427 Marketing Trends found for Media / Mobile

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Facebook's App Revenue Is Poised to Surpass Site's Own Income

More than a social phenomenon, Facebook harbors a lively and growing ecosystem of game and other application makers, ad networks and retailers of virtual goods. What happens when businesses running on Facebook become bigger than Facebook itself? That could very well be the case in 2009. Facebook, which just surpassed 200 million global users, is expected to bring in about $500 million in 2009 revenue, mostly from advertising. Tech blog Venturebeat estimated that Facebook developers make a combined $500 million on the platform. Ad Age estimates the collective revenue from Facebook of developers to be between $300 million and $500 million. All in all, numbers big enough that Facebook is looking to cash in.

[Estimated timeframe:2009-onward]

Not all the developer revenue is from advertising. San Francisco-based Zynga, the top developer on Facebook with more than 41 million users, according to AllFacebook.com, makes much of its revenue from the sale of chips for its Texas HoldEm Poker or weapons in Mafia Wars. Zynga is expected to break the $100-million-sales mark in 2009, split between Facebook and MySpace. In addition to Zynga, there are at least a half dozen other companies in the $10 million to $50 million range, as well as many smaller players.

"It wouldn't surprise me if apps on Facebook generate more revenue this year than Facebook," said LivingSocial CEO Tim O´Shaughnessy, whose app is Facebook´s most popular at the moment, thanks to its "Pick Your Five" feature. "The overall platform is in the hundreds of millions of dollars."

Lisa Marino, who runs West Coast business development for RockYou, estimates developers will earn $300 million from Facebook this year primarily from three streams: virtual currency, branded sponsorships and ad-network inventory. "These are three strong revenue models that Facebook isn´t participating in but that might overall be bigger than what Facebook brings in revenue," she said.

No charge for developers
Unlike News Corp. unit MySpace, which took a hard turn toward commerce in 2008, Facebook has stressed ubiquity of its platform over revenue. Its strategy is to become a conduit for as much of the world´s communication as possible and part of that has been to not charge developers to use the platform, no matter how much revenue they generate from it.

That´s about to change. Facebook is testing a payments system with some of its developers that would enable one-click buying of virtual goods and services on the Facebook platform, with Facebook taking either a percentage of the transaction or a flat fee. In addition, Facebook is testing a service to allow users or advertisers to buy and trade "credits" or a virtual currency to facilitate commerce. Spokesman Brandon McCormick said three tests of the system will commence in the coming weeks.

That the developer community will soon overshadow the platform in revenue is a sign that Facebook is growing up as a platform, but it also presents a conundrum as it attempts to develop its own advertising business. Facebook profile pages, and the stream of social connections and information they contain, have proven a tough environment for advertising. Display ads in social networks are some of the cheapest inventory in the business. Facebook is pushing "engagement ads" -- surveys, quizzes or games that encourage interaction, but a big chunk of its revenue comes from a pre-existing ad deal with Microsoft.

Applications, on the other hand, have proved fertile ground for commerce. "Once the user goes from their profile into the app platform, whether to play a game, send a virtual gift or check stocks, then its not about connecting with people; it´s about having fun or saving time and money," said Buddy Media CEO Michael Lazerow. "There are a lot of different ways to monetize that."

Pennies add up
While there are plenty of ad networks and companies making branded applications and games, the biggest source of revenue in the applications come from small payments people make, say in games like Mafia War to restore health more quickly. Unlike advertising, the payments business has grown internationally along with Facebook´s audience. Players in Singapore are plunking down pennies along with users in the U.S. As a game gets big, it starts to add up. The top five "megahit" games make between $1 million and $3 million a month.

Adding a payments system would allow Facebook to dip a toe in the developers´ strongest source of revenue, and for the first time create a business relationship between Facebook and its developers. "In the past they´ve made it hard to give them money even if we wanted to," Mr. Lazerow said.

