Archive for May, 2010

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Case Study: Sephora Offers Ratings and Reviews via Mobile

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Sephora, known as a consumer-friendly haven for sampling cosmetic brands, fragrances and beauty tools, recently tapped its shopper base for product ratings and reviews via a mobile site that the company launched at the end of 2009.

As the beauty retailer evolves its mobile strategy, Julie Bornstein, senior vice president of Sephora Direct, hints that there will be additional elements that will extend beyond ratings and reviews to enable consumers to tap their smartphones for in-store shopping opportunities. Here’s a snippet from the full interview with Ms. Bornstein on eMarketer Total Access: (Read more…)

Posted: May 28, 2010. Filed under: Case Studies,Consumers & E-Commerce,Interviews,Mobile,Social Media,Word of Mouth  
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Is Mobile the Next Newsstand?

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It’s a good question, and one that I debated yesterday with Gregg Hano, the VP of publishing for Bonnier Corporation (publisher of Popular Science, among many other titles), and David Steinberger, the CEO of Comixology, a Web and mobile technology platform for comic book publishers. The event was the first in a three-part series entitled “The Magazine Mobile Imperative” presented by the Magazine Publishers of America in conjunction with eMedia Vitals, an online publication that serves print media executives transitioning their business to digital.

In terms of the question at hand, the available survey data present a decidedly mixed outlook. A recent CMO Council study, “Leveraging Loyalty to Transform Publishing,” found that the vast majority (92%) of US magazine subscribers still get their favorite publications in print format and prefer print in nearly equal proportions. However, as awareness of e-readers increases, a growing portion of consumers are starting to consider switching their subscriptions to mobile devices.

Consumer attitudes toward paid content are likewise in transition. As my colleague Paul Verna noted in his March 2010 “Paid E-Publishing Content: Books, Newspapers and Magazines” report (available on eMarketer Total Access):

More than 90% of online newspaper readers and publishers in North America consider news content “somewhat” or “very” valuable, according to the American Press Institute.

However, when it comes to paying out of pocket for that content, most US consumers would take a pass.

A February 2010 Nielsen study, “Changing Models: A Global Perspective on Paying for Content Online,” found that only 36% of respondents had paid for—or would consider paying for—an Internet-only news source.

In an even more discouraging finding for content owners, an Adweek Media/Harris Poll study noted that only 23% of US Internet users were willing to pay for online news.

Other survey data presented in the report reinforced this rather gloomy outlook. And yet, we have word that Wired sold 24,000 copies of its iPad app in its first 24 hours of availability (in other words, since yesterday). Granted, the Wired app benefited from a great deal of pre-release buzz, including a video that was widely distributed in the wake of its presentation at the TED conference in February, but it does suggest that consumer attitudes toward paid content, and specifically mobile paid content, are slowly shifting.

As might be expected, the magazine publishers who attended the MPA/eMedia Vitals event were both very interested in and concerned by the growing level of media consumption on mobile devices, from smartphones to tablets. The excitement in the room was palpable when Gregg Hano took the audience through Bonnier’s development of the Popular Science iPad app, which will serve as the basis for a platform Bonnier will use for its other titles. Popular Science has also been the beneficiary of some significant buzz: during his April presentation of iPhone OS 4, Steve Jobs referred to the PopSci iPad app as the “king of the hill” of iPad magazine apps (Hano did not detail the impact of Job’s endorsement but it’s hard to imagine that it didn’t result in a spike in interest).

Similarly, the audience listened with rapt attention as David Steinberger described that by mobilizing comic books and putting a vast catalog of titles in front of a large mobile audience, many of whom lack access to print comic outlets, his company’s platform has actually boosted, not cannibalized, print comic sales.

Overall, the consensus in the room was that while many magazines had failed to effectively utilize the Web to build readership and drive incremental revenues, tablets, and the iPad in particular, represent a huge opportunity to get right what they had previously gotten wrong.

Posted: May 27, 2010. Filed under: Advertising,Brands,Entertainment,Mobile,paid content  
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Best Practices: Bringing Mobile Apps into Retail Stores

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This summer, Shopkick Inc. is launching a mobile app that the company hopes will help put smartphones to better use by offering consumers rewards and other services as they shop in brick-and-mortar stores. The startup has signed Best Buy and Macy’s as launch partners for the app.

The app itself is aided by a smartphone’s location-based features and camera. While shopping, smartphone users can scan barcodes on items they’re interested in to receive product information, rewards and promotions.

I recently chatted with Cyriac Roeding, co-founder and CEO of Shopkick, about retailers can use mobile apps to improve in-store experience for consumers, and what the future holds for the convergence of the two channels. Here’s a clip from the full interview available on eMarketer Total Access. (Read more…)

Posted: May 27, 2010. Filed under: Case Studies,Consumers & E-Commerce,Interviews,Mobile  
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Game’s On for Zynga and Facebook

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Their armies were massed on opposite sides of the battlefield, but when it looked all-but certain that a full-scale war would ensue, cooler heads prevailed and a peaceful agreement was reached. This is roughly the story of what happened this week between social game developer Zynga (publisher of FarmVille and other top titles) and Facebook.

In recent weeks, the two parties were said to be sparring over Facebook’s policy of requiring third-party applications to use the company’s Facebook Credits virtual currency for all transactions conducted on the site. Because Facebook takes a hefty 30% cut of each transaction, Zynga complained and threatened to take all its games off Facebook.

Implicit in this threat was that Zynga would also pull its ads from the popular social net. According to an estimate from financial researcher Steve Carpenter published in AdAge, Zynga spends approximately $100 million per year on advertising, and this figure amounts to 20% of Facebook’s revenue. Zynga has also driven untold numbers of users to Facebook with its addictive, virally appealing games.

Despite these successes, it seemed unrealistic all along that Zynga would make good on its threat to leave Facebook and build its own online playground. Facebook’s brand is much bigger than Zynga’s. The social network is nearing more than 500 million active users worldwide, and Compete estimated 132 million unique visitors in the US in March 2010. Compare that to Zynga.com’s 20.1 million US visitors the same month, according to Compete.

Further, Facebook is far more integral to the way people interact online than any social game, no matter how popular. To put it in the simplest terms, Zynga needed Facebook more than Facebook needed Zynga.

Neither party disclosed the terms of their agreement, but it’s a five-year deal that essentially keeps Zynga on Facebook for that period. It’s rumored that Zynga accepted Facebook’s 30/70 revenue split, or something closely resembling that share.

Industry insiders largely cheered the deal. Chris Cunningham, CEO of Appssavvy, told AdAge: “Before the partnership, it was two companies operating in the dark as to what their next moves were going to be. Every time Facebook would update the platform, it caused Zynga to scramble in terms of updating the code. Now Zynga will have a front-row seat as to how to adjust their games.”

Now, back to that virtual farm …

Posted: May 26, 2010. Filed under: Advertising  
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How Do Pay Walls Affect Referring Traffic?

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Some new developments in the ongoing transition from “free” to “fee” in the e-publishing world. After sending mixed signals back in February, The New York Times clarified its position on whether blog-originated article views will count toward a user’s quota under the paper’s eventual metered access system (due to debut next January). The verdict: The articles will count toward the quota, but in a sense it won’t matter because users will still have free access to articles referred by third parties – even after the limit is exceeded. That will come as good news to the thousands of bloggers and consumers who send and receive links to NYT articles.

A study by the Pew Research Center’s Project for Excellence in Journalism found that 80% of the articles that bloggers link came from four news outlets: BBC News, CNN.com, The New York Times and The Washington Post. The absence of The Wall Street Journal and The Financial Times from this list strongly suggests that those organizations’ longstanding pay walls have deterred blog referrals.

And speaking of pay walls, the WSJ’s parent company, News Corp., is taking an even harder line with its UK properties The Times and The Sunday Times. News Corp. is about to unveil a pay structure for those outlets that will see them disappear entirely from Google and other search engines (except for legacy content that’s already archived in those sites’ databases). The Times and Sunday Times won’t even publish headlines or paragraphs on the free side of the pay wall, as the WSJ has done for years. If I were a poet I’d say The Times’ content will be AWOL outside the pay wall (I’m obviously not a poet).

I wish News Corp. chairman Rupert Murdoch good luck on this one. I’d be willing to bet a week’s worth of online access to The Times and Sunday Times that News Corp. will eventually soften its stance for those papers and implement something closer to the WSJ model. It will certainly be interesting to see whether the struggling industry’s new monetization plans will have a negative impact Web traffic, which continues to grow on major newspaper sites. For now.

Posted: May 26, 2010. Filed under: Advertising  
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