In digital economy, everything’s a commodity except ideas.
In today’s wired world, the most important economic competition is actually between you and your own imagination, wrote New York Times columnist, Thomas Friedman on Sunday. More on that in a minute.
Facebook Overtakes Google as most popular US Web site
Whether or not Facebook fits into your marketing plans, it’s important to note that the ubiquitous social network destination overtook Google as the nation’s most popular Web site according to a recent report by Hitwise. Checking Facebook accounted for more than seven percent of all Web visits, the report found. Studies show that the average American spends seven hours a month on the site and that 44 percent of all social sharing takes place on the platform. But as Online Metrics Insider pundit, Pat Lapointe recently noted, research from Keller Fay Group clearly shows that only about 10 percent of total word-of-mouth activity occurs online. Further, it establishes that in MOST categories (not all, but most), the online chatter is NOT representative of what is happening offline, at kitchen tables and office water coolers.
Digital advertising to eclipse print in 2010
While print advertising is expected to rebound slightly into positive territory, more and more signs are pointing to 2010 as the year that digital advertising officially surpasses print. Legacy media is one area that could certainly benefit from fresh ideas, or more to the point, executing on those fresh ideas. A new study from Outsell, a consulting and research group serving the information industry, recently released findings of its annual survey of over 1,000 U.S. advertisers and marketers. Altogether, U.S. advertisers and marketers plan to spend $368 billion in 2010, Outsell found -- up 1.2 percent from 2009. Within the 2010 figure, 32.5 percent ($119.6 billion) will go to digital, versus 30.3 percent ($111.5 billion) earmarked for print.
In another new study, Kantar Media found that print media in 2009 underperformed the entire industry as a whole, off 17.5% versus 12.3 percent, for the year and down 11.5% for the fourth quarter. B2B magazines particularly took it on the chin, down 26.2 percent for the year, versus a 16.6 percent for consumer magazines (which are down only three percent so far in 2010according to Media Industry Newsletter). As in previous years, print ad revenue declines will fall heaviest on newspapers -- with Outsell forecasting total ad revenues of $27 billion in 2010, down about eight percent from 2009. Outsell also sees revenue for print directories falling about eight percent to $11.6 billion. But it's not all bad news for print, as Outsell predicts a two percent increase in ad spending for magazines -- rising to $9.4 billion – reversing a several year long slump.
"The advertising recession began to ease in the final two months of 2009 and preliminary figures from the first quarter of 2010, when compared against the abyss of a year ago, indicate many sectors are experiencing growth," noted Jon Swallen, senior vice president of Research at Kantar Media in a company news release. As with other forecasters, Kantar says the best performing media category in 2009 was cable television -- losing just 1.4 percent for the entire year and up 2.7 percent in the fourth quarter. Network TV was down 7.6 percent for the year although it exceeded cable TV in the fourth quarter, up 4.1 percent.
Why ideas can’t be commoditized in the digital era
Today, just about everything is becoming a commodity, except imagination, except the ability to spark new ideas, New York Times pundit, Thomas Friedman notes: “If I get an idea, I can get a designer in Taiwan to design it. I can get a factory in China to product a prototype. I can get a factory in Viet Nam to mass manufacture it. I can use Amazon.com to handle fulfillment. I can use freelancer.com to find someone to my logo and manage my backroom. And I can do all of this at incredibly low prices.
The one thing that is not a commodity, and will never be is that spark of an idea. Thanks Thomas. That’s as true in 2010 as it was in 1910.
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Showing posts with label online media. Show all posts
Showing posts with label online media. Show all posts
Monday, March 22, 2010
Friday, December 04, 2009
Study: Ad Spending Plans Returning to Pre-Recession Levels
But, consumers tightfisted as Cyber Monday fails to rescue a bleak Black Friday. Is a prolonged ‘saving spree’ on the horizon? Google CEO defends practices vs. newspaper industry and online video surges.
Ad executives are more optimistic about their budgets than at any time in the past two years according to new research from Advertiser Perceptions Inc., a media industry research firm that tracks the long-term confidence of advertisers and agency media-buying executives. The Ad Perceptions index currently stands at a positive four percentage points, its highest level since the autumn of 2007, when the index stood at positive eight percentage points.
The most recent survey, fielded in November, shows that ad spending sentiment is now improving for every medium tracked, even for some traditional media such as newspapers, magazines and broadcast, which continue to have an overall negative index. The outlook for most electronic media, especially online and mobile media, is well in the positive range and also continues to improve.
The positive index for all digital media - both online and mobile - went from 40 percentage points in the spring 2009 survey to 55 percentage points in the just-completed fall survey. The positive index for cable TV jumped to 11 percentage points from one percentage point last spring. Traditional media are still in negative territory, but improving, researchers said. For example, broadcast television stood at minus eight percent; magazines at minus 19 percent and local newspapers at minus 35 percent. Bleak readings, bit significantly on the mend from the last time they had their temperatures checked.
In a Wall Street Journal op-ed piece earlier this week, Google CEO said the Internet wasn’t destroying the news industry as much as forcing adoption of a more efficient business model. Borrowing from Rupert Murdoch, Schmidt wrote: “It's understandable to look to find someone else to blame. But it is complacency caused by past monopolies, not technology, that has been the real threat to the news industry.“
From Black Friday to Cyber Monday consumers cautious this Holiday season
Online shopping sites reported a surge in sales and traffic on CyberMonday (the first Monday after Thanksgiving), surpassing the tepid results achieved by bricks-and-mortar retailers so far this Holiday season. Online shoppers spent 11 percent more than they did a year ago, according to CoreMetrics a Web analytics company that tracks online shopping behavior in the U.S. But the average size of each purchase was down 14 percent from last year. Researchers say this indicates that Web merchants are facing the same bargain-hunting/comparison shopping consumer mindset that traditional retailers have faced so far.
