December 16, 2008

2009: The Epoch of Extended Web Content

By Steve Dennen

Once upon a time, accessing content on the Web required the digital consumer to be tethered to their desktop computer, which was in turn attached to a phone line that enabled access to the Internet at blazing 56K speeds. The web-accessing Neanderthal soon became more upright with the widespread availability of broadband access. Later, mobility was generally available – we could access the Internet from different access points (home, work, coffee shop, library, airport) without the burden of wires connected to our computers (a luxury I enjoy while writing this post on my laptop, connected to the Internet through a wireless router). And of course, now the digital consumer can access the Internet from nearly anywhere through their iPhone, Blackberry, or other web-enabled mobile device.

Just as the digital consumer has become increasingly mobile, so too has the content we consume. A web landscape that once required people to go to specific web destinations for content has evolved to one in which content is pushed to consumers, where and how they want to consume it. Starting with RSS feeds and customizable home pages, web content has grown legs and is finding its way around the web.

This dynamic was pioneered by, and is commonplace among, Web 2.0 leaders such as MySpace, YouTube, and Facebook. YouTube, for example, gives users access to easy-to-use tools to embed a video in their customizable home page or Facebook or MySpace profile page. Additionally, the introduction and rapid mainstream usage of widgets, gadgets and other social media applications, all of which allow consumers to get access to a publisher’s content away from that publisher’s site, has exploded over the last 24 months. Facebook has built an entire ecosystem around the idea of their site being a platform for other publishers and application developers to make content available to their users. Publishers face the reality that there can be more consumers of their content off their site than on their site.

As this complex ecosystem rapidly evolved, we at comScore have had to move quickly to provide the critical 3rd-party services that measure consumer engagement with publishers’ content wherever it occurs. It is essential that the many emerging media formats are able to prove their value to advertisers in reaching their desired consumers. For example, since our initial release of the comScore Video Metrix service in 2006, we’ve had to measure the viral nature of video as it is distributed and viewed across the web. Most importantly for video monetization, one needs to properly attribute credit to the publisher that serves the video. So, in the case of a consumer watching an embedded YouTube video on MySpace, it’s important to give proper credit to YouTube for the view. Similarly, a video that is watched on a portal through the Hulu player is attributed to Hulu. (Jason Kilar, CEO of Hulu, recently commented that Hulu content is embedded into over 60,000 Web sites, including MySpace.)

Additionally, as comScore’s video measurement evolves with the use of server-side tagging for enhanced measurement and classification, we will be able to introduce reporting views that account for the distributor, as well as the content creator and the partner site where it was watched.

The more recent forms of portable content - widgets and social media applications - have exploded in their reach over the last 18 months. Our data show that more than 75 percent of U.S. Internet users have viewed a widget or social media application. Social networking sites are prime places for distribution of content in easy, bite sized pieces, through such applications. A new wave of media companies, such as Slide, RockYou, iLike and WaterCooler, have stormed onto the scene as a result of Facebook and other social media sites opening their platform to distributed content. With the initial launch of comScore’s Widget Metrix service in mid-2007 – which subsequently evolved into our Extended Web reporting just last month, we have been able to provide media buyers with a view into the consumer uptake for these new media formats and media publishers with new ways to demonstrate their incremental reach with these vehicles.

We enter 2009 with little doubt that distributed content will continue to grow as consumers get more sophisticated in their media consumption habits and demand content in more portable formats. At comScore, we look forward to measuring what we expect to be an increasing mobile consumer interaction with increasingly portable content. We would be interested to hear how your organization is enabling one or both of these market dynamics.

December 1, 2008

A Tipping Point for Online Coupons?

By Gian Fulgoni

I’ve often wondered if and when the Internet would become a major distribution medium for cents-off coupons issued by CPG manufacturers. Sure, I realize that there are concerns about the possibility of fraud if hackers figured out some way to print millions of coupons and some unscrupulous retailer tried to submit them for redemption. But, since the gang-clipping of coupons from newspapers appears to have been stymied, I figured that it was just a matter of time before manufacturers got to the point where they felt comfortable using the Internet. Today, I’m wondering if we’ve reached that point.

