Turkey day food for thought. Microsoft search deal with Newscorp could backfire. TV still relevant. 2010 marketing budgets show signs of life.
It’s no secret the Web’s explosive growth has been driven by the principle of the open playing field. Using collaboration and open source tools, the small guys can take on the behomoths by using their smarts, speed and savvy. But Microsoft, arguable lacking several of the aforementioned S’s, wants to use its muscle to tilt the playing field in its favor if a proposed deal with News Corporation comes to pass.
In case you missed it, Microsoft is in discussions with News Corp to remove links to its news content from Google’s search engine and display links exclusively on Microsoft’s ambitious new Bing search engine. Web pundits think this kind of a deal could induce major media and tech companies to start choosing one over the other which is about as good for consumers as the cable tv model is. Even worse, this scenario creates a whole new set of hoops for Web users to navigate.
According to Comscore, Bing has gained about 10 percent of the search market in its first year – an impressive showing, but still miles behind Google which handles about two thirds (65%) of the total U.S. search queries performed. Yahoo, ranked second (`19%), has lost about 10 percent of its market share since Bing entered the scene.
While we salute Microsoft’s aggressiveness and its aspirations to break up the Google-opoly on the Web, we side with the experts who say the Internet historically favors players who share tools and information, rather than building barriers to it. If there’s any positive outcome to the latest Miscrosoft initiative it will be that all the major search players will have to continue to improve their offerings in order to hold on to their market share.
Marketing budgets claw back to life
Despite the budgetary carnage inflicted upon marketers in 2009, nearly 40 percent of the 376 marketers surveyed by BtoB magazine plan to increase spending next year. Almost half plan to keep budgets steady and only one in eight (13%) plan to cut them next year. Of course, what marketers report in surveys differs greatly from how they actually open their wallets it’s an optimistic sign nonetheless. It’s no surprise that online marketing will continue to siphon off dollars from traditional media with e-mail marketing, search, social media, video and Webcasts garnering the largest increases. Researchers say customer acquisition (and marketing on the cheap) will continue to be dominant drivers of the B2B marketing landscape as measuring ROI will get a lot more attention than branding for at least another year. We’re betting that when the economy finally rebounds in late 2010 or early 2011, marketers will continue to give online the seat it deserves at the table – because they see its wholistic merits, not because it’s cheap.
Click here for more stats and analysis from BtoB.
Thriving in era of uncertainty
If you get a chance over this long Holiday weekend, check out Howard Sherman’s piece in BtoB: “When Uncertainty Is Normal”. Howard’s take is that business has never been more complicated, demanding or high stakes. To succeed in marketing and in business operations, companies will need skills their top dogs aren’t always comfortable with: “collaborative thinking by smart people.”
You need to help clients/customers accept ambiguity. You need to adhere to a nimble framework. You need to restore internal relationships, especially if your organization has dramatically downsized or restructured and rebuild trust with all of your stakeholders including customers, investors and prospects. Right on, Howard.
Research confirms: TV still draws audience
A new survey by Nielsen Company says that despite the Internet, iPhones, twitter and facebook, we’re actually watching more television not less – an average of 4 hrs and 49 minute/day for average American, up 20% from a decade ago (4:06). Nielsen says U.S. TV viewers broke another record -- increasing their consumption last year. The media research company said U.S. viewers watched 4 hours and 49 minutes of TV per day for the 2008-2009 season -- when looking at live viewing plus seven days of DVR playback.
That's up four minutes -- or 1.4 percent -- from the previous season. Why the rise? Nielsen says the gain came from more television sets in homes and more channels available for U.S. viewers. In addition, DVRs have increased the overall TV usage total: live and playback. It also appears that viewership improvements came in non-prime-time dayparts.
So if you're still agonizing about how to budget for 2010, just expect the unexpected and Strategically Stumble(tm) through it faster than your rivals.
Wednesday, November 25, 2009
Friday, November 13, 2009
Ad Accountability for Print Media?
