Media Week

It's been a busy few weeks and I thought I'd better get back into the routine of blogging more regularly. I've been up north again recently and met with the heads of many of the agencies in that part of the world, and we also welcomed the Media Week awards judges to the Googleplex to take a look at our set-up and meet some of the team. Both occasions allowed me to reflect on the last year or so in the digital industry, and despite the recession things seem to be going very well. While some media sectors are struggling as businesses manage costs more tightly, digital innovation on behalf of both the user and advertiser has been significant.

This time last year, Twitter wasn't the growing phenomenon it is today, Facebook has reached 20m users in the UK, while Spotify was not opened up to UK registration without invite until February this year. Additionally Microsoft has launched its new search engine, Bing, and Google has continued to innovate with tools like Google Squared and Wave on the consumer front, and Doubleclick Ad Exchange on the advertiser and publisher side.

The digital industry can be proud of its achievements in 2009 and the news this week that the Internet as a medium is now well over 20% of UK ad revenues is further demonstration of the progress of online channels. As agencies and advertisers begin planning for 2010, I think we can be upbeat about next year and focus not on relative performance versus other media, but how the channels can work together more effectively for the benefit of users and advertisers.

I had the pleasure of spending some time at Haymarket Towers last week to begin the judging process at the Media Week awards. After years judging the awards, this year struck me as the first in which digital media is getting some real cut-through in the media buying and planning marketplace.

Many of the entries this year made reference to successful groups or campaigns set up on Facebook and, to a lesser extent, on Bebo, as well as activity on YouTube and other video sites. This is good progress and it’s great to see industry folk realising the value of digital within a campaign. Indeed even search marketing was regularly played back as an addition to traditional marketing campaigns.

However, the pedant in me thinks much of the social media and YouTube contributions seemed to be post-rationalising rather than putting digital at the centre of the campaigns. Uploading a video and counting the hits does not a digital campaign make.

Brands need to use digital insights, glean feedback and comments from web users and feed this back into the campaign to keep its momentum strong. People are spending 8 hours of their leisure time per week online, so let’s hope this trend is reflected in the upfront planning process even more so in the award entries of future years.

By now I’m sure you’ve read the much-hyped analyst note written by 15-year-old intern Matthew Robson, published by Morgan Stanley. It indeed makes for fascinating reading, but what surprised me is that this sort of thing isn’t seen more often.

I’m no City-boy, but as someone working in the media industry this stuff makes much more interesting reading than the usual, dry analyst notes we’re used to. Granted, he didn’t take an overly scientific approach with hard figures to back up his piece, but it didn’t matter – it was honest and insightful.

We knew that teens now expect content for free online, but understanding their new patterns of behaviour and consumption, spoken in stark terms, really puts things into perspective. From an online angle, Robson suggests, “Most teenagers enjoy and support viral marketing, as often it creates humorous and interesting content.

Teenagers see adverts on websites (pop ups, banner ads) as extremely annoying and pointless, as they have never paid any attention to them and they are portrayed in such a negative light that no one follows them.” The onus, therefore, is for the online marketing industry to improve tools and technologies – fast – so this generation doesn’t grow up thinking all ads online are a nuisance.

This teaches us that relevancy and, just as importantly, creativity in online marketing may be key to ensuring this generation can still find the content they love for free, while offering content creators fair compensation for their talents. Let’s just hope other interns working in the City this summer are not all feeling the pressure of getting an FT front page for their work. Robson has just laid down the gauntlet.

IAB chairman, Richard Eyre, made an impassioned and thought-provoking speech at Google’s Marketing Summit this week. He argued that the media industry was still trying to make sense of the digital world by wheeling out old-world narratives

I certainly share this view. When new digital innovations are born – seemingly out of thin air – the industry’s reaction always seems to be along the lines of “Oh, this is like the thing that was happening with TV in the 80s,” or “this is a bit like radio for the web” and so on. But such is the pace and growth of the web, the old scripts need to be ripped up, the sepia-tinted lenses need to be dropped (and my nagging clichés can be dispensed with…)

What I’m getting at is there is so much insight available, and consumer behaviour is changing so fast, that everything happens in real-time – such that we often make sense of these things as we go along. How outdated does it sound now to run a television test campaign in the North East of England, then test against this in the South East, compare the results and finally roll out nationally 12 months later? Today the brand would have a dozen online copycats before it made it to the High Street.

No, Twitter isn’t (yet) mass market, but it, along with search engines and social networks, are ready-made focus groups that can give instant feedback on products and services. Historical narratives, tried and tested methods and old-school tools just don’t cut it in the digital world.

