Earned Media to Grow Most in 2010, Survey Finds

Earned media spending will see the biggest increases in spending in 2010, a new survey of brand marketing professionals by the Society of Digital Agencies finds. "Earned media" refers to refers to favorable publicity gained through promotional efforts other than advertising, as opposed to paid media, which refers to publicity gained through advertising. Increasing use of social media accounts for much of the change.

About 81 percent of the brand executives expect an increase in digital projects in 2010, and half will be moving dollars from traditional to digital budgets. Further, more than 75 percent think the current economy will push more allocations to digital formats.

Senior marketers reported that social networks and applications were their biggest priority for 2010, for example.

“Unpaid, earned, proprietary” media spending has seen the sharpest rise, with nearly 20 percent of respondents reporting increases of more than 30 percent.

Apple iPad Will Use AT&T 3G Network

Apple's new iPad will use Wi-Fi and also AT&T's 3G wireless network. Users can opt for using Wi-Fi only, as iTouch users do, or can buy 3G service. AT&T offers a 250-megabyte plan for $15 a month, and an unlimited plan for $30, neither requiring a contract.

Those pricing levels more closely resemble an iPhone data plan than a data card subscription, which costs $60 a month, and typically requires a contract.

Some observers might say the iPad subscriptions represent a "higher-quality" or higher-margin revenue source than is typical for iPhone subscriptions, which also represent $30 a month in fees, because AT&T gets the traffic without having to factor in a subsidy for the devices.

One issue is how much data iPad users will consume. Users of the iPhone typically consume about 400 megabytes a month, where mobile PC card users tend to consumer about 2 gigabytes a month. A reasonable estimate is that iPad usage will fall somewhere between those levels.

Apple Launches iPad: What Don't We Know?

So this is the day we found out, for sure, that Apple is launching a tablet device called the iPad.

Nobody knows how big a market it might create. And that's probably the key: Apple likely intends to create a new market, not simply be " a better Kindle" or a "larger-screen iPod." 

There's no way of telling, yet, what will happen. Apple has launched products before that did not gain mass acceptance, though its iPod and iPhone launches have been revolutionary. The difference this time might be that the iPod basically took a huge existing human behavior ("listen to music" or "voice" and "using the Web") and changed the distribution or the experience. 

It is less clear which major human activity the new tablet will reshape. "TV" is one possibility. "Reading" is another. Down the road, the biggest potential innovation is a way to blend text, full-motion video, music and search in new ways. But that would take some time. Longer term, there may be a new "mobile media player" opportunity. 

Near term, a tablet does not seem to offer as clear a path to reshaping a major human activity as the iPod did for music or the iPhone did for mobile phones and mobile Internet. That might simply be my own lack of imagination. But so far, "mobile TV" hasn't proven as popular as "cheaper consumable media." To a large extent, e-book readers are popular because they offer cheaper ways to buy text content. Mobility plays some part, but it likely is "cheaper ways to read books" that supplies the greatest value.

If that turns out to be true for the tablet, it won't so much be "mobile" consumption as "cheaper prices" for content that prove compelling. Right now, it isn't clear that will be the case. 

The emergence of new multimedia formats is the likely long-term innovation, but that will take some time. At the outset, we'll have to see whether the tablet is able to reshape one or more existing applications and activities, in one or more settings. 

It isn't so clear that people will suddenly change their media consumption patterns because a new mobile display is available. PCs already can provide much of that capability, while the iPod itself and devices such as the Kindle allow mobile or cheaper reading. 

The true revolution lies in the new medium the tablet might enable. But new media requires assembling a complex ecosystem, with lots of stakeholders with much to lose. That suggests the business relationships will take some time. In the early days, the tablet likely will have to succeed based on its ability to do a superior job of satisfying some existing behavior and need. 

Is There a Need for iPad? If So, Is it a Big Need, and Big Market?

"All of us use laptops and smartphones now," says Steve Jobs, Apple CEO. "The question has arisen lately: is there room for a third category of device in the middle, something between the laptop and the smartphone?"


