February 23, 2012
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Mobile-transactions market is next social frontier

The fledgling mobile transactions market, which some experts expect to reach $1 trillion globally by 2015, is about to get a hyper-boost from Facebook, Twitter, Square and other social media players that consider e-sales the new end game.

Despite discrepancies among forecasters, mobile transactions are clearly morphing into a critical revenue stream for retailers and products and service providers. The 15% leap in online holiday spending to more than $35 billion, and the overall retail e-commerce grew 13% to $161.5 billion in 2011, according to comScore, were driven by consumers’ accelerated use of mobile price comparison and payment apps.

This activity has been fueled by Square, which progressively facilitates mobile consumer transactions by acting as a medium between merchants and payment networks (credit-card companies and banks) across all smartphones, tablets and other mobile devices.

In addition to securing consumers’ personal information and providing effective user discount incentives, Square creatively uses hyper-local and social media app components–all of which are driving a flood of competing mobile payment solutions.

The mobile transaction opportunity is huge, according to Wedbush Securities, which estimates the transaction volume across Square’s four payment networks (Visa, MasterCard, American Express and Discover) was more than $6 trillion in 2010.

Little wonder that Facebook and Twitter are positioned for a bigger piece of the action by way of an aggressive mobile ad grab, which the social networks consider a means to a transactional end.

Facebook is leveraging off of its “like” and “own” buttons and new Timelines by inserting featured stories (or relevant marketing-inspired posts) into mobile feeds that are squarely aimed at its 425 million active mobile users. Facebook recently announced a partnership with UK mobile billing and analytics provider Bango, considered a step toward monetizing expanding browser-based mobile platform beyond its Facebook credits program.

While the domestic mobile ad market is an estimated $2 billion, it is a sure stepping stone to the larger mobile transaction market, which can be incrementally shared by all players. Facebook is playing off its competitive share of online display ad revenues in the U.S. and the UK and reliance on small businesses. It must make a major play for mobile transactions to justify its proposed $100 billion public valuation.

Competition for the mobile transaction market is coming from many corners, including Twitter, which announced an expansion of its self-serve advertising program with American Express as a partner. The goal is to attract the small-to-medium local businesses where mobile transactions and marketing can be a big win-win for all concerned. The program opens up to anyone with a credit card later this year.

Location-based interactivity will transform advertising and marketing into precursors to secured, single-click sales.

Social networks are serious contenders for mobile advertising and commerce dollars; they account for one in every five minutes online globally and reaching 82% of the world’s Internet users (or 1.2 billion users), according to comScore. With transactions being the ultimate objective for all marketers, it is likely that by decade’s end, Facebook and Twitter will be vying for more of the television’s $9 billion upfront ad pie alongside Google and Hulu, which are aggressively positioning themselves this spring with the Big Four TV networks.

The direct line to consumers adeptly secured and mined by Facebook will give it an edge as marketers increasingly realize transactional revenues as a measured ROI.

A recent Yankee Group survey revealed that consumers value banking and transaction apps second only to social networking apps as the most important on their smartphones, a simple but impressive indication of just how comfortable they have become with using mobile devices for secured personal transactions.

It is a sure sign of the next phase of connected growth. What we’ve seen so far has been all about consumers learning to “navigate their lives,” according to LinkedIn co-founder Reid Hoffman. What we’re about to see unfold is how consumers use connectivity to monetize their lives. The race is on for a piece of that new economy.

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February 15, 2012
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Geo-targeting apps may find themselves in 2012

Where Are You Going, Where Have You Been?

Location-based technology will redefine behavioral targeting, maybe sooner than you think.

Photos: Joshua Scott; Prop Styling: Terry Lewis for agentoliver.com

That future in which a bus-shelter ad equipped with geofencing technology scans your smartphone as you stroll by—inviting you to, say, a free latte or a cut-rate back rub—may not be so far off after all.

“2012 is going to be a huge year in terms of innovation—not just with respect to being able to leverage location to contextualize the types of advertising and offers that a consumer receives, but also then to turn the corner on that and turn it into actual commerce in the physical world,” said Walt Doyle, CEO of the location-based service Where. Last spring, eBay bought Where to facilitate its mobile transactions. It will figure heavily in the forthcoming mobile-commerce initiative of eBay’s electronic payment service PayPal, which has already been tested with Best Buy and Home Depot.

