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Brands ‘not ready’ for digital era

Warc

Many brands are still “not ready for the digital era” as their marketing departments lack the skillsets necessary to thrive in the connected age, a leading executive has argued.

Speaking at the 2014 Association of National Advertisers (ANA) Digital & Social Media Conference, Bob Liodice, the organisation’s president/ceo, asserted that technology was a “critical enabler” for brands.

But exploiting the opportunities currently available – from formulating one-to-one conversations to driving innovation and pursuing purpose-driven branding – will require a significant shift in skillsets.

“We need to build skills,” Liodice said. (For more, including insights from senior marketers from Unilever, Ford and more, read Warc’s exclusive report: ANA’s Liodice outlines challenges (and opportunities) for the digital age.)

At present, he continued, the majority of organisations do not have the requisite talent in place to move ahead at the desired speed.

“Survey after survey suggests that we’re not ready for the digital era,” Liodice said.

“We found, in one survey, that only 25% of marketers said that they have the skillset necessary to be able to take advantage of the opportunities that are now afforded to them.”

Taking the next step, he reported, would demand a transition in mindset away from the existing marketing model towards a genuinely integrated approach.

“We essentially need to make a change from digital marketing to marketing in a digital age,” the ANA’s president/ceo asserted.

Marc Pritchard, Procter & Gamble’s global brand building officer, has put forward a similar theory, as he reflected that traditional ideas of digital marketing were almost “dead”.

Liodice drew attention to other marketers who had elaborated on such themes, like Joe Tripodi, evp/chief marketing and commercial officer at soft drinks giant Coca-Cola, who has called on brands to “embrace the values of millennials”.

Antonio Lucio, global chief brand officer at financial services group Visa, has further asserted that millennials are the most “equipped” to drive change, adding that “digital natives will rule the world”.

Yusuf Medhi, chief marketing and strategy officer for the XBOX games console at Microsoft, has equally encouraged marketers to “consume new technology – use it, spend time with it and learn from people it has benefitted”.

Ready or Not, the Internet of Things Is Coming

eMarketer

Think the net neutrality debate is all about streaming videos? Think again. It’s actually much more than that: It’s about streaming your life. Internet connectivity might seem ubiquitous today, between the use of PCs, mobile devices, and smart TVs, but there are major swaths of daily life that aren’t connected yet that soon will become so, such as homes and cars, according to a new eMarketer report, “Key Digital Trends for Midyear 2014: The Internet of Things, Net Neutrality, and Why Marketers Need to Care.”

176056 Ready or Not, the Internet of Things Is Coming

Connecting all the unconnected devices, machines and systems will involve vast numbers of new internet-enabled objects and large sums of money. In a relatively untapped market with seemingly limitless potential, forecasts tend toward the sky-high:

  • International Data Corporation predicts the worldwide market for “internet of things” (IoT) solutions will grow from $1.9 trillion in 2013 to $7.1 trillion in 2020.
  • MarketsandMarkets gives the IoT market a more conservative—but still lofty—valuation of $1.029 trillion in 2013, increasing to $1.423 trillion by 2020.
  • Gartner forecasts 26 billion connected objects worldwide by 2020 (a figure that does not include PCs, smartphones and tablets).
  • IDATE projects 80 billion internet-connected things in 2020, up from 15 billion in 2012. This figure does include PCs, TVs and smart devices, but the vast majority (85%) will be objects like car tires or shipping pallets that may communicate with the web via an intermediate device. Devices that communicate directly, such as PCs, TVs and mobile phones, will make up 11% of the total in 2020.
  • Cisco Systems predicts 50 billion things will be connected by 2022, yielding $19 trillion in new revenues ($14.4 trillion of which will accrue to private-sector corporations).

“There’s no doubt the world is moving toward a more connected future, but the speed with which consumers and enterprises make the transition to the internet of things is still to be determined,” said Noah Elkin, executive editor at eMarketer. “The timing of adoption will determine just how much money and how many things are involved.”

If you can’t check in, is it really Foursquare?

IDG News Service

Foursquare unceremoniously dropped its “check in” feature this week.

Now, the service has been re-created as a third-rate Yelp instead of a first-rate Foursquare. Check-ins are now done via Swarm, a new app launched recently by Foursquare.

The trouble with this is that, for many of Foursquare’s most loyal and passionate users, checking in to locations is what Foursquare has always been about.

