Archive for the ‘Vector Media Study’ Category
June 18, 2008
Are SME’s the pragmatists of the marketing world?
In a recent Vector Media Study report, SMEs are proving to be ‘hardheads’ when it comes to digital media. For many business owners, return-on-investment (ROI) is not some recent management fade, but a very real hurdle to further digital initiatives.
In short, when it comes to SME’s adopting new technologies to improve communications, both amongst staff and with customers, there is a real aversion to investing in innovative, but as yet unproven platforms like mobile and multimedia.
A case in point: the Vector Media Study revealed that only 18.5% of SMEs considered mobile to be “very relevant” to their marketing and CRM needs, while almost 35% thought mobile was not relevant at all.
Source: Vector Media Study, N=405
The finding is not that surprising given the lack of case studies available in Australia which demonstrate the successful integration of mobile into business processes, on top of the murky world of mobile data charges.
Where there is a commitment by an SME to increase its communications budget, spend is likely to focus on improving or introducing tried and tested channels like websites, email and search marketing. For example, between the 3rd quarter 2007 and the 1st quarter 2008, the relevancy of search marketing has risen from 36.7% (“very relevant”) to 42.9%.
By contrast, money currently spent on directories like Yellow Pages is expected to decline over the medium-term.
Source: Vector Media Study, N=405
Ultimately, most SME owners are evaluating technologies in the context of how they are likely to improve the business’s CRM. Either the technology is leveraging off existing customer data to improve contact processes or is ‘harvesting’ customer data to optimise the sales pipeline.
Given this background, the study indicates that up to 66% of SMEs are either satisfied or very satisfied with their CRM strategy, with less than 1% “very dissatisfied”.
This highlights how CRM is a key indicator of whether a SME is prepared to upgrade or make a ‘green fields’ investment in digital technology, and goes to the heart of many ROI queries raised by any prudent SME owner or manager.
Interestingly, the study reveals a degree of irony about the alignment of business and digital technologies. When it comes to the question of what SMEs consider to be the most valuable communications channel with customers (particularly B2B), the one element which consistently tops the charts is old-fashioned word-of-mouth (WOM), in other words, the ability to develop positive referrals from customers to non-customers.
Even on the question of how SMEs maintain their market and industry knowledge, WOM is still the leading ‘channel’, ahead of email, blogs, events/conferences, suppliers/partners, general media and direct marketing.
Source: Vector Media Study, N=405
Indirectly, this insight goes to the heart of what digital can potentially mean in the context of SMEs. That is, digital technology is above all a networking mechanism, offering businesses real scope to design and develop systems that play to the strengths of WOM.
For all their cautiousness, SMEs are probably in the best position, ahead of much larger institutions, to leverage real ROI against a digital networking strategy.
May 11, 2008
The recent decision by PBL Media to ‘experiment’ with P2P file sharing using the Canal Road creation as ‘bait’ has struck many as rather perculiar.
That the Nine Network decided to cancel the series just three weeks into its run, reinforces the oddness of the decision to use the program at the forefront of efforts to understand the implications for braodcasters of “positive DRM”.
Just to recap: PBL Media chose to freely distribute Canal Road online, concurrently with its free-to-air broadcast schedule, effectively allowing entire episodes to be freely downloaded and distributed through P2P platforms such as BitTorrent. The catch was to encode the episodes using Hiro technology. This allowed unbridled file distribution, but actively inserted advertisements into the program regardless of when and where the file was shared. The advertisements cannot be cut out or fast forwarded.
Hiro is a well credentialled P2P distribution platform, with trials already underway with several US broadcasters. Essentially a software codec, the technology provides real-time ad serving with admin rights such as geo-locking, age verification and time limited release.
All credit to PBL Media for seizing the initiative on this front, especially given the near infatuation Australians have with P2P downloads. In the most recent Cybercrime Eurovisual Study (2007), the AU domain represents just 1% of the world’s Internet IP traffic, yet makes up more than 20% of all bit torrent traffic. That’s what you call punching above your weight!
However, it remains the choice of material which did most to undermine any opportunity this decision had to assess P2P behaviour in Australia. In short, the vast majority of P2P practitioners are not at all interested in a genre like Canal Road, which has more of a daytime soap audience appeal than a hardcore, ‘must have’ TV drama series like a 24 (in the early days), Battlestar Galactica, Carnivale or, much to Nine’s chagrine, Underbelly.
As the recent Vector Media Study indicated (online survey: 1,500), the vast bulk of the filesharing community is male, aged between 15 and 34, while a small outlier exists amongst females aged between 20 and 24. In short, the classic profile of a P2P user is a ‘first adopter’/'early adopter’, or more accurately, a person with a high to very high DNA score.
Like it or not, PBL’s Underbelly is by far the preferred content fodder for the local P2P community. And with the blessing of PBL and the Victorian Supreme Court, a decision to use the crime series as a Hiro test-case might just have made Australian P2P history.
