Thursday, January 31, 2008
With all of the discussion about social media, blogs, and communities, corporations and marketing agencies are actively putting into motion efforts at initiating and maintaining dialogue.
The ease with which corporate social media can be built may present a future nightmare for CMOs and IT departments of larger companies. Without a broad-based plan and governance policies, the following consequences could arise:
* Blogs and communities will be built based on organizational structure instead of the customer and the brand. Innovative groups in business units build communities to connect with customers. Without guidance, they build whatever suits the best interest of their product instead of the broader context. This fragments the customer relationship, customer attention... and the brand.
* Islands of communities will form. Just as many companies experienced islands of automation, the proliferation of blogs and communities created by multiple business units and employees will have different customer engagement and data collection techniques. Extracting data for useful decision support becomes cumbersome. One Fortune 500 company we interviewed had more than 75 customer databases, thus making predictive modeling an uphill battle. There is clearly an opportunity to learn from this in building communities.
* Customer confusion will abound. With different look and feel, different business unit approaches, different interaction points, and different messages customers will undoubtedly be confused. In our ADHD society, most customers will not take the time to figure it out.
* Ghost ships will appear. As corporations reorganize and employees change jobs, many blogs and communities will be abandoned as priorities shift. Valuable customers will be set adrift.
A Customer community master plan avoids pitfalls
Just as city planners utilize master plans to promote healthy growth, a "Customer Community Master Plan" enables executives to determine an overall customer interaction plan.
Based on our work with Global 1,000 clients, we have found that the following are among the elements of a strong plan:
What Is Our Community Strategy?
* Why are we building communities? What do we hope to achieve as a corporation?
o Advertising and awareness?
o New product development feedback?
o Revenue generation through extended relationships?
o Access to new markets?
* When do we want to build our own, and when do we want to leverage other communities such as Facebook, Linked-in, industry groups?
As social networking challenges pay-dating and anonymous trolling as the dominant mode of Web interaction, our schizoid chickens are coming home to roost.
Monday night was short and sweet on the red carpet. Although Woody Harrelson was scheduled to walk the red carpet, a miscalculation of traffic got him into Santa Barbara too late. Julie Ramos did manage to speak with honoree, Javier Bardem about his role in No Country for Old Men.
Host: Julie Ramos
Camera: Angelina Peterson
Editing: Scott Parent
Still Photography: Joseph Matheny
Sponsored By: MediaTrust
Wednesday, January 30, 2008
Well, I'm certainly willing
The UK market for affiliate marketing grew an estimated 45 percent in 2007, taking the total value of online sales generated by this channel in 2007 to more than £3 billion, according to research published in E-consultancy's Affiliate Marketing Networks Buyer's Guide, reports MarketingCharts.
The £3.13 billion total for 2007, compared with £2.16 billion in 2006, illustrates the healthy state of this digital sector, which will continue to grow strongly during 2008, E-consultancy said.
Sectors such as retail, travel and financial services continue to be the bedrock of affiliate marketing, with both Blue Chips and SMEs ramping up their investment, according to E-consultancy's head of research, Linus Gregoriadis:
"Affiliate marketing continues to gain momentum because the performance-based model is so popular with advertisers. When the biggest consumer-facing brands in these industries do not have a well-defined affiliate strategy, it now tends to be an exception rather than the rule," Gregoriadis said.
"The channel has become much more strategic and boardrooms are starting to take notice. Media agencies are becoming increasingly involved in this sector as a consequence of its increased profile," he added.
According to the research, commissions and fees paid out to affiliate networks (covering payments for both networks and affiliates) amounted to £186 million in 2007, up 40 percent from £133 million in 2006 (and compared with £83 million in 2005).
The growth of affiliate marketing reflects the buoyant nature of online retail in the UK. According to the IMRG, the UK's online retailers generated some £46.6 billion in sales last year.
About the study: The 2008 Affiliate Marketing Networks Buyer's Guide assesses the UK marketplace for Affiliate Marketing, with a focus on 17 leading networks. The 167-page report also contains an overview of market trends and profiles of those companies offering related services.
The Modern Master award is the highest honor from the SBIFF, and Cate Blanchett was on hand Saturday evening to receive it. Our own Melanie Waters spoke with Cate, as well as director, Todd Haynes, who presented the award. And if that wasn’t enough, we spoke with festival juror and “House of Sand & Fog” actress, Shohreh Aghdashloo and TV’s “House” star, Olivia Wilde.
It was an amazing evening. After watching our coverage, we hope you’ll agree.
Host: Melanie Waters
Camera & Editing: Scott Parent
Still Photography: Joseph Matheny
Sponsored by: MediaTrust
It poured buckets of rain down on Santa Barbara on Thursday, but that didn’t stop the thrill of opening night at the 23rd annual SBIFF! People were out in force to watch the world premiere of “Definitely, Maybe,” attend the gala, and maybe get a peek at their favorite celeb. If you couldn’t make it, don’t fret, we captured it all for you!
In our first show we speak with Ryan Reynolds, Abigail Breslin, Adam Brooks, Derek Luke, and Liane Balaban. As if that wasn’t enough, we roped our very own Roger Durling in for a quick chat as well.
Take a look!
Host: Melanie Waters
Camera & Editing: Scott Parent
Still Photography: Joseph Matheny
Sponsored by: MediaTrust
Tuesday, January 29, 2008
Making life easier for publishers struggling to keep up with the explosion of ad networks - now numbering over 300 - and the determination of which network will yield the best results, is the Rubicon Project. Launched eight months ago by Frank Addante, the company, today, announced series B finding of $15 million bringing its total to $21 million.
We've seen a demo of Rubicon and its really fascinating. For a publisher trying to best monetize inventory, Rubicon, in a nutshell, does exactly that. A publisher joins with Rubicon, enters relevant information of their site and, poof, relevant ads are selected from the 300 or so ad networks in the system.
Over 3,000 publishers have signed up to date with publishers seeing between 33 and 300 percent lifts in ad revenue. Rubicon likes to call it "mad cash." Everything is done on the fly and there are endless reports informing the publisher of their campaigns' performance.
The site scales for sites of all sizes from your Dad's blog to sites the size of MSNBC.
With something as cool as this, exclusity doesn't last long. It appears another company, PubMatic, offers a similar service.
JANUARY 29, 2008
And that was before recent economic concerns.
More than seven out of 10 survey respondents said that there would be either no change in their budget or that their budgets would increase by no more than 5% in 2008.
A little more than 7% of respondents expected to see budget increases greater than 11%. The remainder either predicted a decrease in budget or did not want to make a prediction.
A majority of respondents also said that marketing spending had represented less than 4% of their companies' revenues for 2007. More than a third said their spending fell between 4% and 10% of their companies' 2007 revenue. The remainder of those surveyed either spent more than 10% of their company's revenue on marketing or did not make an estimate.
What do these marketer perceptions have to do with actual spending?
For ad spending, at least, the perceptions agree with predictions made in GroupM's "This Year, Next Year" report. As of December the research company projected that ad spending would grow 6.8% worldwide in 2008. That's an increase, but not a dramatic one.
ZenithOptimedia released similar worldwide ad spending projections in December. The company pegged growth for 2008 at 5.9%
Obviously ad spending doesn't account for other types of marketing, but the numbers definitely indicate subdued ad spending growth in 2008.
The larger concern is the global economy. Since the beginning of December, when these projections were made, there has been only bleak news about the US economy. A US downturn inevitably drags the global economy with it.
The marketing spending environment in 2008 could go from subdued to extremely conservative.
David Hallerman, senior analyst at eMarketer, said that an economic slowdown would affect some advertising and marketing directly.
"Paid search is 40% of ad spending," Mr. Hallerman noted. "If consumers are buying less, they will be searching less for shopping. So paid search spending will drop."
Learn where ad spending is heading in 2008 and beyond. Read eMarketer's US Advertising Spending report.
Committed to sports
USA Today announces its second sports-related deal in as many days: It has purchased sports site and ad network Banquet.
Banquet operates BNQT.com, an aggregation site offering coverage of eight different action sports like skateboarding and motocross. BNQT.com pulls video, photos and blog posts from across the 'net to populate its hub for sport enthusiasts, most of which are 12-34 and male.
The company also owns Cold War Collective, an ad network that extends to over 20 sites that cover action sports. The network offers banner, text and video ad inventory.
Like its deal with CSTV — announced yesterday — USA Today's purchase of Banquet is designed to expand sports coverage, especially in niche markets.
REST APIs, Rules and Relevance
In the user controlled medium that is digital advertising success is predicated on delivering relevance. Nowhere is this exemplified better than the success of search where there is a data input (rule 1) and multiple additional rules (geo and behavioral) that results in the delivery of content believed to be most relevant to the goals of the user. There is no question that the race to gain access to more implicit and explicit input data from users and from publishers to create rules will continue to increase the ability for marketers to deliver relevance in the coming years.
There are three components of this that marketers need to understand.
1. The tools for gathering and structuring content into a marketing corpus (ads, articles, products, whatever)
2. The tools for creating rules based delivery (testing, targeting)
3. The methodologies for executing and presenting optimized creative
In the next 12-24 months online marketing success will continue to be less and less about banners and websites and more and more about the dynamic experience everywhere. We need to look “under the hood” at content as being a database platform that improves our ability to present and deliver content. The changes this effects with the strategic and creative use of data through APIs and algorithms is profound.
Pull it Forward
Once content is free from the restrictions and limitations of site architecture and reliance on traffic sources marketers are empowered to create more compelling and relevant digital solutions. This can take the form of advertising unit widgets, dynamic landing pages, microsites, search interfaces and a host of new and useful applications.
Increased relevance will be delivered in the what (messages) but more impact and success for advertisers and publishers will be felt in the where -- bringing tools to deliver relevance closer to users creates better experiences. The same basic principles that apply for search should be your guide and inspiration to create an API that you can use to deliver relevance anywhere, especially in display (where successful ad units are increasingly more dynamic and interactive) or the emerging use of widgets/gadgets.
Distributing user controlled functionality into your business at multiple touch-points is the core idea behind the distributed web or web as a platform. Though this is not new for search engines or publishers (think toolbars or syndication) we are just beginning to scratch the surface of it as a highly optimized advertising solution. Just today Union Square Ventures announced funding of a platform based company that doesn’t even have a website!
Relevance Breeds Emotion
The net result of all this is that deeper and more engaged user interactions are taking place and breeding higher levels of emotional connection to digital -- as the web becomes more intelligent it becomes more relevant. This connection with intelligence leads to higher returns both in transactional measurements and brand value. It’s how Google has built one of the strongest brands in the world while at its core it is the greatest direct marketing platform the world has known. Platform marketing allows you to apply these same principles to achieve success with your online business.
There is one important last piece that can’t be overlooked to ensure success. Marketers and creative folks must begin to understand technology and learn how to use it creatively. This will be the biggest hurdle to success. The days of siloed IT and Marketing, of Creative Directors that don’t know their clients Content Management Systems will end in a fiery furnace filled with ashen businesses and agencies.
In the first decade of the commercial net access to data smote a number of verticals like travel and music. In the next decade far greater access to data will continue to destroy a number of now successful businesses and advertising models. It will also create many revolutionary opportunities and digital success stories. Which will you be? The answer probably rests in if you have or will create a plan in the next 6-12 months for creating the platform, rules and delivery of your marketing content.
NOTE 1/16: Paid Content has an interview today with Google's Andy Berndt where he touches on creating marketing platforms.
"all new platforms give an early advantage to those who can best manipulate the technology itself, the best technicians. After the platform becomes user friendly, when it is opened up to the best storytellers and designers and communicators, they tend to add another level to it. The rare time when you find people who really appreciate both sides of that coin (innovation and storytelling) is where truly amazing things happen."It's a good read. More here
During the year, alpha dog MySpace and Silicon Valley favorite Facebook separately introduced ad targeting based on users' profile data, marking the first major attempts by either firm to connect marketers to social network users based on volunteered interests.
In May, Facebook rocked the developer world with its open platform strategy, spawning an avalanche of branded apps and a fledgling app-based media market. Then in November it dropped another bomb in the form of two ad-driven initiatives. One of these, its Beacon behavioral tracking program, spurred a privacy outcry when users learned their sensitive transactional data could be broadcast to friends and "friends." As pressure mounted in the unlikely form of a MoveOn.org campaign, Facebook altered the program, making it opt-in.
A further social marketing trend has been the rise of so-called widget ads. Though they got their start well before this year, ad units with rich functionality and sharing functions gained momentum in 2007 with the launch of Google's gadget ads and similar offerings from EyeWonder and others.
Yet despite the palpable feeling that social networks represent -- or at least point to -- a seismic shift for marketing in general, advertisers and agencies have produced only a flurry of smash hits. Achieving mass reach for socially driven ad campaigns may simply never happen. In another strike against social marketing this year, many ads on Facebook and MySpace are highly untargeted and appeal only to the lowest common denominator.
"The majority of advertising within social networks is devoid of strategy," said Ian Schafer, CEO of Deep Focus. Schafer believes the problem is partly advertiser laziness and partly confusion about how to approach a channel that demands equal parts creative, media, and public relations savvy.
"Social media is a medium within a medium, and I don't think there's been enough cohesive thought into what a social media strategy is or should be," he said.
And budgets are still tentative. Even though MySpace's reach is now on par with the largest portals and ad networks, Jupiter Research analyst Emily Riley said social marketing campaigns generally spend under $25,000. "They're definitely still in the testing phase," she notes.
Both Riley and Chad Stoller, VP of emerging media for Organic, noted a major risk for social media heading into 2008 is the impact of clutter, including both ad clutter and app clutter. One Facebook group called simply "This has got to stop" has garnered nearly 500,000 members.
"I don't want to be a vampire. I don't want to be a pirate. Leave me alone," the group's page says. "Pointless applications are ruining Facebook."
Such an attitude could dampen the efforts of marketers who want to distribute their expensively produced branded apps to social networking users.
Privacy will also likely continue to dog future social marketing efforts.
"The biggest thing about the Beacon program is it pulled the curtain off of this thing called behavioral targeting," said Stoller. "Joe consumer has no idea about behavioral targeting...There's going to be a backlash."
In addition to low-end appliances, office supplies, and jewelry, Wal-Mart-owned Sam's Club is now offering its primarily small-business customers online advertising and search engine optimization services.
The services are part of its Online Services business, as spotted by Valleywag.
For $25 a month, Sam's Club will work to improve the ranking of a Web site on search engines, and for $50 a month a company can get pay-per-click advertising services. Sam's Club also offers Web site design and e-commerce services. Who knew?!
The online services are provided by Innuity, whose Web site looks a lot smarter than Sam's Club's does.
I saw today this thread at 5StarAffiliatePrograms with the title "How Do You Know, If a Site Will Make Money?" A newbie to internet marketing started the thread with the following post.
"Well I am hoping for some money. I started a blog that's about technology and games and am not getting much so I am trying Yahoo! ads, starting small just 15 cents and 3 dollars a day. No luck with that either. Also another thing I have tried multiple affiliate programs and I am having no luck at all so I am spreading out a little. But how exactly does one go about knowing if a site will make money on ads?"
Several people already responded with good comments and helpful suggestions. I can only agree with what was said by "MarketLeverage" and Linda Buquet.
You never know if and how much money a new site will generate, however, there are some things to consider in general that have direct impact on how much money you make off a site.
If you start a new site that is a content site or blog, you have to establish trust and a readership first. Would you listen to a stranger, who you never met before and who starts with trying to sell you something? Of course not, if you can, you would shut the door or leave yourself. Building trust and selling does not work very well at the same time in almost every case, except what you are offering has to do with selling (comparison shopping engines are such an example). For the most part should you not think about monetization at the beginning and avoid ads like AdSense or Banners as much as you can or better, altogether.
Once you established credibility and trust, you can slowly introduce some advertising and sales pitches. This has to be a slow and step by step process where you get the chance to check how your increase in commercialization was received by your visitors.
The good thing and side effect of this approach is that by checking how your visitors react to certain things, that you learn at the same time, what their needs are and why they came to your site in the first place.
There can evolve monetization opportunities that you have not even thought of when you launched the site.
When it comes to investment into marketing or something else that you hope will provide another stream of income, be careful with spending too much money and energy on something that did not prove itself. Start new things small with the least possible investment to get enough data to tell, if something looks promising or not. If you invest too less, then you don't get enough data to make a good evaluation, if you invest too much, you might burn precious resources on something that does not work and creates a hole in your budget that is hard to fill again.
The right balance is not a set figure, virtually never. You always have to try and find out yourself what that right balance is for your vertical, your audience, your budget and your goals. If something works, try to do more of it until it is saturated. If something does not work, stop doing it as soon as possible and prevent unnecessary losses.
A Note on the Side
People who were able to establish a blog without commercial intent and gained many followers and readers tend to have a problem with monetizing their blog at that stage. They should have started thinking about it earlier, but waited too long and to the point where the blog consumes too much of their spare time to become a time and financial burden and typical gradual approaches take too much time.
For those folks (and anybody else too actually) are this video by Jeremy Shoemaker and my post here at ReveNews.com from Blog World Expo last November might be of some help. Affiliate marketing is an ideal way to monetize content sites and blogs, but it is not as easy as Google AdSense or Yahoo! Publisher Network for example. To get your head around the subject of affiliate marketing, check out these resources on my site and get going from there.
I hope this helps and good luck with your business ventures
Count 'em 11 online ad startups funded just this week and two were bought: IMMI, Covario, EVO Landing (some might not count this as online advertising but part of the biz is in ads), Germany's Adscale, AdInfuse, GoldSpot Media, Smaato, Quantcast, IGA Worldwide, Adchemy, Plus AdOn Network and Prime Visibility were acquired.
The latest funding announced is Ooyala. We had previously reported on Ooyala when it was in stealth made. It was noteworthy as its founders are Bismarck Lepe and Sean Knapp, who came from Google. Google employees who leave the company enjoy a halo effect as it is assumed that they are smarter and better connected than some jerks who left Yahoo. It will interesting to see how many failures will go down before former Googlers lose their priveledged status.
Now that has disclosed that is has raised $8.5M in 2nd-round funding led by Sierra Ventures, the curtain over the company has been lifted a bit. (BTW - Ooyala says its total funding is now at $10M. Moreover Ooyala won first place in Amazon Web Services Start-Up Challenge last month, taking home $100K in cash and services as well as a golden hammer symbolic of the breaking of server boxes.
Ooyala has launched a product called Backlot which allows users to measure, manage, syndicate, and monetize videos across video players. It also tracks over 20 different viewing metrics that detail the performance of online videos and syndication channels. For this Ooyala charges $0.08/hour per video served.
While E*Trade Sucks Wind, Former CEO Raises $29.6M For SocNet MOLI
Former E*Trade CEO Christos Cotsakos left the company under a cloud but he's living large in West Palm Beach, FL and his latest startup has raised $29.6M. Mainstream Holdings did the deal with Home Depot co-founders Bernard Marcus and Kenneth Langone, and Vantis Capital Management's Steven Holzman. A local paper reports that the startup raised an initial $20M from Cotsakos and $6M from other investors.
Opening the kimono today at the Demo event, Mainstream Holdings was launched in 2004 but is launching a social network called MOLI. MOLI is led by some E*Trade refugees including COO Judy Balint who was Chief International Officer at E*trade. At launch, the firm already employees 50 heads in Palm Beach, plus others off-shore.
