News Update – Best of the Day

Twitter is hiring a VIP concierge. Not true… yes it is.

The internet is the world of freebies? Not anymore and there are good reasons for it. The Economist refocuses the old strategic approach on paid services on the internet which is a great wake-up call for the web world – and again reminds me of the Social Globe.

Ultimately, though, every business needs revenues—and advertising, it transpires, is not going to provide enough. Free content and services were a beguiling idea. But the lesson of two internet bubbles is that somebody somewhere is going to have to pick up the tab for lunch.

What is the future of PR? Will agencies look after communities or brands? Jeremiah Owyang thinks that communities will gain more and more power as are aggregating decision making, support each other and share lifestyle.

With communities in the driver seat over product, a shift will happen as communities can define the spec of future products and therefore multiple brands will bid for their business. As a result, we should expect the agency model to flip over, where PR agencies start to represent communities of customers –rather than brands.

Study: Agencies moving to slow for consumers?

If we can believe in a recent study ‘Beyond advertising: Choosing a Strategic Path to the Digital Consumer‘ by IBM Institute for Business Value, then ad agencies are years behind in catching up to digitally savvy consumers – although consumers are moving their media consumption online more quickly than anybody could have expected.

Now, despite the difficult economic climate there are some good news for the digital industry: IBM’s study states that interactive, measurable formats will be expected to account for 20% of global ad spending by 2012. The interviewed CMOs said they will increase interactive and online marketing spending in 2009 while 63% while 65% will decrease on traditional advertising. Generally speaking, the same trend that we acknowledged from the latest CMO report.

So, what are further interesting findings? Between 2007 and 2008 the proportion of consumers answering they used social-networking tools went up to 60% (from 33%). It even doubled for for online and portable music services to 46% and almost tripled for mobile internet. And believe it or not, the access to mobile music and video quadrupled to 35%.

Seeing these numbers, it is surprising that 80% of the interviewed ad executives forecast the industry to be at least five years away from being able to deliver whatever might be necessary in terms of cross-platform advertising, encompassing sales, delivery, measurement and analysis.

The problem seems to be the agencies according to study co-author Saul Berman, IBM global leader, strategy and change consulting services. Agencies need to identify and keep pace with the value shift in order not to loose out the same way the music industry did, he summarizes.

“To succeed — especially in the current economic environment — media companies will need to develop a new set of capabilities to support the industry’s evolving demands which include micro targeting, real-time ROI measurement and cross-platform integration,” said Saul Berman, IBM Global Leader for Strategy and Change Consulting Services, and co-author of the new study. “Now is the time for companies to move quickly to become more effective with their assets and build for the future.”

Spot On!
Watching the last decade, companies and agencies followed their customer audience and pushed their budgets to more interactive, measurable formats such as the internet and mobile (gaining 20% of the overall spend). This is not surprising as digital advertising enables advertisers to measure more effectively campaign success to prove the value of their budgets.

In terms of platform owners it shows that these need to identify new opportunities to monetize new consumer experiences before it is too late like the music industry has shown. The options are obvious: value of content, visual goods sales, value-added services plus hardware or software offerings.

For this study IBM conducted 70 interview sessions with global industry execs and surveyed more than 2,800 consumers in Australia, Germany, India, Japan, the U.K. and the U.S.

News Update – Best of the Day

There is a lot happening on Twitter and some companies might ask if their competitor already uses Twitter in the means of some corporate communication, service tool or some thing else. Andrew Kinnear created a wonderful list on ‘Consumer and Business Brands on Twitter‘. And if you are an exec and want to see some cases on how to engage as a top manager with your target audience on Twitter, just check out this new service called ‘exectweets‘.

This years Media Summit 2009 reveals some very interesting insight in the question ‘Can the Media Business Solve a Problem It Can’t Define?’

Budgets for recruitment low in recession times? Well, here is how some companies solve the issue by using Twitter at ‘Businesses Turn to Twitter to Cut Recruitment Costs‘. See some interesting aspects on the Pros and Cons on an still unproven option.

Will Facebook tackle Google? Doubt it…

The investment bank RBC Capital Markets sees Facebook in three years leading the online market – and leaving Google behind. Their argument: traffic. When watching the Google traffic, it becomes obvious that almost 20% of the Google traffic comes from social networks, RBC thinks.