Magazines borrow page from online media as page shakeout continues. Facebook as crime solving tool. Google acquisition should jumpstart mobile advertising category.
We’re not sure whether to put this under the “innovation” or “desperation” column, but Monday, The Week magazine announced is was guaranteeing advertisers that their ads will generate higher “recall” scores in The Week than they will in most other magazines in which they run. How? The Week has enlisted the help of Vista from Affinity, who will measure ad recall based on how consumers in its focus groups remember seeing a certain ad in the magazines where it runs. The Week guarantees an ad will score in the top one-third of all magazines where it runs or The Week will run free ad pages for the advertiser until it gets to the benchmark. The program is only reserved for regular 12x advertisers, but Steven Kotok, president of The Week, expected 80 percent of its clients to qualify. We salute The Week’s efforts to bring more accountability to the beleaguered print category and expect many more publishers to follow suit in 2010.
Ad pages drop sharply at Conde Nast
You don’t need the geniuses from McKinsey & Company to tell you it’s a lousy year for print media. Make that a lousy decade. Just days after Hachette Filipacchi Media U.S. announced that Metropolitan Home will be shuttered with its December issue (see below), Conde Nast announced this week that its 2009 pages are in, and it won’t be the merriest of office Christmas Parties high above Times Square for those who remain employed there. Ad pages are down by one-third for the year as more than 8,400 pages evaporated from it normally luxurious ledger. The company closed popular titles Portfolio, Gourmet and Modern Bride as well as Cookie and Elegant Bride and survivors who depend on purveyors of luxury goods took significant hits: Architectural Digest lost half (49.9%) of its ad pages; W lost 46 percent and Conde Nast Traveler lost 41 percent according to company data released to the media. On average, ad pages fell 27.6 percent industry wide for the first nine months of 2009 according to the Publishers Information Bureau. Branding will take you only so far in tough time and once again, print advertising becomes a luxury, not a core necessity, when times are tough and you can’t measure its direct effectiveness to pull customers into your stores.
Obituary announced for MetHome
Another acclaimed aspirational consumer magazine will cease publication in December. Hachette Filipacchi Media U.S. announced that Metropolitan Home will be shuttered with its December issue, citing a lousy housing market and cuts in discretionary income for home renovations. Ad pages were down nearly 36 percent year-over-year, about the same as Gourmet’s, another popular magazine shuttered last month by Conde Nast. No plans announced about Met Home’s Web site. This recession has been particular unkind to the shelter magazine category and has forced the closing of House & Garden, Domino, Southern Accents, Cottage Living, In Style, O at Home and Country Home.
Facebook saves accused from perp walk
With more and more people revealing details of their private lives online – from the banal to the shocking – a potentially useful but unintended application of popular social network sites like Facebook, MySpaceand Twitter may be emerging. Crime-solving. A NYC teen, Rodney Bradford posted a seemingly meaningless post on Oct. 17 at 11:49 a.m. asking where his pancakes were. One of millions of banal, time-wasting posts that day until Bradford, 19, was arrested the next day as a suspect in an armed robbery at the housing project where he lives. Those words became his alibi. The entry, made at approximately the same time as the robbery. The New York District Attorney subpoenaed Facebook to verify that Bradford’s words had been typed from a computer at the apartment where he lives with his father. When that was confirmed, the charges were dropped. While social networking sites has been used as prosecutorial evidence in cases ranging from cyber-bullying to armed robbery and murder, legal experts believe it’s the first time such sites have been used as alibi evidence. Because of how ubiquitous social networking sites have become, we expect them to have a role in increasingly more cases as their user demographics tend to mirror the prime ages of those committing violent crimes, teens and young adults.
Social Media Update
Tweeting your company to the top of the search results
According to Internet Marketing Report (IMR), doing more with Twitter could help your company reach prospects who don’t actively “tweet” or even know what that means. IMR says all the search engines plan to include Twitter updates in their search results. Google plans to add tweets in its search result that may gain from real-time observations. The Bing search engine is planning to add posts from Twitter and Facebook.