GigaOm has a long, thoughtful review but in our summary judgment, Moli has whiffed at launch. Maybe they will get their act together later on. The site needs to be more clear about who should use it (creative types who want to make money) and why this would be time well spent (something about creating multiple profiles for your professional and personal selves.)
It's going to be painful for the E*Trade gang to justify their valuation to investors if they can't get a handful more people to check it out soon. Call us jaded, but this is an obvious failure in the making that the rich dudes think will work just by throwing money at a trend.
Monday, January 28, 2008
So, you’re going to launch a social media campaign huh? You’ve got all the tools, resources, and processes together, but did you remember to set some goals?
I get to meet and talk to many companies that are adopting social media from a variety of levels of sophistication: unsure, scared, excited, embracing, overly ecstatic. One of the biggest challenges they have is forgetting to visualize what success looks like. In many cases, they are overly focused on fondling the hammer, that they forget about the overall goal.
Even if a company is doing a trial project (externally, internally, whatever) part of the expectations of the project should include a page, slide, or document that indicates what success will look like –even if they know that it may not be reached, here’s a few example to get you started:
A few examples of what success could look like for you:
We were able to learn something about customers we’ve never know before We were able to tell our story to customers and they shared it with others A blogging program where there are more customers talking back in comments than posts An online community where customers are self-supporting each other and costs are reduced We learn a lot from this experimental program, and pave the way for future projects, that could still be a success metric We gain experience with a new way of two-way communication We connect with a handful of customers like never before as they talk back and we listen We learned something from customers that we didn’t know before
As you prepare your plans (you’ve got one right?) to use social media, don’t forget to include a section on “what does success look like”, and visualize and aim for you goals. Oh, and guess what, your goals can change over time, and they should.
Experimentation with these are important, these are radically different ways for companies to communicate with customers, so be sure to indicate to your management how this is experiment, and you’ll need a bit of wiggle room and latitude for the unexpected. It’s their job to empower and trust you, knowing the risks that could happen as you learn to let go to gain more.
It’s important to setup expectations for yourself, your management, and your customers (feel free to let them know why you are doing this) in order to give yourself a purpose as you embark on connecting in new ways.
'Top Friends' Is Top Facebook App, MySpace Has Largest Widget Audience
never fully leveled
In November 2007, nearly 148 million US Internet users viewed widgets — representing 81 percent of the total audience, according to comScore's November 2007 US rankings of the top web widgets, reports MarketingCharts.
MySpace.com widgets had the widest audience, reaching more than 57 million Internet users, while Slide.com ranked second with 39.2 million viewers.
"Top Friends" by Slide was the top-ranked Facebook application during the month, with more than 6.2 million engaged viewers (18.5 percent of the Facebook audience)
Top Facebook Apps
The inaugural Facebook application rankings revealed that more than 20 million Facebook visitors, or 61 percent of the site's US audience, engaged with an application in November.
Visitors between the ages of 18 and 24 were twice as likely as the average Facebook visitor to engage with applications, while those aged 25 and older were less likely than average to do so.
Ranked second after "Top Friends" on Facebook was Movies by Flixster with 5.2 million (15.4 percent) and SuperPoke! by Slide with 3.6 million (10.8 percent).
Slide contributed three of the ten most-engaged Facebook applications in November, while RockYou! contributed two.
Sunday, January 27, 2008
PRINTED books provide pleasures no device created by an electrical engineer can match. The sweet smell of a brand-new book. The tactile pleasures of turning a page. The reassuring sight on one’s bookshelves of personal journeys.
But not one of these explains why books have resisted digitization. That’s simpler: Books are portable and easy to read.
Building a portable electronic reader was the easy part; matching the visual quality of ink on paper took longer. But display technology has advanced to the point where the digital page is easy on the eyes, too. At last, an e-reader performs well when placed in page-to-page competition with paper.
As a result, the digitization of personal book collections is certain to have its day soon.
Music shows the way. The digitization of personal music collections began, however, only after the right combination of software and hardware — iTunes Music Store and the iPod — arrived. And as Apple did for music lovers, some company will devise an irresistible combination of software and hardware for book buyers. That company may be Amazon.
Amazon’s first iteration of an electronic book reader is the Kindle. Introduced in November, it weighs about 10 ounces, holds more than 200 full-length books and can display newspapers, magazines and blogs. It uses E Ink technology, developed by the company of that name, that produces sharply defined text yet draws power only when a page is changed, not as it is displayed.
Sony uses E Ink in its e-book Reader, which it introduced in 2006, but the Kindle has a feature that neither Sony nor many e-reader predecessors ever possessed: books and other content can be loaded wirelessly, from just about anywhere in the United States, using the high-speed EVDO network from Sprint.
This may turn out to be a red-letter day in the history of convenience — our age’s equivalent of that magical moment FedEx introduced next-day delivery and people asked, “How was life possible before this?”
The Kindle is expensive — $399 — but it sold out in just six hours after its debut on Nov. 19. Since then, supplies have consistently lagged behind demand, and a waiting list remains in place.
The Kindle gets many things right, or at least I assume it does. I haven’t had much of a chance to test out my demonstration unit. My wife, skeptical that a digital screen could ever approach the readability of ink on paper, was so intrigued by the Kindle when it arrived last week that she snatched it from my grasp. I haven’t been able to pry it away from her since.
I can see that the text looks splendid. But when one presses a bar to “turn” a page, the image reverses in a way I found jarring: the light background turns black and the black text turns white, then the new page appears and everything returns to normal. My wife said she wasn’t bothered by this at all, and I didn’t have enough of a chance to see if I would soon get used to it.
Steven P. Jobs, the chief executive of Apple, has nothing to fear from the Kindle. No one would regard it as competition for the iPod. It displays text in four exciting shades of gray, and does that one thing very well. It can do a few other things: for instance, it has a headphone jack and can play MP3 files, but it is not well suited for navigating a large collection of music tracks.
Yet, when Mr. Jobs was asked two weeks ago at the Macworld Expo what he thought of the Kindle, he heaped scorn on the book industry. “It doesn’t matter how good or bad the product is; the fact is that people don’t read anymore,” he said. “Forty percent of the people in the U.S. read one book or less last year.”
To Mr. Jobs, this statistic dooms everyone in the book business to inevitable failure.
Only the business is not as ghostly as he suggests. In 2008, book publishing will bring in about $15 billion in revenue in the United States, according to the Book Industry Study Group, a trade association.
One can only wonder why, by the Study Group’s estimate, 408 million books will be bought this year if no one reads anymore?
