Online Now #1 Ad Sector in UK

Based on IAB UK figures, The Guardian is reporting that the Internet has now taken over from TV as the biggest advertising sector in the UK:

The UK has become the first major economy where advertisers spend more on internet advertising than on television advertising, with a record £1.75bn online spend in the first six months of the year.

The milestone marks a watershed for the embattled TV industry, the leading ad medium in the UK for almost half a century. It has taken the internet little more than a decade to become the biggest advertising sector in the UK.

UK advertisers spent £1.75bn on internet advertising in the six months to the end of June, a 4.6% year-on-year increase, according to a report by the Internet Advertising Bureau and PricewaterhouseCoopers. To put this in perspective, in 1998, when the IAB first measured internet advertising, just £19.4m was spent online.

Traditional media of all stripes have been pummeled by the twin bludgeons of recession and increasing demands for “accountability.” It’s only going to get worse for TV in the US in the coming period, as advertisers cut (but don’t eliminate) their TV spending.

However in the US market it’ll be some time before the Internet can equal, let alone surpass, the TV ad spend. Nonetheless, this is a kind of symbolic “watershed moment” for online.

Source: Robert Coen, MagnaGlobal; NAA; Radio Advertising Bureau; Simba; Outdoor Advertising Association of America; Interactive Advertising Bureau (IAB) other industry sources (2008)

More Bad News for Behavioral Targeting

I’ve argued many times now, there’s momentum toward some sort of regulation of behavioral targeting. And now in my best “Yoda” voice: regulation is coming, prepared must you be. More support for regulation comes in the form of a new survey reported in the NY Times:

About two-thirds of Americans object to online tracking by advertisers — and that number rises once they learn the different ways marketers are following their online movements, according to a new survey from professors at the University of Pennsylvania and the University of California, Berkeley.

The professors say they believe the study, scheduled for release on Wednesday, is the first independent, nationally representative telephone survey on behavioral advertising.

Here’s what the report itself says:

• Contrary to what many marketers claim, most adult Americans (66%) do not want marketers to tailor advertisements to their interests. Moreover, when Americans are informed of three common ways that marketers gather data about people in order to tailor ads, even higher percentages—between 73% and 86%–say they would not want such advertising.
• Even when they are told that the act of following them on websites will take place anonymously, Americans’ aversion to it remains: 68% “definitely” would not allow it, and 19% would “probably” not allow it.
• A majority of Americans also does not want discounts or news fashioned specifically for them, though the percentages are smaller than the proportion rejecting ads.
• 69% of American adults feel there should be a law that gives people the right to know everything that a website knows about them.
• 92% agree there should be a law that requires “websites and advertising companies to delete all stored information about an individual, if requested to do so.”
• 63% believe advertisers should be required by law to immediately delete information about their Internet activity.
• Americans mistakenly believe that current government laws restrict companies from selling wide-ranging data about them. When asked true-false questions about companies’ rights to share and sell information about their activities online and off, respondents on average answer only 1.5 of 5 online laws and 1.7 of the 4 offline laws correctly because they falsely assume government regulations prohibit the sale of data.
• Signaling frustration over privacy issues, Americans are inclined toward strict punishment of information offenders. 70% suggest that a company should be fined more than the maximum amount suggested ($2,500) “if a company purchases or uses someone’s information illegally.”
• When asked to choose what, if anything should be a company’s single punishment beyond fines if it “uses a person’s information illegally,” 38% of Americans answer that the company should “fund efforts to help people protect privacy.” But over half of Americans adults are far tougher: 18% choose that the company should “be put out of business” and 35% select that “executives who are responsible should face jail time.”

People are saying very explicitly that they don’t want targeted (read: relevant) ads. Also, look that the punitive attitudes in the bullets at the end.

There’s a clear difference between attitudes and behavior. People don’t want to be tracked but the do respond to targeted ads and deal offers, etc.

This survey will be taken as conclusive proof of the need for regulation — conclusive. The only question will be about the burdensomeness, the disclosure requirements, etc. Search advertising will be largely unaffected (although data retention will be an issue for search engines). It’s display that will suffer as a result.

Who disagrees with me?

___

Thanks Kevin Lee for pointing me to the IAB self-regulation statement. But as George Bush the first might have said, “That’s not goin’ ta do it.”