And that's the question users, application developers, content providers and marketers will have to answer. Is there some clear need for a third device? And if so, what is that need?


Suppliers have been trying to get the features and value right for as much as 20 years, depending on how one wants to characterize the "tablet" market. So far, nobody has proven there is a large consumer market for devices halfway between a smartphone and a notebook computer. 


We do know there is a major mass market for personal music players, personal music players with Wi-Fi access and smartphones with touchscreens that handle native Web applications very nicely. 


What Apple hopes to prove is that there are similar needs for a "device in the middle" that is an Internet-connected media player, easier to carry than a netbook or notebook, but with a relatively-large display for media consumption. 


The relative lack of apparent demand when consumer surveys are taken is not the big stumbling block. Consumer surveys would not have predicted the success of most recent Apple products. The bigger issue is simply that the device must uncover some existing, large and unsatisfied need.


We don't yet know yet whether the iPad will uncover such needs or not. But that is what Apple expects to discover. 

E-Book Readers Unlikely to Help Newspapers, Study Suggests

Portable e-readers such as the Kindle are unlikely to win readers back to the newspaper habit unless they include features such color, photographs and touch screens, according to professors of advertising Dean Krugman, Tom Reichert, and Barry Hollander, associate professor of journalism in the University of Georgia Grady College of Journalism and Mass Communication.

Young adults in particular compared the Kindle DX used in the study unfavorably to smart phones, such as the iPhone or Blackberry.

Skeptics might also suggest that changing the delivery channel for an unpopular product should not be expected to change the demand curve. An unpopular product's problem is its features and value, not its channels.

For younger adults, the Kindle fell short when compared to their smart phones, with touch screens and multiple applications, available in a single small package. The e-reader felt “old” to them, the professors say.

Older adults were overall more receptive to the concept of an e-reader. However, the Kindle failed to include aspects of the traditional newspaper they had grown fond of, such as comics and crossword puzzles.

Cost was a factor regardless of age. Nearly all respondents balked at the Kindle DX’s $489 price tag for reading a newspaper.

As a stand-alone attribute, Krugman said, the newspaper feature is likely not strong enough to sell the e-reader.

One might note that decades ago, when USA Today was launched, there was much speculation about how much a colorful, more "TV-like" presentation would change reader interest in newspapers. Despite USA Today's success, it does not seem to have had much impact on overall newspaper readership.

At this point, we might wonder why e-book readers will fare better.

Newsday Pay Wall Apparently Leads to 47% Decline in Visitors

Newsday.com, which has put unlimited access to its content behind a pay wall, is finding what most of you would have predicted: it is losing readers. But Cablevision may be banking on a business model it has used in the past: providing "no incremental cost" access for customers who buy other Cablevision products.

In December 2009, unique visitors declined 47 percent while page views fell 32 percent compared to December 2008.

In December, Newsday.com had 1.4 million unique visitors and 18.9 million page views, according to Nielsen. That was down from 2.7 million and 27.8 million, respectively, for the month in 2008.

December was the second full month where Newsday's policy of charging people $5 a week for unlimited access to the site was in effect. People who subscribe to home delivery of the paper, or receive broadband service from its parent Cablevision, do not have to pay extra.

That provides another clue to the success or failure of "pay walls." Cablevision has ways of supplying "no incremental cost" viewership in the same way that it provides "no incremental cost" access to its metro Wi-Fi network.

If a person is a subscriber to Cablevision's fixed broadband access service, then use of the Wi-Fi network is available at no extra cost.

Cablevision does not appear to expect the new pay model to "materially" impact revenues in the "near term." One reason: many people interested in the site also receive the paper at home or get Cablevision high-speed Internet service.

How Important Are App Stores?

Consumers will spend $6.2 billion in 2010 in mobile application stores while advertising revenue is
expected to generate $0.6 billion worldwide, say analysts at Gartner. But app stores might be far
more important than the simple sales revenues would suggest.

