Online Heads for 10% of Total US Ad Spend

MARCH 31, 2008

When the going gets tough…

Sub-prime mortgage meltdowns. Floundering credit markets. Burst housing bubbles. Trillions wasted in war. Gold hitting $1,000. Tumbling stock markets. Falling payrolls. Oil at record highs. The dollar at record lows.

Is it any wonder that—even in a year of the Olympics and a presidential election—US advertising is struggling?

Almost all US advertising, anyway.

In the midst of the doldrums, like the Energizer Bunny, Internet advertising is still going strong.

”Even if its rate of growth is declining slightly,” says David Hallerman, eMarketer Senior Analyst and author of the new report, US Online Advertising: Resilient in a Rough Economy. “US online advertising is proving to be far more robust than other media channels.”

eMarketer predicts that this year online advertising will grow to nearly $28 billion and account for 8.8% of total US ad spending.

”Even more impressively,” says Mr. Hallerman, “in 2009 online advertising will reach $30 billion and account of fully 10% of all US ad spending.”

It is important to note that even as growth rates decline through 2009, overall Internet ad spending increases will remain in positive territory, the mid-teens or higher through 2011.

”This growth, even if less than before, will surpass all other major media,” says Mr. Hallerman.

Don’t make the mistake of thinking the Internet is impervious to downward economic pressures, however.

”Whatever label you slap on the current economic climate, US ad spending both online and offline will be shaped by overarching business trends,” says Mr. Hallerman. “While Internet ad spending is in no way immune to a recession’s impact, it is more resistant to ad spending cutbacks than are other media.”

Get your fair share of the ad network pie

March 30, 2008 @ 4:06 pm · Filed under Research, Content Proliferation, Ad networks ·

The buzz around ad networks and ad serving technologies couldn’t be louder: The Google/DoubleClick merger is moving forward, new ad exchanges continue to pop up on a monthly basis, and just last week Forbes and ESPN followed Martha Stewart’s lead to start their own ad network.

Last week’s actions prove that publishers want a piece of the online advertising pie. After analyzing content monetization across 68 million domains, it’s clear that publishers have a huge opportunity to collect revenue directly from ad networks. (If you are like me and need a refresher on the difference between an Ad Server and an Ad Network, there is a good description here.)

What we did:

We analyzed the ad-server calls across 68 million domains captured from our January, 2008 crawling operations. The data was joined with January, 2008 unique user data from our friends at Compete to determine market share numbers.

What we found:

• DoubleClick and Google dominate overall market share capturing 35% and 34% of unique users, respectively.
• DoubleClick owns the head and Google owns the tail. For sites with over 1MM monthly unique users, Doubleclick has a 48% share, a 3x advantage over 2nd place Yahoo. For sites with less than 100k monthly unique users, Google has an 8x share advantage over 2nd place MSN.
• Professionally produced content is widely proliferated across highly trafficked, commercial sites, representing an untapped opportunity for publishers to increase their revenue through content licensing, ad revenue share or link-building.

Ad Server Market Share

Ad Server	Monthly Unique Users	Market Share	Unique Domains	Market Share
Google	1,107,489,739	35.30%	91,462	77.28%
DoubleClick	1,079,203,140	34.39%	6,748	5.70%
Yahoo	362,201,931	11.54%	5,147	4.35%
MSN	309,290,121	9.86%	8,099	6.84%
AOL	156,109,326	4.98%	1,976	1.67%
Adbrite	73,446,676	2.34%	3,575	3.02%

Ad Server Market Share Grouped by Site Traffic

Ad Server	<>	100k – 1MM UU’s	> 1MM UU’s
Adbrite	4.07%	4.90%	0.48%
AOL	1.95%	6.55%	5.74%
DoubleClick	9.13%	29.92%	48.04%
Google	71.38%	41.56%	15.85%
MSN	6.57%	6.30%	12.85%
Yahoo	4.66%	7.33%	16.49%

Conclusions:

• The GoogleClick combination is an ad-serving juggernaut. They should be at the top of your call list to collect a % off of every ad dollar made off your content.

• Content is proliferating all over the place - Attributor finds an average of 20 different copies for each article we track.

• There is a lot of money at stake. 64% of the copies have ads on their pages and most republishing is on sites with > 1MM monthly unique users.

• It’s an SEO goldmine. 57% of the copies we find do not link back to the original sites.

Stay tuned for regular reports on the pace at which articles, images and videos are spreading across the web and implications for the online content economy.

Methodology notes: This report represents a snapshot of ad server distribution in January, 2008 across 68 million domains Less than 5% of the domains contained more than one ad server call – in these cases, the traffic for the domain was associated with each ad network found. We did not attempt to de-duplicate the unique user numbers.

Spending on Alternative Media Jumps 22%

Marketers Follow as Consumers' Broadband Use Surges

By Jonathan Lemonnier

Published: March 26, 2008

NEW YORK (AdAge.com) -- Spending on alternative media hit $73.43 billion in 2007, a 22% increase over the previous year, and will continue to grow, according to PQ Media's Alternative Media Forecast: 2008-2012, released today. The research firm tracked 18 digital and nontraditional segments, with a combined 16.1% of total advertising and marketing dollars in 2007, up from 7.9% in 2002, yielding a compound annual growth rate of 21.7%.

The forecast predicts a 20.2% increase over the next year, to a total of $88.24 billion, and a compounded annual growth rate of 17% for 2007-2012, reaching $160.82 billion. By then, alternative media will represent 26.6% of all advertising and marketing dollars.

'Where the money is going'
The upswing is as much a result of the effectiveness of new media in a fragmented market as it is from a lack of confidence in traditional media, said PQ Media President Patrick Quinn. "Traditional ad budgets have been going down, but spending has remained stable. This shows where the money is going," Mr. Quinn said.

"There is a lack of standards in these new areas," Mr. Quinn added. "Digital out-of-home advertising is getting recall rates as high as or higher than traditional mediums, but there are few studies on this. They're going to need more and deeper metrics: The bar is being raised across the board."

Alternative advertising, including online, mobile, entertainment and digital out-of-home advertising, saw spending rise at a compounded annual growth rate 25.8% to $39.22 billion in 2007, accounting for 17.7% of all ad spending that year (compared with 7% of all ad spending in 2002), and grew at a compounded annual growth rate of 26.2% from 2002 to 2007.

Online and mobile advertising spending --including search and lead generation, online classifieds and displays, e-media, online video and rich media, internet yellow pages, consumer-generated ads, and mobile advertising -- reached $29.94 billion in 2007 (up 29.1% compared with 2006), a compounded annual growth rate of 31.4% over the 2002-2007 period. The category received heavy infusions from brand marketers trying to reach key demographics that have migrated online and to wireless thanks to wider broadband adoption.

Entertainment technologies
Entertainment and digital out-of-home advertising -- including local pay TV, digital out-of-home media, video on demand, interactive TV, and digital video recorder, video game, home video and satellite radio advertising -- increased at a compounded annual growth rate of 15% from 2002-2007, and rose 16.2% over the previous year to $9.28 billion in 2007. The growth was driven by rising adoption of entertainment technologies, including ad insertion technologies and ad platforms to reach young audiences.

Alternative marketing -- including branded entertainment and interactive marketing -- hit $34.21 billion in 2007, a 17.9% rise over the previous year, and grew at a compounded annual growth rate of 17.5% from 2002-2007. This brings its share of total marketing expenditures up to 14.5% in 2007, compared with 8.7% of total spending in 2002.

Branded-entertainment marketing -- including event sponsorship and marketing, paid product placement, advergaming and webisodes -- also saw and increase of 14.7% to $22.30 billion last year, and climbed at a slower compounded annual growth rate of 13.4% from 2002-2007.

New-media strategies
The deployment of new-media strategies focusing on better interactivity, entertainment and engagement than traditional media was the driving factor.

Thanks to strong gains in segments that reach affluent and influential consumers, interactive marketing -- including e-direct marketing, word-of-mouth marketing, and e-custom publishing -- saw big increases in 2007 of 24.4%, reaching $11.9 billion, compared with the previous year, and a compounded annual growth rate of 28.6% over the 2002-07 period.

"The top-growing segments all share the same similarities," said Mr. Quinn. "They tend to be influential or youth demographics, the coveted 18- to 34-year-old, mostly male demographic with a strong digital component."

Ad Spending Barely Budged in 2007

U.S. Total of $149 Billion Represents Tiny 0.2% Increase

By Nat Ives

Published: March 25, 2008

NEW YORK (AdAge.com) -- U.S. ad spending growth ground to a halt in 2007, climbing a negligible 0.2% to reach $149 billion last year after a 4.1% gain in 2006, according to data released today by TNS Media Intelligence. Ad spending in the fourth quarter declined 0.1% from the fourth quarter one year prior.