And geotargeting doesn’t stop with the widely cited example of a free cup of Starbucks. While often accused of not living up to its promise, we likely will see the day, and soon, when location-based technology redefines behavioral targeting as we know it, when a consumer packaged-goods company recognizes that a shopper is in the cereal aisle and sends a Wheaties coupon to her phone. What’s more, in the not-so-distant future, a marketer could use technology like that of Where to track a person’s daily routine so precisely that it knows when she’s on her way to the office, the gym or home for the evening.

To be sure, the future of location-based marketing is about more than just check-ins.

While Foursquare, the most famous LBS, certainly opened our eyes to the potential of marketing via GPS-enabled devices and made check-ins part of the language, the category is much bigger than one company. In fact, in its current life stage, location-based advertising is far more likely to involve a brand testing mobile banners that factor in a user’s location than any single location-centric social network or app.

Foursquare may have given way to countless marketing campaigns, but it’s a mistake for marketers to equate location-based mobile marketing with a mere check-in campaign, said Forrester Research analyst Melissa Parrish—especially considering that, despite its high profile, Foursquare is not all that big.

According to a Forrester report last December, only 6 percent of U.S. adults online have used an app like Foursquare or the now-defunct Gowalla (which Facebook acquired in December), representing just 2 percent growth year on year. Compare those stats to a 2011 Pew Research Center Internet and American Life Project survey which found that 55 percent of smartphone owners had used their devices for location-based information such as restaurant recommendations or driving directions.

The biggest obstacle to a check-in campaign may be the check-in itself. Plenty of brands display signage in retail locations to remind shoppers to check in, but consumers can easily ignore the call to action.

For some brands, location-based marketing remains a work in progress.

Take JetBlue Airways. Members of JetBlue’s TrueBlue loyalty program can link their accounts to an app on the company’s Facebook page. Then, by checking in at various JetBlue terminals, they automatically received TrueBlue points or special offers.

To encourage customers to participate, the airline’s agency Mullen executed a campaign in which travellers automatically received text messages when they entered an airport, reminding them to check in—a tactic known as geofencing. But as the airline shifted focus to updating its digital platforms (JetBlue unveiled redesigned mobile and desktop sites as well as an iPhone app last week), the check-in campaign went dormant.

Jonathan Stephen, head of mobile at JetBlue, says it’s not dead, however. “We started to focus on our digital refresh program where we introduced some newer technologies such as push notifications in our iPhone application,” he said. “We felt that with the tremendous number of iPhone users that we have, we wanted to leverage the push notification service to send them, perhaps, location-based messages. It’s something that we’re looking into at this point. It’s sort of a crawl, walk, run approach.”

JetBlue doesn’t run location-based mobile ads, says Stephen. One brand that does is The Weather Channel. Its mobile app, which specializes in local weather information, helps brands target users based on their location. Westin Hotels and Resorts teamed with TWC on its “Wipe Away Your Weather” campaign last fall. “It knew where the user was and then allowed them to wipe away from the screen elements of their local weather,” said Pat McCormack, TWC’s vp of mobile sales and strategy. “So if it was [snowing] in Vermont, you wipe away the snow and reveal resort destinations in warm weather climates.”

By Tim Peterson

February 2, 2012
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How China is innovating

FEBRUARY 2012 • Gordon Orr and Erik Roth

Dynamic domestic players and focused multinationals are helping China churn out a growing number of innovative products and services. Intensifying competition lies ahead; here’s a road map for navigating it.

China is innovating. Some of its achievements are visible: a doubling of the global percentage of patents granted to Chinese inventors since 2005, for example, and the growing role of Chinese companies in the wind- and solar-power industries. Other developments—such as advances by local companies in domestically oriented consumer electronics, instant messaging, and online gaming—may well be escaping the notice of executives who aren’t on the ground in China.

As innovation gains steam there, the stakes are rising for domestic and multinational companies alike. Prowess in innovation will not only become an increasingly important differentiator inside China but should also yield ideas and products that become serious competitors on the international stage.

Chinese companies and multinationals bring different strengths and weaknesses to this competition. The Chinese have traditionally had a bias toward innovation through commercialization—they are more comfortable than many Western companies are with putting a new product or service into the market quickly and improving its performance through subsequent generations. It is common for products to launch in a fraction of the time that it would take in more developed markets. While the quality of these early versions may be variable, subsequent ones improve rapidly.¹

Chinese companies also benefit from their government’s emphasis on indigenous innovation, underlined in the latest five-year plan. Chinese authorities view innovation as critical both to the domestic economy’s long-term health and to the global competiveness of Chinese companies. China has already created the seeds of 22 Silicon Valley–like innovation hubs within the life sciences and biotech industries. In semiconductors, the government has been consolidating innovation clusters to create centers of manufacturing excellence.

