This morning at the NAA MediaXchange Rishad Tobaccowala gave a provocative keynote session on the future of marketing and advertising and how traditional media companies must leverage new platforms to more effectively serve advertising to customers.
As the Chief Innovation Officer of Chicago-based Publicis Group Media, Rishad is one of the most influential thinkers in the North American advertising industry. It is therefore no surprise that the audience was on the edge of their seats listening intently to Rishad`s advice.
We at Spreed found his talk very interesting considering many of his recommendations push newspapers in the direction of a number of the products and services that we provide (mobile platforms, mobile advertising, location based advertising, etc).
Rishad left with 10 recommendations for newspapers to follow in the future that we would like to share here:
- Be schizophrenic – Only the schizophrenic will thrive. Run two or more business models at the same time but make sure they are very separate. Do not make a big mesh of all your models.
- Embrace technology – Tech is the new magic. Make sure the follwing ive things are done by the end of this week.
- Use an RSS reader and start following your passions through it
- Get a Twitter account
- Get on Facebook
- Get on Foursquare
- Go to someone in your company who is younger (probably 2-3 levels below you) and make them your mentor. Take them outside of the company every two weeks and get them to teach you about what is new and upcoming
- Embrace the blur – Church and state are too separate within news organizations. All elements of a news organization (sales, editorial, technology) need to work together in the same group.
- Learn fast, iterate faster, make mistakes and don’t be afraid to fail.
- Do a massive outreach to young people – You want to make the industry exciting. Don`t be swamped with old people. Get youngsters into the industry.
- Think about what curating, combining and editing really is
- Platforms – Every company needs a platform strategy. How do you attract new partners? What’s your device strategy (iPad, iPhone, etc)? What’s your search strategy?
- Make sure that you celebrate the software and technology folks at your organization. Don’t hide them in a room somewhere even if they are strange. Tell them about the business and ask them to solve business issues
- Think about the future of your organization. Thank about your organizational design, incentives, benefits, etc.
- This one was a bit odd and I am not sure exactly what he meant by it, but the industry is not anyone but you. there is not industry but yo, embrace the “muchness”. “This is my dream and I am going to decide how it ends”
Apple, who are notorious for their big media events, made their official announcement of the iPhone/iPod Touch OS 4.0 features today. There are loads of new features to go through, but I will do my best highlighting the most important ones here.
Firstly some statistics:
- 300,000 iPad sold on first day of sales. 450,000 iPads sold as of today.
- iBooks: Users downloaded 250,000 iBooks in the first 24 hours. Users have now downloaded over 600,000.
- 1 million iPad apps downloaded in the first 24 hours. As of today they’ve downloaded over 3.5 million
- Users have downloaded over 4 billion apps through iTunes
- 185,000 apps in the App Store now
- Over 3,500 iPad apps in the App Store
- iPhone has 64% mobile browser usage. Everything else combined is just half the iPhone.
- Over 50 million iPhones have been sold.
- If you add iPod touches, over 85 million iPhones and iPod touches
Now for OS 4.0
- Developers can now access calendar, photo library, still and video camera data, quick look, SMS inside their apps.
- This is great news as event modules can now add events into your actual calendar.
- Articles can now be shared via SMS within the application without needing to leave the app
- Automated testing tool that Apple uses internally to decided whether an app will be accepted or rejected is now publicly available.
- This means that the app approval process is much more open and it will speed up the overall approval process
- A few new features: Create playlists, 5x digital zoom in camera, Bluetooth keyboards, spell check, gift apps, Tap to focus video, Places in Photos, Home screen wallpaper, file & delete mail search results, web search from sugestions,Larger fonts for Mail, SMS & Alerts, Rotate photos, Sync IMAP notes, iPod out, Wake on wireless, Folders.
- Multitasking is here! Jobs likens it to cut, copy and paste. “Not the first, but the best.”
- Apps keep track of where you were and can start right back up again.
- iBookstore on iPhone as per our predictions in this blog post
- Better data protection. Encrypt all your e-mail, including attachments with PIN codes.
- Mobile device management. Letting IT managers to deploy iPhones and manage them remotely.
