Colin's Corner

Will mobile advertising be a disaster ?

Over at IDG's Computerworld, Here come the cell phone ad disaster, Mike Elgan compares the upcoming revenue gold rush on mobile devices to the volcanic destruction of a Minoan civilization on the Greek Island of Santorini

Listing plenty of unpleasant ways, advertisers could seek to interrupt you on your personal mobile device:

Unwanted calls.
Recorded advertising voice mails.
SMS ads that ring your phone.
MMS ads that ring your phone.
E-mail ads.
Advertiser-supported software and services.
Web pages that force you to view an ad before you can see the page.
Location-based advertising -- you'll walk by a store, and it will ring your phone to tell you about a sale.
Viral videos.
Text, e-mail or Web-based ads that encourage you to "click to call."
Search ads tailored for phones.

Mike concludes The disaster is coming, and there's not much any of us can do about it other than reward companies that don't engage in cell phone advertising, punish those that do and hope for the best.

I agree with Mike that there's certainly the potential for disaster, and inevitably there will surely be some terrible abuses as the mobile industry matures. However, the sheer scale of the mobile market, coupled with the ability to deliver contextually relevant and targeted information that improves the user experience means that some of the inevitable initial problems will get resolved.

Handled properly, users will value additional information provided by marketers to help their purchasing decisions. But, if the customer experience is mishandled, the backlash from users will irreparably damage a brand. Appreciating the viral power of mobile and the communications power of mobile social networks will ensure that marketers who look to engagement rather interruption will win over the loyalty of mobile consumers.

Time for the end of a guaranteed ratebase ?

Media Week reports that Time is seriously considering the elimination of its rate base, (the circulation it guarantees to advertisers).

This more could signal a move to a "total brand readership" and reader engagement model that looks at the print and online environments together. The print circulation ratebase model is hopelessly out moded so this is a bold but very welcome move for the whole industry.
   
“The rate base is really just an anachronism,” said Rebecca McPheters, who is president of McPheters & Co., a consulting and research firm. “The value to the advertiser is not the number of copies or how they are paid for or distributed, but rather who reads it and who buys the advertiser’s product. It would be a very brave thing for Time to do and would be an exciting development for the industry.”

Yahoo's Brilliant Solution

An excellent article from Fortune on Yahoo's transformation from a search to a media company under the astute leadership of Terry Semel. 

There are many interesting take-aways in the article - including the benefits of fusing together certain semiautonomius units and encouraging co-operation

"Even though sports, news, and entertainment were licensing things and doing partnerships with the same companies, we did it through five different voices and five different people."

" .....Yahoo aims to apply principles of programming from the TV business to enrich users' Internet experience. The tricky part is doing it so that Yahoo users will still feel as though they
control what they do and see instead of feeling as if they are watching.."

A very worthwhile read !

TNS predicts 7.6% rise in 2005 online ads

Advertising spending will hit $145.3 billion this year, according to a TNS Media Intelligence forecast presented at the annual AdWatch conference in Manhattan this morning. Traditionally TNS's forecasts tend to be conservation relative to most others in the market.

The majority of media would see growth, with cable TV and Hispanic media more robust at 11.6% and 10.5%, respectively. Internet will be up 7.6% -- a healthy number but not quite the double-digit growth the medium saw the last two years. Magazines would be up 7.5% and outdoor would rise 5.5%. Newspapers were expected to see moderate 3.8% growth, syndication a 3.3% increase and network TV would grow 1.1%.

Alternative to Google's Adwords

As noted by The Editor and Publisher, Newsday, a Tribune Co. newspaper, has launched its own ad serving program called Pay-Per-Click. The service utilizes the Quigo AdSonar software. 

The Newsday deal is in addition to several publishers already private labeling the Quigo AdSonar cost-per-click software, including  iExplore.com, USATODAY.com, DenverPost.com,  RockyMountianNews.com, www.theknot.com.

Rather than split contextual advertising revenue with Google or another third-party provider, publishers can use the AdSonar software to have a direct relationship with their advertisers.

Durex buys Podcasts

Indicating another interesting split between traditional broadcast mainstream media (MSM) and internet based narrowcast media AdAge reports that condom maker Durex has purchased product placement advertising in podcasts.

In an effort to reach young listeners with more risque marketing messages at the same time avoiding Federal Communications Commission (FCC) decency rules, Durex last month launched an unusual brand integration campaign featuring unscripted X-rated banter on the "The Dawn and Drew Show," which is the No. 2 podcast as currently ranked by visitors to PodcastAlley.com. What will happen if a traditional broadcast media company, covered by the FCC rules creates a Podcast with similar advertising ?

