Suddenly, GoPro isn’t so “Go-Go” …

untitled2Most likely, I’ll never be a GoPro customer.

The only direct interaction I’ve had with the maker of action cameras was several years ago during the Great Target Credit Card Breach of 2013, when suddenly a half-dozen GoPro purchases mysteriously appeared on my card statement.

But other than that, my connection with GoPro and its line of cameras has been nonexistent — which isn’t at all surprising considering that at my age, I’m hardly an “action adventurer.”

Unfortunately for GoPro, many other people aren’t, either – and it’s one reason why the company’s financial results have been pretty ugly coming off of the most recent holiday season.

This past week, GoPro announced that it is cutting nearly 10% of its workforce (more than 100 people) because of weak sales during the 4th Quarter.

In a holiday quarter when product purchases should have grown revenues considerably, the weaker-than-expected sales volume of ~$435 million meant that GoPro’s revenues were far short of the $510 million originally projected.

From the financial market’s perspective, this news was sufficiently negative that trading of GoPro shares had to be halted briefly this past Wednesday.

untitled
GoPro shares over the past six months.

The company promises to divulge more information about its financial results in early February, but some observers are already beginning to paint the picture of what’s out of kilter:

  • GoPro misjudged the price consumers were willing to pay for its Hero4 Session cube cam, introduced in July 2015, resulting in two dramatic drops of the sticker price in September and December down to $199. 
  • Competitors are entering the field, putting further downward pressure on pricing. 
  • There’s a ceiling on the demand for action cameras because “action adventurer” consumers are such a small slice of the general population.

But does any of this come as a particular surprise?

Like in any other consumer electronics product category, the trajectory of high growth among early adopters leads to new market entrants, followed by the hardware becoming essentially a commodity.

… And the whole process is as swift as it is inevitable.

GoPro is branching into newer segments like camera drones — and not a moment too soon. But the reality is that in a product segment like action cameras, any supplier will always be just one step ahead of commoditization.  And for this reason, product mix reinvention has to be happening continuously.

Memo to newspaper publishers: Don’t ‘diss’ your print subscribers.

nindA few weeks ago, the Boston Globe stubbed its toe in major fashion when it changed the company it uses to deliver ~115,000 hard-copy versions of the daily paper in the Boston metro area.

And the problems continue to persist even now.

No doubt, the decision to switch home delivery services was made out of a desire to save money rather than to improve service.  And one can understand why management might have been looking for ways to cut production costs on the print version compared to the “go-go” online/digital realm.

But focusing on solely millennials and other younger customers can come back to “bite you on the bottom line” – which is exactly what happened in the case of the Globe.

Evidently, the new delivery service was untested – at least in terms of taking on a client with volumes as large as Boston’s leading newspaper.

As it turned out, tens of thousands of papers weren’t delivered, sparking a cataclysm of loud, negative feedback.

The pique of customers went well-beyond failing to receive something that had been paid for. In the case of the Globe’s extensive Baby Boomer subscriber base, missing home delivery struck at the heart of the time-honored rituals of how they receive and consume their news.

Consider this: The average subscriber to the Boston Globe pays around $700 per year for their home-delivery subscription.

That’s more than $80 million per year in income for the paper – before factoring in advertising revenue.

Of course, the costs of producing and delivering the print product exceeds that of digital. But this subscription base is more loyal than digital news consumers precisely because they value how the news is presented to them.

Let’s not forget that for people born before 1965, most are emotionally attached to print far more than those in other demographic groups. As Gordon Plutsky, a director of applied intelligence at IDG, writes about the Boston Globe snafu:

“[It’s] not just the physical paper, but the ritual of getting the paper off their driveway or front steps and starting their day spreading out the broadsheet and scanning the news. They missed curling up with coffee or tea and working the crossword puzzle or cutting coupons.  It is easy to forget that until the mid-‘90s, this was the only way to read the news and, for Boomers, it is how they learned to read and interact with the world.  Their brains are wired for print in the same way Gen Z is wired for mobile.”

Perhaps the Globe’s business and administrative staffers lost sight of that fact. Maybe they treated their “unsexy” print subscribers as an afterthought while forgetting that this segment of their customer base is critical to the very survival of their paper – and the industry – in a period of transition.

