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.

Yahoo! Takes Baby Steps Toward Much Needed Search Improvement

[Posted by Shar VanBoskirk]

Yesterday Yahoo! announced enhancements to its search advertising business and consumer experience.  These enhancements include the following:

• Enhanced reporting -- Advertisers will now be able to see how their search ads are performing on Yahoo.com compared to partner sites also serving Yahoo! search ads

• Control over network bids and messages -- Starting next year, advertisers will be able to bid differently for ads showing up on Yahoo.com compared to those that might show up on partner sites.  As a part of this, advertisers can also target different messages based on the sites where their ads might run.

• Enhanced self-service tools for advertisers who need dedicated campaign management tools.

• Integrating rich ads into Panama -- Yahoo! has been trialing rich search ad formats which include video and image enhancements to regular paid search listing with selected brand advertisers.  But the process to date has been a negotiated one that is much higher touch than the process for buying regular keyword ads.  Integrating rich search ads into Panama will enable them to be bought on a bid-for basis and as part of other (non-rich ad) search campaigns.*

• Sites running as part of Yahoo!'s BOSS program will be eligible to distribute and share revenue from Yahoo!'s paid search ads.
  

• Price controls -- Yahoo! will adjust its pricing model a bit to allow it to set pricing floors or ceilings in order to better value traffic for what it is worth.
  

• A focus on improving relevance of search results -- Yahoo! has a new interface for delivering search results and is also dialing up emphasis on delivering intent-based search results.  The idea here is that the search engine would use information about your past searches, searches like your's and what others have found relevant in order to deliver results that fit your need, not just a list of pages that could match a given keyword. 

My take is that these are much needed but not comprehensive improvements for Yahoo!.  Marketer and consumer expectations for search are only getting higher, so Yahoo! (and all search engines) must continually innovate to improve the advertising and search results experience they deliver.

The most interesting developments to me are the ability for advertisers to control their bids and messaging for different places their ads will run.  And, the notion of Yahoo! regulating pricing to keep bids in line with value.  I think these both play to the science of paid search.  That is, how advertisers should optimize their budget and message in order drive the most profitable traffic (not just drive the *most* traffic). 

*Note: Rich search ads are still only available to select brand advertisers as selected by Yahoo! 

Yesterday Yahoo! announced enhancements to its search advertising business and consumer experience.  These enhancements include the following:

• Enhanced reporting -- Advertisers will now be able to see how their search ads are performing on Yahoo.com compared to partner sites also serving Yahoo! search ads

• Control over network bids and messages -- Starting next year, advertisers will be able to bid differently for ads showing up on Yahoo.com compared to those that might show up on partner sites.  As a part of this, advertisers can also target different messages based on the sites where their ads might run.

• Enhanced self-service tools for advertisers who need dedicated campaign management tools.

• Integrating rich ads into Panama -- Yahoo! has been trialing rich search ad formats which include video and image enhancements to regular paid search listing with selected brand advertisers.  But the process to date has been a negotiated one that is much higher touch than the process for buying regular keyword ads.  Integrating rich search ads into Panama will enable them to be bought on a bid-for basis and as part of other (non-rich ad) search campaigns.*

• Sites running as part of Yahoo!'s BOSS program will be eligible to distribute and share revenue from Yahoo!'s paid search ads.
  

• Price controls -- Yahoo! will adjust its pricing model a bit to allow it to set pricing floors or ceilings in order to better value traffic for what it is worth.
  

• A focus on improving relevance of search results -- Yahoo! has a new interface for delivering search results and is also dialing up emphasis on delivering intent-based search results.  The idea here is that the search engine would use information about your past searches, searches like your's and what others have found relevant in order to deliver results that fit your need, not just a list of pages that could match a given keyword. 

My take is that these are much needed but not comprehensive improvements for Yahoo!.  Marketer and consumer expectations for search are only getting higher, so Yahoo! (and all search engines) must continually innovate to improve the advertising and search results experience they deliver.

The most interesting developments to me are the ability for advertisers to control their bids and messaging for different places their ads will run.  And, the notion of Yahoo! regulating pricing to keep bids in line with value.  I think these both play to the science of paid search.  That is, how advertisers should optimize their budget and message in order drive the most profitable traffic (not just drive the *most* traffic). 

*Note: Rich search ads are still only available to select brand advertisers as selected by Yahoo! 

The Video Contests Keep Coming

[Posted by Nate Elliott]

I've spent a lot of time this year researching online video contests (clients can read my report on Best Practices for User-Generated Video Contests and my Video Contest Checklist, while non-clients can get the highlights in this blog post), and I'm happy that I'm still getting questions from our clients every week about how they can run better contests themselves. So to help our clients (and the industry) keep track of what's working well in the space, I've been compiling a list of the best online video contests I've seen.

I just updated that list, and in doing so I noticed two emerging trends in online video contests:

1. Alcoholic beverage brands love the control video contests offer. More than half the contests in my 'food and beverage' category are from alcohol brands: Jim Beam, Okanagan Spring, Black Box Wines, and Little Penguin Wine. And that makes sense, because contests offer brands the opportunity to drive user-generated content, but still remain in control of that content. All they have to do is run each video past their legal team before approving it to be posted on the contest website. (Or, if they want videos to be posted automatically, they still have the ability to pull down questionable content after it's been submitted.) This type of control has made contests popular with marketers in other sensitive or regulated industries, too -- like financial services and health care.
2. B2B marketers are warming up to the power of video contests. We're still not seeing B2B contests by the thousands -- but more B2B marketers are using contests now than six months ago. Two of my favorite recent B2B contests are Google's TV For All Contest, in which they're giving away free TV ads; and TCBY's This Could Be Yours Store Givewaway, in which they're giving away a free TCBY franchise.

Go check out the complete list of my favorite online video contests -- and if you've got one you'd like to add, leave a comment on that page or below.

Omniture Aquisition Will Bring A Boost To Online Ad Measurement

[Posted by Shar VanBoskirk]

Yesterday Adobe announced its intentions to acquire Web Analytics giant Omniture in a $1.8 billion deal.  The aquisition has significant implications for the future of online marketing; my colleague John Lovett spells out Forrester's take on what this acquisition means for customer intelligence professionals, customer experience professionals and interactive marketers in his blog post.  Here's Forrester's take:

Adobe Flexes Its Online Muscle and Acquires Omniture

[Posted by John Lovett]

Follow Me on 

Adobe announced today its intention to acquire Omniture for $1.8 billion dollars. Many industry insiders and practitioners alike are asking why this deal makes sense. Here is Forrester’s take on what it means:

• Measurement becomes embedded within Interactive media. This acquisition has the potential to embed measurement technologies into a burgeoning landscape of interactive media. Adobe’s content creation tools are widespread and this acquisition now provides the opportunity for both developers and content creators to use a measurement tool that is inherent to the development platform.

• Web content management solutions have a new challenger. Adobe has a strong workflow and process management background that is typically disjointed from the online optimization efforts. Bringing these companies together creates the potential for enabling native tagging during content creation; coupled with run time delivery; followed by optimization tactics for continuous improvement.      

• Advertising and onsite measurement potentially share a roof. Advertisers and publishers use disparate tools to measure and reconcile visitors and impressions. Publishers need help monetizing content by understanding how it is consumed by visitors; while advertisers struggle to place relevant as in front of a targeted audience. If these two entities begin to share a common platform for measurement, then analysis and optimization align.  

• Adobe gains a recurring revenue stream. The revenue models for these organizations are different. Adobe largely sells licensed software, which was down 30% this quarter and hurting from the current economy. While Omniture delivers software as a service, thus Adobe gains a SaaS based recurring revenue model.  

We welcome your comments and thoughts on this acquisition news and how it affects Customer Intelligence professionals. Please look for a much more detailed analysis in our syndicated research coming soon.