Internet advertising reaches $9.6 billion

According to an industry survey sponsored by the Interactive Advertising Bureau (IAB) and conducted by PricewaterhouseCoopers, advertising revenues (“revenues”) in the United States totaled over $9.6 billion for the full year 2004, with Q3 accounting for $2.3 billion and Q4 totaling nearly $2.7 billion. Internet advertising revenues for the full year of 2004 increased nearly 33 percent over 2003,and exceeded the previous annual revenue record of $8.1 billion in 2000 by 19 percent.

Consumer advertisers continue to lead all industry categories, accounting for 49 percent of 2004 revenues,up sharply from the 37 percent reported for the same period in 2003. Computing advertisers accounted for 18 percent of 2004 revenues, followed by Financial Services at 17 percent, Telecommunications at 4 percent and Pharmaceutical & Healthcare at 6 percent of 2004 revenues.

Search revenues increased over 50 percent on a dollar basis from2003 ($2.5 billion) to 2004 ($3.9 billion), but remained constant at 40 percent of total revenues during the fourth quarter of both 2004 and 2003.

On a combined basis, display and sponsorship advertising revenues totaled $2.6 billion in 2004, up $346 million or 15 percent from the 2003 total of $2.3 billion.
   
Classifieds advertising revenue totaled approximately $1.7 billion in 2004, up $498 million or 40 percent from the 2003 total of $1.2 billion.

Rich media advertising revenues totaled $963 million in 2004, up$236 million or 32 percent from the 2003 total of $727 million.
   
Referrals, slotting fees and email round out the categories, totaling a combined $480 million in 2004, down from the $509 million reported in 2003.

A copy of the full report is available for download

Googe's AdSense RSS program

Feedburner annouces support for Google's RSS AdSense program

"Google has launched a trial program enabling AdSense in RSS, and FeedBurner has implemented support for this capability. Google is currently testing this program with just a few publishers, but as the program becomes more widely available, and your Google AdSense id is approved for use with RSS ads, FeedBurner will take care of the rest as part of our suite of services". 

Longhorn Blog has a detailed description of AdSense in RSS

Google extends beyond text ads

In a fundamental change to its core philosophy of delivering text only ads, Google today announced that it would sell animated branding advertising. For the moment, Google will not allow the rich media formats that include video, sound and interactive elements. Also, it has placed restrictions on the animation, keeping ads from repeating endlessly or flashing in a particularly distracting manner.

The aim is to make Google a much more attractive environment for band owners, For the moment Google is not selling branding ads on Google.com or any of its Web sites. The new program is just for Google's business of selling advertisements that appear on thousands of third party sites, ranging from small blogs to sites of major publishers. Those sites concerned about a potential competitive threat may choose not to participate.

Google’s charging structure is an unusual hybrid of an ad-pricing yardstick — the cost per 1,000 impressions (CPM) model— that most Web publishers employ, and the cost-per-click (CPC) model that Google and other search-engine providers such as Yahoo use.

Google is providing advertisers with tools to help them search through the many thousands of sites it represents to find those that may have an audience relevant for advertisers' products. It unclear whether these tools will include an affinity index based on a site’s popularity but that’s probably only a matter of time as is the development of behavioral based targeting.

Once the advertisers have chose the websites where they want their ads to appear they name the top price they're willing to pay per 1,000 impressions. Google's system calculates which would generate more money — one display ad or a cluster of text ads from other advertisers — then display whichever has a higher potential value.

It will be very interesting to see if publishers, especially the larger ones who value their tight relationship with brand building advertiser see the new Google service as a threat or as with Google text ad AdSense program, view it as “found money” and embrace the new Google service on their sites.

Internet leads US Advertising gains

According to data released by TNS Media Intelligence, total advertising expenditures for all media in 2004 increased 9.8 percent to $141.1 billion compared to 2003. Almost all of the media measured by TNSMI experienced growth throughout the year, with the Internet, Outdoor, Cable TV and National Syndication showing the strongest gains. Local Newspapers led in dollar spending for 2004, posting $24.5 billion, an increase of 6.7 percent versus 2003. The Internet showed the most robust year-over-year gain for 2004 posting a 21.4 percent increase to $7.4 billion in ad spending versus 2003. Outdoor advertising increased 20.1 percent to $3.2 billion in spending.