Friday
AOL-TW to Drop AOL From Name
By Erin Joyce
The board of directors of AOL Time Warner is planning to vote yes on nixing AOL from the corporate nameplate when it meets Thursday, a person familiar with the situation told internetnews.com.
The change would signal that AOL Time Warner is repositioning itself in the media world after a turbulent three years that followed the historic merger of the world's largest ISP, AOL, and the Time Warner media conglomerate. AOL's well-documented troubles include plummeting ad revenues following the bursting of the dot-com bubble and ongoing regulatory probes of how it booked ad deals during the dot-com heyday.
The name change proposal certainly isn't new. Indeed, the idea has been batted around by analysts and company insiders for months, especially since the abrupt resignation in January of AOL Time Warner's chairman, and then-embattled founder of AOL, Steve Case.
Despite AOL's ongoing struggles, such as 1.2 million fewer narrowband subscribers since last year, and the flattening-out of its ad-related revenues left over from the dot-com heyday, the name change is not about AOL's future with the media giant, this person said.
The move is more about removing any brand confusion among subscribers, investors or the general public, as may arise when there's reference to AOL Time Warner's corporate decisions, such as its recent sale of its interest in sports teams, the source said.
A spokesperson for AOL Time Warner refused comment on the board's plans.
The Time Warner side of the corporate house has been divesting some of its "non-core" holdings, such as its interests in sports teams, as part of its plan to trim the parent company's estimated $24 billion debt.
The name change would come as AOL prepares to roll out its next client, AOL 9.0 Optimized, which officials of the ISP have called the most ambitious and important upgrade in the history of the company.
A person familiar with the company's plans told internetnews.com that the official launch is slated for Oct. 12th, after a special release in New York slated for Sept. 24th as part of a free concert in New York's Central Park by the Dave Matthews band that AOL is helping to sponsor.
New York's Mayor Mike Bloomberg recently announced that AOL would donate at least $1 million to New York City schools as part of the "Dave Matthews Band in Central Park - The AOL Concert for Schools" event.
As it readies its launch, AOL is looking to grow its broadband base while managing the continued erosion of its 23-million member domestic narrowband base as broadband becomes more widely available and customers switch to other high-speed access providers. New features available for narrowband subscribers include exclusive content, anti-virus protection and improved surfing speeds. Company officials have also said they plan to carefully manage costs and find more sources of revenues from the company's dial-up base such as premium, add-on services.
Other new features slated to roll with AOL's 9.0 version is AOL Latino, a new service aimed at U.S. Hispanics, and a separate service geared entirely for kids, primarily those in the 6-12 age range.
Called KOL, the newer customized version of the AOL service is an extension of the Kids Only Channel that is quite popular with subscribers, AOL executives said. The new KOL service is being offered to subscribers in the next AOL 9.0 version free of charge and is accessed through the parental controls features in the AOL client.
In recent weeks, analysts that have been critical of AOL's past performances have turned upbeat about the ISP.
For example, Jessica Reif Cohen, Merrill Lynch's media analyst, wrote in a 46-page note about AOL Time Warner in July that AOL has "made impressive strides on a number of levels and has accelerated the pace at which it has addressed several key issues," such as strengthening its balance sheet, "right-sizing" AOL's cost structure and renewing focus on advertising, "particularly high growth sponsored-search."
AOL Time Warner officials said during a second quarter earnings discussion that they see signs that AOL's ad business is stabilizing.
The board of directors of AOL Time Warner is planning to vote yes on nixing AOL from the corporate nameplate when it meets Thursday, a person familiar with the situation told internetnews.com.
The change would signal that AOL Time Warner is repositioning itself in the media world after a turbulent three years that followed the historic merger of the world's largest ISP, AOL, and the Time Warner media conglomerate. AOL's well-documented troubles include plummeting ad revenues following the bursting of the dot-com bubble and ongoing regulatory probes of how it booked ad deals during the dot-com heyday.
The name change proposal certainly isn't new. Indeed, the idea has been batted around by analysts and company insiders for months, especially since the abrupt resignation in January of AOL Time Warner's chairman, and then-embattled founder of AOL, Steve Case.
Despite AOL's ongoing struggles, such as 1.2 million fewer narrowband subscribers since last year, and the flattening-out of its ad-related revenues left over from the dot-com heyday, the name change is not about AOL's future with the media giant, this person said.
The move is more about removing any brand confusion among subscribers, investors or the general public, as may arise when there's reference to AOL Time Warner's corporate decisions, such as its recent sale of its interest in sports teams, the source said.
A spokesperson for AOL Time Warner refused comment on the board's plans.
The Time Warner side of the corporate house has been divesting some of its "non-core" holdings, such as its interests in sports teams, as part of its plan to trim the parent company's estimated $24 billion debt.
The name change would come as AOL prepares to roll out its next client, AOL 9.0 Optimized, which officials of the ISP have called the most ambitious and important upgrade in the history of the company.
A person familiar with the company's plans told internetnews.com that the official launch is slated for Oct. 12th, after a special release in New York slated for Sept. 24th as part of a free concert in New York's Central Park by the Dave Matthews band that AOL is helping to sponsor.
New York's Mayor Mike Bloomberg recently announced that AOL would donate at least $1 million to New York City schools as part of the "Dave Matthews Band in Central Park - The AOL Concert for Schools" event.
As it readies its launch, AOL is looking to grow its broadband base while managing the continued erosion of its 23-million member domestic narrowband base as broadband becomes more widely available and customers switch to other high-speed access providers. New features available for narrowband subscribers include exclusive content, anti-virus protection and improved surfing speeds. Company officials have also said they plan to carefully manage costs and find more sources of revenues from the company's dial-up base such as premium, add-on services.
Other new features slated to roll with AOL's 9.0 version is AOL Latino, a new service aimed at U.S. Hispanics, and a separate service geared entirely for kids, primarily those in the 6-12 age range.
Called KOL, the newer customized version of the AOL service is an extension of the Kids Only Channel that is quite popular with subscribers, AOL executives said. The new KOL service is being offered to subscribers in the next AOL 9.0 version free of charge and is accessed through the parental controls features in the AOL client.
In recent weeks, analysts that have been critical of AOL's past performances have turned upbeat about the ISP.