Google Wave Supercool Extensions

I wrote about Google Wave at SEL this morning and more extensively earlier in the month. Today Google invited about 100K new users into Wave. That was the basic news. The bigger news in my opinion is the launch of what amounts to a developer “app store,” being called Wave extensions:

When you first encounter Wave it’s not entirely clear what the heck it is. It looks like email, but then there’s the real-time IM aspect. And then one gets the sense that much more could go on here. That’s what these extensions very concretely illustrate. Ribbit is providing a conference calling function; 6 rounds is doing video chat through Wave.

But also check out Lonely Planet’s travel planning collaboration tool Trippy:

Along the same lines there’s collaborative map creation in the Google Maps Wave widget:

These and other (B2B, B2C, C2C) extensions to come will be what really “sell” Wave to the public. Beyond the phrases “collaboration” and “real time,” these extensions help to answer the “why question” — as in why should we use it.

Target on Kaboodle

So I was busy being impressed with Target and its online ads (powered by ShopLocal). Now I’ve discovered that they’re on the Hearst-owned Kaboodle, social shopping site. (Kaboodle, BTW, has mastered social shopping and is generally not getting enough press/credit.) What Target is doing is really “best practices” in action.

It’s only a matter of time before other retailers copy Target and slash (though not eliminate) their newspaper budgets

Peets Pushing Coupon via Twitter

Peet’s coffee is pushing a coupon via Twitter:

Not new or unique but it’s a perfect promotion: See the tweet, print and present the coupon, closed loop. Only issue: people who access on a mobile handset. You can’t print the coupon, will they honor it?

Target Online Ads in High Gear

Target is one retailer that seems to have got this online thing figured out. Check out the Yahoo! home page (on Sunday):

Click on the tile ad (which can be geotargeted) and you go to a hosted version of the “newspaper” circular:

Note the left side of the page:

• Sign up for email reminders
• Sign up for mobile reminders

When you get into the circular you have a range of options, but it duplicates the layout and simulates the page-turning action of the physical, paper ad. 

All this functionality is powered by ShopLocal. With a highly attractive and effective experience like this there’s additional danger that one of the top 10 newspaper advertisers will further decrease its ad spend.

Meanwhile at Internet2Go . . .

Here are a number of recent stories from LMS/Internet2Go:

• MobilePeople and ‘Local Discovery 2.0′
• Will Kindle Move Beyond Books, Periodicals?
• ‘White Spaces’ Worth $100 Billion?
• Struggling to Avoid the ‘Dumb Pipe Scenario’
• Forecasts Don’t Matter, Consumers Do

Another Look at Google Place Pages

When I wrote my original post on Google Place Pages I was under incredible time pressure. But I wanted to take another look at what Google has done, because it’s potentially quite significant – although less significant than if Google were indexing these pages in search results (more on that below).

Here’s a search for SOMA, San Francisco — a neighborhood:

Click the map and then “more info” and you arrive at the new page — being created for every business, landmark/POI, neighborhood and city:

The new SOMA Place Page:

What’s there:

• Ads for things related to SOMA (although Bing really isn’t)
• Related maps that can offer a lot of value (created often by users, e.g., “Ben’s Guide to San Francisco“)
• Popular places (being indexed here may be significant for certain venues and attractions)
• Video and images
• Street View

That these pages are engaging and create highly targeted ad inventory should be obvious. They each have a URL but Google told me they won’t be indexed (but see Mike B’s post). That’s probably a political decision to keep people from screaming that Google’s favoring its own properties. The only way then to get to these pages is to click on “more info.” Thus there somewhat buried. But people will probably discover them given the visibility and volumes of searches on Google Maps.

The big departure for Google, beyond the new format, is the creation of these pages for neighborhoods, landmarks and cities. Formerly information was mostly available for business locations. The addition of places and POIs makes these pages a potentially great discovery tool for travel and tourism. Indeed, Hitwise categorizes Google Maps under Travel. 

Here’s a comparable page for a local business: 

My belief is that increasing numbers of local businesses will claim these pages because they will be visible and widely consulted by consumers (notwithstanding my “buried” remark above). And again they’ll have their own URL so local businesses can link to them. 

Imagine if Google were to index these pages in search results; their impact would be huge. But Google is saying it’s not going to. These pages aren’t yet available for mobile devices but some version of them will be in time. 

What do you think the impact of these changes will be, if any, on:

• Small busnesses
• Consumer behavior
• Locally targeted AdWords 

July’s IB Local Index: TV vs. Newspapers

Internet Broadcasting released its IB Local Index for July. The index mostly compares the reach of local TV and newspaper sites — local content sites. It doesn’t look at maps, verticals, IYP or review sites. But here’s the latest ranking of leading local sites and their markets:

(A larger version of the chart is available on the IB post.)