To begin, here are some interesting – even remarkable -- statistics about coupons. PROMO magazine reported that CPG manufacturers distributed 302 billion coupons in 2007, up 6% and representing a whopping 16 billion more coupons relative to 2006. The face value of the coupons was $387 Billion, a big increase of 16% over the $337 Billion in 2006 and representing a 9% increase in face value. Free-standing inserts in newspapers continued to lead the ways in which marketers distribute coupons (88%), followed by handouts (5%), direct mail (2%), magazines (2%), newspapers (1%), in/on-pack (1%) and the Internet (0.4%), according to NCH Marketing.

According to CMS, a promotions logistics company, the boost in value and sheer number of coupons available helped improve redemption in 2007. Consumers turned in $2.8 billion of the total $387 billion in available coupon value. That added up to 2.6 billion coupons redeemed in 2007, the first time since 1992 that redemption volume did not decline.

Economic pressures and consumer-friendly tactics combined to guarantee continued consumer and manufacturer engagement with cents-off offers in 2007. In fact, comparing coupon response to key economic indicators over time has shown a strong link between the economy and coupon redemption. Most notably, as unemployment and prices rise, coupon redemption increases. So, with today’s challenging economic conditions, I don’t think we should be surprised if coupon redemption increases again this year and next.

So, what’s been happening to the use of coupons online? Well, it certainly appears that surfing for coupons is growing in popularity. comScore’s data show that 27 million people visited coupon sites in October, up 33% from a year earlier (that’s 18% of the 148 million Americans who use any coupons in a year). The number of searches conducted using coupon terms also increased by 100% from January to September of this year. On a global basis, we saw a 42% increase in the number of pages viewed at coupon sites, so it’s certainly not just a U.S. trend.

It’s also very interesting to look at the income segments where the growth is occurring:

Coupon Sites: Average Monthly Unique Visitor Growth Q3 2008 Vs. Yr Ago

At first blush, it might seem counter-intuitive to see the strongest growth occurring in the mid-to-upper income households. But, this might reflect the reality that offline coupon redeemers tend to be better educated and have higher household income than non-redeemers. Several reasons have been put forward to explain this phenomenon, including the fact that the distribution vehicles used by coupon marketers tend to reach higher rather than lower income households and more expensive brands tend to run more coupon promotions. Whatever the real reason, I think it’s encouraging for marketers to see such high online growth rates in the mid-to-upper income households where substantial purchasing power resides.

So, what does the future hold? I believe we’re likely to see an explosion in the use of electronic coupons by CPG manufacturers. There are a number of reasons why I think this will happen. First, I believe that the rapid growth in consumers’ willingness to use the Internet to obtain coupons, coupled with a continued decline in print newspaper readership, will force manufacturers and retailers to reconsider their distribution strategies that today are so dependent on the use of newspaper FSIs. By distributing coupons online, retailers can reach a large audience and realize large savings relative to the cost of newspaper distribution. Second, retailers are increasingly looking at the opportunity to link online coupons to the use of their loyalty cards in a seamless and efficient manner. To get these electronic discounts, shoppers simply have to type in their loyalty-card ID numbers on a store Web site (or other site) and click to load the coupons to their card account. The discounts are subtracted at the retail store after those items are scanned at checkout and the consumers have shown their loyalty card.

Now, that’s a simple and cost effective solution that provides benefits to the manufacturer, the retailer and the consumer.

November 24, 2008

The 2008 JEGI Growth Conference

By Gian Fulgoni

On Thursday November 14, I delivered a keynote presentation at the Jordan Edmiston Group’s 2008 Growth Conference in New York.


Pictured from left to right: Gian Fulgoni, Chairman, comScore; Wilma Jordan, Founder & CEO, JEGI; Michael Chen, President & CEO, GE Commercial Finance, MCE; Scott Peters, Managing Director, JEGI

This by-invitation event is one of the few conferences bringing together senior-level private equity and venture capital investors with CEOs of top global and emerging media, information, marketing services and technology companies.

