Does Native Advertising Face A $3 Billion Question?

Ryan Skinner

Predictions about native advertising’s medium-term impact are both short-sighted and simplistic.

Hedgehog and the Fox by Isaiah Berlin

In 1973, the Wall Street Journal quoted a professor: “Academic politics is the most vicious…because the stakes are so low.” Thereafter, the idea (that the intensity of a dispute is inversely proportional to its stakes) was named after the professor: Sayre’s Law.

Sayre’s law applies very well to native advertising. According to Forrester data, digital advertising dollars are today some 20% of traditional advertising dollars. Of those scarce digital ad dollars, something far less than 10% goes to anything that could be characterized as native advertising.

Perhaps that’s why the dispute has been so vitriolic (at least, by advertising’s standards).

The day after the New York Times launched a redesign to facilitate more native advertising, Tom Foremski, a media commentator, said: “Native advertising is the world’s worst idea and I can’t believe the New York Times management is so gullible and clueless in agreeing to its publication.”

He joins an authoritative cast of native advertising skeptics. Another, Bob Garfield, described native advertising to the Federal Trade Commission as something akin to bat poo. Even Barclays Capital believes the practice peaked in 2012 and will shrink to a less than $500 million market by 2017.

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Marketers: Focus On Video Audience Fragmentation, Not Cord-Cutting

Jim Nail

With all the talk of cord-cutting, you'd think consumers were abandoning video entertainment for a return to a Neolithic era of telling stories around the campfire after the day's hunt. I published a report a couple of weeks ago called Marketers: Don't Worry About Cord-Cutting that shows this isn't the case. (First, a shout-out to my colleague Jeff Wray, who allowed me to use some of the data in his Forrester Research Pay TV Forecast, 2013 To 2018 [US]).

Are consumers getting their video entertainment from different source? Yes, largely migrating from cable to telecom providers like Verizon and AT&T. This has little to no impact on how marketers plan and buy their TV campaigns.

Are consumers filling some of their video entertainment hours with online streaming sources? Sure, but for the most part, online video viewers are -- and remain -- heavy linear TV viewers, using new sources to get more of the entertainment they love (as I documented in this report last fall). Some younger consumers are delaying getting a pay TV subscription of any type, and perhaps they may never. But then they will fill their entertainment hours with video from Vevo, YouTube, HuluPlus, etc., where advertisers will have ample opportunity to reach them (oh, yes and some ad-free Netflix, but then, ad-free DVD viewing is fading away).  

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Three Steps To Combat Elusive Mobile KPIs And Demonstrate Performance

Jennifer Wise

First, the good news: Mobile marketing is maturing within organizations. More marketers than ever have mobile programs in place, and they are shifting from testing to “see what happens” to the more strategic, and Tim Gunn-recommended, “make it work.”

Now for the bad news: Marketers have to demonstrate whether their mobile programs are, in fact, working. And in a still-evolving industry that lacks measurement standards, coupled with marketers who are just starting to measure strategically, this is no easy task.  

But it can be done! Our advice to marketers is this: Start by benchmarking against yourself. Here are the three steps to help you set the right baselines:

  1. Set up a mobile dashboard. You’re going to need a clear view of your data to develop consistent measures. And for mobile, this requires a feature-rich dashboard with the right level of granularity. What does your mobile dashboard need to have? New filters like operating system (OS) and app version, new data sources like app review sentiment, and cross-channel measurement capabilities to demonstrate mobile’s full impact.  
  2. Establish your baselines. So many variables impact the success of any one company’s mobile program — from its stage of mobile maturity to its audience to the campaign's creative. To make sure you land on the right baseline for your company, create a measurement plan that defines which KPIs matter for your goal and what the right frequency of tracking is based on the longevity of the program or introduction of new factors.
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How To Reach Your Unique Mobile Audience In China

Xiaofeng Wang

Does mobile mean on-the-go? That's not always the case, especially for Chinese consumers. My recent report, Chinese Mobile Consumers Are An Attractive But Unique Audience, tells how mobile marketing differs in the largest smartphone market in the world.

