Facebook to Pass Yahoo in Display Ads by End of 2011

Display advertising might not be the only way Facebook creates a revenue model, but it certainly appears to be a growing source of such support. Today, Facebook is close to overtaking Yahoo as a site for display advertising, and is expected by eMarketer to pass Yahoo by the end of 2011. By 2012 Google also will pass Yahoo in display advertising volume.
 

Online Video Might Not Save You Money

There is a widespread notion that a shift from today's packaged, linear video entertainment service to new on-demand, Internet-delivered alternatives will save consumers money. In principle, one can envision ways that could happen. But it is almost impossible to see how those alternative payment schemes could work without the cooperation of the firms that own the content. And that's the rub.

If one assumes, or hopes for, a world where a user can buy and watch only the shows that user wishes to watch, one has to assume that the content owners would agree to supply it. That, in turn, assumes the money those content firms now make from the existing order is not disrupted.

It is hard to see rational executives willingly making that choice. In a market-driven scenario, one would argue, alternative suppliers with lower cost structures could create enough competition that this would happen. It is hard, at the moment, to see where such competition would arise.

Of course, there is supply, and there is demand. If enough consumers decide linear programming is not interesting or valuable, pressure equivalent to new competitors will be created. But that means end users--lots of them--will literally have to stop watching linear video. So far, there is precious little evidence of that sort of refusal.

Nor is there any appetite on the part of the larger distributors to help. Comcast, for understandable reasons, says it has no intention of making its programming available to non-subscribers. So while the utility of linear video one already has paid for will get a boost from Comcast's extension of viewing rights to new devices, there will be no cost savings. Users will still have to buy the full linear packages to get the online or mobile viewing rights.

But that arguably is a secondary issue. The content owners are key. They will have all the incentives they need to make linear content available directly to end users if they do not risk losing the revenue they now make from licensing their content. The amount of money end users collectively could save is the difference between the revenue content owners now make and what they would make under new distribution arrangements, less any avoided costs the current distribution channels now impose.

Basically, that works out to the actual wholesale cost of program rights, less the costs of administering a direct-to-end user system, at pricing levels and end user volume that allow content owners to make at least as much money as they now do, less the "overhead" imposed by use of cable, satellite or telco distribution mechanisms.

Are there potential incentives even for the cable, satellite and telco distributors? Possibly. If video distributors themselves can replace the value of their "video" services in some other way, such as by raising broadband access fees, then a revenue-neutral shift could happen.

The issue is that consumers might want something different. They might want a revenue "not neutral" solution that allows them to watch what they want, and save money.

In the absence of a significant shift of demand (people simply deciding they can live without linear video), it is hard to see how end users wind up saving much money in the shift to online viewing.

Comcast CEO Has No Fear of Web Video - WSJ.com (subscription required)

Cloud Computing Hinges on Trust

With the caveat that most things in life depend to a very large extent on trust, a recent attack on a Vodafone data center and Google's inadvertent erasure of some user emails raise the recurring question all cloud application providers will face: "can we trust you?"

In the case of Vodafone service, the first issue was simply continuity of service, but also some issues about privacy and security since it was not immediately obvious what equipment was stolen from the data center. In Google's case, the issue primarily was destruction of user data.

Those issues will remain as more applications move into a "cloud" environment. Not that trust is an unusual requirement for daily life. We all assume that the paper currency in our wallets will be accepted, without question, as a medium of exchange. But the whole ecosystem hinges fundamentally on trust. You assume the milk you buy at your grocery store is in fact, milk, and is, in fact, safe to drink. But there are trust levels embedded at every stage of the ecosystem that delivers you milk.

Trust is not an unusual or rare requirement for any functioning ecosystem. Trust is, in fact, foundational for any ecosystem that links buyers and sellers, users and creators, of any sort.

BBC - dot.Rory: Vodafone and Google: A question of trust

Mobile Traffic Patterns Shifting Toward Landline Norms

There is a telling statistic in Cisco's latest Visual Networking Index, namely that as the mobile broadband users have rapidly grown, the usage pattern rapidly has assumed the familiar pattern seen in the fixed-line part of the business.

Consider heavy usage patterns. The top one percent of mobile data subscribers generate over 20 percent of mobile data traffic, down from 30 percent just a year ago. That 29-point swing in just 12 months suggests that as more "typical" users adopt mobile broadband, they bring behaviors much different from those of early mobile broadband adopters, namely less-intensive consumption.

Cisco also reports that mobile data traffic over the last year also now matches the 1:20 ratio that has been true of fixed networks for several years (one percent of users generate or consume 20 percent of total transferred bytes).

Similarly, the top 10 percent of mobile data subscribers now generate approximately 60 percent of mobile data traffic, down from 70 percent at the beginning of the year.

