Sorry, Retailers–Cyber Monday’s Days Are Numbered

Two cliches in one ad!

From my Forbes.com blog The New Persuaders:

Not long after Cyber Monday was invented in 2005 as an online alternative to Black Friday, I called it a “marketing myth” because it was actually not even close to a top holiday shopping day.

Then a funny thing happened–Cyber Monday, created by the National Retail Foundation’s Shop.org online unit, became a self-fulfilling prophecy as retailers jumped on the term and began offering special sales that day after the Thanksgiving holiday. By the following year, it had turned into a real phenomenon, at least for many retailers, and last year it became the heaviest shopping day ever to date. It might even happen again this year.

But now, even as many retailers have made Cyber Monday sales a stock part of their holiday strategy, I’m betting its days are numbered. Why?

* Early sales. Smart retailers noticed that before Cyber Monday, at least (and perhaps still), the period leading up to the big day actually were even more active shopping days. And in their never-ending attempt to get a step ahead of rivals, many retailers ran not just pre-Cyber Monday sales, but pre-Black Friday sales as early as the evening before Thanksgiving. Apparently they worked. They almost certainly will cannibalize Cyber Monday sales. …

Read the complete post at The New Persuaders.

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Mobile Ad Spending Doubles in 2012’s First Half

From my Forbes.com blog The New Persuaders:

Mobile ads drove a 14% rise in online advertising revenues, to $17 billion, in the first half of 2012, according to a report out this morning from the Interactive Advertising Bureau and PricewaterhouseCoopers.

According to the IAB’s latest half-year report (full pdf here), mobile ad revenue jumped 95%, to $1.2 billion, or or 7% of total online ad revenues. That’s up from 4% a year ago. The reason is fairly obvious, and something every company from Facebook to Google is struggling with: People are increasingly accessing online service through smartphones and tablets, thanks to the popularity of the iPhone, the iPad, and Android devices, and advertisers are following them there.

The 14% rise pales next to a 23% rise a year ago, though the IAB attributes last year’s jump to a recovery from the recession. Online ad spending continues to far outpace overall advertising spending, which rose less than 1%, according to both Nielsen and Kantar Media. Television remains the one relatively bright spot in traditional media, though its growth also remains far behind digital. Cable saw a 4% increase, to $10.9 billion, and broadcast rose 3.3%, to $11.1 billion.

Performance-based ads, those seeking to elicit an immediate purchase or other action, remain dominant, and even gained ground over more brand-oriented ads. Chief among these ads are search ads, which despite their 48% share of overall online ad revenues continued to gain as a category in the first half, rising 19% to reach $8.1 billion. That means search giant Google, which reports its third-quarter earnings a week from today, still reigns supreme in online ads.

Display ads rose only 4%, to $5.6 billion, reducing its share of overall online ads from 36% to 33%. Although the IAB didn’t mention it, no doubt part of the relatively slow growth is due to the rise of more efficient (that is, lower-priced) banner ads placed via real-time bidding through ad exchanges.

“Brand dollars are moving online, but at a slightly slower pace than the last two half-year reports,” Sherrill Mane, the IAB’s senior VP research analytics and measurement, said in a conference call this morning. That’s a problem, indeed perhaps evidence of a problem, for companies such as Facebook that are depending on brand marketers moving television and magazine ads online. …

Read the complete post at The New Persuaders.

Facebook To Start Charging Businesses To Run Offers

From my Forbes.com blog The New Persuaders:

After launching Offers several months ago, Facebook now is switching the retail and local merchant deals service into money-making mode.

The No. 1 social network, under pressure to prove that it can juice revenue growth to justify its $50 billion-plus valuation, said today that it will require merchants to buy at least $5 worth of ads in order for their offers to appear in  the newsfeeds of their target audiences and their friends. The amount businesses are required to pay for these ads, specifically Page Post ads, will vary depending on the size of their Facebook pages.

Facebook also has added several new features to Offers. For one, they’re available worldwide to all Pages with more than 400 fans. Also, merchants can add a bar code to an Offer so they can track results more easily, as well as potentially run Offers on their e-commerce sites.

Facebook says the changes, in particular the requirement that merchants spend money, should produce Offers that consumers view as higher-quality and more relevant because businesses will be incented to make those offers better if they’re paying for them. The changes also position Offers more squarely against incumbents Groupon and LivingSocial.

Facebook isn’t providing much in the way of numbers on how Offers are doing except for one example: It says the ARIA resort in Las Vegas booked more than 1,500 nights, producing a return of five times its investment from running Offers.

