And in walks Larry...

How many billionaires does it take to brighten up a press conference?

Just one: Google co-founder Larry Page.

Yesterday afternoon at Google's Zeitgeist conference me and about a dozen other journalists were in the middle of a rather dull product demonstration. You know the sort of thing: these are our new search tools, aren’t they wonderful etc etc.

Just as we were all about to nod off, in walks Google co-founder Larry Page, along with chief executive Eric Schmidt - completely unannounced.

Mario Queiroz, Google’s VP of international product management, nearly had a heart attack in the middle of his presentation, the Google PR team all turned white instantly, and every one of the dozing journos instantly came to life.

What followed was a pretty frank and open Q&A with two of the most influential people in digital.

The duo got quite a grilling about Google Street View, consumer privacy and Wolfram Alpha. On the whole they answered most of the questions levelled at them candidly. Only a few times did the phrase ‘let’s talk offline later’ come up, which is Google-speak for ‘I’m not answering that’.

Top marks all round.

Below are a few highlights from the Q&A

Page on Wolfram Alpha: "All those kinds of things are good. There are a lot of things that still need to be done in search."

Page on privacy: "We’re not trying to get any information forcibly indexed. If you don’t want to be indexed you don’t have to be."

Schmidt on plans to monetise new Google services through advertising: "If the user experience is not there the advertising won’t be effective. We take a holistic approach to search."

Schmidt on Google’s planned video chat service: "The quality is better than Skype."

Why have Darth Vader round for dinner?

Google has launched a venture capital arm dedicated to finding the next big thing in technology. The concept is simple. If you're a hot young start-up with oodles of potential Google will hand you a sack full of cash. What could be nicer? Thanks Google.

The blog written by the guys in charge of this new initiative, Rich Miner and Bill Maris, is full of words like 'amazing', ‘awesome' and ‘exceptional'.'

‘The current downturn is the ideal time to invest in nascent companies that have the chance to be the next big thing,' it reads.

Sounds great. Where do I sign?

However, there is a catch, and it comes in the form of three words buried deep in the Google Ventures website: ‘significant financial return.'

It goes without saying that Google wants to make some money from its philanthopism - and encouraging innovation in a downturn in wholly admirable - but surely taking money from Google is like having Darth Vader round for dinner?

He'd be polite at first, he might even bring a bottle of wine, but sooner or later he's going to cut you in half with his light saber, move into your house and take over the universe.

ITV look to give new lease of life to commercials

The way viewers choose to watch and catch-up with their favourite television shows is changing and as a consequence so too is the manner in which they absorb and take notice of advertisements. With the infiltration of Digital Video Recorders into the mainstream and the ever-increasing popularity of online catch-up software, audiences have never had it so easy when it comes to skimming through commercial breaks and racing to the juicy action.

It was obvious that such a state of affairs would not and could not go unnoticed by the advertising industry for long. Indeed, as suspected the very technology that has granted freedom to users of DVRs is now to be used by broadcasters to air commercials during programmes. At the vanguard of the revolution is ITV who recently announced the trialling of ‘automatically placed overlay advertising.’  Making use of complex computer algorithms to find clear space in video footage, such as blue sky or blank walls, it allows the subliminal dispersal of on-screen logos and messages.

The technology, which was developed for ITV by Keystream, a US-based company, is currently being tested in news footage on the broadcaster’s ITV Local website. If it is well received, and if regulations permit it, ITV hopes to transfer it to the television screen. Under current Ofcom rules, the practice would not be permissible; however, with a shake-up planned it is not improbable that such technology could be widely used in the near future.

Given the results of a recent study by McKinsey & Co the need to fast track such systems is rapidly becoming a necessity; by 2010 it is thought that traditional TV advertising will be one-third as effective as it was in 1990. They are bleak statistics for companies already facing the prospect of a global recession.

ITV’s head of future technology, Simon Fell, has publicly stated that he feels the system has ‘a lot of potential.’ He added: ‘If there is a scene in a programme where there's time, then it could give us a chance to get an ad away.
‘But obviously on television you won't be seeing one of these appearing at a crunch point in a drama. It [the technology] looks at moments in the video where it finds segments that are big enough to get a non-moving logo in.’

In the United States broadcasters have developed a technique known as a “speed bump”, in which advertisers buy the presence of their logo or message during programme breaks, so that viewers who fast-forward still see the branding.