Despite today’s drop in the official national unemployment rate, which was the first improvement in the jobless rate in 24 months, “the U.S. consumer is still too depressed to buy us a quick end to the recession,” laments Forbes columnist A. Gary Shilling in this week’s issue. “Consumers have no choice but to begin a decade-long saving spree as depressed home prices and high unemployment rates are temporing their willingness to take on debt of any kind – if they can even get it -- from personal credit cards to home equity lines.
Is the job market really coming back? Click here for a fairly well balanced range of opinions from Wall Street Journal online discussion
Online shopping may account for 10 percent of Holiday shopping this year, up from five percent to seven percent in previous years according to Forrester Research, which indicated the shift to online shopping, fueled by deal seekers in a recession, may come at the expense of traditional stores later in the Holiday season. It’s also important to note that a heavy shopper turnout at this time of year does not necessarily translate into heavy sales. Last year, Black Friday and Cyber Monday traffic hit record levels but the 2008 Holiday retail season was one of the worst in decades according to a New York Times report earlier this week.
If you sensed it was even more crowded than normal at your local mall over Thanksgiving weekend, you’re not alone. According to the National Retail Foundation (NRF), some 195 million consumers visited U.S. stores and Web sites last weekend, up from 172 million the previous year, but the average spend dropped to $347 from $372 the NRF said as “shoppers can continue to expect retailers to focus on low prices and bargains throughout December.
Media royalty was fed by advertising until Google blew that game apart
In case you missed it, David Carr’s thought-provoking piece “The Fall and Rise of Media” in MOnday's New York Times is worth a quick read. Instead of just another piece bashing traditional media, Carr neatly dissects traditional media’s appeal for ambitious young people, its surprising ability to extend its lifecycle beyond its logical expiration date, and how it is currently dealing with its long overdue day of reckoning. Rather than blaming Google, Facebook and Craig’s list for finally fixing an unaccountable advertising economy that “was built on inefficiency and excess, Carr points to a new future “which is not a bad deal if your ignore all the collateral gore.” Ambitious young people will still flock to Manhattan to remake world, Carr quips -- “they just won’t be stopping by the human resource department of Conde Nast to begin their ascent.” For every kid he sees wandering the entrance of the media world looking for an entrance that has long since closed, he sees another kid “who is a bundle of ideas, energy and technological mastery, who is not just knocking on doors but seeking to knock them down.”
Viewing of Online Video Streams Up 26 percent in October
The Nielsen Company today reported overall online video usage and top online brands ranked by video streams for October 2009. Year-over-year, unique viewers, total streams, streams per viewer and time per viewer were up, led by a 26 percent growth in total streams.
October 2009 vs October 2008
Unique Viewers**********138.6M (+14.8%)
Total Streams**************11.2B (+26.2%)
Streams per Viewer********81.0 (+ 9.9%)
Time per Viewer (min) 212.5 (+ 23.8%)
Source: The Nielsen Company
In a related note, Nielsen announced Tuesday that it would start counting online television viewership in its overall rating measurement for which an estimated $70 billion in ad spending is predicated. More next week.
From where we sit, it looks like the 2010 media buying climate will be in lockstop with the 2009 Holiday shopping season – a great deal of bargain hunting and comparison shopping with few long-term commitments and a lot of second-guessing. Measurable value will trump fancy packaging and there will be buyers’ remorse aplenty.
Ad executives are more optimistic about their budgets than at any time in the past two years according to new research from Advertiser Perceptions Inc., a media industry research firm that tracks the long-term confidence of advertisers and agency media-buying executives. The Ad Perceptions index currently stands at a positive four percentage points, its highest level since the autumn of 2007, when the index stood at positive eight percentage points.
The most recent survey, fielded in November, shows that ad spending sentiment is now improving for every medium tracked, even for some traditional media such as newspapers, magazines and broadcast, which continue to have an overall negative index. The outlook for most electronic media, especially online and mobile media, is well in the positive range and also continues to improve.
The positive index for all digital media - both online and mobile - went from 40 percentage points in the spring 2009 survey to 55 percentage points in the just-completed fall survey. The positive index for cable TV jumped to 11 percentage points from one percentage point last spring. Traditional media are still in negative territory, but improving, researchers said. For example, broadcast television stood at minus eight percent; magazines at minus 19 percent and local newspapers at minus 35 percent. Bleak readings, bit significantly on the mend from the last time they had their temperatures checked.
In a Wall Street Journal op-ed piece earlier this week, Google CEO said the Internet wasn’t destroying the news industry as much as forcing adoption of a more efficient business model. Borrowing from Rupert Murdoch, Schmidt wrote: “It's understandable to look to find someone else to blame. But it is complacency caused by past monopolies, not technology, that has been the real threat to the news industry.“
From Black Friday to Cyber Monday consumers cautious this Holiday season
Online shopping sites reported a surge in sales and traffic on CyberMonday (the first Monday after Thanksgiving), surpassing the tepid results achieved by bricks-and-mortar retailers so far this Holiday season. Online shoppers spent 11 percent more than they did a year ago, according to CoreMetrics a Web analytics company that tracks online shopping behavior in the U.S. But the average size of each purchase was down 14 percent from last year. Researchers say this indicates that Web merchants are facing the same bargain-hunting/comparison shopping consumer mindset that traditional retailers have faced so far.
Despite today’s drop in the official national unemployment rate, which was the first improvement in the jobless rate in 24 months, “the U.S. consumer is still too depressed to buy us a quick end to the recession,” laments Forbes columnist A. Gary Shilling in this week’s issue. “Consumers have no choice but to begin a decade-long saving spree as depressed home prices and high unemployment rates are temporing their willingness to take on debt of any kind – if they can even get it -- from personal credit cards to home equity lines.