Although many of the new ad and commerce initiatives Facebook has been rolling out no doubt were planned well before its May initial public offering, the company has introduced a flurry of new ad formats lately. Facebook’s share price had fallen by half from the IPO, thanks to concerns by investors about whether its ads are catching on fast enough, especially on mobile devices.

Experts Trump Friends (And Facebook) For Advice On Buying Tech Products

Problem for Facebook and Twitter?

From my Forbes.com blog The New Persuaders:

To hear Facebook tell it, its Sponsored Stories, which let marketers tap people’s comments or “likes” of products to create an ad for their friends, are the future of advertising. And they’re apparently doing quite well for the social network.

But when it comes to technology products in particular, which account for more than a fifth of online advertising, friends, social networks, and even any kind of advertising all rank well below articles by experts in the field when it comes to consumers researching what to buy. That’s according to a recent survey by tech blog network NetShelter Technology Media, for which audience tracker Crowd Science polled more than 1,000 people on 74 tech blogs such as 9to5Mac, Crackberry.com, and MacRumors.

Some tidbits from the survey:

* 85% of respondents said the most useful and influential online content when they’re considering buying tech products are articles, reviews, blog posts, and videos by experts. That’s far more than 35% who cited brand content, 33% who trust family and friends, and just 6% who are most influenced by advertising.

* 70% of people said they don’t turn to Facebook, Twitter, or other social media when they want to buy a tech product. Only 9% consult a Facebook brand page, 4% consider brand “likes,” and 8% pay attention to likes or recommendations from Facebook friends.

* Email is the preferred way 69% of people like to share articles and reviews, while 37% use Facebook, 15% use Twitter, and 20% use LinkedIn. …

Read the complete post at The New Persuaders.

Amazon’s Ad-Supported Tablet: What Took So Long?

The current Kindle Fire

From my Forbes.com blog The New Persuaders:

Ever since the first, rather expensive smartphones came out five years ago, I wondered: Why not offer cheaper ones supported by advertising? After all, even if you’d prefer not to see ads, you’re already taking a subsidy from a wireless carrier that often entails (I’m talking to you, Verizon) carrier widgets and interface limitations than are far more onerous than any advertising.

But since then, the only ad-supported portable devices that I can think of, at least that are still around, are Amazon.com’s Kindles with Special Offers. Now, however, the Wall Street Journal says Amazon may debut an ad-supported new 7-inch tablet as a followup to now sold-out Kindle Fires, as a way to offer a lower price in an increasingly competitive tablet market. The tablet could come as part of an expected Amazon launch of new tablets on Sept. 6.

The tablet apparently would display an ad as the device “wakes up.” The story mentioned no specific price break. The Special Offers Kindles offer a $30 to $50 price break, which if applied to the current Kindle Fire price of $199 would come in as low as $149. That would provide a considerable discount from Google’s Nexus 7 tablet, whose key appeal since it debuted in mid-July has been its low price.

Apple also is expected to come out with a similarly sized iPad Mini this fall, that could be priced as low as $249. However, Apple’s brand would still make a higher-priced device appealing to many people.

Assuming the ad-supported Amazon tablet actually launches, what took so long? Well, for one, tablets are still a pretty new category, so perhaps it just took awhile to work out the economics. Also, it’s possible that the ad formats on each tablet have to be so unique that it’s hard to get marketers interested at a more than experimental scale. Not least, a lot of people may figure that if they’re already paying a couple hundred dollars or more for a device, having to watch ads as well is a step too far.

But given that the three key tablet combatants today–Apple, Google, and Amazon–each are already in the ad business to varying degrees, and as it becomes clearer what kinds of ads work best on mobile devices, I wouldn’t be surprised to see more ad-supported models before long.

How To Advertise Without Really Advertising On Mobile Devices

From my Forbes.com blog The New Persuaders:

As more and more of us access online content and services via smartphones and tablets, it’s becoming apparent that advertising that works on the Web viewed on desktop and laptop computers just won’t work as well–or at all–on mobile devices. Just look at Facebook’s stock price, sitting at half its IPO level partly because investors can’t figure out how or even if the company can make money from advertising on mobile devices.

Indeed, many people in marketing are wondering if advertising is even the best way to market on mobile devices, where screen real estate is tiny and people view traditional ads as an interruption. The advent of truly mobile computing, says MediaPost columnist Steve Smith, may allow us to rethink the fundamentals of marketing.