Tackling the issue from a different angle, TiVo, the leading DVR system in the US, have pioneered ‘opt-in advertisements’ where viewers are offered the opportunity to create user profiles. With the average consumer more open to viewing adverts directed at their specific hobbies and interests the technology is aimed at giving advertisers a more targeted and interested pool of potential buyers while attempting to deter users from immediately reaching for the fast-forward button the moment a commercial break begins. Although results show a low uptake, the 5-15% who do participate represent a targeted group which greatly interest advertisers.

Conservatives are already predicting a backlash if the new technologies go nationwide on this side of the pond and with online technology messageboards rife with brooding anger they have good reason for forecasting such negativity. British audiences unlike their American counterparts have been spared blatant product placement under current regulations but will, whether they like it or not, have to accept that change is on the horizon. 

Email marketing must embrace social media while making the most of its unique format

The way we communicate is altering.  Whereas once, we may have unthinkingly sent someone an email, the rise of social media and websites like Facebook mean that many of us now use them instead, sending someone an instant message here or writing on their virtual wall there.  This will inevitably have consequences for online marketing.

New results from Jupiter Research show that 22% of email users said that they use social networking sites instead of email and many more signifying that they used instant messaging, text messaging and mobile phones instead of email.  Not only this, but since last year there has been a significant dip in consumer spending as a direct result of decreasing effectiveness in email marketing.  In 2007, 51% of users said that email inspired at least one online purchase and 47% said the same for off-line transactions.  However, in their report, titled “The Social and Portable Inbox: Optimizing E-mail Marketing in the New Era of Communication Tools” of 2008, these figures dropped to 44% and 41% respectively.

According to Jupiter Research’s David Daniels the reason for this is that nowadays people receive so many emails that they simply cannot pay attention to every one.  He stresses the importance for marketers to be relevant and succinct when sending messages to purchasers’ inboxes.  Indeed, consumers do not have the time to sift through reams of text before being told what is on offer within the emails they receive, let alone to sift through numerous emails from different companies that all use the same rather lacklustre format.

More than this, many are becoming suspicious of emails sent to them from companies whose messages are simply irrelevant.  In response, they choose to use uninterrupted forms of communication like text messaging and social networks, which allow for a more direct communication and is not interspersed with spam and inappropriate marketing messages.

Things are indeed changing but it must be stressed that email marketing is not dead.  It is important to remember that email advertisements offer a direct entry into the consumer’s existence not relying on page impressions to be seen and gives the advertiser an extended voice with which to sell their product.  The power of the format needs to be utilised for optimum effect.  Copy must be kept short and the message punchy.  Design should be eye-catching but not dazzling, working in tandem with the copy to relay the email’s message in the most appealing way possible.  Ultimately, email lists should be treated with care, rewarding users for signing up, not pestering them so relevance is key.

In addition to this, a recent study by ThirdAge and JWT Boom significantly attributes the change in behaviour to the younger generation’s preference for social media over email.  Baby boomers and older generations, conversely, continue to use email and many shy away from social media sites.  As with all behavioural trends, advertisers need to be aware that many potential customers are using other forms of communication.  The only way to keep in touch with their market is to adapt strategies to cope with such change but each must also importantly be aware of those older consumers who, by and large, continue to use email.  An entertainment campaign for under 30 year olds might make more use of social media advertising whereas something like a new mortgage offering may be targeted at the over 30s via email.

What marketers must be wary of is favouring one approach of marketing over the other at this stage.  Whilst habits are changing, the use of mixed media is the only real way to ensure that the right audience is being reached and addressed in the right way.

Justin Drummond,

Chief Executive - Media Corporation plc

Intel and Yahoo to bring internet to HDTV

Yahoo and Intel are determined to prove that two heads are better than one and doing several things at once is where it’s at when it comes to their new joint project; to allow HDTV viewers to surf the web on their televisions at the same time as watching their favourite programme.  No longer will we passively sit and watch programmes on one screen, having to strain to get our laptops if there’s something we want to research.  With this new feature, eyes may remain fixed straight ahead while everything can be done in the same arena- TV and Internet will be seamless. There’s no doubt about it, we are becoming a nation of multi-taskers.  Many of us are now accustomed to using an array of media simultaneously.  According to Ofcom’s annual Communications Market report, out last week, a massive 75 percent of 20-34 year olds use their mobile phone while watching television and more than a third of 25-44 year olds surf the net when watching. In response to our changing habits, Yahoo and Intel are launching a “Widget Channel” to enable people to send emails, get the latest sports results and even check the weather when watching TV. The information-delivering widgets can be personalised and will run along the bottom of the screen in a “snippets bar” allowing users to keep one eye on their programme and the other on info from the web. The plans come at a key time for a new industry when consumers are becoming progressively more expectant of interactivity with media.  They’re used to phone-ins where their say is integral to the result of a programme and getting heard through comments on blogs.  The chance to interact with television may just be the next step. “TV will fundamentally change how we talk about, imagine and experience the Internet”, said Eric Kim, Intel senior vice president and general manager of its Digital Home Group in a joint statement with Yahoo. They are keen to stress that this is not just a copy of a PC on a TV.  The companies will work with content providers and television manufacturers to develop the platform.  Twitter and eBay have already expressed their interest in developing software for the channel and television manufacturers Samsung and Toshiba are also included in plans. As part of a broader strategy, Samsung are exploring ways to integrate the internet into its television sets.  They intend to start slowly in order not to overwhelm users but eventually build up the additional content on their televisions and transform its function.  The company believe that TV could become the heart of home entertainment, equipped with software that enables the sets to connect wirelessly to other devices automatically. There is criticism that the service will give too much exclusivity to Yahoo as only services approved by them will be available.  Moreover, it’s feared that Yahoo will bombard viewers with their adverts.  However, it must be acknowledged that this is a bold move and adverts being the currency of the Internet mean there’s little hope that this sort of progression would be happening without them.  Only time will tell whether this is the progression that people are ready for in their homes.

