I have a lot of respect for the tenacity and vision of Tim Westergren and the gang over at Pandora. If you’re a fan, there is a great interview with Tim available on press:here (I’ve embedded the first section below but you can get all three sections through the previous link). In addition, TechCrunch ran a story on Friday, detailing how they were on the verge of shuttering their doors only to break through and expecting to be cash positive by the end of 2009.
According to Tim, Americans spend 20 hours a week listening to music, 17 of which is not self selected (meaning, they are not grabbing a CD and popping it into their player – rather they are streaming music: Radio, Internet, etc). This equals a significant opportunity to advertise to an attractive audience set. Pandora has capitalized on this by creating a service where the the user is very interactive with the website – up to 7 times per hour rating songs or bookmarking songs. Each of these user activities provide the opportunity to present an advertisement through a ‘skin’ on the site or a video interstitial between songs (Intel has used both in our advertising efforts with Pandora). That, coupled with the 10-15 second audio spots sprinkled within your stream, ensures a significant interaction between brand advertiser and consumer on Pandora each hour.
From his discussion with Sarah Lacy of TechCrunch post-interview with press:here regarding the success of advertising on Pandora:
“I think it’s because the interaction doesn’t feel like work. It’s a natural instinct tied to the ability to affect the listening, and it’s rewarding.” (credit TechCrunch)
That reward translates into a significantly higher interaction rate (up to 10x) with ads served on Pandora when compared to industry average – which will make advertisers very happy. Count me as one of them. Keep up the great work Tim and Team Pandora.
According to a recently released report by the research group Interpret LLC:
“Twitter users are twice as likely to review or rate products online (24% vs. 12%), visit company profiles (20% vs. 11%) and click on advertisements or sponsors (20% vs.9%) as those who only belong to traditional social networking websites like Facebook and MySpace. The data suggests that Twitter users uniquely demonstrate higher engagement with brands, not just with “tweets” they post.“ (credit: All Things Digital)
This is an interesting finding, especially when you consider that 20% of Tweets mention Brands and Products, according to Researchers at Penn State’s College of Information Sciences and Technology. Message to Brand Marketers, if you’re not already looking at Twitter as a community that is receptive to your message – you should be.
Recently I had the opportunity to share some thoughts with Jim Hopkinson of the Hopkinson Report about my vision of the future of advertising and the effect of social media on that traditional craft. I’ve done a fair bit of public speaking, but this is my first podcast and it was great to do – Jim is good at his trade. I’d like to think that I represented a collective vision for all the smart people at Intel that are doing breakthrough work in the advertising and social media space. If you have a spare twenty minutes and care to gain some insight on my thoughts, give a listen or download from iTunes for your next commute. In addition, if you’d like to read the full transcript instead of taking in the audio stream, that’s available on the site as well.
Being in the media business, this is a question that I get quite a bit – from peers, from vendors, and yes – from my agencies. Being any agency of record for Intel is not an easy task. We are a very demanding client and our pace of business is extremely fast. We are also very results oriented and measurement driven, something you would expect from an engineering based company. As a result we are accutely interested in the ROI of every campaign we launch. Today I came across an article on MediaPost that discussed how ad agencies need to evolve to better meet their clients needs and deliver a ROI-positive advertising approach. Below is the summarized list (not in priority order), the full article articulates the details behind each tenant. Personally – the two that matter most to me are #1 and #5 – both are top priorty for me as I work through campaigns with my agency partners.
1. Become partners with your clients
2. The creative talent must work hand-in-hand with the analytics team
3. Don’t think you have to sacrifice the brand on the altar of results
4. Members of the creative team should review and analyze results regularly
5. Include performance goals in the creative brief
As we move progressively faster into the digital world, where real time information is readily available through small screens (phones) and big screens (web enabled TVs) alike, publishers will need to focus on content that transcends the real-time web. Those that don’t, won’t survive. The Economist is a shining example of focused, rich content. Per a recent report in the NY Times, they are also leading a trend for publications increasing their subscription cost – even in a down economy. Their rationale? Loyal, involved, and interested readership – willing to pay a premium for good content. It’s paying off . Despite the dramatic increase in the cover price (60% rise in 5 years), circulation is up and purchases @ the newsstand have increased by 50%. From Alan Press, senior vice president for marketing in the Americas at the Economist Group:
“We get more money out of our readers than advertisers, and that’s a very different model….We’ll never discount the kind of content we have.”
