Class and Communication by April Joyner
March 3, 2008
10:13 am | 0 recommendations | Be the first to comment
Yesterday, AOL announced its pending acquisition of Bebo, the third largest social network in the United States, for $850 million. The announcement comes amid ongoing speculation of where AOL and its parent company Time Warner fit in Microsoft's battle for Yahoo! as well as a recent report in The New York Times about AOL's advertising network, Platform A, which so far has yet to gain significant ground.
From AOL and Bebo's conference call this morning, which included Randy Falco, CEO of AOL; Ron Grant, president and COO of AOL; and Joanna Shields, president of Bebo, it appears that AOL hopes to leverage Bebo in order to bolster Platform A. The term "engagement marketing" was peppered throughout the call, in reference to Bebo's existing advertiser relationships and the deployment of now-familiar "viral marketing" tools.
Bebo most significantly offers AOL an even larger entry into the social Web. There was much emphasis on the fact that Bebo and messaging services AIM and ICQ together attract over 80 million users; Bebo alone has over 40 million. Presumably, AOL will work toward integrating these services, as Shields stated this as a goal. And although MySpace and Facebook rank higher in the US, Bebo is the top social network in the UK and New Zealand and number two in Australia. The network intends to expand its presence in Europe by launching in France, Germany, Spain, Italy, and the Netherlands in the next five to six months.
While Bebo officially brings AOL into the social network space, it doesn't necessarily mean that both are now angling for Facebook and MySpace. Perhaps Bebo, with its global reach, might strength AOL's brand abroad, but that possibility didn't seem to factor in very significantly. Interestingly, however, Bebo describes itself as a social media network. Grant stressed this distinction at the beginning of his remarks, noting, "Most social networks are confined to one-dimensional or utilitarian, informational based functions."
Is this an apt observation? The distinction isn't quite that clear-cut, but I would say that Facebook and its elder, bigger rival MySpace are mainly about the people, though both have made inroads -- not necessarily consciously -- into media by acting as a platform for discovery. As a social network, Bebo is certainly about the people, but it has not only built a conscious strategy to attract media companies but also has delved into original programming, with its next show, "Gap Year," set to debut on Monday.
While the two camps overlap significantly -- which is why analyzing AOL's acquisition as a move after the big two social networks is faulty -- Bebo's strategy in ways has more in common with imeem, another "social media network." Bebo's community component, however, is much stronger than imeem's -- overall, it seems to strike a nice balance between community and content.
As a result, Bebo may have a better chance than its larger peers of wooing advertisers and eventually monetizing. Marketing on social networks continues to be a tricky endeavor, and users aren't very receptive to advertising on these networks -- hence complaints such as News Corp.'s about MySpace. But, despite users' grumbling about ads, media and advertising continue to fit together well, provided that advertisers use engaging, not overly invasive, strategies. This is where Bebo has the edge, which is good news for AOL.
05:21 pm | 0 recommendations | 2 comments
Hulu, NBC and FOX's joint Web video site, opened to the public today after being in private beta since late October. I'm not going to do a full review (there have been plenty; check here and here for starters) but from looking over the site and watching a couple of clips, I can say it functions well. The quality is certainly much better than those of pirated YouTube clips, and in addition to being able to share and embed clips and episodes, you can create your own clips from a given episode or clip.
Most viewers, however, don't care about the performance quality or added features as long as it meets bare mininum standards. As the responses to one of our recent Big Ideas show, it's all about the content. In that regard, Hulu is lacking for now. Although it has an impressive list of shows (and movies too!), for many of them, it offers only short clips rather than full-length episodes. Even for shows with full episodes, most of the seasons aren't complete. In addition, there remains the pesky issue of how long clips and episodes can actually remain on the site, due to licensing requirements.
That said, Hulu also offers a pleasant surprise in terms of content. Its television library not only serves up current shows but also offers a nice walk down memory lane, with episodes from golden shows like "Bewitched" and "The Mary Tyler Moore Show," to more recent classics like "Hill Street Blues," to great but still canceled shows like "Arrested Development." Again, not all the episodes are there (yet), but with many lamenting the relatively poor quality of today's programming, it's great to have proven shows available on demand.
When NBC and FOX's plans for Hulu first became public, many reports described it as an aspiring "YouTube killer." Well, that's unlikely; though TV clips certainly help YouTube thrive, the site is fundamentally about user-generated content. However, with the number of classics it offers, right now Hulu trumps the two networks that specialize in the shows of old, Nickelodeon (via Nick at Nite) and TV Land, in online presence. While Hulu won't be a "TV Land killer" any more than a "YouTube killer," if it succeeds in keeping up and building upon its library, it could become a valuable syndication vehicle as television expands online.
02:30 pm | 0 recommendations | 1 comment
Microsoft's bid for Yahoo! is still on the table, and, as seen in The Wall Street Journal's DealJournal and Reuters' DealZone, there's speculation that both companies may be trying to hash out a deal. As I discussed in my first post about the bid, Microsoft's bid was initially interpreted as a move to diminish Google's dominance in search. The positioning of all these companies is especially important for online advertisers, for whom search engine optimization and display advertising have become important tools in their marketing strategy. I recently spoke to Amit Rahav, vice-president of marketing for Eyeblaster, which provides management tools to digital marketing agencies, to discuss the significance of the Microsoft/Yahoo/Google face-off to advertisers.
How have online advertising strategies developed recently?
The two marketing budgets are migrating into one. Companies have performance-driven budgets: they ask people to download, register, buy. Advertising is part of the branding budget. Search has been a breakthrough for performance, and display advertising has become a part of branding.
If the Microsoft/Yahoo! deal goes through, what will it mean for advertisers?
We're seeing a consolidation of publishers, especially if Microsoft and Yahoo! merge. It marries two companies that are not as strong in search -- they are powerhouses that mainly have strength in display, versus Google, whose strength is in search.
Microsoft has been trying to capture some of the business on search from Yahoo! but hasn't captured significant market share. Google is strong on search but has trouble with display, especially premium advertising.
You say that there are distinct fields of dominance: Google in search and Microsoft and Yahoo! in display. Is this bad for advertisers?
For brand advertisers, the brand budget is migrating to online. Brand management used to be only 5 percent of overall spending. Now there's suddenly room for additional online spending. But companies want advertising to work in multiple ways: they want to capture leads, get people to register. Ultimately they want a combination of both [search and display].
When we look at conversions, it's not only impressions but the full experience. Now we can track the types of advertisements viewed, the search engines used. We want to give credit and invest in everything that led to the path. This is how to measure a successful campaign.
Why has it been hard for Microsoft, Yahoo!, and Google to succeed in both search and display?
It's an issue of origin. Yahoo! has become a very strong portal brand, where you go for news, reviews, weather. Google pioneered in search -- its search algorithms are very strong. These are very strong brands in consumers' minds. Once you've found a good search engine, you will keep coming back. Google has $10 billion of a $32-35 billion worldwide market in search. They've done a phenomenal job.
Publishers are now seeking not just to leverage their property but also the property of other sites. Google has AdWords, Yahoo! is buying other sites. In '07 the big trends were acquiring and developing the capability to sell others' inventory. The problem is that you can't really buy keywords.
Many observers interpreted Microsoft's bid on Yahoo! as a challenge to Google. Is Google becoming too powerful?
Google's strategy is that they will sell directly into consumers. For ad agencies, Google might be a short term friend but a long term enemy. Media planning is changing. Google is saying that everything should be on an automated platform. Companies are saying no. There are different channels, and there's the importance of being unbiased. So from an agency perspective, it could be that Google is too powerful.
One concern is when there's less competition -- a mega publisher bypassing the agencies. The pressure may increase, but that's an agency issue. Microsoft owns an online agency, so the question may be, "Are you recommending the best solution, or are you biased toward your own investments?" There's so much fragmentation. It's hard to know what works best for your company.
It will likely take a while for the Microsoft/Yahoo! deal to be resolved. What should online advertisers look out for in the meantime?
First-channel synergy will be important in a year marked by recession. Every account will need to be very accountable, knowing which mediums are most important to look at for ROI. Advertisers are learning online metrics. As the industry learns, we'll be able to simplify the data.
February 2, 2008
11:27 am | 0 recommendations | Be the first to comment
February and Black History Month are just about over, so, building upon my last post about Black History Month and advertising, I'd like to discuss the topic of ethnicity in niche media markets.
Advertising tied to Black History Month not only capitalizes upon a federally observed event -- not quite a holiday but close -- but also seeks to tap into the massive purchasing power of black consumers, estimated at $845 billion in 2007 according to the University of Georgia's Selig Center for Economic Growth. One year-round strategy for taking advantage of this figure is to tailor not only marketing but also actual products and services towards black consumers. Indeed, many black-owned businesses, such as Johnson Publishing Company, whose brands include the magazines Ebony and Jet and Fashion Fair Cosmetics, have been built by serving this niche when other companies did not. But now that most companies are now dedicated to serving and marketing to a wide range of demographics, are ethnic markets still a lucrative niche?
On one hand, the answer remains a resounding yes. In the media industry, publications like Ebony and Essence have a strong readership among black consumers. The eventual media whirlwind surrounding the "Jena 6" emphasized the importance of black news media in bringing attention to the case. And despite being habitually criticized within the black community for its programming, BET remains strong (in fact, it's set to launch a channel in the UK). Yet the critiques of that television network are emblematic of the challenges for this ethnic market as a niche: in particular, the notion that there still exists a unified market of black consumers.
Last year, the Pew Research Center released a survey that indicated that 37 percent of black Americans (nearly two out of five) believed that blacks could no longer be regarded as one particular race. Indeed, like any other group, black consumers have a diversity of tastes and opinions that are often demarcated by class and age. And, even within the market of black consumers, there are niches to consider -- Essence and Black Enterprise are two examples of publications geared toward such markets.
Many recent efforts to capitalize upon these smaller niches, however, have failed. An example that comes immediately to mind is newer magazines targeted at black females. Among the publications that have folded in the category are VIBE Vixen, Suede, Heart and Soul, and Honey (though the latter two have been revived, Honey as a Web-only publication). Although most new magazines come and go, publications for black women face an even greater challenge because they are vying for a thin slice of a very saturated market.
Also interesting is that most of these publications were not targeting black women overall but particularly young (18-30) black women. The Magazine Publishers of America (MPA) market profile for "blacks/African Americans" (click here to view the PDF) devotes a section exclusively to the teen market, which it classifies as 12-18 year-olds. While this demographic is a bit younger than that targeted by Suede, for instance, the point remains that marketing for younger black consumers is a different animal than marketing for their older counterparts -- as most observers would expect.
One significant difference between the two group is that younger black consumers are more accustomed to a wider array of choices of media. Yes, they still read Ebony and Essence, and many of them bemoan the disappearance of publications like VIBE Vixen. But given "mainstream" media's much closer attention to multi-racial and multi-cultural markets, newer publications within this niche may not attract the same strength of loyalty. And even if they attract a core readership, these publications have a less compelling pitch for advertisers -- if other publications with a wider readership include this niche readership, then that's where the ad dollars will go, not to the new upstarts. (This article from CIIJ discusses this last point.)
On the other hand, a brand like TV One might be poised for success, at least in the short term. TV One, a joint venture of Comcast and Radio One, the company founded by Cathy Hughes, is positioned as a alternative to BET for the many who criticize its programming -- predominantly the more negative images associated with rap and hip-hop. Like Radio One (and radio in general), TV One's programming skews toward an older demographic -- viewers more likely to watch a network designated specifically for black viewers.
Also working in TV One's favor is that over the course of its existence, BET has gradually leaned toward a quite young demographic, although it didn't originally start that way. (Back in the day, there was "Softnotes," which featured smooth jazz, right alongside "Rap City.") So, the time may very well be ripe for a niche network for older black viewers, which TV One would fill quite well. (The New York Times' December article on TV One makes this observation.) However, as the generation that BET primarily serves ages, how long will this model last?
These examples bring into question the relevance of ethnicity as an indicator of taste in the first place. The shifting definition of "urban" as a marketing term encapsulates this issue. As the MPA market study notes, "urban," once used interchangeably with "black" and "African American," now refers to a non-racial demographic -- usually coinciding with devotees of hip-hop culture. Although the exact definition of "urban" is still up for debate, in terms of marketing, it's often a clearer term than "black" because it, unlike "black" or "African American," refers to a particular genre.
In fact, in another media industry, book publishing, the labels "black" and "African American" may no longer be relevant. About two weeks ago, I came across an article on TheRoot.com (Henry Louis Gates' new site, which might be described as a site for "high middlebrow" black readers) decrying "street lit," the book segment of "urban" media, and its conflation with "African American literature." The writer called for a new category of literature to be termed "literary black fiction." Besides having an unappealingly elitist air about it, the label doesn't offer much information. While "street lit" titles have common themes, nothing unifies "black fiction" other than the race of its authors. It's odd to lump Zane, a black erotica novelist, with Octavia Butler, a black science fiction novelist, not because of any judgment on the relative quality of their work but because their genres of work are very different.
Looking at these media segments, it seems that the notion of "black media" is quickly changing, if not devolving. While core brands built upon this concept continue to thrive, it's become much harder for new companies to join in as race becomes less reliable as an indicator of consumers' tastes and values. Once again, for advertisers, this means rethinking their approach to multi-cultural and multi-racial marketing.
07:33 pm | 0 recommendations | Be the first to comment
Black History Month is almost over, so I figure I'd tackle this topic while we're still in February. Maybe it's because I'm not watching as much TV, but I haven't seen nearly as many ads saying "We Celebrate Black History Month" as I used to. These types of ads, which were once ubiquitous in February, seem to have fallen off in popularity. Why?
Let's consider the negative angle first: perhaps they come off as opportunistic. That was the charge a few years ago when Procter & Gamble, which makes Metamucil, ran an ad in Ebony that tried to link the values of the black community to gastrointestinal health. It was lampooned by observers, including Jon Stewart on The Daily Show. (Click here to see the video clip.)
Of course, there's also a whole philosophical debate on whether or not Black History Month should still exist, but that's another story. Closely tied to this issue, however, and particularly relevant to marketing is this question: Do companies affiliated with Black History Month inspire greater loyalty or action among black consumers? According to a study conducted by Burrell Communications Group last year, the answer is yes. Out of all respondents, 63 percent said that companies that promote Black History Month enhance their image, 65 percent said that they were more likely to buy products from companies that celebrate blacks' achievements, and 57 percent would recommend those products to people they know.
So if Black History Month ads are still held in high regard by black consumers, why aren't they as prevalent? Perhaps there's been a shift in strategy. In the "Next" section of our current issue, there's an article by Ellen McGirt on Alicia Morga, the founder and CEO of Consorte Media, an online marketing firm geared toward Hispanic consumers. The article noted one case study that examined two ads for a home-financing campaign to determine which would be more attractive among Hispanic consumers. One featured a portrait of a smiling family, intended to key into the high importance of family values within the Hispanic community; the other showed images of suburban homes. Which ad won? The one with the suburban homes -- it, apparently, tapped into the Hispanic community's aspirations for upward mobility. But are such aspirations unique to the Hispanic community? Of course not.
This outcome, although it regards another ethnic demographic, suggests a new approach: rather than slapping "We Celebrate Black History" across their ads, perhaps companies have decided to tie themselves more intimately to economic aspirations within the black community. This might involve highlighting the achievements of black employees or developing initiatives to help black families achieve goals such as home ownership. As Ellen's article shows, the conventional wisdom on attracting different racial and ethnic demographics may not actually be a good bet -- but it still pays to find what works. What works, moreover, might not even be exclusive to that particular group.
06:44 pm | 0 recommendations | 2 comments
Yahoo! has been in talks with both Time Warner and News Corp. this week, according to several reports, seemingly desperate to stave off Microsoft's bid, which it rejected. The Time Warner talks involve Yahoo's potential purchase of AOL, while a deal with News Corp. would have Rupert Murdoch's conglomerate swapping MySpace for a 20 percent stake in Yahoo! (Interestingly, both options have floated around in the past, as discussed here and here.)
Both talks seem to be tactics to pressure Microsoft to raise its bid, which Jerry Yang, Yahoo's CEO, said undervalued the company. In fact, others have quickly pooh-poohed the talks as just that -- all talk and no real threat of action. But if the end of the road really is Yahoo! and Microsoft joining forces, what do the talks suggest about what strategy Yahoo! will take to regain strength?
When Microsoft's bid for Yahoo! first became public, the foregone conclusion was that it was a strategy to take down Google, against which both have struggled, in search and advertising. But neither AOL nor MySpace would offer Yahoo! much leverage in that area. Reports have speculated that difficulties in attracting advertising on areas of MySpace might lead Murdoch to drop the social network in Yahoo's hands. And AOL, of course, is struggling on all fronts in the new Internet.
However, as the leading social network (still, despite Facebook's surge), MySpace has considerable value as a destination site. AOL, though continually waning, has some entertainment value as well, with properties like AIM. And Yahoo! continues to be a successful portal. All these sites have engagement assets in common, unlike Google, which dominates search and has plenty of useful tools but isn't really a destination site (unless you count iGoogle, which has plenty of competition from other startpage aggregators like NetVibes).
ZDNet, which takes the minority view that Yahoo! and News Corp. should make a deal, argues that Yahoo! should reframe itself as a media company. Some support for this may also be found in Patrick Sauer's article from our current issue on how Yahoo! Sports is thriving in its competition against ESPN.com.
This repositioning of Yahoo! may be well and good, but does it mesh with Microsoft's goals for an acquisition? Seemingly not. And considering that Microsoft and Yahoo's combined forces still wouldn't be enough to topple Google in search, figuring out the next steps after the deal, should it happen, would be quite a cumbersome process. It may very well set both companies back even further.
