Watch HBO’s John Oliver Eviscerate Native Advertising

Native advertising, as I have said before, is a tool that should only be used by professionals.  Every time it’s reared it’s profitable, but ugly and unseemly head, trouble has followed.

Looks like it may be time for the age-old lesson to be re-learned.  For the umpteenth time.

Native advertising is everywhere.  And I notice that while most of it is not well-marked, it is well integrated to look like actual content.  You want a lot more of the first in order to not screw with your visitors on the second.

Last night, HBO’s John Oliver, host of “Last Week Tonight” pretty much dissected, blasted, eviscerated (et al) the problem when amateurs–even those with highfalutin’ titles–practice native advertising badly.

Draw your own conclusions, and tread lightly.  Native advertising is like a handling an old, loaded gun.  It might shoot you in the face at any time.

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Spray Cake: Brilliance in Advertising

Ever heard of Spray Cake?  It’s real, because I, like you thought that it had to be a hoax.

Pleeeeze click on the video, because it is one of the greatest executions of the demonstration ever.

As part of a “Brand-a-Thon”, a competition where several New England agencies partnered with a startup for cash prizes, Nail Communicatons came up with the winning execution on behalf of Spray Cake.  And they it it on the head, pardon the painfully obvious pun.

Some would say that the basics of how to move people to an action are old and stale.  I’m willing to step out on a limb and say the folks at Nail Communications, a hot new Providence-based independent agency, would argue against that premise.

I know I’m ready to try Spray Cake.  You?

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Best Whitepaper Value Ever: 22 Ecommerce Growth Hacks

 

We all, at one time or another, have clicked and shared our information in exchange for a vendor white paper that was…40% good.  On occasion these white papers are better than 65% good/35% forgettable.

Generally the problem with the average whitepaper is that the author is so afraid to tell us something of substance, they end up telling us nothing we really didn’t know or could easily figure out on our own.  Granted, I don’t expect to read trade secrets in a whitepaper.  But at least tell me something I didn’t read about last month.  Or give me a solution that isn’t already in the top three of a “past year” Google SERP.

Let me introduce you to one that, to me, is 100% red meat, no filler.

It’s from Qualaroo and RJ Metrics, and is called “22 Ecommerce Growth Hacks.”  I found out about it at GrowthHackers.com  Yes, you have to share your basic information.  But what you get in return is what you always hoped you get.  Solutions to problems with multiple links to tools.  Broken down by “Acquisition,” “Conversion,” and “Retention.”  I’ll recap a few, and you decide for yourself:

Number 3: Find potential customers on Twitter

I like this one because it offers a tool that lets me hashtag search AND follow selected people, along with tools that can help me monitor tags as well.  Yes, you can do this the old fashioned way–it’s up to you.  But the tools here are easy and intuitive; perfect for a twice a day task.

Number 5: Increase Your Content Virality

I like this because I, like many other bloggers, need ideas to write about as well as need to expand my readership.  The white paper offers a simple strategy and a nice free (for now) tool that let’s me see what’s popular by social channel.  I can then copycat it (not advised by me), or write something parallel with my take (always better to give people your thinking than parrot someone else’s).

Number 9: Improve Profit Margins

The solution at #9 is a simple way to figure out how to test for your most profitable price. How many online retailers are terrified of raising prices?  Or any retailer at that?  I’m not advocating raising prices willy-nilly.  But at some point you need to analyze and test in order to determine your most profitable price on the way to finding your best price.

Number 11: Boost Engagement at Your Very First Conversion

I like the quote that’s part of this one, “Can I Have More, Sir?”  Pretty much makes the point about setting the tone with new customers.  Ask for something else, a friend’s email, an add-on, something that leverages the goodwill at the first sale.

That’s 3, there are 19 others to check out.

