- Google Cool to Web 2.0: On this blog, I've shared several news items and thoughts about the difficulties with making advertising work on social media (or Web 2.0) sites. It turns out Google agrees; Google CEO Eric Schmidt touched on these challenges in an interview, saying, "The web 2.0 architecture is not necessarily a revenue opportunity. This is not where the money is." And about Google's well-publicized advertising deal with MySpace, Schmidt noted, "MySpace did not monetize as well as we thought. We have a lot of traffic, a lot of page views, but it is harder than we thought to get our ad network to work with social networks."
But Schmidt isn't closing the door entirely on social advertising. He thinks some sort of advertising may work on social media services, and he predicts it will need to be more experiential. Says Schmidt, "The advertising has to be more entertaining, more interesting, more immersive compared to what we have today." In other words, if you're going to interrupt consumers' conversations on social sites, you have to make it worth their while!
- Do We Really Need To Be Reminded To Include Our URL In Ads? I suppose this is an interesting report, but in 2008 I'd hope no marketer would need a study to know it's a good practice to include your Web address in print ads. According to MediaPost, the Magazine Publishers of America is releasing a study showing that including URLs in magazine ads drives readers to advertiser Web sites.
The analysis of 833 print ads in seven magazines showed that ads with Web addresses were up to three times as likely to drive readers to a Web site, depending on the magazine category. The biggest increases came in the home, women's service and travel categories. So, be sure to include those URLs in print ads. In fact, include them everywhere!
- Internet Advertising Continues Its Growth: The Interactive Advertising Bureau and PricewaterhouseCoopers have released their full-year report on Internet advertising. If you follow online marketing, there is little surprising in this report:
- Full year 2007 Internet advertising revenues set a new record, totaling $21.2 billion, up 26 percent versus full year 2006 revenues.
- A handful of ad-selling company control most of the market; the top ten ad-selling companies accounted for 69 percent of total revenues in the fourth quarter of 2007.
- Search continues to command the biggest share of online ad dollars, with 41% of the total spend. Display advertising (which includes banners, rich media, digital video, and sponsorships) accounted for 34% of online ad revenue.
- Most online advertising is performance based (such Pay Per Click or Pay Per Action). Approximately 51% of 2007 full year revenues were priced on a performance basis, up from 47% reported for full year 2006.
- Internet advertising is now the third largest category of advertising spending behind Newspapers and TV Distribution. Internet ad spending is now slightly greater than that of cable or radio.
- Can Incentives Work to Boost Mobile Advertising? Harris Interactive released a study in which they asked consumers if they'd view advertising on their cell phones in exchange for incentives. A "surprising 35 percent" said would accept incentive-based advertisements; of that total, 78% say the best incentive would be cold hard cash and 63% said free minutes would be effective to get people to view ads on mobile phones.
The implication seems to be that because consumers say they'd accept incentives to watch advertising that this provides some path for marketers to test in the infant mobile marketing channel. The concept of paying people to view ads has never worked in any channel; this revenue model simply isn't viable. Moreover, while survey participants may express a theoretical interest in getting paid to view ads, the reality of receiving a few pennies to see ads is never appealing in practice.
The Harris survey also throws a bit of cold water on one of the most promising aspects of mobile advertising--that advertising effectiveness can be increased by using cell phone users' preferences in order to tailor ads to meet their interests and needs. Just 35% of teens said they would give away their personal information to advertisers even if there is an incentive.
Mobile marketing is going to be huge in the future, but anyone promising easy marketing solutions with personalization or incentives is not learning lessons from the past.
The chart I found most interesting was the one comparing ad spending for the first 13 years of the Internet (1995-2007) versus broadcast television (1949-1961) and cable television (1980-1992), presented in current inflation-adjusted dollars. Thirteen years into this new medium, Internet ad revenues stand at $21.2 billion annual. After the same period, television ad spending was $11.7 billion and cable was just $4.8 billion.