A survey conducted in August 2007 by Ipsos Public Affairs for The Associated Press found that 27 percent of Americans had not read a book in the previous year. Not as bad as Mr. Jobs’s figure, but dismaying to be sure. Happily, however, the same share — 27 percent — read 15 or more books.
In fact, when we exclude Americans who had not read a single book in that year, the average number of books read was 20, raised by the 8 percent who read 51 books or more. In other words, a sizable minority does not read, but the overall distribution is balanced somewhat by those who read a lot.
If a piece of the book industry’s $15 billion seems too paltry for Mr. Jobs to bother with, he is forgetting that Apple reached its current size only recently. Last week, Apple reported that it posted revenue of $9.6 billion in the quarter that spanned October to December 2007, its best quarter ever, after $24 billion in revenue in the 2007 fiscal year, which ended in September.
But as recently as 2001, before the iPhone and the iPod, Apple was a niche computer company without a mass market hit. It was badly hurt by the 2001 recession and reported revenue of only $5.3 billion for the year. This is, by coincidence, almost exactly what Barnes & Noble reported in revenue for its 2007 fiscal year. In neither case did the company owners look at that number, decide to chain the doors permanently shut and call it quits.
Amazon does not release details about revenue for books, but books were its first business. And Andrew Herdener, a company spokesman, said that Amazon’s book sales “have increased every year since the company began.”
The book world has always had an invisible asset that makes up for what it lacks in outsize revenue and profits: the passionate attachment that its authors, editors and most frequent customers have to books themselves. Indeed, in this respect, avid book readers resemble avid Mac users.
The object we are accustomed to calling a book is undergoing a profound modification as it is stripped of its physical shell. Kindle’s long-term success is still unknown, but Amazon should be credited with imaginatively redefining its original product line, replacing the book business with the reading business.
Randall Stross is an author based in Silicon Valley and a professor of business at San Jose State University. E-mail: firstname.lastname@example.org.
Dave McClure (who helps teach the Stanford Facebook class, and runs the Graphing Social Patterns conference), Justin Smith (of Inside Facebook), Rodney Rumford (of FaceReviews), and myself brainstormed last night trying to understand the current state and direction of the emerging widget industry.
The widget universe is vast with a lot of variation. So although the initial goals was to try to categorize the widgets into clean buckets, and we found that to be an impossible task. Widgets can often have multiple attributes, so instead we focused on attributes and characteristics, rather than groupings. We developed a couple of models, (none that are perfected) but noticed a few ways to look at the attributes:
Levels of Data Interaction
Highest | Application uses data from your social network | iLike
High | Application uses data from your preferences | Pandora
Low | Application pulls data from source | Audio stream (like a radio station)
None | Static widget, display badge | Widget links to other website
We also explored a model of self-expression/vanity/entertainment vs utility and communication. And also found that some apps have different lifecycles from simple one time users (disposable widgets) or to those that got more value over time as network usage increased.
Later, Ro Choy from RockYou came by and presented me with a very clear definition of the differences between widgets and applications. Essentially (and I have a video of him to come) widgets are limited in functionality (due to limitations in size), usually resulting in the widget creator trying to get the user to go another website, vs an application that has full functionality, is on multiple pages, and therefore the widget creator doesn’t need to lead the user off the application.
So in summary, this was one of the first cracks at trying to segment the landscape, we’ll have to have subsequent meetings to drill down even farther. I’ll be mulling this whole thing over for the next few days/weeks to try to make sense of all the learnings. It’s a much larger universe (over 13,000 widgets exist, which will likely double this year) developing a taxonomy will be challenging and fun.
I was planning to live stream the event, but had issues with my wireless, although Rodney was taping and I’m sure he’ll post it. Chances are, you’ll find it very boring and dry, as we weren’t playing to the camera, we just had it on from the other side of the room as we discussed.
Friday, January 25, 2008
The Vista disaster has caught Wall Street's attention before but I've never seen the popular press understand the issues like this argument in the Motley Fool. The opposing argument is a weak statement of faith, essentially "as it was in the beginning is now and forever shall be." "You don't need to watch the 'I'm a Mac, I'm a PC' commercials to see that Microsoft is taking a beating. You see it in the company's financials where its online unit, incredibly, is operating at a loss; overheating Xbox 360 consoles find the company taking a huge warranty hit for a system losing market share to the Wii; and the upgrade wave of its flagship operating system has been more of a ripple than a tsunami. That last point is important. This was supposed to be Microsoft's final feast, the major last hurrah for its Windows Vista operating entry and its Office 2007 suite of applications before the inevitable embrace of cheaper open source operating systems and Web-based apps... In fact, even Microsoft will tell you that its fortunes peaked several months ago."
Moreover, 82% of the marketers surveyed indicated that they plan to increase their use of email marketing in 2008, and 55% of the respondents said they expect ROI from email to be higher than any other channel.
Email ROI will hit $45.65 for every dollar spent in 2008, more than twice the ROI of other mediums including search and display, said Datran Media, citing data from the Direct Marketing Association.
Among other findings of the Datran survey of online marketers:
Some 67% of respondents stated that email has helped boost sales through other channels. In these scenarios, email is a tool for sales as well as a media channel.
Search is the favored channel for complementing the email channel.
More than 80% of marketers send targeted email campaigns.
Additional findings, with charts, are available via Datran’s website.
Thursday, January 24, 2008
Social media and user-generated content may be the hot new thing, but from a measurement standpoint, they represent some challenges. In large part, the challenges stem from the fact that the space is immature and growing rapidly; faster, in fact, than experts can come to agreement on what to measure and how to measure it. For example, there is still active and healthy debate in social marketing circles about whether qualitative insights can tell you more than sheer numbers. Some, like noted blogger (and now Forrester Research social media analyst) Jeremiah Owyang, believe that a) quantitative metrics should be balanced in equal measure by qualitative insights, and b) measurement processes will vary depending on a campaign's goals. Yet, the reality at this stage in the evolution of social media is that we lack the equivalent of standard web metrics like the unique visitor, clickthrough and page view. Focusing on the number of friends your brand may have in a social network like Facebook or MySpace fails to capture the essence of "friending" and the interactions those friends may have with your brand.
Keep in mind that as a brand marketer, your opportunities to leverage social media exist within three basic spheres, each with decreasing proximity to your own brand (and a correspondingly decreasing degree of measurability):
- Your own website or sites that you either brand or sponsor
- Sites within your broader link network, such as partners or affiliates
- The vast range of sites on the open web that are relevant to your brand or industry niche (such as blogs, forums, communities and networks).
