Let’s be honest. No one really wants to go down to a car dealership and haggle face-to-face with a car dealer anymore. We can get every other product in the world online, so why not cars?
Why not cars indeed. Mostly, the haggling has been what limits car’s availability online. Buyers know they can often get a better price by speaking with the dealer and engaging in some serious negotiation, and they’re not willing to pay sticker price. The idea of buying a vehicle for its given price is laughable, yet that seemed to be the only way to buy a car online – offer a price, put it in your shopping cart, and check out.
With a new joint venture by GM and eBay, buyers can get the convenience of online shopping without losing the benefits of haggling with their dealer. The pilot program, which is currently only available in California, allows shoppers to browse through 20,000 vehicles from the state’s 250 GM dealers, does have the option to allow the consumer to buy the car for sticker price, but it also features a way to bargain with their car dealer – online.
Though used cars have been available for purchase on eBay for years, this is the first program sanctioned to sell new cars from certified dealers. Dealers are motivated to participate because it can give them access to a wider customer base than the ones who simply know the local dealership, and of course customers have a better chance of finding the deal they’re looking for with more competition.
It’s a great new way to buy a car, but the ones who might be getting the best deal are GM and eBay.
Advertising data is a huge boon to advertisers, particularly those working online.
The more closely an advertiser can tailor their ad to a specific demographic, the more likely they are to make the sale or get the click. While it seems merely useful for advertisers – and in some cases, indispensible – many users are starting to become seriously uncomfortable with the idea that their movements, on and offline, are being observed and recorded.
A surprising amount of offline data is currently referenced to online activity, meaning that public records can be mixed up with a browsing history to create a spot-on diagnostic for the type of person who is currently using the computer.
Advertising research has compiled data that includes everything from birth and bridal registries to warranties to licenses – all with the aim of providing appropriate advertising to that person. However, when targeted advertising becomes almost eerily spot-on, consumers begin to wonder whether the advertisers’ interests are really so benign.
One of the primary focuses of the complaints about privacy is Acxiom, which cross-references a plethora of information to find the exact consumers their advertising interests are looking for. For example, an advertiser might ask them to find the names and addresses of single mothers above a certain income bracket, whose children would soon be going to high school and who did not currently own a car.
That’s very specific. But it’s not an uncommon level of specificity. So far, privacy online is not regulated, and advertising industries argue that no such regulation is necessary. Consumers are increasingly unsure – and unhappy.
Microsoft and Yahoo’s merger is already causing some strife among investors and advertisers who aren’t sure they like the scope of the agreement.
The two major companies joined forces with a 10-year agreement to work on their web search technology together in hopes of rivaling the far-ahead market leader Google. The advertising expertise of Yahoo and the search engine research of Microsoft should make a fairly potent – if not game-ending – combination, but others are skeptical.
Investor shares dropped 12%, showing the disappointment many felt that Yahoo was not to receive any up-front payments, in addition to lower revenue-sharing and cost-savings agreements than had previously been speculated. Microsoft investors seemed a little more enthusiastic about the deal, closing at 1.4% up. Google dropped slightly, but not enough to raise any eyebrows – a scant 0.8%.
Even now, the deal hasn’t been fully implemented. It could take up to two and a half years to get approval and pass antitrust and privacy regulations.
Yahoo had previously attempted a merger with Google, which was dropped for antitrust and privacy reasons after the U.S. Justice Department began to look into it. The Obama administration may look more kindly on this merger to create competition for Google, but that theory is yet to be tested.
That’s a lot of obstacles for the merger to get through, but they may yet rival Google in years to come if they can manage it. All there is left to do is wait and see – and search online for updates.
The Internet is a “threat’ to all media, it seems.
With 35% of cable subscribers who also watch video online thinking of cutting their cable subscription, the threat to major media companies like Time Warner, Viacom and NBC Universal has become very real.
The majority of profits for these companies currently come from cable programming. The concern is that cable programming online will completely erode the significant fees they garner from their subscribers – fees that are currently keeping major entertainment companies afloat.
On the other hand, as more network television shows up online, and the ever-present threat of regular consumers uploading copyrighted material on video-sharing services like YouTube, cable networks could get left in the dust if they don’t get online with all the other shows.
One idea that’s garnered some interest among the cable companies is going ahead with putting cable shows online – but in order to view them, consumers must first prove that they are a cable subscriber. This gives their customers the convenience of viewing their favorite programs anytime they want from their computers, while still ensuring that everyone who views the material has paid for the privilege.
Cable networks are trying to set up a standard cable-viewing policy across the board, worrying that if some shows are available for free (as many of Comedy Central’s shows currently are on Hulu) while others are restricted to cable subscribers only, they will not have managed the problem in the best way possible.
Online ads are one of the few places where advertising spending has actually improved over the last year, but consumers may be liking them a lot less when they find out how dangerous clicking on those ads can be.
Consumers clicking on online ads in the UK and the US have been getting malware on their computers, and the pushback is not going to be pretty.
Since hackers look for places to put their malware that attract large numbers of people, internet ads are an obvious place for them to insert their viruses. Extremely popular ads, particularly ones that involve clicking on a link, are an excellent agent to distribute their malware to the general public.