The stall in spending growth isn't a shock, given the general financial uncertainty and specific problems in high-spending categories like domestic auto or housing. But its arrival highlights the speed with which market conditions have gone south. It was only January 2006 when TNS predicted that 2007 would produce a 2.6% gain, itself considered a "tepid" rate of growth. Now tepid looks positively sunny.

"Marketers are being cautious in the face of uncertainties in the economy, the risk of consumer spending continuing to erode, retail sales beginning to ease and the rate of growth in corporate profits slowing," said Jon Swallen, senior VP-research at TNS, a widely followed provider of ad industry information.

Online and magazines are bright spots
Some sectors, of course, fared better than others. Online ad spending continued to grow faster than any other media, notching a 15.9% increase to reach $11.3 billion, although its rate of growth fell from 17.3% in 2006. Consumer magazines grew 7% to $24.4 billion. Cable TV expanded 6.5% to reach $17.8 billion. And outdoor rose 4.9% to $4 billion.

But spending on network TV slipped 2% to $22.4 billion. Spot TV, suffering tough comparisons against a 2006 that included a surge of political advertising, sank 10.2%. And syndicated TV programming slid 1.5%.

Worse, newspapers and radio saw their declines accelerate in the final months of the year. Local papers took in 5.6% less, national papers lost 5.5%, and Spanish-language papers fell 2.5%. Radio declined 3.5%.

Spending by direct-response marketers surged 17%, while personal-care products got a 10.1% spending boost, financial services grew 5.4% and local services and amusements added 2.8%. But domestic auto spending dropped another 7.1%, import auto sank 6.6% and telecom fell 4.1%

P&G ups its spending
Procter & Gamble, again the largest advertiser, increased its spending 5.6% to total almost $3.5 billion. But seven of the other top 10 spenders cut their budgets.

"It's this slow, protracted unraveling," Mr. Swallen said. "There hasn't been any dramatic event, any sharp inflection point or a turn in the road you could look at and say, 'That was when we went off course.' We've been gradually veering onto this meandering path and we're just continuing to meander." This year so far, he added, looks like more of the same.

The Twenty-Five Most Valuable Blogs

There is no way to accurately put a value on blogs and blogging companies. All are privately-held and, as is true with many content businesses, the value of the company is based on what a buyer will pay. The figures we have put together look at advertising revenue and income from related businesses like conferences. We have not included blogs affiliated with larger media companies. It is too difficult to break-out what their traffic may be and how their income is divided with the parent. Some blogs are fronts for other businesses like O’Reilly Radar Those have been left out. A lot of big blogs do not make the list because they bring in very little commercial revenue. Treehugger probably falls into that category.

We looked at unique visitor and page view measurement services when possible: Alexa, Compete, and Quantcast. These services are often criticized for estimating website traffic too low. We have tried to take that into account. We also looked at data at blogs which gave their own ad rates and page views. Our estimated page CPMs are based on quality of ads and number of ads on each page. We looked at margins based on headcount and our opinion of how may of the people are full-time. Current growth rate based on our measurement sources was also taken into account. A site with traffic doubling year-over-year was give a higher multiple than one with flat traffic. Because not all blogs make money, we looked at multiples of operating income and revenue. These are completely estimates because of the tiny number of blogs which have been sold and lack of information about what the multiples may have been.

Finally, large blogs with big “moats” got higher multiples than smaller ones. Blogs with one founder who contributes a substantial amount of the content got lower multiples than those with several good writers. Blogs which appear to be well-funded or have operated for a long time got better multiples than newer sites or ones where it was not clear that there was a big pool of money behind them.

In short, the task of valuing the largest blogs is impossible. That makes it much more interesting than writing about the P/E at General Electric.

1.The Gawker Properties: $150 million. Gawker, ValleyWag, Gizmodo, Wonkette, and a number of smaller websites. The company claims 30 million monthly unique visitors. According to audience measurement service Quancast, that number is fairly close. Compete shows that traffic to most of the large sites in the group more than doubled from a year ago. If the sites generate one-and a-half page views per unique visitor and the total CPM value of the multiple advertisers on each page is $20, Gawker is an $11 million business which is still growing quickly. The company does not appear to be staff-heavy, so it is imaginable that the margins on the business are 50%. Would the business be worth 15x revenue or 30x operating profits? Could be.

2.MacRumors: $85 million.Blog knows more about Apple than Apple management does. It ranks No. 2,700 in Alexa. Compete shows 544,000 visitors and moving up quickly. Quantcast puts global unique visitors at 5.3 million. Page views at 33 million, which seems a bit high. Advertising looks high-end and solid, probably at least $30 per page CPM. Business should do at least $12 million and have a high margin, estimated at 60%. At a 12x multiple.

3.Huffington Post: $70 million. Several websites commented that HuffPo might be worth $100 million when it raised $5 million late last year. Arianna Huffington said to Portfolio that the business was in the process of becoming profitable. In late 2007 management claimed that the website had 4 million unique visitors per month and would bring in $7.5 million for the year. The website is now in the top 1,000 according to Alexa and its ranking has been climbing, probably due to the election. Compete shows a similar trend with the website reaching over 1.8 million people in February, up 245% from the same month last year. The problem with the business now is that its value has probably peaked. The huge increase in visitors is likely to fall-off once the election is over. HuffPo has tried to building out other content sections, but it is likely that they cannot replace the visits from the core audience which visits the site for political comment. That means that the company will have all of the costs (40 or 50 people) and a falling number of visitors. Revenue should actually begin to fall in 2009. With a business which is likely to shrink next year, it is hard to believe that the company is worth more than 10x revenue.

4.PerezHilton: $48 million. Is No 755 in Alexa. Compete show 1.3 million visitors a month. Quantcast, probably the most reliable of the measurement tools when the sites use its code shows 10.1 million uniques. Quantcast puts month page views at 191 million. That seems high. It would put revenue at $900,000 million a month with a $5 CPM. The site is as much a personality cult as it is a destination. But, it probably runs with margins over 50%. That would put operating profit at $11 million. Founder is central to business. CPMs are low. Give it 8x operating profits

5.TechCrunch: $36 million. The TechCrunch network claims almost 3.2 million unique visitors and 14.6 million page views. The page view number sounds very high. It would be an unusually high PV to unique ratio. The company also has a conference business. Alexa rates TechCruch at the 951st most visited site in the world, but also shows that the company’s audience is not growing. Compete shows the site’s audience as growing but having a modest 900,000 visitors in February. Based on the advertisers running at TechCruch and the high value of its concentrated audience, the CPM yield on each page could certainly be $30. That would put revenue from advertising at $438,000 a month or $5.3 million a year. Ad another $600,000 for conferences based on 500 attendees at $1,250 per person. TechCruch is a $6 million business. With people and conference costs, the firm’s margins are probably about 40%. The firm does have a fairly large staff and relies on founder Michael Arrington for a lot of its best content. That is a risk. Fifteen times operating profit in case the founder is hit by a bus.

6 (tied): Ars Technica $15 million. High church high tech blog. Sites ranks 2,500 in Alexa. Compete shows over 800,000 visitors. Audience is growing very rapidly. Quancast has reach at 1.1 million. Ads are all premium clients. Site should be getting $40 per page CPM. Page views are probably six million a month. Revenue of almost $3 million. Site appears to have high end edit staff writing. Margin estimated at 35%. High-end site should be very valuable. Fifteen times operating profit.

6 (tied): Seeking Alpha $15 million. Site is the world’s largest collection of financial blogs. It is No. 6,600 in Alexa. Quantcast puts reach at just under 400,000. Compete puts number at almost 700,000 and growing. A huge amount of content set up to drive multiple page views on the site. Could be four million page view a month. Several large advertisers so CPM on each page is probably $40. Revenue of about $1.9 million a year. Large staff. Put margin at 10% or even a loss. Multiple of 8x revenue for financial site which should get above market value.

8 (tied): Drudge Report $10 million. The blog has over 1.1 million visitors a month according to Quantcast, but it is not being tracked using the measurement company’s code. Alexa has it ranked No. 1540. Compete says 1.8 million visitors a month. Estimate nine million page views a month. Very little advertising on the site. A business that is probably not doing more than $1.6 million a year. Probably a 60% margin. Low operating costs. Ten times operating income to get value.

8 (tied): Mashable $10 million. The site claims five million page views. Site is No. 2000 in Alexa. Compete shows 735,000 uniques. Modest ads. Should have fairly high CPM, $30 per page. Revenue of $2.1 million, with 50% margin. Social networking news is hot. A 10x multiple of operating income

10. GigaOm: $8.4 million. This is one of the top tech sites in the world. Its network ranks 12,800 in Alexa. Compete shows 225,000 visitors. Quantcast shows global visitors at 400,000. CPMs should be very high and large number of ads on page. CPM at about $40 a page. Pages views estimate at 1.4 million a month. With additional small related businesses revenue total for company at $1,200,000. Has a few full-time people, so put margin at 35%. Discount on multiple because Malik is so important. Twenty times multiple.

