Click fraud won't slow online ad spending

Today's New York Times has a terrific article about the state of click counting in online advertising . The lede:

Iternet companies have had great success selling advertising space, in part because the effectiveness of those ads is supposedly so easily measured. But marketers, even as they continue to push more of their ad budgets online, are starting to ask for better proof.
A group of large companies, including Kimberly-Clark, Colgate-Palmolive and Ford Motor have said that by the middle of 2007, they will demand that online publishers hire auditors to check their ad and viewer counts. And analysts say they believe that online ad growth over the long haul will depend on the eagerness of large advertisers like these to shift more dollars online.

But I think some of the more interesting data is later in the article, where the author talks about online advertising spending, something we study as well:

Concerns about click fraud and viewer statistics do not appear to be affecting online advertising revenue right now, but ad agency executives said the issues must be resolved before large advertisers would want to pour much more money online.

Indeed, the Internet draws only a sliver of the total spent on advertisements. Last year, Internet ads accounted for just 4.7 percent, or $12.5 billion, of the $267 billion spent on advertising, according to the Interactive Advertising Bureau, a trade association of online publishers. And the top 50 advertisers spent just 3.8 percent of their budgets in the first half of this year on online ads, excluding search, TNS Media Intelligence data shows. For all other advertisers, the average spent online was 6.8 percent of the budget.

Procter & Gamble, the nation’s biggest advertiser last year, spent $33.5 million — less than 1 percent of its $4.6 billion ad budget — on online ads in 2005. General Motors, the second-biggest advertiser, spent $110.5 million online, or 2.5 percent of its $4.35 billion total, according to TNS, which does not include search ads in its figures.

As I read this closely, I come up with a couple of insights:

1. The largest advertisers spend below average percentages on online advertising. The top advertisers in offline advertising spend between 1% and 4% of ad budgets on online. Why so little? Perhaps because they invest most of their ad budgets with advertising agencies that make more money from an offline media buy than from putting up ads on Google. Online advertising provides huge value for the media dollar, and since agencies typically are paid a percentage of the advertising spend, this has the effect of driving down their fees.


2. Most of these figures ignore search advertising. As John Battelle notes in his terrific book, The Search: How Google and Its Rivals Rewrote the Rules of Business and Transformed Our Culture, one of the powerful concepts behind online advertising is the fact that it matches advertising to viewer intention. All of the figures quoted above from the IAB ignore search advertising. So these advertising figures grossly underestimate actual online effectiveness. It's kind of like quoting TV advertising revenues excluding prime-time shows. Said another way, there's a reason that Google is making a billion dollars a quarter in advertising revenues, and it isn't because they run the equivalent of display ads better than anyone else.

So what, you ask? My point is that while click fraud is an important concept to keep an eye on, it's not quite the killer problem for online ads that the article portrays. And it's no accident that the primary beneficiaries of this study into click ad fraud are a couple of private companies that are owned by traditional agencies. The final quote of the article demonstrates that despite the issues of click fraud, it probably won't slow the growth of online advertising any time soon:

Though both advertisers and online publishers say more standardized measurements will help, industry experts say discussions on ad numbers tend to go on forever.

“Believe me, we’ve been talking about measurement in print for years, we’ve been talking about measurement in television for years,” said Barbara Bacci Mirque, the executive vice president for the Association of National Advertisers. “Probably we’ll be talking about measurement online for years.”

Technorati Tags: Advertising, Click fraud, Internet, Marketing, Media, Search

No shortfall in XBox 360 shipments -- unless you look at the trend

We reported earlier in the week that an analyst had noted that XBox 360 shipments were running light compared to the original forecasts made during its launch. A reader commented that we got our numbers mixed up on that -- the analyst was only counting North American shipments, whereas the prediction I was measuring it against was for XBox 360 shipments worldwide. So I did some digging, and thought I would set the record straight, right or wrong.

First, I looked up the original prediction, which I cited from the Seattle Post-Intelligencer:

Microsoft Corp. expects to ship 4.5 million to 5.5 million Xbox 360 video-game consoles between its release next month and the middle of next year.

But the company will deliver the units at a steady pace, not overloading the market immediately upon launch, said Chris Liddell, Microsoft's chief financial officer. That disappointed some analysts who wanted the company to ship more consoles sooner to take full advantage of the initial interest in the new machine, and to capitalize on its head start over Sony's next PlayStation.

So that's 4.5 to 5.5 million by July 1. Cool. But in May, we also got an update:

Microsoft Corp. Chairman and Chief Software Architect Bill Gates today staked the claim that the Xbox 360™ system will have a 10 million-unit head start by the time the competition enters the market and more than 160 games by the end of the year.

So in fact, we're tracking against two predictions. In Microsoft's SEC filings this week we got some actual numbers:

Entertainment and Devices Division revenue growth of 70% over the prior year was driven by demand for Xbox 360™ consoles, software, peripherals, and Xbox Live. Xbox 360 has sold 6 million consoles worldwide life to date and achieved record cumulative attach rates for software and peripherals in the United States, while Xbox Live passed the four million member mark during the quarter.

