Curated by Stuart Fogarty stuart@admaticallycom for AFAO'Meara Advertising, Streamabout The Video Agency and Admatic Ireland.
All comments will be posted - promise!
It's been a tough old week for Twitter. In its first filings to Wall Street since their IPO, things have gone downhill. Investors are worried. Twitter's US growth has largely stagnated and international growth is up 8 million users on the same yoy period. Small enough. Now with 187 m users internationally and 54m in the US, giving it 241m overall in Quarter 4 2013. In Quarter 3, that was 232m, so that's the worry because it's a small increase and USA stagnated. US Advertisers account for over 70% of Twitters revenue. And it's all impacting on the share price. Early stage poor growth like this, is really considered badly with the shares down circa -25% on the week. That's a massive offload. It is only one quarter of data, and revenue in 2013 was 665 million usd, up from 317 million or +110% and EBITDA was up +256%. But these numbers never got a look in, so in some ways, the dissemination of information didn't help. Twitter still has a large advertising reach and it's still growing its users and its revenue. But the fluid typical ipo investors, may continue to depart and that's a problem. IPO investors tend to be more 'punters' and get frightened easily. That's not good news for Twitter but it's likely that some maturity will come into the market in time....if that is, investors are prepared to wait.
Superbowl commercials cost an average of 4 million usd for 30 seconds. But of course, the build-up on Social media and the 'excitement' that a new commercial brings, means that these Ads get a reach far beyond the showing on the night. This year the controversy around Scarlett Johansson's commercial for Sodastream, shows how that impact can be extended. It made the front pages of a lot of newspapers and TV/Social media comment. Most advertisers release ads, about the ads, as previews to gain Social Media traction. Doritos of course, get fans to write their Superbowl commercials, giving the campaign "legs" before airing. Justifying the return is tough without that level of cut-through because the spots are expensive (Budweiser took 2 x 60 second spots this year = circa 16 million usd) so you have to grab the opportunity as Apple did in 1984. Newcastle Brown Ale (you'll see it on this blog below) actually captured the Superbowl hype without having a commercial in the game. Real guerrilla tactics. The top 5 Advertisers in the last 5 years are Budweiser, Pepsi, Hyundai,Chrysler and Coke in that order by expenditure. Interesting data from The Financial Times which shows that in order to get a return on that investment, Coke would need to sell 5.7m cans...but I think there's a point too about brand. They need to be seen as having a presence at The Superbowl in order to be quintessentially, pro-American. Can the heritage of Budweiser for example, not be in The Superbowl? It's a brand that's all part of Americana. But is it worth it? You better believe it when it's done cleverly. In some ways, The Superbowl is a must have for brands that need the endorsement of American culture. It's more than just spot-buying, rather, an involvement in American society.
The best Superbowl commercial I've seen this year that isn't in fact, a Superbowl commercial. In fact it isn't even a commercial. Great little ambush though....and a great Anna Kendrick performance. Good work Newcastle.
Superbowl Sunday. The annual feast of new specially created TV Commercials. A time to remember the greatest of them all and I was reminded of this one by a post by Ultan Bannon on LinkedIn. Chiat Day's, Ridley Scott's '1984' Apple Mac commercial. It actually annoyed George Orwell's family so much for copyright, they went legal with a 'cease and desist letter'. Apple sales increased by 50% in the days after it aired in the third quarter on Jan 22, 1984. Hated by the Apple Board, it was pushed through by Steve Jobs and Woz. Woz even offered to pay half of the airtime costs. It flagged the introduction of the Mac on Jan 24 that year. The greatest of them all? Yep, for sure.
There's a lot of talk about Facebook and its popularity brought on by some Princeton University research which suggests it's about to plummet. It's got far more coverage than it deserves and is of course headline-grabbing, rather than solidly thought through. Their "research" is based on the number of times 'Facebook' appears in Google Search and as to how that's declining and therefore (huge leap of faith required here) that Facebook will lose "80% of its users by 2017". It is, as Facebook describe it, "utter nonsense". The reason why Google search of the word 'Facebook' is declining is the growth of mobile. When you have the Facebook App on your phone, you don't have to Search. Donkeys. 78% of Facebook users are on mobile (870 million people a month) so desktop users are declining. So is desktop. It's like saying 'Twitter' search is down and therefore Twitter is collapsing. Oh dear. A Facebook data scientist went on to do the same exercise on Google Search for Princeton to prove there would be no students in Princeton by 2021 and no 'air' in the atmosphere by 2060. Facebook has competition no doubt, from niche social sharing sites but Facebook is not, MySpace. It's share price reached a high this month - £85 billion stg high. And the real loser in this? Princeton University.
