I spoke with Microsoft during the Bing launch period about the iconic “Pepsi Challenge” ads of the late 1970s:
Now it would seem Bing may be about to embark on a version of the same thing (we’ll see). Without much context, we learn about a study that involved a kind of week long “Bing challenge.” Reportedly 10 out of 15 users who participated would switch from the “leading search engine” to Bing:
The site that (sort of) started the social networking craze — which came out of online dating — is Friendster. Reportedly the company turned down $30 million to sell to Google in 2003. The rest is history: technical problems and other issues plagued the site, which gave way to MySpace, which itself is now struggling to reinvent itself in the wake of Facebook’s ascent.
Reuters is reporting that Friendster will now be sold for in excess of $100 million to an undisclosed Asian buyer. The site raised just over $45 million in four funding rounds.
Most of Friendster’s usage and traffic is in Asia so this makes sense. Globally it has roughly 23 million visitors. In the US the numbers are quite low however:
A new Droid commercial goes after the iPhone as a kind of “digitally clueless princess” — a pretty but superficial device. Clearly the audience here is young men and dudes who want “rad” devices that “shred” the mobile Internet.
These TV ads seem to be trying to create an image of a tough, fast phone vs. the fluffy and impliedly weak iPhone. The commercial is borderline offensive in some respects; its subtext is not that far away from suggesting that the iPhone “is gay.”
Now I didn’t spend a ton of time with the Droid device but I did hold it and use it. It struck me as a better Android OS but I was unimpressed by the device and the design in particular (given all the hype). Overall it’s inferior to the iPhone in most respects (save the Google Navigation and multi-tasking). The Droid industrial design is also inferior to the Pre, which I own but don’t really like.
Verizon’s massive marketing campaign has driven sales of nearly a million units. But I find it fascinating that, like a political campaign (via commercials like this) Verizon is trying to define its opponent with labels and names — however false they may be.
I was struck by a recent MediaPost article entitled “The Obsolescence Of Brick-and-Mortar.” I had to look at the date a couple of times because it had the flavor of a piece that might have been written in 1999:
Web sites will replace brick-and-mortar stores within five years. I realize that’s a bold prediction, but here’s why.
Brick-and-mortar retail stores selling everything from clothing to high-ticket items like flat-screen TVs will turn into warehouses where consumers can touch and feel the merchandise. Web sites, supported by search engines and site search, will become the cash cow for the retail store. Advertisers will have more of an opportunity to address consumers because many will spend the time online that they would have spent in the store. Tracking sales and pulling in data from social sites to target consumers with specific ads, coupons and discounts will become much easier for marketers.
True, we’re in a multi-platform world but physical stores and corresponding retail sales will not be cannibalized by e-commerce, which is and will continue to be a fly on the posterior of US retail — albeit a big fly. People fundamentally use the internet to research (“shop” for) products and look at reviews. In 96%+ cases they buy offline. The Internet is mostly a marketing platform accordingly. This is a fundamental fact that many (if not most people in the tech industry) have failed to see and accept.
That’s why location matters so much; offline is where all the spending — and Internet influenced spending — happens.
Let’s get over the e-commerce vs. offline discussion that characterized the early days of online. Now it’s really about how all these channels can work together to support sales, notwithstanding some of the lingering internal political-organizational issues among retailers. Clearly “multi-channel” sellers (e.g., Target) are at an advantage vs. “etailers” (other than Amazon and a tiny minority of others, e.g., NewEgg, Etsy, Zappos [Amazon]). The no-name, pure-play etailers are screwed unless they have:
Indeed, when taxes come to e-commerce (and they will) this will put even more pressure on the pure etailers. People don’t want to pay shipping and they don’t want to pay other costs associated with purchases (e.g., taxes, handling). Convenience and in some cases lower cost are the chief reasons people buy things online. If costs, such as sales taxes, are equalized I’m not going to buy stuff online unless:
Yes, e-commerce will continue to grow (ironically it may be boosted by smartphones) but as Jeff Bezos once said:
I think online ultimately will be 10 to 15 percent of retail. The vast majority of retailing will stay in the physical world because people have acute needs, they want things now.
