The availability of TV programming online has gone from being a nice-to-have to an expect-to-see option in the minds of most Americans, raising major implications for networks and potential new opportunities for advertisers, according to the most recent installment of an ongoing tracking study of the Internet’s effect on TV viewing. The study, Knowledge Networks’ annual “TV Web Connections” report, will be released today and shows that in the four years since their online TV viewing attitudes and behaviors have been tracked, Americans have shifted from thinking of it as a novelty to an expectation. “I think it’s similar to what we went through with print newspapers putting stuff online,” says David Tice, director of the Home Technology Monitor at KN, and author of the new report. Tice says the dilemma for TV networks appears to be similar to the one confronting newspaper publishers whose initial freely available online content publishing models trained consumers to expect total access to their content and to get it for free. While newspaper publishers have been trying to shift their online publishing models by establishing so-called “pay walls,” Tice says the jury is still out on the success of those efforts, and that TV programmers need to pay careful attention, because the consumer backlash could be significant. “It’s a big question for television networks,” he says, adding: “How do they monetize the digital side without cannibalizing the mother ship?” The good news is that TV programmers seem to have strong demand from advertisers for their digital ad inventory -- and so far, reasonable acceptance from users to view it -- but the amount of ad inventory online is still a fraction of what they get with conventional television. Tice says that in the short term, television programmers can look at online access as an opportunity to expose viewers to shows they might not have otherwise seen, so there is a promotional value. He noted that data from KN and other sources such as Nielsen show that the growth in online viewing of TV programs has not hurt conventional TV viewing levels -- and said it’s possible the online access has been a factor in that, although he said KN’s data does not explicitly show that. Nielsen, meanwhile, has begun to integrate online viewing of TV shows into its core TV ratings services, and expects the behavior to become an increasingly important factor in total TV viewing levels. One thing that does not yet appear to be occurring due to the availability of online access to TV shows is so-called “cord-cutting,” or people cutting their conventional TV subscription services, because they can access some or all of the same content online. Tice says KN’s data indicates that there is no difference among people who watch TV online and the total population in terms of cord-cutting behavior. Tice says online viewing tends to be a bigger factor with young adults. He also says that mobile devices -– both smartphones and tablet computers -- increasingly are becoming a factor for viewing TV programs online, but the No. 1 source still is an Internet-connected personal computer. The biggest developing factor, he says, is the shifts in consumer expectations surrounding social sharing. Tice says apps that enable consumers to share TV shows they are watching with friends have become a significant factor -- and that consumers increasingly expect those features too. “That turned out to be a relatively highly used feature,” Tice says, noting: “Over half the people used it, and said it increased their involvement with the program.” Of the features that consumers use most when watching a TV show on a network’s site, Tice says “schedule information” is still No. 1, followed by watching full episodes and watching preview clips. After that, he says, social sharing has become the biggest factor. “The more people watch TV online, the more they want to share those programs with other people,” he says.
Recent research from IBM suggests m-commerce activity is on the upswing, with the share from mobile doubling during the holiday season and on Valentine’s Day. In a new study, the Consumer Electronics Association (CEA) projects that trend will translate into consumers spending $575 on mobile purchases on average in 2012. CEA estimated that nine out of 10 U.S. consumers own a tablet, smartphone or a cell phone, amounting to 216 million mobile device owners. More than one-third (37%) of mobile users are engaging in some form of mobile commerce -- either shopping and/or purchasing online or in physical stores, or using coupons or gift cards. The categories that people are mostly likely to shop on with mobile devices were music (43%), movies (38%), events/ticketing (37%), clothing/footwear (36%) and books (35%). Mobile users also expect to increase couponing in the next 12 months, with about one in three planning to search for coupons online or in email, as well as redeem them. Men are expected to outspend women in mobile purchases this year, by $677 to $489. Among age groups, those 35-44 are projected to spend the most at $664 on average, while people making over $75,000 annually will spend $686 via mobile devices. Recent mobile usage findings from Forrester indicate that mobile shopping is growing, but isn’t yet as widespread as the CEA research shows. In a study released earlier this month, Forrester found the proportion of mobile users researching products doubled to 10% in 2011, while actual mobile purchases have doubled to 4%. When people who have not made mobile purchases were asked why, half told CES they preferred to buy products in other ways, and 35% expressed concerns about security. Only about a quarter of consumers trust that their information is safe and secure using the mobile Internet, given current authentication safeguards. “Consumers want assurances that their personal information is 100% safe and secure. They are not fully confident in technologies available,” stated Jessica Boothe, manager of strategic research, CEA. The CEA study findings were based on a survey conducted among 2,406 U.S. adults between December 16 and 21, 2011. The margin of sampling error is 2%.
