Data is Free

I think Amanda Richman, EVP, Managing Director, Digital, MediaVest USA, Publicis, nails it.

"In the past two years, data has powered new buying approaches. In 2011, our ability to drive conversation, intent, and purchase will require equal attention to the message and the media. With data's role expanding from informing the 'where' to 'what', dynamic creative optimization will be applied as brand-builders seek real-time messages for real-time delivery. Data visualization will become a new form of content while functionality and mobility will have a lead role in more creative conversations. In the deluge of data in 2011, simplicity is key to focus on the data that matters, and the media and message that drive measurable actions, not just attention."

Comscore's Online Retailing Report for Q1 '09 was released today. The results are incredibly sobering. Online spending is down 10% for people making under $50k. But the surprising thing is that it is only up 3% for people making more than $100k, and 2% for people making between $50k and $99k. Typically that group drives a great deal of online retail as they drive 80% of online retail.

Much of this decline can be attributed to the drop in spending for people over the age of 45 who, having seen their net worth pummeled in the market while also facing retirements and/or kids nearing college age, have basically stopped spending.

Diving a bit deeper, the only areas to experience any growth were Sports and Fitness and home entertainment options. I'd love to know what is driving the growth in sports/fitness spending. Are people trying to stay healthy and de-stress? Would love to know more.


As should be expected in our current economic times, discounts and coupons are incredibly popular. In fact, Comscore indicated in their presentation that coupon sites are experiencing a 15 year high in traffic. In fact, coupon sites are second only to search in importance for online shoppers. That's a fascinating stat given the hundreds of millions of dollars invested in search, online shopping comparison sites, and auction sites. I seem to recall that Microsoft recently bought Ciao, an online shopping comparison site, for nearly $US 500 M.


The following chart shows the amazing growth of visits to coupon sites.


What's also astonishing is that most people still get their coupons from the Sunday paper with a minority getting coupons online. So, while coupons are a huge source of information for online shoppers, people are getting their coupons from the paper?


Maybe I'm missing something here, but isn't there a massive opportunity for online retailers and merchants to drive sales and customer retention by investing a greater portion of their marketing budgets and product marketing efforts in online coupons and rebates? Moreover, isn't there a great opportunity to link giving consumers coupons in exchange for getting them to take a survey, agreeing to have their behaviors targeted online?

I know coupons aren't seen as being "cool," but they work to drive sales into a certain segment of the population that is price sensitive - which right not includes everyone. And given the opportunity to link the receiving a coupon to giving up some demographic or behavioral data, doing online coupons seems like a no-brainer.

Tons of interesting new data points on mobile advertising. Lai Kok Fung, Ph.D., CEO of BuzzCity makes is co-founder and chief executive officer of BuzzCity, reveals the results of their 2,000 person survey. One of the biggest findings is that people are not accessing the Internet through their mobile phones while they are "mobile." They are accessing the Internet while they are at home or at work, they are just doing so through a mobile device.

A global survey of users across the more than 2,000 mobile web sites that comprise our mobile advertising network. Perhaps surprisingly, the survey found that most people who access the mobile Internet do not actually do so while “mobile.” Rather, they are surfing the mobile Internet while they are at work, home, etc.

Less than six percent actually use the mobile Internet while travelling, commuting or outdoors. In terms of usage, the survey found that most people use the mobile Internet and applications for communication with friends through chat, blogs and discussion groups—basically, social networking (60%). We found much smaller, but still significant, use of the mobile Internet for entertainment (16%) and for looking up specific information (10%).

The latter point is also an important one. The phone is a communication device. People use it for "social networking." (When I was a kid and we had a "party line" phone, "social networking" meant having the neighbor listening to your calls.) Knowing that most of the page views on a mobile device will come from social networking applications has profound implications for ad targeting and ad budgets. Two spring immediately to mind:

1) Ad impressions on social networking sites must be targeted to the interests of the user, otherwise the advertisers is just wasting their budget.
2) Social networking sites can be an incredibly valuable source of data for marketers for monitoring what their customers are saying about their products. Monitoring and responding to those comments in real time with clever ads is an unexplored but important area for marketers and market researchers to better understand.

Finally, Garrick Schmitt, group VP of experience planning at Razorfish and the agency's global, has very interesting thoughts about "app-vertising" on the mobile phone. I think everyone would agree that custom apps aren't right for every campaign, but we've seen that apps can be hugely effective for campaigns where the medium can be tied to the message. I'm particularly impressed with the Adidas Urban Art Guide which has a map of Berlin that you can access on your phone, and Audi A4 free driving game app. Both of these apps take advantage of a phone's unique properties (mobile and gaming device) that makes the advertisements effective.