So that's 6 million to date, where the date I assume to be September 30, not October 26. But when we dive into the 10-Q filing, we find another little tidbit in there:

We sold approximately 900,000 Xbox 360 consoles during the first quarter of fiscal year 2007.

So those 900,000 units are included in the six million units sold to date. Backing that out, we find that Microsoft sold 5.1 million units by July 1, which falls nicely within the range of 4.5 to 5.5 million. So they made it! There's no shortfall after all!

True enough. But take a look at that sales trend shown in the graph at the top of this posting. In Q3, Microsoft sold half as many units as in Q2, after three quarters of growth. In Q3, there was no lack of supply of units to sell. That graph shows a lack of demand. Perhaps, and I emphasize perhaps, Microsoft has satisfied the market demand for XBox 360s at this price point. Or, perhaps they stuffed their distribution channel a bit in Q2 to make the July target.

All I know is that that trend has to reverse course in a big way over the next six weeks, in the midst of what we have to assume will be Sony's aggressive launch marketing, to hit that 10 million unit prediction.

Technorati Tags: Games, Gaming, Marketing, Microsoft, XBox 360

October 26: when Microsoft and Canonical events coincide

Today, we should hear Microsoft report earnings, which most pundits have said they don't care about. While analysts want to know how the Zune story is working out and if XBox 360 sales are lagging, but everyone is really looking forward the final release of Windows Vista next year as an engine for revitalizing Microsoft's business after five years of development since Windows XP. Analysts are also looking forward to the new release of Microsoft Office, which has only been in development about 2 or 3 years. No one is expecting to see any material results from those releases for at least another six months, but hope is springing eternal.

Ironically, though, today is also the day that Mark Shuttleworth's Canonical company released its latest version of its Ubuntu operating system. Unlike Microsoft, Canonical releases new versions every six months, despite the fact that these releases are nearly as comprehensive as Microsoft's and the changes more dramatic in structure. Surprisingly, Ubuntu Linux supports even more combinations of desktop and server hardware than Microsoft does, since it supports a huge variety of Intel-based platforms and peripherals (including specialized 64-bit and AMD versions), PowerPC systems, and a variety of other architectures. Ubuntu bundles literally thousands of programs in with its releases, including OpenOffice 2.0, and downloads of tens of thousands of programs available to users at the click of a mouse. Ubuntu's latest cutting-edge graphics capabilities rival those featured in Windows Vista. Ubuntu installs on everything from your five-year-old PC to the latest and hottest hardware in about 10 minutes. And it's all free for anyone to use.

The company that makes billions of dollars a month and has a $7.5 billion R&D budget is the one that can't get a release out in five years. The tiny South African company that supports Ubuntu is the one that does releases every six months like clockwork, using software developed all over the world.

It's absolutely clear from a customer point of view which of these firms is adding more value and changing the lives of both consumers and businesses. The big question is when investors and the stock market analysts will figure out that it's not the company with the big bank account.

Full disclosure: I have no positions in either company.

Technorati Tags: Analysis, Mark Shuttleworth, Microsoft, Ubuntu, Windows Vista

Microsoft missing XBox 360 targets?

Colin Sebastian at Lazard Capital Markets has warned that he expects XBox 360 shipments to only total 4.5 million for the year, instead of the 5 million expected. That says to me that the XBox 360 marketing plan is fading fast.

Why? People forget that the original projection for XBox 360 sales was for 5.5 to 6 million within six months of launch. That projection was re-iterated in January this year, but extended out to 5.5 million by July. And now, we're looking at 4.5 million for the year. Ouch.

We'll know more after Microsoft announces earnings tomorrow. But many analysts were originally projecting that there would be 8 or 9 million XBox 360s in the market before Playstation ever launched. If these numbers are correct, it says that sales aren't living up to projections. And with two new competing consoles launching next month, this story isn't going to improve a lot without a serious marketing push to compete. Suddenly, that one-year lead Microsoft had on Sony doesn't look like such a big advantage after all.

Technorati Tags: Marketing, Microsoft, Playstation 3, Sony, XBox 360

Sony's thousands of PS3 kiosks: Now that's a launch plan!

In contrast to the dead marketing plans of Microsoft Live, Gamepro.com has a great writeup on 24 details on Sony's new Playstation 3 (reprinted at MacWorld.com as well). Now I've complained that Sony is botching its launch plan by pre-announcing too many details, but a few of the details revealed here show that Sony hasn't lost its marketing mojo. Specifically:

15,000 [Playstation 3] kiosks across the nation by the end of November

Sony is doing a huge retail rollout of their newfangled system, and these units will be networked to provide updates and new content when necessary. Phil Harrison says that the days of promo discs inside these units is pretty much over. No more physical distribution hassles; new demos can be deployed nationwide in a matter of hours, securely, without assistance by us mere mortals. An elimination of demo discs also means more space on the delivery truck for things that can actually be sold, rather than being dedicated to promotional material. Also, the kiosks will use Sony Bravia HDTVs, which we understand are rather sexy.