11. Boing Boing: $8 million. Gadget sites are at the high end of the blog world order. No. 3700 in Alexa. Quantcast says 8.7 million page views. Compete puts visitors lower at under 700,000. Not much advertising on the site. Federated appears to be doing the selling so only 60% going to site owner. At a $15 net CPM, revenue should be $1.6 million. Type of content could make it valuable to big media company. If margin is 40% at give 12x operating income

12. Silicon Alley Insider: $5.4 million. Site covers media and tech with New York focus. It ranks 13,100 in Alexa. Compete shows 200,000 unique visitors. Quantcast shows 600,000 and 1.5 million page views. CPMs and high, numbers of ads are modest. $30 CPM. Annual revenue run rate of $540,000. Large staff, probably not profitable yet. Very rapid growth. Strong financial backing. Goes at 10x revenue.

13. ReadWriteWeb: $5 million. Everything about tech, almost too much. The blog ranks 6,200 in Alexa. It is actually several sites. Compete puts this at 300,000 visits but growing extremely fast. Quantcast puts uniques at almost 800,000. High value advertisers probably yield $35 CPM. Estimate four million page views. Total revenue of $1.7 million. High editorial expense. Margin may be as low as 20%. Site is not as big as some others in general field. Multiple at 15x.

14. Paidcontent.org: $3.5 million. All about media of every kind. It ranks 20,200 in Alexa. Compete estimates 134,000 unique visitors and growing quickly. Page views at one million a month. High CPM and multiple ads for $40 yield. Revenue of $480,000 for ads. Conference business looks like, at the rate charged per person, the business might add another $700,000. Total revenue of $1,180,000. Expensive to run. Put margin at 20%. High multiple for operating income of 15x.

15 (tied) Search Engine Land: $2.7 million. The site, everything readers would like to know about search engines, is ranked No. 4,600 in Alexa. Quantcast has its code on the site so their numbers are probably fairly accurate. That shows 225,000 unique visitors and over 500,000 page views. The page CPMs for this site appear to be very high, probably $50. Revenue at $300,000 a year. At a 60% margin and 15x multiple.

15 (tied) Smashing Magazine: $2.7 million. The content centers on graphics, animation, and design. It ranks 3,000 in Alexa. Compete says 325,000 visitors. Quality of advertisers looks strong. CPM per page of $30. One million page views a month. Business generates about $360,000 a year. At 15x multiple and 50% margin.

17, DListed: $2 million. Site insults celebrities. Blog ranks No. 17,300 in Alexa. Compete shows 350,000 visits. The site probably has about 1.2 million page views. A lot of ads on each page, but probably not very high CPMs for this kind of gossip content. Peg it at $30 CPM. That is $432,000 in revenue per year. The site seems to have a lot of personnel costs. The operating income is probably around $200,000. At a 10x multiple.

18.Daily Blog Tips: $1.8 million. Blog is paradise for bloggers. Site is ranked No. 14,500 in Alexa. Compete says the site has 120,000 visitors and is growing quickly. CPMs look high, perhaps $40. Page views at 500,000. Revenue of $240,000 and 50% operating margin. Fifteen times yield.

19 (tied) Techdirt: $1.5 million. The insight company for the information age. Or, so they say. It ranks 25,600 in Alexa. Quantcast shows 400,000 unique visitors and almost one million page views. CPM on the pages look to be very high but number of ads is low, probably $20. Close to $250,000 in annual revenue. Margin of 50% and 12x op income.

19 (tied): Neatorama: $1.5 million. The blog is an amalgamation of trivia. It ranks 9,900 in Alexa. Compete shows 300,000 visits and growing very fast. Site may have 1.5 million page views. Volume of ads is light. Fifteen dollar CPM would be good. Revenue of $270,000 a year. Margin of 60%. At a 9x multiple.

21 (tied): BuddyTV $1 million is too much about television. It ranks No. 4,400 in Alexa. Compete shows 800,000 visitors. Probably running two million page views. Advertising is weak, maybe $10 CPM. Revenue at $250,000. Margin 40%. Not terribly distinctive content. Give 10x op income for a network TV or cable buyer.

21 (tied):The Superficial $1 million. About women in bikinis, mostly. It ranks 2,500 in Alexa. Quantcast puts unique visits at 420,000. Compete has 522,000 visits last month, but dropping sharply. CPM here is low. Bikini sites don’t draw the high end marketers. $10 per page, if they are lucky. Probably 1.7 million page views. Annual income of $200,000. Low multiple on 50% margin.

23. Talking Points Memo: $860,000. A news commentary site. It ranks No. 13,000 in Alexa. Compete show 233,000 visitors and rising fast. Ad sales look weak, perhaps $15 page CPM. At one million page views a month, annual revenue would be $180,000. High margin of 60%, but low multiple for medium sized “news” site. Eight times operating income.

24. Travelpod is a travel scheduling and planning site. Blog ranks 9,700 in Alexa. Different model than most. Sells links in sections on airlines, car rentals, hotels, and travel packages. No way to value the site, but should have ad a real benefit to a large travel e-commerce site. Very likely to be in Top 25 on value.

25. 24/7 Wall St.: N/A

Douglas A. McIntyre

Who's Spending on Social Networks?

MARCH 28, 2008

Big spenders may be in the minority.

While social networks are struggling with how best to monetize their millions of users, some marketers have yet to commit major budget to the channel.

One-third of US marketers and agencies surveyed in an iMedia Connection poll in March said that they planned to spend $300,000 or less this year on social network marketing. The poll was conducted among attendees at the recent iMedia Breakthrough Summit.

"At those amounts, social network spending may still be categorized as experimental for many marketers," said Debra Aho Williamson, senior analyst at eMarketer.

To be clear, the poll was not conducted among a representative sample of marketers. However, it is useful in a directional sense. The 29% of marketers polled by iMedia Connection who plan to spend $2 million or more will help social network ad spending add up.

eMarketer predicts that US online social network ad spending will near $1.6 billion this year. The figure includes all forms of advertising appearing on social network sites, including branded campaigns as well as search, video, local advertising and ads delivered via ad networks.

"As in many other developing advertising markets, much of the spending on social networks is driven by leading-edge marketers who are willing to take risks," Ms. Williamson said.

Estimates of the exact percentage of marketers using social networks vary by source and methodology.

October 2007 studies by CoreMetrics, the IAB, Prospero Technologies and others found that anywhere from one-fifth to nearly one-half of marketers used social networks. Differences hinged on whether or not marketers were already using social networks or intended to use them, and if the marketers considered themselves to be digitally savvy or not.

AOL Ad Project, 'Platform A,' Plots Plan B

Digital Effort Aiming To Unite Multiple Fronts Faces Various Obstacles
By EMILY STEEL
March 26, 2008; Page B6
Over the past two years, Lynda Clarizio has helped build Advertising.com, AOL's ad network, into one of the hottest properties in online advertising. Her reward: She gets to try to clean up one of the Internet company's messiest divisions.

Time Warner's AOL unit is aiming to transform itself from an Internet service provider into a full-service digital-advertising business. To that end, it has spent about $1 billion to buy seven ad-technology firms with different areas of expertise, from behavioral targeting to video ads. The next step is to knit them together with Advertising.com -- an entity AOL has dubbed Platform A, but has yet to take to market.

AOL's future largely hinges on the success of that transformation, which involves aggressively slashing costs, forsaking billions of dollars in overall subscription revenue, and laying off thousands of employees. Time Warner Chief Executive Jeff Bewkes has said that mission is key to plotting a new course for a company whose stock price has stagnated in recent years.

But Platform A is off to a rocky start. In its first six months, it has been marked by failed sales targets, tensions among its different business groups, and, most recently, the dismissal of its president, Curt Viebranz. A number of marketers say they are ready to spend their ad dollars with Platform A, but can't because the disparate units still operate independently.

The idea behind Platform A is that AOL can be a one-stop shop for placing ads both on AOL's own Web sites and on the broader Web, through its ad networks like Advertising.com, which sell ads on thousands of Web sites. So far, though, the company is a long way from that reality. AOL is fourth among the major Web portals -- behind Google, Microsoft's MSN and Yahoo -- in ad revenue, and the pace of its ad-revenue growth has also dropped off. AOL's ad revenue grew 12% in 2007, compared with 37% in 2006 and 38% in 2005, according to research firm eMarketer.


Even Advertising.com, a rare bright spot in AOL's business recently, is facing new pressures. A major part of a two-year deal with its biggest advertiser, Apollo Group's University of Phoenix, ended in January. Advertising.com was University of Phoenix's exclusive online marketing partner, managing its ad buys both on its network of sites and on other ad networks. The deal generated $215 million for AOL in 2007, up $58 million from $157 million in 2006, and accounted for 17% of AOL's ad-revenue growth last year. (University of Phoenix will continue to buy ads on the Advertising.com network, but decided to take its ad buying in-house.)