Is the job market really coming back? Click here for a fairly well balanced range of opinions from Wall Street Journal online discussion
Online shopping may account for 10 percent of Holiday shopping this year, up from five percent to seven percent in previous years according to Forrester Research, which indicated the shift to online shopping, fueled by deal seekers in a recession, may come at the expense of traditional stores later in the Holiday season. It’s also important to note that a heavy shopper turnout at this time of year does not necessarily translate into heavy sales. Last year, Black Friday and Cyber Monday traffic hit record levels but the 2008 Holiday retail season was one of the worst in decades according to a New York Times report earlier this week.
If you sensed it was even more crowded than normal at your local mall over Thanksgiving weekend, you’re not alone. According to the National Retail Foundation (NRF), some 195 million consumers visited U.S. stores and Web sites last weekend, up from 172 million the previous year, but the average spend dropped to $347 from $372 the NRF said as “shoppers can continue to expect retailers to focus on low prices and bargains throughout December.
Media royalty was fed by advertising until Google blew that game apart
In case you missed it, David Carr’s thought-provoking piece “The Fall and Rise of Media” in MOnday's New York Times is worth a quick read. Instead of just another piece bashing traditional media, Carr neatly dissects traditional media’s appeal for ambitious young people, its surprising ability to extend its lifecycle beyond its logical expiration date, and how it is currently dealing with its long overdue day of reckoning. Rather than blaming Google, Facebook and Craig’s list for finally fixing an unaccountable advertising economy that “was built on inefficiency and excess, Carr points to a new future “which is not a bad deal if your ignore all the collateral gore.” Ambitious young people will still flock to Manhattan to remake world, Carr quips -- “they just won’t be stopping by the human resource department of Conde Nast to begin their ascent.” For every kid he sees wandering the entrance of the media world looking for an entrance that has long since closed, he sees another kid “who is a bundle of ideas, energy and technological mastery, who is not just knocking on doors but seeking to knock them down.”
Viewing of Online Video Streams Up 26 percent in October
The Nielsen Company today reported overall online video usage and top online brands ranked by video streams for October 2009. Year-over-year, unique viewers, total streams, streams per viewer and time per viewer were up, led by a 26 percent growth in total streams.
October 2009 vs October 2008
Unique Viewers**********138.6M (+14.8%)
Total Streams**************11.2B (+26.2%)
Streams per Viewer********81.0 (+ 9.9%)
Time per Viewer (min) 212.5 (+ 23.8%)
Source: The Nielsen Company
In a related note, Nielsen announced Tuesday that it would start counting online television viewership in its overall rating measurement for which an estimated $70 billion in ad spending is predicated. More next week.
From where we sit, it looks like the 2010 media buying climate will be in lockstop with the 2009 Holiday shopping season – a great deal of bargain hunting and comparison shopping with few long-term commitments and a lot of second-guessing. Measurable value will trump fancy packaging and there will be buyers’ remorse aplenty.
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.
Wednesday, August 12, 2009
Can Web Advertising Adjust to Privacy Rules Proposed by Big Government?
Worst of recession appears over, but now real work begins in age of creative destruction.
The Fed held its ground on interest rates today. Yesterday, the U.S. Labor Department said productivity in the second quarter gained 6.4 percent -- the biggest quarterly gain in nearly six years despite an ongoing contraction in the overall economy. More than a few economists have suggested companies are adjusting to the recession by cutting jobs and workers' hours. Or maybe companies are becoming more innovative. Mind you, that’s not the same as “doing more with less” because innovation is proactive and forward-thinking. “Doing more with less” is reactionary, and often a desperation tactic that leads ultimately to worker burnout and defection – not long term profitability when the economy rebounds.
With stocks at their highest levels since autumn, interest rates holding steady, unemployment not getting too much worse at least statistically (see Wall Street Journal video report and the “cash for clunkers” program injecting signs of hope into the auto industry, some analysts are predicting a correction.
Sure there are plenty of signals about this being a “suckers rally,” but even bearish traders are giving credence to the market turnaround. “You can’t knock this market down,” Joe Saluzzi, co-head of equity trading told the New York Times last week. “Every dip is bought. Any sort of downdraft is picked up right away. I’m extremely bearish but I will not short this.” What’s more, the National Association of Realtors said the increase in pending sales – a forward looking measure of the market offered signs that the market is on the mend. New and previously owned sales have leveled off and single family home prices have begun to show some stability.
So just as consumers and businesses are getting their wallet-opening muscles limbered up, the government. may want to throw a wet blanket on the hottest area of ad growth during the past decade, including the recession.
Government online privacy rules a ‘setback to innovation’?
“We’re not committing ourselves to imposing regulation; what we would like to do is figure out useful tools and a more comprehensive way of looking at privacy protections that may obviate the need for rules,” said David Vladek new head of the Federal Trade Commission’s (FTC) Bureau of Consumer Protection in a recent statement. The message is you have to be more transparent about what you’re doing and the privacy “frameworks” the industry has been using historically are no longer sufficient, he said.
Vladek wants sites collecting personal data to get consumers consent whenever they visit the site (opt in)…. But marketers say such a tactic would be disastrous. “It’s impossible to communicate the value prop to a consumer at the point of and advertisement,” Matt Wise CEO of Q Interactive a Chicago online marketing firm told the New York Times and other trade media last week. It would be a tremendous setback to innovation.“
At HB, we think the solution relies somewhere in between in the form of a mutual trust system between innovators and regulators. Marketers and other data gatherers need to be more accountable, if not necessarily transparent, to regulators and consumers about the proprietary personal data they’re gathering – and how they’re gathering it. On the flip side, regulators need to take the time to understand fully how the online marketing mechanism works, why it’s so powerful, and how it’s changing the future of commerce worldwide. Regulators, shouldn’t be allowed to introduce sweeping legislation to punish a few bad apples, without fully understanding the industry they’re trying to govern. Otherwise their actions could bring one of the few growing sectors of our economy to a halt. And that includes emerging platforms such as online video (see below)
Keep your eye on online video
Online video viewing has grown across all age groups, according to new research (pdf) from the Pew Research Center's Internet & American Life project. Not surprisingly, young adults continue to lead the adoption curve in online video viewing, though adults ages 30-49 also showed big gains over the past year; 67 percent now use video-sharing sites, up from 57% in 2008 according to the Pew study, Researchers found nearly two thirds (62%) of adult internet users have watched online video on a video-sharing website, a figure that has nearly doubled from 33 percent in 2006. The study also found that 19 percent of online adults use video-sharing sites on a typical day (compared with 8 percent in 2006).