Max Levchin, founder and CEO of Slide, creator of SuperPoke, Top Friends and Funspace, believes there probably should be a commercial relationship between Facebook and the developers that rely on its platform for their business. "As long as they add to the bottom line, developers will pay the price."

All data sources are attributed with links to the original insight. The insight is then summarised and, where appropriate, enhanced with additional information.

Source: AdAge.com
MTT insight URL: http://marketingtrendtracker.com/article.aspx?id=4071

Vodafone to Tap Application Market - WSJ.com

Vodafone Group PLC joined the scramble for a slice of the mobile-applications market Tuesday, announcing plans for a kit that will let developers create and sell software that will work across its range of phones.

[Estimated timeframe:Q3 2009-onward]

Customers will pay for applications through their Vodafone accounts. The company will split the proceeds with developers, with Vodafone taking 30% of the revenue generated through its network. Mobile operators like Vodafone are looking for new sources of revenue to combat weaker growth in voice.

The move into applications pits the company against handset makers such as Apple Inc., Nokia Corp., Research In Motion Ltd. and Palm Inc., as well as operating system developers Google Inc. and Microsoft Corp.

The services that are developed using Vodafone's software developer kit, due to be launched in the summer, will be sold in an app store some time towards the end of 2009. Applications developed on its software will be usable across all phones on its network, a feature that Vodafone believes distinguishes its proposition from rivals, where each application has to be written separately for phones that use different operating systems.

All data sources are attributed with links to the original insight. The insight is then summarised and, where appropriate, enhanced with additional information.

Source: WSJ.com
MTT insight URL: http://marketingtrendtracker.com/article.aspx?id=4049

Readers reluctant to pay for online news

RUPERT MURDOCH'S aim to have readers pay for access to newspapers online has been called into question by a global survey that found readers are unlikely to pay for general news they can get elsewhere free. Publishers wanting to charge for content on the internet should instead focus on niche markets, with readers of specialised sport and finance content seen as more willing to open their wallets, it said.

[Estimated timeframe:Q2 2009-onward]

The PricewaterhouseCoopers survey on the outlook for newspapers in the digital age, Moving into multiple business models, found papers and online are likely to co-exist in the longer term. Yet despite the "huge potential" for online, print revenues would dominate "for some time".

Its release today comes after Mr Murdoch said last week that News Corp would start charging for some newspaper titles online over the next year.

Newspaper publishers are looking to online subscriptions and mobile content for new income streams as the global recession and a move of readers to the internet has dried up advertising revenues. PwC forecasts the global newspaper market will decline by 10.2 per cent this year, followed by an average 2 per cent annual contraction to 2013.

Readers interested in financial news and sport "expressed a relatively high willingness to pay for this content online", the study found. Finance readers were ready to pay up to 97 per cent of the price of a general paper.

But overall, consumers were not prepared to pay as much for online content as for a traditional paper, and "would choose free content when the quality was comparable or sufficient for their purpose".

The survey, conducted in seven countries, was also at odds with some of the industry´s hopes for new funding sources, seeing limited potential for electronic readers "due to unfamiliarity with this medium" and finding consumers were "currently unwilling to pay for online content on mobile devices".

However, the consultancy expected the consumer mindset would change in the next few years as people became more accustomed to spending money online.

PwC said Australian publishers were better off than their international peers, being in a less competitive market and having turned to inserted magazines, cross-advertising platforms and niche websites over recent years.


All data sources are attributed with links to the original insight. The insight is then summarised and, where appropriate, enhanced with additional information.

Source: SMH.com
MTT insight URL: http://marketingtrendtracker.com/article.aspx?id=4116

Internet Users in Developing Countries Drag on Sites’ Profits

Facebook is booming in Turkey and Indonesia. YouTube’s audience has nearly doubled in India and Brazil.  That may seem like good news. But it is also a major reason these and other Web companies with big global audiences and renowned brands struggle to turn even a tiny profit.Call it the International Paradox.

