Archive for the ‘Advertising’ Category
October 19, 2009
“I’ve got Comes With Music for 12 months with my Nokia 5800… I’m not complaining about free music, but as soon as the 12 months is up I’ll go straight back to iTunes. Half of my songs download properly, then half of them don’t… .”, - scissormetimbers, Whirlpool Forum, June, 14th
From its release, Nokia’s Comes With Music (CWM) service has been an ambitious step by the handset manufacturer to develop unique customer services that diversify revenues as well as solidify customer loyalty to the brand.
In this sense, CWM has been designed as a ‘walled garden’; a virtual utopia of music choice, confined to particular handsets and particular software configurations.
But in the 12 months since CWM‘s UK launch, and its subsequent rollout across nine markets on four continents (including Australia), subscriber numbers have only reached 107,000 (23,000 in Australia since March 09).
A combination of telco resistance (because of their own music offerings), a poor user experience by some subscribers, as well as locking files to particular handsets, have all played their part in building resistance to the offering. (Did anyone miss the irony of a mobile player restricting the mobility of its music service?)
In recent Music Minds research, there was a wide level of scepticism to the idea of mobile phones becoming the primary portable music player. Device memory, battery power, interface design and menu navigation were all raised as practical concerns, let alone issues to do with data ownership, management and portability.
Even if the concept is generally applauded for its comprehensiveness, the music retail market is simply too competitive for any brand, even one like Nokia, to prosper without a seamless ‘plug and play’ platform.
In a market devoid of iTunes, CWM would have gone some way to differentiating certain Nokia handsets (vis a vis Samsung, LG and Motorola) and, more importantly, taken a reasonable slice of the music retail market. But iTunes has conditioned the market into accepting a certain pricing model, a certain way of selecting music and a certain technology experience. iTunes might not be the perfect model (for users or artists), but the market has determined it’s the best we have, and the perception of seeing every third person on a train or bus with white earplugs spinning their way through a music library, is a powerful endorsement of the technology.
In recent days Nokia has been hammered by a ‘told you so’ sentiment, primarily driven by advocates of DRM-free music and open platform technology. Now a new perception game starts to play out, this one more dangerous for Nokia. Where once CWM was seen as innovative, now the public’s perception will be more circumspect. Like the negative perception that smothered Microsoft’s Zune player, Nokia has to quickly change perception by changing the user experience.
August 10, 2009
There is something very un-News Corp about this global steering committee to oversee, or to at least recommend, next steps towards the commercialisation of content. Where once the Sun King provided the autocratic guidance, now a coterie of editorial managers across the globe are collaborating in a workshop initiative. The company’s about-face on the preferred commercial model almost certainly started with the acquisition of the WSJ. The publication’s insistence on a pay-per-view model, and its general success as a proof-point, provided the content leviathan with some Dutch courage to publicly castigate Google and its parasitic ways. It certainly wasn’t the first shot fired in anger at the algorithm with a copyright blind-spot, but it was a particularly conspicuous comment to make. So while News Corp locks itself up behind the door marked “Special Projects, Scenario Planning”, the latest music whiz kid, Spotify, with its elegant UI and unfaltering streaming technology, makes the simple point to customers: mediocrity is free (160Kbps), while quality (320 Kbps) will cost. Likewise, it’s time for News Corp, or that other renowned first-mover, Fairfax Digital, to swallow the courage cookie, take a deep breath, and politely remind Google and every other freeloader of the same dictum. 
August 1, 2009
With news of Kazaa ‘back from the dead’ and the Pirate Bay now a little more mercenary (how long before the name changes to Tariff Bay?), the world of music downloads has lost a few of its high profile superstars to perhaps a misguided strategy that file-sharers will change their spots when cash-for-content becomes the mantra.
Yet despite the best intentions to swing heavy music consumers towards a ‘all-you-can-eat’ subscription model, the world of P2P goes on, swallowing terabytes of data every hour like a deep space vortex, distributing ‘leaks’ at near light speed. Faced with such gravitational pull (and distribution efficiencies), an uneasy truce seems to have descended between parties in these so-called copyright wars.