Measuring success of marketing campaigns:
• 77% of marketers say new customers acquired
• 73% say the number of new leads
• 67% say net increase in sales
• 29% say increase in purchase intent
• 22% say increase in purchase intent
• 21% say changes in “perceptual attributes”
Source: eMarketer.com, October 2009 study
Blogs, e-mail and Web site optimization most economical sources of leads. But watch PPC.
New research from Hubspot.com finds online channels deliver qualified sales leads for significantly less money than telemarketing, trade shows and direct mail. While Blogs, e-mail and Web site optimization (SEO) scored high on “relative cost per lead”, what caught our attention was that one third (32%) of marketers surveyed by Hubspot said pay-per-click (PPC) was also a relatively expensive way to acquire leads. More on that in future issues.
Relative cost per lead by channel
% of marketers who said “below average cost”
Blogs/social media *****************55%
E-mail marketing**************49%
SEO*********************48%
Direct Mail *********34%
PPC*************32%
Telemarketing **29%
Trade Shows**18
Source: Hubspot.com
Economy
So what’s up with the stock market? The economy can’t get out of first gear. Unemployment’s at the highest level in 27 years. The dollar’s sinking like a stone and the stock market keeps going up. At last glance, The Dow closed the week at nearly 10,200, up more than 16 percent for the year and the S&P closed over 1,100, up more than 20 percent for the year.
Oddly, the same problem that worries many investors over the longer term is what encourages some for the short term: a soft economy. The reason is that an ailing economy requires the Federal Reserve to keep its short-term interest-rate targets near zero and continue pumping billions of dollars into the financial system. That is great for stocks because much of that money eventually finds its way into financial markets, and because cheap money keeps financing costs low and pushes corporate profits higher. Worries about whether government intervention would be enough to keep the economy growing have been one of the reasons behind the series of volatile up and down swings in late October and early November.
*** For a great take on the “Jobless Recovery” check out University of Chicago professor, Casey Mulligan’s blog on Economix.
Google acquisition of startup could jumpstart mobile ad category
Monday Google announced it has agreed to acquire mobile advertising startup AdMob for $750 million in stock. AdMob, whose clients include P&G, Adidas and Land Rover, is a leading seller of banner ads on iPhone apps and Web pages that can be retrieved from mobile phones. This deal will probably cement the viability of the much hyped mobile advertising business….still in its nascent stages at $160 million (source: Kelsey Group), less than one percent of the $23 billion in online ads in 2008 according to Internet Advertising Bureau.
While most of the mobile ads so far have been delivered by text message. Experts point to the growing popularity of the iPhone and other popular mobile devices, the ads will become more engaging and widespread. Analysts say Google already has an edge on its rivals Microsoft and Yahoo when it comes to ads linked to search queries via mobile. Expect Microsoft and Yahoo to look for deals with other mobile ad providers like JumpTap, Millenial Media and Quattro Wireless.
For advertising to work as we head into the second decade of the new millennium, it’s got to be measurable and prove it works. That said, the burden for accountability is a two way street. Publishers and Web site operators have to work more closely with their media partners to understand their marketing objectives, not meet monthly page or banner inventory quotas. On the flip side, marketers and their agencies need to do a better job of understanding their media partners’ audience, editorial tone and pulse. E-mailing generic spreadsheets or RFPs to media partners with 24 hours’ notice to get them done is not how great advertising or marketing gets done. And when it comes time to reconcile the success or failure of a campaign, both sides need real metrics, not self-serving “ad recall” surveys or click-based McMetrics to show ROI.
Let’s be a lot smarter, less greedy and more patient next decade.
We’re not sure whether to put this under the “innovation” or “desperation” column, but Monday, The Week magazine announced is was guaranteeing advertisers that their ads will generate higher “recall” scores in The Week than they will in most other magazines in which they run. How? The Week has enlisted the help of Vista from Affinity, who will measure ad recall based on how consumers in its focus groups remember seeing a certain ad in the magazines where it runs. The Week guarantees an ad will score in the top one-third of all magazines where it runs or The Week will run free ad pages for the advertiser until it gets to the benchmark. The program is only reserved for regular 12x advertisers, but Steven Kotok, president of The Week, expected 80 percent of its clients to qualify. We salute The Week’s efforts to bring more accountability to the beleaguered print category and expect many more publishers to follow suit in 2010.
