Nones Notes

It’s official: Clickthrough advertising effectiveness on mobile devices is somewhere south of atrocious.

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

As usage of the Internet on mobile devices like the Apple iPhone has become more prevalent, many businesses have been wondering how important it is for them to cater to these users through the creation of web sites that are optimized for mobile display.

Although creating a mobile version of a web site doesn’t have to be a major undertaking, it is “yet another task” to add to the marketer’s never-ending to-do list. So, just how important is it?

Chitika, Inc., a Massachusetts-based online advertising network, has analyzed the behaviors of “mobilists” and found some interesting results when it comes to their viewing of advertising and taking action. In tracking more than 92 million ad impressions served up by browsers, it turns out that mobile internet users clicked through at a far lower rate than those viewing ads on desktop machines.

How much lower? The overall clickthrough rate for mobilists was 0.48%, compared to a clickthrough rate of 0.84% for non-mobile users. That’s a serious difference, and gets about as far in the basement as you can go.

But why are the numbers so abysmal? More than likely, several factors are at work. First, consider the ways people use their mobile devices. It’s usually because they want to know something immediately … and it’s at times like those that folks are less inclined to get sidetracked by clicking on advertising links. By contrast, the “immediacy” factor with non-mobile devices often isn’t as acute.

Also, consider the load time on mobile devices – rather much slower. For that reason, mobile web content tends to be less informationally rich — or compelling in its appearance — thus decreasing its “stopping” power.

What this means for advertisers is that the key for succeeding in the mobile space is catching consumers at just the right time, not happening to catch them at any time. Easy enough in theory … but would anyone care to volunteer for putting this into practice? Best of luck to you.

From the perspective of the media purveyors, the Chitika findings certainly won’t make their task of attracting additional advertising revenues in the mobile sector any easier. Perhaps that’s why The Wall Street Journal announced last week that, beginning in November, it will be charging mobile users a weekly fee to access its content on mobile devices – and those fees will be charged to WSJ subscribers and non-subscribers both.

It’s further proof that relying on display advertising revenue simply isn’t cutting it as a practical business model in the mobile environment.

Dealing with all those blankety-blank ads.

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

In a world awash with advertising messages screaming at consumers from seemingly every nook and cranny, some companies go to great lengths to stand out from the crowd.

The most recent "extreme" example of this comes from Hyundai’s financial services subsidiary business, which purchased $2.2 million worth of advertising space recently in a new subway station in South Korea — essentially all of the available real estate — then populated the large white panels with … practically nothing.

As transit passengers move through the new station, they encounter giant advertising spaces on the walls that are covered by 95% white space, with only one small photo image plus the company logo to hint at what is being promoted.

No doubt, the goal of this “way-less is more” approach is to draw attention to the advertising precisely because of its minimalist message.

After all, it’s different. Unexpected. Even irreverent.

But is it working? Viewing photos of the subway station interior reveals that the largely blank advertising wall signs do attract attention to themselves in a kind of perverse way. They convey a sense of something unfinished, unbalanced, and perhaps a bit unsettling.

I’m reminded of 20th Century American composer John Cage’s famous work titled “4 minutes 33 seconds” which is — you guessed it — four and a half minutes of complete silence. Perhaps not surprisingly, this work got more media attention for Cage than any of his previous compositions ever had — even as one critic quipped that while the quality of the piece itself was simply outstanding, the premiere performance itself could have used a bit more vivaciousness on the part of the players.

What all this shows is how people try to “cut through the clutter” today is the same as has been done for years: Run as far as possible in the opposite direction while lassoing some valuable publicity along the way.

Based on those criteria, it looks like Hyundai has scored pretty well on this one.

Companies are Concerned about the Risks of Social Media

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

As blogs, Facebook, Twitter, LinkedIn and other social media tools have moved into the mainstream in a big way, managers at many companies are responding with interest … as well as concern. On the “interest” side, social networking is seen as having great potential for enhancing relationships with customers and promoting brand affinity. But there’s also “concern” that social media has the potential to damage a company’s reputation through the dissemination of information that is unflattering, taken out of context, or simply wrong.

Now, thanks to a July 2009 national survey of nearly 500 management, marketing and HR executives conducted by Minneapolis-based firms Russell Herder and Ethos Business Law, we have a more quantitative idea of the collective corporate thinking about pluses and minuses of social media.

Four out of five respondents in the Russell Herder/Ethos field research believe that social media can help build a company’s brand. In addition, nearly 70% see social media as a viable employee recruitment tool, while two out of three recognize its potential as a customer service tool.