While legal machinations seem to be giving way to technical monitoring options, there is a measurable rise in deliberate marketing tactics designed to take the sting out of ‘leaks’ through the seeding of free sample tracks, either directly into social media communities or via an established media partner.
Whether you conform to the ‘music is water’ theory, or uphold a solid, unerring position on copyright, the reality of local P2P music download activity holds a simple objective truth: it is pervasive, and involves the vast majority of consumers who regularly attend live music performances, or take an active interest in maintaining a music library of sorts. New, or rehashed payment models bolted onto P2P ‘brands’ will not alter this behaviour in any material way.
Right now almost 78m music tracks are downloaded across Australia each week, with the top track alone, usually a mainstream, high-rotation artist (Black Eyed Peas, for example), recording more than 500,000 downloads on a consistent basis, while a local hip hop group, like Hilltop Hoods (Chase That Feeling), which again has the backing of local radio, might record up to 188,000 downloads. By comparison, an indie group like British India (God is Dead, Meet the Kids), with a much lower rotation, records just over 9,000 downloads.
Of course, the correlation between airplay and downloads is not that clear cut., or even that strong.
Black Eyed Peas (Boom Boom Pow), for example, records 571,687 downloads concurrently with 271 spins for the week, which equates to 2,109 downloads per spin. By comparison, Taylor Swift (Love Story) reports 422,780 downloads concurrent with just 18 spins, or 23,487 downloads per spin.
Other artists with high download rates but low spins include: Chris Brown (Forever), 267,982 downloads with five spins; Rihana (Disturbia), 283,557 downloads with seven spins and Dizee Rascal (Dance With Me), 137,585 downloads with just five spins.
Clearly, with so much data on local P2P activity now coming to light, there is still much more to understand about what the download market can define in terms of niche music tastes and what insights they provide to justify this type of analysis becoming an accurate barometer to music trends and, more importantly, emerging stars.
August 1, 2009
Recently, a rather old-fashioned word crept into our popular vocabulary - “narrative”. The thematic qualities of this term resemble a story’s ‘arc’ or the more sinister ‘sub-text’.
Whatever the moniker, this broader, almost minimalist approach to identifying what actuality matters in the ‘scheme of things’ is both a waste saver and a potential red light to crowds powered by the sheep mentality.
In the language of the dismal science, a macro-trend is just such an arc. Standing back, absorbing this vista means taking in a new perspective, and perhaps a new conclusion.
Such an approach has a habit of making the otherwise absurd, obtuse and the downright ambiguous as clear as crystal.
Take for example the synopsis that, for at the least next 50 years, Australia will never suffer a recession, a slow-down perhaps, but never two quarters of negative growth.
This brash, binary call isn’t presumptive at all. Taking your eyes off the next pothole, and back onto the horizon, you realise Asia’s middle class isn’t yet, relatively speaking, a mass market; that’s still a century into the future.
In the meantime, Australia’s minerals, agricultural produce and intellectual property will be sucked northwards like a twister in the sky, fuelling smelters, stomachs and minds.
A macro-trend of that magnitude won’t be diverted, or distracted, by a case of broker embezzlement, Chicken flu or even the next Al Qaeda suitcase bomb.
Ergo, Australia is recession-proof for the next half century.
Another macro trend relates to the long-term consequences of a networked world and the digitisation of assets, particularly intellectual property.
Social media in all its clever and hard-to-monetise guises, is its own type of macro trend. Like the ‘golden rule’ that economic growth requires the consumption of commodities, the ‘rule’ of social media is that the more people broadcast their lives, the more self-aware they become of the ‘content’ of their routines, including the experiences and memories that punctuate their days.
Put plainly, the larger and more active our digital networks become, the more we need to entertain these ‘audiences’ with worthy anecdotes and clever impressions.
Social networks are not sustained by the mundane, the average or ‘middle of the road’, they glow white hot with what we can muster that is ‘jagged and shiny’.
From this point onwards, the macro trend we call social media takes on a new persona – a mass audience and mass market for the unique, the tangible, and the experiential that cannot be replicated by processing lines of code.
