Online business executive Peter Dubens could be about to snap up Friends Reunited from ITV for just $24.6 million, a massive $263 million less than what ITV paid for the social networking site just four years ago.
In the same vein as MySpace, Friends Reunited finds itself hurtling towards the internet scrapheap of innovations that “used to be awesome” but have failed to move with the times and have thus been usurped. The duo of trend setters “back in the day” are now relegated to the “so 2005” pile of outcasts.
Mr Dubens made his money buying small time internet providers, consolidating them into bigger companies then selling them on to major international providers like Tiscali. The entrepreneur is involved with a digital media fund with fellow internet guru Michael Birch, the man behind Bebo.
Friends Reunited could be one of a number of ventures the new capital fund invests in. In this buyers’ market, and with ITV desperate to rid itself of its social media failure, a cheeky offer might be enough to persuade the television company to part with Friends Reunited.
Quite what Mr Dubens might do with the social network remains to be seen. Online advertising revenues have been sapped by drooping visitor returns. In April 2008, Friends Reunited recorded 19 million users with 70 per cent of those returning to the site once every 18 months.
Compare that to Facebook’s 200 million users, most of whom can’t go 10 minutes without giving someone a poke or scribbling something mundane on their wall and you can see a vast void that needs to be bridged.
Just days after Microsoft announced that they would be launching a rival service to the free online jukebox Spotify, the European company has declared its intentions to break into the US market.
Recruitment has begun in New York for staff to implement the US launch of the hugely successful music streaming site, along with a search for suitable premises for an American HQ. Swedish co-founder Daniel Ek said that if all went to according to schedule, Spotify could be available in the US by the third quarter of 2009.
Spotify has managed to slip by relatively unnoticed on the digital media map, mostly on account of the insane amount of press coverage and media attention devoted to Twitter. The blogging service of micro messages has dominated multimedia talk this year pushing Spotify somewhat out of the limelight.
However, despite playing second fiddle to Twitter’s masterstroke, Spotify is the company which looks most likely to turn a profit first. Making effective use of online advertising, which unlike Twitter, sits nicely into Spotify’s business model, the streaming service is interrupted every 30 minutes with a 60 second burst of digital marketing from the likes of IKEA, Nike and Sky.
Spotify is getting 50,000 new users a day across Europe, which also unlike Twitter, are using the service more than once. Aside from a select group of hardcore tweeters, Twitter is notorious for having the retention rate of one of Jordan’s outfits. The average Spotify user on the other hand spends an hour a day streaming music with an impressive 1 per cent click through rate from internet advertising.
Spotify are negotiating with US executives in order to expand its streaming licensing laws across the Atlantic. The platform is ready to go, but without contracts in place the idea is a non-starter. This could give Microsoft a head start if they can roll out their rival system by the end of this month. On top of that, Microsoft are sure to spend money to make their product successful, whereas Spotify plans to rely on word of mouth and viral marketing to capture their market.
However, Microsoft have been beaten before, and Spotify’s founders are confident in their product. Mr Ek said he would be unwilling to part with Spotify at this stage, even for $400 million, the current company valuation. “If it’s done right, this could be a billion-dollar company,” he said according to The Guardian.
Struggling internet company AOL is pleading for patience from investors, insisting that online advertising revenues will pick up in the next two years.
Time Warner laboured over the decision to untangle themselves from the lead weight of AOL, but finally decided to jettison the company in February. Nine years ago, the two companies made the “deal of the century” with a merger that saw AOL takeover Time Warner for $160 billion.
It didn’t take long for the deal to go sour. The “transformed landscape” of digital media quickly turned into a quagmire, with AOL failing to move with the changing trends, crucially missing out on the broadband explosion and early movers who made the most out of the emerging internet advertising movement.
As subscribers dropped by two thirds, AOL shrivelled into virtual insignificance. The company changed its business model to focus on digital marketing but by then they had lost the edge of being on the frontier, and were playing catch up with the likes of Google and Yahoo. In the last three quarters, AOL’s revenue took a 20 per cent nose dive, hastening Time Warner’s decision to ditch its partner.