March 8, 2008
Online retail/e-commerce in Australia is a veritable cottage industry, thanks in no small part to the recalitrance of brands like Harvey Norman and the ineptitude of groups like Coles Myer. In most cases, major retail brands fall into the trap of assuming that the only way to measure the return on an internet marketing channel is by immediate, over-the-browser sales. Rarely is thought given to how such an investment fattens the sales pipeline over the medium-term, with potential sales coordinated with a family’s savings plan or seasonal variations.
So what if the sales of home appliances is on the slide (online and offfline) during a period of interest rate hikes? Invest in online customer intelligence platforms, savings plan applications and the like to tap into latent demand before the competition when the monetary cycle relaxes.
In terms of the broader market experience of purchasing online, figures in the Vector Media Study suggest online credit card usage is now a frequent mechanism for at least a third of online users (32.08%), with just 14 percent never having used a credit card to purchase a product/service online. In terms of demographics, the two age groups which have a higher than average ‘comfort’ level with online credit card purchases include 25 to 34 year olds (36.8%) and 45 to 55 year olds (33.9%).
However, the vast majority of online users are considered infrequent online purchasers, suggesting that while they might be familiar with the process of online payments and have a reasonable level of comfort in terms of security, the suggested barrier to even higher levels of purchase frequencies has more to do with a lack of choice, poor product information and an increasing awareness of the perceptions/experiences held by other consumers. In other words, the influence of consumer reviews (ie online word of mouth) to influence potential purchasers is now happening much earlier in the decision making process.
Looking at specific product categories which are favoured by online purchasers, it is entertainment ticketing which holds the top position (47%), followed a raft of goods in the 40% to 44% range, including household items (have a rethink Gerry), DVDs,/CDs, accommodation and travel. In the 30% to 40% range we have categories like books and software.
What’s missing? Well, when the full list of purchased items is analysed, the key categories which show relatively strong consumer support include computer hardware, car parts, cosmetics (including perfumes), jewellery, mobile phones, sports equipment, toys and wine. While these results aren’t necessarily surprising, they do indicate those particular categories which are likely to continue to rise up the ranks in term of online sales volumes.
Also of interest will be how these product verticals likely to capture the attention of both display and affiliate marketing campaigns, the latter having particular resonance with an audience predisposed to online purchases and therefore a solid earner in terms of CPC or CPA deals.
February 24, 2008
While a majority of online users have contributed to a blog or forum (56%) in the past six months, that average hides a much higher engagement amongst the 18 to 24 age group, with up to 66% having contributed to a blog or forum in that period. From the perspective of recency, 34% of this same age group contributed in the last week, compared to an average of 17%.
In terms of downloading a podcast or vodcast, the tables are turned, with a majority (53%) not having downloaded said files in last six months. Of those who have, only 8.3% downloaded a podcast or vodcast in the last week, and 28.4% infrequently. Interestingly, the age group with the highest activity rate in terms of downloads is the 45 to 54 age group, with almost 52% having done so, followed closely by the 18 to 2 age group with a 51% participation rate.
If judged in terms of our more reguler, or systematic, media habits, like reading the morning headlines or buying our weekly gossip magazine, the regulatory of our engagement via blogs, forums or downloads, remains immature at best. Just 17.5% contribute to a blog or forum once a week, and only 8% will download a podcast or vodcast at least once a week - hardly the figures of an engaged market.
Of those who do engage, the distribution across varying genres and content groups (see above graph), indicates an interesting spread from “general news”, where there is an almost equal marketshare between blog and podcast participation, through to “entertainment and celebrity news”, where podcasts/vodcasts are vastly preferred to blogs and forums. In almost a complete reversal of this split in audience preferences, the “opinion/commentary” category is dominated by the use of blogs and forums.
This is not to say that these audience preferences are fixed. In most cases, the option to engage is usually only via a blog or forum, with little or no downloadable content available. Nevertheless, as frequency of audience engagement improves, it would pay for publishers to consider what is the preferred method of engagement for their audience(s), and the frequency most useful to that audience. There is simply no point publishing a podcast once a day if your audience is unable or unwilling to keep up with such an inundation of content. Likewise, a moderated forum might need to ramp up its broadcast schedule to daily alerts or topics if the audience is willing and capable of engaging at such a rate.
Understanding and measuring the ‘dynamism’ of your audience’s engagement will have an impact on service levels and production standards.
February 11, 2008
Social media is dominated by so much personal ego and immaturity that advertising will never succeed in meeting the expectations set by publishers and agencies.
“Social media is swamped by emotion. The more personal the forum, the younger the demographics, and the more detached the audience is from commercial messages. Libido sets the agenda, not Coke, Nike or Nissan,” says Andrew Reid, Director, Victrix Media.
“The only brand which members show any interest in is their own.”
Commercial de-valuation of social networks is not because they are commonplace but because of a lack of maturity on the part their members and because the context is so deeply personal.
