What to Make of all the Interest in Pinterest …

I love PinterestUntil now, I’ve hesitated to blog about Pinterest, the digital bulletin board and newest “breakout network” in social media.  I wanted to see how it was evolving before jumping to conclusions about its importance and staying power.

Without a doubt, Pinterest is one of the biggest stories in the social sphere right now. It seems that something as simple as enabling users to post “boards” of their collections of photos has struck a nerve.

Pinterest is one of the most user-friendly social sites in cyberspace.  Pinterest participants use a “bookmarklet” button installed in their browser to affix photos or images to virtual bulletin boards set up on particular topics or themes such as interior decorating, food arts and fashion.  Each image has an accompanying clickthrough link to the web page where it was found.  Users can also “re-pin” images they find on other Pinterest boards.

Simple, easy … and popular.  In its most recent Digital Marketing Benchmark & Trend Report, Experian reports that Pinterest is now the third most popular U.S. social networking site. Only Facebook and Twitter rank higher.

Just how well is Pinterest doing? Consider that this invitation-only site has ~10 million users and receives nearly 25 million visits in a single week. That’s 30 times larger the volume of visits recorded on Pinterest just six months ago.

I’m still trying to determine how much staying power this latest social media phenom possesses. The rapid adoption rate tells us something right off the bat … and there are a few additional reasons why Pinterest may be here to stay in a big way:

  • Pinterest is a highly effective form of digital scrap-booking that seems to be extremely popular with its users.
  • Online audience measurement firm comScore reports that users spend an average of 1.5 hours per month on Pinterest, second only to Facebook.
  • Pinterest is easy and intuitive to use, making it popular with people who aren’t your typical “geeky” computer user. Pinterest users tend to skew older … more female (~80% actually) … and generally located more in “flyover country” than in coastal zones like New York and California.

Any time a social network can claim to have attracted the hearts and minds of the broader population, that’s noteworthy … and it leads me to believe that Pinterest isn’t merely a passing fad.

Indeed, we may have just scratched the surface of what Pinterest will be and what it will offer in the years ahead.

What are your thoughts about Pinterest?  Dynamic or dull?  Flash-in-the-pan or here to stay?  And how do you see it being used by marketers to promote their products and brands?

What’s the Very Latest with Consumers and How They’re Using QR Codes?

Scanning a QR code with a smartphoneI’ve written before about QR (quick response) codes and how they’re viewed as a marketer’s dream.

What can be better than the ability for consumers to point-and-click their smartphones for instant access to product details, a coupon or other information … without them having to type in a web address?

But it’s been observed that U.S. consumers are a bit more reticent to use them compared to their Japanese counterparts (where QR codes got their start).

And a July 2011 survey of ~500 adult social media users conducted by research firm Lab42 (Chicago, IL) found that nearly 60% of the respondents were not familiar with QR codes. Furthermore, only ~13% of the respondents were able to use a QR code when prompted to do so in the research, suggesting that many of those saying they were familiar with QR codes may never have actually used them — or maybe only experimented with them once or twice.

But now that some time has elapsed since QR codes have made their debut in America, we have access to field research to help us understand how U.S. consumers are actually interacting with them.

The data comes in the form of a new MobiLens study by comScore, which has found that ~14 million mobile users in the U.S. scanned a QR code on their “smart” mobile device at least once during June 2011.

That figure represents ~6% of the total mobile audience over the age of 13. Not a big percentage, but considering that smartphones still represent only a minority of all mobile phones in circulation (just shy of 40%), it shows that use of QR codes is happening to some degree.

And what are the demographic characteristics of QR code users? According to comScore, they’re more likely to be male (~61% of the code scanning audience) … they definitely skew younger (~53% are between the ages of 18 and 34) … and they’re more likely to be upper-income folks (~36% have household incomes of $100,000+).

What are the most popular sources of scanned QR codes? The study shows that this skews more toward “traditional” media: magazines and newspapers:

 Printed magazines or newspapers: ~49% of the QR code audience
 Product packaging: ~35%
 Websites on a PC: ~27%
 Posters, flyers or kiosks: ~24%
 Business cards or sales brochures: ~13%
 Storefronts: ~13%
 Television: ~12%

I got a chuckle out of the fact that QR codes published on websites receive so many scans … it would seem to me that if someone is already sitting at a desktop or laptop computer, what’s the point of scanning a QR code into a smartphone? But I’m sure people have their reasons.

