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.

Online Advertisers To Spend Through Turbulence

MARCH 18, 2008

The shift online will continue in 2008.

eMarketer predicts that, despite the economic rough patch, US online advertising will continue to grow through 2008. Online ad spending will rise by 23%.

Yet even that reduced rate of growth will continue to top total media ad spending, maintaining online advertising's position as the fastest-growing media in terms of ad spending.

"Several elements unique to the Internet will support continued US ad spending growth even if other media falter," said David Hallerman, senior analyst at eMarketer.

"The greater ability to measure ads online will likely encourage marketers with reduced budgets," Mr. Hallerman said. "Those same marketers are finding that the audiences they need to target are spending more of their media time on the Web."

Search will account for the largest portion of online ad spending in 2008, at 40%. That percentage will decrease slightly through 2012, when it will account for 37.3% of US online ad spending.

Conversely, spending on rich media and video advertising is set to grow as a percentage of online ad spending, rising to 18.5% in 2012 from 10.2% in 2008.

eMarketer predicts that total US advertising spending will grow by 3.3% in 2008.

Advertising Age recently reported that other analysts have also predicted total media ad growth.

Speaking at the American Association of Advertising Agencies' Media Conference and Trade Show, Bear Stearns analyst Alexia Quadrani said US ad spending would increase 4% in 2008, up from an estimated 3.3% in 2007.

360i acquisition signals new era

Sara Holoubek
March 17, 2008


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The news on this second day of Search Engine Strategies New York is that 360i has picked up award-winning digital design, development and marketing firm i33. The acquisition brings expertise in designing and developing social media applications, widgets, websites and other rich media experiences, as well as clients Marvel Entertainment, PBS, New Era Cap, Target and Borders.

Founded in 1998 by Dave Williams and Bryan Kujawksi, 360i has spent the past decade organically evolving into an integrated digital marketing agency. In speaking with Sarah Hofstetter, VP, emerging media & client strategy for the firm, I learned more about this approach to adding more services. “Creative is not just about pretty pictures. It is about understanding consumer insights and the best way to connect,” she said.

Prior to the acquisition, she oversaw an in-house team built to meet clients' growing digital needs, such as designing a Facebook page for H&R Block, developing widgets for a product launch, or experimenting with a new API. Having this competency in the firm's DNA was a plus when partnering, and eventually acquiring, i33. “When we brainstorm with them, we are completely on the same wavelength,” said Hofstetter.

360i is not the first to grow and change through acquisition. Many will recall that the aQuantive we know today is the result of multiple acquisitions made by Avenue A, now one of its business units. More recently, iCrossing acquired multiple competencies by picking up NewGate, Spannerworks, Sharp Analytics and Proxicom over the past 18 months.

So what does this activity mean for the search engine marketing set? Most importantly, the industry has matured. Not only is consolidation happening among search engine marketers that prefer to remain independent, but many others have been acquired by large agency conglomerates. Since the acquisition of Outrider's parent company by WPP in 2001, iProspect landed within the Isobar family, Performics paired with Doubleclick, neo@Ogilvy (a WPP firm) took on Global Strategies International, Reprise Media was picked up by IPG, and so on.

The more delicate sign, however, is that search has become a critical tool in the digital toolbox, and perhaps not viable as a standalone business for most search engine marketers. I can count one hand, make that a few fingers, the number of independent search engine marketers that only offer SEO and PPC, and are not looking to exit or evolve their services within the next few years. The ability to remain independent remains a luxury for all but the biggest players with solid operations, and smaller shops that have carved out a niche market.

The decisions until then will be interesting to watch. Acquisitions of creative, development, social media, mobile and video services are likely to occur. Some will happen organically; others will be artificially glued like limbs on a body. Only time will tell which will succeed. If there is one guarantee, it is that the landscape in 2009 will be very different than the landscape today.

