Google's Economic Impact Report: Just A PR Ploy?

Shar VanBoskirk

Today Google announced that it had generated $54 billion worth of economic activity in the US in 2009. The report, which shows state by state economic contribution, bases Google's total value on three factors: 1) Sales driven through AdSense and AdWords; 2) Ad revenue generated for publishers through AdSense; and 3) Google grants. As a research analyst, I'll admit that you can make numbers tell any story you want to, and my gut here is that this report is principally a PR effort to: 1) Communicate some altruism about the Google brand that has been getting some bad press of late; 2) Simplify the complex transformation Google has brought to advertising into a simple, single number; 3) Shift the focus away from questionable strategic decisions that Google has recently made. I wholeheartedly believe that Google has transformed advertising and is almost singularly responsible for the phenomenon of biddable media buying which I think will ultimately replace relationship-facilitated media buys across channels. But I don't believe that Google stimulated $54 billion worth of business. I think what Google did do is provide a new revenue stream to small businesses and site owners, catalyze some new sales, and take a share of commerce and media expenditures that would have happened anyway.

Join Forrester’s New Online Community For Interactive Marketers

Christine Overby

Hot on the heels of our new blog platform, Forrester has launched an online community for interactive marketers focused on the key business challenges that interactive marketers face every day. The community is a place for interactive marketers to exchange ideas, opinions, and real-world solutions with each other. Forrester analysts will also be part of the community, helping facilitate the discussions and sharing their views.

The community is open to all interactive marketers, whether you’re a Forrester client or not.

Here’s what you’ll find:

  • A simple platform on which you can pose your questions and get advice from peers who face the same business challenges.
  • Insight from our analysts, who weigh in frequently on the issues. 
  • Fresh perspective from peers, who share their real-world success stories and best practices.
  • Content on the latest technologies and trends affecting your business — from Forrester and other thought leaders.
     

I encourage you to become part of the community:

  • Ask a question about a complex business problem.
  • Start a discussion on an emerging trend that’s having an impact on your work.
  • Contribute to an existing discussion thread from a community member.
  • Suggest topics for upcoming Forrester research reports.
  • Create a community profile.
  • Share your perspective with others.
     

Click here to go to Forrester’s Online Community For Interactive Marketing Professionals and bookmark it for easy reference. See you in the community.

Forrester’s European Online Ad Forecast: Rich Formats Will Push Display Ad Spending Higher While Search Growth Will Slow

Nate Elliott

One of the first tasks I settled on when I returned to Europe this year was to update our online ad forecast. After months of research, I’ve just published that report, ‘Western European Online Advertising Forecast Through 2014’ – and I’m happy to say that overall, the picture that’s developed is one of an industry returning to health. 2009 wasn’t a great year for the market, but thanks to a strong fourth quarter it wasn’t the terrible year everyone was expecting either – and more importantly, it looks like the weakness was a short-term blip rather than the beginning of a prolonged market slide. Western European online ad spending – which we define as the total of display ad spending and search spending in 17 countries – totalled €9.6 billion in 2009, and will grow to €13.9 billion in 2014.

When you dig a bit deeper, however, it becomes clear that different sectors of the market will have differing fortunes over the next five years. We think the big story between now and 2014 will be online display advertising. After a year of stagnation in 2009 – when it grew by just 1% across Western Europe – we think display is starting to look as healthy as ever. With huge advances in targeting helping response marketers deliver their ads to the right users, and with rich ad formats convincing brand marketers to shift more of their budget online, display will grow by 4% in 2010 and hit double-digit annual growth by 2013.

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How Forrester Defines Western Europe

Nate Elliott

Because I’ve just published a new Western European forecast – and because I often get asked how we define which geographies we cover – I thought I’d clarify what we mean by "Western Europe." As of May 2010, Forrester defines Western Europe as the following 17 countries (listed here alphabetically):

  • Austria
  • Belgium
  • Denmark
  • Finland
  • France
  • Germany
  • Greece
  • Ireland
  • Italy
  • Luxembourg
  • Netherlands
  • Norway
  • Portugal
  • Spain
  • Sweden
  • Switzerland
  • UK

 

Put another way, when we talk about Western Europe, we’re talking about the old EU-15 plus Switzerland and Norway.

Intercontinental Hotels: A Case Study In Customer-Centric Marketing

Shar VanBoskirk

I just attended Unica’s annual Marketing Innovation Summit (MIS) this year in Orlando.  I sat in on a few terrific conversations about making multi-channel marketing a reality.  Here is the first: An overview of Intercontinental Hotel Group’s (IHG’s) use of data-driven marketing to improve communications with existing customers and prospects.

Lincoln Barrett, vice president for guest marketing and alliances, shared that, for IHG, building a customer-centric marketing strategy hinged on three different, but overlapping, initiatives:

  1. Invest in technology
  2. Expand into new frontiers
  3. Build a centralized customer organization

Each of these initiatives is still a work in progress, but excellent progress has already been made in each one. 

Invest In Technology

Step one here was to build a new data warehouse and real-time data mart that would allow IHG to match the data it was gathering through proprietary and third-party sources to existing customer information.  This step also made it possible to gain immediate access to data for analysis or campaign building purposes – a significant upgrade to IHG's previous functionality, which updated records in batches and only made data available some 30 days after a customer incident (like a hotel stay).

The next step was to expand outbound campaigns beyond email.  Technology upgrades (using Unica) automated internal campaign processes, created localization capabilities (for franchisees to create programs customized to their locale and customer relationships), and integrated call center data and activities with outbound campaign management.  As part of this step, IHG also streamlined its formerly multi-agency model into a single global agency.

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We're Hiring In London

Nate Elliott

I have a great job. My role, essentially, is to uncover the most interesting questions in interactive marketing (things like 'How should we measure our social media programs?' and 'What are the best ways to use online video for marketing?' and 'Can you really build a brand online?') and then talk to as many smart people as I can until I find some answers. I then get to present those answers in research reports, blog posts, speeches, teleconferences, workshops, and consulting projects. 

If that sounds fun to you, and you have a couple years experience in marketing, you may want to consider applying for the Researcher job we have open in London. Our Researchers play a crucial role in all aspects of the research process: they help us find those smart people we talk to, and then help us conduct the interviews; they help us field surveys and analyze the resulting data; they contribute to our written reports -- and eventually write entire reports on their own. Along the way, they learn a remarkable amount about interactive marketing and the research process. And if they're good, like my last researcher was, they get promoted to analyst.

If you'd like to apply -- or you know someone who might -- we're collecting applications now. Check out the full job description, and apply using the online tool. And if you have any questions about the job, feel free to drop me a line: nelliott at forrester dot com.

Stratospheric Levels Of Hype

Thomas Husson

If you are in the mobile industry and you've never heard of Foursquare, there is something wrong with the way you keep up to date on new trends. Indeed, Foursquare is one of the most hyped social location services, enabling users to "check-in" to locations in the real world from pubs, bars and restaurants (through to any conceivable location) - sharing them with updates on social sites like Twitter or Facebook, wrapping points and benefiting from potential discounts. Foursquare recently announced it had passed the 1M users mark. The rate of growth is indeed quite strong, bearing in mind the company had just 170,000 users at the end of 2009. According to TechCrunch, Yahoo! was rumored to have made an offer above $80M to acquire the start-up! I am not a financial analyst, but let's say $100M for just 1M users seems high at first sight. So what makes it so valuable and why is foursquare being perceived as the new Twitter? Here are a few thoughts:

- First of all, foursquare is not the only one in town but is probably the one with the most active PR team. It struck some interesting deals with Metro newspapers, with TV channel Bravo, with Vodafone in the UK (on-deck and via SMS promotion) and more recently with even the Financial Times, if we believe business insiders. What makes it quite successful is its entertainment-centric approach. It is quite addictive as it is primarily an interactive game. There are others (not only Gowalla) such as MyTown (a sort of a real-world monopoly), which passed the 2 million active users mark a few days ago!

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Efficient Frontier Announces Integrated Search And Display Platform

Shar VanBoskirk

Efficient Frontier announced last week its official entry into display advertising with a platform that integrates biddable display with search marketing, real-time bidding capabilities, and the Efficient Frontier trademark portfolio approach to optimization that uses predictive modeling to forecast performance outcomes.

I think this certainly indicates further momentum into the world of biddable display media, and eventually biddable media in all formats. See more about Forrester's thoughts on dynamic media buying and what it will mean for media buying on and offline in the report, Demystifying the DSP

I think the platform from Efficient Frontier addresses a much needed combination -- that of paid search and biddable display media. But I also think that this platform, competing ones -- like those developed by Vivaki -- and demand-side platforms are in “version 1.” Not a bad place to be at the early stage of an emerging opportunity. But I do expect that all of these tools will refine over the next two years. I think they will continue to add data sources, more inventory, additional and easier to use functionality, better metrics, and better reporting. But v.2 will develop only after advertisers begin testing dynamic media buying and can show technology players what additional depth and breadth they need.   

Behavioral Marketers Will Be Responsible For Data Disclosures

Shar VanBoskirk

Frank Gertsenberger, VP of Product Marketing for Audience Science wrapped up day one with an excellent update on privacy concerns and expected changes due to FTC and congressional work on behavioral advertising policy. 

The concern is that even though data is being collected anonymously, when enough anonymous data points are collected, is an individual still anonymous?

Four entities are running concurrently to tackle this challenge:

  1. The FTC began investigating data practices about two years ago and determined that the risk with behavioral marketing is that consumers are not aware of what data is being collected; current privacy policies are insufficient at explaining how consumer data is employed with behavioral marketing.
  2. Congress – A subcommittee was convened last year to quantify the value of behavioral marketing in order to determine its value in the online economy.  Through studies supported by the NAI (the network advertising initiative), Congress now understands this and is outlining a policy outlining what the baseline protections should be for consumers.
  3. NAI– A membership organization which now represents more than 80% of all online ad spend, and created studies focused on answering Congress' need to value behavioral marketing.  Also helps audit member sites to aid compliance efforts.
  4. The Associations – This is a collection of online advertising associations like the DMA (direct marketing association), the IAB (interactive advertising bureau) and the ANA (association of national advertisers).  This group is taking a pass at developing requirements for providing enhanced notice to consumers.

What this means for advertisers and publishers:

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Publishers Create Ad Solutions; Still Don't Talk Tech

Shar VanBoskirk

The second session of AudienceScience Summit this afternoon is a panel moderated by Quentin George, Chief Digital Officer of Mediabrands.  Panelists include Dave Dickman, SVP of Digital Media Sales from Warner Bros. Television and Barbara Healy, VP of Online and Mobile Fulfillment at Tribune.

 The theme of the panel was intended to address how these publishers manage their audience assets.  But really the primary message I took away was that publishers are focusing on solution sells -- finding ways to sell more high margin offerings -- whatever these happen to be.  I was expecting to hear more specifics about how they are working with publisher optimization solutions, or data management offerings.  But it sounded instead that it was any and all efforts to create unique ad solutions, rather than just impressions.

Two points heard, one good, one bad:

1) Warner Bros talked about an alternative way to think about creative, empowering creatives to build original programming that airs on the Web and allows users to provide input into the plot and production that the program takes.  This approach garnered premium sponsorship (from J&J) and helped creative resources feel a part of (and not irrelevant to) emerging media.

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