Facebook is growing and growing, in January Facebook had already 175 million users. In the last months the average increase was somewhere at 20 million users a month. Now, the investment bank’s outlook says that if the increase stays stable, Facebook could be facing more unique users than the online giant Google in 2012. At least Ross Sandler from RBC Capital Markets states that…

Isn’t this statement a bit overestimated?
So, is traffic the right argument? Which platforms really does drive traffic here? How does Facebook drive traffic to Google? Where are the Facebook links that push users to Google? The ‘back button’ cannot be so powerful, right?! Search? Ads? Back-links? What else? Sorry, I cannot find the point…

There is no Google search box on Facebook. Maybe it is the social graph that has it’s effect on targeting, personalization or the digital identity of users might influence the power of Facebook on Google in the future. But traffic sounds like an superficial invalid argument, don’t you think…

News Update – Best of the Day

Excellent, the media meltdown by the American group blog Xark

Great, funny ad by McDonalds…

Some viral campaigns can really deliver what they promise…

Twitter Ads: Thoughts on the test

Now, there has been a lot, a lot, a lot of thoughts and talk lately on how Twitter will be making money. Finally, Twitter is experimenting with a new revenue model as Techcrunch tells us…

First, it seemed like a nice idea to promote their own service (i.e. widgets and search), which I thought is the case. This well-placed add-on feature makes it easier to work with Twitter, especially heading towards their search site, when you are not using any of the helpful Twitter apps. And there were also some good thoughts on Twitter becoming a search engine and as how this will be a driver monetizing their business. But Overture (now controlled by Yahoo), has patented placement of text ads on a search results page. So, this was probably a difficult pitch.

Now, back to what is happening, see the black box on the right hand side on ‘Widget’…

It is obviously really a ‘simple’ test for some solid revenue stream generating business, we all are familiar with via Google text ads. But can this be an appropriate test to recall on revenue models?

The two test objects, Twitter search and the above mentioned Twitter widget link, belong directly to the Twitter concept. It offers some immediate navigation benefit to the user. This is what users are after for a long time. Thus, ‘Twitterati’ will click on the links and appreciate the easy way accessing their search service. So, the results Twitter sees with the test don’t reflect in any way potential click rates on text ads as these are dependent on results.

Isn’t there a difference if you promote some internal service or feature, or if you run a promotion from some external party or company? In my experience, in terms of text ads, and those generating results, we can definitely say, there is a huge difference on the click rates. Hence, on the conversion rate clients will find the difference as well. Editorial focus is not comparable to advertising, reaching out for awareness, right? And as clicks is the interactive currency ‘No. 1’ for marketers and convergence their need, according to yesterdays CMO report, the test sounds like comparing apples and oranges.

Spot On!
Nevertheless, the test is worth some thought. And just imagine Amazon and Twitter are getting engaged, the business model becomes clear based on some semantic web thoughts: connecting Amazon’s product catalog by connecting tweets and related products. Someone talks about a film and gets an offer from Amazon in the text ad. Or maybe Yahoo could be the new ‘Who is buying Twitter at last’ as they could compete in the long-tail market. In general, Google could finally face a competitor here…

CMO report: budgets better than expected

Chief Marketing Officer (CMO) Council’s Marketing Outlook 2009 states that CMO’s see their budgets stable. Almost half of all asked CMO’s (54,1%) say their budgets will increase or at least remain.

What is the value of a click? Obviously, the best deal is transforming a consumer into a customer. For 36% this seems to be the biggest issue: converting clicks to sales and finding the value of online marketing. Just 9% of the chief marketers argue about their online performance capability as being “excellent”.

The outlook in the recession is not too bad… The majority of top marketers answered their traditional marketing focus (print, outdoor and TV) remains the same, and especially digital advertising (also social media and search marketing) will increase. But it also has to me mentioned that 45.7% said their spending budgets will decrease.

“Senior marketers are looking to hold budgets steady and not make tremendous cuts in headcounts,” said Liz Miller, the council’s VP of programming and operations. “Instead, they’re reallocating both their budget and talent into those areas that better engage and communicate with core audiences and customers.”

Spot On!
The loyalty of customer becomes more and more an issue for marketers. Who would be surprised… Those who want to study as deep as possible how the customers thinks, don’t ‘owe’ the sovereignty on customer service and support issues, nor have they big influence on CRM, the survey says.