The only word of caution is that having a cool app is not enough. Campaigns need to be multi-channel (search, display, mobile) and possess a combination of reach and targeted placements in order to be effective for the marketer.

talking on the phone, but times change.

Richard Florida, writing in The Atlantic, makes a great argument for high speed rail by observing that areas of great density - and mobility - generate economic activity far above people working in relative isolation.

Mega-regions are large-scale economic units of multiple large cities and their surrounding suburbs. My research team and I defined them using satellite images of the world at night to identify contiguous economic areas with more than five million people producing $100 billion or more in economic output. The world's 40 largest mega-regions account for two-thirds of all the global economic activity and 85 percent of the world's technological innovation while housing just 18 percent of its people.

That last bit is an absolutely amazing statistic. 18% of the world's population produces 85% of the world's technological innovation?!

Florida then gets into the details of the US, and which mega-regions are driving the most economic growth. Unsurprisingly, the corridor between Boston and Washington DC generates the greatest amount of overall economic activity. What is fascinating is that, on average, the population of that area is significantly more productive than residents of other mega regions.


When you chart this data some other interesting observations pop out. Turns out that, on a per capita basis, Denver and Phoenix generates slightly more economic activity than Northern California. As a resident of Seattle I was also initially surprised to see that the Cascadia area (Vancouver/Seattle/Portland) is generating FAR less economic activity on a per capita basis than other areas.


But, really, it make a lot of sense. As anyone who has ever sat on a 5 hour+ flight from New York to Seattle can tell you, Seattle is a long way from everywhere. The people who live here may love our isolation, and Vancouver and Seattle are the two most beautiful settings for cities in North America, but our isolation comes at a real cost.

What this means, it seems to me, is that our region must invest far more in high speed rail links. High speed rail, with TGV speeds, would reduce the travel time from Seattle to Portland to just over an hour. The trip to Vancouver would only take 54 minutes. The faster we can move people from Vancouver to Portland, the more ideas we will generate. We'll also encourage more density in the cities while revitalizing the areas between the big urban cores.

Now this is interesting, Blackberry outsold iPhone in Q4. Price has always been a double-edge sword for Apple. On the one it drives profit margins that are terrific. On the other it leaves the door open for other players in the market.

I've always admired Apple's willingness to keep prices high. Where everyone else in the tech industry seems to only understand how to burn markets down, Apple has led the way in pricing the old-fashioned way: build a better product, charge a higher price. Raising prices for improved products isn't a sin but a virtue.

Via Yglesias

Bronnenberg, Dhar and Dube report on first mover advantage in consumer packaged goods brands:

We document evidence of a persistent “early entry” advantage for brands in 34 consumer packaged goods industries across the 50 largest U.S. cities. Current market shares are higher in markets closest to a brand’s historic city of origin than in those farthest. For six industries, we know the order of entry among the top brands in each of the markets. We find an early entry effect on a brand’s current market share and perceived quality across U.S. cities. The magnitude of this effect typically drives the rank order of market shares and perceived quality levels across cities. [...] Across 49 current leading national CPG brands, dating back to the late 1800s and early 1900s, we find that the current share in markets close to the city of origin, is, on average, 12 share (i.e., percentage) points higher than the national average of 22 percent.

Tyler Cowen remarks:

What’s amazing is how long these effects — however they are motivated — last. Miller Beer was introduced to Chicago in 1856 (a very early launch though technically not its first city) and it still has an advantage there, relative to other cities. Heinz Ketchup originated in Pittsburgh in 1876 and it still has an market share advantage there, again relative to other cities.

I've seen similar research regarding Internet products. The same effect of geographic proximity = brand awareness = adoption. Except that the geographic proximity is related to concentration of the product's target market. So, products like Facebook start strong where the companies are located, but they quickly migrate to where their target audience lives. So, Facebook is strong on college campuses. Political blogs have strong share in DC, but then quickly get adopted in college towns.

What I haven't seen is an evaluation of this on a global scale.

Michael Fassnacht has a terrific article at AdAge describing the changing nature of customer segmentation. One of the big challenges when analyzing a market is understanding how certain customers will react to a product offering. Having written 12 significant business plans, for companies or projects that were funded, I can tell you that market forecasting is - at best - an inexact science. Even the best, most elaborate forecasts are usually just precisely imprecise - they are incorrect down to the last digit.

The good news is that companies, particularly consumer facing companies, do not have rely solely on traditional market research tactics for understanding their audience. More precisely, technology enables us to understand that consumers are often drifting in and out of "traditional" segments. It seems to me that the best market research shops don't just rely on pre-launch research. Instead, we'll increasingly see the line between research, advertising, and analytics blur to the point where every interaction, every touchpoint, between a company and its market can be analyzed so that shifts in behaviors and circumstances can be picked up very early in the cycle.