Saturday
U.S. E-commerce Gains in 2Q 2003
By Robyn Greenspan
E-commerce scored during the second quarter of 2003, increasing 27.8 percent over 2Q 2002 to $12.477 billion, according to the Census Bureau of the Department of Commerce.
E-commerce sales in the second quarter of 2003 remained steady from the first quarter, accounting for 1.5 percent of total sales, while online retail accounted for 1.2 percent of total sales in the second quarter of 2002.
If July's online shopping traffic is any indication, the third quarter could continue the year's upward trend. Findings from comScore indicate that online shoppers spent more than $500 million on apparel in July, as parents and students began back-to-school preparations. The firm reports online spending on apparel and accessories was up 43 percent in June and 44 percent in July versus 2002 levels, and more than 34 million Americans visited an apparel site in July — up 12 percent from June.
According to Nielsen//NetRatings, Ebay was the most widely used shopping aggregator, reaching 30.6 percent of the active online population logging on from home and work in July 2003. Amazon reached 26.1 percent of surfers in July 2003, followed by MSN Shopping with 11.5 percent of surfers.
In July 2003, PriceGrabber was the fastest growing in the shopping search category with a year over year growth rate of 127 percent. NexTag experienced a significant increase in traffic growing 116 percent.
E-commerce scored during the second quarter of 2003, increasing 27.8 percent over 2Q 2002 to $12.477 billion, according to the Census Bureau of the Department of Commerce.
E-commerce sales in the second quarter of 2003 remained steady from the first quarter, accounting for 1.5 percent of total sales, while online retail accounted for 1.2 percent of total sales in the second quarter of 2002.
If July's online shopping traffic is any indication, the third quarter could continue the year's upward trend. Findings from comScore indicate that online shoppers spent more than $500 million on apparel in July, as parents and students began back-to-school preparations. The firm reports online spending on apparel and accessories was up 43 percent in June and 44 percent in July versus 2002 levels, and more than 34 million Americans visited an apparel site in July — up 12 percent from June.
According to Nielsen//NetRatings, Ebay was the most widely used shopping aggregator, reaching 30.6 percent of the active online population logging on from home and work in July 2003. Amazon reached 26.1 percent of surfers in July 2003, followed by MSN Shopping with 11.5 percent of surfers.
In July 2003, PriceGrabber was the fastest growing in the shopping search category with a year over year growth rate of 127 percent. NexTag experienced a significant increase in traffic growing 116 percent.
Search: The Importance of Indexing
By Masha Geller
Editor
While the East Coast was stuck in the dark last weekend, California-based Overture was in the process of launching one of the most significant system upgrades in company history, which set off a flurry of activity in the search marketing arena.
The company introduced two new matching options: Phrase Match and Broad Match, which do not require web users' search requests to exactly match advertiser's purchased keywords.
With Phrase Match, Overture's director of product development John Slade explained, an advertiser's ad will appear if a consumer query contains any part of the advertiser's keyphrase - for example, an advertiser who owns "Hawaii vacation" will be matched to "family Hawaii vacations." With Broad match, Slade says, the process goes a step further, only needing a keyword to appear somewhere in the query -- the "Hawaii vacation" advertiser's listing would come up in searches for "Hawaii beach vacations."
Additionally, Overture now offers advertisers the option of excluding certain words, has enhanced the interface to allow advertisers to track conversions, and if that wasn't enough, the company yesterday launched what is quite possibly the world's largest search index of approximately 3.2 billion documents. The index was developed by the former Web search unit of Fast Search and Transfer (FAST), which Overture acquired in April.
In addition to increasing the size of the index by over 1 billion documents, the launch features several significant relevance enhancements that will improve the ranking of URLs.
"Increasing the index size while also working to improve relevance offers consumers and Overture's syndicated partners the best of both worlds," said Greg Notess, a search engine expert and editor of SearchEngineShowdown.com. "The enlarged index helps users find even more of what is available on the Web and demonstrates Overture's commitment to continuing to improve their Web search products."
Overture's index is entering a crowded field.
Nielsen//NetRatings also announced yesterday that it has enhanced its search engine reporting to better reflect the web user's experience. The Nielsen//NetRatings NetView syndicated audience measurement service is refined and improved by reassigning pages that are delivered by default when a user enters a non-existent URL, otherwise known as a Domain AutoSearch error page.
The AutoSearch feature in Microsoft Internet Explorer helps users find the content they are seeking more quickly by integrating the search process directly into the browser address bar. When a non-existent URL is entered, users receive a Domain AutoSearch error page served by their preferred search engine. This automatic error page states that the URL does not exist and is typically the result of a mistyped URL. It is not a user-requested search and it does not provide a search of web-based content. Reassigning these pages out of the NetView search category creates a more accurate understanding of user-directed search activity, better reflecting actual online user behavior and the total volume of search engine use.
"Responding to our clients' needs, we recognized the importance of advancing the industry's understanding of search engine use," said Sean Kaldor, vice president of corporate marketing and business development, NetRatings.
And Nielsen//NetRatings isn't alone. Hitwise, an online competitive intelligence service, also announced earlier this week that its new Search Terms tool for the U.S. market, which is based on the Internet usage of more than 10 million U.S. Internet users, is now available. The Hitwise Search Terms tool reports on which keywords surfers use across 50,000 websites, and 160 industries.
Unlike other services that offer this information for a single search engine, or results based on a small sample of Internet users, Hitwise provides search term data across the top 70 global search engines based on the behavior of 25 million global internet users.
"As more and more marketers use website search engine optimization and paid keyword campaigns to create brand awareness and generate sales, having detailed information on how customers use search engines is critical," said Chris Maher, General Manager of Hitwise, North America.
Editor
While the East Coast was stuck in the dark last weekend, California-based Overture was in the process of launching one of the most significant system upgrades in company history, which set off a flurry of activity in the search marketing arena.
The company introduced two new matching options: Phrase Match and Broad Match, which do not require web users' search requests to exactly match advertiser's purchased keywords.
With Phrase Match, Overture's director of product development John Slade explained, an advertiser's ad will appear if a consumer query contains any part of the advertiser's keyphrase - for example, an advertiser who owns "Hawaii vacation" will be matched to "family Hawaii vacations." With Broad match, Slade says, the process goes a step further, only needing a keyword to appear somewhere in the query -- the "Hawaii vacation" advertiser's listing would come up in searches for "Hawaii beach vacations."
Additionally, Overture now offers advertisers the option of excluding certain words, has enhanced the interface to allow advertisers to track conversions, and if that wasn't enough, the company yesterday launched what is quite possibly the world's largest search index of approximately 3.2 billion documents. The index was developed by the former Web search unit of Fast Search and Transfer (FAST), which Overture acquired in April.
In addition to increasing the size of the index by over 1 billion documents, the launch features several significant relevance enhancements that will improve the ranking of URLs.
"Increasing the index size while also working to improve relevance offers consumers and Overture's syndicated partners the best of both worlds," said Greg Notess, a search engine expert and editor of SearchEngineShowdown.com. "The enlarged index helps users find even more of what is available on the Web and demonstrates Overture's commitment to continuing to improve their Web search products."
Overture's index is entering a crowded field.
Nielsen//NetRatings also announced yesterday that it has enhanced its search engine reporting to better reflect the web user's experience. The Nielsen//NetRatings NetView syndicated audience measurement service is refined and improved by reassigning pages that are delivered by default when a user enters a non-existent URL, otherwise known as a Domain AutoSearch error page.
The AutoSearch feature in Microsoft Internet Explorer helps users find the content they are seeking more quickly by integrating the search process directly into the browser address bar. When a non-existent URL is entered, users receive a Domain AutoSearch error page served by their preferred search engine. This automatic error page states that the URL does not exist and is typically the result of a mistyped URL. It is not a user-requested search and it does not provide a search of web-based content. Reassigning these pages out of the NetView search category creates a more accurate understanding of user-directed search activity, better reflecting actual online user behavior and the total volume of search engine use.
"Responding to our clients' needs, we recognized the importance of advancing the industry's understanding of search engine use," said Sean Kaldor, vice president of corporate marketing and business development, NetRatings.
And Nielsen//NetRatings isn't alone. Hitwise, an online competitive intelligence service, also announced earlier this week that its new Search Terms tool for the U.S. market, which is based on the Internet usage of more than 10 million U.S. Internet users, is now available. The Hitwise Search Terms tool reports on which keywords surfers use across 50,000 websites, and 160 industries.
Unlike other services that offer this information for a single search engine, or results based on a small sample of Internet users, Hitwise provides search term data across the top 70 global search engines based on the behavior of 25 million global internet users.
"As more and more marketers use website search engine optimization and paid keyword campaigns to create brand awareness and generate sales, having detailed information on how customers use search engines is critical," said Chris Maher, General Manager of Hitwise, North America.
Friday
Domino's and eBay Team up to Mesh Offline and Online
Media Post
Domino’s Pizza, the recognized world leader in pizza delivery, announced that it is teaming up with eBay, The World’s Online Marketplace, to bring the online experience to Domino’s customers nationwide. To kick off the program, beginning August 14, Domino’s will deliver to its customers, via 15 million box-tops, special “Back to School” offers including the opportunity to win one million eBay Anything Points (which is the equivalent of $10,000 to spend on items available on eBay.com) or a chance to win one of 100 Domino’s gift certificates valued at $10.00 each. Other promotional offers include discounts on the purchase of textbooks at Half.com, an eBay company, and a special incentive in eBay’s computer category.
The second promotion – eBay’s “Stay True to Your School” college football campaign - presented by Domino’s Pizza, will be delivered through an additional 15 million box-tops, reaching college football fans and alumni across the nation. Special prizes include an Ultimate Homecoming Trip valued at $15,000, which awards the winner and five friends a trip to a college football game including $6,000 cash, airfare, hotel accommodations, rental car and game tickets. In addition, ten recipients will receive a $500 Domino’s Pizza gift certificate, and 100 winners will receive a Domino’s Pizza gift certificate valued at $10.00.
Domino’s Pizza, the recognized world leader in pizza delivery, announced that it is teaming up with eBay, The World’s Online Marketplace, to bring the online experience to Domino’s customers nationwide. To kick off the program, beginning August 14, Domino’s will deliver to its customers, via 15 million box-tops, special “Back to School” offers including the opportunity to win one million eBay Anything Points (which is the equivalent of $10,000 to spend on items available on eBay.com) or a chance to win one of 100 Domino’s gift certificates valued at $10.00 each. Other promotional offers include discounts on the purchase of textbooks at Half.com, an eBay company, and a special incentive in eBay’s computer category.
The second promotion – eBay’s “Stay True to Your School” college football campaign - presented by Domino’s Pizza, will be delivered through an additional 15 million box-tops, reaching college football fans and alumni across the nation. Special prizes include an Ultimate Homecoming Trip valued at $15,000, which awards the winner and five friends a trip to a college football game including $6,000 cash, airfare, hotel accommodations, rental car and game tickets. In addition, ten recipients will receive a $500 Domino’s Pizza gift certificate, and 100 winners will receive a Domino’s Pizza gift certificate valued at $10.00.
Thursday
First Quarter revenues up 7% - IAB
By Erin Joyce
New figures out from the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC) show that Internet advertising revenues were up by 7 percent to $1.7 billion in the first three months of 2003, the second straight quarterly increase in two years.
Details about key drivers are expected in September when the IAB has more complete data. But the early results suggest a continuation of current trends that helped boost the second half of 2002, namely the hot paid search market and the growth of rich media.
For now, at least, top line numbers the IAB has collected show two straight quarters of rising online ad sales in a two year period. The first quarter's $1.692 billion in revenue was up by 7 percent from the fourth quarter of 2002, and up by 11 percent compared with the first quarter of last year, the IAB said.
