Category: Internet Marketing

Internet Ad Spend to Surpass Newspapers in 2013

Prediction from ZenithOptimedia Adspend Forecast

Internet advertising expenditures will surpass newspaper advertising in 2013, to become the second largest advertising medium, according to the most recent quarterly forecast on global advertising expenditures by ZenithOptimedia (July 2011).

With a forecasted growth rate of 14.2% per annum, Internet advertising will grow from $63 billion in 2010 to almost $954.5 billion in 2013. Advertising in global newspapers is predicted to decline over this same period from $95.2 billion last year to just $92.8 billion in 2013.

If these projections come to fruition, Internet advertising will account for 18.3% of all global advertising expenditure (up from 14.1% last year), while newspapers will receive just 17.9% of the advertising pie, down from 21.3% last year.

Television advertising is forecast to have moderate growth, going from 40.4% share last year to 41.4% in 2013. Television accounts for the most new ad dollars over this period, growing from some $180 billion last year to almost $216 billion in 2013. TV advertising will remain at twice the level of the second highest medium.

While advertising in China will be approximately 50% higher in 2013, all markets are miniscule compared to the behemoth USA market, which at $151.5 billion last year was 3.3 times larger than second place Japan at $43.3 billion.

Over the next two years China will surpass Germany for the third spot on the advertising expenditure leader board, while Australia will climb one spot from 9th to 8th. Italy is projected to drop out of the top ten ad markets and will be replaced by Russia.

An interesting break down of Internet advertising expenditures shows paid search advertising accounting for almost 50%, with display advertising (36%) and classified ads (15%) accounting for the rest of this $90+ billion advertising pie.

Online Product Resarch Now First Step for Shoppers

58% of consumers conduct pre-purchase online research

The investigative phase of the buying cycle of the typical adult shopper in the USA now frequently starts with online product research.

According to the latest Pew Research Center’s Internet & American Life Project, 58% of American adults have done research online about the products and services they buy, up from 49% in 2004. The study was conducted with over 3000 adults between August 9 and September 13, with the findings released earlier this week.

On a typical day, one in five adults (21%) are searching for product or service information online, a 40% from the 15% level reached in September 2007.

According to Jim Jensen, a senior fellow with the Pew Research Center, the research clearly shows that more people are going online first to compare prices, make product comparisons, and read product reviews, even if they make their purchases in retail stores rather than online. As Jensen says, “even if they end up making their purchases in a store, they start their fact-finding and decision-making on the Internet.”

Interestingly, nearly a quarter (24%) of the respondents said they have posted comments or reviews online about the products and services they buy.

The Pew research also reported that 52% of Americans are now purchasing products online.

It definitely appears that shoppers start with the Internet, and then decide if, what and where to purchase.

Is Green the “New Black” for Women Shoppers?

As stated in the previous blog post, Green Marketing is no passing fad. In fact, to some observers, including me, Environmental Marketing looks like the New Black for women shoppers.

According to a recent study by the marketing consulting firm Frank About Women, one-quarter of all products in a woman’s shopping cart are environmentally friendly. (Note: this is data from the USA, unfortunately our shopping carts here in Australia have no current way of achieving such lofty green levels.)

The study also shows, according to an article in Ad Week, that “women are less likely than men to scoff at ecological concerns.” Most importantly, “if they feel they are getting a comparable product with green benefits, 69% are game to buy it.”

Another study, being released this week at the Good and Green Marketing Conference, will reportedly show that 80% of adult women in the USA believe very strongly that individuals can affect the environment, but that almost 60% believe that they are personally not doing enough to protect it.

It’s no wonder why Procter & Gamble has announced it will embark on a multi-brand initiative in the USA to educate and encourage consumers (read: women) to “make sustainable choices.” Called Future Friendly, this new platform from P&G includes a line of “green” Pampers disposable diapers and a pledge to provide 4 billion liters of clean drinking water in the developing world.

Modeled on previously successful initiatives in Canada and the UK, P&G is attempting to differentiate itself by claiming their existing products use less waste, energy and packaging, rather than by creating new “green” brand extensions. P&G is targeting its loyal customer base, hoping these consumers will be more likely to remain with their trusted brands if these are shown to be sustainable products.

“We are targeting the mainstream consumer – rather than the ‘environmental’ consumer – who does not want to give up on the brands that they like, but wants to use them in a sustainable way,” explained Glenn Williams, a P&G official, in the Financial Times.

While P&G is a late entrant to the green household products market, the company is sending a clear message that corporations must adopt sustainable practices in order to stay competitive. Of course, P&G also has a bottom-line target for this program, which reportedly includes placing 30 million of the company’s sustainable products into U.S. households by the end of next year and achieving total sales of $50 billion in sustainable products by 2012.

Interestingly, this “future friendly” program from P&G was announced (at the Clinton Global Initiative) while the U.S. Chamber of Commerce is voicing opposition to the climate change legislation before Congress. It appears that P&G, unlike the U.S. Chamber of Commerce, understands the need to align their business practices – and their brands – with the growing environmental concerns of consumers.

P&G also understands that Green Marketing is the New Black for women shoppers in America.

Which Way Is Internet Advertising Headed?

A pair of expenditure reports on Internet Advertising has us wondering in which direction is this headed?

First, Britain became the first major market in which advertisers spent more on Internet advertising than on TV ads, with a record £1.8 billion (US$3.2 billion) invested online in the first six months of the year. Earlier this year Denmark became the first country where Internet ad spending overtook TV advertising spend.

Internet advertising now accounts for 23.5% of all advertising in the UK, with TV ads (down 17% in actual spend from the first half of last year) at just 21.9% market share.

Then, about a week after this report from the Internet Advertising Bureau (IAB) and auditor PricewaterhouseCoopers, the pair released a report stating Internet advertising in the U.S. dropped 5.3% to $10.9 billion in the first half of this year. Of course, that’s not as bad as the 15.4% decline in total advertising expenditure in the first six months of the year according to Nielsen figures.

Even more concerning (for those selling online advertising), IAB and PwC predict that total online advertising expenditure this year will fall in the $21 billion to $22 billion range, a significant drop from the $23.4 billion recorded last year.

So why has Internet advertising become the biggest advertising sector in the UK with a 4.6% year-on-year increase, while at the same time Internet advertising expenditures have dropped 5.3% in the U.S.?

And what’s happening in other major advertising markets, such as Australia, France, Germany and Japan?

Anyone have any insights on this?

Personal Recommendations More Trusted Than Advertising

Personal recommendations and consumer opinions posted online are the most trusted forms of communications, according to the latest Nielsen Global Online Consumer Survey. Over 25,000 respondents from 50 countries participated in the survey.

According to the survey, which is conducted twice yearly, 90% of Internet consumers worldwide trust recommendations from people they know, while 70% trust consumer opinions posted online.

Brand websites, the most trusted form of advertiser-led communications, are also trusted by 70% of the survey respondents. Fortunately for marketers, all forms of advertiser-led advertising, except ads in newspapers, experienced higher levels of trust in this most recent survey.

Brand sponsorship is the marketing category that has seen the most significant increase in trust levels since the Trust in Advertising portion of the survey was initiated in April 2007. Almost two-thirds (64%) of Internet consumers now trust Brand Sponsorships, up from just 49% two years ago.

Significantly, text ads on mobile phones have the lowest trust factor, with less than one-fourth of respondents saying they completely or somewhat trust this form of advertising. This is not going to make the folks at the Mobile Marketing Association happy!

Here’s the ranked order of the results for some degree of trust in the following categories:

1. Recommendations from people known (90%)

2. Consumer opinions posted online (70%)

3. Brand websites (70%)

4. Editorial content {e.g. newspaper articles} (69%)

5. Brand sponsorships (64%)

6. Television (62%)

7. Newspapers (61%)

8. Magazines (59%)

9. Billboards / outdoor advertising (55%)

10. Radio (55%)

11. Emails signed up for (54%)

12. Ads before movies (52%)

13. Search engine results ads (41%)

14. Online video ads (37%)

15. Online banner ads (33%)

16. Text ads on mobile phones (24%)

The Marketing of Presidential Candidates

You’d think that with the tens of millions of dollars they have in hand to spend on their campaigns that American presidential candidates would be better marketers. Or at least have better marketing results.

But alas they seem to have fallen to the same disease of short-term sales (i.e. votes) and quarterly results (i.e. the next set of primary elections) as many corporate CEOs. This is why even when they win they often lose for their support is not deeply engrained and there is no voter (customer) loyalty post election.

This is also because none of the current crop of candidates has shown any ability to strongly position themselves (i.e. brand themselves). There’s not a solid brand amongst them. These candidates have no branding power (unlike JFK”, Harry Truman and Ronald Reagan). As one astute observer wrote to me last week, the current crop of candidates can be described (branded in my words) as:

a) a mean-spirited woman

b) a slick-talking,” Oprah-backed inexperienced quasi-Muslim

c) an old man from Arizona with a trophy wife

d) a womanizing 9-11 opportunist from New York

And those are just the leading candidates!

Change seems to be a major topic in this election. Perhaps the true change that is needed is the way the few remaining candidates need to start employing strong branding and marketing strategies to create some brand power and customer loyalty building with the American voters.

Otherwise,someone in November is going to win the election and lose the electorate (ala the current incumbent in the White House).

Apple Combines Powerful Brand With Great Marketing to Create iPhone Success

How powerful is the Apple brand?

 

Damn powerful.

 

I read last week that the Apple iPhone share of the U.S. smart phone market for the fourth quarter was an amazing 28%. This was up from the 19% level in the third quarter.

