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Borrell Associates is forecasting a moderate increase in overall ad spending for 2011, but continued strong growth for online advertising, including mobile. Overall, advertisers will increase their spending next year by less than 5% above this year's projected level, bringing U.S. ad spending totals to $238.6 billion.
We're expecting total online ad spending to grow almost 14%, from $45.6 billion, in 2010, to $51.9 billion, in 2011. The fastest-growing segments of online advertising are the local sector, anything targeted, and everything involving social media.
By next year, local online advertising should grow by almost 18%, from $13.7 billion, in 2010, to $16.1 billion, in 2011.The big driver will be targeted display (such as banner ads) advertising, which we expect to grow almost 60% in 2011, reaching $10.9 billion for national and local combined. While national advertisers will increase their use of targeted display by nearly 50%, local advertisers will outperform even that. Use of targeted display by advertisers local to the markets where their ads run will more than double, reaching more than $2.3 billion next year.
However, the Web's initial darling –run-of-site display– continues to lose luster. Sales of run-of-site display ads will continue to decrease, dropping nearly 14% from this year's level – from $9.5 billion to $8.2 billion for both local and national. This early online format has simply been overshadowed by newer, more productive ad formats, and competition has pushed display unit prices down. Most of the spending decease will come from national advertisers. Local run-of-site ads are forecast to decrease less than 3% next year.
The national paid search ad format will experience a double-digit spending decline next year, moving down 11.3%. This drop will be caused by lower pricing and churn, but will be mitigated by a local advertiser increase of more than 10%. (In general, local online advertiser trends tend to lag those of the larger national advertisers by about two years, and that is certainly the case for paid search.) Local spending decreases in paid search are sure to follow, perhaps as soon as 2012.
Email advertising will see moderately strong growth in 2011, up 9% to $16.0 billion for national and local. Growth in this format is almost all from national advertisers; only 3% is local. White paper marketing is a major contributor to its popularity – especially among B2B advertisers.
The streaming video format is expected to continue its dramatic growth, increasing more than 60% to $5.6 billion next year. More DIY and less expensive tools put this ad format within the budgets of even small advertisers. Because of this, two out of every five streaming video ad dollars will come from local advertisers next year. Streaming audio, on the other hand, looks to remain a footnote. Though it too will enjoy double-digit ad spending increases in 2011, streaming audio has yet to pass the $1 billion ad spending level.
Unlike legacy marketing, where promotions overshadows advertising, online advertising has historically gotten far more attention from marketers than online promotions. But changes are coming. Online promotions will top $24 billion next year, up 10% from this year's totals. Much of this increase will be due to the rising use of online couponing, forecast to grow almost 14%, to $9.1 billion, in 2011. Proximity advertising is also on the rise, up 11% next year. Mobile devices that can tell users when a particular merchant is in their immediate vicinity continue to sell briskly, and advertisers are expressing interest in this form of advertising.
Mobile marketing continues to grow, fueled by ubiquitous apps, user-friendly browsers and 3G/4G speeds. As smartphone ownership now comprises 25% of all cellphone ownership, mobile ad sales will enjoy growth of more than 20 cents of every online ad dollar spent next year.
August 15, 2010
A couple of weeks ago, Redfin engineers got together for a hackathon to prototype features we’d like to see on the site. One team, featuring Jane Nemenman, Jamie DeMichele, Dane Brandon and Llewellyn Botelho, built a Redfin.com widget for each listing that showed the listing agent’s track record: how many listings he had on the market, what his average discount to list price was, how long it had been since he closed a deal.
It was a great idea. But it didn’t all come from the engineers. The original insight started with our San Francisco agents, who like to size up a seller’s agent before deciding how to represent a buyer in a negotiation, on the theory that negotiating strategy is often influenced as much by the listing agent’s state of mind as by her client’s. Some agents are chronic over-pricers, expecting to give part of that away at the negotiation table. Others stand firm. And still others just need to get a deal done.
Jane, Jamie, Dane and Llewellyn wanted to give everyone this information, so that anyone using Redfin’s site could know what she was up against going into a negotiation. Then we dug into the rules that govern how we use listing data, and decided that using the broker’s database of listings to embarrass brokers publicly wasn’t a fair use of the data.
We’ll still build this into the tools our agents use, so we can help all of our customers know when to hold ‘em and know when to fold ‘em. We’ll also share with everyone the listing stats for our own agents. In the meantime, what I haven’t been able to stop thinking about was how the engineering team reacted as Jane demonstrated the widget, showing the dismal stats for one seller’s agent after another.
