Curated by Stuart Fogarty stuart@admaticallycom for AFAO'Meara Advertising, Streamabout The Video Agency and Admatic Ireland.
All comments will be posted - promise!
Interesting piece on The New York Times online. Seemingly, according to BuzzFeed who've sight of internal documents, they've lost 50% of their homepage views - 80 million in two years. Crisis? No....rather than a loss of readers, perhaps what we're seeing is the move away from homepages and possibly, here is a reason why. News is no longer the destination read and what's delivering news readers is referral traffic - from Twitter, Facebook, Blogs, Reddit and so on. So people are getting their news when it's sent to them - they're not going looking for it. So when they see something of interest say on Twitter, they click that link and it brings them to the specific page and NOT via the homepage. The readers are only looking at stories that interest them - snacking - rather than the "news in full". So the notional idea that I read a paper online from front to back, might be changing. Homepages are institutional, whereby Social Media reflects the readers interests. So readers are looking to be entertained as we know and so only read the stuff they find interesting. Audience analysis by publishers as to what's being read, might confirm this trend and they may find that their homepage traffic is in demise whereas overall, their numbers are still holding up. Interesting for advertisers too who are paying premiums to be on the homepages.... But perhaps important to publishers too, to drive their stories by links on Social Media, although they do that, but this may need more focus to deliver views. So the Social Media aspect of publishing is becoming more important. They might, for example, keep tweeting the popular stuff. And the headline on the Social Media link to the story, will be key. Perhaps the way we're reading news is changing and perhaps an interest in "general news" is declining as such. It's not a commentary but just an interesting development to note. I don't believe the NY Times have lost readers - they've just lost readers on their homepage landing page. So news needs to adapt to that.
One day too, we'll get the point where we send relevant news to the relevant people rather than to everyone en masse. The Internet is a one-to-one medium, not one-to-many.
The very reliable BusinessInsider has published an interesting report into digital video. It might come as no surprise (hopefully) that digital video is skyrocketing. Online video ads are the fastest growing medium outpacing TV. They exploded in 2013 and trust me, continue to do so in 2014. Over 35 Billion video ads were viewed in the US in December alone. Largely because they give clients an opportunity to give longer narrative (because they're longer!) and more engaging content through storytelling, which 30 seconds on TV restricts you from doing. They also of course, come with the benefits of all things digital such as low cost media placement and tracking. BusinessInsider estimates that digital video will take $5 billion in ad revenue by 2016 ($2.8 billion in 2013), growth of +100% year on year (yoy) and the highest click through (just under 2%) of any other digital format. Of course, if you're prepared to watch a 2 or 3 minute video online, you're likely to be more prepared to click through because you've been engaged. One thing you can't do, is click a TV Commercial.... The growth in domestic use of streaming devices, better Internet connectivity and indeed, more savvy PC users almost assures the growth. As more go online, the Opportunity-to-see (OTS) video, increases. Viewability of course is the issue too - if your video is no good, then it won't be watched.....but that applies to all other Ad formats too. Advertisers need to start increasing their investment in what is generally, low cost digital video. Low cost from a Production perspective and low cost Media. The days of 50k and 100k and more on TV Commercial Production are over with Digital Video costing 1k-5k generally. And just as good. In fact, a whole lot better. As BusinessInsider say too, much more watched.
Publicis and Omnicom call it off. The 50:50 mega-merger of 35 billion us dollars announced 9 months ago, is being eh, 'de-coupled'. The Agencies, which own a large number of established brands in the market, had difficulties in completing transactions in a timely manner (according to an Omnicom statement) and Omnicom have spent circa 48 million usd in the merger thus far. Reading between the lines, they're putting the blame on Publicis. It also seems that the announcement was communicated initially via Twitter (or it 'leaked') and Clients were not formally informed per se. Rumours abound of rows about key positions (typical merger nonsense) but one wonders why these sorts of issues weren't dealt with pre-merger? Seemingly the CFO position (who'd oversee the merger) was a big issue. Clearly, knowing both Agencies well, there was always going to be a French Versus American way of doing things and trust me, both are very, very different. The launch photocall (above) with The Eiffel Tower in the background, was the start of the "I am in control here" piece. Financially too, with savings of "$500 million" touted as a reason from the outset to do the merger, hardly seemed a good enough reason. It also puts WPP back to top of the heap without the new entity. And it damages the reputation of both Publicis and Omnicom in not being able to complete this. At least those "$500 million" in savings won't happen and so those job losses (the savings) are now safer. Apart from that, pretty pathetic.
