These bad economic times do not improve this picture. Large, unsold inventories create endless repetitions of the same ads. Budget cuts discourage agency creativity and smart targeting is still underdeveloped. As I write this note, I visit a well-known French news site: after four seconds trying to read the lead article, five modules of all shapes and sizes occupy at least a third of the page, hiding part of the story. Last week, I performed a random test on friends and acquaintances who use Gmail: none of them remembered clicking on any text-ads, the ones supposedly relevant to the message they were working on.

An Internet user is exposed to more than 2000 ads a month, according to ComScore. The resulting situation is easily summed up: more ads at a lower price.

- Overall this year, we will see little volume growth, if any. In the US market last year, online ads grew by 10.6% for the full year, the worst performance since 2002. But growth slowed down to 2.6% for Q4 2008 (by comparison, Q4 2007 growth was +24%). And, last week, for 2009, Nielsen halved its prediction to 4.5%.

-  Prices and yields are falling. In the French market, for instance, big media sites I know of, were used to get a 10€ CPM (cost per thousand impressions) per module; now they only get 8€ or 7€. According to the marketing firm PubMatic, CPM decreased by 48% between Q4 2008 and Q4 2009.

- The share of ads dumped through networks is rising, especially within the cash-panicked news media sector. This year, many sites will dump about 50% of their unsold pages to ad networks at fire sale prices.  In France alone, 150 companies vie to sell your Internet ads, an inefficient and scattered market.

- Predictably, the click-through rate is not improving (except to close the window).Since the pay-for-performance ad segment is increasing, the poor click-through performance applies further downward pressure on prices.

Look at the pie chart below. It shows the distribution of ad types (source: IAB).

All three big components representing 80% of the revenue stream are in jeopardy or experiencing major shifts:
- Banner ads: they are shrinking for all the reasons stated above (poor creativity, random targeting) to the benefit of the search ads — I’ll come back to that later.
- Classifieds: significantly impacted by the economic downturn; in 2008, classifieds were already down 4% on the internet; expect worse in 2009. And, with the rise of free, Craigslist-like, classifieds, total market revenue will shrink dramatically (but nice margins are guaranteed for the survivors).
- Search is both the largest revenue format (it might count for more than 50% this year) and the fastest growing segment (+20% in 2008, twice the rate of the entire ad sector on the net). But this strong performance comes with declining prices and a growing imbalance in Google’s favor, at the expense of its partners (i.e. media sites).

The search ad segment is indisputably Google’s fiefdom. The Mountain View giant controls 70% of the business in the US alone, according to eMarketer. The percentage is higher in some European countries.  Whatever the metric or the region, Google does control the search ad market in terms of volume, price and technology (its ability to serve relevant ads to a large chunk of the 188 millions sites in operation worldwide).  The key figures are: in 2008, Google’s revenue was $21.8bn, operating income $6.6bn and net income $4.2bn. 51% of the revenue came from outside the United States.

The company draws its revenue from two main sources:
- Two-thirds come from the Ad Words system, in which brands buy keywords through a complex (and opaque) auction system under Google’s sole control. In return, the brand (an online business or a media) gets traffic it will monetize through advertising or e-commerce.  As an example: I manufacture hot air balloons; I buy — expensively if there are many bidders — the right keyword(s); each time someone searches for hot air balloons, my text-ad will appear on top of the results page. In the chart below, this is the Search (AdWords) line.
- A bit less than one-third comes from the AdSense program in which sites allow Google to fill boxes with text-ads in exchange of a fee repaid by Google to the host site.
in the chart below, this is the Network (AdSense) line.

Now let’s have a closer look at the trends, by the quarter:

We see three things:

1. Of course, like everyone else in this recession, Google is feeling the pinch. For the last quarter of 2008 versus 2007, growth is “reduced” to +18%, to be compared to +51% between Q4 07 and Q4 06.
2. Revenue streams show uneven growth: the biggest one, the AdWords system, representing 2/3 of Google revenue, still grows at +22%  for Q4 08 vs. Q4 07. For the Q4 06/07, the growth was +58%. This is the most controlled and obscure part of Google’s business. The search engine sets prices in a totally opaque way, by assigning a complex (and arbitrary) “Quality Score”. See The Registertech site for details.
3. In the meantime, the revenue stream Google shares with partner sites (for instance media sites with tons of text-ads) is comparatively shrinking: only +3% in Q4 08 vs. a year before, a big drop from +37% between Q4 07 and Q4 06.

