Those Awful Apple Olympic Ads? Eliminated!

From my Forbes.com blog The New Persuaders:

Mayday, indeed.

You know those new Apple ads that began running during the Olympics, featuring an Apple “genius” helping out clueless Apple users in completely Contrived situations? Gone. Eliminated. Expelled.

Mashable reports that Apple’s ad agency, TBWA\Media Arts Lab, says that short run the first weekend of the Olympics was the intention all along. But it’s hard not to think that the storm of negative reaction had a lot to do with the ads getting tossed almost as fast as those slacker badminton teams.

By many viewers’ estimation, the ads, including the “Mayday” spot above, made Apple users look like idiots, something that clearly didn’t fit Apple’s brand. That ad, for instance, got 241 “likes” and 1,867 “dislikes” on YouTube.

Still, regardless of whatever face-saving excuse is being offered today–who can really believe a multi-spot campaign with a new recurring character was planned to run only a few days?–it’s to Apple’s credit that it spiked the campaign before it did any more damage. The twin themes of Macs being easier to use and Apple offering great customer service are fine fodder for ad campaigns–but separate ad campaigns, not mashed up into one frenetic, unrealistic set of spots.

One set of bad ads won’t hurt Apple much, but like few other companies, Apple must maintain its image as the elegant and cool alternative. It’s pretty clear execs decided these ads didn’t do the job.

About these ads

Facebook Social Ads: What’s Working, What’s Not

From my Forbes.com blog The New Persuaders:

One of the biggest uncertainties about Facebook is how well its social ads work. The social network and its partners have trotted out study after study showing that people more often click on Sponsored Stories and related ads that contain a friend’s name, but advertisers and especially investors are not yet universally convinced.

Today at TechCrunch’s Crunchup conference in Silicon Valley, we got the skinny from two people who know as much about Facebook advertising as anyone: Greg Badros, Facebook’s vice president of engineering and products and the guy in charge of advertising engineering; and longtime adman Tom Bedecarre, chairman of digital agency AKQA, now a unit of ad giant WPP. Here’s what they had to say in conversation with TechCrunch’s Josh Constine.

The bottom line: Both men indicated that Facebook is just at the start of the opportunity. But the guy with the checkbook really wants more kinds of ads than Facebook currently provides–and implied that the size of those checks in the future depends on getting them. …

Read the rest of the post at The New Persuaders.

Don’t Pay Any Attention To Facebook’s Q2 Earnings Report

From my Forbes.com blog The New Persuaders:

To hear almost everyone tell it, Facebook’s earnings results Thursday will be a huge test of whether it will become the blockbuster business success so many investors have bet on. “Facebook Efforts on Advertising Face a Day of Judgment,” intones the New York Times. “Big financial test for Facebook,” blares the dead-tree version of the hometown Mercury News. “There is a lot on the line,” writes the Wall Street Journal.

It’s all a crock. Manufactured journalistic drama. Not that any quarter for such a fast-growing, newly public, highly influential, and closely watched company is unimportant. Of course it’s important. Especially given the underwhelming IPO, investors have a right to information that might tell them if their shares will be heading up or down.

But this won’t be a bellwether for Facebook’s long-term future. Fact is, no one should look to this quarter, or even the next, to determine whether Facebook can fulfill expectations that it will become the next Google.

Why? Because it’s too early. Way too early. Nobody, probably including Facebook, yet knows for sure what kind of advertising and marketing works at large scale in social networking. Facebook is clearly experimenting with a variety of ad formats, such as its socially infused Sponsored Stories. Just as clearly, it’s not apparent that it has found its equivalent of Google’s search ad or television’s 30-second spot. …

Read the complete post at The New Persuaders.

Still Following Apple Playbook, Google Debuts Cute Ads For Nexus 7 Tablet

Adapted from my Forbes.com blog The New Persuaders:

Next to its elegant products, Apple is best known for its iconic advertising–all the way from its famous (or infamous) IBM-baiting “1984″ Macintosh ads to its “Think Different” campaign to its minimalist iPod spots. Now Google is borrowing Apple’s marketing mojo to promote its new Nexus 7 tablet computer.

