58% Local Search Growth in 2008

Local search, using online search tools to find local businesses, products, or services, grew 58 percent in 2008, reaching an annual total of 15.7 billion searches, says comScore. By comparison, overall core U.S. Web searches grew 21 percent year-over-year, nearing 137 billion searches by the end of 2008.

About 75 percent of the top 100 keywords searched on Internet Yellow Pages sites were non-branded, indicating that a majority of consumers have not decided on a specific company or product brand when they begin their search, comScore says.

Nearly half (45 percent) of Internet Yellow Pages and local online directory searchers made an online purchase in the fourth quarter of 2008.

One wonders whether Google Maps and mobile Web access have at least something to do with the growth. Local search makes much more sense when one is out of the home or office, and Google Maps, with or without global positioning satellite support, makes it really easy to search for something one needs, where one is at the moment.

The other angle is that small businesses, which operate locally, now are investing more heavily in Web sites, which would allow them to be found more easily.

http://www.marketingcharts.com/interactive/local-search-grows-58-outpaces-overall-online-search-8929/?utm_campaign=rssfeed&utm_source=mc&utm_medium=textlink

http://www.marketingcharts.com/interactive/smbs-poised-to-triple-website-spending-8894/

Satellite Broadband: What Will Reviewers Do?

There is little doubt but that satellite broadband providers will try to secure broadband stimulus funds to subsidize the cost of customer premises equipment, a move that Hughes Network Systems SVP Mike Cook believes could increase its subscriber base by an order of magnitude.

WildBlue presumably also would see customer lift if such subsidies were possible.

There also is some speculation that funds could be sought for new satellite construction to offer customers much-higher access speeds.

Anything is possible, of course. But if I were reviewing grant applications, I'd be looking for projects that get broadband services to people as fast as possible, to as many people as possible, creating new jobs now, are sustainable after grant funds are gone and can get services to the most-isolated locations, across the United States, now.

Anything is possible. But looking at funding for new satellites that might not be launched for years, and consuming lots of program cash, compared to spending lots less and serving lots of rural customers now, would rank a lot higher.

Politically, I'd also (for better or worse) be looking in advance for evidence to justify why I made my decision. Enabling new broadband services to rural residents in all 50 states, within months, is safer than defending a relatively signficant capital investment that won't result in new services for some years.

Also, as a reviewer, I would be looking to get the biggest bang for the buck, spreading the money as widely as possible. On that score, subsidizing CPE would seem a more defensible choice that building satellites.

Social Gaming Grows

The number of people playing social games is expected to surge to 250 million in 2009, from 50 million in 2008, by some industry estimates. And there is a shift in the way games are used. Connecting with friends, and doing things with friends or other people, now is becoming more important.

It's but one more example of how social aspects of gaming, media and content consumption are growing.

http://www.businessweek.com/technology/content/apr2009/tc20090429_963394.htm

Video, Social Networking Top Online Growth

Online users have significantly shifted their interests over the past five years, say researchers at Nielsen Online. Where  portal-oriented browsing sites, such as shopping directories, guides and Internet tools or Web services used to be the top categories for user engagement, today the active Internet user tends to prefer sites that contain more specialized content.

There is a growing shift to more-fragmented usage, in other words, as well as more use of video and social sites. Video and social networking sites are the fastest-growing sites in 2009.

The number of American users frequenting online video destinations has climbed 339 percent since 2003, for example.  Time spent on video sites has shot up almost 2,000 percent over the same period.

In the last year alone, unique viewers of online video grew 10 percent, the number of streams grew 41 percent, the streams per user grew 27 percent and the total minutes engaged with online video grew 71 percent.

There also are 87 percent more online social media users now than in 2003, with 883 percent more time devoted to those sites.

• In the last year alone, time spent on social networking sites has surged 73 percent.

In February, social network usage exceeded Web-based e-mail usage for the first time.

http://blog.nielsen.com/nielsenwire/wp-content/uploads/2009/04/nielsen-online-global-lanscapefinal1.pdf

1 of Every 7 Minutes of Media Use are on Mobile

More than a third of high-use smart phone users are taking action on mobile advertisements, according to AOL Platform-A and Interpublic Group of Companies UM. About 53 percent of smart phone users are clicking on advertisements.

Some 35 percent are requesting more information or a coupon, while 24 percent are making purchases, a new study sponsored by AOL and UM indicates.