True, delivering the news to print customers is more expensive than doing so digitally. But these customers are more predictable and loyal, versus fickle and finicky.

… But only if the product is delivered. Fail in that fundamental function, and the gig is up.

nosThe Boston Globe’s print readers are hardly unique. Recently, Pew Research Center surveyed consumers in three urban markets.  Despite the differences in these markets (geographic, economic, social), a highly significant percentage of respondents in all three metro areas reported that they read only the print version of their local newspaper:

  • Denver, CO: ~46% read only the print version of their local newspaper
  • Macon, GA: ~48% read print only
  • Sioux City, IA-NE-SD: ~53% read print only

This isn’t to suggest that Boomer audiences are a bunch of rubes who aren’t connected to the digital world. Far from it:  They tend to be better educated and more wealthy (with more disposable income) than other demographic segments.  Their attachment to print isn’t in lieu of digital, but more in concert with their online habits.

Unlike other generations, they’re not single-channel as much as omni-channel consumers. The keys to newspaper publishers’ continued relevance are bound up in how they serve this older but critically important segment of their customer base.

Speaking personally, I can “take it or leave it” when it comes to print.  I don’t subscribe to a daily print paper, and the bulk of my news comes to me from digital sources.  But there’s something quite comfortable about sitting down with a quality daily paper and reading the news stories therein — including long-form journalism pieces that are difficult to find very many places these days.

There are millions more people across the country that are happy to continue paying for the privilege of consuming the news in just such a fashion.  Indeed, they’re the newspaper industry’s most loyal readers.

Digiday ID’s the most “overhyped” marketing developments of 2015.

Digiday logoWhat were the most overhyped marketing stories in 2015? Media company Digiday‘s brand reporter Tanya Dua has come up with a list of four that she feels fits the bill.  See if you agree.

Apple Watch

Apple WatchDua notes that the Apple Watch was announced with so much fanfare that developers began making apps for it a half-year before the product hit the shelves — including big consumer players like Target and American Airlines.  But sales of the Apple Watch have been tepid at best.  There’s no way the marketplace performance of the product has come even remotely close to the company’s hopse for it.

Thom Gruhler, a CMO at Microsoft, says it well:

“When it [comes] down to the Apple Watch, one big question has still not been answered: Will anyone end up really ‘needing’ to engage with this shiny new technology?  What happened in 2015 was a disappointing start.”

Others appear to be even less charitable. A few are even equating the launch of the Apple Watch with that of another product that was similarly hyped:  Remember the Segway?  Everyone was supposed to end up having one of those — whereas the reality is closer to no one having them, with the exception of a few security cops and a few “trendy” businesses with long hallways.

Wearable Tech

wearableMany prognosticators were expecting that the “big data” promise of using wearable technology for experiences that were predictive and personalized would be fulfilled in 2015.  That’s hardly what’s happened.  According to Dua, wearables have yet to deliver anything like that in any meaningful way.

She quotes Julie Lee, Managing Director of marketing communications firm Maxus USA’s Chicago office:

“Technology, design and user experiences still need to be worked out. Though many companies are making great strides, we continue to watch this space to see if ‘what’s possible’ can truly become possible.  Wearables still hold great potential, but we’ll need to address today’s obstacles before we can become a ‘wearables-first’ market.”

Tanya Dua cites two other developments she feels were overhyped in 2015: Influencer Partnerships and Virtual Reality.

The problem with influencer marketing is when there’s little natural synergy between brands seeking to connect with their consumers more directly. “Authenticity” matters — and too often influencers are rather awkwardly tied to products few people would ever associate with them.

As for virtual reality, the problem is one of practical implementation and adoption by consumers; it hasn’t been happening — mainly due to lack of content and available hardware. Without those pieces of the puzzle in place, marketers simply can’t justify the cost having their brands present in the mix.  Instead, look for this trend to gather more steam in 2017 and years further out, Dua contends.

What do you think? Is Tanya Dua correct in labeling these marketing trends as “overhyped”?  What else would you add to the list?  Please share your thoughts with other readers here.

