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Speed Summary: FT 2013 Special Report on Digital and Social Media Marketing | Social Commerce Today
Speed Summary: FT 2013 Special Report on Digital and Social Media Marketing | Social Commerce Today.

Here’s a speed summary of the just-published Financial Times 2013 special report on Digital & Social Media Marketing (PDF (FT subscribers only)).
It’s a long report, published in tandem with today’s FT Digital Media conference in London, but we’ve summarised it down to key bullet points for you. And if that’s too long, here’s the one word summary.
Television.
From ‘second screen’ TV experiences on tablets that boost TV advertising effectiveness to ‘addressable advertising’ (personalised and hyper targeted TV ads delivered digitally) and the shrinking of TV ad slots to fit digital attention spans, the FT paints the future of Digital & Social Media Marketing with television, not instead of it.
So standing atop the $205bn TV advertising mountain is the smartest place to be in digital and social media marketing right now; this makes sense – the secret to success has always been, and always will be, to stand next to the money.
Advertisers look for ways to follow consumers Emily Steel
- The big change in digital marketing is not that marketers have shifted nearly a fifth of their budgets to digital outlets, but that the divide between digital and traditional media is so blurred it may soon disappear.
- Rather than threaten the $205bn television ad business, digital promises to grow it, by helping advertisers understand the messages that will best resonate with a target audience, target the right ad to the right person at the right time, and make it easy for people to share those messages with their social networks, catapulting the brand to the centre of digital chatter.
- Whilst social media has now found its place in the world of digitally enhanced marketing as a strategic insight and targeting tool, mobile media has yet to find its niche; mobile is expected to capture more than 20 per cent of media consumption in the next five years, yet it receives only a minuscule portion of total advertising revenues, and a glut of mobile advertising inventory is causing mobile ad rates to plummet
Media: Watching television no longer rates as passive pastime Andrew Edgecliffe-Johnson
- The average American still spends about five hours a day glued to TV; the smart money in digital is being invested in making TV advertising better
- TV is not dead, it is just evolving into a two screen experience, the TV display and a tablet or smartphone. “Lean-back” TV experiences, passively consumed from the comfort of the couch, are giving way to ”lean-in” TV experiences, where viewers multitask viewing and interacting on smartphones and tablets
- A survey by Time Warner’s Medialab found that 65 per cent habitually multitask with a digital device while watching TV. Much of this activity is in social media discussions of TV shows (tripled in the last 12 months), stimulated by TV networks to sell TV advertising space by showing their content is more engaging
- “I have no interest, frankly, in just growing the successes of Twitter and Facebook,” says Philip Bourchier O’Ferrall, senior vice-president of Viacom International Media Networks: “My number one role … is to drive TV ratings.” To this Nielsen’s SocialGuide found that an 8.4 per cent increase in Twitter volume correlated to a 1 per cent rise in ratings for new shows among viewers aged 18 to 34. But for 35- to 49-year-olds, however, it took a 14 per cent jump in tweets to produce the same 1 per cent ratings bump.
- The rise of second screening is spawning a new generation of specialist second-screen agencies, creating content, data and tools to support the new twin-screen TV advertising industry. Viggle offers loyalty rewards to fans who “check into” shows, GetGlue, a social TV app developer has 3m users who have checked into, rated or reviewed 500m shows, and Bluefin Labs and SocialGuide, purchased by Twitter and TV metrics giant Nielsen respectively, analyse social TV chatter.
Online video: Web of creativity means greater opportunities to boost sales Matthew Garrahan
- The big idea is “addressable advertising“, a fancy name for online ad targeting, and the big opportunity is to turn TV advertising into addressable advertising, using personal data to get the right ad in front of the right person. DirecTV and Dish Network, two satellite operators, and Hulu are already with online addressable TV advertising
- As TV and video consumption moves online, there has been an explosion of professional content to wrap advertising around. Rapidly expanding audiences are only doing so much to ease the downward trend of advertising CPM (cost per thousand impressions) rates. Down 15% from 2011, eMarketer expects video CPMs to fall a further 30% from $45 in 2010 to $31.20 in the next four years.
- With more much more content funded only by a little more advertising money (up from $4bn in 2013 to $8bn by 2016), the future will belong to content producers who can produce premium quality original content that consistently attract eyeballs
Networking apps: Agencies scramble to find the next big thing Tim Bradshaw
- Advertisers should focus on trends that lie behind technology, not the technology itself – whether geeky and gimmicky Google Glass or popular networking apps (video, image, chat and data sharing).
- It may be better for advertisers to use Instagram-style posters with comment-style tag-lines in traditional media than to run an Instagram campaign. Likewise it may be better to shorten TV ads, from the 30-second sport to a 6-second Vine-length video than to run a campaign on Vine itself. “Five seconds is the right length” for a TV ad today say TV ad man Trevor Beattie
- The challenge is to make advertising fit new media expectations set by trends digital; this means becoming masters of short, snappy visual content.
- The opportunity to create trans-media advertising adapted to digital trends. For example, advertising content from Starbucks, Nike, MTV and Forever 21 is created to be sharable on networking apps such as Instagram. Meanwhile,leave Google Glass to the geeks.
Privacy: Data industry scrutinised over profiling Emily Steel
- Global data brokers such as Acxiom and Datalogix are coming under scrutiny from authorities as they amass consumer data and use it to improve marketing ROI
- Axciom, that collects information about more than 700m people across the world and sells that information to more than 7,000 clients, uses credit card transaction data, primary research, geographic information and other demographic details to improve as targeting and can triple the return on investment of ad campaigns, and boost targeted consumer spending by 50%
- Facebook has integrated Datalogix data into its ad offer, allowing brands to buy ads targeted at people based on their spending habits, for example, people who spend three times more than the national average on children’s cereal. Advertisers can then can tap the Datalogix data to figure out whether or not people who saw the ad end up visiting the store and buying the advertised product.
- Although lawmakers may sympathise with consumer privacy advocates who fear a world where the tracking, collection and selling of personal information creates a so-called “database of ruin” of past financial, sexual, and medical follies/woes, they is a conflict of interests. Politicians deploy the same tracking, analytics, personalisation and targeting technologies as corporations in their election campaigns.
Future of search: Keyword-driven system requires refinement Richard Waters
- Although Google search remains the undisputed king of online advertising, traditional keyword-driven search advertising is set to evolve, with Facebook and Amazon poised to move in
- The future of search is hyper-targeted advertising based not only on search terms, but Amazon / credit card purchase data, Facebook personal data, and mobile location data.
Smartphones: Canny advertisers target your mobile phone Robert Cookson
- After a slow start, mobile advertising is taking off; in the UK, mobile advertising spend more than doubled in 2012 to more than £500m, and in the US, mobile ad spending has become the fastest growing among all media categories as smartphone ownership surged past 50%.
- Nevertheless mobile advertising only represents less than 3 per cent of total ad spend across all media, and currently there is more mobile ad space available than advertising to fill it, resulting in average ad rates (cost per thousand impressions) slumping to well below $1.