Despite a deserved reputation for not doing many ads for its own products, Google was already making a small name for itself with a few scattered spots–even ones during the Super Bowl in 2011 and 2010–for selected products such as its Chrome browser. Some observers have noted how Apple-like the “Dear Sophie” and “Parisian Love” ads were–Apple’s FaceTime ads and “Get a Mac” ads, in particular, are pretty cute–so Google must have figured it might as well stick with what works.

Today, Google debuted a TV commercial for the Nexus 7 tablet that once again follows the Apple playbook: simple, cute ads with music that walks the edge of heartwarming and treacly. This one has a father and son using the tablet while camping–and if that sounds strange for a device that requires a WiFi connection, well, watch the ad to discover the twist.

Will the ads work? As the Atlantic points out, this one may not work as well as the others for several reasons that have to do with that twist. Others love it.

The only mystery is why Google is running these ads now, when the pricier version of the Nexus 7 is sold out. Yes, a product shortage–another buzz-producing page from Apple’s playbook. But if Google keeps up the high level of emotional connection its ads routinely forge, it seems likely to set its own example for tech advertisers.

Internet Ad Spending Bucks Economy To Grow 12% in Q1

From my Forbes.com blog The New Persuaders:

Despite a roller-coaster economy, marketers spent 12.% more on Internet advertising in the first quarter from a year ago, according to a new report from Nielsen.

That’s the highest growth rate of any ad medium. Radio, a bit surprisingly, came in next at 7.9%. Television grew 2.9%, but it still commands almost 62% of all ad dollars to the Net’s 2.6%. (While the latter seems quite small, it’s only display advertising, not search. Why Nielsen leaves out the largest online ad format, I’m not sure.

Magazines were the only loser, falling 1.4%. Overall, ad spending grew 3.1% worldwide, to $128 billion in the first quarter, but in North America, the uptick was only 2.1%–there’s that economy.

Those figures from Nielsen’s quarterly Global AdView Pulse report mask much bigger increases in some overseas markets. Latin America saw a 31.8% jump in Internet ad spending from a year ago, the Middle East and Africa 35.2%.

And those increases weren’t just online.  TV ad spending in the Middle East and Africa jumped 33.8%.

The Asia-Pacific region, however, saw a noticeable cooling to 1.7% thanks the slowing Chinese economy.

Read the original post on The New Persuaders.

Is the Online Ad Industry Too Obsessed With Technology?

From my Forbes.com blog The New Persuaders:

When two data collection companies you’ve barely heard of, Epsilon and Acxiom, are named by the trade magazine Advertising Age as the top ad agencies in the country, you know technology has arrived as the key driver of advertising innovation. But not everyone thinks that’s such a great thing for a business whose purpose, at some level, is still to elicit in human beings an emotional connection with brands.

The issue was explored in some depth at two panels at a recent Google online advertising event for advertisers, agencies, and publishers. The discussions, lively at times, shed some light on when technology is the answer and when it’s the problem for marketers as they try to reach consumers in new ways.

On the first panel, which looked at what’s needed for the rapidly emerging ad tech ecosystem to serve advertisers, agencies, publishers and ultimately consumers, were moderator Terry Kawaja, CEO of boutique investment bank Luma Partners; Omar Tawokol, CEO of ad data firm BlueKai; ex-agency exec Greg Stuart, global CEO of the Mobile Marketing Association; Kurt Unkel, president of the digital ad buying unit of Publicis Groupe’s VivaKi; and Shishir Mehrotra, VP of product management at Google’s YouTube. Here (paraphrased in some cases, with a few comments of my own in italics) is what they had to say:

Q: How do we get to $300 billion to $400 billion in display ad revenues? Is the fragmentation of media that media people worry about actually a way we might get there? …

Read the complete post at The New Persuaders.

Marketers, Get Ready: ‘All Advertising Soon Will Be Digital’

From my Forbes.com blog The New Persuaders:

The constant battle between TV viewers who want to watch their favorite shows when and where they want broadcast and cable networks that want to maintain their lucrative linear-TV business model is just the tip of a digital media iceberg. Fact is, people want to view all kinds of content, whether it’s TV shows, movies, games, or blogs and magazine stories, wherever they want. Inconveniently, that’s not necessarily on media companies’ own websites, where they make most of their money from advertising.