- Wireless app distribution. Companies can push out custom apps over the air instead of relying on an iTunes sync.
- This is great for corporate apps as they no longer have to be distributed through iTunes
There is much more, but this is all they had time to highlight
iAd’s is Apple’s new advertising network. They will be managing all the inventory and from the sounds of it they will be taking 40%. All ad units are built in HTML5 and get served up in the application without having to go to an external site. Spreed is doing something very similar, but NO development skills are necessary.
- Jobs says Apple wants to help developers make money off their creations, but says that “most of this mobile advertising really sucks, and we thought we might be able to make some contributions.”
Jobs says ads are easy on the desktop b/c of search. But people are spending all their time within apps. “This is where the opportunity to deliver advertising is,”
- Jobs: Average user is spending 30 minutes a day using apps. That’s 10 ads per device each day.
- We want to get 1 billion ad impressions per day by the end of the year.
Jobs: deliver “interaction” and “emotion” – Something that’s in the middle of where Web ads are, and ads on your TV.
- Jobs said it was annoying for people to click on an in-app ad b/c it would take them out of whatever they were doing.
- Devs can add iAd in their apps for a 60% split of the revenues. All the sales and inventory are handled by Apple.
- Ads have access to much of the same APIs as apps, like location and some level of accelerometer access
- Jobs demoed a Toy Story and Nike ad
- All the animations are interactive, and crazy smooth.
- It’s not so much about the content of the app, but the interactivity
- He’s flipping through the app: it’s offering up the history of nike ads, allowing you to flip through the years to see all the shoes throughout history
- He pulls up the app with the Nike ad. It puls up an Air Jordan 2010 clip
So the run down on iAd’s is that it is great for developers in that it will be very easy to monetize apps. However, this is not a great solution for publishers and media companies. Apple will be taking 40% of all ad revenue and they are administering the inventory (you cannot retain your ad sales teams). In addition I am skeptical as to how deep their ability to target advertising will be. They have one piece of the puzzle and that is strong creative advertising, but they do not address targeting. Because they do not parse, control or index the content and because they do not understand user behavior, it will be hard to do deep targeting which is one of the main promises of mobile advertising.
Julie Ask of Forrester Research backs up my point about iAds not being for big publishers in her blog post on OS 4.0 with these two points
- We didn’t hear a lot about targeting – making use of past purchase behavior, day-to-day use of applications, etc. We did hear about location. Knowing that I have downloaded and am using the latest Audi application or browsing automotive sites on my iPhone might indicated that I am in the market for a car – that would be valuable information to automotive OEM’s. Knowing that I buy alternative rock music or that I read mysteries adds other dimensions. Location – given the structure of how they sell ads – this will more likely be purchased by large, national companies with stores throughout the country. Location (from the consumer’s perspective) will be more interesting when it helps me find local mom and pop stores that better match my interests.
- We didn’t hear much on analytics for the advertisers. This will be interesting to watch as the more effective Apple can be in demonstrating ROI – bought movie tickets, purchased a Nike shirt, bought the movie Toy Story – the more advertisers will spend. They’ll spend on branding now, but I think they’ll spend more if they can drive sales.
What is good though is that it will super charge the agencies to begin selling ads as they can utilize their existing skills sets to build strong creatives. Jobs just did to the mobile ad industry what he did to the mobile industry in general 2 years ago.
Retail advertising is the engine of newspaper revenue. Of the $13,356.2 billion spend on national and retail advertising in Q’3 2009, 77% came from retail. As retailers and newspapers continue to test new ways to engage shoppers, flyers are and will remain an connection bewteen retailers and their customers.
According to Matthew Tilley, COO of Inmar quoted in the January 26th edition of Internet Retailer “newspaper inserts still account for 89% of coupons distributed to consumers and more than half of coupon redemption” . Tilley also points out that consumer coupon redemption grew by 27% between 2008 and 2009.
As mobile publishers, we are aware of the increasing importance consumers place on their smarphones as a source of price intelligence. A recent study from Compete demonstrates how smartphone users in general, iPhone users in particlular, have made mobile device an essential part of their shopping activity.