There were a lot of other lovely little marketing touches, such as the built-in power supply (no XBox 360 power bricks), the touch-sensitive controls, and the bundled Blu-ray movies. And Sony's ability to promote two products -- both the PS3 and the Bravia LCD flat-panel TVs -- in one display is a nice little branding bonus. But the fact that there will be 15,000 self-updating kiosks out deployed pushing PS3 by the beginning of December shows that Sony will have the infrastructure to aggressively promote the machine as production ramps up. And that bodes well for sales after the Christmas holiday rush.

Technorati Tags: Games, Gaming, Marketing, Playstation 3, Sony

Microsoft Live: failing marketing 101

Mary Jo Foley over at ZDNet gives Microsoft a mixed report card for its year-old Live initiative. Given that Ray Ozzie noted that Live and associated Internet services as the single most important initiative at Microsoft, I think this comment illustrates just how mixed this report card is, especially regarding how it is being marketed:

“I think the branding of Live has been confusing,” said Directions on Microsoft analyst Matt Rosoff. “It seems like end-users who don't particularly follow Microsoft have never heard of Live or confuse it with the next version of Windows, and customers, partners, and advertisers often express puzzlement over the difference between Windows Live, Live (e.g., Live Search), and MSN. The developer strategy for Live still hasn't seemed to gel very well, either.”

Microsoft has used ‘Live’ to mean several different things, Rosoff added. “We (Directions on Microsoft) view Windows Live as Microsoft's latest consumer online strategy, essentially the latest chapter in the long story of MSN. But sometimes the Live brand is also used to describe broader concepts, such as software being delivered as a service or subscription-based models for buying software. I don't think the brand has been as misused as .Net was a few years back, but it's still fairly indistinct.”

Now that's what I call poor branding: most users have never heard of it, and those that have get the definition wrong. But it is really one of Microsoft's Most Valuable Professionals who nails the real issue:

"I think all that is clear but what I disagree with is Microsoft's ongoing silence about Windows Live, its definition, its goals etc.,” LeBlanc continued. “I think this problem lies with the guys in the higher ranks on top of what seems to be endless shifting of ‘re-orgs.’ I think it’s time to stop and have some of the bigwigs come out and talk about what Windows Live is, what is important, and how Microsoft is working to meet its goals for Windows Live.”

And maybe have them all say the same thing, too. But no, they won't even talk about it, as Mary Jo notes:

Sources close to the company say Microsoft doesn’t want to talk about Live for a variety of reasons. Most of the Live family of services remain in beta. (But since when does Microsoft refuse to talk about vaporware or unfinished products? Why the reticence now?) Not all of the Live properties have been as thoroughly beta-tested as Microsoft officials tend to like. (But hey, Google’s out there bragging about having the lowest ratio of testers to developers in the industry! What have you got to lose, Microsoft?) Microsoft doesn’t want to give its competitors a leg up, by offering too many details about its unfinished products and evolving strategies. (Again, since when has that stopped the Redmondians from attempting to freeze markets by talking about products when they are little more than drawing-board concepts?)

The bottom line: Microsoft entered the market, not because they had a plan for delivering value to users, but because someone else was making money there. And since this wasn't intended to fulfill any specific need, there is no marketing message for the initiative, even though it's the most important thing they are doing. And with no marketing, you can bet those grades -- and their related financial losses -- aren't going to improve either.

Is it any wonder this company is floundering?

Technorati Tags: Communication, Marketing, Microsoft

Macsimum News: new rumor of 50-inch Apple monitor

Macsimumnews has the latest buzz on a refresh of the Mac monitor line to include a 50-inch monitor. We've been predicting this launch for quite a while, largely as an all-in-one plasma HDTV. But given it is described as being a monitor, and not a TV, that implies it would almost certainly be a high-res LCD panel with a price to match. But given the price dives over the last year or so on LCDs, that may not be so crazy after all.

It is going to be an awesome MacWorld in January.

Technorati Tags: All In One HDTV, Apple, Flat Panels, HDTV, LCD, Plasma

The New York Times enjoys Sony's Playstation 3 marketing misstep

Hello? Sony? Why are you doing this?

Despite the fact that the Nov. 17 launch of the Playstation 3 is three weeks away here in the US (only about 2.5 in Japan), the company held a Playstation 3 preview in San Francisco for the press last week, here covered by the Seth Schiesel for the New York Times. And it was clear he loved it.

It was only then that I looked up and realized that the dozen other PS3 stations around the room had been shut down. Almost all of the journalists Sony had invited to test drive the new machine, and almost all of the Sony employees there to handle them, had decamped downstairs to watch Ludacris, in full blinged-out mode, perform a few yards away from the sushi bar.

I like Dirty South hip-hop, and I really like Ludacris. But the emotions that surged through me in that instant were not excitement and anticipation. Rather, they were anger and frustration: anger that I had to put down the controller and frustration that I had to go see Ludacris rather than keep playing.

That’s the kind of effect the PlayStation 3 can have on a person.

So let's get this straight. They invite the press to an event to experience the Playstation 3, and then promptly turn the machines they want them to experience off so that everyone can experience Ludacris? Maybe that's a good name for it: ludicrous marketing.

We've previously noted that we think pre-announcing products is a marketing blunder, and despite our enthusiasm for the PS3, we think it is even more of a blunder for this product. Sony is busy de-mystifying the PS3 at a time when they should be building up excitement and anticipation for it. And that just means they're wasting a lot of marketing dollars. No wonder the company is reducing earnings estimates.