As a result, marketers and publishers alike are gradually realizing they need to reach people through their advertising on whatever site, app, or device they’re using, not just where they’d like them to be. At a recent event held by Google’s DoubleClick display-ad business, a couple of prominent online media executives said they’re well on the way to doing just that.

On the stage at the Google event were moderator Terry Kawaja, CEO of boutique investment bank Luma Partners; Neal Mohan, Google’s vice president of display advertising; Weather Channel (and former adman) CEO David Kenny; and Disney Interactive Media Group Co-President Jimmy Pitaro. Here’s what they had to say about how they’re dealing with the challenge.

Q: Is a $200 billion display ad prediction [made by Mohan last year] just wishful thinking?

Kenny: It’s not wishful thinking at all. The mistake is in assuming it’s in advertising units that exist today. The $200 billion could be $300 billion or $400 billion if it’s more of service to the consumer.

Q: It feels like the digital channel is still an adolescent. Isn’t a lack of new formats the problem? …

Read the rest of the post at The New Persuaders.

What’s Coming in Internet Advertising: 12 Predictions for 2012

I did my annual predictions first on my Forbes blog, The New Persuaders, since they’re focused largely on the Internet media and advertising I cover there. On that blog, they’re done as separate posts, but I wanted to gather them up in one place here, as I’ve done in previous years. So here’s what I think will happen (or in some cases, not happen) this year in my corner of the technology and startup world:

Facebook goes public, but won’t start an IPO landslide: Facebook will make the signature stock offering of the decade, one that reportedly will value the social network at up to $100 billion. But it won’t launch a thousand IPOs as a gazillion venture capitalists and angel investors hope.

Of course, the first part of that prediction is a gimme. But I can’t go without mentioning it because the Facebook IPO will be one of the biggest stories of 2012. Assuming Goldman Sachs or Morgan Stanley don’t stumble in pricing and selling the offering, Facebook’s IPO will be every bit as important as Google’s in 2004. It will be a sign that Facebook is a real, sustainable company (if there was any doubt left by now), but also a sign that social networking is getting woven into the fabric of our entire online experience.

The second part of the prediction depends less on how the Facebook IPO goes than on how (or whether) the economy recovers. If the recover remains slow to nonexistent and the stock market reflects that, IPOs will be sparse. If we get the slow but growing economic improvement we seem to be seeing now, more companies will go public but not a gusher. But the point is that Facebook is such a singular success that it’s not going to set the tone for lesser (often far lesser) Internet companies.

Facebook’s ad business booms–but not at Google’s expense: Facebook’s social advertising looks promising, but won’t come close to challenging Google’s huge success in search ads this year–maybe ever.

Obviously, Facebook is having no problem raking in the bucks from advertisers eager to reach its 800 million-plus audience–or more specifically, the millions of people in whatever target markets they choose. EMarketer reckons the company will gross nearly $6 billion in ad revenues this year, up from $4 billion in 2011. And that’s before we know anything about Facebook’s likely plans for mobile ads or an ad network a la Google’s AdSense that would spread its ads around the Web.

From reading a lot of articlesyou’d think Facebook is stealing all that money directly from Google. That’s not mainly the case, given Google’s own considerable growth in display advertising, though Facebook’s success may well blunt that growth in the future. Instead, Facebook currently is eating Yahoo’s and AOL’s lunches, and those of many ad networks that, until Facebook ramped up its ad business, were the main alternative for advertisers looking to target sizable audiences.

What would make Facebook a huge Google-scale company is the theft of an entirely different meal: television advertising. After all, Facebook shows much more promise as a brand advertising medium than a direct-marketing medium like Google. It needs only to draw a small fraction of the $60 billion or so spent on television advertising, the biggest brand medium, to be enormously successful. But even then, it’s not mainly a Facebook vs. Google contest.