AOL's biggest competitors are developing their own ad networks, which will make life tougher for Advertising.com. "If I get the inkling they are not innovating, I'm going to look elsewhere and talk to Yahoo or any of the other Web giants," says Tom Hespos, president of Underscore Marketing, a closely held digital agency in New York.

AOL executives have picked Ms. Clarizio, 47 years old, to rescue Platform A, which has the widest reach of any ad network in the country -- reaching 90% of the U.S. online audience, according to comScore -- but isn't able to effectively sell across that spectrum yet. A nine-year veteran of AOL, Ms. Clarizio led the deal team that acquired Advertising.com in 2004 for $435 million. That unit has accounted for nearly a quarter of AOL's revenue and is one of the fastest-growing parts of the company.


Trained as a lawyer, Ms. Clarizio is known internally for an analytical mind and an ability to delegate. A graduate of Princeton University and Harvard Law School, she came to AOL from Washington law firm Arnold & Porter, where she was a partner for seven years and also worked as an AOL outside counsel.

While AOL is known as a relatively slow-moving, bureaucratic company, Advertising.com has developed a different reputation. "AOL has reinvented itself so many times. It is hard to keep track," says Adam Schlachter, senior partner and group director at Mediaedge:cia, a media-planning firm that is a part of WPP Group's Group M. "(Advertising.com) has been able to grow steadily, consistently and innovate."

Ad.com grew from a cramped townhouse on the outskirts of Baltimore, where brothers Scott and John Ferber opened a digital advertising company called TeknoSurf in 1998. Their idea was to piece together a network of Web sites where they would buy ad space, then resell it to advertisers at a premium. It changed its name to Advertising.com in 2000.

Ms. Clarizio tried to embrace Ad.com's start-up spirit. The company remained at its Baltimore headquarters, instead of relocating to AOL's Dulles, Va., base, 60 miles away. She dressed up for Halloween and competed in relay races.

She also has tried to get the company's various sales teams and engineers working on common goals. During daily 9 a.m. meetings in Ad.com's "War Room," midlevel executives discuss the previous day's results and chart the next day's goals.

Ms. Clarizio wants to replicate that culture at Platform A, which suffers from duplication among its sales, tech and other groups. Different ad units, for instance, call on the same clients -- in essence competing for the business. One of Ms. Clarizio's first moves in her new post was to announce a "leadership team" for Platform A. The new structure puts in place one sales team, one technology team, one product and operations team, one marketing team and one publisher-services team to cut across all the company's different ad units.

Some digital-advertising executives question whether combining sales teams is the right strategy. They fear Ad.com's emphasis on data-driven results will come to dominate Platform A, frustrating bigger-brand marketers used to the tailored campaigns they have gotten from some of AOL's ad-sales teams.

But Ms. Clarizio is moving full speed ahead with the integration. AOL also announced last week that it has integrated two of the companies that provided separate search-engine-marketing services -- Advertising.com and Quigo, a contextual targeting ad firm AOL acquired last fall. "It's an example of what we need to do across the board. It's definitely an iterative process and takes a lot of work to do that," Ms. Clarizio says.

Banks Boost Direct Marketing Spend

MARCH 25, 2008

Paperless statements, paperless pitches.

US banks and credit issuers spent $13.4 billion in 2007 on direct marketing advertising, generating $178.8 billion in sales, according to the recently-issued Direct Marketing Association (DMA)'s "Direct Marketing Facts and Figures in the Financial Services Industry" report.

The DMA said direct marketing financial services ads will drive $286.2 billion in sales in 2012.

"Financial institutions are relying more and more on multichannel direct marketing to sell services and products to current and prospective customers," said Anna Chernis, senior research manager for the DMA.

"In fact," Ms. Chernis said, "DMA found that the financial, banks and credit institutions sector in 2007 was the number one American industry spending on direct marketing, and it ranked second in sales."

The DMA predicted that financial services commercial e-mail ad spending would grow 22.5% from 2007 to 2012, more than spending on any other media type.

During the same period, spending by the sector on Internet direct marketing ads was projected to grow by 17.8%.

What types of offers work best?

"The most common marketing ploy in the banking industry is to offer either higher interest rates or lower fees than the bank down the street," said Lisa Phillips, senior analyst at eMarketer.

More than half of respondents and panelists surveyed last April told comScore they would open an online account in order to receive $100. Only 13% said they would be swayed by a 6.5% interest rate on new deposits.

Offers of free credit reports, iPod shuffles and no-fee ATM use for the first year each garnered only single-digit enthusiasm, between 8% and 9%.

Forrester Research has also said that financial services providers that do not charge for online bill payment should promote that fact.

The company said in its “Five-Step Action Plan to Help Banks Compete with Biller Sites for EBPP Users" report that more than 40% of online consumers thought their banks charged for online bill payment. That is despite the fact that almost all major banks have dropped the fee in recent years.

5 rules of closing

Closing Rule #1: Think Like a Closer.

We’re going to spend this week on a key skill: how to close. The last time we touched on this subject, I pointed out the many problems with manipulative “trick closes,” so I’m not going to go over that material again. Instead, I’m going to present a series of inviolable “rules” for closing, based largely upon several conversations that I’ve had on the subject with the guru of closing, Linda Richardson, leavened (as usual) with my personal experience. So let’s get started.

The best way to learn something quickly is to emulate the thought processes and behaviors of somebody who’s already good at what you want to learn. That’s why people who want to learn to play tennis well study the attitudes and behaviors of tennis stars. It’s why aspiring actors have a fascination with those who are already successful in that field. It’s easier to walk in the footsteps of giants than to blaze a trail of your own. So:

Rule #1: Think Like a Closer. According to Richardson, the great “closers” in this world share two characteristics: they’re incredibly prompt and incredibly persistent. If they get a lead, they’re on that lead immediately. If they sense the time is right, they close the deal, right then and there. After they’ve closed, they always follow up immediately. So if you want to be a better closer, you’ve got to torque up your behavior so that you’re on top of things.

If you aren’t willing to be vigilant and inexhaustible in your focus and your ability to understand customer needs, you’ll never be a great closer. If you aren’t willing to constantly improve your skills at dialog and questioning, you’ll never be a great closer. If you aren’t willing to do the extra mental work to build confidence in your own ability, you’ll never be a great closer.

That’s the foundation. Over the next few days, we’ll be looking at strategies and techniques that will help you close more business more quickly, so stay tuned.

If you think you have what it takes to be a great closer, hit the “thumbs up” button at the top of the page.

Closing Rule #2: Set an Objective.

Myth: Every sale has a single, all-important point where the deal closes. Truth: Some extremely simple sales processes have a defined close point, but complex sales processes (i.e. almost all B2B sales) have a series of points where the prospect makes a decision, even if it’s just the decision to let you pitch, rather than pitch you out. According to closing guru Linda Richardson all sales go through four phases, each with its own type of close:

1. Initial. The “close” is moving from a cold-call into the sale cycle.
2. Developmental. The “close” is gathering information to define a solution.
3. Culmination. The “close” is the asking for the next step or for the business.
4. Follow-up. The “close” is ensuring that the relationship goes forward.

Your job is to make certain that all those “closes” take place in a timely manner. Therefore:

Rule #2. Set an Objective for Each Meeting. At every point in the sales process, you should always have a closing objective that is specific, measurable and appropriately aggressive. I’m not talking about crunchy granola, touchy-feely goals like “get closer to the customer” or “learn about customer needs.” Yeah, you need to do those things, but those are processes, not goals. Goals are specific and measurable, like:

• I will get a list of the key decision-makers.
• I will get a copy of the competitor’s proposal.
• I will obtain a working description of the customer’s problem.
• I will get first access to my customer contact’s boss.

And, of course, eventually:

• I will ask for the business.

Richardson says that your closing objective should be aggressive, but appropriate to the stage of the sales cycle. For example, setting a goal to “ask for the business” on the first sales call for a million-dollar deal is probably setting yourself up to fail. This isn’t to say that you can’t be flexible and ask for the business on those rare opportunities where a deal gets fast-tracked. But you should always have a “stretch” objective for every sales meeting and make your best effort to close on that objective.

By the way, the incredible advantage of treating the sales cycle as series of closes is that the approach makes it easier and more natural to ask for the business, when it’s time to achieve that particular objective. More on this tomorrow.

Closing Rule #3: Overcome Your Fear.

Closing is simple. What’s difficult is dealing with the negative emotions that you’re having about closing. Those emotions include.

