Former AOL executive Ted Leonsis was frustrated: He'd produced a critically acclaimed documentary called Nanking, a film that looked at some Westerners who had protected Chinese civilians during a brutal, six-week attack by the Japanese army in 1937. But he was pretty sure the film, which premiered in 2007 at the Sundance Film Festival, would reach a relatively small audience.
Only a few hundred movie theaters in the U.S. will even show documentaries, and even those cinemas don't always give non-fiction films prime spots on their schedules. Distribution is a source of aggravation for many documentarians.
Unlike most filmmakers, though, Leonsis, who stepped down from day-to-day management at AOL at the end of 2006, had the wherewithal to do something about the situation. Last year he launched SnagFilms, a company that aims to distribute documentary films via the Internet. But rather than just stream its library of 650 titles through the SnagFilms site, the company is enabling portals, news sites and individual fans to share the movies through their own Web sites, blogs, Facebook home pages and other sites.
"Everyone talks about user-generated content," says Leonsis, who also is majority owner of NHL's Washington Capitals. "Let's talk about a new category called user-distributed content,"
Leonsis' Nanking, which will be available online for the first time Memorial Day weekend, is the centerpiece of an 10-film slate Snag is presenting during the holiday; each of the movies commemorates the heroism of soldiers and civilians during periods of war and conflict.
For films released in theaters Snag provides an opportunity for the documentaries to find new audiences. A blogger who is writing about alcohol abuse on college campuses, for example, might seek to embed in her blog a Snag video player that shows the movie Haze, a look at a drinking-related hazing incidents.
Filmmakers who make their movies available to Snag benefit in a few ways: For each film it includes a "Buy DVD" button that takes a viewer immediately to the documentarian's DVD distributor. Leonsis contends that many Snag users will only watch a portion of the film via the Internet, and that true fans will end up purchasing the film to watch on their home televisions.
Snag also sells advertising in the documentaries, and splits the ad revenue with the filmmakers. "We are writing checks to filmmakers every quarter," Leonsis says. "They're not always big, sometimes as small as $20 but sometimes more than $1,000."
Finally Snag offers users a chance to make an online donation to a cause of the documentary maker's choosing.
But for most directors who work with Snag, the main benefit is the opportunity to reach more people. "Filmmakers have never had this kind of opportunity before," says Steven C. Barber, whose film, Return To Tarawa, is part of Snag's Memorial Day slate. "I can get my film to every single country this way."
Barber's film has already run on Discovery's Military Channel, and many of the films in Snag's library have traveled a fairly conventional path for documentaries (film festival, theatrical or television premiere, DVD) before landing at Snag. But Snag CEO Rick Allen says the company is looking for more documentaries to launch on Snag, a concept that would upend the traditional theatrical distribution model.
(Entrepreneur Mark Cuban has also sought to disrupt theatrical release windows, showing films on his HDNet Movies channel two days before the film appears in theaters.)
Allen says it is too early to know if Snag's Internet-distribution efforts will cause major movie studios to think differently about their current models, but he does believe the film industry will go through lots of experimentation in the coming years.
"I think everybody believes that digital distribution is the wave of the future and they're all trying to figure our how it affects content delivery and content creation," Allen says. "I think people in large media organizations have seen the success of something like Hulu and its broadened people's ideas about how to get content out there and consumed."
[the article was originally published at http://money.cnn.com/2009/05/18/technology/mehta_docs.fortune/?postversion=2009051810]
Tuesday, May 19, 2009
Microsoft Rolls Out Its Contextual Ad Network
Microsoft has taken its Content Ads contextual network out of beta.
The official launch of Content Ads, which media buyers can use to place keyword-targeted ads on up to 1,000 sites including WSJ.com, FOX Sports, and RunnersWorld.com, is part of an upgrade to the company's adCenter pay-per-click ad buying system. The upgrade also includes enhanced targeting, bidding and keyword research options.
Microsoft's answer to Google's AdSense network, Content Ads enables advertisers to deliver content-relevant ads across the Microsoft content network audience. With its general release, the offering has added a site exclusion option that allows advertisers to withhold their ads from up to 500 sites in the network at the campaign or ad group level. Additionally, marketers can now analyze the performance of individual sites in the Content Ads network.
"With this increased visibility into Content Ad placement and performance of their Content Ads, advertisers will be able to help control the distribution of their Content Ads and improve ROI," said Brian Boland, director of search and media with Microsoft's Advertiser and Publisher Solutions Group. Boland claimed financial services advertisers have found particular success with Content Ads to date.
[the article was originally published at http://www.clickz.com/3633791]
The official launch of Content Ads, which media buyers can use to place keyword-targeted ads on up to 1,000 sites including WSJ.com, FOX Sports, and RunnersWorld.com, is part of an upgrade to the company's adCenter pay-per-click ad buying system. The upgrade also includes enhanced targeting, bidding and keyword research options.
Microsoft's answer to Google's AdSense network, Content Ads enables advertisers to deliver content-relevant ads across the Microsoft content network audience. With its general release, the offering has added a site exclusion option that allows advertisers to withhold their ads from up to 500 sites in the network at the campaign or ad group level. Additionally, marketers can now analyze the performance of individual sites in the Content Ads network.
"With this increased visibility into Content Ad placement and performance of their Content Ads, advertisers will be able to help control the distribution of their Content Ads and improve ROI," said Brian Boland, director of search and media with Microsoft's Advertiser and Publisher Solutions Group. Boland claimed financial services advertisers have found particular success with Content Ads to date.
[the article was originally published at http://www.clickz.com/3633791]
Pepsi Crafts 'Throwback' Spots for Hulu Play
In a sign of Hulu's growing clout for building brands, Pepsi has crafted retro-themed spots to run with Hulu's selection of shows from the 1970s and '80s.
The 15-second ads promote "Pepsi Throwback," a beverage launched in April to tap into the nostalgia market. It features packaging reminiscent of '70s designs -- and uses real sugar like the soft-drink recipe did 40 years ago.
Pepsi is running the commercials, beginning today, with vintage fare on Hulu like Hill Street Blues, Battlestar Galactica and The Mary Tyler Moore Show. In all, Pepsi plans to run 11 spots with more than 200 programs through June 15.
The beverage giant hopes the ads will connect with a youth audience that is discovering programs from the '70s and '80s thanks to Hulu. While many of the service's most popular shows are current TV hits, some older entries -- like Doogie Howser, M.D., Alf and Married...With Children -- have found a second life on the site.
"We know Millennials are craving this content," said Ana Maria Irazabal, Pepsi's U.S. brand marketing director. "What happened in the past is not old, it's considered new because they haven't seen it before."
In one spot called "Pet Rock," a Pepsi Throwback can chats with the U.S. Bicentennial-era collector's item about how the two "go way back." The clip closes with a shot of the Pepsi Throwback can on a shag carpet and the message "Made with real sugar" in psychedelic font. Other iterations feature the can bantering with other touchstones from the era, such as a fondue pot, an eight-track player and a Polaroid camera.
The program sprung from a collaboration between several Pepsi agencies, including brand shop TBWA\Chiat\Day, media agency OMD and digital strategy firm Undercurrent.
Pepsi also worked with IAC-owned youth entertainment site CollegeHumor.com to create three of the commercials. CollegeHumor's spots feature two guys spoofing the '80s. In one, they are shown playing videogames when a phone call arrives from someone who uses vintage catchphrases like "Eat my shorts."
The challenge was creating compelling ads on a shoestring budget, said Irazabel. "If we don't have cost efficiencies we wouldn't be able to produce 12 spots," she said. "They need to be nimble."
Hulu, which publicly launched 14 months ago, has quickly registered impressive growth. Estimates of its audience vary widely. According to ComScore, it attracted 42 million visitors in March. Nielsen, parent of Adweek, estimates its audience that month at 8.9 million. Both services believe Hulu's audience and views are up sharply.
Its advertising efforts have not kept pace, despite keen interest from brands in attaching themselves to high-quality, professional content. Hulu visitors frequently see public service ads, and nearly all the site's commercials consist of repurposed TV spots. Hulu CEO Jason Kilar has complained that not enough advertisers are crafting spots geared to the environment.
"Our goal is to target highly relevant environments and experiences for users and for advertisers' brands which ultimately allows us to increase the effectiveness of our advertising platform," Hulu svp of advertising J.P. Colaco said in a statement. "The Pepsi example is one that allows us to uniquely bring together more than 200 relevant archived shows with retro-themed advertising to create a more immersive and engaging experience."
[the article was originally published at http://www.adweek.com/aw/content_display/news/agency/e3i505437152ed713675ae9ae9f8bf96bf6]
The 15-second ads promote "Pepsi Throwback," a beverage launched in April to tap into the nostalgia market. It features packaging reminiscent of '70s designs -- and uses real sugar like the soft-drink recipe did 40 years ago.
Pepsi is running the commercials, beginning today, with vintage fare on Hulu like Hill Street Blues, Battlestar Galactica and The Mary Tyler Moore Show. In all, Pepsi plans to run 11 spots with more than 200 programs through June 15.
The beverage giant hopes the ads will connect with a youth audience that is discovering programs from the '70s and '80s thanks to Hulu. While many of the service's most popular shows are current TV hits, some older entries -- like Doogie Howser, M.D., Alf and Married...With Children -- have found a second life on the site.
"We know Millennials are craving this content," said Ana Maria Irazabal, Pepsi's U.S. brand marketing director. "What happened in the past is not old, it's considered new because they haven't seen it before."
In one spot called "Pet Rock," a Pepsi Throwback can chats with the U.S. Bicentennial-era collector's item about how the two "go way back." The clip closes with a shot of the Pepsi Throwback can on a shag carpet and the message "Made with real sugar" in psychedelic font. Other iterations feature the can bantering with other touchstones from the era, such as a fondue pot, an eight-track player and a Polaroid camera.
The program sprung from a collaboration between several Pepsi agencies, including brand shop TBWA\Chiat\Day, media agency OMD and digital strategy firm Undercurrent.
Pepsi also worked with IAC-owned youth entertainment site CollegeHumor.com to create three of the commercials. CollegeHumor's spots feature two guys spoofing the '80s. In one, they are shown playing videogames when a phone call arrives from someone who uses vintage catchphrases like "Eat my shorts."
The challenge was creating compelling ads on a shoestring budget, said Irazabel. "If we don't have cost efficiencies we wouldn't be able to produce 12 spots," she said. "They need to be nimble."
Hulu, which publicly launched 14 months ago, has quickly registered impressive growth. Estimates of its audience vary widely. According to ComScore, it attracted 42 million visitors in March. Nielsen, parent of Adweek, estimates its audience that month at 8.9 million. Both services believe Hulu's audience and views are up sharply.
Its advertising efforts have not kept pace, despite keen interest from brands in attaching themselves to high-quality, professional content. Hulu visitors frequently see public service ads, and nearly all the site's commercials consist of repurposed TV spots. Hulu CEO Jason Kilar has complained that not enough advertisers are crafting spots geared to the environment.
"Our goal is to target highly relevant environments and experiences for users and for advertisers' brands which ultimately allows us to increase the effectiveness of our advertising platform," Hulu svp of advertising J.P. Colaco said in a statement. "The Pepsi example is one that allows us to uniquely bring together more than 200 relevant archived shows with retro-themed advertising to create a more immersive and engaging experience."
[the article was originally published at http://www.adweek.com/aw/content_display/news/agency/e3i505437152ed713675ae9ae9f8bf96bf6]
Scribd borrows a page from iTunes
Scribd is proposing to do for books what iTunes did for music -- let readers buy only what they want to read.
Eight years ago, Apple Inc. turned the music industry upside down when it launched iTunes, an online music store that let listeners cherry-pick one or two songs instead of having to buy the whole album. Starting today, Scribd is giving readers the option of buying content, including paying a few dollars for a chapter or two from a travel guide or a how-to book.
That's just one example of the flexibility that digital book purveyors are experimenting with as printed content migrates to the digital format. Another is the pricing model. Paperbacks have largely been priced at about $10 to $15, while hardcovers are $25 to $30. With digital books, that price could be any amount. Scribd just takes 20% of whatever price publishers and authors set for their works. The rest goes to the writer or publisher. Some authors, for example, are releasing their books on Scribd for $2.
One of them is Kemble Scott, a 46-year-old San Francisco writer whose first book, "SoMa," was published as a trade paperback in 2007. For his second book, "The Sower," Scott eschewed print and decided to debut his novel on Scribd as a $2 digital book.
Scott chose the digital route for its immediacy. His thriller includes a number of contemporary references such as swine flu and Susan Boyle, a Scottish singer who rose to media stardom on the wings of YouTube, Twitter and Facebook. "Publishing a book the traditional way can take a year to 18 months from the time you find a publisher to the time it ends up on store shelves," Scott said. "Now I can publish a book instantly that makes the most contemporary pop culture references of the day."
As for the $2 price, Scott said he and several other authors on Scribd thought the amount would be low enough that readers partial to print would take a gander with books on a screen. (Readers can also purchase books in a format that can be printed.)
"We realized that if we want people to try something new, we had to price it appropriately," Scott said. "We felt $2 puts it in the realm of an impulse buy. Paperbacks were invented during the Great Depression as a low-cost option. Now we're in the Great Recession, so we decided to give people a price break."
Still, at $2, Scott will make more money per copy than he did with his first book, priced at $15. His contract for "SoMa" gave him 7.5% of the cover price for each copy sold, or roughly $1.12. His contract with Scribd for "The Sower" gives him 80% of $2, which is $1.60 per copy. The question is whether Scribd will be able to push the kind of volume on its website that a traditional publisher can through bookstores.
Scribd's chief executive and co-founder, Trip Adler, believes it can. The 2-year-old website already has 60 million unique readers a month, Adler said. Until today, the site has been primarily supported by ads. Writers have uploaded millions of documents for anyone to read, including family recipes, original music scores, academic research papers and doctoral dissertations and even original novels.
Until today, access to those works had been free. But Scribd, like other digital book players such as Google Inc., Amazon.com Inc., Sony Corp. and O'Reilly Media Inc. (which put their entire catalog on Scribd), is seeing how digital distribution can transform the publishing industry's business model.
Scott sees opportunity in digital publishing. "With print, my income was limited by the number of runs the publisher made," he said. "Online, it's limitless."
[the article was originally published at http://www.latimes.com/business/la-fi-scribd18-2009may18,0,6817936.story]
Eight years ago, Apple Inc. turned the music industry upside down when it launched iTunes, an online music store that let listeners cherry-pick one or two songs instead of having to buy the whole album. Starting today, Scribd is giving readers the option of buying content, including paying a few dollars for a chapter or two from a travel guide or a how-to book.
That's just one example of the flexibility that digital book purveyors are experimenting with as printed content migrates to the digital format. Another is the pricing model. Paperbacks have largely been priced at about $10 to $15, while hardcovers are $25 to $30. With digital books, that price could be any amount. Scribd just takes 20% of whatever price publishers and authors set for their works. The rest goes to the writer or publisher. Some authors, for example, are releasing their books on Scribd for $2.
One of them is Kemble Scott, a 46-year-old San Francisco writer whose first book, "SoMa," was published as a trade paperback in 2007. For his second book, "The Sower," Scott eschewed print and decided to debut his novel on Scribd as a $2 digital book.
Scott chose the digital route for its immediacy. His thriller includes a number of contemporary references such as swine flu and Susan Boyle, a Scottish singer who rose to media stardom on the wings of YouTube, Twitter and Facebook. "Publishing a book the traditional way can take a year to 18 months from the time you find a publisher to the time it ends up on store shelves," Scott said. "Now I can publish a book instantly that makes the most contemporary pop culture references of the day."
As for the $2 price, Scott said he and several other authors on Scribd thought the amount would be low enough that readers partial to print would take a gander with books on a screen. (Readers can also purchase books in a format that can be printed.)
"We realized that if we want people to try something new, we had to price it appropriately," Scott said. "We felt $2 puts it in the realm of an impulse buy. Paperbacks were invented during the Great Depression as a low-cost option. Now we're in the Great Recession, so we decided to give people a price break."
