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Say Google buys Twitter. It was always something that made sense, and now it's gone from "what if" to rumor to late stage negotiations in less than a day. Let's assume it happens and take a peek into what it means for marketers.
Search: Twitter will not become Googleized. With its YouTube acquisition Google showed itself to be a good integrator of other companies. However, it makes sense that Google will clean up the Twitter interface to be more friendly to contextual ads, people search, and keyword search. Twitter will also become more trackable on its own, as well as within Google. And marketers will be intrigued at the possibilities just at the time that search was topping out.
Just as the industry is getting used to the terms and conditions of "online video" it's time to split it up. Online video is headed for three distinct executions: online spots, email video, and online programming.
The evidence for this comes from several sources, most notably Goodmail's CertifiedVideo, which bowed this week. CertifiedVideo jumped the gate with AOL and Yahoo aboard and many entertainment brands carrying promotions as part of their email campaigns. It also became apparent at the ARF conference this week, that online video needs to be more closely defined.
As one of the biggest real estate companies in the country, Coldwell Banker is in a tough spot when it comes to media. It has to drive leads for its brokers. It has to make consumers aware that it has the stability to get through a huge market downturn. Last week it announced a major online and offline media campaign aimed at doing both. In terms of spending it's split down the middle and we talked to Senior Marketing Vice President Mike Fischer about its positioning.
Century 21, which is perhaps your biggest competitor, announced it was moving 100 percent of its spending online. Why not follow that?
I believe in balance. There's a cost for everything and I think in order for us to take care of our brokers and our consumers we need to make sure we have a balanced approach. We'll probably spend 40 percent of our budget online. I think that's a pretty good place to be.
Neuromarketing. Neurometrics. In-store shopper insights. There's a lot to like about the bleeding edge of ecommerce these days, but the cold reality is this: it's time for basic internet marketing block-and-tackling strategies.
So many observers and front-line retailers are truly excited about this period of time that it is completely forgivable to race ahead with technology. Research about how consumers perceive and then buy that's coming to the fore from people like Paco Underhill is compelling, and new customer behavior data from companies like Nielsen and Microsoft is brilliant. All the in-store technology that will blend the in-store experience with the online experience needs to be quickly adopted. But let's face it. The bankruptcies and inconsistent discounts happening offline are creating a unique opportunity online. We see four very predictable ways to take advantage:
Growth forecasts for 2009 continue to be revised. Emarketer, following on the heels of the IAB's tentative outlook on 2009, has taken its internet ad spend projection down to 4.5 percent. It predicted an 8.9 percent bump last December.
And like the IAB, eMarketer analysts are hailing the projection as a good achievement in a terrible economy. That's for internet spending. On a global, multimedia level today WPP's GroupM revised U.S. spending this year to fall by 4.3 percent in 2009 to approximately $155 billion (versus the 3 percent drop predicted in December) and drop another 6.8 percent to about $144.5 billion next year.
The mobile ad platform is fragmented, lacks customer data, and needs standards. That's some of the thinking produced by the blogosphere and recent conferences. Whether mobile marketing is really in such disarray is debatable. It has, after all, attracted most major brands and will rate its own category in the next round of IAB quarterly measurements. But for the "broken" side of the mobile debate, two developments may address some concerns.
Both are technology driven, which is important as mobile finds its legs with advertisers. The first announcement: AOL and Platform-A will make a "device-agnostic" rich media mobile ad format available through Third Screen Media, Platform-A's mobile ad-serving platform and network. That means rich media can run on iPhone, Android, Blackberry, Windows Mobile, Palm and Symbian handsets. It's a clear indication that AOL will make rich media ads a priority and make them easy to buy. One complaint from the "broken" side of the debate is that marketers have to choose one device over another for campaign creation and planning. If the AOL solution works, that argument is a long way toward over.
Sponsorship and internet marketing are proving to be a tough couple. But they need immediate attention and innovation if brands have a shot at finding an effective presence on social media networks.
Two recent datapoints illustrate the issue. Yesterday's IAB report of 2008's ad results showed a 40 percent drop in sponsorships online. That is a shocking plunge for a business that tracked a 10 percent overall increase. And IDCs report on social media advertising delivered last week showed sponsorships may be the only form of advertising social network users will tolerate. "Tolerate" is the operative word here. They will not tolerate any kind of traditional display approach.
An ecommerce site needs a healthy environment in which to flourish, especially in today's competitive hothouse. At GardenCentreUK.com, that environment is decidedly home grown. The company has achieved 100 percent sales growth over the past year largely through its own ecosystem created through affiliate marketing.
"With so many competitors we felt as though a strong affiliate network was the best way to keep our business growing," says Peter Howarth, GardenCentre general manager. "I'd say our affiliate network makes up about 15 or 20 percent of our revenue."
The GardenCentre plan actually runs against current trends. A 2008 Econsultancy report shows that the proportion of merchants saying that affiliate marketing drives high volume has decreased from 26 percent in 2007 to 15 percent in 2008. The average proportion of online sales credited to affiliate activity has decreased from 16 percent to 12 percent over the same time period.
For most cross-channel retailers 2008 was a financial disaster, and surviving to discuss 2009 is an achievement. No different at Zales Jewelers. The mall and outlet center-based retailer closed more than 100 stores and took an 18 percent hit in 2008. But one of the bright spots has been its ecommerce operation. As SVP Steve Larkin says we "do a lot of stuff" online that doesn't get as much publicity as the collapse of the high-end jewelry market. We talked to Larkin after the company announced that its revenues for January and February had stabilized for 2009.
We've heard a lot lately about the saving power of ecommerce as offline retail struggles and the economy starts to crawl back. Zales has certainly had its offline problems, and I'm interested to know your macro view of retailing right now.
Ecommerce is better than traditional retailing. And that comes from advances in just about everything that has to do with online retail. We're constantly improving the customer experience and constantly improving customer service. I also think we provide a lot of value online for the customer. They can comparison shop, they can research products, and they can get best price. We will continue to invest in ecommerce and continue to cross-promote our online store through our offline stores.
The IAB presented its statistical and philosophical take on 2008 today, and while it tracked some surprising growth numbers it left more than a few questions unanswered for the balance of 2009.
The important numbers: total US internet advertising growth topped 10.6 percent in 2009 when offline media dropped 2.4 percent. The industry crossed the $6 billion plateau for the first time during the fourth quarter of last year, but it came on the heels of the lowest sequential quarter-to-quarter growth rate since 2002. Search was up 10.5 percent over 2007 and the much-maligned category of display ads bounced 8 percent. However, display ads contracted 4 percent in the fourth quarter.
A friend of mine was recently hired as the ad director for a mid-market newspaper, owned by the Tribune Company. After he was there about a month I asked him, "so how do you plan on selling ads for a dying media?"
"For starters," he said, "I do something absolutely no one in that office does. Every morning I read the newspaper. Cover-to-cover."
No secret that performance-based advertising is dominating internet marketing. But brands are still trying to find the right mix for all those performance options, email, and a rapidly declining display market.
According to IDC research analyst Caroline Dangson, the display market contracted by 7 percent in Q4 of 2008, and will continue to see decreased spending until the end of this year. With this in mind, several brands are trying to find some balance for all the advertising options available.