Twitter continues to take a bath. More than 120 million shares were traded on Tuesday with a price fall of -18% down to under 32 us dollars a share - an all time low. It's up on the 26 us dollar November IPO price but well down on the post IPO surge of over 70 us dollars. It's a slide but accentuated this week by the expiration of 'lockups' in shares with 470 million available to come onto the market for the first time. The co-founders, CEO and large investors have indicated that they'll continue to hold the stock...but for how long? They hold about 205 million shares - leaving circa 265 million available to possibly trade and 120 million were. Tuesday's volume in traded shares though, is an all time high and indicates large stock offloads. Less that 20% of Twitter shares had been traded to this point. Twitter are suffering from a general downturn in tech stocks but in particular, it is driven by concerns that Twitter hasn't found a way to generate substantial revenue - yet. And monthly active users are down. Negative sentiment. That concern is at the core of this. As well as, legal or not, probable market short selling which will in turn create a downward dynamism in the share price.... possibly. Add to that, those staff holders of shares who have an opportunity to "get rich" following the release of their shares from the lockup, will be nervous of these drops and possibly, look to sell, rather than wait. Further adding to the decline. Not a good time for Twitter. But fundamentally it shows that an IPO has benefits especially for tech companies. However, there's also a darkside. It can ruin you.
The global TV advertising market is something close to $300 billion. The online part of this is about 8%, the rest (ridiculously) going to traditional TV Stations. Although online video advertising surged +44% last year. Younger audiences, a key demographic, are now more online with digital video, than watching TV. Almost in every country. So online broadcasters want a cut of that spend, as they develop and as their audiences switch away from traditional TV. You'll see my other blogs following - about the decline of TV, decline of Cable (pay) TV and how broadcasters such as ITV/Comcast are investing fortunes into content creation for online. The decline of Cable TV is in fact, a direct switch by consumers towards online broadcasters. It's a massive wave. It's also massive that these online shows are being watched on multi devices in the home. They're watching something in the region of 15 hours a week (versus 33 hours watching TV). Netflix's 'House of cards' and 'Orange is the new black' and others, are showing advertisers the way. Of course too, as I often say, ad money follows audience, so the real task here is to drive viewers and it is happening. Indeed, online broadcasters are using traditional media (notably Outdoor) to promote their shows. However, online ad rates remain high but are decreasing. And of course, sponsorship on online programmes is working. Fundamentally too, digital advertising generates direct measurable response which traditional TV cannot do. You cannot click a TV Commercial. But as online broadcasters get better and better at producing online digital video content, the eyeballs will follow and so too, the advertising. The time lag is really down to agency media planners who are moving slowly and older marketing managers who haven't got to grips with the way it's changing so fast. Content is still....king.
ITV, is a traditional TV broadcaster that's showing growth? Why? Because of the resurgence of advertising in the UK but largely because, it has moved to become less dependent on advertising (!) and more into content creation. It understands that the traditional TV model is diminishing so it's now more of a content creator. It sells programmes to other broadcasters (including BBC) but also to new buyers like Netflix, Hulu and Xbox. The production side, ITV studios, showed a +24% 2013 profit increase (£133m) on turnover of £857m. They now have 60 shows on US channels (more than 50% of their revenue is overseas) such as 'Hell's Kitchen' on Fox and Mr. Selfridge is in 150 countries (including being streamed on Amazon Prime). Last year they spent £66m on buying independent content producers and yet acquisitions added £97m to ITV's revenue. Good result. More funding for acquisitions is planned too, possibly nearly £200m as a war-chest in order to develop more content to sell. There's little doubt that ITV are learning the online lessons and looking at it as an opportunity to become programme makers rather than seeing it as a threat. Online in essence, has opened up a market of content purchasers. In other words, whilst the likes of Netflix are very techy, they're not programme makers (although they are getting there now) whereas ITV have a long history of making strong programmes. So you match one against the other. And you start seeing TV Ad revenue as not being the driver anymore. Looks to me, that ITV have got it.