For the first time since Apple opened its Itunes music store in 2003, US digital music sales have fallen last year. Interesting data from the reputable Financial Times. Why? They've dropped by about -6%, and downloads account for about 70% of that market (which shows you how much record shops have suffered) to well over a billion units. Of which Apple now controls about 70%. The reason why is streaming - music rental. Itunes Radio is one reason where people hear songs in a radio playlist supported by advertising. So if they switch to Itunes Radio, they are less likely to buy from ITunes. Might be a case of shooting yourself in the foot? We will see. Spotify also people to choose the songs they want to hear for a monthly fee. Deezer similarly. Monthly fees might stabilise the market but it will defeat downloads. I don't necessarily need to buy the song, just listen to it. But artists and music company revenue is worse in monthly streaming.... generating licence fees of circa 7,000 usd which is equivalent to about 12,000 bought downloads. Only. Beyonce's latest album had about 830,000 downloads in three days. And of course, there's the monthly free streaming options out there which don't generate hard core revenue but rather a share in advertising. Worse again if you're a record label. It's a sea change in the manner in which music is distributed and hence the impact on downloads. Will people want to just rent an album rather than buy it? If they do, there's a long hard road ahead. However, it's hard to feel sorry for record labels. They spent years fighting it instead of embracing it and now find themselves dictated to by the market. For once.
After all the talk, interesting to see Amazon's announcement this weekend that it will launch a Sunday delivery service. Starting in 7 areas in the UK but becoming the norm, it's about getting deliveries to people who might miss them (or not be around to get them) during the week. It will be a permanent feature in London from the get go. They've already tested them in December and they are free to members of Amazon's 'Prime' Service. This is nothing whatsoever to do with digital. Simply, it's just better business that happens to come from a digital business. If people want Sunday deliveries (and clearly Amazon's test show they do), then give it to them. There is no reason why existing traditional retail couldn't have done it and yet because they haven't, they'll now scramble to keep up. Online sales already account for about £1 in every £5 spent. Better customer service through Sunday delivery, will grow that. Traditional retailers have been dealt another blow. Hard to think of an excuse for them though. This is just, Better Business.
Ad men and Advertising is driven by Brands. Marketeers are driven by brands. Company Balance sheets are driven by the values of those brands. And yet, we may be seeing the end of them. A brand is something a consumer is prepared to pay more for, a premium price. "Prepared" is the key word. Largely, how Brands started, was with Sugar believe it or not when it was a hugely valuable commodity. In the old days...you went into a grocer's store and asked for sugar which he kept in a large, open, hessian sack, behind the counter. If you had a jar, the grocer filled it, weighed it and handed it back to you and you paid him. If not, the grocer had some sort of a container that he'd fill and sell to you. But there were problems. The amount of sugar you got every time you went in, was different. The hessian sack wasn't always clean and the sugar not always hygienic, as flies circled it. The quality was different because the grocer bought it in bulk from different suppliers so it was never consistent. The taste varied. And so on. So the grocer decided to bag the sugar. In doing so, standardising the weight, the quality, the hygiene and the named it something - they branded it. What that meant was the customers knew what they were buying consistently and they were prepared more for it in return. That's the essence of a brand. When I go into McDonald's for example, I get the same burger in Dublin as I do in LA. Or Coke tastes exactly the same in Jamaica as in Norway. That's a brand. However, because of all that preparation in developing consistency as well as the advertising costs, brands demand a premium price. You trust it more than the hessian sack of sugar and so you pay more for it. Straightforward. Also, you'll develop loyalty to that brand for one reason or another. Maybe it makes you feel better buying a branded coat. Or perhaps you like the taste of a brand of sausages and are loyal for that. Or the packaging you feel, makes you look cool. And so on. Loyalty to brands is a cornerstone of marketing because advertising can only get you to try a brand once. And if you like it having seen the Ad and tried it, you'll stay with it and so hence the long return on that advertising/marketing investment. All good. Until that is, a recession hits. What we're seeing now in Ireland and the UK certainly, is a pull back on brands. A major break in that loyalty. The main reason is of course affordability but what's totally shocking is the quick reaction of consumers to switch to lower cost products. They're leaving established life-long brands and buying products they know nothing about, because they're cheaper. They're doing so without as much as a thought. In retail for example, they're flocking to the discounters and buying products that they're unfamiliar with. In a lot of cases, brand names they've never heard of nor know nothing about that brand's heritage. It could have been produced in a shed. In other retail, they're opting for lower cost products rather than the brand they trust and buying 'off deal'. Bogof and twofors (Buy one get one free, two for the price of one). They're not prepared to pay the premium. And it's obvious even in my fridge. Established brands are reacting by reducing their prices, reducing in other words, their 'premium'. It's understandable - they have to sell - but it will kill them ultimately. How many years did friends of mine develop Sony as the top end brand? How much money was spent on building that premium brand? And then I walk into Tesco on Saturday and lo and behold, there's Sony on the shelves. Any wonder Sony shares are graded at 'junk status'? You see, as I said, if a company loses the value of their brands, they lose the Balance Sheet. As they trade their brands down in price, their brands have lower sale value should anyone want to buy them. And consequently, the company who owns the brand, eventually has a lower sale value in turn. I looked after BMW when it had exclusive brand status. Now I see the BMWOne series cheap version, at every traffic light. My 3 year old BMW car was then 80,000 euro new, and it's now 45,000 euro new. I do understand the short term gain in reducing prices, but understand too, the long term brand loss. I won't buy BMW or Sony again.... and I was a long term brand loyalist. Consumers ultimately decide whether a brand survives. And right now I get a sense, they don't want them anymore. Shocking but we need to get our heads around it. Brands aren't dead. But they might be dying.
