Cookie-blocking is having a big impact on ad revenues … now what?

When Google feels the need to go public about the state of the current ad revenue ecosystem, you know something’s up.

And “what’s up” is actually “what’s down.” According to a new study by Google, digital publishers are losing more than half of their potential ad revenue, on average, when readers set their web browser preferences to block cookies – those data files used to track the online activity of Internet users.

The impact of cookie-blocking is even bigger on news publishers, which are foregoing ad revenues of around 62%, according to the Google study.

The way Google conducted its investigation was to run a 4-month test among ~500 global publishers (May to August 2019). Google disabled cookies on a randomly selected part of each publisher’s traffic, which enabled it to compare results with and without the cookie-blocking functionality employed.

It’s only natural that Google would be keen to understand the revenue impact of cookie-blocking. Despite its best efforts to diversify its business, Alphabet, Google’s parent company, continues to rely heavily on ad revenues – to the tune of more than 85% of its entire business volume.

While that percent is down a little from the 90%+ figures of 5 or 10 years ago, in spite of diversifying into cloud computing and hardware such as mobile phones, the dizzyingly high percentage of Google revenues coming from ad sales hasn’t budged at all in more recent times.

And yet … even with all the cookie-blocking activity that’s now going on, it’s likely that this isn’t the biggest threat to Google’s business model. That distinction would go to governmental regulatory agencies and lawmakers – the people who are cracking down on the sharing of consumer data that underpins the rationale of media sales.

The regulatory pressures are biggest in Europe, but consumer privacy concerns are driving similar efforts in North America as well.

Figuring that a multipronged effort makes sense in order to counteract these trends, this week Google aired a proposal to give online users more control over how their data is being used in digital advertising, and seeking comments and feedback from interest parties.

On a parallel track, it has also initiated a project dubbed “Privacy Sandbox” to give publishers, advertisers, technology firms and web developers a vehicle to share proposals that will, in the words of Google, “protect consumer privacy while supporting the digital ad marketplace.”

Well, readers – what do you think? Do these initiatives have the potential to change the ecosystem to something more positive and actually achieve their objectives?  Or is this just another “fool’s errand” where attractive-sounding platitudes sufficiently (or insufficiently) mask a dimmer reality?

Company e-newsletters: Much ado about … what? (Part 2)

This post is a continuation of a topic I wrote about several days ago. That column focused on the (lack of) reader engagement with customer e-newsletters and what may be the root causes of it.

This follow-up post focuses on what marketers can do to improve their newsletters’ worth to readers. It boils down to addressing four main issues:

Too much e-newsletter content is “full of it” – People don’t want to read about how great the company is or other navel gazing-type content that’s completely company-focused.  Instead, offer soft-sell (or no-sell) content that’s truly of value.  Simply ask yourself, “If I weren’t an employee of this company, would I care at all about this topic?”  This exercise applies equally to B2B and B2C newsletters.

Tired writing – There’s nothing more tiresome than a newsletter article that’s filled with corporate-speak or comes across as a patchwork of language from multiple sources.  But this happens all too often.  Sometimes it’s because the writer is overworked and hasn’t had sufficient time to source the article and create a compelling narrative.  Perhaps the author is a non-writer.  Often, it’s simply that the people inside the company love how the copy reads – tin ear or not.  Regardless of the topic of your story, newsletter copy should have personality, and it needs to move.  Otherwise, it’s your reader who’s going to move on.

Gaining an audience – Too many newsletters are playing to an empty house, whether it’s because of an opt-in audience that doesn’t care about you anymore, or from a total lack of visibility in search results or on social media.  Build circulation through in-house databases, optimizing copy to draw in new readers via SEO, and promoting article content through social posts.  Again, these prescriptions work for both consumer and business marketing, although the individual tactics may differ somewhat.