As my historian colleague Phil Miles tells me: History is a continuum, but this digital thing seems to have broken the space-time continuum and created its own big bang. The new universe cannot be made sense of in an old world narrative, but must be engaged with in real time. Back to my Tardis...

I’ve had a week to digest the talking points of our Zeitgeist conference, where royals, bankers, business leaders, journalists and even an Amazonian tribal chief came together to discuss issues of the day. But one issue in particular stuck in my mind – sustainability. Sustainability was certainly the key theme as the Prince of Wales made a moving and humbling speech about the environment and technology, pleading that the Amazon be “treated like a human being.” But there were also lively debates about the future of the media industry, and indeed, the sustainability of the business models of traditional media. It was a chance for us all to think about the roles we play within the industry, how content producers manage and make money from content and how we sustain quality and valuable advertising output. It was also another chance for Google to understand the concerns of newspaper and TV owners, and ensure their thoughts are top of mind for us in helping them make money from their content on the web. From talking to agency leaders at the event, it’s clear media agencies will be fighting tooth and nail over any big accounts that come up for grabs over the coming weeks and months. The industry must be careful that the stiff competition doesn’t become a cut-throat exercise in cutting costs, inevitably leading to a downfall in the quality of advertising. Indeed quality and value for money is something all agencies and media owners need to ensure is sustainable when trying to encourage advertisers to invest in marketing in the downturn.

There’s been much talk in the industry recently about habit forming. In this recession, consumer and media consumption patterns change, sometimes out of fear, but more often than not out of necessity. Naturally, people are looking for bargains and best possible value during this time. The media industry should use this time to understand and embrace these new consumer habits, as we must assume that many of the patterns formed during the recession will become the norm when the economy bounces back. So what are consumers doing? As I’ve mentioned a few times before, they’re using the web to compare prices, they’re searching for discounts and vouchers in their droves and their researching online before purchasing offline. But media consumption patterns are also changing rapidly. People are watching more videos online than ever before, through user generated sites and through sites like Hulu and iPlayer, they’re simultaneously watching TV whilst surfing the web on their laptops, they’re listening to radio through the web and choosing their own playlists through platforms like Spotify and Last FM and mobile devices with location-based services are becoming increasingly popular. As a result, companies need to be consumer centric – brands should be led by consumers and allow consumers to develop the brand. And there are now simply no excuses to not find out and understand what consumers are saying about your company. Search trends, Twitter feeds and Facebook groups give us real time insights from the world’s largest focus group – the internet population. Brands now need to prove their value to consumers constantly and if the recession has taught us anything, it is that it is so easy to switch brands. New habits and behaviours may well be formed in the recession, but it gives the media a great excuse to ditch any bad habits we’ve gotten into – let’s ditch anything that doesn’t give absolute measurement to advertisers and agencies, or best value advice and advertising to the consumer.

As you may have read in a previous post, our house is currently a building site and we’re living in temporary accommodation. Although the flat is nice enough, the family and I are all starting to miss our creature comforts: my wife and I the garden and the Sky Plus HD box, the kids their trampoline. But we’re united in yearning for broadband which we’re all struggling to cope without.

My youngest daughter is a fan of the Bratz website (about dolls and accessories, for those of you without young girls), my son his Xbox live gaming & my eldest a constant stream of YouTube - let alone all their homework requirements which seem to demand internet access these days.

As well as for work, broadband access is vital for my late night binges on iTunes & paying the builders. We’ve experimented with 3G cards, but can’t seem to get a good enough reception out in the sticks, so the whole experience becomes frustrating.

We know that around 90 per cent of people who’ve just moved home would chose broadband over a microwave if they could only have one installed in the first month. How consumer behaviour has changed in the last few years. And I hope there are no doctors reading, but I read that 40 per cent of us would rather give up fresh fruit and veg than our broadband connection!

Whatever the industry’s thoughts on Digital Britain, we can applaud the decision to give as many people as possible access to broadband. Not only will it feed my families’ needs & obsessions but it’s great news for the UK’s agencies and advertisers as it expands the vibrant marketplace that the internet creates, as well as delivering consumers all the public service information they need.

I’ve recently come back from a couple of days in the north, where I had breakfast, lunch and dinner with most of our agency partners in that part of the world.

As ever, leaving the London smog and arriving in Manchester, I get a real buzz from the sense of community you get when talking to media agencies in the creative hubs of Leeds and Manchester - it offers something you don’t get in the capital. The industry really seems to pull together to present the north as a region of fantastic creativity and world-leading service in digital, while still retaining their competitive spirit. Perhaps it’s not fashionable to segment regions these days as the Internet has few geographical boundaries, but it’s something I’ve definitely observed.