What might work better than banners on mobile devices? A panel at MediaPost’s Mobile Insider Summit today in Lake Tahoe, streamed online, took at crack at it, and panelists had some pretty interesting answers. On the panel were moderator Anna Bager, VP and general manager of the Interactive Advertising Bureau‘s Mobile Marketing Center of Excellence; Lars Albright, cofounder and CEO of mobile engagement company SessionMBrent Hieggelke, chief marketing officer at Urban Airship, a mobile message company for apps; Jon Vlassopulos, CEO of mobile entertainment studio/agency skyrockit; and Brian Wong, founder and CEO of mobile rewards network Kiip. Here’s what they had to say:

Bager says this is the “non-banner” panel. The banner is not dead, she says, but we need to see an evolution of banners and how we advertise on different screens.

Q: How is a mobile user different from a TV, radio or Internet user?

Hieggelke: Mobile devices are much more personal. They’re never beyond an arm’s length from people.

Wong: The person is no different. The usage is a lot more intimate. The smaller screen is seen (by marketers) as an impediment, which is frustrating.

Q: How can you use mobile devices differently from other channels?

Vlassopulos: We hope the differences will wash away. If mobile can be at the beginning of the idea channel, then the other ideas and creative will flow.

Albright: Too much marketing feels random on mobile.

Wong: One of the most exciting things we’re seeing is going beyond trying to spur actions. Tapping into streams of existing behavior has a lot more promise.

Vlassopulos: The notion of interruptive advertising in theory could go away and eventually will go away. If you start to think of advertising as content, and social media has helped here, then people might see it as something they like.

Wong: When you have an intimate relationship with someone, you don’t want to mess it up by constantly yelling at them. You can do that (intimate relationship) with mobile.

Albright: New formats such as rewards and opportunities to engage work better than banners. About 90% of people opt in and engage with these new formats, vs. 90% finding them annoying.

Wong: You need to let people maintain the activity they’re already engaged in. …

Read the complete post at The New Persuaders.

How Retailers Can Benefit From Consumer ‘Showrooming’

From my Forbes.com blog The New Persuaders:

Showrooming, the practice of checking out products in a physical store and then buying them online, is a rising concern among retailers as smartphones and other mobile devices become ubiquitous. Various apps make it easy to scan a barcode to compare prices and buy a product cheaper online.

I’ve somewhat skeptical of the impact this has on retailers, in part because of my own anecdotal experience. Even more than I showroom, I research a product online–often at Amazon and other online retailers presumed to be the key culprits in showrooming–and then buy a product in a physical store because I need it now or simply want to touch a range of products, not just look at photos of them. In other words, it works both ways.

In any case, some of the most savvy brand managers are making the case that physical retailers can actually benefit from consumer behaviors that lead to showrooming, leveraging them into a marketing and advertising opportunity, or at least employ ways to head it off–without draconian techniques that may do more harm than good. Today at MediaPost’s Mobile Insider Summit at Lake Tahoe, livestreamed online, a panel offered insights into how marketers can do just that.

On the panel were moderator Carla Paschke, director of mobile innovation for marketing agency EngaugeMike Bloxham, executive director of the research firm Media Behavior InstituteHans Fredericks, VP for mobile business development for researcher comScore; Sloane Kelley, director of interactive strategy for ad agency BFG Communications; and Alexis Rask, VP and general manager of brand partnerships for retail shopping app Shopkick. Here’s what they had to say:

Q: How do each of you view the opportunities with mobile?

Bloxham: Mobile is the first umbilical media we’ve ever had. It’s deeply personal. One thing that’s really important to understand … is mobile use in the full context of their lives, other media. Mobile and TV are inextricably linked, but so are other media. We can’t look at mobile in a vacuum. People use their mobile devices to inform their thinking before, during, and after purchasing.

The idea that retailers should suppress showrooming is delusional. That ship has already sailed.

Fredericks: Folks’ usage of smartphones vs. tablets vs. laptops is different. Folks are using that PC during the course of the day. The smartphone is fairly steady during waking hours, because it’s very personal. Tablets show very pronounced evening-hours use. By and large, it is more of a home use device.

Kelley: Brands that get hip to this early can really rise above the rest.

Rask: We see two main trends. One is what to do about the in-store experience. What doesn’t get talked about enough is that arc from the couch to the store. At Shopkick, about two-thirds of our usage is couch mode. People are planning their shopping trip. They’re basically deciding: Am I going to make a left out of the driveway or a right out of the driveway?

Bloxham: TV dominates by far in the home in terms of share of mind. A lot of people also use another screen. That’s actually the first screen, not the second as we often call it. Radio dominates in the car, and there’s an opportunity to drive people to a coupon on their mobile device, like what they’re going to eat for lunch.

Rask: Mobile is the only medium where you can map a full path to purchase. …

Read the complete post at The New Persuaders.

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