We are beginning to work on a Forrester Wave focusing on brand monitoring, scheduled to be published next quarter. What's a Wave? A detailed vendor evaluation using proprietary methodology (click here to learn more).
Spam works because it pays. Whether through phishing, selling lists, or otherwise, spammers make money. Sure, some do it just for kicks too. The real problem is that spam makes life more expensive for everyone. Legitimate bulk emailers (e.g. the number of order confirmations that a large e-commerce site sends out in a day could be considered "bulk") already spend time and capital to ensure delivery - this cost is already passed on to customers in one form or another (directly via service fees or indirectly via seller charges, passed through into pricing/margins).
Earlier this week at the ANA's Financial Management Conference, AdAge reported on a proposal led by 10 marketers including Wal-Mart, Microsoft, and Lexus to create a $50 million advertising auction test. eBay demonstrated a prototype for the "media marketplace" which could work in forward or reverse auction format.
In theory, the use of a marketplace would introduce microeconomic efficiency to the buying and selling of advertising. With a reserve price set at a network's cost and buyer's ceiling set at an advertiser's internal rate of return (IRR) for marketing investments, competitive market dynamics would set an equilibrium price somewhere in-between the two.
With the declining efficacy of the 30-second spot, more advertisers have been turning to branded entertainment. Now, some players with big budgets are taking their efforts one step further. Ford is mulling a reality show that's part American Inventor (the ideas), part America's Next Top Model (the aesthetics), part The Apprentice (the commercialization). Procter & Gamble is planning a Martha Stewart-type show based on their Home Made Simple campaign.
Great strategy - if you have the money to do it. Marketers should be careful though to not stray too far into the TV production business - it's a lot deeper than making commercials. No word on whether networks will prevent competitive advertising during the shows - otherwise get ready for some interesting placements ala Domino's/Papa John's. Either way, networks win.
Forrester believes that cable companies should embrace VOD advertising as a competitive weapon against satellite. In a March 2006 survey of ANA members, Forrester found that 80% of respondents had already experimented with VOD ads or had plans to. So what's going on with VOD advertising? Some answers were provided in Comcast's VOD "upfront" on Friday, April 21st at the Museum of Television & Radio in New York - the first event of its kind for VOD advertising.
Comcast is putting up some impressive numbers. In the past year, they have 10 million VOD customers and $1.4 billion in spot advertising. VOD programs have over 2 billion views since 2004. Over 70% of their digital cable customers use VOD monthly, selecting from over 7,000 programs. According to Nielsen, the largest segment consuming Comcast VOD is ages 18-34, with 37% of the segment accessing the programming.