As of the time of this posting, there's one more hour to go before SingTel starts the festivities leading to the launch of Apple's new iPhone 3G(S). It will be interesting to see if the crowd matches the number of people queuing for the original iPhone 3G some 12 months ago.
Here are some photos leading up to the launch:
All interested Singaporeans are directed to join the queue. However, all business customers are still welcome to visit the mobile operator, which is indicated by a iPhone 3G (S) signboard.
The crowd is building up slowly as the mobile operator mounted an extensive tented environment to cater for all weather conditions.
These individuals are likely to be one of the 1st 100s who will get their hands on the new iPhone 3G (S).
As Singapore awaits the launch of iPhone 3G(S) by SingTel on 10th July 2009, it is perhaps an appropriate time to see how the iPhone has influenced the mobile browsing habits of mobile users in the country. I'll be using data from StatCounter which uses a sample size of more than 3 million websites with more than 4 billion pageviews per month.
As you can see from the graph above, Nokia's browser (presumably Symbian) has swapped the leadership position with iPhone's Safari browser over many months since the start of 2009. Interestingly, there is a divergent break in this flipping trend between the two browsers sometime last month. I decided to do a more focused analysis on this by using data for the last three months (i.e. April to July 08):
It seems that the divergent break started on 14 June 2009 and this gap between the browsers widened since 1st July 2009. As of 8 July 2009, more than 38% of all websites were accessed Nokia's mobile browser in Singapore. In comparison, slightly more than 26% used iPhone's Safari to access websites in Singapore in the same period. It will be interesting to see the effect of iPhone 3G(S) on the mobile browser competition in Singapore following their launch tomorrow.
How is this information useful for marketing professionals? Simply said, the two dominant mobile digital platforms today are Nokia and Apple. I'm sure advertisers know this trend, either through popular perception or through word-of-mouth from the marketing community. Nonetheless, the need to justify and convince senior management such as the CFO or CEO on investments in mobile marketing can now use these trends as the rationale to perhaps develop apps to tap on this increasingly tech-savvy target audience. I'm sure a picture speaks a thousand words for your internal proposal to get the budget needed to meet your marketing objectives.
The television and newspaper have been the two most widely used mediums by advertisers to maximize the reach of their products and services. Presumably, this reach is a result of the limited broadcast spectrum and newspaper license issued by the government respectively, which allows these media owners to establish distribution channels that reaches individuals in an economic manner.
It is obvious that the two mediums communicate the advertising message in a different mode. The television has the capacity to deliver the message in a multimedia format that encapsulates the visual and audio elements that are creatively expressed in a 30 second format used by broadcasting stations as the standard advertising unit. This visceral creative in the video advertisement hopes to evoke the emotion of viewers that will either raise the awareness of the advertiser or motivate them to make a spontaneous follow-up action following the viewing of the advertisement. An example of such an ad that encapsulates these two elements is from Monster.Com:
Given the deliberate thought process that goes into the development of the video advertisement (not to mention the production cost which rises in tandem with the creative effort), it is perhaps frustrating to see the video ads being stymied by the lack of reach from broadcasting stations that segments the daily programming schedule into different time belts with varying advertising rates. Accordingly, advertisers with restricted budgets can run their video advertisements in limited frequency in the time belts which are most widely watched by viewers. Alternatively, advertisers can run their video ads in other time belts with relatively lesser audience but at a higher frequency.
This approach seems to run counter to the assertion that television is a medium which advertisers can use to maximize reach. While broadcast stations may position their rates as competitively structured with low cost per reach, the reality is that this metric is meaningless if the frequency of advertisement is limited. Realistically, consumers who are exposed to the video advertisement will perhaps need to view it more than once to appreciate the advertising message. It is this reality that advertisers must accept as the true economics of advertising on the mainstream television medium. This harsh reality is magnified further by the growing use of digital video recorders (DVRs) which allows the advertisers’ target audience to bypass their video advertisements in an increasingly time-shifting viewing environment.
Many progressive advertisers have since turned to the Internet to distribute their creative video productions. Broadband penetration has been growing on an annual basis which accompanies the declining trend of dial-up subscriptions still offered by Internet service providers. As such, there are many channels available today that takes advantage of this high broadband penetration for online video distribution.
The obvious choice would be Youtube, which is perhaps the most consistent rich media site on the Internet today. There is also Facebook which allow videos to be uploaded and viewed by the network of friends associated to the user (who placed the ad in the site). Finally, there are branded portals which offer rich media video solutions for advertisers seeking to distribute their video advertisements to the supposedly large online community.
