Bing/News Corp: Not a Game Changer

 

 Posted by Shar VanBoskirk and Sarah Rotman Epps]

Microsoft and News Corp are rumored to be in talks about an exclusive relationship, where Microsoft would pay News Corp to remove its content from Google and allow it to be indexed only through Microsoft's Bing.

I don't know anymore than you do about the veracity of this rumor.  But my colleague Sarah Rotman Epps and I put our heads together on the potential deal. Here is our take:

News Corp’s short-term desperation will sabotage its long-term interests.  Everyone is watching newspaper companies lose more ad revenues as subscriptions fall even lower in 2009 than the declining trajectory they have been on since 2000.  Getting consumers to pay for content is a hard sell; media companies may have an easier time generating revenue by licensing their content to other companies, like portals, device makers, and non-media companies like Fidelity who need content for their Web sites. Murdoch wants a deal like this to get MS to pay him for the opportunity to index his companies' content. But the tradeoff for short-term revenue could be long-term irrelevance: If consumers don’t find Newscorp results in Google searches, they’ll just click on another content source. “If a tree falls in the woods…” could be rephrased as “If a site isn’t indexed by Google, does it really exist?” For the 65% of searches relying on Google, the answer is no.

Microsoft wins publisher goodwill, but probably not much search traffic. Bing has enjoyed growth in its share of searches since its launch in summer 2009, but it still accounts for only about 10% of searches compared to Google's 65%.  So Microsoft needs to do everything it can to try to gain search traffic. I see this as another way to try to drive searchers to use Bing instead of other possible search engines. But stealing one content source from Google won’t be enough to change consumers’ search habits.

Consumers don't care about a deal like this.  Consumers do not expect search engines to be exclusive.  In their minds, search engines are gateways to answers, and if they can’t find something through search, it may as well not exist.  So, while News Corp and MS might enjoy scratching each others backs in a deal like this, consumers won't know and won't care that Bing is the only place they can find Wall Street Journal articles and other News Corp content.

Most content doesn't have enough value for exclusivity to matter.  A number of reporters have asked me if this is the beginning of something big in terms of media/search engine deal.  My take is no way.  Because frankly content is plentiful and cheap and consumers are very good at finding what they need without having to pay for it or be inconvenienced to get it.  So while News Corp may have some content that still qualifies as "exclusive," I don't see many other media firms having any leverage to create similar deals with search engines.

See Forrester's blog for Consumer Product Strategy Professionals for additional take on this deal and others affecting the media industries.

 Posted by Shar VanBoskirk and Sarah Rotman Epps]

Microsoft and News Corp are rumored to be in talks about an exclusive relationship, where Microsoft would pay News Corp to remove its content from Google and allow it to be indexed only through Microsoft's Bing.

I don't know anymore than you do about the veracity of this rumor.  But my colleague Sarah Rotman Epps and I put our heads together on the potential deal. Here is our take:

News Corp’s short-term desperation will sabotage its long-term interests.  Everyone is watching newspaper companies lose more ad revenues as subscriptions fall even lower in 2009 than the declining trajectory they have been on since 2000.  Getting consumers to pay for content is a hard sell; media companies may have an easier time generating revenue by licensing their content to other companies, like portals, device makers, and non-media companies like Fidelity who need content for their Web sites. Murdoch wants a deal like this to get MS to pay him for the opportunity to index his companies' content. But the tradeoff for short-term revenue could be long-term irrelevance: If consumers don’t find Newscorp results in Google searches, they’ll just click on another content source. “If a tree falls in the woods…” could be rephrased as “If a site isn’t indexed by Google, does it really exist?” For the 65% of searches relying on Google, the answer is no.

Microsoft wins publisher goodwill, but probably not much search traffic. Bing has enjoyed growth in its share of searches since its launch in summer 2009, but it still accounts for only about 10% of searches compared to Google's 65%.  So Microsoft needs to do everything it can to try to gain search traffic. I see this as another way to try to drive searchers to use Bing instead of other possible search engines. But stealing one content source from Google won’t be enough to change consumers’ search habits.