One of the “takeaways” from this list is: “Only 3 sites have achieved in-market reach of at least 25%. Interestingly, these are all TV stations: KSL, WGAL and WRAL.” These stations operate in secondary markets: Salt Lake City, UT; Lancaster, PA; Raleigh-Durham, NC respectively. There’s information on aggregate and local newspaper reach available from the NAA here. 

One of the ad-sales benefits of the Yahoo-newspaper consortium is that newspapers can now claim TV-like reach in their markets from their distribution on Yahoo’s network. 

What would be interesting to see side by side is a comparison of local content sites, IYPs, search-mapping sites to get a more complete picture of the local market.

Google’s ‘Local Extensions’ Redux

When Google introduced “local extensions” in July I wasn’t paying close attention I suppose. But upon revisitation it’s very interesting, especially for nationals, franchise businesses or small businesses with several locations. It also represents the future of local targeting, in particular for mobile advertising, in some respects. Here’s the Google blog post explaining how it works:

If you’re a business owner, you can set up extensions by linking an AdWords campaign to your Local Business Center (LBC) account. If you’re not the primary business owner of the locations you’re advertising, you can manually enter addresses directly into AdWords. For example, a clothing brand that distributes to a number of different stores might want to associate their ads with various store locations through extensions, even though their official business address doesn’t correspond to those addresses.

Once extensions are set up, we’ll dynamically match your business locations to a user’s location or search terms and show the address with your text ads. If we’re unable to determine a user’s location or if there are no relevant addresses to show, we’ll simply show your ad without an address. If you prefer not to dynamically match addresses to your ads and would rather show a specific address in one particular ad, you can do so by setting up specific location extensions for individual ads. Your ads can show with their relevant extensions on Google and Google Maps and as regular text ads without the extensions on partner sites in the Search and Content Networks.

With the introduction of location extensions, local business ads will no longer be a separate ad format. Instead, you can simply create new local ads with extensions from scratch or add extensions to your existing text ads.

The idea here is that the system dynamically automates the injection of location into the ad when the user’s location can be determined and there’s a nearby store. Everyone likes the idea of geotargeting, though not all marketers fully understand its benefits. But one of the challenges is managing lots of campaigns for lots of stores or locations. This system addresses that. 

ShopLocal is doing something conceptually similar, creating search ads/ad copy dynamically for its retailer customers. Yahoo also can create display ads dynamically based on targeting parameters. 

These dynamic systems are a key to one version of location’s future. In mobile dynamic ad creation is also a key concept. Some version of the oft-repeated fantasy of 1:1 marketing will never be realized unless ads can be customized “on the fly” as it were. 

Surojit Chatterjee, Google Product Manager, Mobile Ads spoke at the Metaplaces event last week in San Jose. He said that he has seen increasing adoption of “local extensions” by marketers, especially larger marketers and franchisors.

In a mobile context I can well imagine systems of the very near future where marketers input a master list of locations, an offer or deal (of the week or month) and then check off the locations that are participating. All of that information will get mashed up and served to users dynamically either in a search context or banners.

Is Twitter Worth $1 Billion?

After its $100 million investment by T. Rowe Price Group Inc. and Insight Venture Partners, Twitter will reportedly be valued at $1 billion. I’ve gone from Twitter detractor and critic to Twitter fan. But this seems like a really big number.

Is Twitter worth $1 billion? What do you think?

Back in February, Twitter was saying that it didn’t need more money and only took a $35 million round when it was approached by investors. Prior to the new $100 million Twitter had raised a total of $55 million in three rounds.

Now the pressure is on to generate revenues and/or find a buyer who will pay several billion for the site (though Twitter wants to remain independent). According to Google’s Ad Planner, Twitter has 67 million users globally. Compete shows almost 24 million users in the US as of August.

PaidContent summarizes a study that reflects Twitter users are twice as likely to “engage” with brands than users of other social networks:

Interpret surveyed over 9,200 internet users in August, finding that roughly 24 percent of the respondents that used Twitter, reviewed or rated products online; just 12 percent of people that used other social nets—but not Twitter—said the same. Twitter users were also more likely to visit company profiles (20 percent) than non-Twitter users (11 percent), and twice as likely to click on ads or sponsored links (20 percent vs. 9 percent).

