Tag Archives: Revenue

The Path to Success In The Face Of Ad-Blocking Technology

AdBlock

Many publishers and planners alike are lamenting the adoption of ad-blocking technology and the growth in its use by consumers. Even with the race to the lower end of costs per impression/action/conversion/whatever, there are strong revenue models in place where many businesses are reliant on those traditional methods for survival. The thing is, there’s a way to shift those dollars while also providing real value to the brands and the consumers they are looking to draw near. Unfortunately, many (like Barry Lowenthal  and the commentors on his Tech Insider post on this very subject) are choosing to believe that the sky is not falling and there is still a huge audience that still cares, so they are not paying attention to the shifts that are available directly in front of them. Luckily, we all have examples of this new (old) form of revenue all around us – integrated sponsorship.

What isn’t addressed in the space between skipping ads via ad-blocking, fast-forwarding or flat-out ignoring them – as we grapple with ways to maintain revenue – is that the consumers advertisers look to attract are searching for, and finding, value in other ways. Those consumers find that sponsorship of content that helps them learn, explore and discover resonates more strongly than programmatic advertising – which might only bombard them with innocuous advertising that either doesn’t provide relevant value or wastes their space with places/companies/communications they’ve already experienced.

We’re seeing the ad-blocking workaround online, on television, in music, within gaming and even overlaid in out-of-home. Monies that are diverted to the integrated presentation of content are more valuable if done properly than if just purchased at the scale that we have been seeing. When you look at the changes in browsers, the user engagement experience within mobile devices and the new announcements by Apple, the same-old, same-old is daunting. Yes, the shift might require different skill sets, reporting, integration and no easy way out. But, if the right steps are taken, the sky might not fall. Actually, the audience will see and, more importantly, care.

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VidCon Teases Keys to Engagement in a Shifting Marketplace

John Green Presenting the VidCon 2015 Industry Opening Keynote

John Green Presenting the VidCon 2015 Industry Opening Keynote

Attending a conference like VidCon can wear a person out – especially if the person is not the predominant target. With the majority of attendees being teens and pre-teens that are exceedingly enthusiastic about the YouTube celebrities, it’s far to easy to overlook what is truly special and energizing about this movement.  Vulture’s Bryan Moylan attempted to do this and, while he did capture some solid elements, they were nowhere near what the reality was in the Anaheim Convention Center. By actually attending VidCon, there are no promises that an older generation will completely “get” what’s going on. But, the sooner everyone realizes that the motivations of the majority generation of VidCon attendees is drastically different than the generations that came before, we’ll be quicker to get into the media innovations that will truly make a difference in the future.

One would think that being a part of the Industry Track – the most expensive entry – would count as being a bona-fide member… The thing is, being away from the groups of Creators and Community meant more than being on a different floor physically – it meant being in a different thought process of why people would want to participate in mediums that are so self-celebratory. Even though John Green (VidCon Co-Founder as well as the writer of Fault In Our Stars and a business partner with his brother, Hank, in starting VidCon as well as a burgeoning video/content industry) mentioned in his Industry Track Opening Keynote that only 18% of their company’s revenues came from advertising revenue, so many of the following tracks allayed the conceit that, somehow, we need to figure out how to work the traditional forms of media into this new phenomenon.

Attending VidCon confirms that the traditional media conceit will absolutely not work among this crowd, nor any crowd/generation beyond it. Certainly, there were numerous speakers that tipped their hat to a need for change in the way big business is done. We all know that it is easier and/or quicker to promulgate change when you are not really a part of big business (yet), but it was disheartening to hear from some brand people about how they needed to break into the content and disrupt the movement that is disrupting the norm. It just isn’t gonna happen.

Vulture’s Moylan does capture some essence from afar as it relates to the community that this community is a part of – one of shared experiences among large crowds that, without the internet and the new mediums, they would have not had the opportunity to connect with. Absolutely, there are chances to expand upon social good and education in addition to entertain. You just can’t overlook what this movement is writing the book on – true audience development.

As long as we keep our way-we’ve-always-done-it hats on, they are all looking to be movie stars. Take those hats off and we see it for what it is – people using a medium to build and foster audiences in ways that couldn’t be done previously. The most important thing to Creators – at first, at least – is gaining and fostering their audience. With relatively basic, YouTube-integrated products, they are more successfully doing what large brands with huge amounts of data and resources aren’t even aware that they need to do.  In the same way that Creators are working exhaustively to build an empire that they have no idea where it will lead them, the Community is looking to support and look up to those who put themselves forward in authentic ways.

Brian Solis of Altimeter put it succinctly when he said that traditional media’s challenge is in, “figuring out Attention Spans and Engagement”.  A huge, flourishing community is already on their way to determining what draws their attention and engages them. We just need to step in the room, stop projecting our beliefs and, just observe. We’ll hopefully get the point soon enough…

Mapping The Cost Of Innovation

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Many companies claim that they place an emphasis on innovation – and to a point, they are delivering – but when it comes specifically to marketing and buzz generation, companies set themselves up to fail in the innovation category.

Sure.  They may execute a campaign that utilizes a new technology or create a video that goes viral and generates an insane amount of views. They might even develop a marketing product that revolutionizes the industry or makes use of an existing product in ways nobody thought of before. But when it really comes down to it, most companies fail when bringing innovation to their marketing because they don’t plan or spend in the right way that lends to cost-savings down the road. Or, even worse, the execution doesn’t align with their strategy, so it hits the intended consumers like a thud.

Many innovative marketing products could be better if they were not treated as the end-all product that is oft copied, but as something that builds upon itself. Innovation done correctly is built with future iterations in mind so that products and development can be built on or added on cost-effectively. Too often, those new product are developed for one execution and then, upon its success, they do not allow for augmentation – forcing companies and their vendors to start from scratch.

Numerous factors lead to innovation that is not cost-effective.  Sometimes, due to a lack of vision or strategic planning.  Others might be due to a company’s lack of determination in supporting ongoing innovation expenditures. And then sometimes, products just don’t work out. All of those factors, are reasonable explanations for the waste of money but they don’t need to be. It really comes down to the ability to have long-term vision and communicate objectives well.

With the right executives supporting the long-term innovation play – where a specific near-term ROI may not happen – the environment can be ripe for marketing success for quarters and years to come.

Here’s how you do it — think more than one step ahead. Auto manufacturers build concept cars with the full knowledge that the car as a whole might not make it to the dealer, but components like auto-parking most likely will.  With that vision toward the future derivatives, even an unsuccessful campaign is not a waste of money. Be thinking of what components might be re-used in the future and make sure your team and vendors build those elements accordingly.

Granted, some form of smoke and mirrors is a component of your innovation process – and not in a devious way – you might think of innovation as putting the cart before the horse.  What it does is build an environment of hype that points to a vision of what the future could be. Be prepared to create assets that just show off what you are planning to do in order to effectively communicate expectations within the company. Utilize communication and spin control. If innovation is treated solely as a magic force that nobody has insight into, it is doomed to fail in the long run.  Even the major technology companies that have super-secret labs share some of their developments internally and sometimes, even externally. Maintaining to others that you are doing really cool things under a shroud of mystery will only lead to further questions on the money that’s being spent. Conversely, communicating too much without conveying the ultimate vision can be almost as damaging.

To the finance types, developing key KPIs to measure your success is a necessary component. Innovation is not an always-win proposition. You may not find huge marketing numbers to point to a winner. Come up with those elements that prove its working.  Is it money saved on future campaigns?  Is it press coverage of your marketing products? Is it related to time-to-market for future products? Is it tied to sales? Brand recognition? Whatever it is, make sure that is known to your team and management. Without those clearly understood KPIs, you’re effectively spending a lot of money on just an illusion…

When all is said and done, there needs to be an environment or atmosphere that welcomes trial and error. Intrinsically, there is no other undertaking that comes across so much success and failure with few traditional methods of measuring both. It is those corporations and organizations that truly embrace innovation (and not just tout that they are innovative) who most consistently bring successful innovations to market. Sometimes innovation can seem just outside your grasp (as an individual or an organization) but with vision, communication and execution, it will come back x-fold in marketing and revenue streams you might not have even considered at the onset.

Showing ReSTRAINt In Outdoor Advertising

FX launched their new series THE STRAIN last night to solid critical response and viewer numbers. With a creative force behind the basic cable series of Guillermo del Toro and Carlton Cuse, it certainly deserves a look.  Unfortunately, at least in Los Angeles and New York, that look was forced upon us in the guise of a disgusting worm coming out of an eyeball in large outdoor displays. As has been seen over numerous posts in this blog, outdoor advertising is something to be celebrated when used correctly, but I wish there had been some restraint with this campaign.

TheStrain

Beyond the unsettling nature of the image – and unsettling isn’t always a bad thing when trying to enter the cluttered fray of advertising – the placements were far too many when considering not everyone wants to see something graphic like this.  It hit home for me when my five year-old daughter started questioning why a worm would be coming out of an eyeball. While we’re able to control what our children see on TV and online, it’s not easy when driving around our neighborhoods. And, parents shouldn’t have to be concerned about where they drive to steer clear of disturbing advertising.

A blog entry on MoviePilot was published on the 30th of June stating that FX had called a mea-culpa and was going to take down the advertisements, but as of today (two weeks later) there hasn’t been a noticeable reduction in the outdoor impressions around Los Angeles. The reason probably had a bit to do with cost, but more so with the buzz that was being created and wanting to keep the awareness up until the series premiere. From a business perspective that could be well and good, but from a responsibility one, does it?

Certainly, advertising falls under freedom of speech and there shouldn’t be any censorship of what is displayed and what isn’t.  The problem is, if we as an industry don’t take responsibility or show restraint, others will come in and attempt to do it for us. If the trend keeps moving toward disturbing outdoor advertising and more parents start complaining about having to explain things to their kids before the time that it is reasonable to do so, there will be additional strains that curb creativity and revenue generation.

What’s Up With Narrow-Mindedness When Judging Technology Firms?

With the brewing storm of excitement/dismay/wonder surrounding Facebook’s acquisition of What’s App, the disconnect between expectations for – or public perception about – large conglomerates and new technology business seems to have widened. Much has been discussed about melding What’s App into Facebook’s interface or bringing advertising into What’s App’s in or just a Big Data play.  Perhaps it’s much simpler than that and has nothing to do with UX or building up the Facebook product.  Perhaps it has to do more with smart business and diversifying offerings. It just seems funny that the initial response is narrow-minded in relating the technology as merely an opportunity to bolster a company’s product.

Perhaps a lot of the thinking is related to Facebook’s relatively recent acquisition of Instagram.  Almost immediately, the photo service seemed fully integrated into Facebook.  But, to be fair, it was already there and there is still easy integration with other platforms that Facebook doesn’t own.

The thing is, would anyone question if Unilever or Nestle or some other company that owns a diversified group of products were to buy another relative upstart – especially if they had so much cash lying around?  The only concern people could or should have is the valuation placed on What’s App. That too can come back to the consideration of development resources and user base.  What’s App might not have been hugely known in the U.S. but it is around the world and by anyone who has family, friends in colleagues in other countries.

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In this connected world, we can no longer just focus on what’s happening in North America. Whether people realize it or not, most web-enabled products (websites, apps, software, etc.) have no borders. The use-cases might be different from market to market, but they each gain hold for very real business reasons.  In the case of What’s App, one direct reason that folks in the States don’t realize the value is that all-you-can-eat data and mobile packages are not commonplace around the world. It can be quite cost-prohibitive to send texts to your friend down the street, let alone around the world.

Another key piece is the fact that What’s App has moved into the subscription realm. As more offerings move behind a paywall, the lessons that can be learned from What’s App success in subscription could prove invaluable to its owners. The data is certainly not available to those who are not and if subscription-based usage come further into the market, those with real data are in the driver’s seat.

While Google has huge development teams working on disparate products and they still go out and acquire business that fit their portfolio, it should come as no surprise that others shouldn’t do the same.  Google has long been less defined by their search product than their suite of technologies that assist in many parts of consumers’ lives.  Facebook should not be any different.

The great thing about technology development (or any business development, really) is that code and process can be duplicated in other areas – if done correctly. Just because someone makes it big with an app or single product doesn’t mean that should be the end-all – no matter how successful it is. There is no such thing as growth while remaining flat. Any company with flat growth is actually shrinking. Once the business survives its start-up phase, growth is the hardest part. It doesn’t matter who you are or what technology you created. Sometimes you just have to grow by acquisition.

Who knows if the $19B is too much for What’s App. Looking at the $10B value associated with Instagram after Facebook paid a “measly” $1B for it, we can’t underestimate Facebook. There’s a clear reason why What’s App’s investor, Sequoia Capital thought it was worth it. The reality is that new technology companies and the products they launched with have matured more quickly, perhaps, than any other businesses in the world. We’ve got to stop being narrow-minded in our judgement of why they should be any different from any other traditional business.

Digital Upgrade At Your Own Risk – Brand Be Damned!

It seems that many apps and digital offerings have been updated since the beginning of the year – and an interesting trend has taken shape. What once was so wonderfully free – with few ad breaks and just slightly more privacy – has turned the corner and has become, well… less. Additionally, a huge sector of mobile users that excitedly upgraded to Android 4.3 before the end of the year have only further lamented the multitude of issues they’ve encountered since (with battery life reducing drastically being a consistent theme).  All of this leads to the question – To Upgrade or Not To Upgrade?  Unfortunately, in many instances, the consumer never gets the chance to question and the brand is damned to stumble.

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The gray area is meant to have content served within.

 

In the case of ESPN, they chose to re-brand their scores and news app to be more aligned with their colossal SportsCenter brand – changing it from Scorecenter to SportsCenter. That change makes sense – as does the twitter feed from their on-air personalities.  What’s more challenging is that the app is much more volatile (see above) with nothing showing much of the time.  Even more annoying is the fact that users now have to log in or register in order to automatically keep track of their favorite teams. For most, this might not be an issue, but for those trying to hold on to the last piece of privacy, that component might be a deal breaker. The fact that there’s now far more advertising with page overlays and in-feed ads only adds salt to the wound.

Diminished revenue generation is definitely an issue for all content providers, but it will be interesting to see how conversion plays out as more and more previously free apps move into the paid model. Since the new year, at least 4 of my news apps have moved behind a paywall – with only headlines available for free – rendering it useless. Hopefully, we’ll soon see the ramifications – one way or the other – on this change soon. We’ll definitely see if people have an appetite for paying in multiple places for content.

Even in the free realm, questionable choices have been made:

  • ABC force upgraded the app leaving users with a lot less content choices and a lot more ill will. Checking the ratings on the App Store and Google Play shows a very large distaste for something that was the standard bearer for innovative video presentation. With the previous usage and inability to skip through commercials, it made sense.  Who knows what will happen now.
  • Yahoo! changed their mobile product to supposedly simplify their content delivery. The only problem is that the UI leads one to believe that if they click on search, they’ll be able to search within the category (i.e.,Entertainment, Sports, Life), only to find that it takes them out of the app environment and to their general search interface.
  • Sporting News is struggling to keep from crashing as they deal with issues stemming from iOS 7 in their newest update. The fix might come with the supposed release of iOS 7.1 in March, but that brings us to the next issue.

With all of the concerns users have with upgrading already – and the worries of what they will have to learn or not have access to – is the update to iOS 7.1 or Android’s 4.4 KitKat one that people will venture into widely or quickly?  Microsoft is having it’s own issues getting consumers to upgrade Windows OS – especially as people realized how much was still left to be done with each release. Is the same lack of concern for the user experience – and the interest of meeting ambiguous deadlines worthwhile for consumers who are quick to pull the trigger and move elsewhere? A concern is that, among developers, there is an excuse permeating that everyone expects issues. How sad is that?

The debate can continue as to whether it’s human nature to always want the new bright and shiny object. But, it is pretty clear cut that when forced to the new, something good should be delivered.  If companies/brands keep forcing the issue, they might be damned to losing the loyalty of those who just want to keep interacting the way they always have.

HBO Presents Their Own Smart Freemium Model

In the past, HBO was able to drive subscriptions for their services based on the fact that they were a special premium product. Whether through buzz about their shows, awards their shows garnered, or the enabling of a few days a year of allowing users to sample their content, they were able to drive subscribers.  Now that the other premium cable networks, like Showtime and Starz, have gotten into the production of buzz and award-worthy original shows, HBO has to change their traditional ways.  One of those is HBO’s entry into their own form of the Freemium model. Freemium is generally the term used for product that are attained for free and then continued usage requires payment, or premiums. HBO’s version consists of them making the pilots of their new shows – GIRLS and VEEP – available on HBO.com, YouTube, DailyMotion, TV.com and multiple distributors’ free on-demand platforms the day after their premieres. The shows will also be available as free downloads on iTunes. To me, this is a smart model for HBO to induce viewers to move from freemium to premium and subscribe to the premium cable network to get their fix of those shows.

Hopefully, HBO's Freemium play will drive engagement and not apathy. (Courtesy of HBO)

Of course, they’ve got to hope that the shows are good enough to compel viewers to actually want to pay to see more. This model is probably a stronger one than the limited opening of the FreeView windows they’ve done in the past.  From a television programming perspective, I would even allow for more than just the pilot episodes to be streamed for free. As it takes a couple of episodes to become truly engaged, they should probably look to make three episodes available. The Freemium model is proving to be more and more successful as time goes on and HBO’s foray into that style of marketing or sampling could be a sign for the future of products that are not traditionally associated with that Freemium way of engagement.

In the music sector, Spotify has certainly established itself strongly on the freemium model, but the uptake to premium is an unscientific process. The numbers reported in a Billboard article covering 2010 and early 2011 showed a slow uptake, but that was before they launched in the US and picked up steam in their existing markets.  Even with that, users are running into issues as people start interacting with the product and deciding whether they want to shell out the money for the premium model. Spotify reports that since launching in the States in June of 2011, they have 3 million users, with only 20% subscribing.

On the gaming front, the poster child for the Freemium model is ANGRY BIRDS. They most recently launched on Facebook in February – where playing is free, but the opportunities to power-up or get other additional gameplay benefits comes with a cost. This incremental revenue may just be a flash in the pan as we see whether Facebook users actually care to purchase additional powers, but they don’t seem to be hurting amidst all their other growth on multiple platforms that all effectively launched on either the true freemium model (limited level gameplay with payment for more) or a nominal premium for slightly robust access and the payment opportunities for even more.

The freemium model across the board is increasing and revenues are driving up.  Steve Smith wrote about it on his MediaPost blog recently. Smith cites an IHS Screen Digest Mobile Media Intelligence Service report that projects that Freemium will drive 64% of app revenue by 2015.

I give HBO credit for trying something different as a strategy to remain above the competition in an ever-tightening race with more and more outlets for the type of content they are known to provide.  Will this lead to other businesses to delve deeper into their own forms of the Freemium model? If so, it’s got to be more compelling that what might have been a very early form of Freemium – giving away free food samples in stores hoping that consumers will buy. Regardless of the product, there’s got to be a real desire by the end users to get more. Hopefully, for HBO, these shows are good enough to drive that craving for more.