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My Prediction is Validated About Business Model Of Video – Give Users What They Want October 29, 2008

Posted by John in social media, Technology.
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Taking credit for big trends is all the rage these days of blogging. So here is my self promotion post on the future of online video and future of online advertising. :-)

Today the news in the NY Times tells us about the future of online video and advertising. It comes as a shock to many people including Mike Arrington, Mathew Ingram, and others. With headlines from Wired like Hulu Celebrates First Anniversity, Gain Popularity By Serving Fewer Ads.

As predicted by me years ago and blogged here at Furrier.org – “Content is the Ad”

Hulu’s success is due to the a great user experience verses forcing the maximizing of moneitization. That is why Hulu is not littered with Ads. Why? Because the content is the ad. SNL’s franchise on TV is their product and their online distribution (widgets) is their ad. NBC TV broadcast was the product and their online coverage was their advertising. Why do the big content people do this? This is going to sound too simple – they know what the users want. And their product (main content franchise) gets a reward for it – more viewers. Badda bing. Simple.

One more time – CPM ads don’t work in social network or online in targeted user groups – said again for the zillionth time

How do you monetize: the plans for this new content model online will be different. Expect to see new contextual and behavior tools that serve users – a utility of some sort. For now it’s all about cross-promotion.

Successful online strategies have been successful if they do three things: 1) easy to use, 2) reduce steps, and 3) save time

Anything online that distracts users will lose – online experiences must be value-add. Advertising can be value-add and I expect new advertising solutions to be of value.

Social Advertising About to Boom – In Growth Not Bubble Pop. July 23, 2008

Posted by John in social media.
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While I talked about Social Media being misunderstood, the real dollars will be in online web video advertising.  Seems pretty straight forward – the web delivers and is measurable.  Connecting the dots you can see that advertising is changing which basically means the users are changing.  User behavior is alway leading advertiser behavior change.  Except video advertising will be done in a new way.

Report out today shows that Professionally-produced Web programming yields high CPMs, according to a new report from the Diffusion Group. The CPMs for long-form online content are $40 today and will reach nearly $46 in 2013. Meanwhile, CPMs for short clips are clocking in at about $30 and will increase to about $34 in five years.

User-generated videos generate CPMs of about $15 today and will reach $17 in 2013. The report also found that user-generated videos account for about half of the online videos consumers watch but only 4% of online video ad revenue. Meanwhile, professionally-produced videos command the other 96% of Web video dollars. Advertising in Web video should reach $590 million this year and hit $10 billion in 2013.

YouTube is slowing figuring this out.   The key to success is to evove with the market not force it.  I’m long on YouTube.  They are the ‘next new network’.

Video works on the web and soon advertisers will figure out how to do it.  Right now they are failing.  Prerolls are the only game in town so we’re stuck with it for now.

Social Media is the New Standard for Emerging Online Advertising March 27, 2008

Posted by John in social media.
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This blog is about the cutting edge of technology and social media. It is often overlooked by the social media experts who are just now approaching the cutting edge. I’ve seen that the best social media consultants just don’t understand what social media is? To fully understand social media you have to look at the trends within Internet Infrastructure side of web 2.0 – collaborative filtering, software search tools, viral sharing, measurement. Most social media experts come from a PR background – not that there is anything wrong with that. I have yet to meet a PR person who can really nail the value of social media.

Forget all about that infrastructure stuff for now – just look at the numbers. Alternative media is growing fast. source:adage

Alternative media or emerging media or social media is fast becoming the standard in online advertising. Why? Because Web2.0 is about connected relationships with channels of abundant content that is fully measurable.

What the web page was to web1.0 social media is to web2.0.

The numbers are behind it. Below are the highlights from AdAge.