For example, Jessica Reif Cohen, Merrill Lynch's media analyst, wrote in a 46-page note about AOL Time Warner in July that AOL has "made impressive strides on a number of levels and has accelerated the pace at which it has addressed several key issues," such as strengthening its balance sheet, "right-sizing" AOL's cost structure and renewing focus on advertising, "particularly high growth sponsored-search."
AOL Time Warner officials said during a second quarter earnings discussion that they see signs that AOL's ad business is stabilizing.
Tale of a New Ad Unit's Debut
By Tessa Wegert
Earlier this year, I wrote about working with site publishers to create new online advertising placements that overcome obstacles like limited space. Naturally, this isn't something undertaken by media buyers alone. Publishers do their part, improving their sites with new and better placements for advertisers.
In late April of this year, mega-news sites NYTimes.com and Boston.com (both owned by New York Times Digital) launched a new type of advertising unit, the half-page ad. At the time, it was the first such placement. It's since been adopted by CBS MarketWatch.com and Forbes.com, among others.
Publisher motivation for introducing new ad placements is virtually always the same: to offer something other sites can't, and consequently to generate increased ad revenue. The type of placement sites introduce can vary greatly and depend on such factors as page layout, the nature of the site's content, and the audience. In NYTimes.com's case, the new format was intended to give advertisers a more prominent online presence than afforded by standard ad units.
As New York Times Digital saw it, it was a simple matter of showcasing advertisers in a superior way, one not possible on comparable news sites. "We wanted to take advantage of the pristine environment present on NYTimes.com," says Jason Krebs, VP of advertising sales.
The half-page ads (an example can be seen here) are 336 x 800 pixels. They can be animated or developed in Flash. They appear vertically, providing advertisers with a large skyscraper-style area within which to display their message. When developing a new ad format or placement, the user's mindset must be considered. How will that placement alter user experience on the site? Given NYTimes.com's audience is exclusively interested in gathering information, the placement was designed to shift whole blocks of text to the left, as opposed to directly inserted into an article. Visitors don't find the ads intrusive, claims Krebs, as these placements "don't chop the article in half, and don't interfere with the content."
Krebs points to another advantage of half-page ads: size. According to industry research, larger ad units tend to be more effective, produce increased view-through rates (indicating a user has visited the brand's site within 30 days of viewing an ad), and higher click-through rates. Advertisers have shown increased interest in larger placements for some time now; DoubleClick reported last year skyscrapers were the second most popular ad unit next to the standard 468 x 60 banner, and use of large rectangle placements grew 300 percent in 2002.
Half-page ads seem to be following in the footsteps of other large-units. IBM, FedEx, British Airways, Buick and Exxon Mobil are some of the major advertisers that have employed them to date.
One factor motivating interest, as well as promoting advertiser satisfaction, is surely the targeting capabilities associated with the ad as it's served on NYTimes.com. The site boasts a dynamic page service, meaning content layout and advertising can appear differently to different users, based on internal targeting specifications. Advertisers employing the half-page ad unit can indicate exactly which user groups they wish to reach, match those criteria to desired content, and ads are displayed accordingly. Every NYTimes.com user goes through a registration process to access the free content, so targeting can be done based on profile data, article themes, and so on.
Perhaps the best indicator of the half-page unit's success on NYTimes.com is the elevated renewal rate. Krebs assesses renewal rates for half-page ad campaigns as consistently in the high double-digits. Now that the ads have been on the market for several months, competing with conventional banners and enticing rich media placements, this is proof positive in Krebs' mind that advertisers are thrilled with what the placement can do. Granted, the unit is priced higher than other formats in similar NYTimes.com sections (rates depend on section placement and targeting requirements). But Krebs asserts he often gets advertiser requests for the units, adding "advertisers have been very satisfied with the results."
NYTimes.com supports the Interactive Advertising Bureau's (IAB) Universal Ad Package. While its half-page ad is not yet an IAB accepted format, the site believes it has what it takes to be approved.
Earlier this year, I wrote about working with site publishers to create new online advertising placements that overcome obstacles like limited space. Naturally, this isn't something undertaken by media buyers alone. Publishers do their part, improving their sites with new and better placements for advertisers.
In late April of this year, mega-news sites NYTimes.com and Boston.com (both owned by New York Times Digital) launched a new type of advertising unit, the half-page ad. At the time, it was the first such placement. It's since been adopted by CBS MarketWatch.com and Forbes.com, among others.
Publisher motivation for introducing new ad placements is virtually always the same: to offer something other sites can't, and consequently to generate increased ad revenue. The type of placement sites introduce can vary greatly and depend on such factors as page layout, the nature of the site's content, and the audience. In NYTimes.com's case, the new format was intended to give advertisers a more prominent online presence than afforded by standard ad units.
As New York Times Digital saw it, it was a simple matter of showcasing advertisers in a superior way, one not possible on comparable news sites. "We wanted to take advantage of the pristine environment present on NYTimes.com," says Jason Krebs, VP of advertising sales.
The half-page ads (an example can be seen here) are 336 x 800 pixels. They can be animated or developed in Flash. They appear vertically, providing advertisers with a large skyscraper-style area within which to display their message. When developing a new ad format or placement, the user's mindset must be considered. How will that placement alter user experience on the site? Given NYTimes.com's audience is exclusively interested in gathering information, the placement was designed to shift whole blocks of text to the left, as opposed to directly inserted into an article. Visitors don't find the ads intrusive, claims Krebs, as these placements "don't chop the article in half, and don't interfere with the content."
Krebs points to another advantage of half-page ads: size. According to industry research, larger ad units tend to be more effective, produce increased view-through rates (indicating a user has visited the brand's site within 30 days of viewing an ad), and higher click-through rates. Advertisers have shown increased interest in larger placements for some time now; DoubleClick reported last year skyscrapers were the second most popular ad unit next to the standard 468 x 60 banner, and use of large rectangle placements grew 300 percent in 2002.
Half-page ads seem to be following in the footsteps of other large-units. IBM, FedEx, British Airways, Buick and Exxon Mobil are some of the major advertisers that have employed them to date.
One factor motivating interest, as well as promoting advertiser satisfaction, is surely the targeting capabilities associated with the ad as it's served on NYTimes.com. The site boasts a dynamic page service, meaning content layout and advertising can appear differently to different users, based on internal targeting specifications. Advertisers employing the half-page ad unit can indicate exactly which user groups they wish to reach, match those criteria to desired content, and ads are displayed accordingly. Every NYTimes.com user goes through a registration process to access the free content, so targeting can be done based on profile data, article themes, and so on.
