How a New Company Indirectly Kills Unrelated Businesses Trying to Garner Your Attention

Here is an interesting post from TechCrunch about how MySpace and YouTube killed eBay.  While the post focused largely on MySpace, YouTube and eBay, it’s really about how new technologies / businesses / business models indirectly kill old ones when consumers start focusing their attention elsewhere.  This lack of attention, whether it is on a competitor’s company or something completely unrelated (e.g. spending more time on Facebook than surfing for stuff on eBay), starts to make what was once hot become cold.

Does Twitter Hate Advertising?

Here is Twitter’s position on advertsing (from the twitter blog) ….

When we speak publicly about how Twitter might become a profitable business, we talk about the idea of commercial usage and then explain that we’re still exploring what that means—that’s true. We also say traditional web banner advertising isn’t interesting to us which is also true. However, to say we are philosophically opposed to any and all advertising is incorrect.

For a long time, we’ve said that we think there are interesting opportunities related to commercial usage. Businesses and individuals are getting value out of Twitter and we may be able to enhance that. We’ve just begun exploring in this area—early ideas include account authentication, management tools, and discovery mechanisms. We’ll keep you posted.

The idea of taking money to run traditional banner ads on Twitter.com has always been low on our list of interesting ways to generate revenue. However, facilitating connections between businesses and individuals in meaningful and relevant ways is compelling. We’re going to leave the door open for exploration in this area.

Does Twitter hate advertising? Of course not. It’s a huge industry filled with creativity and inspiration. There’s also room for new innovation in advertising, marketing, and public relations and Twitter is already part of that.

Biz Stone Interview

In a video age, it’s really nice to [occasionally] step back and listen to an audio only broadcast, uncluttered by reference to charts, graphs, and corporate logos. This is a clip of one of the newest media companies (Twitter) being interviewed by one of the oldest (KQED Public Radio). Both, oddly enough, eloquently simple.

Worldwide Mobile Growth Statistics

There are now 4.1 billion mobile subscriptions in the world, a global penetration rate of 61.1 percent: This compares to 1.270 billion fixed line subscribers, corresponding to a penetration rate of 18.9 percent. The really impressive part is the growth rate of mobile subscribers over the last 10 years, which can be seen in the graph below. These figures were released by the International Telecommunication Union, which released its ICT Development Index (IDI) for 2008. More information here.

The index includes access and use of fixed and mobile telephony and households with computers and internet, and found that access is growing much faster than actual usage. The strong increase in the number of mobile subscribers in developing countries has helped narrow the gap between countries in the “high” ICT group and those in the other groups. Mobile isn’t the only thing increasing countries’ rankings though?strong movers such as Pakistan, Saudia Arabia, China and Viet Nam also have an an increase in internet users.

here has been a lot of talk about the benefits of mobile technology to developing countries, and the uptake has been rapid (Reuters notes that “while just 1 in 50 Africans had a mobile in the year 2000, now 28 percent have a cellular subscription”), but while voice calls and text are incredibly useful the real benefits will come from more sophisticated digital technologies?and they are on the way?thinks like mobile banking, mobile health assistance and so on are just beginning to take off, and the next ICT Development Index should show a strong increase in the level of access to digital information and services through the mobile networks in developing countries. However, it seems to combine different types of digital access, so I think it needs to be careful to take into account people that access the web and digital services only through mobile devices, but nevertheless have access to the services they need and want.

The CMO’s Role in a Recession

Source: Harvard Business Publishing and Advertising Age

Some good news for marketing heads: Chief Marketing Officers (CMOs) are holding on to their jobs longer. Spencer Stuart’s annual survey of CMO tenure at the 100 most advertised brands in the USA reveals average time on the job has risen to 28.4 months from 26.8 months in 2007 and 23.2 months in 2006.

The popular interpretation of this data is that CMOs are aligning better with CEOs. The latter are no longer expecting instant rainmaking and the former have learnt to be humble. CMOs have learned not to pontificate about brand values before researching the issue, and they no longer fire the incumbent advertising agency the day after being appointed. The best CMOs stay low-key and aim to make the CEO, who is often from a non-marketing background, comfortable becoming the chief cheerleader for the brand.

The economic recession has, perhaps surprisingly, elevated the standing of the CMO. It hasn’t always been this way, to be sure. So how can CMO’s solidify this standing with the chief? Here are the four top marketing issues on which today’s CEOs are looking to their CMOs for guidance:

Shifting consumer behavior. The recession has induced dramatic changes in consumer attitudes and behaviors in many categories. Companies need updated consumer research and revised approaches to customer segmentation. The CEO needs a CMO who understands the company’s brands and consumers (and their comparative profitability) to recommend needed changes in customer targeting and brand messaging.