In the nick of time (given the explosion in mobile-device usage), the Interactive Advertising Bureau has formalized five new formats for mobile advertising. The IAB says the five winning formats come from some 36 companies including AOL, Google, Microsoft and Pointroll, which served up something like 60 concepts. Over the next three to four months the bureau will release specifications based on the new mobile ad concepts, which are winners of the IAB's "Mobile Rising Stars" competition, and are intended to work on all mobile platforms. The IAB says the formats are also supposed to allow ad buys at the same scale and scope as typical online display buys. Here are the new (potential) mobile standards: 1. Filmstrip, which the IAB describes as a scrollable, film-strip style multipanel, horizontal or vertical unit. 2. Slider, an overlay unit that resides on the bottom of a page. It is meant to mirror touchscreen usage by prompting users to slide the entire page over, revealing a full brand experience. The idea here is that although the slider unit replaces content with a full-page brand experience, the user can slide it out of the way again at will. 3. Adhesion Banner, a banner ad that the IAB describes as “adhering” to its start position, when one rotates the device or re-orients the page. 4. Full Page, which accommodates both portrait and landscape orientation, with interactive functionality. 5. Push, a bottom or top banner that expands to full screen, like “Pushdown” units. The IAB says this allows for an immersive, in-page ad experience. The winning companies -- AOL, BabyCenter, Crisp, Google, Jivox, Mediamind, Medialets, Microsoft, Pointroll, Time Inc., The Weather Channel, and Yahoo -- will collaborate with IAB, its Mobile Marketing Center of Excellence, Agency Working Group, and mobile ad ops experts to build specifications. Separately, the IAB has released six new Standard Ad Units (SUA) that, per Randall Rothenberg, IAB president and CEO, offer more space, greater functionality, and a broader range of user experiences. To measure the new units’ ability to deliver at scale for brand advertisers, IAB partnered with a roster of interactive agencies to test campaigns from AT&T, Jeep and Westin Hotels & Resorts, leveraging all six Rising Stars units for each. The test creative, which was showcased on MSN.com, was built by AOL/Pictela, DoubleClick/Google, MediaMind and Microsoft Advertising. “As marketers we are all going to be more efficient in maximizing our production resources by having more structure around rich digital advertising units,” said Christi Gettinger, senior director brand management, Westin Hotels & Resorts, in a statement. “To date, publishers have been fairly fragmented in their offerings to advertisers and this ultimately drives up production costs to effectively reach our target audience."
One of the first newspapers to implement an online pay wall is doing quite nicely by it: Pearson’s Financial Times Group derived 47% of its total revenues from digital sources in 2011, according to owner Pearson, up from 25% in 2007, the year that it launched. Content revenues -- meaning digital subscriptions -- made up most of the digital revenues, at 58%, with the other 42% coming from digital advertising. The proportion supplied by content revenues is up from 41% in 2007, while the proportion coming from advertising is down from 59%. Crunching the 2011 numbers, the FT Group now draws just over 27% of its total revenues from digital subscriptions, and about 20% from digital advertising. In 2011, the FT Group brought in revenues of $675.6 million, up 6% from $637.7 million in 2010. Pearson’s total revenues, including its North American and international education divisions, as well as Penguin, came to $9.27 billion in 2011, up 4% from $8.96 billion in 2010 (converted from pounds using the current exchange rate). The number of digital subscriptions to FT.com increased 29% to 267,000 by the end of 2011, accounting for approximately 44% of total paid circulation of 600,000. In fact, digital subscriptions are now the top source of new subs in some areas, including the U.S., where they surpassed new print subs this year. The total number of registered users increased 33% to 4 million, with an average daily audience of 2.2 million across its print and online properties -- up 3% from 2010. Mobile users now make up 19% of the traffic to FT.com.
Advocacy group Public Knowledge is panning a new plan by AT&T to allow app developers to purchase a service it describes as a toll-free number for mobile broadband. The telecom reportedly said on Monday that it will roll out a feature that will allow mobile app developers to pay for the data subscribers use. When app developers purchase that service, data transmitted by their apps won't count toward subscribers' monthly limits. But Public Knowledge says the plan will disadvantage developers that can't afford to pay for consumers' data. "Right now, the system works the same for every application," says Public Knowledge's legal director, Harold Feld. By contrast, he says, the new plan will necessarily favor big companies at the expense of startups. "People who are trying to compete with Facebook, and operating on a shoestring, will not be able to pay." AT&T subscribers who joined in 2010 and later are required to sign up for tiered plans, where they pay fees based on how much data they consume. Longtime users who originally signed up for unlimited plans can keep them, but face throttling if they are classified as "bandwidth hogs" -- meaning they consume more data than 95% of other users. Public Knowledge says that AT&T's plan demonstrates why the Federal Communications Commission should investigate telecoms' decisions to impose data caps, as well as the 2010 shift toward tiered mobile broadband pricing. The group also stated that the new proposal “is exactly the type of market manipulation we hoped the FCC’s Open Internet rules would prevent." Current Net neutrality rules prohibit wireless companies from discriminating against some types of competing apps, like Skype. But the rules appear to give wireless companies more flexibility in dealing with app developers that don't offer competing services.
