This is the first time in 23 years that Pepsi’s high-production spots won't be found in the commercials for the biggest sporting event of the year. Between 1999 and 2009, Pepsi spent over $142 million on Super Bowl ads, but that number won’t be growing anymore come February, according to ABC News.

Instead, Pepsi will put over $20 million into The Pepsi Refresh Project, a social media advertising campaign set to launch in 2010. On January 13, Pepsi will begin accepting requests from the community for project proposals by which Pepsi can “make the world a better place.” The winning project by number of votes (voting starts February 1) will receive up to $20 million to make the project a reality.

Before the rocket launch rise of social media, the Super Bowl’s ability to sit down over 95 million viewers (42% of TV-equipped US homes) seemed like the best possible avenue to reach people. Even a 30-second spot during the commercials would draw in a massive number of potential customers.

On the other hand, 85% of people aged 18-34 use popular social media sites. Facebook is the biggest, with 350 million users worldwide. Just tapping into a percentage of that kind of advertising potential could easily earn Pepsi more viewership than would the Super Bowl.

via VatorNews – Pepsi drops Super Bowl for social media.

Share/Bookmark

Razorfish, one of the largest digital marketing companies in the world, declared in its fifth annual Digital Outlook Report that television has morphed from a mass distribution channel to a collection of interactive and personal experiences. The report,  provides insightful industry commentary on topics such as the future of TV and Social Influence Marketing™ and examines media buying, planning and distribution trends from the past year.

Razorfish publishes the report to help marketers make smarter choices about their digital media spend and investments in digital marketing channels.

“Marketers have been talking over the past few years about the long tail of the Internet, but now we are seeing the development of a long tail of television,” said Terri Walter, vice president of emerging media at Razorfish. “TV is alive and well, but the viewing experience is moving from mass to niche in terms of both audiences and programming as consumers divide their time between computer screens, TV sets, mobile devices, gaming systems and set-top boxes. As viewership fragments, advertisers must find a way to adopt their messages to smaller, but potentially more valuable audiences.”

In addition to exploring the fundamental shift happening in television, the Razorfish Digital Outlook Report offers insights into digital media trends that are affecting the media industry overall, and in particular, search and social media. For example, Razorfish saw a significant increase in client spending in paid search, which rose from 31% in 2007 to 36% in 2008.

“As the economy began to soften toward the end of the year, we witnessed a renewed focus on search because it delivers a stronger ROI than many other tactics,” said Sarah Baehr, vice president and national media lead at Razorfish. “We also saw a continued shift in digital ad spending toward niche sites as clients realize the value of targeting precise audience groups.”

The comprehensive report provides research, predictions and recommendations from agency thought leaders and a stellar group of guest contributors. Key findings include:

• Explosion of Social Influence Marketing™ – Razorfish predicts “Your CEO will join Facebook” this year. The traditional C-Suite is finally responding to the pressure that social influencers have on their brands, and they’re getting onboard. The Digital Outlook Report discusses ways to measure the value of social influencers, including the proprietary Razorfish Generational Action Tag technology.
• Findings on the “connected class” – Razorfish found that those in the digitally savvy, 18-25 age group are becoming more selective and sophisticated in their digital choices, and are not afraid to ignore superfluous online video content or reduce the number of their ‘connections’ on social networking sites. Marketers would do well to respect the discerning nature of the “connected class.”
• Defining a new retail experience – As customers are now demanding the same level of personalization in brick-and-mortar stores as they receive online, retailers need to deploy modern tools such as digital in-store signage, coupons delivered via mobile devices and interactive store floor plans and merchandise directories.
• Annual “Publisher of the Year” award – Razorfish’s media team named New York Times Digital, Yahoo! and FM Publishing this year’s publishers of the year based on their service, creativity, responsiveness and the ability to deliver meaningful solutions to the agency and its clients.