Still, at $2, Scott will make more money per copy than he did with his first book, priced at $15. His contract for "SoMa" gave him 7.5% of the cover price for each copy sold, or roughly $1.12. His contract with Scribd for "The Sower" gives him 80% of $2, which is $1.60 per copy. The question is whether Scribd will be able to push the kind of volume on its website that a traditional publisher can through bookstores.
Scribd's chief executive and co-founder, Trip Adler, believes it can. The 2-year-old website already has 60 million unique readers a month, Adler said. Until today, the site has been primarily supported by ads. Writers have uploaded millions of documents for anyone to read, including family recipes, original music scores, academic research papers and doctoral dissertations and even original novels.
Until today, access to those works had been free. But Scribd, like other digital book players such as Google Inc., Amazon.com Inc., Sony Corp. and O'Reilly Media Inc. (which put their entire catalog on Scribd), is seeing how digital distribution can transform the publishing industry's business model.
Scott sees opportunity in digital publishing. "With print, my income was limited by the number of runs the publisher made," he said. "Online, it's limitless."
[the article was originally published at http://www.latimes.com/business/la-fi-scribd18-2009may18,0,6817936.story]
Nielsen: Hulu's Traffic Soars While FIM's Plummets
Hulu’s video traffic has grown at a staggering clip over the past year—driven in part by an older (35-plus) Web audience. Meanwhile, over the same period of time, former Web video powerhouse Fox Interactive Media has seen its streaming traffic plummet. And all the while YouTube has maintained its dominance of the category—accounting for 58 percent of all video streamed on the Web in the U.S.
Those are just a few of the findings in the latest VideoCensus report issued by Nielsen Online. For example, in April, Hulu streamed over 373 million videos, a whopping increase of 490 percent versus the same month last year. According to Nielsen’s analysis, a big chunk of that growth can be attributed to adults 35 to 49, who make up 30 percent of the site’s audience. In the past six months Nielsen found that demo’s time spent per viewer increased by 154 percent to 416 minutes per month on Hulu. That minutes-per-month figure is 10 percent larger than any other age group found on the site—indicating that the 35-plus crowd is drawn to Hulu’s collection of longer-form content—much of which is sourced from TV.
However, to keep things in perspective, even as Hulu soars, YouTube is hardly shrinking in its wake. The Google-owned video site saw its total volume of streams climb by 36 percent in April to nearly 5.5 billion videos compared to the same period last year. That’s almost 15 times as many videos as Hulu streamed last month. The 35 to 49 crowd also spent three times as much time on YouTube as they did on Hulu (nearly 3 billion minutes versus less than 1 billion).
Meanwhile, Fox Interactive Media (FIM), which includes social networking giant MySpace, is quickly losing its stature among the top Web video players. FIM properties generated 201 million streams in April, representing a slide of 39 percent year over year (and just 54 percent of Hulu’s video volume). That places FIM behind Yahoo, which delivered 203 million streams, a decline of 8 percent versus last year for the portal.
Gaining ground on FIM is MTV Network’s Nickelodeon Kids and Family Network, which theoretically targets a much more niche audience. According to Nielsen, Nickelodeon Kids and Family Network streamed 176 million videos in April, an increase of 16 percent versus the same month in 2008.
[the article was originally published at http://www.mediaweek.com/mw/content_display/news/local-broadcast/e3id8b91cde574aee6561378e0eb5ff80bb]
Those are just a few of the findings in the latest VideoCensus report issued by Nielsen Online. For example, in April, Hulu streamed over 373 million videos, a whopping increase of 490 percent versus the same month last year. According to Nielsen’s analysis, a big chunk of that growth can be attributed to adults 35 to 49, who make up 30 percent of the site’s audience. In the past six months Nielsen found that demo’s time spent per viewer increased by 154 percent to 416 minutes per month on Hulu. That minutes-per-month figure is 10 percent larger than any other age group found on the site—indicating that the 35-plus crowd is drawn to Hulu’s collection of longer-form content—much of which is sourced from TV.
However, to keep things in perspective, even as Hulu soars, YouTube is hardly shrinking in its wake. The Google-owned video site saw its total volume of streams climb by 36 percent in April to nearly 5.5 billion videos compared to the same period last year. That’s almost 15 times as many videos as Hulu streamed last month. The 35 to 49 crowd also spent three times as much time on YouTube as they did on Hulu (nearly 3 billion minutes versus less than 1 billion).
Meanwhile, Fox Interactive Media (FIM), which includes social networking giant MySpace, is quickly losing its stature among the top Web video players. FIM properties generated 201 million streams in April, representing a slide of 39 percent year over year (and just 54 percent of Hulu’s video volume). That places FIM behind Yahoo, which delivered 203 million streams, a decline of 8 percent versus last year for the portal.
Gaining ground on FIM is MTV Network’s Nickelodeon Kids and Family Network, which theoretically targets a much more niche audience. According to Nielsen, Nickelodeon Kids and Family Network streamed 176 million videos in April, an increase of 16 percent versus the same month in 2008.
[the article was originally published at http://www.mediaweek.com/mw/content_display/news/local-broadcast/e3id8b91cde574aee6561378e0eb5ff80bb]
Is Paid Subscriptions, the Next Great Trend In Online Advertising?
As respected online publications such as Salon.com, The New York Times and The Wall Street Journal removed all or most of their paid subscription models over the course of the decade, conventional wisdom formed that holding print content intended for a mainstream audience behind a pay wall was a noble but failed experiment.
But are paid subscriptions on the Internet poised to make a comeback, albeit in a different form?
There are several standard ways to make money in the highly competitive online publishing space. The dominant one for years has been free content supported by advertising, but the massive amount of supply (even of the high-quality stuff) coupled with a worldwide recession have pushed down rates that advertisers are willing to pay for ad space, squeezing profit margins for most online publishers.
TechCrunch’s MG Siegler points out a not-so-little secret about online display ads: most people couldn’t care less about them:
The web is increasingly filling up with ads. Many sites, including this one, have a bunch of them all around with the hopes that you’ll find one relevant to you, and click on it. Of course, most of you don’t. And if you do, it may be by accident.
While there are a number of other ways to make money at the online content game, such as using content to sell products and services, there are a few factors at play that could pave the way for online paid subscriptions to make major headway over the next few years.
An Anti-ad Network?
Siegler discussed online advertising while covering Contenture, an “anti-ad network” that allows publishers to group themselves together with the idea that Contenture members can pay a subscription fee to gain access to a group of member sites that have the ads removed.
Think about what the future of online browsing might look like when you take this idea to scale. For example, what if you could one day pay Contenture (or Facebook Connect, perhaps) $5 a month — a fee I’m grabbing out of the ether — with the blessed result of being able to visit thousands of high-quality web sites, absolutely ad-free? That could theoretically provide both an important revenue stream for publishers while improving the user experience at the same time.
Subscriptions For Mobile Content
Amazon, with its handheld content reader Kindle, is steadily moving forward — using a similar strategy as Apple in terms of monetizing the sale and distribution of MP3s to iPod devices — with the creation of a massive and sustainable business in getting people to pay for digital content.
While the Kindle is best known for selling books available from the Amazon.com catalog, there’s a growing number of magazine, newspaper and blog subscriptions that can be paid for using an existing Amazon account. Importantly, the Kindle is “training” a mainstream marketplace to pay for digital content, including a subscription component.
While an announcement on Wednesday (again covered by Siegler on TechCrunch) that Amazon is opening all blogs to become part of the Kindle Publishing for Blogs Beta program was not front-page news, it could be another notable step toward building the importance of online subscriptions for online publishers.
Consider, too, that the Kindle’s forthcoming DX release, with its 9.7-inch screen, has the opportunity to further challenge both the computer monitor and print for the attention of readers across the planet. Therefore “training” people to pay for content in the form of subscriptions on the Kindle may have vast repercussions for the future of digital content.
[the article was originally published at http://www.nytimes.com/external/gigaom/2009/05/14/14gigaom-paid-subscriptions-the-next-great-trend-in-online-10572.html]
But are paid subscriptions on the Internet poised to make a comeback, albeit in a different form?
There are several standard ways to make money in the highly competitive online publishing space. The dominant one for years has been free content supported by advertising, but the massive amount of supply (even of the high-quality stuff) coupled with a worldwide recession have pushed down rates that advertisers are willing to pay for ad space, squeezing profit margins for most online publishers.
TechCrunch’s MG Siegler points out a not-so-little secret about online display ads: most people couldn’t care less about them:
The web is increasingly filling up with ads. Many sites, including this one, have a bunch of them all around with the hopes that you’ll find one relevant to you, and click on it. Of course, most of you don’t. And if you do, it may be by accident.
While there are a number of other ways to make money at the online content game, such as using content to sell products and services, there are a few factors at play that could pave the way for online paid subscriptions to make major headway over the next few years.
An Anti-ad Network?
Siegler discussed online advertising while covering Contenture, an “anti-ad network” that allows publishers to group themselves together with the idea that Contenture members can pay a subscription fee to gain access to a group of member sites that have the ads removed.
Think about what the future of online browsing might look like when you take this idea to scale. For example, what if you could one day pay Contenture (or Facebook Connect, perhaps) $5 a month — a fee I’m grabbing out of the ether — with the blessed result of being able to visit thousands of high-quality web sites, absolutely ad-free? That could theoretically provide both an important revenue stream for publishers while improving the user experience at the same time.
Subscriptions For Mobile Content
Amazon, with its handheld content reader Kindle, is steadily moving forward — using a similar strategy as Apple in terms of monetizing the sale and distribution of MP3s to iPod devices — with the creation of a massive and sustainable business in getting people to pay for digital content.
While the Kindle is best known for selling books available from the Amazon.com catalog, there’s a growing number of magazine, newspaper and blog subscriptions that can be paid for using an existing Amazon account. Importantly, the Kindle is “training” a mainstream marketplace to pay for digital content, including a subscription component.
While an announcement on Wednesday (again covered by Siegler on TechCrunch) that Amazon is opening all blogs to become part of the Kindle Publishing for Blogs Beta program was not front-page news, it could be another notable step toward building the importance of online subscriptions for online publishers.
Consider, too, that the Kindle’s forthcoming DX release, with its 9.7-inch screen, has the opportunity to further challenge both the computer monitor and print for the attention of readers across the planet. Therefore “training” people to pay for content in the form of subscriptions on the Kindle may have vast repercussions for the future of digital content.
[the article was originally published at http://www.nytimes.com/external/gigaom/2009/05/14/14gigaom-paid-subscriptions-the-next-great-trend-in-online-10572.html]
Google eases trademark restrictions
Google Inc is lifting restrictions on the use of trademarked terms in its U.S. online advertising system, a move that could increase friction between the Internet giant and brand owners.
The new policy will allow businesses to place trademarked terms directly in the copy of text advertisements that run in the U.S. starting next month, the company announced in a blog post on Thursday.
The move, which Google said will improve the quality of its advertisements, comes as advertisers have begun bidding less money for the individual search terms that their ads appear alongside and as Google's revenue growth slows in the dismal economic climate.
Until now, Google has forbidden companies from placing trademarked terms in their advertising copy unless they owned the trademark or had explicit permission from the trademark owners.
That policy was the equivalent of a supermarket promotion in a Sunday newspaper that only listed generic products like "discount cola" instead of the actual products for sale, Google said in its blog post on Thursday.
The new policy will allow resellers and informational Web sites to use trademarked terms in their copy in certain situations without seeking permission from the trademark owners.
The move represents the second recent loosening of Google's policies on trademark use. Earlier this month, Google said it would allow companies in 190 countries outside the US to bid on trademarked keywords that act as the triggers for their own advertisements.
Google is also facing new legal challenges from trademark owners.
On Monday, Firepond, a Texas software company, filed a trademark infringement suit against Google seeking class action status for all Texas trademark owners.
Brand owners have historically had serious concerns about Google's policy with regards to trademarks, said Eric Goldman, Associate Professor of Law at Santa Clara University School of Law.
Google's latest policy change is "kind of like pouring gasoline on the fire," he said.
The change may help consumers better understand sponsored search results, by allowing the advertiser to reference trademarks in their marketing pitches, Goldman said. But he predicted that the change could spark more legal challenges.
Google Senior Trademark Counsel Terri Chen acknowledged some people might be unhappy with the change, but she said she believed the ads would be well-received overall.
Chen said the policy was well-established legal principle in the US. Google is changing the policy now, she said, because it was more comfortable it had a process in place to monitor situations that don't comply with the new policy.
[the article was originally published at http://www.reuters.com/article/technologyNews/idUSTRE54B6R020090515]
The new policy will allow businesses to place trademarked terms directly in the copy of text advertisements that run in the U.S. starting next month, the company announced in a blog post on Thursday.
The move, which Google said will improve the quality of its advertisements, comes as advertisers have begun bidding less money for the individual search terms that their ads appear alongside and as Google's revenue growth slows in the dismal economic climate.
Until now, Google has forbidden companies from placing trademarked terms in their advertising copy unless they owned the trademark or had explicit permission from the trademark owners.
That policy was the equivalent of a supermarket promotion in a Sunday newspaper that only listed generic products like "discount cola" instead of the actual products for sale, Google said in its blog post on Thursday.
The new policy will allow resellers and informational Web sites to use trademarked terms in their copy in certain situations without seeking permission from the trademark owners.
The move represents the second recent loosening of Google's policies on trademark use. Earlier this month, Google said it would allow companies in 190 countries outside the US to bid on trademarked keywords that act as the triggers for their own advertisements.
Google is also facing new legal challenges from trademark owners.
On Monday, Firepond, a Texas software company, filed a trademark infringement suit against Google seeking class action status for all Texas trademark owners.
Brand owners have historically had serious concerns about Google's policy with regards to trademarks, said Eric Goldman, Associate Professor of Law at Santa Clara University School of Law.
Google's latest policy change is "kind of like pouring gasoline on the fire," he said.
The change may help consumers better understand sponsored search results, by allowing the advertiser to reference trademarks in their marketing pitches, Goldman said. But he predicted that the change could spark more legal challenges.
Google Senior Trademark Counsel Terri Chen acknowledged some people might be unhappy with the change, but she said she believed the ads would be well-received overall.
Chen said the policy was well-established legal principle in the US. Google is changing the policy now, she said, because it was more comfortable it had a process in place to monitor situations that don't comply with the new policy.
[the article was originally published at http://www.reuters.com/article/technologyNews/idUSTRE54B6R020090515]
Thursday, May 14, 2009
Facebook's virtual currency
Facebook will soon begin testing a system that would let members use its virtual currency to make purchases within applications in the social network, providing a potential new revenue stream for the company.
Until now, people have only been able to use Facebook "credits" ($1 buys 100 credits) to purchase items in the site's virtual gift store. But extending that virtual currency to the site's thousands of third-party applications could possibly bring in millions of dollars in additional revenue for the company.
The blogs Inside Facebook and VentureBeat estimate that developers this year will generate between $300 million and $500 million in revenue from transactions within Facebook applications that currently offer payment options via credit card, PayPal and other providers such as OfferPal and SuperRewards.
Through its own gift shop, which sells things like virtual birthday cakes and flowers, Inside Facebook estimates that Facebook will make $45 million to $55 million in 2009. That would amount to about 10% of a projected $500 million in total revenue for the company this year.
Going a step further by creating a "universal" virtual currency system for applications "could be a powerful revenue driver for the company, which to date has largely abstained from directly monetizing the sea of applications running on the Facebook Platform," wrote Inside Facebook's Justin Smith, in a post Tuesday about Facebook's plans to trial its virtual currency in apps.
Indeed, the company has come under criticism for not doing more to make money from its developer platform, while helping companies like Zynga, Rock You and Slide to flourish by distributing apps on Facebook.
A Facebook spokesperson Wednesday confirmed the test, but indicated that it was too premature to provide details. "We're starting a very small alpha test in a few weeks with a handful of developers that explores ways for users to use their Facebook credits with third-party applications on Facebook.com," he said.
Facebook initially announced plans to begin beta testing a payment system for application developers in December 2007, but the company appeared to put that effort on hold while it focused on growing its user base and other priorities.
But that has not stopped competitors from pushing ahead with their own e-commerce initiatives. Social network Hi5 in March launched a virtual currency system for developers, and MySpace is reportedly looking to develop its own payment system for third-party applications.