While much of the content on video-sharing sites is still user-generated, a growing archive of professional content is becoming increasingly available through YouTube and network-sponsored video portals such as Hulu, MarketingCharts reports. In response, more than one-third (35%) of internet users now say they have viewed a TV show or movie online. This compares with just 16% of internet users who had watched or downloaded movies or TV shows in 2007.
Video outranks social networks, twitter
Pew noted that the use of video-sharing sites currently outranks many other online pastimes of American adults, though video viewing does not always get a proportionate amount of media attention. Watching online videos on sites such as YouTube and Google Video is more prevalent than the use of social networking sites (46% of adult internet users are active on such sites), podcast downloading (19% of internet users) and the use of micro-blogging tools such as Twitter (11% of internet users).
The darkest days are over, but the good times are a long way off. Innovation, whether benign or in the form of “creative destruction” is the only thing that will get us back on the path to prosperity. Let’s just be responsible about how we innovate (or monitor those who innovate).
The Fed held its ground on interest rates today. Yesterday, the U.S. Labor Department said productivity in the second quarter gained 6.4 percent -- the biggest quarterly gain in nearly six years despite an ongoing contraction in the overall economy. More than a few economists have suggested companies are adjusting to the recession by cutting jobs and workers' hours. Or maybe companies are becoming more innovative. Mind you, that’s not the same as “doing more with less” because innovation is proactive and forward-thinking. “Doing more with less” is reactionary, and often a desperation tactic that leads ultimately to worker burnout and defection – not long term profitability when the economy rebounds.
With stocks at their highest levels since autumn, interest rates holding steady, unemployment not getting too much worse at least statistically (see Wall Street Journal video report and the “cash for clunkers” program injecting signs of hope into the auto industry, some analysts are predicting a correction.
Sure there are plenty of signals about this being a “suckers rally,” but even bearish traders are giving credence to the market turnaround. “You can’t knock this market down,” Joe Saluzzi, co-head of equity trading told the New York Times last week. “Every dip is bought. Any sort of downdraft is picked up right away. I’m extremely bearish but I will not short this.” What’s more, the National Association of Realtors said the increase in pending sales – a forward looking measure of the market offered signs that the market is on the mend. New and previously owned sales have leveled off and single family home prices have begun to show some stability.
So just as consumers and businesses are getting their wallet-opening muscles limbered up, the government. may want to throw a wet blanket on the hottest area of ad growth during the past decade, including the recession.
Government online privacy rules a ‘setback to innovation’?
“We’re not committing ourselves to imposing regulation; what we would like to do is figure out useful tools and a more comprehensive way of looking at privacy protections that may obviate the need for rules,” said David Vladek new head of the Federal Trade Commission’s (FTC) Bureau of Consumer Protection in a recent statement. The message is you have to be more transparent about what you’re doing and the privacy “frameworks” the industry has been using historically are no longer sufficient, he said.
Vladek wants sites collecting personal data to get consumers consent whenever they visit the site (opt in)…. But marketers say such a tactic would be disastrous. “It’s impossible to communicate the value prop to a consumer at the point of and advertisement,” Matt Wise CEO of Q Interactive a Chicago online marketing firm told the New York Times and other trade media last week. It would be a tremendous setback to innovation.“
At HB, we think the solution relies somewhere in between in the form of a mutual trust system between innovators and regulators. Marketers and other data gatherers need to be more accountable, if not necessarily transparent, to regulators and consumers about the proprietary personal data they’re gathering – and how they’re gathering it. On the flip side, regulators need to take the time to understand fully how the online marketing mechanism works, why it’s so powerful, and how it’s changing the future of commerce worldwide. Regulators, shouldn’t be allowed to introduce sweeping legislation to punish a few bad apples, without fully understanding the industry they’re trying to govern. Otherwise their actions could bring one of the few growing sectors of our economy to a halt. And that includes emerging platforms such as online video (see below)
Keep your eye on online video
Online video viewing has grown across all age groups, according to new research (pdf) from the Pew Research Center's Internet & American Life project. Not surprisingly, young adults continue to lead the adoption curve in online video viewing, though adults ages 30-49 also showed big gains over the past year; 67 percent now use video-sharing sites, up from 57% in 2008 according to the Pew study, Researchers found nearly two thirds (62%) of adult internet users have watched online video on a video-sharing website, a figure that has nearly doubled from 33 percent in 2006. The study also found that 19 percent of online adults use video-sharing sites on a typical day (compared with 8 percent in 2006).
While much of the content on video-sharing sites is still user-generated, a growing archive of professional content is becoming increasingly available through YouTube and network-sponsored video portals such as Hulu, MarketingCharts reports. In response, more than one-third (35%) of internet users now say they have viewed a TV show or movie online. This compares with just 16% of internet users who had watched or downloaded movies or TV shows in 2007.
Video outranks social networks, twitter
Pew noted that the use of video-sharing sites currently outranks many other online pastimes of American adults, though video viewing does not always get a proportionate amount of media attention. Watching online videos on sites such as YouTube and Google Video is more prevalent than the use of social networking sites (46% of adult internet users are active on such sites), podcast downloading (19% of internet users) and the use of micro-blogging tools such as Twitter (11% of internet users).