This kind of late-stage pivoting is something of an unhappy trend. I believe the cause of these strategic errors by companies is a combination of taking longtime and passionate users for granted while simultaneously coveting thy neighbor’s business model.

That’s a risky strategy. A company that goes that route could fail to succeed with the new model and also fail to hang on to its most passionate users. Then it could be acquired by Yahoo, never to be heard from again.

Twitter trouble

The poster child for this kind of error is Twitter.

People who love Twitter fell in love with it when it was a hyper-minimalist, quirky, secret-code-controlled text-centric microblog. It was minimalism that made Twitter great.

But Twitter got a bad case of Google andFacebook envy. The company redesigned its spare minimalism to look almost exactly like cluttered Facebook. The CEO of a company called Berg illustrated this perfectly by putting his Twitter and Facebook profiles side by side. The redesign is part of a larger direction for Twitter streams to move from text-based to picture-based. Twitter is joining Google+ and Facebook in the arms race that has broken out as people use images, rather than words, to compete for attention.

Twitter also embraced the card interface, which Google has rolled out to multiple properties, from Google+ to Android Wear.

Twitter has recently been testing a feature called “retweet with comment,” which gathers up the original tweet in a card and essentially attaches it to the retweet. This moves Twitter away from its core idea, which is forced brevity.

Of course, new features can fail their tests and may never be rolled out. But the nature of Twitter tests suggests that the company is making the dual mistakes of taking its core user base for granted and simultaneously flirting with the business models of competitors.

For example, Twitter tested a feature that causes a link to a movie trailer to automatically appear when a user types in a hashtag for that movie.

Twitter is even considering dropping both the @ symbol, for identifying and linking to specific user accounts, and the hashtag, for linking to specific kinds of content, according to some testing it has done.

Over time, Twitter is evolving from something that people loved to something that is just like other services and has has few differentiating features.

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Mobile gadgets outnumber people in these 7 countries

IDG News Service

Wireless broadband subscriptions now outnumber people in seven countries as consumers continue to snap up smartphones and tablets, according to a new report.

Finland, Australia, Japan, Sweden, Denmark, South Korea and the U.S. had wireless broadband penetration of more than 100 percent as of December 2013, the Organization for Economic Cooperation and Development said Tuesday. That means there was more than one wireless broadband subscription per person, usually because consumers have more than one mobile device that can go online. The U.S. just barely crossed the bar, while Finland led the group with more than 123 percent penetration.

Across all 37 OECD countries, wireless broadband penetration rose to 72.4 percent as total subscriptions grew 14.6 percent. The group spans North America, Australia, New Zealand, and much of Europe, as well as Japan, South Korea, Turkey, Israel, Mexico and Chile. It’s sometimes treated as a barometer of the developed world.

Wired broadband subscriptions also grew in 2013, reaching an average of 27 percent penetration. That means there was just over one wired subscription per four people: Wired broadband services, such as cable and DSL (digital subscriber line), typically are shared. Switzerland led in that category with 44.9 percent penetration, followed by the Netherlands and Denmark. The U.S. had just under 30 wired subscriptions per 100 people, while Turkey came in last with just over 11.

DSL still makes up a majority of wired broadband subscriptions, at 51.5 percent, followed by cable with 31.2 percent. Fiber-optic grew to a 16.7 percent share, gradually replacing DSL services. Fiber more than doubled its share of the market in the U.K. and also gained strongly in Spain, Turkey and France. While those countries still have relatively low fiber penetration, Japan and Korea continued to lead the OECD for that technology. Nearly 70 percent of all wired broadband in Japan goes over fiber, and almost 65 percent in Korea.

The OECD has compiled some of its broadband statistics on a portal page. For all the technologies it tracks, the group uses a generous definition of broadband as a service capable of at least 256K bits per second downstream.

Facebook’s mobile app install ad business faces growing competition

Mobile Marketer

While Facebook’s mobile advertising business keeps growing – mobile represented a whopping 62 percent of ad revenue during the second quarter – the social network could become a victim of its own success, particularly on the application marketing front, as a growing number of competitors come out with their own, often compelling offerings.

The 62 percent of ad revenue delivered by mobile in the second quarter is up from 41 percent during the same period a year ago and from 59 percent in the first quarter of 2014. Facebook’s new mobile ad network and app install ads drive much of the mobile ad revenue but the company continues to look at ways to broaden its mobile ad business.