The bureau said the first quarter figures in the Internet Ad Revenue Report, which was conducted for the IAB by Price WaterhouseCoopers, were estimated by surveying and compiling 2003 first-quarter data from the top 15 online ad sellers. They were then extrapolated to calculate the total industry revenue figure.
"Advertisers follow the timeless creed of go where your consumers are, and the interactive advertising market is no exception," said Greg Stuart, president and CEO of the IAB, in a statement. "Consumers are going online in droves and the ad dollars are following closely behind."
Tom Hyland, a partner with PricewaterhouseCoopers and chair of the accounting firm's new media group, said the early results show that the future for interactive advertising appears to be on strong footing and poised for gradual and sustained growth.
"Many of the factors contributing to last quarters up-tick seem to have held momentum, including improved data for advertisers to analyze as they have now been engaged in the market for a longer period of time," he said.
The survey collected data about online advertising from Web sites, commercial online services, free e-mail providers, and all other companies selling online advertising. The IAB said the first and third quarter revenue reports are estimates, with the actual figures being released along with second and forth quarter data.
New figures out from the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC) show that Internet advertising revenues were up by 7 percent to $1.7 billion in the first three months of 2003, the second straight quarterly increase in two years.
Details about key drivers are expected in September when the IAB has more complete data. But the early results suggest a continuation of current trends that helped boost the second half of 2002, namely the hot paid search market and the growth of rich media.
For now, at least, top line numbers the IAB has collected show two straight quarters of rising online ad sales in a two year period. The first quarter's $1.692 billion in revenue was up by 7 percent from the fourth quarter of 2002, and up by 11 percent compared with the first quarter of last year, the IAB said.
The bureau said the first quarter figures in the Internet Ad Revenue Report, which was conducted for the IAB by Price WaterhouseCoopers, were estimated by surveying and compiling 2003 first-quarter data from the top 15 online ad sellers. They were then extrapolated to calculate the total industry revenue figure.
"Advertisers follow the timeless creed of go where your consumers are, and the interactive advertising market is no exception," said Greg Stuart, president and CEO of the IAB, in a statement. "Consumers are going online in droves and the ad dollars are following closely behind."
Tom Hyland, a partner with PricewaterhouseCoopers and chair of the accounting firm's new media group, said the early results show that the future for interactive advertising appears to be on strong footing and poised for gradual and sustained growth.
"Many of the factors contributing to last quarters up-tick seem to have held momentum, including improved data for advertisers to analyze as they have now been engaged in the market for a longer period of time," he said.
The survey collected data about online advertising from Web sites, commercial online services, free e-mail providers, and all other companies selling online advertising. The IAB said the first and third quarter revenue reports are estimates, with the actual figures being released along with second and forth quarter data.
Wednesday
The Latest in Research Tools & Findings
By Underscore Marketing
Today there is enough research completed demonstrating the value of online advertising to re-sod a football field. Here’s a look at what’s available and what’s to come.
one of the obstacles many in this industry first saw as preventing general market advertisers from migration to the Web was a dearth of research. It seemed as though there just wasn’t enough of the good stuff to convince old-school marketers to make a larger commitment to the Web as an advertising medium.
Blessedly, the industry got down to business early on and started producing research.
This research has come in all shapes and sizes, from basic counting like audience traffic measurement from NetRatings and comScore to the more Byzantine proclamations from Forrester, to the downright confounding readings from the Oracle of Delphi somewhere hidden inside the offices at Jupiter.
Now, there has been enough research done to demonstrate the value of online advertising to re-sod a football field.
Understand that research isn't just being done for its own sake. Well, okay; perhaps that being done by the Pew Charitable Trusts through the Pew Research Center is. But research is a big business. One agency executive we heard from said that they spend upwards of $750,000 per year on research. There are marketing organizations that spend much more than that on an annual basis.
But the point of this column isn't to talk about the research business; it is to look at the present and prognosticate the future as it pertains to research covering the online media and marketing industry. So, let's get moving, shall we?
In Use
“We believe online research both for Website development and online marketing is a mandatory component in any serious marketer’s arsenal of advertising and branding weapons,” says Duff Anderson, VP of Research and Development at iPerceptions. “It is no longer a question of ‘would be nice to have’ but rather ‘being able to compete’ with those who are using the latest tools and technologies to support their decisions. The challenge for all of us now is to understand how to harness that power and consolidate it with existing traditional methodologies.”
Research is deemed only as important as its application. We asked some experts in the field what kinds of research they thought was most important now to those considering online marketing activity.
For online media and marketing professionals, the most important research tools in use today are tools that can cross-tab media usage with product usage.
Knowing a site's traffic and the size of its audience both in terms of sheer numbers as well as demographic breakdowns is still important, but it has become secondary to more sophisticated research tools that demonstrate not only "how many" use a site but "who."
Atlas DMT's SiteFinder tool can provide this kind of information to its users. Similar to Mediamark Research Inc.'s MRI+, which provides multimedia audience research to over 450 advertising agencies, the tool attempts to link user behavior with media usage. But where syndicated research like MRI and @plan are based on recall survey data, SiteFinder is based on actual behavior users have exhibited on an advertiser's site. Instead of using media vehicles based on user behavior and product usage by proxy, vehicle selection can be based on demonstrated behavior instead.
"The beauty of Site Finder is not that it provides an obvious list of sites that an experienced planner could find with syndicated data. Rather, it is the unintuitive sites that represent true buying opportunities to reach customers in unique ways, or recommendations on how to best reach tertiary target audiences," says Young-Bean Song, Director of Analytics & Atlas Institute at Atlas DMT.
Lynn Bolger, EVP of Agency Relations at comScore also sees a similar trend in use of research. Determining the intersection of media and product usage has become much more commonplace with online media planning than it once was.
"The most important tool for our clients is the AiM [Audience Insight Measures] report. As more of them take the traditional report, more of them are using this like they would, say, an MRI," she says.
It differs from MRI or @plan in that it combines metered data with survey data, rather than relying solely on the memory of a respondent filling out a questionnaire.
It would seem that getting closer to the person as they are a person is the most desired use of research in marketing today. Is the promise of Peppers and Rogers closer at hand than we might imagine or are we still just catching Zeno's arrow by the fletching?
"Very much along the line of getting closer to consumers as 'people' rather than only as 'interviewees,' it seems that there is a growing trend to take the personal status of the individual into account in terms of his/her profile of how innovative they are,” says Laurent Flores, CEO of CRM Metrix, referencing the much-regaled book by Edward Keller and Jonathan Berry. "Indeed, much is currently said on the so-called 'influencers' or 'opinion leaders.'"
Important Developments and Findings
Some of the most important developments in media and marketing research are those that bring customers, businesses, and the products that link them together in the same place. This place, of course, is media. And the media we are talking about is online.
"If you look at the progression online, it started with hits, then you have panels," says Manish Bhatia, SVP of Products and Services at NetRatings. "The next step is to help marketers understand how the Internet impacts their plans; to help them understand what spending has what kind of impact on their marketing to affect reach/frequency."
The marketing landscape doesn't consist of just a single medium, after all. When we talk about what impact something might have for online, we are talking about what the implications are for the marketing project at large.
Initiatives like the sort that NetRatings has under way will aid marketers in planning and allow them to link the offline with the online components under consideration.
Bhatia points out that the first step is media allocation. One must understand what contribution Internet makes to the overall marketing strategy. Then buyers and sellers will more clearly understand how to make investment decisions involving the online media.
"Media research assessing the optimal advertising mix and use of online, print, TV and radio has proven enormously valuable to advertisers and agencies over the last six months," says Jeffrey Graham, VP of Client Development at Dynamic Logic. "The IAB-sponsored XMOS studies have been a great boon for advertisers seeking ways to find efficiencies in their media mix."
This follows with what Bhatia of NetRatings suggests. The ongoing efforts of the industry to place online media in the proper, larger, context of marketing at large is one of the most essential developments in research in recent months.
“We've stopped seeing interactive in isolation and started looking at how it works in conjunction with other media,” says Kathryn Koegel, Director of Research & Industry Development at DoubleClick.
"This type of research is rapidly developing and evolving, and will become even more insightful and precise," says Graham.
This is because of something research showed us over the last year: There is a shift in consumers’ media consumption from TV and Print to Online; and online is the best way to reach people at work. These two facts require that research demonstrate what role online plays in the larger marketing mix and what impact it has.
"Consumers are spending hours everyday online, and most with high-speed connections at work," says Song. "We know online media consumption and online shopping activity peak during work hours especially at lunch time. From a macro perspective, advertisers and their agencies can’t ignore this forever."
Integrating this knowledge is part of what new research initiatives are about, hence the IAB's XMOS studies that have been conducted for the last year.
Other developments involve the oft-mentioned aspect of online media and marketing labeled search, that until recently garnered little public attention in the realm of research.
The IAB Search Road Show last month brought a lot of powerful information about search marketing, and sponsored search links specifically, to the fore.
Most of the findings were facts that many in the industry have found as a result of their own initiatives, but having it made public by a third party legitimized our collective knowledge and brought it before major agencies and marketers.
One individual at a research provider who chose not to speak for attribution said that at this individual's company, they were working on a tool that would allow users to cross-reference search terms with media usage.
And finally, among the most powerful developments in research and the Web relates to product development, among the most important but least recognized component of our business.
"Reach of the Internet can finally allow marketers to go beyond identifying consumers just in terms of socio-demographic profiles or buying behaviors to now qualifying people in terms of their innovativeness, their opinion leadership or their 'lead usage,' says Flores of CRM Metrix. "The use of such profiling variables is perfect for the Web, as you can now target those people that are the most relevant to your needs during your product development cycle."
By using a tool they developed and applying their findings, "Professor Von Hippel at MIT conducted a study using this approach with 3M… and found that products that were improved (or even created) through this process enjoyed eight times the sales volume of standard products and went on to capture twice the standard market share," says Flores.
According to Judit Nagy, Senior Market Research Manager of Yahoo!, though there are several online marketing and media planning tools under development (WebRF, WebRF Plus, Atlas, etc), she thinks it more important to remain focused on initiatives executed and managed by the IAB and the ARF than just specific research product being issued.
The IAB’s involvement with online media planning tools, audience measurement, and audience traffic reporting rules (the most recent effort relates to “online entity naming structures) and the ARF’s attention to thesis focusing on online audience planning tools, and universal media planning languages and methods will be the key influencers and drivers for what the industry is going to see in the coming months from leading research companies.
What We Need More Of
All in all, everyone agrees we are now getting plenty of research we once weren't. But everyone also agrees there is still some research we lack.
According to Bhatia of NetRatings, being able to measure duplication between media is among the most important, as it will give media professionals and marketers what they need to have a real sense of what kind of contribution online makes to overall communication delivery. Essentially, it will give us combined reach and frequency across media. To do this, we need to find a way to commit data fusion.
NetRatings currently has researchers looking at the two data-sets to come up with an algorithm that would allow planners to understand what the duplication is between those two media outlets.
For clients who have a need right now, NetRatings will customize some research, but the hope is that by using some of this research developing today it will one day be made available to all clients on a syndicated basis. According to Bhatia, they are hoping to have some fused data sets available by the end of the year for customers to look at.
When we asked Song of Atlas what he thought we needed more of, he said we need more research that is comparable to offline. Two examples: "the impact of brand exposure duration, and the impact of online advertising on offline sales."
It is known that online ads impact offline behavior. What is lacking is a critical body of research that directly links how online budgets increase offline sales and traffic to stores.