The darkest days are over, but the good times are a long way off. Innovation, whether benign or in the form of “creative destruction” is the only thing that will get us back on the path to prosperity. Let’s just be responsible about how we innovate (or monitor those who innovate).
Wednesday, July 29, 2009
Dow Holds Above 9,000. Home Sales Improve
Recession innovators extending lead over the pack. Mobile advertising gains.
In most parts of the United States, the recession seems to be losing steam and economies are beginning to stabilize, the Federal Reserve said today in a snapshot of economic activity from across the country. This assessment is based on the Fed’s latest “beige book” (PDF)which gauges economic conditions from 12 distinct areas of the country.
“Recession is over, economy is recovering — let’s look forward and stop the backward-looking focus,” John E. Silvia, Wells Fargo’s chief economist, wrote yesterday in a research note.
We're one-third of the way out of the recession, according to Kiplinger's Recovery Index, which tracks six key economic indicators. The National Association of Realtors (NAR) just said that sales of previously occupied homes rose 3.6 percent last month, the third straight month to do so. It was the highest level of sales since October 2008 and beat analysts expectations. Meanwhile, the Case-Shiller index of home prices in 20 metropolitan areas, produced by Standard & Poor's, rose 0.5% in May from the month before, the first increase after 34 straight months of decline. If you’re keeping score, the median sales price nationwide is now up to $181,800, up from 174,700 last month -- still 15 percent below $215,000 a year ago – but a key positive trend to be sure.
According to Kiplingers, home prices may be bottoming out after two years of decline (some say they bottomed out six months ago), but at least people are buying stuff. Said the Kippies: "Home sales activity is a key indicator of the economy's health because buying a house involves such a large commitment of funds, reflecting confidence about the future. Rising home sales also show that banks are willing and able to lend, which is another requirement of a healthy economy."
But, what about the sky high unemployment rate? Oh that. Jobless claims are still at record highs, but since unemployment lags behind other economic indicators, that’s not the downer it may appear – provided you’re among the lucky few still working. Breaking from historical patterns, the unemployment rate -- currently at generation-high 9.5 percent -- is ONLY one to 1.5 percentage points higher than would be expected under one economic rule of thumb, Lawrence Summers, President Barack Obama's top economic adviser told the Wall Street Journal last week. Since the recession began in December 2007, the economy has lost 6.5 million jobs, 4.7 percent of total employment. The unemployment rate has jumped five percentage points, while the economy has contracted by roughly 2.5 percent.
If you can take a moment to ignore the painful shrinkage to your retirement account, investments and college savings plans, the midsummer stream of earnings reports from major companies is refreshing, and so is the market's reaction to them. So far, July's quarterly results are reassuring in the macro view. Neither the economy nor the indexes are on the verge of backsliding, and they've helped push the Dow above 9,000. Some 61 percent of the companies in Standard & Poor's 500-stock index to report for the quarter beat analysts' forecasts.
White House budget director Peter Orszag and Fed Chairman Ben Bernanke have all talked publicly about the unusual disconnect between growth and employment. Though today's disparity between growth and jobs is especially stark, a jobless recovery wouldn't be new: The past two recessions were marked by firms reluctant to resume hiring right away after demand recovered. The current disconnect could reflect an unanticipated surge in productivity -- companies finding ways to increase output with fewer workers. That could set up the economy to grow rapidly in future years. Rising productivity is the linchpin of economic growth and rising living standards.
As history shows time and time again, if the wisdom of the crowd thinks things are getting better, then they eventually WILL get better, because so much of our economy (and marketing strategy) is based on psychology, rather than true fundamentals. as we predicted earlier this year (“Recessions Can Spawn the Best Ideas”) companies that hunkered down during the depths of the downturn – rather than full scale retreat – are starting to show the fruits of those decisions.
Innovation Rules
Last week Apple Computer reported its best non-holiday quarter ever -- earnings up 15 percent -- despite continued malaise in the overall electronics sector. Meanwhile the U.S. financial markets leapt to their highest level since November on news that The Conference Board’s Index of leading economic indicators rose for the third straight month in June. While the increase was a modest 0.7 percent, the index hasn’t had a three-month win streak since 2004 and seven of the 10 data points it tracks showed improvement including building permits. The S&P 500 Index – in which 70 percent of companies have posted better than expected earnings -- is up 5.3 percent for the year and up 41 percent since its early March nadir. The broader Wilshire 5000 Index is up 7.5 percent for the year.
Analysts point to unexpectedly strong sales of Macintosh computers and a surge in iPhone purchases. We’ve been banging the “innovate when times are worst” drum for months here in this blog and Apple’s an example of why. Its products work and function the way the human brain thinks. {Disclosure: we have not financial or promotional interest in Apple Computer, Inc.). Apple customers – not corporate I.T. wonks or Indian outsourcing farms – control the customer experience.
“We’re making our most innovative products ever and our customers are responding,” said Steve Jobs, Apple CEO in a statement. Shaw Wu, a Kaufman Brothers analyst, told the New York times that Macs were “resonating with increasing numbers of customers, as it is arguably the best platform for what people do today, which includes Web surfing and creating and managing content.”
Thanks to the Web, the rules are dramatically changing in the music industry too. The Internet, not record labels, is increasingly calling the shots when it comes to promoting and distributing music. Physical album sales fell 20 percent to 362 million last year, according to Nielsen, but sales of individual digital tracks rose 27 percent to 1.07 billion – that’s right billion – more than enough to make up the shortfall.