Sony's advantage with PS3 is not technology, but marketing. But this event certainly didn't demonstrate that skill. With the Playstation 3 launch, it's either game on or game over for Howard Stringer and a host of other Sony execs. Let's hope they have some better planned events than this one in their launch campaign.

Technorati Tags: Marketing, Playstation 3, Sony

Copyright and Google and CNET, Oh my!

CNET's Charles Cooper has stirred up a hornets nest by calling Web 2.0 a "rip-off", He claims that Europe understands copyright better than the US when it comes to Web 2.0 services, especially the fact that a Belgian court banned Google from summarizing some European newspaper content. In counterpoint, Mike over Techdirt has issued a call to Internet arms for one and all to stop reading Coop's articles. Nothing like a good disagreement to draw people to their computers over a weekend.

Now as context, it's important to realize that Google and CNET have not exactly been the best of friends, particularly after CNET published Google CEO Eric Schmidt's address, net worth, and a variety of other personal details. Google then cut off CNET's access to its executives for a year (it later relented). Needless to say, I don't think Google is CNET's favorite company. You can read what I wrote about that story when it happened last year here.

But Cooper has a legitimate point that we need to start talking much more seriously about copyright. Copyright in the digital realm is a tough and complex topic. But unlike Mr. Cooper, I believe it is a concept that needs reigning in, not preserving to protect the established players. For copyright is a system that impedes, not promotes innovation and value creation.

Countless successful businesses, including Disney, Microsoft, Sony, and all of cable TV, were built by taking copyrighted material and distributing it more widely than its original reach, and often without asking permission of the copyright owners. In the cable TV world, in fact, this point had to get decided by the courts as being legal, since it was a clear violation of copyright to take broadcast material, redistribute it, and charge money for that previously free content. But the courts ruled that the public interest was served because the cable companies added value. And in fact today, cable TV is a major source of revenue for both broadcasters and content creators.

Now I recognize that this only scratches the surface of argument, and many learned luminaries such as Larry Lessig have written entire books on the topic as well as presented it before the Supreme Court. But 95% of the business and consumer world really doesn't care about the details. They care about value. And they already view Google's service much like they view cable TV -- they may not like paying the bill, but it sure is nice to have. And kudos to Google for having the courage to challenge an intellectual property protection system that has been stretched way beyond its original intent to simply reward innovation.

Not to pick on CNET, but I could go months or years without ever reading CNET again. But I would rue every single day on the net without Google. And that clearly shows which of these two companies is adding more more value -- and quite frankly is worth more -- to the digital world. Maybe it's time we content creators recognized that Google just might be more important and better for us that copyright is.

Technorati Tags: Charles Cooper, CNET, Copyright, Eric Schmidt, Google, Web 2.0 rip-off

Google delights, but even it isn't immune to slowing online ads

As noted here in the New York Times, Google reported another bang-up quarter. No surprises there. But readers will recall that our research noted some slowing of the boom in online ad-spending. Can that be true with Google's break-through quarter?

Even though Google has the biggest ad network and the lion's share of online advertising revenues (one company recently noted that it may be earning as much as 1/4 of all online advertising revenue), the softness in online shows up in Google's revenue growth rate. If you look at the chart above, while Google continues to post growing revenue (with some seasonal variations), that revenue growth is slowing year over year. And this is while Google is building its market share of the online advertising market.

We saw the online ad softness hurt Yahoo's growth earlier this week. And while Google is feeling the effect as well, clearly they aren't being hurt as much. But when a dominant market leader shows a declining growth trend, even when it is taking market share, that's a sign the market is changing. And with our research showing advertising buyers falling back on more traditional methods as their budgets get cut, and nearly every Web 2.0 company --including new entrants like Microsoft adCenter -- flooding the net with online ad capacity, we can expect more media company disappointments to come as earnings season wears on.

Full disclosure: I have no positions in Google, Yahoo, or any other media company.

Technorati Tags: Adsense, Advertising, Earnings, Google, Internet, Marketing, Media

Wasting billions on marketing?

Steven Silvers, a blogger who writes about reputation management, had an interesting comment on our recent Sizing US Marketing 2006 report. I responded on his blog, but I thought I would also post the comment here. Steven wrote:

Research firm Blackfriars Communications estimates that U.S. business will spend around $615 billion on marketing this year.

That’s more than two thousand bucks per every living man, woman and child in the U.S. going toward online and offline advertising, direct mail, telemarketing, spam, promotional events, Web sites, brochures and collateral, giveaways, tchotchkes, marketing PR and everything else.
....
Wow. Given the inherent hit-and-miss nature of marketing communications, it’s staggering to think about how much money American companies spend to create absolutely nothing in return. Every one percent of the “marketing industry” that is ineffective represents more than six billion dollars poured down the drain.

Yup, these are whopping big numbers. So here's a thought experiment to try to get your head around the $2,000 per man, woman, and child in the US concept: Think about all the businesses you deal with every day. Your dry cleaner. Your grocery store. The pizza shop down the block. The company at which you work. How many of them have marketing programs, like coupons, advertising, direct mail, etc. If you are anything like me, your answer is "all of them." So this is an activity that basicly every company in the US does. That's one of the reasons this is bigger than the IT business. You don't *have* to have a computer to run a business. But you almost certainly *have* to have some type of marketing to find customers.

Now on to the efficiency argument. I think the old marketing saw is accurate: "I know half of my advertising budget is wasted; I just don't know which half." Most marketing is incredibly inefficient. That said, you still have to do it or you have no customers. Even word-of-mouth marketing and networking are marketing efforts; they just show up on your expense account rather in your marketing budget. But you are still spending the money.

The challenge of US business today is that we live in a saturated media environment, and consumers naturally react by tuning out a lot of marketing. That means it is getting less efficient, and requiring more money for the same results. The one bright spot has been online marketing, where I can precisely target marketing messages to people who are searching for specific items. But in traditional marketing, efficiency is going down not up.

In summary, the answer to why businesses keep spending so many dollars on marketing is similar to that of why sharks keep swimming: if they stop, they die. And the big winners will be the ones who figure out how to spend those dollars in the most efficient ways possible.

Technorati Tags: Advertising, Marketing, Marketing measurement, Marketing spending, Sizing US Marketing

Analysis of my quarterly Apple miss

Apple reported its fourth quarter FY06 earnings after the close today, citing basic earnings of $0.64 on revenue of $4.6 billion. Another blow-out quarter. Wow. Of course, I have to sheepishly admit, I predicted only $0.53 in earnings. What did I get wrong?

Well, as it turns out, not much. I was within $10 million on the gross margin number, and the iPod units and computers were also nearly on the money. So where did another $0.11 in income come from?

A quick spin through the income statement shows that Apple grew its "Other income and expense" line by about $50 million over last year (undoubtedly because I forgot to factor in growing interest on the $11 billion it has in cash), and it also did a great job of holding down operating expenses. In other words, they just managed the business well.

And then, just to make me feel bad, Apple issued guidance for next quarter that was $0.73, or just a penny shy of what I'd predicted. You know what that means. That means that barring some catastrophe, I'm undershooting earnings next quarter too, despite predicting shipments of 18 million iPods. All I can say is, "Wow". But it also says that there may be a "November surprise" in the pipeline that Apple believes will put their results over the top. And somehow, I don't think it is the Mac Pro Octo using Intel's Quad core Xeon.

Full disclosure: I own some Apple stock.

Technorati Tags: Apple, Earnings, Finance, Financial analysis, iPod, iTunes, Marketing, Stocks

Why Sun's blackbox is the future of commoditized computing

[Image courtesy of Sun Microsystems; click on the image for a larger one]

Jonathan Schwartz, Sun's CEO, has blogged why he thinks this is an important product for his company. The above picture shows why I do as well. Suffice it to say that warehouses are at the other end of the cost spectrum from today's data centers.

And by the way, I noticed an interesting bit about the Blackbox. A single Blackbox has about 8 racks that can hold about 250 servers in total. But those servers might have multicore processors. If you were to populate those servers with 8-core Sun Niagras, that would mean a single BlackBox could have as many as 2,000 processor cores. Yowza.

If you decide to put disks in a Blackbox instead, you get about 1.5 petabytes of storage in a standard shipping container. Hmmmm. Maybe there's a really good reason that EMC's profits are starting to tank.

One of the proof points I see in the design of this system was the amount of thought, design, and energy put into cooling the system. The mark of a great computer designer is not just how fast they can make the systems run, but how efficiently and elegantly they can expel the heat generated by high-performance computing. And Sun has done Seymour Cray one better by building their cooling system not on something esoteric like Florinert (a fluorocarbon-based cooling liquid), but on simple water. Most cool (no pun intended).

As I said earlier, Blackbox changes the fundamental economics of data centers. If you own a data center today, it wouldn't be a bad idea to start looking around for someone to buy it from you. As of next year, that data center is going to become a rapidly depreciating investment.

Technorati Tags: Blackbox, Data centers, EMC, Jonathan Schwartz, Marketing, Processors, Storage, Sun, Sun Microsystems

Watch out for online advertising downturns at Yahoo and Google

We should hear Yahoo report Q3 earnings at the end of the day today, and Google's Q3 earnings on Thursday. In both cases, we expect to see the companies report some softness in online advertising revenues and earnings.

Why so negative on online? Isn't it growing like gangbusters?

Yes, and that's the problem. As the Wall Street Journal notes today, nearly everyone in Silicon Valley a is launching businesses dependent on advertising, so there's a glut of online advertising supply. And at the same time, our most recent report of US business marketing spending shows that companies have cut back dramatically on their online investments over the last six months. The result? Let's just put it this way: Oversupply and decreasing demand is not going to be good news for the companies dependent on advertising revenues for profits.

In May, we predicted that this glut of media types competing for limited consumer attention was going to have a negative effect on most media companies. We also tapped Google as one of the few survivors because of its single-minded focus on branded content as an advertising vehicle. But that doesn't mean that the decline in advertising prices is going to be fun for the companies involved, Google included. And with the whole Web 2.0 bubble being fueled by Google's willingness to blow $1.7 billion on a company with no significant revenue stream, I see the froth still building in new media markets. Don't be surprised if this week's earnings from Yahoo and Google start popping some of those bubble valuations.