But the survey also found that over 80% of respondents believe that social media poses a corporate security risk. Similarly, half of the respondents consider social media to be detrimental to employee productivity.

These findings show that senior company managers are somewhat ambivalent about social media. They see its positive potential … but at what cost? On the other hand, is shutting the door on social media a wise response (or even a viable one)?

One solution to this dilemma is to be found in dusting off an old standby – the employee handbook. In many companies, policies have evolved over the years to cover pretty much every kind of issue – from what constitutes approved and non-approved workplace activities, attendance policies, and conducting personal business during office hours to policies regarding alcohol consumption, gender/age/racial discrimination, and sexual harassment.

Why not incorporate new guidelines outlining the company’s philosophy toward social media and what constitutes appropriate company-related social media activities on the part of employees?

While it may also be a very good idea to conduct meetings or training sessions on social media as well, this a good first step that will give employees a sense of the “boundaries” they should observe when commenting on company-related issues in the social media realm.

The alternative is a “Wild West” atmosphere in which a problem is destined to arise sooner rather than later. And when that occurs, if no formal social media policies are in place, the company will have no cause for defending itself in the court of public opinion – as well as little recourse for disciplining in addition to counseling the employees involved.

Surprising Findings about Smartphone Apps

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

iPhoneWith the explosive adoption rate of Apple’s iPhone smartphone since its release a little over a year ago – more than 25 million phones to date – it couldn’t be long before researchers would start examining user behavior and study the most popular applications that are being used.

Indeed, there are already hundreds of “for free” and “for fee” applications that are available for use on smartphones.

So what are most popular iPhone apps? You’re to be forgiven if you think of music or games, because that’s certainly where most of the press hype has been. But in fact, the most popular iPhone apps are all about … the weather.

That is right. In a recent report issued by online market research and analytics firm Compete, staid and unexciting weather apps were cited by ~40% of respondents as one of the three top iPhone apps they used.

The next most popular application cited? Facebook (by ~25%). By contrast, game applications were cited as a top three-category by only ~20% of respondents, and music apps even lower still.

So much for iPhone users demonstrating cutting-edge online behavior!

In a related analysis, online analytics firm Pinch Media found that most iPhone apps aren’t setting the world on fire in terms of their popularity. The Pinch analysis found that iPhone users are quite fickle: Only ~20% ever return to a free app after downloading it. And a month later? The return rate drops to a paltry 5%. (The percentages are even lower for paid apps.)

These stats have implications for third-party advertisers on smartphone app programs. For many, it may make more sense to advertise on The Weather Channel or other less flashy but more frequently used apps than going with high-sizzle gaming applications that might be used only a handful of times before they’re replaced by the “next new thing.”

Jazz music: Gone classic? Or just gone?

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

The National Endowment for the Arts’ latest survey of public participation in the arts has some very interesting – and sobering – statistics about the U.S. audience for jazz music. In a nutshell, the audience is both aging and getting smaller.

Since this is the fourth survey of its type conducted since 1982, the latest data can be compared against earlier NEA surveys. Here’s one choice statistic: In 1982, the median age of adults who attended a live jazz performance was a youthful 29. In this year’s survey, that median age has grown to a paunchy 46.

Moreover, the proportion of adult Americans who have attended a jazz performance over the past year (fewer than 10%) is down nearly one-third from the previous NEA survey fielded in 2002. That degree of decline was seen across all sectors – including college-educated adults who have typically been the most jazz-inclined audience segment.

The new NEA survey confirms that the median age of the jazz audience is now comparable to the audiences for opera (48), ballet (46), classical music concerts (49), and non-musical plays (47). This is the first time this has happened, and it underscores the significant aging of the jazz audience.

What this means, of course, is that jazz has finally “grown up.” Once an emblem of a more hip and outré culture than those represented by the (stuffy) other arts, jazz seems to have lost its edginess and has settled into comfortable middle age.

… A comfortable “elitist” middle age, actually. Terry Teachout, a drama critic for The Wall Street Journal, notes that in recent decades many jazz artists have been disinclined to present music in a genuinely popular idiom, and instead have focused on creating a form of “sophisticated art music.” It seems that some jazz artists don’t care at all whether their music is understood or appreciated by the “popular masses.”

Indeed for some artists, it may even be a strike against jazz music if it has broad popular appeal. In this sense, the parallels of jazz to modern art and modern classical music are uncanny. It’s all very important and terribly sophisticated … but who’s listening? Who’s looking?

When George Gershwin’s famous Rhapsody in Blue was premiered by Paul Whiteman’s orchestra at New York City’s Aeolian Hall back in 1924, the conductor Walter Damrosch famously declared that Gershwin finally “made a lady out of jazz.” Of course, that statement was a few decades premature. But it we’ve certainly gotten there now – in spades.