You get it: media are getting less and less advertising dollars and euros from Google. As many say, perhaps without realizing it, without intent, see the company’s Don’t Be Evil motto, Google is killing the golden goose as it preserves its fat (38%) operating margin. For many websites, especially small ones, working with The search engine becomes less attractive.

Is an alternative looming? Between the impenetrable alchemy of its keywords auction system and the shrinking revenue channeled back to its partners, even the very successful Google model needs to adjust to these difficult times.  —FF

April 5, 2009 – 9:52 am | Edited by Frédéric Filloux

http://www.mondaynote.com/2009/04/05/advertising-real-change-must-happen/

Entertain or educate
- which social media strategy is best?

“How about a blend of both? – entertaining and relevant content (to reach the proposed target groups). In terms of the proportions, the answer is in brand’s personality: the theme that suits the brand best should ‘weigh’ more than the other. This will also keep the brand message consistent and help integrate social media into an overall marketing campaign.” Nadya Tatarciuc, PR and new media analyst

“To truly have an impact in the social media arena, brands and the companies who own and shepherd them would do well to consider another E-word instead: Engage. If they can truly engage their audiences by making their social communications relevant, interesting, and perhaps even thought-provoking, then brands will start to earn the right to be included in the social conversation.” Gunnar Loy, Executive Creative Director, Triibe

“Social media platforms are a good opportunity to educate consumers about the brand with the idea to offer a good brand experience. In the future it’s rather about experiencing brands compared to possessing brands. But I think that education can contain certain aspects of entertaining. For me it’s a combination of both directions.” Dr. Alexander Linder, Director CCMI, Swarovski

“If a brand fails to deliver the basics (which I see as providing helpful information/customer service and which falls more into the education camp) while seeking to entertain it can feel, at best, inappropriate. An example of this is Eurostar hosting a Facebook page for their ‘Little break, big difference’ campaign, then failing to respond swiftly and empathetically to consumer needs during their pre-Christmas disruptions. Admittedly Eurostar have learned from this experience but I think it’s a good example of why entertainment alone is not enough for brands in social media.”Christina Lemieux, Planning Director, Agency.com

“The key in education online is to make sure that it matches what’s going on offline, including how (brand) personnel are also being kept up to date. On the entertainment side, social media provides new and unique ways to create experiences. The theme and the cohesion with the brand values are critical ingredients for success.” Minter Dial, President/Founder, The Myndset Company

“A lot of research has to go into creation of messages that reach out to a considerable audience without losing out on personalization. Brands eventually need to talk to people as individuals – not as a faceless mass of human beings.” Arun Panangatt, Manager – Market Intelligence, Dubai Properties Group

Posted by Shirley Brady on May 11, 2010

http://www.brandchannel.com/home/post/2010/05/11/Social-Media-Debate-Educate-or-Entertain.aspx

The proliferation of devices of all shapes and sizes — from the jumbotrons in Times Square to the micro-menus of Apple’s Nano — surround us. And, of course, the sheer multitude of these screens (GPS, iPod, mobile phone, LCD TV, Nintendo DS, etc.) has begun to change our interaction with the physical world.

But what’s most interesting about this development is not the abundance of screens, per se, but about how our culture’s seemingly ravenous desire for digital experiences is changing our expectations for physical spaces — both in public and private.

In the past few years, a host of artists, programmers and marketers have melded art and science to create new, digitally driven experiences that are redefining the way we think about our urban and personal landscapes.

Some of the better-known advertising work here includes Mini’s groundbreaking “Motorby”campaign, where an interactive digital billboard responds to Mini drivers passing by, and HBO’s “Voyeur” campaign, which transformed a New York City street into a theater.

