Advertising

Newspaper Ad Revenues Plummet to a 60-year Inflation-adjusted Low

Phillip Nones Uncategorized , , , , , , , , ,

Newspaper advertising revenues decline to 1950 levels in inflation-adjusted dollars.Newspaper ad revenues have now collapsed to a level not seen since the 1950s in inflation-adjusted dollars. 

That’s the sobering conclusion from the Newspaper Association of America’s release of the most recent advertising revenue figures for the U.S. industry.

With these dismal statistics, the newspaper industry seems sure to contract even further, while getting precious little boost from their online advertising activities.

Clearly, when it comes to media, it’s “out with the old” and “in with the new” …

Online display advertising’s clickthrough performance: Now it’s just embarrassing.

Phillip Nones Uncategorized , , , , , , , , , ,

poor online display ad clickthrough ratesRecently, several executives at the Advertising Research Foundation, the online analytics firm Moat and media buying company Accordant Media created six completely blank online display ads – no copy and no images – in three standard sizes and two colors.

The idea was to test the veracity of information being collected on clickthroutgh rates in online advertising and the algorithms that drive automated ad buying and selling — ads being automatically served where they will generate the most clicks.

Once the ads had been created, the crack team had them served via a demand-side ad platform, using both run-of-exchanges as well as being trafficked to publishers that would accept unaudited copy.

The idea was to see what sort of clickthrough rate would be garnered by these “faux” ads.

It’s common knowledge that clickthrough rates for online display advertising are abysmally low. But what transpired in the ARF-led team’s “nothing-doing” ad campaign was startling, to say the least.

The average clickthrough rate on these ads, across 1 million+ impressions served, was 0.08%. 

That clickthrough rate rivaled the better results achieved by online branding campaigns … and isn’t very far off the average performance for a direct response effort!

The team noted that the modest cost of this research effort (less than $500) was a “pretty good deal for a diagnostic check-up on a $100 billion machine.”

And what are those results telling us? A couple things, I think:

  • If you believe these clickthroughs are legitimate, there’s not much difference between someone clicking on an ad by mistake and the degree of intentional interaction with actual online branding campaigns.
  • If you believe that these clickthroughs might be happening to generate click rates that someone can roll up into an ROI calculation … you might be correct, too.

But ARF’s Ted McConnell reported that a follow-up screen appearing once an ad was clicked asked why the person who clicked did so — out of curiousity or by mistake. 

Here’s what McConnell reported:  “We detected no click fraud in the data we counted.  Half the clickers told us they were curious; the other half admitted to a mistaken click.”

McConnell noted that the team went beyond the follow-up query in its investigation.  “To obtain further insights, we tracked hovers, interactions, mouse-downs, heat maps — everything.  (Heat maps detect click fraud because bots tend to click on the same spot every time.)”

So, what’s the major takeaway finding from this experiment? 

If it’s that online brand advertising campaigns are going to deliver abysmal engagement, you already knew that. 

But if you think achieving a clickthrough rate of 0.04% or 0.05% for an online brand advertising campaign is an indication of anything in particular, you’re probably off by miles, too.

Was this “nothing-doing” research worthwhile, seeing as how it didn’t test “real” ads? 

I think it was … because the findings are telling us that below some threshold level, what we’re really experiencing is just noise. That’s not exactly what the online display advertising advocates want to hear …

Advertising that’s really on a roll.

Phillip Nones Uncategorized , , , , , , , , , , , , , ,
Toilet Paper Roll Advertising
Here’s advertising that’s really on a roll — in more ways than one.

One definition of good advertising is how effectively it reaches the most people and engages its audience for longer periods of time.

According to that definition, placing advertisements on toilet paper rolls is a brilliant move that should “wipe away” competing promotional tactics, correct?

[On the other hand, you might think this advertising idea “stinks.”] 

But it’s just what two young entrepreneurial brothers are up to. They’ve formed a business – Star Toilet Paper – that supplies toilet paper to public bathrooms.  And the TP features advertisements printed right on the roll.

According to brothers Bryan and Jordan Silverman, Star’s toilet paper is made from environmentally friendly materials, with coupons and ads printed on them using a soy-based ink.

Their company sells space on the rolls for a half-penny per ad.  Coupons printed on the TP can be redeemed through the company’s own website.

Reportedly, some big-name advertisers like Ben & Jerry’s ice cream have signed on … as have some smaller businesses like physicians offices.  (No word on whether the doctors specialize in gastroenterological medicine.)

How are the Silverman brothers enticing restaurants, bars and other venues to stock their toilet paper? They’re providing the ad-filled rolls to these establishments at no charge.

Not surprisingly, this idea came to the brothers while they were students in college.

After patenting the concept in 2010, they’ve since formed their company, developed a business plan, and have already lined up approximately 50 advertisers.

