The Mobile Web: Great Promise + Growth Pains

It’s clear that the mobile web is a big growth segment these days. Proof of that is found in recent Nielsen statistics, which have charted ~34% annual growth of the U.S. mobile web audience, now numbering some 57 million visitors using a mobile device to visit web sites (as of late summer 2009).

And now, a new forecast by the Gartner research firm projects that mobile phones will overtake PCs as the most common web access devices worldwide … as early as 2013. It estimates that the total number of smartphones and/or browser-enhanced phones will be ~1.82 billion, compared to ~1.78 billion PCs by then.

Gartner is even more aggressive than Morgan Stanley’s prediction that the mobile web will outstrip the desktop web by 2015.

So, what’s the problem?

Well … consumer studies also show that web surfing using mobile phones continues to be a frustrating experience for many users. In a recent survey of ~1,000 mobile web users, web application firm Compuware/Gomez found that two out of every three mobile web users reports having problems when accessing web sites on their phones.

Because people are so used to fast broadband connections – both at home and at work – it’s only natural that their expectations for the mobile web are similarly high. To illustrate this, Gomez found that more than half of mobile phone users are willing to wait just 6 to 10 seconds for a site to load before moving on.

And what happens after they give up? Sixty percent say they’d be less likely to visit the site again. More importantly, ~40% report that they’d head over to a competing site. As for what would happen if the mobile web experience was as fast and reliable as on a PC, more than 80% of the respondents in the Gomez study claim they would access web sites more often from their phones.

For marketers, this means that to maximize their success in the mobile world, they should reformat web sites to conform to the small-form factor of handheld devices. And Gartner also notes that “context” will be the king of the hill in mobile – more than just “search” – in that it will deliver a personalized user experience. New functionalities such as Google’s “Near Me Now” are providing information on businesses, dining and other services that are in the proximity of a mobile user’s location. These and other innovations are opening up whole new dimensions to “seeking and finding” in the mobile web world.

Facebook Continues on its Merry Way to Social Media (and Web?) Dominance

Here’s a very interesting finding ripped from today’s social media headlines: The Business Insider and other media outlets are reporting that Facebook now accounts for nearly one in four page views on the Internet in the United States.

So claims database marketing consulting firm Drake Direct, which has studied web traffic in the U.S. and the U.K. by analyzing data collected by Compete, a leading aggregator of web statistics.

Just to give you an idea of how significant Facebook’s results are: by comparison, search engine powerhouse Google accounts for only about one in twelve page views.

And Facebook is now closing in on Google when it comes to site visits – with each currently receiving around 2.5 billion visits per month. In fact, studying the trend lines, Drake Direct anticipates that Facebook site visits will surpass Google any time now.

Another interesting finding is that the length of the average Facebook visit now surpasses that of YouTube (~16 minutes versus ~14 minutes per visit), whereas YouTube had charted longer visits prior to now.

These findings underscore the continued success of Facebook as the most successful social media site, even as it has grown to 350+ million users, including more than 100 million in the U.S. with 5 million added in January alone. No doubt, it’s on a roll.

McCormick Place Loses its Luster

Has all the grumbling about Chicago’s vaunted McCormick Place as America’s premier tradeshow venue finally reached critical mass?

For years, corporate exhibitors have groused about government-controlled, money-losing McCormick Place. Stories abound of exhibitors being forced to spend hundreds of dollars for services as mundane as plugging in a piece of machinery, or being charged $1,000 to hang a sign from the ceiling, because of onerous union rules governing “who does this” and “who can’t do that.” It’s been a constant refrain of complaining I’ve heard at every tradeshow I’ve attended at McCormick Place, dating back some 20 years.

Despite all of the criticism about McCormick Place’s high costs and lack of user-friendly service, it remains the largest convention complex in America, with over 2.5 million square feet of exhibit space. But attendance has been declining pretty dramatically, from ~3.0 million in 2001 to ~2.3 million in 2008. While the figures haven’t been released yet for 2009, it’s widely expected that show traffic will be reported as down another 20%.

