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Your smartphone, your moods, their market

advertising By June 17, 2013 2 Comments


Coupled to facial imaging, the smartphone could become the ultimate media analytics tool, for evaluating editorial content or measuring the effectiveness of ads. Obviously, there are darker sides. 

When it comes to testing new products, most of us have been through the focus group experience. You sit behind a one-way mirror and watch a handpicked group of people dissect your new concept: a magazine redesign, a new website or a communication campaign. It usually lasts a couple of hours during which the session moderator does his best to extract intelligent remarks from the human sample. Inevitably, the client — you, me, behind the glass — ends up questioning the group’s relevance, the way the discussion was conducted, and so on. In the end, everyone makes up their own interpretation of the analyst’s conclusions. As usual, I’m caricaturing a bit; plus I’m rather in favor of products pre-tests as they always yield something useful. But we all agree the methods could be improved — or supplemented.

Now consider Focus Group 2.0: To a much larger sample (say few hundreds), you send a mockup of your next redesign, a new mobile app, or an upcoming ad campaign you better not flunk. The big 2.0 difference resides in a software module installed on the tester’s smartphone or computer that will use the device’s camera to decipher the user’s facial expressions.

Welcome to the brave new world of facial imaging. It could change the way visual designs are conceived and tested, making them more likely to succeed as a result . These techniques are based on the work of American psychologist Paul Ekman, who studied emotions and their relation to facial expression. Ekman was the first to work on “micro-expressions” yielding impossible to suppress, authentic reactions.

The human face has about 43 facials muscles that produce about 8,000 different combinations. None of theses epxressions are voluntary, nor are they dependent on social origin or ethnicity. The muscles react automatically and swiftly — in no more than 10 or 20 milliseconds — to cerebral cortex instructions sent to the facial nerve.

Last month, in Palo Alto, I met Rick Lazansky, a board director at the venture capital firm Sand Hill Angels. In the course of a discussion about advertising inefficiencies (I had just delivered a talk at Stanford underlining the shortcomings of digital ads), Rick told me he had invested in a Swiss-based company called Nviso. Last week, we set up a Skype conference with Tim Lellewellyn, founder and CEO of the company (Nviso is incubated on the campus of the Swiss Federal Institute of Technology in Lausanne where Dr. Matteo Sorci, Nviso’s chief scientist and co-founder used to work.)

Facial Imaging’s primary market is advertising, explains the Nviso team. Its technology consists in mapping 143 points on the face, activated by the 43 facial muscles. Altogether, their tiny movements are algorithmically translated into the seven most basic expressions : happiness, surprise, fear, anger, disgust, sadness and neutral, each of them lasting a fraction of a second. In practice, such techniques require careful adjustment as many factors tweak the raw data. But the ability to apply such measurements to hundreds of subjects, in a very short time, insures the procedure’s statistical accuracy and guarantees consistent results.

Webcams and, more importantly, smartphone cameras will undoubtedly boost uses of this technology. Tests that once involved a dozen of people in a focus group can now be performed using a sample size measured in hundreds, in a matter of minutes. (When scaling up, one issue becomes the volume of data: one minute of video for 200 respondents will generate over 100,000 images to process.)

Scores of applications are coming. The most solvent field is obviously the vast palette of market research activities. Designers can quickly test logos, layouts, mockups, story boards. Nviso works with Nielsen in Australia and New Zealand and with various advertisers in Korea. But company execs know many others fields could emerge. The most obvious one is security. Imagine sets of high-speed cameras performing real-time assessment at immigration or at customs in an airport; or a police officer using the same technology to evaluate someone’s truthfulness under interrogation. (The Miranda Warning would need its own serious facelift…) Nviso states that it stays out of this field, essentially because of the high barrier to entry.

Other uses of facial imaging technique will be less contentious. For instance, it could be of a great help to the booming sector of online education. Massive Open Online Courses (Moocs) operators are struggling with two issues: authentication and student evaluation. The former is more or less solved thanks to techniques such as encoding typing patterns, a feature reliably unique to each individual. Addressing evaluation is more complicated. As one Stanford professor told me when we were discussing the fate of Moocs, “Inevitably, after a short while, you’ll have 20% to 30% of the students that will be left behind, while roughly the same proportion will get bored…” Keeping everyone on board is therefore one of the most serious challenges of Moocs. And since Moocs are about scale, such task has to be handled by machines able to deal with thousands of students at a time. Being able to detect student moods in real-time and to guide them to relevant branches of the syllabus’ tree-structure will be essential.

These mood-analysis techniques are just nascent. Besides Nviso, several well-funded companies such as Affectiva compete for the market-research sector. The field will be reinforced by other technologies such as vocal intonations analysis deployed by startups like Beyond Verbal. And there is more in store. This story of titled “One day, your smartphone will know if you are happy or sad“, sums up the state of the art with mobile apps designed to decipher your mood based on the way you type, or research conducted by Samsung to develop emotion-sensing smartphones. As far as privacy is concerned, this is just the beginning of the end. Just in case you had a doubt…


Why Google Will Crush Nielsen

advertising, online publishing By May 19, 2013 Tags: 19 Comments


Internet measurement techniques need a complete overhaul. New ways have emerged, potentially displacing older panel-based technologies. This will make it hard for incumbent players to stay in the game.

The web user is the most watched consumer ever. For tracking purposes, every large site drops literally dozens of cookies in the visitor’s browser. In the most comprehensive investigation on the matter, The Wall Street Journal found that each of the 50 largest web sites in the United Sates, weighing 40% of the US page views, installed an average of 64 files on a user device. (See the WSJ’s What They Know series and a Monday Note about tracking issues.) As for server logs, they record every page sent to the user and they tell with great accuracy which parts of a page collect most of the reader’s attention.

But when it comes to measuring a digital viewer’s commercial value, sites rely on old-fashioned panels, that is limited user population samples. Why?

Panels are inherited. They go back to the old days of broadcast radio when, in order to better sell advertising, dominant networks wanted to know which station listeners tuned in to during the day. In the late thirties, Nielsen Company made a clever decision: they installed a monitoring box in 1000 American homes. Twenty years later, Nielsen did the same, on a much larger scale, with broadcast television. The advertising world was happy to be fed with plenty of data — mostly unchallenged as Nielsen dominated the field. (For a detailed history, you can read Rating the Audience, written by two Australian media academics). As Nielsen expanded to other media (music, film, books and all sorts of polls), moving to the internet measurement sounded like a logical step. As of today, Nielsen only faces smaller competitors such as ComScore and others.