Full disclosure: I have no positions in either Yahoo! or Google.

Technorati Tags: Advertising, Google, Internet, Marketing, Media, New media, Yahoo

Sun's most important product: thinking inside the (shipping) box

Apologies for the poor photo of the Sun ad above; it's the best I can do on short notice before the announcement today.

Sun Microsystems is about to make good on an idea that Google has been working on for more than a year: building a self-contained data center inside a standard 20-foot shipping container that can be moved by rail, sea, or truck. It's an extremely cool idea, and is covered today by John Markoff in the New York Times and by The Wall Street Journal. An announcement from Sun is due at 3 pm EDT today.

This is the ultimate computing commoditization play. Danny Hillis had probably the best quote in the Times.

Long an advocate of the concept of utility computing, analogous to the way electricity is currently delivered, Mr. Hillis said he realized that large companies were wasting significant time assembling their own systems from small building blocks.

“It struck me that everyone is rolling their own in-house and doing manufacturing in-house,” he said. “We realized that this obviously is something that is shippable.”

And, in an increasingly environmentally-conscious business environment where power is a major cost, the system breaks some new ground:

Sun has applied for five patents on the design of the system, including a water-cooling technique that focuses chilled air directly on hot spots within individual computing servers.

The system, which Sun refers to as “cyclonic cooling,” makes it possible to create a data center that is five times as space-efficient as traditional data centers, and 10 percent to 15 percent more power-efficient, Mr. Schwartz said.

And since the system is water-cooled, these systems could have a fascinating dual-use application in northern climates. The warmed water can be used as a heat source for adjacent buildings. With 80% of power in a data center being converted directly into heat, the ability to heat an office as well as providing computing services to it provides even more value to business buyers.

We have to give kudos to Sun's CEO, Jonathan Schwartz, and his team for their vision and thinking in bringing this product to market. With data centers running from $250 million to a billion dollars to build, Sun's Blackbox changes the economics of that market by starting around $500,000. That's like IBM selling $5,000 PCs that could do the work of $500,000 DEC mainframes -- and I predict it will be just as disruptive.

Assuming Sun delivers on its promise to sell and lease these systems in the second half of 2007, this could easily be one of the most transformational computing products of the decade for business. It changes data centers from a build-it-yourself business to one where they are available off the shelf and on demand. And, like the standardized shipping containers in which they are built, most people will never give them a second thought.

Technorati Tags: Computers, Data centers, Jonathan Schwartz, Sun, Sun Microsystems, Technology

My entry in the "guess Apple's earnings" sweepstakes: $0.53 a share

Apple is scheduled to report earnings on Wednesday, October 18, after the close of the markets. Merrill Lynch just updated their forecast for earnings to $0.48 to $0.51 a share. My model says roughly the same. I'm predicting that Apple sold about 900,000 laptops, 750,000 desktops, and about 8.2 million iPods (sheesh, that's still a lot of iPods). Oh, and by the way, don't forget Apple's software business is now more than $1 billion all by itself. But the earnings get better because I believe Apple's continuing to improve its gross margins by another percentage point. The result: I see $0.53 a share basic earnings for the quarter and $0.51 diluted.

Now remember that there will undoubtedly be a some new adjustments to earnings this quarter because of the impact of stock options backdating, so that throws a wild card into all these estimates. But regardless of accounting shenanigans, I still see the company earning about $450 million on sales of $4.5 billion this quarter.

Of course, the real prize will be the Christmas shopping season, which Apple reports as FY07Q1. My prediction: Apple will sell about 1.7 million computers and another 18 million iPods, resulting in more than $6.5 billion in revenue. Look for earnings that quarter to be up nearly 17% over last year to $627 million or $0.74 a share (actually a little more due to fewer shares outstanding).

So that's my opinion. What's yours? Vote below in our "Guess Apple's earnings" quiz.

Full disclosure: I do own some Apple shares.

Technorati Tags: Apple, Earnings, Financial analysis, iPod, iTunes, Macintosh, Marketing

Forrester misses the point on the HP story

In Computerworld this week, my old Forrester colleague Frank Gillett commented on the impact of the HP pretexting scandal on CIO plans to purchase from HP.

The perception of Hewlett-Packard Co. by other companies has suffered somewhat as a result of HP's boardroom scandal, according to a survey by Forrester Research Inc. But only a few HP customers said the controversy would affect their purchasing plans.

The results are based on a small sampling of 44 responses to e-mails sent by Forrester to 240 members of its CIO Group. Among the current HP customers responding to the survey, most are keeping their existing purchasing plans intact, the Cambridge, Mass.-based industry analysis company reported.

"Three out of 28 companies did report a negative impact on their existing plans to work with HP," wrote Forrester analyst Frank Gillett, the main author of the research note. "This is surely concerning for HP, but Forrester believes that the poll results are not conclusive as to whether HP faces more than a minor problem."
...
Forrester recommended that CIOs at other companies ignore the scandal. "Unless the investigations threaten CEO Mark Hurd's position, Forrester believes there will be little impact on the company that is relevant to choosing whether to work with HP or not," the company said.

