Internet advertising is, well, media. And, people who make a living in advertising, should have their finger on the pulse of where things are going within media. Here's a good article to help capitalize on where things are going. Enjoy.
j. Bruce
www.SalesDrivenMarketing.com
--------------------------------------------------
Media's Mixed Outlook for 2008
By Steve Birenberg RealMoney Contributor12/21/2007 10:00 AM ESTURL: http://www.thestreet.com/p/rmoney/media/10395562.html
Media stocks face several headwinds in 2008. Advertising growth across most media is decelerating. Fragmentation of time spent using traditional media continues.
Regulatory change is either not helpful or punitive. Merger and acquisition activity will be low because of problems getting financing. The writers' strike could bite hard on the revenue side of the TV business and confuse the outlook for the movie business in 2009.
Not all is lost, however. Political spending will set records and tighten up inventory-producing upward pressure on rates. Cost savings are driving margins and will get a boost from the writers' strike. Internet and digital revenues are becoming material for many companies and growing very quickly. Balance sheets are in good shape and free cash flow is high, giving management several options for enhancing shareholder value. Lack of M&A activity is viewed positively by investors, because most big media deals have not produced value.
Against this confused backdrop, it will be hard to make money across the sector in 2008. However, as Jim Cramer says, there is always a bull market somewhere, and positive change is happening at many companies.
My best ideas for absolute dollar profits in 2007 are Central European Media Enterprises (CETV) , Discovery Communication (DISCA) and News Corp. (NWS) . On a relative basis, I also like Disney (DIS) , Meredith (MDP) , Regal Entertainment (RGC) and National Cinemedia (NCMI) .
Advertising Outlook
Advertising growth, the largest driver of media fundamentals, was poor in 2007, particularly in traditional media in U.S. markets. Universal McCann believes that total ad spending in the U.S. in 2007 will grow less than 1%. If you eliminate Internet advertising, which will grow north of 25% in 2007, total ad spending was slightly negative. The major trend in 2007 was weakness in local advertising offset by strength in national and Internet advertising.
For 2008, the outlook is not much better, with the exception of political advertising. Political advertising is spent mainly at local media outlets such as TV and radio. The volume should be enough to push TV growth into positive territory and prevent radio growth from decelerating further into negative territory. However, investors are unlikely to pay for politically driven ad growth.
Within the U.S., the best-performing categories -- you could even call them growth categories -- will remain Internet, cinema, outdoor and cable TV networks. Internet should continue to grow near 20%, and cinema advertising should continue to gain share and grow 15%.
Outdoor and cable TV networks may be the only traditional media to offer growth in 2007 when political is backed out. Outdoor growth is decelerating rapidly but should hold at least in the upper single digits. Cable networks have already decelerated from 15% to upper single digits but should stabilize in the 5%-7% range.
The only other growth in advertising in 2007 and 2008 is international, which is being driven by emerging markets. In 2008, international growth should again run in the range of 4% to 5% -- still a premium to politically driven U.S. growth of 3%-4%.
To get an idea of the growing influence of emerging markets, Zenith Optimedia is forecasting that Central and Eastern Europe will see its share of global advertising rise from 5.5% in 2006 to 8% in 2010. In 2010, the region will have greater advertising revenue than Japan. Similarly, Asia ex-Japan will see its share of global advertising grow from 11.7% in 2006 to 14.2% in 2010. In 2010, advertising in Asia ex-Japan will be two-thirds the size of that in Western Europe.
TV Guide Cable stocks have been smashed in 2007 by fears about competition from satellite TV providers and telco TV. I don't expect sentiment toward cable to change for at least six months, but I do believe the reality is far better than current stock prices imply. Therefore, I believe patient investors will be rewarded for buying cable stocks at current prices. Comcast (CMCSA) is my top pick.
I expect current optimism toward satellite stocks to wane as 2008 progresses. The bottom line is that macro trends in multichannel TV affect all three subsectors more equally than stock prices reflect. Thus, investors should buy the most out-of-favor group when valuation and sentiment reaches extremes. For now, that is cable.
The TV business will benefit from political advertising but faces secular challenges, which will be exacerbated if the writers' strike continues through spring. Local TV revenue will return to positive territory, including political, but multiples in the group are too high, given underlying negative growth.
Broadcast network TV is especially challenged by the strike, and investors will be more worried about the secular challenge than about the cost savings. The best growth is outside the U.S. Therefore, Central European Media Enterprises is my best idea for investing in the TV business. Cable network growth is stabilizing, it benefits from the writers' strike, and it is more easily transferred to the Web. Discovery Communications is best positioned here.
Enjoying Entertainment
Entertainment companies have exposure across most media sectors. Disney, Time Warner (TWX) , and News Corp. are the three primary plays. All three stocks offer relative performance upside in 2008 for different reasons:
Disney is very tightly managed and has great momentum from a multiyear hot streak in content production.
Time Warner is cheap and could see a dramatic restructuring under new management.
News Corp. offers the best growth, and estimates and guidance are too low unless the U.S. has a legitimate recession. News Corp. is my top choice.
Printing New Lows
Newspapers are looking at another tough year. Classified advertising is moving to the Web, and there is nothing newspapers can do about it. Even if they develop good Web businesses, they will lose massive market share at lower CPMs.
I expect another year of negative growth. The stocks have gotten hammered and could get a dead-cat bounce at any time, but the secular trend is clear. If you want to bottom-fish, Gannett (GCI) is by far the best idea. It is cheap and financially strong.
Too Much Static in Radio
Radio growth just went negative, and investors are only beginning to appreciate the secular challenges it faces. Local advertising is losing share to national, and radio is losing share to other music delivery mechanisms.
Multiples in the group have come in but remain at a significant premium to other media stocks. I believe radio in 2008 and 2009 will follow the path of newspaper stocks in 2007. Avoid the industry.