• Fear of failure. If I lose this sale, it means that I’m a failure as a sales professional.
• Fear of rejection. If I lose this sale, it means that the customer doesn’t like me.
• Fear of financial loss. If I lose this sale, I won’t make the commission and my kids won’t eat.
• Fear of management disapproval. If I don’t make quota, my boss will be unhappy.
• Fear of lost anticipation. If I don’t make the sale, I’ll lose the pleasant fantasy of winning.
• Fear of social blundering. If I ask at the wrong time, the customer will think I’m pushy.

The unifying factor in all these emotions, of course, is fear. The specific quality of that fear differs from person to person. Some folk don’t care that much about social rejection , for example, but hate, hate, hate to lose a commission. Other folk are happy to take a financial loss as long as they don’t have look like a fool in front of a customer. However, regardless of the particular size and shape of your fears, the solution is the same:

Rule #3. Overcome Your Fear. Regardless of how uncomfortable you are or how terrible you might feel if your close doesn’t result in a sale, the truth is that YOU HAVE TO CLOSE. It’s part of the job, no matter how much it’s scaring you. So just do it, dammit.

Closing is like standing on the edge of a cold swimming pool. Slowly lowering yourself in the water is slow torture; better to just take a deep breath and jump.

Or, to use another analogy, closing is like walking across a bed of hot coals. (I actually did this at a sales seminar.) If you walk quickly you’ll be fine, but if you dawdle you’ll end up with a couple of size 11 blisters.

Now, that doesn’t mean that you should gird up your loins and blurt out “so how about it?” ten minutes into the first meeting. Effective closing is all about timing, which is what we’ll be discussing tomorrow.

How to Overcome Fear.

I was going to write about the “timing” aspect of closing deals. but it occurred to me that talking about timing would just so much jabber-jawin’ if I don’t provide some tools to overcome the fear of closing.

I’m well aware that experienced sales pros seldom have a debilitating fear of closing. However, that fear is a major problem for novices and a common reason for a lack of success at sales. And even experienced sales pros sometimes clutch when they’re working on a deal that’s larger than their zone of comfort.

More importantly, the ability to overcome irrational fear is a major enhancement to the quality of life. All in all, I think that taking care of that fear — forever — is worth a one-day pause in the “rules of closing” discussion. So here goes:

How do you overcome a fear? Here are five basic techniques:

• Familiarity. The more you close, the easier it is to close. That’s why I recommended that you treat the sales cycle as a series of small closes. That way closing on the big deal isn’t a big deal in and of itself.
• Rehearsal. When it comes to emotions, your brain can’t differentiate between what it imagines and what’s actually happened in the real world. If you repeatedly rehearse closing in your mind, and while rehearsing force yourself to feel confident, your behavior in the real world will imitate your imagination.
• Reframing. This entails creating a comparison that makes the original fear seem trivial. Example: There are millions of Iraqi citizens who have to worry about being shot simply if they go to the store to buy some food, so what have you got to be afraid of?
• Association. Ever been to an amusement park? If so, you probably paid $30 to $50 to be frightened. The “fear” part of selling is like going on a rollercoaster — except that you get to some steering, so you’re more in control. So the “fear” is the exciting part of selling, right?
• Redefinition — Fear is actually just a signal that you need to do something. If you’re afraid to ask for the business, it’s just your subconscious mind telling you that it’s getting close to the point where you need to ask for the business.

Put these techniques in your mental “bag of tricks” and fear of failure or rejection will be unable to hold you back any longer. The techniques are best applied in combination. For example, here’s the specific routine that works for me:

1. I notice that I’m putting something off because of a fear that it won’t happen.
2. I re-confirm that the goal is worth pursuing.
3. I “remember” that the fear is just a signal that this is a desirable goal.
4. I feel grateful that I have the opportunity to achieve that goal.
5. I briefly think about all the things that I don’t have to be afraid about.
6. I recall all the times that I’ve overcome similar fears.
7. I imagine myself taking the action that I’ve been putting off because of fear.
8. I repeat the above step 5 times, visualizing a successful outcome.
9. I use the momentum of all of the above to push me forward.

The above formula has allowed me, a relatively quiet guy, to pursue some goals and have some experiences that otherwise would have been completely impossible for me to achieve. And it’s certainly taken away any fear I ever had of closing a deal. Try it!

Closing Rule #4: Always Be Checking

When it comes to closing, timing is everything. And that leads us to:

Rule #4. Always Be Checking. The best way to know when it’s time to close, according to closing guru Linda Richardson, is to return the old ABC adage from “Always Be Closing” to “Always Be Checking.” The idea is to constantly get feedback from the prospect about whether it’s safe to close. That way, when you do close, it becomes less of a “moment of truth” and more like a natural extension of the conversation that you’re having with the prospect.

At convenient points during the sales call (after you have positioned your message, responded to an objection, answered a question, etc.) ask a question that draws out more information and which reveals the prospects state of mind relative to the progress of the sale. Nothing elaborate, just normal conversational stuff like:

• How does that sound?
• How would that work?
• What do you think about…?

Asking for feedback not only give you critical information about the prospect’s problems and potential to accept your solution, but also increases your confidence when it comes to asking for the business or the next step.

When you’re checking, avoid leading questions like “Does that make sense to you?” or “Do you agree?” while nodding your head. Prospects will almost always respond to such questions by nodding along with you, without really agreeing. Instead, ask questions that encourage the prospect to provide you with vital information. Example:

INEFFECTIVE:
Rep (nodding): “We have the best framistat in the business. Do you agree?”
Prospect (nodding back): “Uh huh.” (Thinking: “Yeah, I hear you.”)

EFFECTIVE:
Rep: “Do you think our service program could satisfy your needs?
Prospect: “We need a global deployment for service.”
Rep: “I can see why that’s important. We have international partners who deliver our services. How would that meet your concern?”

According to Richardson, the best part about “always be checking” is that half the time the client will say preemptively close the sale for you by saying something like “So, when do we start?”

On Monday, I’ll explain the exact mechanics of how to close. You’ll want to read that post first thing in the morning, because it’s going to increase your closure rate for entire week… and beyond.

Important: Click the “thumbs up” symbol at the top of the post if you’re committed to becoming a great “closer.”

Finally: How to Close!

The old “Always Be Closing” philosophy is often misinterpreted to mean hammering the customer until the customer buys. That’s too bad, because that interpretation of the ABC strategy creates a sense of overwhelming pressure. And that inevitably creates resistance to the sale because the prospect doesn’t want to feel that he or she is being manipulated or conned.

This isn’t to say that high pressure sales tactics don’t work sometimes. They can, and do. Otherwise sales pros wouldn’t use them. Most of the time, though, high pressure tactics backfire, even when they “work.” But most B2B sales involve a long-term relationship between two firms, so if you make a high pressure sale, chances are you’ve made your customer contact feel like a fool, and you’ll be persona non grata next time you need some business. And that leads us to:

Rule #5: Close with Confidence. If you’ve been following the rules from the previous post, you’ve used checking to get feedback and to position your offerings. If so, you should be able to sense the rhythm of the conversation and whether the customer is ready to make a decision. That’s when you close. Closing guru Linda Richardson describes this as a five step process:

1. Summarize. Make a concise, powerful summary that reiterates the benefits of your offerings and its appropriateness for the prospect. Speak with confidence, but don’t let your voice slip into “sales pitch-eese.” Keep it conversational.
2. Final Check. Once you’ve summarized, do one final check - not for understanding but for agreement. Example: “I think we’ve pretty much concluded that our solution will solve your problem and save you money; how does that meet your objective?” Don’t be pushy and don’t ask a leading question like: “Do you agree?” This final check gives the customer the opportunity to surface any final objections that might interfere with the close.
3. Ask for the Business. If the final check doesn’t surface a new objection, be direct and ask for the business — confidently and clearly. Example: “Will you give us the go-ahead?”
4. Conclude with Confidence. Chances are you just made a sale, in which case it should be easy to conclude the meeting with confidence, energy, and rapport. But even if you didn’t get the sale, you want to leave the (almost) customer with the sense that you are a person with whom they want to do business. So thank the prospect and state your desire to work with the client in the future.
5. Follow up Immediately. This is where many reps stumble. They’re so elated at getting the business that they think the job is done and don’t take the necessary steps to make sure that the deal is executed and that the customer remains happy.

It’s really that simple. The most elegant thing about the above sequence is that it builds on the previous four rules.

E-Mail Tactics Help Determine Winners

MARCH 19, 2008

Personalization helps.

The workhorse of digital marketing has been through some muddy terrain.

E-mail, a tactical mainstay of many campaigns, saw open rates dip worldwide during the second half of 2007, according to data from e-mail list management company MailerMailer.

Overall open rates for messages sent through the company fell by several percentage points from the rates seen in the first half of 2007.

Still, some e-mail tactics performed better than others.

Looking at personalization, the company said that e-mails that had only the subject line personalized did worse than those with no personalization at all, probably because spammers often gear their subject lines toward recipients.