All of those instances of "reversion toward the mean" are driven by the broader adoption by "typical" users of smartphone service. That noted, average smartphone usage doubled in 2010. The average amount of traffic per smartphone in 2010 was 79 Mbytes per month, up from 35 Mbytes per month in 2009.

Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update, 2010–2015

What Sprint Will be Focusing on for the First Half of 2011

Sprint's board of directors wants Sprint management to focus on five things in the first half of 2011, as judged by the bonus plan for the first half of the year. The first matter is operating income before depreciation and amortization).

Another 20 percent of the evaluation hinges on net service revenue (operating revenue less equipment revenue). So 40 percent of the focus is on overall revenue.

About 20 percent of bonus weighting will be based on retention of post-paid wireless subscribers.

Another 20 percent will be based on postpaid net subscriber additions, while the final 20 percent will be based on how well the team does with prepaid net subscriber additions. So in addition to the 40 percent focus on revenue, 40 percent of the concern is net subscriber growth.

k2011stilti.htm

Google Sees Online Ad Market of $100 Billion

The online display-advertising market could top $100 billion over the next several years, says Neal Mohan, Google VP.

Mohan says Google has some 1,000 engineers around the world working to eliminate complexity and challenges from the Internet display advertising market, an effort that will prompt more advertisers to spend more of their budgets online.

Google Sees Online Ad Market Ballooning to $100 Billion - WSJ.com

Apple Aware of Need for Prepaid and Lower-Cost Products

Apple is said to be working hard to “figure out” the prepaid market, a development that would allow Apple to reach a broader segment of the market for mobile products.

Toni Sacconaghi, Bernstein Research analyst, reports that Apple understands "price is big factor in the prepaid market” and that the company was “not ceding any portion of the market, despite the company's historic emphasis on the higher-end, higher-priced portion of any market it enters.

Apple: Not 'Just for the Rich,' Says Cook - MarketBeat - WSJ

Apple targets SMBs

Apple's new "JointVenture" program reportedly will be launched the week of Feb. 28, 2011, representing Apple's attempt to better sell computing products to small businesses.

Apple will charge $499 for up to five users and $99 for each additional user per year, for expedited acces to the Apple "Genuis" staffs at Apple stores. That $500 is an additional charge n top of the three-year Applecare support plans.

Subscribers of the new service will be able to speak with a store-based Apple technician over the phone for one-on-one consultation and troubleshooting, or they can request an on-site visit. Currently, Apple’s "Geniuses" are not allowed to provide support remotely via the phone or in-person outside of Apple’s retail locations.

Apple targets SMBs with JointVenture | 9 to 5 Mac Apple targets SMBs with JointVenture | Apple Intelligence

Voice Remains a Crucial Communications Function

Global international long-distance and bandwidth trends remain in character, according to the latest TeleGeography data. Users are consuming about 60 percent more bandwidth every year, while pricing per bit continues to drop. International voice growth continues to slow, but still is growing.

But global trends obscure clear differences. In the U.S. market, for example, consumers are talking less even on their mobiles. Nielsen reports that the amount of time mobile subscribers talk has dropped to 700 minutes per month in 2010. That includes incoming calls. A survey by CTIA, a trade group, shows that the average length of a mobile call has dropped from just over three minutes to one minute and 40 seconds since mid-2007.

Voice remains a crucial communications feature. What is less true is that voice communications is the most-strategic driver of service provider revenue. Increasingly, that role is being assumed by data services of various types, on both landline and mobile networks.

Less talking also does not necessarily mean less phone use, in one sense. According to Nielsen the number of paid texts per subscriber has grown rapidly over the same period, recently surpassing 700 per month. But there seems to be some substitution effect.

http://www.economist.com/node/17797782

Telecommunications - Global Bandwidth and Voice Trends: Usage Up, Prices Down

Content Isn't What It Used to Be

Before the advent of social and other online media formats, businesses used to spend significant amounts of money on advertising placed in traditional media. These days, with significant audience fragmentation, some companies are changing tactics. Where once they were dependent on existing media, now companies can create their own content-rich media channels that arguably can be as engaging and informational as that provided by media brands.

That will come as a shocking notion, but a study by Kingfish Media suggests that nearly two thirds of marketers believe that content from a brand or company is perceived as having the same or more value than content from a media brand. More importantly, they feel that having their own original content will produce a better return on marketing dollars than traditional advertising, and they have reallocated their budgets to invest more in original content development. See this..

One might argue that, the effect of periodic adjustments for recessions notwithstanding, the advertising business is at the front end of a huge long-term change, where funds formerly earmarked for advertising are diverted to other customer channels, ranging from website investments to social media or content marketing of new types.

