Friday, August 10, 2007

How will Yahoo address social networking?

The due date for Yahoo CEO Jerry Yang’s strategic plan isn’t here yet, but that hasn’t stopped the handicapping. Bear Stearns analyst Robert Peck has a 22 page report addresses Yahoo’s options.

His conclusions:

  • Yahoo will have to address its social networking strategy since Comscore reckons that social sites (think Facebook and MySpace) account for 60 percent of the world’s Internet users.
  • These social sites have scattered the ad revenue pie.
  • Social sites threaten the portal business model–also known as Yahoo’s bread and butter.
  • A company like Yahoo could monetize a social site with behavioral targeting.

The big question: What is Yahoo going to do about it?

Peck writes:

“One of the topics we feel the company must be reviewing closely is Social Networking. Yahoo! has looked at this closely in the past, and in our opinion needs to decide what steps (if any) need to be made for Yahoo! to solidify its future with the impact coming from this ‘emerging’ phenomenon. We put emerging in quotes because social networking is nothing really new - Friendster was started back in 2002, and Yahoo! already has its own social network in Yahoo! 360. However, industry data shows that Yahoo! 360 has been losing ground to more popular networks, and to compound the problem that social networks are growing much faster than the “traditional portals ” like Yahoo!.”

Peck also notes that Yahoo needs to step up its social media initiatives via acquisition or partnership “or risk being marginalized in some of their business.”

Link to ZDNet Article

Breaking Down the Walls Of Phones' Web Gardens

Chuck Halverson, a banker in Minneapolis, pays AT&T Inc. $20 a month on top of his calling fee so that he can surf the Internet from his cellphone. But he doesn't use the browser that came loaded on the AT&T phone because it limits the sites he can visit.

Instead, he downloaded another program, Opera Mini, that lets him easily go to almost any Web site he wants.

"The experience should be the same no matter if you're on a mobile phone, a laptop or a desktop," he says. "You want it to be universal."

Ever since wireless companies began offering Internet services on cellphones, users have shared a similar complaint, largely because the companies want to control which sites their customers visit. Phones come with browsers designed to go mainly to the Web sites the carriers chose -- usually the ones they have revenue-sharing deals with. It is possible to go to sites outside this "walled garden," but the experience is so slow and cumbersome that most users don't try. And some of those outside Web sites won't work with the carrier-approved browsers.

But now those walls are beginning to break down, in a development that harkens back to America Online's failed attempt to limit its Internet subscribers' surfing in the 1990s. "Having a Web browser and the ability to browse the open Internet on your mobile phone will be a given in the future," says Tony Cripps, an analyst at research firm Ovum in London. "It's a capability that eventually people would expect to be there, just like text messaging and camera."

Many new browsers to ease surfing on the Web are being developed, and some wireless carriers have begun opening up Internet use for customers.

Since it was launched in January 2006, more than 15 million cellphone users around the world have downloaded the Opera Mini browser, which is available for free and usable on most cellphones. Early versions of the Opera Mini, developed by Opera Software ASA in Norway, display Web pages in a single column, which works well on cellphones with small screens. The latest version shows Web sites in full-page views that are even more similar to the look on a PC.

Deutsche Telekom AG's T-Mobile International has preloaded Opera Mini into 35 cellphones that are available in nine European markets. T-Mobile expects that by providing its customers better browsing experience, more people will pay to access the Internet on their cellphones.

The walled-garden approach "didn't work with AOL," says Ingo Schneider, vice president at T-Mobile International. "It's not going to work in mobile either."

Apple Inc.'s iPhone, sold by AT&T, displays Web pages the way they appear on the wired Internet, with a zoom-in, zoom-out feature that allows users to read text and enlarge photos. A TV ad for the iPhone says the Safari browser provides "not a watered-down version of the Internet, or the mobile version of the Internet...It's just the Internet on your phone."

Other forces are also opening the wireless Internet. Rules approved Tuesday by the Federal Communications Commission for its coming auction of radio spectrum set aside a portion of those airwaves for wireless networks that allow customers to use any mobile device, not just those approved by the network owner. That is expected to encourage the spread of devices that are able to surf the entire Internet, as well as other innovations.

But these new networks will take years to build and require billions of dollars of investment. For now advanced browsers are the best route to the wide-open Internet. However, these browsers on their own can't mimic the PC experience completely on cellphones. While the new browsers can take users to any site, handsets can't download music and video unless those features are supported by the wireless carriers. And, they don't work on all cellphones -- for instance, Opera Mini can't be used on Verizon Communications Inc. cellphones.

Among the technology companies developing products similar to the Opera Mini, Microsoft Corp. is working on a browser called "Deep Fish," which, its Web site says, can display content in a view that is closer to the desktop experience. Deep Fish, like many of the browsers in development by various companies, isn't yet available to consumers. The browser is being tested on smartphones supported by the Windows Mobile operating system. Microsoft says the software is not tied to Windows Mobile and could possibly be used on other phones. The company hasn't disclosed when the browser will be available to the market and if it will be free for download.

The growing sophistication of these browsers marks the latest step in the evolution of wireless Web surfing technology. Initially carriers and media companies hired software engineers to reconfigure Web pages to fit into the small screen of cellphones with few photos and images. A special domain name ".mobi" was created last year in hopes that a parallel World Wide Web will be built just for cellphones. But the focus is shifting to developing browsers that can bring the regular Internet experience to cellphones without the need to upgrade to expensive handsets or recreate Web pages just for cellphones.

Smaller companies also have gotten into the game. Novarra Inc. is working directly with carriers to improve the limited browsers that have been preloaded into handsets.

The more advanced browsers also reduce the time it takes for wireless devices to load Web pages. This is possible because the new generation of mobile browsers rely on servers rather than the device itself. The Opera Mini, for example, is able to display a Web page on a wireless device with only 10% to 20% of the bits needed to display the same page on a PC. Consumers using it can surf faster than with a dial-up Internet connection on a PC.

"My browsing tends to be on my phone," says Ryan Octavianus, a 22-year-old college student in Bandung, Indonesia. He says it takes about three to six seconds to load a photo-laden Web page from social-networking site Friendster on his Nokia cellphone using the Opera Mini -- much faster than the 30 seconds it takes on his PC at home.

Opera Software, which also develops Web browsers for PCs and the Nintendo Wii game console, makes money on Opera Mini by licensing it to handset makers and wireless carriers, and sharing advertising revenue with Yahoo Inc., which has a search box on the Mini's homepage. The company is focusing for now on getting as many users as possible, says Chief Executive Jon S. von Tetzchner. Analysts believe Opera is hoping that its browser's popularity will eventually persuade more operators and handset makers to license its product.

Mr. von Tetzchner says technology advancement in mobile Internet will have a particularly big impact in developing countries, where many people's only option to go online is through their cellphones. For example, roughly 400,000 people in Bangladesh use Opera Mini for Web browsing, according to the country's largest cellphone operator GrameenPhone Ltd. -- in contrast, only 370,000 Bangladeshi had wired Internet service as of June, according to Internet World Stats, a site that tracks global Internet usage.

Link to WSJ Article

Pandora Spins Customized Facebook Radio Widget

Music recommendation provider Pandora is now pushing a Facebook widget, a move that closely follows the exit of a popular streaming radio application from the site. The movable Pandora player can be lodged into any Facebook profile page, and visitors can enjoy the customized channels. Users must have an active Pandora account to position the tailored stations. Once installed, interested listeners are sent to the Pandora destination to enjoy the streams.