QR and other mobile codes seem to be appearing everywhere. In fact, only 6% of ads carried a mobile code in the last quarter of 2011, according to Competitrack and its new survey of 7,300 mobile-activated ads it catalogued last year. But that 6% of ads represented enormous growth from the 1% that occupied January issues. Overall, Competitrack says more than 2,300 advertisers used 2D codes in their ads last year. The tactic remains primarily a print approach. According to company president Bob Moss: “We were monitoring 2D codes in six media: TV print, outdoor, online display, online video and opt-in email. But about 96% of the codes we found were running in print.” Among the 11,000 outdoor ads Competitrack monitored in 24 markets, only 175 carried mobile codes. Select advertisers are making very heavy use of the method for linking physical advertising with virtual assets. Competitrack counted 85% of Oppenheimer Funds ads having codes, 71% of Next Day Blinds ads and 68% of Tag Heuer ads. On a monthly basis, 2D code use jumped markedly in the final quarter of the year, peaking throughout September through December for magazine issues at 6% of all ads. Retail advertisers accounted for 21.9% of ad code use in print. In fact, retail, technology (13.6%), financial services (6.7%) and cosmetics & personal care (6.3%) accounted for more than half of codes. Home Depot emerged as the clear leader in code use, as Competitrack located 121 campaigns that featured the approach. The home building and remodeling supplies retailer was especially adept at using the context of their weekly circulars to offer specific calls to action that telegraphed to users what specialized content they would receive from a 2D code. The Competitrack report even singled out Home Depot for using simple URLs that produced clean and clear QR codes that were easier to scan on many phone models. While other code types struggle for a toehold in the print market, advertisers continue to favor QR overwhelmingly -- found in 87.8% of ads. Microsoft’s Tag platform is a distant second at 10.2%, with others such as JagTag, SnapTag, EZ Code and Datamatrix Code each accounting for less than .5% of use. With mobile codes, it all comes down to the user experience and whether advertisers are delivering something that makes the user interaction worth the effort. With the heavy use of codes among retailers, it is not surprising that 40.7% of these activations led consumers to product information, a brand’s site or a purchase opportunity. But many marketers were focusing their landing experiences on branding efforts, with 23.2% of codes leading to some kind of engagement experience. Another 12.7% led to video, with some involving branding or product illustration. Only 7.8% of these placements led to sign-ups for continued communications with the brand or for contests. Another 3% led to social network activities such as “liking” or “following” a brand. Only 2.2% initiated an app download and even fewer (1%) rendered a coupon. Competitrack is maintaining a database of 2D code advertisers and their campaigns. The full report is available at their site.