Glossy Returns for Magazines
Magazines have shown surprising strength -- advertisers like the narrow genres, and the industry has done a good job launching new titles and reinvigorating older titles. In addition, magazines have done a better-than-average job of moving their brands online. Meredith is an excellent relative performance idea for 2008, particularly if it turns out to be a tough year for the stock market.
The Not-So-Great OutdoorOutdoor has been a favored sector, but growth is decelerating fast. The stocks still trade at a significant premium multiple compared with other subsectors.
I believe that decelerating growth will make it difficult to make money on an absolute or relative basis in outdoor in 2008. Therefore, I have no long recommendations.
Movie Ads Moving Forward
Cinema advertising came into its own in 2007 with the IPO of National Cinemedia. Cinema advertising has a tiny market share in the U.S. compared with Western Europe. I believe market share will rise steadily for the next several years, fueling consistent mid-teens growth. NCMI is not a cheap stock, but I believe media investors will reward growth given the lack of growth across most of the sector.
One headwind NCMI will face in 2008 is tough box-office comparisons. This could also hamper the performance of theater stocks. Nevertheless, with great dividend support and underappreciated growth drivers from the transition to digital and 3-D, the recent collapse in theater stocks due to a weak fourth-quarter box office has set up a good entry point. Regal Entertainment will do particularly well if the stock market does poorly, because of its stable dividend that produces a current yield of greater than 6%.
-------------------------------
At time of publication, Birenberg was long Disney, Regal Entertainment, News Corp. and Central European Media Enterprises in client and personal accounts; and he was long Time Warner in a client account; but holdings can change at any time.
Steven Birenberg is president and chief investment officer of Northlake Capital Management, LLC. Northlake specializes in managing equity portfolios using a combination of exchange-traded funds and special situation stocks. Birenberg appreciates your feedback; click here to send him an email.
Friday, December 28, 2007
Thursday, July 19, 2007
Malicious Computer Code Found In Online Ads
80% of malicious computer code on the Internet is found in online ads, according to computer security firm Finjan Inc.
As an advertiser, stay away from putting your ads on content sites. This is where most the click fraud occurs. I ran a campaign for a client who sells all over the world. If I do place ads on content sites, I limit my risk by only bidding at most $0.05-$0.10 per click, and you should have seen all the fraud click throughs coming from Korea. This is just one example, but through my experience, click fraud for advertisers occurs on the content partners of Yahoo and Google.
Be safe out there,
j. Bruce Martin (Jeff)
http://www.salesdrivenmarketing.com/
The Internet Advertising Experts.
As an advertiser, stay away from putting your ads on content sites. This is where most the click fraud occurs. I ran a campaign for a client who sells all over the world. If I do place ads on content sites, I limit my risk by only bidding at most $0.05-$0.10 per click, and you should have seen all the fraud click throughs coming from Korea. This is just one example, but through my experience, click fraud for advertisers occurs on the content partners of Yahoo and Google.
Be safe out there,
j. Bruce Martin (Jeff)
http://www.salesdrivenmarketing.com/
The Internet Advertising Experts.
Sunday, July 15, 2007
Online Video Ad Rates for 3Q 2007
Video still doesn't provide the bang for buck that Internet search does, or any CPA ad buy can give you; however, many Fortune 500 companies that don't understand how to truly evaluate their ad buys, are paying:
$40-$50 CPM per short video ad.
Barron's 7/9 Technology Week article states consumers can tolerate maybe 3 video ads in a free hour long video program, which costs advertisers $150 per 1000 viewings ($0.15 in revenue per user).
Take high quality videos out of the equation, many advertisers will pay only $1.00 CPM for ads on user generated content.
j. Bruce Martin (Jeff)
www.SalesDrivenMarketing.com
$40-$50 CPM per short video ad.
Barron's 7/9 Technology Week article states consumers can tolerate maybe 3 video ads in a free hour long video program, which costs advertisers $150 per 1000 viewings ($0.15 in revenue per user).
Take high quality videos out of the equation, many advertisers will pay only $1.00 CPM for ads on user generated content.
j. Bruce Martin (Jeff)
www.SalesDrivenMarketing.com
Monday, March 05, 2007
Medical Focused Search Engine
MSN's Medstory Story by Mark Simon, Monday, March 5, 2007
LAST WEEK, Microsoft announced plans to buy health search engine Medstory. More than just a buy into a great product, that purchase might be Microsoft's secret weapon into winning the search wars.
As a vertical engine, Medstory's search functionality is fantastic. It's a genius at showing health material and weeding out non-health results -- as a search for an ambiguous term like "wine" will show. When I ran that search, the engine was great at avoiding non-health "wine" results (like results for wine stores or wine recipes); non-health listings only seemed to sneak in around results page 90. (On searches around medical personalities, though, Medstory's filtering looked a lot weaker.)
On top of its excellent relevance, Medstory is also spectacularly effective when it comes to granularity. Along with standard specialty searches like audio and video, Medstory allows searchers to drill down for items like drugs, experts, and even genes that relate to a keyword.
But Medstory's true value only begins with what it offers as a health-search engine. It will undoubtedly make a killer app within MSN Health & Fitness, but that's just the start. It also looks like its technology will be copied across all of the vertical content sections within the MSN portal, like MSN Autos, MSN Music, and MSN Money. Currently, those content areas offer only a site search within the content area itself, and access to run a non-specialized search on Live.com. Visitors to those content sections would gladly welcome -- and use -- a Medstory clone that's geared towards their topic of interest. And that new wave of vertical search traffic would create many more opportunities for highly targeted search advertising.