But progress isn’t uniform across industries, and innovation capabilities vary significantly: several basic skills are at best nascent within a typical Chinese enterprise. Pain points include an absence of advanced techniques for understanding—analytically, not just intuitively—what customers really want, corporate cultures that don’t support risk taking, and a scarcity of the sort of internal collaboration that’s essential for developing new ideas.

Multinationals are far stronger in these areas but face other challenges, such as high attrition among talented Chinese nationals that can slow efforts to create local innovation centers. Indeed, the contrasting capabilities of domestic and multinational players, along with the still-unsettled state of intellectual-property protection (see sidebar, “Improving the patent process”), create the potential for topsy-turvy competition, creative partnerships, and rapid change. This article seeks to lay out the current landscape for would-be innovators and to describe some of the priorities for domestic and multinational companies that hope to thrive in it.

China’s innovation landscape

Considerable innovation is occurring in China in both the business- to-consumer and business-to-business sectors. Although breakthroughs in either space generally go unrecognized by the broader global public, many multinational B2B competitors are acutely aware of the innovative strides the Chinese are making in sectors such as communications equipment and alternative energy. Interestingly, even as multinationals struggle to cope with Chinese innovation in some areas, they seem to be holding their own in others.

The business-to-consumer visibility gap

When European and US consumers think about what China makes, they reflexively turn to basic items such as textiles and toys, not necessarily the most innovative products and rarely associated with brand names.

In fact, though, much product innovation in China stays there. A visit to a shop of the Suning Appliance chain, the large Chinese consumer electronics retailer, is telling. There, you might find an Android-enabled television complete with an integrated Internet-browsing capability and preloaded apps that take users straight to some of the most popular Chinese Web sites and digital movie-streaming services. Even the picture quality and industrial design are comparable to those of high-end televisions from South Korean competitors.

We observe the same home-grown innovation in business models. Look, for example, at the online sector, especially Tencent’s QQ instant-messaging service and the Sina Corporation’s microblog, Weibo. These models, unique to China, are generating revenue and growing in ways that have not been duplicated anywhere in the world. QQ’s low, flat-rate pricing and active marketplace for online games generate tremendous value from hundreds of millions of Chinese users.

What’s keeping innovative products and business models confined to China? In general, its market is so large that domestic companies have little incentive to adapt successful products for sale abroad. In many cases, the skills and capabilities of these companies are oriented toward the domestic market, so even if they want to expand globally, they face high hurdles. Many senior executives, for example, are uncomfortable doing business outside their own geography and language. Furthermore, the success of many Chinese models depends on local resources—for example, lower-cost labor, inexpensive land, and access to capital or intellectual property—that are difficult to replicate elsewhere. Take the case of mobile handsets: most Chinese manufacturers would be subject to significant intellectual property–driven licensing fees if they sold their products outside China.

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January 25, 2012
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Virtualization gains wider acceptance, survey finds

A survey from the Corporate IT Forum has found that more than 60% of its members are running virtualisation for server consolidation and to reduce IT costs.

“Virtualisation is established. It is a known thing. People are happy with it. The distinction between private cloud and virtualisation is becoming blurred,” said Dani Briscoe, research services manager at the Corporate IT Forum.

She said virtualisation allows users to streamline efficiencies in their datacentres and potentially prepare business for the cloud. When the Corporate IT Forum conducted a survey on virtualisation 18 months ago, Briscoe said it was not an obvious progression to move from virtualisation to cloud computing.

Given that IT budgets have remained flat, she said IT managers are linking virtualisation to cost saving: “One box can run many servers. People can reduce hardware support costs, but there is added complexity in licensing costs.”

Many are using virtualisation as an opportunity to rationalise the application estate and simplify complex hardware environments. Savings in both hardware and support is the objective of many organisations.

Optimising costs, doing more with less and doing it better is the key aim across the sectors in 2012, and virtualisation has an important part to play in optimising costs, through the continued virtualisation of the IT estate. One respondent said they were planning to “reduce costs by use of extensive virtualisation”.

Virtualisation technology has also improved IT administration, especially in terms of de-skilling server provisioning and allowing fewer staff to administer large virtual server farms. “People no longer need to know how to build a computer from bottom up. There is black box mentality,” said Briscoe. Users can simply drag and drop virtual servers to configure them.

The Corporate IT Forum conducted the survey of its members in the fourth quarter of 2011, and the results were analysed in the first quarter of 2012. The survey received 692 responses from 170 organisations.