But the trend is more than just “digital out of home,” which is a phrase that gets used a bit too broadly to describe this cultural shift. Instead, it’s a complete rethinking of our public spaces as digital experiences.

Project Blinkenlights: Perhaps the most influential and pioneering work done so far has been by this German group, which transforms office buildings into digital interactive installations. Its most recent project, Stereoscope, took over Toronto City Hall and created an interactive, visual concert.

Blinkenlights Stereoscope Toronto documentation video from Tim Pritlove on Vimeo.

The experience went beyond just a light display; it was participatory as well. Attendees were invited to play video games on the sides of the building by using their mobile phones. And artists could create their own animations for the installation using Project Blinkenlights’ open animation formats and tools.

555 Kubik: Similar to the work of Project Blinkenlights, the 555 Kubik project is a digital installation that turns a naked building facade into a compelling piece of art through 3-D projections.

And Creating ‘Screens’ Where There Weren’t Any

Posted by Garrick Schmitt on 09.01.09

http://adage.com/digitalnext/post?article_id=138725

For digital marketers the eagerness to find the next new thing is both a blessing and a curse. Steve Rubel, Edelman’s digital czar, summed up the paradox best recently when he said, “Second Life was digital marketing’s Vietnam.” There is a price to be paid for being too quick to embrace a new, untested technology after all. You can both overshoot the market and look foolish at the same time.

Augmented reality, also known as AR, sits at that precarious nexus today. It could transform the digital landscape, merging online and offline in wild new creative ways, as Hashem Bajwa points out in an earlier DigitalNext post. Or it could forever be the stuff of freaks and geeks. Will the hype around augmented reality crush the technology before it can really take off?

First, a bit of background: today augmented reality enables consumers to physically manipulate 3-D objects as displayed on a monitor. The technology is based on using markers that are basically printed patterns on paper that when viewed through a video stream and recognized by software create a type of hologram-effect.

Think Star Wars’ Princess Leia’s hologram communication with Obi-wan and you are pretty close.

Brand marketers have spared no time in utilizing augmented reality to inspire consumers’ imaginations — here’s a look at some of the best early work:

Lego and K’Nnex:
The toy company, with its “digital box,” has one of the more arresting uses of augmented reality today. Simply hold up the Lego box to an in-store kiosk with a web cam and watch a rendering of the toy assemble itself. Metaio, one of the leaders in AR, designed the experience for Lego. Total Immersion, another leader in AR, created a similar experience for K’nex toys which also allows you to control and even pilot the AR rendering of the toy.

Topps:
Topps is leading the way with augmented reality today and trying to ignite new consumer interest in sports trading cards for the digital era. The company enlisted Total Immersion to create a full AR experience that brings Major League Baseball favorites like Ryan Howard to life. At Toppstown fans get the full 3-D experience, can make the tiny players bat and pitch, plus explore stats and game info.

“Coraline”:
The marketing for “Coraline,” the first stop-motion animation feature shot in stereoscopic 3-D, was top notch. One of the highlights was the creation of a digital out-of-home campaign that literally placed consumers in the story by allowing them to see themselves as a part of the film through augmented reality. These “Storescapes” used AR to superimpose images onto pedestrians, so onlookers could see their reflections in a screen with animations including button eyes covering their real eyes.

Toyota IQ and Mini:
Car companies such as Toyota and BMW have been quick to use augmented reality technology to create a 3-D interactive experience for new cars. Toyota employed the technology to show off its new small car, Toyota IQ, which allows consumers to interact with the car and discover its agility and interior space. MINI employed the same strategy for the release of its Cabrio convertible.

Fanta Virtual Tennis:
Fanta uses augmented reality to bring a bit of whimsy and play to its Play On Virtual Tennisoffering. The game enables consumers to play in either single or double mode, facing off with a friend any conceivable location. It’s promises the closest thing to an out of home Wii experience that we’ve seen yet.

As novel and fun as these examples are (and there are many, many more – even GE is in on it), we are still years away from realizing the true potential of augmented reality. The next wave, which is just starting to emerge from the labs, promises a full melding of virtual and physical without markers. Imagine walking down the street and seeing digital overlays on physical locations (bars, restaurants, movies) with adverts, video clips and even avatars.