Importantly, this shift is not based on the division of wealth, where the less well off are subjected to a commoditised, homogenised existence. On the contrary, the attribute of wealth is in fact neutered by the intellectual and creative elements that increasingly dictate terms. The artisan, the scientist, the explorer – these are the new rule makers. They personify a new aesthetic, largely detached from the materialism that has characterised the ‘acquisitor age’ (Ravi Batra).
It is this aesthetic that now ignites a more authentic introspection on the part of so many more individuals; indeed, a more widespread perspective on what contributes to happiness and wellbeing.
This search for quality, uniqueness and beauty is nothing new, only the scale of the phenomenon has altered; a scale made possible by the diffusion of network technology and our desire to broadcast ourselves committing to new experiences and a re-weighting of particular values.
The trajectory of this macro trend, or social arc, is unstoppable. Being on the cusp of this mass movement, where an increasing number of individuals now put their lives, their decisions and their associations into perspective, means institutions likewise must now recast their own assumptions about consumer motivations and political relations.
May 11, 2009
The social media phenomenon has attained a perception of commercial value because of how it has quickly generated a massive world-wide audience within a certain demographic profile. Combined with a relatively intimate framework, social media is now a prolific sub-set to every media buying opportunity.
In short, social media (including that rather quaint term, micro-blogging) has become a type of arterial network through which so much of our 1st and 2nd degree knowledge (friends and family first, interests and curiosities, second) relies.
Attached to these streams of consciousness are product and marketing statements. These commercial elements weave their way through online discussions, opinions and comments, but rarely are they tackled in terms of what value (or lack of it) the associated products receive from being part of this intimate, personalised network.
In the case of the music eco-system, social media has become an integral part of talent discovery, marketing and sales. Because commerce and art are so intertwined in this instance, it is logical that online ‘chatter’ should be measured or indexed, which in turn, produces the necessary insights to affect marketing strategies and sales results.
In this example, Music Sentiment Index or MSI, is now being applied to music artists and their album releases. The MSI is quantifying the chatter in a given time period based on the number of mentions, as well as the ‘quality of exposure’ of each mention. The former is relatively straightforward, the latter, however, less so.
In this case, quality refers to the ‘authority’ number carried by each site, blog and forum; a number based on a similar ‘links-in’ algorithm used by Google, though in this instance, the links originate from social media properties only.
In this example, the MSI for Eminem’s Relapse album in the weeks leading up to its launch on the 19th May has been something of a roller coaster ride, beginning with an initial burst of venom between fans and detractors about the album’s first single release. With traditional news sites blasting out headlines about Eminem’s first album in four years, the blog and forum space went ballistic, pushing the MSI beyond 1,000 in weeks four and five.
Eventually, every product, individual and event with its fortunes tied to social media ‘chatter’, including the leverage of the much-hyped ‘influencer’ segment, will require an index measure to validate performance and an ROI. The really interesting work begins when digital agencies, advertisers and publishers attempt to build MSI-type standards, or a common currency, to allow for benchmarking. Something else to add to the IAB’s to-do list!
May 9, 2009
12 months ago Rupert Murdoch said the media industry simply didn’t understand what the future held for companies like News Corp. It was an admission that said more about the unparalleled challenges of today, with newspapers in particular, trying desperately to derive a net positive result from the digitisation of content.
Fast forward to the present, and by all accounts these problems have only become more acute.What has changed however is Murdoch’s explicit wish not to wait around around any longer to die a death of a thousand cuts, or to be turned into worm food for billion-dollar parasites like Google to gorge upon.
News Corp’s recently announced digital flying squad, represented by teams in London, New York and Sydney, has the remit to end the free ride; to restore order (and value) to an otherwise perverse state of affairs, where the only real source of daily news gathering, which is integral to the entire media eco-system, let alone to a functioning democracy, is being marked ‘free-of-charge’!
The urgency of this task has no doubt been precipitated by the latest 09/10 revenue forecasts suggesting that the online pennies, which have been substituting for offline dollars for several years, are likely to devalue further, perhaps to the level of the Zimbabwean dollar!