“When you think about our mobile ads, I do sometimes think that people think our mobile app install ads are all of the revenue or a great majority of the revenue, and they are not,” said Sheryl Sandberg, chief operating officer at Facebook, during a conference call with analyst to discuss the company’s second quarter financial results. “They are only a part of the mobile ads revenues.

“Our mobile ads revenue is broad based,” she said. “We have large brands advertisers, small, direct response advertisers as well as developers using our mobile ads.

“The mobile app install ads which are run not only by developers but also by large companies that want to get people to install apps are growing. They remain a good part of our mobile ads revenue and we are excited about the opportunities there. But we see our opportunities in mobile ads as much broader than just installing apps.”

Mobile growth
Facebook reported yesterday that its overall revenue grew 61 percent for a total of $2.91 billion during the second quarter of 2014. Of that, $2.68 billion came from advertising, a 67 percent jump from the same period a year ago.

Growth in mobile use on Facebook continues to outpace general use, with mobile daily active user increasing 39 percent for a total of 654 million while mobile monthly active users grew 31 percent for a total of 1.07 billion.

In comparison, overall daily active users grew 19 percent for a total of 829 million and monthly active users increased 14 percent for a total of 1.32 billion.

The company also posted a 138 percent increase in net income for a total of $791 million.

App install ads
Facebook launched mobile app install ads in late 2012 and the offering quickly took off because it meet an untapped need to help developers drive app downloads. In less than two years, Facebook has driven 350 million app installs, per Fiksu.

However, Twitter recently released its mobile app promotion product suite. Fiksu is a partner, helping clients such as Groupon, Dunkin Donuts and Barnes & Noble drive app downloads from Twitter.

“Over the past 12 months, Facebook has enjoyed a leadership position with respect to performance in the app marketing space,” Craig Palli, chief strategy officer at Fiksu.

“While costs of media were often up to ten times greater on Facebook than other channels, they could command this premium because their cost per purchasing user was 28 percent better than other traffic sources, based on the strength of their segmentation tools,” he said.

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Apple gets patent for 3-year-old smartwatch design labeled ‘iTime’

IDG News Service

The U.S. Patent and Trademark Office served up further evidence on Tuesday that Apple is designing a smartwatch when it awarded the company a patent for a wrist-worn gadget with a touchscreen and ability to communicate with a smartphone.

“The invention pertains to an electronic wristwatch,” wrote Apple in the filing for U.S. Patent 8,787,006, which was submitted in July 2011 but made public on Tuesday.

The patent doesn’t give much away about any commercial product that might be planned by Apple, but it does provide an insight into the way the company was thinking in 2011.

It describes “an electronic wristband to be worn on a wrist of a user” that has a receptacle for a “mobile electronic device.” That mobile device is a small display module that can be clipped into the wristband when needed.

The display portion is a mobile device in its own right and functions while not clipped into the wristband. Once connected together, the wristband and mobile device form a smartwatch that can communicate with a second device such as a phone, tablet PC or desktop computer. the patent said.

The wristband might include haptic sensors that allow for control with gestures “with one’s arm or wrist.”

“For example, the gesture might be a horizontal movement for one user input option (e.g., decline incoming call), and might be a vertical movement for another user input option (e.g., accept incoming call). For example, the gesture might be a single shake (or bounce, tap, etc.) of the user’s wrist for one user input option (e.g., accept incoming call), and might be a pair of shakes (or bounces, taps, etc.) for another user input option (e.g., decline incoming call),” the filing reads

In some of the drawings that make up the patent, the watch device is labeled “iTime,” although that name isn’t claimed as a trademark with the USPTO.

“Portable electronic devices are commonplace today,” Apple wrote in the document. “In some cases these portable electronic devices can be carried by a user with relative ease, placed in a pocket of user’s clothing, or clipped onto the user or the user’s clothing. Some portable electronic devices are small enough to be worn by a user.”

“Additionally, accessories have been utilized to provide additional functionality to portable electronic devices,” it said. “There are, however, continuing needs to make portable electronic devices smaller and more portable. There is also a continuing need to enhance functionalities of portable electronic devices.”

While Apple hasn’t publically acknowledged it is working on a smartwatch, a number of leaks from the company have suggested one is under development.

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The 5 biggest myths of modern advertising

Digiday

Industry sage Jeremy Bullmore’s recent takedown of big data, the latest craze to sweep the ad industry, provides exactly the sort of sensible commentary the industry has been lacking of late. As the industry adapts to digital, the scale of the hyperbole too often outweighs the profoundness of the changes in the marketplace.