The primary way to experience this today (albeit with bugs) is with a mobile device, such as T-Mobile’s G1, which runs Google’s Android software. For example, Wikitude from Mobilizy is a mobile travel guide that provides overlays of locale information for more than 350,000 world-wide points of interest. Similarly, Enkin wants to “reinvent navigation, by combining GPS, orientation sensors, 3-D graphics, live video, and several web services into something wholly new. More practically, SPRXmobile and ING deliver a mobile ATM finder for the Netherlands that allows you to locate ING ATMs simply by holding the phone in front of you.

At this moment, augmented reality for marketers is a novel, nifty new technology — but one that will probably grow gimmicky quickly. I’ve personally played with seven or eight demos at this point (many mentioned above) and after the “gee whiz” factor is exhausted, there’s not really much there to sustain any real engagement. Besides, there’s a vague whiff of “Dungeons & Dragons” around this stuff that’s will be hard for most to get over.

Today, the biggest potential is for both geeks and gamers. It’s not hard to imagine how a video-game company could use the technology to literally place consumers into the game. Or how companies like Topps and Legos will further use augmented reality to enable a more enhanced game play experience. Check out WiiSpray for a taste.

Augmented reality has huge promise, but in the short term it’s a niche technology for a niche audience. But, of course, gaining a foothold in the multibillion-dollar gaming industry is not a bad place from which to start. Let’s just hope our desire to hype it AR as the next big thing won’t harm it.

Despite Intriguing Trials, the Technology Remains Is Still Niche

Posted by Garrick Schmitt on 05.01.09

In fact, any planner worth his or her salt can reel off a stream of statistics pointing to advertising’s demise — or lack of effectiveness, at least: Prime-time continues to erode as all the major networks saw significant declinesfor last year’s season; 77% of U.S. consumers trust businesses less than they did a year ago; consumers trust their peers’ opinions online more than any other source and a whopping 83% of Mad Men’s supposedly ad-friendly time-shifted audience fast forwards through commercials according to Tivo. The list goes on and on.

But perhaps it’s not that advertising is failing but that brand experiences (both on and offline) are really what are capturing the imagination of today’s consumer. In FEED, a new report that I authored with my colleagues at Razorfish, we found that digital brand experiences are having an inordinate sway on consumer purchasing habits and brand affinity.

For example, 65% of U.S. consumers report a digital experience changing their perception about a brand (either positively or negatively) and 97% of that group report that the same experience ultimately influenced whether or not they went on to purchase a product from that brand. In a nutshell, experience matters. A lot.

Of course, brands that were “born digital” intuitively know this. Google and Amazon are pioneering experiential brands. That’s why Amazon continues to pour money into improving its customer service rather than run traditional advertising or marketing campaigns. As Amazon CEO Jeff Bezos has said, “We are not great advertisers. So we start with customers, figure out what they want, and figure out how to get it to them.” Zappos (which recently hired Mullen) built its brand the same way, as has Facebook.

But what about more traditionally-minded marketers who weren’t born digital? Can they succeed in an experience-driven world? The answer is “yes” and here are some of the best:

Red Bull: Red Bull basically pioneered the experiential category. Not only did the brand rise to prominence by sponsoring alternative athletes and lifestyles, it went further by creating its own events, like Red Bull’s Flugtag and even its own sports like Red Bull’s Crashed Ice, which takes over old Quebec with a mix of hockey and motorcross. Even the brand’s website has morphed into a blog, much like today’s most popular publishers.

Camper: Most of us in the U.S. think of Camperas purely a comfortable yet stylish shoe brand. But the Spanish company is much more and pursues abrand ethos that’s both traditional, cultural and fashion forward simultaneously. Proof: Casa Camper, stylish (but laid back) hotels in Barcelona and Berlin that embodies the brand’s essence. Ditto for Camper Together which taps up and coming artists to create one-of-a-kind boutiques.