According to the survey, ongoing virtualisation is highest on the agenda in retail sector IT (65%) and lowest in manufacturing sector IT (48%).

By Cliff Saran

January 19, 2012
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What is Cloud Computing?

Imagine your PC and all of your mobile devices being in sync—all the time. Imagine being able to access all of your personal data at any given moment. Imagine having the ability to organize and mine data from any online source. Imagine being able to share that data—photos, movies, contacts, e-mail, documents, etc.—with your friends, family, and coworkers in an instant. This is what personal cloud computing promises to deliver.

Whether you realize it or not, you’re probably already using cloud-based services. Pretty much everyone with a computer has been. Gmail and Google Docs are two prime examples; we just don’t think of those services in those terms.

In essence, personal cloud computing means having every piece of data you need for every aspect of your life at your fingertips and ready for use. Data must be mobile, transferable, and instantly accessible. The key to enabling the portable and interactive you is the ability to synch up your data among your devices, as well as access to shared data. Shared data is the data we access online in any number of places, such as social networks, banks, blogs, newsrooms, paid communities, etc.

Ultimately, your personal cloud—which includes everything from your address book and music collection to your reports and documents for work—will connect to the public cloud and other personal clouds. Everything connects. That means every place on the Internet you interact with, as well as every person you interact with can be connected. This includes your social networks, bank, university, workplace, family, friends—you name it.

Of course, you will determine what you show the public and what you keep private. Clusters of personal clouds will form new social networks that will likely have a lot more privacy settings than Facebook, especially if these clusters are family or business oriented. (Privacy will be a huge issue as personal clouds hit critical mass.)

Eventually, like the smart house in the TV series Eureka, your devices will learn about you and eventually intuit what you are doing, where you are going, and what you intend to do when you get there. Think of all this as helpful… not creepy.

This might all sound a bit like science fiction, but this is exactly where we’re headed with cloud computing. We’re not quite there yet, though. We’re all still creating our personal clouds.

So, what is involved in creating a personal cloud and what can you do with it right now? We’ll explain the basics here and, in our subsequent pieces, we’ll delve in to the specifics. We’ll take a look at the features within Windows 7 and Windows Live that will take you to the cloud—often without you even knowing it. So, check back for stories about Photo Fuse, Windows Live Messenger, Windows Live Mesh, SkyDrive, and more.

Microsoft Windows 7 and Your Personal Cloud

Technology insiders like to talk about the “consumerization of IT” and how such things as social networking are changing the business landscape. With its latest cloud-enabled product lineup, Microsoft seeks to flip this equation, banking heavily on the fact that a technology previously confined to corporations can be packaged to appeal to consumers.

Featured prominently alongside all of Microsoft’s lineup of products (Windows 7, Office 365, Windows Live, etc.) is its personal cloud.

“The personal cloud is a way to link several experiences together for end users,” said Steven Guggenheimer, corporate vice president of Microsoft’s OEM Division. “Technology is converging, with devices using similar operating systems, networks and radio stacks, but as technology converges, devices tend to diverge. The next challenge, then, is to figure out how to get content to behave consistently across a range of very different devices.”

Today’s cloud is very good at synching content across a single vendor’s devices. A recent Microsoft demo by corporate vice president Brad Brooks shows how Windows 7, Bing, Windows Phone 7, Windows Live, and other services interact to create a connected personal cloud.

In the demo, Brooks uses Bing as his search engine and pulls up one of his favorite bands, ZZ Top. When an entertainment button on the top of the Bing UI is clicked, the search returns relevant media items, including song snippets, upcoming concert dates, and one-click buying links to various music services, including Zune Marketplace, Apple iTunes, and Amazon MP3.

When Brooks downloads Sharp Dressed Man, the song is not just queued up in his PC-based Zune player, it’s automatically synched across his personal cloud, meaning that it’s synched up and ready to play, with no intervention from him, on his Windows Phone 7 device. He then shows photographs that he took with his phone and explains how they were immediately loaded in a Web-optimized format on SkyDrive, a Microsoft cloud storage service. (We’ll be detailing SkyDrive later in this Personal Cloud series.) Later on, once the phone is cradled in his home network, the photographs will be available throughout his home network, accessible on devices that range (eventually) from his PC to the TV to digital picture frames.

With the personal cloud in the background, consumers can have music hubs, photo hubs, productivity hubs, and more, from which they can access content consistently on whatever device they have, wherever they happen to be.

Personal Cloud and Your Work Life

Today’s cloud originated because the typical enterprise application was too bloated and required too much maintenance and support. They were also all-or-nothing affairs. You didn’t just pay for what you used. Rather, you paid for all of the features that came with the software, even if only a small percentage of the features were applicable to you.