Currently, the application add-on remains stealth, and less than 2,000 users have jumped on board. But social networking destinations are great at spreading good things, and that could lift awareness for Pandora considerably. Whether users ultimately subscribe to Pandora as a result remains unclear, though the widget is playing within a healthy, music-related sweet spot. Just last week, Facebook was forced to eliminate a streaming, third-party radio application based on infringement concerns.

Link to Digital Music News Article

Passalong Broadens Into Video, Strikes CinemaNow Deal

Nashville-based Passalong Networks is now broadening its media scope, part of a trend among digital music backend providers. The company, which powers digital music storefronts for companies like Trans World Entertainment and Proctor & Gamble, is now moving into the world of digital film and video. On Tuesday, the company announced a deal with CinemaNow, a move that gives clients access to roughly 7,000 movies and music videos. "Over the past couple of years, a growing number of our clients have asked that we expand our catalog to include film, concert and music video content," said Dave Jaworski, cofounder and chief executive of the company. "We are excited to offer them these services."

Passalong clients have also been requesting MP3-based content, and that prompted a number of earlier deals involving independent labels and EMI Music. Meanwhile, the asset diversification play follows moves by competitors like MusicNet - which recently changed its name to MediaNet Digital - and 24-7 MusicShop - which recast itself as 24-7 Entertainment this week. From a broader perspective, those changes reflect a widening consumer appetite for digital media, a trend spurred by broader pipes and larger storage capacities.

Link to Digital Music News Article

Nokia Names JWT as Lead Global Network

WPP Agency to Support Local Efforts in More Than 80 Markets

SAN FRANCISCO (AdAge.com) -- The world's largest mobile-phone marketer, Nokia Corp., today named JWT its global-network marketing agency. JWT will support local efforts in more than 80 markets worldwide.

Nokia in a statement said hiring the WPP Group agency is part of a "marketing renewal that focuses on streamlining marketing planning and increasing the effectiveness and efficiency of all marketing activities." Maybe so, but the streamlining also involves a large cast of characters.

Not a slim roster
In July, independent Wieden & Kennedy, working out of its London office, was named lead agency for mobile-phone creative.

Nokia also has divided duties for its multimedia phones, such as the Nokia NSeries, and its enterprise solutions group. Creative support for the former is with Interpublic Group Cos., while WPP houses the latter's global creative business.

A JWT spokeswoman said the win covers 95 markets and "was hard-fought over six months and tens of countries, and that delivers on JWT's promise of being future ready." JWT and sibling Grey Worldwide, the marketer's agency in the U.S., Europe and parts of the Middle East, led the pitch. Bates, Nokia's shop in Asia, and Omnicom Group's DDB Worldwide were other finalists.

Last year, Nokia spent $49 million in measured media in the U.S., according to TNS Media Intelligence. Some estimates have put its global spending as high as $300 million.

Transition to new marketing will begin during the fall, with the new shops taking over in January.

U.S. battleground
Although Nokia, with sales of $17.2 billion, is the world's leader in market share, it battles for first place in the U.S. market. From April to June of this year Nokia's worldwide sales were up 29% from 2006, more than double the industry's overall growth of 14%. Of the 262 million mobile devices sold globally, 100 million were Nokia phones, the company said.

According to Strategy Analytics, in the second quarter Nokia was No. 4 in the U.S. marketplace, with a 13.4% share behind No. 1 Motorola at 33%, followed by Samsung at 17% and LG at 15%.

Link to AdAge Article

A Website Where Ads Are the Draw

USA Network Launches Didja.com With Eye Toward Marketers

NEW YORK (AdAge.com) -- NBC Universal's joint venture with News Corp. for a proposed YouTube-killing broadband video site still doesn't have two key elements -– a name or a launch date -– but that hasn't stopped NBC's top cable network, USA, from moving forward on its own destination site, Didja.com.

Scheduled to launch in first-quarter 2008, Didja is designed to be a destination for consumers who want to watch their favorite ads off the TV screen in a social-networking setting.

'Logical next step'
"Didja.com is the logical next step in the changing dynamic between consumers and advertisers," said USA president Bonnie Hammer. "There's no doubt that commercials are major drivers of pop culture -- all you have to do is check out traffic on any video-sharing site. We want to own that watercooler conversation and become the go-to destination for on-demand advertising content."

USA is not the first cable network to create an ad-based social-networking site. Turner Entertainment's TBS has VeryFunnyAds.com, which focuses exclusively on humorous commercials both domestically produced and internationally made. Since its launch last summer, the comedy site has averaged about 233,000 page views a month, according to ComScore Media Metrix data. Those numbers are relatively low for a network that attracts millions of viewers on-air in prime time, but it's enough proof of consumer interest in viewing ads away from YouTube to encourage USA to take more of a mass reach approach with Didja.

Appealing to marketers as well
The site will have channels for "every category humanly possible in the world of advertising," said Chris McCumber, USA's senior VP-marketing and brand strategy. "This is another way for us to be able to offer advertisers an engaged audience predisposed to watch commercials, from Super Bowl ads to Academy Awards ads. We know when viewers are engaged or interested in seeing a particular ad -- whether it's services or learning about a product they want to buy -- we can provide a place for them to hear about the latest commercials they love."

Mr. McCumber and the USA sales team are currently looking for five to 10 charter advertisers with which to launch the site, across all categories. Considering "New Site" (as the still unnamed NBC/News Corp. joint venture is currently known) was able to scrounge up major advertisers such as General Motors, Intel and eSurance within 24 hours, there's reason to be optimistic that more marketers might be willing to sign up for another unproven project designed to compete with the YouTubes and MySpaces that have kept eyeballs away from the networks' own home pages.

"There's a lot of ways to drive traffic," Mr. McCumber said. "You can create entertainment pods on USA Network, or you can almost do something like Entertainment Weekly, like plug a new actor in a new campaign. You could say, 'Here's a sneak peek at a new Geico commercial,' or air a world premiere of a certain commercial on Didja and put it through an entertainment lens."

'Characters Uncovered' campaign
USA has dabbled in branded extensions of commercials before through its "Characters Uncovered" campaign, crafting mockumentary-style ads around popular ad characters such as Tanqueray's Tony Sinclair, the Orkin Man and the Keebler Elves.

Mr. McCumber said to expect a similar approach on Didja, as well as a "director's cut" approach to certain ads. "There's a lot of ways where creative teams can utilize the site to not only show their work but also test their work out," he said. "You could put on four or five different versions and immediately get a response. The 30-second spot is king sometimes ... but the Joe Pytkas of the world might want to put out a director's version of the next Geico spot."

Link to AdAge Article

Scion Drives Into There.com

TOYOTA'S SCION HAS PARTNERED WITH Makena Technologies, parent company of the virtual world There.com, to launch Club Scion--an in-world branded nightclub cum hangout spot.

Makena partnered with Metaversatility (a virtual design studio) to create a nightclub "tower" out of three "larger-than-life sized" Scion vehicles, the xA, xB, and tC models--complete with music, dance floors, hot tubs and transparent floors.

The construction lets avatars explore the interior features of each car in detail while creating a sleek, urbane space for casual socializing--arguably the "most popular activity" in There.com, according to Ben Richardson, Makena Technologies' vice president of business development. Members can also use Club Scion to host more formal community events.