Guinness: Guinness may be 250 years old, but it’s acting like a much, much younger marketer. The company has embraced experiential branding both literally and figuratively with its “It’s Alive Inside” positioning. For its anniversary, Guinness offered upRemarkable Experiences, including a trip into space. It also released a pub-finder iPhone application with a social media twist. More impressively, the brand created the Guinness Storehouse, a seven-story building that functions as both museum and pub, that has now become one of Ireland’s top tourist attractions. And, more recently, Guinness even wired up its rugby team with RFID tags(including balls and players) to capture a whole range of statistics about how fast, powerfully and effectively the game is played.

UNIQLO: Few companies have so used digital like Uniqlo to both build a brand and breakthrough to new consumers — and on a truly global scale.The Japanese retailer surprises and delights consumers at every turn, whether through innovative iPhone applications, calendars, e-commerce, stylebooksand microsites. Uniqlo’s experiential efforts not only express the brand, but reach new consumers who may live thousands of miles away from the nearest retail location.

Virgin America: Virgin America has gone further than most, ensuring that the experience is the marketing — and advertising in many cases. The brand targeted tech-savvy consumers early on with its Red system entertainment console and in-flight WiFi. It showed off its dramatic interiors in promotions with Diggnation and YouTube celebrities; became an early adopter ofTwitter for customer service; and reinforced its brand values through its simple booking engine on VirginAmerica.com. And now, for the holidays, Virgin America is partnering with Google to offer free WiFi for travelers.

Nike: Nike, of course, has been moving in this experiential direction for a few years. ‘We’re not in the business of keeping the media companies alive,” Nike’s Trevor Edwards told the New York Times in 2007. ”We’re in the business of connecting with consumers.” And so they have. The company continually earns kudos for consumer experience breakthroughs like Nike+, its online running community; the Human Race, a global running event; and more recently theLivestrong Chalkbot which enabled users to submit a text message that would be painted (digitally) on the route of the Tour de France.

Experiences, it would seem, are the new advertising. Experiences reach and engage customers in new and more meaningful ways, they promote “trial” over simply messaging and — quite frankly — experiences are much more suited to our digital era when everything is just a click away. Our challenge now, as marketers, is to make sure that our products and brands can actually live up to the experiences that we advertise.

Red Bull, Virgin America, Uniqlo and Guinness Lead the Way

Posted by Garrick Schmitt on 11.10.09

http://adage.com/digitalnext/post?article_id=140388

Savvy marketers know how to balance defined, actionable goals with the inherent flexibility needed to achieve them. But in the brave new world of social media where the possibilities for both success and failure are overwhelming, competing brands are quick to recognize the success of others, and implement similar objectives. When this happens, however, brands begin to lose their edge, uniqueness, and focus.

Establishing a presence on Facebook, Twitter, YouTube, Delicious, FourSquare or blog posts isn’t enough. Brands must back up their social tools with timely, influential content that consumers will respond to – content specific to particular brands distributed via various forms of online platforms from videos and interactive images to networking groups and empowered brand advocates. Does this sound familiar?

It should. Here comes that word we all hate to love: synergy.

Sean Corcoran, an analyst at Forrester Research, investigated the three types of media that organizations have to work on synergizing today: owned, paid, and earned.

Owned media is that which companies control. Websites, blogs, and twitter accounts help to build long-term relationships with customers and niche markets through an efficient, yet somewhat unpredictable model.

Paid media combines the more traditional advertising methods with the Internet through display ads, sponsorships, and key word searches. While this type of promotion is in demand by advertisers and host sites, the payoff is still fuzzy due to consumer’s resistance to clutter.

Earned media is the latest viral marketing where brands have very little control over the impact, but when done correctly, it can take off. Burger King knows this all too well.

In the end, the smartest companies are going to be the ones that fine-tune their new media goals and integrate all of the appropriate tools together for one cohesive strategy.

“Increasingly, interactive marketers are being asked to manage a wide range of paid and unpaid marketing communication – despite the fact that many marketing departments are still organized around traditional paid marketing channels,” Corcoran noted in his report. “All types of online media (whether ‘earned,’ ‘owned,’ or ‘paid’) can play specific roles in meeting marketers’ objectives – especially when seamlessly working together.”