Any activity that takes place on your own site, for example, carries a high degree of measurability, and should be covered by whatever analytics package you have in place. The second and third tiers -- where actions linked to your brand or site and discussions referencing your brand -- are the least measurable by conventional standards, and that's where you are most likely to enter unchartered territory.
Charting the uncharted waters
Any major brand is going to be mentioned on hundreds if not thousands of sites and blogs across the web. These sites and posts need to be sorted by level of engagement. While it is the case that online word-of-mouth -- in the form of consumer-generated reviews, photos, videos and ratings -- can have a significant impact on purchasing behavior, not all of this content carries equal weight. Examining the relevancy, frequency and visibility of brand mentions is one way to reduce the list of thousands or hundreds to a far more manageable list of tens.
Colleagues of mine did this when they found themselves in unfamiliar waters with a consumer electronics client for whom they were developing a social media campaign, the cornerstone of which was engagement with online communities and forums. And by engagement I mean the highly granular process of actually entering into discussions and responding to questions about the client's products with community members on the client's behalf.
Initially, my colleagues found themselves staring at an extremely broad universe. To avoid getting lost in space, they focused on basic goals:
- Finding the networks most relevant to the client
- Determining how to engage with and be useful to the audiences
- Tying that engagement back to actions on the client's site.
They succeeded in narrowing down the larger universe by applying basic relevancy criteria, such as the extent of client-related discussions and the frequency of postings mentioning the client. The visibility of sites in search was another important consideration, as it provided a measure of potential influence for one community site versus another (in terms of the likelihood of being found by consumers interested in the topic and/or the client's products).
With a more circumscribed list of sites to monitor in hand, my colleagues were able to move on to consider the weight and social authority of links and discussion networks, contextual references, visibility scores and tonal analysis as building blocks for measurable and actionable data. Bearing in mind that their primary aim was to improve the client's online reputation, they started with the number of sites they were monitoring for brand references and then the number with which they actually engaged. This helped to show the client how often opportunities arose and the resulting need for ongoing engagement. Then, my colleagues focused more granularly on the number of threads posted in a given conversation, the number of community members with whom they engaged on behalf of the client and the overall tone of those conversations. This helped to gauge the audience's level of interest in developing and maintaining a dialogue about the client's brand and the level of credibility my colleagues were able to forge with each network of users.
Each metric gave rise to a number of derivatives, all linked by the process my colleagues developed. These metrics may not be part of any marketing textbook -- yet -- but baselines can be established for each, and the evolution of each metric can be tracked over time. Even if these metrics currently lack the authority of the clickthrough or page view, they do constitute a stake in the ground in what will be a developing conversation. And as we all know, you have to start somewhere.
JC Penney Feels the Marketing Power of Link Love
Retailer Aggregates Content From Blogs and Lets Readers Talk Among Themselves; Google Results Soar
By Abbey Klaassen
Published: January 21, 2008
Yes, search equity is all about link love. Creating -- or aggregating -- compelling content online and letting readers use social-media tools to share the content can goose Google results for brand or related terms. It's something bloggers have known for years, but marketers are really just beginning to employ.
One case study: Federated Media and JC Penney teamed up to launch the Fall Shopping Guide, a collection of content from popular woman-focused blogs prominently sponsored by the retailer's Chris Madden Collection.
The site aggregated content from blogs such as Heather Armstrong's Dooce, The Mommy Blog and Confessions of a Pioneer Woman. JC Penney didn't have rights to review or influence content. The site launched mid-September; a few of the contributing bloggers mentioned it on their blogs, some did not. But traffic started to grow. Federated execs started to notice traffic coming from places such as StumbleUpon, a social-bookmarking site, and RSS readers, which meant people were beginning to subscribe to the content.
"Once people start engaging in that, they feel part of the experience. And when they feel part of the experience, they share it with friends and upload it to social-bookmark sites," said Chas Edwards, publisher and chief revenue officer at Federated Media. "And then Google starts to take notice of this. ... A month after the campaign, this site was showing up."
Today, it shows up as No. 5 of 13 million results for the search term "fall shopping" and second out of more than 4 million results for "fall shopping guide."
Licensing the chatter
At time when many marketers are looking to become content creators themselves, JC Penney instead partnered with several existing bloggers who already had significant user bases. Mr. Edwards talked a lot about the conversation going on among the bloggers in his company's network. "We said, 'Let's build a site that licenses the conversation.'"
In the end, the campaign so closely linked JC Penney to the content that many of the site's comments referred to it as JC Penney's blog or content. Yet in this case, the marketer was the content aggregator -- something brands are increasingly exploring. For example: As part of its HDNA campaign, Sony partnered with Digg to launch a site devoted to news about high definition.
"From a marketer's perspective, it's hard to write good stuff all the time and have a diversity of voices. When you can find like-minded folks who create a rich conversation, you get a much more appealing product," said Andy Sernovitz, CEO of Blog Council, a coalition of Fortune 500 bloggers.
JC Penney's interactive agency, Avenue A/Razorfish, didn't address the Federated Media campaign, but talked generally about research it had done that documented an authority shift among media sources.
"Bloggers, even if they have small audiences, are seen as trusted sources," said Jeff Lanctot, senior VP-global media. "They can pique our interest about products."
Mr. Lanctot said marketers are becoming more comfortable with campaigns that involve things such as blogs, even if that means giving up some control.
"What we've seen to date online is this explosion of content because everyone can be author or writer or producer -- and now we're getting a need to filter that content," he said. "The question is, who will be that filter? You will see brands that have authority and trust to act as a filter."
Wednesday, January 23, 2008
Question: How difficult will it be to launch a worthwhile version 1.0?
Blogger was highly tractable. Twitter was tractable, but sightly less-so because of the SMS component. Google web search had quite low tractability when they launched it. Vista?: About as low as you can get.
Tractability is partially about technical difficulty and much about timing and competition—i.e., How advanced are the other solutions? Building a new blogging tool today is less-tractable, because the bar is higher. Building the very first web search engine was probably pretty easy. Conversely, building the very first airplane was difficult, even though there wasn't any competition.
In general, if you're tiny and have few resources, tractability is key, because it means you can build momentum quickly—and momentum is everything for a startup. However, tractability often goes hand and hand with being early in a market, which has its own drawbacks (e.g., obviousness, as we'll discuss below).
If you're big and/or have a lot of resources—or not very good at spotting new opportunities, but great at executing—a less-tractable idea may be for you. It may take longer to launch something worthwhile, but once you crack the nut, you have something clearly valuable.
Question: Is it clear why people should use it?