- One of the reasons for the slow ramping of mobile advertising is that it has been stuck in a search and display ad rut, serving canned text, static images or dumb videos. The opportunity is to reinvent mobile advertising with immersive rich-media interactive features. Nuance, a US company that develops speech recognition technology, this month launched a product that allows advertisers to create ads that respond to a user’s voice. And Blismedia recently bought up ad space on smartphones near ad agency offices with an interactive ad that used the gesture control functionality of handsets
- The future potential of mobile advertising lies not only in getting the right message to the right person at the right place at the right time, but in improving the advertising experience.
Real-time marketing: Instant response requires cultural change by brand owners Rob Budden
- The future of marketing is agile marketing, responsive and reactive creative that responds in real time to events with interesting content. This meanscreating creative in minutes, not months. Coca-cola has committed to doing doing 30 per cent of its marketing in an agile way.
- In agile marketing, time is everything; similar creative placed just hours apart can have vastly different results. Mondelez (makers of Oreos cookies) and Motel 6 were both quick to create content around this year’s Super Bowl power cut, and both with similar content. Mondelez took minutes, Motel 6 took hours. Mondelez’ content was shared more than 15,000 times, Motel 6 less than 30 times.
- Agile marketing requires a mind-shift from brands, brands can no longer get away with telling consumers they are interesting when they want to tell them, they have to be interesting when consumers want to listen
People: Struggle to stay on top of a moveable feast April Dembosky
- A talent war is raging between advertising agencies and tech companies, both are looking for technical talent and marketing strategists – ideally in the same person.
- But what’s required in terms of technical talent and strategic planning is a fast-moving moveable feast, understanding the role of search in the marketing mix used to be key, then it was social media, then apps, and now user experience.
- The talent war is making recruitment difficult, especially for ad agencies who find the allure of the ad exec lifestyle waning. Young talent want to be part of the change, not the old guard, and have a mission to change the world, whilst working in a flat non-hierarchical organisation (with share options).
- Ad agencies are having to adapt and reposition themselves by abandoning the language and corporate paraphernalia of traditional advertising; Aegis media have gone so far as to jettison the terms ‘advertising’ and ‘consumers’
Social network: Facebook measures up for marketers Emily Steel
- Facebook has spent the last year reinventing itself to become more attractive to advertisers and to transform itself from “just being a social media conversation… to being an indispensable media partner”. Ads are now far more prominent in users’ newsfeeds, especially on mobile devices, targeting is better, and advertising metrics have been improved.
- And it looks like it is working; a year after announcing that it would stop announced it would stop buying Facebook ads because of questions over what returns the ads generated, General Motors is back testing Facebook’s new targeting and measurement offerings for a mobile ad campaign promoting its Chevrolet Sonic sedan.
- Developments in Facebook ads have helped Unilever understand how Facebook ads lift sales, spurring big promotions such as a recent campaign in Brazil for Seda hair products. Unilever designed a campaign with mobile ads featuring a soap opera actress. The company credits the campaign with boosting market share.
- Overall, advertisers are expected to spend more than $5.6bn on Facebook advertising this year, up more than 31 per cent from $4.3bn in 2012, according to eMarketer. On mobile alone, Facebook is expected to earn $1.5bn this year, more than three times the $471m it earned in 2012.








Digital et TV : un couple qui booste les ventes de la grande conso – JDN Média
Digital et TV : un couple qui booste les ventes de la grande conso – JDN Média.
Pour qui en doutait encore, l’association du média digital à une campagne TV peut s’avérer très pertinente pour les marques de grande consommation désireuses de booster leurs ventes en magasin. Tel est l’enseignement principal de l’enquête, “Digital Performance”, menée sur 500 campagnes publicitaires de marques grande consommation par le groupe Havas Media. L’étude fait ainsi ressortir qu’en complément d’une campagne TV, le digital peut générer jusqu’à 25% de ventes supplémentaires par rapport à des plans 100% TV. En outre, le média peut assurer entre 5 et 7% de couverture additionnelle. Un ratio qui peut même s’établir à 10 points sur des cibles plus pointues comme les actifs ou les CSP+.
L’efficacité du media digital est d’autant plus grande s’il est utilisé en cohérence avec le message de la campagne. Plutôt que d’être utilisé “en silo”, dans une logique déconnectée du reste des moyens de communication, il doit s’intégrer à plein dans le “mix media” de la marque. “Le digital fait vendre non seulement sur son propre canal, mais également dans les magasins réels”, explique ainsi Yves Del Frate, COO Havas Media, illustrant une tendance observée depuis quelques temps déjà, le ROPO, pour “research online, purchase offline”. Exemple, un couplage “branding” TV et “performance” sur le digital peut permettre de développer de véritables synergies. Mais pas que… Le digital peut aussi être propice au développement de mécaniques d’engagement et de brand content. Sites interactifs, opérations Facebook ou campagnes multi-écrans en sont la meilleure illustration.
Ce calcul, tous les annonceurs ne l’ont pas encore intégré. Le digital pèse moins de 10% des investissements dans près de 70% des campagnes grande conso réalisées entre 2011 et 2012, note l’étude. Un ratio qui pointe l’importance de développer des indicateurs adaptés à la mesure d’un ROI le plus exhaustif possible, prenant en compte l’ensemble des coûts induits et l’apport de chaque canal pour pouvoir mesurer plus largement l’impact sur la génération de revenus. Une condition sine qua non pour soutenir les investissements dans le digital.
Le mix TV/digital peut rapporter jusqu’à 25% d’efficacité supplémentaire sur les ventes par rapport à des plans 100% TV (étude Havas Media/Capgemini Consulting) – Offremedia
Le département 2MV (Marketing Media Value) de Havas Media a analysé plus de 500 campagnes publicitaires TV/digital de marques FMCG en France, réalisées en 2011 et 2012, pour tirer des enseignements sur l’apport du digital à la télévision en termes de couverture et d’efficacité sur les ventes en magasins. Pour ce faire, l’agence a utilisé une base de données de performances des plans TV/digital, le panel single source Kantar Worldpanel (14 000 foyers) et des techniques de modélisation de données de ventes permettant de quantifier l’impact des médias au sein du mix-marketing.
Cette démarche quantitative a été complétée par Capgemini Consulting qui a réalisé une série d’entretiens qualitatifs auprès de responsables opérationnels du digital, afin de recueillir la vision des annonceurs, leurs réactions vis-à-vis des résultats de l’étude et d’analyser les impacts organisationnels chez les clients.
Les résultats de l’étude montrent qu’un mix média TV/digital bien optimisé permet «d’accroître le taux de couverture d’une campagne à budget équivalent, même lorsque l’investissement TV est très élevé». Le digital peut apporter entre 5 et 7 points de couverture additionnelle par rapport à la télévision sur des cibles larges et jusqu’à plus de 10 points sur des cibles plus pointues telles que les actifs ou les CSP+. Le mix média peut rapporter jusqu’à 25% d’efficacité supplémentaire sur les ventes par rapport à des plans 100% TV, avec un ROI du digital supérieur de 20 à 70% par rapport au ROI du média TV.
Havas Media déplore que le média digital représentait moins de 10% des investissements pour 70% des campagnes grande conso réalisées en 2011-2012, et que seulement 10% des plans avaient plus de 30% de digital. Ces «annonceurs précurseurs ont des résultats impressionnants» et «les autres annonceurs pourraient raisonnablement s’en inspirer» insiste l’agence média.
Le Figaro – Médias & Publicité : La presse écrite américaine s’invente un nouveau modèle
Le Figaro – Médias & Publicité : La presse écrite américaine s’invente un nouveau modèle.

Le New York Times a annoncé des recettes de diffusion payante supérieures à ses revenus publicitaires. Crédits photo : Ramin Talaie/AFP
Les offres numériques payantes réduisent sa dépendance à la pub, selon le centre Pew.
La seconde initiative qui permet d’enrayer le déclin de la presse quotidienne concerne l’effort de développement des éditions du week-end. Traditionnellement très épais, riches en éditoriaux, en reportages, en suppléments magazine, en cahiers publicitaires et promotions spéciales, ces numéros disponibles dès le samedi touchent un public qui a davantage le temps de lire qu’en semaine. Ce produit «week-end» est le plus profitable pour les quotidiens. Son succès est probablement responsable de la poursuite inquiétante du déclin des hebdomadaires d’information dont la diffusion plonge encore en moyenne de 16 %. Pour Time, dernier survivant sous forme papier depuis la disparition deNewsweek des kiosques fin décembre, l’effondrement atteint 27 %!
Bond de la pub digitale
On ne saurait par ailleurs qualifier de «bonne nouvelle» la croissance de 3 % seulement des recettes publicitaires numériques. Les plates-formes digitales des journaux ne parviennent pas à profiter suffisamment de l’explosion continue du marché de la publicité sur Internet. La publicité diffusée sur support mobile, comme un smartphone ou une tablette numérique, a ainsi bondi de 80 % l’an dernier. Mais Facebook, Google et quelques autres avalent l’essentiel de ce nouveau marché.
Il faudrait changer la tendance si la presse écrite veut s’appuyer durablement sur un nouveau modèle économique. Traditionnellement, les recettes de la presse écrite américaine provenaient à 80 % de la publicité et pour 20 % des abonnements et ventes au numéro. «À l’avenir, de nombreux dirigeants de médias d’information pensent qu’un nouveau modèle émerge où la publicité et la diffusion payante seront en gros équivalentes, avec une troisième source de revenus qui ne serait pas liée directement au produit d’information», explique le rapport.
Le New York Times , par exemple, est fier d’annoncer des recettes de diffusion désormais supérieures à ses revenus publicitaires. Mais cet équilibre est tout autant le résultat du succès de sa tarification payante mise en place en 2011 que le fruit de l’érosion de ses recettes publicitaires traditionnelles. Ces dernières continuent pour les quotidiens de chuter bien plus vite que ne grimpent les recettes de publicités numériques. «En 2012, pour 16 dollars de publicité perdue sur le papier, seulement un dollar de recette publicitaire numérique a été gagné. C’est encore pire que le ratio de 10 à 1 observé en 2011», souligne le Pew Research Center. À ce propos, certains journaux préfèrent désormais augmenter fortement leur prix de vente au numéro et celui de leur abonnement, acceptant de perdre ainsi en volume de diffusion, pour augmenter leurs recettes en contrepartie.
17 digital marketing and ecommerce trends for 2013 by Econsultancy CEO Ashley Friedlein
17 digital marketing and ecommerce trends for 2013 by Econsultancy CEO Ashley Friedlein.
Following are my personal thoughts on what will be interesting and important in the world of digital marketing and ecommerce for 2013. As is traditional for my trends, there are around seventeen of them.
I haven’t spent too much time on giving extensive justification for any of these; they are based largely on the many conversations I have with industry influencers and practitioners.
Many are really just notes, or bullet points, but I’ve tried to give links to further information if you want to delve deeper. They are in no particular order though I’ve started with the more ‘strategic’ stuff.
As ever, I’d be very interested to hear your thoughts, or feel free to post a link to your own trends or predictions.
1. The end of the digital beginning
Obviously digital maturity differs by country globally but there was a phrase used in PWC’s “Global entertainment and media outlook: 2012-2016” report which resonated for me.
They describe that we are at the “end of the digital beginning as companies reshape and retool for life in the new normal”.
With digital now at the core of business-as-usual, PWC believes that experimentation and execution are no longer sequential but will proceed in parallel:
The technology to deliver the enterprise with digital at its core is here now. The main challenges are around leading and marshalling the talent and innovative culture needed to make it a reality.
I entirely agree.
There are some significant implications for the phase we are now entering:
- Restructures and ‘re-orgs’. A lot of companies are restructuring ‘digital’, in some cases dissolving it completely as a separate function. In some instances the good digital people stay, with wider roles and remits; in others their passion for pure digital, or frustration at the re-integration with the corporate mother ship, cause them to leave for a start-up or pureplay digital company.
- M&A. A lot of consolidation has already happened. A lot more is to come. As digital has gone mainstream the big incumbent players are either going bust, painfully trying to transform, or, in most cases, buying digital assets. This is particularly true for agencies and consultancies but also true ‘client side’.
There aren’t many big purely digital agencies left now; in any case their competition is increasingly from the big consultancies (Accenture, PWC, Deloitte, Capgemini, KPMG etc.) as projects get bigger, more complicated, more strategic.
- Business model evolution. Many ‘traditional’ business models remain under threat because of the rise of digital. Most notably publishing which is being further squeezed by their erstwhile advertising clients investing more in their own content marketing and their readers’ move to mobile devices which make advertising difficult to deliver effectively.
But digital businesses are running out of digital-only growth too and facing increasingly stiff global competition online. As digital matures it feels like digital alone will not always suffice; and being “medium sized” is not a good place to be.
Whilst we might be at the end of the digital beginning we are a long way from the beginning of the end of digital. In any case, before we reach that stage I believe the distinction between digital and non-digital will have become largely meaningless.
For those of us who have been in digital for more than fifteen years it is strangely almost a surprise that digital has finally ‘gone mainstream’.
Useful Econsultancy links:
- Econsultancy’s Trends Briefings.
2. The war for digital talent
I talk about this a lot because I feel it is probably the biggest challenge for most things digital. There are three notable things I’d draw out for 2013:
The size of digital teams has grown a lot
Forrester did a report called “Right-Size Your Interactive Marketing Organization” where they found that:
- At the end of 2009, 60% of marketers surveyed had fewer than 10 people dedicated to digital.
- By 2012 only 17% had teams this small.
- 45% boasted more than 25 dedicated digital marketers.
- 20% had 100 or more digital staff.
I now talk to Heads of Online (or whatever the most senior digital person is called) who manage digital teams of 1,000+. Likewise for agencies or consultancies. There is a huge need to feed these organisations with digital talent. The demand far outstrips supply.
