measure success, what comes next? How much slower will the rollout of user-friendly, immersive, interactive implementations be since the agency world has strong financial incentives to delay the inevitable?
Clearly we need to start looking at other actionable items, such as content delivery or purchase. It's going to have to be more specific to the goals of the individual company. Given that, how do we come up with a universal metric to show relative success between different websites? If I want to buy media, for example, and I'm comparing two sites and one has twice the page views of another, but the one with the fewer page views is much more compelling and interactive and is clearly hurt in the page view metric by its advanced user interface, which one do I go with?
This is important for our clients and I'll be watching closely to see what the industry starts to push as a new standard.
As an example, Steve writes in "Watch Videos Without Leaving the Google Homepage" about the example of Google now allowing people to watch Google videos without leaving the Google viewer. Net/net this will decrease page views to sites that house these videos. However, the content from these sites is still be watched. Clearly the page view is lessening as a valid metric.
Mediaweek reports that an increasing number of mainstream advertisers are experimenting with advertising on podcasts. Of note, however, is that 60% of podcast listeners claim that they fast-forward through commercials. The usual trick of having the podcast host endorse or speak of the product/service has been the typical way of getting around this issue.
I think it's interesting that mainstream advertisers are trying this. Typically, those with the big bucks want to try to get mass exposure. Clearly, podcast advertising doesn't gain that at this time. There are very few podcasts that get major exposure. However, this is clearly a case of "long tail" advertising, and I think the business model for this is going to become more and more obvious over the next year.
pqmedia has a new report out entitled "Alternative Advertising and Marketing Outlook 2006". You can download an executive summary. It shows quite clearly that the biggest advertising growth areas right now are online advertising and mobile and interactive marketing. Word-of-mouth marketing is also experiencing large growth.
The AMN found that brand marketers are accelerating the shift of advertising and marketing dollars away from conventional media to newer media that are using digital technology to reach youth and influential demographics. In many cases these alternative media tactics are doing a better job of reaching target demographics, delivering stronger ROI metrics, or are more engaging to consumers.
Something's gotta give. The traditional 30-second spot is becoming more expensive every year, with record fees being paid during the Super Bowl and American Idol. Yet, TV's reach and effectiveness is decreasing. Was TV such an amazing deal in previous years that it still makes sense nowadays to budget huge sums for television advertising anyway?
According to a survey by the Association of National Advertisers, 78% of advertisers say that TV advertising has become less effective during the past two years. They largely blame video-on-demand and Tivo for this, which obviously has an impact. But so does the fragmentation of television and the Internet. Think "micro"... micro-communities, micro-advertising, etc.
It's just common sense. When there were 3 major broadcast networks, a few local channels, and that was it... well of course mass advertising was going to work. But there will never be a MASH moment again. It's VERY rare that a single event brings the entire nation together (and when it does, it's usually some sort of tragic event during which you wouldn't want to advertise.) There is so much choice now, which is great for consumers but not so great for traditional advertisers.
A new way of thinking is required. And it's starting. The leading edge is jumping on the bandwagon and it's just a matter of time before everyone else starts to catch up.
User-generated online media (all that "Interactivism" stuff we talk
about) is growing extremely rapidly. Ad spending on blogs, podcasts and RSS
feeds grew nearly 200% from 2004 to 2005 and is projected to grow another 145%
in 2006. Research
done by PQ Media suggests that the root causes are audience fragmentation, the
ineffectiveness of traditional advertising, and the desire to reach the 18 - 34
market. Among the paper’s findings:
People are booking hotel rooms at the hotel brand's website, and not at Travelocity, Expedia, etc. according to eMarketer...
I am frequently asked what I mean by "Brand Interactivism". I've been preaching this mantra for years, but perhaps not as succintly as Courtney E. Counts in an article in Chief Marketer. He writes
But thanks to Internet technology, which has decentralized information and disseminated influences so disparately across lines, a society of young, hyper-heterogeneous consumers has emerged, many with mutual interests but with highly customized and individual tastes. Technology has empowered the consumer so much that the sellers’ market now has become the buyers’ market.
For this reason, integrating the consumer’s voice into a campaign’s development has become the winning formula for any successful marketing strategy targeting today’s youth. We call this social marketing strategy “interactivism” because it invites the target audience to coauthor the campaign.
Now, we've been using this term to mean exactly this for 4 or 5 years now. It contains aspects of the buzzwordy "Web 2.0" to be sure, but ultimately the strongest marketing campaigns online are interactivism campaigns.
According to a recent eMarketer report, ad spending in podcasts will grow from $80 million in 2005 to $300 million in 2010. Clearly this is not mass market, but it's growing so fast it should be part of any media consideration set.
In some good news for hotel companies, but maybe bad news for aggregators, it seems that more and more people are going directly to airline and hotel company websites to book, rather than finding deals at the Orbitz's and Travelocity's of the world.
Well, the statement that "targeting is necessary to market to this demographic" is obvious, but such an old school way of looking at things. Yes, if you're going to put up banner ads, make sure they're targeted to your audience. This is marketing 101 type of stuff. It doesn't matter if it's college students like in this article, or any other group.