The problems with 'cord cutters' and the collapsing of pay TV (cable TV) has not gone unnoticed at BSKYB according to The Telegraph. They are preparing a major overhaul of their service and their set-top boxes to allow customers access to any programme on any device. They are also looking at Sky+, using the cloud (rather than the local box drive) to store programmes allowing greater accessibility. The multi-screen technology will also allow greater advertising opportunities possibly targeting customers by post code. Direct selling. They also plan to introduce 4K (very high definition programming) and a 'film to own' service. Of course, Sky aren't the only ones bringing Television across many devices with Google and Amazon already in the market and Netflix is signing deals. Traditional TV will become just a part of their subscription service (funny how it used to be the other way around!). Apple of course, are there too. But good to see traditional TV broadcasting embracing digital and getting into the space rather than usually, running from it. Sky, at least, are responding. The only downside to the story is that it's "a year or two away" which is a long time in politics as they say - but a generational time in digital. They'll need to move faster, but at least, they're moving.
They call it 'cord cutting'. That's where you stop paying your expensive monthly cable or satellite subscriptions in favour of watching online video. You 'cut the chord'. In fact it's likely that young adults will never pay for cable in their lives having been brought up online, so the cable future is bleak anyway. And the number of 'cord cutters' is increasing at a dramatic rate year on year.
In turn, as you'll read in another blog here, as subscribers are moving away from cable so too is the cable viewing audience obviously declining (by -11% last year). Less subscribing, less watching and ultimately, less advertising. Of course too, the highest percentage of cord cutters are those with a Netflix or Hulu account already - as you'd expect - but in recessionary times with so much content online, subscriptions are being cut anyway. At averaging $200 a month, it's no wonder. Pay TV is going to be in decline forever. And on this side of the world, that means 'Sky'. What they might resort to is monthly caps or limits on access with a more "tiered" approach - practically 'pay-per-view'. If I was them, that's what I would do. I do understand that there's more revenue in the stability of monthly subscriptions and that's one model. But given the swiftness and steepness of the decline of that model, you have to do something else or be eaten. Introduce a pay-per-view option to supplement your subs.
But what it does point to, is the future for growing demand for online video, is bright.
Cable TV is sinking. Fast. 2013 was its worst year on record with a -11% decline in audiences. Fox, MSNBC, CNN and so on have been in decline since 2009 and largely because 82% of Americans get their news from desktops or 54% from mobile devices (according to Pew Research). But we knew that anyway. The sharpest decline was in their lucrative primetime spots. Yet, their advertising revenue is growing! So what we are seeing is the time lag between audiences declining and advertisers moving to digital. More than a little crazy...but it will come. Advertising money follows audiences as sure as night follows day. Online media is of course, showing growth as a result. And it would seem that the core problem here is news what has traditionally been the 'hook' for TV viewing. The scheduling needs of traditional TV for their 6 o'clock and 9 o'clock breaks, means that their news is 'out of date' by that time having been broken online, earlier in the day. Last year, over 18% of US households with a Netflix or Hulu account, dropped cable. So by not having it, obviously decreases viewing. Traditional TV Broadcasting, is over as we know it.
The US Supreme Court might decide the future of Television, today. Aereo, a start-up, rebroadcasts TV content like Fox, ABC, NBC, CBS on the basis that those signals are free and in turn it charges customers to watch them (about 8 usd a month). Subscribers can watch, record and see a lot of content on their various devices. But cable companies like Time Warner and Comcast, pay those broadcasters billions, to be allowed re-broadcast their content. They in turn sell it on to consumers as part of a cable subscription (like Sky). Broadcasters have sued Aereo on the basis of copyright infringement. However, if Aereo's model is found to be legal, this will be a dramatic day for cable companies and for traditional TV broadcasters. If Aereo loses, it might have to shut down. If it wins....re-broadcasting free signals is now going to expand and perhaps broadcasters will be forced to do it themselves and by-pass cable. For example, NFL (America Football) would overnight be "free to air" through re-broadcasters online. But of course, the bigger picture is copyright and as to who owns it and what rights the copyright holder has. However, the even hugely bigger picture is that TV Broadcasters have now to resort to legal actions to defend their business. Always the sure sign that technology has overtaken them. And it has.
Google shares dropped 6% yesterday, a fall of $22 billion in value in a day. Largely because investors were concerned at Google's inability to maintain advertising prices. In their own reported numbers, one critical measure is their 'cost per click' which fell -9% and this caused concern - notably on mobile devices where advertisers seem to want to pay less than the norm. Largely, this is because of a perception that the mobile screen is half the size of a PC/Desktop so they'll only pay, half. The sale of Motorola Mobility to Lenovo at a discounted price, also caused worry. They sold is at 3 billion usd having paid over 12 bn. All that said, the underlying performance of the company is still strong with Q1 revenues up +20% to over 15 billion usd and profits up +3% to over 3 billion usd. Although investors did expect more. But one big, huge elephant in the room here, is the size of Google's market cap - a widely huge valuation. At circa 400 billion usd, a 6% slides wipes out a lot of value (circa 22 billion). It is the second highest market cap in America. And frankly bears no resemblance to the level of profitability it's making although it has large cash reserves. There are growing concerns about the high values of tech stocks so even when the core business delivers great results, any shakiness, causes a major investor outflow. This seems to sum it up.
What makes a video go viral? Absolutely no idea but have a look at this selection of the highest virals so far in 2014 and you might get an idea. And look at the Fox clip numbers. Nearly 300 million? So it's almost impossible to know. But we do know that if you don't do online digital video, it'll never go viral!
Twitter and Facebook are ramping up their proposition as TV's "second screen" social media in order to get some of those TV Ad budgets...but they've a good bit to go. They're not getting traction. 16% of online Americans use second screens when watching TV prime time says Nielsen. Only half of them then use their Social networks to talk about TV shows - so that's all pretty low numbers. A big jump perhaps, but still in its infancy and becoming a struggle. Consequently, Social Media isn't yet the way to use product promotion in relation to TV advertising. And this game might be up for Twitter/Facebook, or at least, be a much longer term play than they anticipate. The problem here is that Social Media is an alternative to TV not an add-on. Relating them together under the "second screen" proposition, isn't effective.... rather than, what they should be doing, is driving Twitter/Facebook as being different and offering other choices to TV. But Twitter/Facebook want to get their hands on TV advertising spend now to show revenue potential because of share price issues...they'll be waiting. The fact is that traditional TV broadcasting is dying, nothing surer, as audiences get fed up with scheduling of content at times that don't suit them and see better alternative content through either online broadcasts (Hulu, Love Film, Netflix) or online video (YouTube, Vimeo). TV audiences are in terminal decline and TV stations are compensating that loss of viewers by increasing their rates to compensate. So advertisers are paying more for lower views and that simply won't stand. They are diametrically opposed. So in time, advertising budgets on TV will switch to online. They've been slow to thus far, but like big ships, they take time and they will. Basic inertia, largely on the part of their Media Agencies, coupled with a generational belief in the power of TV advertising, means it will take time. A lack too of new digital media understanding and confusion about formats, still gives digital media a "fog" over it. But that will clear. Already there is an understanding amongst large brands, the traditional TV advocates, that they "need to do more online", but they're just not clear about what. Social Media second screen offerings from Twitter and Facebookare not it. Social Media alternatives to TV, such as broadcasting their own content, are it. In other words, they should be taking TV on and not be part of it. Twitter TV? Facebook TV? online newspaper TV? What Twitter/Facebook are currently doing is seeking short term revenues, whilst at the same time, being deflected from where they should be long term. They should be content providers onto huge platforms which they already have with massive subscribers. Traditional TV is over as broadcasters and the TV stations need to realise that their long term play is as content providers into Social media platforms. And not, as Nielsen shows, the other way around.
US tech stocks are taking a bit of a hammering from US investors this month. A 275 billion usd hammering. About 14 companies have lost about 20% of their stock market values which brings us back to the crashing sound of 2008. Business Software companies like Workday, Fireye and Splunk have been hit hardest down -30/40%. Biotech is down but Facebook has fallen -22% from its March highs (having spent 19 billion on What's App). Twitter and LinkedIn are down circa -40% from highs and even Google is down -12%. Netflix too are feeling the draught. Of course, this comes on foot of a flood of tech IPO's which in itself, creates a supply and demand issue (too much supply potential) and indeed, reflects a correction on the initial high levels of capital raised. Temporary? perhaps but these rallies tend to naturally gather momentum and continue to slide as nervous investors get cold feet and exit. It may affect the Alibaba float with a value of 200 Billion usd which is quite extraordinary. Although there could also be a view that these downward corrections actually bring realism to the market and is better for forthcoming IPO's. In other words, lower valuations are more realistic. But other issues could be at play too - the Russian/Crimean problem is not helping, growth bringing interest rate rises, and general economic matters. It could also be the first sign of another Internet bubble and crash as I know well from 2000. Hopes then were dashed because of the optimism on future earnings didn't materialise (and nor too, did investors know what they were buying into). If you want a view, it's that it's a correction on insanely high valuations based on unachievable revenues. And investors who got in for a quick bullish gain are realising that. So they're offloading long term...they'll tend not to come back. A market correction alright, but nothing temporary about it. Planet Earth.
Tesla, the new electric flash car that the world is talking about, is also going to be a digital first and shows the opportunity for in-car tech which will have issues for things such as radio listenership. (I should point out too, that Dermot Hanrahan, no stranger to radio and indeed, Electric Media, pointed out to me that Tesla was the name of a hungarian inventor who is largely credited with inventing radio for Marconi and not Marconi himself). Tesla will have a 17 inch touchscreen display and in trials it revealed that during commuting times (peak airtime drivetime) that news accounted for 54% of usage. With 26% of sites visited being local news sites and 13% being financial related. After news, restaurants/travel/auto related sites accounted for 15%, entertainment 14% and lifestyle 12%. Californians were the highest users of the screens by a mile but legislation in states regarding in-car screen restrictions (such as Washington + New York) meant lower opportunities to view. Web video is not there yet but getting there and this will of course, bring online digital video into a new market. News for example, will need to be more video driven to reach this audience - an issue for online newspaper publishers. The massive opportunity for in-car media is only at its infancy but it is something we should be aware of and react to. All cars will have web enabled screens as a standard and we the opportunity to deliver news/entertainment in a visual context, it may override audio radio listening.
But perhaps that's an opportunity rather than a threat. Radio Stations need to move into online video programming anyway, to reach the online user and indeed, to generate higher revenues from online TV. With established presenters doing established shows, there's no reason to move that type of programming online. Unless of course, the presenter only has a face for radio.....
Disney is buying Marker Studios for a rumoured 950 m usd, which in itself isn't unusual except that Marker is probably the largest supplier of short-form video content on YouTube. So here is the established brand Disney, recognising that it too needs to be in digital online video. Marker started only in 2009, but today has about 380 million subscribers with 55,000 youtube channels and wait for it, 5.5 Billion views a month....around 4% of youtube's monthly output. And of course, Disney wants to reach out to those active subscribers. It also will change future online video consumption and production - but in a real positive way. Notably too, these subscribers will be young adults, right smack into Disney's market. Disney already own 'Club Penguin'. It's a real shot in the arm too for youtube being able to up their game with rich Disney content and further proof, if it was needed, of the bright future of online video. A 950 million bright future.