The ‘big and boring’ companies are most desperate
Start-ups, and internet companies like Google, have been cleverly luring the best digital talent for years.
It seems only recently that bigger ‘traditional’ players have woken up to just what a problem they have in attracting and retaining digital talent right from graduate level to the more experienced staff.
Often they can’t compete on salary, despite deep pockets, because of pay inequality issues compared with other staff; they struggle to compete on the working environment (Wot no bean bags? No BYO device approach? No everything run as SaaS? No Agile throughout?); and they can’t offer meaningful equity.
Digital Marketers aren’t the most in demand
I’m afraid to say that whilst digital marketers and ecommerce professionals are still very much in demand, particularly in certain niches, those even more in demand typically have ‘product’, ‘data’, ‘engineering/developer/technical’ or ‘architect’ in their job titles.
Combine those words with ‘mobile, social, video, content strategy, platform’ and ‘manager, director, head of’ and the recruitment consultants are drooling.
We recently did an interview with Chris Ramsbottom, Sky’s Mobile Product Manager. Not only is that clearly a killer job title (see last bullet above) but his description of how Sky works sounds pitch perfect for the kind of approach I predict all large organisations will need to adopt if they want to attract and retain digital talent:
We work within an agile (scrum) framework, with a Mobile Product Manager responsible for one particular part of the business, such as News, Sports, or Movies. We then typically have a number of development teams working on different products on different platforms, but all the teams are co-located in London so there’s a lot of knowledge sharing that goes on between them.
The Product Managers will research, define and then drive the product strategy, working with user experience experts and designers within our Sky Creative department to help create wireframes, story cards and acceptance criteria.
Everything we propose is based on anticipated customer need, so we do a lot of user testing, usability studies and market research before and during development.
The development teams then have a solid basis to begin work from – we research, design, develop, device test and then launch to market – but scrum allows us to be flexible in the functionality we decide to prioritise, meaning we can respond much quicker to change in the external environment, which, working in mobile, is the only thing that can be guaranteed.”
Useful Econsultancy links:
- My article on How do you create a marketing function fit for the future?.
3. Optimized cross-channel customer experiences
Basically this is what we should all be focused on delivering, right?
Currently mobile is particularly weak for most companies (including Econsultancy…) so that’s getting a lot of focus. And integrating online and offline, whilst not a new topic, is still a big, and complex, journey for most companies.
We need to be delivering outstanding customer experience across all channels and touch points. They should be personalised intelligently, relevantly, responsively, in real time. The customer journey should be seamless across channels and each should play to its strengths.
There is a lot of cool stuff happening (control the web with your phone via a QR code scan), the internet of thingsand intelligent environments open new possibilities, behaviours like ‘show rooming’ bring new challenges and opportunities.

We’re not short on buzz words, or marketing theories, or even best practice. Actually delivering it is much harder. For that you need the right people. See point 2.
Useful Econsultancy links:
4. Focus on the head rather than the long tail
For a long time the long tail has been part of digital lore. A recent Econsultancy article heretically suggested that perhaps the long tail of referral traffic is short.
I think there are few reasons that the ‘head end’ might be coming back into fashion in 2013:
Focusing on the biggest bang for your bucks
Given we all have limited resources, it seems that focusing on the long tail can sometimes be an awful lot of work for limited results. Or, at least, easily measurable or short term results.
So whilst we might want to engage with all those niche bloggers, or build links to tiny product categories we stock, do we actually have the resources to do this?
With so much fragmentation I think we’ll see increased effort on the few rather than dispersed effort on the many.
This reminds me of one of my favourite internet articles of all time by Mike Grehan back in 2004 called Filthy Linking Rich And Getting Richer!
Polarisation of attention
There is increasing evidence that we now have far too much choice and actually we crave less, but better and more relevant, information and services. We are starting to settle on particular sources as those we trust.
If this continues then there should emerge a smaller number of ‘winners’ leaving a swathe of insignificant players. This polarisation favours concentrating on the head end.
Ossification of consumer behaviour
We all talk about ‘the next Google’ or the ‘next Facebook’ sagely noting that these could spring from anywhere at any moment such is the world of digital change. But do we really believe this? I don’t.
I can’t believe Google is really worrying that much about some students in a garage eating their lunch. As Fred Wilson says in a recent article, I think we’re seeing consumer behaviour ‘settle’ much more, though it varies globally. It is now much harder than it was to become a global force quickly.
If this is true then again it makes more sense to focus resources on the existing ‘head end’ big players rather than expend lots of effort on many niche players who may never gain real traction.
Useful Econsultancy links:
5. Internationalization
With businesses looking for growth in stagnant economies their gaze turns to digital not just in their home markets, which are becoming more mature and saturated, but they see digital as the obvious route to international expansion and growth.
My recent post on “China: a special report on digital marketing and e-commerce” shows a digital giant that has yet to turns its attention aggressively to the west. But, in the words of Brad Pitt, this is inevitable.
The war for talent (see point 2) is also encouraging companies to look internationally, particularly for technical skills.
Why not have a play with Google’s Global Market Finder tool to see where you could be expanding this year.
Useful Econsultancy links:
- The Internationalisation of E-commerce: A Best Practice Guide
- The 11 Cs of e-commerce internationalisation
6. GAFA
The big four of the internet: Google, Apple, Facebook, Amazon. I don’t think Twitter, Pinterest or even Microsoft quite merit entry yet into the GAFA-rati.
For me there are four interesting broad themes here:
Resurgence of Google
At some points in 2012 (the leaked results, ‘disappointing’ G+ performance etc) it felt like we’d seen serious chinks in Google’s armour. But anyone writing off Google in favour of the likes of Pinterest, Twitter or even Facebook are, in my view, much misguided.
Android is soaring; YouTube is starting, finally, to seriously eat into the territory of traditional broadcasters; G+ is really starting to grow on me, and others; Google Communities, Google Pages… all starting to nibble at Facebook, LinkedIn, WordPress etc.
Google also has the best ad platform for mobile; Google’s own marketing and creativity, in ad format innovation too, is impressive.
Amazon, the dark horse
Amazon is a global e/m-commerce steam train that has just powered through another massive Christmas sales success. And yet it is building a media business; and yet it has an awesome cloud services business; and yet it owns LOVEFiLM and IMDb.com and is taking ever more share of the consumer wallet.
Amazon gets less press coverage than the likes of Facebook or Twitter but it has a built a behemoth that it looks very hard to compete with given the scale and complexity of the e-commerce operations in particular.
Amazon as a broader platform for paying for, and getting delivered (physically or digitally), pretty much anything makes it a fascinating one to watch.
Will Apple set out to conquer TV?
Apple’s hardware no longer seems as sexy and distinctive as it once was with the likes of Samsung doing very well. Apple’s software, likewise, is looking less differentiated, particularly in the mobile space.
The Maps fiasco left a slightly sour taste in the consumer mouth and are you, like me, getting somewhat tired of constantly re-approving increasingly draconian T&Cs every time you use an Apple service or downloading huge software updates?