The Wall Street Journal (WSJ) is cited as a positive proof point of how charging for editorial content, rather than face up to the full-force of a depression in advertising revenues, can work. The WSJ is also the exception to the rule; its one of those few information sources which have a very clear value-proposition - read me, and you too can drive that Mercedes to your weekender in the Hamptons.
An alternative walled-garden approach is for News to borrow from its Israeli cryptography business (NDS) and build a type of set-top box, or handset that effectively takes its content off the Internet and onto a proprietary network - online and/or wireless; mirroring the success of BSkyB, Sky Italia and Foxtel in becoming subscriber-based information and entertainment systems (with some peripheral advertising dollars). Is it time for News’ print assets to follow the same tune?
August 19, 2008
What the…?
Another day of hard-hitting, relevant news items courtesy of the once venerated Sydney Morning Herald.
Forget about brand extensions or leveraging the brand to optimise reach, this is arguably a case of how one brand now seeks to appeal to a majority of daily AB readers offline, while growing its online marketshare by cutting into the ‘jagged and shiny’ of tabloid reporting.
The strategy to broaden the brand’s online appeal by emphasising the sensational over the newsworthy is risky, but with News.com.au hiding The Daily Telegraph under a bushel and neutering its potential to dominate the Sydney online news scene, the SMH has more latitude to experiment with its news coverage. In other words, so what if a section of the audience is offended by “Contraversial Katy”, where else are you going to go for your dose of Sydney-centric business and sports news?
This is audience segmentation at its best, and worst.
The following headlines for Tuesday 19 August are not buried three or four links in, but are front-and-centre on page one. And with offline circulation figures being less than healthy, these news trinkets are certain to become more mainstream and less a titallating experiment in audience reach than they have been in the past.
This all begs the question - what’s the eventual impact on SMH’s premium CPM pricing and Fairfax’s impressive record of protecting its advertising yields? Time will tell, but doing ‘tabloid’ better than tabloid is not the optimum strategy for securing a premium on ad contracts over the longer term.
August 18, 2008
Universal Music’s recent product launch of a CD compilation containing user options such as additonal tracks, interviews and band profiles really crystalised the emotion felt by some consumers vehemently opposed to record labels because of their perceived recalcitrance in dealing with the commercial realities of a digital paradigm, and those who are increasingly challenging the ‘free’ mantra as a viable business model.
Universal has been stung with criticism that the label still persists with this walled garden approach to music marketing, effectively forcing consumers to pay for a cluster of tracks, with a supposed hook of user options. Others defend the label, insisting the ‘industry’ is getting it, allbeit by small increments.
MTV adds its two cents worth to the discussion with the release of its Music Matters annual research pack, profiling music usage in several Asian markets, including Australia.
The 2008 survey (5,700 15-34 year olds in the “urban middle class”) taps into markets as diverse as Vietnam, India, China, Indonesia, Singapore and Australia.
Not surprisingly, “whats hot” includes listening to music (53%) and social networks (37%); “whats not” includes spending $ on music and watching TV (46%). For an MTV-sponsored survey, that last one has got to hurt.
Despite the overwhelming enthusiasm for music (THE killer application), MTV sees the glass being half-empty. Illegal or ripped forms of music downloads now account for more than two-thirds of activity amongst the 15 to 34 age group (aggregated across the different markets), while in the specific case of Australia (”Oz”), 45% of survey respondents didn’t pay to download music in the previous month.
One of the more unpredictable stats in the research related to mobile activity, primarily music videos via the handset. In 2007, 13% of respondents used their mobile phone to access a music video (versus 27% via the computer and 78% for TV), 12 months later, mobile access reached 38%.
In terms of online reach for music videos, 32% chose YouTube, versus 16% for MTV, 10% for MySpace, 10% for [V] and 10% for iTunes.
The bottom line: consumers cannot get enough music content. Further, this rate of consumption is only set to accelerate as mobile and the building of personal libraries encourages even higher rates of music consumption, forcing the product’s life-cycle (i.e. utility of the music track itself) to become shorter and shorter.
Despite all the looney tunes and fruit loops which dominate the music industry’s personality scene, it would be a mistake to assume the industry is too stupid or too ignorant to learn and adapt to future market conditions - even if that involves adopting a free price point for some projects. The irony is the music industry, of all industry types, could be the first to develop a sustainable commercial model that works in a paradigm where scarcity does not play the ‘invisible hand’.