When service providers offered a different delivery model, and, more importantly, different pricing models, companies realized that they no longer needed to pay for and manage heavy infrastructures for things like Customer Relationship Management (CRM) and Enterprise Resource Planning (ERP) software.

What does this mean for the consumer in the workplace? We’re heading toward being able to data mine on the fly. What most consumers will notice is that it’s getting easier and easier to have a consistent experience whether you’re on your phone, PC, or some other Internet-enabled device. Smartphones already deliver this to a degree. Browser-based e-mail and popular e-mail programs like Outlook sync up easily with smartphones. Meanwhile, cloud services, such as Grooveshark, Facebook, and Twitter, all have mobile extensions.

But data mining, to some degree, is already easier, thanks to tools like those found in Windows 7. You can start implementing your own data mining system and synching up with other people’s data, with permission, of course. These are the first examples of interactive personal clouds coming to life.

There’s also analytics-driven data mining for Internet data and the ability to synch it up, as well as categorize it across all your devices. Say you’re researching cloud computing for a business meeting. You decide there’s an intersection between cloud computing, analytics, data mining, and business intelligence. You have, somewhere on your PC, articles about each of these subjects that you’ve collected over the years. With personal cloud tools, you could ask your hard drive for all of these articles, as well as those you find on the Internet, to be retrieved and regrouped under the title “personal cloud,” with subcategories and cross references, and all of this would be synched to all of your devices. Think about the number of hours, perhaps days, of busy work this could save. We’ll be looking at some of these cloud-based tools, including Windows Live Sync, Office Web Apps, and SkyDrive, later on in this series.

Let’s face facts: We’re moving to a cloud-based computing society—some of us faster than others. And it’s a fascinating prospect—once you get past all the jargon.

What Constitutes a Cloud Service?

The way vendors and analysts define cloud computing is all over the map. Some of the confusion is due to marketing hype, some to nitpicking technical disagreements. When everything has the label “cloud” on it, the term loses its meaning.

IDC came up with a handy checklist to determine whether or not something should be called a “cloud” service.

Key Cloud Services Attributes:

Off-site, third-party provider
Accessed via the Internet
Minimal/no IT skills required to implement
Provisioning = self-service requesting; near real-time deployment; dynamic and fine-grained scaling
Pricing model = fine-grained, usage-based (at least available as an option)
UI = browser and successors
System interface = web services APIs
Shared resources/common versions (customization “around” the shared services)

Source: IDC, September 2008

By Rivka Tadjer

January 11, 2012
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The next industrial revolution

Economic advances now sweeping through China, India, and other emerging markets dwarf the pace and scale of the Western world’s industrial transformation in the 18th and 19th centuries. As three billion more middle-class consumers join the global economy over the next two decades, the resource landscape will change profoundly: demand for many commodities will soar, and new technologies will be needed to counterbalance critical shortages of food, water, and other resources.

“Mobilizing for a resource revolution” shows how higher resource productivity and expanded supply can meet this surging demand. “Voices on the resource revolution” comprises three video interviews on the risks and opportunities ahead, with Harvard historian Niall Ferguson, the North American CEO of a leading water services company, and Boeing’s environmental chief. “Five technologies to watch” explores potentially revolutionary approaches that could dramatically affect the unfolding of the resource productivity revolution.

A great change is coming.

December 29, 2011
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New year might bring rapid change in media universe

The Media Equation
New Rules for the Ways We Watch

For the last year, media pundits like me have been running around screaming our heads off about falling skies and collapsing paradigms, and yet as 2011 comes to an end, the sky is still there.

Yes, competition is storming out of every device and connection, and consumers have choices and leverage they never dreamed of. But network television continues to waltz along, attracting advertisers in big numbers. Cable had a great year, and media octopuses like Time Warner and News Corporation continue to find plenty of profits. Big media companies still rely on huge, well-entrenched assets that include brands, distribution and capital.

But even if the sky is still aloft, there are visible, portentous cracks appearing. The inertia that has kept consumers from bolting from traditional content providers is beginning to erode as a new generation remakes media in its own image. Device companies and search outfits are intent on manufacturing their own content. And the migration of movies, music and video to the cloud could change the weather in a hurry.

Even as some of the old truisms in media still obtain — content wears the crown and strong brands break through clutter — a few new rules are taking shape.