If it gets to that point those will still be huge revenues, given that total retail in the US is just under $4 trillion annually.
When I look up definitions or check my spelling I usually search Google for the word in question and then click the “definition” link in the upper right of the SERP (ignoring the myriad organic links on the main part of the page):
But when I did that earlier today (not for “haberdasher”) I noticed that the usual source, Answers.com, had been replaced by Google’s own dictionary:
Answers.com has lots of traffic and offers a range of features/services, but this development is probably going to have a material impact on its traffic:
I don’t know when or why this change occurred but it’s not good (and could be very bad) news for the site, which is public.
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Speculation: This may be tied into the new, improved Google Translate features announced today.
The much-rumored purchase of NBCU by Comcast is now public. The company has paid $30 billion for a controlling interest in the company. According to the NY Times report:
The agreement will create a joint venture, with Comcast owning 51 percent and G.E. owning 49 percent. Comcast will contribute to the joint venture its stable of cable channels, which includes Versus, the Golf Channel and E Entertainment, worth about $7.25 billion, and will pay G.E. about $6.5 billion in cash, for a total of $13.75 billion. For now, the network will remain NBC Universal, but ultimately Comcast could decide to change the name.
The strategy according to the joint statement issued by Comcast and GE is media “anytime, anywhere”:
Comcast Chairman and Chief Executive Officer Brian Roberts said, “This deal is a perfect fit for Comcast and will allow us to become a leader in the development and distribution of multiplatform ‘anytime, anywhere’ media that American consumers are demanding. In particular, NBCU’s fast-growing, highly profitable cable networks are a great complement to our industry-leading distribution business. Today’s announced transaction will increase our capabilities in content and cable networks. At the same time, it will enhance consumer choice and accelerate the development of new digital products and services.
So this would seem to be a great marriage of “carriage” (distribution) and content and the “anytime anywhere” media concept also seems right for a bold, new multi-platform world. It’s worth noting that this combination is potentially much more potent than TimeWarner and AOL were. However an AP analysis suggests that Comcast is weighting content over distribution as the future of its business:
Comcast Corp. is buying control of NBC Universal from GE largely because Comcast wants to own more movies and TV shows. The point is to give it a position of strength if fewer people sign up for its cable TV services and watch more video online.
I would tend to agree that cable TV subscriptions will decline over time as people get the Internet on TV and use the Internet to consume TV and movies, unless bundling and aggressive pricing with other services (phone, Internet) keeps people hooked in.
But think about this: on the Internet distribution has become more important than content; consider the Google vs. News Corp. debate . . . or Google vs. YP publishers. Or perhaps it’s more accurate to say that some categories of “content” have become commoditized (general news, local business listings) and thus distrubtion is more important in those situations. Branded content remains in demand.
So one view of this GE-Comcast deal, as the AP article argues, is to value content above distribution. Clearly both are required for success. But what do you think? Is branded content more important than disribution or vice versa?
Stumbled across this: Yelp reviewed on Citysearch . . . It gets 3 out of 5 stars. 
Touché: Citysearch rated on Yelp (thanks Luther).
I was in a meeting today with some folks in Montreal and I was told that Pages Jaunes (France) saw approximately 44% of its revenue coming from online. I was then told that the company has more online revenue that Yahoo! in Europe.
If it’s true it’s pretty remarkable. Can anyone verify. I’m in the airport so I can’t check further at this time.
Local deals and coupon (er, “social commerce”) purveyor Groupon announced that it had raised $30 million:
Groupon, the social commerce service that has saved consumers in cities across America more than $36 million since its launch 12 months ago, has raised a $30 million round of capital led by Accel Partners with participation from Groupon’s initial investor, New Enterprise Associates. The financing will be used to accelerate Groupon’s customer acquisition, expand into new geographies and further develop its technology.
Groupon leverages group buying and social media to provide its millions of customers big discounts on the best local businesses in major cities such as Chicago, Boston, New York City, San Francisco, Atlanta and Washington, D.C. To date, customers have purchased over 800,000 Groupons on deals ranging from spa treatments and golf outings to fine dining and skydiving.
