Ad Spending Overview

While Australia raises interest rates and Google is actively hiring its AdWords account strategists, global spending on advertising, including online, seems to be taking a dive, as proven by recent research from Nielsen, Interactive Advertising Bureau, and PWC.

With North America and Europe continuing to cut advertising costs, Asia Pacific looks rather cheerful compared to the first half of 2008:

According to Nielsen, the industries most hit by the crisis are automotive, financial, clothing and accessories and durables - basically offering, high-involvement, long buying cycle products - which keep reducing their ad spend. Sectors that have increased their advertising budgets compared to the first half of 2008 are distribution channels, FMCG, and healthcare.

While overall online advertising seems to be decreasing (following the general trend), there is some evidence that spending on the social networking and blogging sites is actually increasing. In the past some (most) social networking sites experienced difficulties in actually making a profit due to the cautious attitude of the advertisers, now it seems like those issues are being solved. Most attractive social networks to advertisers are obviously the most established ones, namely Facebook (1) and MySpace (2).

'The Lost Symbol' Online Marketing Strategy

Haven't been blogging for a while, but now I'm back. I'm planning to shift the focus of this blog a little bit - apart from writing about online marketing, I will be covering general marketing topics. We shouldn't lock ourselves in this virtual reality.

Anyone heard of the new Dan Brown book? Well, 'The Lost Symbol', available since last week, sold a million copies in the first day. Sales have been successful not only in hardback, but in the electronic format. The book appeared on several file-sharing sites hours after the official release and has been downloaded by more than a hundred thousand people.

Now, piracy is, of course, not the most socially desirable way to read a book. However, from marketing and sales prospective, the effect of availability of unauthorised copies on sales does not always have to be negative. Some argue, including the famous writer Paulo Coelho, that giving away free digital copies of the book can actually boost your sales. While that may well be true and regarded as a sales promotion, it still has to be done in a controlled environment. Giving away five or ten thousand copies is one thing, but hundreds of thousands is totally different.

The success of the book, as well as the crazy demand on the e-versions, has a lot to do with online efforts that Dan Browns team put into its promotion. I'm not sure where the guys got my email address from, must be some marketing lists, but several days before the release I got a message with the cover of the book as an attachment. That's it, no text, just the cover. And actually prompted me to find out more about the book (which has more than 21,6 mln searches on Google). Easy, and effective for them. Pricey, though, I would imagine.

Apart from the email campaign, and, of course, the website, there was Twitter. Now, that could have been used much more effectively. Doubleday, administering the Twitter account, seemed to lack experience in micro-blogging and needed more preparation in regards with heir launch strategy. Cryptic tweets are good, so long as you don't have to be a mason to understand them. Pure link-twittering, little engagement, and very poor communication. But, indeed, Twitter is not an easy tool to use to get measurable results.

Optimistic Revenue Forecasts for Mobile Web 2.0

Mobile Web 2.0 is an evolution, already started, that will create major changes in the online and mobile world. The Internet today is not just PC-based anymore. There are 3 billion mobile phone users in the world today, compared to less than a billion of PC users. The growth predictions for mobile Internet are better than for PC-Internet, and the estimated number of Mobile Internet sites in 2017 is 150 million. As some experts believe, there will soon be a new generation of users whose first interaction with Web will occur through their mobile devices. The research carried out by the Online Publishers Association showed that that majority of Mobile Web users are males about 25-34 years old with a medium level of income.

Mobile Web now is obviously becoming a mainstream market and opportunities for businesses are growing. According to Juniper Research, Mobile Web 2.0 applications, services and advertising will generate about $22.4 billion in revenues worldwide by 2013 as compared to the $5.5 billion of today. Juniper described Mobile Web 2.0 as the use of mobile devices for social networking, search, instant messaging and various applications and services.

The research states that social networking and user-generated content on their own would amount to $11.2 billion in 2013 from $1.8 billion in 2008. The report identifies the ‘prosumer’ – someone who both creates and consumes content and the ‘social web’ – a variety of social computing tools that enables users to develop online identities, create online communities and communicate to people sharing the same interests. As the Juniper analyst Ian Chard points out, ‘combining the power of the social network map… with that of mobility presents the greatest opportunity for revenue generation of any of the applications’.