A SCREEN IS A SCREEN Steve Jobs taught us a bunch before he exited, but one of his most current lessons could be the one with the most far-reaching implications. Content has a price tag, which is reassuring, but the old dividing lines between television, radio, Web and print disappear within the four corners of a tablet. That means, for instance, that CNBC and The Wall Street Journal are not in different businesses anymore, and in fact The Journal is adding hours of live video with each passing month. The BBC and Al Jazeera are no longer regional curios, they’re here. Every cable channel with two nickels and more than a few digital enterprises is financing the kind of narrative television that used to be available only at a certain time on a certain network.

NEW NETWORKS EVERY DAY On Christmas Day, a lot of people took the ribbon off a Web-enabled flat-screen television, and now the fight for real estate on all those enhanced television screens will be fast and furious. Cable providers will try to keep people from downloading the products of insurgent Web “broadcasters,” but they can’t stop what’s coming. They will have to win by providing value that trumps the now-infinite channel universe of the Web.

The $27 billion that traditional media just paid to the National Football League is a hedge, not an answer. So-called virtual operators — Netflix, Hulu, Amazon, Google and Apple — have none of the legacy or infrastructure costs. Google has unleashed $100 million to seed new programming on YouTube, and Netflix is financing a series by the director David Fincher. That gaming device your children are playing with? That too is a network in the making. Traditional networks and cable providers have the content, but if they hold on too tight, they will miss out on vast new avenues of distribution and revenue.

THE REMOTE AS BRICK The iPad is a screen on your lap that makes it easy to navigate toward a completely personal experience. That screen on your living room wall is going to have to perform the same way to remain relevant. As it has in many other areas of technology, the smartphone will point the way. Our phones — and now tablets — are always on and poised for action.

When I switched from the first iPad, which took a few seconds to boot, to the iPad2, which stands ready for duty every time I lift its cover, my use more than doubled. I expect that other devices will greet me in similar fashion. Navigating is as easy as a swipe of the finger or, in the case of the new iPhone, a verbal request to Siri.

As for your remote control, well, using it is a little like hitting your television with a stick until it finally delivers what you want. If things go as they should, we will spend less time looking under the couch for the remote and more time telling our television to get us the seventh episode of the second season of “Boardwalk Empire.” (Beginning in December, Xbox 360 owners were already able to search TV shows by voice.) And our media identity is becoming ubiquitous, and transportable: someday, I should be able to walk into a hotel in Kansas, tell the television who I am and find everything I have bought and paid for, there for the consuming.

CELEBRITY AS COMMODITY The multiplatform and infinite-channel universe can manufacture its own celebrities. Is Scott Pelley a more important asset than Kim Kardashian? You may not know who Rebecca Black is, but more than 14 million YouTube users do and have spun her ridiculous music video “Friday” to laugh at or with her. Oprah Winfrey, the celebrity with the golden touch, got clobbered when she started her own network. Anderson Cooper felt compelled to do a daytime show to diversify his bets. Keith Olbermann and Charlie Sheen thought their audiences were a movable feast, but big chunks of their followers stayed put to watch Rachel Maddow and Ashton Kutcher in their slots.

THE FUTURE WILL BE HACKED I happened to be at dinner with Howard Stringer back in June when Sony and its PlayStation network were under attack by hackers. Mr. Stringer, an even-keeled executive who has lived through all kinds of challenges, looked as if he had stumbled onto a beehive. It’s nice that NBC News has a Twitter account for breaking news; but when the hacked version started spitting out alarmist messages about an attack during the run-up to the Sept. 11 anniversary? Not so great. In November, the digital wrenches of Anonymous wreaked similar havoc on Fox News. As more vital content is distributed from the cloud and not cables, security breaches will not be something media companies report about, but something they live through.

THE CONSUMER WILL DECIDE Yes, consumers are programming their own mediated universe, but they can snap healthy companies in two while they are at it. Last year I wrote a story about Netflix’s deft understanding of consumer preferences, but in September the company decided to split its DVD and streaming options into two services, and that, in addition to a price increase, cost the company almost a million customers. The Daily, an iPad-only newspaper started by The Wall Street Journal, came out to a herald of trumpets and now hears only the sound of crickets. Research in Motion decided people wanted a cheaper tablet. Turns out they wanted one that worked, as well.

MASH-UPS AND HYBRIDS WILL RULE Everything that can be mashed together will be. The Tea Party will do a debate with CNN, and the Showtime series “Homeland” will be a cable series, an on-demand product, an app and a community. That informational crawl at the bottom of your television set? It could come from the broadcaster or it might come from Twitter. Soon the Oscars award show could be accompanied by comments from your wisecracking friends, not on your phone but on the bottom of your flat-screen. Huge world events will first appear on social media platforms and then leap to mainstream media and back again. The books you read to your children will take over when you are tired and read themselves, or they might turn into a game when the joys of unadorned narrative begin to bore.