Major record labels no longer have an iron fist on creating and selling professional music and getting air time on the radio. Polyphonic and other savvy startups are running their record labels like VC firms, by investing in promising bands, allowing them to record their own music and choose outside contractors to handle their publicity, merchandising, touring, etc. Instead of groveling for advances and praying for royalties if they create a hit, musicians share in all the profits from their music and touring. Guess what, they’ll also maintain ownership of their own copyrights and master-recordings. Can you imagine Sony, Warner or EMI cutting deals like that with up-and-comers, let alone their stars?
The year of the true multimedia campaign?
Three in four (74%) of advertisers using the Internet are doing so more than they did a year ago, while half (49%) who use print are using it less, according to a recent Linked In / Harris poll (PDF) of 1,015 ad agency and marketing execs nationwide. The poll not only found 69 percent of mobile marketers are using the medium more than they did a year ago, but more than half of online advertisers overall, are using the Web as part of a broader multi-media campaign. Just one in seven (14%) Web advertisers, are committing dollars only to online.
We’re not out of the woods by a long shot. But those who continued to trust their instincts, resourcefulness and innate sense of direction during the darkest days are going to be the first ones seeing the clearing through the trees.
In most parts of the United States, the recession seems to be losing steam and economies are beginning to stabilize, the Federal Reserve said today in a snapshot of economic activity from across the country. This assessment is based on the Fed’s latest “beige book” (PDF)which gauges economic conditions from 12 distinct areas of the country.
“Recession is over, economy is recovering — let’s look forward and stop the backward-looking focus,” John E. Silvia, Wells Fargo’s chief economist, wrote yesterday in a research note.
We're one-third of the way out of the recession, according to Kiplinger's Recovery Index, which tracks six key economic indicators. The National Association of Realtors (NAR) just said that sales of previously occupied homes rose 3.6 percent last month, the third straight month to do so. It was the highest level of sales since October 2008 and beat analysts expectations. Meanwhile, the Case-Shiller index of home prices in 20 metropolitan areas, produced by Standard & Poor's, rose 0.5% in May from the month before, the first increase after 34 straight months of decline. If you’re keeping score, the median sales price nationwide is now up to $181,800, up from 174,700 last month -- still 15 percent below $215,000 a year ago – but a key positive trend to be sure.
According to Kiplingers, home prices may be bottoming out after two years of decline (some say they bottomed out six months ago), but at least people are buying stuff. Said the Kippies: "Home sales activity is a key indicator of the economy's health because buying a house involves such a large commitment of funds, reflecting confidence about the future. Rising home sales also show that banks are willing and able to lend, which is another requirement of a healthy economy."
But, what about the sky high unemployment rate? Oh that. Jobless claims are still at record highs, but since unemployment lags behind other economic indicators, that’s not the downer it may appear – provided you’re among the lucky few still working. Breaking from historical patterns, the unemployment rate -- currently at generation-high 9.5 percent -- is ONLY one to 1.5 percentage points higher than would be expected under one economic rule of thumb, Lawrence Summers, President Barack Obama's top economic adviser told the Wall Street Journal last week. Since the recession began in December 2007, the economy has lost 6.5 million jobs, 4.7 percent of total employment. The unemployment rate has jumped five percentage points, while the economy has contracted by roughly 2.5 percent.
If you can take a moment to ignore the painful shrinkage to your retirement account, investments and college savings plans, the midsummer stream of earnings reports from major companies is refreshing, and so is the market's reaction to them. So far, July's quarterly results are reassuring in the macro view. Neither the economy nor the indexes are on the verge of backsliding, and they've helped push the Dow above 9,000. Some 61 percent of the companies in Standard & Poor's 500-stock index to report for the quarter beat analysts' forecasts.
White House budget director Peter Orszag and Fed Chairman Ben Bernanke have all talked publicly about the unusual disconnect between growth and employment. Though today's disparity between growth and jobs is especially stark, a jobless recovery wouldn't be new: The past two recessions were marked by firms reluctant to resume hiring right away after demand recovered. The current disconnect could reflect an unanticipated surge in productivity -- companies finding ways to increase output with fewer workers. That could set up the economy to grow rapidly in future years. Rising productivity is the linchpin of economic growth and rising living standards.
As history shows time and time again, if the wisdom of the crowd thinks things are getting better, then they eventually WILL get better, because so much of our economy (and marketing strategy) is based on psychology, rather than true fundamentals. as we predicted earlier this year (“Recessions Can Spawn the Best Ideas”) companies that hunkered down during the depths of the downturn – rather than full scale retreat – are starting to show the fruits of those decisions.
Innovation Rules
Last week Apple Computer reported its best non-holiday quarter ever -- earnings up 15 percent -- despite continued malaise in the overall electronics sector. Meanwhile the U.S. financial markets leapt to their highest level since November on news that The Conference Board’s Index of leading economic indicators rose for the third straight month in June. While the increase was a modest 0.7 percent, the index hasn’t had a three-month win streak since 2004 and seven of the 10 data points it tracks showed improvement including building permits. The S&P 500 Index – in which 70 percent of companies have posted better than expected earnings -- is up 5.3 percent for the year and up 41 percent since its early March nadir. The broader Wilshire 5000 Index is up 7.5 percent for the year.
Analysts point to unexpectedly strong sales of Macintosh computers and a surge in iPhone purchases. We’ve been banging the “innovate when times are worst” drum for months here in this blog and Apple’s an example of why. Its products work and function the way the human brain thinks. {Disclosure: we have not financial or promotional interest in Apple Computer, Inc.). Apple customers – not corporate I.T. wonks or Indian outsourcing farms – control the customer experience.
“We’re making our most innovative products ever and our customers are responding,” said Steve Jobs, Apple CEO in a statement. Shaw Wu, a Kaufman Brothers analyst, told the New York times that Macs were “resonating with increasing numbers of customers, as it is arguably the best platform for what people do today, which includes Web surfing and creating and managing content.”