Web companies that rely on advertising are enjoying some of their most vibrant growth in developing countries. But those are also the same places where it can be the most expensive to operate, since Web companies often need more servers to make content available to parts of the world with limited bandwidth. And in those countries, online display advertising is least likely to translate into results.

This intractable contradiction has become a serious drag on the bottom lines of photo-sharing sites, social networks and video distributors like YouTube. It is also threatening the fervent idealism of Internet entrepreneurs, who hoped to unite the world in a single online village but are increasingly finding that the economics of that vision just do not work.

Last year, Veoh, a video-sharing site operated from San Diego, decided to block its service from users in Africa, Asia, Latin America and Eastern Europe, citing the dim prospects of making money and the high cost of delivering video there.

“I believe in free, open communications,” Dmitry Shapiro, the company’s chief executive, said. “But these people are so hungry for this content. They sit and they watch and watch and watch. The problem is they are eating up bandwidth, and it’s very difficult to derive revenue from it.”

Internet start-ups that came of age during the Web 2.0 era, roughly from 2004 to the beginning of the recession at the end of 2007, generally subscribed to a widely accepted blueprint: build huge global audiences with a free service, and let advertising pay the bills.

But many of them ran smack into global economic reality. There may be 1.6 billion people in the world with Internet access, but fewer than half of them have incomes high enough to interest major advertisers.

“It’s a problem every Internet company has,” said Michelangelo Volpi, chief executive of Joost, a video site with half its audience outside the United States.

“Whenever you have a lot of user-generated material, your bandwidth gets utilized in Asia, the Middle East, Latin America, where bandwidth is expensive and ad rates are ridiculously low,” Mr. Volpi said. If Web companies “really want to make money, they would shut off all those countries.”

Few Internet companies have taken that drastic step, but many are exploring other ways to increase revenue or cut costs in developing countries.

MySpace — the News Corporation’s social network with 130 million members, about 45 percent of them overseas — is testing a feature for countries with slower Internet connections called Profile Lite. It is a stripped-down version of the site that is less expensive to display because it requires less bandwidth.

MySpace says it may make Profile Lite the primary version for its members in India, where it has 760,000 users, although people there could click on a link to switch to the richer version of the site.

Perhaps no company is more in the grip of the international paradox than YouTube, which a Credit Suisse analyst, Spencer Wang, recently estimated could lose $470 million in 2009, in part because of the high cost of delivering billions of videos each month. Google, which owns YouTube, disputed the analysis but offered no details on the site’s financial situation.

Tom Pickett, director of online sales and operations at YouTube, says the company still hews to its vision of bringing online video to the entire globe. In the last two years, it has pushed to create local versions of its site in countries like India, Brazil and Poland.

But Mr. Pickett also says that YouTube has slowed the creation of new international hubs and shifted its focus to making money. He says that does not rule out restricting bandwidth in certain countries as a way to control costs — essentially making YouTube a slower, lower-quality viewing experience in the developing world.

“We may choose to set a limit to how much we are willing to pay in bandwidth cost,” Mr. Pickett said. In some countries, he said, “there may be particular peak times where instead of high definition, we might decrease the resolution.”

The Facebook social network is also considering lowering the quality of videos and photographs delivered to some regions in an effort to reduce expenses.

All data sources are attributed with links to the original insight. The insight is then summarised and, where appropriate, enhanced with additional information.

Source: NYT.com
MTT insight URL: http://marketingtrendtracker.com/article.aspx?id=4108

In UK, Testing an Automated Media-Trading System

Automated media-trading is not a new idea. But getting a system that media sellers and buyers can agree to for the most coveted ad space has proven nearly impossible to create. Enter MediaEquals, a new U.K.-based player with ambitions to secure the whole world's media inventory on its system. MediaEquals is currently running trials with six major media buyers -- Omnicom, WPP, Publicis, Aegis, Interpublic and Havas -- and with media owners, including BBC Magazines, The Guardian Media Group and Bauer Publishing.