Daily deals are delivered via email. I get them and mostly just delete because of lack of relevance (to my interests and lifestyle). Obviously, however, people love deals and email marketing remains quite effective. Daily Candy, a similar city-specific daily email newsletter, was sold last year for $125 million to Comcast.
Separately Coupons.com reported — it offers mostly grocery coupons with some fast food — the top coupon categories of 2009:
2009 Top Coupon Categories
My favorite categories on this list: Refrigerated Dough and Salty Snacks.
Here’s a list of the top local queries by US city from Google’s year-end list:
What’s striking is how distinct and local they are. I’m sure there are other patterns that exist but with low blood sugar I’m unable to find them now.
The Kelsey Group’s latest release projects an increase in geotargeted display advertising:
The geotargeted display (or banner) advertising market will grow from $897 million in 2008 to $1.9 billion in 2013, representing a compound annual growth rate of 16 percent, according to BIA/Kelsey. The geotargeted segment of the display market will grow from 10.2 percent of all display ads sold in 2008 to 15 percent by 2013.
The locally bought portion of the market, which primarily comprises small and medium-sized businesses, will see the highest growth, at a CAGR of 66 percent. The segment will grow from $45 million in 2008 to $565 million by 2013. Further, the SMB market will swell from 5 percent to 30 percent of the total geotargeted market over the same period.
Most small advertisers are not using display advertising today. Three different surveys (with different sample sizes) I’ve conducted in the past year and a half have shown between 13% and 22% of SMBs saying they have done online display advertising of some sort (definitions are an issue). That means, on average, roughly 80%+ have not done any display advertising. There’s a much longer conversation to be had about how SMBs execute display campaigns directly or via surrogates.
My belief is that national entities will still be the primary ones taking advantage of increasingly accurate display geotargeting online and on mobile devices in the foreseeable future.
The 10.2% starting point in the Kelsey forecast likely derives from a comScore study, which was based on a creative but pretty rough methodology for determining which display ads were geotargeted in four markets. It probably under-counted actual geotargeted display inventory.
The stated rationale behind geotargeted display growth in the Kelsey release — that local search resellers are looking for cheaper local impressions/clicks — is sound. But in my view it’s too narrow in terms of what may actually drive geotargeted display over the long term.
There’s also the problem of the ad creative. While that can be automated it has to be done carefully and thoughtfully or those ads simply won’t perform. Creative is the most important part of a display campaign and most of the local search resellers are not thinking about creative; rather they’re just thinking about alternative sources of cheap local inventory.
Compare Borrell’s numbers (definitions are always an issue in forecast comparisons), which have locally targeted “banners” at $5.3 billion in 2010. In addition Borrell sees standard display giving way to myriad other forms of local advertising, including video, email and search over the next few years.
SEMPO and Advertise.com have put out findings from a study of online marketers. Survey respondents indicated the following about their campaigns (sample size not provided).
- Search – 70.7%
- Cost-per-action (CPA) – 14.6%
- Email – 6.1%
- Social – 3.7%
- Other – 2.4%
Used display:
A minority of viewers already get Internet access and content on their TVs through an IP hookup or set-top box. Akin to that Netflix is doing lots of streaming deals with set-top box makers. Yahoo! has its widgets initiative, and so on. There’s lots of activity in the space. LG, Samsung and Sony all have Internet-enabled TVs on sale this holiday season.
While I was in Best Buy this past weekend I saw two prominent “Interactive TV” displays for Samsung and LG. Here’s the LG display.
It’s very clear that once Internet content (broadly defined) is available to mainstream audiences on TV it will create an interesting new market that is in some ways parallel to mobile, because it will need to change to accommodate the limits and capabilities of the device — in this case a large screen “10 feet away.”
It will also eliminate the need for many to subscribe to conventional cable TV, although they’ll need an IP connection from some source. This also potentially marginalizes TiVo or other cable DVRs because it offers broader content and it’s all on-demand. In this world we also quickly get the convergence of online and TV video advertising. Pre-roll that runs on YouTube runs on my TV if I’m watching a show or content on YouTube “in the living room.” And what about Hulu? That’s even more like conventional TV today. Will Hulu ad rates go up, will there be interstitial ads? Will there be an ad-free subscription model?