Because of the heritage of direct response advertising, the North has adapted to the science of search marketing very well. Agencies there have taken ideas of best practice and shared goals and are often ahead of the game when it comes to their southern counterparts – a bit like their football team (and that’s coming from a Chelsea supporter). For example, many agencies in the north, such as Brilliant Media, Latitude and Mediavest, have set up teams to monitor user click paths and site usability, an area we see as integral to the success of search.

The challenge for the northern agencies, as I see it, is to take the great reputation they’ve built through search and apply that experience to the fast developing online video and interest based display market, keeping the London agencies on their toes. I’m looking forward to being invited back to the Manchester office this summer for a swift round of golf and to learn of more progress in this vibrant digital region so I can take the learnings back with me to London and spread the word.

Albeit we’re in a major media recession it was interesting to see this week’s IAB numbers showing continued growth for digital. Online ad spend in 2008 rose 17.1% to £3.3bn, and online spend now makes up over 19% of the overall market in the UK. The UK is still leading the world in terms of digital advertising, but my question is how do we maintain this position?

Firstly, consumer insight. Consumer behaviour is changing rapidly as the web becomes more and more important to people’s lives. Advertisers can ensure they keep up with these consumers by being found where they are looking for information about their products or services – be it on social networks, blogs, video sites or on search engines.

Secondly, as regular readers will probably guess, data. Search advertising deals in cold, hard numbers. Advertisers can make the most of the wealth of insight afforded by the web, especially in an advanced market like the UK, where people spend 33 hours of their leisure time every month on the web.

Thirdly, integrating their media. Online advertising can make offline media more efficient and can turbocharge offline media campaigns. What is a consumer’s next step after seeing your press or TV ad? They’ll probably make a trip to the online high street to find out more – and it they can’t find you there, then you can be sure they’ll find a competitor.

Finally, conversions. As an industry, online stores are increasingly getting better at setting themselves up for converting clicks into business. But sites can always do more and continuing to test the user journey extensively and in real time is the only way we’re going to crack this nut.

A downturn may well be a time when people expect more for less, but it’s not right to do so if accuracy and effectiveness is compromised. We mustn’t allow advertiser procurement departments to drive out creativity, insight and brand strategy from the digital industry, just as it’s crept in to other media sectors. The UK has led the way in digital by following consumers online and letting the numbers speak for themselves.

We all have to encourage marketing and planning departments to better use the rich vein of information and results driven by digital media and the value of ensuring this is integrated with preexisting media thinking to continue to demonstrate real time value.

This will keep digital media ahead of the curve and help us all through the recession.

Apologies for not blogging over the last couple of weeks, but we’ve got builders tearing my house apart - and finding a temporary home for the family has been taking up a lot of time (outside of work of course)!

I’m writing this from my 'Travel Tavern,' where we’re currently living Alan Partridge-style until the builders complete their business - or we find another house - wondering what all these other sad people are doing in a Surbiton hotel without access to Champions League football on a Wednesday night. My kids are screeching and screaming - rather than sleeping - next door, which leads me to believe that perhaps they too are becoming increasingly irritated by the broken air-conditioner noisily blasting chilly air around the place. I’ve complained several times about this to the manager, but to no avail. Of course, each time he has quoted from the customer services handbook, assuring me that they’re "looking into it," that it'll be fixed "as soon as possible," but it's been four days now... Yes, he can placate me this way in the knowledge that I’m probably not going to go through the hassle of moving the whole family to another hotel mid-week, but it doesn’t really solve my problem.

Which of course got me thinking... brand reputation and customer service are even more important now that the world is digital. Opinions, views, reviews, comments – both positive and negative – can spread like wildfire across blogs, networks and websites (see Mel Carson’s post about Ryan Air for a topical example of this). As most of the web is open, this kind of information is no longer locked inside 'walled gardens'; these points-of-view can be searched for, linked to, and replicated very easily.

Taking that concept a step further, even if experiences happen offline, they are quickly written about online. In other words, even offline brands have nowhere to hide from a modern consumer. If the air-con issue isn’t sorted tonight, perhaps I’ll add my name to the list of disgruntled bloggers seeking redress for bad customer service... and if anyone has a couple of spare rooms they want to rent out, do give me a shout.

