2012 Content Marketing Benchmarks, Budgets and Trends

Some nine in 10 business-to-business marketing organizations, regardless of company size or industry, say they've used content as a form of marketing in 2011, the same proportion as in 2010, according to a study by the Content Marketing Institute and MarketingProfs. Those marketers say they use about eight separate content marketing tactics to achieve their marketing goals. 2012 Content Marketing Benchmarks


Some 60 percent of the 1,092 surveyed marketers say they plan to increase spend on content marketing in 2012. On average, they now spend over a quarter of their marketing budget on content marketing, the study found.

The report, "B2B Content Marketing: 2012 Benchmarks, Budgets, and Trends," provides a detailed look at the findings. Get the full findings here.

One in Four Starbucks Transactions Now Use Mobile Payments

Less than a year after Starbucks launched an app that allows mobile payments, it has hosted 26 million such transactions on iOS, BlackBerry and Android. Roughly one in four Starbucks card transactions is now executed using contactless  mobile payment.


In the nine weeks after it was released, there were three million transactions. But in the past nine weeks, there have been six million, says Adam Brotman, SVP and general manager of Starbucks. One in Four Starbucks Transactions Now Done Via Mobile:


But mobile vastly lags the Starbucks card where it comes to volume. About  $110 million has been reloaded to customers’ Starbucks cards using mobile top up, Brotman says. Some $2.4 billion was loaded onto Starbucks cards overall in 2011.


So 25 percent use mobile payment, but only about 4.5 percent of card top-ups have been conducted on the mobile device. For whatever reason, it appears people are more comfortable using PCs to refresh their accounts, instead of reloading directly on the mobile. 


For those of you who have done both, there might be a simple reason. It is just easier to reload on a larger screen than on a smart phone. 

Is Netflix Business Model Broken?

Wedbush analyst Michael Pachter has downgraded Netflix to "underperform" from "neutral," with a $45 price target.


“In our view, the company’s business model was broken when it raised prices for its hybrid customers, and continued customer defections will require it to invest ever increasing amounts on marketing,” he says. “We estimate that Netflix will spend $800 million on streaming content in 2011, and expect streaming content costs to rise to at least $1.7 billion in 2012, partially offset by approximately $200 million in DVD and postage savings.” Wedbush Downgrades Netflix


One wonders, though. Retail price adjustments happen all the time. It is not so clear that a simple price change, even a change that arguably involves creating two new products where there once was a single product, can break a business model. 


One might argue that becoming a provider of substantial amounts of original content, where the original business had been video distribution, can break a business model. Some have pointed to potential price increases of as much as 60 percent for some Netflix customers. But we are talking about a video entertainment product that costs, at most, about $16 a month, even assuming the biggest price increase.


Before the changes, consumers had been paying about $10 a month for both DVD and streaming access. 


To keep both features costs about $16 a month, and providing users with one DVD at a time and unlimited streaming. Given prevailing prices for a subscription to a service such as HBO, or renting DVDs from kiosks, that really is not an outrageous amount of money. 


One might argue that what "broke" was investor expectations that had bid Netflix up into the $300 per share range. Irrespective of the merits of operating costs around delivery of discs, versus streaming, what really has changed is the Netflix decision to become a provider of more original or unique content, which is a different business than simple video distribution.


The retail pricing changes, and the differences in online distribution compared to postal delivery arguably cannot "break" the business model. But becoming a distributor of unique or differentiated TV programming is a different business from distributing rental movies. 

Clearwire Seeks $300 Million in New Equity

Clearwire Corp. says it will seek $300 million in a new equity offering. Clearwire said Sprint would buy as much as $347 million if Clearwire can raise between $400 million and $700 million. Clearwire Seeks $300 Million in Equity Offering

Cloud Computing Yields Perceived Benefits, But Might Not Save Much Money, Global Survey Finds

About 82 percent of 3,645  cloud computing users surveyed by TNS in eight countries say they saved money on their most recent cloud project. But savings have been relatively small, with
35 percent of U.S. organizations, for example, reporting payback of less than $20,000. Cloud computing ROI

The issue is not whether respondents believe they have seen improvements. The survey indicates that nearly all organizations boost improvements in IT performance following cloud adoption, with 93 percent of all organizations reporting at least one area of IT improvement.

Among the most common improvements, 52 percent of users report increased data center efficiency and utilization, while 47 percent witness lower operating costs post cloud adoption.

And these benefits arrive quickly as 48 percent of organizations see benefits within six months. Overall, more than 80 percent of respondents see gains within six months.

Some 23 percent of all U.S. organizations and 45 percent of U.S. organizations with fewer than 50 employees report no savings, says CSC, which funded the study.

Some 88 percent of Australian organizations see improvement in their IT departments since adoption of cloud, and 82 percent see benefits in six months. However, the cost savings of cloud are not as high as expected. Some 64 percent of organizations say they save under $20,000 or nothing at all after their last cloud adoption project. In particular, cloud computing is not helping Australian small businesses save money, as 95 percent save less than $20,000 or nothing at all. In fact, 48 percent of small businesses say they saved no money.

Eighty-two percent of UK organizations see benefits from the cloud in under six months; 38 percent see benefits immediately. Almost half (49 percent) cite increased data center efficiency and utilization as the number one benefit from adopting cloud.

However, 63 percent of small businesses say their total cost of delivering enterprise services stayed the same after implementing cloud services.