Consumers don't care about a deal like this.  Consumers do not expect search engines to be exclusive.  In their minds, search engines are gateways to answers, and if they can’t find something through search, it may as well not exist.  So, while News Corp and MS might enjoy scratching each others backs in a deal like this, consumers won't know and won't care that Bing is the only place they can find Wall Street Journal articles and other News Corp content.

Most content doesn't have enough value for exclusivity to matter.  A number of reporters have asked me if this is the beginning of something big in terms of media/search engine deal.  My take is no way.  Because frankly content is plentiful and cheap and consumers are very good at finding what they need without having to pay for it or be inconvenienced to get it.  So while News Corp may have some content that still qualifies as "exclusive," I don't see many other media firms having any leverage to create similar deals with search engines.

See Forrester's blog for Consumer Product Strategy Professionals for additional take on this deal and others affecting the media industries.

How Industries Spend On Interactive Marketing

[Posted by Shar VanBoskirk]

I dedicate this blog post to anyone who has read Forrester's interactive marketing forecast and thought, "well that's great, but how are interactive marketers in *my* industry spending on interactive tools." I've just published the US Interactive Marketing Forecast By Industry, 2009 to 2014 which splices our interactive marketing forecast by 12 different industries including:

Retail and wholesale trade
Financial services
Lead generation
B2B
Travel
High-tech
Automotive
Heath and pharmaceuticals
Consumer goods
Media and entertainment
Telecom
And an "other" category which includes primarily education, government and non-profit businesses

A few takeaways from the research:

Direct marketers spend the most, but brand advertisers have the most growth potential.  Look for the steepest growth to come from traditional advertisers who are under invested in interactive marketing today.

Advertisers should benchmark against their own peer set.  Industry benchmarks are helpful (the report includes some per-company budget estimates for different industries).  But don't presume your interactive budget should always match industry averages. We recommend adjusting your spend according to how online you business model and your customers are.

Stay tuned for deeper dives into retail, financial services, consumer goods and travel interactive spend in subsequent pieces of research.

I dedicate this blog post to anyone who has read Forrester's interactive marketing forecast and thought, "well that's great, but how are interactive marketers in *my* industry spending on interactive tools." I've just published the US Interactive Marketing Forecast By Industry, 2009 to 2014 which splices our interactive marketing forecast by 12 different industries including:

Retail and wholesale trade
Financial services
Lead generation
B2B
Travel
High-tech
Automotive
Heath and pharmaceuticals
Consumer goods
Media and entertainment
Telecom
And an "other" category which includes primarily education, government and non-profit businesses

A few takeaways from the research:

Direct marketers spend the most, but brand advertisers have the most growth potential.  Look for the steepest growth to come from traditional advertisers who are under invested in interactive marketing today.

Advertisers should benchmark against their own peer set.  Industry benchmarks are helpful (the report includes some per-company budget estimates for different industries).  But don't presume your interactive budget should always match industry averages. We recommend adjusting your spend according to how online you business model and your customers are.

Stay tuned for deeper dives into retail, financial services, consumer goods and travel interactive spend in subsequent pieces of research.

Less Is More For MSN.com

[Posted by Shar VanBoskirk]

Last night Microsoft launched a new look and feel for msn.com to a limited number of consumers.  The new design will roll out to the mainstream in January.

Forrester got a sneak peak of the new-and-improved interface in October.

 

Here is my take on the redesign.  It:

Limits clutter.  Perhaps the best thing about the new msn.com is that it is simply cleaner.  MS says it has 50% fewer links than the old msn.com.  As part of the clean up, MS removed the left hand navigation and turned the top nav links into five customizable tabs.

Integrates personal social experiences.  The idea of the new msn.com is to make it a "personal portal" where people can come to "infosnack" on their preferred news, communications and community fix.  I like the facebook and hotmail integration shown here, but I think all portals are facing a strategy challenge as consumer media behavior changes.  That is, consumers no longer *want* to come to a single source for news, communications and community.  We, in fact, want these syndicated to us across the multiple sites and devices we use.  So while I think integration of new types of content is imperative for MSN.com, I don't think it completes users' overall quest to have their online needs met.

