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IMARKETING REPORT 05.28.02:
Is A Paid-For Internet Catching On?
>> "Due to rising costs, all [wishing well] wishes are now two dollars."
- Jim Unger, Herman
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Spend, spend, spend. So we're led to
believe. The Wall Street Journal claimed
that advertising spending rose just 0.4%
in Q1, however, BtoB Daily News report-
ed online ad revenues declined by 7.5%.
What gives? When you read a little more
carefully, BtoB talks about online ad spend-
ing while WSJ talks about advertising in
general. It seems that advertisers simply
spent more on other media than the inter-
net. No big deal - it was only in Q1 and
give it a week or two and you'll start see-
ing another organization (like the IAB)
offering up rosier analyses.
Have you heard? Around 46% of con-
sumers hate AOLs customer service
enough to quit the service for better
broadband. This comes from a survey
conducted by investment and research
firm ChangeWave Investment Research.
Although the report doesn't outline who
conducted the actual survey, the metho-
dology, nor how the respondents were
recruited, it's not hard to believe that the
once might AOL, with it's high subscription
fee, it's difficult integration with non-AOL
software, and it's slacking management
is in deep doo-doo. To their defense,
8% of respondents can tolerate AOL b/c
they have good content.
CONTENTS:
1. BRANDS&INSIGHTS: Is A Paid-For Internet Catching On?
2. CONSUMERFOCUS: Everyone But You Is Talking to Your
Customer
3. MEDIA&CONTENT: TiVo Sells Out
4. MGMT&OPS: Why eBay May Buy Amazon
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1. BRANDS&INSIGHTS: Is A Paid-For Internet Catching
On?
Dating seems to continue to hold it's
grasp of the legit paid internet services
landscape. A step down from blatant smut,
it seems there is a limit to what people
will pay for, as Yahoo has learned. Al-
though they're still charging for members
to be able to hook up, they're dropping
the $4.95 fee to post pics next to your
personal ads, claiming negative consumer
feedback. But is paying for online services
catching on at all?
BOTTOM LINE: Yes. Jupiter claims
that a low percentage would actually
pay for things like enhanced email,
instant messenger, and file-sharing
capabilities, however, what choice will
these consumers have when they can't
find free alternatives? And the ones that
are free, suck? Jupiter fails to mention
how profitable the charging companies
are and the speed of growth of consumers
that do end up paying, whether they want
to or not. I know all this sounds like I'm
being anti-consumer, however, a closer
inspection of what's happening will reveal
that consumers that pay do so because
of convenience. They pay for a good
product, not for crap. And if you &
all your competitors are charging for a
good product, then the best one will
succeed at the right price.
READ MORE:
http://news.com.com/2100-1023-919941.html?tag=cd_mh
http://www.atnewyork.com/news/article/0,1471,8471_1142881,00.html
top
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2. CONSUMERFOCUS: Everyone But You Is Talking to
Your Customer
So there are these agencies
that companies
hire to basically identify emerging trends
amongst the companies target consumers.
Not only do these trends help a company
figure out shifting consumer attitudes, but
they also dictate future products these
companies make. No, these companies
are not some super, state-of-the-art tech
labs with "brand-something" in everyone's
title. No, these agencies don't work with
John Edwards or Miss Cleo. These agencies
are simply tapped into regular consumers
by asking large groups of them for feedback.
That's right, ASKING, not following around.
FEEDBACK, not analyses of clickstreams.
BOTTOM LINE: I bet you didn't know you
could assemble your very own panel-o-consumers
to bounce questions off of? That's right,
whether you're using the internet or a bunch
of DJs, you can discover everything you need
to know about your consumers if you just know
where your consumers are, how to ask, and
how to translate that data into something useful.
Well, lucky for you, you're already working
with al berrios iMarketing, one of these agencies
that's perpetually interacting with consumers
to discover any little thing you need to know.
top
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3. MEDIA&CONTENT: TiVo Sells Out
They had 'em by the 'nads, but the lure
of advertising revenue was obviously too
great to ignore. "While 80 percent of
TiVo users fast-forward through com-
mercials, TiVo has found a way to serve
ads to its 400,000 subscribers all the same.
This week TiVo announced a deal to
develop branded 'advertainment' with
Best Buy. The ads will appear on TiVo's
main programming screen as a small box.
Users who click on the box are invited to
view exclusive music videos by Sheryl
Crow and win free CDs. The catch?
You have to watch a 30-second Best Buy
ad before you get to the goods." Now,
even advertisers like Coca-Cola are
getting in on things like that. It's not
enough that advertisers are taking over
the content that we watch (remember
Coca-Cola's movie on theWB, "Young
Americans" [?]) and inserting their
products as product placements in
just about every other movie, series, or
talk show we watch, but now, just when
we figured out a way to avoid them, they
manage to find a way back into our lives.
I suppose if you spend a $600 billion dollars
a year trying to get our attention, then it
was just a matter of time.
BOTTOM LINE: This game of cat
and mouse is interesting. If advertisers
just stopped trying to yell louder than the
next advertiser and tried talking to us
instead, they'd discover that they could
probably reach us just as effectively
with a few million bucks, with better
response, too, than with all the money
they invest with such low response me-
thods. What am I talking about? Ad-
vertisers, stop wasting the bulk of your
budget on a medium that hasn't been the
only way to reach the country in over a
decade and start diversifying your media
investment across more interactive, more
niche, and more relevant-to-your-consumers
media. In last week's IMARKETING
REPORT, I pointed out how prime time
as the best part of the day to reach people
via TV was a dead concept since consumers
are no longer sitting obediently in front
of TV screens like they used to. Con-
sumer behavior and their media consump-
tion has changed and it's time for you to
start working with them. It's true that no
one ever got fired for using TV, however,
great companies never get built using only
TV, either.
READ MORE:
http://www.business2.com/articles/web/0,1653,40788,FF.html?nl=mf
http://www.theneteconomy.com/article/0,3658,s=902&a=23624,00.asp
http://www.latimes.com/business/la-000035635may20.story?coll=la%2Dheadlines%2Dbusiness
http://www.nytimes.com/2002/05/23/technology/23VIDE.html
http://www.nytimes.com/2002/05/24/business/media/24ADCO.html
BrandWeek, May 13, 2002, p 34
top
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4. MGMT&OPS: Why eBay May Buy Amazon
On 05.14.02, I highlighted in my IMAR-
KETING REPORT how eBay was
emulating a more e-tail focused model,
however, I also pointed out that it was
not that their biz model was broken but
rather because their model never stopped
being facilitating interaction between two
people. Now Amazon is emulating eBay
even more by allowing listings of old and
new products on their site. Turns out that
this sort of business accounted for 23% of
total US sales for them and they're not
blind enough to let that go unnoticed.
BOTTOM LINE: I believe that eBay,
the granddaddy of auctions, the one
with the most choice, the one conditioned
to respond to their customer's demands
quicker, the one with the experience,
resources, management, brand equity
and bigger profits for the longest time,
will be in an early position to buy Amazon
if Amazon continues to modify their
business to that of eBay's. Let's also
not forget the basic fundamentals that
have made eBay so successful: no inven-
tory, consumers have been doing the mar-
keting, the ability to empower it's users
to own their own businesses, it's care-
ful attention to consumer feedback.
What other company, if any, can claim
all these keys to success? Did you
know that there are at least 4 major
companies that have based their business
on buying and selling via eBay? They
make millions. How much longer before
other businesses or lone sellers that
aren't using eBay yet realize this potential?
Although Amazon has spent the most
on their brand, it's customers, not bu-
sinesses or analysts that dictate the
success of a company, and with more
people using eBay and spending more
on eBay, it's just a matter of time before
eBay buys out Amazon.
READ MORE:
http://www.business2.com/articles/web/0,1653,40731,FF.html?nl=ti
top
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