While the Internet is clearly an alternative channel to distribute advertisers’ video messages, it is perhaps more important for the advertiser to appreciate the advantages the Internet offers over the television medium. The most obvious advantage is the scientific measurement of the number of online users who viewed the video advertisement. Unlike the television medium (specifically viewers receiving free-to-air channels on non-cable boxes) that tracks viewing on random sample of panelists, the online medium gives advertisers metrics such as the date, time and viewer’s geographical location (based on the user’s IP address). These tools are readily available on Youtube to measure the effective distribution of the uploaded video.
The commercial solutions offered by portals offer a more sophisticated array of online tools for advertisers. For example, AsiaOne’s Targeted Video Commercial service allows the advertiser to select the segment within the portal to distribute the video advertisement. This allows the advertisement to be targeted to a specific target audience who will presumably appreciate the video’s subject matter and context. Moreover, advertisers will know the percentage of all users who finished viewing the entire video advertisement. Finally, advertisers can maintain a consistent brand positioning by customizing the design of the panel (or what is commonly known as the skin of the video player) that broadcast the video advertisement.
At this point, it seems that the advertiser has an economic solution to distribute their video advertisements that sufficiently meets their objectives of maximizing reach. However, I would argue that advertisers should now consider the influence of social media as the next evolution of online video advertisement, or what I term it as video advertisement 2.0. In an earlier posting, I put forth the argument that social media is now a mainstream medium which is embraced by millions around the world. As such, it is perhaps fitting to integrate the elements of social media into the production of the video advertisement so as to take advantage of this medium.
What does this really mean? The advantage of social media lies in the power to influence or instigate the viral effect of a message (which includes advertising). Accordingly, the creative development of a video advertisement 2.0 should involve piquing the interest of the target audience, rather than communicating a direct message. This is an evolutionary change, which will probably deter some advertisers as it risk missing the opportunity to deliver the supposed message to the target audience. Yet, I would argue that the online user of today is perhaps more discerning then before and is usually sceptical at any advertising message that interrupts their online experience. As such, the challenge to advertisers and creative agencies is to develop a video advertisement that really sets the people talking. This “talking” is expressed through the many online forums today, none more evident than on social media sites such as Facebook and Friendster, as well as blogs written by anyone who have Internet access. This is the viral effect which, if harnessed properly, will have a positive multiplier effect on the level of awareness associated with the advertiser. More importantly, individuals with a strong social network have inadvertently become the advertiser’s ambassador by extending the distribution of the video advertisement to their network. As such, the collective viral effect would have generated the word-of-mouth effect which translates into higher reach for the same video advertisement.
Hence, it can be concluded that the viral effect of video advertisement 2.0 will require a rethink on the creative process leading up to the video production. Thankfully, we have some progressive advertisers that worked with agencies that share this belief in incorporating social media in video advertising. One of the best examples is the T-Mobile UK’s Life’s About Sharing campaign.
Filmed in Liverpool, it triggered a tremendous viral effect on the Internet that led to the development of a second video advertisement being produced.
Samsung has dabbled into this field by coming up with the Extreme LED sheep advertisement that promotes the technology that drives its LED television products.
The advertisement generated more than 8 million views on Youtube and generated more than 150,000 postings on the Internet on the same keywords used on the video site.
Finally, there's the Evian Babies commercial which generated more than 6 million web entries. Herein is another example of producing videos which trigger responses online.
As always, the power of the Internet allows advertisers to measure the social influence of the video advertisement that incorporates social media. A case study of this measurement methodology is offered by Visible Measures which tracked the viral effect of the Nike commercial below.
In this example, the company tracks engagement, viral distribution and re-production into parodies on the same Nike advertisement. These measures form the justification on extending the reach of the video advertisement with 2.0 tools and social media strategies.
It is perhaps fitting that I end this posting with an example closer to home. Here's one of the many MobileOne advertisements which has created a parody on Youtube
M1 Commercial
Parody of M1 Commercial
Hence, the Internet is an alternative video advertisement channel, and the economics is definitely more compelling than television. What is recommended, however, is for advertisers to take advantage of the social media element in their video production process. A carefully thought out advertisement will achieve a multiplier effect to extend the reach of the advertiser. As the start of this posting suggest, it is the objective of the advertiser to maximize reach, and this is certainly one way to do so.