The typical business marketer spends 33 percent of the total marketing budget on "content," including brochures, white papers, Facebook, blogs, testimonials,  creating articles, newsletters, webinars, videos, events and so forth, according to the Content Marketing Institute. The "2010 Content Marketing Spending Report" from Junta42 found that 59 percent of marketers were increasing their content marketing spending in 2010, compared to 56 percent in 2009 and 42 percent in 2008.

According to ITSMA, nearly two-thirds of buyers (63 percent) report they conduct their own research when considering an information or manufacturing technology purchase, and then contact the vendor. About 37 percent of the time, a supplier contacts the enterprise before the enterprise starts conducting its own research. What that means is that, in most cases, before buyers have personal contact with any given supplier, they are already armed with information about the company and its products. This is true whether they plan to buy office equipment, software or machine tools.

One might argue that means an opportunity exists to educate potential buyers about an industry, possible solution choices, best practices, and the right questions to ask, before an actual "sales process" begins. In fact, one might argue that the key issue is not the "sales" process, but the "buying" process, which can begin before any sales entity is aware a purchase is contemplated.

Content marketing, some would argue, is about influence on the buying process, before the sales process begins. In essence, the potential customer has initiated a conversation with you before you even know they are interested in your products and services.

In the pre-Internet world, buyers relied on traditional media companies to fill their information needs. With today’s technologies, that is no longer true. In fact, discrete companies can become media. What makes that possible is not simply the Internet, blogs, social media and other content media. There also has been a change in buyer attitudes about the “credibility” of content.

Today’s buyers look everywhere for essential content in  order to make smart buying decisions, and those searches are not restricted to traditional media. These days, people use search engines, real simple syndication, Twitter, Facebook and blogs as part of their information gathering and learning strategies.

Businesses that provide that content will win. Whereas in the past, customers were wary about information that didn’t  come from a traditional media source, today’s savvy buyers can sniff out the good content from the bad, and they don’t mind if the information they engage in comes from a non-traditional source, be that a blog, micro-blogging sites and feeds, Facebook or even content marketing sites.

Traditional media sources also are less effective than they used to be. Some companies might have better information about their potential customers and prospects in their own databases, or can create such assets using content marketing.

Also, shrinking revenue streams mean media companies are less able to cover as much terrain as they used to, if only because the number of traditional outlets is shrinking, as well as staffs. Continued cutbacks in editorial staff and circulation size have created a void that non-traditional content  
creators can fill.

Selling to all customers also is becoming more challenging, because all buyers now have access to much more information than they used to. Some companies will develop a different relationship with potential customers because those firms already have become trusted sources of information about the issues, problems and opportunities any particular business segment has.  Such thought leadership "rubs off" on the firms that supply the knowledge.

Read more here

Mobile Payments Are About Erasing Difference Between Offline, Online

Mobile payments are important for reasons more than “payment.” Though much of the attention now seems to be focused on ways to replace a plastic payment card with a mobile phone, that ultimately will not drive most of the value, many believe.

Instead, it might be more about ways to redefine “commerce” to account for “always on” devices carried by people who can use those devices in new ways.

When a user walks into a store, all of that user’s shopping lists, loyalty, couponing, comparison shopping and social networks will available, interacting on a real-time basis, in a dynamic way, in a present space way, with a particular retailer.

Mobile Payments Are About Erasing Difference Between Offline, Online | Mobile Marketing and Technology

Mobile Grows Faster than Expected, Says Eric Schmidt

Employers Expect Flexible Work Trend

CEOs, senior HR professionals and workplace decision makers from across the United States, the United Kingdom and other countries, including Spain, Argentina, El Salvador, and India, believe 50 to 80 percent of employees would move to time or location flexible work within five years, driven largely by the need to attract and retain superior talent. This is up from a reported 25 percent today

Email Not "Dead"

It might not be the case that any application or service actually is waning when stories about the "death of X" start to appear, or when "X is not dead" stories also start to appear. Email is among the latest applications to get the treatment. Obviously email is not "dead." It remains among the top applications used on either mobile or tethered devices. But there also is greater use of alternatives, such as text mesaging, instant mesaging and even micro-blogging.

Verizon Wireless Sold 60% of iPhone Online

Some reports have suggested that relatively sedate traffic at Verizon Wireless retail locations indicated less-robust demand for iPhones than some might have expected. Verizon Wireless CEO Daniel Mead points out that more than 60 percent of iPhone sales occurred online.

That heavy activity online contributed to short lines on launch day, he maintains. "If we had not done online, you would have seen a much different flow in the pictures," says Mead. Mead also says that Verizon deliberately phased the introduction, to avoid potential problems with a sudden rush of buyers.

Verizon deliberately limited the number of locations where iPhones could be purchased, in addition to using the online channel quaite heavily In a few days, Verizon Wireless also will double the number of stores that sell the iPhone, going from 4,000 to 8,000.

Verizon Wireless CEO Says iPhone Sales Strong - WSJ.com (subscription required)