Taking inspiration from Bullmore, here are five other hyperbolic statements about the future of advertising that need calling out.

1. TV is dead.
More people watch more TV now than ever before, both in the U.S. and U.K., and they watch it more often and for longer; as a result, TV advertising has never been more valuable. Audiences are more thinly scattered, true. People consume TV content on more devices. Despite the doom and gloom about ad-skipping, most are still viewed. TV is here to stay, but we’d be wise to migrate our way of thinking from TV to video. The notion of “television” generates false boundaries to what’s possible with video advertising when you now consume video in so many new ways.

2. Consumers want conversations with brands.
This is a soundbite so good it scatters the slides of presentations around the world, untainted by the inconvenience of not being based on any facts, or observed behavior. We can see a handful of inane comments that respond to a fabric softener’s question on Facebook if people like Fridays, but the conversations I most often see are those of disgruntled customers, given the microphone to complain that Twitter provides. It strikes me overwhelmingly, with remarkably few exceptions, that for most brands, people want an outcome or resolution, or perhaps information and not a conversation.

3. Brands must create great content
Content marketing is not the answer to all brands’ problems. I don’t look for a beer brand to do a better job of finding me a good bar to go to, or a coffee brand to entertain me. We live in an age with endless, incredible content, where our phones give us access to everything ever made, at any moment in time, normally for free. Brands must find a voice in a world where people are looking to reduce distractions, not seek even more entertainment.

Yes, content must provide value and it should be well made — but it’s not as simple as that. Successful content is likely to be highly personal, distributed well using social connections, and be time- and context-dependent. Branded content is not meritocratic — you can’t say any one piece of content is “better” than another. Perhaps the real test of content is when it’s served, how, who it reaches and what value that provides.

4. Advertising is about storytelling.
Advertising types are wonderful salespeople — so much so, that we’ve bought our own lies. It’s lovely to think of brands as storytellers, and for some brands in some markets this is possible. But let’s not delude ourselves that advertising is not about selling stuff.

5. Advertising spend should be correlated with consumers’ time spent with media.
As an industry, we are obsessed with reaching people wherever they are, but we’ve never used empathy to establish how appropriate that moment is. As the world evolves to spend more time on mobile and online, we’ve assumed the money must follow. Media spend projections for the future bear no resemblance to what seems to be working or not working, and how it’s even possible to spend this much money in these channels.

Things are changing, but we need nuance and wisdom. While nobody gets famous or a promotion saying things are complex or largely unchanged, it’s closer to the truth.

Companies Link for Success White Paper

 Companies Link for Success White Paper

Alliance marketing is becoming a critical component in successful technology companies. Often formed to promote a new device, unified solution or concept, alliances can give companies greater market presence in areas that, alone, they may face more competition. Given the growing importance of alliance marketing efforts, IDG Enterprise sponsored research across the B2B Technology Marketing Community on LinkedIn to help marketers benchmark their efforts against those of their peers. The results of that research, plus insights from leading alliance marketers, have been combined into a white paper designed to help elevate your alliance marketing efforts.

This white paper will provide insight into:

  • Key ingredients for strong alliance partnerships.
  • Common challenges faced within alliances.
  • Common tactics used and how are those executed.
  • How success is measured.

Please or in order to access this content.

Why digital publishers want to be in the magazine business

Digiday

There’s a lot of positive talk about magazines these days — but, interestingly, it’s coming from the digital likes of Yahoo, Say Media and Flipboard.

Backwards as it may sound, online “magazines” have become core to Yahoo’s strategy to make the site a regular destination for people. Along those lines, CEO Marissa Mayer has been introducing several verticals in topics including travel, food, beauty and health — all typically the domain of glossy magazines.

Yahoo is not alone. Say Media, parent of xojane and ReadWrite; First Look, the new media company created by Pierre Omidyar; and Flipboard all similarly describe their digital products as magazines. And it’s not just an exercise in semantics: They’ve been hiring journalists who have serious print bona fides. Yahoo’s spate of recent hires has included New York Times’ David Pogue, Bon Appétit’s Julie Bainbridge and Joe Zee from Elle.

Yahoo and Say Media have also been rolling out highly visual and elaborate (read: premium-priced) ads. By using the very term “magazines,” Say is trying to remind advertisers that these are high-quality, editor-driven products with real audiences, not just listicles, in the hopes that it will translate into revenue.