Everything is obvious once its successful. Big wins come when you can spot something before its obvious to everyone else. There are several vectors to this: 1) Is it obvious why people should use it? 2) Is it obvious how to use? 3) Is it an obviously good business?
Number two is more affected by the design of the product than the idea itself. You don't actually want number three to be true. You want it to be a good business, but not an obviously good business, because than you get more competition. Web search was not an obviously good business before Google demonstrated it. This allowed them to leap-frog the competition that was in it for years, but not taking it very seriously. But, like Google, the business may not be clear until later.
The key question for evaluating an idea is number one: Is it obvious why people should use it? In most cases, obviousness in this regard is inversely proportional to tractability. The cost of Blogger and Twitter's high tractability was the fact that they were defining a new type of behavior. The number one response to Twitter, still, is Why would anyone do that? Once people try it, they tend to like it. But communicating its benefits is difficult. We're heartened by the fact that Why would anyone do that? was the default response by the mainstream to blogging for years, as well, and eventually tens of millions of people came around.
On the flip side, if you can build an ad network that makes people more money, a better search engine, or a productivity app that actually does tasks for people—all, less-tractable solutions—it will be highly obvious to people why to use your product.
Sometimes you can come up with ideas that are highly tractable and obvious. For example: Top Friends or HotOrNot. These products were not hard to launch and yet, were immediately appealing (to their target market). What was not obvious, in either case, is that they could also be great businesses. HotOrNot has proven this to be true. And I suspect Slide will, as well.
Question: How much value can you ultimately deliver?
The most successful products give benefits quickly (both in the life of a product and a user's relationship with it), but also lend themselves to continual development of and discovery of additional layers of benefit later on.
Facebook is incredibly deep because it leverages your connections, which touch practically every aspect of your life. Scrabulous, on the other hand—a Facebook app for playing Scrabble—is not very deep. How big is the Scrabble-playing part of your life, and how much can it deliver beyond that?
But most things are deeper than they seem at first glance. Practically any application, once people start using it, can be used as a lever to more activity and benefit delivery. Being smart about what you're leveraging is key.
When Feedburner first launched, their only feature was the ability to take an RSS feed and spit out multiple versions, depending on the capabilities of the feed reader requesting it. It seemed useful, but hardly something to start a company around, especially because that particular problem would probably go away over time. Or so I thought. What I didn't get and they did (because Dick and gang is smarter than me) is that they were setting themselves up at a great leverage point—between publishers and their readers—where they could offer an ever-deeper value stack. Soon it was feed stylesheets with one-button subscription, feed stats, feed flare, blog stats, email subscriptions, and, of course, advertising, where they made their money.
While we're talking about Feedburner, its worth mentioning that their product was also very obvious for their core user-base. There were clear benefits and very little drawbacks. They also had no competition, even though there were tons of companies in the RSS/feed space, because most of the others were battling it out on the reader side.
Other times, you stumble into deepness. When they put up HotOrNot on a whim, Jim and James didn't know they'd be able to leverage it into a highly profitable dating site. Okay, so HotOrNot's still not the "deepest" of sites, but it's deeper than you think.
Question: How many people may ultimately use it?
Wideness, like deepness, is a fairly classic market analysis measure. They are usually inversely proportional—do you try to offer the mass-market good or the niche one?
Feedburner is not particularly wide. Their market was those who published RSS feeds (and cared about them). This was in the hundreds of thousands, not a hundred million. Turns out, it didn't need to be used by a hundred million to be worth a hundred million, so going for wideness is not entirely necessary. But it's something to look at.
Like deepness, wideness can take you by surprise. The web is getting so damn big, what seem like niche ideas can be very decent businesses. When Ted Rheingold launched Dogster, as a joke, he didn't know there were enough people out there who would be interested in making their dogs web pages to actually build a business. When we launched Blogger, I thought maybe a few thousand people would use it.
Sometimes, you can find a spot that is both deep and wide. This is where multi-billion-dollar businesses are built: Google, Windows, Ebay. It's easy to think these kinds of opportunities aren't laying around anymore—at least not for the little guy. But most people would have said the same before Facebook entered the picture.
Question: How will people learn about your product?
I was going to call this criteria "viralness." However, there's a lot of focus on viralness these days, and—while sometimes amazingly effective—it's not the only way to grow a user-base. And it doesn't make sense in all cases.
Interesting to note: Google web search is not the least bit viral. Nor is Firefox. Nor it Kayak.
It's possible to get the word out without being "viral." One way is organic search traffic. Another is pay-per-click ads (if you can monetize). Another is plain old-fashioned word-of-mouth/blog/press. (Twitter has probably grown more through press and blogs references than any inherent viralness.) There's also distribution deals and partnerships.
Either way, it's something to think about up front, as different ideas lend themselves to different discoverability strategies. And some things are more difficult than others to spread. Dating sites, for instance, have not historically been viral, because people weren't going to invite their friends to—or even talk much about—their personal ads. The sites made up for this by buying lots of ads, which worked because they monetized signups via subscription.
Question: How hard will it be to extract the money?
Far be it for me to say that obvious monetizability is a requirement. I'm generally a believer that if you create value, you can figure out the business. However, all things being equal, an idea with clear buck-making potential is better than one without.
Whether or not something is monetizable is not always clear up-front. It wasn't clear how Google was going to make money early on. Ebay thought it would sell auction software.
In most cases, if you position yourself close to the spending of money, you can extract some. Or if you offer something that clearly saves or makes people money.
Blogger, I believe, makes money for Google, but it's not the most monetizable of products. Twitter, I believe, will be more-so, but that's yet to be seen.
Question: Do you really want it to exist in the world?
Last on the list, but probably the first question I ask myself is: How important to me is it that this product exists in the world? If I were evaluating a startup, I'd ask this of the founders. As I wrote in "Ten Rules":
Great products almost always come from someone scratching their own itch. Create something you want to exist in the world. Be a user of your own product. Hire people who are users of your product. Make it better based on your own desires.
In theory, you can get around this with lots of user research. (It's pretty clear neither Slide nor Rockyou's founders are creating widgets based on their own needs and desires.) But you're more likely to get it wrong that way. When I've gone sideways, it's when I wasn't listening to my gut on this issue. Specifically, Blogger and Twitter were personally compelling, while Odeo wasn't.
However, "personally compelling" doesn't have to mean only that you want it as a user yourself. Curing cancer or helping the world be more green may be highly personally compelling for other reasons, which I think is just as good. My favorite products are those I really want as a user, but that I also think have some "greater good."