With Facebook and other social networks still struggling to monetize their vast amounts of inventory through advertising -- especially amid the economic downturn -- any supplemental e-commerce revenue they can produce is welcome.
But why should developers who already offer various payment options want to add another from Facebook? The company says it would give members more places to use Facebook credits and developers another avenue to monetize apps. Smith adds that Facebook's own currency would have the benefit of being more deeply integrated into the social network's ecosystem than a third-party service.
While no details have been disclosed, Smith speculates that developers who agreed to accept Facebook credits would be reimbursed by Facebook for currency spent in their apps, less a small percentage the company would take as a commission.
[the article was orginally published at http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=106016]
Until now, people have only been able to use Facebook "credits" ($1 buys 100 credits) to purchase items in the site's virtual gift store. But extending that virtual currency to the site's thousands of third-party applications could possibly bring in millions of dollars in additional revenue for the company.
The blogs Inside Facebook and VentureBeat estimate that developers this year will generate between $300 million and $500 million in revenue from transactions within Facebook applications that currently offer payment options via credit card, PayPal and other providers such as OfferPal and SuperRewards.
Through its own gift shop, which sells things like virtual birthday cakes and flowers, Inside Facebook estimates that Facebook will make $45 million to $55 million in 2009. That would amount to about 10% of a projected $500 million in total revenue for the company this year.
Going a step further by creating a "universal" virtual currency system for applications "could be a powerful revenue driver for the company, which to date has largely abstained from directly monetizing the sea of applications running on the Facebook Platform," wrote Inside Facebook's Justin Smith, in a post Tuesday about Facebook's plans to trial its virtual currency in apps.
Indeed, the company has come under criticism for not doing more to make money from its developer platform, while helping companies like Zynga, Rock You and Slide to flourish by distributing apps on Facebook.
A Facebook spokesperson Wednesday confirmed the test, but indicated that it was too premature to provide details. "We're starting a very small alpha test in a few weeks with a handful of developers that explores ways for users to use their Facebook credits with third-party applications on Facebook.com," he said.
Facebook initially announced plans to begin beta testing a payment system for application developers in December 2007, but the company appeared to put that effort on hold while it focused on growing its user base and other priorities.
But that has not stopped competitors from pushing ahead with their own e-commerce initiatives. Social network Hi5 in March launched a virtual currency system for developers, and MySpace is reportedly looking to develop its own payment system for third-party applications.
With Facebook and other social networks still struggling to monetize their vast amounts of inventory through advertising -- especially amid the economic downturn -- any supplemental e-commerce revenue they can produce is welcome.
But why should developers who already offer various payment options want to add another from Facebook? The company says it would give members more places to use Facebook credits and developers another avenue to monetize apps. Smith adds that Facebook's own currency would have the benefit of being more deeply integrated into the social network's ecosystem than a third-party service.
While no details have been disclosed, Smith speculates that developers who agreed to accept Facebook credits would be reimbursed by Facebook for currency spent in their apps, less a small percentage the company would take as a commission.
[the article was orginally published at http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=106016]
Bigger Ad Units - A new way to get noticed
When the going gets tough, the ads get bigger.
Amid all the hand-wringing about the decline of the news business and the need for subscription revenue, big publishers are doing something concrete: They are trying to sell more ads for more money.
You see advertisements expanding to cover pages of major sites all over the Web these days. Now the Online Publishers Association has created a series of new standards for really big, intrusive, bash-you-on-the-head sorts of advertisements, which you are going to start seeing on its member sites in coming months.
The association was started by Martin A. Nisenholtz, the senior vice president for digital operations at The New York Times Company, to represent the needs of companies that offer premium content online and in turn, hope to earn premium ad rates. These days the group includes companies like CBS, Forbes, and Condé Nast.
One format is a version of the sort of expandable banner ad you’ve already seen. It starts big and then rolls up to fit at the top of the page. The other two formats will be more jarring. There is an ad, meant to go on the side of a page, that is 468 pixels wide — far bigger than other side-of-the-page formats. Publishers are going to have to squeeze the width of their editorial content on pages with this ad format.
Another format rises and falls like an elevator on the right-hand side of the page, so the ad is always in view. This means that publishers need to clear out the various other features and ads placed on the side of pages to give this ad some space to roam.
Among the first sites rolling out these formats is MSNBC, which has included them in a new design it is introducing for the pages on which its articles appear (as opposed to its home page and topical section pages).
The site has been trying to integrate more of its content — photos, videos, interactive elements — onto the same page as its articles. Until now, you often had to jump to a separate page to see a slide show or watch a video. This page from a series on Elkhart, Ind., shows off all these features and a gizmo that allows navigation between elements as you scroll the page.
It’s a bold, in-your-face design, said Kyoo Kim, MSNBC’s vice president for sales — and perfect for bold, in-your-face ads.
“When you are getting robust photos or videos within the story itself, then you can afford to have large ad units because you are not totally hijacking the user experience,” Mr. Kim said. “It’s a value exchange.”
MSNBC will use the large formats at the top and sides of its pages. It isn’t going to use the elevator ad. It had a similar unit that chased people around its site early on, and it doesn’t want to remind users of how much they disliked that format.
The company will not sell the big ads to just anyone. Rather, it will use the formats for its best customers, which sponsor entire sections or buy “roadblocks” that fill every page of the site, or a big part of it, for a period of time. MSNBC has cultivated these sorts of deals and gets 60 percent of its revenue from sponsorships.
Indeed, while the company hopes it can extract higher prices for bigger ads, the main focus initially is simply to use them to encourage companies to keep buying the sponsorships they already have. A sponsorship can cost $50,000 to $500,000 per month, he said.
In these deals, one advertiser will have all the ads on one of these new article pages: perhaps a big banner at the top, a very large rectangle along the side, and other units further down. In addition to the standard units, MSNBC has created a series of “adgets” — short for advertising widgets — that are based on technology originally developed for its news content. For example, a company might use its mapping widgets to show off various locations, Mr. Kim said.
Other members of the Online Publishers Association, including The Times, are expected to roll out support for these big ads in the coming months.
[the article was originally published at http://bits.blogs.nytimes.com/2009/05/12/make-room-for-the-wide-load-ads]
Amid all the hand-wringing about the decline of the news business and the need for subscription revenue, big publishers are doing something concrete: They are trying to sell more ads for more money.
You see advertisements expanding to cover pages of major sites all over the Web these days. Now the Online Publishers Association has created a series of new standards for really big, intrusive, bash-you-on-the-head sorts of advertisements, which you are going to start seeing on its member sites in coming months.
The association was started by Martin A. Nisenholtz, the senior vice president for digital operations at The New York Times Company, to represent the needs of companies that offer premium content online and in turn, hope to earn premium ad rates. These days the group includes companies like CBS, Forbes, and Condé Nast.
One format is a version of the sort of expandable banner ad you’ve already seen. It starts big and then rolls up to fit at the top of the page. The other two formats will be more jarring. There is an ad, meant to go on the side of a page, that is 468 pixels wide — far bigger than other side-of-the-page formats. Publishers are going to have to squeeze the width of their editorial content on pages with this ad format.
Another format rises and falls like an elevator on the right-hand side of the page, so the ad is always in view. This means that publishers need to clear out the various other features and ads placed on the side of pages to give this ad some space to roam.
Among the first sites rolling out these formats is MSNBC, which has included them in a new design it is introducing for the pages on which its articles appear (as opposed to its home page and topical section pages).
The site has been trying to integrate more of its content — photos, videos, interactive elements — onto the same page as its articles. Until now, you often had to jump to a separate page to see a slide show or watch a video. This page from a series on Elkhart, Ind., shows off all these features and a gizmo that allows navigation between elements as you scroll the page.
It’s a bold, in-your-face design, said Kyoo Kim, MSNBC’s vice president for sales — and perfect for bold, in-your-face ads.
“When you are getting robust photos or videos within the story itself, then you can afford to have large ad units because you are not totally hijacking the user experience,” Mr. Kim said. “It’s a value exchange.”
MSNBC will use the large formats at the top and sides of its pages. It isn’t going to use the elevator ad. It had a similar unit that chased people around its site early on, and it doesn’t want to remind users of how much they disliked that format.
The company will not sell the big ads to just anyone. Rather, it will use the formats for its best customers, which sponsor entire sections or buy “roadblocks” that fill every page of the site, or a big part of it, for a period of time. MSNBC has cultivated these sorts of deals and gets 60 percent of its revenue from sponsorships.
Indeed, while the company hopes it can extract higher prices for bigger ads, the main focus initially is simply to use them to encourage companies to keep buying the sponsorships they already have. A sponsorship can cost $50,000 to $500,000 per month, he said.
In these deals, one advertiser will have all the ads on one of these new article pages: perhaps a big banner at the top, a very large rectangle along the side, and other units further down. In addition to the standard units, MSNBC has created a series of “adgets” — short for advertising widgets — that are based on technology originally developed for its news content. For example, a company might use its mapping widgets to show off various locations, Mr. Kim said.
Other members of the Online Publishers Association, including The Times, are expected to roll out support for these big ads in the coming months.
[the article was originally published at http://bits.blogs.nytimes.com/2009/05/12/make-room-for-the-wide-load-ads]
Responding but Not Clicking
Clicking on an online display ad isn't the only way of responding to it, emphasizes a new iProspect report on a survey of Internet users.
While 31 percent of respondents to the survey (conducted online in January by Forrester Consulting) said they'd responded to such ads in the past six months by clicking on them, nearly as many -- 27 percent -- said their initial response was to do a search for the product, brand or company. (iProspect is itself in the search-engine-marketing business.)
Another 21 percent of respondents said they "typed the company Web address into browser and navigated to site." Nine percent reported that they "investigated the product, brand or company through social media or message boards." Thirty-seven percent said they hadn't responded to such ads in the past six months.
As you'd expect, people were more likely to buy a product if they were familiar with the company and its wares before seeing a particular online display ad. Among those who said they'd responded to such an ad, 33 percent of those who were already familiar with the company or offering said they ended up buying the product, vs. 14 percent of those who were learning of the company or offering for the first time.
Another question in the survey asked respondents to describe any searches (using a search engine) "you may have eventually performed as a result of the ads you saw." A plurality, 38 percent, said they "performed related search and visited site from search results." Another 11 percent conducted a search "but did not click on any results."
Gladdening the hearts of the advertisers, 14 percent "performed related search, visited site, and purchased product."
[the article was originally published at http://www.adweek.com/aw/content_display/news/agency/e3i14c62023ee3459abfb95e3e71d67059c]
While 31 percent of respondents to the survey (conducted online in January by Forrester Consulting) said they'd responded to such ads in the past six months by clicking on them, nearly as many -- 27 percent -- said their initial response was to do a search for the product, brand or company. (iProspect is itself in the search-engine-marketing business.)
Another 21 percent of respondents said they "typed the company Web address into browser and navigated to site." Nine percent reported that they "investigated the product, brand or company through social media or message boards." Thirty-seven percent said they hadn't responded to such ads in the past six months.
As you'd expect, people were more likely to buy a product if they were familiar with the company and its wares before seeing a particular online display ad. Among those who said they'd responded to such an ad, 33 percent of those who were already familiar with the company or offering said they ended up buying the product, vs. 14 percent of those who were learning of the company or offering for the first time.
Another question in the survey asked respondents to describe any searches (using a search engine) "you may have eventually performed as a result of the ads you saw." A plurality, 38 percent, said they "performed related search and visited site from search results." Another 11 percent conducted a search "but did not click on any results."
Gladdening the hearts of the advertisers, 14 percent "performed related search, visited site, and purchased product."
[the article was originally published at http://www.adweek.com/aw/content_display/news/agency/e3i14c62023ee3459abfb95e3e71d67059c]
Google's Rival Keyword Sales
Google is going global with an advertising strategy that has kicked up controversy in the U.S. and Europe. As part of its efforts to generate revenue from online ads, Google lets marketers in a handful of countries pay to surface their ads when a would-be customer searches for a rival's brand name.
Starting June 4, marketers in about 200 countries will be allowed to purchase rival trademarks as keywords to trigger display of "sponsored search" ads on Google. Honda, for instance, could bid to have one of its ads displayed when a consumer searches the term "Toyota." In recent years some companies have sued Google or the competing company, saying the practice is a form of trademark infringement.
The decision to implement the strategy more widely suggests that Google is confident it is operating on sound legal footing. "Following a global legal review, we have made the changes in countries whose legal and business practices are consistent with making the change," Google spokesman Ben Novick explained in an e-mail. Notably excepted from the long list of countries are member of the European Union, though a forthcoming court ruling could change that.
European Court of Justice will rule
Efforts to force Google to curtail the practice have met with mixed results. In April a U.S. appeals court said a patent-infringement claim by computer repair company Rescuecom could go forward—though to win, Rescuecom will have to prove that consumers will be confused if rivals are drawn to rival Web sites.
Europe's highest court, the European Court of Justice, has also been asked to rule on the issue after member country courts reached differing results. Google is appealing the loss of an infringement case in France to LVMH Moët Hennessy Louis Vuitton but has won similar cases in Germany. In the EU, "the legal and business practices there are not consistent with making the change," Novick wrote in the e-mail.
Google's policy, implemented in the U.S. and Canada in 2004, bars advertisers from using others' trademarks in the text of the ad itself but does permit it in the unseen keywords used to display the ad in cases where the keyword is used in a search. After adopting the same policy in the United Kingdom and Ireland last year, Google has now decided to extend it virtually worldwide.
[the article was originally published at http://www.businessweek.com/technology/content/may2009/tc20090511_791916.htm]
Starting June 4, marketers in about 200 countries will be allowed to purchase rival trademarks as keywords to trigger display of "sponsored search" ads on Google. Honda, for instance, could bid to have one of its ads displayed when a consumer searches the term "Toyota." In recent years some companies have sued Google or the competing company, saying the practice is a form of trademark infringement.
The decision to implement the strategy more widely suggests that Google is confident it is operating on sound legal footing. "Following a global legal review, we have made the changes in countries whose legal and business practices are consistent with making the change," Google spokesman Ben Novick explained in an e-mail. Notably excepted from the long list of countries are member of the European Union, though a forthcoming court ruling could change that.
European Court of Justice will rule
Efforts to force Google to curtail the practice have met with mixed results. In April a U.S. appeals court said a patent-infringement claim by computer repair company Rescuecom could go forward—though to win, Rescuecom will have to prove that consumers will be confused if rivals are drawn to rival Web sites.
Europe's highest court, the European Court of Justice, has also been asked to rule on the issue after member country courts reached differing results. Google is appealing the loss of an infringement case in France to LVMH Moët Hennessy Louis Vuitton but has won similar cases in Germany. In the EU, "the legal and business practices there are not consistent with making the change," Novick wrote in the e-mail.
Google's policy, implemented in the U.S. and Canada in 2004, bars advertisers from using others' trademarks in the text of the ad itself but does permit it in the unseen keywords used to display the ad in cases where the keyword is used in a search. After adopting the same policy in the United Kingdom and Ireland last year, Google has now decided to extend it virtually worldwide.
[the article was originally published at http://www.businessweek.com/technology/content/may2009/tc20090511_791916.htm]
Study : Display Ads, Paid Search Work in tandem
Display ads influence search behavior, according to a study from iProspect released today. The findings rely on data to support industry rhetoric that display ads and search work together to provide a bigger impact on campaigns.
The "Search Engine Marketing and Online Display Advertising Integration Study" suggests that while 31% of people click on display ads, nearly as many -- 27% -- go to search engines to provide a search. More than 20% type the company Web address into their browser and directly navigate to the Web site, and 9% respond by investigating the product, brand, or company through social media.
"If I don't have a display campaign to support my paid search campaign, I'm basically giving the traffic away to my competitors," said Robert Murray, CEO at iProspect, Boston. "Display isn't dead, but just as many people will perform a search, and you had better have an integrated paid search campaign."
Murray called paid search "the ultimate demand capture mechanism," but it can't create awareness for the products and the services. He said smart marketers don't need to generate demand. Although a bit of a "gorilla tactic," those running smart search campaigns integrated with someone else's display campaign let marketers capitalize on another's spend.