As the current economic recession has put the most severe strains yet on the tradeshow business, it seems that a rebellion against McCormick Place is in now full swing. According to a recent article in The Wall Street Journal, “a gradual drop-off in business … has turned into a rout as a string of high-profile shows have pulled out.” The deserters include a triennial plastics show (~75.000 attendees), as well as the Healthcare Information & Management Systems Society’s annual conference (~27,500 attendees).

But isn’t tradeshow attendance off in other convention centers as well? Well … yes. But clearly not as much. In truth, tradeshow attendance has been under pressure at a “macro” level ever since 9/11, and an important reason beyond the issue of terrorism is technological innovation and the ability for people to interact through video-conferencing and for companies to demo their equipment and services via the Internet and other forms of digital communication.

Tradeshows were once the only way to gather a community together, but now there are other options. One school of thought holds that large tradeshows are now less effective than small, targeted conferences that provide heightened ability for attendees to interact with one another on a more intimate basis. Some events no longer charge attendees … but they make sure to “vet” them carefully to ensure that the show sponsors who are underwriting the costs are reaching prospects with important degrees of influence or buying authority.

On top of these “macro” trends, the current economic downturn just makes McCormick Place look more and more like a loser when it comes to the tradeshow game. Compared to Chicago’s three most significant competing tradeshow locales – Atlanta, Las Vegas and Orlando – the cost of many items from electricians (union labor) to foodservice (greasy spoon-quality coffee at Starbucks® prices) to hotel accommodations (room fees and surtaxes that won’t quit) ranges two times to eight times higher in Chicago. And in today’s business climate when every cost is scrutinized closely, none of this looks very cost-effective to the corporate bean-counters.

True, Chicago is more centrally located for travel from both coasts: Who wants to take a five hour flight from New York to Las Vegas or from California to Orlando to attend a meeting?

[On the other hand, no one can honestly say that the weather in Chicago is preferable to sunny Florida, Nevada or Georgia!]

So it would seem that Chicago’s worthy tradeshow competitors have achieved the upper hand now. I just returned from two national shows this past week – the International Air Conditioning, Heating & Refrigeration Expo and the International Poultry Expo. Where were they held? Orlando and Atlanta – the same cities which are attracting McCormick Place’s erstwhile customers.

Case closed.

Mathematicians and the Meltdown

I can’t wait for the release of The Quants, a new book by Wall Street Journal reporter Scott Patterson about the role of so-called “quant funds” in the financial near-meltdown in September 2008, to be published on February 2. The weekend edition of The Wall Street Journal printed excerpts from the book, a powerful indictment of the mathematicians and computer whizzes who “nearly destroyed Wall Street.”

According to Patterson, “quants” was a name given to “traders and financial engineers who used brain-twisting math and super-powered computers to pluck billions in fleeting dollars out of the market.” In a major departure from traditional trading – evaluating individual companies’ management, performance and competitive positions – the quants used mathematical formulae to wager on which stocks will rise or fall.

Because of breakthroughs in the application of mathematics to financial markets – some of them so novel so as to have won their discoverers Nobel Prize awards — quant funds had quickly come to dominate Wall Street, with most of them piling up profits day after day. (To the senior brass at the investment houses, who likely knew little if anything about how these funds operated except that they made a lot of money, a hands-off policy seemed just the thing.)

And just as in so many other fields, technology elevated the “nerds” to the position of “stars” – with commensurately stratospheric compensation.

Unfortunately, in September 2008 the quant funds could not anticipate the effect of the collapse of the housing market bubble. In fact, this development turned the mathematical formulae of the quant funds on their head: What should have declined, rising … and what should be going up, dropping.

Patterson’s book promises to go into the details of just how things spun out of control, as seen through the eyes of key Wall Street managers such as the piano-playing, songwriting Peter Muller, founder of Morgan Stanley’s Process Driven Trading (PDT) quant fund, and Cliff Asness, formerly of Goldman Sachs and leader of the Applied Quantitative Research (AGR) quant fund.

In addition to presenting all the facts and all the drama, I’m hoping that Patterson will offer a few observations on how we can avoid a debacle like this from happening again in the future.