The note missed the major issue though. Scandals like this don't have their major impact on existing customers. They affect whether new customers will sign with the firm. By focusing on existing plans to work with the firm, Forrester is underestimating the scandal's effect. And just the anecdotal evidence Forrester reported showed that 10% of existing companies were seeing a negative effect.

I stand by my earlier prediction: this scandal is going to hurt HP's business in a real way. Watch out for a negative revenue surprise coming in its earnings filing for the fourth calendar quarter, regardless of whether this touches Mark Hurd or not. Criminal prosecution is a negative for customers, regardless of who is in charge.

Full disclosure: I have no positions in HP.

Technorati Tags: Hewlett Packard, Mark Hurd, Pretexting

Christmas console deja vu: PlayStation 3 shortages guaranteed

Tuesday was the first official day when retailers were allowed to take Playstation 3 pre-orders, and as Ars Technica notes, most locations sold out their allocations in minutes. With planned production of 2 million by the end of the year (constrained we're told by the blue laser shortages), we can expect to see similar shortages to that experienced with XBox 360 consoles last year.

The only good news: Despite the many complaints about Sony's high prices of $499 and $599, the higher prices Sony is demanding for the PS3 should tamp down demand a bit and reap a bit more revenue for Sony during this high-cost launch phase. But even so, with more than 100 million Playstation 2s in the market today, there's an installed base of Sony consumers -- 8.7 million according to market research firm Interpret -- who will be interested in buying next generation console, regardless of price. That's about 10 times the 800,000 willing to pay full price for the XBox 360, according to the study. The only question is whether the higher console price will mean that those consoles that will inevitably be scalped on eBay will be sold for $1,500 instead of just a measly $1,000.

One other interesting detail from some of the marketing documents being circulated about the PS3: Sony is forbidding requiring bundling of games to purchase a PS3. I personally think that's a good move. Nothing puts a worse taste in a consumer's mouth than having to buy bundles just to get access to a hard-to-get product. By forbidding retailers to use this sleazy marketing tactic, Sony should garner at least a bit more good will than they would otherwise.

And by the way, Nintendo Wii's are also being made available for pre-order this week as well. I think these $250 consoles will do a bit better than many believe, simply because of their ability to run all Nintendo games since the beginning of time (practically) and their innovative game controller. And with the lowest cost third generation console and Nintendo reaping profits from its hand-held gaming franchise as well as its consoles, it stands to do particularly well in the shoot out this Christmas.

Technorati Tags: Games, Gaming, Marketing, Microsoft, Nintendo, Playstation 3, puppy, Sony, XBox 360

Disney-ABC gets a wakeup call: piracy identifies market opportunities

Kudos to the Anne Sweeney at Disney-ABC for seeing content sharing and piracy as something more than lost dollars. In an interestingArs Technica article, she notes:

"So we understand piracy now as a business model," said Sweeney in a recent analyst call. "It exists to serve a need in the marketplace specifically for consumers who want TV content on demand and it competes for consumers the same way we do, through high-quality, price and availability and we don't like the model. But we realize it's effective enough to make piracy a key competitor going forward. And we've created a strategy to address this threat with attractive, easy to use ways to for viewers to get the content they want from us legally; in other words, keeping honest people honest."

When you start thinking this way, the goal becomes offering a more compelling product than file-swapping networks can provide, rather that attempting (for instance) to sue the users who like your content. For ABC, this has meant launching their own streaming media player and providing shows like Lost and Desperate Housewives online only minutes after they air.

I would take issue with her use of the term piracy in this context; what she's really talking about is content recording and sharing, and some of that is actually fair use of copyrighted material, as was acknoweldged by the US Supreme Court in the famous Betamax court case. But her point is still valid: piracy identifies market needs that aren't being filled. That's free market research. And anyone who pursues piracy with lawsuits instead of products to fill those needs, no matter how much the law is on their side, is losing the battle for the consumer's hearts and wallets.

The article concludes with what I consider to be a terrific less for everyone in the content business. ABC has 16 million reasons to pursue the legal content downloading market with products that satisfy the consumer rather than sue them:

While it's hard to compete with free, it's not impossible—witness the success of iTunes in both music and TV shows. You just have to offer a compelling product at a reasonable price that is simpler to use than the alternatives. When ABC introduced its own shows into iTunes earlier this year at $1.99 a pop, it sold more than 8 million of them without damaging its TV ratings at all.

Technorati Tags: ABC, Anne Sweeney, Disney, iTunes, Marketing, Piracy, TV

Plasma pricing precipice follow-up

No sooner did I write about the flat-panel TV plasma pricing precipice, part II, than Circuit City advertised on Sunday that it would sell a variety of off-brand 50-inch plasma panels for $1899 at its stores this weekend. It's feeling like plasma panel prices will fall nearly 30% again this year. Kind of amazing, since they did that last year as well.