AOL’s chief executive Tim Armstrong told investors that AOL will make a comeback in the advertising market as the industry bounces back from the recession. “Advertisers are going to be driving to Internet Road and AOL is a major property on Internet Road,” Mr Armstrong told Reuters. The new look AOL will be pure display advertising, but with the frontier moving again to SEO, AOL could once again be caught one step behind its competitors.
Digital media analysts Outsell Inc. have projected in their annual advertising study for 2009 that some $65 billion (£39 billion) is due to be skimmed off the top of traditional advertising budgets and reallocated online.
Major brands are going through some hefty corporate liposuction, sucking the fat media budgets out of TV and newspaper and plumping up online spending. The trend towards digital has been talked about for quite some time, but according to Outsell, the money will not be transferred directly to an online advertising equivalent of the traditional ads.
Instead of investing in internet advertising, companies are increasingly looking to spend money improving their own websites, with Search Engine Optimization (SEO), web analytics and good quality relevant content.
Chief executive at Outsell, Anthea Stratigos spoke in an interview with Forbes: “The marketing dollars companies now spend on their own sites is equivalent to all TV ad revenue for the year. Eight years ago we said that the Global 2000 would be the dot-coms of tomorrow. That’s what is playing out.”
If SEO copywriting isn’t about the percentage of keywords within the copy, then what is it about? Balance. You have two audiences with SEO copywriting: the search engines and your site visitors. But surprisingly, the balance doesn’t come with serving both masters well. The balance comes in how much you cater to the engines. You see, your site visitors always come first.
However, if you write with too little focus on the engines, you won’t see good rankings. If you put too much focus on the engines, you’ll start to lose your target audience. Balance… always balance.
One of the biggest mistakes many businesses make is focusing the majority of their advertising budget on print ads and local newspapers, fortunately, a new approach is starting to take root to solve this problem.
Local search online is starting to cause a flurry of excitement for some businesses who are taking advantage of the technology.
More and more people are performing local searches on the internet before they ever leave their home. It allows them to do all their research online and make decisions on where to find what they need right from the comfort of their home.
Less and less, people are using the phone book or newspaper because of this. On top of that, there are too many phone books circulating and it makes it nearly impossible to decide which to use.
Companies who still spend hundreds if not thousands on newspaper ads and other print advertising and are passing up on a golden opportunity to get in front of their target audience by using outdated, archaeic methods.
The internet is changing the way people find products and services.
Local search is a form of advertising that allows you to lower your overall costs, it is cheaper than print advertising and gets you in front of more people when they are ready to buy. The overall ROI of leveraging the power of local internet searches are only going to increase and it makes perfect sense to ride the wave.
Recession is a time for battening down the hatches, staying the course and avoiding unnecessary expenses — right?
Not according to Canada’s entrepreneurs, who are in a fighting mood as they await a recovery. In a new survey, 61% of business owners said they are investing in innovation and/or research and development this year, which may surprise business-watchers who think small business owners are innovation laggards.
But business owners are always looking at new product ideas and tweaking their service offerings. Designing a new type of sandal, hiring an SEO consultant to beef up a Web site, or recruiting a student to make cold calls all count as innovation in a small company, where you fall behind whenever you stop moving forward.
The Canadian Small Business Monitor, published last week by American Express, breaks ground by putting a price tag on innovation investment. An impressive 13% of the 500 business owners surveyed said they will spend more than 10% of revenues on innovation or research and development this year; 10% expect to spend between 6% and 10%; and 28% plant to invest 1% to 5%.
Another reassuring finding is only 19% of business owners said they will spend nothing on it “because innovation/ R&D does not apply to my business;” while 13% said they don’t have the budget for it, and 7% were undecided.
(That last group probably includes the dry cleaner that tore your favourite jacket, the e-commerce Web site that lost your order and the ad agency that produced the Stephane Dion video last December.)
Overall, 40% of the businesses surveyed consider innovation a “high priority,” while 8% call it a “top priority.” Generally, the larger the company, the higher priority they place on innovation.
Interactive marketing will near $55 billion and represent 21 percent of all marketing dollars spent in 2014 as advertisers shift money away from traditional media to search marketing, display advertising, e-mail marketing, social media and mobile promotions, according to a recent study.
