Brands are Media, These Days

Because of the Internet, blogs and social networking, marketing really is changing. It has been clear for some time that where brands once relied on media companies to get their messages across, using public relations and advertising, new forms have arisen.

Many firms, perhaps most, now divert spending from advertising to bolstering their own Web sites. Many, because of real simple syndication, recommendation engines and other sharing tools, can become "media" in their own right. That is not to say the new tools completely replace the older channels. It would be more accurate to say the new tools more often supplement the older channels.

Most firms likely still would see more value in a story in the Wall Street Journal than on their own blogs and content sites. But most firms can use "earned media" (non-paid attention as compared to for-fee advertising, for example) to a growing extent.

Whether the goal is "branding" or "direct response," earned media seems to be assuming a greater role. But the business models are different. Where "professional" media have relied on a revenue model where attention is converted to advertising or subscription revenue, "earned media" relies on converting attention to sales of hardware, software or services.

That means many of the proxy measures used by professional media to measure success have less relevance. Where volume metrics such as visits, clicks or views are a way of demonstrating "attention," those same metrics may or may not have as much direct relationship to brand sales activity, especially in businesses with long sales cycles.

Attention still is important. But the attention a brand wants is the sort that contributes to sales of the firm's products, not advertising or other revenues. So far, this is a metric nobody seems to have figured out. Perhaps it is not directly measurable.

What does seem clear is that attention created by brand-sponsored content can lead to peer recommendations. And studies of influence do suggest that peer recommendations are more powerful, by far, than traditional or even most "new" media messages.

So far, this more art than science. But brands believe it works. Some studies show firms are switching spending away from advertising and towards their own Web sites and content. This will have big implications both for marketing and for the media.

http://blog.hubspot.com/blog/tabid/6307/bid/4897/Be-a-Publisher-But-Don-t-Use-the-Publishing-Industry-s-Metrics.aspx

Verizon Wireless Unveils Cross-Network, Cross-Device, Cross-OS App Store

Up to this point, "application stores" have been device specific. But Verizon Wireless is launching the first cross-device, cross-network application development effort and store. Specifically, developers can create apps running across four different mobile providers and operating systems ranging from Research in Motion, Android, Windows Mobile, Palm and Symbian operating systems.

The “Joint Innovation Lab” is a consortium consisting including Verizon, China Mobile, Vodafone and Softbank. That platform, which will push common standards for developers, will allow those developers to reach a billion customers on all four networks.

The consortium will offer its own software developer kit and open up handset and service application programming interfaces to developers.

This is important: until now, developers have had to design apps to work with the dozens of handsets supported by each carrier. Now, however, Verizon says it will offer tools so developers can write one app that will work on all handsets developed under the JIL standard.

The JIL will feature common application access management standards, including for things such as billing and common application management standards.

The app store will be run by Qualcomm. The storefront will be available on the Internet, mobile web and through a portal on the handset, and is expected to be operational by the end of 2009.

Many obstacles must be surmounted, of course, but the effort is qualitatively different from all prior app store efforts, in offering cross-network, cross device and operating system capabilities.

http://deals.venturebeat.com/2009/07/28/verizon-promises-developers-access-to-a-billion-customers-so-there-apple/

Sprint Buys Virgin Mobile

Sprint Nextel Corporation is acquiring Virgin Mobile USA for $483 million, Sprint already owns 13.1 percent of Virgin Mobile, which has been a mobile virtual network operator customer.

The move illustrates the growth of prepaid as a segment within the mobility business, as well as the maturation of the mobile business overall. Organic growth is harder to come by, making growth through acquisition a more reasonable tactic. But the biggest take away is the growth of the prepaid segment, which traditionally has been a segment major operators have shyed away from.

Broadband Stimulus: Let the Bellyaching Begin!

Not a dime of broadband stimulus money has been awarded but the carping will begin in earnest once the first round of awards are made. That is almost inevitable, given the vastly greater number of potential "losers" compared to the actual award winners, the range of contestants already locked in fierce competition with each other and the predictable complaints that incumbents got too much of the money.

The Rural Utilities Service portion of the program arguably faces more challenges. The National Telecommunications & Information Administration likely will have an easier time since that is where many training, public computing center and other projects can legitimately be funded.

Almost by definition, rural broadband communications is capital intensive enough that if one is not already a service provider, becoming one would be prohibitively difficult. Beyond that, running a service provider business does require some organizational skills and capabilities even experienced entrepreneurs have found challenging.