PepsiMax have quite a clever Bus Shelter Video stunt - real digital ooh (out of home) making the side panel of a 4 sheet poster, interactive. It is done extremely cleverly using CGI, on London's Oxford Street and then recording the reactions for online viral video. The link to Pepsi is that it's "unbelievable" (like the stunt geddit?) but that's tenuous at best. More likely someone had a good idea and is trying to make it work.
But these things work great largely because they create talkability and moreover, generate a video which can then be shared (already nearly 2m times). Like I just have.
You may or may not, like Walmart. But you'll find it hard not to like them when you see this online video. Because it's storytelling - the best way to use digital video - and because it's real. Nobody is trying to sell you anything here except to feel good. About jobs. About American products. About Walmart. People might say that it's using people with Special Needs to promote Walmart. Exploiting them. We have Special Needs in our family and I can assure you it's the opposite - people want their voices heard and for so, so long we refused to use them in Advertising. Now we can and now they can be heard with online digital video. Good on you Walmart. And with 1.3 million views already, you're going viral which you could never do on TV. Deservedly.
Telsa, the new electric car that's creating a stir by founder Elon Musk, have a new video Ad online. For 1,500 dollars. Here it is (sorry you have to copy the link).... https://www.youtube.com/watch?v=-fvfiYi7uUE Produced by college graduates and titled 'Modern Spaceship', the college kids have gone on to create a video unit called, 'Everdream Pictures'. I predict their prices will increase though... Already with 14 staffers, the 25 year olds see a future in online video. Pretty good looking electric car if you ask me and pretty good looking digital video. The after affects are very 'Star Wars' and no harm in that, but it does show what can be achieved online albeit if 1,500 dollars is understating it a bit. But online video is inexpensive. And it's not a million miles away price-wise, from can be done. As well as reaching that bigger and bigger online viewer who's not watching TV without the big TV budgets. All it needs is a good idea.
Google Glass has a new application - Google Soldiers. US Soldiers (and I guess, others) are looking at equipping troops in the field with Google glasses. What it will allow them to see, is video. Perhaps video of soldier positions from over a hill from drone sky footage; perhaps a close look at a house or enemy position; perhaps better live maps of terrain; all in full colour and possibly in 3D. Developed in the UK by BAE, in a secure network, it will be a huge military advance. But it does also open the possibility of other applications that may be extremely useful. We've already seen leisure applications such as video of yourself, skiing. But Rescuers, such as lifeboats, being another one. Clear views of a distressed ship status by sending out a video drone in advance and beaming back to a lifeboat member. Or Police drone footage relayed to pursuing vehicles in a car chase saves the cost of helicopters as well as, making that information more readily available. Every police station could have a video drone. Or Medical applications through live video links to a hospital as a doctor tries to help someone off-site. Australia's bush doctors would be glad of them! Or Traffic drones, helping cars see traffic blocks ahead so as to avoid them. Google Glasses might just be becoming more than just smart leisure wear. And perhaps, helping develop business opportunities.
Simple piece of video, nothing too complicated here to shoot and no massive budgets - but powerful? Is it ever. Online video when it tells a story can really reach out and in this case, for "good". Over 10.5 MILLION views since March 5 (3 days) giving it a reach no Advertising campaign could without spending literally, millions. And it will get results. It already has. Brilliant concept, superb copyline (which I'll leave you to work out). You'll note too, some touches such as the Dad's newspaper headline, "Government declares martial law" and so on. 10,000 children have died in Syria alone. 5 million have been "displaced" in tents. Ours, sleep happily tonight. And you can click the video to help. So there's your call to action. It's all round, a great piece of work and thanks to 'Mashable' for pointing it out. It shows the power of what online video can do. What we do.