"If we can't come up with a way to enhance the user experience through a marketer's offering, then we don't do a deal," said Richardson. He added that There.com's commitment to a quality experience is what keeps its 1 million regular users open to trying branded promotions.

As skepticism about the viability--and more importantly, the ROI--of advertiser spending in virtual worlds increases, the terms of this deal highlight what Richardson says is There.com's unique value proposition.

Makena works with marketers throughout the campaign, from planning and development to implementation and management, to ensure that the promotion gets enough user attention.

"We embed [marketers] throughout the world in strategic ways, rather than sticking them in one specific place and leaving it to them to drive traffic," said Richardson.

For example, interactive kiosks and billboards with Scion information will placed at various other in-world locations, in addition to Club Scion. Richardson added: "We know it works very well based on activity with current marketers."

Advertisers such as Capitol Music Group have already launched in-world promotions, ESPN's X Games features wearable merchandise, and MTV jumped ship from Second Life to develop virtual versions of "The Hills" and "Laguna Beach" TV shows in There.com.

Makena provides real-time measurements and reports on the frequency and duration of user interaction with a brand--but the immersive nature of the medium warrants additional key performance indicators, something that the company discusses with potential marketing partners in the development stage.

"It's the difference between watching a car drive in a commercial, and going to the dealership for a test drive," said Richardson. "There.com offers an engaged interaction, a greater sense of mindshare. So we can track the ROI and make changes if need be--but the goal is to create an experience that allows users to access products in a way that's never been done before."

Link to MediaPost Article

Universal Music Group Spreads DRM-Free, Spites iTunes

Universal Music Group is now triggering a multi-month, DRM-free download experiment, a significant step that follows a similar move by EMI. But unlike EMI, Universal is leaving iTunes out of the fun, and playing a dicey strategic game in the process.

Just recently, the mega-label indicated that it would soon offer portions of its catalog DRM-free to a number of online outlets, including Rhapsody, Amazon, Wal-Mart, and even Google. But the iTunes Store is not being handed the same luxury, a move that follows a period of dissatisfaction with the online retailing giant.

In a discussion Thursday, an executive at RealNetworks confirmed that portions of the Universal Music Group catalog will be positioned on Rhapsody starting August 21st, and continuing through January. Those tracks will be playable on iPods and a broad number of other players, according to the source. The executive also noted that songs from 50 Cent, Amy Winehouse, Johnny Cash, and a long list of others will be offered as MP3s, and sold at the same price as protected songs. Tracks will be encoded in 256kbps quality.

Universal Music Group is expected to release more information in the near future, though the Rhapsody experiment is likely to resemble rollouts by rival retailers.

Link to Digital Music News

Alltel Wireless Grabs MTV Networks Video Content

US-based wireless network Alltel has now finalized a content relationship with MTV Networks, according to deal terms disclosed Thursday. The Viacom-owned MTV is delivering a number of goodies to Alltel, including mobile-based videos, WAP sites, and games revolving around its MTV, Comedy Central, Nickelodeon, Spike TV, and VH1 properties. Compatible Alltel handhelds will enjoy mobile-friendly clips from Comedy Central's "South Park," "The Hills," and Nickelodeon's "SpongeBob SquarePants," among others.

The deal provides lots of content for Alltel, and a nice content jumpstart for an emerging format. "As the wireless phone continues to evolve
into a mobile entertainment device, Alltel is committed to providing the
latest and most compelling content available," said Wade McGill, senior vice president of wireless product management for Alltel. The MTV Networks content will be blended into an existing, premium data offering from Alltel called Axcess, a service that also includes news, sports, GPS, texting, and music-related content like XM Satellite Radio, ringtones, and ringbacks. Alltel has roughly 12 million subscribers.

Link to Digital Media News Article

Facebook enables advertisers to opt out

Facebook advertisers will be able to opt out of parts of the social networking website following the discovery that some campaigns were running close to content promoting the British National Party, the far-right political party.

Companies including Vodafone, Virgin Media and First Direct, the internet bank owned by HSBC, last week pulled Facebook campaigns after finding these were running next to a page for the BNP. They vowed not to return unless they had reassurances about where their ads appeared.

Facebook has now updated its system to enable advertisers to avoid appearing next to listings for some of the estimated 6 million user groups on its website.

The blocking feature, which is likely to be offered to advertisers internationally at a later date, will attempt to address marketers’ concerns about the unpredictable and relatively uncensored nature of some of the fast-growing site’s content. The US-based company is working on other ways of giving advertisers more control over which pages they are seen on.

The incident highlighted a risk of advertising on social network websites, which are nevertheless attractive to advertisers because they offer large audiences and innovative marketing formats. Most of the businesses had bought space “blind” from third-party sales houses which sell bundles of slots across many different websites, as there are currently no Facebook sales teams in the UK.

The advertisers were not aware of the BNP link until this was pointed out by media outlets including New Media Age, the UK trade magazine, and the BBC.

The BNP page was in the political groups section of the site which has grown quickly by allowing users to interact for free with friends and contacts, creating blogs or setting up communities of shared interest.

Facebook executives said the BNP page did not break any of the site’s terms of use which, among other things, forbids promotion of hate crimes.

But Owen Van Natta, Facebook’s chief operating officer, said it was one of “the pillars” of Facebook that users, including advertisers, could control where their information appeared.

Mr Van Natta said only a small number of advertisers had appeared on the BNP page and most of the brands and agencies consulted by the company had chosen to keep appearing in the groups’ section.

He said that the site did not “have an editorial function like a newspaper” but reflected the “reality of what is happening with the socialisation of the web”.

He added: “Most of our groups are in social interest or entertainment categories which can be very rich environments for advertisers.”

Link to Financial Times Article

Scripps Networks Buys Incando For Social Networking

BOLSTERING ITS CAPABILITIES IN USER-GENERATED content, Scripps Networks has acquired Incando Corporation, a provider of social networking and content sharing tools online.

Incando is known for its personal media-sharing service Pickle.com and the user-generated content management platform Powered by Pickle, which allows for the speedy uploads of photos and videos from consumers' computers, mobile phones and digital cameras.

Marking the company's second digital media buy in under a month, Scripps Networks just acquired Recipezaar.com, a user-generated recipe and community site with some 230,000 recipes.

Long considered an afterthought, the "content" a publisher's community can generate has emerged as a highly valued commodity, according to Deanna Brown, president of Scripps Networks Interactive Group.

"It's becoming clear that consumers have an appetite for both the professional guidance," Brown said, "as well as the insights and sensibilities they can get from the user-generated experience."

Within the next few years, Scripps Networks expects as much as 50% of its online content to be co-created by its users. "User-generated content is the perfect complement to the authoritative resources currently provided by our brands," Brown added.

Ron Feinbaum, executive vice president of new business development for Scripps Networks, negotiated the deal with Incando as one of several acquisitions the multimedia company is considering.

Founded in 2005, Incando is the brainchild of John Funge and Leo Scott. The two will now will join the Scripps Networks Interactive Group, headed by Brown, to lead the integration of their technology across all of Scripps Networks' online properties.

E.W. Scripps' online divisions have performed well this past year. In the second quarter, online revenue at Scripps Networks--HGTV, Food Network, DIY Network, among other brands--increased 26% to $19.4 million. Online revenue at Scripps' newspaper unit, meanwhile, increased 25% to $10.7 million.