Tapping into a competitor's display campaign, marketers can run paid search ads based on keywords and messaging. Marketers should keep in mind all conversions and clicks the display ad will drive to competitors' sites if they invest in display and not integrate a paid search campaign.
The survey found that of the 52% of Internet users who respond to an online display ad, 48% are familiar with the display ad offering or company but do not purchase the product. It is interesting to note that 38% learn of the offering or company for the first time from exposure to an online display ad but do not purchase the product, while 33% are familiar with the offering or company and eventually make a purchase of the product or from that company. Only 14% learn of the offering or the company for the first time and eventually purchase the product.
Overall, the study shows that Internet users are more likely to engage and/or eventually make a purchase from brands with which they are already familiar.
Consumers also seek to validate a brand through search engine rankings. Perception suggests that if search engines rank a product or a brand high in query results, it must be a reputable brand.
Murray said marketers should also integrate display and paid search with offline media, such as radio and TV. A iProspect study conducted last year suggests that 67% of the people exposed to an offline marketing message said they performed a search. "You need to make sure the message is consistent throughout all media including the look and feel of ad units and keywords," he said.
[the article was oroginally published at http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=105740]
The "Search Engine Marketing and Online Display Advertising Integration Study" suggests that while 31% of people click on display ads, nearly as many -- 27% -- go to search engines to provide a search. More than 20% type the company Web address into their browser and directly navigate to the Web site, and 9% respond by investigating the product, brand, or company through social media.
"If I don't have a display campaign to support my paid search campaign, I'm basically giving the traffic away to my competitors," said Robert Murray, CEO at iProspect, Boston. "Display isn't dead, but just as many people will perform a search, and you had better have an integrated paid search campaign."
Murray called paid search "the ultimate demand capture mechanism," but it can't create awareness for the products and the services. He said smart marketers don't need to generate demand. Although a bit of a "gorilla tactic," those running smart search campaigns integrated with someone else's display campaign let marketers capitalize on another's spend.
Tapping into a competitor's display campaign, marketers can run paid search ads based on keywords and messaging. Marketers should keep in mind all conversions and clicks the display ad will drive to competitors' sites if they invest in display and not integrate a paid search campaign.
The survey found that of the 52% of Internet users who respond to an online display ad, 48% are familiar with the display ad offering or company but do not purchase the product. It is interesting to note that 38% learn of the offering or company for the first time from exposure to an online display ad but do not purchase the product, while 33% are familiar with the offering or company and eventually make a purchase of the product or from that company. Only 14% learn of the offering or the company for the first time and eventually purchase the product.
Overall, the study shows that Internet users are more likely to engage and/or eventually make a purchase from brands with which they are already familiar.
Consumers also seek to validate a brand through search engine rankings. Perception suggests that if search engines rank a product or a brand high in query results, it must be a reputable brand.
Murray said marketers should also integrate display and paid search with offline media, such as radio and TV. A iProspect study conducted last year suggests that 67% of the people exposed to an offline marketing message said they performed a search. "You need to make sure the message is consistent throughout all media including the look and feel of ad units and keywords," he said.
[the article was oroginally published at http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=105740]
Wednesday, May 13, 2009
Tuesday, May 12, 2009
Nokia Asks Advertisers to Brand Its Mobile Phones
SAN FRANCISCO (AdAge.com) -- If you brand it, they will buy. That's the hope of Finnish handset maker Nokia, which is hoping mobile devices wrapped in a corporate logos will appeal to U.S. consumers.
For an undisclosed fee, the world's biggest cellphone maker is offering advertisers the right to brand the mobile handset. Advertisers choose a Nokia phone that complements their demographic target, splash the handsets and the accessories with their visual identities, embed some mobile content into it and wrap it all up in packaging plastered with their logo.
The program, set to launch in the U.S. in the second half of 2009, comes from Nokia Interactive, the cellphone maker's ad-selling arm. Nokia's ability to preload content on the advertisers' behalf is the linchpin of its custom-device strategy -- the prize for the consumer is, presumably, access to that original content. Brands may also subsidize the cost of a handset.
The idea is for brands to put "content in the hands of the most potent brand advocates -- people who like the brand ... so much that they want to be seen with it," said David Kohl, Nokia interactive head of sales-Americas.
The 18-month-old program has seen some early success in its initial testing ground in Brazil, but a U.S. launch would certainly require some tweaking. When it arrives, the program will test how far consumers here are willing to go to interact with brands -- and experts say value and relevance are the operative keys.
Select audiences
"If you ask advertisers, 'Would you like to brand a phone?' I think it'd be difficult to find one who says no. The question is: Is this something that's got enough value for consumers to change from the phone they already have?" said Maria Mandel, Ogilvy's executive director-digital innovation. She said this program would appeal to brands that want to reach a select, targeted audience, build buzz or create a loyalty tool.
In Brazil, the branded phones are priced between $70 and $200 and sold through retailers that market them with in-store promotions and co-op advertising programs involving Nokia.
One of the program's best-selling phones belongs to Unilever's Seda personal-care brand, which used a limited-edition pink Nokia phone to refresh its brand and launch a teen shampoo line. The $100 device, which came bundled with games, trial-size shampoos and exclusive music by a popular Brazilian band, sold out within two months; it eventually sold 200,000 units between April and December, according to Nokia.
Unilever media director Maria-Luisa Lopez said Seda tapped into branded handsets to get closer to its customers, and plans to brand more Nokia phones in the future. "The project ... was one of the ways to increase relevance to our consumers -- being with them, speaking their language, with the colors, sounds and shapes they love the most," Ms. Lopez said. Nokia says the branded-handset program is profitable and that it has sold millions of the branded devices.
But Brazil's mobile economics favor the program's success in ways that the U.S. may not. There, consumers pay dearly for mobile internet access and content (songs cost $3 a pop), but stateside content is cheap or free and rarely the top reason to purchase a handset.
Distribution could also be a challenge. Brazilians, who overwhelmingly prepay for their mobile talk time, can buy handsets without carrier oversight, but in the U.S., people typically buy phones through carriers, who subsidize the handsets in exchange for signing a service contract. In fact, experts say Disney and ESPN's attempts to sell branded handsets earlier this decade went nowhere because they lacked wide distribution. Nokia said it is in talks with T-Mobile and AT&T regarding distribution of the branded sets.
Trade-offs
Ultimately, the program's success will likely come down to what consumers get in exchange for carrying a brand-plastered handset. In the U.S., the branded phones will cost the same or cheaper than the unbranded one of the same model.
"I'm not sure if consumers would want their mobile experience to be a commercial-advertising experience," said Mike Slusar, a former AT&T executive who now consults on brand management and licensing. "Their preference is to brand their own phones."
As Forrester research analyst Charles Golvin pointed out, consumers are savvy: "If they're being co-opted as a brand spokesman, they expect some compensation in the way of increased subsidies."
While Nokia's program has the attention of retail, entertainment and package-goods advertisers, not everyone is into it. For example, said Mr. Kohl, automakers are still scratching their heads: "It's not clicking with them to the same degree as it is with a Coke."
For now, entertainment companies are among Nokia's low-hanging fruit because they view mobile as a key promotional channel for their movies and music. Mr. Kohl said Nokia is working on possible joint partnerships, including one that marries a cable network with a fashion retailer.
[the article was oroginally published at http://adage.com/article?article_id=136543]
For an undisclosed fee, the world's biggest cellphone maker is offering advertisers the right to brand the mobile handset. Advertisers choose a Nokia phone that complements their demographic target, splash the handsets and the accessories with their visual identities, embed some mobile content into it and wrap it all up in packaging plastered with their logo.
The program, set to launch in the U.S. in the second half of 2009, comes from Nokia Interactive, the cellphone maker's ad-selling arm. Nokia's ability to preload content on the advertisers' behalf is the linchpin of its custom-device strategy -- the prize for the consumer is, presumably, access to that original content. Brands may also subsidize the cost of a handset.
The idea is for brands to put "content in the hands of the most potent brand advocates -- people who like the brand ... so much that they want to be seen with it," said David Kohl, Nokia interactive head of sales-Americas.
The 18-month-old program has seen some early success in its initial testing ground in Brazil, but a U.S. launch would certainly require some tweaking. When it arrives, the program will test how far consumers here are willing to go to interact with brands -- and experts say value and relevance are the operative keys.
Select audiences
"If you ask advertisers, 'Would you like to brand a phone?' I think it'd be difficult to find one who says no. The question is: Is this something that's got enough value for consumers to change from the phone they already have?" said Maria Mandel, Ogilvy's executive director-digital innovation. She said this program would appeal to brands that want to reach a select, targeted audience, build buzz or create a loyalty tool.
In Brazil, the branded phones are priced between $70 and $200 and sold through retailers that market them with in-store promotions and co-op advertising programs involving Nokia.
One of the program's best-selling phones belongs to Unilever's Seda personal-care brand, which used a limited-edition pink Nokia phone to refresh its brand and launch a teen shampoo line. The $100 device, which came bundled with games, trial-size shampoos and exclusive music by a popular Brazilian band, sold out within two months; it eventually sold 200,000 units between April and December, according to Nokia.
Unilever media director Maria-Luisa Lopez said Seda tapped into branded handsets to get closer to its customers, and plans to brand more Nokia phones in the future. "The project ... was one of the ways to increase relevance to our consumers -- being with them, speaking their language, with the colors, sounds and shapes they love the most," Ms. Lopez said. Nokia says the branded-handset program is profitable and that it has sold millions of the branded devices.
But Brazil's mobile economics favor the program's success in ways that the U.S. may not. There, consumers pay dearly for mobile internet access and content (songs cost $3 a pop), but stateside content is cheap or free and rarely the top reason to purchase a handset.
Distribution could also be a challenge. Brazilians, who overwhelmingly prepay for their mobile talk time, can buy handsets without carrier oversight, but in the U.S., people typically buy phones through carriers, who subsidize the handsets in exchange for signing a service contract. In fact, experts say Disney and ESPN's attempts to sell branded handsets earlier this decade went nowhere because they lacked wide distribution. Nokia said it is in talks with T-Mobile and AT&T regarding distribution of the branded sets.
Trade-offs
Ultimately, the program's success will likely come down to what consumers get in exchange for carrying a brand-plastered handset. In the U.S., the branded phones will cost the same or cheaper than the unbranded one of the same model.
"I'm not sure if consumers would want their mobile experience to be a commercial-advertising experience," said Mike Slusar, a former AT&T executive who now consults on brand management and licensing. "Their preference is to brand their own phones."
As Forrester research analyst Charles Golvin pointed out, consumers are savvy: "If they're being co-opted as a brand spokesman, they expect some compensation in the way of increased subsidies."
While Nokia's program has the attention of retail, entertainment and package-goods advertisers, not everyone is into it. For example, said Mr. Kohl, automakers are still scratching their heads: "It's not clicking with them to the same degree as it is with a Coke."
For now, entertainment companies are among Nokia's low-hanging fruit because they view mobile as a key promotional channel for their movies and music. Mr. Kohl said Nokia is working on possible joint partnerships, including one that marries a cable network with a fashion retailer.
[the article was oroginally published at http://adage.com/article?article_id=136543]
New Search Tool Aims at Answering Tough Queries
Every new online search service must face the inevitable question: “Is it better than Google?”
Result of a query for "space needle eiffel tower" entered into the WolframAlpha search service.
WolframAlpha, a powerful new service that can answer a broad range of queries, has become one of the most anticipated Web products of the year. But its creator, Stephen Wolfram, wants to make something clear: Despite the online chatter comparing it to Google, his service is not intended to dethrone the king of search engines.
“I am not keen on the hype,” said Mr. Wolfram, a well-known scientist and entrepreneur and the founder of Wolfram Research, a company in Champaign, Ill., that has been quietly developing WolframAlpha.
Mr. Wolfram’s service does not search through Web pages, and it will not help with movie times or camera shopping. Instead it computes the answers to queries using enormous collections of data the company has amassed. It can quickly spit out facts like the average body mass index of a 40-year-old male, whether the Eiffel Tower is taller than Seattle’s Space Needle, and whether it is high tide in Miami right now.
WolframAlpha, which is expected to be available to the public at wolframalpha.com in the next week, is not a finished product. It is an early working version of a project that has been years in the making and will continue to evolve over years, if not decades. As such, there is much it cannot answer now.
But even as he dismisses the Google comparisons, Mr. Wolfram, a former child prodigy who published his first research paper on particle physics at age 15 and is best known for creating the math-formula software Mathematica, is happy to add fuel to the simmering expectations surrounding his service.
“I think WolframAlpha has the potential to be quite important,” he said.
The goal of creating a computer system that can answer questions has been a tantalizing but elusive pursuit for many computer scientists for more than four decades. Some veterans of the field say Mr. Wolfram may have come as close as anyone yet.
“In many ways, creating a system like this has been a holy grail of lots of folks for some time,” said Nathan Myhrvold, a former chief technology officer of Microsoft and co-founder of Intellectual Ventures, an investment company that owns a portfolio of patents.
“It has wound up being considered something that is virtually impossible,” Mr. Myhrvold said. WolframAlpha has shown “that it wasn’t impossible but really difficult,” he added. “It involved applying lots of different tricks.”
Doug Lenat, an artificial intelligence expert whose company Cycorp has spent the last 15 years developing a system that brings human-like reasoning to some computer systems, said WolframAlpha can handle “an astronomical number of questions,” and could eventually turn into a favorite destination on the Web.
“It may become a massive player alongside Google,” Mr. Lenat said.
Traditional search engines like Google and Yahoo, by and large, excel at finding information that already exists online. If there are Web pages that include the words used in a query, the engines will find them and rank them in order of relevance.
WolframAlpha is different. For starters, it does not gather data from the Web. Instead, its “knowledge base” is made up of reams and reams of data — ranging from the kinds of facts you would find in a World Almanac, to highly specialized data from physics and other sciences — that some 100 employees at Wolfram Research have gathered, verified and organized over several years.
When a user types in a query, WolframAlpha tries to determine the relevant area of knowledge and find the answers, often by performing calculations on its data. If you type “LDL 120,” it will return a graph showing the distribution of cholesterol levels among the United States population, and display the percentage of people above and below that figure. If you type “LDL 120 male 33,” it will adjust the results to focus on that gender and age group.
In response to “how far is the Moon from Earth,” WolframAlpha will calculate the exact distance based on an algorithm that computes the ever-changing distance between the two bodies. The engine that computes answers is largely built on Mathematica.
In its current state, there are many queries that WolframAlpha cannot answer, either because it does not understand the question or because it does not have the requisite data. For instance, it is stumped by queries like “obesity rate,” “housing prices New York” or “unemployment San Francisco” (but it will answer “unemployment San Francisco County”).
“It is going to be very good in some areas and incomplete in others,” said Nova Spivack, the chief executive of Radar Networks, which is using artificial intelligence and other techniques to help people find Web content that is interesting and relevant to them.
WolframAlpha does not actually try to work out the real meaning of a query, as some artificial intelligence systems do, so there are some questions it will never be able to answer. But experts say its approach appears to be effective in many areas.
“He’s done a great job of marrying the acquisition of data with the mathematical algorithms,” said David A. Ferrucci, an artificial intelligence researcher at I.B.M., who is leading a team developing a computer program that will compete with humans on “Jeopardy.”
If successful, WolframAlpha has the potential to become a large business opportunity. For now, Mr. Wolfram said he plans to offer advertising and other forms of sponsorship on the site, and perhaps offer premium versions of the service for researchers. And somewhat coyly, he said he has discussed potential partnerships with the “obvious people,” including search engine companies.
“We are actively pursuing interesting relationships,” he said.
Representatives for Google and Yahoo declined to discuss WolframAlpha.
Mr. Spivack and others said WolframAlpha may become a complement to traditional search engines, which themselves have begun to offer simple versions of the kinds of calculations and data manipulation at which WolframAlpha excels.
“There is a huge space of possible questions that Google doesn’t answer,” Mr. Spivack said. “I think WolframAlpha will go well beyond the academic world to cover business and industry, economics, health.”