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

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

The upswing is as much a result of the effectiveness of new media in a fragmented market as it is from a lack of confidence in traditional media, said PQ Media President Patrick Quinn. “Traditional ad budgets have been going down, but spending has remained stable. This shows where the money is going,” Mr. Quinn said.
Alternative advertising, including online, mobile, entertainment and digital out-of-home advertising, saw spending rise at a compounded annual growth rate 25.8% to $39.22 billion in 2007, accounting for 17.7% of all ad spending that year (compared with 7% of all ad spending in 2002), and grew at a compounded annual growth rate of 26.2% from 2002 to 2007.

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

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

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

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

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

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

Say hello to social media and the upcoming engagement metric.

Google Video AdSense Review: A Mistep – No Innovation February 21, 2008

Posted by John in social media.
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Google announced AdSense for video today. Google prides themselves on innovation. I love Google and have many friends over there (here comes the but), but their approach to video Adsense just isn’t there. IMHO.  Here is a link to Google’s blog on the topic.

Everyone knows that Adsense has been a poorly performing product for ‘long tail’ and ‘torso content’ publishers. Adsense works great for Google, but Adsense isn’t working well for many publishers. However, it’s the only game in town. Google’s new AdSense is interesting, but I feel like Simon from American Idol. This wasn’t Google’s best performance. I’m not blown away by this.

Why?

User experience: The user experience for net video advertisement has to be good. Adding a 30 sec ad is a total distraction. Why would I want to watch a 30 sec ad from HP when I skip over these ads using Tivo. Give me something from HP that is compelling then I’m interested. The 30 sec ad user experience is poor.

Micronetworks need Microcontent: Microcontent is the only advertising solution that works in the ‘long tail’ and ‘torso’. In microcontent networks the ‘content’ is the ‘ad’. This is why cpm based video and cpc text ads don’t work in social networks. Micronetworks or social networks thrive on delivering value to users and the generic (somewhat) targed ads don’t deliver that value.

Monetization conflict with Editorial Content: Relevance is the problem here. Are advertisers getting the best bang for their buck – maybe its good for Crest toothpaste but not for the ‘holy grail’ which is targeted conversion. Publishers have targeted high value audiences and their audiences are looking for value not generic content ads. Many publishers don’t want to dilute their audiences with distracting ads. Publishers want a solution that delivers value to their ‘microaudiences’ and they are looking for a solution that pays them accordingly.

The paradigm of search and discovery *and* related ad techniques that orginated from search are changing. Google’s solution is an extension of their existing franchise in Adsense and doesn’t pass the innovation test.

Google will certainly make money because the big advertisers and their agencies are scrambling to move ad dollars from TV to the web. At best this solution from Google is a short term solution. It really isn’t a strong solution for advertisers and users.

Google: no offense but I think that you need to go back to the drawing board. Think different and build a product that is good for users, advertisers, and publishers.

Online Advertising Slowing? Just More Money – Expect New Products in Social Networks February 12, 2008

Posted by John in Technology.
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New data is out confirming that online ads are growing.  Many people are looking at a potential online advertising recession. NOT. In fact more money is going into online ads then ever before. It’s recession proof.  Last week Forrester came out with research confirming it. Now IDC has data confirming this online ad growth trend.

The real story is that Google is losing share *and* the ad formats are changing. In discussing the company’s latest quarterly report about Internet advertising, IDC analyst Karsten Weide said businesses affected by the slowing U.S. economy will slash other advertising budgets before paring their online campaigns. “We think there will be some effect on ad spending overall, but we think online ad spending will almost be unaffected even if there’s a depression,” he said.

For the first time ever, IDC’s research found Google actually lost a bit of market share. “Their domestic sales growth has slowed down,” the analyst said. CPM based ads are dying giving way to Microcontent and social network ads.Look for new standards to come from online advertising groups like the Association of Downloadable Media (ADM).

Big Picture: Ads dollars are coming from Broadcast and Print sectors. The money has to flow somewhere and it will be online. Expect video advertising to dominate the big dollars.

No recession here only expansion.

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