The question remains why the majority of marketers rely on old online measures (i.e. page views and registrations 64.6%) and not focusing on more modern online engagement opportunities which keeps the consumers with the brands. The most obvious options could be personalization and client first programs (i.e. client opinion platforms or community building) which could replace the old-school “watering cans” techniques. The more companies focus on the client, the ‘happier’ the revenue lines will show.

The report was co-sponsored by Deloitte, Jigsaw and Ad-ology and asked 650 worldwide marketers.

News Update – Best of the Day

Most of big companies are not really relying on social media, nor evaluating it seriously. Susan Rice Lincoln found some answers why ‘big brands struggle with social media’. She found six reason.

Social Media is…
– … often viewed as just another marketing channel.
– … does not fit into current structures
– … a long term proposition
– … promises no guaranteed results
– … measured differently
and… Communities and content are global and corporations are generally national. – A lot of option if you tackle these issues from the right angle…

In some way Twitter is like a search engine. Have we ever thought on how we use this search option?
Danny Sullivan started a research and – although someone might be there who does not believe in research results – there is definitely a very interesting trend in the findings. Yes, I would say, Twitter is an ‘additional search engine’…

– Half ask a question on Twitter at least once per week
– Nearly 40% are “usually” satisfied with the answers they get
– Half “sometimes” or “often” turn to Twitter for questions rather than a traditional search engine
– Only 4% said they’d give up a traditional search engine for Twitter
– Nearly half said they ask questions on Twitter because they trust their friends or followers more than search results or are seeking expert answers
– 40% said they seek answers to “real time” issues or they want a variety of opinions
– Nearly 70% said questions they asked were related to computer or the internet, followed by 44% asking questions about Twitter, then 41% asking about shopping or product advice

Advertising in a social media world always carries the problem that people might abuse your brand in some unfavorable way. Last week some boys made up the idea in “How to Smoke Smarties”. Adage focuses on this latest YouTube phenomenon and posts some important hints how to handle situations where people are ‘messing messing with your brand online’.

1. Don’t fight it. (Brands cannot control client communication!)
2. Survey the extent of the problem. (Brands need to know how big ‘the damage’ is!)
3. Turn to your social-media crisis plan. (Develop one!)
4. Be open with employees. (Social Media guidelines will help!)
5. Respond accordingly. (All spokesperson should have the official response statement asap!)

Nielsen: Facebook best in reach, MySpace in ads

The recent Nielsen study ‘Global Faces and Networked Plazes‘ focuses on the increase of social networks in terms of worldwide reach and extension. The results emphazise the rise and importance of communities but also the dynamic of the intention to grap more market share.

Talking of reach, Facebook -the worldwide leader in the social network market- is showing the strongest user base and has replaced MySpace as the world’s most popular social network. Classmates comes in third, followed by Orkut and LinkedIn. The reasons for the facebook success are obvious. According to the study and Nielsen measurement, the win of the Facebook tactic is based on the ‘simple design, broad demographic appeal and a focus on connecting’.

Reports estimate that in 2008 Facebook earned around $US300 million in ad revenue compared to around $US1 billion for MySpace. If Facebook has made a conscious choice to go for the quantity vs. quality strategy it has yet to overtake MySpace in the all-important revenue metric.

So, monetization is still not Facebook best business activity. MySpace attracts more advertisers and gets twice as much campaigns than the ‘Zuckerberg team’.
The Nielsen view on the reasons is that “MySpace’s offering possibly makes its inventory – of which there is a lot more compared to Facebook – easier to monetize, particularly in terms of immersive advertising.”

Finally important, the use of social networks has outdated email as the first way of online communication: 67% of the users show a regular activity in communities.

News Update – Best of the Day

The fifth annual Digital Outlook Report from Razorfish helps marketers make smarter decisions about their digital media spend – especially in a recession. The latest executive summary of the 2009 DOR summarizes three main statements: Portals continue to lose their grip, social media becomes social influence and long tail TV rises.

Measurement on the spot: How effective are your social media programs? Want to know the ROI of your social media campaigns? Need data on how to make strategic decisions to refine your social media programs? Robin Broitmann has created a ‘Social Media Metrics Superlist’.

Will our business of the future be without email communication, simply done by social networking? Adam Ostrow finds new stats from Nielsen Online showing that social networking has overtaken email in terms of worldwide reach already at the end of last year.