Yahoo! and Google: The latest in the legality saga of behavioural targeting and internet privacy

Yahoo! and Google have recently announced their promise to let users opt out of cookies online.  This comes after the request from the US Committee on Energy and Commerce, last week, that 34 Internet companies, including these two giants, make available more information about the data they collect from Web surfers and further detail on how this data is used to customize advertising.  The latest move in a saga that has been going for some time, will this gesture allay Congress’s concerns over the collection of user data or will decisive legislation in favour of personal privacy be laid down soon?

On 8th August, Yahoo! said in a letter to the House Committee on Energy and Commerce that it will henceforth present their customers with greater choice in the form of an opt-out option of customized advertising on Yahoo.com.  This is in addition to their current opt-out policy for tailored adverts served by Yahoo! on third-party networks. To be available within the month through a link in the company’s privacy centre, the user can access the service from the homepage and almost every page on the Yahoo! network.

Google expanded a little more in their letter, noting that they do not derive information about users to better target them with adverts.  Yet, they went on to argue that:

“Though it is not the focus of our business today, we also believe that behavioural advertising can be done in ways that are responsible and protective of consumer privacy and the security of consumer’s information.”

Critics have expressed their concern that Yahoo! and Google’s move is an empty gesture.  They maintain that it does not change the fact that the companies continue to collect data about their users even if they do not use it to direct targeted advertising to them. 

Furthermore, they argue that although the opt out concession has been promoted by the giants as helping to protect users’ privacy interests, the true reason for the move is fuelled by a desire to appear cooperative as they prepare to contend these benefits of their joint search deal to the Department of Justice.

Playing an evasive game, their offer of an opt-out option, not an initial opt-in feature has been condemned as being with the view that no one will bother opting out and will simply continue as before with the hope that legislation will swing their way.

The principal issue is one of privacy.  While avid supporters of Google and Yahoo! see behavioural advertising as a practical approach to giving consumer’s an experience that is tailored to what products they might be interested in and of course, a massively crucial source of their revenue stream (behaviourally targeted adverts fetch many times the price of untargeted ads), censors at the other extreme, see the collection of data as an outright breach of individual privacy, a kind of Big Brother sort of tracking.

The current climate is leaning towards a definitive legislation, which will set out the legal outlines for future policy.  However, it may be that the resolution lay somewhere in between.  If Yahoo! and Google can prove that the data they collect does not allow them to identify what individual users are doing online and is not kept so that it might fall into the hands of third parties this may be enough to allay consumer fears.

What Google must demonstrate now is the manner in which they will administer behavioural advertising without using cookies and Web-surfing behaviour to know what users are doing online.  As the clock ticks on to judgement day, the key now, is to strike a balance between controlling data about user habits to tailor advertising and showing a consideration for their privacy.

Justin Drummond,

Chief Executive - Media Corporation plc

China and the Internet – Uneasy Bedfellows?

No other country is experiencing such a boom in internet users as China. And few countries share China’s strict censorship rules. So can China and the internet ever truly function side by side, or is it a partnership that is doomed to controversy and, ultimately, failure?

Partly due to the sheer size of China’s population, and partly thanks to the rate of development, more people connect to the internet in China than in any other country. China now has more internet users than the United States, with 210 million netizens at the end of 2007. This has meant that some of the world’s most popular websites are Chinese. The most read blog in the world is Lao Xu, written by actor and director Xu Jinglei. The largest distributor of online video is Tudou, overtaking YouTube with over one billion megabytes of data transferred daily.