[the article was originally published at http://www.nytimes.com/2009/05/11/technology/internet/11search.html?_r=1&ref=technology]
Result of a query for "space needle eiffel tower" entered into the WolframAlpha search service.
WolframAlpha, a powerful new service that can answer a broad range of queries, has become one of the most anticipated Web products of the year. But its creator, Stephen Wolfram, wants to make something clear: Despite the online chatter comparing it to Google, his service is not intended to dethrone the king of search engines.
“I am not keen on the hype,” said Mr. Wolfram, a well-known scientist and entrepreneur and the founder of Wolfram Research, a company in Champaign, Ill., that has been quietly developing WolframAlpha.
Mr. Wolfram’s service does not search through Web pages, and it will not help with movie times or camera shopping. Instead it computes the answers to queries using enormous collections of data the company has amassed. It can quickly spit out facts like the average body mass index of a 40-year-old male, whether the Eiffel Tower is taller than Seattle’s Space Needle, and whether it is high tide in Miami right now.
WolframAlpha, which is expected to be available to the public at wolframalpha.com in the next week, is not a finished product. It is an early working version of a project that has been years in the making and will continue to evolve over years, if not decades. As such, there is much it cannot answer now.
But even as he dismisses the Google comparisons, Mr. Wolfram, a former child prodigy who published his first research paper on particle physics at age 15 and is best known for creating the math-formula software Mathematica, is happy to add fuel to the simmering expectations surrounding his service.
“I think WolframAlpha has the potential to be quite important,” he said.
The goal of creating a computer system that can answer questions has been a tantalizing but elusive pursuit for many computer scientists for more than four decades. Some veterans of the field say Mr. Wolfram may have come as close as anyone yet.
“In many ways, creating a system like this has been a holy grail of lots of folks for some time,” said Nathan Myhrvold, a former chief technology officer of Microsoft and co-founder of Intellectual Ventures, an investment company that owns a portfolio of patents.
“It has wound up being considered something that is virtually impossible,” Mr. Myhrvold said. WolframAlpha has shown “that it wasn’t impossible but really difficult,” he added. “It involved applying lots of different tricks.”
Doug Lenat, an artificial intelligence expert whose company Cycorp has spent the last 15 years developing a system that brings human-like reasoning to some computer systems, said WolframAlpha can handle “an astronomical number of questions,” and could eventually turn into a favorite destination on the Web.
“It may become a massive player alongside Google,” Mr. Lenat said.
Traditional search engines like Google and Yahoo, by and large, excel at finding information that already exists online. If there are Web pages that include the words used in a query, the engines will find them and rank them in order of relevance.
WolframAlpha is different. For starters, it does not gather data from the Web. Instead, its “knowledge base” is made up of reams and reams of data — ranging from the kinds of facts you would find in a World Almanac, to highly specialized data from physics and other sciences — that some 100 employees at Wolfram Research have gathered, verified and organized over several years.
When a user types in a query, WolframAlpha tries to determine the relevant area of knowledge and find the answers, often by performing calculations on its data. If you type “LDL 120,” it will return a graph showing the distribution of cholesterol levels among the United States population, and display the percentage of people above and below that figure. If you type “LDL 120 male 33,” it will adjust the results to focus on that gender and age group.
In response to “how far is the Moon from Earth,” WolframAlpha will calculate the exact distance based on an algorithm that computes the ever-changing distance between the two bodies. The engine that computes answers is largely built on Mathematica.
In its current state, there are many queries that WolframAlpha cannot answer, either because it does not understand the question or because it does not have the requisite data. For instance, it is stumped by queries like “obesity rate,” “housing prices New York” or “unemployment San Francisco” (but it will answer “unemployment San Francisco County”).
“It is going to be very good in some areas and incomplete in others,” said Nova Spivack, the chief executive of Radar Networks, which is using artificial intelligence and other techniques to help people find Web content that is interesting and relevant to them.
WolframAlpha does not actually try to work out the real meaning of a query, as some artificial intelligence systems do, so there are some questions it will never be able to answer. But experts say its approach appears to be effective in many areas.
“He’s done a great job of marrying the acquisition of data with the mathematical algorithms,” said David A. Ferrucci, an artificial intelligence researcher at I.B.M., who is leading a team developing a computer program that will compete with humans on “Jeopardy.”
If successful, WolframAlpha has the potential to become a large business opportunity. For now, Mr. Wolfram said he plans to offer advertising and other forms of sponsorship on the site, and perhaps offer premium versions of the service for researchers. And somewhat coyly, he said he has discussed potential partnerships with the “obvious people,” including search engine companies.
“We are actively pursuing interesting relationships,” he said.
Representatives for Google and Yahoo declined to discuss WolframAlpha.
Mr. Spivack and others said WolframAlpha may become a complement to traditional search engines, which themselves have begun to offer simple versions of the kinds of calculations and data manipulation at which WolframAlpha excels.
“There is a huge space of possible questions that Google doesn’t answer,” Mr. Spivack said. “I think WolframAlpha will go well beyond the academic world to cover business and industry, economics, health.”
[the article was originally published at http://www.nytimes.com/2009/05/11/technology/internet/11search.html?_r=1&ref=technology]
Hulu's tug of war with TV
Online video site Hulu trumpeted its ascension to the media big time a few months back with a dash of sardonic humor. In its debut TV commercial, in which Alec Baldwin mocks the audience's addiction to the very shows he creates as a fictional network executive, the site calls itself "an evil plot to destroy the world."
The joke is uneasily close to the truth for some in the television business.
Once dismissed as "Clown Co." by Silicon Valley critics who scoffed at the notion that old media giants could ever harness the Internet, the website with a name that sounds like a Hawaiian dance has quickly upset the status quo. Hulu's traction with users has entrenched entertainment companies worried that the video site's runaway success could undercut the financial underpinnings of the industry.
Those companies are fighting back, and the result could mean no more free passes for many signature cable programs that appear on Hulu.
NBC Universal and News Corp. publicly launched Hulu a little more than a year ago as a gamble on television's digital future. The website allows viewers to watch thousands of episodes of TV shows for free, from current hits like "Family Guy" and "The Office" to old favorites like "WKRP in Cincinnati" and "I Dream of Jeannie." Hulu's simple design, expansive catalog and no cover charge have elevated it to one of the most popular websites for watching video.
With 42 million viewers in March -- an audience nearly twice the size of TV's most popular show, Fox's "American Idol" -- Hulu whizzed past Yahoo and Microsoft's MSN, and is now nipping at the heels of Google's YouTube.
"Hulu has certainly exceeded all of our expectations," said Jean-Briac Perrette, NBC Universal's president of digital distribution. "We've come a long way from Clown Co."
Late last month, Walt Disney Co. overcame its initial skepticism and signed on as an equity owner of Hulu, which has nearly 150 content partners. That gives the video site even more star power with the addition of ABC's "Desperate Housewives" and "Lost," and cable hits such as ABC Family's "The Secret Life of the American Teenager" and Disney Channel's "Wizards of Waverly Place."
"Our feeling is that -- and some of this is instinct, by the way -- media consumption online is growing and will continue to grow," Disney Chief Executive Robert A. Iger said in a call last week with analysts who grilled him about Hulu. "It is really important for us to establish ourselves there."
But in making a bid for the next generation of Internet- attuned viewers, Hulu's owners have strained their lucrative relationships with cable and satellite operators. Companies like Time Warner Cable Inc. and DirecTV Group Inc. pay cable networks billions of dollars each year to carry programming. Believing that they should have exclusivity because their payments support the enormous cost of producing TV shows, such companies have been pushing back against the Hulu freebies.
Investors also are wary that the media companies' embrace of the Internet-content-should-be-free philosophy threatens one of Hollywood's biggest profit centers: cable programming.
"If you give away your premium content for free, you are basically hastening your own demise, signing your own death warrant," said Laura Martin, a media analyst with Soleil-Media Metrics. "There is a choice that companies have to make."
Hulu illustrates the quandary that media executives face as they weigh the potential of the Internet against their dependable, old-line businesses. If the television industry does not find a way to preserve its two pillars of revenue -- advertising and subscription fees -- the consequences could be dire. Analysts point to the rapid deterioration of newspapers, which traded paying print subscribers for the expectation of big bucks from online advertising that have not materialized.
The conflict has forced Hulu to make concessions that have hurt users who have come to expect a rich menu on the video site. In recent months, entire seasons of "It's Always Sunny in Philadelphia" were abruptly taken off the site, along with episodes of other cable TV shows such as "In Plain Sight" and "Psych."
Hulu even blocked access to a technology that lets its users watch content on their TVs. The move provoked outrage among fans of the software, called Boxee, drawing 385 angry comments on the company's website.
"Big Media had better come out of their hole and embrace the power of Internet streaming or they'll be in big trouble down the road," wrote one poster who identified himself as Lew Ciokiewicz.
Hulu's pullback in the case of "Always Sunny," one of the site's early favorites, underscores the tug of war within established media companies over the wisdom of placing TV shows on the Internet for free.
The quirky sitcom about a group of slackers has become a signature of the FX cable channel. (FX is a division of Fox, whose parent company, News Corp., is one of Hulu's founding partners.)
Even as FX acknowledged Hulu brought it new viewers, the cable network nonetheless demanded that the video site drop three seasons from its free online offerings over fears it would undercut the show's ratings and hamper lucrative DVD sales.
"We are not going to take steps that ignore the needs of our partners," explained Hulu Chief Executive Jason Kilar.
[read more at http://www.latimes.com/business/la-fi-ct-hulu11-2009may11,0,5771665.story]
The joke is uneasily close to the truth for some in the television business.
Once dismissed as "Clown Co." by Silicon Valley critics who scoffed at the notion that old media giants could ever harness the Internet, the website with a name that sounds like a Hawaiian dance has quickly upset the status quo. Hulu's traction with users has entrenched entertainment companies worried that the video site's runaway success could undercut the financial underpinnings of the industry.
Those companies are fighting back, and the result could mean no more free passes for many signature cable programs that appear on Hulu.
NBC Universal and News Corp. publicly launched Hulu a little more than a year ago as a gamble on television's digital future. The website allows viewers to watch thousands of episodes of TV shows for free, from current hits like "Family Guy" and "The Office" to old favorites like "WKRP in Cincinnati" and "I Dream of Jeannie." Hulu's simple design, expansive catalog and no cover charge have elevated it to one of the most popular websites for watching video.
With 42 million viewers in March -- an audience nearly twice the size of TV's most popular show, Fox's "American Idol" -- Hulu whizzed past Yahoo and Microsoft's MSN, and is now nipping at the heels of Google's YouTube.
"Hulu has certainly exceeded all of our expectations," said Jean-Briac Perrette, NBC Universal's president of digital distribution. "We've come a long way from Clown Co."
Late last month, Walt Disney Co. overcame its initial skepticism and signed on as an equity owner of Hulu, which has nearly 150 content partners. That gives the video site even more star power with the addition of ABC's "Desperate Housewives" and "Lost," and cable hits such as ABC Family's "The Secret Life of the American Teenager" and Disney Channel's "Wizards of Waverly Place."
"Our feeling is that -- and some of this is instinct, by the way -- media consumption online is growing and will continue to grow," Disney Chief Executive Robert A. Iger said in a call last week with analysts who grilled him about Hulu. "It is really important for us to establish ourselves there."
But in making a bid for the next generation of Internet- attuned viewers, Hulu's owners have strained their lucrative relationships with cable and satellite operators. Companies like Time Warner Cable Inc. and DirecTV Group Inc. pay cable networks billions of dollars each year to carry programming. Believing that they should have exclusivity because their payments support the enormous cost of producing TV shows, such companies have been pushing back against the Hulu freebies.
Investors also are wary that the media companies' embrace of the Internet-content-should-be-free philosophy threatens one of Hollywood's biggest profit centers: cable programming.
"If you give away your premium content for free, you are basically hastening your own demise, signing your own death warrant," said Laura Martin, a media analyst with Soleil-Media Metrics. "There is a choice that companies have to make."
Hulu illustrates the quandary that media executives face as they weigh the potential of the Internet against their dependable, old-line businesses. If the television industry does not find a way to preserve its two pillars of revenue -- advertising and subscription fees -- the consequences could be dire. Analysts point to the rapid deterioration of newspapers, which traded paying print subscribers for the expectation of big bucks from online advertising that have not materialized.
The conflict has forced Hulu to make concessions that have hurt users who have come to expect a rich menu on the video site. In recent months, entire seasons of "It's Always Sunny in Philadelphia" were abruptly taken off the site, along with episodes of other cable TV shows such as "In Plain Sight" and "Psych."
Hulu even blocked access to a technology that lets its users watch content on their TVs. The move provoked outrage among fans of the software, called Boxee, drawing 385 angry comments on the company's website.
"Big Media had better come out of their hole and embrace the power of Internet streaming or they'll be in big trouble down the road," wrote one poster who identified himself as Lew Ciokiewicz.
Hulu's pullback in the case of "Always Sunny," one of the site's early favorites, underscores the tug of war within established media companies over the wisdom of placing TV shows on the Internet for free.
The quirky sitcom about a group of slackers has become a signature of the FX cable channel. (FX is a division of Fox, whose parent company, News Corp., is one of Hulu's founding partners.)
Even as FX acknowledged Hulu brought it new viewers, the cable network nonetheless demanded that the video site drop three seasons from its free online offerings over fears it would undercut the show's ratings and hamper lucrative DVD sales.
"We are not going to take steps that ignore the needs of our partners," explained Hulu Chief Executive Jason Kilar.
[read more at http://www.latimes.com/business/la-fi-ct-hulu11-2009may11,0,5771665.story]
Microsoft Buys another Start-Up
Microsoft Corp. agreed to acquire a videogame start-up co-founded and partly owned by Don Mattrick, the executive who runs Microsoft's videogame business.
The Redmond, Wash., company said the purchase of BigPark Inc., a Vancouver-based company that is staffed by veterans from Electronic Arts Inc., will give Microsoft control of a new game that BigPark is developing exclusively for the company's Xbox 360 game console. Financial terms of the deal weren't disclosed.
The deal is complicated by the role of Mr. Mattrick, who leads Microsoft's videogame efforts as senior vice president of the company's interactive-entertainment business. He is also chairman and co-founder of BigPark and remains a minority shareholder in the company.
David Dennis, a Microsoft spokesman, said Mr. Mattrick wasn't involved in the discussions to acquire BigPark and that the impetus to do the deal came from other Microsoft executives, including Phil Spencer, general manager of Microsoft game studios, and Robbie Bach, the president of Microsoft's entertainment-and-devices division.
"The team was blown away by the creativity and talent of folks at the studio," Mr. Dennis said. "We think the game they're working on is going to be a hit."
Mr. Mattrick co-founded BigPark several years ago after leaving Electronic Arts. Microsoft said Mr. Mattrick disclosed his investment in BigPark to the company before they hired him to run Microsoft's videogame business two years ago. His position as chairman of BigPark was approved by the company pursuant to Microsoft's standard of business conduct, Microsoft said in a statement.
[the article was orginally published at http://online.wsj.com/article/SB124172618297397483.html]
The Redmond, Wash., company said the purchase of BigPark Inc., a Vancouver-based company that is staffed by veterans from Electronic Arts Inc., will give Microsoft control of a new game that BigPark is developing exclusively for the company's Xbox 360 game console. Financial terms of the deal weren't disclosed.
The deal is complicated by the role of Mr. Mattrick, who leads Microsoft's videogame efforts as senior vice president of the company's interactive-entertainment business. He is also chairman and co-founder of BigPark and remains a minority shareholder in the company.
David Dennis, a Microsoft spokesman, said Mr. Mattrick wasn't involved in the discussions to acquire BigPark and that the impetus to do the deal came from other Microsoft executives, including Phil Spencer, general manager of Microsoft game studios, and Robbie Bach, the president of Microsoft's entertainment-and-devices division.
"The team was blown away by the creativity and talent of folks at the studio," Mr. Dennis said. "We think the game they're working on is going to be a hit."