Price positioning. An economic downturn invariably increases customer price sensitivity. Marketers need to hit key retail price points, emphasize lower cost stripped-down or downsized versions of their products, and revamp their promotion calendars to maximize price competitiveness at the point-of-sale. While price and perceived value inevitably become more important to consumers, the core benefits of the brand must still be emphasized. On these matters, collaboration between the CMO and the CFO is critical.

Stretching marketing dollars. Recession demands that marketers come up with creative ways of doing more with less. Dollars might be shifted from television to cheaper radio advertising if it’s important to maintain message frequency. Different versions of the same ad might be used in different countries rather than separate commercials being produced for each. An experienced CMO will know how to take a scalpel rather than a sledgehammer to the marketing budget.

Embracing digital. Rather than avoiding Internet advertising, now may be the time for many companies to experiment further and advocate more of their budgets to search advertising, banner advertising, or motivating user-generated content through a branded website. Only the CMO has the expertise in the C-suite to recommend how to proceed.

The best CMOs have both left brain and right brain proficiency. They must have both the analytical ability needed to focus on return for their spend, but also the creativity needed to position their brands in ways that are truly distinctive. In a recession, both skill sets are still needed but the first outweighs the second in importance.

The recession will have two important, lasting results for CMOs:

First, financial accountability of marketing is here to stay. Only in a few high-margin fashion-intensive categories will the shoot-from-the-hip right brain marketer survive.

Second, improved accountability requires CMOs to be financially literate, to understand the balance sheet as well as the income statement impacts of marketing initiatives. The result will be a new generation of CMOs who command more respect in the C-suite and hold their jobs longer as a result.

For more views on the role of the chief marketing officer, see John A. Quelch and Gail J. McGovern, “The Fall And Rise Of The CMO”, Strategy + Business 37 (Winter 2004), pp. 44-51. An adapted version of this post appeared in Advertising Age, March 10, 2009, under the title “Why CMOs Are Gaining Ground In The Recesion.”

Mobile Internet Usage Increases

According to comScore, Inc., among the audience of 63.2 million people who accessed news and information on their mobile devices in January 2009, 22.4 million (35%) did so daily, more than double the size of the audience last year.

In January, 22.3 million people accessed news and information via a downloaded application. Maps are the most popular downloaded application with 8.2 million users, while search was the overwhelmingly favored use for SMS-based news and information access, with 14.1 million users. Overall, 32.4 million people used SMS to access news and information in January.

Mark Donovan, senior vice president, mobile, comScore, says “…use of mobile Internet (has) evolved from an occasional activity to being a daily part of people’s lives… This underscores the growing importance of the mobile medium… to access time-sensitive and utilitarian information.”

Young males are the most avid users of mobile news and information, says the report, with half of 18 to 34-year-old males engaging in the activity. The mobile Internet is also popular among females in the 18 to 24-year-old demographic, with 40 percent accessing it at least once in January.

Donovan concludes, “…much of the growth in news and information usage is driven by the increased popularity of downloaded applications and by text-based searches… smartphones and high-end feature phones… comprise the Top 10 devices used for news and information access… 70% of those accessing mobile Internet content are using feature phones.”

Concurrently, QuickPlay Media revealed the results of its 2009 independent Market Tools survey focused on mobile TV and video consumption in the US. showing that consumers are confident in the uptake of mobile TV and video, with 78% expecting an increase in usage by 2010. Perceived cost represents the biggest barrier to adoption, with 58% indicating that it is the number one reason they have not viewed TV and video on their mobile phone.

• 55% of respondents stated they are interested in mobile TV and video.
• 46% of respondents are aware that their carrier offers a mobile TV and/or video service, vs. the 35% percent seen in the 2008
• 49% of respondents have a monthly voice and data plan through their wireless carrier versus 38% who currently use a monthly voice-only plan
• 51% said that they would be willing to accept advertising in return for free TV and video content versus 54% in 2008

Consumers show a preference for snacking on content instead of setting aside dedicated viewing times, says the QuickPlay report. Specific findings include:

• 25% respondents view content in between daily activities, 16% while in transit (i.e. on the bus, etc.) and 11% while waiting in line
• 66% said they would consider the ability to pause and resume content a deciding factor in whether or not they would watch longer forms of content, such as a full length movie. This number represents an increase from the 57% figure reported in the 2008 survey
• Of those watching mobile TV and video, 45% have spent 11 to 30 minutes watching a TV show or movie on their mobile phone with 30 % having spent 31 minutes or longer doing so. Additionally, 21% are using mobile TV and video services more than once a week

Social Networks Are the New E-mail

Tens of millions of people are using social networks to stay in touch. In fact, Facebook alone has over 175 M users. The growth in such services is being heralded as the start of the real-time, pervasive web.

Just like email replaced the written letter, and SMS is replacing (maybe supplementing) email, status updates via Facebook, Twitter and other real time update sites, might just replace everything. And what started as a consumer application is now becoming increasingly important as a business application.