The FTC Cracks Down on Native Advertising Abuse

But what difference will it make? Only time will tell …

FTIt had to happen: After years of publications uploading native advertising content that’s barely labeled as such, the Federal Trade Commission has handed down new guidelines that leave very little wiggle room in what constitutes proper labeling of paid advertising material.

Published under the title Enforcement Policy Statement on Deceptively Formatted Advertisements, the FTC’s new guidelines, which run more than 10 pages in length, make it more difficult than ever to “camouflage” advertising as “legitimate” news content.

What it boils down to is the stipulation that any sponsored content must be clearly labeled as advertising – using wording that the vast majority of readers will understand instantly.

Here’s how the FTC guidelines describe it:

“Terms likely to be understood include ‘Ad,’ ‘Advertisement,’ ‘Paid Advertisement,’ ‘Sponsored Advertising Content,’ or some variation thereof. Advertisers should not use terms such as ‘Promoted’ or “Promoted Stories,’ which in this context are, at best, ambiguous and potentially could mislead consumers that advertising content is endorsed by a publisher site.”

Another key provision is warning against advertising content mimicking the look and feel of surrounding editorial content – things like the layout characteristics, headline design treatment, the use of fonts and photography.

And here’s another kicker: the FTC lumps offending advertisers in the same pile as the people who create the materials, in that its policy statement doesn’t apply just to advertisers.  So ad agencies, MarComm companies and graphic designers, beware.

Quoting again from the FTC document:

“In appropriate circumstances the FTC has taken action against other parties who helped create deceptive advertising content – for example, ad agencies and operators of affiliate advertising networks. Everyone who participates directly or indirectly in creating or presenting native ads should make sure that ads don’t mislead consumers about their commercial nature. 

“Marketers who use native advertising have a particular interest in ensuring that anyone participating in the promotion of their products is familiar with the basic truth-in-advertising principle that an ad should be identifiable as an ad to consumers.”

Of course, these new guidelines are only going to make it harder for advertisers – and publishers – to be able to utilize advertising techniques that have, up to now, been far more effective than online display advertising.

iab-logoPredictably, we’re hearing mealy-mouthed statements from the industry in response. A spokesperson for the Interactive Advertising Bureau had this to say:

“While guidance serves great benefit to the industry, it must also be technically feasible, creatively relevant, and not stifle innovation. To that end, we have reservations about some elements of the Commission’s guidance.”

What bothers the Interactive Advertising Bureau in particular is the “plain language” provisions in the FTC’s guidelines, which IAB considers “overly descriptive.”

Translation: there’s concern that publishers can no longer label advertising using such euphemisms as “partner content” or “promoted post.”

Others seem less concerned, however. Sites such as Mashable and Huffington Post appear to be onboard with the new guidelines.

Besides, as one spokesperson said, “When the FTC issues guidelines, you’re better off when you follow them than when you don’t.”

… That sounds about right.

Consumer E-Mail Marketing: Too Much of a Good Thing?

igAdvertisers often complain about the drawbacks of online display advertising — and it’s not hard to figure out why.

Online display ad viewability, which is defined by the Media Rating Council as at least 50% of an ad’s pixels being in-view for at least one continuous second, is running under 45% these days — meaning that fewer than half of online display ads meet the definition of being viewable.

That’s actually a lower percentage than before; viewability charted closer to 50% in 2014, according to the global media valuation platform Integral Ad Science.

Because of these middling viewability rates, many advertisers look to e-mail marketing as the panacea. Not only is e-mail marketing inexpensive, the rational goes, it’s also more likely to attract and engage recipients.

But here too, the evidence is that there is mediocre visibility, too. And in this case, it’s actual willful ignorance.

According to the results of a study conducted earlier this year by business technology research firm Technology Advice, ~40% of the ~1,300 U.S. adults surveyed reported that they completely ignore marketing-oriented e-mails.

Of the ~60% who reported that they do open marketing e-mails, only a little over 15% do so on a regular basis.