MailerMailer found that open rates were highest on Mondays, Tuesdays, and the weekends. The company also said that e-mails with shorter subject lines significantly outperformed e-mails with longer subject lines.

As for click-through, the more links the better. E-mails with 20 or more links got about twice as many clicks as those with fewer links in the MailerMailer study.

The open rates in the MailerMailer worldwide study were below those for US campaigns measured in Harte-Hanks' last "Postfuture Index," which focused specifically on opt-in campaigns.

Harte-Hanks told eMarketer that when it conducted the 2006 measurement, the formula used to calculate open rates included total opens (multiple opens by the same person for the same message), which led to a higher number of open rates—sometimes exceeding 100%.

The company said that it now counts only unique opens (only counting a recipient once for the same message), in line with industry norms. Based on unique opens, the open rate is 20.4% across its client base, in line with MailerMailer's findings.

Online Ads Healthy as Pharma Sales Slow

MARCH 20, 2008

Rx for sales: Web marketing.

Overall sales growth in the US prescription drug market slowed to 3.8% in 2007 from more than 8% in 2006, according to IMS Health's "US Pharmaceutical Market Performance Review."

The company said that sales growth slowed because many branded medicines lost their exclusivity, fewer new products were approved, Medicare Part D year-over-year growth leveled and safety issues slowed approval rates.

IMS said that 2007 US prescription sales totaled $286.5 billion.

"In 2007, the US pharmaceutical market experienced its lowest growth rate since 1961," said Murray Aitken, senior vice president at IMS.

IMS forecasts annual growth in US pharmaceutical of between 3% and 6% through 2012.

"In recent years IMS Health has consistently reported that emerging markets such as Brazil, China and Russia would become the growth engines for pharmaceutical companies," said Lisa Phillips, senior analyst at eMarketer.

"However, in the US, Medicare Part D is a bright spot for online pharmacies, which can offer online prescription renewals and offer all manner of other products and services to seniors who are not visiting the physical drug store as often," Ms. Phillips said.

Online advertising is a bright spot as well. eMarketer projects that annual growth in US pharmaceutical online ad spending is rising again after a dip last year, and that it will hit 28.6% in 2009.

Pharmaceutical marketers surveyed for a March 2007 Guideline-Med Ad News survey said that online ads were already more important to them than traditional media. Respondents said the trend would solidify through 2010.

ESPN Turns Off Ad Nets

Moves to protect brand, content; other publishers mull

mike Shields >> mshields@mediaweek.com

MARCH 24, 2008 -

Top Web publishers are planning a revolt. Even as more prominent sites experiment with selling remnant inventory through online ad networks, and in some cases ad exchanges, ESPN.com is saying thanks, but no thanks.

The site recently cut ties with Specific Media and several other unnamed ad networks, and is taking the bold stand that ad selling that relies heavily on arbitrage and algorithms is not for them.

"We're heading down a path where it no longer suits our business needs to work with ad networks," said Eric Johnson, executive vp, multimedia sales, ESPN Customer Marketing and Sales. Sources say that ESPN would like to rally support from other publishers behind this move and ultimately tamp down ad networks' growth. Turner's digital ad sales wing is rumored to be considering a similar move, though officials said no decisions are imminent.

"Turner, like a lot of media companies, is currently reviewing all of its media practices, and ad networks are certainly a part of that process," said Walker Jacobs, senior vp of Turner Entertainment New Media Ad Sales.

ESPN's decision crystallizes a philosophical debate in the online ad sales industry that has intensified since the Interactive Advertising Bureau's annual meeting last month when during a keynote address, Martha Stewart Living Omnimedia media president Wenda Harris Millard gave her now famous warning against selling Web inventory like "pork bellies."

Two sides have formed—those who want to protect traditional, direct selling of premium content brands and the math-loving crowd that favors automation and data. The math lovers make the traditional sellers nervous.

"There is a genuine concern about commoditization of brand inventory by some of the networks," said Millard in an interview.

Of course, there's a reason that online ad networks, which rose to prominence in the late 1990s by aggregating inventory across thousands of smaller Web sites, are playing a bigger role in Web publishing. Most large sites are swimming in avails they can't sell. Insiders estimate that a range between 20 percent and as much as 70 percent of inventory can go unsold at a given time. Thus, ad networks offer a monetization alternative.

But some sites, like ESPN, see networks as profiting on their brand investments and their user data, while also threatening their own marketer relationships. Many just think using networks devalues the power of content.

Several publishers, in conversations with Mediaweek, privately applauded ESPN and hoped that others would follow suit. However, in this accountability-driven, quarter-by-quarter climate, it's hard for any publisher to walk away from revenue, even if it's not huge.

"Not all inventory is created equal," said Peter Naylor, senior vp, digital media sales, NBC Universal. For example, Naylor said iVillage's Horoscope section generates a lot of traffic but doesn't attract many endemic advertisers. That's why he turns to networks. According to Pam Horan, president of the Online Publishers Association, most publishers do just that.

For example, MTV Networks recently inked a deal with Microsoft to let the software giant sell its remnant inventory. Nada Stirratt, executive vp, MTV Networks Digital Media (a former top sales exec at ad net giant Advertising.com), said that ad networks "absolutely have a place for high-frequency, low-value impressions." Plus, she likes tapping into Microsoft's tech expertise and is comfortable with the numerous safeguards the deal offers.

So can ESPN change the model? "It won't have the desired impact," said Adam Kasper, senior vp, director of digital media, Media Contacts, unless the top 10 or so Web sites followed suit. ESPN is "essentially fighting technology. That's a hard thing to do."

Elements of Sustainable Companies

Start-ups with these characteristics often foretells the success of a business and the likelihood of it becoming a sustainable, enduring company. We like to partner with companies that have:

Clarity of Purpose
Summarize the company’s business on the back of a business card.

Large Markets
Address existing markets poised for rapid growth or change. A market on the path to a $1B potential allows for error and time for real margins to develop.

Rich Customers
Target customers who will move fast and pay a premium for a unique offering.

Focus
Customers will only buy a simple product with a singular value proposition.

Pain Killers
Pick the one thing that is of burning importance to the customer then delight them with a compelling solution.

Think Differently
Constantly challenge conventional wisdom. Take the contrarian route. Create novel solutions. Outwit the competition.

Team DNA
A company’s DNA is set in the first 90 days. All team members are the smartest or most clever in their domain. “A” level founders attract an “A” level team.

Agility
Stealth and speed will usually help beat-out large companies.

Frugality
Focus spending on what’s critical. Spend only on the priorities and maximize profitability.

Inferno
Start with only a little money. It forces discipline and focus. A huge market with customers yearning for a product developed by great engineers requires very little firepower.

Swotti - A Semantic Opinions Aggregator

Written by Sarah Perez / March 21, 2008 10:08 AM / 0 Comments

Swotti is a new semantic search engine that aggregates opinions about products to help you make purchasing decisions. With Swotti, you can learn from the good and bad experiences of others as the site gathers together reviews and feedback from across the web and categorizes them to provide you with more information about the product you're interested in. What's unique about this search engine is that it uses semantics to do so.

There isn't a lot of info about Swotti on their main site - no FAQ, no blog, no how-to section; it's just a search box on a white page. But as you begin typing, search suggestions appear underneath the search box, making it easier to find what you're looking for. Click on search and you'll be taken to a product reviews page, where you'll be amazed at the amount of data displayed.

Swotti aggregates opinions about products from product review sites, forums and discussion boards, web sites and blogs, and then categorizes those reviews as to what feature or aspect of the product is being reviewed, tagging it accordingly, and then rating the review on as positive or negative.

Take the iPhone for example - each review is tagged with keywords like Design, Usability, Display, Reliability, Noise, Battery, Service, Camera, Keypad, Size, etc. Based on the number of positive reviews for a tag, a rating for that feature is given. Bar charts show green bars for good, yellow for average, or red for bad reviews. And they seem to be pretty accurate, at least for the iPhone - "design" is 5 green bars, "speed" is 3 red bars.

There is even a pie chart that summarizes the views. In the iPhone example, 15% said "I Love," 11% said "Too Expensive," 11% said "Worst." (Note to those who hated your iPhones: please send them this way.)

Product images display on the left and the reviews themselves, linked to the original source, display on the right. The reviews can also be sorted to display the best reviews, the worst, or the most relevant. Beneath the sorting options, the number of reviews display.

iPhone Results in Swotti

What's interesting is that this data seems to have been collected, tagged, and rated using only Swotti's technology. This isn't Mahalo - no user-intervention here - it's all automated.

One problem with the site seems to the be with the English spellings of things and wording, like "Adjective" was spelled "Adjetive." Since the site is also offered in Spanish, its likely that the Spanish version was created first and this is an English translation. However, this is only a minor drawback.