But the Golden Shield, or Great Firewall – means that various websites are banned by the Chinese government. When the internet arrived in China in 1987, many in the West hoped that it would augur some degree of political reform. But this has not been the case.

The methods the government uses to censor the internet include IP blocking, DNS filtering and redirection, URL filtering and packet filtering. They block sites covering taboo topics such as police brutality, the 1989 Tiananmen Square protests, freedom of speech and Marxist thought, as well as pornography and sites offering information about Tibet and the Dalai Lama.

But many people believe that the Chinese government will be powerless to stop the internet breaking down their strict rules on censorship in the future. Already the web has brought about changes in judicial matters. The killing of Wei Wenhua after he filmed a fight between villagers and officials was not widely broadcast by the Chinese media and thus not brought to public attention, but bloggers documented it with outrage, leading to the authorities taking a stand and arresting four suspects.

Keso, the pen-name of blogger Hong Bo, believes that “The Chinese internet has a distinctive character. It’s one of the most strictly controlled in the world, but netizens’ behaviour still confounds the government’s expectations. They ban websites and posts, but they haven’t got everything under control.”

So perhaps the future will see China’s stringent censorship policy relaxed. As pioneer blogger Isaac Mao states “I believe the internet will change China more than China changes the internet.”

Justin Drummond,

Chief Executive - Media Corporation plc

New Battle Against Piracy

The issue of piracy and illegal downloads has been a huge problem since the early days of the internet. The ease with which music tracks can be streamed and downloaded illegally has meant that countless web users evade paying for albums.

The topic of illegal downloads has caused something of a rift in the music consuming community. Many listeners believe that music should be freely disseminated, especially since bands make most of their money from touring anyway. Supporters of illegal downloading claim that record label ‘fat cat’ bosses have earned enough money in the past and do not deserve to profit any more. Some music fans believe that they shouldn’t have to fork out for MP3s of certain albums when they already own the CD or vinyl versions.

The furore surrounding piracy has led to many bands releasing their albums free through newspapers, or allowing fans to pay whatever they see fit, as Radiohead did with In Rainbows in 2007. Of the decision, band member Jonny Greenwood said “"It was an experiment that felt worth trying...[and] it's fun to make people stop for a few seconds and think about what music is worth.”

However, not all bands are so willing to bow to the pressure. Some, along with many fans, believe that they should receive due payment for their work, and that piracy is a breach of intellectual property. The heavy metal band Metallica famously brought a law suit against former illegal download side Napster (which has since become a legitimate company) after they discovered that their entire catalogue was available for free download.

For as long as piracy has been happening, the music industry, government bodies and internet service providers have been keen to clamp down on illegal downloaders. Most recently, six of the UK’s biggest net providers have come to an agreement with the music industry. Negotiated by the government, the deal has been taken up by BT, Orange, Virgin, Tiscali, Carphone Warehouse and BskyB and may mean that persistent file sharers’ broadband connection will be slowed or even terminated. The government plans to send hundreds of thousands of letters to net users they suspect are downloading illegally.

It is a welcome move for the British Phonographic Industry which regulates the music business. Previously the BPI has called for a ‘three strikes’ system whereby persistent offenders would have their internet connections terminated, but many net firms have resisted the suggestions. Following recent developments, BPI’s chief executive Geoff Taylor has said “All of the major ISPs in the UK now recognise they have a responsibility to deal with illegal file-sharers on their network.”

He went on to remark that “The focus is on people sharing files illegally… Musicians need to be paid like everyone else.”

In a similar vein, chief executive of British Music Rights, Feargal Sharkey, said that the developments are “a first step, and a very big step, in what we all acknowledge is going to be quite a long process.”

So with new legislations coming into play, this may be the end of the line for illegal downloading and file sharing. Only time will tell how far-reaching the implications will be for those who persistently break the law.

