Archive for the ‘Monetization’ Category

People Will Never Pay for Content — But They Already Are

June 4, 2010

We said at the beginning of the year that 2010 would be the year of the paywall.   It certainly is turning out that way, with magazines commanding a regal price for their iPad editions, Hulu is going to try to push a subscription piece, and the Times coming up with a metered model next year.  The big question is, and will remain, whether people will be willing to pay for it.  Dave Morgan, CEO of Simulmedia said, in his Online Spin column that unequivocably, they won’t.  Here’s, according to him, is why these efforts are doomed to failure:

  1. Consumers say in focus groups that they will pay for what they are now getting for nothing, but that doesn’t tend to translate into actual purchases
  2. Companies like Hulu, without a lot of direct marketing experience, will have a very steeAp learning curve.
  3. All of the high-profile companies that are going to be required to see results fast forget that this is a long process – it took the Wall Street Journal 10 years to build.
  4. The economy is still pretty awful, and people are being very cautious about what they shell out for.

A Forrester analyst, though, feels that people are already paying for content, for instance in high speed access and Netflix accounts.  But really, what they are willing to pay for is the access to content, not the content itself. And, says James McQuivey,

They will pay even more for that in the future as 4G becomes a reality. …That’s why when I’m advising a publisher or programmer, I encourage them to focus on access. Make more content available, on more devices, in the most convenient ways possible. Today, that might mean developing a beautiful iPad app for a magazine, but tomorrow that means developing a new content experience altogether, with personal clippings, recommended stories, all of it socially enhanced to reflect not just what I want to read but what my community is reading and discussing. That is a type of access, too, and it’s one that goes beyond what Google can return as a search result.


Apple Does Advertising. Take That, Google

April 9, 2010

With the launch of the iPad, there’s a lot of talking going on about how to do advertising on it.  Apple wants to get a piece of that action, and yesterday it announced a system that would deliver ads across all of its mobile devices.  the ad platform will be built into the new OS4 operating system that will be released this summer.  ClickZ says that Apple will sell and serve the ads (surprised?  Of course not) and take 40% of proceeds with the rest going to the app developer. At the unveiling, Steve Jobs said that his aim was to improve the quality of ads that are currently served up on mobile devices, particularly his, and make them more interactive, provided with greater “emotion” and becoming “mini-branded applications in their own right”.  Look out Google. Actually, Google’s purchase of AdMob, which is still going through FTC channels, is going to put them in direct competition.

What Consumers Will Pay For

March 19, 2010

Media companies that blithely step behind the pay wall have a surprise coming. Nielsen asked 27,000 consumers whether they would be willing to pay for entertainment and news that they now get for nothing, and the answer is that they will be willing to pay for things they are already paying for – movies, music, games and some television. Here are some other findings:

  • Better than three out of every four survey participants (78%) believe if they already subscribe to a newspaper, magazine, radio or television service they should be able to use its online content for free.
  • At the same time, 71% of global consumers say online content of any kind will have to be considerably better than what is currently free before they will pay for it.
  • Nearly eight out of every ten (79%) would no longer use a web site that charges them, presuming they can find the same information at no cost.
  • As a group, they are ambivalent about whether the quality of online content would suffer if companies could not charge for it—34% think so while 30% do not; and the remaining 36% have no firm opinion.
  • But they are far more united (62%) in their conviction that once they purchase content, it should be theirs to copy or share with whomever they want.

Digital Ad Revenues Surpass Print

March 19, 2010

Consulting firm Outsell conducted its annual forecast of ad spending, and for the first time found that digital ad revenues are about to surpass print  this year. This is a big milestone in the history of online advertising, as advertisers plan to spend 32.5% ($119.6 billion) on digital, versus 30.3% ($111.5 billion) for print. Not every part of the digital market is buoyant. One surprising prediction in the report has mobile advertising revenues sinking 16% in 2010 compared to 2009. On the television front (combining broadcast and cable), Outsell has total TV ad revenues falling 6.5% to $59.6 billion.