Medstory, meanwhile, is hardly ignorant of its potential for expanding beyond health alone. As CNet's Carolyn McCarthy points out, "Medstory's Web site hints that health is only the first topic for which it plans to implement its... technology," and that "other 'complex fields' of inquiry may be on the way."
Even vertical search, though, might not be the ultimate goal that's on MSN's mind with Medstory. If there's anything that AdCenter has taught the world, it's that Microsoft is a master at taking the data it already has, and repurposing it into smarter search. A small army of Medstory clones will allow Microsoft to do just that, at a whole new level -- as it will contain a huge inventory of behavioral data on vertically-minded searchers and search queries. MSN can use that data to deliver more relevant organic results, and better ads, within vertically-minded searches on Live.com itself.
Indeed, as CNet's Ina Fried reported Tuesday, Microsoft Chief Software Architect Ray Ozzie has made clear his plans to push Medstory out "within Microsoft's broader Live search engine;" and that, in Fried's words, "vertical search pages are just one of the possibilities." Presumably, Live.com is another one of those "possibilities."
All of this bodes extremely well for Live.com, as MSN pushes to move from search underdog to leader of the pack. More relevant listings -- i.e., better-targeted listings --mean more clicks, as Yahoo's post-Panama clickthrough surge has shown us. And it's not much of a leap from there to saying that more relevant listings generate increased traffic overall, long-term.
And so in buying Medstory, MSN has purchased a great asset within the health market; the next big thing in vertical search overall; and a golden ticket to making more money off of advertising within Live.com. I'd say that isn't bad for the purchase of a tiny search engine.
Am I 100% right about where Microsoft wants to go with the Medstory purchase? I think I am, but we'll have to wait and see. But I can guarantee that, wherever the planned purchase goes, Medstory is just the beginning of the story.
LAST WEEK, Microsoft announced plans to buy health search engine Medstory. More than just a buy into a great product, that purchase might be Microsoft's secret weapon into winning the search wars.
As a vertical engine, Medstory's search functionality is fantastic. It's a genius at showing health material and weeding out non-health results -- as a search for an ambiguous term like "wine" will show. When I ran that search, the engine was great at avoiding non-health "wine" results (like results for wine stores or wine recipes); non-health listings only seemed to sneak in around results page 90. (On searches around medical personalities, though, Medstory's filtering looked a lot weaker.)
On top of its excellent relevance, Medstory is also spectacularly effective when it comes to granularity. Along with standard specialty searches like audio and video, Medstory allows searchers to drill down for items like drugs, experts, and even genes that relate to a keyword.
But Medstory's true value only begins with what it offers as a health-search engine. It will undoubtedly make a killer app within MSN Health & Fitness, but that's just the start. It also looks like its technology will be copied across all of the vertical content sections within the MSN portal, like MSN Autos, MSN Music, and MSN Money. Currently, those content areas offer only a site search within the content area itself, and access to run a non-specialized search on Live.com. Visitors to those content sections would gladly welcome -- and use -- a Medstory clone that's geared towards their topic of interest. And that new wave of vertical search traffic would create many more opportunities for highly targeted search advertising.
Medstory, meanwhile, is hardly ignorant of its potential for expanding beyond health alone. As CNet's Carolyn McCarthy points out, "Medstory's Web site hints that health is only the first topic for which it plans to implement its... technology," and that "other 'complex fields' of inquiry may be on the way."
Even vertical search, though, might not be the ultimate goal that's on MSN's mind with Medstory. If there's anything that AdCenter has taught the world, it's that Microsoft is a master at taking the data it already has, and repurposing it into smarter search. A small army of Medstory clones will allow Microsoft to do just that, at a whole new level -- as it will contain a huge inventory of behavioral data on vertically-minded searchers and search queries. MSN can use that data to deliver more relevant organic results, and better ads, within vertically-minded searches on Live.com itself.
Indeed, as CNet's Ina Fried reported Tuesday, Microsoft Chief Software Architect Ray Ozzie has made clear his plans to push Medstory out "within Microsoft's broader Live search engine;" and that, in Fried's words, "vertical search pages are just one of the possibilities." Presumably, Live.com is another one of those "possibilities."
All of this bodes extremely well for Live.com, as MSN pushes to move from search underdog to leader of the pack. More relevant listings -- i.e., better-targeted listings --mean more clicks, as Yahoo's post-Panama clickthrough surge has shown us. And it's not much of a leap from there to saying that more relevant listings generate increased traffic overall, long-term.
And so in buying Medstory, MSN has purchased a great asset within the health market; the next big thing in vertical search overall; and a golden ticket to making more money off of advertising within Live.com. I'd say that isn't bad for the purchase of a tiny search engine.
Am I 100% right about where Microsoft wants to go with the Medstory purchase? I think I am, but we'll have to wait and see. But I can guarantee that, wherever the planned purchase goes, Medstory is just the beginning of the story.
Saturday, March 03, 2007
ROI Tracking for Web Marketing Campaigns
A good customer of mine asked how to market his services on ESPN.com w/o this web propoerty offering conversion metrics.
I did some brainstorming and here are some solutions:
1. Look into web analalytic packages that you can integrate into your website. This can be expensive, confusing and time consuming. At the end of the day, you want to simply know how many clicks you received, at what cost, and how much did it cost to drive each sale.
2. Place ads on ESPN with a unique URL, then every month, look at how much you spent with ESPN, and then look at your web logs. For this to work, your ISP's web logs need to be able to tell you the referring URL's for the sales you generated. Then, though a little more manually intensive, you can calculate your cost per sale on sites like ESPN by matching the number of sales from your site with the specific unique URL's. TIP: to start, just ad a "partner code" unique identifier, like ESPN, to every ad you put on ESPN.com.
If you have other solutions not mentioned above, please share them!!
BACKGROUND: My company calculates avg. cost per sale for our clients for free with their campaigns on Google, Yahoo and Microsoft's MSN by using the "scripts" placed on all the checkout screens. Just recently, due to pressure from big advertisers, sites like ESPN, and a few other major web properties, stopped using Google's adsense product because advertisers did not know where their ads were showing up -- maybe next to a few innaproprieste sites! As a result, ESPN now uses a different ad display company. Now, any biz can target their ads to appear on ESPN, and still pay on a pay-per-click basis; however, ESPN does not offer the free conversion tracking capabilities like Yahoo and Google offer.
I did some brainstorming and here are some solutions:
1. Look into web analalytic packages that you can integrate into your website. This can be expensive, confusing and time consuming. At the end of the day, you want to simply know how many clicks you received, at what cost, and how much did it cost to drive each sale.
2. Place ads on ESPN with a unique URL, then every month, look at how much you spent with ESPN, and then look at your web logs. For this to work, your ISP's web logs need to be able to tell you the referring URL's for the sales you generated. Then, though a little more manually intensive, you can calculate your cost per sale on sites like ESPN by matching the number of sales from your site with the specific unique URL's. TIP: to start, just ad a "partner code" unique identifier, like ESPN, to every ad you put on ESPN.com.
If you have other solutions not mentioned above, please share them!!
BACKGROUND: My company calculates avg. cost per sale for our clients for free with their campaigns on Google, Yahoo and Microsoft's MSN by using the "scripts" placed on all the checkout screens. Just recently, due to pressure from big advertisers, sites like ESPN, and a few other major web properties, stopped using Google's adsense product because advertisers did not know where their ads were showing up -- maybe next to a few innaproprieste sites! As a result, ESPN now uses a different ad display company. Now, any biz can target their ads to appear on ESPN, and still pay on a pay-per-click basis; however, ESPN does not offer the free conversion tracking capabilities like Yahoo and Google offer.
Friday, February 23, 2007
New Ad Platforms to Try In 2007
Give these new ad platforms a try in 2007:
www.Turn.com
www.adify.com
www.admob.com (mobile ad network)
www.spotrunner.com (TV)
Test and learn,
j.Bruce
www.salesdrivenmarketing.com
www.Turn.com
www.adify.com
www.admob.com (mobile ad network)
www.spotrunner.com (TV)
Test and learn,
j.Bruce
www.salesdrivenmarketing.com
Wednesday, February 14, 2007
Google Radio and Competitors
Why Can't Google Sell Premium Radio Ads?
by Erik Sass, Wednesday, Feb 14, 2007 8:30 AM ET
WITH THE DEPARTURE OF DMARC founders Chad and Ryan Steelberg last week, industry observers are buzzing about Google's ongoing attempt to penetrate the radio market with low-cost online ad sales and placement. One of the key issues is the quality of radio inventory Google can offer through dMarc's automated interface. Here, Google finds itself in a Catch-22.
Before it was acquired by Google, dMarc trafficked in remnant inventory--the "leftover" air time that stations sell at low prices at the last minute. To make dMarc's system attractive to advertisers, Google has to demonstrate that it's also effective in selling premium inventory. But they face a couple of major obstacles.
Foremost, Google doesn't allow advertisers to choose specific stations where their ads will run because they're selling remnant inventory. Station managers fear that identifying their station as the source of remnant inventory would undercut the price of their premium inventory. In short, advertisers might just wait until the station is desperate before buying.
According to the marketing materials Google sends to participating stations: "To protect your local [rate] card, we do not allow our advertisers to buy/target specific stations." This, in itself, is sufficient to deter most existing radio advertisers.
Conversely, station managers have their own reasons to be leery about turning over inventory--premium or remnant--to Google. dMarc's digital system begins selling remnant inventory automatically at the end of every business day, with no oversight from station employees. Managers don't know which ads will be broadcast the next morning. Although Google offers the option of reviewing and rejecting ads before they air, the "just-in-time" nature of the service makes this difficult in practice.
In addition, it costs about $75,000 to install dMarc. That's a pricey system, even for big radio stations that sell remnant inventory. Although Google offers a barter deal, installing the system for free in exchange for a certain quantity of remnant inventory, this involves charging a 50% commission on remnant ad sales over a period of several years--effectively removing any near-term incentive for station managers to participate.
Finally, radio stations in desirable markets employ sales teams to move their premium inventory, and station managers chafe at the idea of paying Google's commission on top of salaries (or agency fees). Sales executives also fear that cooperating with Google will undercut their sales teams.
In recent months, Google was reported to be negotiating with CBS Radio to buy more than $1 billion of premium inventory. But to offset the commission costs and the risk of sales "cannibalization," big radio groups like CBS will probably charge top dollar for their premium inventory.
Such an investment would constitute a risky gamble for Google--especially to fuel a system that hasn't yet attracted significant advertiser interest.
Investors have maintained unrelenting pressure on Google to keep share prices up, and they may find the high price tag of a big inventory deal excessive. Plus, Google's inability to offer premium inventory, in turn, means that demand will stay sluggish. Constrained by risk-averse shareholders, it will be difficult for Google to break out of this cycle of low demand and insufficient supply.
Adding to Google's woes, dMarc faces competition from other automated radio sales firms, like SoftWave Media Exchange. SoftWave allows marketers to choose stations and schedule their campaigns well ahead of time, while station managers can set prices and review campaigns before they run.
These capabilities have helped SoftWave build a network of stations in the top 50 markets that reach about 11 million listeners on an average quarter-hour basis, compared to just 947,000 for dMarc. Most importantly, station managers are comfortable selling premium inventory through SoftWave, with about 70% of its traffic falling in this category.