Whether it gets it right all the time - that's the real issue. The problems lies in similarly named products, obviously something that is still being sorted out. For example, a search for the Lenovo x300 also returned results for the Dell Latitude x300. I couldn't filter out the Dell results by using -dell in my query a la Google, as that returned a "No enough opinions" result (Yep, that's the English again).

Clicking on "Are you unsatisfied with your results? Help us" gave me a Spanish entry form which returned a bunch of code when I submitted my comments...although at the bottom it did say "Gracias por haber dado tu opinion," so maybe it went through anyway.

Altough these issues would have to be worked out for the site to became mainstream, it doesn't deduct from Swotti's potential - Swotti is reading, categorizing, and rating data from the web on its own. A great concept which hopefully will get better with time. Definitely worth watching.

Real People Use Twitter

Written on March 20th 2008 Author by Mike Troiano | Feed XML Feed

ADOTAS EXCLUSIVE — Twitter is hard to understand for normal people. The service – approaching 1 million users in the neighborhood of its first birthday – is among the most rapidly adopted applications ever. Without hyperbole, I would say that every marketing exec should be on Twitter, for reasons I’ll get to later.

So what is Twitter? Well, you basically create an account, and use it to send little updates (“tweets”) online as you go through your day:

“Long morning, feel like crap, hydrating.”
“Getting hungry, sushi maybe???”
“Fight with Joan last night, I’m a putz.”

Wow. Exciting.

So what accounts for the service’s geometric growth? Why are the digerati so enamored with Twitter, to the point that NOT being there is like missing out on a conversation with the cool kids? And finally, what’s the lesson for marketers in the phenomenon that Twitter has become?

Three pillars underlie Twitter’s undeniable success. First off, it’s blogging for lazy, time-starved, or ADD-afflicted people. In other words, most of us. Where a blog post requires a point, prose, and a few links, a tweet merely requires a thought. If you can just react honestly to the world as it comes to you, you can tweet with the best of them.

And therein lies the second pillar, that there is something utterly fascinating about peeking in on the mundane details and random thoughts that occur in the lives of other people. CommonCraft describes the value of this exchange in a Twitter introductory video, though it focuses a bit too much on your current friends and acquaintances.

While not a friend of mine (yet, anyway) Geek Guru Guy Kawasaki is a habitual Twitterer. Guy recently noted that despite Microsoft CEO Steve Ballmer’s assertion that he (Steve) responds promptly to e-mail, Guy hasn’t yet received a response to the 2 notes he sent Steve after Mix08. For reasons even I can’t understand, this kind of inside baseball is oddly intriguing.

Jim Long is another Twitterati, posting in the system as NewMediaJim. While chasing stories for NBC News, Long mixes tantalizing live tweets from Air Force One with pithy little transcendent insights (“the Brumidi Corridor in the US Capitol is simply stunning.) Another is Laura Fitton, the quasi-mythic Pistachio; making friends by collecting the wisdom of the community (“We’re a team. What’d you learn at SXSW? Who’d you meet? What sessions are worth listening to?”) and just by being so darn… real (“Strange feeling to see my future ex-husband’s face pop up on Snitter…”)

Which brings me to the third driver of the Twitter phenomenon, perhaps the least apparent but most important for marketers.

Twitter is a look beyond someone’s public face, below the more charming and polished persona they present to the world, behind the carefully crafted communication we all use to seem smarter than we are when we let our guard down. While its detractors see a stream of mundane, tedious details, its fans sense something profoundly real and fundamentally human in the quiet musings of both extraordinary events and everyday life.

Twitter fascinates us because it provides a window on the authentic. You can “fake” a blog post, whether you rip off an idea or spend 10 minutes to get a sentence just right. But your tweets are the real you. There aren’t enough characters to support frivolity, and there’s not enough time to pass ideas through the filter of who-we-want-to-be. It’s just you at that moment in time, like letting the world inside your head for just a split second.

So what’s it all mean for marketers? Tactically speaking, Twitter will almost undoubtedly leverage its vast network of impressions through some kind of ad placement eventually, though it has not yet done so. Some third-party “client software” built for Twitter (including Snitter, Spaz, Tweetr and my personal favorite Twitterific) support advertising, though the targeting value of the text that flows through Twitter is questionable.

The Twitter service itself will probably prove to be a poor advertising medium for the vast majority of products. It can, however, be a potent tool for promoting anything that’s sold face-to-face, rather than bought off-the-shelf. That kind of selling is about building relationships, and you can get to know someone very quickly just by following them around in their daily life for a few days.

Stepping back, Twitter casts some light on all social media by revealing that people don’t want pedestrian online dialog for its own sake. These exchanges are instead a means to ends about which many people care a great deal: Understanding, Validation, and Authenticity.

The Twitterati hates anything that smacks of corporate polish, marketing doublespeak, or artificial anything. They like their news from real people, their video from other users, and their music from local bands. They eat more organic produce, watch more reality television and see more independent films than the generations that preceded them. Even their porn looks homemade (or so I’m told). It’s no coincidence that all of those things are gaining share at the same time Twitter and its multi-media spawn (Pownce, Utterz, Transpera, Qik, Mogulus, Seesmic, etc. etc. etc.) are taking over the world.

Strategically speaking, what this means for brands is that real rules. The Columbia ads featuring a sadomasochistic Gert Boyle and her intrepid son are sheer genius in this light, along with the subservient chicken, and even Kia’s “Duh” campaign. A real Frank Purdue still works, a fake Orville Redenbacher did not.

So why should you be on Twitter? Well, to get into the right headspace to do real work that speaks authentically to people, you have to walk the walk. For the people behind the ads – clients, marketing execs, CDs and writers, you and me – it’s time to get real as well. It’s time to come to terms with the fact that we cannot and should not keep our “Work” and “Home” lives in separate boxes. There’s one you – just like everybody else – and in the end making the leap of faith required to expose that real, flawed, whole person is the key to understanding not only social networking, but the spiraling number of people who participate in it every day.

So slap that Obama logo up on Facebook, post Thursday’s party picks on Flickr, and blog your heart out about the fact that that last copy strategy was wrong, wrong, wrong. When you’re ready to share what’s really going on inside your head with the rest of us, join me at http://twitter.com/miketrap.

Does engagement need a common definition?

Is it really necessary for all marketers to settle on a common definition of engagement? Here's a breakdown of the issue.

Several presenters at the iMedia Breakthrough Summit, which wrapped up yesterday, carried a common theme throughout their presentations. Quite a few of them touched on how advertising's history is characterized by standards and standard definitions. Whether it is reach, frequency, GRPs, or even early-stage interactive success metrics like clickthrough rate, adoption is contingent on the industry deciding on a common definition that is accepted by all.

This is how the ad industry has approached the notion of engagement. The three- and four-letter ad organizations have been bickering for years about how to define engagement precisely in the context of an ad campaign. It is thought that a standard will make it easier for marketers to dump money into engagement campaigns. And yes, standards would accelerate this.

But standards aren't necessary.

Marketers are certainly free to define engagement any way they want to. If, to your brand, "engagement" means that someone went three pages deep or more on your website, or that they responded to a blog post or played around with a Flash game for more than 30 seconds, that's fine. What matters is not how a brand defines engagement, but what that engagement does for the brand and its success metrics.

One of the ways we've been determining impact of engagement on brands at Underscore is through the use of what we call a "3D Brand Study." You're likely familiar with the run-of-the-mill brand studies from the likes of FactorTG, Dynamic Logic or Insight Express. Their exposed-control methodology is widely accepted as a way to gauge lift in key brand metrics for online brand advertisers.

A 3D Brand Study executed through any one of these vendors recruits an extra exposed group. That group answers the same survey questions as the control group and the group exposed to banner ads, but the respondents in that group also happen to meet the brand's criteria for engagement. Thus, we can see not only what exposure to advertising does for the brand, but also how much additional lift we get when prospects are engaged.

3D Brand Studies allow marketers to set their own criteria for engagement and not wait for the industry to set standard definitions. Determining what impact engagement has on a campaign isn't going to wait for those standards. Most marketers know intuitively that engagement does a lot more for the brand than mere exposure, so they can't afford to wait for the bickering to end.

So don't wait. Work with your brand teams to define engagement your way, then work with your agencies and research companies to structure campaigns, such that a 3D Brand Study can recruit enough engaged respondents to gauge a lift in metrics.

Let me know what you think in comments.