However, according to this research, 59% still ignore the ad. The research talks all about the ways in which college students use the web. Instead of being about how best to integrate marketing efforts into the ways students actually use the web, the article talks about banner ads. Lame.
80 percent of respondents use the Web for purchases, up from 21 percent in an early study. Nearly half regularly download music, and 71 percent are active users of online banking.
This group has multiple e-mail addresses. Sixty-eight percent of recent graduates use multiple e-mail addresses, and 42 percent retain their .edu account. Graduates prefer to their alma mater newsletter in e-mail form (73 percent). Already, 78 percent read news online; up 20 percent from an earlier report.
Networking through alumni channels is shifting to use of social networks. Socializing through alumni groups fell from 70 percent in 2003 to just 30 percent. In that time, visits to social networking sites rose 30 percent.
So college students immerse themselves in the medium. They create and join networks and communities. They get their news and entertainment online. But the way to reach them is banner ads? I think not!
Many traditional marketing and advertising agencies (even ones that claim to be "online experts") treat the Internet as just another medium to broadcast a marketing message (the way the SuperBowl was handled certainly proves that!) These agencies see email blasts as a cheaper form of direct mail or banner ads as a somewhat more efficient type of television advertising. And while others recognize that the Internet can help support sophisticated one-to-one relationships with customers through online CRM programs, such efforts are only a good first step. While such programs can certainly be of benefit, the best opportunities on the Internet are fundamentally different from those in traditional media. The traditional worldview limits the possibilities of what can be accomplished.
By its very nature, the Internet is a highly complex system. Extremely small actions can have major consequences online. A single comment on somebody’s blog can spread via syndication technologies like RSS to millions of people within seconds of being posted. This dynamic has helped to make marketers feel unsure in this brave new world. How does a company market itself in a medium where the customers are in control -- where they can easily exchange information about pricing, customer service, or product quality? And where a single negative comment is archived forever to be found by the masses on Google?
Issues like these don’t just apply to corporations. For example, how important is it for a politician to make sure that empowered constituents stay “on message”? How can a not-for-profit organization leverage the Internet in ways to give it influence, visibility and a reach that would have been impossible just a few short years ago?
Emergent online communities form and grow every day, and it is in helping to nurture and empower these communities where opportunities lie for marketers.
An important question for any online marketer is, who controls your message? Success online is rooted in relinquishing control of your message to those you are trying to reach – your customers. Allowing them to speak, rather than speaking down to them, is the first step. Marketers must remember that the Internet is made up of empowered individuals who do not want to be treated as a mass consumer or a demographic. The ease and immediacy of communications from anyone to anyone is what makes the Internet so different from traditional media. Broadcast and narrowcast marketing each implies that the source of the message is in control, but this is not how the Internet works. The organic power of online entities like message boards, chat rooms, blogs, podcasts, RSS, grassroots communities, expert opinion sites, mobile smart mobs, and viral emails change the equation dramatically.
While marketers cannot hope to control the Internet, successful companies work to empower their natural communities to sit up, interact, get involved, take action and tell others.
Individuals respond well to organizations that are perceived as being encouraging and supportive of their communities, and brand loyalty is what results. The desired effect is the exponential power of positive word-of-mouth.
Technorati has come out with some statistics about the state of blogging in early 2006. Among the highlights:
Bob Liodice, the President of the Association of National Advertisers, writes about how technology has fundamentally changed marketing from "the creative art of yesteryear into a true business discipline for tomorrow." He writes about how consumers are now in control, the explosion in available media channels (Internet, podcasting, blogging, mobile, etc.), how brand equity is now managed, and how marketing is now measured. Finally he discusses the pillars upon which CMO's today must work to reinvent themselves.
Apparently, eCards are gaining in popularity again, due in part to higher quality. Really good eCards can be extremely viral.
Brandweek reports on a report from Sharpe Partners that shows that 89% of US adult Internet users send content others. 63% do so at least once per week, and an amazing 25% share content nearly daily. As many as 3/4 of the respondents to the survey forward content to up to six others. The study also found that overt branding only has a slightly negative effect on a viral campaign. Intuitively, I would have suspected that overt branding would have hurt more than that.
ClickZ has brought together a number of luminaries from different parts of the interactive spectrum to weigh in on what 2006 will bring. Predictions are written about:
While there is certainly some hype and buzzwordiness here, it's worth a read.
We at Abstract Edge maintain that traditional advertising is on the wane. The time is now for innovative companies to start testing newer methods for reaching customers and deepening relationships. An IBM Business Consulting Services report speaks about two kinds of TV viewers - traditional couch potatoes and the "anytime, anywhere" crowd. Guess which crowd is growing?
So does this mean the end of advertising? Well, certainly as we know it. The good news is that there will still be tremendous opportunity for innovative and intelligent marketers.
Some of the tips from the article include:
Coming as a shock to absolutely nobody, it turns out that lots of teenagers use the Internet to get information about fashion and brands.
A couple of interesting trends. Email open rates dropped in the 4th quarter, and Friday is the best day to do an email campaign.
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