Meanwhile, Bid4Spots, a Los Angeles-based digital clearinghouse, employs a reverse-auction model in which multiple stations compete to sell their remnant inventory to a single buyer during weekly online auctions. Because stations have nothing to lose when unloading unwanted inventory, they drive prices down during the auctions, benefiting the buyers. More than 2,300 stations around the country are participating in the Bid4Spots system.
by Erik Sass, Wednesday, Feb 14, 2007 8:30 AM ET
WITH THE DEPARTURE OF DMARC founders Chad and Ryan Steelberg last week, industry observers are buzzing about Google's ongoing attempt to penetrate the radio market with low-cost online ad sales and placement. One of the key issues is the quality of radio inventory Google can offer through dMarc's automated interface. Here, Google finds itself in a Catch-22.
Before it was acquired by Google, dMarc trafficked in remnant inventory--the "leftover" air time that stations sell at low prices at the last minute. To make dMarc's system attractive to advertisers, Google has to demonstrate that it's also effective in selling premium inventory. But they face a couple of major obstacles.
Foremost, Google doesn't allow advertisers to choose specific stations where their ads will run because they're selling remnant inventory. Station managers fear that identifying their station as the source of remnant inventory would undercut the price of their premium inventory. In short, advertisers might just wait until the station is desperate before buying.
According to the marketing materials Google sends to participating stations: "To protect your local [rate] card, we do not allow our advertisers to buy/target specific stations." This, in itself, is sufficient to deter most existing radio advertisers.
Conversely, station managers have their own reasons to be leery about turning over inventory--premium or remnant--to Google. dMarc's digital system begins selling remnant inventory automatically at the end of every business day, with no oversight from station employees. Managers don't know which ads will be broadcast the next morning. Although Google offers the option of reviewing and rejecting ads before they air, the "just-in-time" nature of the service makes this difficult in practice.
In addition, it costs about $75,000 to install dMarc. That's a pricey system, even for big radio stations that sell remnant inventory. Although Google offers a barter deal, installing the system for free in exchange for a certain quantity of remnant inventory, this involves charging a 50% commission on remnant ad sales over a period of several years--effectively removing any near-term incentive for station managers to participate.
Finally, radio stations in desirable markets employ sales teams to move their premium inventory, and station managers chafe at the idea of paying Google's commission on top of salaries (or agency fees). Sales executives also fear that cooperating with Google will undercut their sales teams.
In recent months, Google was reported to be negotiating with CBS Radio to buy more than $1 billion of premium inventory. But to offset the commission costs and the risk of sales "cannibalization," big radio groups like CBS will probably charge top dollar for their premium inventory.
Such an investment would constitute a risky gamble for Google--especially to fuel a system that hasn't yet attracted significant advertiser interest.
Investors have maintained unrelenting pressure on Google to keep share prices up, and they may find the high price tag of a big inventory deal excessive. Plus, Google's inability to offer premium inventory, in turn, means that demand will stay sluggish. Constrained by risk-averse shareholders, it will be difficult for Google to break out of this cycle of low demand and insufficient supply.
Adding to Google's woes, dMarc faces competition from other automated radio sales firms, like SoftWave Media Exchange. SoftWave allows marketers to choose stations and schedule their campaigns well ahead of time, while station managers can set prices and review campaigns before they run.
These capabilities have helped SoftWave build a network of stations in the top 50 markets that reach about 11 million listeners on an average quarter-hour basis, compared to just 947,000 for dMarc. Most importantly, station managers are comfortable selling premium inventory through SoftWave, with about 70% of its traffic falling in this category.
Meanwhile, Bid4Spots, a Los Angeles-based digital clearinghouse, employs a reverse-auction model in which multiple stations compete to sell their remnant inventory to a single buyer during weekly online auctions. Because stations have nothing to lose when unloading unwanted inventory, they drive prices down during the auctions, benefiting the buyers. More than 2,300 stations around the country are participating in the Bid4Spots system.
Monday, February 12, 2007
Second City Stats
State of the Virtual World – Key Metrics, January 2007
Friday, February 9th, 2007 at 5:50 AM PST by: Zee Linden
In December I posted a number of key metrics for the first time. As part of our effort to drive toward complete transparency and openness, Logan Linden and I have upgraded some of our internal systems to create the Excel Workbook posted here. (If you need a viewer, click here, check back later for a PDF). Please consider this a preliminary version of the report. With feedback from the community we will continue to improve the data, the explanations and – most importantly, continue to add more data over time. As you can imagine we have more data to analyze than we have time and people - so thanks for your patience as we roll out more and more of the statistics you are asking for.
The Size of the Virtual World - January was another record month for Second Life in many ways. The size of the world, as measured by the virtual square kilometers of simulation, expanded 23% over December to 361 square kilometers. In fact, continued brisk sales have left us with roughly a two-week backlog for new Island order delivery. (Thanks to everyone for their patience on this.) The backlog has also affected our ability to expand the mainland sufficiently to meet. demand. As a result, the average price for mainland auctions is up higher than I think anyone would like to see it. Over the next several weeks, we hope to rectify both situations with a greater volume of server delivery from our supplier. With a recent release of more than 40 regions of mainland, the addition of a new mainland continent & and doubling of the daily release of new mainland regions I would hope that we will satisfy the seemingly insatiable demand and stabilize the mainland auction market to a more sustainable price.
The Virtual Economy - The virtual economy, as measured by LindeX volume and user to user transactions, grew faster than the land mass in January. User to user transactions in-world increased 37% to 6.1 billion consistent with the 47% increase in user hours from December. On the other hand, Linden Lab sold fewer L$ than we sold in December - primarily driven by January having 25% fewer weekend days than December causing the supply of L$ to increase at a slower rate of 18%.