Facebook still needs to answer a big question, however. That’s whether its “social ads,” which incorporate people’s friends in ads in a 21st century version of word-of-mouth marketing, will have nearly the effectiveness in driving attention and ultimately sales as search ads, which appear in direct response to related queries, often involving products people are looking to buy. The potential is intriguing, and there are some nice examples of how well social advertising can work.

But despite Facebook’s considerable work in providing new kinds of metrics on marketing and advertising impact on its users, marketers and agencies aren’t yet universally convinced they need to spend a lot of money on Facebook ads. After all, they can get a lot of mileage out of their free Facebook Pages and Like buttons around the Web. (Not to mention, it remains to be seen whether these ultra-personal ads will cross what blogger Robert Scoble calls the Facebook freaky line.)

Bottom line: If Facebook is to be the Google of the this decade, its advertising has to at least approach the engagement of search ads, especially as Google itself moves to become more of a brand advertising platform with YouTube and continues its push into display ads. While Facebook is building what seems likely to become a great business on anew vision of advertising that could change many decades of tradition,2012 won’t be the year it closes that deal.

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Reed Hastings at D9 Conference: Netflix Will Remain Complement, Not Competitor, to Cable

Netflix has had an incredible run at transforming television, so I’m always interested in what CEO Reed Hastings has to say. This morning, AllThingsD‘s Kara Swisher is interviewing him at the D9 conference in Southern California. I’m not attending, but AllThingsD is doing a livestream of a few sessions, including Hastings. Here’s what he had to say:

Q: Is Netflix so successful that it’s driving up the cost of content beyond what even it can afford? Hastings: We’re in this virtuous cycle. We’re paying more for content, but we continue to grow with 35% gross margins. So it works as long as subscriber growth continues.

Q: Is it just handing over money to Hollywood that has improved its perception of Netflix? Hastings: Yes (in a word).

Q: What about the Starz deal (a key one for lots of movies and TV shows, which Netflix got cheap a couple years ago)? Hastings: We’ve grown a lot since then, so we’ll pay more for the content.

Q: $200 million as rumored? Hastings: Wouldn’t be shocking. (Though Starz wants a lot more than that.)

Q: Where do you go next to get fresher content? Hastings: We look at what we think our subscriber count will be at the end of the year, so what is our budget? Then we go out and do deals. Consumers want us to have all the new stuff. But the new stuff is very expensive. You can’t get it at $8 a month. We’re really much more of a complement for the new-release business.

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What’s Coming on the Internet in 2011 (Or Not)

I know I shouldn’t do it–predictions too often are either obvious or wrong–but I can’t help it. If I have to think about what’s coming in 2011, and I do, I might as well inflict those thoughts on the rest of the world. Isn’t that what blogging is all about? Anyway, here’s what I expect to see this year:

* There will be at least one monster initial public offering in tech. Take your pick (in more or less descending order of likelihood): SkypeGroupon, ZyngaDemand MediaLinkedIn, Twitter, Facebook (only if it has to). But despite many stories that will call this event a bellwether,  the IPO won’t bring back anything like the bubble days of the late 1990s (and thank goodness for that) because there are still only a few marquee names that can net multibillion-dollar valuations. UPDATE: Well, so much for that descending order. LinkedIn apparently will be the first to file–though whether it will be a “monster” IPO is another question. UPDATE 2: Well, here’s that monster IPO–since it’s hard to believe Facebook won’t go public if it has to disclose financials anyway. But it likely won’t happen until early 2012. Update 3: Now Groupon appears to be leading the IPO derby. Update 4, 1/20/11: Now it looks like Demand Media will be the first out. Again, not sure that’s the monster one, but if it’s successful, more will come.

* App fever will cool. Good apps that encapsulate a useful task or bit of entertainment–Angry Birds, AroundMe, Google Voice–will continue to do well. But those apps that do little more than apply a pretty layer atop Web content won’t get much traction–and moneymaking opportunities are uncertain in any case. The bigger issue: Once HTML5 becomes the widespread standard for creating Web services, enabling much more interactive Web services right from the browser, I wonder whether the need for separate apps will gradually fade. Continue reading

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