The study shows 82 percent of smart phones get used at work while 81 percent are used while people are shopping. Currently, nearly one of every seven minutes of media consumption takes place on a mobile device, and six of every 10 consumers expect their mobile internet usage to increase significantly over the next two years, AOL and UM say.

And though there was a time when mobile Web access might once have been an area where U.S. consumers trailed other consumers, that is no longer the case. In fact, mobile Web access is so widespread that the use cases are morphing.

"Now mobile is less about 'wireless online' and more about being a highly personal, customized medium," says Graeme Hutton, UM director. So the big question is how smart phone applications evolve in the direction of  answering unmet needs. The mobile Web is not simply a mobile version of the PC-accessed Web, in other words. It might be evolving in the direction of becoming a medium in its own right.

http://news.prnewswire.com/DisplayReleaseContent.aspx?ACCT=104&STORY=/www/story/04-28-2009/0005014377&EDATE=

Mobile Twitter Passes ESPN, Facebook, and Google

Subscribers to paid community Predicto are different from users of the free mobile Twitter community, says Nielsen Mobile. Twitter has a dominant presence among young and male oriented audiences while Predicto attracts a more mainstream following with a broader penetration, particularly with the female and older demographics.

Twitter is the leading free mobile community, and Predicto is the largest paid mobile community, Nielsen says.

In the fourth quarter of 2008, Twitter amassed approximately 812,000 unique text messaging users, while Predicto Mobile interacted with over 2,303,000 unique users, according to Nielsen Mobile.

Some other key differences in the user breakdown of the two leading mobile communities include 57/43 percent male/female ratio for Twitter versus 45/55 percent for Predicto.

Some 49 percent of Twitter users are in the 35-plus age group versus 68 percent with Predicto. About16 percent of Twitter users earn $100,000 or more compared to 20 percent for Predicto.

During the fourth quarter of 2008, Twitter overtook other free mobile services including ESPN, Facebook, and Google. At the same time, Predicto remains the undisputed leader in the premium mobile space, further distancing itself from NBC in second place, Nielsen Mobile says.

http://www.prweb.com/releases/2009/04/prweb2367764.htm

Bye Bye RGU, Hello PSU, Says Time Warner Cable

New markets require new terminology. When the competitive local exchange business was roaring in the late 1990s and early 2000s, companies reported using a metric known as "voice grade equivalents," a metric they deemed a better measure of growth than "lines."

Likewise, cable operators began reporting "revenue generating units" when they ramped up new services ranging from voice and broadband Internet access to various types of digital video products.

So Time Warner Cable is using a new subscriber metric its calls a "primary service unit, which the company defines as the total of all discrete video, high speed data and voice subscriptions. A single household buying voice, broadband and video would repreent three PSUs.

The older RGU numbers are similar, but have included digital video or VOD services purchased in addition to basic cable. The new PSU metric presumably is intended to better reflect discrete numbers of voice, broadband and video accounts sold.

In the first quarter, for example, Time Warner Cable reported 26 million PSUs, but 34.8 million RGUs.

http://files.shareholder.com/downloads/TWC/629033522x0x290734/4e925b06-841e-47d8-bcc6-bc8f52f1973a/290734.pdf

Time Warner Cable Reports: Still No Evidence of Cord Cutting

Time Warner Cable first quarter results are in, and, so far, nothing unexpected seems to be happening, relative to financial or subscriber behavior attributable directly to the economy. Comcast reports tomorrow, so we should be in fairly good shape as far as analyzing whether reported or claimed consumer intent to drop video subscriptions, or even scale them back dramatically, is happening.

So far, with results in from Time Warner, AT&T and Verizon, we can note that, despite what people might say, or what observers might believe, the business remains quite stable. We'll have to wait for several other reports from major satellite and wireless providers to assess what is happening with wireless, and to flesh out the video numbers.

But, so far, nothing unusual can be seen. Share shifts continue. Consumers might be scaling back on premium services or discretionary purchases such as video on demand. All of that is typical for a recession. But there is so far no serious evidence of any significant shift in behavior, compared to past recessions, in the video or fixed broadband segments.

Wireless might be a different matter, as the two major providers one suspects will show market share pressure have not yet reported. The issue is whether total postpaid wireless subscriptions have declined. Some shift to prepaid is expected, which potentially could lower average revenue per user, if new data service revenue does not grow faster than the slippage to prepaid voice. So far, data revenue growth remains brisk, so ARPU has not fallen. In fact, it has grown at AT&T and Verizon Communications, the two major wireless companies to report so far.