And where are people situated when they’re scanning a QR code? To hear many marketers tell it, they’re most excited about placing QR codes on billboards or in other public paces. But comScore has found out that most people are scanning QR codes not while “out and about” … but when sitting at home:

 Scanning QR codes at home: ~58% of the QR code audience
 … At a retail store: ~39%
 … At the grocery store: ~25%
 … At work: ~20%
 … Outside, or when using public transit: ~13%
 … In a restaurant: ~8%

If you’re interested in reviewing additional findings from the comScore MobiLens study, you can find them here. Because of the “newness and novelty” of QR codes in the American market, not doubt comScore will be returning to this research topic regularly to chart how consumer behaviors continue to evolve over time.

The Ripple Effects of High Gasoline Prices

Shopping at home is rising along with gasoline prices.We’ve all heard the news reports about the effects that high gasoline prices are having on families who rely on automotive transportation for their livelihoods. It’s all well and good to promote the use of public transportation, but when your job is 25 miles away along suburban or rural roads, it’s often impractical to adjust commuting behaviors.

We’re also reading how high gas prices are affecting other aspects of the economy, such as the rising price of food items in the grocery stores due to higher transportation costs.

To this, we can now add another consequence of the high cost of petrol. Paralleling the gas price spike has been an increase in Internet activity.

Marin Software, a leading paid search manager platform for advertisers and agencies, has performed an analysis across more than $2 billion worth of paid search marketing activity. The firm established a benchmark based on the share of activity across the Google and Bing search engines, and then studied cost-per-click activity, clickthrough rates and conversion rates.

Marin evaluated the rise and fall in the volume of clicks along with the rise of gas prices over the time period January – March 2011. Voila! It found a positive correlation between rising gas prices and increased click activity.

In a similar vein, digital market intelligence firm comScore is reporting that U.S. e-commerce sales were ~$38 billion during the first quarter of the year. That’s up ~12% compared to the first quarter of 2010. And while e-commerce volume has been up over the past six quarters, this is only the second time the growth as been in double digits.

So the premise that the higher gas prices climb, the more the propensity is to shop from home and avoid the cost of driving appears to be on target. And it’s probably being helped along by the plethora of “free shipping” offers that are also out there — along with avoiding paying sales taxes.

Looking forward to the day when gasoline prices may plateau or fall back, it’ll be interesting to see if Internet activity drops back as well. Or will more people have become used to the comfort of shopping from home in their boxer shorts – so that online activity remains at an elevated level?

I have a suspicion it’ll be the latter.

More Insights on Online Display Ad Effectiveness

Ad clickthrough rates
Clickthrough rates are only part of the story in online display advertising.
Last week, I blogged about the low level of clickthroughs on online display ads – basically a cipher at 0.09%.

In a conversation with a business colleague of mine who is with one of our healthcare client accounts, she mentioned that it’s also important to consider the branding aspects of online display advertising. The idea that people may not click through at that precise moment in time, but are favorably disposed to pay a visit later on.

This got me to looking for additional research into the matter. What I found from several advertising digital media marketing and data reporting companies – MediaMind (Eyeblaster) and comScore – confirms this impression.

An analysis by comScore of consumer clickthrough behavior covering ~140 online display ad campaigns found that only about 20% of the conversions came after clicking on a banner ad. The remaining 80% of conversions happened among those who had seen the ad but not clicked through at the time. Instead, they converted at a later date.

Other interesting points from comScore’s analysis include:

 Online display ad campaigns yielded nearly 50% improvement in advertiser website visits as measured over a 30-day period.

 Users who were exposed to the online advertising were ~38% more likely to conduct an advertiser-related “branded” keyword search in the subsequent 30-day period.

 Users who were exposed to the online advertising were ~17% more likely to make a purchase at the advertiser’s retail store.

Similarly, MediaMind’s analysis of ~100 million conversions from thousands of online ad campaigns has found concurring results – namely, that only ~20% of conversions are the result of a clickthrough, while the vast majority of the conversions happen at some point after viewing the banner ad without clicking on it at that moment.

The takeaway from all this: It’s a mistake to consider online advertising clickthrough rates in a vacuum. Because at best, it’s only a partial measure of the effectiveness of an online ad program.

Online Display Ad Clickthrough Rates Finally Bottom Out … Near the Bottom

Online Display Ad Clickthrough Rates Bottoming Out
Online display ad clickthrough rates have stopped declining ... bottoming out at 0.09%.
The latest news in online display advertising is that ad clickthrough rates have now leveled off after an extended period of decline – one that was exacerbated by the economic downturn.

So reports digital media marketing firm MediaMind (Eyeblaster). According to a report released this past week, one key reason for the decline being arrested is the greater sophistication of advertisers in targeting online advertising to audiences and groups that are more likely to be interested in them.