Risks include consumers becoming angry at the companies who put up these ads, even if the companies themselves have nothing to do with the malware and do not have a hacker among their own employees.
This means that companies who want to spend their advertising dollars online would be well advised to invest a portion of those funds in serious security systems to protect their customers – and their own ROI.
Search engine Ask.com has created an ad campaign where advertisers that “crawl” across the bottom of the computer screen during certain cable shows.
The search company will continue running traditional commercials, but it also hopes to get more attention with questions posed to viewers related to whatever programming they happen to be watching. Viewers can answer by going to the company’s search site.
The TV industry is brainstorming ideas to deal with the growing number of viewers using fast forward DVRs to skip over the ads sponsoring their favorite programs.
The truth is that some people want to have their cake and eat it too when it comes to free content and ad-free content. Commercials are not always considered all that entertaining or exciting. TV executives estimate that 60 percent of DVR owners use them to fast-forward past ads, which is the equivalent of wiping out an important part of the TV industry’s economy.
Digital media is still thriving in 2009 in spite of the economic gloom and doom.
Industry bellwether eMarketer predicted that web spending on digital products will increase up to nine percent to $25.7 billion during 2009. (That said, this estimate is actually down from an August 2007 prediction of 15 percent growth.)
Digital media’s winning formula
Despite the situation, many media companies remain calm. They continue to build on their strengths and focus on what works.
“The truth is now that we are a $20 billion business, it’s large enough to cut back,” said Peter Nayler, senior vice president of digital media sales at NBC Universal. “Our strengths continue to be our strengths. These strengths are tractability and efficiency. Also, users are spending more time with digital media.”
The bottom line is that brands are less likely to walk away from marketing and advertising in response to a recession, as they may have done in 2001. Some, in fact, will wind up spending even more money. While media buyers should not expect spending windfalls in 2009 like those of past years, this is sure to a year in which making smarter purchasing choices and focusing on ROI will really count.
Businesses of all sizes are finding that search marketing is still a valuable tool offering the strongest return on investments.
No one knows just how long search engine marketing will continue to be so effective, but so far there appears to be no signs that the current economic slump is threatening to slow its success.
Search marketing is still effective
“We believe that search is not immune to macroeconomic forces, but we also believe it will have the least relative decline of the various marketing tools,” explained Craig McDonald, vice president of marketing and product management with interactive marketing and product management company Covario, Inc.
When asked why search marketing remains unaffected, McDonald explained, “I can tell you precisely the answer to that. There’s less risk in spending money on search. It’s very measured and the cheapest form of lead acquisition out there.”
2009 search marketing predictions
The numbers say it all. A new Covario study reveals yearly growth in paid search in North America was 32 percent during the third quarter. That’s about the same as the previous year.
What’s more, Forrester Research predicts paid search marketing will increase 26 percent this year reaching 114 billion dollars in the U.S. It is expected that search budgets will remain stable throughout most of 2009.
The Internet has definitely made it easier for advertisers to reach a mass audience.
An advertiser’s dream. If you were creating an advertising campaign for a new product or service and wanted to reach the most prospects, this could be accomplished by advertising online more quickly than any other media outlet.
Online up, newspapers down. Online news sources are the newest medium used to reach the most American consumers. A recent Harris poll revealed that an estimated 80 percent of Americans read the news online. Those who regularly read online news reportedly do so seven times a week for an average 30 minutes daily.
One reason for the shift to online news is the drastic reduction in daily newspaper subscriptions. The Harris poll also showed that 47 percent of Americans who read news online have decreased the time spent reading newspapers.
More accurate, better updated. Many consumers believe they can receive more accurate, up-to-the-minute news online. This is another reason behind decreasing newspaper subscriptions — online news websites attract a wide audience.
What is everyone doing online?
- Baby Boomers spend the majority of their time online checking e-mail and reading online news.
- Generation X consumers are also drawn to online news, regardless of the fact that they did not grow up using computers. The Internet is an integral part of this group’s daily life.
- Generation Y is the most technically savvy of the three groups. They have literally grown up working, learning, playing and exploring on computers.
TiVo Inc.’s recent partnership with Time Warner Inc. will position the media giant (the latter) to stand apart from the DVRs currently offered by cable and satellite companies.
TiVo bounces back. The terms of the deal are being kept private, but it’s easy to see that the impact of this merger could definitely resurrect interest in TiVo. Despite all of TiVo’s features, DVRs have grown increasingly popular.
Entertainment Weekly, part of Time Warner, will offer TiVo users the opportunity to automatically record the shows suggested by the magazine. Currently it is estimated that around 60 percent of the magazine’ audience use DVRs.
According to Scott Donaton, EW’s publisher, the magazine will provide readers with weekly recommendations for TiVo subscribers and help them “make the most of [their] entertainment time.”
More media choices for TiVo subscribers. Tom Rogers, TiVo’s CEO, explained that the company is turning to authoritative sources like EW to make it easier for subscribers to record their favorite programs.
Viewers and readers can even find helpful television and media suggestions for recording kid-friendly programming from the nonprofit organization Common Sense Media.