Ad pages drop sharply at Conde Nast
You don’t need the geniuses from McKinsey & Company to tell you it’s a lousy year for print media. Make that a lousy decade. Just days after Hachette Filipacchi Media U.S. announced that Metropolitan Home will be shuttered with its December issue (see below), Conde Nast announced this week that its 2009 pages are in, and it won’t be the merriest of office Christmas Parties high above Times Square for those who remain employed there. Ad pages are down by one-third for the year as more than 8,400 pages evaporated from it normally luxurious ledger. The company closed popular titles Portfolio, Gourmet and Modern Bride as well as Cookie and Elegant Bride and survivors who depend on purveyors of luxury goods took significant hits: Architectural Digest lost half (49.9%) of its ad pages; W lost 46 percent and Conde Nast Traveler lost 41 percent according to company data released to the media. On average, ad pages fell 27.6 percent industry wide for the first nine months of 2009 according to the Publishers Information Bureau. Branding will take you only so far in tough time and once again, print advertising becomes a luxury, not a core necessity, when times are tough and you can’t measure its direct effectiveness to pull customers into your stores.
Obituary announced for MetHome
Another acclaimed aspirational consumer magazine will cease publication in December. Hachette Filipacchi Media U.S. announced that Metropolitan Home will be shuttered with its December issue, citing a lousy housing market and cuts in discretionary income for home renovations. Ad pages were down nearly 36 percent year-over-year, about the same as Gourmet’s, another popular magazine shuttered last month by Conde Nast. No plans announced about Met Home’s Web site. This recession has been particular unkind to the shelter magazine category and has forced the closing of House & Garden, Domino, Southern Accents, Cottage Living, In Style, O at Home and Country Home.
Facebook saves accused from perp walk
With more and more people revealing details of their private lives online – from the banal to the shocking – a potentially useful but unintended application of popular social network sites like Facebook, MySpaceand Twitter may be emerging. Crime-solving. A NYC teen, Rodney Bradford posted a seemingly meaningless post on Oct. 17 at 11:49 a.m. asking where his pancakes were. One of millions of banal, time-wasting posts that day until Bradford, 19, was arrested the next day as a suspect in an armed robbery at the housing project where he lives. Those words became his alibi. The entry, made at approximately the same time as the robbery. The New York District Attorney subpoenaed Facebook to verify that Bradford’s words had been typed from a computer at the apartment where he lives with his father. When that was confirmed, the charges were dropped. While social networking sites has been used as prosecutorial evidence in cases ranging from cyber-bullying to armed robbery and murder, legal experts believe it’s the first time such sites have been used as alibi evidence. Because of how ubiquitous social networking sites have become, we expect them to have a role in increasingly more cases as their user demographics tend to mirror the prime ages of those committing violent crimes, teens and young adults.
Social Media Update
Tweeting your company to the top of the search results
According to Internet Marketing Report (IMR), doing more with Twitter could help your company reach prospects who don’t actively “tweet” or even know what that means. IMR says all the search engines plan to include Twitter updates in their search results. Google plans to add tweets in its search result that may gain from real-time observations. The Bing search engine is planning to add posts from Twitter and Facebook.
Measuring success of marketing campaigns:
• 77% of marketers say new customers acquired
• 73% say the number of new leads
• 67% say net increase in sales
• 29% say increase in purchase intent
• 22% say increase in purchase intent
• 21% say changes in “perceptual attributes”
Source: eMarketer.com, October 2009 study
Blogs, e-mail and Web site optimization most economical sources of leads. But watch PPC.