Marketers see great potential in Chinese mobile consumers for three reasons:

  • It's the largest smartphone market in the world, and it's growing fast. According to Forrester’s global smartphone forecast, China’s smartphone installed base will pass the 500-million mark in 2014, more than the US and Western Europe combined.
  • The number of mobile Internet users has skyrocketed in China. It surpassed the number of PC Internet users in June 2012 and is growing twice as fast as the number of overall Internet users. In 2013, the mobile Internet population accounted for more than two thirds of the total online population in the country.
  • Chinese consumers appear to be among the most sophisticated mobile users in the world. According to our Consumer Technographics® data, more than half of online metro Chinese mobile users access the Internet via their devices several times a day, and a quarter daily. These numbers are higher than those of even major metropolitan cities in the US and UK. Metro China also takes the lead in advanced mobile activities, including social networking, downloading and using apps, purchasing products, and checking finances.
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The Sunset Of GRPs

Jim Nail

Gross rating points (GRPs) have been debated in the digital world for years — census level impressions should crush a panel-based measurement like GRPs — until you run into the raft of pesky technical issues: bots, viewability, server-side versus client-side measurement, et al. Meanwhile, the big money (i.e., TV) continues to be traded on GRPs, and with the advent of Nielsen OCR and comScore VCE, it appeared that digital was ready to throw in the towel and trade on GRPs, at least for online video.

But the story doesn't end there. GRPs, being a panel-based metric, have become more and more vulnerable as audience fragmentation decreases the number of viewers for any individual show: first small local broadcast markets, then low-rated cable networks, and now the general decline in audience size across the TV spectrum. This leaves a lot of audience unmeasured by Nielsen but still with intrinsic value to the advertiser, if only you could find another "currency." 

MAGNAGlobal's most recent Media Economy Report takes one of the most direct stabs into the heart of this venerable metric, as reported in this Mediapost article: MAGNA calls for shifting to impression-based trading for local TV ad inventory.

I believe this is a harbinger of the end of GRPs. As I said in my April 2013 report Digital Disruption Rattles the TV Ad Market, disruption won't likely be a sudden, massive event but will begin at the margins in areas like spot advertising, which are smaller dollars and thus less risk to the advertiser's campaign results if a new technique isn't successful. 

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Find, Support, And Keep Emerging Touchpoint Talent

Anthony Mullen

Traditional marketing organisation structures are failing touchpoint innovation. With marketing teams largely organised by channels such as search, display, social, and customer care, there is little incentive to think laterally about problems and opportunities across the group. 

Emerging touchpoints often redefine and cross channel boundaries, which can quite quickly cause problems for teams with restricted views, budgets, and personnel. Take the emerging touchpoint of interactive video, for example, which turns video content into a microsite and has implications on eCommerce, search engine tactics, social, and content marketing. Aside from process and budgeting issues, many brands find that staff members who have worked together for years find it difficult to break out of their habits when asked to embrace and drive the 'new'. 

So what does this emerging touchpoint talent look like? Along with core qualities of entrepreneurial drive, creativity, and the ability to work flexibly across direct and virtual teams, there is also a skills profile that suits this multifarious role.  Emerging touchpoint staff members have a wholly different profile from staff members in your ROI-driven, core marketing machine, who typically have a single specialism. In 1991, Tim Brown, the CEO of Ideo, described this flexibility as a T-shaped skill set. While he intended it to be used for collaboration across roles, it's also a useful way to think about a broadening of functional skills, resembling more of an "M" shape. See the figure below for an illustration of this new balance with greater emphasis on multiple skills.

 

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What Can We Expect At Mobile World Congress 2014?

Thomas Husson

Last year, when attending my tenth Congress in a row, I wrote that MWC 2013 would be more global and more disruptive than ever before. I believe the same will be true this year, with 2014 bringing a very important milestone in the shift to mobile: an install base of more than 2 billion smartphones globally. Mobile is transforming every industry by offering global reach and the ability to offer contextual services. That’s why we'll see many more marketers, agencies, business executives, and strategists attend the traditional telecom show.

Gone are the days when MWC was about operators' supremacy. As my colleague Dan Bieler summed it up in this blog post, telcos are increasingly being backed into a corner. I still remember this quote from Arun Sarin, the former CEO of Vodafone, in the Financial Times in November 2007: “Just the simple fact we have the customer and billing relationship is a hugely powerful thing that nobody can take away from us.” Really? Well, in the meantime, Apple and Google have created two powerful mobile platforms that have disrupted entire industries and enabled new entrants to connect directly to customers.

From a marketing and strategy perspective, I'd categorize the likely announcements in three main areas:

1)    The Asian Device Spec Fashion Week: Getting Lost In Device Translation

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Mobile Is A Catalyst Toward Agile Marketing

Thomas Husson

Seventy-six percent of marketers think that marketing has changed more in the past two years than in the past 50 years!*

Mobile is a significant contributing factor to this rapid pace of change. For example, between 2011 and 2013, Google’s YouTube share of mobile traffic has increased from 6% to 40%! Facebook’s mobile monthly active users have more than doubled from 432 to 945 million!

My colleague Craig Le Clair recently explained why business agility is a key competitive advantage. I just revisited his framework analysis to explain how marketers must adopt the principles of business agility to survive in the mobile era.

For mobile marketing to succeed, you must deliver your brand as a service, implementing more-personalized and more-contextualized brand experiences on mobile phones — but you can’t do it alone. These differentiated experiences require revamped back-end systems, which requires marketers to take an interest in the software, architecture, and processes handled by business technology (BT) teams. You must work closely with your BT counterparts to innovate new capabilities and deploy them with modern process methodologies and tools. Marketers have a lot to learn from the values underlying the notion of agile IT development.

As mobile matures as a marketing outlet, and as consumers around the world continue to embrace it as their primary Internet touchpoint, mobile’s volatility and velocity of change will instill the need to constantly iterate your entire marketing approach. It will become increasingly imperative for marketing leaders to embrace agile marketing.

Moving forward, agile marketers will:

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How To Win A Forrester Groundswell Award For Social Relationship Marketing

Nate Elliott

We're now accepting entries for the 2014 Forrester Groundswell Awards – and our research associate Sarah Takvorian is here to share her thoughts about how you can with in the Social Relationship Marketing category:

Want to send Forrester a valentine this month? Submit your entry to our 2014 Forrester Groundswell Awards and show us your love for social marketing. The deadline for entries is February 28, and we’ll be presenting the winners at Forrester’s Marketing Leadership Forum in San Francisco this April.

For this eighth edition of our awards, we will continue to evaluate both B2C and B2B entries using Forrester’s RaDaR research for social marketing, selecting winners across three categories: Social Reach, Social Depth, and Social Relationship.

In 2013, we received nearly 150 entries from all over the world – but only a handful could win. Think you belong on the winner’s podium? Let’s take a look back at the two winners in last year’s Social Relationship group. This category recognizes social programs that engaged existing fans and customers in order to increase their lifetime value. (If your social program was designed to create loyalty and repeat business, it was probably an example of social relationship marketing.)

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January Sets The Stage For Faster Disruption Of The TV Ad Model

Jim Nail

The annual hype surrounding Super Bowl ads has reached a crescendo this week, and I won't add to it. (You can always go read the article I published in the Journal of Advertising Research when I was CMO of a social media listening company, proving it was more effective to preview your ad before the game than keep it secret.)

Don't let this cacophony drown out three events this month that signal 2014 as a pivotal year in the evolution of TV advertising. Any single one would be big enough news, but the fact that all three happened in just one month shows that the drivers for changes are accelerating:

  • Charter bids for Time-Warner. Behind-the-scenes overtures broke into the open when Charter went public with their desire to buy their larger rival. This event is a symptom of underlying margin pressures and technological change that we will see accelerate this year http://forr.com/TWCinplay 
  • Verizon buys Intel's online TV service. The chip giant threw in the towel in its attempts to create an over-the-top TV service, frustrated in part by content owners' intransigence. Verizon reportedly got a very slick new user interface, but also potential to become the first "virtual MPVD", an IP-delivered TV service that isn't constrained by the geographic footprint of their infrastructure or regulatory definition of its operating territory. 
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