In a reflection of the growing influence of consumer-generated media on brand perception and performance, TNS Media Intelligence, which tracks advertising spending, has acquired Cymfony, a leading marketing analytics company that monitors online social media and blogs, as well as more traditional media sources. "This is a very significant milestone for us," said Steven Fredericks, president and CEO of TNS MI. "It's our first acquisition moving beyond the aggregation of data into the analysis of data in a very direct way." The move, said Fredericks, is in response to the shift of marketing from an analog to a digital platform, growing consumer control and influence, and the blurring lines between different forms of media--including that generated by consumers. Clients are clamoring for a way to evaluate it all for ROI and to get actionable insights in a very rapid manner. TNS is already tracking ad spending for 24 million brands and adding 300 brands daily, he said. "People are overwhelmed with data," Fredericks said. The goal is "to get to the point where we can now start to view the data, analyze the data and interpret it so clients can act on it in a very short period of time." The deal also gives TNS its first means for online competitive intelligence, and marks another instance where TNS is competing head-on with Nielsen and its Nielsen BuzzMetrics unit. "We've been looking at the space for quite a while" apart from the involvement of Nielsen, said Fredericks. "A year ago is when it really started to make commercial sense" to move into it. The decision to buy, rather than build, was purely pragmatic. TNS would have "missed the market" if it waited the two to three years it would take to build a solution, he said. A Forrester Report on brand monitoring issued last September ranked Nielsen BuzzMetrics and Cymfony as the category leaders and recommended Cymfony as the best acquisition fit for a marketing information company to compete effectively with Nielsen. "It's signaling a fundamental shift in the way marketing is done," said Cymfony CEO Andrew Bernstein of the deal's significance. "The consumer has gained a tremendous amount of power." Cymfony was founded in 1996 and has been performing text mining for government intelligence, as well as the marketing, research and public relations communities. "We are now connecting the dots between all media," Bernstein said. "As marketers increase their activities in the emerging social media channel, they will have an integrated partner to turn to for guidance and insight analyzed within the context of the entire marketing landscape with TNS MI." As an example, Fredericks suggested, the entertainment industry could better fine-tune its marketing strategy and spending for new film releases by monitoring the online buzz earlier in the development cycle, perhaps as soon as a project is green-lit. TNS will now be able to provide pre-release research, and then follow up with post-release analysis. Did the box office, in fact, live up to what people were saying about a film online? According to Compete, two-thirds of online consumers visit social networking sites, and have increased their use of these sites by 414% in the past three years. Cymfony staff will join the TNS MI organization and remain at their present location outside Boston. The unit will be known as TNS Media Intelligence/Cymfony. Bernstein will continue to direct the unit under the deal, whose terms were not disclosed. New ROI models and syndicated services by vertical industry sector are likely new products of the new unit. "As Cymfony is a recognized market leader in the U.S., this acquisition will not only benefit our Media Intelligence clients internationally, but also has the potential to be used in other TNS business units across our network," said Jean-Michel Portier, president and CEO of TNS Media Intelligence worldwide.
Increasingly, consumers are aiding and abetting the melding of communication, community, and entertainment in a trend dubbed "communitainment" in a new report from Piper Jaffray. In the 425-page report entitled "The User Revolution," the investment bank describes the emergence of "communitainment," a trend involving consumers moving communication beyond a mere exchange of information to facilitate an exchange of content, ideas, and entertainment within an online social context. As Internet consumption continues to steal time spent with other media, advertisers need to learn how to tap into online communities to reinforce their brands. "Communitainment" is a type of content consumption that is new to the Internet, says report author Safa Rashtchy, who researched developments supporting the phenomenon for nearly two years. Rashtchy is managing director/senior analyst of the investment bank's Internet Media, Commerce and Marketing practice. The report suggests that "Communitainment" will at least partially replace other forms of content--i.e., TV, magazines, and even big Internet sites in favor of niche content sites. Piper Jaffray projects that one-half of all content consumption will be "Communitainment" over the next decade driven by IM, social networking, photo and video-sharing sites--up from around 30% in 2006. As entertainment platforms, social networking sites like MySpace have enabled millions of people to share their favorite activities, content, gossip, and hobbies--and in general, to promote free expression. "IM has become more mobile, mobile devices are providing IM ... It was obvious [to me] that people are spending a lot of time on what previously was called communication and social networking. The conventional wisdom was that this was because young people like to interact with one another. This is entertainment for them ... they talk and exchange ideas," Rashtchy said. "Communitainment" and time spent on the Internet and on so-called Usites such as YouTube, Heavy.com, Facebook, Yahoo Answers, Google Video, and MySpace has radically redefined content consumption patterns, in the process "creating confusion for advertisers and agencies alike. In a way, we believe Usites are the Internet's democraticized version of the reality TV trend with users placed in control of content creation," the report states. The implications of "Communitainment" are profound. "Not only are these consumers not available to see commercial messages from other [media] channels," Rashtchy said, "but they're also heavily engaged in activity that they would not like to be distracted from by commercial messages." When consumers watch TV, he observed, there remains an unwritten contract that they get commercials in exchange for free programming. Of course, this contract is subverted on a daily basis by DVRs. With "Communitainment," Rashtchy noted, "there is no such contract available. Content is created and shared by users. It's a closed system and advertisers have to find a way to get into it. But once you get in, you're actually part of the family." Part of the family, that is, if advertisers can indeed gain consumers' trust. The report suggests that advertisers need to become more integrated in the activities in which consumers engage, offering free content and services to align themselves with consumers' interests: "If done successfully, this type of advertiser engagement could have a significant long-term impact as consumers will be willing and eager distributors of the advertisers' message and brand to the rest of the community." In addition, the report states: "The importance of the Communitainment trend is not just in shifting traffic patterns but, more importantly, in the way users view content as a free-flowing part of the communication spectrum. As such, many participants in communitainment view content such as music or video as an integral part of their experience and not as a distinct entity for which they have to pay," the report states, qualifying: "Of course, beyond communitainment, there are other contexts in which users are willing to either pay for content or, at a minimum, receive an advertisement in exchange for the content." To that end, separately, Piper Jaffray projects that global online advertising is poised to reach $8.1 billion by 2011.
Advertising on podcasts, dubbed "podvertising," will remain a niche channel through 2011--albeit a $400 million niche. That's according to new research from eMarketer, which predicts a fivefold podvertising spending increase from $80 million last year to $400 million by 2011. The growth projection is even more dramatic if compared to the mere $3.1 million that marketers spent on podcast ads in 2005. Still, the fact that most widely consumed podcasts still have audiences numbering below 50,000--and most have far fewer--will secure the format's niche status for years to come. "Despite an incessant buzz about the medium, regular podcast users are still rare," explains James Belcher, eMarketer senior analyst, in a new report, "Podcast Advertising." "As such, podcasting is a niche marketing channel; it may be the right niche for some marketers, but it's still a niche. "The fact that podcasts are supplemental ad channels for most marketers is not for lack of choice, however," says Belcher. "Downloadable serialized short-content format is increasingly available, and iPod sales are seemingly unstoppable." Forward-looking agencies now push clients to set aside about 5% of their marketing budgets for immature media like podvertising--a percentage not expected to rise dramatically through 2011, according to Chad Stoller, executive director of emerging platforms at Omnicom Group's Organic. "I definitely see growth in podcasts because they're free and targeted," said Stoller. "But it's still going to get lumped into that experimental media category until measurement improves and audiences grow." The number of marketers including podcasts in the mix grew last year. Publicis Groupe's Arc Worldwide developed what it calls a "consumer-experience planning team," and created Purina-branded entertainment and informational packages for iPods and phones. Dimension Entertainment created a podcasting channel for its comedy "Scary Movie 4." Also, National Public Radio reported revenues from new-media operations--including podcasts--equaling 10% of total revenues. Acura is one of NPR's main podvertisers. According to podcast search engine PodNova, consumers can presently choose from roughly 90,000 podcasts online. But, explains eMarketer's Belcher, podvertising's strengths will continue to be overshadowed by its barriers to entry. "Podcast sponsorship uses the medium's strengths: self-selected subscribers, host endorsements and low-waste ad impressions," says Belcher. "Yet the time and effort required to develop an effective sponsorship will keep podcasting from cannibalizing ad dollars in other channels anytime soon." Currently, only a minority of U.S. Internet users listen to podcasts, but according to the "Podcast Downloading" report from the Pew Internet & American Life Project, roughly 12% of Internet users say they have downloaded a podcast to listen to or view at a later time. That number compares to 7% of Internet users who reported downloading a podcast in Pew's February-April 2006 survey. "The bad news is that in surveys only 1% of respondents reported downloading a podcast on a typical day," says Mr. Belcher. "In other words, the frequency level remains very low."
While viewers were tuned into the Oscars last night, IFILM created a show of its own and provided the tools for bloggers to do so as well. The site offered a host of video content surrounding the event, including trailers of nominated films along with past winners, interviews with stars, and brief documentaries on the history of the Oscars. An Academy Awards Blogger Tool Kit gave convenient access to embed codes for bloggers to create their own Oscar-related content and packages. The site included trailers and interviews from all the pictures nominated for the major awards--Best Picture, Best Actor, Best Actress, and Best Director--as well as trailers for films dating back to 1935. The content was culled from IFILM's library of video clips by the site's editorial team. "This is IFILM content that was packaged in a fresh way," said Lowell Goss*, IFILM's senior vice president of user experience. "We have a content and editorial staff that is trolling our database of videos, so unlike a YouTube or a Metacafe, we provide this extra layer of not just convenience, but also fun and packaging." Much of the content hosted by IFILM focuses on the history of the Oscars--a conscious nod to the Academy Awards' promotion strategy this year, Goss said. The outdoor ads feature quotes from old Oscar winners that have become catch phrases, like "E.T. Phone Home" from "E.T." and "What we have here is a failure to communicate" from "Cool Hand Luke." Sponsors on the Oscars page include Comedy Central's Laffapalooza '07 and the upcoming Warner Bros. historical epic "300." Other IFILM advertisers include AOL, AT&T, Budweiser, Red Stripe, Verizon, and NBC. * The spelling of this name was changed after the story was posted.
More than one-third of Internet users have connected to the Internet wirelessly at home, work or elsewhere--up from 22% two years ago, according to a new study. A Pew Internet Project report released today also showed that 27% of Internet users have used a laptop, cell phone or personal digital assistant (PDA) to access the Web wirelessly from someplace other than home or work. One-fifth (20%) have gone online via wireless networks at home, double the number in January 2005. When it comes to devices, a quarter now say they have an Internet-enabled cell phone and 13% have a PDA with a wireless Internet connection. Laptops remain the most common wireless Internet devices, with 80% owning notebook computers equipped for that purpose. Two years ago, Pew asked respondents only whether they had logged on to the Internet using a wireless device, without focusing on which types of hardware. What does the typical wireless Internet user look like? According to the Pew data, he's most likely to be a college-educated white male age 39 to 40, with a salary over $75,000. Wireless Internet users are more likely to be e-mail and news junkies. The Pew study found that 72% of wireless users check e-mail on a given day--compared to 54% of all Internet users--and 46% get news online compared to 31% of all users. "The boundaries between checking e-mail on a portable device for work and or personal purposes can be very blurry; having such work-driven access may foster greater frequency of personal e-mailing or other kinds of online activities," stated the report. The findings were based on a December 2006 survey of 2,373 adults, of which 1,623 were Internet users. Half of those received questions about wireless Internet use.
Many a brand has bounced back from health-related and other PR crises--Tylenol being the classic case study. But what are the dynamics when a brand is faced with two public crises in rapid succession, exacerbated by the relatively new phenomenon of Internet video? Yum Brands Inc., parent of Taco Bell and KFC, is about to find out. Still recovering from the impact of the late-2006 E. coli outbreak that sickened more than 70 Taco Bell customers in four states, Yum Brands must now try to minimize damage to both brands in the wake of a widely disseminated video of rats scurrying around in a KFC/Taco Bell restaurant in New York's Greenwich Village. Brand consultants and PR crisis management experts last week agreed that Yum seems to be taking the right initial damage control steps. But while some said that the effects could be short-lived, at least one expressed concern about long-term damage to the brand. Crisis management guru Jim Lukaszewski of The Lukaszewski Group in White Plains, N.Y. says speed of response is most critical, and that the impact is likely to be largely localized and of short duration. "These are fundamentally good companies, and they'll do whatever is necessary to correct the problem," he says. "In the vast majority of cases, if you fix the problem, that fixes the market." Today's consumers have been educated about such incidents, and they put them in context and make their own decisions, he adds. "From a marketing standpoint, it's hard to stampede or get people riled up. If the [restaurant] opened tomorrow, and the problems had been dealt with, there would be people eating breakfast there." But Jennifer Sheehy, vice president/crisis prevention and management for Boston-based Cone, a division of Omnicom Group, believes the Internet's power should not be underestimated. "What would've been an incident isolated to one area, with limited repercussions for the brands, is now being spread all over the country, even the world," she says, adding that the publicity and effects of this situation would have been less severe and widespread if the E. coli incident had not preceded it. Robert Passikoff, president of the Brand Keys consultancy, expresses concern about Taco Bell's prospects, even with thorough, appropriate crisis management. He points out that Brand Keys' soon-to-be-released Customer Loyalty Engagement Index for 2007 shows that of 10 quick-serve chain brands analyzed, Taco Bell is near the bottom, tied with Jack-in-the-Box for eighth place. The study surveys actual customers of brands, not the public at large. "We're not talking about some fly-by-night company that doesn't pay attention, and some of this is just bad luck," he says of Taco Bell. "People couldn't directly point a finger at Taco Bell as being responsible in the case of the E. coli situation. But now you have this video of rats. That kind of visceral image goes to the heart of brand psychology. How do you wipe that out of people's memories? If you are a strong and resonant brand, you could more easily survive this. But customer loyalty for this brand was not that strong to begin with." How should Taco Bell respond? "Maybe they should think about changing their name," he says. Passikoff is more optimistic about KFC's chances because it placed fifth on the Brand Keys' customer loyalty rankings.
Check out the winning consumer-created Dove Cream Oil ad that was unveiled on last night's Academy Awards show. It's good. Click here.
While at first glance it may not be obvious how the public policy debate over "net neutrality" affects the advertising sector, it does--and big time. Let me explain "net neutrality" in the context of advertiser interests. In simple terms, net neutrality is the politics of convergence. As "convergence" makes the tech and communications sectors collide and creates more direct competition between the sectors than ever before, the choice is: will competition and market forces sort it out, or will government dictate which sector is competitively advantaged over the other? In "brand" terms, the main opposing "brand" players in this public policy fight are the online giants like Google, Yahoo, Ebay, Amazon, and IAC that want net neutrality regulation of broadband companies; versus the broadband companies like Time Warner, Verizon, AT&T, Sprint, and Comcast, which obviously don't want to be regulated. So why should advertisers care who wins? There are three bottom-line reasons why. 1) The companies that advertise very little want to regulate some of the advertising sector's best corporate clients. According to Advertising Age's 2005 rankings: none of the biggest "brand" supporters of net neutrality--Google, Yahoo, eBay, Amazon, or IAC--are in the top 100 companies that advertise nationally. That's because online giants already have their own huge network of users that they can email or reach all by themselves. The online giants simply don't have much need for big national advertising campaigns now or in the future. On the other hand, the biggest "brands" that oppose net neutrality are three of the nation's five biggest spenders on advertising and four of the top 16. These key "brands" include: #3 Time Warner, #4 Verizon, #5 AT&T, #16 Sprint, and #83 Comcast--and collectively these companies spent over $10 billion on advertising in 2005. Not only do these companies advertise a lot now, they will continue to advertise a lot in the future because increasing broadband competition for the customer demands more advertising. Competition is what drives demand for advertising. The broadband sector is vibrantly and increasingly competitive, which is bullish for advertising growth. Supporters of net neutrality do not believe competition offers enough protection for online business models, so they support government regulation of the Internet and broadband access. It should be obvious to everyone in advertising that more regulation means less investment, less broadband deployment to all Americans, less marketing competition--all of which would mean less demand for advertising. 2) Net neutrality will only strengthen the online giants' ability to dis-intermediate advertisers from their corporate clients. Google may be the single biggest threat to the traditional advertising business model. It is clear to most everyone in the TV, radio and newspaper industries that Google is trying to dis-intermediate them and capture the value creation of brokering advertising purchases. The practical effect of net neutrality is to prevent any vertical-ization of broadband competitors into Google's advertising market. Less competition to Google's growing chokehold on digital advertising is not in advertisers' interests. If Congress passed the law that Google is backing, it would freeze Google's current business advantage in place, while outlawing broadband competitors from innovating and competing with Google in search-related businesses. Google would be able to squeeze TV, radio, and newspapers even more. 3) Net neutrality would effectively outlaw broadband from evolving into a two-sided market paid for by both consumer subscriptions AND advertising revenues--the way newspapers, magazines and cable currently operate. In crass economic terms, net neutrality is all about making it law that consumers alone pay for the Internet and that Internet access cannot also become an ad-supported medium as it evolves to be capable of handling video. This type of bad law would shift the tens of billions of dollars of new costs it will take to upgrade the Internet to do video--completely onto consumers and not to the online companies that are generating the video traffic and who are already light spenders on advertising. How is it in the interests of the advertising sector for the Internet not to become at least partially supported by advertising revenues? In conclusion, net neutrality may not be on the radar screen of the advertising sector, but it should be. Not only is net neutrality a big threat to some of the advertising sector's best spending clients, it may be the single biggest potential threat to future national advertising demand--save for a downturn in the economy.