Time Warner Cable revenues for the first quarter of 2009 increased five percent ($204 million) over the same quarter of 2008,  to $4.4 billion. Subscription revenues grew six percent ($256 million) to $4.2 billion. Video revenues rose two percent ($64 million) to $2.7 billion, driven by video price increases and continued growth in digital video subscriptions partially offset by a year-over-year decrease in basic video subscribers and premium channel and transactional video-on-demand revenues.

High-speed data revenues increased 11 percent ($107 million) to $1.1 billion while voice revenues were up 23 percent ($85 million) to $451 million. Advertising revenues declined 26 percent ($52 million) to $145 million.

Customer relationships were 14.7 million as of March 31, 2009. Primary service units, which represent the total of all video, high-speed data and voice subscribers, reached 26 million with net additions of 435,000 during the first quarter of 2009.

Revenue generating units (“RGUs”) totaled 34.8 million – reflecting net additions of 556,000 during the first quarter of 2009.

Triple Play subscribers exceeded 3.2 million (or 22 percent of total customer relationships), benefiting from 146,000 net additions during the first quarter of 2009.

Video penetration now is at 48.7 percent while high-speed data penetration of the customer base now is at 33.5 percent. Phone penetration is at 15.1 percent of the customer base.

Some 55.2 percent of households buy a bundle of some sort. A third of households buy a triple-play package, while about 22.1 percent of those bundle buyers take a double play.

Perhaps the most shocking number for anybody who has followed the cable industry over the past couple of decades is customer penetration of homes passed. Time Warner Cable today sells a service to 54.5 percent of locations the network passes. But looking just at multi-channel video, Time Warner sells video services to just 48.7 percent of households passed, down sharply from the nearly-70-percent levels operators used to have in many markets.

Industrywide, cable penetration now is at 51 percent, according to the National Cable & Telecommunications Association.

Mobile and Social Network Ad Revenue Hot Through 2014

Mobile and social networks are the hottest areas of online advertising growth, say researchers at Forrester Research.
The cumulative average growth rate for the six-year period from 2008 through 2014 is 17 percent, Forrester Researchers say. However, the growth rate for mobile advertising is much higher, at 27 percent per year, and the growth rate for social network advertising is 34 percent per year.
Click the image for a larger view.

Advertising Down, Internet Advertising Up, ZenithOptimedia Says

Consumers are saving money by spending more time at home, so media consumption is increasing, particularly of television and the Internet, says ZenithOptimedia Group. That might explain what appears to be consistent performance by providers of multi-channel video entertainment, though there are share shifts occurring.

And though overall advertising will decline globally in 2009 by about seven percent, Internet ad spending should increase 8.6 percent in 2009, down from 20.9 percent in 2008, ZenithOptimedia Group says.

Most of this growth will come from search advertising. The firm predicts U.S.search advertising to grow nine percent in 2009, while classified grows just 1.8 percent and traditional display shrinks 1.8 percent.

Internet video and rich media advertising is growing about 30 percent annually, while Internet radio advertising is growing 29.7 percent. Podcast ad revenue is growing 11.9 percent, but each from relatively small bases. Internet video, Internet radio and podcasting revenues represent about 12 percent of overall U.S. Internet ad spending.

Internet ad growth is predicted to grow at 11.3 percent in 2010 and 15.3 percent in 2011, ZenithOptimedia Group says. The Internet's share of total advertising will grow to 14.6 percent in 2011, up from 10.4 percent in 2008.

http://www.zenithoptimedia.com/about/news/pdf/Adspend%20forecasts%20April%202009.pdf

Triple Play Future for Web Business Models

Where are Web business models headed? Towards a mix of advertising, subscription and transaction models, says Bernard Lunn ReadWriteWeb COO. There are some obvious implications.

Advertisers will adopt a barbell approach: where they will buy media on a traditional cost-per-thousand basis for branding and cost-per-action for direct-revenue generation, he says. Cost per click will still be dominated by Google but will become less dominant as CPA gains traction, Lunn argues.

The big issue, though, is that Google so dominates the CPC business that it makes tough any other third party CPA model. Lunn thinks ad-suported media will be a mix of CPM and CPA models, but must deal with CPC to achieve a workable balance.