It has been a long time since I last blogged on my site. Back then I made a promise to myself to get involved in a blogging site that actually requires me to pay money to host the site as I'm a strong believer in ROI (i.e. blog more to justify the monthly fees!). It is not surprising, however, to have the realities of family and working life dictating how much time I can set aside to develop an editorial piece which is worthy to be published in my blog. After all, I am determined to document my personal observations on digital media so that it serves as a journal of my journey in this exciting medium.
It is perhaps fitting that the topic of interest in my observation today is on the realities of social media marketing for businesses today. Running a Google search on this subject will give you 234,000,000 pages in 0.23 seconds. As the number suggests, it's no longer an emerging tool. It is a tool that needs to be taken seriously by the community.
Arguably, it is no longer surprising to hear of a fellow online user having a Facebook account. The service is not only accessible on the PC/laptop/Netbook, but is also on major mobile platforms such as the iPhone, Symbian handsets such as the Nokia N79 and even on the Blackberry.
In fact, Facebook is one of the very, very few Blackberry applications that is certified by RIM to have the clearance needed to be installed on any Blackberry device, despite the high enterprise security features associated with such business-oriented devices.
Indeed, Facebook has transformed the social media scene in the maturing Web 2.0 online world. You can even get a specific URL for yourself now that personalize your Facebook URL in the online world (though I still curse my slowness in getting my personal vanity URL from the site). Under this backdrop, we now see the number of unique visitors to Facebook have exceeded MySpace in November last year, with a staggering 113 million unique visitors in May 2009 alone.
Clearly, social media is no longer a medium used exclusively by tech geeks or net-savvy Generation Y individuals. In fact, Facebook is now used by a broader spectrum of users across various demographic groups. As the graph below illustrates, the site is beginning to see a more broad based participation, signally that such sites
are evolving into a mainstream communication channel.
It is perhaps not surprising that many businesses are trying to get into the social media space in the hope that this will be the next alternative marketing channel. After all, Nielsen Online suggested in a March
2009 report that social networks and blogs are now the fourth most popular
online activity, and ominously ahead of email which is the incumbent
communication protocol since the evolution of the Internet. These sites
collectively host online member communities which are visited by 67% of the
global online population. In particular, Hitwise reported that Facebook users
spend close
to 19 minutes on the social networking site, representing the period where
companies on these social networking platforms can potentially reach out to. This is probably one of the main reasons why established media channels such as CNN chose to integrate Facebook in their online programming such as the recent live telecast of Michael Jackson's memorial in Los Angeles.
Clearly, this rising number represents the size of the target audience which
companies seek to engage and establish an online relationship with. Assuming
that such relationships are positive, the company would have created a parallel
communication channel online to engage and build brand equity with these online
users.
Invariably, questions will be asked on the sustainability of these social
networking sites and virtual worlds that companies are presumably clamoring to
establish their presence in them. Indeed, one of the pioneers in social
networking, MySpace, had to retrench many of
their global staff strength as they seek to compete with the rising
popularity of Facebook.
But how do companies really do business on these social media sites? Is it simply the case of setting up an account or a page in Facebook, with the belief that it will be populated naturally by the more than 200 million users on this social media site?
I would argue that businesses should not use the size of these online communities as the motivating force to establish their online presence in
these social networking sites. These social media sites are a conduit for online communities to interact on issues
which may be relevant to the nature of the business’s operations. This
interaction forms the opinions and feedback which companies can use as a basis
to improve their value proposition to their target audience. Companies should
therefore set aside resources such as a dedicated team that is focused on
reviewing issues discussed on these social networking sites and if need to,
respond to such feedback that allows the company’s position to be delivered with
ambiguity. This is important as the nature of such online interaction is
uninhibited and is not moderated by anyone on these social networking sites. As
such, it is critical that companies respond
unequivocally to issues which may adversely influence the public’s
perception of the company. Accordingly, a proactive and well-thought through
process to interact with these online communities will reinforce the brand
positioning of these companies, and foster a situation where relationships with
their target audience can be built over the long run.
Concurrently, these consumers of social media actively provide demographic
and psychographic data so as to get the most benefit and value from their online
social networking experience. In doing so, these users are presenting companies
insights on the behavioral and lifestyle preferences which are used to
fine-tune the targeting of potential customers on these social networking sites.