Mr. Mattrick co-founded BigPark several years ago after leaving Electronic Arts. Microsoft said Mr. Mattrick disclosed his investment in BigPark to the company before they hired him to run Microsoft's videogame business two years ago. His position as chairman of BigPark was approved by the company pursuant to Microsoft's standard of business conduct, Microsoft said in a statement.
[the article was orginally published at http://online.wsj.com/article/SB124172618297397483.html]
Google's Latest Domination
You may think Google (GOOG) dominates the search market, with 63.7 percent of all searches conducted in the United States compared with Yahoo's (YHOO) 20 percent. But you haven't been looking at mobile Internet devices, which everyone agrees will be the most dynamic and explosive piece of the online world for years to come. According to a new report from the Internet marketing firm Net Applications, Google accounts for 97.5 percent of all mobile phone searches. 97.5 percent. Now that's what we call dominance.
And the company's fortunes keep rising elsewhere as well. BusinessWeek spreads around a rumor that Dell (DELL) is exploring the option of using the Android operating system for a new line of cheap laptops. This makes Dell the second major computer manufacturer to flirt with abandoning Windows for Android; Hewlett-Packard announced it was looking into Android a few months back. Google has an outright monopoly on mobile search, and it's threatening to eat into Microsoft's (MSFT) core business. What does it do for an encore?
Ah, yes: Twitter. For months, gossipmongers like us have been spreading word that Google might snatch up the microblogging company for a few hundred million. After all, Twitter's main potential value lies in searching all those tweets in real time and the advertising that could accompany the search results. What business model does that sound like to you?
And Google's not alone in reportedly salivating over all that searchable data. Apple has reportedly offered $700 million to make Twitter a part of the Steve Jobs family. In fact, Twitter Vice President of Operations Santosh Jayaram (who just happens to be Google's former head of search quality) just announced a new breakthrough in searching tweets. Now, Twitter's search engine will also crawl over each tweet, find any links people embedded in them, scan the linked page, and index the content to produce even more accurate results. In addition, Twitter's search engine will also rank results according to whatever Internet or cultural trend is hot at the moment, as well as the popularity of each twitterer. Now everyone searching on Twitter gets to know what Ashton Kutcher thinks, whether they want to or not.
Sounds perfect for Google, right? They've got the search know-how, and Twitter's got the next big thing. Nonetheless, Twitter co-founder Biz Stone maintains that he won't sell the company—to Google or anyone else. In case anyone didn't get the message, he even went on The View to tell Barbara Walters. Got that, Eric Schmidt? Twitter's not for sale. Until it is, of course.
[the article was originally published at http://www.thebigmoney.com/blogs/feeling-lucky/2009/05/07/googles-latest-domination]
And the company's fortunes keep rising elsewhere as well. BusinessWeek spreads around a rumor that Dell (DELL) is exploring the option of using the Android operating system for a new line of cheap laptops. This makes Dell the second major computer manufacturer to flirt with abandoning Windows for Android; Hewlett-Packard announced it was looking into Android a few months back. Google has an outright monopoly on mobile search, and it's threatening to eat into Microsoft's (MSFT) core business. What does it do for an encore?
Ah, yes: Twitter. For months, gossipmongers like us have been spreading word that Google might snatch up the microblogging company for a few hundred million. After all, Twitter's main potential value lies in searching all those tweets in real time and the advertising that could accompany the search results. What business model does that sound like to you?
And Google's not alone in reportedly salivating over all that searchable data. Apple has reportedly offered $700 million to make Twitter a part of the Steve Jobs family. In fact, Twitter Vice President of Operations Santosh Jayaram (who just happens to be Google's former head of search quality) just announced a new breakthrough in searching tweets. Now, Twitter's search engine will also crawl over each tweet, find any links people embedded in them, scan the linked page, and index the content to produce even more accurate results. In addition, Twitter's search engine will also rank results according to whatever Internet or cultural trend is hot at the moment, as well as the popularity of each twitterer. Now everyone searching on Twitter gets to know what Ashton Kutcher thinks, whether they want to or not.
Sounds perfect for Google, right? They've got the search know-how, and Twitter's got the next big thing. Nonetheless, Twitter co-founder Biz Stone maintains that he won't sell the company—to Google or anyone else. In case anyone didn't get the message, he even went on The View to tell Barbara Walters. Got that, Eric Schmidt? Twitter's not for sale. Until it is, of course.
[the article was originally published at http://www.thebigmoney.com/blogs/feeling-lucky/2009/05/07/googles-latest-domination]
Friday, May 8, 2009
Microsoft to buy game maker BigPark Inc
Microsoft Corp said on Thursday it will buy computer game designer BigPark Inc for an undisclosed amount, as it pushes its strategy of producing exclusive games for its Xbox entertainment system.
Microsoft has already been working with Vancouver, Canada-based BigPark over the past year on a game for the Xbox, but has so far announced no details. More information is expected at the video game industry's annual E3 Expo in June.
BigPark, founded in 2007 by former executives of Electronic Arts Inc and Distinctive Software Inc, will become part of Microsoft Game Studios.
One of BigPark's co-founders, Don Mattrick, became senior vice president of Microsoft's Interactive Entertainment Business in July 2007.
[the article was originally published at http://www.reuters.com/article/newsOne/idUSTRE5460AW20090507]
Microsoft has already been working with Vancouver, Canada-based BigPark over the past year on a game for the Xbox, but has so far announced no details. More information is expected at the video game industry's annual E3 Expo in June.
BigPark, founded in 2007 by former executives of Electronic Arts Inc and Distinctive Software Inc, will become part of Microsoft Game Studios.
One of BigPark's co-founders, Don Mattrick, became senior vice president of Microsoft's Interactive Entertainment Business in July 2007.
[the article was originally published at http://www.reuters.com/article/newsOne/idUSTRE5460AW20090507]
Biz Stone says Twitter's not for sale
Twitter Inc. co-founder Biz Stone said today the company is not for sale despite reports that Apple Inc. is in late-stage negotiations to buy the microblogging site.
Stone and co-founder Evan Williams were making an appearance on the morning talk show The View when host Barbara Walters asked about the recent flood of rumors that the likes of Apple, Microsoft Corp. and Google Inc. all are vying to buy Twitter. Stone said, "No. We are not for sale."
Echoing his previous statements about sale rumors, Stone added that right now, Twitter is focused on developing new features on its Web site and on remaining independent.
Stone's comments come just a day after rumors flared on the blogosphere that Apple was laying down a $700 million offer for Twitter. This latest round of speculation comes on the heels of last fall's failed bid by Facebook Inc. to scoop up Twitter, which was followed by rumors that had both Google and Microsoft both casting an eye on the microblogging site.
Blog site Gawker.com reported on Tuesday that an unnamed source, who reportedly has been recruited for a senior-level position at Apple, said the company is in "serious negotiations" with Twitter. The story noted that Apple is trying to hash out a deal quickly so an announcement could be made on June 8, during Apple's annual Worldwide Developers Conference.
Meanwhile, TechCrunch also reported that a "normally reliable source" said that Apple is in late-stage negotiations to buy Twitter. However, that story also noted that other sources said they have no knowledge of any talks between the two.
Dan Olds, an analyst at Gabriel Consulting Group Inc., said yesterday that if the rumors about Apple's interest are true, it could make for an interesting combination.
"Apple has the right 'attitude' to run something like Twitter, plus the ability to monetize it with advertising," Olds said. "I can see where Twitter might fit quite nicely into the Apple empire. It would give Apple a strong entry into the social networking market and also a very solid advertising vehicle."
[the article was originally published at http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9132602]
Stone and co-founder Evan Williams were making an appearance on the morning talk show The View when host Barbara Walters asked about the recent flood of rumors that the likes of Apple, Microsoft Corp. and Google Inc. all are vying to buy Twitter. Stone said, "No. We are not for sale."
Echoing his previous statements about sale rumors, Stone added that right now, Twitter is focused on developing new features on its Web site and on remaining independent.
Stone's comments come just a day after rumors flared on the blogosphere that Apple was laying down a $700 million offer for Twitter. This latest round of speculation comes on the heels of last fall's failed bid by Facebook Inc. to scoop up Twitter, which was followed by rumors that had both Google and Microsoft both casting an eye on the microblogging site.
Blog site Gawker.com reported on Tuesday that an unnamed source, who reportedly has been recruited for a senior-level position at Apple, said the company is in "serious negotiations" with Twitter. The story noted that Apple is trying to hash out a deal quickly so an announcement could be made on June 8, during Apple's annual Worldwide Developers Conference.
Meanwhile, TechCrunch also reported that a "normally reliable source" said that Apple is in late-stage negotiations to buy Twitter. However, that story also noted that other sources said they have no knowledge of any talks between the two.
Dan Olds, an analyst at Gabriel Consulting Group Inc., said yesterday that if the rumors about Apple's interest are true, it could make for an interesting combination.
"Apple has the right 'attitude' to run something like Twitter, plus the ability to monetize it with advertising," Olds said. "I can see where Twitter might fit quite nicely into the Apple empire. It would give Apple a strong entry into the social networking market and also a very solid advertising vehicle."
[the article was originally published at http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9132602]
Top execs reveal why newspapers don't block Google
vTo hear the poobahs of traditional media tell it, Google is to print media what global warming is to the polar caps. At many once-stalwart print publications, profits are melting away.
For several months, leaders at some of the nation's most influential newspapers and periodicals, including The Wall Street Journal, The Associated Press, and the online arm of Forbes magazine have begun blaming Google and similar Web services for at least some of their deepening financial troubles. Google sells ads tied to the news blurbs it "scrapes" from news sites. It links back to the Web sites from which it acquired the content but doesn't share ad revenue with them. This isn't fair, many media execs say.
In all the very public bashing of Google, however, few if any of the critics has answered why they don't just cut Google out of the equation by preventing the search engine from indexing their Web pages. The task could be accomplished by inserting a single line of code into their URLs. If Forbes.com added a line such as forbes.com/robots.txt, content from the site would be rendered invisible to Google.
Representatives from the Journal and AP declined to comment for this story, but their Web sites speak volumes for them. None of the companies has severed ties with Google and risked losing access to the search engine's millions of users. Traditional print publications, which have seen ad revenue plummet, mass layoffs, and in some cases the shut down of operations, are now hopelessly dependent on Google to lure readers, says media executives. Jim Brady, the Washington Post's former digital chief, says the question of whether Google is good or bad for print journalism is almost irrelevant at this point. Print publications are helpless to do anything about it.
"Get out a sheet of paper and write down all the things Google does for you," said Brady, former executive editor of Washingtonpost.com, as he offered advice to his former peers in old media. "Google allows your content to be exposed to people who would never see it otherwise. If you're able to code your pages well, then you can get an awful lot of leads from Google. It's up to your site to turn those leads into loyal customers...Google is not going away."
Pointing fingers
That's not exactly how Jim Spanfeller sees it. The CEO of Forbes.com asked the question in an opinion piece he wrote for the blog PaidContent.com, "is Google being disproportionally compensated for what is fundamentally other people's work?" He said the answer appears to be yes. He claimed Google "makes roughly $60 million a year directing folks" to Forbes.com.
So why doesn't Spanfeller prevent the search engine from indexing the magazine's content?
"I don't know that this isn't a bad idea," Spanfeller said in a phone interview with CNET News. "But I think that would be hard to do without everyone's competitors shutting (Google) out as well."
This sounds like an acknowledgment that Forbes needs Google to compete and that the search engine may provide publications like his a valuable service. That's at least what Marissa Mayer, a Google exec, told Congress on Wednesday during a hearing on the future of journalism. Google sends 1 billion page views every month to print publications, Mayer testified during the hearing.
Spanfeller argues, however, that Google does do harm. For example, the blurbs the search engine obtains from news sites often includes enough information to satisfy the major questions about a story. For many people, reading a headline and synopsis about three more people dying of swine flu in Mexico is all some readers want to know. There's little motivation to click on links to the site that actually produced the news. To some in media, this violates copyright law.
Spanfeller says there's also frustration when a news organization pays professional journalists to do original reporting and then see links to stories written by amateurs--or worse, blogs that are little more than flimsy rewrites of their content--with higher visibility on Google than their own.
Spanfeller wants Google to do a better job of showcasing professionally created content, and "cease stepping on or over the line of fair use." This means he wants Google to start providing less information in its news blurbs and crack down on sites that use stories without authorization.
"We show users just enough to make them want to read more," wrote Alexander Macgillivray, Google's associate general counsel, wrote last month. "Even though the Copyright Act does not grant a copyright owner a veto over such uses, it is our policy to allow any rights holder...to remove their content from our index."
The cure?
So what do print execs want from Google? First, the search engine could cure a lot of ills by sharing ad revenue with print companies. After all, it's their content Google is selling ads against. Forget it, not going to happen predicts Brady.
"There was a fair amount of pushing from people at the (Washington Post) news group who said: 'We should make Google pay us for our content,' Brady said. "I told them 'They're never going to do it. They wouldn't give us a dime.' (They responded) 'Well then, we should block it.' I said 'Fine, we can go ahead and do that and that's suicidal.'
"Google built a better mousetrap than the newspapers were able to build," Brady continued. "That's part of the reason they're making the money they're making. At some point I don't know what you can do about that other than to try and work it to your advantage."
There are some media execs looking for new ways to get their content in front of readers without help from Google. Amazon on Wednesday showcased a new large-screen e-reader called the Kindle DX. The device is partly geared toward readers of newspapers, and magazines. Newspaper publishers Hearst Corp., and Rupert Murdoch's News Corp. have said they will create their own e-readers designed to deliver their own content.
This kind of effort is fine with Brady. He says this kind of thinking is far more preferable than obsessing about the past.
"We have to ask, 'what's next?'" said Brady who plans to soon open his own consulting business. "That's where everybody needs to get to. Because Google isn't going away and they aren't writing us checks. Let's move on. We're all getting way too hung up on the past, with all the things we should have done 10 years ago, could have done...well, we didn't. Game over. We should be asking 'What are the new rules of this game and how do we best take advantage of them.'"
[the article was originally published at http://news.cnet.com/8301-1023_3-10235359-93.html]
For several months, leaders at some of the nation's most influential newspapers and periodicals, including The Wall Street Journal, The Associated Press, and the online arm of Forbes magazine have begun blaming Google and similar Web services for at least some of their deepening financial troubles. Google sells ads tied to the news blurbs it "scrapes" from news sites. It links back to the Web sites from which it acquired the content but doesn't share ad revenue with them. This isn't fair, many media execs say.
In all the very public bashing of Google, however, few if any of the critics has answered why they don't just cut Google out of the equation by preventing the search engine from indexing their Web pages. The task could be accomplished by inserting a single line of code into their URLs. If Forbes.com added a line such as forbes.com/robots.txt, content from the site would be rendered invisible to Google.
Representatives from the Journal and AP declined to comment for this story, but their Web sites speak volumes for them. None of the companies has severed ties with Google and risked losing access to the search engine's millions of users. Traditional print publications, which have seen ad revenue plummet, mass layoffs, and in some cases the shut down of operations, are now hopelessly dependent on Google to lure readers, says media executives. Jim Brady, the Washington Post's former digital chief, says the question of whether Google is good or bad for print journalism is almost irrelevant at this point. Print publications are helpless to do anything about it.
"Get out a sheet of paper and write down all the things Google does for you," said Brady, former executive editor of Washingtonpost.com, as he offered advice to his former peers in old media. "Google allows your content to be exposed to people who would never see it otherwise. If you're able to code your pages well, then you can get an awful lot of leads from Google. It's up to your site to turn those leads into loyal customers...Google is not going away."
Pointing fingers
That's not exactly how Jim Spanfeller sees it. The CEO of Forbes.com asked the question in an opinion piece he wrote for the blog PaidContent.com, "is Google being disproportionally compensated for what is fundamentally other people's work?" He said the answer appears to be yes. He claimed Google "makes roughly $60 million a year directing folks" to Forbes.com.
So why doesn't Spanfeller prevent the search engine from indexing the magazine's content?
"I don't know that this isn't a bad idea," Spanfeller said in a phone interview with CNET News. "But I think that would be hard to do without everyone's competitors shutting (Google) out as well."
