Below is a recap of the five advertising/media stories that I found to be the most interesting/important/informative from this past week, along with a brief POV on each issue.
FACEBOOK IS PUTTING YOUR FACE IN THEIR ADS
Why it matters: This actually isn’t a new technology at all. Facebook and other third-parties have previously offered this type of advertising. Most of the third parties were kicked off of Facebook. Facebook’s new head of advertising clearly sees the value of having your face in an ad targeted to one of your friends (Nielsen says consumers are twice as likely to remember an ad with one of their friends’ faces in it and four times as likely to respond).
POV: This is a very real way for Facebook to make up for the fact that their ads are tiny and mostly text. For a few years now, advertisers have been pouring money into Facebook (fan pages, ads, strategy, apps, promotions, etc.). Many marketers are just now realizing that these investments aren’t necessarily paying off in customers or revenue. Until now, your Facebook ads tended to have the lowest response rate of any other ad format on your media plan. This new type of ad might finally be a way for them to compete with larger format, higher-impact ads like digital video. That is, if consumers don’t opt out.
THE END OF THE DEDICATED PORTABLE DEVICE
Why it matters: More companies that you’d care to count make the bulk of their revenue on some type of dedicated mobile device (camera, phone, game system, PDA, etc.). But with the improvement in smartphone technology, you’re soon going to be able to leave your backpack full of gear at home.
POV: We expect the camera on our phone to out-perform the point-and-shoot we bought even one year ago. The bottom line is that tech continues to get faster and smaller – so anything you can do using technology should be expected to be a part of your phone at some point. The question is whether or not companies like Canon, Nikon, Olympus, Nintendo can find a way to pivot their business models in an effort to compete.
GOOGLE MUSIC STORE FINALLY LIVE
Why it matters: Android is already the dominant operating system on smartphones. So there is a large subset of smartphone owners who could really benefit from being able to buy their favorite songs (or listen to them for free) from the Android Market, especially if they love free songs and independent music.
POV: It will be extremely difficult for the Google Music Store to take a big bite out of Apple’s iTunes business, regardless of some of the unique benefits of the new service. iTunes has a huge head start, including relationships with every record label that matters (Google has yet to land Warner Music). iTunes also now has Match which legitimizes even your illegally downloaded music. In the current environment where music is often given away or shared without a penny changing hands, the labels are going to go wherever they can squeeze even a little bit of cash out of a music fan. So in the short term, you can expect the labels to strike deals with every music store on the block. But in the long term the way the revenue is shared and the volume of purchases will decide which music store wins.
MAC BREAKS THE 5% BARRIER FOR THE FIRST TIME IN 15 YEARS
Why it matters: The global personal computer market has been dominated by the PC for almost two decades. And while many feared that the iPad would cannibalize Mac sales, it appears that Mac isn’t suffering nearly as much as the PC.
POV: Apple is a lot more than a computer company. Most of us know them more for their phones, music players and tablets than for their computers. But the overall growth of the Mac (25% quarterly growth in shipments) and more specifically their growth in the business market (44% in most recent quarter) is an indication that iOS connectivity across all of our devices is an extremely appealing proposition. Many of the consumers who are buying Macs now are doing so because they already own other Apple devices. Just wait until Apple comes out with their own flat screen TV.
ONLINE VIDEO ADS DRIVE HIGH ACTION RATES
Why it matters: While the headline of the actual article is extremely misleading, the results of this research are pretty incredible. When you consider that the industry average click-through rate is below .2%, it is difficult to fathom that nearly 25% of men exposed to a digital video ad take some type of action as a result.
POV: There are lots of reasons why digital video ads might deliver higher rates of response that other types of ads. One might be that you simply don’t see as many of them per minute as you do banner ads or even TV commercials. Whereas you might see 20 spots per 30 minutes of content on TV, you only see 4 per thirty minutes of content online. That lack of clutter (brands shouting at you) means you’re probably less likely to tune them out. It could also be that you don’t generally surf the internet while you watch online content (compared to 81% of online content watchers who surf the web while they watch TV). Regardless of the reason, this is great news for marketers who understand and can effectively utilize digital video in their campaigns.
BONUS OF THE WEEK: THE AVERAGE FACEBOOK USER
As always, I would love to get any feedback on the stories above (positive, negative, otherwise) so that I can ensure that this newsletter is interesting and relevant to you all.