Yes, Smartphone Users Are Responding to Ads
Response rates higher for smartphone users who’ve paid for content

A new survey by Frank N. Magid Associates for the Online Publishers Association confirmed what many B2B marketers have long believed--people ARE seeing and responding to mobile advertising delivered to their devices. And, if they’re paying for that content, then their more likely to be paying attention to you.

The OPA-Magid online survey found that nearly half (44%) of the U.S. Internet population owns a smartphone and within that group:

·         93 percent said they regularly access content and information

·         59 percent access the Internet

·         58 percent check email

·         47 percent check weather information

·         31 percent watch video

·         29 percent access news

Among those who consume content on their smartphones, nearly 40 percent say they have responded to mobile advertising. What’s more, 15 percent of smartphone users who consume content on the phone have clicked on an ad, 12 percent have used a special offer or coupon, and the same number have made a purchase either on a PC or at a store after seeing a mobile ad.

Focus on those who pay for content

Interestingly, researchers say ad response rates seem to be higher among smartphone users who have paid for content. One out of four U.S. smartphone owners (24%) have paid for digital content, according to the OPA survey, with 22 percent paying for video, 21 percent for entertainment, 21 percent for books, and 19 percent for weather content. Of those respondents, nearly four in five (79%) have taken action after seeing an ad, with 31 percent clicking on an ad, 30 percent using a special offer or coupon, 27 percent making a purchase on a PC, and 24 percent making a store purchase thank to a mobile ad.

Conclusion

Again and again we see that free only takes you so far. As B2B marketers are learning, not all clicks are created equal. Throw the “braggable metrics” out the window and focus on engagement stats from those who are truly engaged with the content environment in which you’re reaching them. That’s where your real leads are. Everything else is just fishing for “tire kickers.”

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TAGS: Advertising, mobile, research, tablet, Frank N. Magid Associates, Online Publishers Association

Time Warner Leverages SI Swimsuit Issue to Launch All-Access Subscription Model

Watch out for ‘brain drain’ at your company as economy improves

In case you somehow missed it, the annual midwinter Oogle-palooza for the publishing industry, aka. the Sports Illustrated Swimsuit Issue hit newsstands, mailboxes and inboxes this week and once again managed to raise eyebrows and male pulse rates. But, this year the buzz wasn’t just about the risqué swim attire, which included see-through suits, body paint suits, and one “suit” which consisted of nothing more than a strategically placed kayak paddle. According to Bloomberg Sports (see video report), Time Warner is using its billion-dollar Swimsuit Issue franchise as a launching pad for its new “all-access” subscription model. Here’s the bet—raise subscription prices 23 percent in hopes that subscribers (and advertisers) will buy into SI’s full range of content delivery platforms including digital, online, mobile and tablet (other than Apple-i).

Our take? Even without Apple on board, the all-access model is a good call will gain traction throughout the publishing business as some content – action sports, celebrities, how-to and yes near-naked women—is simply more compelling with audio and video streaming than words on a page. However, we don’t like the strategy of charging subscribers—and presumably advertisers, more for the privilege. It shouldn’t be treated as a premium offering so much as a must-have for any publisher hoping to survive and stay relevant 11 years into the new century.

Just as most publishers are still figuring out newsstand sales by the number of returns they receive nine months later and are still sending annoying renewal notices—rather than billing subscribers’ credit cards via negative option—they need to get out of the quaint mindset of being publishers and realize they’re competing against bloggers, social networks, software companies, mobile apps, cable companies and telecom’s for subscriber/advertiser mindshare. It’s a faster, more cut-throat game than they’re used to—with smarter, hungrier players who generally pay their staffs better to come up with ideas.

Producer price index hits highest level in 27 months

On Wednesday, the Labor Department reported that producer prices in the United States rose in January. The core index, which excludes the volatile food and energy sectors, rose 0.5 percent, the biggest jump in 27 months, the agency said. Yesterday, The Fed announced it expected economic growth of 3.4 percent to 3.9 percent this year, up from the previous forecast of 3 percent to 3.6 percent. Even Fed head Ben Bernanke said “the economy is straightening out” but joblessness could remain high for several more years as companies continue to post profits with a smaller workforce than they had before.

Brain drain on the horizon at your company?

Our take? Despite the lousy job and housing market, the latest economic growth report, coupled with the recent rise in consumer and producer prices shows we’re essentially operating in a non-recessionary climate. It’s hardly a go-go era, but essential staples for households and businesses are being purchased on an ongoing basis and of course, advertising and marketing spend will have to grow to lift demand.

Here in the B2B media business, we don’t put too much stake in the jobs reports. Our industry has always been a fluid one based on ideas and contacts—not raw output or years of service you’ve put in at the same company or government organization. We’ve always relied on a deep pool of experienced independent contractors to get things done and there’s more than enough work to go around—it just doesn’t fit into the W2+B (steady paycheck, plus benefits) hiring model.

What’s more, the lift in “intention to hire” is the biggest in 11 years according to researchers at Bernhart Associates who conducted a survey of digital and direct marketers.

As New York Times columnist Bob Herbert pointed out last week, businesses have figured out how to prosper without putting the unemployed back to work in jobs that pay well and offer decent benefits. Corporate profits and the stock markets are way up. Businesses are sitting atop mountains of cash. Put people back to work? Forget about it. Has anyone bothered to notice that much of those profits are the result of aggressive payroll-cutting —companies making do with fewer, less well-paid and harder-working employees?

Unfortunately, Bob (and corporate America), you have to look at the long-term viability of “doing more with less.” Just as your customer prospect pipeline dries up when you cut back too far on your advertising and marketing programs, too many workers who’ve been doing double- and triple-duty to hold onto their jobs during the downturn are simply getting exhausted and not seeing commensurate increases in compensation or status for holding the fort down during the depths of the recession. They’re out the door as soon as the first decent opportunity comes along. Many organizations will be facing a serious “experience vacuum” as knowledgeable workers bolt for the doors and take their smarts, contacts and ideas they were too afraid (or disgruntled to share) with them.

It will take years for the influx of newbies to get up to speed and become productive. Let’s hope you’re treating your best people as well as you can right now. Now that the economy’s on the rebound, your toughest test is yet to come. Gotta go now. They just posted behind the scenes videos about the making of the Swimsuit Issue. The Twittersphere’s abuzz with rumors of wardrobe malfunctions.


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Quantitative Easing Not Relieving Qualitative Pain

But, stocks, housing, private sector jobs and Wall Street bonuses are on the rise. Financial, tech and airline sectors are rebounding with marketing dollars in tow. Why B2B marketers need to act now.

Maybe it took what the President called a good old fashioned “shellacking” of his party in last week’s midterm elections to get the Administration to see how far out of favor they have fallen from the business community, not to mention conservative and independent voters. When we say business community, we’re talking everyone from your local small businesses to the Fortune 500. Mr. Obama said he needed to "make clear to the business community, as well as to the country, that the most important thing we can do is to boost and encourage our business sector and make sure that they're hiring.”

Business runway getting longer

“The legislative uncertainty that’s kept businesses on their heels the past several years is starting to lift,” said Jeffrey Kleintop, chief market strategist at LPL Financial [www.lpl.com], whom several of us met yesterday at a financial advisor conference in New York. “The Fed’s been a little clearer about what it wants to do and that’s giving businesses a longer runway.”

As just about everyone on the planet knows by now, the Federal Reserve said it would buy $600 billion of U.S. government bonds over the next eight months to drive down interest rates and encourage more borrowing and growth. The strategy, officially known as “quantitative easing” (QE2) has had a positive effect on the financial markets, but could backfire in the long run.

If not managed carefully, the Fed’s spending spree on government bonds could be highly inflationary, since it would flood the economy with money and raise worries about too much government spending. Also, it could continue driving down the value of the U.S. dollar which gets other countries pretty pissed. Why? Because a weaker dollars hurts their exports and can spike inflation in their own countries as outside capital surges in from investors seeking better returns than they’re finding in U.S. markets. The Prez may want to wear a helmet and mouth guard to the G-20 Summit starting in South Korea tomorrow.

That said, we like E2’s chances of succeeding at this stage of the business cycle if it’s deployed gradually and intelligently – two big IFs. In addition to the impact of cheaper borrowing, higher stock prices (see below) could encourage households to spend more and businesses to invest more, and a weak dollar could make U.S. exports cheaper and thus easier to sell in normal times.

Why B2B marketers need to act now

Instead of waiting around for the all-clear signal for the government: here are some of our own leading indicators that the worst is over and now is the time to invest for the surge in consumer and B2B demand that’s likely to pass you by if you’re not ready:

Finance and tech ad rebound continues in business magazines

According to MediaWeek data released last week, ad pages in Forbes are up a whopping 353 percent from this time a year ago, Fortune is up 88 percent, Fast Company is up nearly 58 percent, Entrepreneur is more than 52 percent ahead of last year’s pace and Wired is up 11.4 percent. The leading brands depend overwhelmingly on the technology and financial services sector and generally run longer and more complex media schedules as they have to reach buyers in a long-term sales cycle with multiple purchase decision influencers to win over.

Airlines rebounding

After collectively losing $26 billion during the previous two years, according to the International Air Transport Association (IATA) www.iata.org, the majority of national and international carriers are reporting one of their most profitable quarters in years (for the 3 months ended 9/30) and they’re on track to be in the black again by nearly $9 billion. IATA says average fares for first-class and business travel within North America are up a whopping 140 percent from this time a year ago and up about 20 percent for travel to Europe. Air travel is one of the first things to go when consumers and businesses are pessimistic about their bottom lines. We’re very bullish on this trend and travel-related advertising dollars should start flowing back to leading brands in all media categories serving consumer and B2B.

Wall Street bonuses up

Investment banks and financial firms are planning to dole out larger paychecks and bonuses this year than in 2009. Top Wall Street pay consultant Alan Johnson says he expects compensation by Wall Street firms to rise 5 percent in 2010. The Wall Street Journal projected a similar rise. A recent survey of financial firms by our friends at eFinancial Careers said they expect higher pay in 2010 than they received a year ago. While the number of people working in high finance is tiny compared to the number of people working on Main Street, they account for a disproportionate share of wealth (and consumer spending) and that usually trickles down into main street as well as ad spending by Main Street-supported businesses.

Stock markets up

As of this posting, the Dow and S&P 500 are both up about 8.8 percent for the year and the broader based Wilshire 5000 is up nearly 11 percent. Investors are showing more confidence in the equity markets and have reduced their cash holdings to 17 percent from 21 percent according to a recent Capgemini survey of high net worth individuals. Add to this microscopic interest rates and the likelihood that the Bush tax cuts are likely to be extended by at least one or two more years according to LPL’s Kleintop – “it’s the legislative path of least resistance” – and you’ve got a pretty favorable equities climate.

Private sector job gain

Sure unemployment’s stuck at 9.6 percent, but while the government is shedding jobs at a disturbing clip, more private sector jobs have been created this year than during the entire Bush administration. That’s right. 2010 has had more private job creation than during the entire 8 year tenure of George W. Bush.
According to The Department of Labor, this is the ninth straight month of private sector job growth in the midst of a devastating recession that has put a serious strain mostly on the poor and middle class. There have been a total of 863,000 private sector jobs created in 2010, exceeding the total created under the Bush/Cheney regime. We don’t make this stuff up, the DOL does.

Housing

Existing-home sales rose again in September, affirming that a sales recovery has begun, according to the National Association of Realtors. Existing-home sales, jumped 10 percent to a seasonally adjusted annual rate of over 4.5 million in September from a 4.1 million in August. In a late October news release, Lawrence Yun, NAR’s chief economist, said the housing market is in the early stages of recovery. “A housing recovery is taking place but will be choppy at times depending on the duration and impact of a foreclosure moratorium. But the overall direction should be a gradual rising trend in home sales with buyers responding to historically low mortgage interest rates and very favorable affordability conditions,” he said.

Entrepreneurship

Whether or not we ever return to a 95 to 96 percent rate of “full employment,” the steady-paycheck lifestyle of a loyal employee dedicating one’s career to a single large manufacturing or corporate service entity is pretty much over.

If you’ve ever thought about starting your own business, read Seth Godin’s recent post How can you do it?!

The timing may never be better.

Remember, things were never quite as good as they seemed in the frenzied years leading up to the Great Disruption, and now they’re not as bad as the media, economists and out-of-favor politicians would lead you to believe. The time strike is while the iron’s getting hot; not when it looks, smells and feels like it really is hot. By that time it’s too late as someone else has already taken the iron and formed it into their own shape and vision.

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