There seems little question that the success of Apple's iPhone App Store came as a surprise to just
about all observers, including Apple itself. Perhaps none of us should not have been surprised.

Apple already used iTunes to dramatically reshape music distribution, music formats and relationships within the music ecosystem.

At this point, it is reasonable to look at the similarities between iTunes and the App Store and suggest that the Apple App Store, and other application stores, and wonder if they will not have a similar impact on some key portions of the software business, and further shape the attractiveness of any particular piece of hardware.

For some, perhaps many buyers, the software library could be the factor that pushes buyers toward a particular device or family of devices.

But there might be equally-important implications for service providers as well.

Ask a telecom service provider executive why they do not move faster to introduce new applications "at Internet speed" and you very likely will be told that carriers have reputations for quality and brand equity that require them to test the reliability of any new products very thoroughly, and that necessarily slows the pace of innovation.

Others might point out that moving "at Internet speed" to create new applications now is how things often are done, and for that reason delay can be troublesome.

Perhaps app stores are the crucial missing element in allowing service providers to emphasize the quality, stability and robustness of their transmission networks, while at the same time allowing them to stay abreast of rapid application innovation.

It is possible, perhaps even likely, that users can differentiate between the quality or userfulness of a third-party application sold through a service provider supported or affilated app store.

If so, that offers a way forward for service providers rightly concerned about their reputations, yet also needing to move more quickly on the application development front.

In that sense, app stores might offer a convenient way forward. Network performance and stability can be be separated from the perhaps less robust process of making available new applications of uneven quality and value.

Mobile application stores will exceed 4.5 billion downloads in 2010, eight out of ten of which will be free to end users, Gartner analysts predict.

Gartner forecasts worldwide downloads in mobile application stores to surpass 21.6 billion by
2013. Free downloads will account for 82 percent of all downloads in 2010, and will account for 87 percent of downloads in 2013.

Something of the same argument might be made for e-book readers and other new devices whose value depends on the availability of content or applications.

Information Technology Industry Council Reaches Common Ground on Net Neutrality

The "network neutrality" debate is becoming more nuanced, with possibly greater understanding by many participants that it is important to find common ground that does not jeopartdize the Internet's future in a misguided attempt to preserve its past.

The Information Technology Industry Council, which includes Microsoft, Ebay, Intel, Apple, Qualcom, Adobe and Cisco, seems to be threading a needle, for example.

Everybody seems to agree that "certainty" is needed or innovation will be impeded. Everybody also seems to agree that innovation "at the edge of the network" likewise should not be impeded.

One way of getting there is by avoiding the temptation to write overly-detailed rules in advance of issues that could arise. That means the ITIC prefers that issues be settled on a case-by-case basis, as needed, rather than by creating new rules in advance of any conceivable set of issues that could arise.

"The FCC cannot posibly anticipate all future circumstances, and it is entirely possible that conduct that may appear to be harmful today will in fact be beneficial to consumers in light of future circumstances," the ITIC now says.

Managed services, for example, should be allowed unless it is proven that the services are "anticompetitive or harmful to consumers." That suggests a new openness to the possibility of enhanced services that take advantage of user-defined and user-requested packet prioritization features.

Quality of experience, especially during periods of congestion, almost requires that such mechanisms be available for users and applications that want to make use of such features.

Cbeyond Asks FCC for Mandatory Wholesale Optical Access

Cbeyond has the Federal Communications Commission to reverse its rules on wholesale obligations for fiber-to-customer networks. On copper access networks, competitors have rights to buy wholesale access. The FCC has ruled that on new fiber-to-customer networks, competitors have no similar rights.

Predictably, incumbents say the current rules should remain in place, which allow any voluntary wholesale deals, but do not require incumbents to offer wholesale access. The rules are consistent with rules that apply to U.S. cable companies, which likewise have no obligation to sell wholesale access to competitors.

The Telecommunications Industry Association  and the Fiber-to-the-Home (FTTH) Council have filed comments opposing the change.