Some 90 percent of U.S. respondents said their organizations experienced IT improvement post cloud. However, cost savings were not as extensively realized. In fact, nearly a quarter of U.S. organizations don’t find any cloud savings.

For the purposes of this survey, cloud computing was defined as “a general term for anything that involves delivering hosted services over the Internet.” The survey further specified five essential characteristics, including that cloud computing was an on-demand self-service with broad network access; involved  resource pooling, rapid elasticity and measured service.

Interviews were conducted between October 2011 and November 2011. Organizations in the United States, the United Kingdom, France, Germany, Brazil, Australia, Japan and Singapore were part of the survey.

None of those results should be surprising. We are early in the process of cloud computing adoption. Some would argue significant changes take time to show clear productivity gains because it takes time for human beings to adapt, and for entire processes to be redesigned around the new technology.

What is Happening in the U.S. VoIP Market?

It’s hard to tell precisely what is happening in the U.S. residential VoIP market. According to the most recent Federal Communications Commission data, there were 32 million VoIP subscriptions in service at the end of 2010, representing a growth rate overall of about 22 percent. FCC data

The 149 million wireline retail local telephone service connections in December 2010 included 40 percent  residential switched access lines, 38 percent business switched access lines, 18 percent residential VoIP subscriptions, and three percent business VoIP subscriptions.

The FCC data suggests that 81 percent of VoIP services bought in bundles, representing in turn about 84 percent of all VoIP subscriptions, were supplied using cable modems, meaning that cable operators sell about 81 percent of VoIP connections in bundles, which in turn represent at least 84 percent of all VoIP subscriptions sold in the U.S. market.

But third quarter 2011 data at the company might suggest either that the adoption rate has slowed fairly dramatically in 2011, or that suppliers other than cable operators or telcos have suddenly begun adding more subscribers than ever before. That seems highly unlikely, based on what has been happening in the U.S. VoIP market so far.

Though telcos and independent VoIP providers have represented some VoIP market share up to this point, the FCC data show it is the cable operators who have been responsible for most of the sales and customer volume.

Company results from wireline voice service providers through the third quarter 2011 might suggest that demand is moderating, since most new VoIP subscriptions are sold by cable operators, and cable sales of VoIP clearly are slowing.

Legacy voice services offered by phone companies have continued to decline during 2011, while "digital voice" line growth from cable operators has slowed. What's happening in fixed line VoIP?

AT&T lost 10.5 percent of its wireline voice connections compared to the third quarter of 2010., Verizon lost 7.6 percent  of its total wired voice lines, and CenturyLink reported losses that would total about 6.8 percent annually on a pro forma basis for the 12-month period ending September 2011.

Offsetting  those loses are incremental new telco VoIP connections. AT&T's U-verse Voice connections increased by 119,000 sequentially while 648,000 subscribers over 12 months. HD Voice makes steady progress in mobile networks

But the volume of activity in consumer VoIP has been driven by cable operators, and it now seems as though sluggish economic conditions or wireless substitution might be issues for cable VoIP services.

But there could be other factors at work. Perhaps few, if any observers think telco voice share will dwindle away to “nothing.” For any number of reasons, including product bundles and customer preferences, the likely ultimate outcome is some reasonably stable market share structure. That means cable will reach some “natural” limit in voice, as telcos might reach some “natural” limit in video share.

It could be that cable operators are reaching the “natural” limits of demand for cable voice products. Comcast, the largest domestic cable operator, now has 9.2  million VoIP lines in service representing a 17.6 percent penetration rate of homes passed at the end of the third quarter 2011, up  from a 16.1 percent penetration rate in the third quarter of 2010.

Time Warner Cablehas 4.6 million voice customers, but added only 5,000 new VoIP lines in the third quarter of  2011.

That dramatic slowing suggests cable has reached a natural limit, but also that strong growth of wireless services now is simply as big a problem for cable operators as it has been for fixed-line telcos.

Wireless substitution continues to slowly grow virtually every year, according to the CDC, which estimated in 2010 that 29.7 of homes had only wireless telephones during the last half of 2010.

Is Competition in U.S. Telecom Now Over?

Reasonable people will differ about the potential implications of the Verizon spectrum deal with Comcast, Time Warner Cable, Bright House, where AWS spectrum owned by the cable companies is sold to Verizon Wireless, while Verizon and the cable companies agree to work together in some ways.

Some will argue the deal means the end of competition, which has been bolstered in the fixed line business by robust competition between telcos and cable companies.


Others might argue that the agreement by the cable companies to resell Verizon Wireless capacity, rather than Sprint or Clearwire service, likewise means less potential competition in the wireless business.



Others will simply point to nebulous language about “working together” that might lead to less competition. Those views could prove at least partially correct. They might also have far fewer effects on competition than many fear.



For starters, cable companies essentially have relied on three different wireless partners for wireless service, first Sprint, then Clearwire and Sprint, and now Verizon Wireless. One might argue that the resale agreement with Verizon Wireless removes key potential cable contestants from future roles as new facilities-based wireless competitors.



But cable companies in the United States, for whatever reason, have not succeeded at any of those attempts since 1994. They are going to resell under their own brand names, using somebody else’s infrastructure, no matter whose wholesale assets they use.



Nor does the deal alter the nature of fixed network competition between Verizon and the cable companies. Anybody familiar with the typical tensions within single entities over wholesale and retail sales, whether fixed or wireless, knows the actual financial interests of those staffs are not aligned.



Lots of firms buy wholesale service from Verizon Wireless, and none of that prevents the firms from competing as hard as they can in the retail markets.