Posted by Deborah Dunham on February 12, 2010

http://www.brandchannel.com/home/post/2010/02/12/Are-Brands-Still-Anti-Social-With-Social-Media.aspx

“There is lots of talk but not so much action; there’s also too much focus on what we can’t do rather than what we can,” he elaborates. He doesn’t dismiss the fact that the speed of local internet connection is an issue. Nor does he overlook that most of the population does not have access to the internet. As for not every product or service being suitable for online, even that can be worked around.

He says: “Not everything requires speed, and sometimes it is the simple things that are overlooked.” Case provides a campaign to drive Cosmo audiences online as an example: readers were mobilised by sms messages and traffic peaked by 90%.

Speaking at Tony Koenderman’s brainstorm conference Catch a Wake-up, which was attended by senior advertising and marketing people, Case said more homework had to be done to understand interconnectedness between brand segments. This is the starting point to recognising how an audience can connect and interact with the marketer.

Case presents digital as not an addition, as it is often viewed, but rather an added medium that should receive as much consideration as any other. As much as timing can make or break the work, so can the briefing. Simply dictating to digital agencies and not allowing them to be a part of the process and discovering what a brand needs often results in a copy-cat mentality. All that happens is much of the same, lacking in creativity and boring consumers.

The answer: get the digital experts in from the start and strategise with them. Educating clients will only happen if they are engaged and begin to understand what it takes to produce the end result.

“Own a unique idea and direction and stick to it,” emphasises Case. Most importantly, stop making excuses and dithering until you are ready to implement a digital strategy.

- Fin24.com

Nov 12 2009 19:26 Poloko Mofokeng

http://net-145-057.mweb.co.za/AdReview/Advertising-and-Marketing/Take-online-ads-seriously-20091112

Starting in August, Facebook will promote magazine brands’content and subscriptions through its news feed thanks to a landmark partnership with mega-magazine publisher Time Inc. that aims to reach new readers through social media networks – in this case, Facebook “friends.”

Facebook users can share magazine links with their friends, and those links provide an option to subscribe, all while staying within the social network.

The idea, suggested by the Magazine Publishers of America, is something of a no-brainer as Facebook claims over 450 million users.

With one million new users signing up daily, the potential for subscription sales and to boost magazines’ brand recognition is substantial.

The business model is also noteworthy. Time Inc.’s Synapse is handling the magazine subscription piece for Facebookers, while Alvenda is enabling the e-commerce transactions for Time Inc. and Facebook.

Facebook won’t take a cut of revenues, passing them back to Synapse, Alvenda and the magazine publishers. Their in-kind revenue is laying claim to one more sea change as the lead brand in the tsunami of digital media meets the social networking consumer – at POS.

Alix Hart, Syapse’s VP of marketing, commented in an Ad Age article, “Consumers don’t want to leave where they are on the web, wherever they are. Facebook is a place where we think that over the coming year there are going to be more and more opportunities to present magazine offers in a really relevant way to consumers, as they’re starting to share magazine content in a much deeper way than ever before.”

Selling print subscriptions online is not new. Last year, Time Inc., News Corp., Conde Nast, Hearst and Meredith created a digital storefront to sell subscriptions and custom editions for e-readers and computers.

Posted by Sheila Shayon on May 13, 2010

http://www.brandchannel.com/home/post/2010/05/13/Facebook-Helps-Magazines.aspx

Before performing media oncology tests and discussing possible treatments, let me describe which soapbox I’m standing on. Each time I raise the issue of advertising trailing behind the digital train, I get two responses: media execs nod sagely, and later explain how they intend to progressively circumvent the ad food chain; advertising people breezily dismiss my remarks: ‘Anyway, you don’t like us’. Untrue.

First, I’m in the same boat with many of my friends in the news media: a significant part of my income, past and future, rides on advertising. Therefore, my pragmatic self-interest is to see digital advertising thrive.

Second, over my 25-year career, I worked with ad people in many occasions. In the late 90′s, for a year, I even worked at a large ad agency, trying to evangelize multimedia. I met interesting people there, even though I quickly realized we had little in common. And my last job as a managing editor was at a free newspaper: 20 Minutes — 100% dependent on advertising.