Mobile users are now able to access retail price information on their smartphones because of the increase in the number of retailers that have mobilized their weekly inserts/circulars. Virtually every major American retailer now distributes their weekly Free Standing Inserts (FSI’s) on mobile devises. Retailers continue to expand their use of mobile to engage their consumers and to distribute feature pricing information and mobile coupons. Retailers as diverse as Armani and A&P have add mobility to their marketing communications activity. Very recent examples of the expanding role mobile plays in retailer’s include Valpak’s mobilization of the 17,000 coupons in their vehicle. Verizon has made their SpendSmart digital coupon product available to their mobile sunscribers. Safeway has joined Cellfire to allow loyalty club members to download coupons to their mobile.
The mobilization of retail flyers/ circulars and coupons respond to a very clear demand from consumers for mobile price intelligence.
We believe that we are still in the early stages of the mobilization of retail. As more consumers purchase smart phones we will see a dramatic increase in their reliance on their mobile phones for price intelligence and product discovery. Retailers will need to respond to consumer demand for price intelligence with applications of their own and with smart ad placements across mobile applications. Spreed has been following this development – we know that it is vitally important to our newspaper publishing partners because inserts deliver significant ad revenue. We have built FSI capability into our mobile application platform. We call this solution mFlyers. It has been built to allow publishers to easily sell retail based insert space in their mobile applications. We we will be showing off this functionality very shortly in our blog and on our applications. Keep your eyes peeled for more information soon.
The European Interactive Advertising Association (EIAA) recently released a study on European usage of the mobile web. According the EIAA a whopping 71 million European’s use the mobile web on a weekly basis. They also found that on average European surf the web for an average of 6.4 hours a week.
Where the study falls apart in our eyes is how they compare these stats to the average number of hours a typical European spends reading traditional news/magazines a week (4.1 hours). The study concludes that people are reading news and magazines more on the mobile web than traditionally. This seems like a flawed assumption considering that most of these reported users are in a younger demographic and are probably surfing Facebook and other geographically relevant social networks, not reading a news website.
I have no doubt that in the near future we will see more people reading the news through mobile applications and websites than traditional forms of media. However, it is important that we stay grounded in the statistics and not act to hastily.
An interesting next study for the EIAA would be to segment their data in order to find out how much of the 6.4 hours a week Europeans are spending on actual news and magazine mobile sites.
The mobile web is clearly on the rise and here at Spreed we are constantly asked whether the right mobile strategy for a publishing company is to launch a mobile website or whether it’s best to just launch an application. This is worthy of a blog post in itself, however simply put we do not think that the two are mutually exclusive. In this increasingly mobile world that we live in, it is necessary to work on both strategies as they each address specific goals and challenges.
The mobile web is great for sharing and receiving links on the go. Mobile applications on the other hand serve the purpose of content discovery. More information to come in a future blog post 🙂
Flurry, a mobile analytics company known for their strong industry statistics released their February report today. The report is interesting as it relates to the consistent surge of iPhone developers and their unique demographics. What is interesting to our readers is the specific attention it gave to the news category. As expected traditional media sources are dominating the news category. This is mostly due to the fact that it is not easy to simply start publishing the news and creating content. What it does point out though is that the iPhone and other smartphones are very useful channels to distribute content very inexpensively and target a very attractive demographic.
Possibly, more interesting is the rise of online news sources on the iPhone. Flurry believes that with the release of the iPad we are going to see an even strong supply and demand for blogs and other online media sources. It is therefore essential that if your newspaper does not have an app now, to act fast. If you wait too long, the online media sources will own the real estate on users phones and other mobile devices. More below and in the report.
Like gaming, the creation of compelling content in News is a specialized and costly operation. To source and report quality news, companies often have to span various media such as TV broadcast, radio and print, which further increases cost. It’s therefore no surprise that Traditional Media dominates the News category, controlling nearly two thirds. For traditional media (e.g., New York Times, ABC News, NPR, etc.), the iPhone represents a large channel through which to distribute their existing content. The small incremental cost of expanding the distribution of Traditional Media’s core content, and the attractiveness of reaching an educated, affluent and tech-savvy audience, makes iPhone the perfect platform through which to serve news. Looking forward, the iPad creates an even greater opportunity to increase reach because its larger screen size works better works for newspaper and magazine layouts, as well as TV broadcast.