New research from Hubspot.com finds online channels deliver qualified sales leads for significantly less money than telemarketing, trade shows and direct mail. While Blogs, e-mail and Web site optimization (SEO) scored high on “relative cost per lead”, what caught our attention was that one third (32%) of marketers surveyed by Hubspot said pay-per-click (PPC) was also a relatively expensive way to acquire leads. More on that in future issues.
Relative cost per lead by channel
% of marketers who said “below average cost”
Blogs/social media *****************55%
E-mail marketing**************49%
SEO*********************48%
Direct Mail *********34%
PPC*************32%
Telemarketing **29%
Trade Shows**18
Source: Hubspot.com
Economy
So what’s up with the stock market? The economy can’t get out of first gear. Unemployment’s at the highest level in 27 years. The dollar’s sinking like a stone and the stock market keeps going up. At last glance, The Dow closed the week at nearly 10,200, up more than 16 percent for the year and the S&P closed over 1,100, up more than 20 percent for the year.
Oddly, the same problem that worries many investors over the longer term is what encourages some for the short term: a soft economy. The reason is that an ailing economy requires the Federal Reserve to keep its short-term interest-rate targets near zero and continue pumping billions of dollars into the financial system. That is great for stocks because much of that money eventually finds its way into financial markets, and because cheap money keeps financing costs low and pushes corporate profits higher. Worries about whether government intervention would be enough to keep the economy growing have been one of the reasons behind the series of volatile up and down swings in late October and early November.
*** For a great take on the “Jobless Recovery” check out University of Chicago professor, Casey Mulligan’s blog on Economix.
Google acquisition of startup could jumpstart mobile ad category
Monday Google announced it has agreed to acquire mobile advertising startup AdMob for $750 million in stock. AdMob, whose clients include P&G, Adidas and Land Rover, is a leading seller of banner ads on iPhone apps and Web pages that can be retrieved from mobile phones. This deal will probably cement the viability of the much hyped mobile advertising business….still in its nascent stages at $160 million (source: Kelsey Group), less than one percent of the $23 billion in online ads in 2008 according to Internet Advertising Bureau.
While most of the mobile ads so far have been delivered by text message. Experts point to the growing popularity of the iPhone and other popular mobile devices, the ads will become more engaging and widespread. Analysts say Google already has an edge on its rivals Microsoft and Yahoo when it comes to ads linked to search queries via mobile. Expect Microsoft and Yahoo to look for deals with other mobile ad providers like JumpTap, Millenial Media and Quattro Wireless.
For advertising to work as we head into the second decade of the new millennium, it’s got to be measurable and prove it works. That said, the burden for accountability is a two way street. Publishers and Web site operators have to work more closely with their media partners to understand their marketing objectives, not meet monthly page or banner inventory quotas. On the flip side, marketers and their agencies need to do a better job of understanding their media partners’ audience, editorial tone and pulse. E-mailing generic spreadsheets or RFPs to media partners with 24 hours’ notice to get them done is not how great advertising or marketing gets done. And when it comes time to reconcile the success or failure of a campaign, both sides need real metrics, not self-serving “ad recall” surveys or click-based McMetrics to show ROI.
Let’s be a lot smarter, less greedy and more patient next decade.
Friday, November 06, 2009
First Generation in History in Which Kids Are Smarter Than Parents
Gaming now part of the information paradigm shift at work, home and school. Spike in agency reviews point to ad spending turnaround and need for fresh thinking.
“This is the first generation in recorded history in which the kids are smarter than their parents,” said Tom Hood, CPA, a popular blogger and new media professor who led a poignant social networking panel discussion I attended last week. “They’re way ahead of us in terms of digital technology, interactive media and collaboration.”
While the younger generation doesn’t have the personal spending power or corporate budget influence of its elders, the wired generation is influencing spending decisions (and driving rapid adoption) of anything related to technology, media consumption and social networking. If you market anything that touches a U.S. household or workplace with people under age 30 on the premises, then you better think about ways to market to AND THROUGH the younger generation.