Justin Drummond,

Chief Executive - Media Corporation plc

Online Shopping

It is no surprise to anyone that online shopping is increasing year by year. However it is interesting to see just how comfortable consumers are becoming with net shopping. Where previously online shopping was limited to certain sites and certain consumers, today the online boom means that most retail outlets also sell online. It is predicted that by 2012 the internet will make up 15% of the retail industry’s market share. This is estimated to be worth £45 billion.   Even with the credit crunch biting, it seems that online shopping is not slowing down, but steadily increasing. A survey run by IMRG and Capgemini says that this year alone UK shoppers have spent 17 pence of every pound on the internet. This is an impressive growth of 38% on last year. This will come as no surprise when we consider that while retail spending on the high street was markedly lower in Christmas 2007, online there was £15.2 billion spent in the three months between October and December. This is a 50% increase on spend at Christmas 2006 and that was an increase of 50% on spent at Christmas 2005 (figures also from IMRG). This stunning growth, even during the credit crunch, is holding online retailers in good stead.  This increased confidence in online shopping is a reflection of changing attitudes towards the internet. Security is constantly improving and standardising and users are more savvy about how to shop safely.   As retailers innovate online, consumers are becoming more comfortable with how to shop on the net. Many users now feel that online shopping is more convenient than high street shopping. As Mike Petevinos, head of retail consulting at Capgemini, said in an interview with the BBC: “Convenience has a sharper edge in a world of soaring fuel prices and the ability to research and make more informed choices in a time of heightened price sensitivity is a key advantage of the online channel.”  I It is great news to online retailers that the EU is proposing new rules to make it easier for consumers to shop online within Europe. The proposal intends to outline a more consistent approach to online retail, from consumer rights to standard practices. This will cover things like cooling off periods and guarantees to help open up online retail between countries across Europe. EU Consumer Commissioner Meglena Kuneva is proposing a broad range of practises that should help consumers shop online, including a crackdown on hidden charges (particularly by cheap airlines) as well as cutting costs of telecommunications using broadband such as text messages and downloads.  So while the gloom of recession has made it tough for the high street, it is good news to hear that online retail is holding its course and growth. With the standardisation of retail practises and the growing consumer confidence in online shopping, it seems like the internet is staying on course.

Justin Drummond,

Chief Executive - Media Corporation plc

eBay’s victory spells good news for internet commerce. So, they’ve won the battle, but will they win the war?

Tiffany’s were not best pleased this week after losing their court battle with online auctioneer eBay.  A court ruled that eBay were not, in fact, liable for the sale of counterfeit jewellery from the jewellery maker on their site.  Thus, it would seem that the retailing giant has won the battle against the brand protectionists, but with internet law so fragmented will it eventually win the war? The decision to award the case to eBay followed a four year long trial.  After this laborious process, in which it was concluded that “Companies like eBay cannot be held liable for trademark infringement based solely on their generalized knowledge that trademark infringement might be occurring on their websites”, it leaves internet law in rather a fragmented state. Whilst the US District Judge, Richard Sullivan made this ruling, he did offer strong sympathy with Tiffany’s claim.  To this end, within his 66-page judgement, he stated, “The court is not unsympathetic to Tiffany and other rights owners who have invested enormous resources in developing their brands, only to see them illicitly and efficiently exploited by others on the Internet.” (Source: www.boston.com) Tiffany’s are understandably disappointed with the decision.  A spokesman for them, Mark Aaron said, “We are shocked and deeply disappointed in the district court’s erroneous reading of the law.”  To them, the case has been viewed in the wrong way by the legal system and they cannot believe how this has come about, especially going on the fact that a previous ruling has recently swung the other way. Just last month, a court ruling in France ordered that eBay pay $63.6 million to LVMH Moet Hennessy Louis Vuitton SA, over claims the site didn’t do enough to block the sale of fakes.  They also commanded eBay to stop all sales of LVMH perfumes on its French site.  This seems to depict a clear indeterminacy between countries on a global issue.  Europe certainly seems to be taking a more protectionist view. Another French court stated last month, in relation to a case filed by Hermes International, that eBay is a partner to its vendors and must take more action to ban counterfeits.  Last year, in a case brought by Rolex group, Germany’s highest court declared the same. This issue seems to centre on whether eBay want to affiliate themselves with commerce for the common people or luxury brands like LVMH and Tiffany’s.  eBay’s argument is that the matter of counterfeit goods is a red herring.  Luxury brands, according to eBay, are more concerned with keeping a tight leash on circulation of their goods than in keeping fakes off eBay’s website.  They contend that a more open marketplace is vital for dynamic Internet commerce. Indeed, internet analysts are tending to agree with this view, predicting that should the decision have gone the other way, this would have resulted in the foreclosure of an entire class of eCommerce. At present, the war over brand protection could go either way as it seems that the US and Europe are willing to battle it out.  The issue is far from over and it may well be consumers who will triumph by independently stipulating authentication of goods online.  After all, the customer is always right.

Justin Drummond,

Chief Executive - Media Corporation plc

Viacom vs YouTube

This week there has been much talk of the Viacom vs YouTube case currently in court in the U.S. and with good reason. The case could well be a landmark for online industries and users both and has a reach far beyond the United States.

