Michael Kors is driving Macy’s business into the ground

Source: http://www.businessinsider.com/michael-kors-cited-for-macys-downgrade-2015-6

Macy's

Macy’s is in trouble. 

The retailer’s same-store sales growth has been weakening over the last several years, and Deutsche Bank analysts expect things to only get worse for the department store chain.

Deutsche Bank analyst Paul Trussell on Monday downgraded Macy’s from “buy” to “sell,” saying he has “low confidence that the company can bust out of its same-stores sales rut.”

Sales declines at Michael Kors, one of Macy’s key vendors, were cited as a primary reason for the downgrade.

“We are especially concerned as we see no obvious juggernaut to replace the lost dollars, and we note ongoing challenges at other key vendors as well,” Trussell wrote, specifically naming Coach, Guess, and Ralph Lauren, as additional venders that could cause problems. 

Michael Kors’ same-store sales declined 6.7% in North America during its most recent quarter. The company’s shares are down 43% since the beginning of the year and nearly 52% in the last 12 months.

Michael KorsMichael Kors’ downfall is the result of its widespread popularity. The name became too ubiquitous to remain cool, analysts say. 

But Michael Kors isn’t Macy’s only problem.

Trussell also cited concerns about declining revenue from tourists, as well as a major shift in discretionary spending from products (like clothing) to experiences and technology. 

Deutsche Bank - consumer spending

Macy’s is also suffering from a shift toward direct-to-consumer business models, in which brands use their own websites to sell directly to customers without going through a department! store l ike Macy’s.

At a recent conference, Bloomingdale’s Chairman and CEO Tony Spring said this changing landscape keeps him up at night.

“Our vendors are our partners and suppliers. But many have also become our competitors,” Spring said at the Retail Marketing Society’s “Reinventing the Store” conference in June, according to Trussell.

SEE ALSO: Wal-Mart has a massive plan that should terrify Whole Foods, Kroger, and Trader Joe’s

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By: Dr. Augustine Fou Monday, June 29th, 2015 news No Comments

FTC starts cracking down on crowdfunding fraud

Jun 11, 2015

Scam!

Hang around the crowdfunding scene long enough and you'll hear tales of campaigns that were too good to be true, or creators who simply took the money and ran. It's scary stuff, we know — but you'll be glad to hear that the Federal Trade Commission now has your back when the host sites' safeguards aren't enough. The government body has taken its first action against a crowdfunding fraudster, reaching a settlement with Erik Chevalier after he cancelled a Kickstarter board game project and reneged on promised refunds. The culprit won't pay restitution, unfortunately (he's allegedly unable to pay), but he's barred from any deceptive crowdfunding practices and obligated to honor whatever refund policies he sets. A slap on the wrist, then? Maybe, but it's still a shot across the bow of scammers who are only interested in padding their bank accounts.

[Image credit: Getty Images]

By: Dr. Augustine Fou Friday, June 12th, 2015 news No Comments

Will Music Streaming Ever Become Profitable?

The iTunes Store was a simple premise: Digital songs cost $0.99 each, and the record companies would get $0.70 from each song sold. You could also buy albums, and the record companies would get 70% of that, too. And thus, Apple managed to dethrone Sony, the biggest name in music players at the time with the Walkman, by offering a tight turnkey solution — a complete music ecosystem — in the iTunes Store and the iPod.

chart of the day spotify pandora comparison

Business Insider/Statista

About a decade later, though, music is just one application on our phones and tablets — andpeople aren’t nearly as willing to pay $0.99 for songs. That involves taking out one’s wallet on too many occasions. And so music streaming services like Pandora and Spotify have proliferated: Apps that emphasize music discovery in a radio-like experience with free and paid tiers, but don’t take up any space on your devices, and offer a flat monthly fee, if any fee at all.​

 

By: Dr. Augustine Fou Saturday, June 6th, 2015 news No Comments

Does Programmatic Work for Branding?

Source: http://www.emarketer.com/Article.aspx?R=1012570

eMarketer estimates that US programmatic digital display ad spending will leap 48.9% this year to hit $14.88 billion, or 55.0% of total digital display ad spend. While the majority of those dollars will likely focus on direct-response efforts, April 2015 research by Econsultancy in association with Quantcast finds that programmatic branding adoption is relatively high, and spending will rise in the coming years.

Benefits of Running Programmatic Brand Advertising Campaigns According to UK and US Senior Marketers, April 2015 (% of respondents)

Among UK and US senior marketers polled, 62% said their companies ran programmatic advertising campaigns for branding objectives. What was holding back nearly four in 10 non-users from buying in, or existing users from investing further? Data privacy concerns and difficulty proving return on investment were the two most common issues, each cited by 23% of respondents. Lack of quality data (18%), a complex marketplace (17%) and lack of transparency (16%) rounded out the top five.

When asked about the benefits of using programmatic for branding, respondents were most likely to cite increased efficiency, reduced overall advertising costs and the ability to optimize and target the right audience in real time as “major” benefits. Among all benefits included, at least 45% of respondents rated them highly beneficial.

