Recently in Segmentation/Niche Marketing Category

Fora.tv:

"Playing on the plural word for "Forum" this new web video network's goal is to bring thoughtful discourse, discussion and debate on a variety of political, social and cultural topics to an online audience. From speeches to book readings, this is not bite-sized infotainment. Not surprisingly, founder Brian Gruber is a former executive at C-SPAN. Still in beta, the site is a loud answer to those looking for substance with their interweb styles." (from AdCritic.com)

Google to Sell EchoStar Satellite TV Ads  Annotated

SAN FRANCISCO (AP) - Google Inc. will sell and select some of the ads shown to EchoStar Communications Corp.'s 13.1 million satellite TV subscribers, marking the online search leader's latest effort to extend its marketing muscle beyond the Internet.

Both Google and Englewood, Colo.-based EchoStar are betting their partnership will create new advertising opportunities by making it easier for small businesses to get commercials on TV.

The automated system for TV ads mirrors Google's Internet advertising network with one key difference.

Google's Internet ads are linked to specific terms entered into its search engine or the content displayed on a Web page. Google's TV ads won't get quite as personal because they will be targeted more broadly at specific demographic groups, regions and programs on one of the Dish Network's 125 satellite channels.

Each day, Google will analyze anonymous data culled from the set-top boxes of the Dish network subscribers and only bill advertisers for the segment of the audience that watched a commercial a designated amount of time. Desai declined to specify the minimum amount of time that an ad must be watched to justify a charge.

Advertising on internet soars as world follows British lead-Business-Money-Broadband-TimesOnline  Annotated

— Google unveils its first big assault on television today through a deal to supply adverts to EchoStar, the US satellite network. The internet giant will run auctions for advertising spots on channels such as Discovery, CNN and MTV, which are carried by EchoStar to 13 million US households.

I recommend Frontline's latest four-part piece on the subject, viewable unabridged on line, here.

Forgive me readers, for I have sinned. It's been over a month since my last blog entry. For penance, I promise to watch FoxFaith's new Christian thriller, Thr3e. As Jeff Shannon of the Seattle PI writes, "If 'Thr3e' is any indication of what we can expect from the emerging trend of studio-funded faith-based movies, we may find ourselves wishing "The Passion of the Christ" had been a box-office bomb." Have faith Jeff!

But the real penance would not be complete if I did not take a lesson from Fox's Murdoch on "market retention". What, pray tell, do I mean? As Joanne Ostrow put it, the same cynical Hollywood "where plastic surgery is considered a sacrament" has now found that Christianity sells.

As some of you may know, I split time between Charleston, South Carolina and New York City. Yesterday, I received a direct mail post card from the FoxFaith company itself. Obviously, I wasn't in New York. I raise the point only to re-emphasize (see here and here.) the brilliance of Fox News Corp., who discovered "long tail" marketing years before the term was ever coined by Chris Anderson. Rupert Murdoch, " Me love you long tail."

Where other media firms (Pixar and Disney excluded) have relinquished their brand to stars, Fox has not only retained its brand, it continues to exploit it for it's own gain. You may have a political bone to pick with Fox News, but only because you are aware of their branding. This company understands market retention. This idea is actually quite foreign for many media firms in an age of disposability. Most corporate strategies emphasize market "capture" but not "retention." Fox News Corp. understands both.

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O.K. Lets assume, as the always insightful Jeff Jarvis has written, that "everybody is a network." "The conversation is king" et cetera. A corollary would be that distribution is cheaper and the barriers to entry are lower with digital tech; so leverage shifts to the content producer (or more specifically copyright holder) and away from distribution...but, what about advertising cost? In a global market, increased competition has lowered the cost of production but creative costs (from design, to marketing, to advertising) have increased significantly. Greater competition means a greater need to differentiate oneself from the glut… If everyone is a network, will these content producers really reap the benefit of their copyright vis-a-vis the traditional network model? Is the advertising model that works in this scenario dependent on viral marketing? How about sustained creativity for anyone individual in the mass of Internet content producers? High quality content takes time and time is money for those not independently wealthy? Doesn’t one need economies of scale to spread risk to maintain creative output et cetera? Won’t media firms (MTV FLUX, YouTube, and MySpace in this case) ultimately reap the benefits of copyright….? Who makes money?

TV viewership hits record high: report | Entertainment | Television | Reuters.com

Movie Marketing Blog - Movie Marketing Update: Fox Launches Second Demographically-targeted Specialty Division with FoxFaith

You might not have heard of social networking company Community Connect. It's a small, rapidly growing outfit that has built three MySpace-like sites, MiGente.com, AsianAvenue.com, and BlackPlanet.com, that target Latinos, Asian-Americans, and African-Americans, respectively. The sites are successful, with a total of some 16 million registered users.

The number is a fraction of MySpace's 100 million registered users, but Community Connect Chief Operating Officer Court Cunningham says it is the third largest social networking company in the U.S. in terms of revenue (see BusinessWeek.com, 2/28/2006, "Niche Networking by the Numbers").

With a growing market and more competitors entering the fray, Community Connect is aiming to take the social networking world by storm, one niche market at a time. When it launches its gay and lesbian-targeted site, Glee.com, by the end of 2006, Sun says his company's target market will grow by 40 million to 50 million, which is what he estimates the U.S. gay and lesbian population to be.

"That's almost the population of France, so our strategy of going niche isn't going too niche, since there are still big markets to conquer," he says. Next up: another niche site geared toward evangelical Christians, scheduled to launch in January, 2007. That site doesn't have a name yet.

"Some other sites are consumed like news info, but the Community Connect sites are more suited for integration of promotions and micro-sites," says Albert Thompson, director of interactive services for UniWorld Group, which handles online advertising for AstraZeneca (AZN), Ford (F), Lincoln, Burger King (BKC), and HSBC Bank (HBC). "There's a huge difference between banners and getting involved. It's the natural law as it pertains to rules of engagement," he adds.

"This is the second wave of social networking," says Greg Sterling, founding principal of Sterling Market Intelligence, a consulting and research firm focused on online consumer and advertiser behavior. The first wave, Sterling says, was typified by Friendster, where people found the sites fascinating, but where there was no clear business model, though there was some flirtation with selling classifieds. The second wave coincided with the rise of MySpace (NWS), which was organized around interests in music while developing a huge user base—more of a portal with a range of different revenue streams.

Community Connect co-founder and Chief Executive Officer Ben Sun says social networking is still in its "primordial ooze phase" and that, as dating sites did in the last several years, the business will continue to undergo differentiation, and even the big players will veer away from serving the masses. "More and more competitors will work to super-serve the needs of the niche groups," says Sun (see BusinessWeek.com, 9/12/06, "Buying Sites with a Built-in Audience").

Sterling says sites that rely on user-generated content are becoming common and have been surprisingly hard to monetize (see BusinessWeek.com, 4/19/06, "Social Networking's Gold Rush"). That's why Community Connect's business model is well suited to changing market tastes. When the dot-com bust forced Community Connect to diversify its revenue stream away from just advertising, it chose personals, at least partially due to the success of dating sites like Match.com and others.

"Our BlackPlanet users said 'all the black community is here, give us tools to find other African-Americans who are serious about dating and relationships, and we'll pay for it,'" says Sun. Community Connect soon replicated the service for all three of its sites.

Today, 15% of Community Connect's revenues come from online personal subscriptions. Advertising comprises 50% of its revenue, and 35% comes from job postings. The success of the job posting component of Community Connect resulted in a partnership with Monster.com (MNST), one of the largest job listing sites on the Web.

Monster.com had been unable to help its thousands of corporate clients develop diversity recruitment programs, since isolating minority applications would violate equal opportunity law. By partnering with Community Connect, Monster was able to secure résumés for clients from a database of job-seekers, 95% of whom were minorities (see BusinessWeek.com, Fall '06, "Hand in Glove").

MySpace selects Google search system | Business News | Reuters.com

 Excerpt:

News Corp.'s Fox Interactive Media said on Monday that signed a multiyear deal to use Google Inc.'s search and advertising system to direct traffic across its network of Internet sites, including the wildly popular MySpace.com.

One of the main challenges for media firms in the Creative Economy is market retention. "The media content provider resembles a hunter gatherer in that for the creator of the media you start from scratch and need to capture or kill your prey each time, if you wish to prosper," says William Drury, Senior Marketing Consultant formerly with IBM EMEA, "You are only as good as your last effort. Quality, measured as you wish, is primary."

A thousand options fragment the audience for mainstream broadcaster and advertiser alike. What this means for mainstream broadcasters is that marketing television shows that appeal to broad audiences has also becomes more expensive. One of the growing trends in prime time television today is how TV shows with a broad demographic are marketed more like films. "The Premier means everything, says Megan Wolpert, executive VP of Spyglass Television, "just like it does in the film and the music industry. Today, television is starting to put much more stake into the premier of a show. So where it use to be the box office weekend would make or break how many screens you stay in over the next couple weeks in order to see if you can make more money. Today the same phenomenon is happening with television."

What this means for advertisers is that they are paying more to reach those broad audiences, while their effect is less potent. Companies that continue to capitalize on customer relations and experiential marketing are the real winners in this scenario. Market retention is the key to deriving sustainability in the disposable and immediate age of rapid product turnover and new media. Brand awareness or identity alone are no longer enough.

Advertising Age - McKinsey Study Predicts Continuing Decline in TV Selling Power

Excerpt:

"Should everybody shift 30% of their dollars to the web?" asked Amy Guggenheim Shenkan, senior practice knowledge specialist in McKinsey's San Francisco office. "No. There wouldn't be room today if everybody wanted to shift online. Last year [online media] was $12.5 billion, by end of 2007 digital advertising will be $18 to $25 billion. ... So we're seeing a lot of growth, but if you want to match up share of attention and share of dollars it couldn't happen for that reason." The TV ad industry is a $68 billion one.

Wired 14.08: The Infinite Arcade

Excerpts:

Geometry Wars: Retro Evolved has a fraction of the total sales of PGR3. But Cakebread’s simple hobby project is at the forefront of a new trend: digital distribution of console games. From 2004 to 2005, console disc sales in the US dropped by $700 million, according to market research firm NPD Group. Meanwhile, game companies earned $143 million from online console gaming in 2005, a figure JupiterResearch predicts will grow to $2 billion domestically by 2011. At a panel discussion this February, Microsoft’s corporate vice president of interactive entertainment, Peter Moore, described the future of gaming: “Years from now, the concept of driving to the store to buy a plastic disc with data on it and driving back and popping it in the drive will be ridiculous,” he said. “We’ll tell our grandchildren we did that, and they’ll laugh at us.”

Advertising Age - MediaWorks - Digitas Brings in Digital VP From Roo

AdAge interviews Greg Verdino as the new Digital VP at Digitas about new media marketing. The segmentation or 'narrowcasting' of cable and internet audiences works for marketing brands like Home Depot or Big Pharma with websites, channels, and specialized social networking sites.

Excerpts:

"Advertising is in turmoil because of new technology," says Dave Morgan, CEO of Litton Entertainment when I interviewed the leading independent distributor in February this year. More than fragmenting audiences new media allow viewers to bypass advertising altogether.

Excerpts from "Amazon Readies Launch of Ad-Free Video Download Service":

A year in the works, the e-tailer's digital-video-download service is set for a mid-August launch and will feature a subscription service and a la carte movies and TV shows. Yes, folks, that's more ad-free TV for sale.

The service, which is referred to as Amazon Digital Video -- or Amazon "DV" -- has evolved over the past year from a music-themed offering to a video-centric one, according to production-studio and TV-network executives briefed on the plans. The reason? Apple, these executives said, already commands such a large share of digital-music sales that Amazon felt it would be too difficult to break into the market.

Amazon's reputation for ease of use could help it capture the video-download market, much as iTunes did with its simplicity in the music market. If that happens, it's sure to speed up consumers' comfort level with paying for ad-free TV content -- at a time when networks are trying to launch their own ad-supported video-on-demand plays. ABC, for example, has offered online versions of its shows that allow the advertisers to ride along and has plans for a more sophisticated offering in October.

Revenue from licensed digital-music distribution doubled in 2005 to $653 million, according to PricewaterhouseCoopers, which estimates that by 2010, digital music will be a $20.7 billion market. In contrast, the firm said consumers spent only $1.1 billion on online movie-rental subscriptions and $1 million on digital-streaming movies in 2005. Digital-streaming services are expected to outpace online rentals, by 2010 generating $400 billion in annual spending while online rentals will be a $3.2 billion business.

Amazon owns IMDb.com, the database of Hollywood information, and has been trying to get into the content creation business. Its first foray is a promotional program called "Fishbowl," a series of Bill Maher-hosted interviews, sponsored by UPS and Cingular. Mr. Maher's guests include moviemakers, actors and authors -- all of whose products can be bought on Amazon.