As these users in the online communities actively interact with their network
through site-specific applications, uploading and sharing of photographs and
discussions through dedicated group forums, companies will get to experience a
richer set of data about these users. As a result, the targeting of
communication materials to these users is more specific than what conventional
online marketers will do on websites.
Herein lies the realities of social media marketing. It requires a dedicated and deliberate effort to ensure staff are trained to take advantage of this Web 2.0 communication channel. Remember, it is now mainstream, and it will be foolish to ignore it.
This week's entry is inspired by a cartoon character.
Content is king, but sourcing and distributing that content to the audience cost money. Revenue is needed to cover the costs, make a decent enough profit and reward all the content producers for the work taken to create that content in the first place.
This model works brilliantly during the early years where content acquisitions are limited to a few large content producers who have the economic capacity to do so. Examples such as sending a reporter deep into a war zone, junkets in major entertainment events,etc. are indications on where the investment are needed to acquire content which the editors feel is relevant to their readers. But the upside is that money was flowing in, allowing content producers to make, at times, good money.
Next came the communication path which used to be vertically integrated into the editorial enterprise. They own the media platform, and till today, the traditional print media is still active and have a audience size that is sufficiently enough to keep the lights on (for now). When the Internet appeared and became a mass medium, the content producers decided that it's time to monetize this new communication path, complementing the huge profits off their traditional products. After all, content is king, and people will be willing to purchase content for its editorial value.
What happened following their push into the Internet communication path is a now a case study on how the digital economy is FUNDAMENTALLY different from the bricks and mortar world. Content producers started by offering content at subscription rates in the early years. However, there is no credible payment mode such as a Paypal, WorldPay or PayMo to give the early Internet users confidence to disclose sensitive payment information over a new medium such as the Internet. Subscription rates plummeted, and content producers start to worry about the revenue model needed to make money off the Internet. Costs started escalating as content acquisition costs remain unchanged, and needs a revenue stream to justisfy the investment in that area.
Their next step is to move into advertising. Banners started appearing on the websites, and sales teams are compensated by how much inventory they can sell off the site. Content is now offered free, and the hope is that every Internet user will be motivated to visit these content sites and drive up the pageviews needed to fill up the CPM inventory. It's sounds like a simple enough model, and content producers then felt that it is probably a better way to make money than the subscription model.
Fast forward to 2009, and we now see the number of content producers shutting down or struggling to make money in a "free content in exchange for advertising" model. Here are some examples of venerable content producers who struggle to keep the lights on, and those who didn't (i.e. shutting down):
This problem is not restricted to venerable content producers. Newer upstarts also faced the same problem of monetizing their online assets. A recent article from The Economist highlights some of these new companies who face problems, though some of them managed to find new parents who are now struggling with these problems as part of their acquisition:
The 4 companies above are just a snapshot of what today's supposedly post-Google IPO, Web 2.0 poster cholds are trying to do to make money off their users. There's still Flickr (sold to Yahoo) and Bebo (sold to AOL) who are still trying to monetize their users accessing their sites. The interesting thing is that there is minimal, if not no content acquisition cost. Content is uploaded by the users, shared in many innovatve channels, and distributed across multiple platforms (online, mobile, OOH digital screens, Kindles, iPhones, Blackberrys, etc.). It does sound like a great economic model.
But the cost of distribution remains unchanged. We still need servers to host the software to manage the content. We need terabytes of hard disk space to store the content. We need the bandwidth to distribute the content to global distribution points. Even if the content acquisition cost is minimal (e.g. SpiralFrog), the fact remains that licensing fees need to be paid to other parties in the music ecosystem (e.g. music publishers, writers, authors, etc.).
What I have described above sounds bleak. Does that mean that Content is NO LONGER King? Can we make money off the Internet at all?
I thought so too for some time till I attended a Web Wednesday event at the Geek Terminal in downtown Singapore on 25th March 2009. It was a speaker from Sulake, a company that originated from Finland and creator of the Habbo social networking site . It is profitable, and made a profit of 50M Euros in their last financial year. Average session time is around 40 minutes and they have close to 100M users as of last year. How did they make money then? 3 important points stand out:
1. There is a revenue model from Day 1 Access is free, but upgrades are only available if you make payment.
2. Pricing model Focus on micropayments. Small payment anounts limits resistance to payments.
3. ENter a market where payment modes are readily available Payment modes are not restricted to credit cards. It includes SMS payment, pre-paid gaming cards sold off 7-11s, and other micro-payment methods which charges low processing fee for payments as low as US$0.30.
