Digital advertising and online video surge continues
Picking the right tool for the right job

Despite an overall gloomy forecast for global advertising, GroupM estimated positive growth for digital media in its latest report released Thursday. The global media investment management firm projected that growth in measured digital media investments will rise between 16 percent and 18 percent to approximately $100 billion globally in 2012, compared with a previous 16 percent forecast. That amount accounts for about one fifth of the entire 2012 measured ad spend.

Internet advertising budgets continue to grow in every country. The GroupM report forecast a 22 percent spending uptick in 2013, as digital spending trends continue an upward trend globally, regardless of local economic conditions.

Online video watching and advertising breaks record

More than 180 million U.S. Web users viewed a record 33 billion pieces of video content--and 11 billion ads --in June, according to comScore. Driven primarily by video viewing at YouTube.com, Google sites ranked as the top online video content property in June with 154 million unique viewers, followed by Yahoo Sites with 51 million, Facebook.com with 49 million, VEVO with 46 million and Viacom Digital with 39 million. Last month, time spent watching video ads totaled 4.6 billion minutes, with BrightRoll Video Network delivering the highest duration of video ads at 805 million minutes.

Overall, video ads reached more than half (53%) of the total U.S. population an average of 68 times during the month.

Macro View

A Commerce Department report Wednesday showed builders broke ground for more new homes in June than in any month in nearly four years. Wednesday's housing report from the Commerce Department showed home construction jumped 6.9 percent from May. Because builders cut back so sharply during the downturn, "if there's an increase in the number of households of any magnitude, the homebuilders will now benefit," Daniel Alpert, managing director at Westwood Capital, an investment-banking firm told the Wall Street Journal last week.

Meanwhile, last week’s cover story in the staid Economist argues that the U.S. economy is remaking itself (see article) thanks to the private sector. “Old weaknesses are being remedied and new strengths discovered, with an agility that has much to teach stagnant Europe and dirigiste Asia.”

What’s more, last week, the Mortgage Bankers Association said applications for home mortgages jumped last week on a surge in demand for refinancing as interest rates for 30-year mortgages fell to a record low. Other data in recent weeks has shown a sharp increase in signed contracts for home purchases in May, as well as rising home prices. “Housing continues to be the one sector of the U.S. economy that is outperforming expectations,” said Michael Gapen, a Barclays economist told Reuters.

Conclusion

Despite this morning’s sell-off in U.S. equity markets, the latest economic data confirm our economy is clearly in a slow growth mode and that won’t change much, regardless of who wins the November elections. Yes it’s going to be slow. And yes there’s going to be some growth. If you’re trying to reach your target customers, you need to be selective and online video and digital advertising absolutely have to have a place in your marketing mix—but they’re not magic silver bullets. You have to pick your spots carefully and mix video and digital into your overall tool kit.

My dad is a lot handier than I’ll ever be when it comes fixing things around the house. Sure he’d sometimes fix things that weren’t really broken, but it’s his intrepid appetite for experimentation—not a manual or eHow video--that eventually teaches him how to get the job done.

“There’s a tool for every job, and a job for every tool,” he’d admonish me. “But don’t ever try to use that fancy new cordless drill to fix everything on your Honey-Do list.”

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TAGS: Digital advertising, online video, GroupM, comScore, Commerce Department, home building, Mortgage Bankers Association, Barclays, BrightRoll Video Network

Email Increasingly Viewed on Mobile Device, Not PC Internet advertising sets Q1 record

“Traditional ideas about what is opinion and what is news, what is advertising and what is editorial, is evaporating each day,” quipped New York Times media columnist, David Carr earlier this week. But, we can assure you if it’s advertising, and it’s digital, it just keeps growing.

Internet Advertising Revenues Set First Quarter Record 

Internet advertising revenues for the first quarter of 2012 set a new record for the reporting period at $8.4 billion, according to the latest IAB Internet Advertising Report from the Interactive Advertising Bureau (IAB) and PwC U.S. It is the highest first-quarter revenue ever measured by the IAB and PwC and a $1.1 billion–or 15 percent increase–over the $7.3 billion figure reported in the first quarter 2011. The growth comes on the heels of 22 percent growth in 2011according to IAB's Annual Internet Advertising Revenue Report.