[Estimated timeframe:Q3 2009-onward]

"MediaEquals' ambition and vision is different," said Jim Marshall, chairman of Publicis Groupe's Starcom U.K. "It's not for niche parts of the media and online; they want to create an electronic online trading system that covers all media -- and it's not about distressed sales."

MediaEquals is by no means the first to go down this road. Google's AdWords, Yahoo's RightMedia, and Microsoft's adECN have all managed to capture previously untapped business at the lower end of the ad market, making it easy for local and smaller advertisers to buy targeted ads online. Even Google has backed away from more ambitious plans to sell print and radio ads (although its fledgling Google TV program is still in place).

MediaEquals, which has been in development for three years, claims to offer something more than rival auction-based or pure transaction systems. The founders claim that it replicates the way media is bought and sold in the real world and acts as a vehicle to free up time that can be invested in creativity and developing contacts.

MediaEquals is headed by entrepreneurial executive chairman Martin Banbury, founder of media and marketing group The Mission, part owner of insurance group Insure & Go, and a former brand manager at Procter & Gamble.

Mr. Banbury has just expanded the board to signal his international ambitions. Non-executive chairman John Farrell, until recently president-CEO of Publicis´ SAMS Worldwide, and non-executive director Hannu Ryopponen, ex chief financial officer of Ikea, sit alongside a media owner, an online entrepreneur and a financier. The idea is to eventually get MediaEquals´ trading system up and running beyond the U.K., including in the U.S.

"The media industry is pretty well-run and the next step change requires a technology breakthrough," Mr. Farrell said. "MediaEdge potentially brings this. It allows agencies to focus not on process and implementation but on value-added strategic thinking. For media owners it allows them to worry less about the management of inventory and spend more time on the creative end of their inventory. It´s anything but a commoditization -- it allows a focus on creativity."

What the industry needs
Whether MediaEquals has the solution, the problems of a complex marketplace and the proliferation of media have resulted in frustrated agencies and sellers spending increasing amounts of time on administration.

"There´s no doubt the industry will have to move to online trading systems, just because of the sheer volume of inventory and its demand on time and resources," Mr. Marshall said. "There´s a lot going on in this area -- the value of an online trading system is all about reducing processing costs. Can MediaEquals do that? It´s debatable, but it´s what they are setting out to do and they have got it more right than most."

Danny Donovan, managing director of Initiative London, said, "Previous attempts to launch online media-trading platforms have had only marginal success, primarily because they have tried to change the trading process rather than build on existing practices. MediaEquals has approached the problem from the other end -- what the industry needs, not what the internet likes it to accept."

"We are replicating the way that people trade now but in electronic form," Mr. Banbury said. "We won´t increase the level of commoditization -- we could reduce it by freeing up more time for people to spend on the phone building and using relationships to make sure they´re doing the best job possible. The holy grail is efficiencies without commoditization."

Mr. Marshall, however, said, "MediaEquals says it reflects the way the market trades, but to come up with a really efficient system you will have to impact the way media owners trade and price."

MediaEquals allows for regular trading, but the negotiations take place online, providing a useful record of all conversations in the process. All inventory is instantly updated, and every individual must log on to the system.

Matt Teeman, director-ad sales, BBC Magazines, said, "For us, this is definitely not about selling distressed inventory; it´s about getting more eyeballs on our core media in a way that may actually save us and our advertisers time."

"We are not taking the art out of buying and selling -- we are improving it," Mr. Banbury said. He gave the example of an advertiser at the last minute pulling out of a prime spot, such as a 30-second commercial booked on the Super Bowl. Instead of getting the sales team to make individual phone calls to their contacts (making sure not to double up and sell the space twice), they can send out an availability notice to every relevant client, with the expectation of securing a decent price.

Another function allows media owners to vet which marketers have access to their space. A "black, white and gray" system blocks out some buyers completely, allows some full access and lets others view but not trade certain space.