  

Yesterday Adobe announced its intentions to acquire Web Analytics giant Omniture in a $1.8 billion deal.  The aquisition has significant implications for the future of online marketing; my colleague John Lovett spells out Forrester's take on what this acquisition means for customer intelligence professionals, customer experience professionals and interactive marketers in his blog post.  Here's Forrester's take:

[Posted by John Lovett]

Follow Me on 

Adobe announced today its intention to acquire Omniture for $1.8 billion dollars. Many industry insiders and practitioners alike are asking why this deal makes sense. Here is Forrester’s take on what it means:

• Measurement becomes embedded within Interactive media. This acquisition has the potential to embed measurement technologies into a burgeoning landscape of interactive media. Adobe’s content creation tools are widespread and this acquisition now provides the opportunity for both developers and content creators to use a measurement tool that is inherent to the development platform.

• Web content management solutions have a new challenger. Adobe has a strong workflow and process management background that is typically disjointed from the online optimization efforts. Bringing these companies together creates the potential for enabling native tagging during content creation; coupled with run time delivery; followed by optimization tactics for continuous improvement.      

• Advertising and onsite measurement potentially share a roof. Advertisers and publishers use disparate tools to measure and reconcile visitors and impressions. Publishers need help monetizing content by understanding how it is consumed by visitors; while advertisers struggle to place relevant as in front of a targeted audience. If these two entities begin to share a common platform for measurement, then analysis and optimization align.  

• Adobe gains a recurring revenue stream. The revenue models for these organizations are different. Adobe largely sells licensed software, which was down 30% this quarter and hurting from the current economy. While Omniture delivers software as a service, thus Adobe gains a SaaS based recurring revenue model.  

We welcome your comments and thoughts on this acquisition news and how it affects Customer Intelligence professionals. Please look for a much more detailed analysis in our syndicated research coming soon.

  

Would You Buy Pre-Rolls For $1 Per Thousand?

[Posted by Nate Elliott]

Ad Age ran a fascinating piece this week about how CPG giant Reckitt Benckiser shifted $20 million of their TV budget to pre-roll ads, and then relentlessly hammered publishers on price. According to Ad Age, Reckitt bought some pre-rolls for as little as $1 per thousand.

Granted, the economy is clearly taking its toll on in-stream ad prices. And big budgets always earn marketers volume discounts. But when you realize that even in this market most high-quality pre-roll inventory costs upwards of $30 per thousand, the prices Reckitt paid look incredibly low.

And that's stirred up some debate about whether Reckitt really get good value from those buys. Clearly, they weren't aiming for top-notch, name-brand sites: the buy was focused on networks rather than individual sites, and at those prices Reckitt likely to wound up with remnant inventory. As Freewheel CEO Doug Knopper said, "Reckitt is about premium brands; [this buy] won't showcase those brands -- it will schlock them up."

Marketers can always find low-cost inventory if they want to. Online, that means untargeted, non-frequency-capped remnant inventory and blind network buys; on TV, that means 3am times lots on obscure cable channels. The question isn't whether you can find this inventory, it's whether this inventory offers any real value -- especially to a brand marketer.

What do you think? Did Reckitt help or hurt their brands by advertising on non-premium pre-roll inventory? If you could find remnant pre-roll space for $1 (or $3 or $5) per thousand, would you buy it? Let us 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.

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. 

Confirmed: The Recession Limits Interactive Experimentation

[Posted by Shar VanBoskirk]

Forrester's "Interactive Marketing Channels To Watch, 2009" -- our annual look at actual interactive channel adoption compared to hype -- went live on Friday.  A few of the study's key takeaways:

*Few marketers experiment with emerging media with the exception of social media applications.  They stick with email and search and are waiting for a better economy to embrace online video and mobile marketing.

      

*Marketers embrace social media applications. 64% of our sample are already building social media applications, despite a general hesitancy to experiement with emerging media

*Display media penetration has declined due to marketers prioritizing direct response investments over branding ones this year

How does this adoption of interactive tools match with your own?