Neglect – It happens way too often:  An e-newsletter initiative begins with great fanfare, but it doesn’t take long for the novelty to wear off.  What starts out as a bi-weekly turns into a monthly or a quarterly, with gaps in between.  Eventually the only thing “regular” about it is its irregularity.  It’s surprising how many corporate websites show links to archived newsletters all the way up to 2016 or 2017 — but then nothing more recent than that.  And we all know what that means …

Wrapping it all up, it’s worth asking this basic question every once in a while: “Is our newsletter any good?” The answer should be unmistakable — if you read your content with a completely open mind.

If you’re involved in your company’s e-newsletter initiatives, do you have any additional insights about what makes for a successful program? Please share them with other readers here.

 

Are 5-star online reviews really the best ones?

It would seem that the more top ratings a company or product can receive in online reviews, the better it would be for their business.

As it turns out, this isn’t exactly the case. A recent national study has concluded that businesses earning star-ratings averaging between 3.5 and 4.5 on a five-point scale earn more revenues annually than those with other ratings – higher or lower.

And even more surprising, top-rated businesses with five stars actually earn less in revenues than those whose customer ratings are two stars or lower.

What’s going on here?

It would seem that five-star ratings are considered “too good to be true.”  Seeing them, people tend to think something’s fishy about how the ratings can be so high. And if there’s something worse than getting low ratings, it’s the feeling that the ratings a company has earned aren’t “genuine.”

The analysis, conducted recently by small business SaaS supplier Womply, sought to study the correlation between online customer reviews and company revenues, and in doing so it looked at data from a large number of U.S. small businesses.

The more than 200,000 businesses studied had an average annual revenues of around $300,000. The Womply research spanned diverse industries and markets including restaurants, auto shops, retailers, medical and dental offices, hair and nail salons, etc.

While the ratings dynamics may be surprising, another Womply finding reinforces the intuitive view that attracting more reviews online is better than attracting fewer ones.

The businesses studied by Womply averaged ~82 total reviews across multiple online review sites. But for those businesses attracting more than the average number of reviews, they earned ~54% more in annual revenues than the average.  And for those with 200 reviews or more, the average annual revenues were nearly double the average revenue figure.

The propensity for companies to respond to reviews appears to boost revenue performance as well. The Womply study found that businesses that fail to interact with their customers’ reviews earn lower revenue on balance – as much as 10% less than their counterparts.

The key takeaway points from the Womply research appear to be:

  • Too many top-rating reviews risk making a company’s reputation appear less genuine, actually repelling business rather than attracting it.
  • To improve revenues, businesses should encourage their customers to post reviews online.
  • To improve revenues, businesses should engage with reviewers by responding to their comments, addressing concerns, and expressing gratitude for praise.
  • People feel more affinity with companies that acknowledge their customers and treat them like they care. It’s basically the Golden Rule in practice.

What are your thoughts? Do the findings surprise you?  Please share your perspectives with other readers.

Roads to … nowhere?

Google Maps admits its business listings are riddled with errors and outright fraudulent entries.

The news reports hit fast and furious this week when the media got wind of the millions upon millions of “faux” business listings on Google Maps, thanks to a new Wall Street Journal exposé.

It’s true that there are a ton of map listings displayed by Google on search engine results pages, but the latest estimates are that there are more than 11 million falsely listed businesses that pop up on Google searches on any given business day.

That number may seem eyebrow-raising, but it’s hardly “new news.” Recall the reports that date as far back as a half-decade — to wit:

  • In 2014, cyber-security expert Bryan Seely showed how easy it was to use the Internet’s open architecture to record telephone conversations and create fraudulent Google Maps listings and locations.
  • In 2017, Google released a report titled Pinning Down Abuse on Google Maps, wherein it was estimated that one in ten fake listings belonged to actual real-live businesses such as restaurants and motels, but that nefarious third-parties had claimed ownership of them. Why do this? So that the unscrupulous bad-actors could deceive the targeted businesses into paying search referral fees.

Google is owning up to its continuing challenges, this week issuing a statement as follows:

“We understand the concerns of those people and businesses impacted by local business scammers, and back in 2017 we announced the progress we’d made. There was still work to be done then, and there’s still work to be done now.  We have an entire team dedicated to addressing these issues and taking constant action to remove profiles that violate our policies.”

