16 Apr 2010

Digital developments . . . .

Addressable advertising has hit the news again.   The launch of BSkyB’s AdSmart service around their on-demand service Sky Player will provide the blueprint for integration on its satellite platform next year.   It marks the debut of a mass-market targeted substitutional advertising (TSA) model on linear TV in the UK.   It's aim?   To deliver more relevant messages to TV viewers plus the accountability and personalisation common to digital media, enabling TV ads being tailored to specific households, even individuals.  

That said, addressable TV advertising will take time to build up to a meaningful critical mass.   It certainly has the potential to bring new revenues into TV, an industry desperate to revive its ailing fortunes.   As ever, media agencies will need to build up their understanding of the technology . . . and frankly with many still struggling to grasp digital, it may take some time!   TV measurement needs to shift from outputs to outcomes in orer to match the sophisticated targeting and accountability of online - there is a long way to go yet.

Spotify is in the news again with reports that Lady GaGa earned a paltry $167 from Spotify's million plus streams of her hit Poker Face.   Whoops!   Below is a graphical representation of what music creatives earn from the various distribution methods (click image to see it larger).

Google’s UK earnings have reached yet another record high of $842 million between January and March 2010.   This equates to a nine percent rise from the last Quarter of 2009 and 15 percent from the same period a year ago.   Google execs were delighted with this on the recent analyst's call.

The Hut Group, which rescued Zavvi.co.uk last year, is making a £14 million ($21.7 million) investment for acquisition prior to a float on the stock market. This is the first major digital flotation we've seen in the UK for many years and indicates that there is life in digital yet . . . . it's not all about the ads or paywalls.

The Hut powers the online retailing of physical goods on a white-label basis for diverse clients including WH Smith, Tesco.com, Lovefilm and Argos and also operates its own fulfillment service and own-brand digital retailer, theHut.com.

An interesting example of how social media can create awareness and foster green themed developments came by recently.   Myoo is a community for environmental and social innovation and brngs to the fore creative solutions to environmental challenges.   It's a far cry from making chairs out of old coke bottles!

Apple are delaying the launch of the iPad outside the USA . . . . where they have, incidentally experienced massive problems with meeting demand.   In the meantime here in the UK, digital publishers have been falling over themselves to show off apps designed for the iPad.   Bizarrely, the Daily Express are in the vanguard!

That's all for now, more later.   But before I go, if you want a free subscription to Marketing Week delivered to your door sign up here - don't say I don't give you anything!

15 Apr 2010

Recommended Agency: Creative Nation

Creative Nation provide the production consultancy and project management of creative output you need to deliver great results for your brand.

The showreel below showcases some of what they can do . . . but there is much more.   Find out more from the Creative Nation website and blog.

Creative Nation Showreel V3 from Creative Nation on Vimeo.

Creative Nation are interesting for many reasons.   Their excellent work aside, Creative Nation's innovative business model suggests a new template for the agency business model.  

Creative Nation work by establishing a brief with a client and then assembling the talent to match the requirements.   So far, so good.   But, the difference lies in their approach.   Instead of a permanent staff pool (with the cost base and talent limitations that implies), Creative Nation operate a flexible pool of talent tailored to suit each brief.   For clients this means minimal costs with maximum impact and delivery.  

I have worked with them in the past, so you might see this as an endorsement . . . I confess, I am a fan.

9 Apr 2010

Paywalls: It's payback time

It's payback time for consumers of free online newspaper content as the paywalls come down.  

LexisNexis - once thought to be the one stop shop for news aggregation and search - has begun sending out letters warning of the withdrawal of some of its titles. Guess which ones?

The Times newspapers announced that the paywalls would come down in June.   The long march away from free content starts now.   Mr Murdoch's appearance at the National Press Club (in the USA) saw him argue that people would pay when there was nowhere else left to go.   No, he's not going mad.   But it does underline my earlier thesis that he views the BBC (and Google) as competition.   Why?

The answer is this.   If you are building a system of paywalls you will obviously lose ad revenue.   The BBC can't benefit from ad revenue as it cannot carry advertisements but it may well benefit from an audience uplift to it's network of (very good) websites.   So, what can Mr Murdoch do?  

Ranting aside, Murdoch can recast his newspaper empire as an adjunct to his broadcast/film interests.   In this way he can create a synergetic cross-media whole from what currently seems a disparate grouping of media entities.   Then, fasten the bonds with a 'club' of some sort (Times+) where you get free tickets or reduced subscriptions to other Murdoch owned or sponsored initiatives . . . .

What you now have is a self-sustaining model predicated less on expensive consumer acquisition and more on customer retention (cheaper and more profitable in the long run).   It's the oldest and simplest rule of marketing.   In this way Murdoch can manage the decline in ad revenues from the print editions, which the uplift in online ad revenues has in no way plugged I might add, and thus stem the flow of cusomers away from his products.   Finally, he can upsell advertisements across platforms in a way that the BBC cannot commercially (though it does effectively with it's content).   Oh - and of course his customes are paying customers so are also likely be seen as more attractive by advertisers.

One big problem.   Few, if any, of Murdoch's competitors in the UK show any sign of going down either the paywall route or withdrawing their content from Google and other search engines.   The BBC is also very much alive.   There is little or no proof that audiences will pay for conent they think they can get free elsewhere.

The painful truth may well turn out to be as Thomas Jefferson put it:

"I read no newspaper now but Ritchie's, and in that chiefly the advertisements, for they contain the only truths to be relied on in a newspaper."

Thomas Jefferson, Letter to Nathaniel Macon, January 12, 1819

With the plethora of news and comment available to us, do we really need newspapers as we once did?   Is a managed decline actually the only way forward?   Has Mr Murdoch in fact hit on a way of managing that decline as profitably as he can within a short timeframe?   I think he might have.