"The ironic thing is that our traditional counterparts have been doing this for a long time," points out Song. "Whether it’s correlating pre and post store traffic and sales to regional ad campaigns, or couponing and tracking grocery scanning data, online research has not delivered the kind of research traditional advertisers use everyday to help make budget decisions."
Brand Exposure Duration is just what it sounds like: the amount of time a user is exposed to an ad. We have it in broadcast relative to commercial length. We have it in Print relative to ad size.
"This will be a key way for advertisers to quantify what they are getting for their media dollars and for publishers to differentiate their inventory," says Song.
He also thinks this kind of metric will complete the reach/frequency picture because it adds an element of time. It is really more of a means of valuation of reach and frequency.
One thing is certain, however. Reach and frequency have not and will not go away as a chief concern among marketing and media professionals working in the online space.
"From our perspective, the industry needs to resolve two things: reach/requency and the other one we are hoping… is to help articulate how to use panel data with site data," says Bhatia of NetRatings.
There has been an ongoing argument in the industry about which numbers to believe – panel or site. Bhatia posits that both are valid and depending on what kind of questions you want to answer, each is useful.
Certainly finding a way to marry these figures sensibly will give the kind of reach and frequency accuracy that is necessary for a tool to be reliable for projective purposes.
Nagy from Yahoo! thinks what we need to better understand are the audiences we already have access to.
"There is a true need for online marketers to understand their online audience," she says. "It would be great to see more research focusing on online consumer lifestyles and leisure characteristics, their acceptance level of advertising messaging, and their expectation of online marketing campaigns and communications."
If one knows more about marketers’ online audience, it will allow for better targeting capabilities and more complex campaigns.
“We believe that the leading edge of online research can and should provide valuable new or less obvious insights into predictive user or consumer behavior and preferences,” offers Anderson. “For example, using model-based, tree-growing algorithms that learn predictors from the data itself, you may discover that you have four distinct self-identified customer segments that you have been addressing with only two distinct strategies.”
Flores of CRM Metrix thinks what we need more of are two things. One, he thinks we need more research that measures and demonstrates the ROI of Marketing. To him, there is no excuse for taking focus on the effectiveness of marketing away from the demonstrable effects of its own activity. Secondly, he believes more research that really brings insights into the role of the brand Website will be useful.
"Ten years down the road I think many firms may kick themselves for not realizing the marketing value of their online presence sooner," muses Flores. "The market as a whole needs to understand how brand Websites can be integrated into the marketing mix to extend the shelf life of ad campaigns and serve as the foundation for building long-term, profitable customer relationships."
One thing is sure: There is a lot more of this now than disturbing new studies that find studies are disturbing.
Today there is enough research completed demonstrating the value of online advertising to re-sod a football field. Here’s a look at what’s available and what’s to come.
one of the obstacles many in this industry first saw as preventing general market advertisers from migration to the Web was a dearth of research. It seemed as though there just wasn’t enough of the good stuff to convince old-school marketers to make a larger commitment to the Web as an advertising medium.
Blessedly, the industry got down to business early on and started producing research.
This research has come in all shapes and sizes, from basic counting like audience traffic measurement from NetRatings and comScore to the more Byzantine proclamations from Forrester, to the downright confounding readings from the Oracle of Delphi somewhere hidden inside the offices at Jupiter.
Now, there has been enough research done to demonstrate the value of online advertising to re-sod a football field.
Understand that research isn't just being done for its own sake. Well, okay; perhaps that being done by the Pew Charitable Trusts through the Pew Research Center is. But research is a big business. One agency executive we heard from said that they spend upwards of $750,000 per year on research. There are marketing organizations that spend much more than that on an annual basis.
But the point of this column isn't to talk about the research business; it is to look at the present and prognosticate the future as it pertains to research covering the online media and marketing industry. So, let's get moving, shall we?
In Use
“We believe online research both for Website development and online marketing is a mandatory component in any serious marketer’s arsenal of advertising and branding weapons,” says Duff Anderson, VP of Research and Development at iPerceptions. “It is no longer a question of ‘would be nice to have’ but rather ‘being able to compete’ with those who are using the latest tools and technologies to support their decisions. The challenge for all of us now is to understand how to harness that power and consolidate it with existing traditional methodologies.”
Research is deemed only as important as its application. We asked some experts in the field what kinds of research they thought was most important now to those considering online marketing activity.
For online media and marketing professionals, the most important research tools in use today are tools that can cross-tab media usage with product usage.
Knowing a site's traffic and the size of its audience both in terms of sheer numbers as well as demographic breakdowns is still important, but it has become secondary to more sophisticated research tools that demonstrate not only "how many" use a site but "who."
Atlas DMT's SiteFinder tool can provide this kind of information to its users. Similar to Mediamark Research Inc.'s MRI+, which provides multimedia audience research to over 450 advertising agencies, the tool attempts to link user behavior with media usage. But where syndicated research like MRI and @plan are based on recall survey data, SiteFinder is based on actual behavior users have exhibited on an advertiser's site. Instead of using media vehicles based on user behavior and product usage by proxy, vehicle selection can be based on demonstrated behavior instead.
"The beauty of Site Finder is not that it provides an obvious list of sites that an experienced planner could find with syndicated data. Rather, it is the unintuitive sites that represent true buying opportunities to reach customers in unique ways, or recommendations on how to best reach tertiary target audiences," says Young-Bean Song, Director of Analytics & Atlas Institute at Atlas DMT.
Lynn Bolger, EVP of Agency Relations at comScore also sees a similar trend in use of research. Determining the intersection of media and product usage has become much more commonplace with online media planning than it once was.
"The most important tool for our clients is the AiM [Audience Insight Measures] report. As more of them take the traditional report, more of them are using this like they would, say, an MRI," she says.
It differs from MRI or @plan in that it combines metered data with survey data, rather than relying solely on the memory of a respondent filling out a questionnaire.
It would seem that getting closer to the person as they are a person is the most desired use of research in marketing today. Is the promise of Peppers and Rogers closer at hand than we might imagine or are we still just catching Zeno's arrow by the fletching?
"Very much along the line of getting closer to consumers as 'people' rather than only as 'interviewees,' it seems that there is a growing trend to take the personal status of the individual into account in terms of his/her profile of how innovative they are,” says Laurent Flores, CEO of CRM Metrix, referencing the much-regaled book by Edward Keller and Jonathan Berry. "Indeed, much is currently said on the so-called 'influencers' or 'opinion leaders.'"
Important Developments and Findings
Some of the most important developments in media and marketing research are those that bring customers, businesses, and the products that link them together in the same place. This place, of course, is media. And the media we are talking about is online.
"If you look at the progression online, it started with hits, then you have panels," says Manish Bhatia, SVP of Products and Services at NetRatings. "The next step is to help marketers understand how the Internet impacts their plans; to help them understand what spending has what kind of impact on their marketing to affect reach/frequency."
The marketing landscape doesn't consist of just a single medium, after all. When we talk about what impact something might have for online, we are talking about what the implications are for the marketing project at large.
Initiatives like the sort that NetRatings has under way will aid marketers in planning and allow them to link the offline with the online components under consideration.
Bhatia points out that the first step is media allocation. One must understand what contribution Internet makes to the overall marketing strategy. Then buyers and sellers will more clearly understand how to make investment decisions involving the online media.
"Media research assessing the optimal advertising mix and use of online, print, TV and radio has proven enormously valuable to advertisers and agencies over the last six months," says Jeffrey Graham, VP of Client Development at Dynamic Logic. "The IAB-sponsored XMOS studies have been a great boon for advertisers seeking ways to find efficiencies in their media mix."
This follows with what Bhatia of NetRatings suggests. The ongoing efforts of the industry to place online media in the proper, larger, context of marketing at large is one of the most essential developments in research in recent months.
“We've stopped seeing interactive in isolation and started looking at how it works in conjunction with other media,” says Kathryn Koegel, Director of Research & Industry Development at DoubleClick.
"This type of research is rapidly developing and evolving, and will become even more insightful and precise," says Graham.
This is because of something research showed us over the last year: There is a shift in consumers’ media consumption from TV and Print to Online; and online is the best way to reach people at work. These two facts require that research demonstrate what role online plays in the larger marketing mix and what impact it has.
"Consumers are spending hours everyday online, and most with high-speed connections at work," says Song. "We know online media consumption and online shopping activity peak during work hours especially at lunch time. From a macro perspective, advertisers and their agencies can’t ignore this forever."
Integrating this knowledge is part of what new research initiatives are about, hence the IAB's XMOS studies that have been conducted for the last year.
Other developments involve the oft-mentioned aspect of online media and marketing labeled search, that until recently garnered little public attention in the realm of research.
The IAB Search Road Show last month brought a lot of powerful information about search marketing, and sponsored search links specifically, to the fore.
Most of the findings were facts that many in the industry have found as a result of their own initiatives, but having it made public by a third party legitimized our collective knowledge and brought it before major agencies and marketers.
One individual at a research provider who chose not to speak for attribution said that at this individual's company, they were working on a tool that would allow users to cross-reference search terms with media usage.
And finally, among the most powerful developments in research and the Web relates to product development, among the most important but least recognized component of our business.
"Reach of the Internet can finally allow marketers to go beyond identifying consumers just in terms of socio-demographic profiles or buying behaviors to now qualifying people in terms of their innovativeness, their opinion leadership or their 'lead usage,' says Flores of CRM Metrix. "The use of such profiling variables is perfect for the Web, as you can now target those people that are the most relevant to your needs during your product development cycle."
By using a tool they developed and applying their findings, "Professor Von Hippel at MIT conducted a study using this approach with 3M… and found that products that were improved (or even created) through this process enjoyed eight times the sales volume of standard products and went on to capture twice the standard market share," says Flores.
According to Judit Nagy, Senior Market Research Manager of Yahoo!, though there are several online marketing and media planning tools under development (WebRF, WebRF Plus, Atlas, etc), she thinks it more important to remain focused on initiatives executed and managed by the IAB and the ARF than just specific research product being issued.
The IAB’s involvement with online media planning tools, audience measurement, and audience traffic reporting rules (the most recent effort relates to “online entity naming structures) and the ARF’s attention to thesis focusing on online audience planning tools, and universal media planning languages and methods will be the key influencers and drivers for what the industry is going to see in the coming months from leading research companies.
What We Need More Of
All in all, everyone agrees we are now getting plenty of research we once weren't. But everyone also agrees there is still some research we lack.
According to Bhatia of NetRatings, being able to measure duplication between media is among the most important, as it will give media professionals and marketers what they need to have a real sense of what kind of contribution online makes to overall communication delivery. Essentially, it will give us combined reach and frequency across media. To do this, we need to find a way to commit data fusion.
NetRatings currently has researchers looking at the two data-sets to come up with an algorithm that would allow planners to understand what the duplication is between those two media outlets.
For clients who have a need right now, NetRatings will customize some research, but the hope is that by using some of this research developing today it will one day be made available to all clients on a syndicated basis. According to Bhatia, they are hoping to have some fused data sets available by the end of the year for customers to look at.
When we asked Song of Atlas what he thought we needed more of, he said we need more research that is comparable to offline. Two examples: "the impact of brand exposure duration, and the impact of online advertising on offline sales."
It is known that online ads impact offline behavior. What is lacking is a critical body of research that directly links how online budgets increase offline sales and traffic to stores.
"The ironic thing is that our traditional counterparts have been doing this for a long time," points out Song. "Whether it’s correlating pre and post store traffic and sales to regional ad campaigns, or couponing and tracking grocery scanning data, online research has not delivered the kind of research traditional advertisers use everyday to help make budget decisions."
Brand Exposure Duration is just what it sounds like: the amount of time a user is exposed to an ad. We have it in broadcast relative to commercial length. We have it in Print relative to ad size.