But is “constant action” enough? Certain business trades are so riddled with fake listings, it’s probably best to steer clear of them altogether.  Electricians, plumbers and other contractors are particularly sketchy categories, where roughly 40% of Google Maps listings are estimated to be fraudulent entries.

The Wall Street Journal‘s recent exposé, published on June 24th, reported on a search its researchers conducted for plumbers in New York City.  Of the top 20 Google search results returned, only two actually exist where they’re reported to be located and accept customers at the addresses listed.  That’s pretty awful performance even if you’re grading on a curve.

A measure of progress has been made; Google reports that in 2018 it removed some 3 million fake business listings. But that still leaves another 11 million of them out there, silently mocking …

Pandora’s Box: Spotify is poised to become the #1 music streaming service in the United States.

This past month, digital marketing research firm eMarketer issued its new forecast on music streaming activities in the United States. What it shows is that Pandora, which has dominated the market ever since the category was created in 2000, will likely fall to the #2 position, overtaken by Spotify.

Based on a calculation of internet users of any age who listen to music streaming on any device at least once per month, Pandora jas occupied a narrow band of between 72 million and 77 million listeners since 2015.

During that same period, Spotify users have increased dramatically, from ~24 million to ~65 million Americans. And eMarketer projects that Spotify will overtake Pandora by 2021.  The chart below shows the trajectory:

Actually, the trend had been building since even before 2015. In 2012, Pandora had ~67 million users compared to Spotify’s paltry ~5 million.  But Pandora has been shedding users in recent years.  As the chart above illustrates, by 2023 Pandora will have lost nearly 10% of its users since 2014.

To be sure, Pandora still holds a robust ~35% of audio listener penetration in the United States as of this year. But Spotify is nipping at its heels with a ~32% share.  Amazon Music (~18%) and Apple Music (~16%) are further back, but with still-significant chunks of the marketing.  (It should be noted that there is overlap, as some listeners may engage with more than one music streaming service during the month.)

What has caused the change in fortunes? Christ Bendtsen, an eMarketer forecasting analyst, says this:

“Pandora lost users last year because of tough competition from other services attracting people to switch. Apple Music has been successful in converting its iPhone user base.  Amazon Music has grown with smart speaker adoption, and Spotify’s partnerships have expanded its presence across all devices.”

Speaking in particular about Spotify’s rapid surge, Bendtsen notes:

“Spotify’s initial growth was driven by its unique combination of music discovery, playlists and on-demand features. But now that all music streaming services [possess] the same features, Spotify’s future success will rely on partnerships with other companies.  It has teamed up with Samsung, Amazon, Google and Hulu to be on all devices and provide bundled offerings.  We expect more partnerships to come, leveraging multiple brands, devices and services to drive user growth.”

As for Apple Music, there’s a reason it lags behind other music streaming services in the rankings. That service operates on a subscription-only model and doesn’t offer any form of advertiser-supported free usage.  Forecasters expect it to remain in the #4 position with its “premium-only” business model.

More information about the eMarketer music streaming forecast is available here.

What are your own music streaming listening habits? Have they changed in recent years, and if so, how and why?  Please share your thoughts with other readers.

Which brands are “meaningful” to consumers? Not very many.

What makes a brand “meaningful”? Multinational advertising, PR and research firm Havas SA has studied this topic for the past decade, conducting a survey every other year in which it attempts to rate the world’s most important brands based on consumer responses to questions about select key brand attributes.

According to Maarten Albarda, the methodology behind the Havas surveys is solid:

“It looks at three brand pillars: personal benefits; collective benefits, and functional benefits — and then adds in 13 dimensions like environment, emotional, social, ethics, etc. plus 52 attributes such as ‘saves time,’ ‘makes me happier,’ ‘delivers on its promises,’ etc.”

The Havas research is both global and quantitative — including more than 350,000 respondents in over 30 countries.

