94% of display media buying respondents to a Google and Forrester Consulting survey released in September 2012 currently combine contextual (i.e. targeting based on contextual category or contextual adjacency) and audience targeting. The primary reasons these respondents give for doing so are higher performance and greater accuracy than using one type of targeting alone. For [...]
PepsiCo’s plan to increase profit margins for its Tropicana orange juice is simple: Just add water. Apparently some consumers are already doing that on their own, in order to get a less-thick or lower-calorie beverage. “They themselves add water before drinking OJ,” a PepsiCo exec tells Bloomberg. “So why not add the water ourselves and charge for it?” Tropicana lost market share to Coca-Cola Co.’s Minute Maid and Simply Orange brands after PepsiCo repackaged its juice three years ago.
Now, instead of continuing to compete in the 100% juice category, PepsiCo will focus on different products with higher profit margins. One such product—Trop50, which contains 42% orange juice and uses a low-calorie stevia-based sweetener—has already been successful. Says the exec, “We have lost perspective here on the primary reason we are in business, which is to make money.” Consumers will always know what they’re getting, thanks to strict FDA juice labeling guidelines.
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Amazon just kicked off a new TV campaign for the Kindle Fire, which it doubtless hopes will further dent sales of Apple’s iPad. But Kindle has a long way to go before it starts threatening the iPad as a device for serving online ads to consumers.
Data from Rimm-Kaufmann Group, an online marketing agency, show that the iPad maintains its total dominance of the tablet market when it comes to ad traffic. Kindle is slowly making progress, but it only has 3.48 percent of the market to iPad’s 88.1 percent.
iPad had a 93.44 percent share of the market late last year, so share is being traded quickly in this category.
With iPad 3 on the way, even those small gains for Kindle may be in jeopardy.
When it comes to ad performance, the iPad also has a significant edge. If you index the data to the average ad displayed on a desktop computer, ads on iPad get 10 percent more revenue per click, the same level of overall clicks, and a greater average order value.
All the other tablets, including Kindle, perform much worse than ads displayed on PCs.
iPad dominates ad traffic on tablets, but its dominance is slipping.
The Kindle is gaining share of ad traffic the fastest against the iPad.
But the iPad is still the most effective tablet device by far, for advertisers.
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It’s been a little while since we’ve rolled out a Boutique Call post, but since the category seems somewhat wide open at this point, we’ll let you know that Shaz Sedighzadeh has started up a new operation called The Supply.
Sedighzadeh set up the new shop, which is being dubbed as a “a resource representation entity for digital and creative talent,” following a two-year stint as a digital producer at CP+B, where he helped produce work for Old Navy, Coke Zero and Microsoft Windows. Prior to Crispin, the new entrepreneur spent a few months on the digital production side at Tool of North America.
Want an explanation of what The Supply does? Well, regarding his new operation, here’s a statement from Sedighzadeh, who lives in Denver but shuttles between NY and LA often: “The world of traditional staffing, simply matching keywords on a resume, has been a working model for some time, and may continue to be in some capacity. But in the digital advertising world today, things are shifting way too fast to solely be supported by the standard candidate sourcing methods. Talent specialists and reps now need to think like experienced digital producers and strategists; they need to ‘get it’, knowing what the project/campaign consists of, what type/level of specific talent is needed, matching resources with the timeline/budget, identifying what design aesthetic needs to be applied, whether it’s a job for a vendor or a couple of freelancers, and the list goes on.”
New Career Opportunities Daily: The best jobs in media.
It’s that time of year when we all reflect on the past, search our souls and determine what we want for the next year. I’ve been reflecting on what it means to work with a company that controls so much of the market, provides such a broad set of capabilities and delivers such a large percentage of monthly revenues to publishers. Of course, I’m thinking of Google and what their dominance in the ad market means for a publisher’s future and its ability to remain relevant to marketers.
What do we know about Google? They are this great company that gives consumers some of the best digital products available on the Web: search, email, maps, Android, apps and more. This has catapulted Google to the rank of second most valuable brand, behind only Apple, according to Millward Brown. This seems to be great for consumers, but what about the businesses who are now reliant on Google for search and display revenue, advertising technology and various business applications like Google docs, Android OS, Chrome, etc.?
Many of the businesses I meet with hold Google in high regard because of the products they represent and the amount of revenue they provide. However, these businesses are equally concerned about Google’s consumer stranglehold, their influence over the ad ecosystem and their focus on automation, all of which lessens the publishers’ worth in the value chain as a whole. Google’s market dominance stretches well beyond search, which in itself is obviously enormous. This expansive dominance should be alarming for every marketing-related business, including publishers, advertisers and agency and marketing services technologies. Here are a few stats on Google by category that will likely frighten even the largest of these businesses:
- 65.38% Share of Search, Oct-11 Hitwise
- 44.1% Share of Ad revenue, Oct-11 PCMag
- 43.8% Share for Video, Oct-11 Comsccore
- 30.03% Share for Travel, Oct-11 Comscore
- 22.38% Share for Automotive, Oct-11 Comscore
- 18.69% Share for Shopping, Oct-11 Comscore
- 16.29% Share for Health, Oct-11 Comscore
If these stats weren’t enough to dampen your holiday spirit, Google now is even prioritizing their own products above the paid search listings on their search engine. This creates a major conflict for the advertisers that have made Google what it is today and may force those clients to pay even more if their advertising is to remain competitive in this new bidding landscape. Google clearly is leveraging its position of power with consumers to launch new products and ensure their own success. The latest example of this is the promotion of their Chrome browser on the Google homepage. As you can see from the chart below, Chrome is rocketing to the position of #1 browser, a rank it is projected to achieve by June 2012.
Google is now a major threat to every business in the publishing and advertising marketplace. In the short term, while they may appear to be a superior partner that provides revenue and marketing innovation, I believe that over the long term they are eroding the value of each and every business in the media sales and publishing value chain. And, worst of all, they are charging heavily for the privilege. I’d estimate that for every dollar spent by an advertiser in the media buying process, Google captures upwards of 25% in tolls (via their various ad services, DFA, Invite, DFP, AdX, Motif, Admeld, etc.), thereby minimizing revenue and profits for publishers and other vendors along the way
So as you reflect on 2011 and consider whom you want to partner with in 2012, give some thought to the short versus the long term. What is your value proposition to clients? And who do you ultimately want to run your business … the Grinch or You?
Have a great holiday and Happy New Year!
The views expressed here reflect the views of the author alone, and do not necessarily reflect the views of 24/7 Real Media, its affiliates, subsidiaries or its parent company, WPP plc
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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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