Another key question is whether any of the proposed regulations being debated in Congress will address the practices of quant funds – or is it all too complicated for anyone to figure out?

If that’s so, it’s pretty scary.

Where Does the News Begin? Pew Looks for Answers.

Pew studies news reporting today ... and who's crafting it.

You don’t have to be over 50 years old to be concerned about where the world might be heading when it comes to the generation of news stories and how they are vetted. As newspapers and other publishers have cut the size of their reporting and editorial staffs, the quality and consistency of news reporting has suffered in the eyes of many.

Recently, the Pew Research Center’s Project for Excellence in Journalism decided to take a look at this issue to see how it’s playing out on the ground by studying the “news ecosystem” of a single geographic region. The market chosen for the study – Baltimore, Maryland – just happens to be in my backyard, so I’ve been able to review the results with a good understanding of the dynamics of the region in question.

Pew’s Baltimore study evaluated the news environment during the summer of 2009 and came to some interesting conclusions. While the regional media landscape – print, web, radio and TV – has broadened considerably to include 53 separate outlets that regularly produce and broadcast some form of news content, much of what is truly “new news” came from the traditional news outlets and not from other media resources.

Six major local/regional news threads were studied, ranging from the Maryland state budget situation to crime trends, issues affecting the metro transit system, and the sale of the Senator Theater, a local historical landmark. An analysis of those news threads found that:

 More than 80% of the news stories were repetitive – just rehashes of someone else’s original news content that contained no new information.

 Of the ~20% of the news stories that did include new information, nearly all of the content came from traditional media, published either in conventional format (e.g., print) or in digital.

 General-audience newspapers like the Baltimore Sun produced roughly half of the news stories, followed by local TV stations such as WBAL-TV contributing ~30% of the reporting.

 Specialty business or legal newspaper outlets such as the Baltimore Business Journal and the Daily Record contributed just under of 15% of the news items, with the remaining news reporting coming primarily from local radio stations such as WYPR-FM.

 Interestingly, about one-third of the news coverage generated by newspaper publishers appeared on the Internet rather than in their print editions.

Thus, the Pew study demonstrates that “new news” is coming from the same sources as before, led by the local papers. But another clear picture to emerge from the Baltimore profile is that the scaling back of editorial staffs has resulted in less original reporting, with much heavier reliance on simply republishing stories that have appeared elsewhere.

At the same time, new interactive capabilities are giving “we the people” an unparalleled broadcast platform via the ability to post feedback and commentary, not to mention utilizing Facebook, Twitter and other social media platforms as a megaphone.

In today’s “everyone’s an editor because they can write” environment, no one can stop us from broadcasting our own opinions and analysis to the world. But that’s not the same thing as a properly sourced, properly vetted news story. And that’s what Pew sees falling away.

The Latest Read on e-Readers

The e-reader phenomenon continues to grow. In fact, sales of e-readers have turned out to be one of the brightest spots in the consumer electronics segment during the 2009 holiday season.

And 2010 is starting out with a bevy of new e-reader product introductions from a half-dozen different manufacturers.

“Way back” in August 2008, research firm iSupply released projections for e-readers that anticipated 3.5 million units to be sold worldwide in 2009. That was up dramatically from 1.1 million units sold in 2008 – almost all of them Kindle or Sony e-readers.

Those projections were considered highly optimistic by some observers. But now that the year has passed, it’s looking like the prediction was on the low side; iSupply’s revised sales figures for 2009 are closer to 5 million units. And Forrester Research estimates that 2009 e-reader sales in the U.S. were very strong, with ~30% of the sales occurring during the holiday season in November and December.

In fact, Amazon has reported that its Kindle e-reader emerged as the most-gifted item ever from its web site.

Now, hard on the heals of the recent Nook e-reader introduction by Barnes & Noble comes news from the International Consumer Electronics Show (CES) of a host of new entrants in the e-reader game. Ranging in price from under $200 to nearly $800, each new entrant is aimed at meeting the needs of different target groups – from those wanting business news to people who wish to read full-length books. Not surprisingly, many of the new enhancements are centered on making the e-reader experience as “easy on the eyes” as possible.