Which brings us to the final question: What – besides an audience – has jazz music given up along the way?

New Business Models for Newspapers: Tilting at Windmills?

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

Hope springs eternal in the newspaper world, despite the fact that the business has been unremittingly bleak for … it seems like ages.

And yet, new business models are being trotted out. In addition to publisher Rupert Murdoch announcing that he intends to begin charging for viewing online content of his various papers beginning next year, Journalism Online announced in August that it has signed up nearly 180 dailies as affiliate partners.

Journalism Online is author and lawyer Steven Brill’s venture which is offering a variety of “pay models” that allow for micro-payments, subscriptions, sampling, and versatile flexibility in what news content is offered free or for a charge. Reportedly, more than 500 newspapers, magazines and other media properties have now agreed to sign up.

According to Brill, “By creating a platform of flexible hybrid models for paid content that maximizes online advertising revenue while creating a new revenue stream from readers, Journalism Online has helped shift the debate over charging for online news from ‘if’ to ‘when and how.’”

Just how is this supposed to work in a practical sense? The idea is for newspapers to focus attention on the top 10% of their most avid online readers, which would result in preserving approximately 90% of page views as well as ad revenues, even while migrating to a paid-content structure.

Oh, really?

This forecast pans out only if all of those “avid readers” continue to visit the site after a fee or subscription program is introduced. But what’s to ensure that will actually happen?

The marketing world is littered with examples of rosy projections and expectations that flamed out – despite a bevy of opinion research and focus group interviews predicting otherwise. That’s because talk is cheap.

But most online news is even cheaper – as in free. Nevertheless … hope springs eternal.

The “age-old, old-age” disconnect in advertising.

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

Here’s an interesting statistic: Consulting firm McKinsey & Co. projects that by 2010, half of all consumer spending in the United States will be generated by people age 50 or older.

It’s a reminder of just how important the Baby Boom generation has been to the U.S. economy over the past three or four decades. And now, just when you might think that power has shifted to younger generations, the McKinsey statistic helps us realize that Baby Boomers aren’t ready to leave the stage just yet.

In fact, they’re not even ready to leave center stage yet.

Here’s another interesting stat: The average age of creative personnel at ad agencies and related communications firms is … 28 years old. And the number of personnel over the age of 50? Fewer than 5%.

And therein lies the age-old, old-age disconnect.

Perhaps it isn’t surprising that ad agencies are stuffed with creative types who are mostly between the ages of 20 and 35. After all, that’s traditionally the demographic group most likely to buy and spend … and so the vast bulk of marketing dollars – traditional and emerging – are devoted to this segment (as true in the 1970s as it is today).

And of course, having a bunch of twenty-somethings spending time developing marketing pitches to other twenty-somethings makes perfect sense. It’s just that the 18-34 target is no longer where the bulk of the buying power is happening. That’s still happening with the Boomer group, whose average age as of 2009 happens to be 53.

Just how significant are “the oldsters” today? McKinsey’s statistics are telling. They include the finding that the over-50 population in the United States brings home nearly 2.5 times what the 18-34 group earns. Which makes it no surprise that the over-50 group represents more than 40% of all disposable income in the U.S.

And when you look at spending, the over-50 segment — which makes up only about 30% of total U.S. population — accounts for well over half of all packaged goods sales and three-fourths of all vacation dollar expenditures. These spendthrifts buy more than 50% of all the automobiles. They even spend significantly more than the average online shopper during the holidays – 3.5 times more, to be precise.

These are strong financial figures.

Now, consider for a moment to what degree ad creative personnel who are 20 years younger are going to really understand older consumers. Sure, they’re well-versed on the ever-growing interactive and social marketing tactics that are available today. But how likely is it that they’re actually able to craft compelling advertising and marketing messages to older consumers?

Undoubtedly, many will scoff at the very question. For one thing, these creatives grew up with Boomer parents.

But when you consider how many common, worn-out clichés one sees in the advertising that’s aimed at the over-50 set — online as well as off — it does make you wonder if the communications firms are putting their creative emphasis in the right hands!

The Broad and the Beautiful

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

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!

Click fraud: How much is really out there?

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

One of the knocks against pay-per-click advertising is concern about fraudulent clicks being made on online ads that cost advertisers money and drain their account budgets needlessly. And while Google, Yahoo and various online publishers have long held that their SEM operations can detect patterns of fraud and then credit-adjust advertisers’ accounts accordingly, that hasn’t mollified the skeptics at all.