Thanks to the Web, the rules are dramatically changing in the music industry too. The Internet, not record labels, is increasingly calling the shots when it comes to promoting and distributing music. Physical album sales fell 20 percent to 362 million last year, according to Nielsen, but sales of individual digital tracks rose 27 percent to 1.07 billion – that’s right billion – more than enough to make up the shortfall.
Major record labels no longer have an iron fist on creating and selling professional music and getting air time on the radio. Polyphonic and other savvy startups are running their record labels like VC firms, by investing in promising bands, allowing them to record their own music and choose outside contractors to handle their publicity, merchandising, touring, etc. Instead of groveling for advances and praying for royalties if they create a hit, musicians share in all the profits from their music and touring. Guess what, they’ll also maintain ownership of their own copyrights and master-recordings. Can you imagine Sony, Warner or EMI cutting deals like that with up-and-comers, let alone their stars?
The year of the true multimedia campaign?
Three in four (74%) of advertisers using the Internet are doing so more than they did a year ago, while half (49%) who use print are using it less, according to a recent Linked In / Harris poll (PDF) of 1,015 ad agency and marketing execs nationwide. The poll not only found 69 percent of mobile marketers are using the medium more than they did a year ago, but more than half of online advertisers overall, are using the Web as part of a broader multi-media campaign. Just one in seven (14%) Web advertisers, are committing dollars only to online.
We’re not out of the woods by a long shot. But those who continued to trust their instincts, resourcefulness and innate sense of direction during the darkest days are going to be the first ones seeing the clearing through the trees.
Wednesday, June 24, 2009
Mid-Year Media Reflections
Digital drives ad industry growth and business models. But it’s not all about the new.
Whether or not we’re pulling ourselves out of this (hopefully) once-in-a-generation economic quagmire remains to be seen. New jobs are being created, but the rate of unemployment is at 25 year highs in most parts of the country. The financial markets surged 40 percent after hitting 12-year lows in March, but they’ve been stuck in neutral the past month and most indices are about where they were at the start of the year. That means, investors haven’t lost real money, but they’re not keeping up with inflation either. Home sales are rising, but the median price of homes continues to plummet. Interest rates remain at historic lows, but no one’s really in a position to act on the bargain rates.
Despite this macro-inertia, it’s heartwarming to see that as in tough times before, innovation is thriving – no thanks to the venture capital community -- and long delayed-tough decisions are being made across all industries and walks of life.
In the media business, newspapers and magazines are taking it on the chin as both subscribers and advertisers are fleeing to more immediate and lower-cost outlets for news, information and entertainment. No surprise there. Some of the lost advertising and subscription revenue will return when the economy rebounds, but the rules of the game have changed so much that the tipping point has long since been passed.
What’s most striking about the media landscape in this downturn is that the audience (not the media gatekeepers) have stormed the cockpit and taken over the controls. Whether you’re in old media, new media or somewhere in between, you better get used to the idea that the audience/customer is calling the shots, not you. Get used to it.
Audience in control
Christian Dirschl, Content Architect for global information company Wolters Kluwer calls it the 4A’s: “Anyone can say Anything about Any topic at Any time.”
As Michael Marcel Fenez, Global Leader of Pricewaterhouse Coopers’ Entertainment & Media practice observed in a report released last week, “The accelerated migration to digital technologies has reinforced and proliferated new consumption habits and ‘digital behaviors’ as consumers seek more control over where, when and how they consume content while, more than ever, watching their pennies and seeking the best value from the choices they make.”
Over the next five years, PWC projects newspapers will lose $13 billion, dropping about 32 percent of its advertising revenue as digital technologies become increasingly widespread. The report expects print advertising overall to fall the most from $36.7 billion in 2008 to $24.3 billion in 2013. Online advertising revenue is anticipated to decline over the next two years. PWC expects online ad revenue to grow at a 2.5 percent compound annual rate from 2008.
Can’t hide from the digital migration
Fenez says the economic downturn has accelerated and intensified the digital migration among both providers and consumers of content. “Companies who grasp the opportunities which are appearing in this fast changing marketplace and are agile enough to adapt their business models will be able to take full advantage of the potential and new revenue models as they emerge.”
For instance, end-user spending through digital/ mobile platforms accounted for 23.4 per cent of the overall consumer/end-user/ access market in 2008 and should account for 78 per cent of total growth during the next five years, says PWC.
Consumers are taking control in various ways.
• They’re “time-shifting” via digital video recorders and video-on-demand to free them up from the TV schedule enabling them to watch what they want when they want.
• Increased broadband penetration is enabling them to get what they want from wherever they want while improvements in technology allow better downloading and streaming.
• Growth in mobile access is allowing consumers to access the Internet from any location and giving rise to the popularity of high-end devices such as smartphones, iPods, and the Kindle that combine mobility and access.
• The advances in digital music are also allowing consumers to purchase songs individually through digital channels (unavailable in physical format) and generating growth in “sideloading,” which allows consumers to buy music less expensively online, then transferring that music to mobile devices.
The changing face of advertising
PWC predicts that over the next five years, as consumers receive an increasing proportion of their E&M through digital/mobile platforms, advertisers will shift their resources to reflect the increasingly fragmented ad market. In the mobile arena, opportunities across the advertising continuum will enable the growth between brands and consumers, ranging from click-through banner ads and pre-roll ads on video clips through coupons and online subscriptions.
The growing proportion of Internet and mobile advertising in the overall global advertising mix will rise from around 12 percent in 2008 to 19 percent in 2013.
Age of accountability
However, the migration reinforces the need for greater transparency and accuracy over audience metrics which together with accountability for ad results, is becoming a “must have” in this new media world.
“Though operating in challenging and fast-moving times, this has never been such an exciting time for the industry,” say Fenez. “The accelerating digitization is why there is no place to hide from new models and dynamics across the industry. The winners will be those players who focus on driving and leading change that delivers real value for consumers.”