The well publicised vital Christmas retail sales figures have been a double-edged sword but perhaps, a lesson. Whilst trading was down for familiar names such as M+S and Tesco, in turn causing drops in their share prices, online retailers such as Asos (online fashion), Ocado (online grocery), Argos, Dixons have done well. Dixons/Currys will have done well too, through the sales of technology products such as the Kindle, Ipad, games consoles and Phones. They are replacing traditional toys as gifts. John Lewis is saying it sold an Ipad every 10 seconds in the Christmas run-up. Indeed Tesco showed +10% growth in their online business but it didn't compensate enough, for the decline in their shop sales. Morrisons which is considered to be a big Christmas loser, have only just launched their online shopping site in January. There is a marked contrast between offline/online and further signifies the consumer switch, both to online shopping and to discounters such as Aldi, Primark and Lidl (up circa +20% in the UK). Asos (online fashion) showed growth of a staggering +30% in the UK in Q4. White Stuff, a clothing retailer showed +50% growth online. KPMG reported that online non-food sales at Christmas were up by a fifth. That's +20%! In grocery alone, they report 15% of all sales are online and a value of £900 million sold online between December 20th and 23rd (3 days). A third of Tesco's online grocery sales were by mobile at Christmas and 'click and collect' being a big feature all around. Apart from convenience of being able to shop whilst watching TV for example, in a recession, the cost of petrol and car-parking is an issue. Equally too, there remains an over-riding view that online is cheaper (and in some ways it should be, cutting out middle-man margins). Of course too, online shopping is now so easy and intuitive, that it's considered an easy option for most. It's not as technologically daunting as perhaps it once was. There can be little doubt left, I think, that online shopping has exploded and these Christmas UK numbers illustrate it clearly. The proliferation of devices too, make it even more convenient and the 'same day delivery' issues as promoted by Amazon, bring it into a new phase. If you're in retail, the value of your brand is now in what you do with it online. The need for large, traditional retailers to start investing in their online brand, is almost past. It's now a must or they will suffer. Hard to see it any other way.
In fact it's 7 years old. Steve Jobs presented his great new idea for the phone market and everybody thought, What? A phone? And it brought the whole concept of touchscreen, firmly to the market. Today it accounts for over half of Apple's total revenue with about 450 million units sold. Of course, the revenue isn't just in the expensive handsets but rather in the applications through ITunes, App Store sales and so on. The Apple Store alone, generated 10 Billion usd in 2013 with over 50 BILLION Apps being downloaded since the start. 50 Billion! The Iphone 5S by the way, is 20% lighter than the original Iphone but 40 times faster. The Iphone now makes more money than all of Disney and all of Coca-Cola. It makes more money than all of Microsoft! It's pretty impressive for a 7 year old idea don't you think? And a helluva tribute to Steve Jobs.
Interesting idea from one of America's oldest newspapers, The San FranciscoChronicle. It's 149 years old and owned by Hearst. Audrey Cooper, the new Managing Editor appointed in May 2013 and only 37, has started a digital incubator or 'boot camp'. She is making all staff, notably reporters, to go through this incubator and understand more about digital publishing, for training. It is to give a better understanding of clicks, metrics and referral sites (like Reddit, LinkedIn, Pinterest) to bring better insights into how stories get pushed out there. And to understand reader habits better. They have had declines in their printed circulation to now, 300,000 readers only, but their website is picking up readers, although not fast enough to compensate for the printed readership decline. So it's a mindset change to put digital first, something I've spoken about before. It's new young publishers that have the digital savvy to embrace online and this scheme seems a good way to start. For a lot of traditional newspaper people, they simply don't understand digital and frankly, most of us are embarrassed to ask when we don't. Absolutely understandable and reflects the general populus. But this is charming way of enlightening them all, without that embarrassment and in a way, motivating them. When you talk about the digital world, it tends to become exciting and opportunistic, rather than threatening. She's on Twitter (@audreycoopersf) and LinkedIn (http://www.linkedin.com/pub/audrey-cooper/40/a71/17) and I've no doubt all other Social Media. A lesson there too for publishers - if you're not online, you'll never understand how it works. But let's hope it all works out and proves to be a business success. It's certainly to be applauded.