Here’s a breakdown of the underwhelming stats that were gathered by Technology Advice:

  • ~58% of recipients read from 0 to 25% of marketing-oriented e-mails sent to them
  • ~21% read 25% to 50% of the marketing e-mail sent to them
  • ~13% read 50% to 75% of them
  • Just ~8% read 75% to 100% of them

In an attempt to “juice” these figures, marketers are experimenting with robust personalization in e-mails that become evident even before anyone opens them (e.g., personalization showing in the subject line), along with offering clearly marked discounts and other promo attractions.

In this regard, consumers do expect businesses to provide “value” in exchange for their attention, which explains by ~40% of the survey’s respondents are responding to discounts and similar promotional offers above all other types of e-communiqués.

But with such modest levels of people interacting with any marketing-oriented e-mails at all, there’s a question as to how whether these ploys to improvement engagement are just nibbling around the edges.

Because the reality is, there’s a big portion of the market that’s become jaded about e-mail.

Another approach seems counter-intuitive but just might be working better: reducing the frequency of e-mail solicitations from advertisers.  That theory is supported by the Technology Advice research, which found that nearly 45% of respondents feel that businesses would improve their marketing effectiveness by actually sending them less frequent e-mails.

A case of “less is more”? Probably so.

What’s in a name? When it comes to senior living communities – plenty.

BrooksideFor those of us “of a certain age,” it seems hard to believe that within five years, most of the Baby Boomer generation will be of retirement age.

… This also means that millions of people will be thinking about downsizing, right-sizing, or whatever the applicable term may be.

All sorts of considerations come into play when making such a decision; climate, social, cultural and recreation opportunities, plus proximity to relatives are some of the most common.

But when the dust settles, most people will actually end up “aging in place.”

That’s one key finding from a recent survey of ~4,000 American Baby Boomer households that was conducted by the Demand Institute Housing & Community.

Not only do nearly two-thirds of the respondents plan to stay in their current homes, the majority of them feel that their homes are well-suited for aging – even if they’re multi-story, don’t offer accessibility features, or aren’t particularly low-maintenance structures.

But the survey suggests another interesting dynamic that may also be at work:  the notion that senior living communities are primarily places for people who have serious health issues or who can’t take care of themselves on their own.

Let’s face it.  Baby Boomers don’t consider themselves part of that cohort at all, which they equate with people who are substantially more elderly than themselves.

When you think about it, so many of the terms used to describe senior living facilities convey exactly the wrong thing to Baby Boomers.  The names may well be accurate descriptions of the properties in question, but they fairly scream “geriatrics.”

community

I’ve run across quite a few descriptors.  A good number of them reside in the same wheelhouse – which is to say, distinctly unattractive.  Meanwhile, other alternative names are often too narrowly descriptive as well, because one important aspect of senior living is to access to continuing care if and when that becomes necessary.

Either way, those charged with marketing these properties clearly prefer the word “community” over the word “center” or “home.”  But you can be the judge of how successful these names really are:

  • 55+ communities
  • Active adult communities
  • Age-restricted communities
  • Continuing care retirement communities
  • Elder cohousing communities
  • Independent living communities
  • Leisure communities
  • Mature living communities
  • Senior housing communities
  • Senior living communities

The bottom line on this is pretty fundamental:  Few people – regardless of how old they are – wish to be reminded of the limitations of life on a downward curve.  It’s just not compatible with the positive attributes that are so much a part of human nature.  Anything we can do to avoid being reminded of our mortality, we’ll do.

Obviously, that reluctance to face the reality of aging is of concern to property developers in the housing industry as well.  One of the actions coming out of field research such as the Diamond study is a new initiative to establish an alternative “umbrella descriptor” that works across the entire spectrum of senior living facilities.

It will be interesting to see where that exercise will end up.  As for me, I’m guessing it’ll still telegraph “geriatric.”  But perhaps we’ll end up being surprised.

The Ad Fraud Gravy Train Keeps Chugging Along — No Matter What …

xbnAd fraud is quite a large issue for online advertisers – and it’s been on many companies’ radar screens for a long time.

But even with the higher visibility and greater scrutiny of online ad fraud, it seems to be a problem that only gets bigger.

The most recent example of the phenomenon came to light a few weeks ago, when ad fraud prevention consulting firm Pixalate announced that a newly discovered botnet has been draining literally billions of dollars from advertisers’ MarComm coffers.