As we approach the expected launch of an iPad 3 next week, it struck me at last week’s Tablet Revolution event in New York (our second in this series) just how far ahead of the curve Apple’s technology and even its user base remain two years after the device’s launch. As our keynoter Jon Haber of OMD reflected, Apple gave us a gadget we really didn’t think we needed. Now, those of us who have embraced the platform on a day-to-day basis might find it hard to live without it. As Haber pointed out, the interface and mode of use the tablet offers may well kill the Web site as we know it, since its tree-like structure of links and layers evolved from a mouse and keyboard mentality. Touch engages us in spatial relationships among objects that could lead to reorganizing our typical modes of ordering digital data. And yet the experiences rendered by the gadget are struggling to keep up. Most Web sites are woefully unprepared for 10-inch screens and fat fingers. App-ified versions of magazines have been stumbling through phases of excessive interactivity and navigational pyrotechnics, only to find we really didn’t want our periodicals to spin and flip, especially if it took hours for them to download. And while some games are leveraging the touch interface, we haven’t really thought through yet the possibilities for this screen and interface on storytelling. And it was clear from the discussions among media buyers at last week’s show that tens of millions of tablet owners (still mostly iPad) and even media companies are ahead of advertisers. One of the most spirited panel discussions I have seen in recent years revolved around the challenges that print brands are facing on the platform. TargetCast’s Audrey Siegel said: “It has been a very long and a very short two years and particularly trying for the print industry.” She was with fellow buy-sider Robin Steinberg of MediaVest and publishers John Cantarella of Time Inc., Todd Haskell of The New York Times and Gael Towey of Martha Stewart Living Omnimedia. Steinberg echoed Siegel's lament that for the time being, executing tablet ad campaigns is simply too complicated and difficult. There are interesting “one-offs,” she said -- but not even close to the point where they are an integral part of the plan. While tablet advertising can have a purpose “for a specific reason, for a specialized audience,” Steinberg said, “there is nothing compelling about it that makes me tell a client ‘you need to do it.’” The publishers contend they are moving toward the kind of scale and reach that will be more impressive to buyers. Towey said MSLO has been seeing surprising traction even on tablet editions that are barely enhanced from the print version. “We are at about 5% of circulation using the digital magazine -– a combination of authenticated users and new subscribers.” The company is well ahead of its planned trajectory, which was to have 8% of readers using digital editions by the end of 2012. In fact, throughout the day many media companies suggested they have discovered less is more on the tablet. The initial impulse was to make everything spin and move -– make it tappable because you can. But many users are just as happy with modest interactivity. Echoing sentiments I have heard in recent months across the value chain, the tablet appears to occupy a user mode that is somewhere between the leanback of TV and the lean-in of the Web. Cantarella says that while all of the Time Inc. titles now are on tablets, some -- like Money magazine -- might have less interactivity than a People. The content and audience in some sense help determine levels of design complexity. But he is a big believer in leveraging the exceptional nature of the platform. Layout and immersion are the strong suits of magazines that companies like Time want to recreate. “These tablets allow a very high design intent in a very tactile experience,” he said. Media buyers were generally chanting the same tunes throughout the day: They need greater transparency from publishers than they are seeing now, and they need some standards to buy and plan against. Neither element is where it needs to be for considerable media buying to take place. Getting on the same page with metrics is critical -- not just to ease the buy process, but to help everyone understand what kind of creative and campaign work best here. “It is important to standardize the business models,” said Steinberg. “Now it is about rate bases. But as the market scales and there are more subscribers, we might move to a more impression-based [approach], which might support top-of-the-funnel engagement metrics.” Siegel warned that tablets run the risk of being persistent outliers to the ad economy if some order is not imposed. “It is incumbent on the MPA and publishers to bring together the ad community and agencies to explore and understand the value of the different ad units. If we don’t arrive at standardization, the cost of this will make this more and more challenging and less likely to become part of the vernacular as it should be.” Both Steinberg and Siegel complained that publishers have been promising transparency for nearly a year now. “When will you open the kimono?” Steinberg asked Cantarella. He responded that the metrics “will be coming,” but that it is still “not ready for prime time.” Siegel and Steinberg said the parties need to agree that the numbers from tablet usage will be rough -- and perhaps even disappointing and misleading -- when viewed in the raw, but that buyers and sellers need to work together to understand what they mean. Well, from the publisher's perspective, many of them are facing a kind of statistical specificity that may be daunting. The difference between a newspaper on tablets and magazines is considerable. As Todd Haskell pointed out, the Times developed its app with the Web site in mind, not the print publication. It worked from templates into which breaking news and items from the Web could flow automatically. And its audience is daily and persistent, whereas magazine audiences come in bursts with new issues. Haskell and the Times have been more transparent in sharing audience, usage and ad performance data than magazines. But monthlies and weeklies on the tablet have a whole different prospect of facing metrics that actually show how many of their subscribers are opening and reading issues. This is a level of detail that makes publishers blanch. It reminds me of the pre-tablet days when digital editions were read on laptops and Web screens as email reminders prompted users of new issues. For the first time, many publishers actually had a metric reflecting how many subscribers were reading each issue. Oops. I had more than one magazine executive tell me over the years that this was not always a pretty picture. To reiterate Siegel’s point, it has been both a long and short two years for the tablet platform. It may seem unreasonable for business models and an ecosystem to take shape around a gadget that was dropped on us with little warning only two years ago. But the tablet is exceptional because it is the enjoying the fastest adoption curve we have seen yet from a media platform. And among those who own them, the device has come to occupy an important -- literally “prime time” -- place in everyday media routines, often at the expense of much more established platforms. There is not a lot of time to dither here. Before it spins off into its own permanent galaxy of one-offs and perennial test campaigns, doesn’t this extraordinary technology demand extraordinary measures by the major stakeholders to get on the same digital page and swipe it forward?