My fifth grader does his school reports in PowerPoint, saves them to a pen drive, turns the device in to his teacher who inserts it into her classroom PC and displays the assignment on a chalk-free SmartBoard for all his classmates to critique. My first grader is an active “MMOGer” (massively multiplayer online gamer) interacting after school each day with virtual peers on Club Penguin, a 12-million member online community containing a range of Web based games and activities in which players user cartoon penguins as avatars, waddle around, chat, play mini-games and participate in other activities with one another in a snow-covered virtual world. Both kids and their pals have taught themselves to use Mom’s digital SLR camera to shoot YouTube videos of their sports and car racing exploits, complete with music, slow motion and title credits. I’m staying out of it, mildly amused. But when the ads start rolling in, I’m insisting on taking a cut to pay for “studio rental” time.
My kids also got their hands on my clunky standard-issue cell phone during a long car trip. Turns out it has a camera, video recorder and app for downloading games and music. Who knew? Like me, they wouldn’t be caught dead reading the manual. Unlike me, they have the patience and intuition to experiment with mysterious looking buttons on the side of the phone and don’t get frustrated when it fails to do what one expects it to do. They still can’t do anything about the spotty voice service, but to this generation, a cell phone is a multi-media toy that happens to have voice capabilities. It’s not a semi-reliable mobile communication tool that we view it as. They also don’t have to deal with the new charges showing up in my monthly bill – yet.
Unlike the games their older siblings grew up with, today’s educational games tend to be online and social, allowing kids to interact and collaborate to achieve common goals. As the New York Times reported last week, the newest educational games, unlike the stand-alone boxed games of the 1990s, are set up like services in which children can enter a virtual world, try on a character and solve problems that may relate to the real world. Newer games work concepts of math, science and language into the actual game mechanics, instead of stopping for something that feels like schoolwork.
For another take on responsible online destinations for kids, check out Fifty P where kids can get real-life lessons on financial literacy and savings plans without stern lectures about the value of money from their elders.
Marketing to the short attention, time-shifting consumer
The debate rages on about whether or not humans can truly perform simultaneous mental processes, but we’re multi-tasking more than any previous generation and there’s no sign of turning back. A recent University of Melbourne study found that people who use the Web at work for personal use are actually nine percent MORE productive, not less, than those who don’t.
If you’re in marketing, you better get used to increasingly shorter attention spans and you’ll have to work harder than ever to reach those targets in a three-screen time shifting world.
Economy
The recession is technically over, stock markets are up double-digits for the year and the Fed yesterday promised not to raise its rock bottom interest rates for an “extended period.” What’s more, the government last week said the economy grew 3.5percent in the third quarter, its first quarterly expansion in a year. Unfortunately, experts says economic growth will remain “weak for a time” as the jobless rate surpasses the 10 percent barrier for the first time in 27 years and retailers brace for a Grinch-like Holiday shopping season. With both consumers and corporations in extended “wait and see” mode, media partners should expect short term, opportunistic ad spending flurries, but no sustained uptrend that you can take to the bank.
Media
U.S. ad spending fell 15.4 percent in the first half of 2009, according to Nielsen Company data with online advertising the only sector expected to record positive growth for the year -- a projected 9.2. percent to $54.1 billion, according to Zenith Optimedia research. All other media are shrinking, notes Zenith in a recent report (PDF) “Most are shrinking at around the market average rate, but newspapers and magazines are in steep decline: we forecast newspaper ad expenditure to fall 17 percent this year, and magazine ad expenditure to shrink 20 percent. In both cases this is a particularly severe example of a longer-term trend; these media have been in decline since 2007, and we expect them to remain in decline for the rest of our forecast period.”
Despite print media’s long-term struggles, signs are emerging that the painful advertising slump of the past two years may finally be easing. The Wall Street Journal reported last week that a long list of major marketers, including UPS, Unilever, US Army, General Motors, Yum Brands and Emirates Airlines, are seeking overtures from new advertising firms. According to the Journal, when the online shoe retailer Zappos.com invited pitches for its small account earlier this year, more than 100 ad agencies submitted credentials.