"This will be a key way for advertisers to quantify what they are getting for their media dollars and for publishers to differentiate their inventory," says Song.
He also thinks this kind of metric will complete the reach/frequency picture because it adds an element of time. It is really more of a means of valuation of reach and frequency.
One thing is certain, however. Reach and frequency have not and will not go away as a chief concern among marketing and media professionals working in the online space.
"From our perspective, the industry needs to resolve two things: reach/requency and the other one we are hoping… is to help articulate how to use panel data with site data," says Bhatia of NetRatings.
There has been an ongoing argument in the industry about which numbers to believe – panel or site. Bhatia posits that both are valid and depending on what kind of questions you want to answer, each is useful.
Certainly finding a way to marry these figures sensibly will give the kind of reach and frequency accuracy that is necessary for a tool to be reliable for projective purposes.
Nagy from Yahoo! thinks what we need to better understand are the audiences we already have access to.
"There is a true need for online marketers to understand their online audience," she says. "It would be great to see more research focusing on online consumer lifestyles and leisure characteristics, their acceptance level of advertising messaging, and their expectation of online marketing campaigns and communications."
If one knows more about marketers’ online audience, it will allow for better targeting capabilities and more complex campaigns.
“We believe that the leading edge of online research can and should provide valuable new or less obvious insights into predictive user or consumer behavior and preferences,” offers Anderson. “For example, using model-based, tree-growing algorithms that learn predictors from the data itself, you may discover that you have four distinct self-identified customer segments that you have been addressing with only two distinct strategies.”
Flores of CRM Metrix thinks what we need more of are two things. One, he thinks we need more research that measures and demonstrates the ROI of Marketing. To him, there is no excuse for taking focus on the effectiveness of marketing away from the demonstrable effects of its own activity. Secondly, he believes more research that really brings insights into the role of the brand Website will be useful.
"Ten years down the road I think many firms may kick themselves for not realizing the marketing value of their online presence sooner," muses Flores. "The market as a whole needs to understand how brand Websites can be integrated into the marketing mix to extend the shelf life of ad campaigns and serve as the foundation for building long-term, profitable customer relationships."
One thing is sure: There is a lot more of this now than disturbing new studies that find studies are disturbing.
New Thinking On Old Thoughts
Joseph highlights findings from some recent research, and comments on what it all means.
By Joseph Jaffe
The past few weeks have been pretty interesting. The Interactive Advertising Bureau (IAB) released new research from its Cross Media Optimization Studies which reiterates that larger online ads perform better in communicating brand attributes. This isn’t the first time we’ve heard that bigger is better and it certainly won’t be last.
But what really caught my eye was a piece of research from Advertising.com (ADC) that shed some new and existing light on several hot buttons (some sizzling) in our industry right now.
When I first heard about this research circulating, which among other things underscored the efficacy of pop-ups, I was visibly perplexed. I got my grubby paws on the executive summary and as I skimmed over it, I became notably impressed with the findings.
Perhaps the most important takeaway from this research was the harmonious middle ground between branding and direct response, which suggests (and this shouldn’t be a surprise to anyone) that the two can co-exist hand-in-hand, and even reinforce each other.
The key findings go something like this:
Frequency
Maximum revenue per impression was garnered between one and five impressions. Revenue per impression maintained acceptable performance between a frequency of six and 20, and after 20 dropped off considerably. It’s not déjà vu all over again – it is the same ballpark as we’ve always been led to believe in the branding arena (usually in the region of five to eight impressions)
Size
The new 728x90 leaderboard played second fiddle to the lowly 468x60 banner from a conversion perspective (based on a paltry sample size of only 168MM impressions across 15MM users). And just when you thought it was safe to get back in the water, data revealed that pop-ups generated 13X more clicks and conversions than standard banners.
Now while you might think the multiple should have been more in the region of X10 (think about it), combine this conclusion with the frequency inference and the hybrid takeaway is that pop-ups, when properly controlled, are effective response-driving online tactics.
In fact, one of the conclusions is that the appropriate or optimal exposure of pop-ups should be limited to one pop-up for any given advertiser per user per day (that’s X1 for anyone keeping score).
This statement should prompt you to take any preconceptions you might have had regarding pop-ups and basically throw them out the window.
Rich media
It was music to my ears when I read that although rich media wasn’t as effective as generating clicks compared to poor media, it was however, roughly 4X more likely to convert that elusive two-point play (i.e. conversions). The implication here is that traffic-driving campaigns might be better suited opting for the KISS method (read: gif/jpg), while a branding (see: Dynamic Logic) or direct-response objective should lean in the direction of rich media.
I surmise that this also reveals the chasm or wide spectrum between the role of online communications as an interactive or involving experience on the one hand, and a directional signpost or billboard on the other. Neither is necessarily “better” than the other as both live on opposite ends of a broad objectives’ range.
Day-parting
The ADC study tested 11,000 different ad and site combinations (boggles my mind) in order to determine the best time of day to drive conversions. The results were strikingly similar to much of the same learnings from various Online Publishers Association (OPA) and other at-work studies: Peak performance was achieved during the at-work hours, and particularly around noon. This being said, there was no hard and fast rule across the board, with each advertiser demonstrating different sweet spot times.
Vertical
Similar to the day-parting realization, conversion varied across the board from one vertical to another, with perhaps the only common thread being a similar clickthrough-to-conversion ratio.
As mentioned earlier, the findings from the research are more complementary than contradictory when it comes to synthesizing the oft-thought diametrically opposed worlds of brand and business. Frequency and rich media are the Funny Cide and Jose Santos pairing when it comes to branding or direct-response action or conversions. Pop-ups as an intrusive form of media are most effective when limited, controlled and consistent.
I’ve often said that anyone who professes to know all the answers in the online world is either lying or a fool. However, when technology is factored into the equation, sometimes the answer is a little less subjective and more scientific.
Empirically, this body of research utilizes an almost inordinate amount of data in order to reach its conclusions.
Intuitively, the conclusions it reaches make sense.
By Joseph Jaffe
The past few weeks have been pretty interesting. The Interactive Advertising Bureau (IAB) released new research from its Cross Media Optimization Studies which reiterates that larger online ads perform better in communicating brand attributes. This isn’t the first time we’ve heard that bigger is better and it certainly won’t be last.
But what really caught my eye was a piece of research from Advertising.com (ADC) that shed some new and existing light on several hot buttons (some sizzling) in our industry right now.
When I first heard about this research circulating, which among other things underscored the efficacy of pop-ups, I was visibly perplexed. I got my grubby paws on the executive summary and as I skimmed over it, I became notably impressed with the findings.
Perhaps the most important takeaway from this research was the harmonious middle ground between branding and direct response, which suggests (and this shouldn’t be a surprise to anyone) that the two can co-exist hand-in-hand, and even reinforce each other.
The key findings go something like this:
Frequency
Maximum revenue per impression was garnered between one and five impressions. Revenue per impression maintained acceptable performance between a frequency of six and 20, and after 20 dropped off considerably. It’s not déjà vu all over again – it is the same ballpark as we’ve always been led to believe in the branding arena (usually in the region of five to eight impressions)
Size
The new 728x90 leaderboard played second fiddle to the lowly 468x60 banner from a conversion perspective (based on a paltry sample size of only 168MM impressions across 15MM users). And just when you thought it was safe to get back in the water, data revealed that pop-ups generated 13X more clicks and conversions than standard banners.
Now while you might think the multiple should have been more in the region of X10 (think about it), combine this conclusion with the frequency inference and the hybrid takeaway is that pop-ups, when properly controlled, are effective response-driving online tactics.
In fact, one of the conclusions is that the appropriate or optimal exposure of pop-ups should be limited to one pop-up for any given advertiser per user per day (that’s X1 for anyone keeping score).
This statement should prompt you to take any preconceptions you might have had regarding pop-ups and basically throw them out the window.
Rich media
It was music to my ears when I read that although rich media wasn’t as effective as generating clicks compared to poor media, it was however, roughly 4X more likely to convert that elusive two-point play (i.e. conversions). The implication here is that traffic-driving campaigns might be better suited opting for the KISS method (read: gif/jpg), while a branding (see: Dynamic Logic) or direct-response objective should lean in the direction of rich media.
I surmise that this also reveals the chasm or wide spectrum between the role of online communications as an interactive or involving experience on the one hand, and a directional signpost or billboard on the other. Neither is necessarily “better” than the other as both live on opposite ends of a broad objectives’ range.
Day-parting
The ADC study tested 11,000 different ad and site combinations (boggles my mind) in order to determine the best time of day to drive conversions. The results were strikingly similar to much of the same learnings from various Online Publishers Association (OPA) and other at-work studies: Peak performance was achieved during the at-work hours, and particularly around noon. This being said, there was no hard and fast rule across the board, with each advertiser demonstrating different sweet spot times.
Vertical
Similar to the day-parting realization, conversion varied across the board from one vertical to another, with perhaps the only common thread being a similar clickthrough-to-conversion ratio.
As mentioned earlier, the findings from the research are more complementary than contradictory when it comes to synthesizing the oft-thought diametrically opposed worlds of brand and business. Frequency and rich media are the Funny Cide and Jose Santos pairing when it comes to branding or direct-response action or conversions. Pop-ups as an intrusive form of media are most effective when limited, controlled and consistent.
I’ve often said that anyone who professes to know all the answers in the online world is either lying or a fool. However, when technology is factored into the equation, sometimes the answer is a little less subjective and more scientific.
Empirically, this body of research utilizes an almost inordinate amount of data in order to reach its conclusions.
Intuitively, the conclusions it reaches make sense.
Simultaneous Multi-Media Usage
Jim Meskauskas
When it came to leisure we were just as singular in our occupation. One read, or went for a walk, played parlor games, or listened to the radio. In later years, everyone would give up just about all of those things and simply watch TV.
So, too, it is with our media engagement over the years. If we did more than one thing, it was sequentially, not simultaneously. I read a magazine, then I listen to the radio, and then I watch TV.
But Americans have become pretty well known for being multi-taskers (if not for being that good at any one of those tasks). Talk on the phone, write an email, quickly respond to an Instant Message.
Again, the same can be said of our media usage. Some folks might have the radio playing while reading the newspaper. Some might flip through a magazine while the TV is on.
Some new studies have come out recently that have found that Americans have begun multitasking in the arena of media. These studies, which measure simultaneous media usage, may change how marketers reach their target audiences.
According to the Simultaneous Media Usage Study from BIGResearch, roughly half of consumers engage in simultaneous media usage. BIGresearch reports that 59.8% of men and 67.2% of women go online while they're watching TV.
Another company, the Internet research firm ComScore, found that almost half of Internet users have both their PC and their television set in the same room. Almost half of them - approximately 20 million people - watch TV and use the Net at the same time.
The study should have significant implications for advertisers. What it suggests is that the Internet is either becoming a powerful distraction for TV viewers, when advertisers would like them to be watching commercials; or that advertisers could take advantage of the reinforcing nature of a media mix that realizes itself instantly. Reinforcement is a common disguise for "frequency."
In the October 8th issue of AdAge, the president of the Retail Advertising & Marketing Association, Tom Holliday, was quoted as saying, "Today's consumers are hearing overlapping messages from advertisers. If consumers are watching television while surfing the net, it becomes increasingly difficult for marketers to know how to craft a message and reach their customers. It also creates new dilemmas for media planners and buyers. Simultaneous media usage changes all the rules."
Suddenly, when advertisers try to determine just what kinds of communication levels are going to be necessary for motivating a predictable volume of activity from this fuzzy collective of individuals we call 'target audience,' it is no longer possible to simply throw messages into one specific medium like broadcast and trust that those messages will impact enough of your intended audience to make a difference. This is not only because they might not be there, but also rather that your target audience might be there, but not at full attention. They might be looking up the recipe that was just featured on Emeril Live!, or checking the scores of other football games happening on Sunday which aren't being televised locally.