By: Dr. Augustine Fou Friday, June 5th, 2015 news No Comments

Media Consumption Trends, 2010-2017

Source: http://www.marketingcharts.com/traditional/media-consumption-trends-2010-2017-55089

ZenithOptimedia-Global-Media-Consumption-Trends-Jun2015

Source: ZenithOptimedia

Notes: Global internet consumption grew by almost 84% between 2010 and 2014, driving overall media consumption growth of 5.1%, to 485 minutes per day, according to estimates released by ZenithOptimedia. Exposure to outdoor advertising was the only traditional medium to show an increase during that 5-year period, of 1.2%, with time spent with TV (-6%), print newspapers (-25.6%) and print magazines (-19%) all declining. Nevertheless, TV still dominated global media consumption last year at an average of 183.9 minutes per day, 68% higher than internet consumption (109.5 minutes/day).

TV is expected to still account for more than one-third (34.7%) of global media consumption by 2017, though time spent watching broadcast programs on TV sets is expected to decline by 1.7% per year. By contrast, time spent accessing the internet is predicted to grow by 9.4% per year between 2014 and 2017.

By: Dr. Augustine Fou Wednesday, June 3rd, 2015 digital No Comments

One-Quarter of Premium Video Ad Views Occurred on Mobile Devices in Q1

FreeWheel-Share-Digital-Video-Ad-Views-by-Device-May2015

Source: FreeWheel [download page]

Notes: Premium digital video ad views continue to migrate to devices outside of desktops and laptops, per FreeWheel’s latest quarterly report, with strong growth in particular coming from smartphones, which accounted for 17% of overall views, more than double a year earlier. OTT Devices also demonstrated rapid growth year-over-year, though their 8% share was consistent with the previous quarter.

In other study results:

  • Authenticated viewing accounted for 57% of long-form and live monetization for programmers (MVPDs) in Q1, more than double the 25% share from a year earlier;
  • OTT devices continue to represent the second-largest share of authenticated ad views, at 19% in Q1;
  • Overall video views grew by 40% year-over-year and video ad views by 43%, driven by live and long-form viewing;
  • Tablets and OTT devices continue to be used primarily for long-form (20+ minutes) and live viewing, with the opposite true for desktops/laptops and smartphones; and
  • Ad completion rates were almost as high for post-roll (72%) as for pre-roll (73%) videos.
By: Dr. Augustine Fou Friday, May 22nd, 2015 digital No Comments

Pay-TV, Broadband Subs Continue Moving in Opposite Directions

LRG-Pay-TV-Broadband-Subscription-Trends-in-Q12015-May2015

Source: Leichtman Research Group (LRG)
Notes: Although the pay-TV subscriber market continues to be larger than the broadband subscriber market, that gap continues to narrow, per the latest data from LRG. The results indicate that the top broadband providers – representing roughly 94% of the market – added about 1.2 million subscribers in Q1 2015, bringing their total to 88.5 million. Cable companies had a particularly strong quarter, with a net gain of slightly more than 1 million subscribers, their largest net add since Q1 2008.

By comparison, they didn’t fare so well with pay-TV subscribers. Indeed, the top 9 cable companies shed roughly 60,000 video subscribers in Q1, though that wasn’t much worse than in Q1 2014, when they lost around 50,000. Overall, though, the top pay-TV providers (representing about 95% of the market) had a weak first quarter, adding only around 7,000 subscribers overall. That’s despite this being traditionally a strong quarter: last year, these providers added more than 250,000 video subscribers in Q1.

Indeed, the top telephone providers (+140,000) had the fewest net adds since Q4 2006, while the top DBS companies (+52,000) had the fewest of any first quarter since LRG began tracking the pay-TV market.

By: Dr. Augustine Fou Thursday, May 21st, 2015 digital No Comments

Ad blocking start-up has the potential to tear a hole right through the mobile ad industry

Ad blocking on mobile has been possible for a while — with services like Adblock Plus and TrustGo allowing users to control the amount of advertising they see on apps and the mobile web. But a new Israeli start-up called Shine claims to have backing from the major wireless carriers, which could seriously threaten the mobile advertising industry.

There are some 144 million active ad blocker users around the world, a number that grew 70% between 2013 and 2014, according to PageFair and Adobe.

The rise of ad blocker usage clearly have the potential to seriously damage publishers’ online revenue — advertisers won’t pay for ads that aren’t served.

But for mobile carriers, ads can actually be a hindrance. Roi Carthy, chief marketing officer at Shine, told Business Insider that the standard app or website pings an antenna up to 50 times a minute — it’s called background signaling. Bandwidth is one of the most expensive pieces of infrastructure for a telecommunications company to operate.

It’s expensive for users too: Shine estimates that, depending on your geography, ads are using up 10-15% of user’s data plans (and not to mention sucking up battery life, and making load times slower.)

Shine mobile ad blocking

Shine originally started its life in 2011 as a company devoted to creating mobile anti-virus software. The company has raised $3.3 million in funding to date, has 25 staff, and is based in Israel.

Its investors include Horizons Ventures — which is owned by Li Ka-shing, the billionaire chairman of Hutchinson Whampoa, the huge conglomerate that owns the “3”-branded mobile carrier, which operates across Europe, and also the company that has a stake in carriers in Asia including Hutchinson Asia Telecommunications. It also invested in a number of technology companies Facebook, Spotify, and Siri. Shine is also funded by Initial:Capital, which is an early stage investment firm, where Carthy is managing partner.

It was only recently that Shine pivoted to look at ad blocking

Carthy said: “What we discovered redefined malware, and ad tech. That doesn’t mean it has to be malicious, but [ad tech] behaves like malware. The tech and methodology is the same, [but in the case of advertising] it’s more about targeting.”

And so Shine’s ad blocking technology was built.

The ad blocker — or ad-controlling technology as Carthy sometimes calls it — aims to block ads across all mobile display, apps, and mobile video ads. It won’t siphon out “native” ads on sites like Facebook, Twitter, and BuzzFeed, however as these are an “intrinsic part of the user experience,” Carthy says.

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By: Dr. Augustine Fou Wednesday, May 13th, 2015 news No Comments

Ad Injection: Yet Another Challenge for Online Advertising

Source: http://blogs.wsj.com/cmo/2015/05/06/ad-injection-yet-another-challenge-for-online-advertising/?mod=WSJBlog

The digital media world is battling ad fraud, ad blockers, and ads that aren’t viewable. There’s another, less-talked-about challenge: ad injection.

Ad injectors are computer programs that insert ads — or replace existing ones — on Web pages as users browse the Internet. If users add a toolbar to their browser, for example, there’s a chance that software might “inject” extra ads into the pages they visit, even if those pages don’t regularly feature ads. Wikipedia’s pages might be covered in banners, despite the fact they don’t usually carry advertising.

David Cheskin/Zuma Press

Many users aren’t aware that the software they add to their browsers might behave this way, and say it’s detrimental to their browsing experience. According to Google, the software can also pose serious security and privacy risks.

Ad injectors are also problematic for online publishers because they allow marketers to place impressions on their sites and alongside their content without paying them to do so, potentially costing them ad revenue.

Even the sites of retailers and other companies are affected.

Google says it has received more than 100,000 complaints about ad injectors appearing in its Chrome browser since the beginning of 2015 alone. To better understand the scale of the problem Google, in collaboration with the University of California, Berkeley and Santa Barbara, created an ad injection “detector” and placed it across Google sites for several months in 2014 to identify “tens of millions of instances of ad injection.”

In total, Google said 5.1% of page views on Windows and 3.4% of page views on Mac showed signs of ad injection software during its study. It tracked ads from more than 3,000 brands appearing through ad injectors, including Sears, Walmart, Target, Ebay and others. The companies could not immediately be reached for comment.

Google

The research also unveiled the “tangled web” of ad networks and middlemen that profit from injected ads, Google said.

“Everybody has known about ad injection, but we’re finally getting an idea of how many parties are involved and that there isn’t a simple solution to handle this,” explained Kurt Thomas, a research scientist at Google.

For example, ad injection software is often distributed by a network of affiliates that bundle it with popular downloads or hide it in malware. Then, middlemen called “injection libraries” help fill the newly created ad space by selling it on to advertising networks, which may then resell it to other networks and ad exchanges, which in turn sell it on to marketers or agencies that purchase ads on their behalf.

It’s a complicated chain that often results in ads for major brands being displayed on major publisher sites without the consent of users.

“We want to shed light on this issue so publishers can take action,” Mr. Thomas said.

Google itself says it’s attempting to combat the issue by cracking down on deceptive extensions for its Chrome browser. It’s also telling advertisers about the practice, and sharing the names of some of the companies involved. During its study, Google found 77% of all injected ads passed through one of three ad networks.

“We strongly encourage all members of the ads ecosystem to review their policies and practices so we can make real improvement on this issue,” a blog post from the company read.

As with many of the challenges in the online advertising ecosystem, however, fixing them is much harder than identifying them.

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By: Dr. Augustine Fou Wednesday, May 6th, 2015 news No Comments

Video Consumption, Ad Dollars Continue to Favor TV Over Digital

eMarketer-TV-vs-Digital-Video-Time-Ad-Spend-Apr2015
Source: eMarketer

Notes: While TV’s share of adults’ daily media time has shrunk slightly in the past couple of years, the medium continues to pull in a disproportionately high share of ad spending, according to new eMarketer estimates. This year, TV is expected to account for 36.4% of adults’ daily major media time, while raking in slightly more than 40% of media ad dollars. And while consumption of – and ad spending on – digital video has been rising quickly, digital is expected to pull in just 4.4% of ad spend versus its 10.9% share of adults’ media consumption this year. The disparity may be related to the greater perceived influence of TV advertising; eMarketer attributes TV’s continued strength as part inertia and part concern from advertisers over digital video ad viewability and completion rates.

By: Dr. Augustine Fou Wednesday, April 29th, 2015 news No Comments

Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.

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