August 13, 2008
There is something very elegant about seeing the juxtaposition of a bad news story and a product promotion unintentionally triggered by key words in the story; the assumption being that every story carrying the key words will always have positive connotations, reflecting well on the promotion.
Enter the amazing, world changing iPhone. Zealots would have you believe the handset has, well…cred worthy of zealots. Others are more pragmatic in their attitude and consider the handset (no, its not a portal to the universe or a window to the soul) to be overpriced and now oversold on connectivity speed.
Well, that’s not the real story. The more interesting angle is how the market assumes iPhone will always be in the ‘good books’ with nothin to fear in a reputational sense, unlike Microsoft and its Vista/Yahoo debacles.
With that sort of assumption gaining ground, compounded by the cred of having something innovative to package around the iPhone, i.e. being first to market with an iPhone application, the scene is set for some diabolical encounters between product reviews and promotions, aided by another much hyped technology - ad targeting.
Cutting to the chase. Exhibit 1. is a story in the SMH about the issue of iPhone technology being incompatiable with 3G networks, both in Australia and worldwide. Telcos are putting the blame squarely in Apple’s court, and Apple in response, is deadly quiet. As an aside, if Apple doesn’t deal with this issue head-on, the likes of Nokia will eat their lunch when the next generation of handsets are released.
Exhibit 2. Thanks to the magic of word-association (without any consideration of the context in which these words are used) CommSec ads are splashed across the entire story - banners, boxes, the works. Ironically, this is when display advertising gets noticed really well.
CommSec seem to be very chaffed about their new iPhone trading application, and they wear the badge of ‘innovators’ all over their sleeves. Trouble is, the accompanying story goes to great length to point out the service outages currently being experienced by iPhone users; not the sort of thing you want to happen when you’re trading the last of your superannuation on a Chinese-hedged managed fund!
One question: shouldn’t the publisher or agency alert the advertiser of the issue, or even better, be proactive enough and pull the campaign’s word-association parameters when there’s a whiff of bad press? Just a suggestion.
August 10, 2008
Time Warner refuses to scotch rumours of an AOL sell-off, despite the worst than expected performance of the group’s online division. State-side, the AOL division is missing all financial targets, thanks in part to a strategy which sounded good at the time - dump subscription fees for advertising dollars. Perfectly reasonable in a bullish ad market!
Yet, despite the turbulence, AOL has invested millions in its Advertising.com ad network, aong with swallowing the Euro-centric social site, Bebo. Interestingly, AOL has re-launched its Australian presence, with an obvious interest in propelling Bebo to a critical mass locally.
The question for AOL, and its relatively late run in the Australian market is, can its social network, with an audience profile skewed towards a sub-16 age group, generate the necessary attention to garner advertising support, or is this simply a spoiling exercise to disrupt MySpace’s local efforts?
To be brutaly frank, all social networks are playing the spoiling game. None are generating sales-based returns for advertisers here in Australia, yet they still attract display ad dollars which would probably be better spent elsewhere online, hence their ability to disrupt or impede revenues of the more ‘traditional’ online media plays.
In the meantime, the combination of Bebo, MySpace and Facebook battle it out for two very different audiences - those aged below 18 years (Bebo, MySpace) and those above (Facebook). Yet, all have one thing in common - they all have audiences with a predisposition to ignore display advertising which impinge on their personal space.
Audience Composition (%): June 2008
From an audience perspective, Bebo is running a distant third in Australia, with a monthly active audience of between 600,000 and 700,000, compared to MySpace with more than 2m and Facebook with 3.2m (Source: Nielsen Online). Interestingly, anecdotal evidence suggests Bebo is regarded more highly than MySpace amongst the teen market for its ease of use and cleaner design. However, to this point, that hasn’t translated into a larger monthly audience, let alone one which carries a premium.
Here’s the point: AOL is in no position to afford Australia prime status in its Bebo network, hence it will increasingly find itself outgunned in the sales department relative to other local operations. AOL’s most recent incursion into Australia will probably be even shorter than its first.
