| Monday, Mar 18, 2002 |
What's inside:
Today's Online News
1. Bumpy Road From Free To Fee
2. Cell Phone Ownership Grows
3. CNET Launches Builder.Com by Ken Liebeskind
News Briefs
4. Maytag to Consolidate Media Buying
5. BBDO New York Takes Home Top Addy
6. DoubleClick Releases DART Enterprise 5
7. Saluting 100 Years of Advertising
8. B2BWorks Introduces Email List Management
Today's News
1. Bumpy Road From Free To Fee
Jupiter Media Metrix today reports that revenues from paid online content will only grow to $5.8 billion by 2006 - up from $1.4 billion in 2002. According to Jupiter's new market forecast for paid content presented today at the ninth annual Jupiter Media Forum, revenues for general content will reach $2.3 billion in 2006 (up from $700 million in 2001), while revenues from online games and digital music will equate to $1.8 billion and $1.7 billion by 2006, respectively (up from $260 million and $30 million in 2001). Jupiter also unveiled findings from a March 2002 Consumer Survey, revealing that almost three quarters of online adults (70%) cannot understand why anyone would pay for content online.
"While there is money to be made in the online content business, Jupiter's latest survey and market forecast numbers indicate that the mass market still largely shuns anything that smells like a subscription online," said David Card, Jupiter vice president and senior analyst at today's Jupiter Media Forum in New York City. "However, in the near term, media companies will create subscription services via packaging, exclusivity and added interactive features. Over time, they must use the gradual U.S. broadband transition to re-set industry ground rules and re-condition consumer expectations.”
Consumers Resigned to Paying in Future
According to the March 2002 Jupiter Consumer Survey, 42% of online adults expect over time that people will have to pay for content on the Internet. Consumer attitudes toward paying for content have, if anything, worsened from August 2000, when 45% of respondents answered the question the same way. Despite consumer reluctance, Jupiter analysts believe that major media properties are in a better position than they were four or five years ago because they no longer face well-financed start-ups giving away quality programming in an effort to lure new users.
"The online future is beginning to look a lot like cable TV. Established portals will emerge as networks that aggregate premium content and services in packages - both those that portals determine and those that users customize. This will pave the way for content providers to resell premium content through numerous partners," Card said.
General Content Opportunity Fragmented
Although Jupiter forecasts that general content revenues will hit $2.3 billion by 2006, the market will stay relatively fragmented. Within the general content category, the highest revenue generating genres in 2006 will be audio/video entertainment ($600 million), adult entertainment ($400 million) and financial and business news content ($350 million). Genres expected to generate the least revenue in 2006 include: consumer/shopping aids ($85 million), kids content ($95 million) and sports content ($95 million). According to the survey, fewer than six percent of online consumers would be willing to pay for kids, sports, video or shopping aid content.
ISPs Could See Early Returns
The survey indicates that, among those online users who would pay for content, nearly one third (29%) would likely pay their ISP. However, digging deeper into the survey responses shows a good sign for mainstream media companies. Jupiter analysts have found that experienced online users - those who have been online for five years or more - are more likely to pay publishers than ISPs or portals. Time and again, Jupiter has seen online tenure to be the surest predictor of online behavior. Jupiter analysts contend that online cross-genre, cross-brand packages will lead the way into a cable TV-like tiered services future.
2. Cell Phone Ownership Grows
The latest study from Scarborough Research shows a 29% growth rate for cell phone ownership over the past two years with almost two-thirds (62%) of American adults owning a cell phone.
The study shows Houston leads the nation with almost three-fourths (74%) of adults owning a cellular phone. Other cities that have a high concentration of cell phone ownership are Atlanta (73%), Honolulu (70%), Miami (69%) and Dallas (69%) - all above the national average.
Ranking on the low end with the least percentage of wireless adults are Roanoke, Va. (49%); Albany, N.Y. (49%); Wilkes-Barre, Penn. (46%); Buffalo, N.Y. (45%) and Charleston, W. Va. (39%).
Scarborough's market trending data shows that in 1999, slightly less than half (48%) of American adults owned a cell phone. In 2000, more than half (55%) of U.S. adults owned a cell phone and in the latest 2001 study, cell phone penetration numbers are up to 62%. All indicators demonstrate that the numbers will continue to grow since nine percent of American adults plan to purchase a cell phone in the next year.
“Overall, it is clear that wireless phone penetration continues to increase but what is important to note is the variance by local market,” said Alisa Joseph, vice president of advertiser marketing services, Scarborough Research. “While some local markets have extremely high penetration for wireless users, other cities rank well below the national average for cell phone ownership. For the wireless industry, this points to a need to target these consumers where they live, work, socialize and commute. A targeted local campaign or wireless service package designed specifically around local market dynamics is essential to reach current and untapped customers.”
This study also examined the average amount spent on monthly cellular bills. In the past month, more than one-third of cell phone owners (41%) paid more than $50, while almost a quarter (23%) paid more than $75 for their cellular service. In addition, the study shows a correlation between the amount of time spent commuting and the size of wireless phone owners' cell phone bills. Cellular phone owners who commute an hour or more are 66% more likely to have a cell phone bill of $150 or more.
The Wireless Adult
The wireless adult is tech-savvy with almost three quarters (72%) accessing the Internet and two-thirds (66%) using email. Almost a third (31%) shop online and close to a quarter (21%) play games online. Cell phone users are 25% more likely than the average adult to pay bills online and 22% more likely to purchase items or services while surfing the Web.
Cellular phone owners tend to be slightly more female (52%) than male (48%), age 25-54 (64%), married (59%) and over a quarter (27%) of cellular households have two or more children. The cell phone consumer is affluent with 71% owning their own home. In addition they are 26% more likely than the average adult to have a household income of $75,000+.
3. CNET Launches Builder.Com
by Ken Liebeskind
Today, CNET launches Builder.com, a website for enterprise software developers and their managers.
Other CNET sites, including CNET, ZDNet and TechRepublic already appeal to this audience, but Builder will provide comprehensive editorial coverage of site architecture, management and other issues, access to a community of peers and the latest software downloads. It will be a site where "developers can share information with their peers and get the mission critical answers they need," according to Bob Artner, vice president of Builder and TechRepublic.
The site will be registration based, drawing from a pool of 2.2 million developers, CNET says.
CNET has much to say about Builder's content, but not as much about the advertising. It announced Sun and Macromedia as two charter advertisers and said a limited number of charter sponsorships are available. "There will be a variety of opportunities depending on the level they want to participate," Artner says, without saying what the specific opportunities are. He says there will be 17 email newsletters generated by the site that can be used for advertising.
Artner says advertisers will be enterprise development product vendors who will seek to reach the tech spending decision makers who will visit the site. He says developers are an atypical market for tech Web sites, because they are not thought of as spenders. But that situation is changing. "They are becoming decision makers as the products get more involved and complicated. Companies are looking for decisions on tech platforms and turning to developers for guidance because they work with the products and have the best sense for what's going on and what works best. And the largest vendors in the space are trying to get in front of the developer market."
Thus it appears Builder will provide a new online advertising opportunity for vendors seeking to reach the specialized developer market.
The site launches today, with promotions at other CNET sites, including ad banners and editorial placements.
News Briefs
4. Maytag to Consolidate Media Buying
Maytag Corporation has announced that it will consolidate its media buying under one agency for all of its brands, including Maytag, Jenn-Air, Amana and Hoover. The company has retained Chicago-based Jones-Lundin Beals as its search consultant. The announcement marks the final phase of a planned media transition process, according to David Miller, senior director, brand management, Maytag Appliances. ``Putting all media buying under a single umbrella will leverage efficiencies and maximize effectiveness across all Maytag brands,'' Miller said. ``We will also evaluate the media planning processes as well and make a decision whether to also consolidate this function at that time.''
5. BBDO New York Takes Home Top Addy
BBDO New York captured the top honor at the 2002 New York Addy Awards held at Manhattan's prestigious Sky Club last Thusday. The agency was awarded "Best of Show" for its new "Bold and Daring" television campaign on behalf of Frito-Lay's Doritos brand chips. The humorous campaign, which also received three Gold Addys, is targeted to teens and stars "Clive," an unidentified, but eccentric, European-sounding spokesperson, in the middle of a grass field, asking viewers the question, "Yes, my friend you are bold. But, are you also, daring?" In addition to "Best of Show," BBDO New York was also the recipient of the first-ever "New York Pride Award," presented by the New York Addys in recognition of the agency's "New York Miracle" campaign.
6. DoubleClick Releases DART Enterprise 5
DoubleClick Inc. today announced the launch of DART Enterprise 5, the newest version of DoubleClick's AdServer technology. According to the official announcement, DART Enterprise 5 provides customers with creative templates for improved trafficking and administration, enhanced inventory management features, multi-event analysis, and additional Application Program Interfaces (APIs) for platform integration. DART Enterprise 5's customers will continue to leverage the robust and scalable architecture and flexible business object framework that AdServer provided, in addition to the industry's leading real-time ad-hoc reporting and fully extensible design. In the past four months, more than twenty DoubleClick customers worldwide have licensed or migrated to DART Enterprise 5.
7. Saluting 100 Years of Advertising
As Popular Mechanics magazine continues its salute to 100 years of Americana and technology in print, the April, 2002 issue, on sale at newsstands now, features a tribute to 100 years of classic advertisements as published in Popular Mechanics starting with the lone display ad from the first issue dated January 11, 1902.
That first major advertisement, which sought investors in the Chicago - Texas Oil Syndicate, offered shares in oil wells drilled the year before near Beaumont, TX. Those wells turned out to be some of the most productive oil wells in history.
“While we cannot promise that all Popular Mechanics ads make both our advertisers and readers wealthy, those who paid attention to that 1902 display ad made a lot of money, as did the Syndicate,” said Jay McGill, publisher of Popular Mechanics.
Another early advertiser was the Safety Razor Company, founded by King Camp Gillette in 1901 to sell his invention -- razors with disposable blades. When Gillette discovered men were reluctant to give up their strop razors, he decided to give razors away to promote blade sales.
8. B2BWorks Introduces Email List Management
B2BWorks, the business-to-business digital marketing and media services provider, today announced the addition of permission-based email list management services to its suite of B2B digital marketing products and services for marketers and publishers.
B2BWorks CRMWorks is an end-to-end service designed to help B2B marketers and publishers develop email strategies, create and build email lists of customers and prospects, and execute email marketing programs. It is an end-to-end marketing solution that can include anything from a one-time deployment to full management of all email marketing initiatives.
Monday, Mar 18, 2002
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