"Today's fragmented media environment is characterized by an exploding number of media alternatives vying for peoples' time," Dr. Joe Pilotta, Vice President, BIGresearch, was quoted as saying in the October 8th Ad Age piece. "Unfortunately, people still have only 24 hours in a day, which has necessitated their need to simultaneously use the media in order to keep pace."
Advertisers are going to have to start looking at stacking their messages on top of one another in a variety of niche media in order to make the kinds of connections with potential consumers that could once be made with a simple contact through broadcast or print advertising. Media choices are fractious as human interests and enthusiasms are fractious. If marketers want to find influence with prospective consumers, marketers are going to need to join them in the multiple environments those prospects are found in.
The reason is simple. First of all, the number of prospects that a marketer is interested in is no longer substantial enough in any one medium or vehicle to be able to rely on simple, single-media planning and placement. Secondly, since people are doing more "multi-tasking" media usage, their attentions are diffuse. A person doesn't really "multi-task" so much as they "attention split." Attention splitting is like slicing a plum: with every cut at the fruit, you loose a little juice. An individual engaged in dual-media usage of broadcast and the Internet is going to have his or her attention split between the reclining passivity of television and the neck-craning activity of the Web.
Instead of incurring the expense of inefficiently running more commercials on television in the hopes of hitting the kinds of reach against the intended audience, marketers need to consider supplementing their broadcast media with the more efficient interactive medium. There, the "maybe I'll talk to who I'm looking for" of a particular TV program is replaced with the "I KNOW I've an addressable audience" of the Web. Online content adjunctive to the television programming being used by a marketer is a MUST in 21st century marketing.
But there is another very significant implication of people's dual media usage of both television and online. The opportunity to conduct research.
While I was watching a football game on ESPN one Sunday night last Fall there happened to be a coach's challenge. Not uncommon since the revival of the instant replay (which I am so happy about). The commentators asked viewers to log onto the web site and cast their vote as to whether or not a play should be overturned upon the ref.'s review. Within a minute and a half, over 90,000 people cast their vote. These guys weren't using their PCs during commercial; they were using them right then and there, during programming.
What we are talking about here is a kind of primitive convergence. Certainly not the kind of device convergence that Nicholas Negroponte and his ilk at the Media Lab might have predicted. It isn't just a Neolithic form of iTV, but something else. It could be seen as an extraordinary research opportunity for those media companies and their advertisers. Knowing that as many as 10% of a viewing audience is going to the web during programming to "lean forward" into the media they are consuming provides an extraordinary occasion to run supporting media, do surveys, collect data, and all sorts of other things that before now could only have been accomplished using teams comprised of dozens of people and the expenditure of hundreds of thousands of dollars for sample sizes the fraction of what can be had right here, right now, with the TV/Web tag team.
Just imagine what can be learned about audiences. Where are they? Who are they? How are they feeling at the time they are watching the program your ad runs? One thing I tried to discern during that ESPN game, from watching the votes count up and the percentages of those who supported a call-reversal vs. those who did not, was audience geography. A pro call-reversal was to have been to the West Coast team's advantage, a con call-reversal to the East Coast team's advantage. 2/3 of the voters were pro call-reversal. So, just from the little bit of data (number of votes, percentage pro or con) it appeared to be that there were more viewers watching this national broadcast on the West Coast than the East Coast.
I have no real data to support this, but this is just an example of how, without even trying, advertisers could start using the TV and Web in tandem, still as separate devices, to conduct research that would aid in better targeting their advertising both on and offline, and making it more effective. Only further research, cross-tabbed with ratings data, could confirm or deny this. But just think of what opportunity this is for a marketer trying to figure out the impact of their broadcast media and how it works in tandem with interactive media.
It is possible for advertising messages to have a cumulative effect. In the instance where a same or similar message is being communicated to an individual in two different media that operate in two very different ways, advertisers might be able to not only learn a great deal about their audiences both on and offline, but boost the effectiveness of their advertising.
In this case, 1+1 might just equal 3
When it came to leisure we were just as singular in our occupation. One read, or went for a walk, played parlor games, or listened to the radio. In later years, everyone would give up just about all of those things and simply watch TV.
So, too, it is with our media engagement over the years. If we did more than one thing, it was sequentially, not simultaneously. I read a magazine, then I listen to the radio, and then I watch TV.
But Americans have become pretty well known for being multi-taskers (if not for being that good at any one of those tasks). Talk on the phone, write an email, quickly respond to an Instant Message.
Again, the same can be said of our media usage. Some folks might have the radio playing while reading the newspaper. Some might flip through a magazine while the TV is on.
Some new studies have come out recently that have found that Americans have begun multitasking in the arena of media. These studies, which measure simultaneous media usage, may change how marketers reach their target audiences.
According to the Simultaneous Media Usage Study from BIGResearch, roughly half of consumers engage in simultaneous media usage. BIGresearch reports that 59.8% of men and 67.2% of women go online while they're watching TV.
Another company, the Internet research firm ComScore, found that almost half of Internet users have both their PC and their television set in the same room. Almost half of them - approximately 20 million people - watch TV and use the Net at the same time.
The study should have significant implications for advertisers. What it suggests is that the Internet is either becoming a powerful distraction for TV viewers, when advertisers would like them to be watching commercials; or that advertisers could take advantage of the reinforcing nature of a media mix that realizes itself instantly. Reinforcement is a common disguise for "frequency."
In the October 8th issue of AdAge, the president of the Retail Advertising & Marketing Association, Tom Holliday, was quoted as saying, "Today's consumers are hearing overlapping messages from advertisers. If consumers are watching television while surfing the net, it becomes increasingly difficult for marketers to know how to craft a message and reach their customers. It also creates new dilemmas for media planners and buyers. Simultaneous media usage changes all the rules."
Suddenly, when advertisers try to determine just what kinds of communication levels are going to be necessary for motivating a predictable volume of activity from this fuzzy collective of individuals we call 'target audience,' it is no longer possible to simply throw messages into one specific medium like broadcast and trust that those messages will impact enough of your intended audience to make a difference. This is not only because they might not be there, but also rather that your target audience might be there, but not at full attention. They might be looking up the recipe that was just featured on Emeril Live!, or checking the scores of other football games happening on Sunday which aren't being televised locally.
"Today's fragmented media environment is characterized by an exploding number of media alternatives vying for peoples' time," Dr. Joe Pilotta, Vice President, BIGresearch, was quoted as saying in the October 8th Ad Age piece. "Unfortunately, people still have only 24 hours in a day, which has necessitated their need to simultaneously use the media in order to keep pace."
Advertisers are going to have to start looking at stacking their messages on top of one another in a variety of niche media in order to make the kinds of connections with potential consumers that could once be made with a simple contact through broadcast or print advertising. Media choices are fractious as human interests and enthusiasms are fractious. If marketers want to find influence with prospective consumers, marketers are going to need to join them in the multiple environments those prospects are found in.
The reason is simple. First of all, the number of prospects that a marketer is interested in is no longer substantial enough in any one medium or vehicle to be able to rely on simple, single-media planning and placement. Secondly, since people are doing more "multi-tasking" media usage, their attentions are diffuse. A person doesn't really "multi-task" so much as they "attention split." Attention splitting is like slicing a plum: with every cut at the fruit, you loose a little juice. An individual engaged in dual-media usage of broadcast and the Internet is going to have his or her attention split between the reclining passivity of television and the neck-craning activity of the Web.
Instead of incurring the expense of inefficiently running more commercials on television in the hopes of hitting the kinds of reach against the intended audience, marketers need to consider supplementing their broadcast media with the more efficient interactive medium. There, the "maybe I'll talk to who I'm looking for" of a particular TV program is replaced with the "I KNOW I've an addressable audience" of the Web. Online content adjunctive to the television programming being used by a marketer is a MUST in 21st century marketing.
But there is another very significant implication of people's dual media usage of both television and online. The opportunity to conduct research.
While I was watching a football game on ESPN one Sunday night last Fall there happened to be a coach's challenge. Not uncommon since the revival of the instant replay (which I am so happy about). The commentators asked viewers to log onto the web site and cast their vote as to whether or not a play should be overturned upon the ref.'s review. Within a minute and a half, over 90,000 people cast their vote. These guys weren't using their PCs during commercial; they were using them right then and there, during programming.
What we are talking about here is a kind of primitive convergence. Certainly not the kind of device convergence that Nicholas Negroponte and his ilk at the Media Lab might have predicted. It isn't just a Neolithic form of iTV, but something else. It could be seen as an extraordinary research opportunity for those media companies and their advertisers. Knowing that as many as 10% of a viewing audience is going to the web during programming to "lean forward" into the media they are consuming provides an extraordinary occasion to run supporting media, do surveys, collect data, and all sorts of other things that before now could only have been accomplished using teams comprised of dozens of people and the expenditure of hundreds of thousands of dollars for sample sizes the fraction of what can be had right here, right now, with the TV/Web tag team.
Just imagine what can be learned about audiences. Where are they? Who are they? How are they feeling at the time they are watching the program your ad runs? One thing I tried to discern during that ESPN game, from watching the votes count up and the percentages of those who supported a call-reversal vs. those who did not, was audience geography. A pro call-reversal was to have been to the West Coast team's advantage, a con call-reversal to the East Coast team's advantage. 2/3 of the voters were pro call-reversal. So, just from the little bit of data (number of votes, percentage pro or con) it appeared to be that there were more viewers watching this national broadcast on the West Coast than the East Coast.
I have no real data to support this, but this is just an example of how, without even trying, advertisers could start using the TV and Web in tandem, still as separate devices, to conduct research that would aid in better targeting their advertising both on and offline, and making it more effective. Only further research, cross-tabbed with ratings data, could confirm or deny this. But just think of what opportunity this is for a marketer trying to figure out the impact of their broadcast media and how it works in tandem with interactive media.
It is possible for advertising messages to have a cumulative effect. In the instance where a same or similar message is being communicated to an individual in two different media that operate in two very different ways, advertisers might be able to not only learn a great deal about their audiences both on and offline, but boost the effectiveness of their advertising.
In this case, 1+1 might just equal 3
Tuesday
Measuring Your Web Content Management Process
by Gerry McGovern
What’s really important to measure for your Web site?
First, you need to measure how successful you are at creating, editing and publishing content. These are your Web content management processes.
Second, you need to measure reader behavior. There will also be some core Web site performance issues to measure. Here, I’ll examine key Web content management “measurables.”
These are questions you need to answer:
• Is the Right Content Being Published for the Right Reader?
Have you identified the right readers for your content, and are you publishing the right content for them? How effective are you in reaching these target readers?
• How Quickly Is Content Getting Published on the Web Site?
Time-to-market is a major measure of the efficient industrial organization. Time-to-publish is a key measure of the information organization. Is the right content getting published as fast as possible?
• How Well Is Content Being Edited?
Publishing quickly does not mean publishing sloppily. How well is content being edited? How well does published content reflect the style and tone of your organization? (You cannot even begin to answer this question if you don’t have a Web style guide.)
• Is the Publishing Schedule Being Adhered to?
Professional publishers have a publishing schedule—and they stick to it. Just as in entertainment (where the show must go on!), in publishing the publication must get published on time, every time. If you agree to update your Web site at 10 AM. every Monday, that must happen. Not a minute later.
• Is Out-of-Date Content Being Removed Quickly?
One of the most important lessons of the Web is to publish the content you can manage. The lifecycle of content does not end at publication. It ends when the content is removed from publication. How quickly is out-of-date content being removed from your Web site?