This sounds like an acknowledgment that Forbes needs Google to compete and that the search engine may provide publications like his a valuable service. That's at least what Marissa Mayer, a Google exec, told Congress on Wednesday during a hearing on the future of journalism. Google sends 1 billion page views every month to print publications, Mayer testified during the hearing.
Spanfeller argues, however, that Google does do harm. For example, the blurbs the search engine obtains from news sites often includes enough information to satisfy the major questions about a story. For many people, reading a headline and synopsis about three more people dying of swine flu in Mexico is all some readers want to know. There's little motivation to click on links to the site that actually produced the news. To some in media, this violates copyright law.
Spanfeller says there's also frustration when a news organization pays professional journalists to do original reporting and then see links to stories written by amateurs--or worse, blogs that are little more than flimsy rewrites of their content--with higher visibility on Google than their own.
Spanfeller wants Google to do a better job of showcasing professionally created content, and "cease stepping on or over the line of fair use." This means he wants Google to start providing less information in its news blurbs and crack down on sites that use stories without authorization.
"We show users just enough to make them want to read more," wrote Alexander Macgillivray, Google's associate general counsel, wrote last month. "Even though the Copyright Act does not grant a copyright owner a veto over such uses, it is our policy to allow any rights holder...to remove their content from our index."
The cure?
So what do print execs want from Google? First, the search engine could cure a lot of ills by sharing ad revenue with print companies. After all, it's their content Google is selling ads against. Forget it, not going to happen predicts Brady.
"There was a fair amount of pushing from people at the (Washington Post) news group who said: 'We should make Google pay us for our content,' Brady said. "I told them 'They're never going to do it. They wouldn't give us a dime.' (They responded) 'Well then, we should block it.' I said 'Fine, we can go ahead and do that and that's suicidal.'
"Google built a better mousetrap than the newspapers were able to build," Brady continued. "That's part of the reason they're making the money they're making. At some point I don't know what you can do about that other than to try and work it to your advantage."
There are some media execs looking for new ways to get their content in front of readers without help from Google. Amazon on Wednesday showcased a new large-screen e-reader called the Kindle DX. The device is partly geared toward readers of newspapers, and magazines. Newspaper publishers Hearst Corp., and Rupert Murdoch's News Corp. have said they will create their own e-readers designed to deliver their own content.
This kind of effort is fine with Brady. He says this kind of thinking is far more preferable than obsessing about the past.
"We have to ask, 'what's next?'" said Brady who plans to soon open his own consulting business. "That's where everybody needs to get to. Because Google isn't going away and they aren't writing us checks. Let's move on. We're all getting way too hung up on the past, with all the things we should have done 10 years ago, could have done...well, we didn't. Game over. We should be asking 'What are the new rules of this game and how do we best take advantage of them.'"
[the article was originally published at http://news.cnet.com/8301-1023_3-10235359-93.html]
Tuesday, May 5, 2009
Search Goes On - New Google ad chief points to untapped potential
NEW YORK Companies often go back to basics in lean times. That's a message Google's new ad leader, Dennis Woodside, plans to convey to marketers.
Woodside, 40, said that despite the fast growth of search advertising over the past seven years, much more can be done to tap into its potential, particularly as the pressure to prove ad effectiveness grows.
"There are still huge opportunities in search," he said in an interview at Google's office here. "There are clients still not understanding the scale of the opportunity."
Google is pushing an expanded definition of search, hoping to make money from YouTube by inserting advertiser videos into the search results page. By some measures, YouTube is second only to Google in search volume. So far, advertiser uptake has been modest, Woodside said. It will continue to try new formats on the site to find what works. "Over time, some of these things will break through," he said.
Although Google made ambitious forays into selling print, radio and TV advertising, it abandoned efforts with newspapers and radio, marking an embarrassing retreat. Woodside said Google remained committed to TV advertising, seeing it as an adjunct to its video efforts and an opportunity for Internet-like targeting and measurement.
"We're trying to create a feedback loop as you have with the Web," he said. Newspaper and radio programs failed because Google couldn't implement such systems.
Woodside, who was vp of the United Kingdom, Ireland and Benelux for Google, was named vp of Americas operations after Tim Armstrong left in March to helm AOL.
[the article was originally published at http://www.adweek.com/aw/content_display/news/agency/e3i06056b3e43453484d1438c745e92c513]
Woodside, 40, said that despite the fast growth of search advertising over the past seven years, much more can be done to tap into its potential, particularly as the pressure to prove ad effectiveness grows.
"There are still huge opportunities in search," he said in an interview at Google's office here. "There are clients still not understanding the scale of the opportunity."
Google is pushing an expanded definition of search, hoping to make money from YouTube by inserting advertiser videos into the search results page. By some measures, YouTube is second only to Google in search volume. So far, advertiser uptake has been modest, Woodside said. It will continue to try new formats on the site to find what works. "Over time, some of these things will break through," he said.
Although Google made ambitious forays into selling print, radio and TV advertising, it abandoned efforts with newspapers and radio, marking an embarrassing retreat. Woodside said Google remained committed to TV advertising, seeing it as an adjunct to its video efforts and an opportunity for Internet-like targeting and measurement.
"We're trying to create a feedback loop as you have with the Web," he said. Newspaper and radio programs failed because Google couldn't implement such systems.
Woodside, who was vp of the United Kingdom, Ireland and Benelux for Google, was named vp of Americas operations after Tim Armstrong left in March to helm AOL.
[the article was originally published at http://www.adweek.com/aw/content_display/news/agency/e3i06056b3e43453484d1438c745e92c513]
How to use the downturn to your advantage
As the world teeters on the brink of financial collapse, the smartest thing you can do is increase your spending in paid search. Now.
That sounds counterintuitive, but it's all a matter of learning to see your paid search as an investment. I'll explain why.
Boom times are for revenue, bust times are for market share
On the most basic level, recessions are perfect times for marketing overall -- particularly because they're an ideal time for capturing market share. While your competition is slashing its marketing budget, you can take the opportunity to snap up the customers that your competition ignores. The strategy will be particularly rewarding once the economy bounces back, and your brand equity is suddenly head-and-shoulders above the competition's.
This point holds particular weight in the world of search as it becomes an increasingly critical shopping arena amid the worsening economy. Analyst David Hallerman from eMarketer explains it bluntly: "Customers are going to search engines because they are looking for better deals."
And if customers are flocking to search engines during a downturn, then capturing market share in a downturn means paying particularly strong attention to the search channel. If search is where the customers are, then you need to be in search to capture the customer market.
Investment in data
If you want to know how best to target your ads to your best customers, you need plenty of data to work with. And if there's ever a time when you need to create efficient campaigns by targeting your ads better, it's when times are tough.
This point resonates powerfully in search, perhaps the most data-driven marketing medium around. It's your marketing data that tells you things like what kind of keywords your ideal customers use, what types of search ads they are most likely to click, and what your customers look for in an ideal landing page.
But the amount of data you have correlates directly to the size of your search investment. If you create a large search campaign, you'll have a lot of data to work with, and you'll have the opportunity to create an extremely strong search ROI by working with that data. If you run a tiny search campaign, you'll lose the opportunity to find the data you need, and you'll end up risking the ability to target efficiently.
Of course, it's not enough to have the data from a large campaign. You need to know how to make use of that data. But without the data as a starting point, you really never know what levers to push to make your search marketing campaigns more intelligent -- something you need to know in a downturn, when efficiency matters most. At the same time, having more data now will help you know how to take advantage of improvements in the economy, whenever they come.
Since these are things you really can't do without, you really can't do without a strong investment in paid search.
Data as an investment, part two: Quality score
There's also a second, search-specific part of the data story that's valuable to explore here: the search engine's ad quality ranking systems (like Google's Quality Score).
The idea behind quality ranking is simple. Search engines only make money when searchers click on search ads. Therefore, poorly-performing search ads represent an opportunity cost for the engines, which would rather hand over an ad unit to an ad that gains more clicks. To compensate, search engines charge advertisers more per click on ads that seem unlikely to perform well.
How do the engines know if an ad will perform well? One of the most powerful indicators is the advertiser's track record. Search engines assume an advertiser with a strong history of clicks will gain a similar number of clicks going forward. And so the more search clicks you've garnered in the past, the less you'll pay per click now.
The converse is also true: The fewer clicks you've garnered in the past, the harder it is to know that your ad will be a success, and the more you'll have to pay the search engine per click. That's equally true if your ads have underperformed in the past, as it is if you simply haven't run enough ads to build up a track record. Either way, the engines can't tell if your ad will perform well, and they'll simply charge you more for each click. (This, of course, is a woefully simplified explanation of quality ranking, but it gets to the gist of things.)
Quality ranking holds tremendous ramifications for would-be search advertisers who are planning to sit out the recession. By not running search ads, those advertisers are doing nothing to develop click histories. As a result, they'll need to pay exorbitant click costs on the search ads they run, once the economy bounces back. In other words, they'll be slammed with exorbitant search fees, at precisely the time when their customers are looking to buy again.
And so while some advertisers hope to save money by pulling out of search for the duration of the recession, it may prove cheaper to stay in search, in the long run.
Recessions are temporary; investments are forever
Is holding steady in search an easy decision in a recession? Of course not. But in business, the people who come out on top are the ones who keep their heads when everyone else panics. This is why you need to think beyond short-term fears, and instead look to long-term investments. Search is just one such investment you need to consider.
After all, recessions are temporary. But the benefits of a good search campaign might just be forever.
[the article was originally published at http://www.imediaconnection.com/content/22914.asp]
That sounds counterintuitive, but it's all a matter of learning to see your paid search as an investment. I'll explain why.
Boom times are for revenue, bust times are for market share
On the most basic level, recessions are perfect times for marketing overall -- particularly because they're an ideal time for capturing market share. While your competition is slashing its marketing budget, you can take the opportunity to snap up the customers that your competition ignores. The strategy will be particularly rewarding once the economy bounces back, and your brand equity is suddenly head-and-shoulders above the competition's.
This point holds particular weight in the world of search as it becomes an increasingly critical shopping arena amid the worsening economy. Analyst David Hallerman from eMarketer explains it bluntly: "Customers are going to search engines because they are looking for better deals."
And if customers are flocking to search engines during a downturn, then capturing market share in a downturn means paying particularly strong attention to the search channel. If search is where the customers are, then you need to be in search to capture the customer market.
Investment in data
If you want to know how best to target your ads to your best customers, you need plenty of data to work with. And if there's ever a time when you need to create efficient campaigns by targeting your ads better, it's when times are tough.
This point resonates powerfully in search, perhaps the most data-driven marketing medium around. It's your marketing data that tells you things like what kind of keywords your ideal customers use, what types of search ads they are most likely to click, and what your customers look for in an ideal landing page.
But the amount of data you have correlates directly to the size of your search investment. If you create a large search campaign, you'll have a lot of data to work with, and you'll have the opportunity to create an extremely strong search ROI by working with that data. If you run a tiny search campaign, you'll lose the opportunity to find the data you need, and you'll end up risking the ability to target efficiently.
Of course, it's not enough to have the data from a large campaign. You need to know how to make use of that data. But without the data as a starting point, you really never know what levers to push to make your search marketing campaigns more intelligent -- something you need to know in a downturn, when efficiency matters most. At the same time, having more data now will help you know how to take advantage of improvements in the economy, whenever they come.
Since these are things you really can't do without, you really can't do without a strong investment in paid search.
Data as an investment, part two: Quality score
There's also a second, search-specific part of the data story that's valuable to explore here: the search engine's ad quality ranking systems (like Google's Quality Score).
The idea behind quality ranking is simple. Search engines only make money when searchers click on search ads. Therefore, poorly-performing search ads represent an opportunity cost for the engines, which would rather hand over an ad unit to an ad that gains more clicks. To compensate, search engines charge advertisers more per click on ads that seem unlikely to perform well.
How do the engines know if an ad will perform well? One of the most powerful indicators is the advertiser's track record. Search engines assume an advertiser with a strong history of clicks will gain a similar number of clicks going forward. And so the more search clicks you've garnered in the past, the less you'll pay per click now.
The converse is also true: The fewer clicks you've garnered in the past, the harder it is to know that your ad will be a success, and the more you'll have to pay the search engine per click. That's equally true if your ads have underperformed in the past, as it is if you simply haven't run enough ads to build up a track record. Either way, the engines can't tell if your ad will perform well, and they'll simply charge you more for each click. (This, of course, is a woefully simplified explanation of quality ranking, but it gets to the gist of things.)
Quality ranking holds tremendous ramifications for would-be search advertisers who are planning to sit out the recession. By not running search ads, those advertisers are doing nothing to develop click histories. As a result, they'll need to pay exorbitant click costs on the search ads they run, once the economy bounces back. In other words, they'll be slammed with exorbitant search fees, at precisely the time when their customers are looking to buy again.
And so while some advertisers hope to save money by pulling out of search for the duration of the recession, it may prove cheaper to stay in search, in the long run.
Recessions are temporary; investments are forever
Is holding steady in search an easy decision in a recession? Of course not. But in business, the people who come out on top are the ones who keep their heads when everyone else panics. This is why you need to think beyond short-term fears, and instead look to long-term investments. Search is just one such investment you need to consider.
After all, recessions are temporary. But the benefits of a good search campaign might just be forever.
[the article was originally published at http://www.imediaconnection.com/content/22914.asp]
ABC to Add Its Shows to Videos on Hulu
Three of the four big broadcast networks now own stakes in Hulu, the popular video Web site.
ABC Enterprises, a unit of the Walt Disney Company, announced Thursday that it would join NBC Universal, which is owned by General Electric and Vivendi, and the News Corporation, owner of Fox, as a partner in the joint venture.
Hulu, which in the last 18 months has become the third most popular video site on the Web, behind YouTube and Fox Interactive Media, displays free, high-quality versions of television shows and movies, supported by advertising. It said it would add ABC shows like “Lost,” “Desperate Housewives” and “Jimmy Kimmel Live” to its online library by late summer, pending regulatory approval.
Anne Sweeney, president of the Disney-ABC Television Group, said that while most of the network’s shows will continue to be available on ABC.com, that site attracts mostly core fans. By distributing them on Hulu, Disney hopes to reach Hulu’s much-larger audience of 42 million visitors a month.
According to people briefed on the terms of the deal, ABC will give Hulu an exclusive license to distribute its shows on Hulu.com and across the Web on Hulu’s partner sites, like MySpace and AOL .com. ABC will also give Hulu around $25 million in marketing credit, which Hulu can use to advertise itself during ABC’s broadcast shows.
In exchange, Disney will take a 28 percent stake in Hulu.com, a little less than the stakes of the joint venture’s founders, NBC Universal and the News Corporation. As part of the deal, NBC and the News Corporation also renewed their commitments to provide their shows exclusively to Hulu for an additional two years.
The deal is a blow to YouTube, owned by Google and by far the largest video site on the Web. It also courted Disney but struck a deal to display only short clips from shows on ABC and ESPN. People familiar with the negotiations said talks between Disney and YouTube broke down over how a deal would be structured, with Disney insisting on owning a stake in any joint venture.
Jeff Zucker, president of NBC Universal and a member of the Hulu board, said the experience on Hulu.com was superior to that on YouTube, for viewers and advertisers.
“Advertisers have made it clear that they want a safe environment unpolluted by videos of cats on skateboards,” Mr. Zucker said. “Couple that with the fact that Hulu has generated a user experience that is second to none. That has made Hulu the pre-eminent video site.”
ABC’s deal with Hulu also isolates CBS, which will be the only major broadcast network without a seat at the Hulu table. In a statement, CBS said it wanted to maintain control over the distribution of its shows online.
CBS has been offered a chance to join the joint venture several times, say people who have followed the continuing discussions, but has always declined. CBS distributes its shows on 300 video sites, including Joost, MSN and AOL. It also withholds some shows from the Web for several days after they are broadcast to ensure that the Web does not cannibalize the more profitable TV-watching audience.
That is a widespread concern among all the television networks and cable and satellite companies, and it is the reason Disney will not make cable shows like “Hannah Montana” available on Hulu. But Peter A. Chernin, president of News Corporation, said the answer was not to withhold material from sites like Hulu.
