Lairig Marketing

Columbus Circle – The Tunnel of DOOH Love

Whatever you’re doing right now, if you are within ten miles of Manhattan – stop. Put down that pen. Oops. Um, put down that iThing.

Go directly to 8th Avenue and head down the subway entrance at 57th, 58th or 59th Streets. At the bottom of the steps, walk in the downtown direction, opposite the turnstiles.

Feast your eyes – and ears and hands – on a digital out-of-home masterpiece that takes up an entire block in the underground passage of the Columbus Circle subway station.

We’ve cheered the DOOH industry before, one of marketing’s best kept secrets. Purina has taken it to heart.

To a dog lover’s heart, that is. Along the passageway’s west wall is a floor-to-ceiling interactive experience for Purina’s Beneful brand of dog food. (An unfortunate name, sounding too much like the product that helps adults poop – dogs do not appear to need help pooping.)

The ins and outs of the display are described in rich detail here. It wouldn’t look out of place at Disney World. And you’ll see from the linked article it even includes the requisite social media integration, where you can take a picture of you and your “virtual dog” and SHARE IT WITH YOUR FRIENDS !!!

Hats off to everyone involved in this one, especially the people responsible for securing the location. It’s an area seemingly under never-to-be-finished reconstruction. (ING did an excellent campaign in the same spot during last year’s New York City Marathon.)

The location has “captive audience” written all over it – a confined area, with no escape, nothing else to look at, and never too much pedestrian traffic that would block your view.

Maybe this will be the “tipping point” for DOOH. When advertisers see how much better this is than a display ad on some pet site, how much more engaging it is than a pre-roll video on The Weather Channel website, how many more smiles it puts on people’s faces than a YouTube upload.

Not sure what the CPM is on this, but we’ll wager it’s worth about 100 times whatever the IPO insiders are charging for a crappy display square on Facebook.

The Beneful campaign should prove, once and for all, that digital out-of-home advertising is no dog.

DVR Versus Online Video – “Roll” Out The Barrel (Of Ads)

The DVR is underrated. It can do just about everything except make wine. It even allows the user to SKIP (THROUGH) TV COMMERCIALS!

Yet.

Yet, DVR penetration of U.S. homes is starting to level off, and we predict won’t cross the 50% threshold without some major disruption (technology, pricing, etc.). In addition…although oddly there is no reputable, recent data…we do know ad-skipping by DVR users is nowhere close to 100%.

Some media pundits are now throwing the future of DVRs into the “cord cutting” mix. After all, they posit, if you don’t need your cable company, you don’t need a box and – presto – no DVR.

Whether they are cord cutters are not, there is no question that the demand for online consumption of video programming (in addition to videos of dogs on skateboards) is currently insatiable. But a funny thing happened on the way to the online viewing forum.

Advertising.

Just like on TV, the advertising solution for online video is - * drumroll * - online video. Often the same commercials you see on TV, simply shipped over to an online ad trafficker.

Except.

Unlike the DVR experience, you cannot skip online video ads. Lairig Marketing has touched on the topic of faux “completion rates” before. Whether pre-roll, mid-roll, or post-roll, all eyes (!!!) are on the data that show whether or not the user bailed out during the advertisement.

We already know the insanity of clicking on a link on The Weather Channel – e.g., LIGHTNING STRIKE BLOWS OFF MAN’S HEAD ! – and having to “watch” a 30-second TV ad before the 17-second video plays. Anyone who willingly complies with this sort of scenario on a continuous basis is an imbecile.

But as more and more long-form programming comes online (more Hulu, TV Everywhere, etc.), including on iPads and smartphones, how will viewers weigh the trade-off? Will they “watch” full 30-second spots every five to seven minutes…THAT THEY CANNOT SKIP ?

Will advertisers then push too far, and load in 60-second spots? Or perhaps interrupt programs more frequently? Imagine watching a hockey game online some future day, where an ad rolls every time there is a stoppage of play. Imagine watching The Big Bang Theory with ads playing after every change of scene.

It might all be enough to make viewers skip back to the DVR.