But Apple makes obscene amounts of money and has $100bn+ in cash. So what is it going to do with it? TV has to be the big prize. Not least because the current TV user experience is so broken that even a smattering of Apple user experience magic could transform it.
Rationalising your choice of platforms
There is growing evidence (see point 4) that consumers don’t want to manage and maintain presences across all the platforms and networks available. It’s just too much effort, too many logins to remember, too many profiles to try and reconcile etc. So perhaps most of us will settle on only a couple?
If I think about it I’d consolidate around Google (for apps, G+/identity/networking, blogging, search, content) and Amazon (for commerce, delivery) rather than, say, Facebook and Apple.
Over 2013 and beyond I imagine more people will start to settle on a preferred ecosystem. If so this will clearly have important ramifications not just for those businesses, but for us marketers.
Useful Econsultancy links:
- 12 reasons behind Amazon’s massive mobile success
- Get on Google Plus or get left behind
- Apple shows chinks in the armor with Maps fiasco
7. Personalisation
This is really a sub-set of point 3. But as I point out in more depth in my article on “The 4Ps of Personalisation”, personalisation is very much back on the digital agenda.
I recently came across a concept I liked the sound of: “automagic”. We must aim to create digital services that are self-aware and personalised to the point that, for the customer, they just seem to magically know what they want and make things generally easier and more enjoyable.
If automagic is achieved then I don’t think customers will care too much about giving the personal data and permissions required to make it possible.
Useful Econsultancy links:
- Quarterly Digital Intelligence Briefing: Personalisation, Trust and Return on Investment
- Infographic: The ROI of personalisation
8. Content marketing
I’ve always been uneasy with the terms ‘content marketing’ or ‘content strategy’. Not because I think focusing on earned/owned media, rather than paid media, isn’t a sensible approach, but because it feels like we’re inventing a new term for something that should be blindingly obvious and shouldn’t need buzzword-ing.
Really ‘content marketing’ is again just a sub-set of point 3. It isn’t about ‘marketing’ content. It is about creating outstanding customer experiences which, inevitably, involve content in its many guises.
The rise of ‘content marketing’ has also been fuelled by the realisation that actually a lot of the success of, say, SEO or Social Media or Email Marketing or Most Forms of Marketing, isn’t about “doing more SEO” or “investing in social” but is about creating great content that people will want to read, link to, talk about and share.
This shouldn’t be the Damascene moment it appears to be for so many businesses.
This said, there are considerable implications of the increased investment in owned media. In particular, where ‘brands’ are investing in content instead of advertising. Firstly, these brands will have to try and find the talent and get used to working with editorial which most aren’t used to; secondly, this will further disrupt the publishing and media business models of old.
Within content marketing, there are three areas which interest me:
- Content curation. In fact, content business and operational models generally. Assuming we’re going to be creating more content, the question is then how, and how much it will cost versus the ROI.
In a recent presentation I gave (“What can retailers learn from publishers online?”) I talked about hybrid models e.g. 70% Aggregated, 20% Curated, 10% Original.
- Content creation, curation, experience platforms and services. Related to above there is an interesting new set of platforms and services appearing that enable these new content models, often enhancing existing CMSs (Content Management Systems). We at Econsultancy, for example, use both Idio and Flockler to add more capabilities to our core CMS. There are a host of new decisioning engines, social curation platforms, content provisioning and production technologies and services emerging (e.g. Storystream, Smartology,iTrigga etc).
- Content as data. Obviously all digital content is data. But the future of content is most interesting when that content becomes ‘smart’ through data: semantic, meta, or otherwise. This allows the content to be efficiently distributed, packaged, “sliced and diced”, to maximise its value.
Thinking this way might even save a few publishers’ business models. Have a read of The World Is Not Enough: Google and the Future of Augmented Reality to see an example of how we should be thinking more intelligently about ‘content’ as data.
Useful Econsultancy links:
- Hubspot presentation on Inbound marketing.
- Content and curation are changing integrated digital marketing
- Which content marketing metrics are valuable for Econsultancy?
9. Mobile
Clearly the year of mobile was a few years ago. There is so much happening in mobile that it would need a full post of its own: mobile search, mobile ads, mobile payments, m-commerce, social/mobile etc.
So I’ve highlighted just two themes for 2013 which interest me:
Mobile, especially native apps, is less ‘ossified’
With reference to points 4 and 6, I think mobile is where there is still most to play for. People get excited about social, video, connected TV etc but it feels to me like mobile is where there are the biggest chances to be disruptive, to be small, but still have a good chance.
Look at the sheer range of answers in “Econsultancy’s favourite mobile apps from 2012” – this is a fragmented space.
So whilst you are unlikely to have a *really* big app, and the costs of creating, maintaining and marketing it across multiple OSs are bigger than you might think, there are still opportunities to get real engagement and long term loyalty if you deliver a great app that serves a particular need.
M-commerce
For me this has to be the big focus for 2013. And it’s just about getting the basics right: mobile search marketing, a good mobile web experience, better integration of mobile into the multichannel experience, and better integration of mobile throughout the company (marketing, customer service etc).
Responsive design is great but isn’t always realistic as it is more difficult than most people think, therefore hard to find the talent, expensive etc.
Just having a stripped down mobile-specific site that does the basics well would be a good start for most (and, yes, Econsultancy is guilty of not having this). Not wishing to pick on B&Q but when I was out shopping this Christmas and wanted to find the opening times of my local B&Q store on my phone, to then go and buy something in store, I got the following:

Full marks for having a mobile site but it’s not much good when it is riddled with 404s. This reminds me of the early days of websites.
Useful Econsultancy links:
- Best mobile innovations of 2012
- Show rooming
-
Why retailers need to embrace mobile internet in stores
10. Social media
As with mobile, a huge topic. So a few areas I’d single out:
- Talent (see point 2) – people who actually understand social and how to ‘execute’ – the biggest challenge. Also, how to do social media at enterprise scale is still a big challenge in terms of process and, to a lesser degree now, technology.
- Personalisation. This is the topic of point 7. There is a lot of talk about ‘social CRM’ and how we can personalise based on social data points but still relatively few executing successfully on this (Amex, KLM, Photobox come to mind as brands who have). So 2013 should see more experimentation and results here.
- Campaigns making better use of social. In the previous year or so there has been a great improvement in marketing and advertising campaigns that make powerful and effective use of social.
Read our “10 of the best social media campaigns from 2012” or look at Google’s Creative Sandbox resource for examples. We’ll see more examples in 2013.
- Owned versus earned social media. Or ‘onsite’ vs ‘offsite’ social as I tend to think of it i.e. social activity happening on properties you own, like comments on your blog, forums you run, reviews on your site etc, versus externally controlled properties like Facebook, or Twitter, or LinkedIn.
I think this distinction is helpful since some companies mistakenly think they own their Facebook pages or friends. They don’t. Facebook do. In previous years the focus of activity and investment has been in offsite social, most notably Facebook.