SOCIAL MEDIA AS ITS OWN FRIEND Facebook wants to be your cultural operating system, providing recommendations and serving as a platform for music, movies and news. Twitter has taken its initial lightweight design and begun to offer more windows of content, hoping to keep you tuned in for more than 140 characters. If these services are capable of fomenting revolutions against repressive regimes, they can do plenty of world-changing right here. Occupy Wall Street drew enough notice with D.I.Y. media to command a national stage and reorder the discussion.

What else will we be watching for in the coming year? The fates of Julian Assange and Rupert Murdoch, two men who changed the world in very different ways and are now both being pursued, will probably be decided. We’ll find out whether the 38 or so Republican debates will give the party’s nominee an advantage against the president. And everyone, especially the people at Apple, knows that the consumer response to its next big thing — iTV anyone? — will be a referendum on whether the company can prosper absent its visionary in chief.

By DAVID CARR

December 18, 2011
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Portals struggle for relevance in a social world

Agencies, marketers, and research data all say the same thing about Facebook’s 2011 ad sales. The social giant left portals Yahoo, AOL, and MSN in the dust, as well as most major publishers.

“It’s definitely a challenge to [Yahoo, AOL, and MSN],” said Scott Symonds, head of media for digital agency AKQA. Symonds said Facebook’s marketing allure lies in not only its 800 million worldwide users, but also how it can offer advertisers routine follow-up pitches in terms of the likers/fans community they build on the social site.

“There’s the whole concept of earned media and talking to influencers around your brand,” he said. “We’ve seen that positive impact in surveys. We’ve seen it in data from Nielsen, etc. I think Yahoo, AOL, and MSN all have great content. They are all trying to find a way to make their content more sharable so they can compete with Facebook, which has a pretty good advantage right now. The portals are not even disputing that. They are trying to socialize their inventory.”

Digital shop Big Spaceship is experiencing the same trend. “Specific to our clients, I’ve seen larger and larger portions of our media agency partners’ display budgets allocated to Facebook,” said Victor Pineiro, a Big Spaceship strategist. “Especially since Facebook released Sponsored Stories, [which is] an ingenious way to leverage fans’ social graphs to propel ads socially and organically.”

Brian Yamada, executive director for Kansas City-based ad agency VML, offered up a more nuanced assessment. He echoed some industry analysts who have concluded that Facebook is nabbing more marketing dollars from traditional platforms like broadcast, print, and billboard than from other digital channels.

“I wouldn’t say an apple going to Facebook means an apple lost for portals,” Yamada said. “But I think the money is definitely following the eyeballs, and people are spending a lot of time on that particular platform now.”

Facebook’s Jump to No. 1 in Display

The anecdotal talk from agencies can be backed up with data from third-party researcher eMarketer. Facebook’s display ad revenues, according to the most recent eMarketer forecast, will total $3.8 billion this year – up 104 percent from 2010.

By comparison, Yahoo, AOL, and MSN’s display ad sales – not including search, to be clear – were modestly up year over year in what has turned out to be an uptick year for numerous display platforms. The fiscal quarters for the trio of aforementioned Facebook competitors, respectively, showed growth typically between 5 percent and 15 percent. In the meantime, according to eMarketer, Facebook has catapulted to No. 1 in display ads market share at 17.7 percent, beating Yahoo (13.1 percent), Google (9.3 percent), AOL (4.9 percent), and MSN (4.2 percent).

At this time last year, Facebook trailed Yahoo and Google. Five weeks ago, Yahoo, AOL, and MSN struck an unprecedented partnership for major display platform competitors, pooling together their unsold inventory in a deal aimed to increase their margins, secure higher prices for remnant ads, and augment the reach available to agencies and advertisers.

“Facebook has hurt publishers,” said Nichole Goodyear, a strategic adviser specializing in social media for marketing services company Extole. “They’ve hurt CNN, ESPN, and Yahoo – any of the big publishing or portal sites that we used to consume as the entry point of the Internet. They still have a lot of content on those sites. And they still have a lot of traffic on those sites. But what they call the ‘excess inventory’…They have a lot of excess inventory, which affects the price and supply curve. A large portion of that display advertising has shifted to Facebook engagement ads.”