"Clearly we are seeing the beginnings of an ad recovery. The volume of ad reviews is way up," Russell Wohlwerth, principal of Ark Advisors, a consulting firm that matches ad firms with marketers, told the Journal. But over the past few years, the process of searching for a new advertising or media-buying firm has dramatically changed. About 80 percent of reviews now include procurement departments, up from 30 percent to 40 percent about five years ago, consultants say. And decisions are being made in the conference room not the golf course.
For nation’s newspapers print circulation plummets, but Web visits up
New figures released last week by the Audit Bureau of Circulation showed double-digit circulation drops for 22 of the nation’s top 25 papers amid an industry-wide decline of 10.6 percent for the six months ended September 30. At just 44 million copies, U.S. daily papers sold fewer editions than at any time since the 1940s. Industry execs say part of the readership loss is self-imposed. By that they mean rising manufacturing costs and dropping ad revenue has forced them to cut “unprofitable circulation” which in industry parlance refers to those with bad credit, low incomes, intermittent subscriptions and readers who live in outlying areas. But, few will argue that the Web has siphoned off millions of print readers and advertising dollars. Newspaper Web sites are updated more frequently than their ink-stained brethren. Web papers don’t arrive wet, late or tattered and by and large they’re free. This year, newspaper Web sites have had more than 72 million unique visitors, up 20 percent from 60 million in 2007 according to Nielsen Online reports for the Newspaper Association. We see this trend continuing on an exponential
The younger generation thrives on collaboration, speed and entertainment, said blogger Tom Hood.
If you’re in marketing, particularly B2B, then keep in mind the fact that “Young people may be new to the world of work, but their bosses are immigrants to the world of the Web.”
Look to gaming if you want to win the game.
“This is the first generation in recorded history in which the kids are smarter than their parents,” said Tom Hood, CPA, a popular blogger and new media professor who led a poignant social networking panel discussion I attended last week. “They’re way ahead of us in terms of digital technology, interactive media and collaboration.”
While the younger generation doesn’t have the personal spending power or corporate budget influence of its elders, the wired generation is influencing spending decisions (and driving rapid adoption) of anything related to technology, media consumption and social networking. If you market anything that touches a U.S. household or workplace with people under age 30 on the premises, then you better think about ways to market to AND THROUGH the younger generation.
My fifth grader does his school reports in PowerPoint, saves them to a pen drive, turns the device in to his teacher who inserts it into her classroom PC and displays the assignment on a chalk-free SmartBoard for all his classmates to critique. My first grader is an active “MMOGer” (massively multiplayer online gamer) interacting after school each day with virtual peers on Club Penguin, a 12-million member online community containing a range of Web based games and activities in which players user cartoon penguins as avatars, waddle around, chat, play mini-games and participate in other activities with one another in a snow-covered virtual world. Both kids and their pals have taught themselves to use Mom’s digital SLR camera to shoot YouTube videos of their sports and car racing exploits, complete with music, slow motion and title credits. I’m staying out of it, mildly amused. But when the ads start rolling in, I’m insisting on taking a cut to pay for “studio rental” time.
My kids also got their hands on my clunky standard-issue cell phone during a long car trip. Turns out it has a camera, video recorder and app for downloading games and music. Who knew? Like me, they wouldn’t be caught dead reading the manual. Unlike me, they have the patience and intuition to experiment with mysterious looking buttons on the side of the phone and don’t get frustrated when it fails to do what one expects it to do. They still can’t do anything about the spotty voice service, but to this generation, a cell phone is a multi-media toy that happens to have voice capabilities. It’s not a semi-reliable mobile communication tool that we view it as. They also don’t have to deal with the new charges showing up in my monthly bill – yet.
Unlike the games their older siblings grew up with, today’s educational games tend to be online and social, allowing kids to interact and collaborate to achieve common goals. As the New York Times reported last week, the newest educational games, unlike the stand-alone boxed games of the 1990s, are set up like services in which children can enter a virtual world, try on a character and solve problems that may relate to the real world. Newer games work concepts of math, science and language into the actual game mechanics, instead of stopping for something that feels like schoolwork.