How successful is the endeavor so far? No official word on whether the brothers are “cleaning up” in the business and “flush” with cash yet.

But Jordan Silverman notes that bathroom stall visitors are the very definition of a captive audience. “It’s an unmatched active audience. A person looks at the average advertisement for two to five seconds. People will look at ours for a lot longer,” he notes.

One of the customer segments considered to be highly lucrative for the company is movie theaters.

Come to think of it, this newfangled TP would be perfectly suited for the next Star Trek movie.

… You know, the one where the Starship Enterprise circles Uranus and wipes out the Klingons …

B-to-B e-mail marketing: From sleepy to creepy?

Phillip Nones Uncategorized , , , , , , , , ,

Unwanted e-mails from businesses and brandsThe amount of information that companies know about the behavior of their customers has been growing, thanks to the “digital footprints” people leave all over the place when interacting with companies and brands via web surfing, e-mail and e-commerce.

Still, up until now, there’s been a polite dance wherein the companies don’t acknowledge the degree of that knowledge. Call it a sort of digital politeness.

But that seems to be changing, as the stakes have grown higher for engaging with customers via online, social and e-mail communications rather than traditional advertising.

Take Pitney Bowes in the B-to-B world, for example. In recent months, its marketing staff has sent out e-mail communiqués to their opt-in customers containing messages like, “We notice it’s been a while since you opened an email from us.”

That creepy little missive is as impertinent as it is likely false. Considering the wide swath of people who use the Microsoft Outlook e-mail platform – and many of those use preview panes and have set their default preferences to block images – in reality Pitney Bowes doesn’t actually know if its customers have been reading its e-mail messages or not.

It’s also unclear whether Pitney Bowes really wants its opt-in recipients to go away rather than just browbeating people into engaging with their e-mails more.

This has manifested itself in e-mail messages sent asking if customers are still interested in receiving e-mails so they can “continue receiving the latest from PB.” But despite this implicit threat to be dropped from Pitney Bowes’ e-mail database, ignoring those e-mails doesn’t seem to result in that actually happening.

Rather, it’s just a continuation of more borderline-creepy e-mails with messages chiding the recipient for potentially missing out on “valuable information about supplies, offers, discounts, new products and thought leadership pieces.”

Thought leadership pieces? The leaders of Pitney Bowes may think quite highly about their company and its “vaunted” position in industry … but self-describing itself as being the fount of industry-leading knowledge is a surefire way to get laughed out of town.

Just like the obnoxious teacher’s pet in school or the crashing bore at a cocktail party, no one enjoys interacting with a know-it-all who just can’t wait to corner you and tell you all about his or her latest feats of accomplishment.

In a world where most businesses are spending more effort than ever trying to collect e-mail addresses for ongoing engagement with customers and prospects, here’s a little reminder to them: Try disseminating content that is actually of value to people … which is what will get them to engage with you.

More often than not, that content won’t be about their products and services.

Radio audiences: “Stickier” than you might think.

Phillip Nones Uncategorized , , , , , , , , ,

Radio audiences: Stickier than you might realize.It’s a pretty common belief that when commercial breaks come on the radio, the audience scatters to the four winds.

And that view isn’t just held by laymen … those in the broadcast industry itself tend to believe that.

A study conducted by Arbitron, Media Monitors and Coleman Insights, released about six months ago, discovered that ad agency personnel believe that the typical radio audience is one-third lower during commercial breaks than during the lead-in.

Among radio industry personnel, those feelings are only slightlycloser to reality; they believe that the radio audience is about one-fourth lower during commercial breaks than during the lead-in.

In fact, a parallel study conducted by the same researchers found that these industry perceptions are way wide of the mark. Their evaluation, which covered nearly 18 million commercial breaks and ~62 million minutes of ads airing over a 12-month span on ~865 radio stations, revealed these interesting findings:

  • The average radio station aired 2.6 commercial breaks comprising nearly 9.0 minutes of advertising per hour.
  • The average break was ~3.5 minutes in duration.
  • On average, more than 93% of the lead-in audience stuck with the station during commercial breaks.
  • Longer spot breaks (4 to 6 minutes) still delivered ~90% of the lead-in radio audience.

These figures are significantly higher than the perception of industry observers. But one perception did turn out to comport with reality – the fact that older radio listeners are more apt to stay listening through the commercials than are younger listeners (~98% versus ~90%).

The study also determined that listening behaviors don’t differ at all between the different seasons of the year. But the audience for music stations is somewhat more prone to “wander off the reservation” compared to listeners of radio stations with spoken-word formats:  Fully 99% of the news-format radio audience stays on the station during commercials, while only ~88% of music format station listeners have the patience to stick around through the advertising.

The bottom line on the study’s findings is that radio is delivering audiences for commercials at levels that far exceed advertisers’ expectations.