That being said, the overall clickthrough rate has leveled off at an abysmal 0.09%.

That is correct: less than one tenth of one percent. In any other business, this would be a rounding error.

If that statistic seems difficult to believe, consider this factoid: The average Internet user in America is delivered more than 2,000 display ads over the course of a single month. We might think that users would be inclined to click on more than just two or three of these ads during a month’s time.

But it’s important to realize that when users are in the mood to shop and buy, they’re typically going straight to the sites they like … or they’re using Google, Bing or some other search engine to find their way.

And it turns out there’s really no such thing as an “average” Internet user, anyway. Research conducted by digital marketing auditing and intelligence firm comScore, Inc. has found that around two-thirds of people on the Internet never click on any display ads during the course of a month. Moreover, only 16% of Internet users are responsible for around 80% of all clicks on display ads.

All the more reason why search marketing continues to be the online advertising powerhouse that it is. And why not? It’s putting your business in front of the customer when s/he is in “search-and-buy” mode … not when s/he’s doing something else.

YouTube’s Big Accomplishment

YouTube logoHere’s an interesting milestone that YouTube has just achieved: In May 2010, it surpassed the 100-video mark in the average number of videos shown monthly to its U.S. viewers.

Data released by comScore, a marketing research company that collects data for many of the Internet’s largest businesses, show that ~183 million people watched online videos during May. (By the way, that’s nearly 85% of the entire U.S. Internet audience.)

With YouTube accounting for ~14.6 BILLION videos served, it translates into 101 videos for the average viewer. The duration of the average online video shown was a little over four minutes.

How pervasive is YouTube? The May comScore stats show that it accounted for far more activity than any other video site, charting ~43% of all videos viewed. Hulu ranked second, with the various Microsoft video sites ranking third.

And the contest isn’t even close: Hulu’s second-place ranking was good for only ~4% of viewership!

The average number of videos seen monthly per viewer as recorded by comScore were as follows:

 YouTube: 101 average number of videos per viewer
 Hulu: 27
 Microsoft video sites: 16
Viacom Digital: 10

If there were any continuing questions as to who is the 500-pound gorilla in online video, these statistics appear to be putting that debate to rest.

The e-Commerce Hiccup

One of the bigger surprises of business in the year 2009 was how big of a hit U.S. e-commerce has taken. According to digital marketing intelligence firm comScore in its just-released report 2009 U.S. Digital Year in Review, e-retail spending in America decreased about 2% during the year to come in just under $210 billion.

This represents the first decline in e-commerce spending ever recorded.

Obviously, the economic recession was the culprit. But considering that e-commerce growth has charted above 20% annually in every year leading up to 2009, seeing an actual fall-off has raised more than a few eyebrows.

Where was the e-commerce decline most pronounced? It was in travel-related services, which saw revenues drop by 5% to ~$80 million. Not that all sectors saw decline. A few continued to experience growth during the year, including the books/magazines category which charted gains of ~12%. Online computer software purchases were also up by about 7%.

What does comScore see on the horizon for U.S. e-commerce? Is continued softness predicted … or a return to robust growth?

Analyzing the last few months of e-commerce activity during 2009 provides clues to the future: Growth looks like it’s returning. In fact, the 2009 holiday season marked a return to positive growth rates when compared against the same period in 2008.

[Granted, this comparison is made against “down” months of November and December in 2008, after the recession had already kicked in. But the pace of e-commerce activity is clearly picking up again.]

But whether it will go back to a 20%+ annual growth is still an open question.

How are things clicking in Internet marketing at the moment?

What’s happening with clickthrough behaviors on online ads these days? According to comScore, Inc., a digital market intelligence and measurement firm, activity today versus 2007 reveals that ~50% fewer people are clicking on Internet ads now compared to then. In fact, fewer than 10% of all Internet users accounts for ~85% of all ad clicks.

This may call to mind the old adage: “When a tree falls in the forest, does it make a sound … and does anybody know?”

On the other hand, it’s good to remember that banner advertising can have branding value. In fact, comScore research also shows that one in five users who click on an ad go on to conduct a search about the advertiser … and one in three visit the brand’s own web site.

Unfortunately, determining just how effective online advertising is can be a challenge to measure – reflective to some degree of the “bad old days” of print advertising. One reason for the difficulty is because of evolving consumer behaviors regarding “cookies.” When consumers delete tracking cookies from their computer, they’re counted as a “new customer” when returning to the site. Interestingly, comScore’s latest data find that nearly one-third of web users delete cookies – many as often as five times per month. And with the steady stream of news items warning of “Big Brother”-type information harvesting, it’s hardly a surprise that cookie deletion has grown by ~20% since 2007.