As in previous years, the Digital Outlook Report incorporates essays from guest writers who bring fresh insights into all things digital. The 2009 report includes contributions from Mike Steib, director of Google TV Ads; Davina Kent, director of strategic alliances, Comcast; media visionary and consultant Jack Meyers; Dean Carignan, director, advertising business group, entertainment & devices division, Microsoft and Mark Kroese, general manager, advertising business group, entertainment & devices division, Microsoft; and Alec Gerster, CMO, Navic.
About Razorfish
Razorfish is one of the largest interactive marketing and technology companies in the world. With a demonstrated commitment to innovation, Razorfish counsels its clients on how to leverage digital channels such as the Web, mobile devices, in-store technologies and other emerging media to engage people, build brand loyalty and provide excellent customer service. The company is increasingly advising marketers on Social Influence Marketing™, its approach for employing social media and social influencers to achieve the marketing and business needs of an organization. Its award-winning client teams provide solutions through their strategic counsel, digital advertising and content creation, media buying, analytics, technology and user experience. Razorfish has offices in markets across the United States, and in Australia, China, France, Germany, Japan and the United Kingdom. Clients include Carnival Cruise Lines, MillerCoors, Levi’s, McDonald’s and Starwood Hotels. Visit http://www.razorfish.com for more information.
Contacts:
Sally O’Dowd Sally.odowd (at) razorfish (dot) com (direct) +1.312.696.5068 (mobile) +1.773.458.3740
Katie Lamkin Katie.lamkin (at) razorfish (dot) com (direct) +1.312.696.5241 (mobile) +1.773.308.3425

Share/Bookmark

Among the report?s other key findings:

* The US, UK and Italy are leaders in mobile internet penetration, with 15.6% of mobile subscribers in the US, 12.9% of subscribers in the UK and 11.9% in Italy actively using the mobile internet; New Zealand (1.6%) and Indonesia (1%) have the lowest mobile internet penetration rates:

* The number of US subscribers who paid for mobile internet increased 28% between Q1 and Q1 2008 (from 74 million to 95 million). The number of monthly unique visitors increased 73% from May 2006.

* 26% of mobile internet users recall seeing some form of advertising while using the mobile internet.

* Unlimited data packages are growing more popular in the US: 14% of US wireless subscribers have unlimited data packages, and 50% of data users say they would prefer to have them.

* The Motorola RAZR series phones are the most owned devices among mobile internet users in the US, followed by first-generation Apple iPhones, Research In Motion?s BlackBerry Pearl series, the BlackBerry 8700 series and Motorola?s Q series. Nokia phones are the most widely used by mobile internet users internationally.

* US carriers now market bundled data and voice services more often. In Q1 2008, the top carriers shifted a portion of their voice-only and data-only marketing dollars to advertisements that promoted both voice and data services. Advertising promoting both services accounted for 59 % of carrier advertising expenditures in 1Q08 (up from 52% in 1Q07).

* 23% of US mobile data users expect to see more mobile advertising, and 32% are open to it if it helps to lower their wireless bills. Mobile internet users are also 60% more likely than the average data user to find mobile advertising acceptable.

* 3G networks are improving the quality of the mobile web and will help drive up customer satisfaction. 3G networks perform up to six times faster on data throughputs used for mobile internet than 2G and 2.5G networks.

* Yahoo Mail is the most popular mobile website in the US, with 14 million unique visitors per month, as of May 2008.

* Longer battery life (38%), larger screen size (22%) and more memory capacity (21%) and better data inputs (20%) are among the most important features mobile internet users want on their devices.

* Most mobile internet users seek out websites to visit. Some 40% say they find the sites through search engines; 22% say they type in the URL directly; 18% say they find sites through their favorite links; and 17% find the sites they visit through their carrier’s portals.

As of May 2008, the US mobile internet audience (age 13+) is about evenly split between those over the age of 35 (48%) and those under the age of 35 (52%) and is slightly more male than female. There are about as many teens using the mobile internet as there are people over age 55 (5.1 million age 13-17 and 4.4 million 55 and older). In order to fully realize the mobile internet marketing opportunity, agencies and brands need tools to plan targeted ad campaigns and track performance relative to other media channels.

Share/Bookmark

Although a new Harris Interactive study reveals that over one-third of consumers say the dire economy will not affect their spending habits,  the 60 percent of consumers who will limit their discretionary spending will curtail going out to restaurants (74 percent) and limit their purchase of electronics (71 percent). 41 percent of consumers, however, have no plans to stop or cut-back on the purchase of cell phones, making it an increasingly viable advertising channel.

To many, it seems the use of mobile phones has become an indispensable part of their lives. People are actually severing ties to land lines with increasing frequency. According to a new study from the National Center for Health Statistics, notes the report, 16 percent of U.S. homes are using wireless phones exclusively.

These trends support the push by marketers to leverage mobile advertising as part of an integrated marketing program to promote their brands and sell products and services, Harris analysts conclude – especially during difficult economic times.