For another take on responsible online destinations for kids, check out Fifty P where kids can get real-life lessons on financial literacy and savings plans without stern lectures about the value of money from their elders.
Marketing to the short attention, time-shifting consumer
The debate rages on about whether or not humans can truly perform simultaneous mental processes, but we’re multi-tasking more than any previous generation and there’s no sign of turning back. A recent University of Melbourne study found that people who use the Web at work for personal use are actually nine percent MORE productive, not less, than those who don’t.
If you’re in marketing, you better get used to increasingly shorter attention spans and you’ll have to work harder than ever to reach those targets in a three-screen time shifting world.
Economy
The recession is technically over, stock markets are up double-digits for the year and the Fed yesterday promised not to raise its rock bottom interest rates for an “extended period.” What’s more, the government last week said the economy grew 3.5percent in the third quarter, its first quarterly expansion in a year. Unfortunately, experts says economic growth will remain “weak for a time” as the jobless rate surpasses the 10 percent barrier for the first time in 27 years and retailers brace for a Grinch-like Holiday shopping season. With both consumers and corporations in extended “wait and see” mode, media partners should expect short term, opportunistic ad spending flurries, but no sustained uptrend that you can take to the bank.
Media
U.S. ad spending fell 15.4 percent in the first half of 2009, according to Nielsen Company data with online advertising the only sector expected to record positive growth for the year -- a projected 9.2. percent to $54.1 billion, according to Zenith Optimedia research. All other media are shrinking, notes Zenith in a recent report (PDF) “Most are shrinking at around the market average rate, but newspapers and magazines are in steep decline: we forecast newspaper ad expenditure to fall 17 percent this year, and magazine ad expenditure to shrink 20 percent. In both cases this is a particularly severe example of a longer-term trend; these media have been in decline since 2007, and we expect them to remain in decline for the rest of our forecast period.”
Despite print media’s long-term struggles, signs are emerging that the painful advertising slump of the past two years may finally be easing. The Wall Street Journal reported last week that a long list of major marketers, including UPS, Unilever, US Army, General Motors, Yum Brands and Emirates Airlines, are seeking overtures from new advertising firms. According to the Journal, when the online shoe retailer Zappos.com invited pitches for its small account earlier this year, more than 100 ad agencies submitted credentials.
"Clearly we are seeing the beginnings of an ad recovery. The volume of ad reviews is way up," Russell Wohlwerth, principal of Ark Advisors, a consulting firm that matches ad firms with marketers, told the Journal. But over the past few years, the process of searching for a new advertising or media-buying firm has dramatically changed. About 80 percent of reviews now include procurement departments, up from 30 percent to 40 percent about five years ago, consultants say. And decisions are being made in the conference room not the golf course.
For nation’s newspapers print circulation plummets, but Web visits up
New figures released last week by the Audit Bureau of Circulation showed double-digit circulation drops for 22 of the nation’s top 25 papers amid an industry-wide decline of 10.6 percent for the six months ended September 30. At just 44 million copies, U.S. daily papers sold fewer editions than at any time since the 1940s. Industry execs say part of the readership loss is self-imposed. By that they mean rising manufacturing costs and dropping ad revenue has forced them to cut “unprofitable circulation” which in industry parlance refers to those with bad credit, low incomes, intermittent subscriptions and readers who live in outlying areas. But, few will argue that the Web has siphoned off millions of print readers and advertising dollars. Newspaper Web sites are updated more frequently than their ink-stained brethren. Web papers don’t arrive wet, late or tattered and by and large they’re free. This year, newspaper Web sites have had more than 72 million unique visitors, up 20 percent from 60 million in 2007 according to Nielsen Online reports for the Newspaper Association. We see this trend continuing on an exponential
The younger generation thrives on collaboration, speed and entertainment, said blogger Tom Hood.
If you’re in marketing, particularly B2B, then keep in mind the fact that “Young people may be new to the world of work, but their bosses are immigrants to the world of the Web.”
Look to gaming if you want to win the game.
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