Perhaps the best indicator of the half-page unit's success on NYTimes.com is the elevated renewal rate. Krebs assesses renewal rates for half-page ad campaigns as consistently in the high double-digits. Now that the ads have been on the market for several months, competing with conventional banners and enticing rich media placements, this is proof positive in Krebs' mind that advertisers are thrilled with what the placement can do. Granted, the unit is priced higher than other formats in similar NYTimes.com sections (rates depend on section placement and targeting requirements). But Krebs asserts he often gets advertiser requests for the units, adding "advertisers have been very satisfied with the results."
NYTimes.com supports the Interactive Advertising Bureau's (IAB) Universal Ad Package. While its half-page ad is not yet an IAB accepted format, the site believes it has what it takes to be approved.
Thursday
DoubleClick: Online Ads Are Bigger, Richer
By Brian Morrissey
DoubleClick (Quote, Company Info) reported on Tuesday that the Internet ads it served in 2002 were bigger and more likely to include rich media.
In the release of its fourth-quarter and full-year ad-serving report, the online ad giant said that larger ad formats, such as skyscrapers and large rectangles, saw sharply increased use, although standard sizes still accounted for the lion's share of ads.
Continuing a trend noted in DoubleClick's last report, rich media sustained its march into the mainstream, with use growing 43 percent over the year. In the fourth quarter, rich-media ads accounted for 25 percent of all ads served by DoubleClick. The report said it expects this trend will continue, with rich-media ads growing another 10 percent in the first quarter of 2003.
With bigger and richer ads, DoubleClick found increased effectiveness. View-through rates -- based on users taking an action within 30 days of seeing an ad -- rose 47 percent during the year, from .36 percent in the first quarter to .53 percent in the fourth quarter. Rich media led the way, recording click-through rates of 2.5 percent in the fourth quarter. Click-through rates for non-rich-media ads actually declined from .4 percent in the first quarter to .3 percent in the fourth.
DoubleClick found that marketers and publishers have grown more sophisticated in their advertising, targeting about 42 percent of all ads. The most common form of targeting remains keyword/content, followed by geographic location. Daypart targeting, which has been tabbed as a lucrative opportunity for news sites, remains relatively rare, growing to just 1.44 percent of all ads.
Despite proclamations of its demise by many in the industry, even the Interactive Advertising Bureau (IAB), the standard 468 x 60 pixel banner remained very much alive: it accounted for half of all ads DoubleClick served in the fourth quarter. Skyscrapers were the next most popular, making up 8.3 percent of total volume. The use of large rectangles grew 300 percent over the year, but still accounted for just 2 percent of total volume.
The use of larger ad sizes has been a trend in the industry for some time. In December, the IAB endorsed a suite of four standard ad units that significantly increased the size of recommended ad units.
DoubleClick collected the data based on the 630 billion ads its DART system served last year.
DoubleClick (Quote, Company Info) reported on Tuesday that the Internet ads it served in 2002 were bigger and more likely to include rich media.
In the release of its fourth-quarter and full-year ad-serving report, the online ad giant said that larger ad formats, such as skyscrapers and large rectangles, saw sharply increased use, although standard sizes still accounted for the lion's share of ads.
Continuing a trend noted in DoubleClick's last report, rich media sustained its march into the mainstream, with use growing 43 percent over the year. In the fourth quarter, rich-media ads accounted for 25 percent of all ads served by DoubleClick. The report said it expects this trend will continue, with rich-media ads growing another 10 percent in the first quarter of 2003.
With bigger and richer ads, DoubleClick found increased effectiveness. View-through rates -- based on users taking an action within 30 days of seeing an ad -- rose 47 percent during the year, from .36 percent in the first quarter to .53 percent in the fourth quarter. Rich media led the way, recording click-through rates of 2.5 percent in the fourth quarter. Click-through rates for non-rich-media ads actually declined from .4 percent in the first quarter to .3 percent in the fourth.
DoubleClick found that marketers and publishers have grown more sophisticated in their advertising, targeting about 42 percent of all ads. The most common form of targeting remains keyword/content, followed by geographic location. Daypart targeting, which has been tabbed as a lucrative opportunity for news sites, remains relatively rare, growing to just 1.44 percent of all ads.
Despite proclamations of its demise by many in the industry, even the Interactive Advertising Bureau (IAB), the standard 468 x 60 pixel banner remained very much alive: it accounted for half of all ads DoubleClick served in the fourth quarter. Skyscrapers were the next most popular, making up 8.3 percent of total volume. The use of large rectangles grew 300 percent over the year, but still accounted for just 2 percent of total volume.
The use of larger ad sizes has been a trend in the industry for some time. In December, the IAB endorsed a suite of four standard ad units that significantly increased the size of recommended ad units.
DoubleClick collected the data based on the 630 billion ads its DART system served last year.
New Online Sponsorship Research Demonstrates Six Point Branding Lift From “Exclusive” Sponsorship
New results were announced from the IAB/Volvo/Euro RSCG MVBMS Partners “Sponsorship Effectiveness Survey,” featuring Volvo Cars of North America. The study, conducted by Next Century Media Research, sought to understand the branding value of advertising sponsorship on the Internet as well as the difference between the value of “exclusive” sponsorship (when an ad is displayed exclusively on a site) as opposed to “shared” sponsorship (when there is more than one advertiser on a page.).
The study tested a sample group of 1,514, half of whom were exposed to sponsorship ads from Volvo. Overall, the research demonstrated that “exclusive” online sponsorship produces considerable lift as compared to a negligible lift from “shared” sponsorship. Specifically, “exclusive” sponsorship produced a 6.1 point lift in brand consideration among those consumers exposed to the sponsorship. This lies in stark contrast to the absence of any lift in brand consideration for those consumers exposed to the “shared” sponsorship ads.
“This study and 28 similar ones preceding it, clearly demonstrate that “exclusive” sponsorship on the Internet produces a substantial lift in brand consideration and purchase intent. Advertisers know that exclusivity is always preferable to shared real estate for online advertising and we can now add to this equation that there a considerable and meaningful ‘“gratitude effect”’ generated by sponsorship,” said Bill Harvey, founder of Next Century Media, and today Senior Vice President & General Manager of OpenTV Research.
“Volvo has an ongoing commitment to connecting with consumers where they live in today’s world. From creating the first automotive website in 1994 to the first digital launch of a car in 2000 (the Volvo S60 via America Online) to a variety of online initiatives like this one, we believe that interactive marketing continues to yield significant results,” said Phil Bienert, Manager of CRM and e-Business for Volvo Cars of North America LLC.
“We believe in sponsored content as a meaningful way to create ongoing dialog with consumers, said Charlie Tarzian, CEO, Euro RSCG Circle. “Through sponsorship, an advertiser can deliver relevant content at the right time, and be rewarded with consumer appreciation which results in increased branding metrics such as purchase intent and loyalty.”
The research methodology was based on the landmark “Sponsorship Effectiveness Index” (SEI) - developed in accordance with the new ARF Media Model. The SEI measures the effect of an advertiser's sponsorship of an Internet site. When SEI software has been installed at a web site, visitor samples are divided into test and control groups. These groups are then automatically queried to discover the differences between them related to their exposure to the sponsor's ads.
The study was developed by the IAB Sponsorship Committee, chaired by Andrew Susman, President and CEO, StudioOne Networks. Several leading online publishers donated inventory for the study, where the Volvo sponsorships ran against appropriate content. They include: CondeNet, Forbes.com, PRIMEDIA, Register.com, StudioOne Networks, Terra Lycos and Yahoo!.
The study tested a sample group of 1,514, half of whom were exposed to sponsorship ads from Volvo. Overall, the research demonstrated that “exclusive” online sponsorship produces considerable lift as compared to a negligible lift from “shared” sponsorship. Specifically, “exclusive” sponsorship produced a 6.1 point lift in brand consideration among those consumers exposed to the sponsorship. This lies in stark contrast to the absence of any lift in brand consideration for those consumers exposed to the “shared” sponsorship ads.
“This study and 28 similar ones preceding it, clearly demonstrate that “exclusive” sponsorship on the Internet produces a substantial lift in brand consideration and purchase intent. Advertisers know that exclusivity is always preferable to shared real estate for online advertising and we can now add to this equation that there a considerable and meaningful ‘“gratitude effect”’ generated by sponsorship,” said Bill Harvey, founder of Next Century Media, and today Senior Vice President & General Manager of OpenTV Research.
“Volvo has an ongoing commitment to connecting with consumers where they live in today’s world. From creating the first automotive website in 1994 to the first digital launch of a car in 2000 (the Volvo S60 via America Online) to a variety of online initiatives like this one, we believe that interactive marketing continues to yield significant results,” said Phil Bienert, Manager of CRM and e-Business for Volvo Cars of North America LLC.
“We believe in sponsored content as a meaningful way to create ongoing dialog with consumers, said Charlie Tarzian, CEO, Euro RSCG Circle. “Through sponsorship, an advertiser can deliver relevant content at the right time, and be rewarded with consumer appreciation which results in increased branding metrics such as purchase intent and loyalty.”
The research methodology was based on the landmark “Sponsorship Effectiveness Index” (SEI) - developed in accordance with the new ARF Media Model. The SEI measures the effect of an advertiser's sponsorship of an Internet site. When SEI software has been installed at a web site, visitor samples are divided into test and control groups. These groups are then automatically queried to discover the differences between them related to their exposure to the sponsor's ads.
The study was developed by the IAB Sponsorship Committee, chaired by Andrew Susman, President and CEO, StudioOne Networks. Several leading online publishers donated inventory for the study, where the Volvo sponsorships ran against appropriate content. They include: CondeNet, Forbes.com, PRIMEDIA, Register.com, StudioOne Networks, Terra Lycos and Yahoo!.
E-Commerce Channel Grows by Leaps and Bounds
Offline retailers are feeling the pinch of the down economy, but there's a glimmer of good news for online channels. Online retail will grow at a steady 19 percent annual rate from $95.7 billion in 2003 to $229.9 billion in 2008, says a new report from Forrester Research. Why such a jump? More users are going online, for one, but the biggest reason Forrester cites is the adoption of multi-channel strategies from traditional offline retailers.
According to the "US eCommerce Overview: 2003 To 2008," food and beverages, sporting goods and home goods will grow the fastest in the next five years, outpacing more traditional online categories like books and travel. Forrester projects the most dramatic growth in the food and beverage category, with sales increasing from $3.7 billion to $17.4 billion over the next five years. Grocers like Safeway and Stop & Shop/Peapod are leading the charge by executing consistent, multi-channel strategies. To make the most of online revenue potential, multi-channel retailers need to keep the customer's needs in mind. Easily navigable sites, accessible user information across all channels and seamless transactions will help retailers shine through.
According to the "US eCommerce Overview: 2003 To 2008," food and beverages, sporting goods and home goods will grow the fastest in the next five years, outpacing more traditional online categories like books and travel. Forrester projects the most dramatic growth in the food and beverage category, with sales increasing from $3.7 billion to $17.4 billion over the next five years. Grocers like Safeway and Stop & Shop/Peapod are leading the charge by executing consistent, multi-channel strategies. To make the most of online revenue potential, multi-channel retailers need to keep the customer's needs in mind. Easily navigable sites, accessible user information across all channels and seamless transactions will help retailers shine through.
Tuesday
IAB gets sponsorhips from industry giants
by Zachary Rodgers
Senior Editor of ChannelSeven.com
The Interactive Advertising Bureau has had its ups and downs over the years. The downs have included miniscule budgets, a limited staff and reluctance among members to cooperate on industry initiatives. On the up side, the trade body has succeeded in expanding its research and events programs, adding some big publishers to its roster and finally establishing a headquarters.
The latest and most dramatic "up" for the IAB is a surprise $5.8 million "acceleration program" that's being funded with interest-free loans from 11 member companies.
Not long ago, the IAB was of marginal importance to the sector, said Forrester Analyst Jim Nail, and he describes the loans as "a big vote of confidence, well deserved, which will help accelerate growth in online advertising."
But what exactly is the IAB going to do with all that money? And what are the contributing members getting in exchange for the cash?
With regard to the first question, it might be easier to count what isn't on the list of things to do with the money.
You need both hands and both feet to count the initiatives for which IAB President Greg Stuart has earmarked the funds. They include:
* The widely promoted Cross Media Optimization Study (XMOS) and its seven-city road show;
* An expansion of the IAB's events business;
* A new media credit service to check the credit of agencies and marketers;
* Sales training for publishers; and
* Further marketing efforts.
......................................The list goes on and on.
A Risk of Favoritism?
But given that the online ad sector is not traditionally inclined to think in terms of collective good, one must ask: What's in it for the contributing member companies?
The companies' first answer to that question is simply that the money will assist industry growth.
"We did it because we are firm believers in the Internet being an ad supported medium and a viable one for now and the foreseeable future," said Jason Krebs, VP of ad sales for New York Times Digital (NYTD), one of the member companies to grant the IAB an interest-free loan.
Yahoo! Director of Marketing Eric John said the portal contributed to the program to spread the gospel about interactive media. "Some messages are better heard from an industry group like the IAB," he said.
However, it's also clear the publishers and media companies behind the $5.8 million are buying a measure of influence in setting the IAB's agenda. Stuart is planning to hold personal meetings with the members who granted loans -- including America Online, MSN, Yahoo!, NYTD, 24/7 Real Media, LookSmart, Wall Street Journal Online, The Walt Disney Internet Group, CNET, Overture and Google. These powwows, he said -- and the companies confirm -- are intended to set the initial agenda for how to spend the cash.
"We do set the agenda for that money," stated NYTD's Krebs.
"It's a collaborative process," he added. "Your voice is heard, you shape the trends of the industry, and you direct the member groups along paths that are not always to the benefit of everybody but in the larger scheme are... beneficial."
It's neither a secret nor a shock that the IAB's highest-profile, highest-dues-paying members hold the top seats on its many committees, therefore shaping its goals to a large extent. But when fewer than a dozen members get to establish the course for the organization, the trade group may risk being perceived as an agent for those companies' interests.
Of course, it all depends on the degree of their influence, and the degree to which their interests overlap with the rest of the IAB's membership.
So here's the question: Will this level of influence on the part of the IAB's debtors adversely affect smaller media companies?
Krebs doubts the lower-profile online ad players will be excluded from benefit. "A rising tide lifts all boats," he quotes.
But Stuart himself expressed worry about under-representation of small publishers: "I was concerned that we would only have the interests of the big players represented," he said, quickly adding he feels a balance was achieved when member companies of different sizes and specialties joined the program -- companies like Overture, New York Times Digital and 24/7 Real Media. These aren't small companies by any means, but he says they diversify the pool of interests involved in the dispersal of the cash.
"The beauty of the program is that we're very balanced: We have portals, content companies, advertisers and search engine marketers," he said.
However, there remains a concern among some that the unique needs of small publishers must somehow be addressed.
"The IAB needs a committee of publishers that are not in the top 50," said Karen Orton, VP of sales for ThirdAge.com, an online media company targeting adults over 45. While Orton expresses strong support for the IAB, she says low and mid-tier media companies need attention from the trade body.
The IAB has occasionally stood accused of favoritism in other areas, for example granting press registration for its events to member organizations while excluding non-members. Such behavior only serves to balkanize a sector that is struggling to present a unified front, which should be any trade body's first order of business.
Members to whom ChannelSeven spoke put a great deal of faith in the abilities of the IAB and Stuart, its superlative salesmen, but it seems a given that a trade body should be impartial as well as effective.
Spending Wisely
The loan raises other potential concerns about fiscal management. Just how much can one relatively impoverished trade body achieve? And is it a mistake to allocate money in so many directions at once, when certain key initiatives go begging?
The IAB's immense to-do list covers an astonishing merry-go-round of committees, councils and task forces. There's an e-mail committee, an agency relations council and an ad sizes task force; a Hispanic committee, a research council and a measurement task force; a search engine committee, a CMO council and -- well, one could fill a whole article just listing them.
Meanwhile, some of the group's long-established objectives haven't done as well as one might hope. Take for example the IAB's rich media guidelines, the second version of which languished for two years, even while industry luminaries and Stuart himself proclaimed this area the hotspot in the online ad sector.
Or take the recent refusal of AstraZenica to release more than top-level results of research the IAB itself funded. The firm decided to keep most data private, and declined to participate in a public panel discussion of the study.
While Stuart said he was disappointed in AstraZenica's insistence on withholding data from the research, he's not surprised considering the competitiveness in the pharmaceutical sector.
"I wish they had been comfortable releasing more data, but to expect that from a pharmaceutical study is unrealistic," he said.
The Little Trade Org That Could
Despite jabs and jibes about favoritism and money management, most agree the IAB is among the notable success stories in the industry it represents. In the twenty-one months since Stuart took the reins, he's built the association up from a staff of two with a meager $1.3 million budget to a staff of 13 with $5 million to spend annually. Membership has gone from 35 to 160, and many of the biggest players in the sector are now onboard.
Additionally, the trade group has finally established independent offices, after couch surfing around Madison Ave. for a year-and-a-half. (It was based first out of StudioOne's offices, then later out of Google's and CNET's digs.)
Certainly the IAB and its president have grappled with demons, but among the group's members are fewer detractors than there once were.
"They were on the brink of irrelevancy," said Forrester's Nail. "But with all the work they've done on the [XMOS] media studies, best practices and at the grassroots level, they're really making some progress."
Senior Editor of ChannelSeven.com
The Interactive Advertising Bureau has had its ups and downs over the years. The downs have included miniscule budgets, a limited staff and reluctance among members to cooperate on industry initiatives. On the up side, the trade body has succeeded in expanding its research and events programs, adding some big publishers to its roster and finally establishing a headquarters.
The latest and most dramatic "up" for the IAB is a surprise $5.8 million "acceleration program" that's being funded with interest-free loans from 11 member companies.
Not long ago, the IAB was of marginal importance to the sector, said Forrester Analyst Jim Nail, and he describes the loans as "a big vote of confidence, well deserved, which will help accelerate growth in online advertising."
But what exactly is the IAB going to do with all that money? And what are the contributing members getting in exchange for the cash?
With regard to the first question, it might be easier to count what isn't on the list of things to do with the money.
You need both hands and both feet to count the initiatives for which IAB President Greg Stuart has earmarked the funds. They include:
* The widely promoted Cross Media Optimization Study (XMOS) and its seven-city road show;
* An expansion of the IAB's events business;
* A new media credit service to check the credit of agencies and marketers;
* Sales training for publishers; and
* Further marketing efforts.
......................................The list goes on and on.
A Risk of Favoritism?
But given that the online ad sector is not traditionally inclined to think in terms of collective good, one must ask: What's in it for the contributing member companies?
The companies' first answer to that question is simply that the money will assist industry growth.
"We did it because we are firm believers in the Internet being an ad supported medium and a viable one for now and the foreseeable future," said Jason Krebs, VP of ad sales for New York Times Digital (NYTD), one of the member companies to grant the IAB an interest-free loan.
Yahoo! Director of Marketing Eric John said the portal contributed to the program to spread the gospel about interactive media. "Some messages are better heard from an industry group like the IAB," he said.
However, it's also clear the publishers and media companies behind the $5.8 million are buying a measure of influence in setting the IAB's agenda. Stuart is planning to hold personal meetings with the members who granted loans -- including America Online, MSN, Yahoo!, NYTD, 24/7 Real Media, LookSmart, Wall Street Journal Online, The Walt Disney Internet Group, CNET, Overture and Google. These powwows, he said -- and the companies confirm -- are intended to set the initial agenda for how to spend the cash.
"We do set the agenda for that money," stated NYTD's Krebs.
"It's a collaborative process," he added. "Your voice is heard, you shape the trends of the industry, and you direct the member groups along paths that are not always to the benefit of everybody but in the larger scheme are... beneficial."
It's neither a secret nor a shock that the IAB's highest-profile, highest-dues-paying members hold the top seats on its many committees, therefore shaping its goals to a large extent. But when fewer than a dozen members get to establish the course for the organization, the trade group may risk being perceived as an agent for those companies' interests.
Of course, it all depends on the degree of their influence, and the degree to which their interests overlap with the rest of the IAB's membership.
So here's the question: Will this level of influence on the part of the IAB's debtors adversely affect smaller media companies?
Krebs doubts the lower-profile online ad players will be excluded from benefit. "A rising tide lifts all boats," he quotes.
But Stuart himself expressed worry about under-representation of small publishers: "I was concerned that we would only have the interests of the big players represented," he said, quickly adding he feels a balance was achieved when member companies of different sizes and specialties joined the program -- companies like Overture, New York Times Digital and 24/7 Real Media. These aren't small companies by any means, but he says they diversify the pool of interests involved in the dispersal of the cash.
"The beauty of the program is that we're very balanced: We have portals, content companies, advertisers and search engine marketers," he said.
However, there remains a concern among some that the unique needs of small publishers must somehow be addressed.
"The IAB needs a committee of publishers that are not in the top 50," said Karen Orton, VP of sales for ThirdAge.com, an online media company targeting adults over 45. While Orton expresses strong support for the IAB, she says low and mid-tier media companies need attention from the trade body.
The IAB has occasionally stood accused of favoritism in other areas, for example granting press registration for its events to member organizations while excluding non-members. Such behavior only serves to balkanize a sector that is struggling to present a unified front, which should be any trade body's first order of business.
Members to whom ChannelSeven spoke put a great deal of faith in the abilities of the IAB and Stuart, its superlative salesmen, but it seems a given that a trade body should be impartial as well as effective.
Spending Wisely
The loan raises other potential concerns about fiscal management. Just how much can one relatively impoverished trade body achieve? And is it a mistake to allocate money in so many directions at once, when certain key initiatives go begging?
The IAB's immense to-do list covers an astonishing merry-go-round of committees, councils and task forces. There's an e-mail committee, an agency relations council and an ad sizes task force; a Hispanic committee, a research council and a measurement task force; a search engine committee, a CMO council and -- well, one could fill a whole article just listing them.
Meanwhile, some of the group's long-established objectives haven't done as well as one might hope. Take for example the IAB's rich media guidelines, the second version of which languished for two years, even while industry luminaries and Stuart himself proclaimed this area the hotspot in the online ad sector.
Or take the recent refusal of AstraZenica to release more than top-level results of research the IAB itself funded. The firm decided to keep most data private, and declined to participate in a public panel discussion of the study.
While Stuart said he was disappointed in AstraZenica's insistence on withholding data from the research, he's not surprised considering the competitiveness in the pharmaceutical sector.
"I wish they had been comfortable releasing more data, but to expect that from a pharmaceutical study is unrealistic," he said.
The Little Trade Org That Could
Despite jabs and jibes about favoritism and money management, most agree the IAB is among the notable success stories in the industry it represents. In the twenty-one months since Stuart took the reins, he's built the association up from a staff of two with a meager $1.3 million budget to a staff of 13 with $5 million to spend annually. Membership has gone from 35 to 160, and many of the biggest players in the sector are now onboard.
Additionally, the trade group has finally established independent offices, after couch surfing around Madison Ave. for a year-and-a-half. (It was based first out of StudioOne's offices, then later out of Google's and CNET's digs.)
Certainly the IAB and its president have grappled with demons, but among the group's members are fewer detractors than there once were.
"They were on the brink of irrelevancy," said Forrester's Nail. "But with all the work they've done on the [XMOS] media studies, best practices and at the grassroots level, they're really making some progress."
MORE MOVIE ADVERTISING MOVES FROM NEWSPAPERS TO INTERNET
Hollywood's Print Spending Slows; Online Ad Buys Skyrocket in First Half
For years, some movie media executives have yearned to cut back on newspaper ad spending, believing it inefficient in reaching the prime movie consumers : young males and females who increasingly get movie information, including local schedules, online.
Movie-studio research has shown movie newspaper ads don't encourage people to see a specific wide-release film, and that by the time a consumer reads an ad in a newspaper, consumers already have made up their minds what to see. Despite this, about 10% to 25% of the average $25 million marketing budget for a wide-release movie is earmarked for newspaper ads.
71% spending spike
But the ad model may be shifting. While newspaper spending growth for movie studios slowed in the first half (up 6.5% from nearly 20% in 2002), Internet outlays skyrocketed 71.2% in the first half, according to TNS Media Intelligence/CMR.
Yahoo!'s Yahoo! Entertainment, which claims to command 50% of all Internet movie-ad dollars, maintains the movie the category is surging -- much of it siphoned from newspapers.
"Some studios have doubled their online media budgets," said Jim Moloshok, senior vice president of media, entertainment, information and finance for Yahoo! and Yahoo! Entertainment. Though he wouldn't name specific studios, he said "they are moving money from print into online."
Some evidence
There is evidence newspapers have taken some hits recently in this area. Two of the largest newspaper companies, Gannett and Tribune Co., indicated a weakness in the movies and entertainment category in July. A Gannett spokeswoman declined to comment. A New York Times spokesman said the paper was in "preliminary talks" with the studios and their agencies regarding 2004 plans.
"The category has been weak for newspapers this summer," said Merrill Lynch analyst Lauren Fine, but she quickly added that she had no way of determining whether online competitors were to blame.
Dave Murphy, president of Tribune Co.'s Media Net, which orchestrates cross-market and cross-platform deals for the company, said any implications that online was drawing share away from newspapers in this arena was "very difficult" to measure.
Ego and competition
Additionally, studios can't move the bulk of their budget out of newspapers for two reasons: ego and competition.
Big-name producers, directors and stars in major markets such as New York and Los Angeles want to see print ads of their movies in the newspapers they read. Additionally, studios still compete heavily with each other.
"Everyone would like to not have to run so much newspaper -- but you can't," said Kristy Frudenfeld, senior vice president of media for Walt Disney Co.'s Buena Vista Pictures Marketing, "because you know Sony [for example] is going to run a double-truck ad.
A game of chicken
"Nobody wants to be the first one to blink," she said. "We started this three different times [to cut back on newspapers]. But then you get into the reality of what is going on competitively, and you have to backpedal."
Some major-market newspapers are well aware of movie companies' need to accommodate talent. Two years ago, the Los Angeles Times raised movie studio ad rates 9%. The move surprised marketing executives, who said readership levels at the Times, owned by Tribune Co., have been declining or held steady in recent years.
Fandango.com
Movie theater owners have also been looking for alternatives to newspaper ads. For instance, 10 of the largest U.S. movie exhibitors are partners in Fandango.com, a movie ticketing and information site that represents more than 13,000 movie screens -- more than 46% of the U.S. theater market.
But newspaper companies aren't sitting idle. For instance, Fandango.com recently struck a joint venture with Tribune Media Services where Tribune's online readers can link to Fandango to buy movie tickets.
Nonetheless, Tribune's Mr. Murphy took pains to not underestimate any competition. "It's a customer-by-customer battle today," he said. "Advertisers are doing their best to evaluate the return on investment of all media. And we're up to our neck in it. ... Welcome to the media world."
For years, some movie media executives have yearned to cut back on newspaper ad spending, believing it inefficient in reaching the prime movie consumers : young males and females who increasingly get movie information, including local schedules, online.
Movie-studio research has shown movie newspaper ads don't encourage people to see a specific wide-release film, and that by the time a consumer reads an ad in a newspaper, consumers already have made up their minds what to see. Despite this, about 10% to 25% of the average $25 million marketing budget for a wide-release movie is earmarked for newspaper ads.
71% spending spike
But the ad model may be shifting. While newspaper spending growth for movie studios slowed in the first half (up 6.5% from nearly 20% in 2002), Internet outlays skyrocketed 71.2% in the first half, according to TNS Media Intelligence/CMR.
Yahoo!'s Yahoo! Entertainment, which claims to command 50% of all Internet movie-ad dollars, maintains the movie the category is surging -- much of it siphoned from newspapers.
"Some studios have doubled their online media budgets," said Jim Moloshok, senior vice president of media, entertainment, information and finance for Yahoo! and Yahoo! Entertainment. Though he wouldn't name specific studios, he said "they are moving money from print into online."
Some evidence
There is evidence newspapers have taken some hits recently in this area. Two of the largest newspaper companies, Gannett and Tribune Co., indicated a weakness in the movies and entertainment category in July. A Gannett spokeswoman declined to comment. A New York Times spokesman said the paper was in "preliminary talks" with the studios and their agencies regarding 2004 plans.
"The category has been weak for newspapers this summer," said Merrill Lynch analyst Lauren Fine, but she quickly added that she had no way of determining whether online competitors were to blame.
Dave Murphy, president of Tribune Co.'s Media Net, which orchestrates cross-market and cross-platform deals for the company, said any implications that online was drawing share away from newspapers in this arena was "very difficult" to measure.
Ego and competition
Additionally, studios can't move the bulk of their budget out of newspapers for two reasons: ego and competition.
Big-name producers, directors and stars in major markets such as New York and Los Angeles want to see print ads of their movies in the newspapers they read. Additionally, studios still compete heavily with each other.
"Everyone would like to not have to run so much newspaper -- but you can't," said Kristy Frudenfeld, senior vice president of media for Walt Disney Co.'s Buena Vista Pictures Marketing, "because you know Sony [for example] is going to run a double-truck ad.
A game of chicken
"Nobody wants to be the first one to blink," she said. "We started this three different times [to cut back on newspapers]. But then you get into the reality of what is going on competitively, and you have to backpedal."
Some major-market newspapers are well aware of movie companies' need to accommodate talent. Two years ago, the Los Angeles Times raised movie studio ad rates 9%. The move surprised marketing executives, who said readership levels at the Times, owned by Tribune Co., have been declining or held steady in recent years.
Fandango.com
Movie theater owners have also been looking for alternatives to newspaper ads. For instance, 10 of the largest U.S. movie exhibitors are partners in Fandango.com, a movie ticketing and information site that represents more than 13,000 movie screens -- more than 46% of the U.S. theater market.
But newspaper companies aren't sitting idle. For instance, Fandango.com recently struck a joint venture with Tribune Media Services where Tribune's online readers can link to Fandango to buy movie tickets.
Nonetheless, Tribune's Mr. Murphy took pains to not underestimate any competition. "It's a customer-by-customer battle today," he said. "Advertisers are doing their best to evaluate the return on investment of all media. And we're up to our neck in it. ... Welcome to the media world."
Who's Sharing Files - Study
by Masha Geller
As much talk as there has been in the online arena about digital music and file sharing, it really boils down to a small number of people who’ve amassed huge music libraries on their hard drives.
According to the most recent data from The NPD Group, 64% of households with Web access have at least one digital music file on their computers. Of the total population saving digital files on their hard drives, 56% have more than 50 files while a comparatively small number of Web users (8%) possess more than 1,000 digital files.
Russ Crupnick, VP of The NPD Group, says that a majority of people have a very basic experience with digital music, but there clearly are a small percentage of users who have taken full advantage of file sharing services. "The RIAA's focus on those sharing the most files makes sense, because this group provides the most egregious example of one of the music industry's most pressing business issues - copyright infringement."
Preliminary data findings from MusicWatch Digital from The NPD Group also show that two-thirds of all digital music file acquisition can be attributed to file sharing. The remainder is mainly attributed to ripping tracks directly from CDs. Among the most popular P2P services, according to NPD, was Kazaa (21% usage) and WinMX (5% usage).
In addition, high-speed broadband Internet access appears to be a key facilitator to digital file acquisition. A little over half of all music files in inventory are held by households with high-speed broadband Internet connections.
According to Crupnick, "There's a silver lining in the file-sharing cloud. There are now tens of millions of consumers who are primed for digital music; the challenge is finding the right combination of features and pricing to effectively monetize this behavior. Half the file sharers are college aged or younger, which represents an opportunity for the recording industry to keep pace with younger consumers."
As much talk as there has been in the online arena about digital music and file sharing, it really boils down to a small number of people who’ve amassed huge music libraries on their hard drives.
According to the most recent data from The NPD Group, 64% of households with Web access have at least one digital music file on their computers. Of the total population saving digital files on their hard drives, 56% have more than 50 files while a comparatively small number of Web users (8%) possess more than 1,000 digital files.
Russ Crupnick, VP of The NPD Group, says that a majority of people have a very basic experience with digital music, but there clearly are a small percentage of users who have taken full advantage of file sharing services. "The RIAA's focus on those sharing the most files makes sense, because this group provides the most egregious example of one of the music industry's most pressing business issues - copyright infringement."
Preliminary data findings from MusicWatch Digital from The NPD Group also show that two-thirds of all digital music file acquisition can be attributed to file sharing. The remainder is mainly attributed to ripping tracks directly from CDs. Among the most popular P2P services, according to NPD, was Kazaa (21% usage) and WinMX (5% usage).
In addition, high-speed broadband Internet access appears to be a key facilitator to digital file acquisition. A little over half of all music files in inventory are held by households with high-speed broadband Internet connections.
According to Crupnick, "There's a silver lining in the file-sharing cloud. There are now tens of millions of consumers who are primed for digital music; the challenge is finding the right combination of features and pricing to effectively monetize this behavior. Half the file sharers are college aged or younger, which represents an opportunity for the recording industry to keep pace with younger consumers."
Internet Impacts More Spending Offline than Online
Internet-Influenced Offline Spending Is 50% Greater than Online Spending
The Internet influences offline purchases worth half again as much as the value of products sold directly online, according to new data from the 2003 American Interactive Consumer Survey conducted by The Dieringer Research Group, a Milwaukee-based marketing information and consulting company. In addition, one out of four U.S. consumers now says that online information changed their brand perceptions during the past year.
The annual study of multi-channel consumer behaviors is based on telephone interviews with 2,000 U.S. consumers.
"This data clearly contradicts those who argue that the Internet does not seriously affect brand perceptions," said Pam Renick, executive vice president of The Dieringer Research Group. "We see overwhelming evidence that online content not only impacts brands but also drives traffic both to retail stores and to financial service branches and insurance agent offices."
Overall, consumers spent some $137.6 billion in goods and services purchased offline after first seeking online information. Shoppers who made direct online purchases spent only $93.1 billion, a third less than Internet- influenced offline spending. Both figures are based on consumer self-reports of their spending in the twelve months prior to the survey.
Regarding branding, as a result of advertising and other product information found online, 45% of all online adults (25% of all U.S. consumers) say that their brand opinions have changed in one or more of ten common product categories covered by the survey. Brand opinions about airlines and lodging companies are most likely to be changed by online content, followed by consumer opinions about household products and clothing brands. In financial services and insurance, 29% of all consumers who conducted online product research prior to opening a new account or policy indicated their opinions of financial or insurance brands had changed.
"These findings prove that virtually every marketer can leverage the Internet in some way, depending on the product or service category," Renick explained.
The American Interactive Consumer Survey covers multi-channel customer acquisition behaviors related to retailing, branding, advertising, financial services and insurance. Findings help marketers accelerate customer acquisition, improve customer loyalty, and allocate resources across multiple channels.
The Internet influences offline purchases worth half again as much as the value of products sold directly online, according to new data from the 2003 American Interactive Consumer Survey conducted by The Dieringer Research Group, a Milwaukee-based marketing information and consulting company. In addition, one out of four U.S. consumers now says that online information changed their brand perceptions during the past year.
The annual study of multi-channel consumer behaviors is based on telephone interviews with 2,000 U.S. consumers.
"This data clearly contradicts those who argue that the Internet does not seriously affect brand perceptions," said Pam Renick, executive vice president of The Dieringer Research Group. "We see overwhelming evidence that online content not only impacts brands but also drives traffic both to retail stores and to financial service branches and insurance agent offices."
Overall, consumers spent some $137.6 billion in goods and services purchased offline after first seeking online information. Shoppers who made direct online purchases spent only $93.1 billion, a third less than Internet- influenced offline spending. Both figures are based on consumer self-reports of their spending in the twelve months prior to the survey.
Regarding branding, as a result of advertising and other product information found online, 45% of all online adults (25% of all U.S. consumers) say that their brand opinions have changed in one or more of ten common product categories covered by the survey. Brand opinions about airlines and lodging companies are most likely to be changed by online content, followed by consumer opinions about household products and clothing brands. In financial services and insurance, 29% of all consumers who conducted online product research prior to opening a new account or policy indicated their opinions of financial or insurance brands had changed.
"These findings prove that virtually every marketer can leverage the Internet in some way, depending on the product or service category," Renick explained.
The American Interactive Consumer Survey covers multi-channel customer acquisition behaviors related to retailing, branding, advertising, financial services and insurance. Findings help marketers accelerate customer acquisition, improve customer loyalty, and allocate resources across multiple channels.