Among the more interesting introductions at CES:

 Que (made by Plastic Logic), which incorporates advanced polymer technology to create a shatter-proof screen.

 Skiff (Hearst Corporation), which offers a store for digital newspaper/magazine subscriptions.

 eDGe (from Entourage Systems), which provides two screens that fold up like a book. (One offers color display and the other a b/w display for newspaper reading.)

Not to be left on the sidelines, the granddaddy in this business – Amazon – is introducing an international version of the Kindle DX. Amazon now offers both larger- and smaller-sized Kindle units in prices ranging from $250 to $500.

With all of these new options in e-readers, what’s in store for 2010 volume? Observers are now predicting that unit sales will be twice as many as in 2009 … which certainly qualifies e-readers as the latest “rage” in the consumer electronics world.

The “Greening” of Corporate America: Fact or Fad?

Considering the cold winter season we’re having – not to mention the equally cold economic and business environment – it’s not hard to imagine that the “corporate green” trend, so popular and prevalent only a year or two ago, might have stalled out in a major way.

Add to this the recent flap over climate change data fudging by some over-enthusiastic scientists, and it seems the perfect recipe for “corporate green” being a movement that’s on the wane.

But a just-completed market research study on “green” marketing provides interesting clues that this might not be the case. A group of U.S. commercial/industrial firms was surveyed for MediaBuyerPlanner, an arm of Watershed Publishing, to determine the extent of green marketing that is occurring. Among the key findings:

• ~70% of the firms surveyed consider themselves to be “somewhat green” or “very green” … but they suspect that customers think of them as less green than they actually are. Perhaps related to this concern, ~80% of the respondents expect to spend more on green marketing in the future – and that percentage approaches 90% among the manufacturers contained in the survey sample.

• For those who currently feature “green” marketing themes in their promotional efforts, the most popular media for that is using the web (~74% of respondents), followed by print promotion (~50%) and direct marketing (~40%).

• More than half of the companies reported that they are taking concrete steps to become “greener” in their operations. The most popular actions are conserving energy in their operations (~60%) and changing products to reflect greener characteristics, such as altering product ingredients, packaging, or intended uses (~54%).

And here’s another interesting survey finding: Quite a few respondents believe their green marketing efforts are more effective than their normal marketing efforts. (One third of them felt this way, compared to just 7% who felt regular marketing activities are more effective than their green messaging. The remaining 60% have not observed a measurable differentiation and/or did not feel knowledgeable enough to make a judgment.)

The survey also found that the commitment senior management makes to sustainability and other green principles in the form of specific actions is what comes first … followed later by “green” marketing efforts. In other words, there is a lower incidence of companies creating green marketing campaigns just out of a desire to appear “green.”

This suggests that green marketing depends first on company management buying into the ideological principals of environmentalism.

Certainly, the “soft economy” as well as the controversy of “soft science” could be acting as a damper on the potency of green messaging. But this field research suggests that “corporate green” continues to be a trend as opposed to just a passing fad … and that its significance as a marketing platform for companies will grow stronger in the coming years.

Plunging Headlong into the Next Digital Decade

Looking back over the past ten years, so much has happened in the world of digital communications, it’s almost impossible to remember the “bad old days” of slow-loading web pages and clunky Internet interfaces.

And yet, that was the norm for many web users at the beginning of the decade.

So what’s in store for the upcoming decade? When you consider that a 120-minute movie file can be downloaded about as quickly as a single web page these days, how could data processing and download times get any faster than they are already?

Certainly, if the world continues with transistor-based computer chip designs, there’s very little room for further improvement. That’s because today’s chips continue to be based on the original 1958 Shockley transistor design – except that they contain many more transistors along with circuits that have been engineered smaller and smaller — down practically to the size of an atom.

We can’t get much smaller than that without a radical new design platform. And now, along comes “quantum computing” which goes well beyond the traditional binary system of using ones and zeros in information processing. The betting is that so-called “qubits” – quantum processor units – will become the new design paradigm in the 2010s that will dramatically increase processor speed and power once again.