So, the radio industry’s job is two-fold: Change the erroneous perceptions about audience levels … and also convince advertisers that the audience is actually listening and learning during the advertising breaks, not tuning out.　

This last bit may well be a lot harder to accomplish!

You can read more findings from the radio audience research here.

What does e-mail engagement mean to consumers? Getting a discount.

Phillip Nones Uncategorized , , , , , , , ,

e-mail engagement is all about providing discounts to customersIf you suspect that most people opt in to receive commercial e-mails so that they can receive discounts on the products want … you’re absolutely right.

The latest proof of this is in a survey of ~1,000 consumers conducted earlier this year by BlueHornet, a San Diego-based e-mail marketing services company.

That survey found that the percentage of consumers signing up to receive commercial e-mails in order to receive discounts is a whopping 95%.

So while marketers may want to believe that “engagement” with consumers is all about brand affinity and excitement … all that is much less important to them than simply getting a good deal on the product or service.

There will always be a desire for companies to nurture personalized, relevant conversations with customers via their e-mail communications.

After all, a highly engaged customer base that sees a brand as tops in its field … perhaps leader in innovation and technology … and above all, a brand that makes a true difference in the customer’s personal or business life.

All of these objectives represent Holy Grail of marketing. By all means, marketers can and should strive for this level of brand engagement – however hard to attain it may be.

But to make it a whole lot easier easier, offer a coupon or discount as well.  Preferably big.

Reasons Why the Facebook IPO Bombed

Phillip Nones Uncategorized , , , , , , , , , ,

Facebook IPO failureShare prices of Facebook stock have been distinctly underwhelming since the first day of trading — to the tune of ~30% off its original offer price. And everyone seems to have an explanation as to why.

I’m partial to a list of reasons put out by Dan Janal, president of PRLeadPlus.com and author of the business book Reporters Are Looking for You.

Mr. Janal has come up with a dozen reasons for the Facebook IPO failure. The ones that struck me as most compelling are these:

  • The public is not as dumb as Wall Street thinks. Chalk it up to too many other dot.com “can’t miss” opportunities that whiffed big-time.
  • Who has excess money to throw around? Small investors are struggling with underwater mortgages and mountainous debt … so how do they have extra funds to throw at an IPO? Get real. (And the institutional investors stayed away because they were clearly “in the know” about how unrealistic Facebook’s IPO share pricing really was.)
  • Who goes on Facebook to actually buy things? Precious few, that’s who. And if buyers aren’t on Facebook … then advertisers won’t be there either. And with that, there goes a big part of Facebook’s business rationale down the toilet. (GM backed out of its Facebook advertising program – very publicly – just days before the IPO. That timing suggests they were trying to tell the market something!)
  • Friends aren’t really “friends.” Indeed, many Facebook friends are more like acquaintances, which is a lot less compelling when it comes to word-of-mouth influencing. (LinkedIn connections are far more “honest” in terms of being “all about business.”) When Facebook contends that friend networks will influence more buyers, investors look at their own friend networks … and they don’t buy the hype.
  • There’s a huge gulf between Facebook “friendships” and actual “engagement.” And if friends don’t engage, a big piece of what makes the Facebook power matrix potentially so potent falls away.

Mr. Janal maintains that the characteristics that make the Facebook platform what it is aren’t the same ones that’ll launch “a million new millionaires.”

Sure, the early investors who acquired stock options early in the game came out big winners. But precious little of that largesse turns out to be in the cards for the rest of the investors.

Bombs away.

Revenge of the Nerds: Microsoft will make “Do Not Track” the Default Setting for IE 10.

Phillip Nones Uncategorized , , , , , , , , , ,

Do Not TrackIs it just me, or has Microsoft seemed to be the quiet wallflower in recent months? Meanwhile, Facebook and Google have been getting all the attention – good and bad.

But now, here comes this announcement: Microsoft will make the “do not track” feature in the next version of its Internet Explorer browser the “default” option when it ships.

This move poses a threat to the efforts of online advertising giants – including arch-rival Google – to track browsing behaviors and serve up relevant advertising – you know, the high-priced kind.

Could it be that Microsoft is doing a Monty Python “I fart in your general direction” number on Google? And how does this move affect the evolving privacy standards in the online realm?

It should be remembered that the “do not track” feature doesn’t actually block tracking cookies. But it does send a message to every website visited, stating the preference not to track.

It’s a request, not a command, but more sites are now honoring the request. Including, importantly, Twitter … which announced in May that it would embrace the emerging privacy standard.

The Federal Trade Commission also backs the new privacy standard, even as the agency has become more hostile to the online advertising industry’s tracking practices. In fact, the FTC has been threatening to advocate for privacy legislation.