Today North America, Western Europe and Far East are the main regions dominating this market, but the situation is about to change as more and more mobile phone users appear in the developing countries.

A lot of big brands, such as Pepsi, BMW, McDonalds, Google and others have embraced the opportunities offered by the Mobile Web. However, the challenges are present as well. Mainly, of course, the technological problems, but as well the problem of changing the business model for mobile operators, and, nothing new, the issues of privacy.

To my mind, the findings of the report could turn out to be far too optimistic. For example, three years ago Mobile Web already experienced a huge decline in browsing figures, and there is no guarantee it won’t happen again. Social networking sites are hugely popular today, but as the generation of their users is growing up they might be replaced by something entirely different. The number of PCs in the world is growing fast as well. What I can’t understand (probably someone can explain that to me) is why would anyone who is not able to get a PC spend substantial amounts on Mobile Web applications?

Image source: http://www.mobilecomputermag.co.uk/tag/mobile-services.html

A Good and a Bad Example of Employees Blogging

Let’s talk once again about corporate blogging – looking at good examples and understanding the mistakes. Kodak has been an example of successfully blogging company for the past few years. They have two simple but great blogs, targeting different groups of readers – first one, A Thousand Words, and a second one, used to be called A Thousand Nerds but now renamed into PluggedIn. A Thousand Words is, as written in a blog user guide a ‘place for stories for from the people of Kodak’. The stories written by employees are about photography, they provide readers with useful tips, engage them in contests. The blog is not focused on Kodak’s products. It is very honest and open, has particular audience and updated regularly.

The second blog is more product-focused, is ‘a place where Kodak employees share insights about the products we make’. As I suppose it targets more male readers, interested in technology behind photography.

The posts in both blogs are very natural. While a lot of brands center their blogs around their products, Kodak tries to present the content from the readers point of view. Authors of both blogs are very attentive to comments, and are able to create a conversation with the readers.

The example of Kodak is very positive. However, sometimes companies’ employees can do a lot of harm when posting on official blogs. Some time ago one of the Google employees and bloggers posted a story on Google’s Health Advertising Blog trying to rally health care advertisers against Michael Moore’s documentary ‘Sicko’ by advising them that they should increase their presence in the search results as well as criticized the movie as one-sided. As her statement caused a lot of negative reactions, she had to later clarify that what she wrote was only her own opinion, not Google’s. As Google representatives stated in Google official blog, ‘our internal review of the piece before publication failed to recognize that readers would – properly, but incorrectly – impute the criticisms as reflecting Google’s official position. We blew it.’

Therefore it is crucial that a business blog has a corporate voice, not a personal one, and all criticism should be well-thought to avoid reputational damage.

Image source: www.successful-blog.com/tag/living/

Social Network Ads: Not Much Targeting, Not Much Revenue?

Social networking sites could be, undoubtedly, very successful marketing tools. Unfortunately, the problem is that most of the companies do not yet realize that marketing online requires special marketing mix. They are using Internet as a part of broader marketing campaigns, without realizing the differences of the medium itself. Today we see targeted ads when we use search engines, but advertising on social networks, in which a lot of companies invest heavily, is mostly not targeted.

A research by Prospectiv shows that 56% of the respondents (on the whole 800 social network sites users were surveyed) think that their social networking experience would be better if marketers would use more targeted ads. 62% said they would be interested in offers from their preferred brands, and the majority of 82% said that right now they see very few or no ads relevant to their interests.

I find it very surprising that few companies using social networks realize the potential of targeting to increase their performance. On Facebook, for example, one wedding photography agency increased its business significantly by searching for the profiles of engaged women and placing its ads there. On MySpace two companies which reached consumers according to their preferences in clothes and music increased their performance by up to 300% while they were only on early stages of optimization.

Meanwhile, most of the companies are disappointed by their ad revenue from social networking sites. This week eMarketer reduced its forecast for U.S. and global online social network advertising spending, estimating that U.S. advertisers will spend $1.4 billion to place ads on social networking sites this year, instead of the previous projection of $1.6 billion, as social networks are still trying to come up with successful advertising models. Advertisers worldwide will spend $2 billion on these ads in 2008, and the spending will grow to $3.8 in 2011.