“The situation is akin to cuddling up with your partner at the back of a cinema, or enjoying a picnic with the family. During these moments of intimacy, would you appreciate a representative from American Express or Campbell’s Soup tapping you on the shoulder and asking you to consider buying their product?”
The Vector Media Study indicates that while social media memberships are growing, with between four and five percent of members signing up to social networks in the last week alone, the real issue for social networks and media planners is the growing number of dormant or dead accounts.
Source: Vector Media Study, online sample=1,200
“When asked about the last time they accessed their social network accounts, on average 22% of accounts have remained idle for six months or more. This poor level of recency only compounds the issue of how advertisers reach their market in a social media context, let alone build that association over time,” says Andrew Reid.
To understand the connection between the social network’s maturity level and its potential to develop an association between members and brands, an Id Index* has been developed which demonstrates the fact that when maturity levels are low (a high Id Index number), the potential to build brand recognition and engagement is also low.
In this example, a social networking site like MySpace or Facebook has a high Id Index score (2.0) and a low brand engagement score (0.5). By comparison, a specific industry forum where professionals (e.g. engineers, lawyers, health professionals) congregate to discuss issues and post comments, the Id Index score is low, while the potential for brand engagement is high, if the brands being promoted are relevant to the member’s profile.
“The industry has to stop wringing its hands about the value of social media. Yes, there is enormous value is pursuing a social media strategy for advertisers, but all parties need to be aware that the more general social networks, where social norms and discretions are tossed aside, advertising messages have as much impact as a sandwich board in Kings Cross at 2am on a Saturday morning.”
Putting the obsession with audience sizes to one side, a more specific, more focused social media forum, which benefits from higher levels of frequency over longer periods of time, and can leverage more accurate membership data, should be the preferred branding platform for advertisers.
*The Id Index is named after Sigmund Freud’s theory about the human ego. The Id, the Ego, the Superego are all stages in our ego’s development from birth to maturity. As infants, our desires, impressions and how we interact with one another is governed by the Id. This level of infantilism is a critical factor in people’s current level of self-absorption in the context of social media.
February 10, 2008
Commercialising social media assets is only going to get harder.
The audience numbers aren’t in dispute, neither is the longevity of social media, vernacular media, in any doubt. This is a phenomenon that won’t be turned back. Imagine George Eastman trying to ’switch off’ the popular surge in photography by pulling the plug on his Kodak brand?
Yet in the context of return on marketing investment (ROMI), we’re still struggling. Social media brands provide a Superbowl-sized audience everyday, yet the ROMI is still hard to quantify. In part we’re still struggling to understand audience mind-sets, levels of association and engagement. Enter the recent findings from VM’s Vector Media Study.
Focusing in on the issue of recency, a key finding is the levels of account activation amongst some of the biggest social networks, including MySpace, Facebook, Bebo and LinkedIn. According to the study, 38% of MySpace members accessed their account in the last week, compared with 62% for FaceBook, 30% for Bebo and almost 29% for LinkedIn.
In this one data point alone, a large discrepancy already appears between one brand and almost every other social network in the study. However, the most interesting finding relates to account dormancy. The study indicates that up to 21% of all MySpace accounts have not been accessed in the previous six months, compared with 6% for FaceBook, a massive 41% for Bebo and 21% for LinkedIn (N=1,200).
In short, the average dormancy rate across these four social networks is 22%. In the abscence of verifiable data from the publishers themselves, the ‘22% rule’, as we will call it, isn’t a bad rule of thumb in applying a discount factor to the total number of members a social network claims to have on its books.
In every business ‘dead accounts’ are an issue, be it a bank, retailer or hospitality - but when the business is media, and audience, particularly an active audience, is the currency for advertisers, greater focus on the issue of recency is absolutely critical.
January 30, 2008
In the latest cut from VM’s quarterly Vector Media Study, consumer behaviour relating to personal security and privacy issues suggested that proactive steps taken around cookie deletion, and as a consequence, online ‘tracking’ is more prevalent than first suggested.
The Vector Study revealed 22.85% deleted cookies once a month, 30.96% once a week, 11.24% after every session, 28.71% infrequently and just 6.24% never deliberately deleted their cookies (either 1st or 3rd party).
Interestingly, in the 65+ age group, 42.86% deleted their cookies once a week, and an incredible 28.57% deleted cookies after every session. The 25 to 34 age group, however, is less likely to delete cookies on a more regular basis, with just 4.08% deleting cookies after every session against the average of 11.24%.
Sample:N=800, SD=1.19
Cookies are completely benign, and in fact, are there to add value to the consumer’s experience. However, this relatively high frequency of deletion is worrisome, in so much as the effectiveness of measurement systems and processes are undermined by the constant re-issuing of unique cookie IDs to individual browsers. Simply put, the ’system’ has to deal with more unique cookies than there are actual people. Over-counting becomes prevalent, which ultimately impacts external and internal business reporting and associated revenue drivers.