I am way more open to this business than most of my journalist colleagues are. No ideological posture or agenda on my part. Today’s note is the result of two years of observations and conversations with digital editors and publishers I met in Europe, US or Asia.

Let’s face it. On digital medias, advertising hasn’t delivered. In the news business, we have a rule of thumb: an electronic reader brings 15 to 20 times less in advertising revenue than a print reader does. I’ll stop short of saying this dire state of affairs is only attributable to advertising. Between inadequate interfaces, poor marketing, and the certainty that, just by itself, intellectual superiority entitles to success, medias carry their share of responsibility in this situation. But, for the most part, it is the advertising community who missed the digital target.

Digital advertising sucks. Both on the web and on mobile. Two main reasons for this.

#1: Poor design. Where is the creative talent? Not in digital, that’s only too clear. Let’s face it: most of banners, skyscrapers, sliders, pop-ups, you name it, merely act as reader repellents. Judge by yourself.

These “creative works” end up as fodder for ad-blocking systems. Unfortunately, these defense mechanisms are thriving. A Google query for “ad block” yields 1.25 million pages which send to dozens of browser add-ons. On Firefox, AdBlockPlus is the most used extension with more than 80m downloads and more than 10m active users. The same goes for Chrome whose ad-blocking extension is downloaded at a rate of 100,000 times a week and now has over one million users. For Internet Explorer, there are simply too many add-ons to count.

I spotted this comment in an excellent Media Guardian ad blocking story.

“I work for a digital advertising agency. Along with microsites, iPhone apps and long-form digital content, I make banners. Shitloads of them. And I use Adblock Plus. I also advise my friends and colleagues to use it too. This is because most advertising, online or otherwise, is utter crap. And banners contain some of the worst of the crap. Flickering, squiriming, farting, buzzing crap”.

Another sign of the ad design failure is Apple’s decision. Not only does Apple enter the mobile ad business as a sales house, but Jobs’ company will also design ads, for a hefty $50,000 to $100,000 fee. Apple’s message is the profession needs to reboot advertising graphical standards. How strange it is to see a technology company giving lectures on design to the very people who prided themselves for their creative brilliance. If this is not a blow…

#2: badly sold, badly bought. A high-tech product sold and purchased in the most low-tech way. One after the other, most technology aspects of the advertising business have slipped out of the hands of those who were supposed to own it: ad serving, data management, behavioral targeting, analytics… All are now controlled by engineering-driven companies.

In the process, the added value of media buying outlets has shrunk to a bare minimum, in which a bunch of twenty-something are negotiating discounts with their counterparts in media. That’s the exact opposite of yield management.

Everyone laments that Google, the ultimate geek machine, has absorbed a large part of the digital advertising business, but that’s just the logical consequence of an inability to invest in technical talent.

The digital world is not the only one affected by advertising’s creative weakness.Over the recent weeks, I met some managers of RTL, the n°1 French radio. Their take:

• True, the overall quality of ads we air is falling.
• We know that such degradation contributes to the erosion of our audience numbers; listeners tends to shift to quieter listening such as public radio. (This is especially in the morning time slot where commercial stations make most of their revenue, hence their concern).
• We try to limit the damage by screening and sometimes rejecting the most inaudible ads, but economic conditions don’t help: we can’t afford to lose any campaign on the basis of aesthetic considerations.
• Fact is: because they don’t make enough money on ads, creative agencies are simply not motivated to invest in the talent needed to develop good ads.

Three trends should cause the advertising community to stop and think harder about its future.