CPMs for the company's broadband outlets--which include HGTV--have been in the $30-$35 range, versus $15-$18 for a more traditional Internet banner presence.

Link to MediaPost Article

Scripps Networks Buys Incando For Social Networking

BOLSTERING ITS CAPABILITIES IN USER-GENERATED content, Scripps Networks has acquired Incando Corporation, a provider of social networking and content sharing tools online.

Incando is known for its personal media-sharing service Pickle.com and the user-generated content management platform Powered by Pickle, which allows for the speedy uploads of photos and videos from consumers' computers, mobile phones and digital cameras.

Marking the company's second digital media buy in under a month, Scripps Networks just acquired Recipezaar.com, a user-generated recipe and community site with some 230,000 recipes.

Long considered an afterthought, the "content" a publisher's community can generate has emerged as a highly valued commodity, according to Deanna Brown, president of Scripps Networks Interactive Group.

"It's becoming clear that consumers have an appetite for both the professional guidance," Brown said, "as well as the insights and sensibilities they can get from the user-generated experience."

Within the next few years, Scripps Networks expects as much as 50% of its online content to be co-created by its users. "User-generated content is the perfect complement to the authoritative resources currently provided by our brands," Brown added.

Ron Feinbaum, executive vice president of new business development for Scripps Networks, negotiated the deal with Incando as one of several acquisitions the multimedia company is considering.

Founded in 2005, Incando is the brainchild of John Funge and Leo Scott. The two will now will join the Scripps Networks Interactive Group, headed by Brown, to lead the integration of their technology across all of Scripps Networks' online properties.

E.W. Scripps' online divisions have performed well this past year. In the second quarter, online revenue at Scripps Networks--HGTV, Food Network, DIY Network, among other brands--increased 26% to $19.4 million. Online revenue at Scripps' newspaper unit, meanwhile, increased 25% to $10.7 million.

CPMs for the company's broadband outlets--which include HGTV--have been in the $30-$35 range, versus $15-$18 for a more traditional Internet banner presence.

Link to MediaPost Article

Starwood Hotels Unveils Preferred Guest Web Site

STARWOOD HOTELS & RESORTS HAS rolled out a newly revamped consumer loyalty Web site with production support from Firstborn Multimedia.

In addition to providing the requisite property info and booking functionality all on one page, the new site at www.SPG.com aims to create a highly customized experience for Starwood Preferred Guests through the "My SPG" portal.

My SPG allows members to access their account, choose the information displayed, and search for Starwood properties that are linked to their interests and favorite travel destinations. Users can also add the Starpoint Tracker to their page, a tool to manage their customer reward or "Starpoint" balances and wish lists.

Members can access 'SPG Check-In' on the site, a downloadable application that sends special coupons and offers based on their preferences right to their desktop, PDA, or other mobile device daily. The application also feeds travel buffs the top stories of the day from TheLobby.com, the Starwood Preferred Guests' travel blog.

SPG.com's 'Hotel Explorer' feature is a tool that lets users find new travel destinations and hotels based on their predefined interests. After members enter their destination and activity preferences on the first visit, the 'Hotel Explorer' will offer new, user-specific hotel and trip options with one-click.

"The new SPG.com offers our members an easy way to book a stay, manage their account and access insights and recommendations on great new destinations that cater to their interests and travel persona," said Robin Korman, vice president of loyalty marketing for Starwood Hotels & Resorts Worldwide, Inc.

Link to MediaPost Article

Music companies seek new money in old partners

NEW YORK (Reuters) - The world's leading music companies, hit by falling sales of CDs, are switching to a new groove -- buying merchandising, management and other companies to diversify and boost profits.


Just this week, Universal Music and Warner Music Group announced investments in companies specializing in artist management or Web networking, segments they might not have considered part of their core operations in the past.

"Our return needs to be enhanced through a broader partnership with artists," Warner Music Chief Executive Edgar Bronfman said on a conference call with analysts on Tuesday.

Warner Music said it had invested around $110 million to increase its stake in artist management company Front Line Management, whose clients include Jimmy Buffet, Neil Diamond and Christina Aguilera.

"While the overall music business, including management, touring, sponsorship, merchandising ..., is growing, the recording business at present is not," Bronfman said.

NO MORE BUSINESS AS USUAL

Music companies make most of their money from sales of recorded music, usually as CDs, followed by music publishing.

Major record companies have traditionally acted like venture capital firms by seeking out unknown talent, taking a risk in developing artists.

If an artist has a hit album, the record company can usually recover its investment and make a profit through CD sales. But CD sales have fallen 20 percent in the first half of the year, more than the companies and analysts had forecast, as fans increasingly buy music online.

Piracy also remains a major drain on profits.

And despite their role in cultivating unknown talent, record companies make no money from the artist's touring, personal appearances, advertising and merchandising.

That is why the music companies, from Vivendi's Universal Music to EMI Group Plc and Warner, are beginning to bulk up resources in areas which had previously only been ancillary revenue streams.

Warner's management has been one of the most vocal about the need to diversify its revenue sources to include areas such as new digital businesses, touring and merchandising.

In June, Warner Music formed a joint venture called Brand Asset Group with Violator Management whose clients include rapper 50 Cent.

"This where the restructuring they talk of becomes important," said Tuna Amobi, analyst at Standard & Poor's.

"The challenge is to work with the artists and come up with management models that are beneficial to the label," he said. "It's not going to be an easy thing to do.

THE FULL BENEFIT OF TALENT

Other industry majors are looking to reduce their reliance on recorded music sales.

Universal Music Group said on Monday it had taken a stake in Loud.com, a hip-hop social networking site which offers competitions to win cash and recording contracts.

The deal follows an $88 million deal by Universal to buy British management and merchandising firm Sanctuary, whose artists include James Blunt and Elton John.

Though analysts understand why the majors are making the moves, they caution these companies will need to change the way they work with their most important asset: the talent.

"The Big Four have always been predatory and artist management is a very personal kind of business," says Bishop Cheen, analyst at Wachovia Securities.

"With the big majors this has not always been their strongest suit," he said. "But diversifying is still absolutely the right strategy."

Link to Yahoo! News Article


Social Shopping Site ThisNext Dubbed 'Marketer's Wet Dream'

ThisNext, the "social shopping" site that turns user reviews of products into a social network, has just added a new feature that Wired's Epicenter calls "a marketers wet dream."

The feature is called ThisWorld, and it uses Google Maps to display what visitors have purchased around the world in real time. This brings the micro-blogging phenomenon popularized by sites like Twitter to another level: a live feed of what people are buying.

A ThisNext representative noted, "We're all voyeurs and we like to know what other people are up to," a statement that can attest to the traffic the new tool is expected to draw from users and brand-builders alike.

ThisNext already touts other hip characteristics, like the ability to create widgets that show what users are currently shopping for, dubbed ShopCasting.

Link to Marketing VOX Article

Blockbuster Purchases Movielink to Build Online Distribution Network

A source reports that Blockbuster has just purchased online firm Movielink for an undisclosed figure.

Movielink, which was rumored to sell for at least $50 million, may assist the longtime video rental company in its ongoing battle against Netflix.