Now all this sound like common sense, and it's being practiced by at least this company who is still privately owned and profitable. The fact remains that this is a company that has relied on basic common sense and financial discipline to ensure that the company grows organically at a stready rate. While Sulake may not have the billion dollar valuation as Facebook, it does have a sustainable revenue stream that allows valuation to be based on actual cash flow.
The Internet does make money for some. The question is whether one is willing to rely on their common sense to do so.
According to a Gartner report released on 11 March 2009, Apple and Samsung have established their presence in the global smartphone market. Both vendors have experienced triple digit percentage growth y-o-y, and clearly they are eyeing at how much more market share they can take away from Nokia and RIM.
Considering that Samsung has released more models than Apple (the one and only model), it will be interesting how much resources will continue to flow into the development of smartphones.
Many in the industry have identified smartphones as the next category where users will interact online from these mobile handsets while experiencing the rich multimedia functions these smartphones have today.
Clearly, Nokia now have a headlight at the rear view mirror, and these headlights from Samsung and Apple are getting nearer and nearer.
Table 1 Worldwide: Smartphone Sales to End Users by Vendor, 4Q08 (Thousands of Units)
One of my mandates in my current role as a Database Sales Manager is to define the entry points where data is captured, managed and stored in a CRM-focused database. The obvious entry point is the web where the website owners use registration pages to get their users to sign up for benefits restricted to registered users.
This strategy worked in the early years on the Internet as users explored with a childlike innocence on how the digital medium brought them to places unimaginable before. Registering their details online seemed to be the only path to get more information from website publishers.
It was only when website publishers decided to work with marketing agencies to target their users that triggered frustrations of being bombarded with irrelevant email advertisements and the fear that their private data is being used by third parties that are not related to the website they registered in the first place.
As the Internet user matures and gains more experience over the years, website publishers are beginning to see their users imposing their right to manage their data and privacy. Increasingly:
More users are using fake names and details to get themselves registered on websites (with the same intent of getting "more" information then un-registered ones).
Email providers like Yahoo and Gmail give users the ability to have multiple email addresses at no incremental cost, vis-a-vis the old days when emails are tagged with the ISP we're registered with. Invariably, a user can have multiple email addresses used for different sites, some of which could be dormant and not checked over the years.
Any attempt by website owners to send irrelevant email advertisements to their users are met with contempt and revolt, leading to a drop in site traffic and lower pageviews (i.e. lower CPMs).
Undoubtedly, marketers are facing a challenge to engage with their users. Most websites do away with the registration process completely, contented to focus on featuring banner ads and Google sponsored links to generate revenue. Some sites simply left their registration pages dormant, given that they too know that the onerous data fields to compel users to sign up is no longer relevant for today's Internet user.
Are the days of targeted and segment marketing over?
Interestingly, it is not, and even more surprisingly, there are sites where you can get real and factual information about the user. There are even details that describe the social life of these users, allowing preliminary insights on the lifestyle choices these users make.
Where are these sites? Try Facebook or LinkedIn. Users over there contribute their real details without any hesitation.
The question is how we mine these data as a marketing professional? That's where a social web contract is needed between the user and the website owner. You can read a very interesting post by Jeremiah Owyang, a social media analyst and researcher in Forrester.
More on this in my next post. For now, please enjoy the slide below.
The next incarnation from Microsoft Labs shows how a banking organization can potentially tap on digital technologies to deliver value to their customers. Armed with a myraid of digital platforms such as tablets, PDAs, smartphones and location-based technologies, organizations can now "organize" digital data into useful chunks for specific situations. One such example is how a customer's investment portfolio can be tracked over a fixed period and matched in real-time at any location with an average performance from similar banking customers.
Continuing my previous post on the future of the digital space, Microsoft Labs created this video in a Target store on how digital technologies will influence how consumers will make their purchasing decisions within the mall. We are not talking about simple RFID and mobile barcodes which many companies are pushing in this space.
The simple cellphone plus an "always-on" environment allows demand (consumer) to match supply (mall owner), thereby creating an efficient ecosystem that is win-win on both sides.
There is no doubt that the next 15 years will bring a fundamental change in how we interact with digital platforms to communicate, network and exchange information with the community. Please take a look at this video below from Microsoft Labs and you'll realize that your finger is the mouse, and how you use the finger to initiate action goes to show how gestures will be the way forward to communicate. Imagine having a Wii around you 24/7.