Charting it Out
To bring it home, here's a table with my estimates on where different products land by these criteria. Obviously, these are subjective measures, and for some of them, it's hard to judge in retrospect. (I didn't inlclude Personally Compelling on the list, because I can't really speak to the founder's motivations in most cases.)
|Google (web search)||Very Low||Very High||Very High||Very High||Low||Very High|
|High1||High||Very High||High||Very High||High2|
|HotOrNot||Very High||Very High||Med||Med||Med||High4|
|Scrabulous||High||Very High||Low||Low||Very High||Low|
|Ebay||Med||High||Very High||Very High||High||Very High|
The "Anmuth's Internet Inside Weekly" report states $42.5 million or 5 percent of all presidential campaign spending in 2008 will flow online. The remaining forecast $67.1 million in online political ad spending will come from other political advertisers, including congressional and public policy related campaigns. Mirroring other prognostications, the firm anticipates an incremental rise in online campaign ad expenditures moving forward.
Lehman Brothers also expects US online advertising to grow 24 percent to $26.2 billion in 2008, pointing particularly to presidential election and summer Olympics-related ad spending as key drivers.
The report suggests presidential campaigns will spend more of their ad budgets on the Web compared with statewide campaigns because they are national in scope. However, it's important to note the ability to target ads geographically down to the zip code level has been a draw to presidential candidate campaigns during the primary season. Geo-targeting will most likely continue to be an attractive option to these advertisers once party nominees emerge, since the campaigns typically target ads heavily in important swing states or other tight-race regions.
Overall, total political ad spending on all media in '08 is set to reach over $3 billion, with $850 million coming from the presidential campaigns, according to the report. Spending by US Senate campaigns across media will rise almost 8 percent from $302 million to $325 million, while US House spending will go up nearly 19 percent from $337 million to $400 million. Public policy and other state efforts will also drive political ad revenues this year. Ad spending by such groups, however, isn't always associated with a candidate campaign.
Lehman's estimate that 3.6 percent of political ad dollars will move online this year is higher than the 1.6 percent estimate published in a December PQ Media report. That forecast encompasses political ad spending on all media in 2007 leading up to the presidential primaries, as well as '08 revenues, totaling an estimated $4.5 billion across all media. Despite casting a larger net, PQ predicts just $73 million is expected to go towards the Web, compared with Lehman's $110 million forecast.
According to PQ, about 80 percent of all money spent by political advertisers on the Web will go towards e-mail marketing efforts, a primary method for online fundraising pitches and communicating with grassroots supporters. The Lehman report, which represents all forms of online advertising, notes, "our estimates are directly associated with the advertising budgets of each candidate." Anmuth added he thinks less Web spending is going towards e-mail than is estimated by PQ.
The Lehman report notes about 80 percent of the projected $3 billion in political ad spending will go towards TV, with the rest going to radio, print and the Web.
"We believe the major publishers such as Yahoo! and others are likely to benefit not just from campaign advertising, but also from increased traffic and engagement across their News and Elections coverage," predicts Lehman.As reported by ClickZ News last month, Yahoo served up the lion's share of presidential campaign ad impressions in 2007, according to Nielsen Online AdRelevance information. Nearly 90 million ad impressions from the candidates, or 32 percent, ran across Yahoo, and MSN grabbed about 30 million or 11 percent of display ads run by presidential hopefuls. Excite and AOL also scored a chunk of ad dollars from the presidential campaigns.
Slide gets $50M on $500M Valuation
Widget dev firm Slide has secured $50 million in a new round of financing, drawn from a group that included Fidelity and T. Rowe Price. The company is now valued at $500 million.
BusinessWeek deduces that, over the long term, Slide may favor share offerings over selling to another company.
Widgets built by Slide reached 150 million users in 2007, according to comScore. The opportunities behind such reach, for a utility that can be wedded to any site, is of understandable interest to investors.
Last night, Facebook’s 23-year-old founder and CEO Mark Zuckerberg appeared on “60 Minutes,” the most watched TV news magazine the US. The interview didn’t necessarily break any new ground for those of us that cover the company regularly, but it was the first time Zuckerberg appeared in front of tens of millions of viewers to explain what Facebook is, why people use it, and where it’s going. If you missed it, the video is embedded above. Today’s poll:
http://mashable.com/2008/01/14/facebook-60-minutes/ SEE VIDEO HERE
Tuesday, January 22, 2008
The Internet accounts for about 20 percent of overall media consumption in the U.S., says the Yankee Group, but advertisers are spending only about 7.5 percent of their budgets online, leaving "tremendous potential for marketplace growth." By 2011, the researcher predicts, 25 percent of all media consumption will be online, drawing 15 percent of advertiser dollars.
According to Yankee Group, the factors driving the revenue growth are increased online audiences, the development of new types of advertising, and new publisher business models that help sell interactive ads.
"With Internet connectivity nearly ubiquitous, online advertising growth is inevitable," said Yankee Group Sr. Analyst Daniel Taylor, author of the report. "And yet the Internet is still a relatively new digital medium. Steady growth in online advertising will require publishers to invest extensively in new media and advertising product development."
JANUARY 22, 2008
Shared budgets are still common.
Nearly three-quarters of e-mail marketers said in a recent survey that they plan to spend either the same amount or more on e-mail marketing in 2008 as they did last year.
The survey was part of MarketingSherpa's "E-Mail 2008: Top 10 Research Findings and Practical Ways to Increase E-Mail Performance" report.
More than a quarter of respondents said they would spend 1.5 times as much or more as they did in 2007.
"That speaks a lot toward digital media coming into adulthood," said Tim McAtee, senior analyst at MarketingSherpa. "Every [type of digital media spending] is coming up with it, but I do still feel that e-mail marketing can fight for a greater share of budget."
MarketingSherpa also said that many e-mail marketers had no separate budget line item for e-mail.
The company found that small in-house marketers were slightly more likely to say they had no specific e-mail marketing budget line item, but that a third of large in-house marketers said so as well.
eMarketer predicts that spending on e-mail marketing will grow by 5.1% in 2008, up 46% over 2007's growth rate. Marketing for both the national and local elections will contribute to this growth. Spending growth in 2010 will be similarly boosted on a smaller scale by election activity.
E-mail's low cost, which contributes to its popularity, also moderates growth. Because it is a low-cost medium, even relatively large increases in the number of commercial e-mails will not be reflected in large spending increases.
Because e-mail has typically been positioned as a low-cost tool, many companies look to spend correspondingly little for their e-mail marketing efforts.
Read how this low-profile digital marketing tool produces high-profile results. Get your copy of eMarketer's E-Mail Marketing: Getting Through to Customers report today.