The database that Google, as owners of YouTube, have been asked to hand over to Viacom contains the IP addresses, login details and viewing history of every YouTube user. Since these are not distinguished by country, users from all over the world will be affected by this decision.
Viacom, whose interest in protecting their copyright comes from owning two media powerhouses- Paramount and MTV, brought the case to court for the first time over a year ago in March 2007. At the time it claimed that YouTube had a staggering 160,000 unauthorised clips on the site, with 1.5 billion views. With figures like these Viacom’s concern with the loss of viewership is understandable.

However, it is interesting to note that in a statement made in response to the lawsuit YouTube made this comment: "It's unfortunate that Viacom will no longer be able to benefit from YouTube's passionate audience, which has helped to promote many of Viacom's shows."

This oblique reference brings an important point to the debate, because there can be an argument that the accessibility, particularly internationally, and the community popularity of some TV shows on YouTube actually add to their popularity on network television.

The case will have further reach than just Google, because of its threat to the privacy of individual users. Although the court has instituted a contempt clause that means that Viacom cannot use any of the information in the database for anything other than proving the case against Google, if successful, it will set a precedent that many people find may have disturbing implications on both individual privacy and internet communications.

There have been calls for several years now for Google to better protect the privacy of its users both in its search and on YouTube. Privacy expert Simon Davies is quoted by the BBC as saying that ‘the chickens have come home to roost for Google’ after years of groups campaigning them to mask IP addresses.

Those of us in online industries will watch closely as this case unfolds, because one way or the other it will help define the murky parameters of online content and intellectual copyright.

How Will New Domain Name Rulings Affect the Net?

With recent rulings governing domain names, a whole new spectrum of website names has been thrown open to businesses. But what exactly has happened, and how will this impact brands and the internet as a whole?

Not-for-profit organisation ICANN (Internet Corporation for Assigned Names and Numbers), which supervises website naming, recently accepted a proposal which will let companies buy a range of new top-level domain names ending in a variety of suffixes. This will come into play in the second quarter of 2009 and will allow companies to employ specific domain names such as .ebay and .amazon instead of the customary geographical suffixes like .co.uk.

ICAAN’s chief executive Paul Twomey remarked “It’s a massive increase in the ‘real estate’ of the internet.

However, the new ruling may prove thorny for companies, as they will have to register all possible variables of their brand-specific suffix. Jonathan Robinson, CEO of domain management company NetNames, said “While it is clear the internet domain name structure needs to evolve, the vote in favour of opening up top-level domains leads to complex questions for marketers and trademark owners.” He rightly warns that an increase in domain names will encourage a rise in “speculative activity”.

But fears of cyber squatting will be allayed in part by the fact that the new domain names will come with a hefty price tag. They are predicted to cost between $1500,000 and $500,000. As well as prohibiting squatters from buying up multiple domains, this will enable ICAAN to gain back the $20 million they will spend on implementing the ruling.

ICAAN also hopes to deter domain tasting, a tactic used by site prospectors to test the viability and money-making potential of a domain by registering and placing pay-per-click adverts on it. If the domain looks as if it won’t make money, registrars cancel their subscription within the five day trial period without losing money.

There is the danger of brands floundering under a wash of domain names, as web users become confused by the plethora of names that they have to remember to access the site they are looking for. In this way, it is Google who stands to benefit most from the ruling. With numerous URL possibilities for locating the domain they are seeking, users will most likely run a Google search instead of remembering and typing in individual URLs.

And what is to say that brands will even want a raft of name-specific URLs in their stable? Many of the most successful web brands go by catchy titles which have little to do with their purpose (Amazon) or made up names (Dopplr, Flickr). It seems that this ruling threatens to cause more trouble than it is worth as companies will be railroaded into buying up costly web real estate simply to protect their brand from cyber squatters. Having said that, there is a clause in the ruling that states that new domain names ‘must not infringe the existing legal rights of others’. This is cheering, as long as it doesn’t mean costly and time-consuming court battles between companies and individuals looking to cash in on their brand.

The ethics of the internet may also come under scrutiny if domain names ending in contentious words such as ‘nazi’ or ‘jihad’ are requested. Clause 6 of the ICAAN ruling decrees that names ‘must not be contrary to generally accepted legal normal relating to morality and public order’, but what is to say that freedom of speech and expression won’t win the day in individual cases?

As with everything related to change, there are fears that can only be dispelled by time. The implications of this ruling are impossible to predict, but detractors shouldn’t be too quick to condemn the ICAAN until the effects of their decision are manifest.

 Justin Drummond,

Chief Executive - Media Corporation plc

It is time bigger brands started making the most of online advertising?