Will increase content distribution relationships.  To the above point,   This means, MSN should increase the network of content providers, sites and devices it shares content with.  We hope MSN's rev after this one shares MSN proprietary content more universally across devices and sites (yes, esp iPhones and iTunes) and allows consumers to add in feeds for digital formats of books, video, music, or games into their customized msn.com.

Last night Microsoft launched a new look and feel for msn.com to a limited number of consumers.  The new design will roll out to the mainstream in January.

Forrester got a sneak peak of the new-and-improved interface in October.

 

Here is my take on the redesign.  It:

Limits clutter.  Perhaps the best thing about the new msn.com is that it is simply cleaner.  MS says it has 50% fewer links than the old msn.com.  As part of the clean up, MS removed the left hand navigation and turned the top nav links into five customizable tabs.

Integrates personal social experiences.  The idea of the new msn.com is to make it a "personal portal" where people can come to "infosnack" on their preferred news, communications and community fix.  I like the facebook and hotmail integration shown here, but I think all portals are facing a strategy challenge as consumer media behavior changes.  That is, consumers no longer *want* to come to a single source for news, communications and community.  We, in fact, want these syndicated to us across the multiple sites and devices we use.  So while I think integration of new types of content is imperative for MSN.com, I don't think it completes users' overall quest to have their online needs met.

Will increase content distribution relationships.  To the above point,   This means, MSN should increase the network of content providers, sites and devices it shares content with.  We hope MSN's rev after this one shares MSN proprietary content more universally across devices and sites (yes, esp iPhones and iTunes) and allows consumers to add in feeds for digital formats of books, video, music, or games into their customized msn.com.

Using Social Media To Create And Amplify Offline Influence

[Posted by Nate Elliott. Follow me on twitter.]

According to all the data I've collected in the past few years -- no matter what age group or country you study, and no matter how actively people use social media -- the huge majority of users influence each other face to face rather than through social online channels like blogs and social networks. And a huge body of research -- most recently including Razorfish's Fluent study -- has proven that recommendations from offline friends are more influential than recommendations from online friends. So I decided to have a closer look at how interactive marketers can create offline influence in my new report The Analog Groundswell: Using Social Media To Create And Amplify Offline Influence.

I found marketers using a range of strategies to create offline influence, but there are two in particular that are most promising:

1. Events. If you want to create a big splash for a new product or service, tweet-ups and house parties are a great strategy for reaching a lot of people quickly. For instance, the NHL worked with fans to run a series of 23 simulatenous tweet-ups to celebrate the opening of the 2009 Stanley Cup Playoffs -- and attracted more than a thousand attendees, generated a potential Twitter reach of more than 200,000, and garnered press coverage that reached millions. And right now, Microsoft is working with a company called House Party to plan in-home launch parties for its new Windows 7 operating system.
2. Ambassador programs. If you want to build long-term relationships and ongoing influence, ambassador programs might be the right strategy for you. For instance, scissor maker Fiskars found a great way to turn members of its legendary Fisk-a-teers online community into offline ambassadors: they gave each member a special pair of scissors engraved with their member number. When the Fisk-a-teers go to crafting parties and pull out their special scissors, it invariably creates a conversation about the brand. Vendors like BzzAgent can drive offline sampling and evangelism for marketers. And even Facebook has used ambassador programs in some markets where it's been slow to grow.

Clients can learn more -- including lots more examples, and our best practices for offline influence programs -- by reading the full research report. And I'll also be speaking on this topic at both Forrester's 2009 Consumer Forum (in Chicago, October 27 and 28) and our 2009 EMEA Marketing Forum (in London, November 17 and 18).  I just finished writing a case study on the NHL's tweet-ups as well.

In the meantime, I'd love to hear from you: what are you favorite examples of brands driving offline word of mouth? Have you ever run an offline influence program - and if so, what vendors did you use and how did it work? Let me know in the comments below.

