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It is quite possible that Internet advertising has reached its saturation point. The Wall Street Journal is reporting that data from research group comScore Inc. indicates that the number of paid-clicks on Google’s search ads has declined for the second consecutive month. The consumer has become wise to advertising on the Web. That’s not necessarily a bad thing.
Google maintains that the decline reflects the company’s efforts to improve the quality of leads, that they have made it more difficult for Web surfers to accidentally click on ads. What a great spin! I agree that rather than curiosity clicks, the advertiser is getting more people who are truly interested in their product. However, I find it difficult to swallow that Google intentionally wanted fewer clicks. That’s how they make their money.
The spin to the story allows Google to charge more per click by assuming a more customers with fewer clicks. But has the actual number of customers increased? The number of customers can stay the same but because the curiosity clicks have declined, the percentage of customers to clicks would increase – that’s not more customers. If Google increases the per click cost, you are paying more for each actual customer.
Advertisers need to stay focused on the brass ring. Forget the number of clicks. How many actual customers are coming through the Internet ads and how much did each customer cost versus other advertising. Without knowing that, the number of clicks is really meaningless.
Did you watch Brittney Spears special appearance on “How I 
Met Your Mother?” The train wreck that many had hoped would happen, never did. Of course it didn’t. Welcome to prerecorded programming. Edit out the bad and do it again until it’s right. Gone are the days when actors forget their lines, miss their mark or the lights burn out in the middle of a performance.
Back in the Golden Age of Television, when Uncle Miltie ruled the airwaves, live television was the norm. The idea was to execute a flawless performance to entertain the audience, but 
because it was a live performance, anything could happen. Once videotape came along, shows could be more controlled by being taped in advance and re-taping if necessary to eliminate embarrassing mistakes. Then along came the blooper outtake specials followed by the various funniest home video programs. These shows were really the turning point that got us to where we are today on television. It didn’t take long before everyone in America was trying to videotape their family mistakes to earn some easy cash.
And now look what it has turned into. It shouldn’t be a surprise that YouTube and reality television shows have such a strong viewership. They all pander to the desire to see people embarrass themselves. Most people slow down to gawk at a car wreck, now you can watch one anytime you want. Try doing a search for Brittney on the web and you can bet most of what you will find is not very flattering.
Brittney’s appearance in the controlled environment of a traditional sitcom was finally a smart public relations move. No foibles to apologize for or to try to explain away. It was a flawless performance. She actually seemed normal. If you were disappointed, just wait for the outtakes.
Remember the days when your opinion and a quarter could actually buy you a cup of coffee? I still hold out hope that those days may return even though I don’t drink much coffee anymore. Apparently Starbucks, whose stock has dropped 40 percent in the last 12 months, is worried that a lot of other people aren’t drinking as much coffee as they used to either.
A current story in Reuters proclaims Starbucks is in a “tailspin” and quotes Starbucks Chief Executive Howard Schultz that there was no “silver bullet” for fixing Starbucks, but clearly they are trying to find one. Apparently changes include new coffee machines, a new coffee blend and frequent customer reward programs.
So, take your core product and change it. Does anybody remember the lesson that Coke learned when they changed their recipe? That’s why we have Coke Classic today.
While the economy is certainly a factor affecting impulse buying by occassional coffee drinkers, I would suggest that Starbucks, whose product admittedly is an “affordable luxury,” is at risk of losing their most loyal fans. I have to assume that using new machines and a new coffee blend is meant to change the taste of the product. Undoubtedly, some people will like it and some people will not, but I don’t understand why they would want to gamble with their core loyal customers.
Imagine if McDonald’s, soon to be a major competitor in the expresso drink market, changed the Big Mac – used a different bun, changed the special sauce. I buy a Big Mac with an expectation of quality and taste, that’s the brand I expect. If I want something different, I can go to Burger King. Likewise, I don’t see any research from Starbucks that their customers are going somewhere else, consumers are not dissatisfied with the product, they are just not spending as much on luxury items.
I can’t help but think this is a major blunder on Starbucks part. Basic marketing tells you to go back to your strength. Reinventing yourself is an act of desperation.
In my last post, I asked if traditional media was dying. Only a few days later there is more fuel to add to the discussion. In addition to Pepsi shifting their dollars to new media, GM is also getting ready to shift half of its $3 billion budget into digital and one-to-one marketing according to a recent article in Advertising Age.
As I have discussed previously, the important issue here is that the advertising dollars are not increasing to include new media, existing dollars are being taken away from traditional media to pay for new media. Numbers indicate that spending in television, print and magazines for 2007 were well below the dollars spent in 2003 while Internet advertising continues to grow.
Clearly the pendulum is in full swing, an interesting phenomenon that is always fun to watch. Back in the ’80’s, health care industry experts predicted that managed care, and HMO’s in particular, would be the only health insurance available. While today many of us have health insurance plans that have some aspects of manged care, the pendulum never swung so far as to put us all into the shackles of managed care as had been expected.
So the question becomes, how far will the pendulum swing when it comes to shifting advertising from traditional media to new media?
I enjoy watching movies and a number of television shows, not just on the traditional networks, but cable networks like AMC and HBO. One of my new favorites on AMC is Breaking 
Bad staring Bryan Cranston, a story about the life of a high school chemistry teacher whose life is suddenly turned upside down when a terminal diagnosis changes everything.
When the show first started a few months ago, I videotaped it on my old-fashioned VCR since I have not yet taken the plunge into buying a DVR. I actually happen to know how to program a VCR, an art that will undoubtedly die with me. Despite working in marketing, I enjoy fast-forwarding through the commercials – hey, I’m a busy guy! Then I discovered the free on demand viewing option on my cable system. I can call up the show at my convenience, just like on the VCR, only without commercials.
Two issues here for traditional media, and I am only focusing on television viewing. First, the audience gets more and more splintered every day with more cable and satellite options. We all have more channels and shows to watch than ever before and whenever we want. Second, it is easier than ever to skip the commercials.
So maybe I shouldn’t be surprised that Pepsi is launching a new brand, Tava, a no-calorie, fruit-flavored, caffeine-free, carbonated beverage, without the use of traditional media like print and television. Most interesting to me is that their target market is men and women ages 35 to 49, not the stereotypical kids using their I-pods while searching the web and text messaging their friends.
So does Pepsi know something? Is it time to give up on traditional media? Clearly the answer is no, but it does make one hit the pause button to wonder. If a major advertiser like Pepsi is willing to forgo television in a new brand launch, how soon before other advertisers follow suit and give up on television? Will there be a snowballing effect?
For years people thought there was plenty of advertising dollars for both traditional media and new media. With all the new media options these days, I don’t know if that is the case anymore. Follow the money, it’s moving away from traditional media. That’s what the recent writer’s strike was all about. Pepsi has to be making the networks a little fidgety.
Gas prices have hit an all-time high draining consumer’s pockets at the pump and increasing the cost of transportation for the profit sensitive business community – adding further pressure to consumer’s pockets. At the same time, tree-huggers continue complaining about global warming (I want to talk to you people in particular about the two feet of global warming that fell on my house this past weekend, but I digress).
Throughout American history, modern ingenuity has always come to the rescue to meet our needs and improve our standard of living. Henry Ford with the model T and assembly line. Traffic lights. Seat-belts. Airbags. Starbucks. Radar guns. OK, I went too far with the last one, but there is a natural progression and you get the point.
Gas prices have been rising for years, affecting our wallets and our economy, yet we still don’t have a reasonable alternative. At the same time, global warming has been in the headlines for years with gas guzzling cars often blamed as the cause. One big problem shared by two influential groups of people. I just can’t help but think that if these two groups of people worked together, a solution could easily be found.
The Wall Street Journal reported yesterday that Exxon scientists, to help reduce our reliance on oil, have developed a plastic “separator” film that is a critical part of lithium-ion batteries for use in electric and hybrid cars. This is great news that a major corporation has made this investment, but it is not enough and not fast enough. Yet despite their mutual goals, I don’t expect Exxon to be teaming up with any environmental groups in the near future to share ideas and bring it to market faster.
It really is a shame, because I would love to be the marketer for the company with the practical electric car that was cheaper than a gas guzzler. Talk about selling like hotcakes! Maybe we just have to wait for the next Henry Ford or Bill Gates to build an electric car in his garage that we all want and will make our lives better, because the big boys just don’t get it. Still, I just can’t help but to think that if tree-huggers and for-profit lovers united, we could all be happier.
I am not asking about the voyeur next door peeking through his shades, I am asking about television viewing habits, as in the Nielsen ratings.
This fall, Nielsen will unleash the Local People Meter (LPM) on northeast Ohio. The audience data from the LPMs are used to determine advertising rates, but it can also determine which television shows stay and which shows go. Got a favorite show that you want to make sure does not get cancelled? Stop by the local Nielsen family to watch it with them. Problem is, only 540 LPM households will determine the viewing habits of all of us in northeast Ohio. Good luck trying to keep the Bionic Woman going for another season!
Concern over advertising rates or your favorite show is irrelevant to the measurement methodology discussion. Nielsen claims that the daily electronic measuringof the LPM is more accurate the old-fashioned diary method, but is it any better? Stay tuned!
You are the first to visit my new blog as I share my rambling thoughts down life’s trails. Thoughts like…
- It’s not pretty anymore, bring on spring; and
- Presidental primaries should be held nationwide on one day and eliminate all of the nonsense – unless of course you want to argue how it stimultates the economy by keeping network consultants, statisticians and special effects people employed, then we can talk further.
More to come.