“The term magazine describes the value advertisers are getting,” said Joyce Bautista Ferrari, executive editorial director at Say Media (and, worth noting, a former longtime Condé Nast magazine journalist). “They’re getting storytelling, something that has a personality.”

It makes sense. Look at the rates of magazines compared to online ads. A single page in a glossy magazine could be discounted by more than half its open rate and still get an effective CPM of about $70. Online display ad CPMs average under $3, according to Nomura Securities via eMarketer, and even less for programmatic.

“Outside of those very premium spots, everything is highly negotiable,” said Steve Minichini, director of digital media and innovation at Assembly. “Especially with programmatic — all bets are off. It’s very different from the print space, where there’s legacy pricing.”

Print magazines, meanwhile, are everything online publishers want — they stand for something with their audiences, they have established rates based on a long tradition of buying and selling. The publisher can artificially limit supply by cutting pages.

And the magazine-reading experience is different. Magazines may be losing importance as more readers shift online, but they’re still the ultimate engagement vehicle. Research has shown that people are more focused when reading print than when listening to radio or watching TV.

Meanwhile, online publishing is heading for trouble. Desktop ad spending is flattening out and projected to decline as consumers shift to mobiles, but ad spending on mobile hasn’t kept up with the amount of time people spend on the devices. Yahoo’s ad business is struggling, as it revealed in its second-quarter earnings call, which is why it’s rolling out new premium products for its digital magazines.

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Google continues to play it close to the vest on mobile ads

VentureBeats

Before Google’s earnings announcement today, many investors and analysts were hoping for details on progress in building and monetizing the massive corporation’s mobile ad network.

It’s an area of Google’s business that continues to see a lack of sunlight, even though it may be the most promising sector that the company’s playing in today.

True to form, in its earnings announcement today, Google again reported mobile ad revenues in a bundle with other ad business lines. Paid clicks from ads served through Google’s AdSense for Search, AdSense for Content, and AdMob businesses (that’s the mobile part) increased approximately 9 percent over the second quarter of 2013 but decreased 5 percent over the first quarter of 2014.

But we really don’t know much about the volume, price, or profitably of Google’s mobile ad business.

“Google has tended to take a holistic approach to advertising,” IDC analyst Scott Strawn tells VentureBeat. They tend to talk about ad results in terms of many different devices, Strawn says, but he wishes the company would talk about mobile cost-per-click numbers specifically.

“They’ve been successful in search and display, but in fact, over time, monitization on mobile should be as good or better,” says IDC analyst Scott Strawn. “But we haven’t really seen more detail, and that’s what’s needed to give investors a greater level of comfort.”

And, of course, when a public company is vague on the results of a business line, the natural reaction is to wonder if it’s hiding an area of poor performance. That skepticism may be warranted. Strawn says he’s talked to Googlers who have said openly that Google was “caught off guard” by the rapid growth in demand for mobile ads.

And, Gartner analyst Andrew Frank says, the industry reasons to believe that Google is facing challenges in mobile.

“It’s an interesting place to watch, especially with the tradeoff about volumes going forward and pricing pressure on clicks, which have been fairly volatile,” Frank told VentureBeat.

Frank explains that the mobile ad market is ruled by a supply-and-demand dynamic: The number of mobile users is going up, but the amount of mobile ad inventory may be increasing even faster. When there’s more inventory than people to view or click, the price of the inventory goes down, and mobile ad profits decline.

Google CFO Pachette said during the earnings call that he “took issue” with a question from an analyst concerning specific results of the mobile ad business.

The research shows that consumers view content on multiple screens, Pachette said. “They might start something on a smartphone or tablet then watch the rest on a smart TV.”

“So it becomes a question of how much attribution to give to each of these elements in the chain of views moving toward a purchase,” Pachette said. “What really matters is that you have a footprint of all of these devices.”

Google doesn’t feel the strong sense of urgency that Facebook felt when it dove into the mobile ad business. Facebook has been successful in mobile ads, the numbers show. Two years ago, people were criticizing the social network for having “no mobile strategy.” Today, mobile ads contribute half of Facebook’s revenue.

Google, meanwhile, is taking its time in what it sees as a developing market. “There’s long runway going forward,” Pachette said today. “I don’t think we have to fear the saturation of smartphone penetration for a while.”