Some time ago Netflix, which was crowned king of online VOD by Compete, released a complimentary streaming film component for subscribers. The ability to download these films was recently discovered by hackers, adding security concerns to the online movie rental brand's list of issues to address.

Link to Marketing VOX Article

Universal Music Takes Stake in Loud.com

Universal Music has made an investment in hip-hop music-focused social network Loud.com, reports The New York Times.

Loud.com allows members to upload homemade rap creations and share them with friends. They're also eligible for a recording contract competition through SRC Records, owned by Universal.

Financial terms of the investment, which was made in exchange for a stake in the company, were not disclosed.

Link to Marketing VOX Article

Wal-Mart Taps into Facebook for Dorm Pimping

Wal-Mart has launched a sponsored Facebook group devoted to dorm room decoration, reports Silicon.com.

The Roommate Style Match group lets members enter their particular style preferences, which are then compared to their roommates'. Members then get a list of products Wal-Mart recommends and just happens to carry.

Wal-Mart has previously tried to launch its own in-house social network, which was closed shortly after its debut.

Link to Marketing VOX Article

Wednesday, August 8, 2007

Nielsen Research Proves Less Than Engaging, Only A Third Of Viewers Recall TV Spots

by Joe Mandese, Wednesday, Aug 8, 2007 8:45 AM ET
CONSUMER ENGAGEMENT IS STILL ONE of the hot buzz concepts on Madison Avenue, but if the preliminary results of new Nielsen research on the subject are any indication, the conclusion may be, well, less than engaging. Of the nearly 1,000 consumers Nielsen has interviewed to date, only a third could recall any TV commercials they had seen, Nielsen said in an update sent to clients on Tuesday. And it's not just advertising that TV viewers apparently have trouble remembering. Amazingly, 21% of TV viewers could not correctly recall at least one TV program they had viewed.

The findings, which come from Nielsen's so-called engagement panel--a panel of 1,000 "retired" people meter households that have agreed to participate in the engagement research--are based on 918 telephone interviews Nielsen had completed through July 20. Nielsen said it plans to have preliminary results of the full panel available by the end of this month, but the initial data does not seem encouraging, since two-thirds of TV viewers could not recall even one TV commercial. Moreover, among those who said they could recall a TV spot, Nielsen still needs to verify the accuracy of their recollections by comparing it with data from its Monitor-Plus TV commercial tracking system.

Among those who said they could recall a spot, the average commercial "recaller" claimed to remember 2.21 commercials.

Nielsen was more confident of the veracity of its preliminary findings on program recall. The 79% of viewers who could correctly recall at least one TV program were matched to data from the people meters Nielsen still has installed in those households. The average program "recaller" recollected 1.95 programs, Nielsen said.

The findings were released as part of a regular client update on Nielsen's so-called A2/M2 initiative from Nielsen chief Susan Whiting. As part of the update, Whiting said Nielsen also is making progress with its "mailable" TV meters, its out-of-home measurement, its "solo" meters for personal video devices, and with its Internet/TV integration panel.

"As part of our Internet integration initiative, we have concluded our focus groups and computerized individual surveys at our research facility in Las Vegas to determine participants' comfort levels with monitoring their Internet activities," Whiting writes in the client update. "The results, which are still being analyzed, will help us clarify whether people will take part in such measurements; under what conditions; and what would discourage them from doing so."

Whiting added that Nielsen is investigating whether consumers would be more willing to cooperate with its Internet and TV convergence panels if Nielsen agreed to "limit monitoring to certain sites." Previous Nielsen research indicated that one of the biggest obstacles confronting such convergence research is consumer concern over the privacy of their Internet behavior.

Link to MediaPost Article

Mobile Platform AdMob Now Serving 1B Mobile Ads Per Month

AdMob, a mobile advertising marketplace, announced today that it has hit a rate of 1 billion mobile ads served per month, according to information from the company.

Advertisers include Atlantic Records, Countrywide Home Loans, EA, JCPenney, MSN, Starbucks, and Windows Mobile, among others.

Data from the company reports that AdMob generates 520 million impressions per month in the US, compared to AOL's Third Screen Media, which triggers 225 million impressions.

Over 2000 mobile websites appear in the AdMob network, which launched a year in a half ago.

Link to Marketing VOX Article

Tuesday, August 7, 2007

Social Networks Impact Music Downloads; Piracy Growing

While music piracy is on the rise and legal downloads of music are slowing down, social networks are having a serious impact on the way users consume music, according to a survey by Entertainment Media Research (EMR) and law firm Olswang.


The survey interviewed 1,700 music consumers age 13-60 and found that music is important to social networkers: 39% have embedded music in their personal profiles.

70% said they embed music to show off their taste; half said music is a good way to reflect personality.

Some other survey findings:

  • Some 53% of people actively surf social networking sites to find music.
  • 30% said they went on to buy or download music that they had discovered on a social network site (for MySpace, the proportion is 36%).
  • On popular sites the numbers of people who use sites to find music increase - for MySpace and Bebo, 75% and 72%, respectively, and 66% for YouTube.
  • 46% say they wish it were easier to purchase music they had discovered on social networking sites - for example via a “buy now” button on the site.
  • The number of those saying they illegally download music tracks has increased, from 40% in 2005 and 36% in 2006 to 43% in 2007.

  • Only 33% cited the risk of being prosecuted as a deterrent against illegal downloading, compared with 42% in 2006.
  • Nearly one in five respondents - 18% - claimed an intention to download more unauthorized tracks, up from 8% in 2006.
  • After a dramatic 40% increase in the number of legal downloaders between 2005 and 2006, only 16% growth occurred in the number of legal downloaders from 2006 to 2007.
  • 22% of legal downloaders admitted that they had not paid for a track in the last six months.
  • 84% agreed that digital downloads of older music should be cheaper; 48% said they would be prepared to pay more for newly released music.
Link to Marketing Charts Article

Music publishers join YouTube lawsuit

NEW YORK - A group of music publishing companies said Monday it is joining a copyright infringement lawsuit against Google Inc.'s video-sharing site YouTube.

The National Music Publishers' Association said it was joining the lawsuit out of concern that many songwriters weren't receiving proper compensation when their music appeared on YouTube videos.

The lawsuit also includes as plaintiffs The Football Association Premier League and Viacom Inc., a media company that owns MTV, Paramount Pictures, Nickelodeon and Comedy Central.

The plaintiffs say YouTube is breaking the law by hosting video clips that they hold the copyrights to. However, YouTube says it's complying with the law by immediately taking down any clips found to be violating copyrights after receiving notification.

David Israelite, chief executive of the NMPA, said in a statement that the music publishers' group was "very concerned about YouTube's approach to copyright."

The lawsuits have been combined for trial purposes into one case being heard by U.S. District Judge Louis L. Stanton in New York.

Music publishing companies administer the copyrights of songwriters and composers and collect the royalties that are due to them.

Link to Yahoo! News Article

Hallmark Expands Cards With Sounds, Gives Away Music

by Sarah Mahoney, Friday, Aug 3, 2007 5:00 AM ET
THE BATTERED MUSIC INDUSTRY IS getting a boost from an unlikely source: Greeting cards.

Cards with sound have evolved from a few lousy bars of "Happy Birthday" to a new level of sophistication. Hallmark recently unveiled about 100 variations, bringing its total to more than 250--covering all genres of music as well as sound clips from favorite movies and TV shows.