And now SEM critics have new ammunition in the form of two click fraud reports issued in July by Anchor Intelligence and Click Forensics, two of the industry’s leading traffic auditing and traffic quality management firms. Researchers at both companies have discovered that “scripted” programs that click on ads increased in volume during the second quarter of 2009.

Click Forensics estimates that the overall average click fraud rate was nearly 13% over the quarterly period. According to the firm, this also included an ominous rise in “collusion fraud” on advertising networks. That’s when publishers rotate IP addresses (botnets) to click on ads on their own sites to generate inflated commissions from unprotected ad networks. Many ad networks have difficulty differentiating these attacks from valid clicks.

Based on these results, Click Forensics estimates that the amount of money lost yearly due to click fraud exceeds $4 billion. And while a large chunk of those dollars are presumably reimbursed to advertisers in the form of discounts or rebates, it is impossible to know what portion that amount actually represents because SEM program providers don’t share that information with the outside world.

Anchor Intelligence reported even higher rates of attempted click fraud during the second quarter 2009: nearly 23%.

Where are the nefarious attacks coming from? Richard Sim, Anchor Intelligence’s vice president of product marketing, says, “Vietnam stands out in terms of the fraud as a percentage of all traffic. Nearly one out of every two clicks from Vietnam was registered as click fraud.” That’s nearly double the rate of attempted click fraud found by Anchor Intelligence for the next highest ranked countries – Canada at ~28% and the U.S. at ~26%.

What this says is that click fraud is very much with us, despite all of the best efforts that go into trying to root it out. This should be taken into consideration by advertisers when planning and executing an online advertising program. And it wouldn’t be a bad idea to factor in a 15% or 20% “degradation” factor on all advertising goals and results when evaluating clickthrough rates and calculating ROI.

The good news is that, even with this reduction factor applied, when you compare search engine advertising against alternative forms of promotion, it’s still one of the better buys in the business.

Credit Card Reward Programs: Cut to the Chase

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

Chase Card Services has just announced the introduction of a new credit card rewards program. Dubbed Chase Sapphire, it’s aimed at the top 15% income-earning households in the U.S. The program offers the usual premium travel services, a variety of reward-level awards, reward points that never expire, a 24-hour access to a dedicated customer service team, and other perks.

What is Chase Card Services up to, introducing a new rewards program at this particular time? It seems like Sapphire Rewards is destined to deliver only mediocre results at best in the current toxic consumer environment.

But Chase is pressing forward, undaunted. In fact, it’s offering two program levels, including a “preferred” level that offers a bevy of additional goodies such as the ability to transfer reward points to various airline and hotel programs, free bonus points for high spenders, enhanced identity protection and so forth – all for a “low” added fee of $95 per year (waived the first year).

It all sounds so ordinary. But just as you might be thinking that this new rewards program has all the pizzazz of a cold mashed potato sandwich, look more closely. There’s something actually pretty unique being offered among the grab-bag of benefits.

What could be the best benefit of all is the 24-hour dedicated customer service team that comes along with the Sapphire program. What does this mean for customers? To quote the Chase press release, when a cardholder calls in, “a specially trained advisor picks up the phone – with no need to navigate a voice-response system.”

Well, well!

Maybe, just maybe, Chase has conducted focus groups and discovered how wildly unpopular telephone trees are with consumers. Those obnoxious trees may be the single most irritating aspect of customer account service.

Phone trees transform what would normally be a short, simple phone contact into a marathon event. Moreover, often the myriad account information, social security numbers, phone numbers or other data that have been so painstakingly voice e-n-u-n-c-i-a-t-e-d or punched into the phone keypad never make it to the customer rep who finally does come on the line … and who then proceeds to ask for the same information all over again.

And here’s another black mark: How many consumers end up having to yell into the telephone in order for the voice recognition system to do what it’s actually supposed to do – correctly recognize what the person is saying? It’s no wonder the decibel level of many phone calls escalates from “normal” to “screaming” within the span of mere seconds.

Seeing as how Chase is targeting only affluent households with its new Sapphire Rewards program, perhaps they’re willing to spend a few extra dollars on “real live” customer service, figuring the ROI will work itself out with this customer segment.

Certainly, for beleaguered consumers who are tired of doing battle with the annoying phone trees, the prospect of interacting with real customer service people must seem like nirvana.

Here’s an idea. Why don’t the folks at Chase Card Services try scrapping all of the reward benefits associated with the Sapphire program and leave just the 24/7 live customer service feature in place? And then use the savings to extend that courtesy to the rest of the Chase credit card customer base. That would be novel, wouldn’t it?

Besides, they might actually gain more customer loyalty in the bargain.