MediaEquals works via the web and won´t charge for use of the system. It will instead charge media owners a "tiny proportion" of the value of each trade, which Mr. Banbury claims will be a lot less than the improvement they will see in overall trade.

Mr. Banbury has some even more radical plans for MediaEquals in the long-term. He wants to develop the technology to accommodate a brokerage system, where marketers, media buyers and even city traders can buy options on future space -- perhaps, for example, during premium events such as the 2012 Olympics -- and even sell on those options as futures.

All data sources are attributed with links to the original insight. The insight is then summarised and, where appropriate, enhanced with additional information.

Source: AdAge.com
MTT insight URL: http://marketingtrendtracker.com/article.aspx?id=4582

Mobile Media Usage Soars, Opens New Vistas for Marketers
Mobile Media Usage Soars, Opens New Vistas for Marketers - Steve McClellan NEW YORK One out of every seven minutes of media consumption today takes place via mobile devices, according to new research from IPG's Universal McCann and AOL. And with mobile usage expected to grow by 60 percent over the next two years, marketers must devise appropriate ways to communicate about the......

Mobile Media Usage Soars, Opens New Vistas for Marketers

- Steve McClellan

NEW YORK One out of every seven minutes of media consumption today takes place via mobile devices, according to new research from IPG's Universal McCann and AOL.

And with mobile usage expected to grow by 60 percent over the next two years, marketers must devise appropriate ways to communicate about their brands with mobile users or they risk missing out on huge opportunities.

With 63 million mobile Web users in the U.S. -- 19 million of whom access the Internet on a weekly basis -- Stuart Rodnick, senior director of strategic insights at AOL, said that mobile is leading a "social transformation."

The study, which polled 1,800 mobile users over the fourth quarter of last year and first quarter of 2009, found that 80 percent of smart-phone users are satisfied using the quality of the Internet on their mobile devices. Essentially those consumers are saying, "My life is better now," said Rodnick.

Ninety-five percent of the respondents said they used mobile media to fill downtime; 82 percent said they use it at work; 81 percent while shopping; 80 percent at home; and 65 percent while commuting to their jobs.

That usage "creates an unprecedented opportunity for marketers to transition with consumers as they move from activity to activity throughout the day," the study concludes.

Among specific activities, 73 percent of respondents reported searching for maps and directions while 55 percent said they participated in social networking or sought out restaurant and movie listings or reviews. Forty-four percent reported seeking national news and information. "It´s basically a guide to leisure life," said Rodnick.

According to Graeme Hutton, director of consumer insights at UM, a key finding of the research was the "media-meshing" nature of mobile. "It´s not a stand-alone media source," he said, noting that 77 percent of those polled in the research said they use TV and mobile at the same time to enhance the overall media-consumption experience.

The research also showed that 55 percent of mobile users follow brands across multiple media while 56 percent said they have been driven to mobile from other media. Conversely, 42 percent said they have been driven from mobile to other media.

"Brands have a compelling opportunity to engage consumers in mobile," said Hutton, noting that 27 percent responded that they were "completely focused" when using mobile, slightly lower than the 33 percent who reported being completely focused when surfing the Web on computers, but higher than many traditional media such as TV, newspapers and magazines (all less than 20 percent) and radio (6 percent).

Mobile users are surprisingly accepting of advertising, said Hutton, noting that 38 percent of respondents said they had taken action based on mobile ads. Almost 30 percent said mobile ads had led them to share information, while 22 percent said mobile ads had influenced a purchase decision.

"Mobile is a separate channel" that allows marketers to talk to consumers wherever they go, said Hutton. But it´s critical, he said, "to let the consumer lead and place the relationship alongside of it."

All data sources are attributed with links to the original insight. The insight is then summarised and, where appropriate, enhanced with additional information.