Milton Ellis, vice president and senior consultant, Harris Interactive technology group, says “… there are a lot of people who are still spending money… and even those cutting back still need to buy essentials… the key is to reach out to them through innovative marketing, including mobile advertising… “

Among teens surveyed, 56 percent said they would be interested in viewing mobile ads with incentives, while 37 percent of adults noted that they would be receptive to such advertising.

Ellis continues, “… our research indicates that teens will be strong early adapters to this advertising, with adults not far behind… no other advertising medium approaches the personal relationship consumers have with their mobile devices… “

80 percent of adults and 70 percent of teens identified “cash” as the top incentive for responding to mobile advertising. Additional popular incentives among teens are:

• Entertainment downloads (61 percent)
• Free music (57 percent)
• Complimentary minutes (53 percent)

Appealing incentives among adults are:

• Free minutes (49 percent)
• Discount coupons (37 percent)
• Free entertainment (31 percent)
• Music downIoads (24 percent)

Text messaging is the most preferred advertising approach among over two-thirds (69 percent of adults and 64 percent of teens) of consumers. Teens are more willing to accept advertising images on their mobile phones (47 percent), versus adults (35 percent).

54 percent) of adult respondents said they are comfortable providing personal information to mobile advertising marketers if offered for the right incentive, while teens are very guarded about their personal information. Only 35 percent would divulge it, even if an incentive is offered. 25 percent said they would never provide personal information.

Judith Ricker, division president, Harris Interactive marketing communications research group, concludes that “No matter how mobile advertising messages are delivered, our research shows that consumers demand that if a company is going to invade their personal space with advertising, it better be for something of interest to them. Personalization is hyper-critical.”

For more about this study, please visit HarrisInteractive here. For expanded data and charts, visit Marketing Charts here.

Share/Bookmark

Spending on alternative media in the US jumped 22% from 2006 levels to reach $73.43 billion in 2007, and that rapid growth is expected to continue in 2008 despite a slowing economy. Alternative media, including 18 digital and non-traditional media segments, accounted for 16.1% of total advertising and marketing spending in 2007, up from only 7.9% in 2002 , according to a new report from PQ Media. By 2012, we anticipate one out of every four dollars spent on advertising and marketing will be earmarked for alternative media. Alternative media spending grew at a compound annual rate of 21.7% from 2002 to 2007.

- The alternative-media growth momentum to continue in 2008 and through the rest of the decade as brand marketers seek new ways to deal with the evolving media landscape:

* Total spending on alternative media is forecast to grow 20.2% to $88.24 billion in 2008 and post compound annual growth of 17.0% in the 2007-2012 period, reaching $160.82 billion.

* Alternative media is forecast to account for 26.6% of total US advertising and marketing spending in 2012.

* The largest alternative media segments in 2007 were event sponsorships & marketing, search & lead generation, e-direct marketing, online classifieds & displays, local pay TV, and product placement.

While all 18 segments of the Alternative Media Matrix – including 12 alternative advertising segments and six alternative marketing segments – posted double-digit growth in 2007, 12 of the 18 segments grew faster than 20% for the year.

* The following segments are projected to drive growth over the next five years (in order of projected growth): consumer-generated media, mobile advertising, videogame advertising, online video advertising, word-of-mouth marketing, advergaming & webisodes, product placement, search & lead-generation advertising, and digital out-of home media.

* Among the segments forecast to grow the most by 2012:

- Online search spending is expected to be 113% more than 2007 levels and will reach $26.1 billion.

- Event sponsorship expenditures are expected to reach $33 billion, 72% more than last year.

- E-direct marketing (email and pop-up ads) spend is forecast to reach $22.1 billion, up 121%.

- Online video and rich media spending is expected to be 389% more, reaching $12.2 billion.

Spending highlights and key trends affecting each major sector and related segments of alternative media:

* Alternative advertising, including online & mobile advertising and entertainment & digital out-of-home advertising, climbed 25.8% to $39.22 billion in 2007, and grew at a CAGR of 26.2% in the 2002-2007 period. Alternative advertising accounted for 17.7% of overall ad spend in 2007, up from a 7.0% share in 2002.

* Online & mobile advertising, including search & lead generation, online classifieds & displays, e-media, online video & rich media, internet yellow pages, consumer-generated ads, and mobile advertising, rose 29.1% to $29.94 billion in 2007, and increased at a CAGR of 31.4% in the 2002-2007 period. Growth was driven by brand marketers’ shifting budgets out of traditional advertising to reach key demographics that have increased online and mobile usage due to improvements in online and wireless technology, particularly with wider adoption of broadband access.