What’s the implication? Not accounting for cookie deletion can lead to an overstatement of unique visitors, reach and frequency – by about 2.5 times. (Relying on IP addresses doesn’t solve the issue either, because the typical computer in the U.S. has a multiple number of IP addresses.)

Of course, these hurdles don’t mean that an attempt to measure the effectiveness of online advertising is an exercise in futility. Just as in print advertising, there are clues marketers can hone in on that point to whether an online advertising campaign is a success. And prudent companies will discount web traffic statistics by a certain degree in order to paint a more realistic picture … not to mention incorporating conversion tracking triggered by specific actions on the web site such as a purchase, a customer query, or registering to download an informational document.

Social Media and the Internet: Click … or Clique?

All of the hype about social marketing and social media might make you believe that people are flocking to this new form of communications in droves.

Well, if you think this … you’re right. And now we have the stats to prove it. The Nielsen Company has just released web statistics for the month of August that report that time spent on social networks and blogging sites accounted for ~17% of all time spent on the Internet.

Compared to August 2008, this figure is nearly triple the percentage of time spent on social networks and blogging sites just one short year ago. Seeing as how there is an upper-limit ceiling on the total amount of time available to spend online in any given day, the increased attention on social media is coming at the expense of the more traditional use of the web as an informational tool.

This is not to say that text and video content don’t remain central to the online experience, because that is clearly the case. But the ability consumers have now to use platforms like Facebook and blogging sites to “connect, communicate and share” is what’s driving much of the continuing growth of the web and online engagement.

Because of this new emphasis, is it any wonder more online advertising dollars are chasing social media than ever before? Nielsen pegs advertising on social media sites as representing ~15% of total online ad spending in August 2009. That’s more than double its proportion a year earlier.

Along with the shift in online ad revenues to social media sites, we’re also experiencing a major change in clickthrough behavior as it pertains to online display ads. Research published recently by comScore shows that the percentage of people who clicked on one or more display ads during a monthly period of Internet interaction – in this case March 2009 – was only ~16%.

How does that result compare with earlier surveys? It’s dramatically lower, and dropping. Just two years ago in 2007, ~32% of people online clicked on at least one online display ad over a month-long period – twice the proportion as today.

What’s more, the comScore analysis reveals that a very small portion of viewers represent the vast majority of the clickthrough activity. Specifically, only ~8% of the people are responsible for ~85% of all clicks. Of course, we can be sure that the robust clickthrough behavior of these 8% translates into equally robust product sales … NOT!

Clearly, any company that is attempting to promote products and services over the Internet needs to carefully study the composition of its market and the behavior of its online audience targets before making extensive online advertising program commitments.

The reality is, with the dynamics we’re seeing such as the behaviors noted above, it’s more likely an online promo effort will fail rather than succeed unless a dispassionate review of the situation is done beforehand and a practical, realistic program put into place.

But that’s so unlike many of the web advertising programs we’ve seen implemented up to now, which could be best characterized as: “Throw a bunch of advertising at the web and hope some of it sticks.”

The Broad and the Beautiful

It took awhile, but access to faster Internet service is finally beginning to even out across all geographic regions of the United States.

A new study on broadband growth conducted by comScore, Inc., a digital marketing intelligence firm, finds big gains for broadband in rural areas. As of the end of 2nd Quarter 2009, an estimated 75% of rural households with Internet access now have broadband service. (Rural markets are defined as those having less than 10,000 population).

Two years ago, comScore counted only 59% of rural households connected to the Internet having broadband service.

Not surprisingly, large metropolitan areas with populations over 50,000 have higher broadband penetration (92% of Internet households), but this percentage is up only a couple points in the past year.

Who’s providing these broadband services? A just released study by Leichtman Research Group found that 19 service providers account for well over 90% of the U.S. market – the largest among them being Comcast and Time Warner for cable … and AT&T and Verizon for telephone.

Indeed, some metro markets are beginning to approach broadband saturation. For instance, in the New York metropolitan area comScore finds 96% of all Internet households are using broadband. It’s 92% in Chicagoland, and nearly 90% in Philadelphia and San Francisco-Oakland-San José.

The Internet broadband penetration for the country as a whole — at nearly 70 million households now — is estimated to be over 85%, meaning that rural areas are still relatively under-served. But the differential is shrinking quickly. Chalk up yet another instance where regional differences are disappearing – thus making rural markets more attractive not just to consumers, but also for rural-based businesses and for companies that rely on far-flung employees who telecommute from home.

It makes saving money on gasoline and avoiding rush-hour traffic snarls more attractive than ever!