Yahoo! Has The Right Mobile Priorities

[Posted by Shar VanBoskirk]

I spoke with Yahoo! in response to my WIM bullet about them in my recent US Interactive Marketing Forecast, 2009 to 2014.  They wanted to correct how I had represented their mobile strategy.  I spoke with Adam Taggart, Head of Global Product Marketing for Yahoo! Mobile and Zealous Wiley who heads up communications for

Mobile.  They stressed that Yahoo! has three primary goals this year for mobile:

1) To continue to develop more mobile applications to allow for greater use and utility of Yahoo! via mobile devices.

2) To extend relationships with current Yahoo.com users into the mobile realm.

3) To improve synergies between the Yahoo.com and the Yahoo mobile experience, so that the two environments reflect the same experience

I would agree with Yahoo, that this sounds like a solid approach to mobile, particularly because today the mobile Yahoo environment does not fully harmonize with the one on Yahoo.com.  In fact I think that Yahoo's greatest challenge is creating a unified experience of Yahoo! for consumers (and advertisers) across its myriad properties and applications.  For example, not all of the applications integrated into Yahoo! Mail as part of Yahoo's Open Strategy are available through other Yahoo properties like My Yahoo! and Y! Toolbar. 

So, I've amended my comments about Yahoo! to reflect that it is not specifically a challenge with its mobile strategy that makes it a potential fit with Apple.  Rather the current struggle to better unify the customer experiences across all of Yahoo!, coupled with declining online ad sales will leave Yahoo! seeking a suitor.

Online Video Contests Can Help Marketers Listen To And Energize Their Customers

[Posted by Nate Elliott]

Chances are you've seen an online video contest lately. In fact, you've probably seen a lot of them: more than 20% of interactive marketers -- including category leaders like P&G, Nike, Coca-Cola and Sony -- tell Forrester they've run campaigns asking users to submit online content in the past year. I've been collecting a list of dozens of great video contests, and one contest clearinghouse site says there are 115 user-generated video contests accepting submissions right now, across a huge range of categories.

Some of these contests -- like Tourism Queensland's Cannes-Lion-winning "The Best Job in the World" contest, or Doritos' "Crash the Super Bowl" contest -- generate a lot of media coverage. But there are many hundreds more each year, promoting everything from steak sauce to psoriasis research, that don't get as much notoriety.

Why are so many marketers running online video contests? Because users love online contests almost as much as they love online video -- and because user-generated video contests can help marketers achieve a huge range of marketing objectives.

Video contests let marketers listen to their customers and learn about their needs -- like student loan provider Access Group, which asked law students to enter videos about their concerns and then used insights from those videos to create its "Student Loans, No Worries" ad campaign. Contests can help marketers energize users an drive a viral marketing effect -- like Servus Credit Union, which encouraged entrants to develop their own marketing campaigns to drum up votes, and found the three finalists generated as much publicity as the credit union's PR firm did. And they can give marketers access to cheap, original online video content -- like ski resort Sunshine Village, which used its contest to generate a video library of its mountain's trails and terrain.

Of course, not every video contest succeeds. They often take months to plan, they can cost anywhere from $10,000 to $250,000 or more, and they usually require the coordinated efforts of several internal departments and external vendors. And if you don't get the "three Ps" right (choosing the right premise, offering the right prize, and picking the right promotional strategy) you could fall flat on your face.

I've spent the last two months studying hundreds of contests, and have just published two new reports on the topic. User-Generated Video Contests: Best Practices For Driving More Entries And Creating Viral Impact is designed to help marketers understand which users they should target with video contests, what goals they can achieve, and how to get the most value from their contests. Video Contest Checklist: How To Choose The Right Premise, Prize, And Promotion For Your Contest contains a checklist that guides marketers through every single step in the contest process -- including choosing a contest premise, selecting a prize, planning a promotional strategy, choosing a voting structure, picking a vendor, setting a schedule, establishing a budget, getting internal buy-in, and measuring the results.

