If you’ve been looking for for a hand-sculpted Gothic dragon weathervane, you now have a new way to find it: Amazon’s Handmade online store. As rumored earlier, the new venture has arrived in response to the success of Etsy, the artisan-goods company that just went public with a massive $3.5 billion valuation. The store is divided into seven categories, including jewelry, home decor, artwork and furniture. That’ll give you a chance to find some one-of-a-kind paintings, along with items like leather magnetic cuffs, walnut rocking chairs and a beer growler holder.
Amazon has 80,000 items in the store already from artisans in over 60 countries around the world. The company told the NYT that “you can think of it as a factory-free zone… we’re going to launch with an experience that’s very different.” The retail giant has promised that every item is genuinely handmade, and every artisan has a profile on the site so you can see how they make their items. Meanwhile, Etsy recently allowed vendors to outsource manufacturing, and has faced questions over counterfeit goods on its site.
However, artisans have expressed concerns over the higher fees that Amazon charges, and think that the corporate vibe doesn’t mesh with craft culture. Either way, Etsy will be in tough against Amazon, which is the largest retailer in world and has over 10 times the customers of its artisan rival.
It’s no longer all about ads — here’s how publishers, streaming sites, and apps are using subscriptions to boost revenues
Many digital media companies have embraced monthly and annual subscriptions and now Apple has gotten into the business with its Apple Music service. The subscription model allows digital media companies to provide a premium experience that offers more than the basic, often ad-supported service level.
Subscriptions are enjoying a new prominence as a revenue model for digital content and apps. Internet companies are exploiting the opportunity to boost ARPU (average revenue per user), thanks to recurring payments from a subscriber base.
In this exclusive report from BI Intelligence we look at how prominent players in five separate categories have tried to build a subscription-based revenue stream alongside ad-based businesses: the categories are video, music, news publishing, social networks/messaging, and dating apps.
Here are some of the key takeaways:
- Most companies operate on a “freemium model.” Subscriptions typically operate alongside an advertising business.
- Success in freemium boils down to offering a core audience exclusive value that can only be accessed beyond a paywall. The key is to target the most loyal audiences, and sell them on an expanded offering — bundles of features or content — that they find irresistible.
- Some publishers and apps have had mixed results with subscriptions, and vary in terms of how hard they have pushed them. Part of the problem is that ad-dependent companies are worried about limiting audience if they pack away too much value into a subscription tier.
- The proportion of paying subscribers within the total user base varies considerably across digital media industries. Each category is obviously different, and won’t face the same challenges and opportunities in dialing up the percentage of subscribers and subscription revenue. Here are some of the proportions of subscribers in apps’ user bases: Spotify (25%), WhatsApp (21%), Pandora (5%), Match Group (5%), The New York Times (3%), and LinkedIn (2%).
The report is full of charts, data, and case studies that can easily be downloaded and put to use.
In full, the report:
- Analyzes the most common subscription-based digital media revenue models
- Explores the drivers that allows some subscription or freemium business models succeed
- Explains the revenue mix and business opportunity in several key digital media industries
- Outlines companies that have succeeded with subscription-based business models
To access the full report from BI Intelligence, sign up for a 14-day full-access trial here. Full-access members also gain access to new in-depth reports, hundreds of charts, as well as daily newsletters on the digital industry.
Source: Kenshoo [download page]
Notes: Mobile application installs grew by 346% year-over-year in Q2, representing a significantly faster rate of growth than experienced during 2014, reports Kenshoo in a recent study. Ad spend (+293%) also saw rapid growth, though these metrics are at least in part affected by new entrants and titles tracked. Of note, while costs-per-click (CPC) grew by 16%, cost-per-install (CPI) dropped by 12%, with the CPI gap between iOS and Android sharply narrowing this year. › Continue reading
Source: Monetate [download page]
Notes: Q2 2015 was “pretty good,” declares Monetate, noting overall increases in conversion rates, average order values and revenue per session on a global basis, though bounce rates also increased. Also of interest, average order value for visitors referred by social networks grew each quarter during the previous year, but still lagged direct, email and search. Within the US, smartphones’ share of e-commerce visits increased again; however, these devices continue to trail tablets and desktops in conversion and add-to-cart rates.
Ad-block software usage may be more common than previously thought. There are nearly 200 million monthly active users (MAU) of ad-block software globally, according to data from a new study by PageFair and Adobe included in our latest ad-blocking report.
That represents a big uptick in ad-block usage from just one year ago. The software, which blocks ads from appearing on websites, search, and social networks, is also catching on in the US. Ad-block MAU totaled 45 million in the US as of June 2015, increasing nearly 50% from last year, according to PageFair and Adobe.
In this report, BI Intelligence looks at ad block usage rates, Apple’s newest ad block software and how it could make ad blocking more common on mobile, and examines solutions for publishers. There are several solutions that publishers can use to combat the growing ad-block problem, including education, technical solutions, and micropayments. Which solution publishers should opt for can be determined by their particular ad-block usage rates.
Here are some of the key takeaways from the report:
- Ad blocking poses a major threat to digital media companies that depend on advertising for revenue. If ad blocking on mobile reaches desktop levels, US digital media companies could lose out on as much as $9.7 billion across digital ad formats next year, according to BI Intelligence estimates based on current usage rates.
- Ad-block usage rates vary greatly depending on content type and audience demographics. Publishers whose audience skews toward young males, such as video game sites, tend to see much higher ad-block usage compared with general news sites.
- Ad blocking may become even more common with the release of Apple’s widely used desktop and mobile operating systems later this year. The operating systems will feature a framework that makes it significantly easier for developers to create ad-blocking software, particularly on mobile.
- Ad blockers typically use one of two methods to prevent ads from loading. In most cases, ad blockers prevent the loading of digital ads that are served by a list of known ad servers. Blocked ads typically include display, video, social, and search ad units that appear in web browsers.
In full, the report:
- Outlines ad-block usage trends across content types, geography, and demographic
- Explore the rising threat of mobile ad blocking, including Apple’s new content blocking framework
- Examines solutions that publishers can use to combat ad blocking
To access the full report from BI Intelligence, sign up for a full-access 14-day trial here. Full-access members also gain access to new in-depth reports, hundreds of charts, as well as daily newsletters on the digital industry.
A majority of consumers don’t trust websites that suffer from security and usability issues, says Neustar in recently-released research [pdf], although inaccurate content is the most common complaint of those identified. Indeed, 91% of the more than 750 adults surveyed for the report said that they don’t trust websites that contain errors or mistakes. › Continue reading
Notes: Apps continue to dominate US time spent with mobile, says Flurry, reaching 90% of mobile minutes in June 2015, up from 86% share in Q2 2014. Breaking down mobile internet consumption by app and browser categories, the data shows Facebook’s app by itself occupies 19% share of time spent, meaning that it alone accounts for almost twice as much time spent with mobile as browsers. The study also finds that time spent with gaming apps has shrunk, while mobile users are spending more time with entertainment and messaging/social apps. › Continue reading
Almost one-third (31.6%) of US media ad spending will be allocated to digital media this year, with mobile capturing the majority share of that spending, estimates eMarketer in a recent forecast. In fact, for the first time, the share of media ad spending allocated to mobile (16.6%) will exceed the share allocated to print (15.8%). › Continue reading
Notes: Facebook will grow to account for 20.3% of all US mobile ad spending in 2017, up slightly from an estimated 19.4% share this year and 18.5% last year, per eMarketer’s latest estimates. (That would be in line with the 19% of mobile internet time spent with Facebook.) While Facebook’s share of mobile ad revenues is expected to grow slightly, the opposite is true for Google, which is projected to see a sizable decrease in revenue share this year (from 36.9% to 32.9%). › Continue reading
Notes: A majority (56%) of US smartphone owning adults have abandoned a mobile transaction, according to Jumio, though this figure is down from 66% in a similar survey conducted in 2013. Among those who have abandoned a mobile transaction, purchase uncertainty (45%) was the top reason cited, followed by slow load times (36%) and difficulty with navigation (31%). These usability concerns appear to outweigh security concerns around payment (27%) and personal (26%) information, per the survey’s results, though other research suggests security con! cerns ar e still prevalent.
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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