Indeed, online advertisers are now walking a fine line in all of this. Ostensibly, they’re supporting privacy policies … but the ones they’re advocating aren’t too onerous on their ability to collect behavioral data.

What’s most concerning to advertisers is the possibility that they may eventually need to change the way they build profiles of users in order to sell premium-priced targeted ads.  That’s a nightmare scenario they’re attempting to avoid at all costs.

In this environment, how much of a threat is Microsoft’s move? Potentially big, since it’s likely that ~25% or more of web users will upgrade to the IE 10 product over time – with all of them having the “do not track” feature “on” by default.

Microsoft claims that it’s making the change “to better protect user privacy.” That seems logical on its face – and in keeping with Microsoft’s recent moves to incorporate privacy technologies in its browser products.

But one has to wonder if it’s also one of those “nyah” moments directed squarely at Google.

Because as we all know, there’s absolutely no love lost between these two behemoths.

Data-Driven Pricing: Biting the Hand that Feeds

Phillip Nones Uncategorized , , , , , , , , ,

Data-driven-pricingWe hear the claim all the time: Online shopping gives you the best opportunity to find the best pricing on goods.

But here’s the rude reality: Developments in “data-driven pricing” is putting the lie to that assertion.

Although it’s a turn of phrase that hasn’t received very much play – at least until now – data-driven pricing is the latest method by which sellers are hankering to extract every last dollar they can from buyers.

Think of it as the digital version of global zone pricing in the petroleum industry, wherein gas companies charge filling stations in well-heeled areas more for the exact same gasoline product that they sell for less elsewhere.

But in the digital realm, online retailers like travel sites are keeping track of customer IP addresses and recording past shopping activities in order to serve up higher prices to the people who are interacting with their sites.

These retailers are taking customer loyalty … and standing it on its head.

Using browsing and shopping data collected about each customer – including every time a site is visited via Google search results – retailers can determine in real-time if they can get away with charging a higher price.

And that may well be why you paid $75 more for your air ticket than the person seated next to you on the plane who also purchased their ticket online on the exact same day.

Now, this scenario isn’t universally true. When there are many retailers to choose from on a particular item, along with ample supply of a good, the consumer can usually hold out for the lowest combination of price, shipping (hopefully little or none), and sales taxes (hopefully none).

But on items ranging from airline tickets to concert tickets, the online consumer is often up against a stacked deck.

Believing that online shopping is the slam-dunk way to extract the lowest price from the retail channel is a notion that’s out of date at best … and naïve at worst. Simply put, data-driven systems have gotten a whole lot “smarter.”

Some consumers might respond by hesitating before buying – no longer assuming that the price they’re being offered is the “lowest available” one.

So here’s a question: When consumers become more cautious about buying online, who’s hurt more?

The consumer? Or the suddenly smarter retailer?

What people say: More believable than what brands say.

Phillip Nones Uncategorized , , , , , , , , , , ,

Word of mouth and review/ratings sites trump branding activityWord of mouth has always been a powerful influencer over the success or failure of a product in the market. So when surveys show that consumers value the opinion of their friends most when it comes to the value of a product, there’s nothing particularly unusual about that news.

But consider the explosion in the popularity of review sites like Angie’s List and Yelp, plus other sources of information and opinion in cyberspace over the past few years. These have made it possible to access the opinions of significantly more people than ever before.

Nielsen’s most recent Global Trust in Advertising Survey, which queried ~28,000 consumers around the world in late 2011, found that ~92% of respondents trust word-of-mouth recommendations from friends and family members.

Interestingly, that percentage is actually up from 2007, when Nielsen found ~75% of respondents trusting their friends as a good source of information.

What about online consumer reviews written by complete strangers? Consumers’ trust levels in those information sources has also gone up; it’s ~70% today compared to ~55% back in 2007.

The picture is different with branding and advertising, however. Trust in traditional advertising (TV, radio, magazines and newspapers) has dropped in recent years. Today, only about 47% of Nielsen survey respondents say they trust those sources of information.

Online advertising has actually improved its standing with consumers, but trust levels are still mired in the 30s: 36% trust online video ads … ~33% trust online banner ads … ~39% trust paid search engine advertising.

And when it comes to branded content like company websites, consumer trust in these “owned media” is running below 60%, while e-mail communiqués are scoring even lower on the trust scale (around 50%).

The Nielsen survey results underscore why developing a robust social media presence has become such an important strategy for so many brands. Clearly, recommendations and reviews from friends and strangers alike is having the strongest impact on the purchase decisions that are being made.

Of course, building a social media presence is only half the battle: Whether the content is positive, neutral or negative has huge implications as well. A few negative reviews or ratings can stop a purchaser dead in his or her tracks. Just ask anyone in the hospitality industry, whose establishments are in some senses almost held hostage by TripAdvisor and other rating sites.