The botnet is dubbed Xindi – the same name as the hostile aliens in the Star Trek sci-fi TV series.

Xindi is making money for its creators by serving actual ads – but to simulated audiences.  It has spread via familiar methods such as phishing.

Pixalate estimates that just shy of 78 billion fake ad impressions have been racked up so far.  Even at low cost-per-impression revenue figures, the high volume amounts to several billions of dollars of illicit revenues siphoned (and counting).

What makes the Xindi botnet particularly nettlesome is that it’s designed to go after computers and networks at high-end organizations, enabling it to “mimic” desirable web traffic (i.e. affluent consumers).

xbotAccording to Pixalate, already there could be as many as 8 million computers compromised in more than 5,000 networks, including a goodly number of Fortune 500 companies as well as university and governmental networks.

Such desirable locations and ad audiences translate into lucrative online ad pricing (CPMs of $200 or more).

In the event, advertisers are paying high prices … for nothing.

To counteract Xindi, Pixalate recommends that the Internet Advertising Bureau update its protocols to factor in the pace of ad requests, so that impression generated after a certain time period cannot be accepted as valid — and hence would be non-billable.

Whether this or other remedies will actually happen is up in the air at the moment (the IAB isn’t onboard with the recommendations).

Either way, what seems clear is that whatever the remedial actions that are taken, burgeoning ad fraud activity is bound to continue.

The question is, can it ever be contained, or will it just continue to grow and grow?  If you have any thoughts or ideas on the challenge, please share them with other readers.

Marketing Technology: Is “Implosion” Where We’re Headed?

A chart of just some of the major marketing technology platforms -- and this is as of 2013!
A chart of just some of the major marketing technology platforms — and this was in 2013!

It seems that with each passing day, one or two new technology products are announced by MediaPost and other publishers in the marketing field.

The numbers tell the story. The marketing technology industry website chiefmartec.com lists nearly 1,900 marketing technology vendors in more than 40 categories.

That’s nearly double last year’s tally of around 950 vendors.

Software clearinghouse Capterra lists even more: a whopping 3,000+ marketing technology products across 30 categories.

These firms account for well over $20 billion in financing – the dollars that can be tracked, that is – including around 30 companies that are valued at $1 billion or more each.

That’s a lot of companies and vendors. Of course, there are many customers who are looking for tech-driven marketing solutions as well.  The question is whether things have gotten out of balance.

Business writer and marketing tech specialist Malcom Friedberg thinks so. He’s Chief Marketing Officer at CleverTap, and he also publishes columns on a variety of business topics.

In Friedberg’s view, the sheer number of marketing technology vendors and products means that the segment may now be on the brink of an implosion.

Friedman references a recent CMO Council document that reports that more than 80% of marketers are using as many as ten different marketing-related technologies or cloud solutions.

And as new technologies are added, the problem is finding educated staff – and enough hours in the day – to cover all of these products well. In many instances, users may be just scratching the surface of what these products can provide; the “multiple hat” dynamics of many marketing departments mean that very few people qualify as being “advanced” users.

The problems boil down to this: Even if a department has two or three marketing people devoted exclusively to tech-related responsibilities (at tall order in most companies) – this assumes that those people can work equally well on multiple different platforms.

The reality is quite different. It’s more like a big jumble – with consultants brought in to sort things out.  It may get the job done, but it isn’t pretty – and it’s hardly a recipe for “the best of best practices.”

Survey work by the CMO Council supports this hypothesis. The Council has found that fewer than on in ten of the marketers it surveyed reported that they possess a highly evolved digital marketing model that has a proven, clear path of evolution.

Malcolm Friedberg
Malcolm Friedberg

Friedman thinks he knows where things are heading. Not to more choices, but rather to less:

“In my opinion, we’ll start to see massive consolidation and uber-marketing systems. Think super-integrated marketing and advertising clouds … the preoccupation with ‘best-of-breed’ in every category will be replaced by a ‘tree-and-branch’ model, with one core technology and a few ‘good enough’ complementary ones.”