JEGI is an independent investment banking company for media, information, marketing and related technology. We worked with JEGI in comScore’s recent acquisition of M:Metrics.

Speakers from the media world included Gordon Crovitz, former Publisher, Wall Street Journal; Martin Nisenholtz, SVP, Digital Operations, New York Times; Mike Galgon, Chief Advertising Strategist, Microsoft; Jonathan Hsu, CEO, 24/7 Real Media; George Kliavkoff, Chief Digital Officer, NBC Universal; Dave Morgan, former Chairman & CEO, Tacoda and current Chairman, Tennis Company; Rob Norman, Global CEO, GroupM Interaction (WPP).

There were some fascinating discussions regarding the global economic crisis and its impact on the media industry.

In my presentation, I discussed how the Internet is faring in these tough economic times and focused on three issues that are of vital concern to online marketers:

1. E-commerce Trends
2. The State of the Online Ad Market
3. The Rise of the Long Tail

You can request a copy of my presentation by visiting our Presentation Gallery.

Also, click here http://link.brightcove.com/services/player/bcpid2651885001 to see some interesting interviews with some of the speakers at the conference.

November 20, 2008

Ernst and Young Entrepreneur of the Year Conference

By Linda Abraham

Okay, so I’m bragging.

As the wife of the CEO, I don’t often do this, but this past weekend was not only fun, but inspiring. I’ve just had the pleasure of attending the annual Ernst and Young Entrepreneur of the Year Conference with comScore’s leaders, Magid and Gian, and Gian’s wife Sarinda. Having won the regional Entrepreneur of the Year title for the Mid-Atlantic Region back in June, Magid and Gian were invited to attend the national competition, which culminated in a gala on Saturday night, hosted by Jay Leno.

Hosted in Palm Springs in all its glory, the conference was quite an event. E&Y put on a first class event, all around. Speakers included people like Jack Welch, and Robert Nardelli, CEO of Chrysler (who, IMO, deserves a lot of credit just for showing up.) My favorite quote of the week came from Jack Welch, who, when espousing on the topic of how companies could survive the current economic environment, said: “Your competitors: buy them or bury them. And by that I mean dismember them — pick off all their best people.” (Hmmm…good advice, Jack)

Offering all the glamour and glitz of the Oscars, the gala on Saturday night was the highlight (although Gian, who grew up in the UK during the sixties couldn’t quite get over the Joe Cocker concert on Friday). Complete with champagne, a red carpet, and yes -- even Joan Rivers, the gala was attended by a black-tie crowd of over 3,000 that was just as handsome (if somewhat more geeky) than the Hollywood version. Jay was about the best I’ve ever seen him — hilarious in his prepared bit, and just as good with his spontaneous comments, making fun of politicians and entrepreneurs alike. Our own Dustin Hoffman, as Gian was referred to in a recent Fortune article, was right at home. Even Magid, coined ‘the grim-looking CEO’ in the same article, was all smiles.

It was quite an honor to have made it that far. To get there, Magid and Gian were among 250 regional winners who had been selected from over 3,500 applications from across the country, representing every possible type of company under the sun. Unlike the Oscars, no one knew who the four finalists were in each of the ten categories until they were dramatically announced that evening, via a very fancy video profiling each of the finalists. Low and behold, Magid and Dustin were named one of the four finalists in the Services category, placing them in the top 1% of all applicants. Very exciting.

But when the big moment came, and the envelope was opened with the requisite drama and drum roll, alas, they did not win the big enchilada in their category. That honor went to —and here’s the rather funny part — James Barnes of Oakleaf, which is a waste management company. Sparing you Jay’s comments about how happy he was that “finally, there were some ‘non-Italians’ in the waste management business,” and the jokes at our table about how we ended up in that category (which were very funny), Oakleaf, with its many green initiatives, is actually a very impressive company. Instead of physically hauling trash, the company contracts with retailers, restaurants, property management companies, hospitality companies and corporate clients and hires haulers in the immediate area to do the actual removal. Oakleaf was started with a $45,000 loan in 1995 and has grown at a 30% per year clip to become a company with 750 employees and annual revenues of more than $700 million. Walmart, CVS and Home Depot are three of its flagship accounts. Not too shabby. This was a well deserved honor for them, and all the other winners of the evening.

