JupiterResearch Analyst Weblogs - Advertising

Online Classifieds More Popular Than Print Classifieds - Even Among Older Users

Last week we published a new report, Online Classifieds in Europe: Consumers Moving Online More Quickly Than Advertisers. The report finds that approximately one-quarter of European online users read some form of classifieds (print or online) each month, and that consumers' channel shift from print classifieds to online classifieds is now basically complete. While it's commonly acknowledged that online classifieds are now more popular than print classifieds, I was surprised to find that this is true among every single age group surveyed -- even the oldest users.

Despite the fact that the huge majority of European classified users read classified ads online, though, advertisers have been relatively slow to follow users: the marketers we surveyed were still more likely to advertise in print classifieds than in online classifieds.

Jupiter clients can read the full report, which includes our latest European online classified spending forecast, here.

On the Road: Stockholm and London

I'll be on the road next week, keynoting the SMX Stockholm event and then taking a bunch of meetings around AdTech London. If you're going to be at either event and want to catch up -- especially if you want to talk about SEO for blended search, or next-generation online video ads -- drop me a line: nelliott (at) jupiter research -dot- com.

Publishers: What Would You Give to Monetize Your Video Traffic?

As anyone with a broadband connection and an internet browser can tell you, video is now a standard feature on most web sites. (In our 2008 webtrack of leading European sites, we found that 96 percent offered video content -- up from 88 percent in 2007.) But many publishers still aren't making any effort to monetize their video content. According to that webtrack, just over one-half of European sites with video content accept in-stream advertising.

Now don't get me wrong: half is good progress. In 2007, barely one-quarter of sites with video content were accepting in-stream ads. But it's still maddening for me to see so many sites spending money on producing or acquiring, and then promoting and serving video content, without making any real effort to monetize that traffic.

A number of holdout publishers have told me they think that in-stream ads are too annoying, and that they'll lose a huge number of users if they run in-stream ads. But the data doesn't bear this out: I haven't spoken to any publisher who lost a significant number of video visitors as a result of introducing in-stream advertising -- and even those publishers who report losing a handful of visitors because of pre-roll ads say their traffic bounced back within a month or so. Further, we've got years of survey data which tells us that although users don't particularly like in-stream ads (or any other type of online or offline advertising we've ever asked them about), most of them understand the quid pro quo, and are willing to accept a certain level of advertising in exchange for free video content.

I've spoken to dozens of industry executives about this, and collected quite a lot of data on user abandonment rates in various scenarios. And according to my calculations, if a site offers good quality video content and manages their in-stream advertising properly (limiting ad length, controlling ad frequency, eliminating ad clutter), the introduction of pre-roll ads should cost them less than five percent of their video traffic.

As a publisher, would you give up five percent of your video traffic in order to start monetizing the rest? Put another way, would you rather lose money on 100 percent of your video traffic, or make money on 95 percent of that traffic? For me, the decision is easy.

Jupiter clients can read our latest research on this topic: Video Advertising in Europe: Increasing User Acceptance of In-Stream Ads. I'd also recommend you have a look at last year's report on how to properly manage in-stream advertising on your site: European Online Video Advertising: Best Practices Guide.

Can Google Be a Serious Player in TV Advertising?

This week's announcement of Google's 'advertising, technology, and research partnership' with NBC Universal has got everyone talking again about just how important Google might become to TV advertising. And since I'm an advertising analyst who also recently spent a couple years covering digital TV, it's something I've been asked about a few times. My take: while there's room for Google to make TV ad buying more efficient and accountable, there's only so much you can do to target ads on TV -- and so Google can't, and won't, cause nearly the upheaval in TV advertising that they did in online advertising.

Google's dominance of online advertising is based primarily on their ability to target relevant advertising to consumers. But it'd be incredibly difficult for Google (or anyone else) to ever target TV ads nearly as well as online ads, for several reasons.

First, there's no expressed intent in TV viewing. When you search for something online, you're expressing an interest that can often be answered with an ad. But when you consume content (online, or on TV, or anywhere), there's typically no expressed intent. We already know that Google's content-targeted online ads don't perform nearly as well as their search ads, because advertising targeted by context isn't nearly as accurate (or actionable) as advertising targeted by intent. Google's targeting of TV ads will have same problem as their contextual online ads; the lack of expressed intent will mean that the targeting is less effective.