• How Are Authors and Editors Managed?
Authors and editors must be motivated to write and edit quality content. They must know that if they publish quality content, they will be rewarded. They must also know that if they publish poor-quality content, there will be a price to pay.
• Is the Metadata of a Sufficient Quality?
Metadata is the ugly duckling of Web publishing. Writers and editors think that metadata is something the IT department should look after. IT thinks it’s something you can automate using software. Wrong on both counts. Metadata is a fundamental writing-for-the-Web skill. Poor quality metadata is poor quality Web content.
• How Is Reader Feedback Managed?
If you’re in charge of a Web site, then one of your most important duties is to talk to your readers. Every week you should communicate with a minimum of one reader. What do they like about your Web site? What do they not like? Also, when readers get in touch, how fast are you getting back to them?
What’s really important to measure for your Web site?
First, you need to measure how successful you are at creating, editing and publishing content. These are your Web content management processes.
Second, you need to measure reader behavior. There will also be some core Web site performance issues to measure. Here, I’ll examine key Web content management “measurables.”
These are questions you need to answer:
• Is the Right Content Being Published for the Right Reader?
Have you identified the right readers for your content, and are you publishing the right content for them? How effective are you in reaching these target readers?
• How Quickly Is Content Getting Published on the Web Site?
Time-to-market is a major measure of the efficient industrial organization. Time-to-publish is a key measure of the information organization. Is the right content getting published as fast as possible?
• How Well Is Content Being Edited?
Publishing quickly does not mean publishing sloppily. How well is content being edited? How well does published content reflect the style and tone of your organization? (You cannot even begin to answer this question if you don’t have a Web style guide.)
• Is the Publishing Schedule Being Adhered to?
Professional publishers have a publishing schedule—and they stick to it. Just as in entertainment (where the show must go on!), in publishing the publication must get published on time, every time. If you agree to update your Web site at 10 AM. every Monday, that must happen. Not a minute later.
• Is Out-of-Date Content Being Removed Quickly?
One of the most important lessons of the Web is to publish the content you can manage. The lifecycle of content does not end at publication. It ends when the content is removed from publication. How quickly is out-of-date content being removed from your Web site?
• How Are Authors and Editors Managed?
Authors and editors must be motivated to write and edit quality content. They must know that if they publish quality content, they will be rewarded. They must also know that if they publish poor-quality content, there will be a price to pay.
• Is the Metadata of a Sufficient Quality?
Metadata is the ugly duckling of Web publishing. Writers and editors think that metadata is something the IT department should look after. IT thinks it’s something you can automate using software. Wrong on both counts. Metadata is a fundamental writing-for-the-Web skill. Poor quality metadata is poor quality Web content.
• How Is Reader Feedback Managed?
If you’re in charge of a Web site, then one of your most important duties is to talk to your readers. Every week you should communicate with a minimum of one reader. What do they like about your Web site? What do they not like? Also, when readers get in touch, how fast are you getting back to them?
Going to movies ??
Masha E. Geller
Editor in Chief
MediaPost Communications
For all you entertainment advertisers out there, there's a new site on the block. Movies.com, a site for movie fans offering movie reviews, trailers and local show times to assist with making the right choice on movie night, ranked number seven in the July comScore Media Metrix Entertainment -- Movies sites category with 4.2 million unique visitors. Site traffic jumped by more than 53% over June, and by 65% over July of last year, making Movies.com the fastest growing general movie site according to the comScore report.
With a 75% increase in traffic since January of this year, Movies.com has experienced higher growth than the Entertainment -- Movies sites category as a whole (which is up 6%) and the total Internet audience (which is up just over 2%) during the same period.
Movies.com Motion, which instantly launches high-quality video within the homepage when visitors enter the site, launched on July 16. The free application airs editorial and entertainment content including movie trailers, exclusive clips, and behind-the-scenes interviews, without the buffering or errant pauses typically associated with viewing full-motion video over the Internet. The technology also allows advertisers to run television commercials online with the same video and audio quality of broadcast television.
Launched in March 2000, Movies.com provides a broad array of news, original content and services, including show times and ticket sales, to help movie fans make the right choice on movie night. Operated by the Walt Disney Internet Group, its content encompasses films from throughout the U.S. film industry and follows films from production through video/DVD release.
Check the site out if you're looking to reach the movie going demographic (it's fast becoming my personal favorite).
Editor in Chief
MediaPost Communications
For all you entertainment advertisers out there, there's a new site on the block. Movies.com, a site for movie fans offering movie reviews, trailers and local show times to assist with making the right choice on movie night, ranked number seven in the July comScore Media Metrix Entertainment -- Movies sites category with 4.2 million unique visitors. Site traffic jumped by more than 53% over June, and by 65% over July of last year, making Movies.com the fastest growing general movie site according to the comScore report.
With a 75% increase in traffic since January of this year, Movies.com has experienced higher growth than the Entertainment -- Movies sites category as a whole (which is up 6%) and the total Internet audience (which is up just over 2%) during the same period.
Movies.com Motion, which instantly launches high-quality video within the homepage when visitors enter the site, launched on July 16. The free application airs editorial and entertainment content including movie trailers, exclusive clips, and behind-the-scenes interviews, without the buffering or errant pauses typically associated with viewing full-motion video over the Internet. The technology also allows advertisers to run television commercials online with the same video and audio quality of broadcast television.
Launched in March 2000, Movies.com provides a broad array of news, original content and services, including show times and ticket sales, to help movie fans make the right choice on movie night. Operated by the Walt Disney Internet Group, its content encompasses films from throughout the U.S. film industry and follows films from production through video/DVD release.
Check the site out if you're looking to reach the movie going demographic (it's fast becoming my personal favorite).
Movie Marketers Starting To Harness The Web
by Newswire Report
Hitwise, the online competitive intelligence service providing daily insights, reports that websites promoting this summer’s movies are succeeding in drawing large numbers of visitors and in routing many of them to various other sites where they can view the trailer, play the game, buy tickets, or buy the soundtrack, DVD and other merchandise.
As the marketing efforts for summer movies heated up, traffic to the Hitwise Entertainment - Movie category also rose, increasing 18% between early May and July 5th. The individual movie site that captured the highest share of visits during the week of the film’s release was The Matrix Reloaded (whatisthematrix.warnerbros.com), followed by Pirates of the Caribbean (pirates.movies.go.com) and Terminator 3 (www.terminator3.com).
Lara Croft, Tomb Raider (www.tombraiderthemovie.com) led all movie sites in sending traffic directly to ticket-buying sites during the week of the film’s release. After visiting the Tomb Raider website, 12.7% of traffic visited the leading movie ticketing sites. Terminator 3 and Legally Blonde 2 (www.legallyblonde2.com) were the next best with 5% and 4.5%, respectively. Moviefone (www.moviefone.com) has been the most popular ticket-buying site with U.S. internet users all spring and summer, with Fandango (www.fandango.com) and Movietickets (www.movietickets.com) rounding out the top 3.
Viewing the trailer online has become an extremely popular activity of movie site visitors, with Apple Trailers (www.apple.com/trailers) by far their favorite site for doing so. Visitors to 28 Days Later (www.28dayslater.com) illustrated this most strikingly – after visiting www.28dayslater.com, a full 68% of visits viewed the film trailer through Apple Trailers.
“Downstream” analysis of The Hulk (www.thehulk.com) reveals a particularly effective merchandising program. During the week of the film’s release, 22.4% of Hulk visitors clicked directly to Hulk Games (www.hulkgames.com), 6.5% to Universal Studios Theme Park (themeparks.universalstudios.com) to learn about the new Hulk Ride, and 5.1% to the Incredible Hulk Television Series DVD site (www.incrediblehulkdvd.com).
“Movie marketers are clearly starting to get the hang of the Internet,” said Chris Maher, General Manager of Hitwise, North America. “They’re harnessing fan passion to both drive sales and build brand.”
Hitwise, the online competitive intelligence service providing daily insights, reports that websites promoting this summer’s movies are succeeding in drawing large numbers of visitors and in routing many of them to various other sites where they can view the trailer, play the game, buy tickets, or buy the soundtrack, DVD and other merchandise.
As the marketing efforts for summer movies heated up, traffic to the Hitwise Entertainment - Movie category also rose, increasing 18% between early May and July 5th. The individual movie site that captured the highest share of visits during the week of the film’s release was The Matrix Reloaded (whatisthematrix.warnerbros.com), followed by Pirates of the Caribbean (pirates.movies.go.com) and Terminator 3 (www.terminator3.com).
Lara Croft, Tomb Raider (www.tombraiderthemovie.com) led all movie sites in sending traffic directly to ticket-buying sites during the week of the film’s release. After visiting the Tomb Raider website, 12.7% of traffic visited the leading movie ticketing sites. Terminator 3 and Legally Blonde 2 (www.legallyblonde2.com) were the next best with 5% and 4.5%, respectively. Moviefone (www.moviefone.com) has been the most popular ticket-buying site with U.S. internet users all spring and summer, with Fandango (www.fandango.com) and Movietickets (www.movietickets.com) rounding out the top 3.
Viewing the trailer online has become an extremely popular activity of movie site visitors, with Apple Trailers (www.apple.com/trailers) by far their favorite site for doing so. Visitors to 28 Days Later (www.28dayslater.com) illustrated this most strikingly – after visiting www.28dayslater.com, a full 68% of visits viewed the film trailer through Apple Trailers.
“Downstream” analysis of The Hulk (www.thehulk.com) reveals a particularly effective merchandising program. During the week of the film’s release, 22.4% of Hulk visitors clicked directly to Hulk Games (www.hulkgames.com), 6.5% to Universal Studios Theme Park (themeparks.universalstudios.com) to learn about the new Hulk Ride, and 5.1% to the Incredible Hulk Television Series DVD site (www.incrediblehulkdvd.com).
“Movie marketers are clearly starting to get the hang of the Internet,” said Chris Maher, General Manager of Hitwise, North America. “They’re harnessing fan passion to both drive sales and build brand.”
The bubble that didn't burst
The Guardian
Stories of profligate internet companies crashing after the dotcom bust are legion. Tales of those that were created in the immediate aftermath of dot-mania and have not only survived but prospered are rare indeed. Espotting, however, is just such a case. As Concorde rides and the champagne lifestyle of the young bosses of the dotcom-crashers came to an end, ex-schoolmates Daniel Ishag and Sebastian Bishop set up a paid listings internet search company in one room of Ishag's flat in South Kensington.
Amid the turmoil of the online world at that time, the two young entrepreneurs struck gold. This was confirmed when, two and a half years after Espotting's low-key start, it was acquired in June this year by US paid-for search company FindWhat.com in a share-and-cash deal valued at $163m. The company has now moved out of Ishag's flat into an open-plan office in the trendy Brick Lane area of east London.
"From day one it was never a question of failure, it was only a question of how much pain we could take," says Ishag, 30, the older of the two founders by three months. "Or how big we were going to get," adds Bishop, who is the more softly spoken. Ishag intermittently hops up during the interview to take a call or check his computer - always returning and apologising a few minutes later - while Bishop fills out the story of how the two worked together to build Espotting from the ground up. "We never argue, but if there is a disagreement, he's right," says Ishag. "Through years of being friends, I've learned that if Seb pushes back, then he's got a point."
Ishag and Bishop are opposites, and they like it that way. Ishag is the hyperactive one, too busy to sit down for too long. He is also the money man, a natural trader, the guy who came up with the idea for the business and who can charm money out of any investor's pocket. Bishop is taller than Ishag, more thoughtful, talks in considered tones and has been in love with the advertising business since his schooldays.