Think about: Facebook on your TV . . . Skype . . . Google Street View . . . interactive/social shopping on TV. Think about new “social programs” where people watch and chat at the same time. Then there’s gaming and how it might evolve. Very interesting stuff to consider.
Cumulatively all these changes will radically transform advertising for “television,” which could result in a massive decline in traditional ad rates and revenues. And that in turn will affect production budgets, the nature and quality of programming and so on.
More and more professional editorial is giving way to low-paid freelancers or upaid UGC. David Carr’s piece The Fall and Rise of Media contains the following observation:
That carnage has left behind an island of misfit toys, trains whose cabooses have square wheels and bird fish who are trying to swim in thin air. The skills that once commanded $4 for every shiny word are far less valuable at a time when the supply of both editorial and advertising content more or less doubles every year.
Where do all the burgeoning pixels come from? Everywhere, and cheap at that. An outfit called Demand Media now tests headlines for reader salience and cranks out thousands of articles and videos daily that it pays about $20 apiece for.
While user-generated content and “crowdsourcing” work well for certain kinds of content creation (e.g, online reviews), it’s not equally applicable for all situations and use cases. This is not a new view of course, but experts and professionals have an important role to play in the future of online content. This is where Yahoo! and AOL both hope to excel BTW.
Salon CEO Richard Gingras makes the point that brands matter even more today than in the past:
“I do think that in the content space, as we see the print publications decline, I think brands matter more than ever,” he said. “I think brands with sharp personalities matter more than ever, and I think that presents an opportunity for salon.”
I totally agree with him. Trust and quality, two values that content brands should stand for, will continue to gain in importance in this new world of digital serfs and sloppy UGC.
What do you think? Will people care about experts and editorial quality going forward?
The iPhone and its “paid apps” have created a culture that makes users more inclined than the general population to pay for content. As was widely reported last week UK law firm Olswang released findings from a consumer survey (in the UK, n=1,013) that showed iPhone users are more willing to pay for things than others.
In the charts below the blue bars are iPhone users, the red all respondents. The question, essentially, is what would you pay for:
At the very top above, 30% of iPhone owners say they would pay for “newspaper articles or columns which you can read on a PC or portable device . . .” That compares with 19% of the general respondent sample. The numbers are higher for magazines: 38% vs. 29% overall.
While it will be very difficult for newspapers (absent some clever pricing/bundling) to get people to pay for their content online, mobile and eReaders represent an opportunity to create a new “culture,” that will support paid subscriptions. The problem, however, is that already much of the newspaper content is available for free on the iPhone and other smartphones via the mobile Internet or apps.
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Related: See David Carr’s eulogy (of sorts) for traditional print media . . . and Andrew Shotland’s SEO-related advice for newspapers.
Somebody really needs to invent another term for “Cyber Monday.” Cyber connotes Sci-Fi (as in the 1980s novel Cyberpunk) and the Internet is now more like a toaster than something otherworldly.
Anyway, e-commerce and offline sales were pretty decent according to various reports out this weekend and this morning. The NY Times reports:
Consumers began looking for discounts early, with more of them visiting stores this year before dawn. An estimated 31.2 percent of shoppers were at stores by 5 a.m., compared with 23.3 percent who were at stores by that time last year, according to the federation’s survey, which was conducted by BIGresearch . . .
The National Retail Federation said shoppers’ destination of choice appeared to be department stores, with almost half of holiday shoppers visiting at least one, a nearly 13 percent increase from last year. Discount retailers were also top choices, attracting some 43.2 percent of shoppers.
As for online sales, comScore, the Internet research company, said retail e-commerce spending for the first 27 days of the holiday season, this year Nov. 1 to 27, rose 3 percent, to $10.57 billion, compared with the period last year. Online sales on Friday were $595 million, up 11 percent from last year.
The most popular purchases of the weekend were clothing and books, according to the federation. And many more consumers bought toys, up nearly 13 percent from last year. More shoppers also bought sporting goods, beauty items and gift cards. The NPD Group said its research showed the three hottest categories to be electronics, clothing and movies.
