Posts from — August 2008

Can this little mobile bar code be worth a significant slice of a $320 billion market opportunity to Google?

It’s not a question that one of the cornerstones of Google’s future earnings growth will be in the mobile market, but what is debatable is whether its paid search revenue template that has worked to date through traditional desktop computers will be the way they get there.

Recently Henry Blodget of the Silicon Alley Insider wrote about why Google shouldn’t be thinking that mobile advertising is the ticket to higher revenue.

Specifically, he took Google CEO Eric Schmidt to task about his statement that Google could make more through mobile advertising than the $20 billion it currently takes in through traditional desktop computers.

He does the math this way:

“Google currently makes about $20 billion a year in desktop. For Google to make “more in mobile than desktop,” the targeted mobile advertising market will have to grow from less than $1 billion today to, say, $50 billion (assuming Google pulls down a mind-boggling half of it).”

While I agree with him that users aren’t going to tolerate intrusive mobile advertising interfering with their communications, if Google can find ways to deliver value to consumers through mobile, maybe those revenue  fantasies can become more of a reality.

And a key way I believe that Google could deliver that value is through mobile couponing.  In fact, as this earlier Silicon Alley Insider article by Dan Frommer covers, Google has tipped its hat in this direction already.

The secret is using the little square bar code above in conjunction with a mobile device’s camera to tap into the large existing market of paper coupons that appear every week in publications across the country.

For a point of reference, in free standing inserts alone (FSI coupons added to daily and weekly newspapers), there were 257 billion coupons dropped in 2007, according to TNS Media Intelligence and Marx promotion, up 1.6% versus prior year.

The average face value of these coupons was $1.26, which represents over $320 billion dollars of value delivered to consumers by major and minor marketers across the country.

This doesn’t even include the value of coupons through direct mail, in store coupon machines, or coupons with your register receipts.

In contrast, the total amount to be spent by marketers on online advertising in 2008, as estimated by eMarketer, is $24.9 billion, which was recently revised downward versus prior estimates.

I agree with Blodget that $50 billion for a mobile advertising market is a big number, even with Google being involved.  And if Google thinks they’ll be able to growth mobile revenues by jamming traditional advertising into a mobile handset, they certainly won’t get there.

However $320 billion in coupon spending is a bigger number, and if by levering mobile to provide true value to consumers versus just ads, Google could maybe do to traditional couponing what they have done already to traditional advertising.

On Tuesday of this week, Google launched a new tool with a wide range of applications for marketers and marketing researchers, Google Insights for Search.

Google Insights allows users to analyze and compare different search terms by showing patterns in search volume over time, group top related search terms, and show which of those related terms are rising or falling in popularity.  It also allows you to slice and dice the data by different date ranges and geographical locations.

Below is a quick chart I did analyzing the search interest of a couple top social networking sites by comparing the search volumes associated with their names over the past year and a half (click for larger image).

Google Insights for Search

In a very intuitive and and clean manner, the tool shows how MySpace’s search popularity has plateaued, while Facebook has rapidly overtaken it in the past several months.  It also shows the rapid rise of interest in the fast growing site, Hi5.

This tool is very granular, allowing users to drill down to very specific localities (e.g., Madison, WI) or time frames (e.g., last week).  Which means it has strong utility for local and seasonal search analyses.

You can even filter results by category, so you can analyze results for “apple” the fruit, rather than the company Apple, which dominates the search traffic for that word.

Marketers in particular can use Google Insights to analyze the popularity over time of different trends, topics, products, or even marketing campaigns.

Google Insights is clearly a tool that can mine Google’s massive “database of intentions” for a vast range of different insights and applications.

And, by the way, it’s free.

There are lots of digital marketing campaigns out there that look great flashing on a page, but in the end, never really seem to connect with consumers.

The main problem is that marketers are trying to shoehorn traditional marketing tactics onto digital mediums.  In this post that appeared in Ad Age, David Armano of Logic+Emotion has a great term for this in between approach to digital; he calls it “Tradigital” marketing:

“Tradigital, in my opinion, means using traditional marketing methods in the digital space. For example, creating an advertising campaign and “extending it digitally” usually ends up as a checklist. Micro-site? Check. Online banners? Check. Social media? Check. Mobile? Check.”

His answer to better digital marketing is a staple of what good marketers have done well in the past, which is understanding consumer behavior, this time in the digital space:

“It’s time to come to terms with how people really use the web (hint — it might not be to figure out your experimental navigation) and how we can harness the true power of digital.”

The way most people use the web, in contrast to something like watching TV, is as an active medium, rather than passive.

Whether it is asking questions through search, uploading family photos to Flickr, or communicating with friends through social networking, most of the time spent on the web is spent doing something.  Or, as Armano puts it, solving problems.

Which is why traditional interruption marketing like flashing banner ads, are not only ineffective, but in most cases, very irritating in their distraction.

A solution to better digital marketing would be to look at the top reasons why people use the internet and then ask how your digital marketing efforts can enhance their activities rather than distract:

• How can your digital marketing help people better connect with their friends or people with similar interests?
• How can your digital marketing connect your core consumers with the music or video content they really want to see?
• Are your digital marketing efforts genuinely entertaining and are they something people would want to share with their family and friends?
• How is your digital marketing helping people search for information quicker or more reliably?

I know it seems odd to ask digital marketing to simply lever what Facebook or YouTube are doing already.  It doesn’t seem groundbreaking or that creative.

But therein lies the point: how effective do you think your flashing banner ad is when it only serves to stand in the way of what people really want to do online?