I have yet to meet a publisher who is happy with this situation. Fearing retribution, very few people talk openly about it (twisting the dials is so easy, you know…), but hey all complain about inaccurate, unreliable data. In addition, the panel system is vulnerable to cheating on a massive scale. Smarty pants outfits sell a vast array of measurement boosters, from fake users that will come in just once a month to be counted as “unique” (they are indeed), to more sophisticated tactics such as undetectable “pop under” sites that will rely on encrypted URLs to deceive the vigilance of panel operators. In France for instance, 20% to 30% of some audiences can be bogus — or largely inflated. To its credit, Mediametrie — the French Nielsen affiliate that produces the most watched measurements — is expending vast resources to counter the cheating, and to make the whole model more reliable. It works, but progress is slow. In August 2012, Mediametrie Net Ratings (MNR), launched a Hybrid Measure taking into account site centric analytics (server logs) to rectify panel numbers, but those corrections are still erratic. And it takes more than a month to get the data, which is not acceptable for the real-time-obsessed internet.

Publishers monitor the pulse of their digital properties on a permanent basis. In most newsrooms, Chartbeat (also imperfect, sometimes) displays the performance of every piece of content, and home pages get adjusted accordingly. More broadly, site-centric measures detail all possible metrics: page views, time spent, hourly peaks, engagement levels. This is based on server logs tracking dedicated tags inserted in each served page. But the site-centric measure is also flawed: If you use, say, four different devices — a smartphone, a PC at home, another at work, and a tablet — you will be incorrectly counted as four different users. And if you use several browsers you could be counted even more times. This inherent site-centric flaw is the best argument for panel vendors.

But, in the era of Big Data and user profiling, panels no longer have the upper hand.

The developing field of statistical pairing technology shows great promise. It is now possible to pinpoint a single user browsing the web with different devices in a very reliable manner. Say you use the four devices mentioned earlier: a tablet in the morning and the evening; a smartphone for occasional updates on the move, and two PCs (a desktop at the office and a laptop elsewhere). Now, each time you visit a new site, an audience analytics company drops a cookie that will record every move on every site, from each of your devices. Chances are your browsing patterns will be stable (basically your favorite media diet, plus or minus some services that are better fitted for a mobile device.) Not only your browsing profile is determined from your navigation on a given site, but it is also quite easy to know which sites you have been to before the one that is currently monitored, adding further precision to the measurement.

Over time, your digital fingerprint will become more and more precise. Until then, the set of four cookies is independent from each other. But the analytics firm compiles all the patterns in single place. By data-mining them, analysts will determine the probability that a cookie dropped in a mobile application, a desktop browser or a mobile web site belongs to the same individual. That’s how multiple pairing works. (To get more details on the technical and mathematical side of it, you can read this paper by the founder of Drawbridge Inc.) I recently discussed these techniques with several engineers both in France and in the United Sates. All were quite confident that such fingerprinting is doable and that it could be the best way to accurately measure internet usage across different platforms.

Obviously, Google is best positioned to perform this task on a large scale. First, its Google Analytics tool is deployed over 100 millions web sites. And the Google Ad Planner, even in its public version, already offers a precise view of the performance of many sites in the world. In addition, as one of the engineers pointed out, Google is already performing such pairing simply to avoid showing the same ad twice to a someone using several devices. Google is also most likely doing such ranking in order to feed the obscure “quality index” algorithmically assigned to each site. It even does such pairing on a nominative basis by using its half billion Gmail accounts (425 million in June 2012) and connecting its Chrome users. As for giving up another piece of internet knowledge to Google, it doesn’t sounds like a big deal to me. The search giant knows already much more about sites than most publishers do about their own properties. The only thing that could prevent Google from entering the market of public web rankings would be the prospect of another privacy outcry. But I don’t see why it won’t jump on it — eventually. When this happens, Nielsen will be in big trouble.


What’s the Fuss About Native Ads?

advertising By April 21, 2013 Tags: , 5 Comments


In the search for new advertising models, Native Ads are booming. The ensuing Web vs. Native controversy is a festival of fake naïveté and misplaced indignation. 

Native Advertising is the politically correct term for Advertorial, period. Or rather, it’s an upgrade, the digital version of an old practice dating back to the era of typewriters and lead printing presses. Everyone who’s been in the publishing business long enough has in mind the tug-of-war with the sales department who always wants its ads to to appear next to an editorial content that will provide good “context”. This makes the whole “new” debate about Native Ads quite amusing. The magazine sector (more than newspapers), always referred to “clean” and “tainted” sections. (The latter kept expanding over the years). In consumer and lifestyle sections, editorial content produced by the newsroom is often tailored to fit surrounding ads (or to flatter a brand that will buy legit placements).

The digital era pushes the trend several steps further. Today, legacy media brands such as Forbes, Atlantic Media, or the Washington Post have joined the Native Ads bandwagon. Forbes even became the poster child for that business, thanks to the completely assumed approach carried out by its chief product officer Lewis DVorkin (see his insightful blog and also this panel at the recent Paid Content Live conference.) Advertising is not the only way DVorkin has revamped Forbes. Last week, Les Echos (the business daily that’s part of the media group I work for) ran an interesting piece about it titled “The Old Press in a Startup mode” (La vielle presse en mode start-up). It details the decisive — and successful — moves by the century-old media house: a downsized newsroom, external contributors (by the thousand, and mostly unpaid) who produce a huge stream of 400 to 500 pieces a day. “In some cases”, wrote Lucie Robequain, Les Echos’s New York correspondent, “the boundary between journalism and advertorial can be thin…” To which Lewis DVorkin retorts: “Frankly, do you think a newspaper that conveys corporate voices is more noble? At Forbes, at least, we are transparent: We know which company the contributor works for and we expose potentials conflicts of interests in the first graph…” Maybe. But screening a thousand contributors sounds a bit challenging to me… And Forbes evidently exposed itself as part of the “sold” blogosphere. Les Echos’ piece also quotes Joshua Benton from Harvard’s Nieman Journalism Lab who finds the bulk of Forbes production to be, on average, not as good as it was earlier, but concedes the top 10% is actually better…

As for Native Advertising, two years ago, Forbes industrialized the concept by creating BrandVoice. Here is the official definition:

Forbes BrandVoice allows marketers to connect directly with the Forbes audience by enabling them to create content – and participate in the conversation – on the Forbes digital publishing platform. Each BrandVoice is written, edited and produced by the marketer.