The biggest advertisers, which have in the past sponsored other advertising formats – TV, radio and print – are yet to fully welcome the online arena as the growing medium for advertising that it is.  It is, in fact, smaller companies that are paving the way to the future of advertising.  Still, isn’t it time they started reaping the benefits?

According to the 2007 Advertising Age list of US leading national advertisers, Proctor and Gamble Co., which spends almost $5 billion a year on advertising, channelled less than 2% of its measured advertising spending online.  It spent most of its enormous budget on television.  Measured media spending rose just 0.3% for major marketers – the most slothful growth since the 2001 recession.  Bradley Johnson remarks that Advertising Age’s LAN report is clear: “[b]ig marketers, facing a weakening economy and pressure to control costs, clamped down on spending” (Source: www.adage.com).

The Washington Post published an article last week featuring the University of Phoenix as an example of a small business in the advertising world that in fact is far more forward-looking than a number of big businesses at the moment.   Rob Wrubel, who manages ad spending for the University, spends up to $20 million a month on Internet ads.  The company paid more for online display advertising in the U.S. than any other business over the past year according to data from TNS Media Intelligence.  Moreover, out of the $278 million they spent on advertising last year most of it was on the Web.

“While spending on Internet marketing has been growing dramatically over the past decade, the top 50 or 60 brand marketers are very much underrepresented”, says Randall Rothenberg, president of the IAB (Internet Advertising Bureau).  He believes that the online industry has been “growing by grabbing the low-hanging fruit”.  Larger companies are yet to take the internet by storm.

There is huge potential revenue in online advertising and analysts have predicted that this will be realised and flourish steadily to double or more over the next ten years.   However there is doubt that the proceeds are sufficient for the type of content (articles, video etc.) that Internet thinkers foresee.  At present, the majority of money spent in online advertising is in search.  This form of advertising does not directly benefit companies putting information online – the search engines that run them take the profits.  For companies providing internet content, the largest source of revenue is in display advertising.  However, many online companies, though experimenting with new formats all the time, are waiting for the leading advertisers to direct their attention to the Internet.

There is a number of reasons why this might not have happened yet.  Many onlookers have remarked that the advertising industry is not sufficiently assured about the online sphere.  They are more used to producing 15-second TV slots or filling the pages of magazines than they are to completing an online campaign.  This is changing quickly though, with professionals rapidly getting used to the way advertising can work optimally on the web.  While it is difficult to gather precise information about online audiences for a given website, internet advertising holds the advantage of being able to be tracked.

Some critics say that bigger brands and especially luxury brands have more to lose and are consequently less inclined to innovate.  A new study by consultants Forrester Research found that only a third of the world’s premium brands sell their goods online, which indicates that this reticence is a mistake because online sales are growing all the time.  Some luxury brands bust after the dotcom boom and so are reluctant to try again, and there’s also a wariness hanging over from the 1980s when too many designer brands went on licensing flings that cheapened their class.  Guy Salter, deputy chairman of Walpole, the British luxury brands trade association says, “since then, the mantra has all been about control of the brand.  And to some, the net looks like the Wild West” (Source:www.time.com).  There is also the worry that the internet is a less refined sphere,”[b]ut the opposite is true”, says Victoria Bracewell-Lewis, a Forrester senior analyst, "a well-run digital channel can only enhance their image”.  An example of this is Coach, the American leather goods manufacturer.  David Duplantis, senior vice president oversees the web sales for Coach.com and praises the web as “our most powerful marketing tool and a significant driver of store traffic”.  The site receives 60 million visits a year and 40% of Coach customers say they view goods online before making in-store purchases.  Advertising on the internet is a gain for companies like these.

Surely it is only a matter of time before these larger brands gather the confidence required to take off online.  The exciting possibilities of the web are yet to be fully investigated.  Social and interactive facets hold many treasures in terms of advertising - the opportunities with blogging and video for building brand understanding and value are immense and certainly it is time that these companies started making the most of it.

Justin Drummond,

Chief Executive - Media Corporation plc

How the Internet is transforming American politics

As Obama’s historic nomination as the Democrats’ candidate for the U.S. presidency fills the press, much attention has been given to the role of the internet in his campaign, particularly the way that he used online campaign donations to challenge the initially far greater war chest of the Clintons. This, along with the record breaking number of Americans using the internet to remain informed and to participate in the election, has made for a new kind of political campaign - one that exists both in real space and cyber space.

The growing importance of the internet in politics is reflected in the findings of the non-partisan Pew Internet & American Life project released this year. Their study of 2,251 adults in April and May corroborated what many have anticipated: that the internet has become a tool to politically participate, understand and comment as well as disseminate information.