What is the Linden Dollar? Technically, the L$ is a limited license right to participate in and use certain features of Second Life. The value of the L$, as reflected on the exchange, is based on the demand for a limited supply of L$. “Sources” – such as stipends to premium users and direct L$ sales on the exchange - are the ways in which Linden Lab put L$ into the virtual economy. “Sinks” – such as the L$ fee that we charge to post classified ads or upload images – represent ways that the L$ are taken out of circulation.
How does the LindeX work? The LindeX is the Linden Dollar exchange market. Linden Lab operates the exchange as a peer-to-peer trading platform in which users can buy and sell Linden Dollars from and to other residents. Just like in a real economy, there are consumers (the buyers of L$) and producers (the sellers of L$). The ratio of buyers to sellers is approximately 10 to 1. The number os sellers is consistent with the number of in-world business owners with “Positive Monthly Linden Flow“. In January, buyers and sellers traded just under USD $5 million– up more than 29% from December. That’s an average daily volume of USD $158,000. To be sure, this is still a very tiny economy relative to countries, states, cities or even towns in the real world, but it’s probably not hyperbole to surmise that it’s the fastest growing economy on the planet (up more than 9x in the last 12 months!). A handful of the largest buyers on the exchange are reselling them in local currencies, languages & payments systems - such as the Dutch Exchange here. Third party exchanges agree to use the Exchange Risk API to to identify sellers who’s historical behavior doesn’t match the amount of Linden Dollars they are selling.
How is the exchange rate determined? In the face of this growth, the floating exchange rate continued to hold steady throughout the month as Lawrence Linden has done an amazing job managing the exchange rate by managing the supply of L$ in-world balancing the “sources” and “sinks” of L$ in world. Our strategy is to keep the L$ sinks to Linden Lab high enough such that the only lever we need to balance supply and demand on the LindeX is to expand the supply by selling new L$ - something that we can do in real time in response to the vagaries of the market.
Resident Population vs Unique Users vs Log Ins vs Active Users. With this report, I’ve released some more detailed population information including a comparison of total resident population to unique residents who have logged in - both grew approximately 38% over December. Residents with Premium Accounts increased 16% to more than 57.7 thousand. There has been a lot of controversy regarding the Total Residents number on SecondLife.com (A Resident is a uniquely named avatar with the right to log into Second Life, trade Linden Dollars and visit the Community pages). Unique users represent approximately 63% of Total Residents.
Approximately 10% of unique users have logged in for 40 hours or more. Committed usage at this stage of Second Life’s growth requires a great deal of effort. Mitch Kapor has said that giving away Second Life for free to everyone is comparable to if we were giving out Apple ][+ computers for free to everyone in 1980. Clearly not everyone is going to find relevance, and be able to build on a technology at this early stage. Interestingly, it appears that blogging has a similar ratio of committed users to registrations as indicated by Live Journal.
Usage by country and gender. The top five countries are the US, France, Germany, the UK, and the Netherlands. I’ve also included the percentage breakdown of unique residents by self-reported age and self-reported gender.
Thanks again. That wraps up the update for January. I am committed to continually improving the data that we provide about the metrics within the virtual world and I look forward to reading your critical and constructive feedback and questions each month. I’ll try to incorporate more of them into the metrics and this analysis that I’ll publish each month.
Friday, February 9th, 2007 at 5:50 AM PST by: Zee Linden
In December I posted a number of key metrics for the first time. As part of our effort to drive toward complete transparency and openness, Logan Linden and I have upgraded some of our internal systems to create the Excel Workbook posted here. (If you need a viewer, click here, check back later for a PDF). Please consider this a preliminary version of the report. With feedback from the community we will continue to improve the data, the explanations and – most importantly, continue to add more data over time. As you can imagine we have more data to analyze than we have time and people - so thanks for your patience as we roll out more and more of the statistics you are asking for.
The Size of the Virtual World - January was another record month for Second Life in many ways. The size of the world, as measured by the virtual square kilometers of simulation, expanded 23% over December to 361 square kilometers. In fact, continued brisk sales have left us with roughly a two-week backlog for new Island order delivery. (Thanks to everyone for their patience on this.) The backlog has also affected our ability to expand the mainland sufficiently to meet. demand. As a result, the average price for mainland auctions is up higher than I think anyone would like to see it. Over the next several weeks, we hope to rectify both situations with a greater volume of server delivery from our supplier. With a recent release of more than 40 regions of mainland, the addition of a new mainland continent & and doubling of the daily release of new mainland regions I would hope that we will satisfy the seemingly insatiable demand and stabilize the mainland auction market to a more sustainable price.
The Virtual Economy - The virtual economy, as measured by LindeX volume and user to user transactions, grew faster than the land mass in January. User to user transactions in-world increased 37% to 6.1 billion consistent with the 47% increase in user hours from December. On the other hand, Linden Lab sold fewer L$ than we sold in December - primarily driven by January having 25% fewer weekend days than December causing the supply of L$ to increase at a slower rate of 18%.
What is the Linden Dollar? Technically, the L$ is a limited license right to participate in and use certain features of Second Life. The value of the L$, as reflected on the exchange, is based on the demand for a limited supply of L$. “Sources” – such as stipends to premium users and direct L$ sales on the exchange - are the ways in which Linden Lab put L$ into the virtual economy. “Sinks” – such as the L$ fee that we charge to post classified ads or upload images – represent ways that the L$ are taken out of circulation.
How does the LindeX work? The LindeX is the Linden Dollar exchange market. Linden Lab operates the exchange as a peer-to-peer trading platform in which users can buy and sell Linden Dollars from and to other residents. Just like in a real economy, there are consumers (the buyers of L$) and producers (the sellers of L$). The ratio of buyers to sellers is approximately 10 to 1. The number os sellers is consistent with the number of in-world business owners with “Positive Monthly Linden Flow“. In January, buyers and sellers traded just under USD $5 million– up more than 29% from December. That’s an average daily volume of USD $158,000. To be sure, this is still a very tiny economy relative to countries, states, cities or even towns in the real world, but it’s probably not hyperbole to surmise that it’s the fastest growing economy on the planet (up more than 9x in the last 12 months!). A handful of the largest buyers on the exchange are reselling them in local currencies, languages & payments systems - such as the Dutch Exchange here. Third party exchanges agree to use the Exchange Risk API to to identify sellers who’s historical behavior doesn’t match the amount of Linden Dollars they are selling.