Practically, Forbes lets marketers use the site’s Content Management System (CMS) to create their content at will. The commercial deal — from what we can learn — involves volumes and placements that cause the rate to vary between $50,000 to $100,000 per month. The package can also include traditional banners that will send traffic back to the BrandVoice page.

At any given moment, there are about 16 brands running on Forbes’ “Voices”. This revenue stream was a significant contributor to the publisher’s financial performances. According to AdWeek (emphasis mine):

The company achieved its best financial performance in five years in 2012, according to a memo released this morning by Forbes Media CEO Mike Perlis. Digital ad revenue, which increased 19 percent year over year, accounted for half of the company’s total ad revenue for the year, said Perlis. Ten percent of total revenue came from advertisers who incorporated BrandVoice into their buys, and by the end of this year, that share is estimated to rise to 25 percent.

Things seemed pretty positive across other areas of Forbes’ business as well. Newsstand sales and ad pages were up 2 percent and 4 percent, respectively, amid industry-wide drops in both areas. The relatively new tablet app recently broke 200,000 downloads.

A closer look gives a slightly bleaker picture: According to latest data from the Magazine Publishers Association, between Q1 2013 and Q1 2012, Forbes Magazine (the print version only) lost 16% in ads revenues ($50m to $42m). By comparison, Fast Company scored +25%, Fortune +7%, but The Economist -27% and Bloomberg Business Week -30%. The titles compiled by the MPA are stable (+0.5%).

I almost never click on banners (except to see if they work as expected on the sites and apps I’m in charge of). Most of the time their design sucks, terribly so, and the underlying content is usually below grade. However, if the subject appeals to me, I will click on Native Ads or brand contents. I’ll read it like another story, knowing full well it’s a promotional material. The big difference between a crude ad and a content-based one is the storytelling dimension. Fact is: Every company has great stories to tell about its products, strategy or vision. And I don’t see why they shouldn’t be told  resorting to the same storytelling tools news media use. As long as it’s done properly, with a label explaining the contents’ origin, I don’t see the problem (for more on this question, read a previous Monday Note: The Insidious Power of Brand Content.) In my view, Forbes does blur the line a bit too much, but Atlantic’s business site Quartz is doing fine in that regard. With the required precautions, I’m certain Native Ads, or branded contents are a potent way to go, especially when considering the alarming state of other forms of digital ads. Click-through rates are much better (2%-5% vs. a fraction of a percentage for a dumb banner) and the connection to social medias works reasonably well.

For news media companies obsessed with their journalistic integrity (some still do…), the development of such new formats makes things more  complicated when it comes to decide what’s acceptable and what’s not. Ultimately, the editor should call the shots. Which brings us to the governance of media companies. For digital media, the pervasive advertising pressure is likely keep growing. Today, most rely on a Chief Revenue Officer to decide what’s best for the bottom line such as balancing circulation and advertising, arbitraging between a large audience/low yield or smaller audience/higher yield, for instance. But, in the end, only the editor must be held accountable for the contents’ quality and the credibility — which contribute to the commercial worthiness of the media. Especially in the digital field, editors should be shielded from the business pressure. Editors should be selected by CEOs and appointed by boards or better, boards of trustees. Independence will become increasingly scarce.


Google’s Amazing “Surveywall”

advertising By September 9, 2012 Tags: , , 8 Comments


How Google could reshape online market research and also reinvent micro-payments. 

Eighteen months ago — under non disclosure — Google showed publishers a new transaction system for inexpensive products such as newspaper articles. It worked like this: to gain access to a web site, the user is asked to participate to a short consumer research session. A single question, a set of images leading to a quick choice. Here are examples Google recently made public when launching its Google Consumer Surveys:

Fast, simple and efficient. As long as the question is concise and sharp, it can be anything: pure market research for a packaging or product feature, surveying a specific behavior,  evaluating a service, intention, expectation, you name it.

This caused me to wonder how such a research system could impact digital publishing and how it could benefit web sites.

We’ll start with the big winner: Google, obviously. The giant wins on every side. First, Google’s size and capillarity puts it in a unique position to probe millions of people in a short period of time. Indeed, the more marketeers rely on its system, the more Google gains in reliability, accuracy, granularity (i.e. ability to probe a segment of blue collar-pet owners in Michigan or urbanite coffee-drinkers in London).The bigger it gets, the better it performs. In the process, Google disrupts the market research sector with its customary deflationary hammer. By playing on volumes, automation (no more phone banks), algorithms (as opposed to panels), the search engine is able to drastically cut prices. By 90% compared to  traditional surveys, says Google. Expect $150 for 1500 responses drawn from the general US internet population. Targeting a specific group can cost five times as much.

Second upside for Google: it gets a bird’s eye on all possible subjects of consumer researches. Aggregated, anonymized, recompiled, sliced in every possible way, these multiple datasets further deepen Google’s knowledge of consumers — which is nice for a company that sells advertising. By the way, Google gets paid for research it then aggregates into its own data vault. Each answer collected contributes a smallish amount of revenue; it will be a long while, if ever, before such activity shows in Google’s quarterly results — but the value is not there, it resides in the data the company gets to accumulate.

The marketeers’ food chain should be happy. With the notable exception of those who make a living selling surveys, every company, business unit or department in charge of a product line or a set of services will be able to throw a poll quickly, efficiently and cheaply. Of course, legacy pollsters will argue Google Consumer Surveys are crude, inaccurate. They will be right. For now. Over time the system will refine itself, and Google will have put  a big lock on another market.

What’s in Google’s Consumer Surveys for publishers whose sites will host a surveywall? In theory, the mechanism finally solves the old quest for tiny, friction-free transactions: replace the paid-for zone with a survey-zone through which access is granted after answering a quick question. Needless to say, it can’t be recommended for all sites. We can’t reasonably expect a general news site, not to mention a business news one, to adopt such a scheme. It would immediately irritate the users and somehow taint the content.