Clearly Twitter is valuable. But did it need to raise $100 million more to succeed? Or did it have to because Facebook is trying to co-opt its features and supplant it among users? What do you think?

Meteor Solutions: A Company to Watch

I got briefed a few weeks ago by a company called Meteor Solutions. It’s based in Seattle and being run by Ben Straley, who was with Judy’s Book. The company measures so-called “earned media” and social media ROI. I was impressed with what I heard.

The company was founded earlier this year and already has a fair amount of traction with marketers and publishers. The company groups media into three categories: paid media (ads), owned media (publisher and marketer sites) and “earned media” (passed links and social media conversations). Here’s the company’s chart:

Directed at the third category, Meteor tracks online word of mouth and identifies “influencers” and “where they share content.” Unlike many “buzz tracking” applications and platforms that are based on inferences, Meteor’s is based on actually tracking who passes links and what happens thereafter. The system has the ability to track a shared link from its originator to a conversion of some sort and see who was most influential in that process.

The company uses javascript code and unique IDs for each person its tools encounter. Another slide from the company’s deck:

In other words: I pass an offer link to you (50% off NY Hotel X) and you send it to others, who in turn send it to others. Some people click; some people “convert.” All that is tracked. Within that melee of passed links, the system can determine who’s having the biggest effect on conversions: me, you or somebody else. In this way it can identify the biggest influencers, which opens the door to do targeted promotions to those individuals. It’s very interesting because you’re actually seeing what’s happening as people disseminate links to one another.

Much of this activity would be totally invisible to marketers and publishers otherwise. In a different way AgendiZe has the ability to do something similar and is doing that with local directory publishers.

Meteor is also helping to power Microsoft’s new experimental “Looking Glass” social media monitoring and tracking tool.

Because it’s analytics are real and it “fills in the blanks” in many ways, Meteor is likely to be a near-term acquisition candidate by an analytics provider or by one of the big ad platforms/search engines.

TouchLocal Buys Scoot in UK

UK based local search and directory site TouchLocal has acquired Enable Media Limited, which owns and operates Scoot and AskAlix in the UK. TouchLocal outlined the benefits of the acquisition in an email to me this morning:

1. A combined paying customer base in excess of 25,000 local business advertisers on annual subscriptions and growing at 8% per month.
2. More than 2 million UK businesses listed, 500,000 of whom have activated their profiles.
3. Over 3.5m uniques and 6m searches per month. Generating over 8m calls to SME’s per year.
4. A field and telesales team in excess of 130 people and a really established platform for further aggressive growth.
5. A forward combined revenue run rate in excess of $32m and EBITDA in excess of $7.5m.
6. A significant move forward in annual renewals rates that can exceed 80%.
7. Strengthening of distribution strategy that will enable more exclusive partners to be added this year in addition to our local search partnership with AOL.

Scoot has been innovative and was one of the first directory sites to try and use Twitter as a marketing and distribution vehicle for its advertisers. It was an early UK Internet directory powerhouse with a huge valuation that plummeted in the earlier part of this decade. It has changed ownership a couple of times.

The UK local segment is highly competitive and getting more so:

• Yell
• TouchLocal/Scoot
• TrustedPlaces
• Yelp
• Google, Yahoo, Bing
• Qype
• Others

The Alert Shopper Part 2: Moms

1020 Placecast continues with its fascinating series “The Alert Shopper.” Part of that is empirical research with Harris Interactive, which will be released soon I’m told. But more fun and interesting in a way is the video interview series that the company has done: people “on the street” discussing their shopping behavior.

Part two is about moms (mostly in their 40s) and their attitudes toward sales and email. Basically the “takeaways” from the information on the video are:

• They don’t really pay attention to commercial email (and are thus not influenced by it accordingly)
• They mostly don’t online research prior to shopping (the cost of the purchase would be an interesting variable to explore)
• They’re often unaware of and/or indifferent to sales
• They have their phones while shopping and use them in various ways (call spouse, use smartphone for research in one case)

This is a limited group of people so be cautious in generalizing, but it’s pretty interesting stuff. The buried inference is that these folks are going to be receptive to mobile marketing while shopping. More on that later.

Telmetrics Argues for PPCall for Print YPs

Telmetrics President Bill Dinan argued (at the Kelsey show) that yellow pages publishers should shift the print directory to an entirely performance-based model, specifically PPCall.

The call-tracking company released data from its aggregated customer records to argue that the industry needs to adopt a performance-based pricing model for the traditional printed directory to be more competitive with online.