One thing the two friends do have in common is that on leaving school at 18, they both headed for the world of work instead of university. Bishop moved full time into the ad-agency world at Publicis in France, and later at Rainey Kelly Campbell Roalfe/Young & Rubicam. Ishag, meanwhile, did a series of jobs in a variety of industries with an itinerary of far-flung places, including Indonesia and China, until he settled in Geneva at Hirsch & Cie, a boutique bank co-founded by his brother, where he advised technology companies. Both are natty dressers and have interesting social networks in the UK and continental Europe, which has at times been useful.
It was after completing a few online business-to-business deals at his brother's bank that Ishag thought an online advertising company could work, especially one that was based on the technology used by search engines like Google. Ishag knew that, with his banking brother's help, he could raise the money for the new business, but realised he knew nothing about advertising. "I was a suit and that's what I knew, and that alone wouldn't have worked," he recalls.
A skiing vacation in Europe with Bishop was the venue for a decision by the old roommates to join forces and launch Espotting together. In February 2000 the company was born, and the website came online six months later. At the time, it seemed in many ways to be the worst possible time to start any online business, let alone one centred on advertising. However, the timing proved to be perfect; and the two men respect each other's personalities, getting along so well that they even share an office. "It is very rare that Dan and I tread on each other's toes," says Bishop, whose skills are marketing, advertisers, and website design.
Faith and family were among the keys to its success. The seed money was delivered by Ishag and his brother. Ishag and Bishop then raised cash from 40 friends and family members, investing from £10,000 to £50,000. The duo were determined to repay their investors' faith.
Institutional investment came a year after their site launched. The founders won't say how much money has been invested, but it was likely less than $25m. "They funded this business as they went along and in a very hostile funding environment. I have to give them credit for that," says Bertrand Lipworth, a venture capitalist and personal investor in Espotting.
The faith in the business has been shared by the rest of the Espotting team, who have sometimes gone weeks without salary, yet stayed the course largely because of an unusual esprit de corps built around the original 10 employees (all of whom still work at the company) as well as plenty of fellow ex-Highgate school chums.
After the startup money was raised, Ishag concentrated on business development, although in the early days he worked the phones alongside the rest of the original sales team. "I remember we would call 60 advertisers a day each," says Ishag. "The first 2,000 or so advertisers were brought in this way." There were some tough early times, such as the day Bishop had to visit 20 people at Orange before the mobile-phone company placed its first advertising order in August 2000. "We educated a lot of customers and ad agencies about this business," recalls Bishop. In June, at the time of the deal with FindWhat, Espotting boasted 16,000 advertisers and had operations in 10 European countries.
One of the things that clinched the company's success is the speed at which Espotting was able to roll out its European offices and meet with key local players, in many cases faster than its biggest competitor, the paid-listing company Overture. Espotting owes part of its success to having the right connections. The Italian Espotting office, for example, is headed by Bishop's friend Rocco Benetton, part of the fashion-house family.
Another key is that the paid-for search ad system is performance-related. Customers only pay the search company if they get a "qualified lead", that is, a click from the ad to their own site.
"For tough chief financial officers of companies that were running out of advertising budgets, paid-for listing was the perfect advertising medium because they only pay us when we deliver them business," says Bishop.
It's a business that has certainly proved its worth. Paid-for search is as successful as anything on the web. The deal between FindWhat and Espotting was followed in July by the $1.6bn purchase of independent paid-for search provider Overture by super-portal Yahoo.
FindWhat's acquisition of Espot ting is good for both parties. Neither previously had a presence on the other side of the Atlantic, and both are independent, ie they provide paid-for listings to other sites rather than run their own search site, as Google does. Their ongoing strategies are also pretty close - to chase money from mid-tier online operations such as travel, food and destination sites, roll out turnkey paid-for listings services to big portal sites, launch new products and, in time, create a presence in Asia.
To do all that well will require more of the teamwork that has been Espotting's signature since the start. As part of the deal with FindWhat, all 178 Espotting employees will receive shares or share options. Ishag will become vice-chairman of the combined company, while Bishop will be chief commercial officer. Both will be on the board.
"Technically, this is an acquisition but we call it a merger because we want every single part of Espotting to stay intact and to continue to grow," says FindWhat's CEO, Craig Pisaris-Henderson, who has known Bishop and Ishag since 2000. The financial clout of FindWhat will help the merged company to take the next steps and quell any market concerns about Espotting's longer-term financial stability. "Amateur hour is now over in terms of financial questions or corporate procedures," says Pisaris-Henderson. "What these guys have shown is the tenacity to build the business and the intelligence to bring in the right people in the key positions. Now it is time to take it to another level."
FindWhat's stock price has risen since the deal with Espotting was announced from $13.50 to around $20, but the market is also aware that the newly enlarged company, which is now the largest independent paid-for listings firm, is now a prime target to be swallowed up itself. Portals such as MSN or AOL may want to do what Yahoo has done with Overture and buy in their own paid-for listings provider.
Pisaris-Henderson thinks that adding Bishop and Ishag's European nous will be an excellent addition to the merged company. He says the three of them are already finishing each other's sentences and that they all have the same vision about how to grow. But Pisaris-Henderson, who is 33, admits that the two Europeans are way ahead of him in one particular area. "They are a lot cooler than me. We call it SOA - standard operating attire - and it's about the way they dress, which is really cool," says FindWhat's CEO, feigning a slight sigh of regret.
Stories of profligate internet companies crashing after the dotcom bust are legion. Tales of those that were created in the immediate aftermath of dot-mania and have not only survived but prospered are rare indeed. Espotting, however, is just such a case. As Concorde rides and the champagne lifestyle of the young bosses of the dotcom-crashers came to an end, ex-schoolmates Daniel Ishag and Sebastian Bishop set up a paid listings internet search company in one room of Ishag's flat in South Kensington.
Amid the turmoil of the online world at that time, the two young entrepreneurs struck gold. This was confirmed when, two and a half years after Espotting's low-key start, it was acquired in June this year by US paid-for search company FindWhat.com in a share-and-cash deal valued at $163m. The company has now moved out of Ishag's flat into an open-plan office in the trendy Brick Lane area of east London.
"From day one it was never a question of failure, it was only a question of how much pain we could take," says Ishag, 30, the older of the two founders by three months. "Or how big we were going to get," adds Bishop, who is the more softly spoken. Ishag intermittently hops up during the interview to take a call or check his computer - always returning and apologising a few minutes later - while Bishop fills out the story of how the two worked together to build Espotting from the ground up. "We never argue, but if there is a disagreement, he's right," says Ishag. "Through years of being friends, I've learned that if Seb pushes back, then he's got a point."
Ishag and Bishop are opposites, and they like it that way. Ishag is the hyperactive one, too busy to sit down for too long. He is also the money man, a natural trader, the guy who came up with the idea for the business and who can charm money out of any investor's pocket. Bishop is taller than Ishag, more thoughtful, talks in considered tones and has been in love with the advertising business since his schooldays.
One thing the two friends do have in common is that on leaving school at 18, they both headed for the world of work instead of university. Bishop moved full time into the ad-agency world at Publicis in France, and later at Rainey Kelly Campbell Roalfe/Young & Rubicam. Ishag, meanwhile, did a series of jobs in a variety of industries with an itinerary of far-flung places, including Indonesia and China, until he settled in Geneva at Hirsch & Cie, a boutique bank co-founded by his brother, where he advised technology companies. Both are natty dressers and have interesting social networks in the UK and continental Europe, which has at times been useful.
It was after completing a few online business-to-business deals at his brother's bank that Ishag thought an online advertising company could work, especially one that was based on the technology used by search engines like Google. Ishag knew that, with his banking brother's help, he could raise the money for the new business, but realised he knew nothing about advertising. "I was a suit and that's what I knew, and that alone wouldn't have worked," he recalls.
A skiing vacation in Europe with Bishop was the venue for a decision by the old roommates to join forces and launch Espotting together. In February 2000 the company was born, and the website came online six months later. At the time, it seemed in many ways to be the worst possible time to start any online business, let alone one centred on advertising. However, the timing proved to be perfect; and the two men respect each other's personalities, getting along so well that they even share an office. "It is very rare that Dan and I tread on each other's toes," says Bishop, whose skills are marketing, advertisers, and website design.
Faith and family were among the keys to its success. The seed money was delivered by Ishag and his brother. Ishag and Bishop then raised cash from 40 friends and family members, investing from £10,000 to £50,000. The duo were determined to repay their investors' faith.
Institutional investment came a year after their site launched. The founders won't say how much money has been invested, but it was likely less than $25m. "They funded this business as they went along and in a very hostile funding environment. I have to give them credit for that," says Bertrand Lipworth, a venture capitalist and personal investor in Espotting.
The faith in the business has been shared by the rest of the Espotting team, who have sometimes gone weeks without salary, yet stayed the course largely because of an unusual esprit de corps built around the original 10 employees (all of whom still work at the company) as well as plenty of fellow ex-Highgate school chums.
After the startup money was raised, Ishag concentrated on business development, although in the early days he worked the phones alongside the rest of the original sales team. "I remember we would call 60 advertisers a day each," says Ishag. "The first 2,000 or so advertisers were brought in this way." There were some tough early times, such as the day Bishop had to visit 20 people at Orange before the mobile-phone company placed its first advertising order in August 2000. "We educated a lot of customers and ad agencies about this business," recalls Bishop. In June, at the time of the deal with FindWhat, Espotting boasted 16,000 advertisers and had operations in 10 European countries.
One of the things that clinched the company's success is the speed at which Espotting was able to roll out its European offices and meet with key local players, in many cases faster than its biggest competitor, the paid-listing company Overture. Espotting owes part of its success to having the right connections. The Italian Espotting office, for example, is headed by Bishop's friend Rocco Benetton, part of the fashion-house family.
Another key is that the paid-for search ad system is performance-related. Customers only pay the search company if they get a "qualified lead", that is, a click from the ad to their own site.
"For tough chief financial officers of companies that were running out of advertising budgets, paid-for listing was the perfect advertising medium because they only pay us when we deliver them business," says Bishop.
It's a business that has certainly proved its worth. Paid-for search is as successful as anything on the web. The deal between FindWhat and Espotting was followed in July by the $1.6bn purchase of independent paid-for search provider Overture by super-portal Yahoo.
FindWhat's acquisition of Espot ting is good for both parties. Neither previously had a presence on the other side of the Atlantic, and both are independent, ie they provide paid-for listings to other sites rather than run their own search site, as Google does. Their ongoing strategies are also pretty close - to chase money from mid-tier online operations such as travel, food and destination sites, roll out turnkey paid-for listings services to big portal sites, launch new products and, in time, create a presence in Asia.
To do all that well will require more of the teamwork that has been Espotting's signature since the start. As part of the deal with FindWhat, all 178 Espotting employees will receive shares or share options. Ishag will become vice-chairman of the combined company, while Bishop will be chief commercial officer. Both will be on the board.
"Technically, this is an acquisition but we call it a merger because we want every single part of Espotting to stay intact and to continue to grow," says FindWhat's CEO, Craig Pisaris-Henderson, who has known Bishop and Ishag since 2000. The financial clout of FindWhat will help the merged company to take the next steps and quell any market concerns about Espotting's longer-term financial stability. "Amateur hour is now over in terms of financial questions or corporate procedures," says Pisaris-Henderson. "What these guys have shown is the tenacity to build the business and the intelligence to bring in the right people in the key positions. Now it is time to take it to another level."
FindWhat's stock price has risen since the deal with Espotting was announced from $13.50 to around $20, but the market is also aware that the newly enlarged company, which is now the largest independent paid-for listings firm, is now a prime target to be swallowed up itself. Portals such as MSN or AOL may want to do what Yahoo has done with Overture and buy in their own paid-for listings provider.