Over the next few days, I'll be publishing some of the most important lessons I've learned in my research -- including the best promotional strategies I've seen, and mini-case studies on what makes contests successful -- on my personal blog.

In the meantime, if you've been thinking of running a user-generated video contest -- or if I've convinced you it's a good idea -- drop me a line (nelliott at forrester dot com). I'd be happy to work with you on making your video contest a success.

Interactive Marketing Nears $55 Billion; Advertising Overall Declines

[Posted by Shar VanBoskirk]

I'm pleased to announce that Forrester's five year forecast is now complete and live on Forrester's site.  It feels like this has been a long time in coming from my side too! Please see the full report for detailed explanations of the trends affecting overall marketing budgets and the growth of the channel in the forecast.

You may remember we previewed our forecast at Forrester's Marketing Forum at the end of April.  If you cross reference this post to the one we posted as follow up to the forum, you will notice that the "% of all advertising spend" has changed.  The absolute forecast is still the same, we just changed this calculation to make sure it was done in the same way as in years past. See below for the most recent release:

  

This research will certainly help marketers plan their channel strategies.

• Search continues to lead interactive spend followed by display. 

• And owned social media assets (like internal blogs, community sites) are really the only emerging media getting traction in today's economic climate.

But to me, the most interesting takeaway from the research is that overall advertising budgets will decline.  Yep.  With dollars moving out of traditional media toward less expensive and more efficient interactive tools, marketers will actually need less money to accomplish their current advertising goals.   But reasonable marketers won't relinquish budget because their programs are running too efficiently. Instead, marketers will allocate unused advertising dollars into investments like innovation, research, customer service, customer experiences, and marketing-specific technology and IT staff, in order to further marketing's strategic influence within their companies. 

Microsoft's Bing Will Change The Face of Search

[Posted by Shar VanBoskirk]

Microsoft announced today its Bing search engine, a "decision engine" that will replace live.com worldwide as of June 3.  A distant third place in the search engine game, Microsoft hopes that this engine will help it gain more searcher share by delivering results and content more relevant to how users actually search.  What makes Bing different from existing search engines?

• Bing focuses on delivering answers, not Web pages.  Microsoft research shows (and Forrester's research affirms) that users rely more and more on search engines to deliver solutions...hotel reservations, movie listings, gift ideas, newsclip replays...not just a directory of Web sites.  Bing was developed to help consumers make decisions, not just to catalog content.

• Bing organizes content/results by searcher (not algorithm) relevance.  Using research of what types of results have proven relevant to former searchers, Microsoft has organized its Bing interface to deliver the content users are most likely to value, rather than just content that matches an algorithmic formula.

• Bing filters out results that aren't relevant.  Instead of giving users an overwhelming volume of results, Bing acts as a concierge to help point users to the results most likely to meet their need.

What does Bing mean for interactive marketers?

• More, quality search inventory.  Today most advertisers buy search ads just with Google and Yahoo because Microsoft has a measly 8% share of searches -- not enough reach to make buying search ads with MS worth the trouble.  Forrester expects Bing to change that.  We expect Bing to appeal to the savvy searcher seeking more relevant search results.
• A new approach to SEO.
  Instead of Bing showing all sites that match the search engine's algorithm, it will show just three results for a given "subcategory" related to a search.  For example, a search for "Britney Spears" may organize by the subcategories "biography," "videos," "music" and "concert information."  This means SEO strategies will adjust in order to optimize Web content for select sub categories, rather than select keywords only.
• Search engines will become information portals.  Search engines have long been used as gateways to Web content.  But as a decisioning engine, Bing introduces a search engine that actually delivers Web content without sending users away to other destination sites.  A search for "airfare to Denver" shows avaiiable fares, pricing trends, a buy or wait recommendation, and a link to purchase.  Since we expect other search engines to follow Bing's lead, this means marketers should expect increased costs for search and display ads.  We also expect online media planners to adjust the sites where they buy.  We expect consumers to frequent Bing (and other similar search engines in its wake) instead of other portals (Yahoo) and preferred destination sites.