But a young audience should be more inclined to accept such a surveywall. Younger surfers will always resist any form of payment for digital information, regardless of quality, usefulness, relevance. Free is the norm. Or its illusion. Young people have already demonstrated their willingness to give up their privacy in exchange for free services such as Facebook — they have yet to realize they paid the hard price, but that’s another subject.
On the contrary, a surveywall would be at least more straightforward, more honest: users gives a split second of their time by clicking on an image or checking a box to access the service (whether it is an article, a video or a specific zone.) The system could even be experienced as fun as long as the question is cleverly put.
Economically, having one survey popping up from time to time — for instance when the user reconnects to a site — makes sense. Viewed from a spreadsheet (I ran simulations with specific sites and varying parameters), it could yield more money than the cheap ads currently in use. This, of course, assumes broad deployment by Google with thousands of market research sessions running at the same time.

A question crosses my mind : how come Facebook didn’t invented the surveywall?





Apple Ads Only Samsung Could Love

advertising By September 9, 2012 Tags: 8 Comments

Over the years, Apple has produced a number of memorable TV commercials. The “1984” Super Bowl spot, with its dystopian noir and portrayal of Big Blue as Big Brother, is arguably the most celebrated commercial ever made. This bit of sixty-second cinema by Ridley Scott (now Sir Ridley) — director of epoch-making films such as The Duellists, Alien, and, my favorite, Blade Runner — was, and still is, mesmerizing. After the ad was screened for the first time at Apple’s Fall 1983 Sales Meeting in Honolulu the crowd sat in stunned silence… for about three seconds.

When Steve Jobs rebooted Apple in 1997, he needed a rallying cry…and he found one that still resonates: Think Different. Richard Dreyfuss narrated the campaign’s “The Crazy Ones” commercial, but there’s another, never-aired version voiced by Jobs that still moves me to tears. (Last year, on the occasion of Jobs’ demise, AdWeek edited the famous commercial and spliced in a smiling picture of the young Steve at the ending, right after the image of the child opening her eyes… )

Then there’s the long and well-loved “I’m A Mac, You’re a PC” series, featuring John Hodgman and Justin Long (the link gives you access to all 66 TV spots of this historic campaign). It’s more than good fun, it’s a great, lasting example of a classic (a polite way of saying apparently “unoriginal”) strategy: Us vs. Them. The ads are brilliant, consistent, cleanly executed with simple, unencumbered visuals and a sly, understated humor. A joy.

Occasionally, Apple’s sense-of-commercial misses the mark, such as in this PowerMac G4 dud that features tanks and a US Army sergeant voice-over. But the missteps have been few; Apple advertising is typically well thought out and well done. Good ideas, near flawless execution.

That brings us to today. Over the past few months, Apple has put out a series of commercials that fall into two categories: a good idea poorly executed, and the great execution of a troubling concept.

First, we have the “Genius” ads. The Apple Store Geniuses provide, undoubtedly, the best tech support in the industry, leading the company’s products to top scores in customer satisfaction surveys. An ad campaign that promotes this advantage while poking subtle fun at the immodesty of the “Genius” designation should have been a straight shot. The idea lends itself to a series of humorous vignettes that end with a relieved customer, a show back on the road, a CEO in distress saved from embarrassment, and so on.

But in practice, as you can see for yourself here, here, and here, the ads fail. The worthy idea is ruined by stories that feel forced and overly cute, the message falls far short of the clarity we expect from Apple’s marketing campaigns… and they’re just not funny. Even the production seems cheap and hurried, right down to continuity problems: A sleeping Genius, garbed in his official blue t-shirt, is roused by a panicked knock on the door and appears a split-second later… with his badge-cum-business card holder now draped around his neck.

The ads were widely panned and, soon, mercifully yanked.

In the more troublesome category, we have the Siri commercials featuring celebrities Zooey Deschanel, Samuel L. Jackson, John Malkovich, and Martin Scorsese. They’re smart and well-produced, they’re flatteringly imitable — and Samsung must love them.


Because they’re pernicious: They dilute the focus, they detract from Apple products’ own well-deserved and well-earned celebrity.

As a comparison and a template, regard the series of Louis Vuitton ads produced by the great photographer Annie Leibovitz. What, or rather, who do you see? Sean Connery, Catherine Deneuve, Michael Gorbachev, Roger Federer, Keith Richards, Muhammad Ali…

… with a Louis Vuitton bag.

The message is cynical but clear: Our bag is no better than a Gucci or an Hermès, but if you sport our logo, you’ll have something in common with iconic athletes, artists, intellectuals… You, too, can be like Mikhail Gorbachev or Michael Phelps… if only in our accoutrements. (The Annie Leibovitz campaign is pompously called “Core Values” — or, given the roster of subjects, is this unconscious honesty?).

This is an exceedingly well-thought out and executed plan; Louis Vuitton is an astute, superbly managed company, at the top of its game. But what does it say about the iPhone if Apple feels it has to use Louis Vuitton-like tactics to entice consumers?

Until the Siri celebrity campaign, Apple products had always been the focus of Apple marketing. The product is the hero, the ad extolls what it does and how it does it. The recourse to celebrity endorsement sends a new message: The product isn’t strong enough, it needs the propinquity of the famous. And that message becomes even more dangerous because the ads are so slick, so well executed. (The Scorsese ad even includes a sweet visual joke that refers to the director’s 1976 Taxi Driver movie. A nice touch…but it has nothing to do with Apple.)

That’s why Samsung must have an extra reason to smile when they see Ms. Deschanel dance in her pajamas, and that’s why these ads should be yanked and why the celebrity strategy — a first for Apple if memory serves — should be reconsidered.

And, then, at the risk of piling on, there is the product being promoted: Siri.

Doubtless, it works for some people, but how many?

How many give up after a few tries?

I recently asked an Apple insider that very question. The individual thought a moment but couldn’t recall seeing a Siri-using colleague.

There is a difference between a beta product such as a spreadsheet exhibiting annoying but reasonably well-defined bugs — and a beta like Siri that “kind of works” and discourages some users while pleasing others.

I have no doubt Apple has thought out ambitious long term plans for Siri, plans that might unfold in time and make Siri as universally and reliably usable as a other iPhone functions and apps. But, for the time being, besides their feeble Vuitton-like recourse to celebrities, the slick Siri ads could be perceived as misleading. Another reason to shelve them.

As for the Genius campaign: Fire the ad agency, but keep the concept. Press the reset button, keep the message, rewrite the ads. The idea has potential for a series of effective and fun ads.


The Insidious Power of Brand Content

advertising By June 25, 2012 Tags: 61 Comments

Dassault Systemes is one of the French industry’s greatest successes. Everyday, unbeknownst to most of us, we use products designed using DS software: cars, gadgets, buildings and even clothes. This €2bn company provides all the necessary tools for what has become known as Product Lifecycle Management: starting from the initial design, moving to the software that runs the manufacturing process, then to distribution logistics and, at the end of its life, disposing of the product.

Hence a simple question: What could be the axis of communication for such a company? The performance of its latest release of CAD software? Its simulation capabilities?

No. Dassault Systemes opted to communicate on an science-fiction iceberg-related project. The pitch: a French engineer — the old-fashion type, a dreamer who barely speaks English — envisions capturing an iceberg from a Greenland glacier and tugging it down to the thirsty Canary Islands. The DS mission (should it choose to really accept it): devise all the relevant techniques for the job, minimize melting, maximize fuel-efficiency. The result is a remarkable and quite entertaining documentary, a 56 minutes high-tech festival of solutions for this daunting task’s numerous challenges. I watched it in HD on my iPad, in exchange for my email address (the one I’m dedicating to marketers). It’s a huge, multimillion video production, with scores of the helicopters shots, superb views of Greenland and, of course, spectacular 3D imaging, the core DS business. The budget is so high and the project so ambitious, that the documentary was co-produced by several large European TV channels such as France Televisions and the German ZDF. Quite frankly, it fits the standard of public TV — for such a genre.

But this is neither journalism nor National Geographic film-making. It’s a Brand Content operation.

In advertising, Brand Content is the new black. You can’t bump into an ad exec without hearing about it. It’s the new grail, the replacement for the other formats that failed and the latest hope for an ailing industry. But there are side effects.

Let’s have a closer look.

1/ What defines Brand Content as opposed to traditional advertising?

In a good BC product, the brand can be almost absent. It’s the content that’s front and center. In France, advertisers often quote a series made by the French Bank BNP-Paribas titled “Mes Colocs” (My roommates). The title says it all. Launched two years ago, it featured 20 shorts episodes, later supplemented by… 30 bonus ones, all broadcast on YouTube and DailyMotion. Mes Colocs became such a success that two cable TV channels picked it up. The brand name does not appear — except in the opening credits. But, far from being a philanthropic operation, its performance was carefully monitored. BNP-Paribas’ goal was obvious: raising its awareness among young people. And it seems to have worked: the operation translated into a 1.6% increase in accounts opening and a rise of 6.5% in the number of loans granted to young adults (details in this promotional parody produced by the agency.)

This dissociation between brand and content is essential. An historical French brand has been rightly celebrated for being the first to do brand content decades before the term was coined: Michelin with its eponymous guides provided a genuine service without promoting its tires (read Jean-Louis’ Monday Note Why Apple Should Follow Michelin.)

The following opposition can be drawn between traditional advertising and content-based message :

2 / Why the hype ?

First of all, medias are increasingly fragmented. Advertisers and marketers have a hard time targeting the right audience. BC is a good way to let the audience build itself — for instance through virality. It is much more subtle than relying on the heavily (and easily) corrupted blogosphere.

Second, most digital formats are faltering. Display advertising is spiraling down due to well-known factors: unlimited inventories, poor creativity, excessive discounts, bulk purchasing, cannibalization by value killing ad networks, etc. Behavioral targeting is technically spectacular but people get irritated by invasive tracking techniques (see my previous take: Pro (Advertising) Choice.)

Three, marketers have matured. The caricatural advertorial grossly extolling a product is long gone.  Today’s contents are much smarter, they provide information (real or a respectable imitation), and good entertainment. Everything is increasingly well-crafted. Why? Because — and that is reason #4 for growth in BC — there is a lot of available talent out there. As news media shrink, advertising agencies find an abundance of writers, producers, film-makers all eager to work for much more money they could hope to get in their former jobs. Coming in with a fresh mindset, not (yet) brain-washed by marketing, they will do their job professionally, accepting “minor” constraints in exchange for great working conditions — no penny pinching when you do a web series for a global brand.

Five, compared to traditional advertising messages, Brand Content is cheap. As an example, see the making of a recent and highly conceptual Air France commercial shot in Morocco; the cost ran into seven figures. Now, imagine how many brand content products can be done with the same investment. Brand content allows an advertiser to place multiple bets at the same time.

3/ The risks. (Here comes the newsman’s point of view)

Brand content is the advertiser’s dream come true. The downfall of the print press has opened floodgates: publishers become less and less scrupulous in their blurring of the line between editorial and promotion — which is precisely what ad agencies always shoot for. Most women magazines, the luxury press, and now mainstream glossies allocate between 30% and 70% to such “tainted” editorial: nice “journalistic” treatment in exchange for favors on the advertising side. I’m not blaming publishers who do their best to save their business, I’m just stating the facts.

The consequence is obvious: readers are not informed as they should about products. Less and less so. (Although islands of integrity like Consumer Reports remain.) That is not good for the print media as it feeds the public’s distrust. While many publications lose what’s left of their credibility by being too cosy with their advertisers, brands are becoming increasingly savvy at producing quality contents that mimic traditional editorial. As brands tend to become full blown medias, the public will get confused. Sooner or later, it will be difficult to distinguish between a genuine, editorially-driven prime-time TV show and another one sponsored by an advertiser. Call it the ever shrinking journalism.


Pro (Advertising) Choice

advertising By June 10, 2012 14 Comments

A couple of weeks ago, I came to a realization: I was becoming more and more reluctant to click on advertising banners because I feared I being digitally tailed for the next few months. When I mentioned this to friends, I noted that I was not alone. Everyone had their example of ads that, once clicked, become as sticky as the proverbial band aid. This could be the result of exploring a product (read my own experience testing an app), or occasional research on a subject… Your online behavior — queries you send, ads you click on — draws your marketing profile, enabling brands to deluge you with “targeted” ads. A shoe freak will be swamped by shoemakers ads, someone who intends to buy a car will be targeted by automakers and dealers. (I always wonder how the web page of someone afflicted with an embarrassing disease looked like…)

Once you’re caught in the behavioral targeting net, you’ll have a hard time cleaning up your surfing. I recently tested a utility for my computer — a poor quality product I quickly dumped — and ended up having to spend time removing the offending cookies with metaphorical tweezers. Now, I sacrifice a “polluted” browser (and a specific email account) which I use to click on ads, download products or marketing information, and do my best to keep my other browsers clean.

Why not flush the hundreds of cookies piled up inside my browsers, you might ask? Good question. In a file on my two computers, I keep almost 200 encrypted passwords, ranging from subscriptions to various publications, accounts to e-commerce sites or business online services. I don’t want to re-enter these codes each time I get rid of unwanted cookies. Hence the “dirty” browser.

The conclusion is obvious: behavioral advertising is backfiring. The more experienced users become, the more cautious they get in order to avoid aggressive tracking. For advertisers, this is the exact opposite of what they meant to achieve. And I take the trend will accelerate. Marketers have more sense of efficiency than of measure; they were quick to embrace these clever technologies without considering they might end up killing the golden goose. It is happening much earlier than anyone has anticipated.

The debate around the Do Not Track (DNT) system epitomizes this trend. The idea originated at the US Federal Trade Commission (FTC): it devised a piece of software embedded in a browser or an application, able to send a signal instructing a web site not to inject a tracking cookie in the user’s computer. After that, it is up to the website to comply or not. Mozilla quickly included the feature in its version 9.0 of Firefox, and Twitter followed.

Early june, Microsoft added fuel to the fire by announcing the DNT feature will be turned “on” as a default on its new Internet Explorer 10 browser set to work with Windows 8. This is by no means unimportant: the vast majority of users do not change default settings in their software. As a result, a sizable percentage of web surfers could end up automatically asking web sites to forgo any tracking. A potential catastrophe for the advertising industry: while most ads are purchases in bulk, at heavy discounts, the industry relies on behavioral targeting to increase the efficiency of ads — and of their resulting margins.

Intense lobbying on behalf the ad community ensued.

First, the definition issue, As viewed by the FTC :

An effective Do Not Track system should go beyond simply opting consumers out of receiving targeted advertisements; it should opt them out of collection of behavioral data for all purposes other than those that would be consistent with the context of the interaction.

Naturally, marketers are in favor of a much narrower definition, excluding the data collection process. In other words, OK for not targeting users, but their personal data must be ours.

In this story, Atlantic’s senior editor Alexis Madrigal makes the following point:

No one understands the industry’s definition because it deviates so far from the standard english definition of the word ‘track.’
Stanford’s Aleecia McDonald found that 61 percent of people expect that clicking a Do Not Track button should shut off *all* data collection. Only 7 percent of people expected that websites could collect the same data before and after clicking a ‘Do Not Track’ button. That is to say, 93 percent of people do not understand the industry’s definition of DNT.

Eventually, Microsoft had to backtrack under pressure from the Digital Advertising Alliance. The DAA is a one-year old body that defines itself as the “Self-regulatory program for online behavioral advertising”; it lines up all the major players in the business, including Google, Apple and Microsoft. The DAA fired a first shot by saying that the “on” default setting envisioned by Microsoft was going way beyond FTC’s definition as well as the W3C (World Wide Web Consortium)’s DNT recommendation. The DAA suggested DNT activation ought to be left to users — for instance, when they launch their browser for the first time. As a consequence, Microsoft’s IE10 featuring a DNT set to “on” as a ‘‘factory default’’ would be seen as “non-compliant” and the no-tracking signal sent to websites could be legally ignored.

The battle is just starting. It is unclear if Microsoft will fight the non-compliance issue and what kind of compromise will be reached. (The DAA’s final position will be disclosed in a few months.) In the meantime, digital kremlinologists will keep dissecting Microsoft true motives. After all, according to eMarketer, this year, in the US alone, the Redmond giant will make $700 million in advertising revenue:

This chart also clearly shows what’s at stake here. With DNT-as-a-default, Microsoft is obviously aiming Google and Facebook — and their higher advertising income. Both rely heavily on data-collection to serve relevant ads. It is even a crucial part of Facebook’s business model (see this previous Monday Note: Facebook’s Bet on Privacy) based on people giving up personal data in exchange for its service. A bet increasingly at risk.


Mobile Advertising:
The $20B Opportunity Mirage

advertising, mobile internet By June 10, 2012 Tags: 152 Comments

There are a lot of questions left to be answered about Facebook’s IPO fiasco, but one thing we know is this: As consumers shift their use of Facebook from PCs to smartphones, investors worry about lower mobile advertising revenues. Is this a temporary situation that will be remedied when usage patterns settle, or do investors have a right to be concerned? Must the advertising industry learn to adapt to a permanently leaner income stream from smartphones?

Let’s start by taking another look at Mary Meeker’s latest Internet Trends presentation from last week’s All Things Digital conference. On slide 17, she projects a $20B opportunity for Mobile Advertising in the US:

When Meeker uses the word “opportunity”, she means “unfulfilled potential”: Mobile Ad Spend in the US alone should be $20B larger than it is. For reference, Google’s latest quarterly revenue was about $10B worldwide.

$20B is a big number, and it got me thinking. How is it possible that the industry’s richest and most sophisticated players are unable to grab such a big pile of money? They have the brains and the computers, they’re aware of the situation…Is there a deeper problem?

A too-easy answer is the market’s age: Mobile advertising is still in its infancy. But that’s an indefensible excuse: The first iPhones shipped in late June 2007, the Smartphone 2.0 era is now five years old. Both Android and iOS are prosperous platforms with bulging App Stores, they sell tens of millions of devices every month, close to half a billion this calendar year. Brand managers, advertising agencies, search engines, social networks, a myriad of vibrant startups keep trying, but mobile advertising barely moves the needle.

We get closer to the heart of the matter when we look at a common thought pattern, an age-old and dangerously misleading algorithm:

The [new thing] is like the [old thing] only [smaller | bigger]

We’ve seen this formula, and its abuse, before. Decades ago, incumbents had to finally admit that minicomputers weren’t simply small mainframes. Manufacturers, vendors, software makers had to adapt to the constraints and benefits of a new, different environment. A semi-generation later, we saw it again: Microcomputers weren’t diminutive minicomputers but truly personal machines that consumers could lift with their arms, minds, and credit cards.

The “Tech-savvy We” should know better by now; We should have learned, but the temptation — and the lazy easiness — of the “X=Y but for the form factor” algorithm continues to derail even Our most “different thinkers”. When the iPad was introduced, a former Apple Director described the offering thus: “It’s just a big iPod Touch” (which proves nothing more than that Steve Jobs didn’t burden his Board of Directors with loads of information).

At the D8 conference in 2010, in front of an iPad-toting audience, a bellowing CEO dismissed Apple’s tablet as just a PC, minus the keyboard and mouse. (And I’ll share the shame: On April 3rd 2010, I looked at my new iPad through PC goggles and lamented the Mac features that were “missing” from my new tablet.)

Now we have advertising on smartphones, and we’ve fallen into a comfortable, predictable rut: “It’s just like Web advertising on the PC, shrunk to fit.” We see the same methods, the same designs, the same business models, wedged onto a smaller screen.

PC advertising has successfully navigated different screen sizes. On a large screen you might see something like this:

Plenty of space for both advertising and content. Even on a smaller screen, the ads are unobtrusive:

But on a smartphone, this is the advertising that’s supposed to entice us:

…and this is the NY Times, one of the better mobile apps.

Mobile ads aren’t merely smaller, they have less expressive power, they don’t seduce…and they’re annoying.

Of course, there’s more to the smartphone misunderstanding than the fairly obvious screen size problem. There’s also a matter of how we use our computing devices.

When we sit down in front of a laptop or desktop screen, our attention is (somewhat) focused and our time is (reasonably) committed. We know where we are and what we’re doing.

With smartphones, we’re on the move, we’re surrounded by people, activities, real-world attractions and diversions. As yet another Mary Meeker presentation suggests, time spent on mobile devices is fragmented:

We’re not paying (a loaded word) the same type of attention as we do on a PC.

Business Insider features an InMobi report on mobile ads, with the following comment [emphasis mine]:

Those ads were served across 6 billion mobile devices. That’s less than $1 per device, per year—a tiny sum. That tells you how far mobile advertising has to go, and how massive it will become in the next five years.

The dollar-per-device statement is a fact, the assumption of “massive” growth is wishful thinking.

When I hear that there’s a mother lode of advertising revenue in location-based ads that are pushed to my mobile phone as I stroll down Main Street (with my permission…I hope), ads that offer succulent deals in the stores and restaurants I’m about to pass, I wonder: Do we want barkers on our devices? Is this the game changer for mobile advertising, yet another kind of spam? LBA may be a hot topic among marketers but the public is dubious, as this MobileMarketer article soberly explains:

The reality is that this scares consumers, rather than excites them. Mobile marketers need to realize that what gets them and their peers fired up does not necessarily move consumers in the same way.

And this…

According to [Rip Gerber, CEO of Locaid Technologies, San Francisco], marketers create their own privacy obstacles when they forget relationship, relevance and preferences in favor of short-sighted metrics.

If the industry hasn’t cracked the mobile advertising code after five years of energetic and skillful work it’s because there is no code to crack. Together, the small screen, the different attention modes, the growing concerns about privacy create an insurmountable obstacle.

The “$20B Opportunity” is a mirage.


Advertising: The trust Factor

advertising, online publishing By April 29, 2012 517 Comments

The digital advertising equation is outlined in the Nielsen graph below. The Global Trust in Advertising survey released this month (summary on Nielsen site and PDF here) underlines one key finding: For the vast majority of digital users, trust lies first and foremost in recommendations and opinions from their peers. As for the bulk of formats found on web sites or on mobile (such as various flavors of display advertising), they fall to the bottom of the chart. Nielsen’s study, based on 26,000 respondents in 56 countries, was conducted in Q3 2011.

Here are the expanded results (click to enlarge):

By themselves, these figures provide the perfect explanation for the current state of the advertising industry and, more specifically, for the digital ads segment.

Then, superimposing the ad revenue structure of most news medias companies would show an alarmingly symmetry: these businesses derive most of their revenue, allocate most of their effort to the least trusted ad vectors: display banners of various forms (on web, mobile or social), online video ads, etc.

The survey also provides a grim view of what people trust: they put more of their faith in a branded website (58% positive), a brand sponsorship (47%) ad, or even a product placement in a TV series (40%) than in a display ad on a website or on mobile (33% each)!

Even worse is the general distrust of advertising: on this list of 19 ad vectors, only 5 are are trusted by 50% of the respondents.

Let’s focus on a few items:

Recommendation from people I know: Trusted: 92% Not Trusted: 8%
Consumer opinions posted online: Trusted: 70% Not Trusted: 30%
Problem is: traditional medias don’t own these two segments. Social networks and consumer websites do. It’s a key Facebook’s strength to have people engage in conversations around brands and products. (IMO: a pathetic waste of time). Interestingly enough, the social network environment doesn’t boost the despised banners that much: When served on a social network, banners gain a mere 3 percentage points (at 36%) against a plain website or a mobile context. This must be a matter of concern for Facebook’s revenue stream: its unparalleled ability to pinpoint a target doesn’t raise the level of trust.

Editorial content such as newspaper articles. Trusted: 58%, Not trusted: 42%
Not surprising, but worth a bit more thought. It pertains to the level of trust readers put in the medium of their choice — carbon or bits. As expected, a fair and balanced product review written by a non-corrupted journalist (every word in the sentence counts) will be trusted. That’s what I call the Consumer Reports syndrome. This organization deploys 100+ professionals testers — and no ads beyond the ones for its own paid-for services and extra publications. Among its enviable base of 7 million subscribers, half pay $6.95 a month (or, a much better deal, $30 dollars a year) to access — this is good ARPU compared to other digital medias who only make a few bucks per year and per viewer in advertising revenue.

What does this mean for online outlets? They should consider beefing up the volume of product reviews, while preserving the reliability of their coverage. This also raises the question of the separation between journalism, advertorial and plain advertising. By no means should a publisher accept blurring the lines: beneficial on the short term but damaging on the long run. Having said this, when I see a growing number of anglo-saxons magazines making big money from high quality advertorials, I tend to believe online medias should consider sections of their websites or applications harboring such content. But two requirements need to be met: (again) no confusion whatsoever; and editorial standards for what will indeed carry commercial content, but in a well-designed, informative, visually attractive package. One important point to keep in mind: this type of service is typically out of reach for a Facebook, a Google or a Microsoft. But moving in such a direction requires unified thinking between publishers, the sales house (and the ad agencies they are dealing with) and the editorial team. A long way to go.

Ads served in search engine results:  Trusted: 40% Untrusted: 60%
Speaking of Google, here’s another interesting finding in the Nielsen survey: by and large, readers doesn’t trust search ads. To many viewers, text ads popping up on pages, on YouTube video or on emails, are seen as intrusive and irrelevant (to say the least: look at this hilarious site featuring inappropriate ad placements.) Still, search ads account for about 60% of online ad revenues. Why? Essentially because it provides a cheap, convenient, and totally disintermediated way of promoting a product. On this count, Google makes no mystery of its intention to vaporize the advertising middleman thanks to its superior technology.

The digital advertising party is just warming up. The business will continue its ongoing transformation. Currently, digital accounts for 16% of the global ad spending. It is likely to gain 10 more percentage points over the next five years. Not all markets nor products carry the same potential: According to the Financial Times, Unilever currently spends 35% of its US budget on digital, compared with 25% in Europe and only 4% in India. For news medias, the opportunity is that brands and agencies are still searching for the right formula. Brands face an incredibly complex challenge as they have to play with many dials at the same time: traditional ads, digital, web, mobile, apps, social, behavioral. And all are tightly intertwined, creating flurries of new metrics: ROI naturally, but also engagement, sentiment, feelings.

Like elsewhere in the digital world, the most successful players will be the genuine tinkerers. Software giant Adobe is said to spent 20% of its digital budget on experimental campaigns. They test, measure, adjust and iterate.

It is up to digital medias to go from passive to active in the quest for the right model. Their economics depend on it.


RSS Lenin’s Rope

advertising, online publishing By March 13, 2011 35 Comments

As I write this column, I wonder: Am I slipping into schizophrenia? My right brain is frying, overloaded by a never ending whirlwind of new digital tools, from hardware to internet applications. My left brain, which powers both my current daily job and this Monday Note, is cooler, skeptical. Both sides look on as the digital wave devastates professional journalism, shredding all value previously associated to it.

Take RSS feeds.

From a right brain perspective, RSS is an extraordinary invention. It provides all the ingredients of modern news consumption: unlimited choices, free access (including to otherwise paid-for sources), easy setup, inherently up-to-date, etc.

The first RSS iterations were rather crude. “Readers” (RSS client software) were spartan but extremely efficient. Now, we’re entering a new phase: RSS “arrangers” or “organizers” transform raw feeds into a rich reading experience, much closer to a newspaper or a magazine. The introductions of Flipboard and, last week, of Zite make Google Reader look like a Finnish psychiatric ward being replaced by a Norman Foster design.

Zite has generated a great deal of reviews (see Fast Company’s ). It’s a marked improvement over Flipboard. The latter is better designed, but offers not hierarchy to help arrange RSS feeds and other sources (such as Twitter, Flickr of Facebook feeds). Zite creates a magazine-like table of contents and, using a recommendation engine, appears to learn from your reading patterns. Further dissection is left to learned tech bloggers debating the pros and cons of the latest iterations of these multi-sources readers.

No matter how perfectible these personal readers are, they undoubtedly gestate the news publishing industry’s future. They successfully address two key factors in today’s media consumption:

– time allocation — I’ll tend to pick the service that helps me to be more productive
– the interface dimension, i.e. the increasing appetence for sleek and fluid designs.(Something Google still doesn’t get: instead of sticking to their Blue Cross Blue Shield-like, data-centric color code, they ought to go get their own Jonathan Ive).

Now, the left brain speaks up and asks two questions:

– what business model for the apps developers?
– how does this way of reading the news impact (positively or negatively) the business models of existing medias?

Advertising is the most likely answer to the first query. In theory, huge readership should yield nice revenue streams. At some point, B2B licensing could become feasible; large firms could fill bespoke versions of Flipboard with internal information, catalogs, manuals, etc.

The second issue is more tricky. Here are some examples.

Below is the Business home page in Zite. No ads, no nothing. In the red rectangle, a headline from Business Week:

Next is the Business Week article as it appears in Zite:

Look, Ma: No ads! No money!

Now, the original story as it appears on the BusinessWeek site:

As you can see, there are ads. Expensive ones, actually. According their official rate cards,  Bloomberg Business Week expects to charge a CPM (Cost Per Thousand) of respectively $115 for the banner and $144 for the square in the right column. OK. These are before-negotiation rates. But even after a 50% rebate, this is still huge: in Europe, rates for business sites are more likely to net a CPM in the $20-$30 range. Bloomberg Business week supports this price with its 12.9m unique visitors audience and its enviable  demographics. BBW brags it reaches 638,000 millionaires, which is half the Wall Street Journal’s purported score of 1.38m millionaires.

The wall Street Journal, precisely. As it appears in the Zite business page:

….Then, in a Zite full story page:

… and the original story, as you can see full loaded with ads (but, for some reason, not behind the paywall):

You get my point: by reinserting a story from an external source in its interface, Zite strips it of any value to the original publisher. Here, I refer to the ads sold in this particular editorial environment. And Zite isn’t even substituting its own value — thank God…

This could be fine for a Twitter feed, Facebook babbling, or any kind of user generated gruel. But it is not fine at all for professional publishers such as The Wall Street Journal Gigaom or Business Insider (I performed the test above for all three.) To a varying extent, these organizations line up writers and editors in order to produce their content. For them, this is the perfect lose-lose situation since their news material leaks into Zite, resulting into content they won’t be able to monetize. In return, they get nothing: no fee, no revenue share, zip.

The agent responsible of this economic absurdity is the RSS system. Medias are profusely generous with their RSS feeds. The New York Time offers no less than 167 streams of various natures. You can reconstruct an entire digital newspaper with those. In doing so, you remove all the value that was sold with this content by the NY Times ad sales people. And if you add feeds provided by great newspapers and magazines such as The Guardian, The Financial Times, The Economist (50 feeds!), The New York Review of Books and some good pure players and professional blogs like Slate, Poltico or TechCrunch…. You’ll end up making the best digital daily you can think of, because, you will end up to be the ultimate editor.

I cant’ help but consider the RSS  generosity shown by all medias (main street traditional as well as digital natives) as another iteration of Lenin’s rope: “Capitalists will sell us the rope with which we will hang them”…

At the risk of repeating myself, from a user’s perspective, I find this abundance of great content just fantastic. And as a journalism freak, I carry no nostalgia for the good old days. My concern is simply for the news business, for its ecosystem’s sustainability — i.e. the ability to collect and produce original information. That’ll be the subject for a next column.