“The alternative of never making anything available on the Web is just silliness,” he said. “Then the pirates will just make it available for you. ”
Mr. Chernin said cable companies and Hulu were devising ways to identify the subscribers of cable and satellite services when they visit the site, so they can provide access to cable shows.
[the article was originally published at http://www.nytimes.com/2009/05/01/business/media/01hulu.html?_r=1&ref=media]
ABC Enterprises, a unit of the Walt Disney Company, announced Thursday that it would join NBC Universal, which is owned by General Electric and Vivendi, and the News Corporation, owner of Fox, as a partner in the joint venture.
Hulu, which in the last 18 months has become the third most popular video site on the Web, behind YouTube and Fox Interactive Media, displays free, high-quality versions of television shows and movies, supported by advertising. It said it would add ABC shows like “Lost,” “Desperate Housewives” and “Jimmy Kimmel Live” to its online library by late summer, pending regulatory approval.
Anne Sweeney, president of the Disney-ABC Television Group, said that while most of the network’s shows will continue to be available on ABC.com, that site attracts mostly core fans. By distributing them on Hulu, Disney hopes to reach Hulu’s much-larger audience of 42 million visitors a month.
According to people briefed on the terms of the deal, ABC will give Hulu an exclusive license to distribute its shows on Hulu.com and across the Web on Hulu’s partner sites, like MySpace and AOL .com. ABC will also give Hulu around $25 million in marketing credit, which Hulu can use to advertise itself during ABC’s broadcast shows.
In exchange, Disney will take a 28 percent stake in Hulu.com, a little less than the stakes of the joint venture’s founders, NBC Universal and the News Corporation. As part of the deal, NBC and the News Corporation also renewed their commitments to provide their shows exclusively to Hulu for an additional two years.
The deal is a blow to YouTube, owned by Google and by far the largest video site on the Web. It also courted Disney but struck a deal to display only short clips from shows on ABC and ESPN. People familiar with the negotiations said talks between Disney and YouTube broke down over how a deal would be structured, with Disney insisting on owning a stake in any joint venture.
Jeff Zucker, president of NBC Universal and a member of the Hulu board, said the experience on Hulu.com was superior to that on YouTube, for viewers and advertisers.
“Advertisers have made it clear that they want a safe environment unpolluted by videos of cats on skateboards,” Mr. Zucker said. “Couple that with the fact that Hulu has generated a user experience that is second to none. That has made Hulu the pre-eminent video site.”
ABC’s deal with Hulu also isolates CBS, which will be the only major broadcast network without a seat at the Hulu table. In a statement, CBS said it wanted to maintain control over the distribution of its shows online.
CBS has been offered a chance to join the joint venture several times, say people who have followed the continuing discussions, but has always declined. CBS distributes its shows on 300 video sites, including Joost, MSN and AOL. It also withholds some shows from the Web for several days after they are broadcast to ensure that the Web does not cannibalize the more profitable TV-watching audience.
That is a widespread concern among all the television networks and cable and satellite companies, and it is the reason Disney will not make cable shows like “Hannah Montana” available on Hulu. But Peter A. Chernin, president of News Corporation, said the answer was not to withhold material from sites like Hulu.
“The alternative of never making anything available on the Web is just silliness,” he said. “Then the pirates will just make it available for you. ”
Mr. Chernin said cable companies and Hulu were devising ways to identify the subscribers of cable and satellite services when they visit the site, so they can provide access to cable shows.
[the article was originally published at http://www.nytimes.com/2009/05/01/business/media/01hulu.html?_r=1&ref=media]
Pentagon targets recruits on Facebook, Twitter
You don't often hear a three-star general using the word "friend" as a verb.
But for Lt. Gen. Benjamin Freakley and other Army brass, a new era has brought a new language — and new tools like online social networks Twitter and Facebook — for seeking out young recruits and spreading the military's message.
Freakley, who heads the Army command that oversees recruiting, says social networking sites offer another way to reach tomorrow's soldiers.
"They live in the virtual world," Freakley said. He cited Facebook as a key component in targeting 18-to 24-year-olds. "You could friend your recruiter, and then he could talk to your friends."
The Army isn't the only branch of the military with Facebook friends or that has a following on Twitter. The Air Force has also established a Facebook page, Twitter feeds and a blog, while the Marine Corps is using various networking sites mainly for recruiting purposes. The Navy is "experimenting" with several forms of online media, and some of its commands are using Twitter, a spokesman said. Even the Coast Guard commandant regularly updates his Facebook status while traveling.
The Army has also added to its Web site video games, a virtual recruiter and clips that answer commonly asked questions about life in uniform.
Showing off the videos during an interview at his office at Fort Monroe, Freakley said some of the questions were surprising: Can I have a dog in the Army? Can I buy a truck in the Army? Can I be married in the Army?
The Army, Freakley said, wants to answer those questions.
Earlier this year, the Army established an online and social media division within its public affairs office. The division's director, Lt. Col. Kevin Arata, said the search is on every day to find new avenues online to reach not only soldiers, but their families and the general public.
"We know that's where they are, and we need to go to them," Arata said.
[the article was originally published at http://www.msnbc.msn.com/id/30513702]
But for Lt. Gen. Benjamin Freakley and other Army brass, a new era has brought a new language — and new tools like online social networks Twitter and Facebook — for seeking out young recruits and spreading the military's message.
Freakley, who heads the Army command that oversees recruiting, says social networking sites offer another way to reach tomorrow's soldiers.
"They live in the virtual world," Freakley said. He cited Facebook as a key component in targeting 18-to 24-year-olds. "You could friend your recruiter, and then he could talk to your friends."
The Army isn't the only branch of the military with Facebook friends or that has a following on Twitter. The Air Force has also established a Facebook page, Twitter feeds and a blog, while the Marine Corps is using various networking sites mainly for recruiting purposes. The Navy is "experimenting" with several forms of online media, and some of its commands are using Twitter, a spokesman said. Even the Coast Guard commandant regularly updates his Facebook status while traveling.
The Army has also added to its Web site video games, a virtual recruiter and clips that answer commonly asked questions about life in uniform.
Showing off the videos during an interview at his office at Fort Monroe, Freakley said some of the questions were surprising: Can I have a dog in the Army? Can I buy a truck in the Army? Can I be married in the Army?
The Army, Freakley said, wants to answer those questions.
Earlier this year, the Army established an online and social media division within its public affairs office. The division's director, Lt. Col. Kevin Arata, said the search is on every day to find new avenues online to reach not only soldiers, but their families and the general public.
"We know that's where they are, and we need to go to them," Arata said.
[the article was originally published at http://www.msnbc.msn.com/id/30513702]
Google Tries Viral Campaign to Goose Interest in Chrome
Why would Google take on Apple, Microsoft and Mozilla in the web-browser war and not try to win it? That question has been asked since Google ambled into the Safari-Explorer-Firefox derby last fall with its own entry called Chrome, but took a remarkably low-key approach to marketing it.
Well, Google is about to turn up the heat, a little. The search giant is releasing 11 short films on YouTube today that extol Chrome's various virtues, in hopes it can turn them into the kind of viral hits YouTube is famous for. (It doesn't hurt that Google owns YouTube.)
The videos take pains not to mention or to directly attack the competition; rather, their goal is to get people to start thinking about what they want out of an appliance most thinks works just fine.
'Featured videos'
Initially, the videos will get promotion as "featured videos" on YouTube's home page, but Google may combine that with a media buy across the content network that would see the videos placed as display ads across the web. Tagline: a new way to get online.
"There's a teeny group of people who obsess and care browsers, but most people don't really think about it," said Google Creative Director Robert Wong. "But imagine if a browser was a car and people didn't know what they were driving or that they had a choice?"
The videos are Google's latest effort to market Chrome, which has been limited largely to keyword and display ads on Google's ad network, a download button on YouTube and for a few days after its launch a link on Google's search page. But after a flurry of early-adopters, market share for Chrome has settled at 1.23% compared to Explorer's 66.8%, Firefox's 22% and Safari's 8.2% according to Net Applications.
Adoption has been abysmal largely because Google hasn't promoted the software or signed any expensive deals to have PCs shipped with Chrome pre-installed (which reports say it has considered). Google also hasn't yet released a Mac version, eliminating a small but potentially enthusiastic group of early adopters.
Marketing on the cheap
Google is still trying to market Chrome on the cheap: Budgets for the videos were $10,000, according to a person who bid on the project. In using YouTube to market Chrome, Google is using the video service in much the same way mass marketers tend to, as an opportunity for free, earned publicity rather than a medium on which to purchase advertising.
The videos were produced by a diverse array of designers, illustrators and mostly small creative shops such as Motion Theory, Go Robot and Hunter Gatherer. Christoph Niemann, a frequent illustrator for The New Yorker and the New York Times, created an animated short called "You and Your Browser," which depicts the difference between a "Bad Browser!" and the various attributes (speed, power, sophistication) of a "Good Browser."
The campaign is similar to Chrome Experiments, a site launched in March where Google commissioned web designers to create web pages and applications that take advantage of the speed of the browser.
Google got into the browser business as a defensive move: All of its products and services from search to e-mail to YouTube are experienced through a browser, software that Google does not control. By launching an open-source browser, Google can push development in the space, even if it never wins in market share. A video of Google engineers explaining the strategy has been viewed nearly 1 million times on YouTube.
[the article was originally published at http://adage.com/digital/article?article_id=136340]
Well, Google is about to turn up the heat, a little. The search giant is releasing 11 short films on YouTube today that extol Chrome's various virtues, in hopes it can turn them into the kind of viral hits YouTube is famous for. (It doesn't hurt that Google owns YouTube.)
The videos take pains not to mention or to directly attack the competition; rather, their goal is to get people to start thinking about what they want out of an appliance most thinks works just fine.
'Featured videos'
Initially, the videos will get promotion as "featured videos" on YouTube's home page, but Google may combine that with a media buy across the content network that would see the videos placed as display ads across the web. Tagline: a new way to get online.
"There's a teeny group of people who obsess and care browsers, but most people don't really think about it," said Google Creative Director Robert Wong. "But imagine if a browser was a car and people didn't know what they were driving or that they had a choice?"
The videos are Google's latest effort to market Chrome, which has been limited largely to keyword and display ads on Google's ad network, a download button on YouTube and for a few days after its launch a link on Google's search page. But after a flurry of early-adopters, market share for Chrome has settled at 1.23% compared to Explorer's 66.8%, Firefox's 22% and Safari's 8.2% according to Net Applications.
Adoption has been abysmal largely because Google hasn't promoted the software or signed any expensive deals to have PCs shipped with Chrome pre-installed (which reports say it has considered). Google also hasn't yet released a Mac version, eliminating a small but potentially enthusiastic group of early adopters.
Marketing on the cheap
Google is still trying to market Chrome on the cheap: Budgets for the videos were $10,000, according to a person who bid on the project. In using YouTube to market Chrome, Google is using the video service in much the same way mass marketers tend to, as an opportunity for free, earned publicity rather than a medium on which to purchase advertising.
The videos were produced by a diverse array of designers, illustrators and mostly small creative shops such as Motion Theory, Go Robot and Hunter Gatherer. Christoph Niemann, a frequent illustrator for The New Yorker and the New York Times, created an animated short called "You and Your Browser," which depicts the difference between a "Bad Browser!" and the various attributes (speed, power, sophistication) of a "Good Browser."
The campaign is similar to Chrome Experiments, a site launched in March where Google commissioned web designers to create web pages and applications that take advantage of the speed of the browser.
Google got into the browser business as a defensive move: All of its products and services from search to e-mail to YouTube are experienced through a browser, software that Google does not control. By launching an open-source browser, Google can push development in the space, even if it never wins in market share. A video of Google engineers explaining the strategy has been viewed nearly 1 million times on YouTube.
[the article was originally published at http://adage.com/digital/article?article_id=136340]
Social Gaming Scores in the Recession
Gaming goes gangbusters in a downturn. In 2001, the Nasdaq was plunging and such tech mainstays as telecom, e-commerce, and enterprise computing were in a tailspin. But gaming giants Electronic Arts (ERTS) and Activision (ATVI) soared. Titles including The Sims, Grand Theft Auto, Halo, and the Madden sports series became national big-budget obsessions.
In the current recession, amid declines in computing and online advertising, gaming again is on a tear. Only this time around, it takes more than producing a pricey console or a slick blockbuster in a shrink-wrapped box to win big at gaming. In a way, it takes a lot less.
Some of the most impressive growth of late is in technologically stripped-down games that offer players social, communal experiences. The most talked about are Guitar Hero, Rock Band, and several interactive titles associated with Nintendo's (7974.T) Wii. And the trend isn't confined to the living room. Less talked about is a surge in social games, played with friends on smartphone platforms such as Apple's (AAPL) iPhone and on mass-market sites such as Facebook and News Corp.'s (NWS) MySpace.
Many Games Are Free
Social gaming is less about killer graphics and quicksilver hand-eye coordination and more about connecting with friends. The best games aren't impressive in terms of technology, though they're quite adept at harnessing media that let players interact. For games on social networking sites, that means letting far-flung friends and families share an activity, rather than just photos and wall posts. On the iPhone, games utilize sophisticated multitouch technology that lets the screen respond to more than a single touch at a time. The number of people playing social games is expected to surge to 250 million in 2009, from 50 million in 2008, by some industry estimates. During recessions, people tend to look for low-cost entertainment, often staying at home. Many social games are free; often even power users pay less than $50 a month.
Despite the low costs associated with social games, many actually make money. That's where entrepreneur Mark Pincus comes in. Pincus missed the last countercyclical gaming surge. Unlike most Silicon Valley geeks, Pincus isn't into video games; and in the early part of the decade he was too busy starting a company called Tribe, an ultimately failed effort to merge local newspapers with the burgeoning social networking trend then made popular by Friendster.
Pincus doesn't intend to make the same mistake twice. So he started Zynga, a site that specializes in social gaming. He's raised almost $40 million from some of the most well-regarded names in venture investing, including über-angels Reid Hoffman and Peter Thiel. Other investors include Union Square Ventures' Fred Wilson, and Kleiner Perkins Caufield & Byers.
[you can read more at http://www.businessweek.com/technology/content/apr2009/tc20090429_963394.htm]
In the current recession, amid declines in computing and online advertising, gaming again is on a tear. Only this time around, it takes more than producing a pricey console or a slick blockbuster in a shrink-wrapped box to win big at gaming. In a way, it takes a lot less.
Some of the most impressive growth of late is in technologically stripped-down games that offer players social, communal experiences. The most talked about are Guitar Hero, Rock Band, and several interactive titles associated with Nintendo's (7974.T) Wii. And the trend isn't confined to the living room. Less talked about is a surge in social games, played with friends on smartphone platforms such as Apple's (AAPL) iPhone and on mass-market sites such as Facebook and News Corp.'s (NWS) MySpace.
Many Games Are Free
Social gaming is less about killer graphics and quicksilver hand-eye coordination and more about connecting with friends. The best games aren't impressive in terms of technology, though they're quite adept at harnessing media that let players interact. For games on social networking sites, that means letting far-flung friends and families share an activity, rather than just photos and wall posts. On the iPhone, games utilize sophisticated multitouch technology that lets the screen respond to more than a single touch at a time. The number of people playing social games is expected to surge to 250 million in 2009, from 50 million in 2008, by some industry estimates. During recessions, people tend to look for low-cost entertainment, often staying at home. Many social games are free; often even power users pay less than $50 a month.
Despite the low costs associated with social games, many actually make money. That's where entrepreneur Mark Pincus comes in. Pincus missed the last countercyclical gaming surge. Unlike most Silicon Valley geeks, Pincus isn't into video games; and in the early part of the decade he was too busy starting a company called Tribe, an ultimately failed effort to merge local newspapers with the burgeoning social networking trend then made popular by Friendster.
Pincus doesn't intend to make the same mistake twice. So he started Zynga, a site that specializes in social gaming. He's raised almost $40 million from some of the most well-regarded names in venture investing, including über-angels Reid Hoffman and Peter Thiel. Other investors include Union Square Ventures' Fred Wilson, and Kleiner Perkins Caufield & Byers.
[you can read more at http://www.businessweek.com/technology/content/apr2009/tc20090429_963394.htm]
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