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If You Read One Chart on Music Downloads and the Apple-Beats Music Deal, Read This One

 

If you read the headlines about the Apple-Beats Music deal, you’d think that the music industry is going to move away from downloads….yesterday.  You’d think that unless Apple inked the deal, Pandora and Spotify would take over the helm of music as we know it.  You’d think that people, in a complete 180-degree turn, now want to rent their music–even abandoning the digital music they’ve already collected.

As with most media, especially entertainment media (and politics), the key is to step out of echo box into the sunlight of fact and reason.  First, take a look at the image above, provided by the Music Industry Blog.  It pretty much provides context around downloads versus streaming.  200 million for Apple versus 18 million paid subscribers for all other Pandora-type streaming services combined.

Now lets define streaming.  According to the RIAA (next to the skinheads, one of my favorite organizations), streaming is defined as Pandora-type services, streaming radio such as SiriusXM, and other non-subscription services like YouTube and free streaming products (Spotify Lite).  When you add satellite radio into the mix, it’s easier to understand why streaming services are growing.  The headlines scream “Pandora” and “Spotify”, when they should be yelling “Pandora” and “SiriusXM”.

Next, let’s look at the numbers:

On the second page you’ll find the magic.  Turns out that CD is still the player, with $2.7 billion in sales in 2012, and $2.4 billion in 2013.  Compare that to singles and album download sales of  $2.5 billion in 2012 and $2.8 billion in 2013.  These figures, as you see, don’t include kiosk, music video, or ringtones/ringback sales.

And the streaming services? The future of music?  The new “Shiva, God of Death” for downloads?  $1.032 billion in 2012 and $1.4 billion in 2013.  A billion dollars is strong; but if you combine downloaded singles, albums and physical media sales,  then streaming is a trend with a lot of catching up to do.

Now, let’s look at royalties.  It’s inside ball, as they say, but it is very important.  Artist royalties is the number one thing putting upwards pressure on the monthly costs of Pandora-style streaming services.  Here’s a great quote to provide context, from MarketWatch.com:

Bette Midler is angry, and you won’t like Bette Midler when she’s angry.

The singer lashed out at Pandora P -0.40% last month after the streaming music provider paid her $114 in royalties for more than 4 million song plays. She’s not the first to complain; last year, members of Pink Floyd accused Pandora of “tricking artists,” while the Talking Heads’ David Byrne called Internet radio “unsustainable as a means of supporting creative work.”

Yes, you can read that Pandora paid $500 million in royalties.  Here’s an article from an artist (remember “Low” from the 90′s?) who says–and provides paperwork–that Pandora paid him $16.89 for 1 million plays.  Along the way, he makes a great point about Pandora-style streamers:

Why doesn’t Pandora get off the couch and get an actual business model instead of asking for a handout from congress (legislation to lower royalty rates by 85%) and artists? For instance: Right now Pandora plays one minute of commercials an hour on their free service. Here’s an idea!  Play two minutes of commercials and double your revenue! (Sirius XM often plays 13 minutes and charges a subscription).

Lastly, let’s look at Apple.  First, I believe that had iTunes Radio gotten off the ground, the Beats deal would never had been thought of.  But it didn’t and we are here.

Next, iTunes Radio is a good service.  I’ve used it.  I don’t use other Pandora-style streamers.  Why?  We pay $25 a year for iTunes Match.  What’s the deal with that?  iTunes Match scans my library (169.4 gigabytes) and matches it in the cloud.  Which means I can stream 99% of my music to any of my devices–Mac, iOS, and AppleTV.  Apple has the pieces in place.  The Beats deal gives them some glitz and branding.  It gives them the opportunity to repackage and tweak some great products under a bleeding-edge brand name.

So what will happen with iTunes Radio?  Back to the Marketwatch article for a glimpse into Apple’s strategy:

So when Apple AAPL +0.09% rolled out iTunes Radio last fall, it was a sea change. Tim Cook and Co. not only offered to pay more in performance royalties , they threw the labels a slice of advertising revenues to boot. Songwriters were offered a 10% cut from Apple — more than double what they receive from Pandora. That was in addition to less tangible benefits, like integration with the iTunes Store, independent licensing deals (not possible with Pandora), and the ability for artists to get paid directly and avoid large Performance Rights Organizations like SoundExchange.

In return, Apple got exclusivity. Earlier this month, Coldplay, which pulled its catalog from Spotify last year, pre-released a new album on iTunes Radio. The Black Keys did likewise. December’s Beyoncé album was an iTunes exclusive, and the Los Angeles Times reported in March that Apple is pressuring the major labels for more such deals. They have no reason to refuse. Pandora’s royalty rates may be protected by the courts, but there’s more than one way to skin a cat.

I see Apple using Beats as a way to introduce a hybrid subscription/streaming model.  For a monthly fee, you can listen to iTunes Radio; as well as take advantage of a fixed number of downloads.  Streaming radio is a 21st century way to sample music, like AM/FM used to be before the conglomerates (er…conglomerate) ruined radio.  I may be wrong.

But it follows that at the end of the day, people prefer owning to renting.  The sales figures bear it out.

The costs to rent music will increase.  Either Pandora and her sisters pay more royalties, or they have to take measures to build their subscriber base.  Does that mean more commercials for free listeners?  If so, will they abandon that platform for one that doesn’t play as many ads?  As the monthly rate increases, what’s the magic number that reminds people renting is a bad deal?  Is it $15/month?  Is it $20?  Because at some point, you could take the rental money and simply buy what you listen to.  It makes sense; to me at least.  How about you?

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4 Ideas That Will Shape Advertising by 2020, and My Take as Well

Read a great article by Tom Edwards on his team’s top 4 ideas that will shape advertising by the year 2020.  My big takeaway?  Granularity. Sure, that’s easy given all the data we freely provide on a daily basis.  But how he sees the use of this data is what intrigued me. Personally, I think all of this data (measured in “yottabytes” according to Edwards) is going to confound marketers.  Soon we will have so much data, we should be able to map a person’s buying pattern like we did the human geonome.  This development cubes the potential “creepiness factor,” and puts even more emphasis on ethical use, industry-wide guidelines, great creative, and shrewd media selection.  But I digress… Edwards talks about mobile being the point of a “physical to digital ecosystem.”  My take is that in 2020, you need something, your device gives you recommendations.  You go to the store, your device shows you specials, head-to-head comparisons, and alternatives in stores nearby.  You select and take your item without having to go through a traditional checkout, or have it delivered. Edwards discusses how fragmentation will drive changes in segmentation:

Fragmentation and non-linear consumption will lead to more cohesive and relevant networks to connect with consumers. That sounds counterintuitive, but the fragmentation is an opportunity to reimagine connections with consumers in the near future.

As we understand shopping and buying patterns on an individual basis, our current concept of segments will have to be rebuilt into something more expansive and responsive.  Expansive because the data will present the need to destroy current and recreate vast new segment definitions.  Responsive because if we plan to use on-the-fly messaging, we will have load segment information to adjust communications that will defend against other brands on the trip to that store, as well as make a strong case for our product when the inevitable head-to-head occurs at the shelf or rack. Edwards discusses the Internet of Things, how our objects talk back to us.  Personally, I don’t need to hear from my thermostat on a daily basis, but that’s me.  Others might. Anyway, his vision of IoT is that our devices become a web unto themselves.  They’ll let us know what’s going on with them at an adjustable level.  They’ll let us know their needs (batteries and other alerts). They will be able to tell us our needs (milk, based on a level in relation to a sensor or chip in the carton).  Each of these messages will probably sync with pricing and branding messages to present us with a matrix of products to choose from (“batteries are $1.99/4 oak at Home Depot”; or “here are milk prices at your preferred stores on your way home from work”). And he makes a case for Google being at the center of it all.  Go figure. Great article, here’s the link again.  It made me sit up and think.  I believe it will do the same for you.

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