Second, and crucially, TVs are shared devices. Think about how people watch TV: quite often, there's more than one person in the room. When there's more than one person watching TV, it's unlikely that any single ad will prove truly relevant to everyone watching. (And if a single ad is relevant to everyone watching a certain program -- say, football -- then advertisers don't need Google's targeting; they can hit that target by simply buying spots during football matches.) Even if there's only one person watching, it's difficult to use past viewing behavior for targeting -- because Google can't be positive whether the person watching at any given moment is the dad who usually watches sports, or the kid who usually watches cartoons. (Unless, of course, sports or cartoons are what they're watching at that moment -- in which case advertisers can again simply buy spots during that type of programming.) The bottom line is, one-to-one targeting simply can't exist on TV like it can online.

It also doesn't help that TV delivery platforms aren't as conducive as the Internet to ad targeting. Again, I'm an advertising guy, not a TV platform guy -- but last time I checked, you needed IP delivery to do pinpoint targeting on TV. The problem is, Jupiter expects IPTV to grow pretty slowly, and most cable operators still don't use IP delivery. And I'm not sure it'll ever be possible to do real pinpoint targeting to anyone who primarily uses terrestrial or satellite TV (as the majority of European households do).

So the one thing Google does best online, that they made their reputation and their fortune on -- pinpoint ad targeting -- will be all but impossible in TV for a long, long time. One day, if all TV is IP-delivered and people log into their TV sets for individualized experiences, then Google's online targeting tactics could work on TV. But that day is a very long way in the future, if it ever happens.

Without the ability to target ads on TV as well as they do online, Google is left trying to introduce efficiency and accountability into the TV advertising ecosystem. And that's a role in which they may well find success. Networks both big and small would be pleased to see a more efficient way to sell their lower-value inventory, and we know that Google's marketplace and bidding system can help networks get the best prices for that inventory. Further, advertisers would love to know how many viewers really see the ads they're paying for, to help them make their future media buying decisions. Google, intelligently, seems to be focusing on just these features.

Basically, it looks like Google is building AdSense for TV. And while that's useful, and offers a positive step forward for advertisers and networks, it's nowhere near the type of revolution Google's paid search model brought to the online advertising space.

Google Rated Most Important Site for European Social Marketing Efforts

We recently asked European advertisers which site was most important to their social marketing efforts this year, and much to my surprise, Google came out on top. We know that respondents weren't thinking of YouTube when they selected Google, because YouTube was listed separately in the survey. And they weren't thinking of OpenSocial either because even though OpenSocial's not a site per se, we listed that separately on the survey as well. They really meant Google, as a search engine. If you add in Yahoo and MSN, more than 1/3 of European social marketers chose a search engine or portal as being most important to their social marketing efforts -- nearly as many as chose social media sites.

Which is pretty odd. Because the search engines and portals have been getting their butts kicked in social media. Sure, Google owns YouTube and Blogger, and Yahoo owns Flickr and del.icio.us. But those were all acquisitions. The truth is, portals and search engines have had no success at all in building their own social media offerings. (And Blogger, Flickr, and del.icio.us aren't exactly hotbeds for marketing. Nor, really, is YouTube.)

So these findings tell me that social marketers are pretty confused -- they still don't know exactly how to make social marketing work, or even where they should be trying. Maybe that's why most European marketers spent less than �10,000 on social marketing last year, and why less than 10% of European social marketers say they're happy with their social marketing ROI.

It's a complicated topic -- one that's hard to deal with properly in a blog post -- but for those interested in learning more, we've just published a new report with lots more discussion and detail: Mining for Fool's Gold: European Social Marketing Budgets Grow Slowly as Marketers Focus on Free Opportunities.

(And for anyone who's curious, Facebook was #2 on the list of most important sites for social marketing. MySpace finished a very distant #4.)

Back Bloggin'

So, I've had my own little summer holiday. Over the past few months, as my travel schedule has gone haywire and I've gotten more and more enamored of twitter, I've stopped blogging entirely. Shame on me; I've started thinking in 140 characters rather than 140 (or 280 or 420) words. I'm going to do my best to fix that from now on.

But really, you should follow me on twitter too -- it's great fun, and it allows great conversations.

Declining prices for mobile banner ads

Not sure why but there were some articles today about the deal between Virgin Media and mobile advertising firm 4th Screen deal.
4th Screen was already selling ads for Virgin Mobile, but it may well be an extension of the deal with 4th Screen collaborating with Virgin's in-house advertising unit ids to plan and execute cross-platform efforts spanning mobile, television and the web.