Friedman calls it “an expensive French meal” instead of “a Vegas buffet.” While there will always be new products promising incremental improvements, he predicts that by 2020, the common business model will be super-integrated marketing and advertising clouds as we see already with the likes of Marketo and Hubspot.

What do you think? Is Friedman onto something … or is the orgy of new marketing technology products going to continue unabated?  Please share your thoughts with other viewers here.

The “100% ad viewability” gambit: Gimmick or game-changer?

Say hello to the ad industry’s newest acronym: vCPM (viewable cost-per-thousand).

viewabilityA few weeks back, Google announced that it will be introducing 100% viewable ads in the coming months, bringing all online ad campaigns bought on a CPM basis into view across its Google Display Network.

The news comes as a relief to advertisers, who have long complained about the high percentage of ads that never have a chance to be viewed by “real people.”

The statistic that Google likes to reference is that approximately 55% of all display ads are never viewed due to a myriad of factors — such as appearing being below the fold, being scrolled out of view, or showing up in a background tab.

And the problem is only growing larger with the increased adoption of ad blocker software tools.

Google isn’t the only that’s one coming up with in-view advertising guarantees. Facebook recently announced that it will begin selling 100% viewable ads in its News Feed area.

But some are questioning how much of a better benefit 100% viewability will be in actuality. For one thing, ad rates for these program are sure to be higher than for conventional ad buying contracts.

For another, neither Facebook nor Google have stated how long an ad would need to remain in view before an advertiser gets charged. Whether it’s 1 second, 2 seconds or 5 seconds makes a huge difference in the real worth of that exposure to the consumer.

Then there’s the realm of mobile advertising. In a startling analysis conducted and reported on by The New York Times, a mix of advertising and editorial on the mobile home pages of the top 50 news sites was measured.  What the analysis found was that mobile airtime is being chewed up by advertising content far more than by the editorial content people are tuning in to view.

Boston.com mobile readers are a case in point. The analysis found that its readers spend an average of ~31 seconds waiting for ads to load versus ~8 seconds waiting for the editorial content to load.  That translates into a home page visitor paying $9.50 per month — just to view the ads.

ad blockerWhen there’s suddenly a cost implication in addition to the basic “irritation factor,” expect more smartphone and tablet users to avail themselves of ad blockers even more than they do today.

As if on cud, Apple is now allowing ad blockers on the iPhone, giving consumers the ability to conserve data, make websites load faster, and save on usage charges all in one fell swoop.

Sounds like a pretty sweet deal all-around.

Surprising statistic? One-third of American adults still aren’t on social media.

social mediaFor the many people who use social media on a daily basis, it may seem inconceivable that there are a substantial number of other Americans who aren’t on social media at all.

But that’s the case. The Pew Research Center has been tracking social media usage on an annual basis over the past decade or so, and it finds that about one-third of Americans still aren’t using any social networking sites.

To be sure, today’s ~65% participation rate is about ten times higher than the paltry ~7% participation rate Pew found the first time it surveyed Americans about their social media usage back in 2005.

According to Pew’s field research findings, here’s how the percentage of social media involvement has risen in selected years in the decade since. (The figures measure the percentage of Americans age 18 or over who use at least one social networking site.)

  • 2006: ~11% using at least one social networking site
  • 2008: ~25%
  • 2010: ~46%
  • 2012: ~55%
  • 2015: ~65%

In more recent years, the highest growth in social media participation rates has been among older Americans (over the age of 65), ~35% of whom are using social media today compared to just 11% five years ago.

That still pales in comparison to younger Americans (age 18-29), ~90% of whom use social media platforms.

While it’s a common perception that women are more avid users of social media than men, Pew’s research shows that the participation rate is actually not that far apart. Statistically it isn’t significant, in fact: a ~68% social media participation rate for women versus ~62% for men.

pew-research-centerSimilarly, there are more similarities than differences among the various racial and ethnic groups that Pew surveys — and the same dynamics are at work when it comes to differing education levels, too.

Regional differences in social media practice continue to persist, however, with rural residents less likely to use social media than suburban residents by a ten-point margin (58% versus 68%). City dwellers fall in between.

More details on Pew’s most recent field research on the topic of social media participation can be accessed here. See if you notice any surprising findings among them.