Older Internet Users Feel Web Advertising and Content Not Relevant

Wednesday, March 19, 2008 A recent BurstMedia survey of more than 13,000 web users 18 years and older found that online content providers are not meeting the needs of all age segments. A majority of Internet users 45 years and older believe online content is focused on younger age segments. Overall, 52.0% of respondents believe Internet content is primarily focused toward people their own age. Not surprisingly, says the study, younger respondents are most likely to say online content is focused on people their age. This is particularly true for the 18-24 year and 25-34 year segments. Additionally, 55.7% of respondents 35-44 years perceive online content as focused toward their age segment. Few respondents 55 years and older say Internet content is primarily focused on people their age.
Respondents Who Believe Web Content is Focused Towards People their Own Age (% of respondents)
Age % of Respondents
18-24 76.0%
25-34 73.9
35-44 55.7
45-54 35.4
55-64 22.9
65+ 12.0
Source: BurstMedia, February 2008

Similar to the content findings, 75.9% of respondents 18-34 years say websites are designed for people their age. Among respondents 35-45 year this perception slips to 55.2%.
Only 36.9% of respondents 45-54 years believe websites are designed for people their age
19.9% of respondents 55 years and older say websites are designed for people their age.
Overall, only 38.6% of respondents believe online advertising is focused on people their age. It is only among respondents 18-24 and 25-34 years that a majority believes online advertising is focused on their age groups, 56.6% and 56.5% respectively.

Among respondents 35 years and older the prevailing perception is that online advertising is focused on younger age segments.
43.8% of respondents 35-44 years, say online advertising is focused on people their ages
52.9% say online advertising is focused on people younger
72.5% of respondents 45-54 years say online advertising is focused on people younger than they are
83.2% of respondents 55 years and older feel the focus is on younger people
Overall, three out of five of respondents are visiting more websites in a typical week than they were one year ago. An expanded catalogue of sites visited is not only a phenomenon of the young, but is found among all age segments. In fact, 62.8% of respondents 55 years and older say they are visiting more sites today in a typical week of web surfing than they were one year ago.

Number of Sites Visited During Typical Week Compared to One Year Ago (% of Respondents)
Sites Visited % of Respondents
Many more 33.8%
A few more 25.8
About the same 26.2
Fewer 7.2
Not sure 7.0
Source: BurstMedia, February 2008

Local/national news is the most popular content consumed online with half (48.9%) of respondents regularly seeking it out. There are differences in the types of content consumed by age segments. Among respondents 18-34 years, entertainment information (44.7%) is the most regularly sought online content, followed by:
Local/national news (40.1%)
Online games (38.1%)
Shopping/product information (36.1%)
Information for work (35.0%)
Online communities such as social networks, forums and blogs (31.4%)
Local/national news (54.2%) is the most popular online content for respondents 35-54 years. Other types of online content sought by this age group include:
Shopping/product information (44.8%)
Information for work (42.7%)
Health information (37.1%)
Entertainment information (37.0%)
Travel information (33.7%)
Local/national news is by far the most popular online content for respondents 55 years and older - with over one-half (55.9%) of this segment saying they regularly seek it out online. Other types of content sought include:
Shopping/product information (44.0%)
Health information (42.5%)
International news (38.9%)
Travel information (38.2%)
Food information/recipes (34.1%)
Two-thirds (67.7%) of respondents say their daily routine would be disrupted if their Internet access was taken away and not available for one week (42.9% say "significantly"). This survey findings are consistent among all age segments, with the oldest segment looking very much like the youngest segment

For more information , please visit Burst Media here.

Get in on the social shopping craze

By Denise Zimmerman

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The social element of shopping is manifesting in many ways online, providing marketers with opportunities -- and challenges. NetPlus Marketing's president describes the environment.

The thrill of the deal, spreading the word, networking with birds of your feather, getting the scoop -- social shopping has all of the trappings, joys and innuendos that fuel commerce.

In 2008, U.S. advertisers are expected to spend nearly $1.6 billion -- up 69 percent from the $920 million they will have spent in 2007, according to the report, "Social Network Marketing: Ad Spending and Usage." In four years, U.S. ad spend on social-networking sites is expected to reach $2.7 billion.

Social commerce has arrived….so pay attention
Simply put, social commerce is about customers having the means to interact with one another in order to make better buying decisions.

The social aspects of shopping have long been an integral part of our culture first institutionalized and marketed perhaps with the original Tupperware Home Party in 1948. Asking someone where she got that great bag, hearing about the latest sale from a friend or socializing at the mall are all integral parts of our consumer culture.

The advent of ecommerce and, more specifically, word-of-mouth vehicles such as reviews on shopping sites and other online platforms is a bold extension of the power of word of mouth and the social joys that accompany shopping. New media communications now provide an even broader, extensible platform to further ignite the social aspect of shopping.

Social shopping online expresses itself in a multitude of different ways, from so-called social shopping sites with features that encourage word of mouth to social networks such as Facebook that are trying to monetize their social fabric with shopping applications.

What does this all mean for marketers? How can they join in the conversation, start the buzz, spread the word without seeming like…well, like they are trying to sell stuff? What is acceptable in this environment? What are the current options, opportunities and challenges?

To begin to answer these questions requires gaining an understanding of how social shopping is being enacted, the environment, the opportunities and challenges.

The environment
From social networks to social shopping sites and site features that encourage and facilitate social commerce, social shopping is evolving. With most teens and nearly 40 percent of adults visiting social networking sites, advertisers are avidly experimenting on Facebook, MySpace and niche online social networks, according to a new eMarketer report. Social networking sites and services designed around shopping such as Stylehive, Kaboodle and CrowdStorm encourage customer feedback, discussion and reviews. They are rooted in encouraging dialogue, chatter and peer-to-peer sharing of information.

The Upside of Recession

The Upside of Recession
Most businesses think now's the time to cut back and cower. Why not see it as an opportunity, the way the creators of some very big brands have?

by G. Michael Maddock and Raphael Louis Vitón
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* The Recession Talk Your Board Should Have

Pop quiz, hot shot: What do MTV, Trader Joe's, and the iPod have in common? Yes, of course, they're all now ubiquitous and make our lives much more agreeable.

But to us, the most interesting thing about all three is that these great brands were born during recessions. (Trader Joe's: 1958; MTV: 1981; iPod: 2001, if you are scoring at home.)

And therein lies a point everyone seems to be forgetting in the midst of the current economic slowdown. If handled correctly, a downturn can be a good thing for your company. It can give you the opportunity—and the funds—to innovate and get a substantial leg up on the competition. But only if handled correctly.

It is never going to happen if your company—or your department—goes into the recession saying, "We have to tighten our proverbial belts; let's cut spending 22.73% across the board." People are going to be demoralized. And even worse, that is what most firms are doing, and you are never going to gain a competitive edge doing the same thing as everyone else.
A Catalyst for Innovation

Cutting across the board is the coward's way of dealing with a downturn. It assures that no one is going to yell—how could anyone possibly object to sharing the pain equally—and it gives the timid a built-in excuse to fail. ("Gee, I know no one liked our new product, but they slashed our budget 22.73% right before launch, so, it wasn't my fault.")

But suppose you use the recession not as an excuse or a reason for hiding under your desk but rather as a catalyst for innovation? Instead of cutting everything by 22.73%, why not see the downturn as a chance to whack 90% (or the whole darn thing) out of stuff that isn't working well?

Cutting off funding to your laggards would free up a lot of money to back the one, or possibly two, big ideas you have been working on, ideas that have a chance to become breakthrough brands. If you want to be less aggressive, you could place more resources behind the existing ideas/programs/products that are already working well.
A Two-Pronged Approach

Two key assumptions are necessary to make this possible: First, you should already have in a place a solid strategy, one that has identified your company's competitive advantage, so you know where to place your relatively big bets. If you don't have a sound strategy, you are at a huge disadvantage. And two, it assumes you have the intestinal fortitude to react to the recession in a way that is not like everyone else.

If you are the chief executive officer, you can make this gutsy call on your own—assuming, of course, you get the board to go along (BusinessWeek.com, 1/29/08). The rest of us probably need to take a two-pronged approach.

First, when the word comes down from on high that you need to belt-tighten, go through the usual drill. Explain you probably can fly everyone in for a meeting three times a year instead of four, and why you can get by with 12 people in the department as opposed to 13.
Increase Advertising While Others Cut Back

But then go to your boss, and say, "Instead of dealing with the need to cut like everyone else, why don't we use these hard times as an opportunity," and then outline how you plan to create an MTV, a Trader Joe's, or an iPod of your own, complete with an aggressive launch timeline to ensure it is firmly established in the marketplace when the recession ends.

As Harvard Business School professor John A. Quelch noted recently, "It is well documented that brands that increase advertising during a recession, when competitors are cutting back, can improve market share, and return on investment at lower cost than during good economic times."
Time to Attack

You can also point out that what you are advocating will leave your company perfectly positioned once the recession ends. While your competition is withdrawing, you will be charging ahead, taking market share. Maybe neither argument will carry the day. But if it does nothing else, this kind of innovative thinking gives the boss another reason to keep you around, no small thing when the phrase "reducing headcount" is in the air.

Recessions by definition are temporary. Great companies and great executives don't abandon their growth strategies in light of temporary setbacks. They attack aggressively, while everyone else is pulling back.