Google Does A Double Split

While the "Do No Evil" guys shocked Wall Street with its faux (and evil) stock split, announced during last week’s quarterly earnings review for Google, there was another “split” discussed, and it seemed to fall through the cracks.

Over the two days following the call, GOOG fell $35 (nearly 5%), made worse by $10 of pre-announcement run-up. Google didn’t meet expectations in a key metric – cost-per-click for the paid-search business that still constitutes the bulk of Google’s total revenues.

Cost-per-click “growth” for Q1-2012 was negative 12% compared to a year ago, and down 6% quarter-over-quarter. This metric caught everyone’s eye in Q4, when Google saw the first year-over-year decline in CPC in more than two years.

CFO Patrick Pichette had this to say, in an attempt to calm listeners on the earnings call:

“…dynamics around CPCs and paid clicks are just simply very complex…”

SIMPLY complex. [We love reading earnings transcripts for these verbal tics…]

Pichette then spun the complexity wheel by stating the CPC decline was driven by five factors. The one marketers should pay attention to = “…the shift in search activity from desktop computer to mobile computer.” This is the other “split” that everyone else might miss.

This, of course, is not good news looking forward, unless the many, many hands on the mobile advertising steering wheel get it together. One major driver in raising CPC is demand (i.e., more marketers bidding on a keyword, ratcheting up its price), and as we have said at Lairig Marketing about a billion times, “The Year of Mobile Advertising” is about six years late.

One wonders when someone will come up with the idea to track the CPC metric for iPads and other tablets SEPARATE from smartphones. The delta there must be significant, and getting larger over time.

The mobile CPC dynamic will certainly impact Facebook, but will be a discussion that won’t take place before the IPO, we wager. But you only have to look at Pandora’s stock price to see what low mobile CPCs mean from a business standpoint. After debuting at $16 last June, Pandora tread water around $12 until this March, where it has trended straight down to $8-and-change.

Mobile CPC is indeed a sensitive topic. When a Barclays analyst took another attempt at interrogating Google’s cost-per-click performance on last week’s earnings call, CEO Larry Page had this to say:

“I'm just going to close the call here…”

And then he split.

Playing Games With The Game Industry

Now we know it is not just smartphone “users” who play games 50% of the time (watch out as they bear down on you on the sidewalk, or maybe even on the highway). According to a study by Frank N. Magid Associates, 7 of every 10 Americans between 13 and 54 years of age are classified as “casual gamers.”

That one data point ruins what is a fairly informative report about games – e.g., most popular access devices, differences in age groups, etc. To get a number as high as 7 in 10, it appears Magid had to reverse-engineer the definition of “casual gamer.”

Its definition? Play just once a month. A frequency that seems way different than the one researchers use to classify “casual sex.” Ridiculous. One can only wonder what Magid would have reported if the definition was once per week.

This definition is important, to help us understand how big games are going to get. The only thing we know for sure is that there is a slow transition from console to digital. The rest is a conundrum.

The State of Retail
Monthly industry data are always a riddle. In February, video gaming sales were reported to have fallen 20% from prior year. Not to fear, they say. “Lack of major titles.” You hear this about six times a year.

This lumpiness in revenue seems to run counter to the 7 out of 10 supposition. If that many were truly playing, new titles would be coming out every week.

Zynga’s Zig Zag
Now we know why Zynga is cheating on Facebook. A nice bit of research by a chap at GAMESbrief notes engagement time with games on Facebook is down some 25%.

Zynga is burning money at a rapid rate trying to find those “7 out of 10.” Wall Street analysts get a bad case of déjà vu when listening to Zynga management report earnings on a “non-GAAP” basis. Talk about playing games.

Just Like The Year Of Mobile Advertising
Speaking of déjà vu, in between begging marketers to spend money on mobile advertising, digital gurus point to this being “the year in-game advertising breaks out.” For the second year in a row.

For reference, we are currently in year #6 of “the year of mobile advertising.”

It appears it might take exactly that long for in-game advertising to become a winner.

Flurry’s Flurry of Bullsh&t Data

With all the outcry over SOPA and PIPA, we continue to be amazed that no one (other than Lairig Marketing) – NO ONE – has bemoaned the privacy risks associated with online analytics vendors. Companies such as Flurry, who explains itself thusly:

“…the world's leading mobile application analytics and data-powered advertising platform, with more ground breaking [sic] services in development.”

No idea what that means, but we eagerly await the promised earthquake (sorry for the reference, El Cerrito).

Here is an example of what Flurry has access to:

“…[we take] a sample of 60,000 daily active users on iOS, from among a total group of 6 million for whom we have demographic data…”

Flurry knows who you are and follows you all around every single place you go on your smartphone, all day long. And there are dozens more similar companies. You either don’t know or you don’t care. Potentially a much bigger story than Google and Safari, but we digress.

Flurry has been able to parlay all this snooping into two large helpings of marketing analytics catnip. The trade press and blogarrhea live for headlines like this:

1. “Flurry finds mobile apps usage dominates Web.”
2. “Flurry finds time spent in mobile far outpaces ad spending.”

Let’s take the first one, um, first. There was something else Flurry found out in that study that no one mentions, ever: half of the 90 minutes a day an average that a smartphone user spends on apps is – drumroll – PLAYING GAMES.

All these people you see coming straight at you, heads down, on the sidewalk? Playing Pac-Man. Or whatever. (Still wondering why there is high unemployment?)

The next 30% of “apps time” is spent on social networking (read: Facebook – still wondering why there is high unemployment?).

And so you have one reason from Flurry’s first “finding” as to why its second finding is nonsense – ad spend is low on mobile because the apps people are using are not suited to it.

But that’s just a sliver. In fact, Lairig Marketing wrote about this “underspending” topic – BACK IN MARCH 2008 – when data pundits of that period were wailing about how online ad spend allocation wasn’t aligned with people’s time on the Web.

Here is a summary of what we said then, and still say now. Four years later, the % allocated to online spend is still lower than the % of users’ time on the Web – and therefore mobile will always be “under” – because:

• Cost of ad production is infinitely lower than TV or print
• Cost of online media is pennies on the TV dollar
• TV still has better mass reach
• Average people are not your customers

Please, please help us pass the word the next time you see this “underinvestment in mobile advertising” claim.

In the meantime, here is an example of what Flurry knows that ought to make privacy advocates sh&t their pants:

"...our analysis shows that females and males, between the ages of 25 and 34, who have higher levels of disposable income and a bachelor's degree or higher, more strongly interact with mobile ads.”

Ads Ads Everywhere, And Not A Drop To Drink

Imagine you are making a close connection in some metropolitan airport. Every second counts. You cheat your way to the front of the plane. When the door opens, you sprint down the jetway. Just inside is an airline employee offering connecting gate information for $15 per request.

You opt for one of those big, FREE digital displays, just 25 yards away. You race toward it, knocking down little children and old people. You check your watch as you run. Less than three minutes.

You arrive at the gate information display, sweating and short of breath. You look for “departures.” Then you look for your gate number.

Except, what? WTF? You stare at a full-screen advertisement for Hilton Garden Inn. WTFITS?

After ten seconds, which seems like an hour, the screen goes back to normal, with gate information. You find yours, and start sprinting once again, overturning people in wheel chairs as you go.

You arrive at your departure gate. The agent sighs, “Oh, I’m sorry sir, we closed the boarding process ten seconds ago.”

Think you’ll be staying at Hilton Garden Inn anytime soon?

While this story is exaggerated, the part about the advertisement on a gate-info display is true. Welcome to the theory of ad “impressions,” which posits that the more places you see my brand’s name, the more likely you are to remember it, fondly.

It’s been done before – ski lifts, grocery conveyor belts, escalator handrails – anyplace that people are “captive.” Of the 67 million opportunities, there are approximately only 588 left.

The airline industry is doing all it can to make that list grow shorter, and in the process, make the flying experience more miserable than it already is. Take Spirit Airlines (please!).

This bucket-of-bolts operation has the following advertising opportunities available:

• $14 million to advertise on the exterior of its planes
• $200,000 for ads on overhead bins
• $119,000 for tray tables
• $18,500 for the puke bags

This is essentially a staring contest. You stare at your tray table – the ad stares back at you.

We’ve said it before. Marketers should add value in these captive audience situations – ideas like sponsoring the in-flight WiFi, or funding free beverage service or free box lunches on board.

Or maybe you could sponsor a slidey chute Olympics for flight attendants.

Benetton & Wodka Advertising – Shock & Flaw

Here is an extract from a presidential candidate’s platform:

“…we have decided, through this campaign, to give widespread visibility to an ideal notion of tolerance and invite the citizens of every country to reflect on how hatred arises particularly from fear of 'the other’…”

Just kidding. That’s actually from the website of Italian apparel retailer Benetton. Every few years, the company gins up some controversy through distasteful imagery in print and out-of-home marketing.

This go-round, its “anti-hatred” campaign managed to piss off even the Vatican. Benetton was compelled to pull its photo-shopped ad of the Pope kissing a Muslim cleric. An altar boy could have predicted that outcome.

Some might defend Benetton by saying it has established itself as a lifestyle brand, for people attracted to global causes and outspokenness. Lest you think that translates to a growing, highly profitable brand, consider this:

Benetton annual sales have come in almost on the nose at 2-billion euros every year, for the past five years. Profit margin has been 5% each year, plus or minus a couple tenths. This is the mark of a boring brand.

Wonder how well it would do if it focused its marketing on its product.

Meanwhile, a campaign controversy that didn’t get as much press as Benetton’s came and went last week. Polish vodka maker Wodka got itself into a stew with the Jewish ADL for a billboard that, in so many words, said Jews are cheap: “Christmas Quality, Hanukkah Pricing.”

So much for Benetton’s “anti-hatred” vision for the world.

This is of a piece for Wodka, who has hit this theme with high-minded stuff like "Hooker Pricing” and “Newark Pricing." That same altar boy could have told Wodka's execs that this one wasn’t going to fly. The billboards were replaced in less than 24 hours.

All vodka is the same, except for price and branding. For Wodka to go all Benetton on a positioning of cheap is about as dumb as you can get.

Sort of like “Affordable Product, Polish Marketing.”

Mayor Koch Moment #8 – How’m I Doin’?

Here’s what Lairig Marketing predicted in December 2010, for August 2011:

"August – NYTimes.com’s First Paywall Victim
After receiving an inordinate volume of reader complaints about the value of paying for access to long-time Advertising columnist Stuart Elliott’s articles, The Times forces him to retire…"

Written half in jest, half in hope. But, in reality, there was no hope The Times would part with him.

So, mark this an “0 for August” (bringing us to 4 for 8 on predictions through August). All is not lost, however, as we will show how you – yes you, DEAR READER – can write like Herr Elliott.

Your opening must hark back to a reference no one under the age of 35 will get. For example:

From April 7: “What does Kraft Foods have in common with Dan Aykroyd, Ernie Hudson, Bill Murray and Harold Ramis? They are all ghostbusters.”

Then, less than a month later: “Remember the mock rant in Ghostbusters about ‘dogs and cats living together’? A new campaign for a dairy staple takes another look at the concept of unlikely amorous encounters.”

Next, have your assistant fetch two very dry paragraphs about the industry of the advertiser being “reviewed” in the current column (reviewed is in quotes, because all of Elliott’s articles originate from the PR department of the featured marketer).

Next, you literally describe the marketer’s TV spots. Other sources would link you to actual video, but not Elliott. Instead, turgid prose like this:

“In one commercial, a family is saying goodbye to their Thanksgiving dinner guests and as soon as the door closes, their home is magically transformed into Christmas Holiday Central, complete with decorated tree…” Jesus! As exciting, and as interesting, as watching paint dry.

Next, include no less than 15 paragraphs describing what the marketer is trying to do, using as much marketingspeak as possible. And, do it with an annoying convention of sentences that are half quotes, half nonqoutes. Like this:

For instance, the print ads featuring Unilever describe how Accenture helped Unilever executives “with an unprecedented effort to simplify, standardize and unify their business processes worldwide,” achieving “over 1 billion euros in savings” so far.

Look at those last nine words – nonquote, quote, nonquote. Dizzying. Unreadable. Especially when it covers a high-end topic like Chuck Norris as the spokesperson for Era laundry detergent – all 1850 words of it.

Conclude with where the campaign will run (content lifted directly from the marketer’s press release), and have your assistant plug in media spend data from a third-party.

Rinse “and repeat.” Weekly. Year “after year” after “year”…

Sadly, Elliott has stopped closing each piece with a bad pun. Age, we guess.

Sadder still is the fact that The Times has upped the ante considerably with its technology blog, Bits. Its media blog, Media Decoder, is well done, also. That it hasn’t created a similarly strong advertising and marketing blog that covers more than TV campaign blather, is a tragedy.

But what do we know? We thought Ghostbusters was a bore.

Wired Takes Blogging To A New Level – The Basement

It has taken a while, but publishers and marketers are discovering just how hard it is to maintain a successful blog. The Web, like any other thing consumers interact with, is a popularity contest. Good, thoughtful content doesn’t win. It doesn’t even matter. Nearly impossible to make money at it if you’re not one of the popular ones.

The answer? Sell out.

But like all things Web, first dress it up with a douchey term: “conversational media.” Social media gurus with too much time on their hands, but I digress.

Recently, Wired magazine launched a "conversational media blog” called Cloudline. Sponsored by IBM. You will recognize that name as one of the biggest cloud vendors around. With a “line” of cloud products and services to sell.

The right-hand rail of Wired’s Cloudline blog is all IBM content. Basically, IBM has brought its IBM.com cloud content page over to Wired. Soon, we will also see full blog posts written by IBM employees.

A blatant show of commercialism.

But back to that “conversational media” thing. Since no one will define it, I’m left to think everyone is referring to the comments section of a post as “conversation.” Which is really a f&cked up way to look at it.

Here’s an analog analogue to this digital conversation meme: I go to the town square and make a speech from a soapbox. I finish and walk away. One by one, three people get up on the soapbox and blurt some inanity, in response to my speech or maybe not, to the crowd. I come wandering back. Someone whispers in my ear what was said. I laugh and go home.

It might be media, but it ain’t no conversation.

For grins, Lairig Marketing will track the number and sentiment of comments on Cloudline and report back periodically.

Irony or what? Wired’s Editor in Chief is Chris Anderson, who we dished on for his unworkable treatises on “Long Tail” and “Free.” In its ride to the basement of blogging, Cloudline debunks both.

Wall To Wall Online Reality Video

A week or so ago, we wrote about the trend toward “smaller” in these shite economic times. We should have added the caveat that the media business is excluded from this theory.

Here is one proof point that “smaller” doesn’t pay in media. Last week Clear Channel, owner of 600 “local” radio stations, turned off the mics on dozens of DJs. The reign of Herr Pittman is underway to “Clear” the corporate balance sheet of debt – turning local programming into nationally syndicated dreck.

That’s in the real world. Our next example comes from Fantasy Land, better known as online video. YouTube, on top by multiples when it comes to number of users, plans to tack in the opposite direction from where Clear Channel is headed.

The ad-hungry Google-managed YouTube announced last week a plan to build out more channels where…um…well, here’s what YouTube says:

“…including channels created by well-known personalities and content producers…as well as some of the most innovative up-and-coming media companies in the world…”

Note the word “personalities.” That’s what Clear Channel used to call its now laid-off jocks.

Among the “well known” future YouTube content producers are names like these:

- Alli Sports: Alli Sports
- Intelligent Television: Intelligent Channel
- Seedwell: American Hipster

Nope, I never heard of ‘em either.

“These channels will have something for everyone…”

To see how this works, visit Ustream TV and see if you can stand it for more than three minutes. Garbage video, drowning in advertisements.

The reach of the Web is infinite. The volume of online ads is infinite. The number of “professional” video producers is near-infinite. All in YouTube’s favor.

Variety of video content, however? Very small.

Ergo, Reality TV will continue its insidious, kudzu-like spread, onto YouTube.

All Kardashian-like, all the time.

On all the screens.