If the nation learned nothing else from the massive expansion of investment in competitive service providers in the late 1990s, it is that most such ventures without continuing "high cost" support will fail.

One example of such "incumbent bias" is Viaero Wireless, a Fort Morgan, Colo.-based wireless company providing services to residents and businesses in eastern Colorado and western and central Nebraska.

The company was formerly known as NE Colorado Cellular Inc., prior to which the company was known as Cellular ONE of Northeast Colorado.

Viaero is seeking as much as $150 million in stimulus funding to expand its operations, says Mike Felicissmo, company VP. That presumably would include an upgrade to a 3G network, though the company already provides EDGE services.

Wired telecom companies might not be too happy facing the new competition, though. And some will not be happy if such incumbent firms get funding. Of course, that is what RUS traditionally does.

http://www.fortmorgantimes.com/ci_12922308

Satellite Gains 3.5%, Cable Flat, says Centris

Satellite TV providers have gained 3.5 percent more subscribers, while cable TV operators were essentially flat for the period, say researchers at Centris. And while some have noted sluggishness in ownership of Blu-Ray video players, adoption grew 71 percent over the last year.

There were 7.2 million Blu-Ray households in the first quarter of 2008 and 12.3 million Blu-Ray households in the first quarter of 2009.

Some 32 million households now subscribe to satellite-delivered multi-channel TV service, up from 30.9 million a year ago.

Nearly 63 million households have cable TV, but pay-per-view is quite flat. In April 2009 Centris reported that 12.6 million households ordered PPV in a typical month, unchanged from 2008.

In the first quarter of 2009, about 64 percent of all US households access the Internet each month, up nine percent over 2008, and representing growth of about nine percent.

About 80 percent of all homes accessing the Internet did so using broadband, a 17 percent increase over 2008. The percentage of homes using broadband has grown at about a 17-percent rate over the last three years, Centris says.

Where Did AT&T Prepaid Accounts Go?

AT&T's prepaid results were weaker om the second quarter. "Obviously we had a net loss of customers of about 400,000," AT&T CFO Richard Lindner says.

So what happened? Did those users stop using their mobiles? Other evidence suggests not. Few users in recent surveys claim to have terminated their mobile services entirely.

So the most-logical explanation is that other prepaid mobile providers picked up those 400,000 customers. And Lindner doesn't dispute that view. "Certainly we’re seeing impacts from other competitive offers in the market," he says.

Prepaid represents about four percent of AT&T wireless service revenues and less than that amount as a percentage of total earnings. So AT&T is not likely to push too hard in the prepaid direction for fear of cannibalizing its more-lucrative postpaid business.

But that will mean growing opportunties for providers of prepaid wireless.

"Obviously we recognize there’s certainly some opportunities for us there in that portion of the market and so you’ll see us continue to address that and make some tweaks and changes to our product offers," says Lindner.

"But one thing that I think we feel is important is we are not going to put offers in the market that we don’t feel will be profitable or earn a reasonable return," he adds. "And we won't do anything obviously that would impact or cannibalize our postpaid base."

AT&T, Verizon: Business Segment Suffers Worse than Consumer

Verizon Communications and AT&T arguably took bigger hits to their enterprise than consumer segments as a result of the recession, second quarter financial results suggest.

Revenue from Verizon’s global enterprise business dropped 6.7 percent while the wireless customer segment revenue grew 27.7 percent. Even consumer wired services revenue grew 13.7 percent in the second quarter.

AT&T also reported that the deepest economic impacts in the second quarter came in the business services segment.

AT&T CFO Richard Lindner likewise says total business revenues, including enterprise, wholesale, small and mid-sized customers, were down 5.6 percent year over year. Excluding equipment sales, business revenues were down 4.3 percent, Lindner says.

Wireless revenue was up 10.1 percent, on the other hand, while total wireline consumer customer revenues were $5.4 billion in the second quarter, compared with $5.7 billion in the year-earlier quarter and essentially flat, down only $11 million, versus the first quarter of 2009.

"We’ve seen pressures across business product lines but the largest impacts are volume related in traditional voice and legacy data products," says Lindner. "The sectors where we’ve seen the most impact, as you would expect, are in finance, transportation, and manufacturing."

Consumer broadband and video are helping both AT&T and Verizon, while it appears legacy business products are suffering. Newer services including Ethernet, VPNs, hosting, IP conferencing and applications services grew 15.2 percent year over year.

In an economy where consumer spending drives roughly 75 percent of activity, one might have suspected consumer revenue would be harder hit. Instead, it appears massive job losses have crimped business segment spending the most.