* Entertainment & digital out-of-home (OOH) advertising, including local pay TV, digital out-of-home media, video-on-demand (VOD), interactive TV (ITV), and digital video recorder (DVR) advertising, videogame & home video advertising, and satellite radio advertising, rose 16.2% to $9.28 billion in 2007, and climbed at a CAGR of 15.0% from 2002 to 2007. Spending was fueled by new ad insertion technologies, the pursuit of new ad platforms that reach young audiences; and the steady growth of local pay TV, satellite radio, and DVRs, subscribers.

* Alternative marketing, including branded entertainment and interactive marketing, rose 17.9% to $34.21 billion in 2007, and posted a CAGR of 17.5% in the 2002-2007 period. Alternative marketing accounted for 14.5% of total marketing spend in 2007, up from 8.7% in 2002.

* Branded entertainment marketing, including event sponsorship & marketing, paid product placement, and advergaming & webisodes, rose 14.7% to $22.30 billion in 2007, and climbed at a CAGR of 13.4% from 2002 to 2007. Growth was driven by deployment of media strategies aimed at being more interactive and entertaining than traditional media, as well as to engage target audiences in locations that are not affected by ad-skipping technology.

* Interactive marketing, including e-direct marketing, word-of-mouth marketing, and e-custom publishing, rose 24.4% to $11.91 billion in 2007, and climbed at a CAGR of 28.6% from 2002 to 2007. Spending was driven by strong gains in segments that reach affluent and influential consumers with focused messages that are either opted in to or come from very trusted sources.

Share/Bookmark

Video Games have emerged as a main-stream entertainment medium that generates worldwide revenues of about $25 billion in hardware and software sales. Surpassing box office revenues, movie rentals, book and music sales, Video Game revenues reached $12 billion in the US in 2006, according to a study by Interactive Advertising Bureau.

* Over 40% of households have a video game console system
* Over 120 million people play video or computer games in the U.S.
* Personal Computer Gamers are expected to reach 80 million in 2007 and up to 99 million in 2012
* Console/Online gamers is expected to reach 6.9 million in 2007 and up to 18.5 million by 2012

The integration of online games across all hardware platforms has resulted in the emergence of advertising as a significant revenue driver for the games industry. Overall game-related ad spending will grow from $370 million in 2006 to more than $2 billion by 2012. In-game advertising expenditure is widely expected to accelerate the fastest. Predictions show more than $800 million – $970 million in spending by 2012.

* Average brand familiarity increased by 64% due to in-game ads on Massive’s network. The study also found
* Average brand rating increased by 37%,
* Average purchase consideration increased by 41%,
* Average ad recall increased by 41% and
* Average ad rating increased by 69%.

This medium represents an opportunity for advertisers, however it is somewhat fragmented and can be difficult to navigate. Advertising opportunities may vary from platform to platform, and certainly demographics will vary based on platform and game type. A basic understanding of the game platforms and available advertising formats is an important piece of mastering the Interactive landscape.

Generally, advertising opportunities are either in-game or around-game and can be further described as “environment” or “immersive.” Around-Game ads are displayed in conjunction with, or alongside a game while in-game ads are elements of the game itself whether by display or interactive in nature. Typically, web-based games are played within a “traditional” website environment where ad units can be displayed around the game window during game play. On the other hand PC-based downloadable games are typically housed in an HTML environment and are played in full-screen mode. Advertising can be displayed both before and after gameplay, in the launch and exit windows, with digital video ads running while the game is loading. This format also allows for game patching, digital rights management, and commerce.

Share/Bookmark

DEVELOPMENTS IN DIGITAL MARKETING AND media are happening at such breakneck speed that marketers must prepare to navigate them–or be left behind. The same goes for the agencies that advise them. But the consensus among a panel of experts appearing at OMMA Hollywood earlier this week is that they’re not ready, not by a long shot.

“Agencies aren’t prepared for where things are going,” said Tim Hanlon, senior vice president-Ventures Group, at Publicis Groupe’s Denuo. Hanlon was, by far, the most strident of the group. Agency silos, he said, remain the order of the day, referring specifically to the relationship between brand and direct response media.

“Consumers, especially younger ones, if they see something in any form of media, they’re going to want to go further with it,” Hanlon said. “Agencies should be de-siloing to make that TV expression both a branded and DR vehicle,” whether it’s a TiVo vehicle or a telescope unit, “a little TV with a DR component,” adding: “Is that the direct marketing agency’s responsibility or the brand agency’s? I think it’s both, so why do have two separate groups?”