During “Snow Day” as I was building a terrific snowman with my kids (if I say so myself), I got thinking about the behaviour of all those like me that were stranded   for the day (and just how good my snowman was - see right). It also got me  thinking about the great opportunities that were afforded to me and the kids by     the Internet: to continue communicating and engaging with work, friends and  brands alike from the comfort of home.

With the actual climate so cold and the economic climate even colder it’s now apparent that search is a barometer of consumer behaviour.

This concept was mooted a number of years ago now and couched in a slightly more erudite way by journalist and author John Battelle who once called Search  the “Database of Intentions”.

Battelle went onto explain that Search data “represents, in aggregate form, a    place holder for the intentions of humankind - a massive database of desires, needs, wants, and likes that can be discovered, archived, tracked, and exploited   to all sorts of ends.”

So, with that in mind, what happened around Snow Day?

Our search data shows that around Snow Day™ searches for schools spiked on Sunday and Monday. People were looking for transport information, searching for train, bus, and airport updates, as well as radio broadcasts. Interest in weather spiked when the snow storms kicked off, but remained high as people pondered the rest of the week. 

This may all sound very obvious, but it just goes to prove that search has not only become a core provider of instantaneous information, but also – as I mentioned earlier & excuse the pun – a real barometer of the mood, needs and wants of the general public. 

This can of course be applied to business.

With the wealth of search data out there, advertisers and agencies can use it to discover new trends, hot topics and likes and dislikes of consumers. At even more granular level, advertisers can test ad slogans, straplines, keywords and many more things from mining search data and assessing them against consumer behaviour.

Regardless of when the next Snow Day takes place, I really hope planners and creatives will make use of all the free search data at their fingertips over the next year, and use this to manage the whole campaign process with real time insight into consumer behaviour.

Sorry to bang on about it, but today’s post will again be related to my ‘data is the new black’ theme. In a time where value for money and return on investment are sacred, it amazes me that some businesses are still taking a laissez-faire approach to conversions on their websites – in other words, something that can directly affect the bottom line.

Figures vary by industry, but on average about two-thirds of online shopping carts are abandoned at checkout - an astonishingly high number. I’m not sure whether some retailers see drop-offs in the sales process as part and parcel of ecommerce, but we have to change this

Imagine going to your local supermarket or high street store and seeing hundreds of trolleys scattered about at the checkouts. It never happens. Why? Because bricks and mortar stores have not only had decades to streamline the shopping experience for customers, but the time and effort it takes to wheel a trolley round a shop means shoppers are much less likely to drop out at the last minute and move on to another shop to repeat the process again.

The web breaks down these barriers. A few clicks and you’re at another store with your basket refilled, hoping for a better checkout experience second time around.
There are plenty of tools available to help with conversions, and a growing industry of specialists who are helping retailers achieve their customer conversion goals. 

As we see it, there are a number of ways businesses can tackle problems at checkout:

    * Ensure that your analytics package is programmed to measure the right things - a must for optimising for conversion. Important metrics include: bounce rate, site search exit rate, checkout flow exits. Base your optimising decisions on real data.
    * Continually test and tune. All websites and their customers are different; what works for one site may not work for another. Identify areas of improvement using analytics, then design and build alternatives to test. Let your customers decide what they prefer.
    * Build your team to optimise for conversion. There are a lot of pieces that need to fit together to improve conversion. There is the backend of technical staff, ecommerce managers trying to drive traffic, designers trying to make things look pretty, etc. Make sure that they are all working together to the common goal of improving conversion.

I’d like to see e-commerce players and their agencies really getting to grips with the challenges of conversion in the months to come. The better the web is for consumers and the better their online shopping experience, the better for us all in the digital industry in the long run.

I had the rare pleasure of spending time at HM Prison Wolds this week ….. and before you start thinking Howie’s in trouble with Sarbanes-Oxley or something, it was actually in the company of Hedley Aylott, the founder and MD of Summit Media and the operation he runs there. For those of you who have not heard about Hedley’s unique story, he runs a highly successful, largely Retail client specialist, search and online business, in North Yorkshire (as well as a Polo school, but that’s another story) – where a number of his employees are in fact detained at her Majesty’s pleasure in the Wolds prison. The competition for these places at Summit Media is high and the guys have built a knowledgeable and successful team, which is valued by their clients and us here at Google. Apart from it being a very inspiring, and even cathartic experience, it got me thinking about the quality of many of our search and online agencies outside of the Big Smoke. Without wishing to upset the London-based agency community and all the others I don’t now mention, companies like BigMouth, Cheeze, iCrossing, Latitude, MVi, Brilliant, The Search Works and of course Summit, all have successful digital media businesses outside the City, mostly up North. The rise of the internet as both a consumer and business phenomenon has meant that a Central London base no longer has to be a prerequisite for success. Our own business here in Google’s London office is only a part of our European operation, with many more people and business accounts handled by our excellent team in Dublin. The challenge for all of us in this dire economic climate is to ensure we keep our operational costs tight, with a flexible approach to mobility and available talent. You might think that’s a bit rich coming from a soft Southerner who has never worked outside London, but – as my sales presentations from my days at Tyne Tees TV used to say – it’s “not so grim up North.” In fact, for the migration to a digital economy it’s positively thriving.