Interesting retail data from The Financial Times. Best Buy, an electronics chain, saw a 15% rise in online sales in Q4 to 499m usd. Home Depot, the DIY stores, online rose by 50% to 600m. Walmart online sales expected at 13 billion for 2014. Very strong rates of growth but ecommerce is still low in their overall sales. Only 6% at Best Buy, 3% at Home Depot and less than 3% at Walmart. Whereas generally, online now accounts for an average of about 11% of all retail sales. Consequently in fact, these traditional 'bricks and mortar' retailers have a lot of catching up to do. In particular, they need to win against pure online retailers (such as Amazon) who are offering better shipping times and better customer service. Amazon will do 75 billion online this year. The view is to be able to offer both experiences (online and offline) is the ideal notably at stores (like Home Depot) where customers feel they need to have the advice of a sales person. Indeed, 'click and collect' is seen as a classic example as to how to compete with Amazon's same-day delivery. I'm not sure they're right. Online is the new way to shop and will eventually overtake bricks + mortar. Consequently, these retailers need to focus on their online shops and start thinking like tech companies, not as pure retailers. Online is cheaper to provide (fewer staff, no high street rents/overheads) and it's better margin being direct. It's also global so provides the opportunity to sell into a new customer base, previously limited by store location. Online media is also cheaper, targeted and more effective in promoting online shopping and reduces the big advertising overhead that these large retailers hold. The switch from high street shopping to online is now well upon us and growing fast. That means that new retail ventures are starting online every day and chipping away at traditional customers of the large retailers. It has to be the focus now, instead of shops. And not a bit of both. It's what the customer wants.
Mashable, the probably best regarded technology blog, has named its breakthrough brand of 2013 as Netflix. Right too. Two years ago Netflix was dead and it's a real lesson how a bricks + mortar business embraced online. You might not know, but Netflix then, was a DVD seller sending them to you by post. When they opened their online streaming business, they offered both (online or by post) but increased their price by 60% causing outrage on social Media (and a mass customer exodus). CEO Reed Hastings was named the worst CEO by The New York Times and the shares went into freefall. Then. It was only a new focus on their online business that brought back customers and early in 2013, their first real good performance with a 7m usd profit on the last quarter of 2012. And a big growth in subscribers, eating Blockbuster along the way who didn't react. They ploughed money back into the service with more content and international roll-outs. They used their money to build their business with a clear identification of low cost movies aimed at families with kids. No porn here and possibly no blockbusters, but good solid family stuff at 7 dollars a month. They released 'House of Cards' in February and it all started to come right topping 40 million subscribers now. Stunning. It was the top performing share early in 2013, up 300% year-on-year (YOY). The future could not look brighter. Better content supported by their cashpile, with an opportunity to enter new markets and with business acumen to keep at their brand, couldn't be better. They are already the new TV. Advertising money, if they decide to take it (they may not since it's not conducive to their brand offering) awaits in the billions. Subscribers looking for additional premium services like live sports, await on the sofas. It's a great digital story. The new Apple one.
Original online programming moves on. Netflix now move into the Documentary space with the announcement of 'Mitt', a documentary following Mitt Romney's bid for the US Presidency. It starts in 2006 and goes to the loss in 2012 but what's interesting is that this is typical of "digital" film making. Not the sort of thing that would end up on TV but it can end up on Netflix. TV stations are no longer the arbiters of content, thankfully. Because Netflix want new and interesting, exclusive content and this is a classic example of that. They should be thanked. It airs Jan 24.
TV is actually on a tipping point. A lot of us take the view that traditional TV is dying at a rapid pace but Saturday's story in the illustrious 'Financial Times' will only hasten things. It's a paper well read, by CEO's and Marketing Directors. The story is based around new Advertising spend data which shows, that after three consecutive decades of growth, it has finally peaked this year and now starting to decline - the tipping point. TV should capture 40% of the global 532 billion usd ad market in 2013 and then start falling. That data came from none other than Publicis ZenithOptimedia, reliable a source as you'll find. That 40% share will now go into steep decline. This is of course due to the rise of digital. The explosion of digital across multi-screens, was going to hit TV hardest always and in particular, the reluctance (ongoing reluctance) of TV stations to get involved with digital, has further accelerated their demise. A new breed of marketers too, has brought an opportunity to change and online video is also now a far sexier media buy, than traditional TV. For example, YouTube is surging + 50% with 66 billion usd in revenue this year. Google is also powering ahead on their GDN network. It is good news for digital providers and another breakthrough in their fight with TV stations who went to lengths initially, to try and put them out of business. But like a lot of businesses that simply refuse to accept digital as even an option, they lose out. And TV is digital's biggest scalp.
Music streaming just got shot. Spotify announced that its music streaming service will be free (yep, free) to mobile users. Now that's a real shot at Itunes Radio (which is free) as they prepare to launch fully. Other services will be really hit because you can't compete with free - only match it. Spotify was previously 9.99 a month (spotify premium) but they did have a free version for desktop and laptop. And they also announced to get more publicity, that they now had a whole lotta Led Zep online. For free. (Led Zep 4, cover above, is always thought to be their best moment btw). The service will be supported by Advertising for revenue. This will concern local radio stations with a music bias, who'll have difficulty in retaining online listeners too. Of course, Spotify will try to upsell you to ad-free versions and indeed other services such as 'on-demand'. But this is a breakthrough in the fight for listeners however, it's also a sign of a race to the bottom for all subscription services. What's happening is, people are able or prepared to pay less so they're moving. If Spotify's subscription model was a roaring success, they wouldn't be doing this, trust me. And will advertising pay for the music copyright fees and run the business? Difficult to see, but it is a model working for Facebook and starting to work for Twitter. One thing for sure though, it has killed the market.
Newsy is a video-journalism 5 year old "startup" by producing news videos alongside content for websites. Websites like Mashable or The Huff Post on commission. Their strategy too, is to provide that video news to online newspapers. Sound familiar? It was exactly the model that Streamabout started with. And Newsy has just been bought for 35 million usd by E.W. Scripps in cash. Scripps are the owners of a large number of daily and "community" (regional) newspapers. So online news they see as important both as a reader service but also as a potential revenue generator through the syndication of news. In other words, here are a group on newspapers prepared to invest in digital news to grow their business rather than seeing it as a threat. Money where their mouth is - 35 million dollars of it in cash. And they are right. News is at the very core of newspapers and the ability to provide online video, brings newspapers into Television land and the money that goes with that. They can break news quicker than TV who are hampered in "holding back" the day's news for lucrative 6 or 9 o'clock bulletins. When I want news, I want it now. Not tonight. With crews 'on the ground', you can make that news video as local and as relevant as you want. It's a great thumbs up for digital news video and more importantly, another clear example of Newspapers getting on board the digital train. 35 million? Offers on a postcard please.
I find myself a lot, in constant debates (arguments really) about media and digital. Traditional Media Versus Digital Media. Offline Versus Online. Effective Advertising V Social Media. Constant. Admen get cranky with me because, although they know I'm second generation Ad Agency with some good industry stature behind me (and some less so) plus some longstanding Internet experience, as you'll see on my profile. That makes it worse for them. But they read this blog and see me and "my like", as a "digital evangelist". Re-born poacher. I'm not. But it's like being asked if I have a disease. Because digital is resented by those who don't take the trouble to understand it. I am in fact, an Ad man that's interested in what consumers are doing and especially the manner in which they're consuming news and media, notably Newspapers. And subsequently, how they consume Advertising with online video. Because that is what I've always been about - and frankly, what all 'Ad people' should beabout too. Arguing this shift is like standing on Dollymount beach, trying to push out the waves. It is such an exciting, dramatic revolution. And what I try to argue, is to convince those media pals, to take the sunglasses off their head and to look at digital as a huge opportunity - and not as a threat. Businesspeople too. To try to stop them go the way of booksellers, music companies, DVD rental businesses and others, the so many traditional businesses that ignored digital and did so at their peril. Indeed, most used legal issues, notably record companies, to try stifle it. And they all perished. Some businesses indeed, have since embraced it, but possibly too little, too late. So what happened to their businesses? Book sales are up! Music sales are up! Movie downloads are up! The web actually increased their businesses, albeit as it turned out because of their neglect, to benefit other visionaries at the demise of those traditionalists. If only they had embraced it rather than fight it and try to see the opportunity. "Visionaries" indeed, like Amazon, Netflix and ITunes who did see what was going on. These aren't "new" business ideas but rather better ways of selling the old ones. That's all. It is exactly the same for Newspapers. Why did it happen? Because they understood the Web brought more people, more access to these products, with more convenience. And so people, bought more. If you make it easier for people to buy, they will. I can buy a book now, at my kitchen table rather than drive to a bookstore. I can buy an Album now in my sitting room, rather than drive to a record store. 247. And even then when I did make the drive, they might not have it. So why wouldn't I prefer to use online? I can after all, get my groceries delivered to my door. I can watch dvd movies on my phone. I can bank on the street (check my balance, transfer money) waiting for a bus. I can buy that shirt, suit, shoes, jumper...and have it delivered same day. I can pay my car tax, my esb bill, my phone bill....instantly online sitting in my car. Done. Because that's what I, you and consumers want. Like it or not. And as so often I have to explain, I can read my newspaper, for free, on my phone all day - anywhere - without having to go and buy it. I can get my news as it happens, instead of waiting for 6 or 9 O'clock bulletins or waiting for tomorrow's newspaper. Because that's what I and you want and we will want more of it, not less. Can we all at least, accept that? And therefore, we have to accept that we'll all need to do more of it. In relation to Newspapers particularly, for these very reasons, people will buy less print editions and view the online versions more, in time. Hard as it is to accept, some day in the future we simply won't print Newspapers anymore. There will be no need to. But that's not the end of Newspapers as many confuse it! You know what? that's the greatest opportunity Newspapers have had. Ever, as I'll try to explain. And why are we all struggling with it? Because newspapers are/were run by newspapermen shock! (yep, men). The Ben Bradlees. Nothing wrong with that (!) but understandably, they believe ingrained in their psyche, that what comes off the press is more important than what's on their website. When it's exactly the other way around - or will be soon. And the new younger breed of newspaper people are getting that. Like DVD Stores thought their bricks and mortars shops were more important or book shops or record shops or retailers, than their websites. They were wrong too. Whereas, if newspapers saw their website as a new, easier, quicker better way to deliver their content, they'd see a resurgence in revenue. I know you doubt that revenue bit, but bear with me. Forgive me too, for singling out one Newspaper as an example, but topically, today's INM ABC data appeared and I'll use those stats because they stand out (as I've blogged before) as being one group that has made the leap brilliantly. And I do know titles like The Mail are becoming online effective as too, the Irish Times and others will. But look, let me take the example at what's happening at independent.ie, an excellent all-round site, to illustrate this. (Indeed an aside, as I'm writing this, I'm watching Zuma announce at a live Presser, that Nelson Mandela's has died and only one site has that news now. Independent.ie) Today's ABC ONLINE numbers show them with 64 million monthly impressions. Up +51% in a year with a staggering, 6 million unique monthly readers or 354,000 viewers a day. Not bad in a country of what, 4.5 million people! See? People want online. And people want news! Now look at a print example. The Sunday Independent has circa 900,000/1 million readers a week. Biggest selling newspaper, extremely strong and has been for years. So call that 4 million readers a month, brilliant as it is (and it is), but it's 4 million, compared to 6 million online....so the online site is worth more than a monthof Sunday Independents. That's the sort of stuff that needs to register amongst newspapermen as it has, at INM. Reporters whom I know and love (kind of) talk about the downfall of news, an area where I've also worked. Whereas in fact, independent.ie, and other newspapers titles, are driven by news! It's news that's delivering the impressions. Hard news but better breaking news. News is and will be, the hook. But now it's news with audio (the Anglo tapes for example) which newspapers could never offer before. It was a newspaper, The Toronto Star, that broke the Rob Ford video recently. Now it's news with video (something new too), now it's news instantly (no deadlines per se, which has been the scourge of newsdesks all our lives). News as it happens, news on your mobile from guess what, a newspaper. Now it's news with unlimited printing (digital can add pages at little cost) and consequently at relatively little cost. Online is cheap to "print". Now it's news with a global audience so the Irish abroad (and there's more of them now as we regrettably know) who can read the newspaper online, instead of having to search abroad for a shop that might sell the printed paper at an inflated cost. But news remains the hook and most importantly, news from a trusted source, a trusted brand that's been delivering news for a hundred years. Which only a newspaper has that cache. The Anglo Tapes were investigative online news, the start of new journalism. Fabulous opportunity or what? It just requires an early mindset change. Both print and digital should keep going in tandem and in fact, use them combined, but expect that balance to shift in time, to more digital readers. They're still readers....just in a new delivery ecosystem. INM online, have +51% growth in a year, some achievement that would be nigh impossible to deliver in printed editions. Imagine another year of that? And it is doable by attracting competitor eyeballs back. But....so they all say, you can't make money from digital newspapers because they're free and you lose the cover price revenue? Yep, you do. But if you're telling me that you can't make more money from more readers, then I'm telling you, you don't understand advertising. Can you make money from 64 million impressions and 6 million unique readers a month as an example? You sure can. Exactly as you can with 6 million monthly print readers! What business wouldn't give to have 64 million impressions in this market? So how do you convert that into revenue then? Firstly, Ad money follows audience, follows eyeballs - as sure as night follows day. The more readers you have, the more Ads you get. Trust me on that.
So keep building the online audience, even perhaps promoting it in the print edition. Sacrilegious? No, it's mindset change (think about it). I think it's critical to remember that more and more advertiser money is going online. You are therefore, in a growth sector so the 'pool' of money for what you're doing is increasing. However, it is true that the current low cpm rates for impressions and pre-rolls won't do it. Those rates have to change upwards before that style of Ad revenue will start contributing and there's no short-term sign of that. When did we decide or agree that one day's newspaper reading for one person was worth circa 2 euro but a thousand views online was worth as low as 3 euros? Newspapers didn't, the market did, but everyone rolled over. Effectively they've slashed comparable print rates by -270%. The readers are the same. Therefore, Newspapers should start pushing up those rates and stop giving away their space cheaply to networks or low rate advertisers. Forget them for now. Like in print, there's a price you just won't accept. Let digital not be different and hold your line. In a recession? Yes. Who needs who here? Remember, this is a small market and advertisers will need you as you deliver high audiences that simply can't be ignored. They can't keep ignoring you as that audience builds, so they will be back at the higher, reasonable price because your readers will be worth more to them. I guarantee you. But it'll be hard to come back from low ad rates when they do. Newspapers also fail (delivering in this example, say 345,000 impressions a day) by offering confusing formats. Formats need to become standardised, exactly as print advertising is. Forget MPU's, Banner Ads, expanding banners, roll-overs....standardise the formats so traditional buyers can understand better. I did a recent campaign in October for a well-known brand. We produced one press ad version, one 48 sheet poster and wait for it, over 60 different digital formats. Time, money and fed up. More hassle for less money. That'll turn Agencies and Advertisers away who constantly complain that it's "too labour intensive" and it is. Why not half pages, quarter pages, third of pages? Just like we've always done in a manner which Ad Agencies and their clients understand. Keep it simple, keep it comparable and cross-sell print with digital. At the moment, we force advertisers to develop new, labour intensive online formats which cost. Why? So high audiences will deliver high advertising if you make it easier, through standardised formats and if you hold your rates, at least above the current low cpms. Secondly, advertising needs packaging. Sponsored sections (travel, sport, beauty, culture....) or simply sponsored stings of say, daily weather, daily stock prices, daily...or sponsored events like Budget Day coverage, GAA finals, Rugby international coverage - get advertisers locked in on 6/12 month deals like TV or Radio do. Every key section, sponsored. Thirdly, introduce new brands. Imagazines are typical of these, appearing both in print and online. Almost like the supplements or features of old, they're a terrific way to deliver smart, quality content online which video brings to life. And they're additional revenue through new brand creation. Fourthly, you can charge for content. That old chestnut, the great paywall debate, but after all, why should people expect their news (that I've always paid for), to be free? They don't. However, the big problem here is, that if you're brave to introduce a paywall, when competitors won't, you'll lose online readers overnight. Consequently, perhaps start with niches who will pay. Business is a typical niche example where corporates will pay. Perhaps add value by emailing them business news alerts or sms them as business news breaks and/or, give them insights and analysis. Most will simply have to have it either way. Fifthly, think about your readers as shoppers. The Daily Telegraph does reviews of books, music, concerts, sports and so on, but you can also buy a ticket from them, there and then. The Newspaper gets a margin simply by introducing the sale. That is massive revenue potential. Say, using my example, only 1% of your 64 million impressions click to buy something, which is a low click thru rate, that's 640,000 shoppers a month. Or think of it as one giant department store and then at only 1% conversion....revenue there. Which leads me lastly, for an opportunity to consider to sell advertisers, not on a simple traditional space basis, but on results. Sell click thrus. Suppose a car manufacturer wants website visits from their Ad campaign. Sell them those, via the newspaper's ability to get readers to click thru as an add on to their Advertising. 1000 clicks is x euro. That makes advertising in the newspaper, an absolute no-brainer...buying a result. It guarantees Ad money. Or say online grocery retailers who want to get sign-ups.
Newspapers just need to think differently. As some are. But no medium is in a better place. TV is well, much trickier.....and digital is demolishing TV. Consequently, that TV advertising will go digital too as TV stations lose viewers and could easily migrate to newspapers online. Never, ever, been a better time. Digital will be won by those who embrace it and learn the lessons of the past. Finally, I can't leave this conversation without a nod to well-known businesspeople, some are friends of mine, who invested substantially in newspapers and continue to do so. They were criticised at the time, because seemingly, "it made no sense" and brought me into more rows. I do hope this goes some way to end those arguments too. They're not fools, indeed as you all tell me and Newspapers, will get this right. Just the light switch needs to go on. If you ask me, I can't think of a better business I'd rather be in right now. How's that.