1. The technology dimension of the business will intensify. Competence and imagination will tend to be in the hands of small companies. As they already do, the biggest and the smartest ad outlets will want to acquire such talent pools. But they will face tech companies ready for a bidding war; see what happened in the mobile ad sector with the AdMob’s acquisition by Google and Quattro Wireless taken over by Apple – with the subsequent launch of iAd, (on the subject, see this preset search on TechCrunch).
2. Media will have a strategic interest in boosting their CRM. They’ll invest in developing this crucial asset for their digital properties.
3. Media will tend to move up the ad production chain by having their own creative teams, working more closely with big advertisers; (see this Australian example mentioned in a previous Monday Note Digital Takeover, The Fairfax way).
   In that matter, Apple could give an interesting pitch: “We are the media, we spent time and money designing a good interface; we don’t want our work ruined by sub-standard advertising; let’s work directly with brands and concoct great campaigns that will benefit us, the advertiser and the reader”. This could become a broader trend, spreading to other medias, such as broadcast radio, neglected by today’s ad creatives.

Does this lead to the extinction of big advertising shops? Certainly not. First, there is the inertia factor; these companies remain quite wealthy thanks to decades of solid rainmaking. Second, agencies still enjoy profitable strongholds in which their value added is undisputed such as outdoors display, television and print — and the associated media and strategic planning. Third, they have no shortage of good managers able to organize turnaround… in due course.

It is hard to reform a fat-cat culture – from heavy margins, captive clients, cozy cronyism – to a more agile one, where technology and innovation drive the business. In this very respect (again), advertising and news media converge: both have been late in hiring developers able to understand the specifics of their business. Because of their intrinsic vulnerabilities, media have been the first to take a hit. If advertising wants to avoid a Jivaro-like downsizing, it needs to listen to the clock: it’s ticking away.

May 24, 2010 – 5:29 pm | Edited by Frédéric Filloux

http://www.mondaynote.com/2010/05/24/the-lethal-self-complacency-of-advertising/

Speculation has followed Peter Chernin since he left News Corp after serving under Rupert Murdoch as COO. As with many moguls in that stratosphere, there was no rush to join another big company. Having worked with the best in the business, Chernin now wants his own empire to run.

According to the New York Times, on Chernin’s drawing board is a two-pronged vision, with one foot in the old-world and the other stretching towards all things new.

He’s hanging out his own shingle with Chernin Entertainment. Chernin has already inked a deal with his former colleagues at 20th Century Fox for a Planet of the Apes prequel, Rise of the Apes. He’s also teaming with Steven Spielberg on Terra Nova, a sci fi TV series about a modern family that travels to prehistoric times.

It’s the other side of his new company that’s decidedly more futuristic. He’s been hiring B-school grads to scour the world for cool new technologies and digital delivery platforms for entertainment media.

Given recent debacles in the media world, including News Corp’s $580 million MySpace acquisition in 2005, and iconic studios like MGM up for sale, an unswerving commitment and unwavering vision are requisite in today’s economy to start a media venture of this scale.

“If you’re going to back somebody, back somebody who actually seems to have a record of respect for the shareholders and the value of the enterprise,” as Jonathan A. Knee, co-author, The Curse of the Mogul: What’s Wrong With the World’s Leading Media Companies, told the New York Times. “It’s certainly better than the alternatives, and there are plenty of the other kind around.”

Chernin certainly has the pedigree – and the means. The plan is to finance projects one at a time, and one backer already in the queue is Jonathan Nelson of Providence Equity Partners, a co-owner of MGM. In addition to his generous package from News Corp. on leaving last June, he is well connected – Hollywood and Philadelphia style.

Last year he became an adviser to Brian Roberts, Comcast CEO, as he navigated the path to acquiring NBC Universal. The two are already in business together, as investors in a Martha’s Vineyard restaurant.

In a keynote chat yesterday with Roberts at the annual US Cable Show, Chernin dodged inquiries about his future, quipping only, “I’m here to dispel any notion that I’m going to be a talk show host.”

A recent rumor roiling the digital world is that Chernin is hatching a deal with Microsoft to develop an Xbox “TV” channel for young males. The suggested model adds a dollar or two to the monthly Xbox Live subscription fees for additional, original programming.

It will be interesting and instructive to watch the making of a new media empire, with an old school mogul turning new tricks, and a refreshed vision that straddles both analog, digital, and the white spaces in between. Back to the Future…redux?

May 12, 2010

http://www.brandchannel.com/home/post/2010/05/12/Peter-Chernin-New-Company.aspx