Mobile Email Viewing Taking Over

Here’s another milestone for you. By the end of this month, more people will be reading their email on mobile devices than on personal computers, according email marketing company Return Path. Mobile email views have increased over 82 percent in the past 12 months and Apple iPads and iPhones now account for 85 percent of mobile email that’s opened. Guess we don’t have to tell you which platform to optimize for.

Tablets Gain Mobile Video Viewers

Meanwhile, a new comScore study of the U.S. tablet market found that the devices have reached a critical mass in the U.S. with 1 in every 4 smartphone owners now using tablets. Smartphone owners are also three-times more likely to watch video on their devices compared to smartphone users, with 1 in every 10 tablet users viewing video content almost daily on their devices.

In April 2012, one in six (16.5%) mobile phone subscribers used a tablet, representing an 11.8 percent increase in the past year. Growth in market penetration was even more apparent among the smartphone population with nearly 1 in 4 using a tablet device in April, up nearly 14 percent in the past year. A lower 10.4 percent of feature phone owners use a tablet, suggesting that smartphone ownership is highly predictive of tablet adoption in the current market.

Internet Video to Surge by 2016

Internet video will play a major role in the quadrupling of the Internet over the next four years. That traffic growth from 2011 to 2016, according to Cisco’s latest report, will be driven by a proliferation in devices. Cisco projects that by 2016 the number of network connections will reach nearly 19 billion -- up from 10 billion last year, due to the growth in tablets, mobile phones and other smart devices. Video will drive the growth. Cisco said to expect about 1.2 million video minutes to travel the Internet every second by 2016. “Globally, there are expected to be 1.5 billion Internet video users by 2016, up from 792 million Internet video users in 2011,” Cisco said. 

Last year, computers accounted for 94 percent of Web traffic, and that share should drop to 81 percent by 2016 as more traffic rides on devices like tablets and smartphones. That figure underscores how quickly handheld devices are becoming the gateway to the Web for many consumers.

Macro view (with a Twist)

A few signs of optimism on the economic front for you. Single family home starts rose 3.2 percent in May and according to the U.S. Commerce Department, builders requested more permits for homes and apartments last month than they have in three and a half years.

U.S. Federal Reserve officials extended through the end of the year a program meant to drive down long-term interest rates and signaled that they were "prepared to take further action" if needed amid heightened worry about the economy's performance. By continuing the program, known as "Operation Twist," the Fed will buy $267 billion in long-term Treasury bonds and notes while it sells short-term Treasurys. The Fed said it still had big concerns about the economy as  the growth in employment "has slowed in recent months, and the unemployment rate remains elevated," with household spending rising at a “somewhat slower pace than earlier in the year."

Conclusion

We’re in a slow growth mode, with more emphasis on “growth” than on “slow.” For the short-term, technological advances have allowed companies to get by with fewer people than before, but those short-term productivity gains (including metrics such as revenue-per-employee) will begin to fade as human fatigue and disenchantment with “The Man” will eventually take over.

Pick your spots carefully when marketing to B2B prospects, but you do have to spend in order to stay in the game. Make sure mobile and video are an essential part of your marketing mix.

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TAGS: David Carr, Cisco, IAB Internet Advertising Report, mobile view of email, smartphones, tablets, online advertising growth, Operation Twist, comScore

Facebook Facing the Music?
Online video continues surge

   Now that the most public of companies is a public company, it looks like it’ll have to grow up a little. Shares of the newest kid on the Nasdaq block skidded again on their second day of trading. FB (Nasdaq) shares are now about 11 percent lower than the company’s initial offer price. Regulators and some investors who bought into the social network's public offering are now in the red (and seeing red) while raising questions about whether the company and its lead banker, Morgan Stanley, botched the deal. There were also some strangely-timed privacy suits against the company last week on top of GM’s decision to pull its entire $10 million ad schedule off the site two days before the IPO. 

It wasn't clear what role if any Morgan Stanley was playing in the stock's trading on Monday.
Disclosure: we’re neither long, nor short Facebook and don’t intend to be anytime soon.

Taking the long view

Regardless of whether FB (NASDAQ) succeeds as a public company, social media will be here to stay in one form or another. Social media’s probably not going to dominate all other forms of media, communication and human interaction—but it has earned a seat at the table. B2B marketers should make sure social plays some sort of part in your overall marketing mix. Let’s skip the hype and get back to business.