[An alarming side effect of quantum processing, however, is the possibility that computers will become so much more powerful that current methods of encryption will become obsolete. Clearly, new ways of protecting information will need to be developed along with the new speed and capabilities.]

In tandem with the new advancements in data processing power and speed, industry prognosticators such as Wired magazine’s chief editor Chris Anderson are predicting that bandwidth and storage will become virtually free and unlimited in the coming decade. As a result, it’s highly likely that the decade will be one of much greater collaboration between people in “peer to peer” creation and sharing of information and media, online and in real-time. Think Facebook on steroids.

“Mag Drag 2009”: Year-End Update

Earlier this year, I reported on the sorry state of print magazine publishing as illustrated by the spate of closures reported up to that time.

Now that we’re wrapping up 2009, we can see the full scope of the damage. MediaFinder has tallied up more than 370 magazine titles that have folded over the course of the year. And the number is closer to 450 if you also include magazines that ceased to publish in print form and went to an all-digital format.

Interestingly, magazine closure stats for 2009 were actually a bit lower than in 2008 and 2007. But this year saw the demise of some pretty important titles. Among the more noteworthy casualties were:

 Country Home
 Editor & Publisher
 Gourmet Magazine
 Hallmark Magazine
 Modern Bride
 Nickelodeon
 Portfolio
 Teen
 The Advocate
 Vibe

As we move into 2010, will these trends continue, or will magazine closures level off? It’s too soon to say, but some prognosticators are forecasting a slight uptick in print magazine advertising revenues, so perhaps the worst is behind us.

But coming off of a disastrous 18-month period when print advertising revenues have tanked 25%, 30% or more, it’s hard to see how some magazines can continue to survive at the new, depressed revenue levels which will likely be a fact of life going forward.

And what about newspapers? For them, 2009 was even more depressing, with a record number of bankruptcies filed including the companies that own the Chicago Tribune, Philadelphia Inquirer, Chicago Sun-Times, Minneapolis Star/Tribune and a number of other iconic newspaper brands. At the end of the year, though, some firms had managed to resolve their bankruptcy proceedings thanks to cash infusions, labor concessions, or selling out to new owners.

Finally, PBS Gets on the Nielsen Bandwagon

It took three or four decades, but the PBS network has finally signed up for full Nielsen demographic ratings for its TV programs. Now, for the first time, marketers will be able to access and review full demo data on who’s watching what on the Public Broadcasting System – information that has been crucial in making decisions on where best to promote products on broadcast TV.

And it’s about time. For far too long, advertisers could rely only on educated guesswork to weigh the effectiveness of promoting their products and services on PBS’s leading programming fare.

Of course, PBS doesn’t present advertising the same way as do other networks, because it’s ostensibly commercial-free programming. But even though PBS is a commercial-free broadcasting service, in recent years it has offered sponsorship deals with major advertisers in the form of comprehensive messaging that is broadcast before and after the shows air.

Indeed, veteran watchers of PBS programming have noticed more extensive promo messages that have gotten awfully close to out-and-out commercials – even though they aren’t ads in the “traditional” sense.

And up until now, PBS has not officially released any extensive form of demographic data, making promotional efforts more of “crap shoot” for advertisers than anything else.

But now PBS has signed up with Nielsen for full demos. The new rating service began on PBS with the Ken Burns series on national parks earlier in the year. According to Nielsen, that documentary scored an overall household average audience rating of 3.5, with an average of 5.5 million viewers tuned in per episode. And the internals provided some interesting clues as to the age, income and educational characteristics of viewers — older, more affluent, and better educated.

Which programs are on tap for Nielsen demo ratings going forward? PBS staples, of course – Masterpiece Theater, Antiques Roadshow, NOVA, Nature and Frontline. They’ll all have weekly demographic rating information, along with several of PBS’s famed kids programs including Sesame Street and Sid The Science Kid.

What’s a little ironic about the latest news is that, after all these years, PBS has finally gotten on the Nielsen bandwagon … just at a time when when broadcast TV audience stats are mattering less and less. The ever-growing non-TV alternatives provided by the Internet have seen to that. And coupled with that, the overall audience for PBS programming has been shrinking.