MTT insight URL: http://marketingtrendtracker.com/article.aspx?id=4417

Google's AdSense for iPhone Trips up Advertisers - Advertising Age - Digital
Google's AdSense for iPhone Trips up Advertisers by Rita Chang Published: July 08, 2009 NEW YORK (AdAge.com) -- In the two weeks since Google announced it would open up AdSense for mobile , serving up text and display ads inside apps, there are signs the online-ad giant -- and marketers -- are still figuring out how to create good experiences for mobile users. Google is h......

Google's AdSense for iPhone Trips up Advertisers

by Rita Chang
Published: July 08, 2009

NEW YORK (AdAge.com) -- In the two weeks since Google announced it would open up AdSense for mobile, serving up text and display ads inside apps, there are signs the online-ad giant -- and marketers -- are still figuring out how to create good experiences for mobile users.

Google is helping marketers run ads on the mobile web and inside applications built for the iPhone and G1 Android phone, but some of those campaigns appear built for the desktop web and don´t necessarily translate to the small screen.

For example, clicking on an ad with the headline "University of Kentucky" served inside the cellphone wallpaper app "Backgrounds" doesn´t land the user on the home page of the Bluegrass State´s university. Instead, users are directed to a Hewlett Packard page with information about student discounts for HP computers. The page has all the characteristics of a desktop web page, laden with text and with a multi-tabbed navigation bar that no mobile user would want to wade through. A mobile page, in contrast, would look more streamlined and simple, due to space limitations. (It´s not clear why the ad is headlined by "University of Kentucky" rather than Hewlett Packard, whose name appears in smaller letters by way of a website address.)

In the same application, Google served an ad titled "Good and Funny Stuff" from Tridentgum.com. But clicking through sends users to a page that begins with the sentence: "You need flash .... to view this site." At the moment, neither the first-generation G1 nor the iPhone supports the animation Flash software.

Meanwhile, an ad served in the Pandora radio app showed a link for a local cleaning service. When clicked, it took users to a plain landing page where one of the links appeared dead.

A reason for the flaws
One reason for these user-experience flaws? Some advertisers may be unaware that, by default, Google´s AdSense campaigns run not only on the PC web but also in mobile unless the advertiser opts out of mobile ad serving. As a result, advertisers could be paying for mobile clicks, even though they´re expecting PC-based clicks.

Google spokesman Eric Obenzinger said the company sent an e-mail last year notifying advertisers that mobile would join mix in its advertising program, and the launch was widely covered by the press and blogs. Mr. Obenzinger said advertisers have a choice to make mobile part of their campaigns and that it can be a visible and well-known feature for them.

In any case, Google´s program is still in beta, and the click volumes are likely still far from being significant.

The kinks do test Google´s philosophy that mobile-optimized web pages are not required for smartphones. The idea behind this thinking is that smartphones are really just minicomputers with browsers that read HTML pages; therefore, they provide a user experience that approximates the desktop web. Google´s self-serve mobile program only runs advertising for smartphones with full HTML capabilities, including the iPhone and the G1 phone. For advertisers that want to run WAP-based campaigns for BlackBerrys and feature phones, Google has a whole other process.

Will consumer interest be sparked?
"The issue for consumers is, will they be motivated to zoom into the website and learn more?" said independent wireless analyst Greg Sterling. If the consumer´s interest is casual, a landing page that delivers a streamlined and optimized mobile experience is more likely to engage the user, Mr. Sterling noted.

He also reckons that Google´s strategy is to first establish its position in mobile and ask questions later.

"They´re concerned about user experience but they´re also concerned about scale. Google has a dilemma: Mobile is strategic, so how do we roll it out faster, rather than wait for everyone to build out their mobile websites? There may be some sub-optimized experience, but it´s first trying to solve the problem of scale."

All data sources are attributed with links to the original insight. The insight is then summarised and, where appropriate, enhanced with additional information.

MTT insight URL: http://marketingtrendtracker.com/article.aspx?id=4416

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