As part of its summer promotion for the expanded line, Hallmark is giving away a free iTunes download worth 99¢ with each card it sells; most cost around $4.99. The promotion continues until Sept. 9 and is timed to coincide with Hallmark's "Use Music Summer Tour" featuring country singer Tim McGraw. (And, yes, three of his songs are included in the Hallmark collection.)

"People love them," says a Hallmark spokeswoman. "It's just fun to watch how they react to the different types of music when they look through the cards. They smile; they dance a little bit." And while the artists run from Barenaked Ladies to Tina Turner, George Thorogood's "Bad to the Bone," "The Chicken Dance" and "Napoleon Dynamite" are among the bestsellers, she says.

Marketers are finding ways to get into the act, too. Aflac recently introduced a Hallmark card--with the duck screaming his trademark phrase. The licensing fee for the birthday card, along with the sale of plush Aflac Ducks and annual Aflac Holiday Ducks, "has helped Aflac raise more than $2 million for pediatric hospitals nationwide," says an Aflac spokeswoman.

Hallmark already has a track record in the music biz: Six seasonal CDs by artists such as James Taylor, Michael Buble, George Strait and Martina McBride have been certified Gold (500,000 sold) or Platinum(1,000,000 sold).

The seven-city music tour also includes opportunities for concertgoers to check out the cards and enter a "Summer Sing-off" contest.

Hallmark launched Cards with Sound in 2006. American Greetings, based in Cleveland, also sells musical cards.

Link to MediaPost Article

East Side, West Side: Diageo Posts Smirnoff 'Tea Party' Sequel


A NEW SMIRNOFF "TEA PARTAY" video was posted on YouTube on Thursday, designed to pit a certain East Coast lifestyle against a cliché of the West Coast and raise awareness of Smirnoff's line of malt beverages.

"Green Tea Partay" features "Boyz N The Hillz" in a satirical rap that responds to 2006's "Raw Tea Partay," which featured "Prep-Unit." The sequel centers on the West Coast's "green" lifestyle and introduces Diageo's Smirnoff Raw Tea Green Tea.

The East Coast version, complete with pink and green Polo shirts, emphasized the refinement of old New England; the West Coast response features open shirts, no shirts and shell necklaces.

While a bunch of white dudes posing as black gangstas was wickedly amusing in the East Coast preppie version, white L.A. dudes don't quite bridge the gap. In the new video, the dudes get massages, eat tofu chowder instead of clam, and surround themselves with sultry babes in bikinis--although in one shot, it looks as if East Coast Buffy has switched teams ("Turns out, she likes the green tea").

One scene paints the picture well. One of the Boyz, working out in a gym, raps, "I'm lookin' in my mirror for my daily affirmation, Skin still glowing from my microdermabrasion."

Last year's rap video spoof, in which blue-blooded homies rapped about their high-living lives, debuted on Aug. 2 as well and raced around the Internet, garnering more than 3 million hits on YouTube as well as the Golden Lion at Cannes and the Award for Advertising Excellence by the Association of Independent Commercial Producers.

Smirnoff's tea-flavored malt beverages come in lemon, raspberry and green tea. Norwalk, Conn.-based Diageo is the world's leading premium drinks business.

Link to MediaPost Article

Study: Branding Can Alter Kids’ Perception of Taste

Preschoolers’ perception of what tastes better can be heavily influenced by the food packaging, if it’s branded by a ubiquitous and food brand’s - in this case, McDonalds’ - according to the findings of a study by a Stanford University researcher, reports the Associated Press.

The study had 3-5-year-olds from low-income families sample foods in taste tests of food wrapped in McDonalds and in umarked wrappers.

Study author Dr. Tom Robinson is quoted as saying kids’ perception of taste was “physically altered by the branding.” Even carrots, milk and apple juice tasted better to the kids if they thought the food was from McDonlad’s.

The study involved 63 low-income children from Head Start centers in San Mateo County, Calif.; only two of the 63 said they’d never eaten at McDonald’s; about one-third ate there at least weekly.

The 63 children performed a total of 304 individual tasting comparisons. In general, McDonald’s-labeled foods were the inevitable favorites:

  • Almost 77% said McDonald’s-labeled fries tasted better; only 13% preferred the fries in generic packaging.
  • 54% preferred McDonald’s-wrapped carrots, versus 23% pointing to the plain-wrapped sample.
  • Only in the case of hamburgers were the results not clear-cut: 29 kids chose McDonald’s-wrapped burgers; 22 chose unmarked ones.
  • Fewer than one-fourth said both samples of all foods tasted the same.

The researchers found that children with more television sets in their homes and children who ate food from McDonald’s more often were more likely to prefer the taste of foods/drinks if they thought they were from McDonald’s (see figures, below).

See the article, “Effects of Fast Food Branding on Young Children’s Taste Preferences,” published in Archives of Pediatric & Adolescent Medicine (Vol. 161 No. 8, August 2007).

Link to Marketing Charts Article

Slide Launches Branded Photo Apps

Photo presentation site Slide has signed some major advertisers as it rolls out branded widgets, reports ClickZ.

The move comes after Slide decided it had reached significant usage levels to support the ads.
Paramount Pictures, Activision, Lions Gate and others have all created branded widgets that Slide users can embed on blogs or social network profiles. AT&T is using the widgets to let people add cellphones to their pictures. Paramount will use them to promote its upcoming flick Bee Movie.

Promo spots within slideshows using the widgets are also available. An icon with the slideshow using Lionsgate's Bratz-branded widget triggers the movie's trailer to appear.

Slide says it spent nothing and did nothing to promote the widgets, relying solely on users adopting them on their own.

Interestingly, Slide sees widget use as an endorsement by the user of the advertiser.

Link to Marketing VOX Article

Disney Hit Proves YouTube Isn't Only Way to Target Teens

Net Turns to Libraries, Little League to Push 'HSM2'

Facebook? Forget it.

MySpace? YouTube? Um, like, nuh-uh! Or as Sharpay Evans would say, "Toodles!"

Kids may spend most every waking hour online, but when it came to marketing the sequel to "High School Musical," Disney Channel had little choice but to go decidedly old-school.
'High School Musical' has generated $1 billion in profits and $26 billion in retail sales. The sequel makes its debut Aug. 17.
'High School Musical' has generated $1 billion in profits and $26 billion in retail sales. The sequel makes its debut Aug. 17.
Photo Credit: Fred Hayes


"We need to be careful about where this shows up," said Richard Loomis, senior VP-marketing and creative for Disney Channel, and the man entrusted with marketing Zac Efron's wholesome grin and post-pubescent baritone to an audience that's largely between the ages of 9 and 14.

"There's the piracy issue, but there's also responsibility -- we have to make sure our content is showing up in safe and appropriate places."

Maintaining trust
Gary Marsh, president-entertainment at Disney Channel, puts it even more starkly: "Nothing is more important than the trust parents have in the Disney brand."

In other words, any official "High School Musical 2" material can't risk being seen within a thousand clicks of, say, a Brazilian supermodel having sex on a public beach. (The widely disseminated clip of Daniela Cicarelli cavorting on YouTube landed Google in a South American court last June.) No, too much is at stake to risk the ultimate fast-spreading infection: outraged parents.