'Millennials' are often referred to as 'Generation Y', the generation born after 'Generation X', probably born from the 1980's. So they're 20-30's year old. In a way, they are now the Internet generation and this is an interesting study from 'BusinessInsider' and 'Youme' which looks at their habits. They're watching less TV. In fact, their constant decline in TV viewing means they're switching online to watch content. No great surprise there....to some of us....but it does re-enforce the ongoing collapse of traditional TV globally. They are though, high viewers of all content. They like to go online and are prepared to watch. Whether that's long form video or short form, they are there and they are watching. The favoured device is of course, mobile (smartphone) which means they're watching content when they can be distracted. Importantly too they're using video whilst their shopping (13%). So clearly looking at products and product reviews as they purchase. So they multi-task. Their "Ad" recall is low - I think probably because they're not bothered by it and want to get onto the real reason they're watching video. A pre-roll just gets in their way and it also shows (I think), that simply replicating a TV commercial as an online duplicate, is not working. Online Video is way better, so online deserves, a different version of the TV Commercial - especially when you can skip it. You need to get your message across now, in 10 seconds before the skipping begins! They also see brands that are using video online as being 'modern' and therefore, more applicable to them. The medium is the message. All of this means that to attract this audience, TV is no longer the answer. You need online video that works across all devices, notably smartphones. We are saying it a long time, but this is not a trend, it's where the future lies.
What is The Suzuki Jimny pulling? This was posted 2 days ago and nearly a million views. Which just shows ya, the power of online video! (Hard to beat with an Advertising campaign, isn't it?)
Bitcoin, the fledgling but becoming more popular, Internet currency, took a leap forward yesterday, with the introduction of a vending machine, the first in the USA. A sort of, kind of, ATM but it doesn't dispense cash although you can put cash in and get a Bitcoin out. Although real, full, normal ATM's are on the way this month in fact. Installed in a cigar shop in New Mexico (honestly), in order to avail of less strict financial rules and notably those affecting money laundering. Problems which have been persecuting Bitcoin following the revelations about 'Silk Road', the drug dealing site. But this vending machine makes Bitcoin more real and more mainstream which is a leap in itself. Mind you, the currency has and continues to suffer wild fluctuations from highs of over a 1,000 usd to just 50 usd. And that in the last 6 weeks. But these fluctuations are fuelled by technology glitches and more over, speculators. Stability is key to the future of a currency. Although in time, I've no doubt Bitcoin will get there. It only "started" in 2009 and really came to notice in 2012. More and more "bricks and mortar" merchants are accepting them and there's a huge number of online businesses/exchanges that do. It's growing. The presence of Bitcoin machines on the 'high street' (or in cigar shops) will also put people more at ease. It has a long way to go but I think, it will be a strong global currency of the future which in turn, will turn the financial world of Governments, unable to control their own currency, on its head.
Nearly 73 Million views of the very excellent 'dumb ways to die' rail safety campaign. Superb. So here's their Valentine's message about well, eat your heart out. Bizarre romance but another extension of a great digital video campaign. Oh the original? Here you go....
Well, well, online video just gets better and better. This excellent work by Camp4Collective is Alex Honnold in a free solo climb in Mexico. Importantly, it's ultimately a trailer for the full version to appear on The North Face YouTube channel. So talk about making high quality, engaging digital video! 350,000 views in 5 days also gives you a good sense of how really interesting online video is working. If it's good, it's shared and it's blogged like this. And it's commercial, presumably North Face are paying for this. Really strong online video is really strong advertising and really useful in building a brand. The association of this video by North Face, is brand engagement of the best kind. You couldn't create a TV Commercial that does as much. The web of course, has allowed people like Camp4Collective and indeed, Streamabout, do quality work without being at the behest of big TV corporations. We've moved a long way too from online video being about the cat falling off the ladder.... Good stuff.
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.