In 2013 I think we’ll see a slight redress in the balance towards onsite social integration, including community management, underpinned, of course, by plenty of ‘content marketing’.
Useful Econsultancy links:
- Social media fast food fight: McDonalds vs KFC
- Six simple social media tips to get you noticed
- About time: Nike moves social media in-house
11. Interactive design and user experience
With increasing numbers of devices, at different resolutions, coupled with a desire for efficiency and streamlining of costs and content management, responsive design is understandably a focus for 2013.
However, given the proliferation of devices, it is increasingly difficult to deliver responsive design that isn’t actually somewhat of a compromise all round. As Stephen Pinches of the FT explains below I expect we’ll be designing not for specific ‘devices’ but for different screen sizes which have different use cases.
In an ideal world, responsive design shouldn’t be just about designs that scale for different devices, but about ensuring your customer experience is responsive to the customer journey and use cases across channels.
Web experiences will become increasingly influenced by mobile devices: the tablet-ization of websites evidenced through above-the-fold-swipe-y designs. Personalisation, video, social integration, chat, HTML5… richer experiences generally that are more complex to design for but which must appear simple, elegant and beautiful to customers.
In the War for Digital Talent I expect great interactive designers to soon out-trump even the engineers in scarcity value.
Great interactive designers will be close in nature to the great digital product managers: sensitive to both the customer experience and business needs and able to knit a compelling experience from APIs, content and data that may already be available and craft new digital services and products from them.
Useful Econsultancy links:
12. Advertising
There is lots of on-going interesting experimentation with online ad formats, YouTube is doing some innovative things with ads, the Facebook Exchange (FBX) is proving interesting, but the buzzword in digital advertising at the moment has to be ‘native advertising’, coined I believe by Fred Wilson in this talk.
Native ads are those formats designed for a specific platform and which only exist on the platform: iAds, promoted tweets, Facebook ads, Adwords in Google search, Foursquare etc. This TechCrunch article on “Native ads in 2013” has a good round up, with examples.
In 2013 I’d expect to see continued experimentation here as media owners try to find the right balance between monetisation and the user experience.
In the first instance this focus on native advertising is not really about users, or marketers, but about the business models, or lack of, behind online publishing. It seems you have four choices as a publisher trying to make money out of advertising online:
- Have native ads. This is great if you can make it work because you should be able to charge a premium AND the advertisers can’t get this form of advertising anywhere else AND the ad experience should be the best it can be for the users in your ecosystem, making it effective. But you need deep pockets to invest in creating and marketing the formats in the first place and you need huge scale to make it worth advertisers working with your bespoke format.
- Don’t have native ads but have massive scale. You can still make money out of banners and the like but only if you have massive scale.
- Don’t have native ads but own a valuable niche. You can still command very good CPM rates with standard ad formats but only if the audience you attract has genuine scarcity and value.
- Be super lean on costs. If you run your site on next to nothing then it is possible to make a living with the smart use of network ads and affiliate networks e.g. as a blogger.
The problem is that most publishers aren’t in any of the categories above, certainly those that have historically relied on print and been focused on a single nationality.
Business model problems aside, the implication for digital marketing of native advertising is primarily yet more fragmentation, and yet more need for specialists that are hard to find. Key will be to prioritise those platforms that work best for your business and target market.
Useful Econsultancy links:
- Are pre-roll video ads going the way of display ads?
- How the way our content is being shown has changed
13. Analytics
A lot of the focus for 2013 as regards analytics will be just doing what we’ve talked about a lot already (see next point). As ever, the major challenge here will be finding the right talent to do it.
Following are areas of interest for me which mostly relate to supporting earlier points:
- Social data and analytics to power ‘social CRM’. See point 10. Lots of talk about social data and social CRM but less obvious successful action to date.
- Web analytics and business intelligence converge. This has been happening, slowly, for years. It will continue to happen through 2013 as the back end and legacy systems of enterprises become more connected to the digital front ends and web analytics systems and processes.
- Personalisation and the analytics relating to this. As per point 7.
- Mobile analytics. Getting better at understanding and optimising mobile usage and behaviour.
- ‘Agile Browser-layer Content Delivery’ (“ABCD”). These are technologies which live in the DOM of the browser and allow marketers to change what users experience without going back to the server (likeMonetate). This is empowering from a marketer’s point of view; perhaps terrifyingly so for anyone in IT or web operations.
Forrester calls it ‘dynamic content delivery’. I think of it also like ‘goal hanging’ in football: whatever any other system has done you can nip in right at the end and claim the credit for achieving a desired goal
- Attribution modelling fatigue. I’m as much a fan of attribution modelling as the next man. However, there is a point where the Return On Analysis Resource (“ROAR”) starts to flatten out i.e. there is only so much attribution modelling worth doing before you conclude a) most of this stuff is worth doing b) social media has a value c) so does email d) so does offline marketing etc.
Yes, you need to understand and optimise the mix, but I contend it still comes down to point 3: if you focus on the customer needs and the customer experience across your ecosystem then that effort will pay dividends even though you cannot hope to analyse every attribute.
Useful Econsultancy links:
14. Conversion rate optimization (CRO); marketing automation; video; real-time bidding; agile.
These are all things we’ve talked about a lot in 2012 and which are good things to do. So in 2013 we should get busy actually doing them, or doing them better.
Useful Econsultancy links:
- Will 2013 be the year of conversion optimisation?
- The rise of video in 2013
- The truth about Real-Time Bidding (RTB)
- Agile management practices: start benefiting from tomorrow
15. Connected / internet TV
Back in my 2011 digital trends post I thought that connected TV would make more of an impact in 2012 than perhaps it did, despite the Olympics.
Most of the action around ‘internet TV’ in 2012 was not about the TV itself being connected to the internet but around “second screening”: mobile devices being used in conjunction with linear TV viewing to provide interactivity.
During 2013 I expect ‘social TV’ to gain traction primarily as TV producers and broadcasters become more aware of the commercial and viewer engagement opportunities and begin to commission and produce content that has interactivity and social ‘baked in’.
This is not new but it is becoming more mainstream.
However, the more important shift I expect to see over 2013 is increasing numbers of consumers actually internet-enabling their TVs, many of which have been internet-capable for years.
Many more consumers will have purchased new TVs over Christmas or in the New Year sales with Wi-Fi connectivity. They will connect these TVs primarily to get on demand services like BBC iPlayer and streaming services like LOVEFiLM and Netflix.
Then they’ll find themselves starting to watch cute kittens doing funny things on YouTube, but on their TVs. Then they’ll start watching more and more ‘TV’ off the internet but on their TVs.
If this happens it ushers in an era of huge potential disruption in the broadcast market. Not only does it threaten existing broadcasters and operators but even the likes of Sky should feel threatened. If a Google, Amazon or Apple went aggressively enough after content rights to premium content (sport, films etc) what could they achieve?
At the same time the TV manufacturers (e.g. Samsung and LG) own the interface to this content and thereby potentially displace EPGs (Electronic Programming Guides), like Sky’s, and create new revenue streams for themselves. It feels a bit like the ‘walled garden’ AOL days of the early internet.