AOL / BEBO deal analysis... very interesting data

The most interesting tidbits about the AOL-Bebo deal are as follows:
Bebo’s revenues for FY2006 were $7 million with $3 million in EBITDA. In FY2007, the financial results were approximately $20 million in revenues and $5 million in EBITDA. Using 2007 results, that means Time Warner’s AOL paid a handsome 42.5 times revenues and an incredible 160 times EBITDA.
Projecting outward, our best guess by Bebo execs would have the Company around $50 million in revenue and $10 million in EBITDA in FY 2008; $117 million in revenue and $48 million in revenue in FY 2009 and $193 million in revenue and $92 million in EBITDA in FY 2010.
As a brief overview, Bebo was launched in July 2005 and has steadily risen to become one of the world’s most popular social networking sites. Users can create profiles on the site for free, stay connected with friends, watch videos, and listen to music. In early 2008 Bebo had over 34 million registered users and 7 billion monthly page views.
Bebo’s founders have extensive experience in online social networking, having been involved in the founding and building of such companies as Birthday Alarm, Ringo, and Friendster.
Bebo is officially the largest social networking site in the UK, Ireland, and New Zealand, and is the third largest social networking site in the US behind only MySpace and Facebook.
Recent Comscore data says Bebo has 22 million unique visitors and 11 billion page views; AOL said Bebo users spend an average of 40 minutes a day on the site in a press briefing. The company claims 40 million users.
The sale will represent more than a 9x cash return for Balderton Capital, which provided Bebo with $15 million in Series A funding less than two years ago. That round gave Balderton a 15.7% ownership position (approx. $95m post-money valuation), which would work out to around a $133 million paycheck from AOL. But Balderton actually gets approximately $140 million, due to some additional provisions and entitlements contained in the investment agreement.
Bebo’s husband-wife founding team of Michael and Xochi Birch won’t be sticking around AOL for very long (if at all).
Bebo plans to soon expand into several non-English-speaking European markets
Bebo had been in the market for new funding to support acquisitions, particularly in the contextual and behavioral search markets. But that ended once acquisition offers began coming in. No comment on earlier reports that Yahoo was an interested suitor (which is now 0-for-2 on such efforts).
PRESS RELEASE BELOW

AOL To Acquire Global Social Media Network Bebo

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Posted: March 13, 2008

Filed Under: International, Products, Corporate

NEW YORK, NY, March 13, 2008 – AOL announced today that it has entered into an agreement to acquire Bebo (http://www.bebo.com), a leading global social media network. Together with its AIM and ICQ personal communications network, the acquisition will give AOL a premier position in the fast growing world of social media with a network of approximately 80 million unique users.

With a total membership of more than 40 million worldwide, Bebo is a global social media network which combines community, self-expression and entertainment to enable its users to consume, create, discover and share content. Bebo is one of the leading social networks in the UK, and is ranked number one in Ireland and New Zealand, and number three in the U.S. Its users are heavily engaged and view an average of 78 pages per usage day. Bebo has approximately 100 employees operating in offices in the UK, San Francisco and Austin, TX.

The deal comes just one week after AOL’s launch of Open AIM 2.0, an initiative that allows the developer community greater freedom to access the AIM network and integrate AIM into its sites and applications, and the announcement by Apple of a downloadable AIM application for the iPhone.

Under the terms of the agreement, AOL will acquire Bebo for $850 million in cash.

“Bebo is the perfect complement to AOL’s personal communications network and puts us in a leading position in social media,” said Randy Falco, Chairman and CEO, AOL. “What drew us to Bebo was its substantial and fast-growing worldwide user-base, its vision of a truly social web, and the monetization opportunities that leverage Platform-A across our combined global audience. This positions us to offer advertisers even greater reach and marketers significant insights into the desires and needs of consumers.”

“AOL understands the shifting dynamics of the Web and has clearly demonstrated its commitment to leveraging the ever-increasing power of social networks,” said Bebo President, Joanna Shields. “With one and the same vision in this area, it was a natural progression for Bebo to join AOL, and we look forward to working together to continue to expand the online social experience globally.”

“Bebo’s dynamic management team recognizes that the Internet is less about destination and more about connecting people, culture and lifestyles,” said Ron Grant, President and COO, AOL. “This acquisition supports our key objectives – accelerating the growth, engagement and monetization of one of the world’s most engaged online communities.”