Even Advertisers Think There Are Too Many TV Ads

February 12, 2010

Does it seem to you that there are even more ads on TV than ever?  Do you sometimes feel that you need to have you hand permanently poised over the fast forward button on your DVR? A study by Forrester Research and the Association of national Advertisers found that most advertisers feel that TV ads have lost their effectiveness.  Why?  Mostly because of what they term “clutter”, that spate of ads in each pod that is so thick that it all jumbles together in a big noisy blur.  While the 30 second spot is not necessarily in danger of demise, branded entertainment is getting a bigger chunk of advertiser dollars this year.  And behavioral targeting will certainly be in the next big wave of spend. Says MediaWeek,

“Contributing to dissatisfaction with the medium was a lack of new audience metrics beyond reach and frequency. Eight-two percent of respondents would like individual commercial ratings. Seventy-eight percent would like to more precisely target consumers.
‘As the overall marketing landscape is in the midst of a massive shift, so is the iconic medium of television,” said Bob Liodice, president and CEO of the ANA. “The standard methods of delivery and measurement need to adapt to what marketers today need: more specificity, greater effectiveness, and more detailed measurement. ROI is one of the most crucial aspects of marketing today, and the processes behind TV must be held to the same scrutiny as marketers.’ “

Three Ad Agencies Look to Next Year

December 11, 2009

It’s the end of the year, and all over the place predictions for next year are popping up like little mushrooms after a heavy rain. Most companies cannot wait to bid a fond farewell to this year of strife, and in a usual optimistic way, look to the future for better times.  Interpublic is no exception.  Its Magna unit of MediaBrands predicted that worldwide ad spending would rise close to 6% next year. Other agencies were a bit more hesitant to jump the gun on good news; Group M  and Zenith Optimedia both predict that worldwide spending will rise less than 1% next year.  All three, though, believe that digital media will be the horse that pulls the industry out of the doldrums.  Eventually.  And that emerging markets will be making the revenue.  Magna expects that growth in the US will be 0.2% next year while the other two agencies see next year as a continuation of decline. All told, in the first three quarters of the year, ad spending in the US declined 14.7% over last year, so pulling up some good news, while heartening, might be like pulling a rabbit out of a hat.

Video Search in Place of a Campaign?

October 30, 2009 spoke with Robert Davis of OgilvyInteractive about the emergence of video content as an ad tool.  Here’s what he had to say: “We are seeing a tremendous search value from video now. You can use video content almost as you use a banner ad or paid search — as a drive-to mechanism to your site…The search engines are out there and waiting. It’s only in the last six months that search and video are starting to gel. The traffic we can drive off of search is sometimes enough for a campaign that they don’t have to have a paid content.” (more…)

Should You Make Them Pay?

October 2, 2009

Free, fee, or something in between? This is the question that every content provider is asking, particularly, of course, news organizations. A study by Harvard Business School and USC’s Marshall School of Business took a look at twenty companies and their payment models, and how they fare.  They looked at four categories of payment: purely fee-based (think iTunes); purely ad-sponsored (i.e. Facebook); mixed models (WSJ) and tiered content (Linked In is an example).  What they found is that when a company uses a mixed model, as many newspapers are thinking of doing, they are in danger of losing their relevance as soon as a free version of the same content shows up.  In the case of WSJ, Murdoch is betting that their brand is so unique that its content is worth money.  And as long as they make sure that all of their content is worth money, they will be fine, if the study bears out. Because it’s not the oney part but the mixing part that puts these brands at risk.

Meeting the Challenges of Video Ads

October 2, 2009

The director of video strategy at Yahoo! Spoke at last week’s conference, and got an interview with her. She spoke about the challenges facing video advertising. She said that although standards continually change because “somebody does a cool interactive thing around social or mobile”, that’s a good thing.  The Web lends itself to a wide variety of types of ads that marketers can use.  Says, “Video ad standards were set last year by the IAB. Online advertisers can buy based on a variety of metrics like click-through, completion, engagement or brand lift. That can be challenging though when talking to TV buyers who are still accustomed to the simplicity of buying on TV. You can see a video of the interview here:

What About Next Year?

September 25, 2009

OK, so this year was a wash, advertising wise.  But where will the money go next year?  A bigger chunk of it will be online next year, says GroupM Interaction.  Globally, Internet advertising will rise about 11% in 2010 , and in the US it will be about 17% of all ad spending.  The biggest part of that will be in tried and true search advertising, but as we just mentioned, mobile will continue to grow.  Display advertising is the exception; it’s share of spend has been falling year after year for a while now.