Online video growth continues surge

Internet users (and advertisers) can’t seem to get enough of online video. The amount of time spent watching online video grew about 46 percent in April 2012 compared to April 2011 according to comScore’s just-released April 2012 online video viewership figures. While comScore’s data indicates that the number of unique viewers rose only 5, viewers are watching a lot more video. Internet users watched about 21.8 hours last month -- up from 15 hours the year before, representing a 46 percent increase.

Meanwhile, the number of video ads viewed online rose to 9.5 billion for April, up from 3.8 billion the year before -- an increase of more than 2.5 times. Plus, the 9.5 billion ads is 14 percent higher than the 8.3 billion ads delivered just one month ago in March.

Our take: Analysts say most of the video viewership increase is coming from YouTube, but we think B2B markets should look closer at using dedicated video playlist tools that give your more control—Brightcove, Vimeo, etc.—with YouTube simply as your fill-in-the-gaps air coverage.

Macro view

Home construction rose to nearly a three-year high in April, the government reported last week and factory output rose in three of this year’s first four months. The two reports suggest growth in Q2 is off to a good start, helped by falling gasoline prices and solid hiring gains.

An AP report said manufacturing has become one of the strongest areas of the American economy since the recession ended nearly three years ago. Factory output is now 18.3 percent higher than its low hit in June 2009, the month the recession ended. It is only 6.1 percent below its prerecession peak.

Conclusion

Let’s stay focused on the fundamentals not FB’s daily gyrations. Things are getting better whether you meet your customers and clients face-to-face or Facebook style. Smart, relevant, targeted marketing will always win out in the long run.

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TAGS: Housing construction, industrial output, Facebook IPO, Morgan Stanley, comScore, Nasdaq

Giving Thanks for Some Hopeful Signs for Retailers, Jobs, Factory Output and Home Construction

Don't underestimate the power of a Black Friday shopper

So Americans are getting soft, you say? We’re getting, fat, lazy, unmotivated as the rest of the world passes us by, you say? Well you haven’t seen Americans shop on Black Friday. If there’s one thing we don’t need to outsource it’s the ability to find a deal. Before you choke on that turkey wishbone in laughter, think about how the web is transforming the shopping experience. Consumers have never been better armed with comparative pricing information, specs, sizes, colors and where to find the best deals. Retailers have to keep opening earlier, competing with both online and bricks-and-mortar sellers and motivate their employees to work, longer, harder and faster when they’d normally be home (sleeping) with their families.

OUR TAKE? When properly motivated, Americans can do anything they set their minds to with resourcefulness, determination and stamina—kind of like a nation of small business owners.

Macroeconomic indicators

For the holiday season-to-date, consumers have spent $9.7 billion online -- marking a year-over-year growth rate of 14 percent, according to new comScore data. During the first 20 days of the season -- which began on November 1--daily online spending peaked on Wednesday, Nov. 16, at $688 million, comScore reports.

The number of Americans applying for unemployment benefits fell last week to the lowest level since early April, a sign that layoffs are easing and hiring might pick up--it was the fourth decline in five weeks. Meanwhile, a Commerce Department report said that builders started slightly fewer homes in October, but submitted plans for a wave of apartments, a mixed sign for the struggling housing market.

A rebound in manufacturing could lead to more hiring. Factory output grew in October for the fourth straight month, the Federal Reserve said Wednesday. Production of trucks, electronics and business equipment all rose, and building permits, a gauge of future construction, rose nearly 11 percent. The increase was spurred by a 30 percent increase in apartment permits, which reached its highest level in three years. Need more? Construction starts of single-family homes, which make up about 70 percent of residential home construction, rose nearly 4 percent last month.

While new homes account for just 20 percent of the overall home market, they have an outsize impact on the economy--each home creates an average of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.

Online video can boost your business

Still not sure if online video is worth it? Check out these new findings from
comScore.

-- Nearly 80 percent of U.S. Internet users –180million+ people—will view online video over the course of the month

-- The typical Internet viewer watches almost 20 hours of online video per month
--The average online video consumed is a full 5 minutes long
--The most watched videos add value by “teaching viewers something or covering a topic they care about,” says comScore.

What B2B marketers hope to accomplish with social media tools

According to new data from Chief Marketer’s 2011 Social Media Marketing Survey it is:

-- Drive traffic to websites (66%)
-- Generate sales or leads (48%)
-- Address company fans (47%)

Yes, times are tough. But give thanks this time of year that you have the brains, the team, the family support and the resources to figure out ways to get through it. You will. And we’ll all be stronger for it.
Happy Thanksgiving. HB


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