Telmetrics put out a press release that asserts that “yellow pages’ average monthly call volume and duration is still ahead of other mediums indicating higher quality leads”:

• Print Yellow Pages ads average 20.5 calls per month at 2.7 minutes in length
• Internet Yellow Pages ads average 20 calls per month at 1.3 minutes in length
• Direct Mail ads average 8.4 calls per month at 1.7 minutes in length
• Interactive/SEM ads average 6.4 calls per month at 1.3 minutes in length

Even though there are many PPCall experiments and efforts going on it print, it would be a radical move to go totally PPCall. Do you think that print revenues would hold up? What categories would grow revenues, which ones might fall?

Calls would need to be priced differently by category and territory or geography. An auction would take care of that and be self-regulating, but would probably be too complex for the bulk of YP advertisers.

First Look: Early Data from Geodelic

Geodelic, which is behind the T-Mobile Android Sherpa app, gave me an update yesterday on the company’s progress. There were a number of very interesting things that would get me killed if I revealed them, but here’s what I can say . . .

• The company has seen 150K downloads six weeks (with new users on a daily basis)
• 70% of those downloading become “users,” defined as having consulted the app at least once and keeping on device.
• 50%+ of users have used the app in the past week
• 74% of users have consulted the app on two different days in past month
• 25% of users have used once in the last week, 30 days after installing (average per Pinch Media is 4%)

So right now the company has (according to my math) something over 50K active users consulting Geodelic’s Sherpa app on the Android platform at least once a week. An iPhone app is coming very soon, which should gain the company quite a few more users.

Top categories in terms of usage:

1. Quick bites (fast food)
2. Dining
3. Bars & nightclubs
4. Movies & entertainment
5. Banks
6. Cafes & coffee
7. Groceries & Essentials (this is a pretty broad selection of businesses)

Collectively “Food & Entertainment” (including bars) represents 50% of activity on the app. And the top two categories represent 25% of the volume.

One of the more interesting things about the app is that it’s arguably a “search” tool (they use the term discovery) but there’s almost no keyword entry. As you’re using it you don’t think about that, but it’s significant in terms of the design and user experience.

The carousel is also kind of a “fun” feature that helps differentiate the app somewhat. What do others who’ve used it think?

Over at Internet2Go . . .

Here are a number of stories this morning from LMS/Internet2Go:

• Augmented Reality News: GeoVector App, Layar Goes 3D, Mobilizy Proposes Standard
• Zong Expands into Subscription Payments
• Starbucks Testing Mobile Payments App
• Tetherball Offers Real-Time Loyalty Reporting
• eMarketer: Mobile Ads Worth $1.56 Billion in 2013
• Snapshot of the Chinese Search Market
• Courier: Microsoft Tablet Prototype Appears

The Microsoft tablet is the coolest thing in the news this am from a mobile perspective.

One Box Showing up More on Big G?

Mike B. writes about how the “authoritative one box” is showing up with greater frequency these days on Google vs. the so-called 10-Pack. Mike’s example for “computer repair” in Las Vegas:

A similar search in San Francisco still yields the 10-pack:

Curious, strange, unexplained . . .

The State of Yellow Pages

Andrew Shotland is at the Kelsey show in Florida — home of Disney World and the forthcoming Harry Potter theme park — and has captured some great data about the state of the YP industry from the mouths of the execs themselves:

• Advertiser volume has decreased from 3.7MM in 2006 to 3.4MM in 2008 while average account value has increased from $2,701 to $3,250 in the same time period.
• EBITDA margins have dropped from 45% in 2004 to 43.5% in 2008.
• Europe has the largest share of revenue from online with 25% in 2008.  North America is at 10.4%.  15% avg global share from online.

Also:

• We will sell leads rather than products
• Price per call is a leading model going forward

More good stuff at his post. The day of reckoning is at hand . . .

ValPak Incorporates Kudzu Ratings

ValPak has struck a deal with Cox’s Kudzu:

As consumers search thousands of directory listings for savings offers on the Valpak.com site, they will now also receive star ratings and reviews for local advertisers from Kudzu.com . . . Valpak.com advertisers whose listings match up to the Kudzu.com listings will have the star rating and review link shown on their results page as well as their profile page.

At the same time, the online offerings give businesses that advertise on Valpak.com a tool to help drive “word of mouth” promotion online. The ratings provide a business solution by enabling businesses to interact with customers, give credentials and respond directly to customers.

Here’s an example from Atlanta, GA: