Unicast

At the current time, the general model for successful internet marketing and revenue generation consists of engaging users with brand messages and ultimately persuading them to take a call to action to purchase a good or service, either online or off. However, emerging technologies, increasing internet traffic, and the growing popularity of social networking has opened the door to a $5.5 billion dollar virtual commerce industry that could possibly have large ramifications to the future of online marketing and product sales.

For those unfamiliar with virtual commerce, it is described as the exchange of virtual goods or “gifts” as they are most popularly known amongst Facebook users. In other words, virtual commerce is the exchange of pixels for fake money (which must be bought with real money). Americans spent roughly $400 million on virtual goods last year, and this number is only expected to increase, especially following this week’s news of Facebook fostering a partnership with Malaysia-based MOL Global, a company specializing in virtual currencies. The entire industry is only two years old with much of the revenue and research coming out of Asia, but current trends seem to follow real world trends for consumer products, the laws of supply and demand, and the “Invisible Hand” of economics if you will.

For example, a luxury “out of production” Golden Halo, which can be worn by characters in the online world of Gaia Online, recently sold for $6,000 on eBay. To say that virtual goods will continue to follow these trends is probably jumping the gun, but it will be interesting to see how this online community develops in regards to security and how currencies can be exchanged across social networking platforms, dating sites, and other areas of the internet.

As virtual goods become more popular and user friendly, it is only a matter of time before advertisements with an immediate call to purchase within an ad unit emerge. For example, an ad featuring a virtual good with all of the necessary purchasing fields and a “Buy Now” button is a conceivable option. For now the virtual goods industry is still in it’s infancy, and not capable of making waves in the larger pool of digital marketing, but if people are willing to pay $400 million for “products” that cost a company virtually nothing, you better believe developers will be willing to spend money on game changing ways to market them online.

The Unicast Business Intelligence team has compiled general benchmarks related to campaigns served in the US during Q1 of 2010. These benchmarks are assessed across all Unicast tagged campaigns and are tracked across individual formats and verticals. This report provides a summary of the engagement and interaction performance of some of the most popular ad formats served by Unicast through March, 2010.

Key Findings Include:

•Branded Canvas ad formats, which are fully custom interactive units positioned within full episode video players, produced very high interaction rates and average video view time.

•Consumer Packaged Goods produced the longest average interaction time across verticals.

Unicast Analytics Benchmark Report Q1 2010

Recently, we finalized a report to help online advertisers know what women want from the web. By surveying 578 women in the U.S., we’ve helped shed further light on the influence women have when it comes to their purchasing power and how they plan to use it on the web this summer.

Some key findings that were revealed in our report were that 76% of women plan to use the web to connect with friends and family, 67% will keep up with the news, 64% plan to shop for sales/compare prices, 59% intend to entertain themselves (play games, listen to music or watch TV/movies), and 48% will research travel/vacations.

The fact is, women have enormous purchasing power and as advertisers we need to be aware of how to reach them – 85% of all brand purchases are made by women. As women continue to bring more of their daily tasks online this summer, we need to be prepared to get access to the women who will be plugged in this summer. To learn more and read the full report then visit the link below and see the numbers for yourself.

Unicast's 2010 What Women Want From the Web Report

A lot of controversy has come up surrounding Apple’s recent change to its developer terms prohibiting Google and other third party affiliates from collecting analytical data from iPhone and iPad apps. We will leave it for the courts to decide, but it’s not completely clear if this is an attempt by Apple to monopolize an emerging market, protect their stake in the smart phone market from Google and others, or just Apple being “different” (which doesn’t seem to be so different anymore). Despite what tricks Apple may have up their sleeve, there are a few daunting realities surrounding this information collection that are no secret to all parties involved.

The sheer volume of data collection coming from mobile users is going to increase exponentially. With the growing popularity of mobile computing, marketers are going to want to start looking at things like location, time, and previous interactions within the mobile device.

The value of this data is going to increase. With new metrics being collected, data will be used to create more innovative ways of ad delivery, and of measuring success. In a dynamic online advertising environment where tiny changes to ad design or placement can mean a world of difference in performance, it forces marketers to buy in, or bust.

And lastly, Apple clearly wants to collect and do things with this data that it doesn’t want Google to know about. This is really no surprise from Apple, but does create artificial barriers to competition and stirs up even more bad blood between fierce competitors, who most certainly will be required to play nice at some point in the future. However, for the foreseeable future, Apple has the tablet market cornered, and doesn’t want to provide information to anyone who may infringe upon that.

Competitor AdMob’s CEO Omar Hamoui wrote in a blog post, “"Artificial barriers to competition hurt users and developers and, in the long run, stall technological progress."

This may be true Mr. Hamoui, but is it “an attempt to monopolize, combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations” as prohibited by the Sherman Antitrust Act of 1890?

This will have to be left for Washington to decide, and with a law originally written in 1890 with no concept of “information” as a commodity or mass marketing in general, it could really go either way. In the meantime, the data keeps rolling in.

Recent research from eMarketer is showing that ad spending is bouncing back at a faster rate than previously expected. We have seen this scenario before, the economy turns south and marketing budgets and staffs get cut to the bone only to later come back stronger than ever. It’s a typical reaction and not the last time we will see this in our careers unfortunately.

So now that the money is flowing back, what have we learned? Ad dollars are flowing into search and video advertising at the highest rate with banner advertising having the third highest growth rate. Advertisers are really taking hold of video advertising and harnessing it’s power to engage and deliver their brand message. Video players abound on the web and video content seems to be everywhere making for a crowded marketplace. The next struggle for these advertisers will be how to differentiate their message above the rest of the video content. Creative departments will be pressured to come up with unique videos and partner with best-in-class vendors like Unicast who can provide custom formats and features to deliver the creative message.

The growth in video advertising will spark a new wave of creativity online and Unicast is ready and able to bring new creative solutions to the marketplace.

CPG spending is projected to grow faster than any other industry over the next five years and it’s not just because interactive is a low-cost medium.

Coming out of the recession, companies are definitely trying to maximize their spend and find low cost methods of reaching their customers. While CPG companies are no different, they are also exploring new methods of engaging their customers and building brand loyalty. A recent Unicast CPG client tested incorporating a game into their advertising campaign and low-and-behold this campaign for a simple household product that some might even dare to call boring generated a higher interaction and click through than many of the campaigns with a much more exciting product.

This year Pepsi did not participate in the Super Bowl in favor of putting that spend to work in social media. Many might call this a mistake, others might think this is a move based on the recession and cutting back to protect the P&L. I think the CPG companies are on to something much larger and their increasing spend in this category is a direct result.

To view the entire Forrester research report click here:

Consumer Goods Interactive Spend Outpaces Other Industries.pdf (159.15 kb)

Recently Google announced that it was going to deploy their own fiber optic network to a "small number of trial locations". The network will bring 1 gigabit speeds to your doorstep which is a huge improvement in speed from even the highest grade of service from the cable or phone companies.

So what is the mighty Google up to? Some say no good and that they will now be able to mine the data from any home that it has wired and see any website you visit. This is true they could and probably will do this, so could our current ISPs but my guess is that Google has the infrastructure and capital to pull it off. Can you imagine the amount of data?

Others are cheering the competition to the cable and phone companies and that it will make them "up their game". I see that, and a little healthy competition is a good thing.

I also see Google or anyone else who brings this type of speed to your home creating a game changing event for how we consume all media. The potential for streaming video content will be incredible. I currently have hundreds of channels at home to choose from but I would bet if you looked at what I actually consume, it is less than 10% of those channels. If Google goes for wide adoption of this service, we can move to a streaming model where content providers create a subscription service that streams the shows/content you want to you and eliminates the 90% you don't use. Just simply subscribe to Mad Men, The Office, Family Guy and those shows stream to you in their normal time slot and then are stored on your computer as part of your subscription. Different levels of service will likely dictate the amount of ads you receive and whether you watch the content through a custom player or if you get the actual file. Advertisers will get more freedom to create highly interactive ads in these environments because bandwidth no longer becomes an issue. Live sporting events present a problem but you can pick those up with an HD antenna for less than $100 one time, not every month.

I am not worried about Google moving into this space but I think the cable companies should be.

Projecting rapid growth in online video is pretty much a no-brainer. So what is it that makes online video attractive enough to have marketers pour money into it? For starters, online video is much more intimate than offline. It’s kind of like when you were a kid sneaking downstairs to watch TV after bedtime, you sat inches away from the screen with the volume down and gave whatever you were watching your undivided attention. Online video can provide a near one-to-one experience. Second, targeting the right audience with your message in online is much easier. Many sites know who you are and what you like and can leverage this information to make the experience better. Third, bandwidth has been increasing rapidly each year and this is allowing for more streaming video options for advertisers and the ability for consumers to see these ads without interruptions or connection issues. Finally, and this is both good and bad, the assets for online video can be leveraged from offline which can reduce the production costs. The flip side of this last one is that many offline videos are not well suited to online either because of content or length.

Online video will continue to rise and through further advancements in hardware, bandwidth, and software in the coming years could overtake the other display mediums.

The chart below from Forrester Research, shows an upward trend in online ad spend by Marketers in the U.S.

The chart below shows how Microsoft's "Engagement Mapping" allows advertisers to determine their Engagement ROI based on their campaign's features:

I read Mike Shield’s article today in AdWeek titled " Complaints Rise Against Video Ad Nets " and it brings up the question: What is fair play in pre-roll, and how do marketers figure out who’s playing nice and who’s automatically playing their video below the fold to boost numbers?

Pre-roll CPMs are too high to waste below-the-fold, even when using an ad network. Using an impartial 3rd-party to serve ad content (as opposed to the network itself) can help alert advertisers to duplicitous practices. Unicast’s ad server provides each advert we serve with the intelligence to know where it is on the page - left-side, right-side, top, bottom – when it plays.

To help keep ad networks honest, how about the industry requires reporting feedback that tells advertisers where on the page their pre-roll was when it started to play? If you’re an advertiser using pre-roll, you should demand this of your ad networks/servers now. And automatic playing shouldn’t happen automatically. The IAB should recommend user-play video by default along with the development of new metrics that disaggregate user-play impressions vs. auto-play impressions, much like the IAB did in enforcing the disaggregation of image vs. rich media impressions. Armed with this information, advertisers will be able to punish the ad networks that waste their pre-roll spend.