Online Media Insights from Sportgenic

[Posted by Shar VanBoskirk]

I had breakfast last Friday with Robert Tas, CEO of Sportgenic an ad network and advertising management platform focused on targeting advertising to sports enthusiasts.  He was in Boston meeting some agency partners (although he did manage to catch game 7 of the Celtics/Bulls series while in town!)

He shared a few observations based on ad sales at his business so far this year:

*Like most publishers, he is finding that advertisers are shifting dollars away from branding and toward direct response vehicles because of the recession.  He and I both agreed that this is a very short-sighted strategy.  Not only does it set your firm up for a poor recovery after the recession ends, but it also means you are likely paying more per conversion than if you invested in some upstream activity focused on warming up an audience to convert easier when they reach the direct response of point of sale touchpoint.

*He's seeing limited experiments with mobile.  Despite the advances in mobile devides and the promise the mobile medium holds for marketers (and of course to the chagrin of my Forrester colleagues here dedicated to mobile marketing), I maintain my cynicism about mobile as well.  With limited marketing budgets available today.  I would definitely invest in trusted channels first and wiat for mobile to work out some more of its kinks. 

*Recent new investment is coming from auto and financial services companies.  After being dark for several months, these industries are back buying online doing reach campaigns (cheaper than TV) and targeting specific users in market for new cars or investments.

*The recession is breeding bad habits.  I have a theory that because business is slower during the recssion, vendors and marketers actually have time to think and develop, which will lead to a burst of innovation after purse strings open back up at the end of the downturn.  Tas, decidedly disagreed with me.  He is finding that marketers are so focused on getting results that they are going after any and all low hanging fruit.  This means they aren't necessarily doing the right thing, but rather doing the thing that gets them to their needed result.  And of course, it will be hard to break bad habits that have been practiced throughout an 18-24 month recession.

P&G Social Media Night: The Results

[Posted by Shar VanBoskirk]

The results are in.  And the collective effort of the four teams partipating in P&G's digital night sold 3,000 Loads of Hope t-shirts and raised $50,000 for charity.  Tide actually matched the money raised, putting the total disaster relief donation to $100,000 for four hours of effort. Thank you to all who bought t-shirts!

If you are just tuning in, Forrester analysts Lisa Bradner, Sucharita Mulpuru and I participated in a P&G-organized event with about 150 digital media experts this past Wednesday focused on understanding how digital media, social networking and word of mouth could drive site traffic and sell product (in this case, vintage Tide t-shirts which raise money for disaster victims.)

While the activity driven by this event was intense, I return to some of my former cynacism about social media (sorry, Jeremiah).  Here are the marketing lessons I learned from this experiment:

*WOM still doesn't have the reach of more mainstream (and dare I say, traditional) channels.  Don't get me wrong here.  I was jazzed about how quickly we created buzz (and sales) on Wednesday night.  But then I got to thinking.  We had some of the biggest social media powerhouses out there (David Armano, Pete Kim, Deb Schultz, Pete Blackshaw) pushing this initiative hard to their network and we only sold 3000 shirts.  When I started translating this into pallets of product I suddently realized that the total audience we had reached was quite small.

*WOM drives site traffic, but the on-site experience closes the deal.  Conversion rates across the four teams hovered right around 7% -- which according to Sucharita is really good for retail sites.  But I couldn't help feeling that conversion should be much higher.  All of the traffic coming online to buy was coming in response to a direct personal reference.  So presumably, they were an audience more qualified than your typical site visitor.  If we had been able to prevent site errors, limit the amount of information required from users at purchase, even merchandised the t-shirts on the site a bit we would have made more good out of our site traffic. 

*The big deals were relationship sales.  My team sold a lot of onesies and twosies, but what really moved our dashboard were a few 50 and 100 t-shirt sales.  And these deals were made personally through phone calls to contacts who might need matching shirts in volume for teams, schools, work groups -- not through digital/online outreach.

Overall, the experiment was definitely a succesful way to feel the power of social media.  My conclusion?  Social media is still young and best used only in tandem with other interactive and traditional tools to drive engagement around brands or issues.