Pisaris-Henderson thinks that adding Bishop and Ishag's European nous will be an excellent addition to the merged company. He says the three of them are already finishing each other's sentences and that they all have the same vision about how to grow. But Pisaris-Henderson, who is 33, admits that the two Europeans are way ahead of him in one particular area. "They are a lot cooler than me. We call it SOA - standard operating attire - and it's about the way they dress, which is really cool," says FindWhat's CEO, feigning a slight sigh of regret.
Monday
Tap into Simultaneous Media Consumption
What was once thought to be a significant cannibalistic threat towards the very existence of television might very well turn out to be complementary.
By Joseph Jaffe
Last week I presented Best Practices to a Fortune 500 client. In introducing the project, I used the analogy of becoming a parent for the first time (and besides, it was a great excuse to include a picture of my two-year old daughter in my PowerPoint deck!). A newbie parent can read all the books in the world, receive all the hand-me-down advice from parents and grandparents, and still they will most likely lack a degree of conviction, confidence and assurance that only comes with going through the process a second time.
That’s kind of what it feels like to work in an infant industry and that’s kind of what it feels like to develop and nurture “best practices in training.” But despite the lack of research and/or case history validation, many of these approaches just feel right (intuitively obvious as I would say) or in the case of a new parent, “trusting your gut” is often times the best solution.
Another interesting parallel between parenting and best practices is that both continue to evolve. A grandparent’s advice is just not given the same reverence nowadays based on new approaches, theories and practices. Modern medicine – like technology – has made the practice of bringing up baby – like introducing a new medium to an existing mix – an inevitable part of evolution.
I use this analogy because, for the first time since I began writing this column, my call out to industry luminaries for their opinions, insights and case studies on this week’s best practice yielded nothing. Akin to being a new parent, marketers trying to deliver on the best practice of tapping into the simultaneous consumption of media are doing so by trusting their gut.
There certainly isn’t a lack of data to suggest that this behavioral shift needs to be taken careful notice of. And this trend is exacerbated by the newly crowned Millennials who are avid media multi-taskers (just pop into your teenage kid’s room if you need further proof).
What was once thought to be a significant cannibalistic threat towards the very existence of television might very well turn out to be complementary. This is not to say that the Web hasn’t already made considerable inroads into TV’s equity. It has. It is not, however, and probably never will be, a replacement for the Tube.
In fact, throughout the history of media, no medium has ever replaced its predecessor. What typically does happen is that a new medium (often an improvement on the ones before) finds its particular sweet spot use and takes up this role together with the symphony of existing touch points.
It is widely held that TV delivers unparalleled emotion (awareness) whereas radio has its particular niche during drive time (consideration). Direct mail has always been the response medium of choice (action), while print is utilized predominantly as a means to tap into high affinity audiences through a series of relevant support or proof points (message association). So what is the Web’s role? Some believe (myself included) that it’s a little of everything; however, with this claim comes a degree of danger in terms of being labeled as a Jack of all media, master of none. Others believe its sweet spot lies in the power of pull or the depth of interactivity-based involvement (I have my other foot in this camp).
Where both assertions fall short, however, is that they hold that mediums are mutually exclusive and in (best) practice, they are not.
Smart marketers (that would be you) have begun to tap into the power of combining media. In part, this is without question a form of advanced integration (unknown to the majority of the “traditional” world), which harnesses a powerful consumer insight – the simultaneous consumption of multiple media.
According to the recent SIMM study from BIGresearch:
32.7% of males and 36.4% of females regularly watch TV when they go online
23.8% of males and 29.1% of females regularly go online when they are watching TV
16.8% of males and 22.2% of females regularly watch TV when they read email.
The study concludes the following: Today’s problem is, while the media planning tools have stayed the same, the media forms, the consumer’s use of media, the sheer abundance of media alternatives and formats and the rise of electronic forms of interactive media have radically changed the way media is used and consumed by audiences.
The implications are as follows:
There are synergies associated with addressing dual media consumption
Simultaneous programming (i.e. Web and TV for example) is one way to reach consumers who would otherwise have slipped through the cracks
In addition, this is a surefire way to reinforce the message and overall impact through increased frequency
Calls-to-action from TV to Web offer a conversion path of least resistance
Increased home adoption of broadband, together with home-networking and wi-fi set up will continue to build momentum around simultaneous media consumption patterns.
Network and cable stations have been tottering around in this particular sandbox for a while now. Some examples that spring to mind are:
Game Show Network’s play-along-at-home efforts
ABC’s Enhanced TV with programming such as the “Academy Awards”, “Who Wants to be a Millionaire” and “Monday Night Football”.
Enhanced TV leveraged the dual TV and PC usage, by involving at-home users with the live programming. TV commercials were not only synchronized with banner placement on the game console, they were integrated into the game.
Users answered questions about the commercials to score extra points.
Over 19MM viewers experienced the Enhanced TV production of "Who Wants to be a Millionaire" since its debut March 28, 2000, with an average connect time of 39 minutes. And 97% of Enhanced TV Users say they will use Enhanced TV again.
This week’s practice focused on TV and the Web, but print and radio have roles to play as well in the ever morphing montage of media.
By Joseph Jaffe
Last week I presented Best Practices to a Fortune 500 client. In introducing the project, I used the analogy of becoming a parent for the first time (and besides, it was a great excuse to include a picture of my two-year old daughter in my PowerPoint deck!). A newbie parent can read all the books in the world, receive all the hand-me-down advice from parents and grandparents, and still they will most likely lack a degree of conviction, confidence and assurance that only comes with going through the process a second time.
That’s kind of what it feels like to work in an infant industry and that’s kind of what it feels like to develop and nurture “best practices in training.” But despite the lack of research and/or case history validation, many of these approaches just feel right (intuitively obvious as I would say) or in the case of a new parent, “trusting your gut” is often times the best solution.
Another interesting parallel between parenting and best practices is that both continue to evolve. A grandparent’s advice is just not given the same reverence nowadays based on new approaches, theories and practices. Modern medicine – like technology – has made the practice of bringing up baby – like introducing a new medium to an existing mix – an inevitable part of evolution.
I use this analogy because, for the first time since I began writing this column, my call out to industry luminaries for their opinions, insights and case studies on this week’s best practice yielded nothing. Akin to being a new parent, marketers trying to deliver on the best practice of tapping into the simultaneous consumption of media are doing so by trusting their gut.
There certainly isn’t a lack of data to suggest that this behavioral shift needs to be taken careful notice of. And this trend is exacerbated by the newly crowned Millennials who are avid media multi-taskers (just pop into your teenage kid’s room if you need further proof).
What was once thought to be a significant cannibalistic threat towards the very existence of television might very well turn out to be complementary. This is not to say that the Web hasn’t already made considerable inroads into TV’s equity. It has. It is not, however, and probably never will be, a replacement for the Tube.
In fact, throughout the history of media, no medium has ever replaced its predecessor. What typically does happen is that a new medium (often an improvement on the ones before) finds its particular sweet spot use and takes up this role together with the symphony of existing touch points.
It is widely held that TV delivers unparalleled emotion (awareness) whereas radio has its particular niche during drive time (consideration). Direct mail has always been the response medium of choice (action), while print is utilized predominantly as a means to tap into high affinity audiences through a series of relevant support or proof points (message association). So what is the Web’s role? Some believe (myself included) that it’s a little of everything; however, with this claim comes a degree of danger in terms of being labeled as a Jack of all media, master of none. Others believe its sweet spot lies in the power of pull or the depth of interactivity-based involvement (I have my other foot in this camp).
Where both assertions fall short, however, is that they hold that mediums are mutually exclusive and in (best) practice, they are not.
Smart marketers (that would be you) have begun to tap into the power of combining media. In part, this is without question a form of advanced integration (unknown to the majority of the “traditional” world), which harnesses a powerful consumer insight – the simultaneous consumption of multiple media.
According to the recent SIMM study from BIGresearch:
32.7% of males and 36.4% of females regularly watch TV when they go online
23.8% of males and 29.1% of females regularly go online when they are watching TV
16.8% of males and 22.2% of females regularly watch TV when they read email.
The study concludes the following: Today’s problem is, while the media planning tools have stayed the same, the media forms, the consumer’s use of media, the sheer abundance of media alternatives and formats and the rise of electronic forms of interactive media have radically changed the way media is used and consumed by audiences.
The implications are as follows:
There are synergies associated with addressing dual media consumption
Simultaneous programming (i.e. Web and TV for example) is one way to reach consumers who would otherwise have slipped through the cracks
In addition, this is a surefire way to reinforce the message and overall impact through increased frequency
Calls-to-action from TV to Web offer a conversion path of least resistance
Increased home adoption of broadband, together with home-networking and wi-fi set up will continue to build momentum around simultaneous media consumption patterns.
Network and cable stations have been tottering around in this particular sandbox for a while now. Some examples that spring to mind are:
Game Show Network’s play-along-at-home efforts
ABC’s Enhanced TV with programming such as the “Academy Awards”, “Who Wants to be a Millionaire” and “Monday Night Football”.
Enhanced TV leveraged the dual TV and PC usage, by involving at-home users with the live programming. TV commercials were not only synchronized with banner placement on the game console, they were integrated into the game.
Users answered questions about the commercials to score extra points.
Over 19MM viewers experienced the Enhanced TV production of "Who Wants to be a Millionaire" since its debut March 28, 2000, with an average connect time of 39 minutes. And 97% of Enhanced TV Users say they will use Enhanced TV again.
This week’s practice focused on TV and the Web, but print and radio have roles to play as well in the ever morphing montage of media.
Digital Directories Overtaking Yellow Pages
Emarketer reports that the Kelsey Group projects that digital directories' share of the North American Yellow Page market should jump from a mere 2.4% last year to 24% in 2008. The report notes that digital directories are not synonymous with online Yellow Pages, as digital directories include online Yellow Pages, but also encompass mobile yellow page directories, CD-ROM and local search functionality that replicates yellow page search.
And, Nielsen//NetRatings reports that Yellowpages.com had 1.6 million unique users in May, 2003 while Superpages.com from Verizon gained over 7.6 million unique visitors.
Unique Audience for Top Directories/Local Guide Sites Among US Internet Users, 2003 (x000)
Yahoo! Get Local ..................................................... 17,267
Superpages.com ..................................................... 7,688
Switchboard.com .................................................... 5,193
Time Warner Cable ................................................. 4,726
Citysearch .............................................................. 4,177
Yahoo! People ........................................................ 4,039
SMARTpages ........................................................... 3,457
Whitepages.com ..................................................... 3,130
MSN Yellow Pages ................................................... 2,536
Government Guide .................................................. 2,480
AOL Yellow Pages ................................................... 2,456
E.W.Scripps Newspapers ........................................ 2,057
Yellowpages.com .................................................... 1,640
Source: Neilsen//NetRatings
And, Nielsen//NetRatings reports that Yellowpages.com had 1.6 million unique users in May, 2003 while Superpages.com from Verizon gained over 7.6 million unique visitors.
Unique Audience for Top Directories/Local Guide Sites Among US Internet Users, 2003 (x000)
Yahoo! Get Local ..................................................... 17,267
Superpages.com ..................................................... 7,688
Switchboard.com .................................................... 5,193
Time Warner Cable ................................................. 4,726
Citysearch .............................................................. 4,177
Yahoo! People ........................................................ 4,039
SMARTpages ........................................................... 3,457
Whitepages.com ..................................................... 3,130
MSN Yellow Pages ................................................... 2,536
Government Guide .................................................. 2,480
AOL Yellow Pages ................................................... 2,456
E.W.Scripps Newspapers ........................................ 2,057
Yellowpages.com .................................................... 1,640
Source: Neilsen//NetRatings