The debate is an old one. Incumbents argue that the business case for FTTH is troublesome, and that they need the ability to profit from FTTH investments without being required to make those faciltities available to competitors who do not have to build expensive facilities of their own when they can simply lease capacity from others.

Though it is difficult to prove, one way or the other, the FCC has faced a dilemma. It can seek to spur competition by mandating robust wholesale access, or it can spur deployment of new optical access facilities, but might not be able to achieve both goals.

The reason is that incumbents can simply refust to upgrade their networks when they do not feel they will get an adequate financial return. There is some important evidence that incumbents are right about the ability to raise investment capital for FTTH.

Investors punished Verizon Communications for pushing ahead with its FTTH program, preferring AT&T's less-costly FTTN approach, for example. Calle and telco executives point out that all competitors are free to build their own facilities if they want, and most observers would note that in markets where there are three ubiquitous FTTH or FTTN networks, it has proven difficult to sustain business models allowing all three competitors to remain in business.

The calls for mandatory wholesale come at a time when everybody acknowledges that the business case for traditional cable TV and voice services is becoming more difficult, and that neither cable companies nor telcos can rely on their mainstay businesses (video and voice) for future growth. In fact, both types of companies are seeing steady shrinkage of those legacy businesses.

Under such circumstances, and given the shift to Internet-based applications, it might not make lots of sense to weakent he business case for robust optical access investments at a time when the financial returns for doing so are under pressure in any case.

Supporters of mandatory optical access obviously would benefit from a rule change, as they could offer optical access without incurring the expense of building new facilities. So the dilemma the FCC faces is an emphasis either on innovation or competition, in some clear sense.

Since virtually all applications now can be delivered over IP-based connections, it no longer makes as much sense as it once did to directly link "access" and "competitive" services. With or without broadband access, companies now can deliver virtually any service over the top, on any broadband connection.

Under such circumstances, robust competition occurs at the application level, not the access level. In fact, that is precisely the problem telcos face with VoIP, and that cable companies face with online video.

Google Voice Extension for Chrome Browser Now Live

Google Voice now is available as an extension for the Chrome browser. Adding the extension
adds click-to-ccall functionality to Web pages. If there is a phone number on a Web page, or your online address book, it will now have a hyperlink. Click it and Google will open a pop-up window asking which phone you want to use to set up the call, and does.

Google Voice, you will recall, is not an IP telephony or VoIP application n the sense that Skype or Vonage are. Basically, Google uses the Web to set up and complete calls using your existing mobile or fixed connections, adding some interesting call management features.

The extension also adds a small icon in the upper right of the browser. You can type in a name or phone number and call or send a text message from the browser, and read recent text messages and transcribed voicemails (Google automatically transcribes voicemails, usually not all that well).

Many observers think Google ultimately will add softphone functionality, allowing Google Voice to function as an VoIP client.

Geolocation's Downside

Don't get me wrong. Location services will be really useful. But as with everything else connected with the Internet, there are downsides. This is one of them. UYou may want to use location services. But you probably don't want to allow "broadcasting" of that location.

The Secret Service knows the location of POTUS on the second or third floor of the White House. The rest of us should not.

fring Upgraded for Android and Symbian Mobile Devices

Mobile VoIP provider fring has just released two new versions for Symbian and Android mobile device users, adding user-requested features.

The Symbian version, for Nokia users, lets users notify their friends know if they are online, offline, busy, or just stay invisible if they don’t want to be disturbed; all in the click of a button.

DTMF dialing now is supported as well. Now dialing “#” (“pound”) and “*” sign (“star”) is possible to use within a call through the new fring dialer.

Android users will find increased app stability as well as the ability to hide or show offline buddy presence, hide or show the address book, and manage privacy settings for IM signatures and "mood" messages.

The company also fixed some audio issues formerly experienced on Motorola Droid or Milestone devices and added better support for Google’s Nexus One device.

Improved battery consumption also is new.

The new apps can be downloaded at http://www.fring.com/default.asp.

