Articles of Interest

Saturday, October 23, 2004

eMarketer: Paid Search Will Comprise 42% of Online Advertising Spending in 2004

eMarketer: Paid Search Will Comprise 42% of Online Advertising Spending in 2004
Overall Market Still Growing; Set to Hit Record $9.4 Billion

NEW YORK, NY -- (MARKET WIRE) -- 10/21/2004 -- New eMarketer projections indicate 2004 will be another boom year for online advertising, with spending expected to increase 28.8% overall from 2003.

The projections, issued today, put total ad spending at $9.4 billion for the year, with another increase of nearly 21% in 2005.

Spending on paid search is forecast to reach $3.9 billion this year, and top $4.6 billion in 2005.

eMarketer benchmarks its online ad spending projections based on data from the Interactive Advertising Bureau and PricewaterhouseCoopers.

"The Internet is now one of the mainstream media," said eMarketer Senior Analyst David Hallerman. "Though paid search is one of the biggest drivers, accounting for 42% of the market this year, spending on other forms of online advertising including display ads and rich media will also increase significantly."

In fact, for the remaining 58% of the spending pie, the growth rate will be 14.9%.

"Any medium would be doing cartwheels over that kind of growth," Hallerman said. "Paid search is the star this year again, but it's the industry as a whole that is really hitting its stride."

Tuesday, October 19, 2004

Jack Myers article about Phase One - WWII Intelligence applied to advertising

TODAY'S COMMENTARY by Jack Myers Monday, October 11th 2004
Jack Myers Report
WW II Intelligence Systems Being Applied to Advertising
By Jack Myers

"PhaseOne offers clients a validated methodology to forecast the impact of proposed marketing communications at an early stage in the creative process before a campaign is launched."

"When your goal is to influence people through communications, you learn there are more similarities among people than there are differences. Those similarities are what our system is based on," PhaseOne founder and president Jody Moxham told me in an exclusive interview in which she disclosed, for the first time in detail, several of the working principles behind the company's secretive formulas for predicting the performance of advertising communications.

The formulas and system's used by PhaseOne were originally derived during World War II as elements of classified work of U.S. and British intelligence analysts who developed the science of content analysis to a point where it was able to successfully predict enemy behavior based on public communications. Since 1973, PhaseOne has been refining these techniques of content analysis into an analytical system for evaluating advertising during its early stages of development. And in 2003, PhaseOne hired as its COO a former senior CIA operative to head its marketing and development and has retained television veteran David Percelay to help guide its strategic planning activities. Reynold (Ren) Stelloh, spent 25 years with the Central Intelligence Agency in several different capacities. His operational assignments included senior leadership and management positions domestically and overseas. While several companies, including MarketCast, OTX, IAG and Starch offer research to measure the creative performance of television commercials and other advertising, PhaseOne is the only service that uses content analysis to determine the messages being communicated by an advertisement, how persuasive the message is, the psychological impact of advertising, and whether the advertising objectives are likely to be met. PhaseOne has analyzed advertising from radio, television, print, direct response and packaging media. Companies that have used the system have been extending its analytical process into public relations, government affairs, speeches, educational materials, recruiting, advertising agency reviews and selection, product design and forecasting competitors' behavior. "All communications shape attitudes and attitudes shape behavior." Moxham commented. "Companies need to understand what it takes to elicit desired behavior from their target audiences. We provide the tools to help marketers understand how all stages of communications at all stages of their development impact consumers."

Because of restrictive confidentially and non-disclosure agreements, Moxham claims little can be publicly said about PhaseOne's specific relationships with AT&T, GM, Campbell Soup, Gillette, Nestle and others. Research conducted on behalf of Duracell was first runner up for the 2004 David Ogilvy Awards for Excellence in Advertising Research. Moxham adds "marketers also use us to determine which agency is in sync with our market intelligence, and agencies hire us for new business pitches."