“A new survey by the Pew Research Center released Monday found more than a quarter of all American adults read news on their mobile.” –Pew research
This headline from the March 3rd edition of MobileMarketing Daily caught our attention. The headline is taken from the recently release Understanding The Participatory Newspaper Consumer which is a deep analysis of the publishing ecosystem. From our perspective as a mobile publishing company the most encouraging news for publishers is the degree to which younger readers – the readers newspaper publisher need to bring into their franchise – are using their mobile devices to access news and information where and when they want. This table taken from the study confirms that younger adults are much more likely to access news and information on their mobile than older adults – 43% adults under 50 expect to find at least some of news and information that they need on their mobiles.
We are not surprised by the importance of mobile as a trusted source of news and information for younger adults. The iPhone apps we have built for our publishing clients continue to drive double digit growth in new subscribers and page views. As important, app publishers are experiencing month over month growth in average number of articles read. This tells us that iPhone app subscribers have quickly adapted newspapers to fit their reading habits – they no longer need to be in front of the paper or online editions to access the news they want when they want it We expect to continued growth in on demand newspaper as more and more adults move to app enabled phones.
We remind our publishing clients that Apple app editions deliver a young readership – almost half of whom are under the age of 34 according to AdMob research.– and that these apps are the pipeline to their future franchise.
When most of us think of Apple app editions, we usually think of the iPhone as the most likely delivery device. But as Flurry research shows, the iTouch now delivers 41% of all Apple app user sessions
AdMob data above clearly demonstrates that the iTouch user profile is very different from the iPhone user profile – three quarters of iTouch users are below the age of 18 vv 15% of iPhone users. We believe that the iTouch cohort is of vital importance to publishers for two reasons.
1) Because they can and do access the App Store just as easily as iPhone users, they are a captive audience for news and information relevant to them
2) They are now locked in to satisfying their information and entertainment needs with proprietary Apple hardware and software. As they mature, the migration to the iPhone and iPad will be a natural and seamless progression for them.
There has been a lot of speculation recently regarding the future of e-books and whether they are going to be the next big thing. What we do know at this point is that Amazon has sold 240, 000 Kindles. Given these numbers, Techcrunch’s Erick Schonfield suggested that Citi analyst Mark Mahaney update his most recent projections for the future of the Kindle (and to some extent e-books in general). Mahaney’s new numbers suggest that Kindle sales estimates should be around 378,000 for this year, 934,000 next year, and 4.4 million in 2010. These are not numbers to scoff at. If Mahaney’s projections are correct the Kindle will be a $1 billion for Amazon by 2010.
The big question for me is that even though these numbers are high, can e-books really win over the mass-audience. Two recent articles, one from Naomi Alderman and another from Peter Conrad of the UK’s Guardian give light to the different sides of this debate. Naomi on one hand advocates the move toward e-books. She is fed up with the piles of books overwhelming her apartment and finds the Kindle easy to use and convenient. Peter on the other hand stuggles to accept that e-books are the future. He argues that reading ebooks actually left him feeling alienated from books he used to love growing up. These two perspectives highlight the seperate camps very well and it is hard to say whether either one represents the mass public at this point.
I personally think we are going to have to wait longer than just 2 years to see a large move to e-books. The cost of an e-book reader is still a large up front investment when compared to the one off price of a paperback. What I will say is that in certain segments, where people have to buy large amounts of books that they must use on a regular basis, the student market for example, we will see a fairly substantial adoption of e-book technology. Students can offset the cost of the reader by only purchasing individual chapters of textbooks as they need them, thus reducng their overall spending on textbooks for years to come. This makes perfect sense and I see the student (as they often do) leading the e-book revolution. The only hurdle I see holding students back is the inability to easily highlight text. Yes, you are able to click and drag a virtual highlighter, but nothing will ever replace the relaxing sensation of passing a hightlighter over a line of text or scribbling notes with a ballpoint pen outside of the columns.
This is going to be a very interesting industry to watch over the next 5-10 years and if the new projections are correct Amazon is very well positioned to ride the wave, as they usually are. See Mark Mahaney’s numbers below: