Like much of the rest of the media marketplace, estimates for the rate of ad spending for online video has slowed down considerably in recent months, but it remains one of the fastest growing of any "emerging" medium, according to new estimates scheduled to be released today by one of Madison Avenue's leading forecasters. Advertisers are projected to spend $699 million on online video ads this year, an increase of 32% from the $531 million spent on online video advertising last year, according to the new forecast from Brian Wieser, global director of forecasting for Magna, a unit of Interpublic's Mediabrands division. As healthy as those projections may seem, they are a significant downward revision from last summer, when Wieser issued a report calling for online video ad spending to rise 45% to $805 million this year. Noting that his previous estimates were made prior to the escalation in the U.S. and worldwide recession, Wieser notes that online video advertising's gains still "will likely outpace growth rates for most other emerging media platforms." The new report does not provide details for other emerging media platforms, but Wieser's last report had online video rising at the fastest rate nine months ago, surpassing the growth rates of online search, social media, mobile, gaming, advanced TV, and emerging out-of-home media - the other emerging media platforms that are the basis of Wieser's periodic reports. Updates for the others, which presumably have also been revised downward due to the recession, will be released over the next several weeks. One reason for online video advertising's relative staying power during the recession, Wieser says, is its ability to "reach their consumers in a more targeted and cost-effective manner" than traditional media. Another factor is that while user-generated content still dominates the supply of online video inventory, there has been a marked increase in the availability of premium online video advertising from network and cable TV programmers, and the penetration of broadband Internet access has risen to nearly two-thirds of the U.S. population. The combined effect, Wieser estimates "led to a 24% increase in time with professionally produced online video during 2008," the kind most desired by conventional national advertisers. While growing fast, the rapid expansion of online video consumption and availability still is no significant threat to the most ubiquitous form of video advertising: conventional broadcast, cable and satellite TV. During 2008, Weiser notes that Americans spent 490 billion person-hours viewing traditional television, according to Nielsen estimates, which is equal to 244 times more consumption of all the professional online video consumed that year. Assuming last year's rapid rate of growth was to continue through 2012, Wieser noted that traditional TV would still represent "98 times more consumption" than online video that year. Even so, the rate of online video advertising's expansion will continue to outpace traditional television's as mainstream marketers flock to an expanding supply of professionally produced online video content, and as advertising networks aggregate the supply of the rest of the online video advertising marketplace, creating "cost-effective" alternatives for marketers seeking mass reach with online video. Those combined factors, Wieser says, will contribute to a continued expansion in advertising dollars spent on online video, which will break the $1 billion mark by 2011, based on a compound annual growth rate of 36% through that year. For more of Interpublic's views on the growth of online video advertising, check out Mediabrands TV's latest installment, including an interview by Wieser of Mark Mackenzie, Head of Technology, Media and Telecom Venture Capital, AllianceBernstein.
Craigslist founder Craig Newmark said the site does not currently plan to discontinue its "erotic services" listings, despite renewed pressure from law enforcement authorities triggered by the recent "Craigslist murder." In an interview with ABC Nightline's Martin Bashir, Newmark also said he disagreed that the site facilitates prostitution. "I wouldn't put it that way; no, I disagree," he responded when Bashir confronted him with ads that appear to be for prostitution and asked whether the site facilitates such activity. Earlier this month, Boston University student Philip Markoff allegedly murdered masseuse Julissa Brisman, who had placed a Craigslist ad offering erotic massage. Her death has resulted in renewed scrutiny of Craigslist's "erotic services" listings. Last week, Connecticut Attorney General Richard Blumenthal, for one, demanded that the site stop accepting prostitution ads. Craigslist also faces a federal lawsuit in Illinois, filed by Chicago sheriff Thomas Dart. In that case, Dart alleges that the site's erotic services ads facilitate prostitution. Dart argued that the term "erotic services" self-evidently refers to prostitution. But Craigslist says in an FAQ that the section is supposed to house ads for services like "sensual massage, adult web cams, phone sex, erotic dancing, adult websites, nude housecleaning, etc." Internet law experts say that legal action against Craigslist isn't likely to get very far because Section 230 of the Communications Decency Act states that Web sites are immune from liability when users of the site violate state law. Separately, last November Craigslist forged a deal with 40 state attorneys general to charge a small amount for erotic services ads. The site now also requires that advertisers provide credit card information, and donates revenue from those ads to charity.
Publishers Clearing House has begun to aggressively move into social media through Twitter, Facebook and an iPhone application in an attempt to breathe new life into the brand and attract younger followers. Reaching out to that target audience, the fifty-something-year-old company launched the Twitter feed @pchwinningways about two months ago. Contest alerts encourage people to follow. About 650 people have signed up as of Friday. Followers keep tabs on news and drawings, as well as enter a monthly contest to win a $100 gift card. Alex Betancur, vice president and general manager of the PCH Online Network, said appealing to a younger demographic has been PCH's biggest challenge. For many years the "super tanker" has been mostly known by people age 35 and older. So, the company has moved to an "instant win mentality," similar to the type of interaction a younger, always-on generation expects. Social media provides the conduit to give away about $50,000 monthly of Amazon.com gift cards, Fandango movie tickets and cash prizes through games and quizzes via Twitter. It's all about opening lines of communication with fans through social media, Betancur said. "We've been quiet about the Twitter launch as we try to understand the metrics and how to promote it," he said. That could change, Betancur said, suggesting consumers could soon see the Twitter feed integrated into television commercials for the multimillion-dollar sweepstakes. Although he declined to provide specifics, he said PCH has plans to promote it in a variety of ways within the next six months. After all, he said, PCH aired the first reality television short with cameras rolling as patrol vans have pulled up and surprised winners with a check. For PCH, Twitter becomes the carrot that leads followers to its six Web properties anchored by the flagship PCH.com site. People who follow the Twitter post to one of its sites will typically interact with three other games or sweepstakes somewhere on the network. Although PCH has yet to promote the Twitter site, there's an opportunity to spread the word through daily emails sent to a database of more than 1.5 million people. Each email offers an opportunity to enter a contest. The emails have about a 35% click-through rate. An umbrella newsletter also reminds people to play.
Effective immediately, News Corp. on Friday announced the appointment of former Facebook executive Owen Van Natta as the new CEO of MySpace. Van Natta replaces MySpace co-founder Chris DeWolfe, who is stepping down, which was announced Wednesday. DeWolfe will remain on the board of MySpace China, and will be a strategic adviser to the company. Van Natta will report to Jonathan Miller, who became News Corp.'s CEO of digital media and chief digital officer April 1. Van Natta most recently served as the CEO of online music company Playlist, Inc. Prior to that, he served as chief revenue officer and vice president of operations for Facebook, which has rapidly overtaken MySpace as the predominant social network online. Before leaving Facebook in early 2008, Van Natta is credited with helping to negotiate its $240 million investment from Microsoft. At MySpace, Van Natta said he will be focused on "an incredibly exciting and rewarding next chapter for the business." Based in Los Angeles, Van Natta reports directly to Jonathan Miller, News Corp.'s CEO of digital media and chief digital officer. "I plan to work closely with Owen to shape our long-term vision," said Miller. Last month, MySpace chief operating officer Amit Kapur announced his plans to exit the company with two other senior executives to start a new venture. To date, Facebook has roughly 200 million users, compared with MySpace's 130 million, according to comScore. Prior to Facebook, Van Natta served as vice president of worldwide business and corporate development for Amazon.com. In that role, he managed global marketing programs and strategic partnerships, and was also part of the founding team of A9.com, the Amazon.com search company, and was responsible for site operations and sponsored-link advertising. MySpace co-founder Tom Anderson is also in talks about taking a new role, Miller said previously. Friday's announcement did not mention Anderson.
Launched in 2007 by Italian billionaire Silvio Scaglia, Babelgum was among the wave of Web video startups that charged online to challenge YouTube's hegemony. Because of its European pedigree and use of peer-to-peer technology, the company was often lumped in with its better-known video rival -- Joost. Taking a page more recently from Joost, the London-based company ditched its P2P software in favor of a browser-based player and is now focused on building a following among urban hipsters here with an array of edgy niche content. It has also introduced a free iPhone app in the U.S. and Europe and enlisted Stolichnaya Vodka as its first sponsor since launching the Flash-based version of its video service, which doesn't require users to download any software. "Making sure consumers could get to our video content in the easiest possible way while still maintaining global rights management (of content) was something that was very important to us," said Michael Rosen, executive vice president and chief revenue officer at Babelgum, which opened a sales and marketing office in New York a year ago. With a cleaner, more user-friendly design and a lineup featuring independent programming, Babelgum wants to claim the ground between viral video hubs and network TV-focused sites such as Hulu. "We're trying to focus on the third part of the ecosystem, which is professionally produced content around very specific passions and created by experts in their fields," said Rosen. During much of the last two years, the company has worked to refine its strategy and programming and is only now coming out of its beta period, he noted. To that end, Babelgum offers five content channels: film, music, comedy, "Our Earth," with green-themed content, and "Metropolis," focused on urban culture and trends. The video catalog ranges from "Bananaz," a 90-minute documentary about the virtual band Gorillas to live concerts from indeed rock favorites like Franz Ferdinand and Kaiser Chiefs to the satirical Web series "Goodnight Burbank: Hollywood Report." Among the experts assigned to each area is Karol Martesko, a co-founder of Filmmaker Magazine and indieWire.com, who oversees the film section. The site also provides more mainstream content from partners including PBS, National Geographic and Sony BMG as well as original productions through its in-house studio including "Extinction Sucks," a series about wildlife protection. The idea is that this carefully crafted video buffet will attract affluent, progressive types who in turn will draw advertisers seeking to reach them. Stolichnaya has an exclusive sponsorship of Babelgum's music channel for a limited time but will also advertise more widely on the site, including the home page, during the rest of the year. With an audience of less than 200,000 globally and 117,000 in the U.S. as of March, according to comScore, Babelgum will have to count on quality over quantity in appealing to advertisers. "Sometimes you have to sacrifice reach to get passion," said Rosen. He added that since the company switched to a Flash-based video player at the end of March, its global traffic had already swelled to 800,000. Even so, it still has a long way to go to catch up with Joost's global audience of 2 million (1.2 million in the U.S.). And compared to another "pro-tail" video competitor such as Metacafe, with about 47 million visitors worldwide earlier this year, Babelgum's audience looks like a blip. Nevertheless, Rosen said the company is hoping to entice upscale advertisers with integrated ad programs that will align brands with site content. It can also offer offline ad opportunities through events such as its Online Film Festival, chaired by Spike Lee and culminating with an awards ceremony Monday night in connection with the Tribeca Film Festival in New York. Babelgum has also extended its brand of Web TV to mobile screens via its iPhone app and through devices from companies such as Nokia and wireless operators including Vodafone. A promotional push via social media properties and search marketing have led to the Babelgum app being downloaded 500,000 times to date, according to Rosen. The app, however, only gets an average rating of two out of five stars in Apple's App store, with a number of the 211 reviews posted complaining about poor design and a lack of full-length shows. The company says it's always seeking to improve its products including the iPhone app. With Hulu expected to launch its own iPhone app soon, Babelgum may soon face tough competition on that front, as well.
Rather than ego fulfillment or networking, what appears to truly motivate Twitter users is learning new things and getting information in a timely manner, according to new data from research firm MarketingProfs. The study of some 425 Twitter users, conducted in early and mid-April, found that nearly 100% respondents agreed with the statements "I value getting information in a timely manner," and "I find it exciting to learn new things from people," while about 80% "like to be connected to lots of people." Still, about 70% of respondents did agree with the statements "I find it gratifying to have people follow me," and "I want to generate new business." How greatly do members of the Twitter community value large numbers of followers? Respondents appeared to be evenly divided on the matter, as about 50% agreed with the statement "People who have a large number of followers are more respected than those who don't." Nearly 40% of the survey sample, meanwhile, agreed with the statement -- most of them "mildly agree" -- 34%. The remaining 60% were roughly equally divided among "neither agree nor disagree," "mildly disagree," and "strongly disagree." All respondents, however, strongly disagreed with the statement "People who have a large number of followers are smarter than those who don't." Also of note, Twitter users do not appear to need instant gratification by way of responses from the rest of the community. When the survey asked how strongly Twitter users agreed with the statement "I feel bad when I tweet something and nobody responds," about 50% implied they aren't too troubled by a lack of response. Less than 2% said they strongly agreed with the statement, whereas those who strongly disagreed constituted a plurality -- nearly 32%. The remaining two-thirds were roughly equally divided among "mildly disagree," "neither agree nor disagree," and "mildly agree."
Wikipedia now has at least one thing in common with Wal-Mart and Goldman Sachs: All have complained about Web users who have used the company name in their own sites. In Wikipedia's case, the gripe is about the site Wikipediaart.org -- created by artists Scott Kildall and Nathaniel Stern. Before they launched wikipediaart.org, they had attempted to create a page on Wikipedia for art that could be edited by community members. Wikipedia administrators quickly deleted the page within hours of its launch on Feb. 14. The following month, Kildall and Stern launched the new site, wikipediaart.org. The Wikimedia Foundation's attorney responded by sending a letter to Kildall on March 23 asking him to transfer the domain name wikipediaart.org to the Wikimedia Foundation. The foundation's attorney also said that Wikimedia owned the trademark to that term, and that he had been asked to investigate whether the artists violated the foundation's trademark rights. The artists objected to transferring the domain name, but added a disclaimer to the site saying that it isn't affiliated with Wikipedia. The company's general counsel, Mike Godwin, posted a note to a public forum last week saying the company was pleased by the disclaimer, and that no "litigation was threatened or commenced." But the site still has not withdrawn its original letter, meaning that the site remains in a legal limbo. These types of disputes occur with some frequency between corporations or other entities (like Goldman Sachs and Jerry Falwell) and critics or parodists. But digital rights groups seemed surprised by the stance taken by Wikipedia -- which itself relies on a liberal definition of fair use to draw on other companies' intellectual property. "We're frankly disappointed to see it go down this path and hope this particular page of Wikipedia history is quickly revised by the Wikipedian powers that be," wrote Electronic Frontier Foundation lawyer Corynne McSherry in a blog post. The artists' attorney, Paul Alan Levy of consumer rights group Public Citizen, added that this type of takedown demand is "par for the course" for some companies, but that he hadn't expected it of Wikipedia. "I'm sad to see that Wikipedia did this," Levy said. He has successfully represented a host of people in trademark disputes, including Wal-Mart critic Charles Smith, who created the unflattering sites walocaust.com and walqaeda.com. "People send out demand letters and hope, because it's cheaper than a lawsuit, that it will succeed," he said. "They tried to intimidate the artists and might have gotten away with it if the artists had to pay for their own defense."
Hoover's wants to improve search features and become a social network. So the Dunn & Bradstreet business directory has created a developers' network, opening its backend infrastructure through an application platform interface (API). It allows companies to integrate business information into their apps and platforms. Similar to Google, Microsoft, eBay, Sony Ericsson and others that have built businesses on the back of third-party developers, Hoover's aims to build out a business-related social network. While the project launched in private beta late last year, it has yet to officially roll out. Developers can find the code at HooversAPI.com. Broadlook Technologies, Pewaukee, Wis., and dozens of other companies such as Basho Technologies have begun integrating the API into their applications, according to Peter Poulin, executive VP of marketing and business development at Hoover's, Austin, Texas. Broadlook's technology skims the Web collecting publicly available company information to help marketers develop sales leads, but cannot access data protected behind firewalls. "With an API from Hoover's, Broadlook can collect that information and build a better profile of companies for customers," Poulin said. "They provide a targeted solution to a niche market we might not have otherwise pursued." Think of Hoover's as the dashboard. The entrance into a host of applications made available through a data connection on the back end. But the information also can flow into a CRM platform by Salesforce.com, Microsoft and Oracle, for example. If the primary workflow tool is Salesforce.com's CRM platform, marketers have a tab allowing them to build lists of prospects that automatically download into the contact database. The user could compare lists, keeping the new contact and deleting duplicates. Hoover's made the data available through Salesforce.com's AppExchange program in 2006, after the on-demand enterprise apps provider opened the platform to third-party developers. Hoover's also worked with Microsoft to offer integration with Dynamics in March. Poulin expects Oracle will become the next CRM platform later this year. Meanwhile, Hoover's added LinkedIn contact data to its subscriber site earlier this month. This addition provides integration between Hoover's information on millions of companies and millions of people with LinkedIn's professional network of business contacts. When viewing a company or person on the Hoover's site, customers can see contacts in that company that are already in their LinkedIn network. Hoover's subscribers can learn how many people they are connected to at any given company through the LinkedIn Connections integration, and can access those individual's LinkedIn profiles with one click.
Social network myYearbook is the latest Web publisher to add IM-community service Meebo to its pages. Since October, Meebo has syndicated its Web chat and IM offering across 25 sites and now boasts 65 publishing partners overall. With nearly 10 million unique monthly visitors, MyYearbook is the largest site that Meebo has teamed with to date. In March, 4.3 million people accessed Meebo through partner sites, expanding the company's overall reach to more than 45 million. "IM is the most requested feature on myYearbook," said myYearbook CEO Geoff Cook. "We are thrilled to work with Meebo to enrich our members' communications and ultimately drive more engagement." Among the latest to sign on -- but not yet launch Meebo -- are AddictingGames, Bleacher Report, CafeMom, Current TV, Fluster, IGN.com and Sugar Publishing. Among the 25 sites already live with Meebo, 13% of monthly visitors are using the service and each user sends 30 IMs per day from the Meebo toolbar, according to the Mountain View, Calif.-based company. Through its publisher network, Meebo is also allowing ad partners to extend their buys on its properties across social networks, entertainment and gaming sites, and blogs.
There is much discussion about how a pricing revolution is looming in online advertising. Behavioral targeting and demographic profiling have the potential to drive ad revenues down, potentially hurting Web publishers. However, online publishers aren't out of the game yet and here's why. Lower-costs seem appealing in the post-recession world, but short-term savings are short-sighted. For advertisers who care about brands, these issues have to balance against cost considerations: • Context: For publishers, there is significant value to be gained from proving and delivering the audience sought by the advertiser. Putting a great ad on low rent inventory reduces the value of your brand -- even if the audience is right. People put offers in context and you want yours to be spot on. This is why a vertical ad network makes more sense for advertisers: publishers and subject matter experts are more reliable judges of quality context than any computer algorithm on its own. • Latency: We are a long way off from individual targeting in real-time. Neither comScore nor Quantcast can offer that. And retargeting from within ads, while possible, does not ensure that the viewer being cookied fits the desired profile. Now you are pursuing someone for no confirmed reason. • Coverage: Most data sources can only confirm about 20-40% of the impressions as fitting a particular profile. Data experts then use statistics to gross up to 100%. It's not clear that this more accurate than trusting real editors to judge context and quality. • High Impact Advertising: The best advertising makes an impression because it's in context and it's entertaining. Large publishers and vertical ad networks are uniquely capable of delivering breakthrough advertising such as roadblocks, overlays, widgets and videos, in a personally vetted context that will resonate with your audience. To avoid a severe case of being penny wise, but pound foolish, here's a wiser approach for advertisers: 1. Focus in on quality content -- especially the niche independent publishers where educated and affluent Web visitors seek out information about their interests and passions. Those are the sites that can be reached through vertical ad networks. 2. Add retargeting on those quality content sites, where you can accurately assess the demographics of those sites visitors better than through individual impressions alone. 3. Retarget the community of visitors you want, but be careful as you select the outlets where your retargeted ads will display. 4. To ensure that you optimize your campaign to the audience (rather than the click) insist on site- and line-item-transparency, as well as post-campaign (or mid-campaign) demographics reports. A word to the wise: over-relying on $3 retargeting can damage your precious brand in the long-term, in the interest of a short-term burst of clicks. That's a price you don't want to pay.