Moxham touts the research and intelligence that contributed to Chevrolet's "Heartbeat of America" campaign more than a decade ago as a breakthrough success for the PhaseOne systems. "Chevrolet was considering closing down the division. No new cars were planned. There were no new designs. Market share had continued to decline and Chevrolet was not a part of the auto consideration set. We analyzed a year of auto ads to understand Chevy's strategic directions and the directions of their competition. We married that with the brands that were showing market strength and market vulnerability. Once we got that framework, we found most auto advertising was rational and feature driven but there was no emotional advertising." Campbell-Ewald, Chevrolet's agency at the time led by creative guru Sean Fitzpatrick, used PhaseOne as a management tool to assure every piece of creative delivered a compelling emotional message coordinated around the successful "Heartbeat" campaign.

Contacted in Virginia, where he now lives, Fitzpatrick told Jack Myers Report "In the early 80's, I was desperate to find a way to leverage Chevy work out of the morass that Detroit advertising was mired in. One of the sources I looked at was PhaseOne and their ability to deconstruct commercials in script form. We were under the gun to get good scores on a variety of recall tests. Chevy was in a giant nose dive and you know who gets the blame when things are not good. So I was willing to give PhaseOne a chance to prove they could do what they said they could do. It worked like a charm and not only predicted scores but also provided excellent observations about our scripts."

"In essence, we started using PhaseOne to improve our scripts and boards, make them more explanatory to the client so she knew what she was getting and provide a common language and reference point for creatives, account people and clients for the discussion of creative work. We gave PhaseOne a commission to study the automotive market (television commercials). They came back with a fascinating and illuminating study that resulted in our ability to sell a strong new strategy to Chevy. That strategy led to the Heartbeat of America. Needless to say we used PhaseOne for a number of years after that. I think they are damn good, damn smart and have a technique that no one else has in the business. Although traditional research people are usually hesitant to use it because it is not strictly research, most creatives, account and clients usually love it once they understand it."

"PhaseOne offers clients a validated methodology to forecast the impact of proposed marketing communications at an early stage in the creative process before a campaign is launched," Stelloh told Jack Myers Report. "The value, of course, is in optimizing creative, production, and media expenditures in time to make a real difference. By comparison," he adds, "other research services offer an array of services to track, assess, and measure advertising effectiveness once a campaign is already in flight. In addition, while most other services depend on consumer panels, the PhaseOne System does not." Several of these methodologies are compatible and used by marketers and agencies in tandem. "There are two aspects to the PhaseOne methodology," says Stelloh. "First is a knowledge system of accumulated insights about how people are motivated and persuaded, using descriptors such as Maslow's Hierarchy of Needs. The second stage is applying how people process and absorb information and then move ideas from short to long term memory and persuasion."

PhaseOne received recognition last year in TV Guide Magazine for a study reporting Americans were exposed to an average of one hour of commercials and promotion for every three hours of programming content. PhaseOne also reported TV viewers were likely to see four to five "pop-up" product placements every night. "We did our original clutter study in 1991," Moxham reports. "Advertisers were struggling even then to determine how to break through the clutter. In our recent study we found clutter is at such a high level of noise it is increasingly difficult to break through. As marketers and agencies battle for attention, we are watching trends in creative approaches and ideas such as use of celebrities, humor, music, and emotion in ads and analyzing which are being effective and which are not." Early next year, PhaseOne plans to release a new study on the communications drivers that impact the performance of different communications methodologies and messaging techniques. Performance measures will be based on specific metrics being used by individual marketers.

This study of recall, persuasion and likeability will be compared to a benchmark study conducted by PhaseOne in the mid-1980s. "We don't measure," said Stelloh. "We figure out the elements of a communication that make it memorable or create an affinity between the message and consumers. Our business is to incorporate consumer learning into an analytic system, allowing us to forecast how consumers will respond. We can predict how different consumers will react to specific messages. We can identify elements that might inhibit response and what the opportunities are to strengthen communication. "

Stelloh, speaking as an expert, claims PhaseOne has more institutional learning in its system than exists in any other proprietary database, but suggests "the company has been one of the best kept secrets in business." PhaseOne plans to syndicate its corporate knowledge but until now has been working with selective clients only. Stelloh is actively speaking with movie studios about analyzing movie trailers and commercials. "We looked at a script for a movie in early production that the studio didn't know how to position or market," he reported. "We took the script, identified how to position the film and recommended the scenes that would best support the positioning." He would not name the film, which is set to be released in December, but hinted the male lead is playing a role out of his usual character and is not introduced until one-third into the movie. Both IAG and OTX actively market products in the film and television communities.

PhaseOne is also developing a new product for evaluating product design. "It's so hard to win in this marketplace," says Stelloh, "product design will be increasingly more important. Whoever is out there first with what consumers want will have a real market advantage."

For more information, contact Jody Moxham at or Ren Stelloh at


Viral blog to check out on occasion

Monday, October 18, 2004

MediaDailyNews 11-18-03

Visible World Nov 2003 article
** Note - Hanlon says they are not at the level quoted below last November; says total addressable homes is now closer to 10 - 12MM **

Joe Mandese
Editor, MediaPost
Tuesday, November 18, 2003

Interactive TV advertising has been a classic case of chicken and egg. Big advertisers and agencies have been loath to make investments in developing addressable ads before there was a critical mass of households to justify a return on investment. And cable operators have been reluctant to roll out the hardware necessary to serve addressable ads before a sizable advertising market existed.

That's all about to change, thanks to several deals being put together by Visible World, a leading developer of interactive TV ads. The company - which is part production facility, part ad agency, and part distribution system - offers advertisers the ability to create highly customized TV advertising content that can be served on addressable cable systems. It's been backed with investment capital from two major ad agency groups, Grey Worldwide and WPP Group, which along with lead investor Reuters, have just sunk millions more as part of a second wave of financing that raised $8 million in new working capital.

One of the investors includes cable TV giant Comcast, which controls enough addressable homes to put Visible World, and interactive TV advertising, on the map. And the company, which has been expanding its own cable ad sales infrastructure in an effort to develop a local cable TV marketplace, just might have an inclination to do that. Executives familiar with the relationship say that Visible World has already begun testing interactive TV ads in two of Comcast's larger markets with the wireless telecommunications, financial services and health categories.

Those tests are expected to culminate early next year in a significant expansion of Visible World's market coverage, which as of Monday stands at 10 million households. In a related move, Visible World on Monday said it signed a deal with the New York Interconnect. Combined with earlier deals with National Cable Communications and Los Angeles-based interconnect Adlink, Visible World can now serve customized ad copy down to the Zip code in markets reaching 10 million subscribers.

Based on its new relationship with Comcast, the company expects to be in 20 million homes by the end of the first quarter of 2004. By that point, operators are expected to begin testing addressable advertising down to the household level, meaning that individual households can be targeted with discrete adv messages unique to the household members.

Consumer media usage - Joe Mandese

Folio: The Magazine for Magazine Management: To Hit Rosy Growth Projections, Mags Need a Year-End Surge - projections for the results for consumer magazines for 2003 - Industry Overview

It's time for prognosticators to update their predictions for the fourth quarter and beyond. And, depending on who you talk to, 2003 will go down as a decent year for consumer magazines - or mediocre at best. At least that's what the three leading industry forecasters - Universal McCann, Zenith Optimedia, and Veronis Suhler Stevenson - would suggest.

On the high end, Universal has consumer magazine ad spending rising 7.0% over 2002. But such optimism is partly due to easy comparisons with the losses of 2002 and 2001, and that outlook seems a bit rosy, given that total U.S. ad spending is projected to rise at half that rate.

Magazine Ad Spending Outlook

Universal is certainly wildly bullish compared with Zenith Optimedia, which projects a 3.0% gain in 2003 and Veronis Suhler Stevenson, which sees a 2.3% gain for the year.

In fact, without some breakout sales in the second half, all of these scenarios may be too rosy. Based on the first seven months of data from Publishers Information Bureau, the industry was on course for a puny 0.2 % increase.

The picture for 2004 and beyond also varies. Universal has yet to release a 2004 magazine outlook, but Zenith predicts magazine ad spending will again rise 3.0% next year; Veronis predicts it will rebound 7.2%. In fact, Veronis anticipates ad demand will remain strong and sustainable through 2007 (see table), the last year of its current long-term forecast. While Zenith doesn't look quite that far out, it does see a modest improvement in 2005, when it sees magazine ad spending rising 4.0%.

Ad Dollars Per Consumer Hour With Media

One reason Veronis has a rosy long-term outlook is that it pays close attention to how magazines compete with other media. The two key metrics are time spent with a medium and a newer metric the magazine industry has dubbed "wantedness." Based on the first, magazines perform pretty badly. Of the five major media - TV, radio, newspapers, magazines, and the Internet - consumer magazines rank last in terms of per capita time: 123 hours per person per year. By comparison, the average consumer watches 1,726 hours of television each year.

If that were the end of the story, the outlook for consumer magazines would be grim, indeed. But when you factor in another component of the Veronis data - how much people pay for the media they consume - the picture brightens considerably for magazines. The amount consumers pay for media is considered a vital component of so-called wantedness, and although magazines are consumed relatively few hours per year, the relative amount consumers pay for those hours - 38 cents - is the highest of any traditional medium.

By comparison, the average TV hour - the cost of cable or satellite TV - costs only 14 cents per person per year, the same as the average of the major consumer media. Radio is an even bigger bargain and presumably a greater "wantedness" question mark to Madison Avenue. It's free.

Only the other print medium - newspapers - rivals magazines in terms of the amount consumers pay per hour: 31 cents. And the only major medium to surpass print's relative consumer value is the Internet, at 58 cents per hour.

COPYRIGHT 2003 Copyright by Media Central Inc., A PRIMEDIA Company. All rights reserved.
COPYRIGHT 2003 Gale Group

Sunday, October 10, 2004

Yahoo! News - Arbitron, VNU, Procter Form Market Research Pact

Yahoo! News - Arbitron, VNU, Procter Form Market Research Pact
LOS ANGELES (Reuters) - Consumer products maker Procter & Gamble, market research group VNU and radio ratings service Arbitron Inc. on Wednesday announced a deal to explore developing a research service to study how consumers react to advertising.

The service would study how exposing consumers to advertising on multiple media affects their shopping and purchasing behavior. Arbitron and VNU said the service would be separate and distinct from any rating services already provided for TV and radio.

The service would study subjects who carry Arbitron's Portable People Meter, a small, pager-like device that keeps track of their exposure to multiple media sources.

Data on consumer preference and purchases would be collected electronically and via surveys. Some households would be part of VNU's ACNielsen's Homescan consumer panel, which tracks packaged goods purchases.

Netherlands-based VNU's Nielsen Media business is the leader in measuring television ratings in the United States. It also publishes trade magazines such as Billboard and The Hollywood Reporter and has a business partnership with Reuters Group Plc .

Earlier this week, VNU agreed to sell its directories unit to venture capital groups Apax and Cinven for 2.075 billion euros ($2.55 billion) as it focuses on high-growth businesses.

Analysts have said they expected VNU may use part of the proceeds for acquisitions, with Arbitron being named among several likely targets. But analysts said such a deal would probably face opposition by regulators.

Thursday, October 07, 2004

iMediaConnection: Blogs, RSS and PR Professionals

iMediaConnection: Blogs, RSS and PR Professionals
Blogs, RSS and PR Professionals
Thursday, October 07, 2004
By Roger Park, Associate Editor
Seminar discusses how to communicate with your audience through blogging.
The seminar "PR and Emerging Communication Channels," sponsored by the Public Relations Society of America (PRSA) addressed the emerging phenomena known as Web logs (blogs) and Real Simple Syndication (RSS); they also discussed how blogs are reshaping the communications industry. Steve Rubel, vice president of client services, CooperKatz & Company and Pamela Parker, managing editor, ClickZ, presented their complementary perspectives on this emerging communication method: Rubel on the PR side, Parker from the journalist's point of view.

Rubel opened the seminar by commenting on the power of RSS. "Basically, RSS TiVos the Net for you. It captures everything on the Web that you care about and pulls it down for you in feeds. The minute something is mentioned about a client of mine on a Web site, I'm alerted to it. That's what makes RSS so powerful."

Rubel talked about how traditional big media has long been "centralized, top-down and costly. In traditional media, there was limited feedback between media and audience." But, according to Rubel, that's changed with the advent of new communication modes.

"Suddenly, big media's dominance is threatened by its own audience. Citizens are becoming amateur journalists with their own blogs," Rubel says.

The widespread of broadband, simple and accessible online publishing tools, mobile devices such as camera phones and new ad paradigms all fuel the power shift from big media to consumers, Rubel says.

"Bloggers recognize their importance and some can make money by selling ad space on their own Web site," adds Rubel.

What do all these changes mean for PR professionals?

"The impact on PR is adapt or die," says Rubel.

Rubel suggests PR professionals listen to the bloggers and monitor conversations about their clients. This is the first step for PR professionals to take in this new "participatory journalism."

The second step is to "reach out to bloggers, but don't pitch them," says Rubel. He advises PR professionals to "engage bloggers " and to treat the bloggers "with sensitivity as if using kid gloves with them."

Getting directly involved with blogging is the third step, Rubel says.

"Launch your own blog. Get other bloggers in engaging discussions about your client or product. Carefully post influential comments on these blogs but be genuine. When you're honest and open in these discussions, the bloggers will respect you," he adds.

Pamela Parker gave the journalist's point of view on blogging. Parker explained how some blogs affect news coverage of different companies. Parker told the story of a hybrid car consumer who started a blog about his car called "Thus, a brand evangelist is born," Parker says.

However, the blogger/consumer became disillusioned with the hybrid car and posted his negative opinions regarding the car. The news media picked up the story and it proves the fact that one consumer can spark a lot of discussion on a product through the power of a blog, Parker says.

Like Rubel, Parker suggests that companies pay attention to blogs and "reach out to bloggers" because blog postings can influence consumers.

In the case of Kryptonite, a popular bike lock, comments on a product default (the discovery that the lock could be picked with a plastic ballpoint pen), caused a swarm of consumer concern and a flurry of media coverage.

"Kryptonite responded to the blogs and media coverage by announcing that they would offer free product exchange to all consumers who are concerned about the security of their current Kryptonite locks," Parker says.

Parker says that "blogs are changing the dynamics of audience and media -- for journalists and PR professionals."

Overall, Rubel and Parker stress how critical it is for PR professionals to communicate and engage with bloggers, even if the bloggers post negative comments regarding your client or product.

"If you ignore these negative bloggers," says Rubel, "they just get noisier. Get these folks and bring them into a dialogue and give them a voice. If you listen to them, it makes you look better."

Parker says that blogs give the consumer and PR professional a personal voice. Rubel adds, "Corporate Web sites are for business, blogs are for human beings."

Viral & Buzz Marketing Association

Viral & Buzz Marketing Association
VBMA Manifesto 1: Mission and Affiliation
All members of the VBMA share the conviction that Viral Marketing, Buzz Marketing and Word-of-Mouth Marketing (and other related marketing approaches that harness network-enhanced word of mouth) are based on the principles outlined below, and that we work constantly on improving these marketing techniques:

1) We strive to

a) identify only those people who will be interested in a particular marketing message,

b) deliver the message to them in a way that makes it an enjoyable or valuable experience,

c) provide it in a manner that encourages them to share it with others.

We will therefore be providing a benefit to our audiences and their acquaintances and in so doing, to the brands for which we work.

2) Our goal is to foster genuine enthusiasm about brands and brand communications, which can spread through networks in a way that is enjoyed, appreciated and / or valued.

3) We believe that network-enhanced word of mouth has a critical role to play in the future of integrated marketing communications. Marketers need to offer content in the media and through one-to-one connections that the recipients themselves choose to propagate to those that they deem appropriate, thereby eliminating irrelevant, untimely and (as a consequence) annoying marketing messages.

4) We believe that whatever our target, we will always be dealing with educated people who detect when they are being deceived.

a) These people appreciate brands that find smart ways to entertain, educate or inform them.

b) They are well-informed in the area of marketing, peer-to-peer exchange and consumption, enabling them to function as partners and stakeholders in marketing communication activities.

c) As partners, we treat these people with care and respect. We will not only develop or send information or content to them, but will also listen to their opinions. We value their contributions.

d) Our audience-centric vision of connected marketing seeks to put the target networks at the centre of marketing.

These positions are unifying principles shared by all members of the VBMA. We agree that working in this field is considered acceptable, professional and valuable when these principles are respected.

Companies or individuals who do not adhere to these principles are not considered to be carrying out viral/buzz/word-of-mouth marketing by the VBMA.