With o2 as main client, 4th Screen had gained lots of traction in the last few months in the UK market. Yahoo! runs mobile ads for 3, T-Mobile and Vodafone. Not many news from ScreenTonic (MSFT) and a few off-portal deals for Nokia and others...

According to my colleague Nate Elliott, "Banner prices are today artificially inflated by the scarcity of mobile advertising inventory". As mentionned several times here, expect those prices to go down over time, as inventory rises. This already started to happen when O2 active inventory was made available.

Together we can do more

Orange's New Vision and Brand Campaign - Premiers in the UK tomorrow with its new �I am� film.

So exit "the Future is bright" and welcome the new vision expressed in the statement "together we can do more".

The rationale behind this global campaign is quite interesting. See excerpt from the PR: �The Orange brand was originally developed for one technology in one market � mobile telephones in the U.K� says Caroline Mille, Senior Vice President, Brand and Communications. Orange. �Today, just 14 years later, the brand now spans a range of technologies (internet, T.V content) and reaches consumers in 26 countries, covering very different cultures".

So contrary to some sarcastic comments I read in the UK press, this is not only about boosting the UK business but about positioning the company as the leading global provider of digital communications.

Interestingly and logically, Orange's claim that "Bringing people together is why Orange is here in the first place" is not that far from a certain "Connecting People".

France Telecom/Orange is entering a new stage of change, highlighted by recent news announced by the company:

- TeliaSonera's abandoned merger. "Too bad, we shall start by taking modest actions, which will not be on the front page of newspapers but rather in page 25" said CEO Didier Lombard. Indeed, there are few equivalent targets that could offer such a complementary geographic expansion, to the exception of Telenor. Strategically, it was also a way to be able to compete with the Internet giants and handset manufacturers with a larger installed base (handset procurement negotiations, return on investment on content/media investments, capacity to negotiate...). So now the company will continue its fight with other operators (Ghana is a good example) to acquire smaller companies in the developing world.

- new content strategy symbolized by the satelitte TV offering launched yesterday and the forthcoming Orange Foot channel. By the way, I attended a panel discussion at a conference from Daily les Echos the other day and was amazed by the agressive tone between Roverato (Orange) and Lafarge (Canal+). Not that common for such high-level executives.

- flaw of constant innovation with services just launched or announced in the coming months such as: Orange Musique Max, 3D TV (nice show off effect from the demo I saw - to be launched end 2009?), Warhammer Online (a MMORPG game expected in H2 2008), My personal TV adviser (easy and simple access to discover the VOD catalogue of 24/24 video - to be launched in 2009), Orange Maps (to le launched in q3 2008 in the UK, q4 in France and q1 2009 in Spain).

AdMob Stats for Europe

Like Julie Ask, I am a regular reader of AdMob Mobile Metrics report. The forthcoming monthly report will have a focus on Western Europe stats. As stated by Admob, it only offers a snapshot of the data in their network. It is indeed dependent on the development of the off-portal business and of Admob's commercial presence but it clearly provides insight into trends in the mobile ecosystem. The strong US biais in worlwide stats (45% of ad requests) can easily be seen by the fact that the top 3 handset models are Motorola phones, but not that surprising to see the Razr so high (more than 100M sales worlwide).

Anyway a few interesting results for Europe:

- 2 European countries in the Top 10: UK and...Romania

- not surprisingly, Symbian / Nokia are the leading players. Sony Ericsson K800i is performing quite well in several countries.

- In countries where iPhone is sold through operator partnerships, iPhone is among the top devices by traffic: 2nd in France, 1st in Germany but not in the UK. Interestingly, the iPod touch ranks second in Germany

- the Hiptop (Danger device) is grabbing the #1 device spot in Netherlands commanding 8.7% share of traffic, and explaining disproportionate Windows Mobile market share

- despite very different market sizes, Sweden and Germany have almost the same number of requests on AdMob servers. Another confirmation that Sweden is a more sophisticated mobile market and that German data pricing needs some revamping.

Speaking in Hamburg this week at Next08

I'll be in Hamburg to speak at the Next08 conference this Wednesday and Thursday. I'm really looking forward to hearing audience feedback on some of our new research on social marketing best practices -- this will be the first time we've presented any of this data to the general public. I'm also excited about hearing from the other speakers -- it looks like a great lineup.

If anyone will be there and wants to meet up, either stop by my presentation -- Thursday at 3:30pm -- or drop me an email: nelliott *at* jupiter research -dot- com.