Here’s more on the comScore data:
A national retail federation survey shows that people also plan to shop online this week but much of the behavior, which originally took place at work (on Monday) because of high-speed connections has now shifted to home (where “broadband” is now prevalent). Just as with offline sales much of that behavior will be driven by deep discounts and special promotions:
A survey released last week found that nearly nine in ten (87.1%) retailers will have a special promotion for Cyber Monday, up from 83.7 percent last year and 72.2 percent in 2007. The most popular promotions are expected to be specific deals (42.9%), one-day sales (32.9%), and free shipping on all purchases (15.7%). Half of retailers (50.0%) will distribute promotions and deals to shoppers through a special Cyber Monday email.
While some Cyber Monday shoppers will choose to shop from the office, the large majority will shop from living rooms and kitchens all across the country.* According to the survey, 91.5 percent of Cyber Monday shoppers – or 88.2 million Americans – will shop from home on Cyber Monday while 13.5 percent, or 13 million people, will shop from work. (A Shop.org/BIGresearch survey released last week estimated that 69 million Americans would shop from work at some point during the holiday season.)
According to the survey, 3.8% of people will use mobile devices on “Cyber Monday” (5% of men and 7.3% of 18-34 year olds).
Shopping engine TheFind reported a significant increase in mobile lookups on Friday:
Searches from mobile devices jumped from around 5,000 on Black Friday in 2008 to roughly 200,000 this year, said Siva Kumar, chief executive of TheFind.com, a product search engine.
According to Hitwise, Amazon was the most visited site among the top 500 retail sites on Friday:
Source: Experian Hitwise
I would argue that to this day, other than the traditional retailers, Amazon (maybe eBay) is the only online shopping “brand,” hence the traffic and sales. I would also argue that a large percentage of the traditional retailer site visits is “multi-channel”: people checking prices before heading into stores to buy items.
Just to “check out the scene,” and to get my hands on a Motorola Droid, I went into my local Best Buy on Friday; it was a complete madhouse. I saw people doing price checks and lookups on smartphones and saw one woman using a barcode scanner app on a TV price tag to do the same.
Hitwise again reports growth in search query length. The greatest growth is coming at the high end: seven and eight or more words. Does this reflect:
In the US Hulu is now the number two video site after YouTube. This reflects the divide between UGC video and “network” or professional video. YouTube has all kinds of jewels as well as lots of crap (although it’s trying to move toward Hulu), whereas people go to Hulu for “catch up” (DVR) TV and to see clips from shows they know and like already.
Considering the competition that existed when Hulu arrived, Hulu’s rise is impressive. And a paid model is coming.
The shopping began at midnight in some cases, and at 4 am in others. There’s something crazy and even pathological about it — although I understand the attraction to the low prices.
It’s almost as if the day after Thanksgiving shopping has become something of a sport for many people, while others are desperate to save money on lots of things they probably don’t need.
The newspaper “de-indexing” movement is gaining steam it would appear. This is partly an irrational “revenge” play by newspaper publishers who blame Google for their own inability to really adapt to a culture in transition. Wounded and reeling from subscriber and ad revenue losses they’re “striking back.”
There are now several publishers in league with Murdoch & Co. considering pulling their content from Google (we’ll see if it actually happens).
I’m mostly taking the day off but I’ll say this . . .
The strategy will utterly fail. Google will not be hurt, Bing will not see a great uptick in traffic (if it’s the exclusive partner) and the newspapers will lose visibility, page views and ad revenues as a consequence. Contrary to their fantasies, it will also hurt their brands (how much would remain to be seen).
The current newspaper predicament is the result of inertia and a failure to act over a period of years, as well as hubris to a degree. Their belief in the value of their content (especially at News Corp.) and, if removed from Google, its capacity to humble the search engine is misplaced. Newspapers need to build more user-centric experiences and have myriad, different ways to distribute their content — as well as offer clever subscriber incentives, etc. (Obviously this is a crude list of recommendations.)
This emerging “take that” approach will simply boomerang and accelerate their current decline.
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