The 2019 Havas research shows that ~77% of the 1,800 brands studied don’t cut it with consumers. This finding came in response to the question of whether consumers would care if the brands disappeared tomorrow.

That’s the biggest disparity ever seen in the Havas surveys. Two years ago, the percentage was 74%.

Which brands perform best with consumers? The top five ranked for 2019 are the following:

  • #1 Google
  • #2 PayPal
  • #3 Mercedes-Benz
  • #4 WhatsApp
  • #5 YouTube

Four of these five are brands that are all about “utility” — helping consumers deal with actions (watching, searching and sharing). The odd one out here is Mercedes-Benz — suggesting that there is something enduring about the time-tested reputation for “German engineering.”

What’s equally interesting is which high-profile brands don’t crack the Top 30. I’m somewhat surprised that we don’t see the likes of Apple and Coca-Cola in the group.  On the other hand, Johnson & Johnson comes in at #6, which seems surprising to me because I doubt that J&J has the same kind of consumer awareness as many other brands.

The Havas research reveals that the highest ranked brands are ones that score well on purchase intent and the justification of carrying a premium price. Repurchase scores are also higher, making it clear that a meaningful brand translates into meaningful business benefits.

In addition to reporting on international results, Havas also releases a U.S. analysis. Historically, U.S. consumers have been even more parsimonious in choosing to bestow a “meaningful” attribution on brands.  In fact, the percentage of American consumers earmarking specific brands as indispensable hovers around 10%, compared to the mid-20s across the rest of the world.

The reason why is quite logical: American consumers tend to have more brand choices — and the more choices there are, the less any one brand would cause consternation if it disappeared tomorrow.

Click here for more reporting and conclusions from the Havas research.

Marketing AI and Machine Learning Come Into Better Focus

Artificial intelligence and machine learning are two phrases that have become regular currency in the marketing world over the past several years. It isn’t hard to figure out why, as both AI and machine learning have the potential to help marketers make sense of the ever-increasing volume (and complexity) of raw data that’s become available in increasing amounts, thanks to the digitization of “everything.”

Some people use the two terms interchangeably, but that isn’t exactly right. According to Thorin McGee, director of content at Fast Capital 360, the distinction is subtle yet significant:

  • AI is when you develop an algorithm that allows a computer to “think” for you towards achieving a goal.
  • Machine learning is when you let a computer create an algorithm to find ways to meet the goals you give it, based on large pools of data.

Put the two together, and you have the ability to gain some really deep insights into what your data is actually telling you, thereby improving decision-making success.

On the data front, this great potential is tempered by some significant challenges. Christopher Penn, chief innovation officer of marketing data and analytics consulting firm Trust Insights, characterizes them as the “5 V’s” of data:

  1. Volume — There’s so darned much of it.
  2. Variety — More kinds of data are being churned out.
  3. Velocity — Data is coming at us faster than ever.
  4. Veracity — If data isn’t verified, it can do more harm than good.
  5. Value — In raw form, data isn’t particularly useful. Like oil, data needs to be refined to be of value.

If getting your arms around data seems like trying to hug a stream of water, you aren’t alone in thinking that. Many companies are pretty adept at using data to identify what happened — and maybe even to diagnose problems and why they happened.  But it’s less easy to predict what will happen based on data … and even harder to use data to determine with confidence what should happen.

The biggest challenge — but also the one with the biggest potential payoff — is tapping machine learning to process and use data in forging future business as you wish it to be.

To date, very few companies have come all that close to becoming AI-powered enterprises. But it’s where we’re headed in the coming decade.  It represents one of the biggest opportunities for differentiating one company from another.  But it will require a disciplined and concerted effort:  talent acquisition (developers and data scientists), tapping outside vendors, along with taking available open-source code and building upon that to implement the appropriate marketing technologies.

Oh, and committing to a multi-year initiative and budget even after all of those other pieces are in place.

Surveying the current landscape, are there particular entities that you see as on the leading edge in applying AI and machine learning to their marketing endeavors? Please share your observations with other readers.