Social network advertising is still considered to be experimental by most brands. Even Google says that it’s not monetizing as expected. As Sergey Brin said recently, ‘I don’t think we have the killer best way to monetize social networks yet. We have had a lot of experiments (and some disappointments).’

Image: http://youblog.typepad.com/

Tweet for Customer Care!

Twitter has been a favourite topic of discussion among bloggers for the past few months. And as in my blog I am trying to describe various tools of e-marketing, this one definitely deserves attention. Obviously, Twitter can be of good use in market research and advertising. But apart from that, it can be used to respond to customer service issues. A lot of companies are on Twitter already, actively monitoring it. The methods of tweet tracking include, for example, TweetScan, TweetVolume, Terraminds Search, Quotably – and this is not the full list. If you are willing to improve your customer service, it’s quite simple to track problems your customers experience with your product and respond to them.

The most notable and discussed examples of companies already using Twitter are Dell and Comcast. Dell follows the Twitter conversations using Tweetscan and reacts when customers ask questions or complain about the Dell products or services. Both these companies had problems with their online reputation previously, and are trying to do everything to prevent it from happening again. Among other companies that have their representatives on Twitter are Firefox, Microsoft, Yahoo, Disney, SAP Labs, and a few airline companies. Most of them, as it is not very hard to notice, belong to the computer segment. Obviously, getting advice on Twitter will be of more help if you have a problem installing software, than if your microwave oven’s broken. Still, other companies could benefit from it as well. Such instant interaction gives customers a sense that companies are open and really care. So I think it is only a matter of time that more and more brands will be using it – if not for the customers’ sake, then for the sake of their reputation.

Twitter gives an opportunity to build an actual relationship with each particular complaining individual. It provides (great?) opportunities for building company’s reputation and enhancing the brand. And yet, the more companies use various kinds of social media, the less privacy customers have.

Image source: http://customersrock.files.wordpress.com/2007/05/happy-sad-faces.jpg

Pepsi & MyClick: Creative Mobile Challenge

With the Olympics coming soon, marketers become busy. Pepsi-Cola, once again, is using the most innovative technologies. In team with Chinese company MyClick, Pepsi launches the Creative Challenge. It encourages consumers to upload their photos with their basic personal data on any of the six major portals used in China - 163.com, xiaonei.com, taobao.com and 51.com, Poco.cn and iPartment. The target group is the so-called ‘Generation Wow’ – young people aged 12-24. Winners will become Pepsi Creative Challenge Stars and will appear on all Pepsi cans during the Olympics. Personally, I wouldn’t be very happy with my face appearing on a can, or say a cheeseburger wrap, but for many people, I guess, it’s a very exciting experience.

The campaign is supported by the various ways of advertising – TV, printed media, WAP, MMS. But the technological highlight is the use of MyClick technology based on image recognition, which allows to convert camera phones into opt-in mobile marketing devices. That’s how it works: users download the MyClick application to their phones via the MyClick website. When they see a MyClick enabled image, they activate their MyClick application and photograph the MyClick frame (Pepsi's frame is shown in the picture above). If the software detects that the phone is not equipped with a camera, it prompts the user for an alpha-numeric code instead.

This gives consumers one-click access to all of the Pepsi Creative Challenge contest details, and the ability to cast vote and check on their current blogs. Customers clicking on MyClick Hyperlink Frames are directed to the campaign site where they can interact with the brand. As MyClick site states, important consumer information may also be captured such as mobile phone numbers and email addresses.

On a more complex level of explanation, this technology works much like mobile barcodes, but instead of consumers snapping a picture of a 2D barcode, or QR code, they take a picture of any image bordered by a MyClick frame. MyClick's frame acts much as a 2D barcode, sending users to a specially created mobile web site for more information, or downloads. By the way, MyClick enabled image is printed on 2 billion Pepsi bottles.

To my mind, this campaign is likely to be quite successful in China, world's largest mobile market, with 500 million mobile phones in use. Youth will definitely be delighted by the campaign, as millions of people dream to become ‘stars’. The difficulty is that most of the time, users have to download a program to their phone to be able to facilitate the image recognition process, which makes it more complicated and takes more effort from consumers. On the whole, I think that this is a good addition to the traditional ways of promotion, and it will further evolve in the future.

Image sources: http://thats-china.com/, http://www.myclick.hk/.