 

This means that Apple sold more iPhones in the fourth quarter than the number of smart phones sold by Palm or Motorola. Even more amazing – Apple outsold all of the various Windows mobile devices combined in the fourth quarter!

 

Chalk up another victory for Steve Jobs over the boys and girls at Microsoft!

 

The only mobile phone vendor to outsell Apple in the fourth quarter was RIM makers of the Crackberry…..oops, I mean Blackberry smart phone. They had 41% market share.

 

Now when is the iPhone being released in Australia???

 

The iPhone is going to make a great case study in how to launch a new product in what was previously considered a saturation market.

A powerful brand. An innovative product. A great launch strategy. Sort of sounds like Marketing 101 to me.

Super Bowl Ads

One of the most anticipated advertising events each year is the showing of new television commercials during the American Super Bowl football championship game.

The game which was played this past Sunday night, attracted an audience of approximately 97.5 million people in American, and countless millions more across the world. A tight contest,this was the most watched Super Bowl in history.

Thirty-second TV commercials during the game reportedly cost as much as US$3 million per spot.

Anheuser-Busch aired the best-liked Super Bowl ad for a record 10th-consecutive year, according to results of the Super Bowl Ad Meter real-time consumer focus group testing. Unlike many previous winners, the Anheuser-Busch ad did not rely on humor. Instead, it featured a Dalmatian who becomes personal trainer to a dejected draft horse eager to make the team pulling the famous Budweiser beer wagon.

The other Top 10 ads:

FedEx (FedEx beats giant carrier pigeons)

Bridgestone (critters scream with squirrel missed by car)

Doritos (gian rat goes for guy’s bag of chips)

Bud Light (fire-breather heats up romantic dinner)

Bud Light (men sneak beer into wine-and-cheese party)

Coca-Cola (cartoon-character parade balloons go after Coke Classic)

Diet Pepsi Max (star-studded cast stops dozing)

Planters (scent of nuts makes homely woman alluring)

Tide to Go (shirt stain is louder than a job candidate) tied with SoBe Life Water (Lizards dance with model Naomi Campbell)

You can watch all the Super Bowl ads as often as you like courtesy of Advertising Age at http://adage.com/superbowl08/article?article_id=124815.

Oh no….the American Marketing Association Has Done It Again!

The American Marketing Association has released a new definition of marketing, a mere three-plus years after their last one!
Supposedly to reflect marketing’s broader role in society the new definition reads:

Marketing is the activity, set of institutions, and processes for creating, communicating, and exchanging offerings that have value for customers, clients,partners and society at large.

One of the most important changes to the AMA’s new definition of marketing is that marketing is presented as a broader activity,states Nancy Costopulos,CMO of the American Marketing Association.Marketing is no longer a function — it is an educational process.

I think the folks who need educating on this is the AMA. This definition has the inherent look and feel of a committee decision trying to please too many self-interested members. I shudder at the thought that this will now be the official definition of marketing in books and taught in universities across the USA as AMA claims.

And what’s the value to society at large that comes from marketing bubble gum, handguns, child pornography, religious fanaticism, Japanese whaling expeditions in the name of science, and xenophobia? Whether the AMA likes it or not the proponents of all these use marketing processes and techniques.

I wonder which set of institutions are now part and parcel of the definition of marketing. Only those who join the AMA? Every organization that has customers is engaged in marketing. My motto: if it touches the customer, it’s a marketing issue. You don’t need to be an intitution, or use one, to engage in marketing.

The last time AMA came up with a new definition of marketing was way back in 2004! That definition read:

Marketing is an organizational function and a set of processes for creating , communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

At least the 2004 changes were a huge improvement on the previous one (created in 1985) which read: marketing is the process of planning and executing conception, pricing, promotion and distribution of goods, ideas and services to create exchanges that satisfy individual and organizational goals.

If the AMA felt a need to improve on its three-year old definition, I would have personally recommended the following:

Marketing is an organization-wide function, activity and set of process to create and keep good customers by creating, communicating, and deliverying value to customers to the benefit of its customers, the organization and its stakeholders.

Now that’s a definition that wouldn’t need updating and amending any time soon.

Marketing Wisdom 2008 now available from MarketingSherpa

The sixth annual edition of the eclectic and interesting Marketing Wisdom report from MarketingSherpa is now available as a free PDF download at http://www.marketingsherpa.com/article.html?ident=30298

The report features dozens of real-life test campaign lessons and tips, and has been collated from 101 stories and submissions submitted by MarketingSherpa’s readers. The topics cover just about every aspect of marketing – advertising, B2B, B2C, customer service, direct mail, email, lead generation, search – and such hot topics as landing page and website design, mobile marketing and Web 2.0.

 

I have all six of these annual reports and refer to them frequently. And while you are at their site, I also highly recommend signing up for the free MarketingSherpa weekly newsletter. It’s one of the best in the business.

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