Good question. The role of the agency will need to change, given the rise of online-based ad auctions, hyper-local media planning and buying services, like SpotRunner and Spotzer, and other emerging media planning platforms.

“Google showed us that search and targeted ad messaging is not only a viable business, but a gargantuan business,” Hanlon said. “The holding company model missed it. Now they’re scrambling to be experts or to acquire this skill.” Hanlon noted Publicis’ acquisition of Digitas late last year.

With mobile and search engine optimization, “the reality is that you still have to have integrated agencies and teams. It’s a big challenge. People have to be aligned differently. The way we hire and [provide incentive] needs to change, and it can’t happen quickly enough,” Hanlon noted.

Holding companies are licking their chops at digital investments. However, “making the investments is definitely the easiest thing we do–the hardest thing is to take an investment of any size and integrate it into the agencies and to deliver a powerful offering,” suggested Bant Breen, president, Interpublic Futures Marketing Group. “That requires more holding company involvement–or a new [kind of] holding company involvement.”

Nick Grouf, co-founder, chairman and CEO of SpotRunner, maintained that agencies, media companies and providers are morphing all the time: “Agencies change but they don’t go away.”

Breen suggested that the idea that creative and technological solutions stand at polar opposites no longer applies. “It’s a messy landscape today … Digital media staff is working two and a half times longer and harder than the traditional media staff,” he noted, citing thousands of media channels and different data feeds. “We need systems to coordinate that process. Truly personalized creative could be very, very exciting.”

“The media agency needs to reinvent its business model so that it’s much more of a polyglot,” Hanlon said. “Agency holding companies risk marginalizing themselves to just focusing on the big stuff. And then it becomes nothing more than a share-shift game. That’s not a growth business; the growth is at places like Google.”

“The big part of what agencies do is to empower consumers to make a purchase decision, foster relationships, enable transactions and deliver information,” added Sean Gold, senior vice president marketing, MySpace. “Traditionally, they’ve been great at delivering information, but the fostering relationships/enabling transactions needs to improve.”

Tobi Elkin is Editor-at-Large, MediaPost. Email her at telkin@mediapost.com

Share/Bookmark

Fast-food retailer Hardee’s is among the companies testing coupons that are downloaded to customers’ cell phones. The test, which is being conducted in Indianapolis and St. Louis, offers coupons for chicken sandwiches, breakfast biscuits and chili cheese fries.

In order to get the coupons, customers have to go to www.cellfire.com, check the compatibility of their cell phone with Cellfire, and enter their phone numbers and e-mail addresses. They then receive a text message with a link to download the Cellfire application. After launching, they can locate coupons stored under the names of participating companies. After clicking “use now” when the appropriate coupon appears, they show the coupon code to the cashier.

Hardee’s core customers are young and male, since it launched the Thickburger line of sandwiches in 2003. But studies show most people who clip coupons are middle-aged and female. “Guys are lazy,” says Steve Lemley, vice president of marketing for the St. Louis-based chain. – Read the whole story…

Share/Bookmark

“Casual game developers traditionally operate on a limited revenue model, typically receiving a set fee from downloadable titles or a small royalty associated with game subscriptions,” said studio manager for Chris Early. “Now, by sharing in-game advertising revenue, we’re allowing a more diversified business model that gives our partners more resources to create new, innovative titles for the 13 million people we see every month on MSN Games.”

For more details:
- check out the release

Share/Bookmark

During the next four weeks, Google will allow users to use AdSense in their websites and choose from a selected playlist of songs to play in their web site. These music videos will be accompanied with advertising.

Distributing video clips with AdSense is not new to Google. In August 2006, Google distributed clips of music videos and shows in partnership with MTV in the AdSense of targeted web sites. This time, Google is playing it big by partnering with the likes of Warner Music Group and Sony BMG Music Entertainment. Also, these music clips will be offered as playlists which the publishers can play on their website. Apart from Sony and Warner music group, there are many other small publishers who are partnering Google in this project. The revenues from the ads will be split between Google, the publisher and the music company. Although Google refused to disclose the exact amount of the split, it disclosed that the ads will be billed on a cost-per-thousand-impressions model.

Whatever the revenue sharing method of Google, this new move from the search engine giant will certainly change the way music videos are marketed online. Instead of the customers going to specific places such as the media company’s website, music videos will now be available all over the Internet. Content owners (music companies) can choose the sites where the music video ads are displayed and extend their reach on the internet.

By Raju Shanbhag

TMCnet Contributing Editor

Share/Bookmark