U.S. is Key Android Market at the Moment

Worldwide mobile advertising requests from Android devices increased 97 percent from October to December 2009 and the big change since October is that Motorola devices have shown the greatest growth, undoubtedly because of Verizon's Droid launch late in the year.

AdMob says that in October, 98 percent of requests came from HTC devices.  In December, just 56 percent of requests were from HTC devices, 39 percent from Motorola devices, and five percent from Samsung units.

Increased device diversity: In December, seven devices generated more than three percent of requests each: the Motorola Droid, HTC Dream, HTC Magic, HTC Hero, Motorola CLIQ, HTC Droid Eris, and the Samsung Moment.

This is up from only three devices in October (HTC Dream, HTC Magic, and HTC Hero).

 The Motorola Droid is already the leading Android handset in the AdMob network and generated 30 percent of requests in December.

The U.S. market also, at least for the moment, the most-important global Android market. About 90 percent of Android traffic was generated in the United States in December, up from 84 percent  in October. The United Kingdom, Germany, France, and Canada were the other countries with some significant traffic.

Coopetition Model for Cloud App Providers and Telcos?

Discussing the future of apps in the cloud, IBM enterprise initiatives VP Mike Hill and Salesforce.com director platform research Peter Coffee said the line between competing and cooperating was becoming blurred, with "coopetition" the likely result.

“The only place we tend to have some level of friction with service providers is when you’re up in to the largest organisations,” says Hill. “We see service providers as a huge platform opportunity for us here, because we’re going to take the platforms that we build in IBM to deliver these services, and we’re going to pitch and sell it to service providers so they have the opportunity to white label services from us; or even white label to start with so they don’t have to invest capital up front.

Coffee says the Salesforce.com model provides one example of how application providers and Internet service providers can cooperate for mutual benefit.

“We have our services being re-sold by telecom providers who want to take advantage of the fact they already have more than their foot in the door, they’re already completely inside the door as a small business service-suite provider.”

"British Telecom packages and sells our CRM application as a service as part of BT’s small enterprise suite, and there’s absolutely no reason why we wouldn’t want to foster that because that means their skills, their knowledge of the local marketplace, local business customs, local regulations, becomes a leveraging factor for us to do what we do, which is to provide enterprise functionality, and then they make it relevant to the local market," Coffee says.

Recession Spurs SMB Shift to Conferencing, Away from Overseas Travel

The global recession seems to have spurred more thinking--and activity--by businesses large and small about the use of conferencing services and applications as a replacement for business travel.

A recent survey of U.K. users by Skype indicates that about a quarter of U.K. small and mid-sized businesses have started using conferencing and communications to displace international travel.

Although 24 percent of U.K. small business executives surveyed communicate with international colleagues on a daily basis, 54 percent say they have had to take unnecessary overseas trips when conferencing would work.

The emergence of more sophisticated technologies is having a clear impact on the way that businesses are opting to communicate and do business.

About 41 percent of respondents says they use instant messaging to avoid some travel. About 40 percent use Skype, while 34 percent use teleconferencing. About 28 percent say they use some form of video conferencing.

Video-based communication likely is the biggers winner as travel substitutes have been sought.

Significantly, almost half of SMEs in the United Kingdom (49 percent) are planning to increase the amount it is used for business and 59 percent indicate it will be a direct replacement for business travel.

That isn't to say other methods are ineffective. About 65 percent of respondents said email was effective. Voice was seen by 39 percent of respondents as effective. Video calls were seen by 36 percent of respondents as effective, compared with 29 percent citing Skype.

About 17 percent say instant messaging is effective. About nine percent say social networking is effective as well.

But 36 percent of respondents said they miss having a real picture of the person that they are dealing with. For videoconferencing as for entertainment television, the advantage of "realism," a greater sense of "being there," is what drives image or audio resolution, high-definition images and audio, bigger displays and ease of use.

“With the obvious cuts in business travel, companies need to find new ways to communicate, collaborate and compete,” says Stefan Oberg, Skype for Business VP.

“Without regular face to face meetings, tools that enable people to build and maintain trusted relationships are key," he says.