Analysts estimate that the squeaky-clean "High School Musical" has generated $1 billion in operating profits to Disney in the past two financial years -- and at far lower cost and risk than CGI extravaganzas such as "Pirates of the Caribbean." In June, Disney trumpeted that overall licensing revenue would increase 13% for the fiscal year that ends next month, thanks in part to some 2,000 productions of actual high-school productions of "High School Musical" being licensed.

Analysts, such as Bank of America's Jonathan Jacoby, expect big things from the Mouse House's tiniest division, Disney Consumer Products: Disney will experience record-breaking retail sales of $26 billion worldwide in fiscal 2007, thanks in no small part to "High School Musical"-branded gear.

Premiere
And so, with viral marketing a nonstarter,"HSM2" makes its debut on Disney Channel on Aug. 17, having relied on far more traditional means to reach tweens.

Mr. Loomis, who arrived at Disney Channel after a six-year run at Comedy Central's marketing and brand-strategy department, said: "Lesson No. 1 was making sure we knew where our audience was."

He promptly set about creating far-reaching "High School Musical" outreach programs at popular bricks-and-mortar venues such as YMCA's and local libraries, where kids might be mouse-less, but not Mouse House-less: This summer, there will be some 1,500 pool parties at YMCA's across the nation, where tweens will watch "High School Musical 2" while drip-drying. Even burying your nose in a book will be no excuse not to see the sequel. Some 3,000 libraries across the country are slipping "HSM2" bookmarks into every children's book.

(The one initiative for "HSM2" that is distinctly techie was already in place, part of a larger, long-arranged Disney deal with Sprint to provide video-on-demand promotions of coming Disney films and shows.)

Handing out tchotckes
Mindful of the fact that Disney Channel's audience is 60% female, and eager to play up the baseball-jocks-vs.-theater-queens storyline of the franchise, Mr. Loomis also set partnerships with Major League Baseball. At Major League ballparks last weekend a musical number from "HSM2" called "I Don't Dance," aired on Jumbotrons. Meanwhile, at Little League tournaments across America, Disney is handing out tchotchkes and other "HSM2" gear.

Parents are also being targeted: "Got Milk?" campaigns feature the cast in print ads, and Wal-Mart and Macy's are getting exclusive access to certain "HSM2" consumer products.

Mr. Marsh is upbeat about his sequel, which used DisneyChannel.com to solicit suggestions about what kids wanted to see in the sequel. About 47 million kids responded.

"I'm foolishly optimistic that we've got a hit."

Link to AdAge Article

Google's Mobile Play Looks to Win Over Carriers and Consumers

But Are Marketers the Real Winners Following Last Week's FCC Ruling?

NEW YORK (AdAge.com) -- Though Google got half of what it wanted from the Federal Communications Commission last week in what is the first round of a long game leading to a more open national wireless broadband network, the FCC ruling has significant implications for consumers and carriers whose interests may prove to be at odds with each other -- just as Google hopes to benefit from both.

The FCC plans to auction off a chunk of wireless spectrum. Google said it would participate in the auction if the FCC adopted four of its requests; the FCC adopted two. The first said consumers can use any mobile handset with any wireless network they prefer, meaning that certain models of cellphones won't be tied exclusively to one service provider (like the Apple iPhone and AT&T). The second ensures consumers could run any program (including, of course, Google programs) on their mobile devices.

Laying groundwork for Google phone
Already Google has been cozying up to handset makers and carriers to be sure its services would play a starring role on their networks and devices. A long-rumored Google phone could make an appearance as early as 2008, the Wall Street Journal reported last week.

Currently telecom carriers operate like AOL in the early days of the internet, creating so-called walled gardens of content and striking deals with content providers and generating revenue from ad sales in that garden. Sprint and Verizon Wireless have begun to sell ads in their gardens.

"At the end of the day, one thing is clear: Walled gardens don't tend to survive," said John Hadl, CEO of Brand In Hand and a strategic advisor on mobile to Procter & Gamble Co.

Unfortunately for carriers, they don't make money from ads sold on mobile sites outside that garden. An ad on the carrier deck of Sprint for the site Weather.com, for example, would generate revenue for Sprint. But if a Sprint customer went onto the mobile web to see a Weather.com ad, none of that revenue would go to the carrier.

The FCC ruling for the wireless spectrum to be auctioned off could ultimately mean less ad revenue for carriers, but could be a boon to marketers.

Regardless of whether Google or the carriers won this round, for marketers "it's incredibly exciting, you've got these open platforms that allow for developers and marketers to reach consumers in whole new ways," said Craig Daitch, VP-group director of interactive strategy at PHD US. "The choices aren't predetermined for them."

Consumer choice
Allowing people to use their mobile device with any networks is also, in theory, good news for consumers. Already a reality in Europe, in the U.K. consumers have benefited as carriers offer discounts on a wider variety of phones to lure customers to sign contracts. Of course, consumers not wanting to be beholden to a contract can always pay full retail for a phone. Currently, telecom service providers, such as Verizon Wireless and AT&T, spend more than $5 billion a year in measured media, compared with about $200 million from cellphone manufacturers such as Motorola and Nokia.

Naysayers suggest otherwise. The handset constraints and control of applications are what allow carriers to provide consumers with deals such as free nights and weekends and new phones every two years, John Hodulik, a UBS telecom analyst wrote in a note to investors. "We believe these incentives make it unlikely that the open access requirements as we understand them will have much of an impact on the market."

Victory for wireless
So what didn't Google get? It wanted the FCC to require any carrier buying the spectrum to sell parts of the network to third parties at wholesale rates. It also wanted to remove limits on where the network could be tapped. Many considered the FCC's decision to reject those conditions to be a major victory for the wireless industry.

Because not all of Google's requests were met, it now says it may not choose to enter the auction. Google responded to the decision on its public policy blog: "The Federal Communications Commission made real, if incomplete, progress for consumers this afternoon. Just two months ago, the notion that the FCC would take such a big step forward to give consumers meaningful choice through this auction seemed unlikely at best."

Link to AdAge Article

The Case of the Incredible Shrinking Blogosphere

Three Reasons Why Micro-media Sites Mirror a Cultural Shift

Bloggers and the media have some common ground: Both like to incessantly navel gaze.

Recently, the conversation has focused on the rising popularity of micro-blogging platforms such as Facebook, Twitter, Tumblr, Jaiku and the invite-only Pownce. All of these enable people to broadcast brief bursts of text (usually around 150 characters) to their circle of friends via the web or a mobile device. It's akin to ye olde telegram. Dave Winer, one of the blogosphere's founding fathers, took it a step further by creating Twittergram -- a service that pumps 30-second MP3s into Twitter via a special dial-in line.

Some have chalked up the micro-blogging boom to what a friend of mine calls "shiny object syndrome" -- our fascination with all things new. However, I believe that the rise of these emerging micro-media sites mirrors three significant cultural shifts.

First, there's the Attention Crash. The demands on our time -- be they work, family, passions -- are growing. Brevity rules.

Second, there's the proliferation of mobile devices, which, through text messaging, encourage people to publish more often but in a far shorter format.

Last but not least we have social networking, which makes it easier for us to tune into "signals," i.e., people and topics we care about, and block out noise. Content you truly care about finds you.

So what does this all mean for blogging? Blogs certainly remain extremely powerful, and I don't expect them to go away. Still, blogging is hard. It takes a lot of work to put out high-quality content. I know. I did so every single day for three years, including weekends and holidays. However, recently I have been blogging far less often and filling in the gap with daily bursts on Twitter. When I do blog, I use it to go into more depth than I used to and expand on ideas I've formed through conversations on Twitter. I am not alone.