This week I was at an industry event chatting with a couple of old mates – one from a traditional media background who now works on the client side, and one from a media agency – about the use of data in our industry. While my agency friend, perhaps unsurprisingly, was up to speed with most of the huge amount of data now available to advertisers and agencies, this was in stark contrast to my other friend who was unaware of the wealth of information at the disposal of professionals in the industry today. I guess my point is that there are still plenty in media who don't yet utilise the huge amount of data-points available to all businesses. It almost feels like a failure on our part when we realise that the message has not yet permeated throughout the whole industry, especially when there are so many easy to use tools and analytics packages out there. The web analytics industry has come a long way in recent years. What used to be a techie subject for tracking server performance and website hits (which clearly went over my head) has evolved into a dream for webmasters, marketers and media planners. Conversions, geography, off and online media and a host of other areas can be measured and cross-referenced. This can be combined with powerful tools like Insights for Search, or Google's keyword tool, to give a snapshot of what people are searching for and interested in. As the digital industry has grown, there seemed to be two extremes in terms of the way marketers have been using data: those focused on direct response and e-commerce players who had data at the heart of their strategy on one side, and more traditional brand marketers who were yet to engage with the hard stats online (either through choice, or lack of understanding) on the other. But the good news is that more recently there's a new breed of media and marketing industry professional coming to the fore, predictably a mixture of the two extremes: the data-driven brand marketer and comms planner, with appreciation of traditional brand values, but with a mind hell-bent on data to prove success (or failure). It is these people who increasingly need to be at the centre of business and media decisions as clients and agencies alike become rightly obsessed with quality, value and ROI in these cash-tight times. It's up to search engines, media owners and the analytics industry to make sure all my mates are data-driven and better versed in the power of numbers in the months to come.

Welcome to my inaugural blog.

As I boxed up my Christmas decorations - shoving them back in the loft for another year - reintroduced myself to the gym, gave up drinking for January and failed to make the High Street sales, there seemed nothing left of the holiday season but the return to work, the cold financial climate and its true effects on the retail and media industries.

It all sounds a little depressing, doesn't it? But it got me wondering if the online successes in retail last year would be maintained through the tough Christmas period, or whether every channel is being hit equally hard?

As the UK's flagship stores begin to release their Christmas numbers, it's becoming clear that the High Street is having as tough a time as people expected, if not worse. While a few stores have defied gloomy expectations - with Sainsbury's, for example, posting results of its best ever Christmas - the trend for most is not a happy one.

None of us know how long or how deep this recession will be, but the Internet may well play a major role in rebuilding the economy after the first downturn in the truly digital age.

While Stuart Rose announced M&S's UK sales were down 3.4 per cent in the 13 weeks to December 27, online sales grew a massive 29 per cent, with record numbers of customers being driven to their website to shop - so much so, that I heard him say they sadly failed to meet some of their online demand. Subject matter for another day, perhaps.

Meanwhile Andy Street of John Lewis could be equally upbeat about online results.  announcing that the company broke a number of records during the last month - including two record weeks online, two  in Electricals and Home Technology and its biggest ever day (on December 27) for the start of their Clearance Sale. John Lewis also saw its busiest ever hour online on Christmas Eve as the clearance began on its website.

Pure-play retailers like Play.com, ASOS and Amazon continue to grow at pace, while Debenhams' online business, Debenhams Direct, continued to grow strongly - with year-to-date visitor numbers and sales up 39.2% and 37.4% respectively -  and Amazon announced it enjoyed its best-ever holiday sales this year.

There are many success stories from the 'virtual' High Street as online sales continue to grow in the face of the economic slowdown. Despite, and perhaps a result of,  the financial conditions, consumer use of the Web to hunt for value and find the best possible prices will continue to accelerate.

As Verdict Research has forecast another year of double-digit growth for online retail, we can make a pretty safe bet that the Internet, which dramatically cuts the cost of logistics, distribution and service, will be high up on every Financial Director and CEO's agenda in the coming weeks and months.

Happy New Year, all.