Cut a long story short... My Iphone (5S 64 running ios 7) was choc full of music downloads. I know, it's a lot of Albums, but consequently I didn't have the phone capacity to download apps or really do anything. And there's no bigger phone. So I got my fab iTunes Cloud account, transferred the albums off the phone, up to the cloud to stream/download in due course when I need to and now, my phone capacity was back. So I downloaded Flipboard. Now I had just forgotten how much my life had fallen apart without Flipboard. I had become a nervous wreck. Lonely, unstable. I stopped showering (okay, I'm exaggerating here, but you get the drift).
Instantly I got my techy stuff back, my music, my art, my books, my news, my videos...the upgrade is even better...if that was possible. Flipboard's Mike McCue is a genius and although the Twitter App comes close, this is the best of them all. The image above is from Wired where they say Flipboard was a favourite App of Steve Jobs. That does not surprise me. And it's free. Treat yourself for Christmas. Download it now and live again.
'Cyber Monday', as it's known, was the biggest shopping day in history and largely because online shopping has matured. It's now the intuitive choice. ECommerce is estimated by as reputable a journal as Forbes, to be +21% year on year. Whopping. And the average value of a transaction was 129 us dollars (!) which surprised me. So people buy big ticket items online. The key story (and we're getting a bit tired of saying it) is the surge in mobile shopping accounting for +17% of the spend and that's up over 50% year on year. Tablets seem to have had the most significant impact with IPads and Kindles showing well. Apple's IOS was also a star with nearly a quarter of all online sales through these devices so there's a lesson here for retailers.....push your messages out on mobile!! Of course too, mobile Apps will have helped to steer IOS shoppers into better bargains and better locations, so that's one reason for this growth. Cyber Monday thrashed all previous records. So online shopping is where it's at and will continue to impact negatively on pure 'bricks and mortar' retailers. Department Stores will be most hit and then beauty shopping as these two sectors are showing the biggest online activity growth. Consequently, retailers, need to follow Banks and Book Stores and Music Stores and others, and to start 2014 saying they're going to focus entirely on their online shop and not on their bricks and mortars. Because that's where the fish are swimming. In time, retail will only exist, online.
Interesting data from Ooyola (who track online video) on mobile usage, in relation to video. Most of us would possibly consider our mobile screen to be too small to watch video and it looks like that's not the case. In fact regarding long form video (longer than an hour), people do seem quite comfortable to watch it on their mobile. More comfortable than on their desktop for example and nearly as much as on connected TV. Of course, it's not so much about preference in terms of screen size but rather because of convenience - we all have a mobile phone in our pocket and not a desktop/tv/tablet. So because mobile is handy, it's used more for video. And them's the facts. Equally too, the graph is worth looking at for the growth in tablet usage and again signifies, the fall off in desktop preference so hurting companies like Microsoft and HP. However, the future is bright for video with the acceptability of mobile for watching it. That's another worry dealt with.
Just when TV thought thought recent reports went unnoticed about their demise....along comes another Car crash. Following my blog on Monday (which is below this) which highlighted those recent shocking data reports about the demise of TV - through a collapse in ratings, a collapse in subscribers and bizarrely, rising Ad costs - another credible piece of research worsens TV's pain. Both are based on facts and that's what's causing all the trouble. Facts. This time it might be terminal. Credible research, because it's current (November 2013) but completely credible because it's from Nielsen - as I often say, the doyenne of TV research. This to be fair is brave by Nielsen because in effect, they are shooting themselves in the foot. But the truth will out. Facebook AND Googleactive monthly users, are both going to take over from TV in total reach. That means, more people use Google and Facebook, than TV. 435 million as against 294 million. That's a HUGE difference. It is the death of TV, nothing less. Google and Facebookcombined, both already have a much larger audience than TV, but of course, there will be duplication between Google and Facebook users. And yet, time and time again I've said it, Media buyers are spending significantly more of their budgets on TV. Over 55% goes on TV. Why oh why? Laziness? Sweetheart back end margin deals? What can be the reason for these supposed data-driven buyers? How can the dominant continued use of TV on a Media schedule, to the detriment of online, be justifiable? And I do understand how it works, having recently owned the biggest media buying Agency in Ireland. But I cannot for the life of me, understand why it's still going on? Perhaps old habits die hard....but it is now, indefensible. A UK TV Station (UTV) has recently announced plans to start broadcasting in Ireland with all the expense that goes with it. With these results now, they might be better off, opening a Facebook page.