How is the exchange rate determined? In the face of this growth, the floating exchange rate continued to hold steady throughout the month as Lawrence Linden has done an amazing job managing the exchange rate by managing the supply of L$ in-world balancing the “sources” and “sinks” of L$ in world. Our strategy is to keep the L$ sinks to Linden Lab high enough such that the only lever we need to balance supply and demand on the LindeX is to expand the supply by selling new L$ - something that we can do in real time in response to the vagaries of the market.
Resident Population vs Unique Users vs Log Ins vs Active Users. With this report, I’ve released some more detailed population information including a comparison of total resident population to unique residents who have logged in - both grew approximately 38% over December. Residents with Premium Accounts increased 16% to more than 57.7 thousand. There has been a lot of controversy regarding the Total Residents number on SecondLife.com (A Resident is a uniquely named avatar with the right to log into Second Life, trade Linden Dollars and visit the Community pages). Unique users represent approximately 63% of Total Residents.
Approximately 10% of unique users have logged in for 40 hours or more. Committed usage at this stage of Second Life’s growth requires a great deal of effort. Mitch Kapor has said that giving away Second Life for free to everyone is comparable to if we were giving out Apple ][+ computers for free to everyone in 1980. Clearly not everyone is going to find relevance, and be able to build on a technology at this early stage. Interestingly, it appears that blogging has a similar ratio of committed users to registrations as indicated by Live Journal.
Usage by country and gender. The top five countries are the US, France, Germany, the UK, and the Netherlands. I’ve also included the percentage breakdown of unique residents by self-reported age and self-reported gender.
Thanks again. That wraps up the update for January. I am committed to continually improving the data that we provide about the metrics within the virtual world and I look forward to reading your critical and constructive feedback and questions each month. I’ll try to incorporate more of them into the metrics and this analysis that I’ll publish each month.
Friday, February 09, 2007
Radio Ads By Google's dMarc
While Google started using dMarc to test radio ad sales last year, the initiative faced some obstacles. First, dMarc is affiliated with only around 700 stations--too few to provide radio ad inventory on the scale needed to achieve high revenue targets. Second, before the Google purchase dMarc mostly trafficked in remaindered ad inventory--unsold air time that is low-value by definition. Google has struggled to ramp up both the quantity and quality of inventory available through dMarc, with limited success. Although Google is rumored to be in talks with CBS Radio to acquire over $1 billion in premium ad inventory, so far nothing has come of the reported discussions.
Despite the rocky year with dMarc, Google remains intent on penetrating the offline or "traditional media" ad business. Over the last two years, it has experimented with selling newspaper and magazine ads--but these have been limited beta forays, and Google is circumspect about their results. Google's Vice President of Ad Sales, Tim Armstrong, has also indicated the company is interested in TV ad sales. Significantly, dMarc's digital ad placement system can also be used in TV.
Despite the rocky year with dMarc, Google remains intent on penetrating the offline or "traditional media" ad business. Over the last two years, it has experimented with selling newspaper and magazine ads--but these have been limited beta forays, and Google is circumspect about their results. Google's Vice President of Ad Sales, Tim Armstrong, has also indicated the company is interested in TV ad sales. Significantly, dMarc's digital ad placement system can also be used in TV.
Wednesday, January 17, 2007
Days & Times of Day to Advertise
M-F: Most Sales Occur Between (decending order)
11 a.m. - noon.
4 p.m. - 5 p.m.
3. p.m. - 4 p.m.
M-F: Range Most Sales Occur
10 a.m. - 1 p.m.
3 p.m. - 5 p.m.
M-F: Least Sale Occur
Midnight - 8 a.m.
Best Days of Week to Advertise
Monday - Tuesday: each day commands 18% of money spent during a week
Wednesday: 17% of money spent during a week
Thursday: 15% of money spent during a week
Friday: 16% of money spent during a week
Saturday: 9% of money spent during a week
Sunday: 8% of total sales.
Shopping Done at Work
58% of all online shopping is done at work.
Busiest online shopping day is Cyber-Monday (Monday after Thanksgiving).
Source: comScore Networks: Online shopping trends in 2005.
11 a.m. - noon.
4 p.m. - 5 p.m.
3. p.m. - 4 p.m.
M-F: Range Most Sales Occur
10 a.m. - 1 p.m.
3 p.m. - 5 p.m.
M-F: Least Sale Occur
Midnight - 8 a.m.
Best Days of Week to Advertise
Monday - Tuesday: each day commands 18% of money spent during a week
Wednesday: 17% of money spent during a week
Thursday: 15% of money spent during a week
Friday: 16% of money spent during a week
Saturday: 9% of money spent during a week
Sunday: 8% of total sales.
Shopping Done at Work
58% of all online shopping is done at work.
Busiest online shopping day is Cyber-Monday (Monday after Thanksgiving).
Source: comScore Networks: Online shopping trends in 2005.
Thursday, January 11, 2007
Holiday Season 2007 Media Spend Planning
Tip: Focus retail media spend budgets on the top days people buy online in 2007. j. Bruce www.SalesDrivenMarketing.com
Thursday, January 11, 2007E-Commerce Finishes Year Up 25% Over 2005
A report on the wrap-up of E-Commerce spending for 2006 helps to set the stage for the 2007 projections... comScore Networks released a report on consumer online retail spending at U.S. sites during 2006, including the holiday season. For the full year 2006, online retail spending reached $102.1 billion, marking a 24-percent increase versus 2005. Online holiday e-commerce was up 26 percent versus last year.
