Thursday, June 11, 2015

Mobile moves to digital ad domination

Any day now, we will cross another technological tipping point, as the majority of digital advertising purchases moves to mobile devices from desktops and laptops. 

The shift could happen before the end of this year or early in 2016, according to a variety of industry prognosticators. Either way, the move will be profound in the coming years, with eMarketer forecasting that mobile will account for 72% of the $93 billion expected to be spent on digital ads in 2019. 

The reason is simple: Mobile is where the eyeballs are. 

The Pew Research Center reported in a comprehensive study in April that more than 90% of Americans owned some sort of mobile phone and that two-thirds of the devices were smart ones.  Meanwhile, eMarketer.Com reported that Americans were spending just short of three hours a day on their mobile devices, as compared with only 24 minutes a day in 2010. 
With growing attention riveted on these pocket-sized media machines, it’s no surprise that ever more advertising dollars are shifting to mobile from the traditional print, broadcast and digital media. Mobile will capture nearly a quarter of the entire ad spend across all media in the United States in 2018 vs. only 3% in 2012, according to eMarketer. Assuming the projection holds true, mobile ad spending could be second only to television within three years, which captured 39% of the ad dollars in 2012 but is projected to shrink to 36% in 2018.  
Mobile’s momentum creates major opportunities and challenges for marketers and publishers, given the following superpowers: 

It’s addictive. Because mobile phones are always there and always on, they represent the most intimate, immediate and individualized media experience ever created.  In its April study, Pew found that 67% of smartphone owners frequently check their devices even when they don’t ring or vibrate, 44% said they slept next to their phones to avoid missing calls and 29% said they “couldn’t live without” their ubiquitous electronic companions. The powerful attraction that mobile phones hold over their owners overcomes the single greatest challenge facing advertisers: capturing a customer’s attention. 

It’s targetable. Because mobile phones have the capability of knowing who you are, where you are, where you are going, what you are reading and where you are shopping, they represent an unprecedented opportunity to send targeted offers to the right customer in the right place at the right time.  The more consumers use their phones, the more data is potentially available to marketers to create compelling and customized offers. Magna Global, the international ad agency, predicts that 82% of digital display ads will be bought and sold by computers, not Mad Men, by the end of 2018. That represents more than $25 billion in volume.  

It’s social. Although smartphones are used to surf the web, shop, play games, listen to music, capture images and sometimes even make telephone calls, the top activity among young consumers is interacting with their social networks. In its study earlier this year, Pew found that 91% of users between the ages of 18 to 29 used their smartphones to interact with their friends. If word-of-mouth is the Holy Grail of advertising, then it’s easy to see why marketers worship this platform.

It’s transactional. While your fingers may have done the walking in the olden days of the Yellow Pages, your thumb does the shopping today on a mobile device – pointing, clicking and buying in one, smooth motion. Global mCommerce sales are forecast by Goldman Sachs to triple to $626 billion in 2018, a sum almost equal to all the stuff sold on all the world’s digital platforms in 2013. The convenience and customization of mobile shopping streamlines commerce like never before. 

It’s measurable. The bundles of Big Data captured through mobile computing give marketers the ability to generate an unprecedented amount of actionable insights about consumers. As the art and science of targeting improve, marketers will further sharpen the pinpoint propositions they put to individual consumers. At the same time brands use data to boost the efficiency and efficacy of their advertising, they will tally clickthrough, sellthough and other metrics to continuously fine-tune their tactics.

It’s unavoidable. Because mobile advertising will force marketers to be accountable for the costs and results of their campaigns, advertisers are bound to hold publishers accountable for their performance, too.  

As mobile becomes the primary platform for digital – if not all – publishing, it will demand ever greater sophistication from every publisher aiming to succeed in the interactive realm. Publishers will have to have the technology and the personnel necessary to capture data, categorize customers, target offers, analyze performance and dynamically tweak their content and advertising offerings to continuously improve performance.  

In other words, legacy media companies hoping to succeed in mobile publishing can’t get away with simply selling buckets of miniaturized, run-of-site banners.   

© 2015 Editor & Publisher

Thursday, June 04, 2015

1 of 4 news start-ups flamed out

In 2009, David Boraks wrote an inspiring guest post here about the launch of his hyper-local news site in Davidson County, NC. Last week, he reluctantly shut it down, saying, “Alas, we haven’t turned it into a sustainable business.”

He is far from alone. One of every four news startups has failed, according to a survey I conducted of the 141 ventures listed in an online directory published by the Columbia Journalism Review since 2010. 

The survey methodology was simple. I searched for every site listed in the CJR list and counted the number that either were defunct or had not posted any new content since 2014. Because CJR depends on news entrepreneurs themselves to list their efforts, not all start-ups  or eventual crackups  are included. 

But the CJR sample is big and diverse enough to alarm those who hope grassroots journalism will replace the news-gathering resources that have been reduced over the years by newspapers and other local media. Since 2000, one out of three newsroom jobs has been nuked at the nation's newspapers, according a survey by the American Society of News Editors.    

The idled projects on the CJR list range from A2 Politico, an Ann Arbor (MI) effort which evidently has not been updated since 2013, to Yadkin Valley (NC) Sports, whose web address leads to a placeholder site with no content whatsoever. 

The toll also includes such high-profile, well-funded and ill-managed ventures as the Chicago News Cooperative and the Bay Citizen in Northern California. A late-breaking addition is the Bold Italic, a recently discontinued effort in San Francisco that had been funded by Gannett as a digital innovation laboratory. 

Although my survey did not delve into the circumstances contributing to the demise of each of the various news ventures, the cause of death in most cases likely was the one cited by Boraks in the farewell message to his readers in North Carolina:

“We’ve been unable to sell enough advertising to local businesses to sustain the sites, to pay me and, lately, to pay our staff,” he wrote. “At the same time, voluntary support from readers – which has always been limited – has dropped off.”

Although it is painful to watch  journalism entrepreneurs flame out, it is important to note that far more new businesses fail than succeed. Even in the technology world, where a handful of garage tinkerers indeed became billionaires, some 80% to 90% of all start-ups fail.

Failures occur in Silicon Valley in spite of the millions of dollars in reasonably patient venture funding that supports most nascent companies. Further, there is an abiding focus, if not to say frenzy, at nearly every start-up company on building the value of the enterprise as quickly as possible so it can go public or get bought by a sugar daddy like Google or Facebook. 

Neither of the above conditions is present at most news ventures, where the founders are admirably intent on afflicting the comfortable and comforting afflicted but put scant attention into funding the next payroll.  

As reported previously here, the Pew Research Center found that nearly a third of news start-ups spent less than 10% of their staff time on business development, while more than half said such activities occupied between 10% and 24% of their time. By contrast, 85% of the ventures said editorial tasks consumed at least half of their time. 

Unless and until people conducting news ventures take the business of their businesses as seriously as they take their journalism, the failures will continue.  

Saying he had struggled to save his news project from a number of near-death experiences over the years, Borak clearly was intent on building a sustainable business.  The lack of support for his effort among readers and advertisers suggests that the most intractable problem for news ventures may be a hopeless reluctance in the marketplace for paying for what journalists do.
Even dedicated newsmen cant afford to work for nothing. As rewarding and exhilarating as the experience was, Borak told his readers in his final missive, “We’re in debt, we’re exhausted and it’s time to go.”