Content increasingly will be dominated by user-generated sources, if only because the amount of professionally-created content is not going to keep up with the amount of UGC. To make UGC consumable, more human editing will be required.

http://www.readwriteweb.com/archives/mapping_the_current_web_transition.php

Small Business Sees Web Site Investments as "Advertising"

In 2008 small and medium-sized organizations spent $6.7 billion on online advertising and will increase that spending relatively slowly between now and 2013, according to researchers at Borrell Associates.

By 2013, SMEs will be spending about $7.4 billion on online advertising, representing relatively slowish growth of nine percent over a five-year period, an annual growth rate of a bit more than 1.5 percent annually.

That might surprise you, if only because the rate of growth is slow slow it might be considered "flat." But Borrell suggests something else is happening. SME spending on Web sites will grow about eight percent a year.

You might not consider Web site spending as advertising, but Borrell Associates says this is precisely how SMEs think about the matter. It isn't so much a shift of advertising from traditional methods, including telephone directory listings and direct mail, to the Internet. It is that small businesses see their own Web sites as a form of "advertising," perhaps a functional substitute.

Consider this a sort of shift to "earned media" (awareness gained through promotional efforts rather than paid advertising). The other angle is that small businesses rightly see their Web efforts as partly a direct sales channel, partly direct marketing and partly a substitute for other sales activities such as printing and distributing flyers, postcards and other direct marketing messages.

60% of Twitter Users Do Not Return the Following Month

Twitter’s unique audience exploded over 100 percent in March 2009, meaning it likely has reached an inflection point of some sort. But there are issues: Currently, more than 60 percent of Twitter users fail to return the following month, says David Martin, Nielsen Online VP.

That means Twitter’s audience retention rate, the percentage of a given month’s users who come back the following month, is about 40 percent.

To put that in perspective, it is roughly the equivalent of turning over 100 percent of the user base every three months. Such a churn rate is unsustainable.

"It is clear that a retention rate of 40 percent will limit a site’s growth to about a 10 percent reach figure," says Martin. "A high retention rate doesn’t guarantee a massive audience, but it is a prerequisite."

There simply aren’t enough new users to make up for defecting ones, at some point.

When Facebook and MySpace were emerging networks like Twitter is now, their retention rates were twice as high, says Martin. When they went through their explosive growth phases, that retention only went up, and both sit at nearly 70 percent today.

http://blog.nielsen.com/nielsenwire/online_mobile/twitter-quitters-post-roadblock-to-long-term-growth/

CableVision to Offer 101 Mbps, Claims Blagging Rights

Cablevision Systems Corp. plans to sell a new 101 Mbps service (with 15 Mbps upstream) for $99.95 a month. The service also will include free access to Cablevision's metro Wi-Fi service, beginning May 11, 2009.

These days, such really-fast services are more a matter of marketing rights than revenue. Earlier this year, Tom Rutledge, Cablevision COO said the company didn't expect much financial impact from any of the really-high speed services in 2009, at least where the consumer market is concerned.

To the extent actual sales will be happen, they are more likely to be generated by small business users. 

http://bits.blogs.nytimes.com/2009/04/28/cablevision-goes-for-us-broadband-speed-record/

Are IP Telephony Suppliers Off the Mark?

Are VoIP retailers "failing to rethink their products aimed at small and medium-sized business owners?

It's hard to argue with this argument in favor of simplicity, savings and support. On the other hand, there arguably are other issues. Demand, for example.

Recent surveys conducted by Savatar Research over the last couple to several years consistently have shown relatively high awareness of IP telephony but flattening sales. Quarterly SME adoption rates of IP telephony have been falling since the third quarter of 2006, Savatar notes.

Since it is hard to think of any IP telephony provider that is not acutely aware of the need for simplicity, savings and support or extreme ease of installation so support isn't necessary, there still is some buyer resistance, apparently.

Savatar surveys also show fairly high awareness of new features IP telephony makes possible. About 38 percent of managers or executives at firms with up to 500 employees already believe IP telephony will save them money, says Savatar. At firms with less than 100 employees, as many as 42 percent of prospects might already believe IP telephony will save them money.

About 18 percent of prospects might be expected to believe that IP telephony offers a more innovative set of features, Savatar says.

Of course, some providers would argue they have cracked the code on IP telephony, and do not have any need to "rethink" how they are packaging and selling their products.

As Savatar says, SME buyers just want to be sure they are buying a phone system that works. Unified communications, software as a service, hosted and managed services, cloud computing and mashups are interesting to lots of us. Small organizations and businesses are unlikely to be so inclined. They just want a phone system or service that works.