The trend is already underway, as more marketers this year are taking money from traditional marketing budgets and using it in interactive advertising, as opposed to supporting interactive efforts with new funding, as was the case in years past, according to the Forrester Research report “US Interactive Marketing Forecast 2009 to 2014,” by Shar VanBoskirk.
“This cannibalization of traditional media will bring about a decline in overall advertising budgets, death to obsolete agencies, a publisher awakening and a new identity for Yahoo,” writes VanBoskirk.
She goes on to say that while ad budgets will decrease, marketing investments won’t, as any money saved by using cheaper interactive media will be put toward funding IT technology and staff, customer service and so on.
Given this, traditional ad agencies must include interactive marketing for mere survival. “We’ve hinted before that agencies that can’t transition from pushing out messages to nurturing customer connections aren’t long for this world. Agency readers, heed our warning. Services firms that lack data management, analytics, listening, social media execution, and strategy expertise will dry up,” warns the report.
Social media campaigns are growing into an established part of the interactive ad mix as more companies embrace it — 64 percent of marketers already build social media applications and 22 percent more will by the end of 2009.
Search marketing continues to do well, in both adoption, today 80 percent of marketers use it, and money spent. “Search marketing accounts for 59 percent of the overall interactive pie. We project spend on paid listings, which includes paid inclusion, and search engine optimization (SEO) to grow at a CAGR of 15 percent, to $31 billion by 2014,” according to the report.
The report says advertisers favor pay-per-click over impression-based display campaigns, with 58 percent going to PPC – and the trend is expected to continue. Rich media is also gaining traction, currently about one-third of display spend, rich media will grow to 45 percent by 2014 as marketers use more and pay a premium for rich media.
E-mail marketing continues to grow, with an 11 percent CAGR over the next five years, due to the “green” market campaigns being in vogue and to increased integration with social media sites.
In response to the evolving change in online marketing strategies, Fresh Traffic announces a complete Inbound Internet Marketing package that encompasses everything a business needs in order to become a web marketing powerhouse. Fresh traffic is an Internet Marketing Services company that expertly provides small businesses with the much needed edge in the big world of search engine marketing to increase their customer base without depleting the company’s financial resources.
“Businesses are seeking returns on their marketing dollars and they’re shifting money out of expensive phonebook ads, direct mail, telemarketing, and into website optimization, expert content and social media that help them get found in organic search results.”Marketing your business in today’s online world, forces small businesses to throw out the old handbook and try new strategies. Traditional outbound marketing using direct mail, print advertising, and phonebook ads are becoming more expensive and less effective. Today, consumers use search engines, blogs, and social media to learn about products and services.
“Businesses are seeking returns on their marketing dollars and they’re shifting money out of expensive phonebook ads, direct mail, telemarketing, and into website optimization, expert content and social media that help them get found in organic search results.”"These changes are laying the foundation for a new marketing strategy on the web.
To succeed online today, businesses need to adopt an Inbound Internet Marketing Strategy. Instead of pushing a sales message out, inbound marketing is the process of drawing prospective customers into their business by allowing the consumer to choose to learn more about a company’s product or service. Fresh traffic’s Inbound Marketing Services will help small businesses be found on search engines, blogs, the media, and help convert those new visitors into leads.
Winnipeg-based Fresh Traffic has seen the success online marketing can offer as a flexible and affordable strategy to keep your company’s brand message fresh and in front of your target audiences. The advantages to E-mail marketing and internet advertising are the ability for companies to finely tune a brand message to an individual market segments to generate a greater response. Fresh Traffic’s clients have used behavior and buzz measurement tools to their advantage with online marketing.
A good internet marketing strategy focuses on the “communications” part before it tackles the “online” component. “A custom E-mail newsletter demonstrates how internet technology can deliver a powerful brand message at a reasonable cost without sacrificing quality or creativity.”
As a full service internet marketing agency, Fresh traffic helps businesses nationwide define and create brand identity, communication strategies and quality marketing vehicles online. From logos to internet advertising, Fresh works to build brands. Since 1998, Fresh has been making businesses successful through Message, Advertising, Branding, Web Design & Web Development, along with Online Marketing services. For more information, visit www.freshtraffic.ca