ChaosScenario

Zune: Poser or iPod Killer?

The portable MP3 player competition is about to get interesting. While Apple worried about whether companies could use the word "pod" anywhere in its marketing materials, Microsoft geared itself to leap into the marketplace on November 14 with a potentially superior product.

The "Zune" is a 30 GB MP3 player that, for all intents and purposes, does everything the iPod does (including video), but it also has built-in wifi music sharing, an FM tuner, and a thankfully larger screen. Even the 640x480 video out will match Apple's. The size is comparable to the iPod, but slightly bigger, and for the time being, there is no 80 GB version like Apple will have once the 5th gen iPods are released, but maybe Apple should be a little worried.

The public's familiarity with iTunes remains a great advantage Apple has over any of its competitors, but this latest entry from Microsoft just might cause Apple to feel Microsoft's footsteps in the music download service business. As a spectator of Microsoft's bunglings with its operating systems over the years, I did not expect Microsoft's first entry to be this complete.

Microsoft's music service will allow users to either buy songs outright or rent the entire music collection for a monthly subscription fee. When a user shares a song with another Zune owner, that user is given the opportunity to listen to the song three times over three days before being prompted to purchase the music himself.

Microsoft will be using a new proprietary DRM system, which is sure to be a requirement of the record labels, but without a device onhand, I cannot predict what that will look like and what the restrictions will be. At any rate, it appears Microsoft is listening to consumers. It will be interesting to see how this all plays out. I'm in the market for a portable listening device, and since the price is reportedly going to be the same as Apple's 30GB iPod, I'm considering going for a Zune instead. - Cam Beck

Update: The Thisislondon.co.uk article I referenced earlier originally reported that the Zune would come with a built-in FM transmitter. However, this claim appears to be false. According to Microsoft, the Zune will come with a built-in FM tuner. FM transmitters will be available for about $70, and car chargers will be available for $25. However, you will be able to save a little money by purchasing them together in the "car pack," which will sell for $79.99.

Grand Central Station?

I learned through Web Metrics Guru about GrandCentral.com, a company that lets you combine all of your phone numbers into one distinct number. Not only that, but it will also allow you to record your phone calls, make custom voicemail greetings based on which group is calling, and secretly block telemarketers--or anyone else you don't want calling you anymore.

It's a novel idea, and at $14.99 per month for unlimited service, it might be worth trying. I could see myself using several of the features regularly. Web Metrics Guru believes Grand Central might be a killer app, but I have a hunch that, if the services have legs, most of them will eventually be rolled in with existing phone service.

If the plan is to sell its technology to one or more of the TelCos, then Grand Central might be successful. Otherwise, I believe they will go the way of calling programs like 10-10-220. - Cam Beck

Cell phone marketing on the rise

With close to 75% of Americans currently using a cell phone on a daily basis (and with projections of 95% by the end of 2010), the cell phone has become a prominent fixture in our lives, right up there with our keys and wallets. But unlike our keys and wallets, cell phones are much more dynamic, creating viable marketing opportunities in the process.

Approximately 58% of mobile phone subscribers use their device for non-voice functions such as sending text messages, using photo messaging and browsing news and information. It is from these latest technologies that "mobile marketing" has risen.

Three factors have helped lead this explosion of mobile media:

1. Mobile phone companies see adding advertising as a way to combat their declining revenue from competitive voice calling plans
2. Marketers are intrigued by the targetability of mobile phone advertising
3. Consumer response to purchasing paid content without advertising has been disappointing leading many companies to explore offering free, advertising-supported content to attract larger audiences

There are also video opportunities (either streaming or pre-roll) on mobile devices, but these currently provide very limited reach as only 2% of mobile phone users watch mobile television or video clips. But, video opportunities are rising rapidly. Subscribers to mobile television have already increased 45% from first quarter 2006 to second quarter 2006 with expectations for this growth rate to continue.

Mobile search advertising opportunities are expected to get a boost with several major internet companies such as Yahoo!, Google and Citysearch preparing to launch new services that would include text ads within search results.

According to Business Week, 12% of U.S. advertisers spent money on mobile marketing in 2005, to the tune of $104 million. eMarketer is predicting that by the end of 2006, 20% of advertisers will use some type of mobile marketing with spending reaching $602 million by 2009.

Bottom line, mobile phone advertising is currently in its infancy but is expected to grow rapidly over the next couple of years as mobile phone companies, internet companies and media publishers determine the best way to incorporate advertising into their models. Most likely, if you have incorporated an internet advertising strategy, you will need to consider incorporating a mobile advertising strategy as well. 