But the bigger takeaway was this: what a club to be a part of. Having overcome a very colorful and storied collection of overwhelming personal and professional odds, this group of entrepreneurs has made a huge impact on the economy. They have collectively created tens of thousands of jobs, supported hundreds of thousands of people, generated untold millions in taxes, and even at today’s valuations, created billions of dollars of market cap. Pretty impressive.

Another great point Jack Welch made is that as the G20 were gathered in Washington this past weekend trying to figure out a plan for the current economic crisis, that “they should be looking at this crowd -- 3,000 miles west.” I couldn’t agree more. Many, if not most, of these entrepreneurs were not from elite backgrounds or Ivy League schools; most were not 4.0 types. Rather, they were often from humble beginnings, but had the ideas, determination, creativity and pure guts to drive to success. To me, that’s America -- at its best. At this point in our country’s history, I believe it is more important than ever that we encourage and harness this energy. I’m not suggesting that this group will provide a silver bullet to all our economic woes, but they will surely provide an important pillar. They look at an economy like the current one and find opportunities. And they will ultimately profit from them. It’s quite a club.

So as I write this from the airport the next day, in my back-to-reality jeans, getting ready to board my flight and take my middle seat back to DC, there is a lot to reflect on. But my net takeaway is this: despite all the uncertainty about our country’s near-term economic future, I am sure of one thing: I’m going home with winners.


November 11, 2008

Collegiate Entrepreneurs Association

By Gian Fulgoni

Last Saturday morning (at 8:30 am!), I delivered a keynote presentation at the annual meeting of the Collegiate Entrepreneurs’ Association (CEO) in Chicago’s McCormick Place.

CEO was founded in 1997 by Dr. Gerry Hills, an entrepreneurial professor at the University of Illinois at Chicago, who had worked tirelessly since 1983 to establish the organization. CEO’s vision is to be the premier global entrepreneurship network which will serve 30,000 students, through 400 chapters and affiliated student organizations at colleges and universities. Today, 150 universities and colleges from across the country are members of CEO. Congratulations, Gerry, on a remarkable accomplishment!

There were about 1,400 students attending this year’s conference, representing universities and colleges nationwide. The energy level was stimulating, and it was terrific to see so many young people excited about the idea of starting their own businesses. Many had done so already.

I shared some of my own entrepreneurial experiences, and liberally referenced quotes I like regarding the life and actions of an entrepreneur. I thought you’d enjoy seeing some of them.

“Pioneers get arrows in their backs. They also blaze trails that have a way of turning into highways for countless travelers to follow.”
Jason Fry, Wall Street Journal

"The innovator has for his enemies those who did well under the old conditions.”
Albert Einstein

“Don’t be afraid to innovate; be different: Following the herd is a sure way to mediocrity.”
David Ogilvy, Co-Founder, Ogilvy & Mather Ad Agency

When asked which customer had given him the idea for the Model T automobile, Henry Ford answered:
“If I had listened to my customers, I would have built a very, very fast horse.”

“Whatever is not nailed down is mine. Whatever I can pry loose is not nailed down.”
Colis P. Huntington, Builder of the Transcontinental Railroad

“When there’s a ton of water, a lot of things float and look like boats. When there’s a ton of money, a lot of things float and look like companies.”
David Roux, Silver Lake Partners

“The meek may inherit the earth, but they’ll never increase market share.”
William McGowan, Chairman, MCI

“Good managers challenge their people. Poor ones comfort them.”

“Time lost in not making a decision can never be recovered. Sooner is better. Right now is best.”
Howard Tullman, Chicago Entrepreneur

“Never give in, Never, Never, Never.”
Winston Churchill

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