If Web 2.0 is like golf, then a blog is a nine iron, while a micro-blog is a putter. It's all still golf, but bloggers are starting to mix it up, and the course is changing. Therefore, marketers need to adapt. More on that in my next column.

Link to AdAge Article

Study: Popularity of Social Networks Hampers Ad Growth

Group M Finds That Marketers in the U.K. Are Still Figuring Out to Advertise on Sites Such as Facebook

The rise of social networking has triggered a fall in the growth of online advertising, according to a Group M U.K. media and marketing forecast. U.S. figures, to be released in a few weeks, are expected to reflect the same trend.

While Facebook has doubled in size globally over the past six months, to more than 30 million users, advertisers are struggling to profit from the popularity of social-networking sites.

In the U.K., MySpace is still the leader but is fast being eclipsed by Facebook's phenomenal growth. Facebook had four million unique visitors in June 2007, up 784% from October 2006, according to NetRatings. MySpace saw 27% growth in the same period to 6.6 million users, and Bebo's 4.3 million users in June represents 60% growth.

"It's hard for advertisers to get in there," said Karin von Abrams, senior analyst at eMarketer. "It's a tricky area, and it's foxing them. Social-networking sites are a more intimate environment psychologically, which means ads may not be welcome. Advertisers need to find a new way. It's part of the whole question of how to follow users 'round the web."

'Gatecrashers'
Richard Hedges, group account director at AKQA, London, said: "Because social-networking sites increasingly provide everything people want in one place, people are less and less interested in seeking out content on other sites. Ads can be an unwanted invasion, like having gatecrashers at your party. The challenge for us is to create content that complements the context and reflects the way people already behave on these communities."

For its Unilever client Pot Noodle, AKQA found 20 groups on Facebook already dedicated to the brand. So AKQA challenges those and other users once a month to make a film on a topical theme with a Pot Noodle twist. Each entrant is sent a case of Pot Noodle, and each month the film with the most hits wins a Sony PlayStation 3 console.

By contrast, when Wyeth Consumer Healthcare's Anadin discovered a number of groups dedicated to the wonders of its pain-killing properties, it decided that such genuine endorsement was valuable to make paid marketing unnecessary.

Group M predicts U.K. online-advertising revenue will still grow 34% this year and 30% in 2008. Those figures are substantially down from 48% growth in 2006 but still way ahead of the U.K. ad market's slight 2.6% growth overall.

"What other medium would like this problem of growing by one-third?" asked Adam Smith, futures director at Group M. He said the slowdown in online-ad growth is also due to a leveling off in both broadband penetration and time spent online.

Big in the U.K.
Group M also reported that U.K. online shopping rose 34% in 2006 to nearly $2,000 per person. Brits are online-shopping champions, accounting for half of all European e-commerce. U.K. supermarkets aggressively promote their websites, and the grocery-delivery vans that are a common sight on U.K. streets represent 10% of all U.K. online shopping. One of the most successful online grocers, Ocado, is partly owned by supermarket chain Waitrose and has annual sales of $600 million that are growing by 30% a year. Ocado claims more than 50% of online-supermarket deliveries in Greater London.

The U.K.'s biggest retailer, Tesco, is also one of the world's biggest online grocers, and another U.K. supermarket chain, Sainsbury's, estimates its online sales will more than double in the next three years.

Mobile advertising, meanwhile, is not yet big business and was dropped from Group M's forecast. "A lot of U.K. mobile advertising is given away, and operators will not release revenue figures," Mr. Smith said. "The future of mobile is as an adjunct to existing advertising, providing a return path for relationship management. It is not a medium in its own right."

Link to AdAge Article

Meet the Little Guys Who Are Challenging ComScore, NetRatings

Quantcast, Others May Not Unseat Giants, but They Do Offer Advertisers More Ways to Measure Traffic Online

NEW YORK (AdAge.com) -- Move over, Nielsen/NetRatings and ComScore -- a new crop of measurement services with names such as Quantcast, Compete and Alexa have popped up, vying to provide quick and free data on a larger swath of sites.
Quantcast is evaluating several revenue models but isn't yet making money.
Quantcast is evaluating several revenue models but isn't yet making money.


OK, it's unlikely the two web-measurement giants will be unseated anytime soon, but unlike in other media, where multiple measurement companies have eventually been whittled down to one dominant player, some advertisers are cautiously welcoming the multiple audience-measurement options available online.

"Where ComScore and Nielsen fall down particularly is in tracking small sites," said Harry Case, director-analytics, MindShare Interaction. He cites the example of a pharmaceutical marketer looking for condition-specific sites: "Often only two or three condition-specific sites are picked up by the syndicated research services [Nielsen/NetRatings and ComScore]. If you're talking about trying to put together a plan for high blood pressure, it is almost impossible to understand the demographics of those sites, so we have to resort to other information."

Not an 'insurmountable challenge'
The service he has looked at most closely is Quantcast, which places a pixel or "tag" on publisher sites and then keeps a record of those viewing the site's content. "As media choices increase and a panel stays the same, the panel's ability to resolve the details diminishes quite quickly," said co-founder and CEO Konrad Feldman. He admitted that Quantcast relies on placing cookies on computers -- which ComScore in particular has argued leads to inaccuracies: Cookie deletion leads to overcounting unique visitors. But Mr. Feldman said "that doesn't mean it's an insurmountable challenge."

Compete was born out of IdeaLab, a technology incubator that also has spawned companies such as Citysearch and Picasa. The service has been around since 2000 but recently has taken on a more proactive role in marketing its services to advertisers. It's not so much focused on the true Long Tail sites of the web as on what Compete's Stephen DiMarco calls the torso, or the top 500,000 sites. After that, he said, audience falls off fairly quickly. The company buys the rights to use ISP data and supplements that with a panel of two million.

Of course, the accuracy of such services is a less-agreed-upon issue. The Amazon-owned Alexa service, which is commonly used by reporters and bloggers because of its ease of use and availability, is often targeted for inaccuracies because of what people call a self-selection bias. Its measurements are culled from the web travels of those who have installed the Alexa toolbar, and because the toolbar is particularly useful for (and, thus, most likely to be installed by) webmasters and search-engine optimizers, it tends to overweight websites popular with that crowd. Alexa didn't return calls, but its website claims it has "several million" toolbar users and admits that certain sites may be undercounted (it doesn't work with the Opera browser, for example) or overcounted.

No standard
A big challenge, said MindShare Interaction's Mr. Case, is that there's no standard against which marketers can measure the accuracy of the new services. For the moment Nielsen and ComScore are the gold standard, and the best marketers can do is benchmark new services against them.

How do all these free services make money? Right now, venture-backed Quantcast doesn't. But it's evaluating multiple revenue models centered on becoming an intermediary that helps smaller publishers increase the value of their inventory. Compete charges clients for consulting services, said Mr. DiMarco, who lists Hyundai, DaimlerChrysler and Sprint as clients of the service.

"You can have one tool and static [measurement services] or multiple tools and innovation," said Andy Fisher, director-analytics at Avenue A/Razorfish, who points out that the barrier to entry is also lower in online measurement than offline. "A healthy market pushes innovation."

Link to AdAge Article