- Cort Gorman

The Power of Blogging

As a kid, I used to love Choose Your Own Adventure books. It was always great to see how a seemingly small decision could alter how the story ended. Although the phenomenon was man-made in this case, it was a small leap of imagination to picture abstract theories of chaos that spurred concepts such as The Butterfly Effect.

I bring this up because last week I was musing on the future of political Internet marketing, and somehow I ended up finding a hilarious new video by "Weird Al" Yankovic. Surprisingly enough, even though the subject of my reading was "Kinky" Friedman, a comedian songwriter, the path I took to get to the Weird Al video had nothing to do with the comedian-politician's website.

I can't even remember precisely how I got there; I just know it had something to do with the trackbacks of my primary source material. Although I know I can trace my exact path with my browser's history tool, I prefer to leave that question unanswered. There's something to be said in favor of preserving the mystery of the journey.

It got me thinking, though, about the power of blogs and how much more rich our experience becomes because of trackbacks and cross-linking. Through hyperlinks, we can find and enjoy stories that have little or no relationship to our original topic we started researching.

As this was sort of dynamic findability the founders of the Internet had in mind when they created this tool, it is ironic that these blogging features are increasingly being recognized as falling under the rubric of something we denote as only the second version of the original: Web 2.0. - Cam Beck

Update: Mindblob has a pretty interesting post on this subject. Check it out when you get a chance.
 

Cookie deletion, year two

The buzz about cookie deletion is back in the press this week with the release of a new report. You'll probably recall last year when all types of reports from BURST, Jupiter and Webtrends and were predicting deletion rates of around 30%. I've always thought these number were a little overblown, and that it's really around 10%.

Now comes new research that says that not all cookies are treated equally. Revenue magazine covers the release of a study conducted by spyware expert Ben Edelman that tests different spyware programs. More and more spyware programs are leaving cookies alone. Even the most aggressive are only deleting 40% of all cookies. Cookies from Yahoo! and advertising networks are deleted most often.

One interesting development is that Google has apparently developed cookies that, not only aren't detected by spyware removal programs, but also maintain the anonymity of the user:

Edelman claims that Google uses an interesting cookie mechanism, which combines the “efficiency of third-party cookies (with easy and fast implementation by the network alone, without complicated merchant-specific integration) with some greater privacy protections (by partial data decentralization using limited-path cookie scope. Google's approach also ends up randomizing cookie filenames, making it harder for some anti- spyware scanners to identify which cookies are Google's, he adds.

Another part of this argument is whether or not cookie deletion is in the best interest of the user. Cookies are used these days to control multiple logins and display customized content. Check out what it's like for a typical user to go anonymous in this WSJ article. In the end, I think the benefits of cookies outweigh the advantages of being anonymous even for typical users. Cookies are here to stay. - Paul Herring

Political Internet Marketing Underway

Even though politicians like to paint a rosy picture when it comes to their election chances, I am almost always underwhelmed when it comes to the execution of their Internet strategies. Navigating poorly designed websites with sparse, vague content, I always have a hard time finding all of the information I need about a candidate to make an informed decision, and because of the propensity of candidates to lie or mislead, I am usually skeptical about the promises they make.

For those of you don't know, we have a comedian/songwriter running for governor  of Texas named Kinky Friedman (learn about it on HotAir.com). He's not being given much of a chance by the media  but I really dig his website. Leave it to a career entertainer to get the marketing done right. Two of his most pithy slogans  are, "I can't screw things up any more than they already are," and "Why the hell not!" What's great is that the website even has a talking action figure that uses some of his colorful phrases.

After seeing this, I am convinced that every politician should have an action figure that says what the candidate thinks, even if the website leaves us a little unfulfilled.

The maintenance of government must depend on more than just clever marketing, but only the foolish believe that marketing doesn't play an integral part. And the Internet is going to play a greater role in that marketing as time goes on. Seth Godin observes:

Your political goals (right, left or center) don't really change the reality that marketing in politics is changing forever. The idea of a spend-and-burn candidacy is fading (how much more than a billion dollars per cycle can we spend?) and it's being replaced by a person-by-person, viral approach that relies more than ever on authentic storytelling and worldviews.

As the nature of politicians is to irresponsibly spend money that isn't theirs, I do think that they can spend more than a billion dollars per cycle. Much more. However, the Internet does open up opportunities for a clever member of the unwashed masses to woo voters with their gimmick, shtick, or even -- dare I say it? -- intellect, foresight, and wisdom.

But more likely, we'll just get pirates in Congress. - Cam Beck

 

Put Customers First

Nothing is quite as frustrating as a company that, when confronted with a widespread consumer behavior that it doesn't know how to deal with, takes its frustrations out on its customers when it should instead find a way to make use of that behavior.