Useful Econsultancy links:
16. Honourable mentions: email and SEO
“If I was down to my last dollar I would spend it on PR” is a famous Bill Gates quote. In digital marketing I would cut almost everything else before email or SEO despite them both being supposedly ‘dead’ according to many commentators.
There are some mildly interesting trends happening in both email and SEO, particularly SEO, but nothing that seems fundamentally different to what has gone before or which doesn’t relate to things I’ve already talked about but just applied to email or SEO e.g. social, content marketing, video, mobile.
Most of us still don’t do a good enough job of email or SEO so 2013 is still about better execution. This is not a technology challenge any more. It’s about people and process.
Useful Econsultancy links:
- ROI from SEO: misunderstood, undermined and inaccurate
- Why good SEOs should look like they don’t exist
- 10 things you can do to make me love your emails
17. The ascendance of long-form blogging
And finally… I predict a rise in popularity of very long blog posts.
Ashley Friedlein is CEO and Co-founder of Econsultancy. Follow him on Twitter (4,600+ followers) or connect via LinkedIn (5,200+ connections) or Google+.
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3 nouveaux talents chez Havas Media Social
Le développement de l’activité Social chez Havas Media fut conséquent en 2012 et le sera encore plus en 2013. Le département dirigé par Mathias Beke accueillera 3 nouveaux talents. Ainsi, Marie Leplae (ex-Social.Lab) rejoint l’équipe Social Campaign Management tandis que Laure-Anne Scieur (ex-Groupon) et Benoît-Xavier Pirson renforceront l’équipe Content & Community Management dès le 1er décembre 2012.
Forte de 9 personnes, l’équipe sera prête à relever le triple défi du management des Médias Sociaux: l’écoute et la mesure de l’influence, la gestion du contenu et des communautés, l’intégration dans la stratégie « Paid-Owned-Earned » de la marque. Pour ces raisons, cette offre intégrée est coordonnée pour les clients d’Havas Media par le département Strategy dirigé par Corinne Verstraete. Elle participe à la concrétisation de la méthodologie Paid-Owned-Earned développée par l’agence depuis 2010.
Une suite d’outils conséquente est utilisée par Havas Media Social : BAM (by BLiNQ Media) pour la gestion et l’optimisation des facebook ads. Socialbakers et Quintly pour la mesure de l’engagement, du taux de réponse et de l’évolution des fanbases. Synthesio et Engagor pour la détection des opportunités de conversation, la mesure de l’e-reputation (volume et sentiment) et le customer care.
«Au travers de cette approche, Havas Media propose ainsi une approche complète qui intègre les médias sociaux dans un plan de communication global tridimensionnel. Elle se veut extrêmement paramétrable et robuste », Hugues Rey (CEO Havas Media).
Contact Havas Media Belgium :
Hugues Rey
Chief Executive 0fficer
Tel: +32 2 349 15 60 – Mobile Tel: +32 496 26 06 88
Hugues.rey@be.havasmedia.com
Rue du Trone 60 – 1050 Bruxelles
A propos de Havas Media
Havas Media est la division media du Groupe Havas. Havas Media est présent dans plus de cent pays avec 3200 collaborateurs. Havas Media Brussels compte près de 55 collaborateurs couvrant tous les aspects de l’utilisation des médias (Offline et Digital) dans des actions publicitaires.
12 Tendances en Marketing Digital pour 2013 (NiceToMeetYou 9th of november 2012)
Havas acquiert Boondoggle, plus grande agence indépendante digitale intégrée au Benelux
Havas a annoncé aujourd’hui l’acquisition d’une participation majoritaire dans Boondoggle, la plus grande agence numérique intégrée indépendante du Benelux.
Cette transaction renforce le leadership de Havas dans le numérique en Europe et fera de la marque l’une des trois premières agences du Benelux.
Créée en 2007, Boodoggle emploie plus de 120 experts en digital et création dans ses bureaux de Amesterdam et de Louvain. L’agence offre des solutions totalement intégrées à des clients de premier plan comme les grandes marques nationales et internationales Coca- Cola, Nike, Heinz Europe, Iglo Europe, Belgacom, Thomas Cook, Tiense Suiker, Belfius, Kinepolis, Delhaize et Rabobank International Direct Banking.
David Jones, Global CEO Havas, a commenté : « Boondoggle est une agence remarquable qui associe un savoir-faire digital de premier plan avec une créativité reconnue et récompensée, ce qui correspond parfaitement à notre modèle plaçant le numérique au cœur de notre activité. Il s’agit non seulement d’une des meilleures agences au Benelux, mais j’ai pu constater que leur travail en digital, médias sociaux et data n’a rien à envier aux meilleures agences du monde. Nous sommes ravis de les accueillir dans le groupe et impatients de mettre leur expertise et leurs idées au service de nos clients ».
Boondoggle a obtenu de nombreux prix saluant le talent et la créativité exceptionnels de ses équipes. Parmi les récompenses obtenues, 11 Lions au Festival international de la créativité de Cannes, 10 prix Eurobest e 2 One Show. Boondoggle a également été nommée Agence de l’année en Belgique en 2010 par Media Marketing, Agence numérique de l’année aux Pays-Bas en 2011 aux Spin Awards, et a été élue 3ème agence numérique créative du monde à Cannes en 2009.
Après la transaction, Boondoggle conservera son nom actuel et ses bureaux en Belgique et aux Pays-Bas. L’équipe de direction reste inchangée et continuera à détenir une participation minoritaire dans l’agence.
Pietr Goiris, CEO de Boondoggle, a ajouté : “Rejoindre l’un des plus grands groupes internationaux de communication était une démarche logique pour Boondoggle, pour que nous puissions atteindre les ambitions que nous nous sommes fixées pour les années à venir. Nous partageons totalement la vision du « digital au cœur de toute activité » de David Jones pour Havas, qui nous permettra d’accélérer notre activité dans un contexte plus international. »
L’acquisition de Boondoggle fait partie de la stratégie de Havas qui cible des agences tournées vers le futur, reconnues comme leaders de leurs marches et qui excellent en innovation et créativité.
A propos de Boondoggle
L’agence a été fondée en 2000 et a été nommée Boondoggle en 2007. C’est la plus grande agence indépendante de Belgique, et l’une des étoiles montantes du marché néerlandais où elle a été élue meilleure agence numérique.
Ses clients incluent Coca Cola, Nike, Heinz Europe, Iglo Europe, Belgacom, Thomas Cook, Belfius, Kinepolis, Delhaize et Rabobank International Direct Banking.
Boondoglle emploie 120 professionnels et a gagné de nombreux prix publicitaires, parmi lesquels 11 Lions de Cannes, 10 prix Eurobest, le titre d’Agence de l’année en Belgique en 2010, celui d’Agence numérique de l’année aux Pays-Bas en 2011.
Ses membres fondateurs et associés sont Werner Camps, directeur général et Pieter Goiris, président directeur général.