E-Commerce Retail Spending Summary (2006 vs. 2005 Non-Travel Billion $)
2005 2006 Pct Change
Full Year (Jan. 1 - Dec.31) $82.3 $102.1 24%
Holiday Season (Nov. 1 - Dec. 31) $19.6 $24.6 26%
Source: comScore Networks, January 2007
Gian Fulgoni, chairman of comScore Networks, said "The online holiday shopping season... played a vital role in the year's success, as spending accelerated during the final two months of the year...") Online retail spending saw several strong individual spending days during 2006, with 12 days during the November/December holiday season surpassing the $600 million mark.
In comparison, just six days in 2005 reached $500 million in online sales, with the top day registering $556 million (Monday, December 12, 2005). Wednesday, December 13 marked the heaviest online spending day of 2006 with $667 million spent, followed by Monday, December 11 and Monday, December 4. Monday, November 27 ("Cyber Monday") was surpassed 11 times during the subsequent weeks of the holiday season.
Top 12 Days of 2006 E-Commerce Non-Travel (Retail) Spending
Rank Date E-Commerce Spending ($ Millions)
1 Wednesday, December 13 $666.9
2 Monday, December 11 $660.8
3 Monday, December 4 $647.5
4 Friday, December 8 $638.2
5 Thursday, December 14 $634.4
6 Wednesday, December 6 $630.6
7 Thursday, December 7 $629.4
8 Friday, December 15 $623.9
9 Tuesday, December 12 $619.8
10 Tuesday, December 5 $612.3
11 Tuesday, November 28 $608.2
12 Monday, November 27 - "Cyber Monday" $607.6
Source: comScore Networks
The flow of online holiday retail spending in 2006, as compared to the previous year, demonstrated that online consumers pushed their buying later than ever. Spending growth during the first third of the season (Weeks 1-3) rose a modest 23 percent above 2005 levels, despite the week before Thanksgiving, which saw robust 30-percent growth versus the corresponding week in 2005.
The middle third of the season (Weeks 4-6), during which the greatest share of holiday e-commerce spending occurred, was consistent with the 26-percent growth demonstrated during the course of the season as a whole.
The final three weeks of the holiday season (Weeks 7-9) saw a major surge in spending as the procrastinators came out in full force, driving a 31-percent increase versus the corresponding weeks in 2005.
The week leading up to Christmas (week ending December 24, 2006) saw the biggest surge with a 45-percent increase versus the corresponding week a year ago, as consumers showed their faith in online retailers' ability to 'deliver the goods' in time for Christmas.
Thursday, January 11, 2007E-Commerce Finishes Year Up 25% Over 2005
A report on the wrap-up of E-Commerce spending for 2006 helps to set the stage for the 2007 projections... comScore Networks released a report on consumer online retail spending at U.S. sites during 2006, including the holiday season. For the full year 2006, online retail spending reached $102.1 billion, marking a 24-percent increase versus 2005. Online holiday e-commerce was up 26 percent versus last year.
E-Commerce Retail Spending Summary (2006 vs. 2005 Non-Travel Billion $)
2005 2006 Pct Change
Full Year (Jan. 1 - Dec.31) $82.3 $102.1 24%
Holiday Season (Nov. 1 - Dec. 31) $19.6 $24.6 26%
Source: comScore Networks, January 2007
Gian Fulgoni, chairman of comScore Networks, said "The online holiday shopping season... played a vital role in the year's success, as spending accelerated during the final two months of the year...") Online retail spending saw several strong individual spending days during 2006, with 12 days during the November/December holiday season surpassing the $600 million mark.
In comparison, just six days in 2005 reached $500 million in online sales, with the top day registering $556 million (Monday, December 12, 2005). Wednesday, December 13 marked the heaviest online spending day of 2006 with $667 million spent, followed by Monday, December 11 and Monday, December 4. Monday, November 27 ("Cyber Monday") was surpassed 11 times during the subsequent weeks of the holiday season.
Top 12 Days of 2006 E-Commerce Non-Travel (Retail) Spending
Rank Date E-Commerce Spending ($ Millions)
1 Wednesday, December 13 $666.9
2 Monday, December 11 $660.8
3 Monday, December 4 $647.5
4 Friday, December 8 $638.2
5 Thursday, December 14 $634.4
6 Wednesday, December 6 $630.6
7 Thursday, December 7 $629.4
8 Friday, December 15 $623.9
9 Tuesday, December 12 $619.8
10 Tuesday, December 5 $612.3
11 Tuesday, November 28 $608.2
12 Monday, November 27 - "Cyber Monday" $607.6
Source: comScore Networks
The flow of online holiday retail spending in 2006, as compared to the previous year, demonstrated that online consumers pushed their buying later than ever. Spending growth during the first third of the season (Weeks 1-3) rose a modest 23 percent above 2005 levels, despite the week before Thanksgiving, which saw robust 30-percent growth versus the corresponding week in 2005.
The middle third of the season (Weeks 4-6), during which the greatest share of holiday e-commerce spending occurred, was consistent with the 26-percent growth demonstrated during the course of the season as a whole.
The final three weeks of the holiday season (Weeks 7-9) saw a major surge in spending as the procrastinators came out in full force, driving a 31-percent increase versus the corresponding weeks in 2005.
The week leading up to Christmas (week ending December 24, 2006) saw the biggest surge with a 45-percent increase versus the corresponding week a year ago, as consumers showed their faith in online retailers' ability to 'deliver the goods' in time for Christmas.
Subscribe to:
Posts (Atom)