In a time when we are willing to shoulder a higher cost for our cable subscription, over-priced concert tickets, or even a super-sized meal at our favorite fast food restaurant, it would be a shame to shun a slightly higher price for an avenue to actually learn something…
Ad spends are down across the board. In the auto industry, it is almost non-existent. Watching the NCAA tournament this past weekend, I took note of which auto manufacturers were running 30 second spots on TV. Two – Ford and Saturn – and their format and spots were very different. Saturn went with the human element – putting their employees in front of the camera and letting everyone know ‘We’re still here‘, while Ford chose to leverage two of the hottest properties currently on TV – American Idol and March Madness. I can’t imagine what those spots are costing them – but it appears that they are taking advantage of available inventory and are probably paying significantly less than what they have paid for each of their previous American Idol sponsorships.
What’s interesting is looking at the hard push by Saturn to remind us that their still around, even when there is wide spread speculation that they are close to being shuttered by GM. Who do you believe? Maybe the true temperature check is with the major TV networks. One of the headlines in the Wall Street Journal today shows us the breadth of collateral damage: “CBS Shares Drop On Downgrade, Auto-Ad Concerns “. The article goes on to state:
“Shares of CBS Corp. (CBS) dropped as much as 18% Monday after UBS cut its stock-investment rating and as concerns about the auto sector hurt the media company….A significant portion of CBS’ revenue – 65% – is generated through advertising sales, and the auto industry has traditionally been one of the largest advertisers.”
The key quote, from my perspective, in this article is the following:
“Ad buyers are looking for higher return on their marketing investments”
You bet they are – and if they get pushback from one network, the next in line will step up with a better offer.
Recession. Wikipedia defines it as “…a general slowdown in economic activity in a country over a sustained period of time, or a business cycle contraction.“ Yes – we’re definitely smack in the middle of a recession.
In the profession that I am in – marketing and media – we see the effects squarely hitting the budgets we use to promote and market our products. Personally, my media budget of 2009 looks vastly different than it did just one year ago. That’s not to say we are de-emphasizing the importance of advertising within our marketing mix, but we are definitely looking to make every dollar we spend work harder for us during this time. In addition we are looking at ways we can integrate ‘human’ capitol into our plan to augment the $$ we are actually spending.
What’s interesting about this is that we are not alone in continuing to maintain, if not increase, our focus on Social Media during this downturn. According to Forrester Research through findings in a recent survey, it was determined that “the use of social media as a marketing tool is on the rise” (from ReadWriteWeb). In fact the report continues to say that over 50% of the marketers surveyed indicated that they will actually be increasing the spend on social media and social tools in the coming months (diagram below from ReadWriteWeb).
For those companies that can afford to ‘spend their way through the recession’ the opportunities that come with it are interesting. How you ask? With so many companies reacting to the downturn by sharply reducing money spent on advertising from their marketing budgets, rates will become cheaper as a result of the decreased demand. For those willing to continue to spend in this environment, they will be able to advertise without having their message diluted by competitors – for a significantly lower cost. The moral I pull from these reports is to be smart where you cut your budgets, because the opportunity to break through the clutter and advertise your product may not be as costly as you think.
Razorfish released their 2009 Digital Outlook Report yesterday. Interesting read that covers a new role for agencies, what’s emerging, consumer conversations, the evolution of research and measurement, and 3 things every executive should know in 2009. I thought the “Trends in Social Influence Marketing” and “Bringing Media Mix Models Into the Digital Era” were very insightful.