Facebook vs. Google Battle Moves to Mobile

Bloomberg reported that Facebook would unveil mobile ads by the end of March. When it does introduce the commercial mobile feature, Facebook will likely find a burgeoning Google atop that emerging space. On Monday, IDC reported that Google was now leading mobile display in terms of market share, charting at 24 percent. According to IDC, a Boston-based research and consulting firm, ad network Millennial comes in second at 19 percent while Apple trails at 15 percent. Previously, IDC said, Apple had been in the No. 1 slot.

Whenever Facebook joins the mobile advertising fray, Pineiro from Big Spaceship said the move won’t come soon enough. “With more than 40 percent of Facebook users accessing the platform on mobile devices,” he said, “this [has been] an enormous missed opportunity.”

So because Palo Alto, CA-based Facebook has had a break-through year on the display ads front, a question begs: Can it make a similar impact in mobile advertising during 2012? Whatever the case, Symonds from AKQA predicted that social-centric platforms like Facebook and Twitter – as well as the more general digital powerhouse Google – would continue to disrupt the marketing world.

“As we build additional technologies around social media and refine our thinking to more socially focused rather than being reach or broadcast focused,” he said, “there is a potential for social media to not only shift the construct of digital marketing but marketing [as a whole].”

By Christopher Heine clickz.com

December 11, 2011
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Email Is The New Social

A recurring theme at this week’s MediaPost Email Insider Summit: social is the new email. There is a frisson of excitement about social media, but email marketers say they have been connecting people effectively for years.

“We call email the original social network because it really is social,” said Tynt CEO Derek Ball in a keynote address. “If you follow the popular media today, you would believe that the world revolves around what they deem social — which means Twitter, Facebook, and other things, which have social components to them.”

Social media is an important marketing platform for sure, he said, but “email is still a very, very critical component and will be for a long time.”

Ball offered data from March 2010 that shows 73% of sharing was happening on email, 25% on Facebook and 2% on Twitter. That has since changed markedly. Now, Facebook represents 69% of sharing and email represents 27%. But Ball said email marketers should not be unnerved.

“This initially sounds ominous,” he said. “This sounds like Facebook is cannibalizing email … [but] sharing as a whole has gone up massively in 18 months … so in fact, sharing via email has gone up a little over 20% in 18 months, so email is continuing to grow. It’s just that Facebook grew faster — much faster.”

Ball said marketers should look for ways to synchronize email and social media. “Recognize the two of them are very important together,” he said.

Tynt is a digital advertising company with clients such as Seventeen and the G4 network.

Also in his keynote, Ball offered five reasons why email maintains an advantage over social. It’s “asynchronous,” meaning time is not necessarily of the essence. A received email waits for the recipient in an in-box.

Email is more personal than, say, Facebook or Twitter. Ball referred to them as “broadcast platforms,” while “most of what comes into your email is very personal and tuned to you.” Email is also very trackable, with data on open rates and other behaviors, while it is “infinitely flexible” — there is no need to build a following or “friend” people or join a group.

And, Ball noted, it is “decentralized.” There is no big brother — no one controlling force. Facebook may change a rule and frustrate millions. Email has no rules.

December 3, 2011
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What marketers say about working online: McKinsey Global Survey results

Marketing executives agree that digital tools and technologies are valuable—but most of their companies are pursuing just a few opportunities online, and struggle to analyze online
metrics and capture better data.

Digital media and online tools remain a largely untapped resource for companies, according to a recent survey of marketing executives.1 Most respondents agree that their online presence is important and that digital tools provide their companies with a major opportunity, but few are taking the structural steps required to benefit from selling online or engaging consumers through new technologies such as social media. Indeed, most respondents indicate that companies are still trying to figure out how digital media can meaningfully improve their bottom lines. The survey asked marketing executives from around the world about the digital tools and channels their companies use and expect to use, the challenges they face and actions they have taken in response, and the metrics available to assess performance online.

Exhibit 1
Interacting with current customers

The state of play online
Marketing executives overwhelmingly agree that an effective online presence is very or extremely important for staying competitive—81 percent of them say so. And more than half of respondents say that over the past two years, the increasing prevalence of digital media and tools has changed their companies’ ability to interact with and serve new customer (Exhibit 1). Notably, about half as many cite either the ability to reach new customer segments or the emergence of new business models as one of the greatest effects of digital media’s pervasiveness. Overall, these tools seem to be creating little competitive differentiation. Just over half of respondents, for example, say their companies and competitors earn about the same share of revenue from online sales, with almost equal numbers of other respondents estimating shares above and below [..>]

McKinsey Global Survey results | What marketers say about working online

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