It’s Not All About the New
“Never adapt technology for the sake of technology,” cautioned Richard Oppenheim in a recent CPA Technology Advisor editorial. Make decisions based on usability and company business support. Technology requires frequent assessments that are often confused by the emotional pull of the new, the sexy and the visually gorgeous. Knowing how and when to make the decisions to change technology means doing evaluations and analysis that effectively measure the impact of that change on dollars, resources and people.”
Great ideas can come from anywhere at any time from all types of people and organizations. Don’t throw out the old, just to make room for the new, but keep your eyes wide open for new opportunities, apps and technologies that can bring fun and bottom line value to your business. Explore everything. It doesn’t matter if you’re currently twittering or tweeting, just keep testing, tweaking and exploring.
Whether or not we’re pulling ourselves out of this (hopefully) once-in-a-generation economic quagmire remains to be seen. New jobs are being created, but the rate of unemployment is at 25 year highs in most parts of the country. The financial markets surged 40 percent after hitting 12-year lows in March, but they’ve been stuck in neutral the past month and most indices are about where they were at the start of the year. That means, investors haven’t lost real money, but they’re not keeping up with inflation either. Home sales are rising, but the median price of homes continues to plummet. Interest rates remain at historic lows, but no one’s really in a position to act on the bargain rates.
Despite this macro-inertia, it’s heartwarming to see that as in tough times before, innovation is thriving – no thanks to the venture capital community -- and long delayed-tough decisions are being made across all industries and walks of life.
In the media business, newspapers and magazines are taking it on the chin as both subscribers and advertisers are fleeing to more immediate and lower-cost outlets for news, information and entertainment. No surprise there. Some of the lost advertising and subscription revenue will return when the economy rebounds, but the rules of the game have changed so much that the tipping point has long since been passed.
What’s most striking about the media landscape in this downturn is that the audience (not the media gatekeepers) have stormed the cockpit and taken over the controls. Whether you’re in old media, new media or somewhere in between, you better get used to the idea that the audience/customer is calling the shots, not you. Get used to it.
Audience in control
Christian Dirschl, Content Architect for global information company Wolters Kluwer calls it the 4A’s: “Anyone can say Anything about Any topic at Any time.”
As Michael Marcel Fenez, Global Leader of Pricewaterhouse Coopers’ Entertainment & Media practice observed in a report released last week, “The accelerated migration to digital technologies has reinforced and proliferated new consumption habits and ‘digital behaviors’ as consumers seek more control over where, when and how they consume content while, more than ever, watching their pennies and seeking the best value from the choices they make.”
Over the next five years, PWC projects newspapers will lose $13 billion, dropping about 32 percent of its advertising revenue as digital technologies become increasingly widespread. The report expects print advertising overall to fall the most from $36.7 billion in 2008 to $24.3 billion in 2013. Online advertising revenue is anticipated to decline over the next two years. PWC expects online ad revenue to grow at a 2.5 percent compound annual rate from 2008.
Can’t hide from the digital migration
Fenez says the economic downturn has accelerated and intensified the digital migration among both providers and consumers of content. “Companies who grasp the opportunities which are appearing in this fast changing marketplace and are agile enough to adapt their business models will be able to take full advantage of the potential and new revenue models as they emerge.”
For instance, end-user spending through digital/ mobile platforms accounted for 23.4 per cent of the overall consumer/end-user/ access market in 2008 and should account for 78 per cent of total growth during the next five years, says PWC.
Consumers are taking control in various ways.
• They’re “time-shifting” via digital video recorders and video-on-demand to free them up from the TV schedule enabling them to watch what they want when they want.
• Increased broadband penetration is enabling them to get what they want from wherever they want while improvements in technology allow better downloading and streaming.
• Growth in mobile access is allowing consumers to access the Internet from any location and giving rise to the popularity of high-end devices such as smartphones, iPods, and the Kindle that combine mobility and access.
• The advances in digital music are also allowing consumers to purchase songs individually through digital channels (unavailable in physical format) and generating growth in “sideloading,” which allows consumers to buy music less expensively online, then transferring that music to mobile devices.
The changing face of advertising
PWC predicts that over the next five years, as consumers receive an increasing proportion of their E&M through digital/mobile platforms, advertisers will shift their resources to reflect the increasingly fragmented ad market. In the mobile arena, opportunities across the advertising continuum will enable the growth between brands and consumers, ranging from click-through banner ads and pre-roll ads on video clips through coupons and online subscriptions.
The growing proportion of Internet and mobile advertising in the overall global advertising mix will rise from around 12 percent in 2008 to 19 percent in 2013.
Age of accountability
However, the migration reinforces the need for greater transparency and accuracy over audience metrics which together with accountability for ad results, is becoming a “must have” in this new media world.
“Though operating in challenging and fast-moving times, this has never been such an exciting time for the industry,” say Fenez. “The accelerating digitization is why there is no place to hide from new models and dynamics across the industry. The winners will be those players who focus on driving and leading change that delivers real value for consumers.”
It’s Not All About the New
“Never adapt technology for the sake of technology,” cautioned Richard Oppenheim in a recent CPA Technology Advisor editorial. Make decisions based on usability and company business support. Technology requires frequent assessments that are often confused by the emotional pull of the new, the sexy and the visually gorgeous. Knowing how and when to make the decisions to change technology means doing evaluations and analysis that effectively measure the impact of that change on dollars, resources and people.”
Great ideas can come from anywhere at any time from all types of people and organizations. Don’t throw out the old, just to make room for the new, but keep your eyes wide open for new opportunities, apps and technologies that can bring fun and bottom line value to your business. Explore everything. It doesn’t matter if you’re currently twittering or tweeting, just keep testing, tweaking and exploring.
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