A propos d’Havas
Havas (Euronext Paris SA : HAV.PA) est un Groupe mondial de conseil en communication. Basé à Paris, Havas développe ses activités autour de ses deux Business Units : Havas Worldwide et Havas Media, afin de favoriser les synergies et renforcer davantage le positionnement de Havas en tant que groupe le plus intégré du secteur. Havas Worldwide comprend le réseau Euro RSCG Worldwide (233 bureaux dans 75 pays incluant les marques Euro RSCG, Euro RSCG Life, Euro RSCG 4D and Euro RSCG WW PR), le micro réseau Arnold (16 agences dans 15 pays sur 5 continents) ainsi que des agences à forte identité locale.
Havas Media (présent dans plus de 100 pays) comprend les réseaux MPG, Arena Media, Havas Sports & Entertainment et Havas Digital. Groupe multiculturel et décentralisé, Havas est présent dans plus de 75 pays au travers de ses agences et ses accords d’affiliation. Le Groupe offre une large gamme de services de conseil en communication, comprenant la publicité traditionnelle, le marketing direct, le média planning et l’achat média, la communication d’entreprise, la promotion des ventes, la conception, les ressources humaines, le marketing sportif, la communication interactive multimédia et les relations publiques. Havas dispose d’un effectif d’environ 15 000 collaborateurs. De plus amples informations sur Havas sont disponibles sur le site de la société : http://www.havas.fr
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Analysis: In scare for newspapers, digital ad growth stalls | Reuters
Analysis: In scare for newspapers, digital ad growth stalls | Reuters.
(Reuters) – As more newspapers cut back on print to reduce costs and focus on their websites, a troubling trend has emerged: online advertising sales are stalling.
A pre-World War I advertisement introduced Washington’s coffee to the public. Advert from The New York Times, February 23, 1914. (Photo credit: Wikipedia)
In the first quarter, digital advertising revenue at newspapers rose just 1 percent from a year ago, the fifth consecutive quarter that growth has declined, according to the Newspaper Association of America, a trade organization.
A flood of excess advertising space, the rise of electronic advertising exchanges that sell ads at cut-rate prices, and the weak U.S. economy are all contributing to the slowdown, publishing executives and observers say.
For an industry savaged by the erosion of print advertising dollars, significantly boosting digital revenue is necessary for survival. But the double-digit online growth rates that many newspapers used to enjoy — and on which their hopes for a prosperous future rest — could be a thing of the past.
At the New York Times Co digital ad revenue at its news sites, including nytimes.com and bostonglobe.com, fell 2.3 percent to $48.5 million in the first quarter from a year earlier. At the Washington Post Co, the decline was even worse, with revenue dropping 7 percent to $24.2 million, mainly at the website of its namesake newspaper and online magazine Slate.
“The online share that newspapers are getting is smaller even though it’s the greatest goldmine of advertising growth we’ve seen in a generation,” said Ken Doctor, an analyst with Outsell Research.
Last week, ratings agency Moody’s issued a report calling the U.S. newspaper industry’s outlook “negative” because of the “relentless” declines in overall revenue.
“At this point, there is no evidence digital strategies are returning most daily newspapers to positive growth,” wrote Moody’s senior credit officer John Puchalla. “It is merely a way to moderate revenue declines.”
Newspaper executives have long touted digital advertising as a bright spot in an industry plagued by declining print readership. For instance, New Orleans will become the largest U.S. city without a daily newspaper this fall, as the New Orleans Times-Picayune prepares to print just three days a week to cut distribution costs and to focus online.
Some publishing executives are still optimistic about the long-term outlook for digital, blaming the slowdown on the economy.
Scott Heekin-Canedy, president and general manager of the New York Times Co, said digital advertising is becoming just as sensitive to economic swings as print. “We actually saw a dip associated with uncertainties,” he said. “We heard it from advertisers and saw it in the spending patterns.”
The New York Times Co gets 10 percent of its revenue from digital ad sales and 35 percent from print ads. Print and digital subscriptions generate 48 percent of revenue, while miscellaneous sources account for the rest.
Steve Hills, president and general manager of Washington Post Media, labeled the falloff a “temporary slowdown” in a weak economy and a technology issue related to how content on its websites is published.
But there’s another problem that is less temporary: the rise of ad exchanges that put downward pressure on ad prices.
BEHIND THE SLIDE
Advertising exchanges are electronic platforms that allow buyers to bid on and purchase advertising space at drastically reduced prices. Many websites — not just newspaper sites — rely on these exchanges to sell unclaimed advertising spots, known in industry parlance as excess inventory. The thinking is it’s better to get something than nothing at all.
But it also trains ad buyers to expect lower advertising prices. “It’s like a publisher trying to sell me an Armani suit for $3,000 but I can walk around the corner and buy it from Google for 90 percent less,” said Shawn Riegsecker, chief executive of Centro, an agency that specializes in buying and selling digital ads, and counts many newspapers as its clients.
Advertisers “are buying audience instead of context and they don’t care what sites they are on,” said Gordon McLeod, president of Krux, a company that helps websites interpret data.
News Corp’s Wall Street Journal, which does not use advertising exchanges, enjoyed double-digit growth in digital ad sales for the quarter ending March, according to Michael Rooney, chief revenue officer at Dow Jones’ Consumer Media Group. He declined to say how that compares with historical trends.
Robert Dickey, president of U.S. Community Publishing at Gannett Co Inc, the largest U.S. newspaper publisher, acknowledged there is pressure on ad prices. But he argued that advertisers want to be associated with strong news brands.
“What we show our advertisers is that our audience and our performance for them is higher than what they are going to find at other types of sites,” he said.
HAVE AND HAVE NOTS
At Gannett, its national paper, USA Today, fared better in the first quarter than did its local properties. USA Today’s digital revenue rose 25 percent in the first quarter, with video becoming a big drawer of ad money, said newly appointed publisher Larry Kramer. That compared with 11 percent growth in Gannett’s U.S. Community Publishing division.
Overall, however, the newspaper industry’s share of online advertising dollars is shrinking. U.S. online advertising revenue is forecast by research firm eMarketer to rise 23.3 percent to $39.5 billion this year, on growth in video advertising and Web search ads.
Auto dealers, retail clothing stores and other local advertisers still use newspaper websites to reach people online, but that segment is also facing insurgent competitors such as daily deals site Groupon Inc, search giant Google Inc, and e-commerce leader Amazon.com Inc.
“If you look at the top 20 companies that made all the money in local Internet advertising, more than two-thirds … have nothing but advertising … It’s not about the news.” said Gordon Borrell, CEO of Borrell Associates, citing websites like Autotrader, Yellowpages.com and Groupon.
Some newspapers are trying out new formats and experimenting with different types of ads on their websites to try to goose advertising spend.
“Newspaper companies have acknowledged those trends and there is a lot more innovation on the online side that’s not immediately reflected in the numbers,” said Caroline Little, CEO of the Newspaper Association of America.
(Reporting by Jennifer Saba; Editing by Peter Lauria and Steve Orlofsky)
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