So, what’s different between email, SMS, and social media updates? In large part, social media is about micro updates (140 characters or less) and its is centered around your daily activity stream. This allows consumers and businesses to publish information that people can choose to engage with it, or not.

The problem with existing social media companies is interoperability. For example, while Twitter can be used to power a status update on Facebook the same is not true in reverse. While e-mail has common protocols which allow people to send and receive messages even if they are with different services, such as Hotmail or GMail, the same is not completely true with status updates and activity feeds.

This makes many the business model of many of these services feel like the walled gardens that killed many of the early Internet companies.

While Facebook seemingly has no incentive to open up its service, other companies are working towards a more open system and many believe there will be no separation between Facebook and Friendfeed and Twitter in the the near future.

Twitter’s Search Engine Focuses on What’s Happening NOW

NEW YORK (AdAge.com) — Twitter sees lucrative opportunities in search, albeit a different kind of search than what Google offers, and, as co-founder Biz Stone told Ad Age recently, “we’ll certainly be exploring those.”

It’s because of the potential it sees in search that the Twitter co-founders walked away from a $500 million offer from Facebook — not just the terms of the deal, said Todd Chaffee, an Institutional Venture Partners general partner and a new Twitter backer. He said contrary to some reports, Facebook offered not just stock but substantial cash in the deal.

Twitter’s search engine, purchased with the acquisition of Summize last summer, bills itself as a search of “what’s happening — right now,” and in Twitter’s small but growing world, it is.

While being a searchable database of what is being said at a particular time is unique, it doesn’t take Twitter too far afield from Google, which is a catalog of the world’s recorded knowledge. Google looks back at what documents have been produced and can be surfaced, while Twitter looks back at what was said on a given topic.

Certainly there’s an AdWords-like business there, but, as Mr. Chaffee told us, Twitter has another “wild card.”

In the future, searches won’t only query what’s being said at the moment, but will go out to the Twitter audience in the form of a question, like a faster and less-filtered Yahoo Answers or Wiki Answers. Users would be able to tap the collective knowledge of the 6 million or so members of the Twitterverse.

“You put a question out to the global mind, and it comes back,” Mr. Chaffee explained. “Millions of people are contributing to the knowledge base. The engine is alive. You get feedback in real time from people, not just documents.”

Here’s how it might work: Someone posts a query on, say, the best basketball shows (is @The_Real_Shaq listening?), or what to look for in a single-malt Scotch, or where to have a drink at 6 p.m. in New Orleans. Then the Twitter community (hopefully) comes back with useful links or other information.

It’s the difference between asking the Twitter community where to go for drink after work and searching for any relevant tweets about a bar in New Orleans, which you can do now, and which may or may not yield relevant tweets.

Twitter users who make themselves useful have the added incentive of attracting more followers to their feeds. Like AdWords, this really only works if there’s scale, and of the active Twitterverse transcends over-sharing journalists and social media “experts.”

But it’s one reason Twitter’s founders and backers who have ploughed $55 million into the company: They believe the best of Twitter is yet to come.

Source: AdAge

Kelsey Group Releases Mobile Local Media Forecast (2008-2013

U.S. mobile advertising revenues (search and display) will grow to $3.1 billion in 2013, from $160 million in 2008, representing a compound annual growth rate (CAGR) of 81.2 percent, according to The Kelsey Group. During the same period, the firm forecasts mobile local search advertising revenues will increase from $20 million to $1.3 billion, a CAGR of 130.5 percent.

According to Michael Boland, program director, Mobile Local Media (MLM), The Kelsey Group. “There is a strong correlation between local search and the mobile use case, which will cause a good portion of the ongoing mobile application boom to focus on local.” 

Findings covered in the report include:

• U.S. Mobile Ad Revenues will grow from $160M in 2008 to $3.1B in 2013 (81.2% growth per year)
• U.S. Mobile Local Search Ad Revenues will grow from $20M in 2008 to $1.3B in 2013 (130.5% growth per year)
• The percentage of mobile searches that have local intent will increase from 28 percent in 2008 to 35 percent in 2013
• There are currently 54.5 million mobile Internet users in the United States, representing 25 percent of online users
• Approximately 15 percent of iPhone applications are local.

Info from Kesley, chart from Praised Media

The Three Keys to a Startup

It comes down to potential, people and priorities.

Let’s start with potential. The business has to be big enough to be worthwhile. The business has to be in a market with significant potential to attract talent and capital.

Then there’s people. “As a member of a startup, you’re the head cook one minute and and a bottle washer washer the next. However, you need competent people to handle their respective roles.

Thirdly, priorities. You will always be short on time, short on people and short on runway. Make sure you have milestones and interim check points, and have those priorities calibrated.

Note: largely pirated from a vatorTV video.