Upon closing the transaction, current President Joanna Shields will continue to run Bebo and will report to Ron Grant.

Analyst eMarketer predicts that by 2011, $4.1 billion will be spent worldwide for social network advertising – a dramatic increase from the $480 million spent in 2006. In 2008 alone, global ad spend in the social networking arena is expected to increase 75% year over year, amounting to $2.1 billion (eMarketer, Social Network Marketing: Ad Spending and Usage, December 2007).

In recent months, AOL has moved aggressively to bolster its position in areas critical to its emergence as a leading advertising-supported Web media and marketing company. Building on its number one position in third party display with Advertising.com, AOL has spent nearly $1 billion on online advertising acquisitions, including market leaders like ADTECH, buy.at, Lightningcast, Quigo, TACODA and Third Screen Media to create Platform-A. Platform-A is the top display ad serving network focused on helping marketers build brands that perform online.* In Web content, AOL’s revitalized network of sites has experienced five months of consecutive page view growth and key categories like Music, Television, Moviefone, TMZ, Money & Finance, News, Living and Body are all in the top four in their respective categories.

As part of its international growth plans, AOL has launched 17 international web sites over the last year and has plans to expand to 30 countries outside the U.S. by the end of 2008. In addition, AOL teamed up with HP last September to include localized versions of the AOL.com portal and other AOL services as the default setting on HP computers shipped in the United States and around the world. Bebo, which has announced plans to launch in five countries this year, will be featured prominently in AOL’s international expansion efforts after the deal is closed.

Since its inception, Bebo has established a radical new vision for online media and engagement marketing, combining community, self-expression and entertainment, enabling its members to consume, create, discover, curate and share digital content in entirely new ways. Bebo global users have high engagement levels spending an average of 33 minutes a day on the site. Its groundbreaking Open Media platform ushered in a new way for Bebo users to experience content online, while giving global media companies like MTV, CBS, BBC and more than 400 others, a new way to promote, distribute and monetize their programming. "Engagement Marketing," is Bebo’s initiative for brands to build long-term relationships with their target audience. Today, brands from Apple to Nike use Bebo as a platform to establish ongoing conversations with consumers.

Bebo pioneered the blending of Web-native original content with interactivity in the social networking environment by co-producing "KateModern," the most successful TV show on the Web, now in its second season, followed by the soon to be premiered "Sophia's Diary," and the upcoming "Gap Year." In December 2007, Bebo opened its platform to external application developers becoming the first social network to embrace both Facebook and OpenSocial APIs. To date, more than 1500 applications have joined the network.

AOL was advised by Banc of America Securities LLC and Deutsche Bank Securities Inc. Bebo was advised by Allen & Co.

AOL and Bebo senior management will host a conference call beginning at 9:00 am ET to discuss the day's news.

The dialing instructions for the call are:

In the United States: 888-730-9143
Outside the U.S.: 210-839-8553
Passcode: AOL Update

Please dial in at least ten to fifteen minutes before the call's scheduled start to ensure you are connected in time for the beginning of the call.

Note to Editors: Photos, logos and video from today’s announcement are available on the AOL Corporate Site at http://corp.aol.com.

About AOL
AOL® is a global Web services company that operates some of the most popular Web destinations, offers a comprehensive suite of free software and services runs one of the largest Internet access businesses in the U.S., and provides a full set of advertising solutions. A majority-owned subsidiary of Time Warner Inc. (NYSE:TWX), AOL LLC and its subsidiaries have operations in the U.S., Europe, Canada and Asia. Learn more at AOL.com.

About Bebo
Bebo, founded by Michael and Xochi Birch, is the world's leading global social media network. Building on the notion of traditional social networking websites, Bebo combines community, self-expression and entertainment to enable its users to consume, create, discover and share professional and user-generated content through the Bebo website. Bebo has 11.4m unique users in the UK and a total membership of more than 40 million worldwide. Bebo also ranks as the UK's most engaging social network with users spending an average of 33 minutes on the site per usage day.**

*According to comScore Media Metrix February 2008 data, Platform-A continues to be the number one advertising network with 167 million unique visitors and a domestic reach of 90%.

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