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Will Consumers Pay for Advergaming?

BK wants its creepy mascot to be the king of all media. Will people buy what it's selling?

By James Belcher - Senior Analyst

According to the American Advertising Federation (AAF), advergames are low on the budget priority list for online advertisers. A November 2006 study by the group revealed that its members had only budgeted 3.6% of their media budgets for video games in 2007. This is up from 2006, when AAF members said that they would spend 1% of their online ad budgets on advergames in particular.

Despite the seeming bearishness on games as ad platforms, the same AAF study found that 23% of respondents thought that video games are "very" or "most" effective among all types of emerging media.

That 3.6% for 2007 mentioned in the first chart is an average, of course, and some firms are placing larger bets on this platform than their peers. One advergaming bull is Burger King, which recently started selling three Xbox and Xbox 360 titles for $3.99 each with the purchase of a Value Meal. One title, called Sneak King, invites gamers to "Sneak down alleys, roads and sidewalks to surprise innocent bystanders with a burger."

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ZigBee to Find Traction in Commercial Building Automation in 2008

Sensor networking technology ZigBee should start finding significant adoption in commercial building applications in 2008, according to a new study published by ABI Research.

There are three major markets for sensor networking: the home, commercial buildings, and industrial facilities, and ZigBee aims to cover them all. In the home, there are alternatives to ZigBee, and in industry there are some questions about its suitability. But according to senior analyst Sam Lucero, commercial building automation is a market where ZigBee is competitively positioned against other wireless sensor technologies.

"Commercial buildings represent a huge addressable market of field equipment currently using wired field buses to connect sensors and actuators with lighting, heating, ventilation, access control, and safety systems," he says. "ZigBee's features and functionality are very well suited to commercial building applications."

Of the five top vendors of building automation systems, which together control about 70% of the market, four — Johnson Controls, Siemens, TAC, and Trane — have introduced wireless products based on ZigBee in the past year, and the fifth — Honeywell — is moving toward doing so.

Over the next five years, up to 20% of commercial building automation system field equipment may "go wireless," seeking the lower costs, better control, and greater flexibility that such systems deliver. However, there are regional differences: in North America and Europe, commercial building markets are largely mature, while greater "greenfield" opportunities can be found in Asia. Asian markets are fragmented, and we may see a rash of acquisitions as the "big five" push into the region.

"In North America and Europe, this is a tough and conservative market," says Lucero. "We are hearing that building owners and managers in Asia are more interested in using wireless than their counterparts in North America and Europe, where it is more a question of replacing existing wires." ABI Research also believes that a lot of the growth will come from new, application-specific deployments in selected vertical industries.

Lucero concludes that, "The mainstream market is clearly moving ahead with ZigBee for automation, so smaller players that do not have a wireless strategy formulated (or are in the process of creating one) will be at a disadvantage."

Source: ABI Research

Chinese mobile video to jump with 2008 Olympics

Staying in the Asia-Pacific region, a new ABI Research study forecasts the Chinese mobile video market will grow to more than 32 million users in 2008, a spike attributed to subscriber interest in the Beijing Summer Olympics. According to ABI, roughly 27 percent of the consumer base will access mobile video via broadcasting technology, while the remaining 73 percent will employ unicast streaming technology.

Ongoing standards debates will no doubt impact the Chinese market, ABI added. "It is likely that local media groups and TV stations will deploy DAB [the first phase of Chinese mobile multimedia broadcasting standards] initially, and implement T-DMB [a terrestrial version of SK Telecom's mobile video format] at a later date," ABI research director Jake Saunders said in a prepared statement. "The Chinese government will give preference to a standard that will be used in the 2008 Olympics, and DAB has been listed as one of the broadcast services that will be available at the Beijing Games."

Source: FierceMobileContent and for more on Chinese mobile video growth read this release

Cyber Fraud Eats into Retailers' Revenues

  • Posted: Friday, December 22, 2006
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  • Author: pradhana
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  • Filed under: Online Services

In 2006, Web merchants in the US and Canada will lose $3.0 billion to online payment fraud.

By Jeffrey Grau - Senior Analyst

Web merchants are usually the ones to take the loss from online credit card fraud. CyberSource, a provider of secure electronic payment and risk management solutions to organizations, estimates that in 2006 Web merchants in the US and Canada will lose $3.0 billion to online payment fraud. While the volume of online fraud is increasing, its percentage of online retail sales is decreasing annually. In 2006 the value of online fraud will be 1.4% of total online sales, down from 1.6% in 2005 and 3.6% in 2000.

Fraudulent orders can be presented to merchants in two ways: as a chargeback from the merchant bank or as a direct request from a consumer for credit. In 2006, 65% of fraud claims were from customer credits, compared with 35% from chargebacks. By dealing directly with customers, retailers avoid penalty fees levied by the credit card issuers and show losses that understate the real amount of fraud.

The cost to retailers of online payment fraud is higher than the $3.0 billion in 2006 attributed to the monetary value of stolen goods and associated delivery/fulfillment costs. CyberSource found that the median amount Web merchants spend on fraud management is 0.3% of annual online revenues, with 16% of e-tailers spending as much as 4% or more of online revenues to manage fraud, up from 12% in 2005. The bulk of fraud management spending (46%) is for staff to review orders manually. This percentage increases to an average of 59% for merchants with greater than $25 million in online revenues. The remainder of fraud management is allocated to third-party tools (28%) and internal tools and systems (26%). Tools constantly need to be upgraded to keep up with increasingly sophisticated criminal techniques.

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The Holiday Season Breaks Records Again and Again

The crashing you hear is good news for online retailers.

First, the one-day record for US online retail sales was set on Cyber Monday 2006, November 27, when sales reached $608 million.

According to comScore Networks, a mere one week later, on Monday, December 4, a new single-day spending record was established as consumers spent $647 million online — $39 million more than the total spent on Cyber Monday.

But, as the old come-on says, "You ain't seen nothin' yet!" On Monday, December 11, consumers spent $661 million, breaking the record for a third time this year.

And only two days later, on Wednesday, December 13, the record was broken again, with $667 million spent online in a single day.

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Online Video Becomes a Real Business

Welcome to the MoneyTube.

eMarketer estimates that more than one-third of the total US population ages 3 and older viewed video on the Internet at least monthly during 2006, and in three years more than half of all Americans will be part of the online video audience.

"At this point, nearly 60% of all Internet users watch video regularly, and that share will increase to over 80% by the end of 2010," said David Hallerman, eMarketer senior analyst and the author of the new Internet Video Audience report.

There were will be 108 million US Internet video users this year, and 157 million by 2010.
But do millions of viewers constitute a market?

According to "The Video Store Goes Virtual: The Global Outlook for Online Video Sales" report from Strategy Analytics, yes, online sales of television shows, movies and other prerecorded video products will become a billion-dollar business — next year.

Although video-download sales made through iTunes and other online sources will total just $298 million this year, Strategy Analytics predicts that by the end of 2007 the online video market will grow to $1.5 billion.

"2007 will be remembered as the year in which online sales of prerecorded video finally become a real business," said Martin Olausson of Strategy Analytics. "Just like with music, online delivery of video content is now emerging as a viable and increasingly important distribution channel for content owners."

By 2010, the report estimates that global revenues from online video sales, rentals and subscriptions will reach $5.9 billion, and account for 8% of total home video industry revenues.

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E! Networks' Asian persuasion

Entertainment news specialist E! Networks has inked new deals for more than 800 hours of programming in the Asia Pacific, continuing its roll-out into Korea, Malaysia and the Philippines.

Season one of E!-owned Style Network series Style Her Famous, specials Party Fabulous and Wedding Altered, and several episodes of E! True Hollywood Story will now be available on TV, VoD, mobile and broadband on Korea's O'live Channel.

Cable entertainment channel ETC in the Philippines has picked up E! News, The Daily Ten, Sexiest, seasons one and two of The Girls Next Door and House of Carters, Number One Single, Love's A Trip from E!; plus Style Her Famous and seasons one and two of Try My Life from Style.

Sister channel ETC Second Avenue in the Philippines will soon add seasons one to four of E!'s plastic surgery docusoap Dr 90210 to its schedule. Over in Malaysia, NTV7 has picked up Beyonce Uncut and US Weekly's Hottest Hollywood Style.

The LA-based lifestyle network also expanded on its E! Everywhere initiative, announcing a VoD deal with Hanaromedia, a subsidiary of Korea's Hanaro Telecom.

Read more (source: c21Media)

Social Communities Go Mobile: 174 Million Members Forecasted by 2011

A new ABI Research Brief has found that "mobile social communities" currently count nearly 50 million members worldwide, a number that is expected to reach 174 million in 2011.

"The rapid rise of online social communities — gathering places such as MySpace and Facebook — has done more than bring the 'pen pal' concept into the 21st century," says vice president of research Clint Wheelock. "It has created a new paradigm for personal networking. In a logical progression, many social communities are now based on the mobile phone and other portable wireless devices instead of (or as well as) the PC. Such mobile social communities extend the reach of electronic social interaction to millions of people who don't have regular or easy access to computers.

"The brisk pace of mobile social community growth means opportunities for new entrants hoping to join the established players such as SMS.ac, AirG, and Jumbuck that provide the technology and marketing behind leading mobile communities.

Opportunities to monetize mobile social communities fall into several main categories. Mobile operators profit from the data usage that underpins all mobile community activities they carry, and in some cases from monthly subscription fees as well. Companies can sponsor special interest communities that relate directly to their brands or services. For instance, MTV Asia sponsors a music forum for Asian users, where members talk about music. (In fact mobile social community sites will see their greatest growth, on both a percentage basis and absolute number of members, in the Asia-Pacific region.) The self-profiling nature of these communities means that advertising can be targeted to specific niches with great accuracy. Many mobile communities also offer downloadable merchandise for sale — ringtones or images, for example.

"What would help drive these communities is for more operators to sponsor them," Wheelock suggests. "In the US, operators have not yet put much backing behind them, which means that it's not simple for a mobile subscriber to get a new phone and immediately join an online social community. They have to seek out a third-party provider. But that's going to change rapidly."

Source: ABI Research

The Mouths Have It

It is still a good idea to look someone right in the eye.

The Internet has been highly promoted as a word-of-mouth (WOM) medium, but according to Ed Keller, CEO of the Keller Fay Group, the majority of WOM conversations take place where they always have, offline.

Fittingly, Mr. Keller's remarks were spoken at the "Word of Mouth Marketing Summit & Research Symposium," and reported by MediaPost.

According to Mr. Keller, a study by the Keller Fay Group found that nearly 90% of WOM conversations are still spoken, with 70% of them occurring face to face and 19% on the phone.

Only 4% of WOM conversations are conducted via e-mail, and another 3% are conducted via instant messaging.

Obviously, the old medium of in-your-face conversation is still winning, uh... hands down.
The study did find, however, that the Internet is effective at inspiring WOM conversations — only TV is more effective.

Television inspires 11% of WOM conversations, the Internet 9%, with other media far behind.

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Young Women Like Tech Gadgets

Gen Y women have digital cameras, phones and video games on their lists.

By Debra Aho Williamson - Senior Analyst

Marketers and retailers of consumer electronics should make a stronger effort to reach young women, according to a study by Vertis Communications.

Young women from Generation X (those born 1965-1976) and Generation Y (those born 1977-1994) are increasingly tech-savvy, both in their technology usage and their purchasing patterns.
Of Gen Y women surveyed, 37% plan to purchase a computer in the next 12 months, vs. 28% of total adults. They are also more likely to say they plan to purchase digital cameras, advanced mobile phones and video gaming systems.

According to the study, 83% of Gen X women and 73% of Gen Y women have Internet access at home.

Read more

SK Telecom, Staccato Deploy Ultra Wideband WPAN Mobile Phone Services

Staccato Communications and SK Telecom, the largest mobile phone and broadband operator in Korea, today unveiled plans for the global delivery of Ultra Wideband (UWB) wireless personal area network (WPAN) mobile phone services. The adoption of UWB by one of the largest and most innovative mobile carriers today will result in a host of new mobile handset applications.

SK Telecom selected Staccato for the company’s leadership in UWB silicon and for the competitive advantages inherent in the company’s Ripcord™ single-chip, all CMOS-based family of solutions. As a result of this partnership, customers, for the first time, will be provided with increased choices for content delivery from access points, connecting mobile phones to larger displays (PC, TV, Auto), connecting mobile phones to the PC ecosystem, and sharing profiles and content from one user to another through personal area social networking (PASN).

Services developed and launched by SK Telecom and Staccato will be standardized and offered worldwide to other operators after initial launch in Korea. With this introduction of UWB WPAN mobile phone services, customers will have expanded options and bandwidth for entertainment content delivery to their mobile devices. This means that users will now experience mobile social networking by communicating directly with other mobile users or from kiosks at 480Mbps. As a result, individuals will be able to connect based on one another’s proximity. This milestone marks the beginning of a revolution in the mobile handset market by employing WiMedia ultra wideband technology for 480Mbps WPAN connections.

With the choice of the WiMedia Common Radio Platform as the foundation for the project, SK Telecom and Staccato are developing together applications using several protocols. This benefit is enabled by Staccato’s PIK MAC (Medium Access Control) technology, which is a Protocol Independent Kernel, based on a custom implementation of hardware acceleration and ARM9 software control. This patent-pending technology enables the simultaneous operation of Certified Wireless USB, WiNet, Bluetooth 3.0 and other potential protocols at speeds up to 480Mbps. Products will initially launch with WiMedia radios using spectrum below 6GHz (band group 1, band 3) and add above-6GHz operation when the WiMedia Alliance completes the certification process for these bands.

“The SK Telecom–Staccato announcement is significant for at least three reasons. First, it signals adoption of UWB in mobile handsets much sooner than anyone had anticipated. Second, it shatters the assumption that a mobile carrier is not willing to use UWB products operating below 6GHz. Lastly, but perhaps most importantly, the value of the UWB applications and services envisioned by SK Telecom looks like it could be very high and very beneficial to both the users and the carriers,” said Fiona Thomson, market analyst, IMS Research.

“SK Telecom is known as the most innovative and aggressive mobile operator in the world due to our history of not only bringing new mobile features to market before our competitors, but also defining such new features that other operators quickly adopt. Staccato is instrumental in furthering this vision by offering the solution that meets our requirements of price, high bandwidth and low power. In order to successfully deploy these mobile devices, we needed a solution based on single-chip CMOS. Staccato is the only company that has accomplished that product design with their Ripcord low-cost, small form-factor wireless solutions,” said Dr. Jong Tae Ihm, vice president and head of the Mobile Device & Access Network R&D Center for SK Telecom.

“From the beginning, Staccato knew that single-chip CMOS was the only viable option to achieve the cost, power and space profile required by handheld products like cell phones, and this endorsement from a major mobile carrier further validates our early path and Ripcord device family. As one of the architects behind the WiMedia PHY and MAC, WiNet and Certified Wireless USB specifications, SK Telecom recognizes that we have the relevant UWB leadership expertise to offer,” said Marty Colombatto, chairman and CEO for Staccato Communications.

“With the mobile handset market representing nearly one billion units worldwide annually, the decision of SK Telecom to adopt the WiMedia Common Radio Platform means a tremendous boost to the potential market for WiMedia applications and Staccato in particular. The impact of this will not remain limited to one application, but will bring an entire array of new features and applications to the mobile customer.”

For the first phase, a Korean-based, leading manufacturer of handsets worldwide will be the handset developer for the new WiMedia UWB handsets.

Source: ABI Research

More Media, More of the Time

  • Posted: Saturday, December 16, 2006
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  • Author: pradhana
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  • Filed under: Market Survey

Eighty percent of kids and teens juggle multiple media.

By Debra Aho Williamson - Senior Analyst

A new analysis from the Kaiser Family Foundation finds that kids and teens are least likely to 'multitask' when they are watching TV or playing videogames. The activity that is most multitasked? E-mail.

When watching TV as a primary activity, young people spend 45% of that time multitasking with other activities, such as eating, doing chores or engaging with other media. When doing computer-related activities, such as looking at Web sites or instant messaging, they are multitasking nearly two-thirds of the time. And when doing e-mail, they are multitasking nearly 80% of the time.

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New Headache for Music Industry

  • Posted: Friday, December 15, 2006
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  • Author: pradhana
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  • Filed under: Market Survey

"I'll take Madonna's 'Jump,' you can have Tiesto Ft. Maxi Jazz's 'Dance4life.' "

In a study of nearly 1,500 6-to-13-year-olds in Britain, released jointly by the newsweekly New Media Age and Intuitive Media, children admitted that they use the Bluetooth wireless feature of their phones to swap music — without the consent of copyright holders.

Well, duh!

Mobile phone usage — and ownership — is starting younger. The survey found that 72% of the 6-to-13-year-olds questioned owned their own mobile phones, and 53% of 8-to-9-year-olds did too.

Nearly a third of those children, 29%, said they share music with their friends rather than paying for it — and almost half (44%) of those who did not currently share music on their mobiles said they wanted to, so the problem is certain to grow.

Read more

Internet Adoption: The Long Tail at Work

The saturation point has yet to be reached.

By Ben Macklin - Senior Analyst

Despite the fact that the Internet has been widely available for over a decade in most developed countries, recent data from Nielsen//NetRatings show that there continue to be new converts to the technology. Active at-home Internet users in the US grew 3.1% between October 2005 and October 2006, reaching 146.5 million. Countries such as France and Spain recorded growth of over 20% in the same period, while there was a strange drop in the number of Internet users in Italy.

Early in the new year, eMarketer will re-examine its global Internet user forecasts, but it is useful now to revisit the definition of an "Internet user." Nielsen//NetRatings, which claims to measure 70% of the world's Internet population, always publishes two figures when assessing the size of the Internet audience in a country. One figure represents the total digital media audience and the other represents the active digital media audience. The former (larger) measure could be said to represent the number of people with Internet access (usually at home and work), while the latter (smaller) measure represents those who have Internet access and use it regularly.

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Spending on Contactless Payments Hardware, Software to Reach $800 Million

With adoption driven by some of the world’s largest card associations and banks, wireless operators and merchants, spending on contactless payments hardware and software will reach $870 million by 2011, up from just $260 million in 2006, amounting to a compound annual growth rate of 27%, according to a new study from ABI Research.

“Initial contactless payments deployments have already shown the ability to speed transactions and capture previously cash-only transactions for financial service networks,” says senior analyst Jonathan Collins.

Two key applications are now driving adoption: proprietary transportation ticketing, and open credit, debit, and e-purse payments tied to financial service networks. At present, transportation ticketing represents the majority of contactless payment adoption around the world, but that position will be overtaken by adoption of open systems payments within the next few years.

However, uptake is taking place at varying rates across regions, national markets and market segments, as contactless payments are added to existing payment networks and environments. “In North America, open system payments are driving the contactless adoption,” says Collins. “In Europe contactless ticketing systems are spurring interest in contactless payments, but it is in Japan and South Korea that contactless technology is making the greatest headway. Built on the foundations of contactless transportation ticketing and with the additional boost from contactless payment-enabled mobile handsets, these markets are leading the way in realizing the potential for contactless payments.”

Elsewhere, while mobile handsets will develop to enable contactless payments, ongoing debate over how payment applications will be deployed and managed on wireless handsets has delayed the rollout of mobile handset contactless payments in the US and Europe.

Such hurdles slow contactless technology’s evolution from promising first deployments to a widely used, mainstream payment technology. Technology and business issues must be resolved to see open systems on mobile handsets and accepted at existing contactless-equipped transportation installations. In addition, consumers have to be comfortable with the use of the technology and confident in the security of contactless payments.

Source: ABI Research

"Laundry list" of hurdles for mobile advertising

The WSJ is running a lengthy Q&A with Courtney Jane Acuff, an associate director of Denuo, the Publicis Groupe consultancy about the hurdles facing the mobile advertising sector:

  • Customer concern over privacy
  • Lack of opportunities (inventory)
  • Marketers still need to understand and learn how important mobile marketing is
  • Consumers are not ready for video ads
The marketplace is so crowded with players: carriers, advertisers, aggregator agencies and so on--difficult for first time mobile marketers to know who to call.

Read more: Inside Mobile and Wireless

Pearl cannibalizes other BlackBerrys

SeekingAlpha is running a provocative column from Citigroup's Daryl Armstrong on Research in Motion's competitive positioning. Armstrong notes that the Pearl is selling very well in the November quarter--he's even upped his estimate from 400,000 to 720,000 Pearl handsets sold this quarter. Despite the growth, RIM's market share has not significantly expanded, which means the Pearl only cannibalized the handset makers' other models.

Armstrong says anecdotal evidence from the retail locations indicate that a mere 30 percent to 40 percent of Pearl sales are going to non-BlackBerry users. At the same time, Cingular's Pearl launch saw some great sales, but the carrier is pushing the Pearl rival BlackJack more than the BlackBerry device.

Source: FierceWireless.

For more from Armstrong: Citigroup's Daryl Armstrong: Sell Research In Motion ASAP

ALSO: BlackBerry maker RIM is suing the maker of the BlackJack over the similarity of the names. Article.

China tightens grip over digital content

  • Posted: Thursday, December 14, 2006
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  • Author: pradhana
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  • Filed under: Digital Content

Chinese officials announced new controls over the nation's online and mobile multimedia industries, ordering distributors to submit all imported content for approval by government censors. According to a posting on the Chinese Culture Ministry website, the moves are intended to encourage growth of a "civilized and healthy" Internet and to protect Chinese content developers from losing market share to international rivals.

The new rules apply to all websites and mobile carriers that distribute music services, lawmakers said, although distributors of Chinese music won't be subject to the same approval processes as firms that license content from other nations. Officials also banned the establishment of foreign-financed music distributors, and will require gaming providers to file monthly reports confirming their platforms are free of material deemed politically sensitive, violent or sexually graphic.

Source: FierceMobileContent. For more read this BusinessWeek article.
Related article: Chinese carriers sign deals with state broadcaster .

Fusion Launches Non-PC VoIP

Fusion Telecommunications International, Inc. today announced the launch of Mobilink, a revolutionary new service that allows subscribers to access its retail Efonica VoIP services from their mobile phones, without Internet access or special software.

Mobilink allows subscribers to enjoy the low cost and excellent quality of VoIP from their mobile phones. Subscribers simply dial an access number, which automatically authenticates their Efonica member status and allows them to call virtually any number in the world at savings of up to 80% compared to their mobile carrier. This service will also be available from landline telephones.

An important Mobilink feature allows users to call any in-network Efonica subscriber worldwide for free by simply dialing '10,' the Worldwide Internet Area Code, prior to the registered phone number of the called party. Subscribers to Mobilink also have access to Efonica's full suite of Internet based VoIP solutions. Consumers subscribe to Mobilink by visiting Efonica's new website at www.efonica.com and completing an easy registration process.

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Global In-Building Wireless Deployments to Increase 20%

  • Posted: Wednesday, December 13, 2006
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  • Author: pradhana
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  • Filed under: Wireless Services

Customers’ dependence on wireless communications and their adoption of high-bandwidth 3G cellular services are the primary drivers of the global growth of in-building wireless systems that extend and create wireless coverage indoors. According to a new study from ABI Research, deployments of these systems are expected to result in revenues in excess of $3.6 billion by 2011.

Says ABI Research analyst Dan Shey, “People spend a significant amount of time indoors and not surprisingly they also expect indoor access from their outdoor wireless service. But indoor coverage does not just satisfy a need for service convenience; it is also used to improve business productivity.” As a result, commercial buildings will be a major focus of the in-building wireless systems industry, affecting carriers, businesses, building owners, equipment manufacturers and solutions providers.

Deployments and revenues of in-building wireless systems will be dominated by distributed antenna systems, commanding over 60% of the deployments and over 75% of the equipment revenues. These systems are most economical for buildings larger than 100,000 square feet, a size where coverage and signal level capacity from outdoor networks into buildings begin to fall significantly.

For buildings smaller than 100,000 square feet, repeaters are the primary solution; however repeater shipment growth will slow due to replacement by picocells and femtocells. According to Shey, “Repeaters are a cost effective way to provide coverage inside buildings but they do not add capacity, which will be needed as 3G services usage increases. New picocells and femtocells which can be backhauled via an IP connection are a cost effective way to add capacity and coverage.”

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CBS Interactive banks on "Next Top Model" mobile game

CBS Interactive announced it would team with mobile content developer Artificial Life to create what the two companies are calling the first avatar-based wireless game tied to a network television show, in this case the Tyra Banks-headlined reality program "America's Next Top Model."

The avatars in question are essentially animated versions of actual "Top Model" contestants: players select models and manage their careers, supervising fashion, makeup, workout routines and even leisure pursuits. Points accumulate as the models pose for photo shoots or get sufficient beauty sleep, but poor career guidance can result in client complaints, and if scores are especially low, the virtual models can even "fire" their managers and seek new representation.

"'America's Next Top Model' is a natural jumping off point for us to introduce this gaming technology given the show's young and mobile-savvy demographic," CBS Interactive VP of wireless Cyriac Roeging said in a prepared statement. "This offering furthers our strategy of extending our top brands and content to multiple platforms."

Source: FierceMobileContent. For more on the "America's Next Top Model" game:- read this release.
Related stories: CBS launches controversial Big Brother Mobile.

Singapore government funds mobile game development

Singapore's federal Media Development Authority announced INVIGORATE, an initiative created to provide funding for mobile game developers. The program stipulates the MDA will provide up to $25,000 for 10 Singapore-based mobile gaming studios as well as match startups with mentors from the local and global game publishing community. Applications are accepted from now until February 9, 2007.

Singapore's Economic and Development Board earlier earmarked $1 billion for game development, while its National Research Foundation has allocated $5 billion for research and development in markets including interactive and digital media.

Source: FierceMobileContent. For more information read this INQ7 article

New E-Mail, Old Challenges

'Who gets this stuff and who reads it?'

As long as there has been advertising, marketers have been not only trying to identify their customers and potential customers, but also trying to understand what makes them tick and which campaign elements make them buy and which do not.

Some things never seem to change.

At least that is the conclusion of a new survey from Silverpop, an e-mail service provider (ESP), conducted by JupiterResearch.

In a poll of 422 e-mail marketers, 34% of them said that a lack of customer data is the largest hurdle they face. Additionally, 32% said they struggled with analyzing campaign results.

In other words: "Exactly who did we send this mailing to and what did the responses (or lack thereof) mean?"

Read more

Only 1 in 20 Internet Video Users Has Purchased a Movie Online

A new ABI Research survey of Internet users in North America found that only 5% of those who watch video on the Internet have rented or purchased a digital movie download, a lower overall number than indicate they have downloaded a movie free from a peer to peer sharing site. Movie downloads, both legal and illegal, remain the least watched genre of online video on the Internet, where short-form content such as sports and news clips is watched by nearly 7 in 10 of those that watch Internet video.

"The vast majority of those watching content online are watching short-form content such as news and sports clips," said research director Michael Wolf. "Older users in particular watch primarily news and sports, while younger users are watching more entertainment content, including viral media provided by sites such as YouTube.

"When ABI Research asked consumers why they chose not to watch movies downloaded or streamed from the Internet, the biggest reason was satisfaction with existing cable and satellite services as well as DVDs. Nearly half - 48% - indicated they would never purchase a movie online for download because they were satisfied with their current providers and the rental market.

"Despite the growing interest in the pay market for Internet-delivered video, perhaps the biggest remaining hurdle to widespread adoption is that the status quo usually gives consumers a vastly superior, and often less expensive experience than Internet-delivered content," said Wolf. "The industry needs to develop reasons and business models that increase overall consumer interest in Internet delivered video, including allowing for easy transfer and better viewing on the large screen."

Source: ABI Reasearch

Internet Ad Growth Drives Total Media Market

New eMarketer analysis shows that Internet budgets about to catch up to radio spending

US Internet advertising spending is expected to reach $16.4 billion in 2006, a 30.8% gain over last year's $12.5 billion figure, according to new estimates from eMarketer. This estimate revises eMarketer's more conservative prediction in September, when many analysts expected Yahoo's third-quarter revenue wobble to have a larger effect on the overall market than it has.
The new estimate emphasizes how online ad spending is taking a larger chunk out of the overall media spend each year. In 2006, US marketers are expected to devote 5.8% of their budgets to the Internet, and by 2008, this share will rise to 8.1% of the total.

Read more

Online Ad Spending to Outpace Overall Ad Market Growth

Internet advertising continues to gain on other ad categories.

ZenithOptimedia forecasts that global Internet advertising spending will grow by 28.2% in 2007, at the same time ad spending in other media will grow by only 3.9% — in other words, online ad spending will grow seven times faster.

This disparity speaks volumes about the ongoing seismic shift in the world of advertising. However, the shift to the Internet among US marketers is even more dramatic. eMarketer's latest ad spending projections were released on Wednesday (see Internet Advertising Will Weather a Sluggish Economy). These put growth in US online ad spending at 18.9% in 2007, within an entire advertising industry set to grow by only 1.4%.

ZenithOptimedia also projects that the Internet's share of worldwide total ad spending will increase from 5.8% in 2006 to 8.6% in 2009.
The researcher's data show worldwide spending on Internet advertising exceeding the amount spent on outdoor advertising this year and surpassing even radio ad spending in 2009.

Read more

Related topic: Internet Advertising Will Weather a Sluggish Economy

China’s Homegrown Digital Media Standards; End Of Piracy?

  • Posted: Friday, December 08, 2006
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  • Author: pradhana
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  • Filed under: Digital Content

by Rafat Ali - PaidContent

China has come out with another home-grown digital media standard, this time for the DVD, the general idea being that with these local standards, Chinese players won’t have to pay royalities to foreign companies on their standards. Areas where China has acted include Wi-Fi, CDMA mobile phone equipment, mobile TV distribution and now DVDs. For DVD, its EVD, or “Extended Versatile Disc” standard is being revived again, after a failed effort a few years ago.

Chinese electronics makers have revived the campaign on a massive scale, saying they plan to switch completely to EVD by 2008 and stop producing DVD players. Electronics makers, film studios and retailers are promising to sell EVD discs and players. HD DVD, Blu-Ray and now this. Promoters of EVD say it provides crisper pictures and sound, bigger recording capacity and better anti-piracy features than standard DVD.

William Moss on the CNET blog has a good point: Even if the government mandates EVD as the format for Chinese content, its success hinges upon China’s movie pirates. Either the pirates will need to support EVD, or they need to be stamped out so that legitimate content can rule China’s shelves. That remains true for other digital standards China is trying to promote.

Source: PaidContent

Ericsson, NRK launch customized mobile TV advertising trial

Swedish manufacturing giant Ericsson and the Norwegian Broadcasting Corporation (NRK) today announced what the two companies claim is the first-ever trial of personalized mobile television advertising. Agency partner Proximity Oslo will provide content for the two-month trial, which enables participants to view live or on-demand content from two NPK television channels and five radio outlets supported by interactive, customized advertising tailored to each individual user's age, gender, location and personal interests. The ads will arrive in formats including video, banners, ticker texts and branded downloadable content.

"We are now welcoming the mobile TV of tomorrow," said NRK director of development Gunnar Garfors in a prepared statement. "Bonuses include fast channel-switching, built-in interactivity and easy access to new services. And many viewers even appreciate adverts, as long as they are relevant and may help lower the price of the service."

Source: FierceMobileContent, for more info read this release

Mobile Entertainment Content to Skyrocket

Mobile games and mobile TV are set to lead the way.

By Ben Macklin - Senior Analyst

In a new report, Juniper Research has estimated that the total global mobile entertainment market (including gambling, adult content, mobile games, mobile music, mobile TV and infotainment) will be worth $17.3 billion in 2006 and rise to $76.9 billion by 2011.

With over two billion mobile phone subscribers worldwide and an increasing number of them upgrading to 2.5G and 3G phones, mobile content is one area of certain growth. Juniper Research suggests that mobile music currently makes up the largest proportion of the mobile entertainment content area, with ringtone downloads making up 80% of mobile music revenues. However, by 2011, the UK-based research firm believes that revenues generated from mobile games and mobile TV will exceed mobile music revenues. Furthermore, despite the recent legal restrictions in the US on Internet gambling, mobile gambling is expected to be a sure bet in Asia and Europe and will also exceed revenues from mobile music, according to Juniper.

Currently, North America makes up only 14% (approximately $2.4 billion) of the total global market for mobile entertainment content. Asia-Pacific is the dominant region worldwide for mobile content, followed by Europe, but North America will begin to take an increasing global share of revenues in the next five years, according to Juniper data.

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Internet Advertising Will Weather a Sluggish Economy

Growth in Internet ad spending will slow next year before rebounding in 2008.

By David Hallerman - Senior Analyst

The latest eMarketer estimates put total US Internet ad spending at $16.4 billion this year, a 30.8% gain over last year's $12.5 billion. The prime engine behind such strong growth is Google, whose US online advertising revenues are expected to be more than $4 billion (after subtracting traffic acquisition costs paid to network partners).

Impressive results will continue in 2007, with total US online ad spending reaching $19.5 billion. However, at 18.9%, the growth rate will clearly be more modest. This will be due to overall economic weakness, with US real GDP growth expected to fall from over 3% in 2006 to around 2% in 2007. It is, however, noteworthy that even with a softening economy, growth in online ad spending will be 17.5 percentage points higher than growth in total US ad spending (set to inch up by only 1.4% next year).

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Search Ad Spending: The UK Punches Above Its Weight

Search advertising spending per capita is bigger than in the US.

By Ben Macklin – Senior Analyst

By any measure, the United Kingdom is one of the most well-developed Internet markets in Europe. According to eMarketer, approximately 50% of the 60 million people in the UK are regular Internet users, and by the end of 2006 nearly 50% of all households will have a broadband Internet connection. Interestingly, many American brands are among the 20 most popular Web properties in the UK, showing how well US brands have translated well "across the pond."

One area of particular growth within the UK Internet market has been in online marketing spending. According to a recent survey from Atlas Solutions, search advertising is the digital marketing medium most likely to grow over the next 12 months, according to survey respondents, followed by marketing within social communities.

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Seniors show little interest in mobile downloads

According to a new report issued by ICM Research and commissioned by the British Internet Broadcasting Company, only 16 percent of respondents ages 55 to 64 are interested in downloading music to a mobile device, in contrast with 54 percent of subscribers between the ages of 18 and 24. Moreover, not a single senior respondent surveyed by ICM expressed interest in downloading movies or other video content to their wireless handsets.

"It is time for everyone to join the download revolution, and there is no need for downloading to be a preserve of the youth," said Paul Hague, managing director of BiBC, in a prepared statement. "There is so much downloadable content and archived material that is ready-made for old people with niche interests."

Source: FierceMobileContent, more information read this Computing article

Telematics Markets in Japan and South Korea to Experience Double-Digit CAGR

  • Posted: Wednesday, December 06, 2006
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  • Author: pradhana
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  • Filed under: Market Survey

A new ABI Research study forecasts that in 2011 the aggregate Japanese commercial telematics market will reach $267 million, up from a 2006 level of just over $120 million, amounting to a compound annual growth rate of 17%. In the same period, the South Korean market, an emerging opportunity for commercial telematics services, will show very strong growth, accounting for a high CAGR of between 38% to 41% in subscribers, hardware shipments, and market values.

With intense competition in the logistics environment, freight carriers in Japan and South Korea have faced a heavy workload in relation to vehicle allocation and the operational management of trucks.

According to Seoul-based ABI Research senior analyst Andy Bae, "Carriers have come to realize that fleet management systems allow them to achieve more efficient vehicle allocation and lower distribution costs. Increasingly, carriers are pursuing operational innovation through fleet management systems which they perceive as powerful tools to achieve a competitive edge."

Along with fleet management systems for freight trucks and construction vehicles, varied applications for commercial telematics, such as EMS (Emergency Medical Service), public transportation, rental cars and taxis, and municipal fleets, are emerging."

Market drivers in the region are lowered integration and implementation costs," notes Bae. "With the advent of GPS-enabled mobile phones, even small and medium enterprises in Japan and South Korea have comfortably adopted commercial vehicle telematics services including fleet management. The GPS-enabled phone will provide key momentum for commercial telematics services in the Japanese and Korean markets."

With location based services proliferating via the mobile handset, many South Korean service providers and manufacturers have integrated LBS applications for vehicle-centric services. Meanwhile, Japan's commercial telematics adoption has grown steadily under the Japanese government's ambitious ITS (Intelligent Transportation System) project.

"Compared with North America, Japan and South Korea lag behind in terms of market penetration and the range of applications," notes Bae. "However, ABI Research foresees that GPS enabled phones, along with carriers' desire for innovation and efficiency in their daily operations, will generate new momentum for commercial telematics services in both regions.

Source: ABI Research

Nortel announces $320M UMTS unit sale to Alcatel

After announcing the deal back in September, Nortel has finally reached a definitive agreement with the newly merged Alcatel-Lucent to sell its UMTS business for $320 million. The deal includes Nortel's UMTS access portfolio: radio network controller and node B products, related services, applications, customer contracts and assets. About 1,700 of Nortel's UMTS employees will transfer to Alcatel-Lucent (I wonder how that squares with the downsizing described in today's number 5 story.) Nortel's UMTS business has been operating at a loss because of a crowded field, as well as a lack of product scalability and momentum, Nortel said.

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Youth Market Favors Facebook

Social networking sites are popular among both males and females.

By Debra Aho Williamson - Senior Analyst

School is in full swing, so that can mean only one thing: It's time for reading, writing ... and social networking.

According to an October 2006 top 10 list from researcher Youth Trends, Facebook ranks as the favorite Web site among males and females ages 17 to 25. More than half of females and 35% of males listed it as their favorite site, beating sites such as Google and ESPN.com, which topped Youth Trends' last survey in the second quarter of 2006.

The survey takes the pop culture pulse of the youth market by asking respondents, on an unaided basis, to list their three favorite choices in a variety of entertainment categories.
"For the first time ever, Facebook was ranked number one among both men and women," said Josh Weil of Youth Trends. "Based on the findings, Facebook is more than likely to be their first visit of the day."

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Mobile Content Market Booming in Australia

The "Australia Consumer Mobile Content Market 2006-2010" report issued by Frost & Sullivan revealed that revenues in the market totaled $576 million in 2006 and projected that they will grow to $1.3 billion by the end of 2010.

One of the main reasons behind this increase is the fact that in Australia telecoms dominate the mobile content market. In fact, most consumers identify with telecom brands over content provider brands. This allows the carriers to drive favorable revenue-sharing deals with content providers and to increase on-portal revenues.

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Mobile entertainment market to reach $77B by 2011

According to a Juniper Research report issued today, the total global mobile entertainment market--music, gambling, adult content, the whole ball of wax--will grow from $17 billion in 2006 to $47 billion by 2009 and $77 billion by 2011, galvanized by the growth of broadcast mobile television and mass-market casual games. Juniper anticipates the Asia Pacific market will remain the most lucrative, accounting for 37 percent of global mobile entertainment revenue over the next five years; Europe will contribute 35 percent of revenues.

While mobile music is currently the largest sector of mobile entertainment, Juniper says traditional core products like ringtones and wallpapers will wither as next-gen technologies and applications become commonplace. "Busy lifestyles in both developed and developing markets means that consumers will have to grab entertainment and relaxation as and when they can," Juniper Research senior consultant Bruce Gibson said in a prepared statement. "Growing disposable incomes, next generation mobile technology and the metamorphosis of the mobile handset into a multifunction communications and entertainment device will enable them to achieve this in a way hitherto thought impossible."

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Merger Creates World's Leading Communication Solutions Provider

Alcatel and Lucent Technologies have completed their merger transaction and will begin operations as the world's leading communication solutions provider today. The new company Alcatel-Lucent, with one of the largest global R&D capabilities in communications and the broadest wireless, wireline and services portfolio, is incorporated in France, with executive offices located in Paris.

“Alcatel-Lucent will be for our customers a partner with the scale and scope to design, build and manage increasingly complex networks that deliver advanced converged services and communications experience to the end-user. That is what Alcatel-Lucent will deliver with an unparalleled focus on execution, innovation and service for our customers: the company will have the most experienced global services team in the telecommunications industry, as well as one of the largest research, technology and innovation organizations in the industry. In fact, our combined company is ideally positioned to help our customers transform their networks so they can offer new kinds of personalized, blended applications and services," says Serge Tchuruk, appointed today as Chairman of the Board of Alcatel-Lucent.

"Through this merger, we are bringing together two top-ranking companies to form an undisputed leader in the industry, a company poised to enrich people's lives by transforming the way the world communicates. Alcatel-Lucent is a strong and enduring ally that service providers, governments and enterprises can count on to help them unlock new market and revenue opportunities. This combination represents a strategic fit of vision, geography, solutions and people, leveraging the best of both companies to deliver meaningful communications solutions that are personalized, simple to adopt and available globally. Both Alcatel and Lucent embraced a common culture of innovation and excellence that will help ensure the success of our merger," adds Patricia Russo, appointed today as Chief Executive Officer of Alcatel-Lucent.

Alcatel-Lucent is a leader in IPTV, broadband access, carrier IP, IMS and next-generation networks, and 3G spread spectrum (UMTS and CDMA). In enterprise communications solutions, Alcatel-Lucent is No. 1 in Europe and has more than 250,000 enterprise and government customers worldwide.

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34 Million Ears Perked for Podcasts

OK, that's just 17 million people, but still....

Only a minority of US Internet users listen to podcasts, but according the "Podcast Downloading" report from the Pew Internet & American Life Project, roughly 12% of Internet users say they have downloaded a podcast so they can listen to it or view it at a later time.

The audience is growing. That number compares to 7% of Internet users who reported downloading a podcast in Pew's February-April 2006 survey.

Mary Madden of Pew, the author of the report, estimated in a podcast interview that 17 million people had downloaded podcasts for use on their computers or iPods.

Again, six months earlier an estimated 10 million users had had a podcast experience. In other words, there has been a 70% increase in the number of people who have downloaded podcasted audio or video content.

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Mobile Advertising: Small Today, Huge Tomorrow

By the end of 2006, advertising delivered via mobile phones will have a turnover of $1.9 billion worldwide. That sounds like a lot of money, but compared to the $60 to $70 billion spent annually on broadcast television advertising in the United States alone, it is insignificant. However the clear benefits of well-executed mobile advertising are so compelling that over the next five years this market is set to enjoy double-digit growth rates, according to a new study from ABI Research.

“There are very good reasons to use the mobile phone to reach consumers,” says senior analyst Ken Hyers. “Unlike a TV or a PC, a mobile device is truly unique to the end-user. That allows a more customized relationship with the recipient of the advertisement. Advertisers can obtain a lot of information about end-users, through the websites they visit and the purchases they make, helping them construct tightly targeted campaigns.”

There is another reason advertisers love the mobile format: the typical click-through rate for a regular Internet banner ad is about 0.2%, while the rate for mobile banner ads is in the range of 2-3%. “I think that performance will go down over time as the novelty wears off,” says Hyers, “but for now, it represents sensational performance.”

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Is Old-Media Influence Really Declining?

Casting old media as yesterday's news risks missing its place in future campaigns.
By James Belcher - Senior Analyst

A recent survey by ICOM, an advertising agency network, found that marketers worldwide see newspapers waning in influence. ICOM asked its member agencies whether any traditional media choices were on the decline with no chance of recovery as a result of new ways of reaching audiences. Of the responding agencies around the world, 42% said that newspapers were in decline, more than twice as many that named any other media type.

Asked which media types were growing most quickly, respondents put blogs, Internet ads and search engine marketing all in the top 10.

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Verizon Wireless makes deal with YouTube

YouTube and Verizon Wireless officially announced a deal that gives Verizon Wireless a new content experience with user-submitted video and YouTube a wider audience. Beginning next month, V Cast will include some of the popular website's videos. YouTube and Verizon didn't disclose any financial details, and Verizon has a short-term exclusivity on the deal, the length of which is also unknown. It could be a major coup for Verizon given the fact that visitors to YouTube, which is being acquired by Google for $1.65 billion, watch more than 100 million videos daily. But only pre-selected high-quality videos will be available for viewing on Verizon's YouTube channel. Given the fact that most of the videos on YouTube are of the homemade quality, you have to wonder how much pre-selection will dilute the value proposition.

TV Downloads on the Rise

And a new TV revenue stream emerges.

By Ben Macklin - Senior Analyst

During Disney's third-quarter conference call, CEO Bob Iger revealed some interesting statistics about the delivery of some of the media company's TV content online. For example, during the fall, users have requested more than 19 million episodes of the six series being shown on ABC.com 24 hours after airing on the network. About 12 million ABC shows have been sold on iTunes since the launch in October 2005, or an average of roughly one million a month. In addition, nearly 500,000 Disney movies have been sold on iTunes since its inception, and since June 2006, 53 million episodes and shorts have been played at DisneyChannel.com. Commenting on the statistics, Mr. Iger said that "TV viewing and Web use can reinforce rather than cannibalize each other when you have a terrific product."

All the alarmist claims that digital video recorders (DVRs), video-on-demand (VOD) and emerging online platforms will cause the death of TV and result in the loss of billions of dollars worth of advertising dollars are just plain wrong. TV distribution and access are changing, to be sure; audiences are becoming increasingly fragmented, that is true; primetime is not what it used to be, admittedly, but with every challenge comes an opportunity. More people will watch more TV and video content in the future, not less. They will just be doing it in different ways — via the TV, the Internet, the PC and their portable devices.

eMarketer estimates that by 2010 there will be 157 million online video users in the US, up from approximately 108 million in 2006.

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YouTube Goes Mobile

YouTube Agreement with Verizon Wireless Marks First Step to Deliver Video Entertainment to Consumers on the Go

YouTube, a consumer media company that enables people to watch and share original videos through a Web experience, today announced that, in early December, its leading video entertainment service will be available to people on mobile devices. In its first strategic mobile distribution agreement, YouTube will enable Verizon Wireless V CAST consumers to access a selection of YouTube videos from their mobile phones exclusively for a limited time.

In this landmark arrangement, YouTube will deliver a sampling of the most popular videos to Verizon Wireless' V CAST subscribers in the United States. With the largest community for online video entertainment, YouTube's move into the mobile space will enable a new audience of mobile users to enjoy entertaining videos virtually whenever and now wherever they want.

"We are excited to launch our new mobile service and to partner with Verizon Wireless to bring YouTube videos to a new audience," said Steve Chen, chief technology officer and co-founder of YouTube. "People want to be entertained in a way that fits their individual lifestyle. This service offers our community and Verizon Wireless subscribers a new opportunity to connect and engage with their favorite videos. We will continue to roll out more exciting partnerships and features for the mobile user over the coming year."

"Delivering YouTube content gives V CAST customers a mobile connection to video content that has revolutionized how people are being entertained today," said John Harrobin, vice president of digital media for Verizon Wireless. "Today's announcement is groundbreaking for mobile video, and we're proud to be working with the leader in online video entertainment. This relationship signals Verizon Wireless' commitment to bring the very best entertainment to V CAST customers."

YouTube will provide Verizon Wireless' V CAST customers with a variety of videos, enabling users to access video clips on any one of the Verizon Wireless V CAST-enabled handsets, including the Chocolate (LG VX8500) and MOTOKRZR K1m. Video enthusiasts also will be able to record and share their favorite moments with their mobile phones -- whether it's an unbelievable skateboard trick or memorable moments, such as their child's first steps.

To get V CAST, Verizon Wireless customers can purchase a V CAST VPak subscription for $15.00 monthly access, or $3.00 daily access, added to their Verizon Wireless calling plan. The subscription includes unlimited basic video, but application download fees apply for 3D games and premium video. There are no airtime charges to stream or watch V CAST content.

Source: PRNewswire

Analysts Bullish on Online Ad Spending

An emerging consensus paints a positive picture.

The trend began early last week, when the Internet Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC) released new data showing that US Internet advertising revenues reached a record $4.2 billion in the third quarter of 2006.

That represents a 35% increase over the $3.1 billion figure posted for the third quarter of 2005, and a 2% increase over the second-quarter 2006 total of nearly $4.1 billion. "Interactive advertising, with its eighth consecutive quarter of growth and the largest single quarter ever, is on pace for its biggest year," said David Silverman of PwC.

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Pay-Per-Click Not-So-Easy

Pay-per-click advertising is not as simple as it might seem.

Online marketers have taken to pay-per-click (PPC), and many use it, but apparently not everyone understands it very well.

Although online marketers have been investing in PPC search marketing for a number of years, a new survey of marketers — all of whom have been using PPC for at least two years — conducted by the e-tailing group found that managing PPC programs poses a challenge.

The fact that marketers use PPC was clear from the survey. In fact, with 44% of e-commerce executives surveyed saying they allocate 20% of their entire advertising budgets to PPC search ads, it constitutes a significant portion of online marketing budgets.

They agree on where to spend PPC ad dollars, too. Of the marketers who invest in PPC campaigns:

100% use Google
90% use Yahoo!
76% use MSN
27% use Ask.com

The problem is that 40% of the respondents reported that they manage more than 5,000 keywords. To accomplish the task, 59% manage internally, 18% outsource and 24% use a combination of internal and outsourced solutions.

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Over 50% of Vacations Now Planned Online

It's bad news for travel agents.

According to a survey from morefocus, a majority of travelers now plan their vacations using the Internet, while only a small percentage continue to use travel agents.

The survey found the 58% of respondents tend to plan their personal travel online. That compares to only 23% who said they usually use travel agents to plan their vacations.

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Nonstop Growth for Online Travel

Apparently, the sky is the limit. According to a new report from JupiterResearch, "US Travel Forecast: 2006-2011," online travel revenues will reach $128 billion in the US in 2011 — 38% of all travel revenue for that year.

"Online travel revenue will continue to grow strongly from $85 billion in 2006," said Jupiter analyst Diane Clarkson. "Factors that will spur online spending are greater consumer wallet share, increasingly sophisticated products available online and improved online compliance in business travel."

For comparison, eMarketer's estimate of this year's US online travel sales is somewhat more conservative at $77.7 million.

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The Bottom Line for Business: Online

Where is the one place large, medium-size and small enterprises all do business?

Believe it or not, it was not that many years ago that many types of businesses questioned whether or not they should even be online.

Now the question seems so last-century.

"Business-to-business (B2B) marketing has undergone significant changes in the last several years," says Lisa Phillips, eMarketer senior analyst and the author the new B2B Marketing Online: Trends and Tactics report. "Spending on advertising and marketing has regained the momentum lost in 2000 and 2001, and the Internet is causing shifts in advertising and marketing strategies among businesses of all sizes."

Although trade magazines and business publications will maintain a leading share of B2B advertising for the foreseeable future, online spending in the B2B category will hit $2.4 billion next year, up 23.7%, according to Veronis Suhler Stevenson (VSS). Growth rates will increase by double-digit percentages through 2010, while spending on older media, particularly magazines, will decelerate.

"The b-to-b guys have been behind the curve on digital spending, but everyone realizes that their future success — and very survival — depends on adopting integrated marketing online strategies," Tom Kemp of VSS told Media Business magazine.

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Who Goes Where (After Sharing and Socializing)?

Social networking, photo and video sites send valuable traffic to other destinations.

By Debra Aho Williamson - Senior Analyst

People who use social networking or online video sites spend a lot of time engaging with the content that is already there. But how do those sites affect traffic to other sites?

A new report by Hitwise attempts to make sense of the business that sites such as MySpace and YouTube send to other destinations.

In September, MySpace had an 82% market share of visits to the top 20 social networking sites, according to Hitwise. The second most popular site, Facebook, received 7% of visits.

However, MySpace is a significant driver of traffic to other social networking sites: 24% of visits to the other 19 sites on the list came directly from MySpace, Hitwise found.

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Online Retailers Face Four-Second Barrier

  • Posted: Saturday, November 11, 2006
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  • Author: pradhana

One... two... three... and gone!

When it comes to online retail, service matters — and so does speed.

"The customer experience begins the very instant a shopper types in your online address," said Don Becklin, president of Motorcycle Superstore. "We put a very strong focus on both the organization of our site and the site's performance."

A year ago, Taylor Nelson Sofres (TNS) found that slow-loading pages ranked near the top of the most "annoying" attributes list for online shoppers.

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Online Video Advertising: 'You Ain't Seen Nothin' Yet!

  • Posted: Wednesday, November 08, 2006
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  • Author: pradhana
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  • Filed under: Merger-Acquisition

Google's acquisition of YouTube was just the beginning.

The American Association of Advertising Agencies (4A) saw it coming. In December 2005, when 4A members were asked which form of "new media" would show the greatest growth in 2006, half replied Internet video.

This year, eMarketer estimates that spending for online video advertising will reach $410 million, an 82.2% gain over last year's $225 million figure. In two more years, US marketers will spend over $1 billion, and only two years after that (in 2010), Internet video advertising will be a nearly $3 billion business.

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Online Video Advertising: Hold on to Your Hat...

...but keep one foot on the ground.

If you have any lingering doubt that online advertising in the form of video is seeing explosive growth, consider this: Spending on online video advertising will reach $410 million this year, 82% more than was spent in 2005. By 2010, Internet video advertising will be a $3 billion business, according to eMarketer's latest projections.

Google, arguably the dominant force in online advertising, recently cast a vote of confidence in Internet video with its purchase of YouTube. But what factors will drive average annual growth of 64% in spending on Internet video advertising for the rest of the decade? Two are clear:

The great desire among companies and their agencies for targeted ad messages in a familiar creative format. The obvious parallels with television, the long-favored mass medium, and the need to replicate that medium's advantages on the Internet

Another factor delivering high-percentage growth numbers is obviously the small base from which online video advertising has started.

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Social Network Ad Space: Sorry, Sold Out!

Ad agencies are abuzz, inventory is tight…

For many marketers who were sitting on the sidelines of social networking as recently as four months ago, advertising on social networks has become a top priority.

In a recent interview with eMarketer, Michael Barrett, chief revenue officer at Fox Interactive Media (FIM), said, "The conversation with marketers has shifted in recent months from 'Why MySpace?' to 'How can I use MySpace?'"

"At this point, many of the dollars are still experimental, but in certain categories such as movies, TV and music, marketers are actively budgeting funds to social networking campaigns," says Debra Aho Williamson, eMarketer senior analyst and the author of the new Social Network Marketing: Ad Spending Update report. "Much like in the early days of Web marketing, there is a fear of being left behind: If a competitor is there, then I need to be there, too."

In fact, the pace of events since August (including Google's $900 million deal with MySpace and the trickle-down effects of this deal) has led eMarketer to revise its expectations for social network ad spending upward.

eMarketer now expects that US marketers will spend $350 million placing ads on social network sites in 2006 (up from our previous estimate of $280 million).

US spending on social network advertising is now expected to rise to $865 million in 2007 and to reach $2.15 billion in 2010.

"MySpace will continue to dominate, accounting for 60% of US online social network ad spending in 2007," says Ms. Williamson. "Networks including Facebook, Bebo and Piczo will make up the next largest chunk of revenue, followed by social networks offered by portal sites. Vertical, or 'niche,' networks are likely to generate $45 million in ad revenue in 2007."

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Wi-Fi Hotspots Forecasted to Increase by 47% in 2006

A new ABI Research forecast finds that in 2006 the number of commercial Wi-Fi hotspots will grow by 47% worldwide to 143,700. While almost three-quarters of these sites (74%) are still found in North America and Europe, the Asia Pacific region is growing very rapidly. "By 2011 the Asia Pacific region will surpass both Europe and North America in the number of Wi-Fi hotspots," says vice president and research director Stan Schatt.

But for the moment, Europe is still the market leader with over 57 thousand hotspots. One major driver of Wi-Fi hot spots is retail establishments. A prominent example is McDonalds, which has moved to add hotspots to 17% of its 4,000 locations.

The growing Wi-Fi hotspot market is fueling a demand for Wi-Fi access points. More than 675,000 access points will be shipped this year specifically for use in hotspots. Not only are hotspot deployments and their subscriber numbers growing, but ABI Research notes that there also has been a dramatic increase in the number of Wi-Fi sessions per subscriber. This means that subscribers are lingering longer and spending more time doing their e-mail and surfing the Internet.

With almost 40 thousand hotspots worldwide, the hospitality industry continues to embrace Wi-Fi. ABI Research believes that voice over Wi-Fi will become a very attractive choice for many major hotel chains, both for their guests and for their staff. Schatt notes that by 2010 the hospitality industry will offer more than 109,000 Wi-Fi hotspots.

Source: ABI Research

Mobile Advertising Set to Double

In a new report, "US Mobile Marketing forecast: 2006–2011," JupiterResearch predicts that advertising for messaging and display ads for mobile devices will more than double over the over the next five years.

Jupiter projects that ad spending will rise from $1.4 billion this year to $2.9 billion in 2011.
The rise will not come without some fundamental changes, however.

"Educating consumers, protecting their privacy and mitigating their concerns about the cost of commercial text messages and SPAM, will be key to driving consumer interest and adoption of mobile marketing executed with SMS," said Julie Ask of Jupiter.

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58% of iPod Owners Planning Purchase Consider Microsoft's Zune

A new survey conducted by ABI Research has shown that many prospective MP3 player buyers—even owners of iPods—would be likely to choose Microsoft's Zune player. 1725 teenage and adult US residents were asked whether they planned to buy an MP3 player in the next 12 months. Of those responding that they were likely to do so, 58% of those identifying themselves as existing iPod owners and 59% of those who owned other brands said they would be "somewhat likely" or "extremely likely" to choose a Microsoft Zune player over an iPod or another brand of MP3 player."

Our conclusion," says principal analyst Steve Wilson, "is that iPod users don't display the same passionate loyalty to iPods that Macintosh users have historically shown for their Apple products." Only 15% of iPod owners said they were "not very likely" or "not at all likely" to choose Zune.

So is Zune attractive enough to build anything like iPod's massive sales record? ABI Research believes that a critical factor will be whether or not Microsoft can differentiate the Zune from competing products in some meaningful way. One differentiator, Zune's Wi-Fi peer-to-peer sharing, which Microsoft is playing up heavily, "isn't all that compelling, at least not now," notes Wilson. "There's a lot more you could do with that capability."

But given the results of ABI Research's survey, Apple will need to make some big announcements in 2007 if it is to maintain its edge in the industry. Says Wilson, "Apple needs a new high-end device that works really well and looks really cool, because other brands are catching up."

Source: ABI Research

Who Shops Online and What Do They Do?

  • Posted: Wednesday, November 01, 2006
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  • Author: pradhana
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  • Filed under: Market Survey

Here is a new way to look at online shoppers.

When it comes to comparative shopping online — not including automobile shopping — the "Simultaneous Media Survey" from BIGresearch shows that two media-consumption consumer clusters top the list: "Independents" lead with 37%, followed by the "Opportunity Minded" at 19%.

In addition, the following chart demonstrates the online comparative shopping habits of Independent and Opportunity Minded consumers (vs. the "All" category) and what each shops for the most.

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Mobile Americans call on the Internet less

In a tracking study conducted across five European countries (France, Germany, Italy, Spain and the UK) and the US, comScore Networks found that while 29% of European Internet users regularly access the Internet from their mobile phones, only 19% of US users say the same.

The highest mobile Web penetration was in Germany, Italy and the UK (at 34% each), followed by France and Spain, with the US lagging.

Across all six countries, Internet penetration among mobile phone users is split almost evenly between men and women, but men have a slight overall edge (55%).

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Next Gen Contactless Payment Readers Debut

On Track Innovations Ltd, (OTI) today announced that USA Technologies has selected OTI to provide its next generation contactless reader solution to be integrated into USA Technologies' Generation Six (G6) e-Port cashless transaction solution, developed specifically to accept contactless payments for vending machines. Initial orders are for 10,000 readers with initial deliveries commencing before the end of the year. The integrated solution will be demonstrated at the National Automatic Merchandising Association Expo, booth 1627, October 25- 27, 2006 in Orange Country Convention Center, Orlando, Florida.

The integrated solution is built to support the growing U.S. contactless payment market. As previously reported by USA Technologies, MasterCard International has teamed with The Philadelphia Coca-Cola Bottling Company and USA Technologies to enable 1,000 Coca-Cola vending machines with the e-port cashless transaction solution.

With MasterCard PayPass, ExpressPay from American Express and Visa contactless, the associations have initially focused on drug stores, quick service restaurants, movie theaters and other merchants where transactions are usually under $25.

Now the 40 billion dollar U.S. vending industry with more than 8 million vending machines, is beginning to expand the payment opportunities for customers who appreciate speed and convenience. With the new reader consumers no longer need to fumble for cash and coins. To use this technology, consumers simply tap their contactless-enabled card or device on the vending machine's e-Port payment terminal. Within seconds, the terminal will flash a light and produce a tone signaling the transaction is complete.

George Jensen, Chairman and CEO, of USA Technologies said, "We are exceptionally pleased with the OTI reader for our G6 e-Port solution. And for the added value it brings our customers. The new product puts USA Technologies in the perfect position to further our relationships with vending operators, soft drink bottlers, credit card companies and banks."

Oded Bashan, President & CEO, OTI, stated, "the expansion to complementary markets of the traditional small contactless payments markets is a strong sign of confidence that the major financial institutions are pushing forward with their contactless programs. The vending machines market that relies today almost exclusively on cash can now enjoy the convenience and speed contactless payments can offer."

Source: WirelessIQ

Internet Video Metrics

Fox/MySpace vs. Yahoo! vs. Google/YouTube

By Ben Macklin - Senior Analyst

Hot on the heals of Google's acquisition of YouTube, comScore Video Metrix released data showing the top 10 video properties on the Web. Coming in top with over 20% of all video streams in August 2006 was Fox Interactive (including MySpace), followed by Yahoo!, at 11.8%, and YouTube, at 9.9%. In August, Google was well down the list in the seventh position with only 1.5% of video streams, which reveals why Google's move to acquire YouTube was very savvy.

A whopping 63.6% of all US Internet users in August 2006 streamed some video online, equating to 110 million people, according to comScore. Interestingly, as far as unique streamers to video properties go, Yahoo! tops the field at nearly 39.9 million unique streamers, compared to 39.5 million for Fox Interactive and 35.5 million for YouTube. Clearly, MySpace users stream more frequently than Yahoo! users.

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Why Rebranding Often Fails

  • Posted: Wednesday, October 25, 2006
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  • Author: pradhana
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  • Filed under: Brand and Branding

by Galen De Young

As competition heats up and sales start to stagnate, companies often seek to breathe new life into the brand through rebranding. In all too many cases, however, those expensive rebranding efforts fail to yield the desired business results.

Here are some of the key reasons rebranding often fails. More than executional mistakes that blunt the effectiveness of rebranding efforts, these are critical errors that almost always lead to failure.

Lack of True Change
Sure, sometimes rebranding is done solely to sharpen the image of a company or brand; after all, periodically things need to be freshened up. However, unless you operate in the world of packaged goods, don't expect great things from launching some new designs and fresh copy.

Rebranding signals change. A new image will cause people to take a fresh look at you—and people's primary motivation in taking a new look is to see what's changed. If you're the same old place dressed up in new wrapping and ribbons, you'll merely confirm the existing position you own in their minds. You'll have wasted a valuable opportunity to change their perceptions.

There are only so many times your prospects are going to reconsider you. Use them wisely.

Making Too Big a Leap
Rebranding should be about truly changing perceptions in the marketplace—changing the position you own in people's minds. That position, however, isn't dictated by you. It's based on what others believe about your company; it's something granted by those in the marketplace.

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US Internet Users out of 300 Million population

eMarketer presents facts and figures on the US Internet population.

By Debra Aho Williamson - Senior Analyst

On Tuesday Oct. 17, the US reached a milestone: Its population grew to 300 million.
Today, the US population has a median age of 36.2 and a life expectancy of 77.8, according to the US Census Bureau. Well over half (59%) of women are in the workforce and 85.2% of people ages 25 and older have at least a high school diploma.

To commemorate this milestone, eMarketer reviews its estimates of the current demographic makeup of the US Internet population.

As of 2006, 63% of the US population ages 3 and older uses the Internet at least once per month, according to eMarketer. That amounts to 180 million people.

Hispanic Internet users number 16.7 million, comprising 9.3% of US Internet users, according to eMarketer. By comparison, 14% of the US population is of Hispanic origin, according to the Census Bureau.

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Business Use of Wireless IM to Exceed $2 Billion

A new report from Strategy Analytics finds that a number of supply and demand side catalysts are aligning to accelerate business use of mobile Instant Messaging (IM) into a US$2 billion-plus opportunity in Western Europe and North America by 2010. From wireless access, to secure and fully auditable enterprise IM platforms, to public mobile IM services such as MSN Messenger, AIM and Yahoo! - both IT-sanctioned and rogue use of mobile IM is set to grow significantly.

Mobile IM will emerge as a valuable real-time data complement to voice, mobile email and SMS, and set the stage for the integration of Presence into a range of enterprise applications. The latest report, cites several key IM drivers including increased enterprise awareness of IM's benefits, a new breed of sub-US$150 QWERTY smartphones pouring into the market, the advent of IMS core networks, and millions of IM-dependent users ready to enter the workforce."

According to Antoine Mathiaud, Strategy Analytics Senior Analyst, "Surveys we have conducted clearly suggest that mobile IM strongly resonates with business cellular users looking for efficient always-on real-time communication tools. 33 percent of business cellular users in Western Europe, and 48 percent in North America, are interested in presence-enabled services such as IM. Moreover, the next generation of worker is one that cannot remember life without the Internet. This is a segment that is extremely receptive, even addicted, to IM and presence-enabled applications."

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