Recording companies did it by litigating the pants off of Napster before Apple stepped in with a workable solution. As Paul wrote earlier this week, YouTube may be the next popular company litigated out of existence--if only temporarily. Today Seth Godin pointed out an Internet-based dog boutique that refuses to accept phone orders because, in essence, the customers are, on balance, more trouble than they're worth (Mine Your Own Business has a great synopsis of this website's inexplicable customer "service" policies.).

As if the lawsuits against DVR manufacturing companies weren't enough to light your hair on fire, now Fox is looking for ways to deliver advertising through commercials even for those people who have DVR equipment by replacing ads with static content. Those without DVRs will be subjected to the same static image as the DVR-owners, but they will be subjected to it for longer periods of time, and it will be accompanied by some sort of dialogue.

One of the early advantages that TV had over Internet in terms of advertising content was that it could deliver video and audio that integrated seamlessly with an activity audiences were already doing. Now that it is clear that, for whatever reason, audiences were tuning out of TV commercials, apparently some people think the best way around that preference is to make the activity that gives them an advantage less enticing.

The next thing you know, they will petition the government to forbid audiences from changing the channel during a commercial--which they will increasingly do if Fox moves forward with this idea.

Instead of annoying people by forcing them to do something they don't want to do, let me suggest an alternative. Give them something they want and find a way to make it profitable. It has become clear that there is a growing demand for Internet-based video and that, although younger audiences are spending more and more time online than watching TV, online advertising spending has not kept pace.

I have to wonder... If the studios spent as much time and energy looking for ways to accommodate the audience's needs and wants as they are currently seeking litigation and retribution, would they have already found a way to make it profitable and effective? If they don't wake up soon, TV broadcasting stations will find themselves catering to a niche market like AM radio, and advertisers will find themselves spending disproportionately on an ineffective medium that no one cares about anymore. - Cam Beck

Online advertising, room to grow

The growth of online advertising has been almost unbelievable. In the first quarter of this year, it's grown 26%. With that kind of growth, you'd think that we're back in the dot-com days. Think again. A recent emarketer article points out that the time spent on the internet is 20% of the time spent watching television.

 

 

 

 

 

 

 

So you'd think that internet advertising would be 20% of television advertising, right? Wrong. Not even close. Where television received 44% of advertising, the internet lagged behind magazines, newspapers and was less than one-half of the next medium, radio at 8% of advertising spending.

 

 

 

 

 

 

 

 

 

You can argue back and forth about the fragmentation of the internet but internet advertising spending is out of balance and primed for explosive growth. - Paul Herring

Is YouTube the next Napster?

Gotta love Mark Cuban, an Internet veteran whose seen it all. While the rest of us are talking about how social media is changing the world, Mark is talking about the demise of YouTube. Doesn't make him real popular with the Web 2.0 crowd.

But wait, if you look closely at what he's saying, you'll see it makes some sense. Basically he argues that:

1. YouTube can't consistently provide free bandwidth - Bandwidth is getting cheaper, but it's not free. Without a sustainable advertising model, you can't pay for it. Although there have been signs of advertising life, so far YouTube has had a hard time attracting substantial large advertising spending, especially considering the amount of traffic the get. Unless advertiser and YouTube figure out a way to take advantage of the traffic beyond just putting their latest 30 second ads on-line, YouTube won't be able to afford their current model.
2. Copyrighted material - Where's the first place you go when someone mentions a great moment in TV show they saw or bad call play in a game? The problems is that all this material is copyrighted. When a request to remove the material is made, YouTube is quick to comply. However, if YouTube to figure out ways to make money off this content, you can bet the people who own the content will want a piece of the action.

In the long run, YouTube has some big strategic business problems that must be addressed. They've been a pioneer in creating an on-line video community. Now the question is if they can create a sustainable business from it. - Paul Herring

Starbucks is Podcasting?

Yet another company has entered the podcasting fray, but this time from someone you might not expect. Starbucks has launched "Coffee Conversations", a weekly podcast dedicated to educating listeners about coffee. It's an audio podcast, and each episode is around 15 minutes in length.

So how would I rate the effort? It's marginal at best. While I think there certainly are people who would value absorbing some knowledge about coffee, the execution could have been much better. For example, in iTunes, the podcast doesn't have any artwork. This is a big deal, since that artwork can be a primary way that podcasts are browsed in the iTunes store. In addition, it appears that this podcast may be very short lived. On the "Coffee Conversations" page on the website, it says the following:

"Join our experts each Tuesday in September for Coffee Conversations, a unique audio series exploring the world of coffee."

So the podcast is just a September thing? That would mean listeners are only going to get 4 episodes... not much of a reason to subscribe. - John Keehler

Launch "Coffee Conversations" in iTunes.