One of the greatest assets to the public is the accessibility of the detail of information about the election. A huge quantity of comprehensive information has been made available, both positive and negative. This has allowed users to see media that is unfiltered, to watch for themselves a full speech or address. The other side of this coin however is that the internet does not forget, and the slightest error or misstep is recorded, uploaded and circulated almost instantly. Each of the key candidates, Obama, McCain and Clinton, have had to battle it out against ill-conceived comments they have made or remarks by those connected to them. These include Clinton’s claim that she was fired on in Bosnia, to Obama’s connection to Revered Jeremiah Wright, to McCain’s association with preacher John Hagee, who stated that Hitler was an agent of God.

The upside, for Obama at least, has been the deep connection between online fundraising and the wealth of his war chest. From an initial disadvantage against Hillary Clinton’s substantial fundraising, Obama’s team took a new approach, promoting smaller online donations of even US$50 or less that were given multiple times. In this way they tapped into a wider base of people who were only able to give small amounts. These added up until Obama’s campaign was soaring, as Clinton went into debt to continue.

Obama has also made excellent use of social networking. TechPresident, a website which tracks the online elements of the campaigns, reports that he has 1.35 million friends on MySpace and Facebook. McCain on the other hand has only 197,000. How this online disparity will reveal itself in the reality of the upcoming race is yet to be seen.

What is assured, though, is that this year’s U.S. election is a historical one, both for Obama’s and Clinton’s battle and for the changing nature of the campaigns. It is a tough race to win, and the candidates must arguably be tougher than ever to manage the constant visibility brought about by online interactions.

Justin Drummond,

Chief Executive - Media Corporation plc

Viral Marketing Part 2

Few industries have undergone such radical changes during the rise of the internet as advertising and marketing. Statistics from the Advertising Association this year attest that UK ad spend has grown 4.3% year on year to reach £19.4 billion. During the past year 40% of all advertising was in the press with a figure of £7.7 billion. This placed it at in top position despite a yearly drop of 1.6%. But the fastest growing medium was online advertising with a yearly growth of 39.5%, making up 16% of total ad spent at £3.02 billion.

 The credit crunch has spelled trouble for television and radio advertising with less money being channeled in to the medium. It has been predicted that ad spend could be down by 2% this year, while radio could drop by up to 12%. With budgets stretched and purse strings tightened, it seems that companies are unwilling to fork out large sums on advertising budgets for traditional methods. Yet online advertising spending is on the increase, as are internet innovations which are changing the face of the medium and posing as many problems to advertisers as they provide benefits. 

Viral marketing was once seen as a somewhat subversive offshoot not to be taken too seriously, but as the years have passed, marketers have recognised its importance and influence. Panasonic’s Lumix campaign is a viral success story. The launch of the Lumix range was supported by a viral game called ‘Gyrorunner’ in which players had to balance a 3D man on a gyroscope for as long as they could. A score of more than a minute was rewarded with a £20 Panasonic voucher and entry into a prize draw to win a camera.

Since the game was launched, nearly 600,000 people have played it and the site has had 1.6 million unique visits. Panasonic’s web communications and e-commerce manager, Gaele Lalahy, recognises the importance of a well-thought, well-placed viral, saying “It can end up being the element that drives the most relevant traffic, creates brand engagement and achieves data capture.” But viral marketing is not without its disadvantages. One of the problems associated with this medium is whether target audiences will actually be reached and, even if they are, will they be inclined to buy the product in question. A high hit rate does not guarantee a successful viral campaign. For example, Kylie Minogue’s Agent Provocateur viral was viewed 350 million times but there was negligible increase in sales for the brand.

Of course, the viral brought Agent Provocateur to people’s attention, so it wasn’t a wasted effort overall. Likewise, viral marketing should not be seen as a cheap alternative to traditional advertising. When a viral takes off it can be great publicity for a brand, but the unpredictability of the tastes and habits of web community mean that the medium cannot be trusted to deliver every time.

Even a well-planned, well-targeted viral can fail, like, like L’Oreal’s consumer blog and Sony PSP Rappers, such is the fickle nature of internet popularity. The main issue is the measurability of ROI through viral marketing. As yet there is no meaningful way of quantifying how successful a viral campaign turns out to be. Although virals may be easy and cheap to make, it is still necessary to measure their success. While there is no definitive way of finding out how well a viral has done, there are various charts and sites such as Viralchart.com. So as online advertising continues to grow and viral marketing reaches maturity, it becomes increasingly important for brands to keep abreast of trends and developments. Forewarned is forearmed.  

Justin Drummond,
Chief Executive - Media Corporation plc