Folks were flabbergasted. At first, people thought it was just one agent having a tough year. But after a few minutes of clicking from one listing agent to the next, everyone began to recognize the truth: that in 2009 it was very hard for any agent to sell a home.
So when we got back to our day jobs, Jamie DeMichele — the man who also created bracket-tracking software for March Madness — looked up the numbers for all the listings put on the market in 2009, to see how many had sold by August 11, 2010. The answer? About half. He emailed me the table below, which summarizes the success rate for broker-listed properties for sale in seven major markets:
County Name Listings Activated in 2009 # 2009 Listings Sold % 2009 Listings Sold # Still Active % Still Active Cook County, IL 134,710 44,789 33.3% 7,893 5.9% Fulton County, GA 27,089 9,941 35.8% 1,329 4.8% King County, WA 51,252 21,500 42.0% 1,729 3.4% Los Angeles County, CA 130,326 68,564 52.6% 3,079 2.4% San Francisco County, CA 9,289 5,259 56.6% 112 1.2% Maricopa County, AZ 137,647 81,204 59.0% 5,008 3.6% Suffolk County, MA 15,763 5,682 36.1% 393 2.5% 7-County Average 506,796 236,939 46.8% 19,545 3.9%
We shared the data over the weekend with the Wall Street Journal, which just published its own analysis. As we’ve argued in the past, the basic problem is a stand-off between buyers who expect the world, and sellers who have already taken more losses than they can bear. When no one will compromise, and the banks have been slow to foreclose on overdue mortgages, listings don’t sell.
What does this mean for you if you’re trying to sell a house? Primarily: don’t hire the agent promising the highest price, no matter how flattering that may sound. Hire the agent with the best track record. If 2010 is anything like 2009, odds are that the property won’t sell at all, or at least not at the originally promised price.
(Picture of Jamie used with his permission, at his insistence that I use one where he’s wearing cowboy boots)Glenn Kelman under Redfin in the News, The Science of Real Estate, Uncategorized.
The Federal Trade Commission is considering proposing a do-not-track mechanism that would allow consumers to easily opt out of all behavioral targeting, chairman Jon Leibowitz told lawmakers on Tuesday.
Testifying at a hearing about online privacy, Leibowitz said the FTC is exploring the feasibility of a browser plug-in that would store users' targeting preferences. He added that either the FTC or a private group could run the system.
Leibowitz said that while Web users on a no-tracking list would still receive online ads, those ads wouldn't be targeted based on sites that users had visited in the past.
Three years ago, a coalition of privacy groups including the World Privacy Forum, Center for Digital Democracy and Center for Democracy & Technology proposed that the FTC create a do-not-track registry, similar to the do-not-call registry. At the time, the online ad industry strongly opposed the idea of a government-run no-tracking list.
Currently, many people who want to opt out do so through cookies, either on a company-by-company basis or through the Network Advertising Initiative's opt-out cookie (which allows users to opt out of targeting from many of the largest companies). But those opt-outs aren't stable because they're tied to cookies, which often get deleted.
The Network Advertising Initiative recently rolled out a browser plug-in that enables consumers to opt out of targeted ads by NAI members.
Leibowitz also told lawmakers that he personally favored opt-in consent to behavioral targeting, or receiving ads based on sites visited. "I think opt-in generally protects consumers' privacy better than opt-out, under most circumstances," he said. "I don't think it undermines a company's ability to get the information it needs to advertise back to consumers."
Online ad companies say that behavioral targeting is "anonymous" because they don't collect users' names or other so-called personally identifiable information, but Leibowitz said that it might be possible to piece together users' names from clickstream data. He told lawmakers about AOL's "Data Valdez," which involved AOL releasing three months' of "anonymized" search queries for 650,000 users. Even though the company didn't directly tie the queries to users' names, some were identified based solely on the patterns in their search queries. Several lawmakers expressed concerns with behavioral advertising during Tuesday's hearing. Sen. Claire McCaskill (D-Mo.) said she was "a little spooked out" about online tracking and ad targeting.
McCaskill said that after reading online about foreign SUVs, she noticed that she was receiving ads for such cars. "That's creepy," she said, likening it to someone following her with a camera and recording her moves.
She added that if an "average American" were to learn that someone was trailing him around stores with a camera, "there would be a hue and cry in this country that would be unprecedented."
Sen. Jay Rockefeller (D-W. Va.) and Sen. John Kerry (D-Mass.) both expressed concern that privacy policies weren't giving Web users enough useful information about online ad practices.
Rockefeller proposed that some companies were burying too much information in lengthy documents that consumers don't read. "Some would say the fine print is there and it's not our fault you didn't read it," he said, adding, "I say, that's a 19th-century mentality."
Kerry added that he didn't know that consumers understood how companies use data. "I'm not sure that there's knowledge in the caveat emptor component of this," he said.
Social cues, social responses, humans know when a computer is engaging themPosted on Wednesday, 2010, July 28, 17:18, by Eric Bryn, under social media, social media and direct marketing research.
This research paper from Nokia Research Center, Stanford, and Queens University implies that humans can ascertain with an uncanny degree of certainty when a social message is sent from a computer versus a human. Social responses to communication technologies theory (SRCT) predicts that humans cannot reliably ascertain such nuances. This research contradicts this premise.
The research team, using prior research in SRCT theories, tested whether humans could discern whether a text message was sent via a human or computer when flattery was an element of the message. They found that humans reliably discern the originator of the message apparently because certain social cues were missing in the computer-generated messages.
Why this is relevant research: SRCT theories could be used by software designers to create computer programs to engage social network users with the goal of getting them to increase self-disclosure under the guise of an interaction seemingly being conducted with a human. With the FTC recently considering allowing people to opt-out of behavioral targeting on the Web, the issue of nudging people towards more self-disclosure is timely given all the issues surrounding privacy and use of PII in social networks, especially if a user discloses such PII under the assumption they’re interacting with a human. This is a very interesting article and quick read (four pages).
ONLINE archaeology can yield surprising results. When John Kelly of Morningside Analytics, a market-research firm, recently pored over data from websites in Indonesia he discovered a “vast field of dead blogs”. Numbering several thousand, they had not been updated since May 2009. Like hastily abandoned cities, they mark the arrival of the Indonesian version of Facebook, the online social network.
Such swathes of digital desert are still rare in the blogosphere. And they should certainly not be taken as evidence that it has started to die. But signs are multiplying that the rate of growth of blogs has slowed in many parts of the world. In some countries growth has even stalled.
Blogs are a confection of several things that do not necessarily have to go together: easy-to-use publishing tools, reverse-chronological ordering, a breezy writing style and the ability to comment. But for maintaining an online journal or sharing links and photos with friends, services such as Facebook and Twitter (which broadcasts short messages) are quicker and simpler.
Charting the impact of these newcomers is difficult. Solid data about the blogosphere are hard to come by. Such signs as there are, however, all point in the same direction. Earlier in the decade, rates of growth for both the numbers of blogs and those visiting them approached the vertical. Now traffic to two of the most popular blog-hosting sites, Blogger and WordPress, is stagnating, according to Nielsen, a media-research firm. By contrast, Facebook’s traffic grew by 66% last year and Twitter’s by 47%. Growth in advertisements is slowing, too. Blogads, which sells them, says media buyers’ inquiries increased nearly tenfold between 2004 and 2008, but have grown by only 17% since then. Search engines show declining interest, too.
People are not tiring of the chance to publish and communicate on the internet easily and at almost no cost. Experimentation has brought innovations, such as comment threads, and the ability to mix thoughts, pictures and links in a stream, with the most recent on top. Yet Facebook, Twitter and the like have broken the blogs’ monopoly. Even newer entrants such as Tumblr have offered sharp new competition, in particular for handling personal observations and quick exchanges. Facebook, despite its recent privacy missteps, offers better controls to keep the personal private. Twitter limits all communication to 140 characters and works nicely on a mobile phone.
A good example of the shift is Iran. Thanks to the early translation into Persian of a popular blogging tool (and crowds of journalists who lacked an outlet after their papers were shut down), Iran had tens of thousands of blogs by 2009. Many were shut down, and their authors jailed, after the crackdown that followed the election in June of that year. But another reason for the dwindling number of blogs written by dissidents is that the opposition Green Movement is now on Facebook, says Hamid Tehrani, the Brussels-based Iran editor for Global Voices, a blog news site. Mir Hossein Mousavi, one of the movement’s leaders, has 128,000 Facebook followers. Facebook, explains Mr Tehrani, is a more efficient way to reach people.
The future for blogs may be special-interest publishing. Mr Kelly’s research shows that blogs tend to be linked within languages and countries, with each language-group in turn containing smaller pockets of densely linked sites. These pockets form around public subjects: politics, law, economics and knowledge professions. Even narrower specialisations emerge around more personal topics that benefit from public advice. Germany has a cluster for children’s crafts; France, for food; Sweden, for painting your house.
Such specialist cybersilos may work for now, but are bound to evolve further. Deutsche Blogcharts says the number of links between German blogs dropped last year, with posts becoming longer. Where will that end? Perhaps in a single, hugely long blog posting about the death of blogs.