Remember that the PC marketing really got going when PCs fell below $1,000. Don't be surprised to see much more large scale consumer adoption as HDTV 42-inch panels fall below that magical pricing point as well. When will we see that happen? I'm sure we'll see some isolated sale prices in that range next month on Black Friday (November 24th this year, the Friday after Thanksgiving here in the US). But I predict that 2007 will be the year of that price becoming routine at US retailers.

Of course, for those really wanting to go flat for less than $1,000 now, there are always EDTV panels, which are already in that vicinity. But no matter whether its EDTV or HDTV, the future of TV looks flat.

Technorati Tags: Flat-screen TV, HDTV, Marketing, Plasma, Pricing, TV

The art of letting go of brand control

Stuart Elliott in today's New York Times has an excellent article on the shifting of brand control from corporate brand managers to consumers. Some notable bits:

“Consumers are beginning in a very real sense to own our brands and participate in their creation,” he said. “We need to learn to begin to let go” and embrace trends like commercials created by consumers and online communities built around favorite products.

The examples Mr. Lafley offered included an animated spot for Pringles snacks created by a teenager and put up on YouTube and a campaign for Pantene that encouraged women to cut their hair and donate the clippings to make wigs for cancer patients. “Most of the experiments don’t work,” Mr. Lafley said, “but we have to be out there, trying.”

One particularly good example cited was from Mastercard:

“We can’t manage what happens out there,” said Lawrence Flanagan, executive vice president and chief marketing officer at MasterCard Worldwide. “It has taken on a life of its own.”

When “you’re tapping into that consumer desire to have a piece of it,” he added, referring to a brand or product, “you have to take the good with the bad.” MasterCard, for instance, has tolerated and, arguably, benefited from the spate of profane or off-color parodies of the “Priceless” campaign.
...
For example, Yahoo Music asked fans of the singer Shakira to contribute video clips of them performing her song “Hips Don’t Lie,” and the submissions were culled to produce a fans’ version of her music video.

“I call it participation marketing,” Ms. Dunaway said. “Allow them to help you shape the brand experience.

“Content is no longer something you push out. Content is an invitation to engage with your brand.”

I have to say, the Association of National Advertisers get together sounds like an interesting conference this week.

Technorati Tags: Advertising, Brand, Marketing

Plasma pricing precipice, part II

Last year I wrote an article talking about the rapid decline of plasma flat panel prices as we entered the second half of the year and started approaching the Christmas shopping season. At that time, I noted that name-brand 50-inch plasma panels had broken the $3,000 barrier and that we might see non-name-brand sub-$1,000 42-inch plasmas around Black Friday.

Well, a similar situation is brewing this year. As I write this, I note that as I look at best flat panel prices, I'm starting to see 50-inch panels such as the Panasonic TH-50PX60U approaching the $2,000 mark before shipping (current best price with shipping is about $2,300 -- these are big boxes we're talking about). 42-inch plasmas such as the popular Panasonic TH-42PX60U are now sub $1,500.

Now we could simply chalk this up to normal 30% per year price declines in flat panels, but I think there is more going on here. Overall, most video aficionados believe that the best plasmas today are pretty convinced that plasmas still generate the best HDTV pictures in home theater environments. And most of the new capacity being added nowadays is LCD, not plasma, so plasma pricing should be holding up better than it is.

But there's also an interesting marketing war going on between plasma and LCD technologies. The LCD guys, especially Sony and Westinghouse, are touting the theater-definition 1080P resolution as their big differentiator, despite the fact that there really aren't any 1080p content sources readily available yet. In the process, they are painting plasma technology as "old and staid". In fact, there was even an Opus Sunday cartoon a few weeks ago where a conservative character Steve notes that he is "staying the course" in upgrading to plasma, implying that that was the choice of people who really didn't want change.

This is a race to the bottom on product margins, which eventually will drive some companies out of business. The winners in this war will be not only those who make the best technology, but those who do the best job of marketing real consumer benefits that will command better margin products. Pioneer has done a pretty good job of doing that in the current plasma war, and Sony is similarly pushing premium consumer value with details like color-coordinated bezels with their XBR2 and XBR3 series LCDs. But this war is going to create a lot of casualties in the second and third tier manufacturers trying to break into the market.

All that said, the high ticket prices for flat panels promise to keep the holidays bright for companies like Best Buy and Circuit City. Amazingly, flat panels and iPods have actually been raising average revenues for consumer electronics purchases the last few years, despite the ever-declining prices of most categories. But there's still a lot of room for innovation toward iPod-like excitement around HDTV with consumers by marketing style, simplicity, and quality. Meanwhile, we predict that $1,000 to $3,000 flat-panels will be the Tickle-Me-Elmo product hits for adults this holiday season.

Technorati Tags: 1080p, Consumer Electronics, Flat panels, Flat-screen TV, HDTV, LCD, Marketing, Panasonic, Pioneer, Plasma, Product design, Sony

Blackfriars Marketing Index for Q3 Falls To 136

We've just released our marketing index for Q3 from our newest report Sizing US Marketing 2006. Overall, marketing budgets appear to be fading, and online advertising spending has fallen from the 10% businesses allocated at the beginning of the year to 7%. You can read the full press release here.

Technorati Tags: Advertising, Blackfriars, Market research, Marketing, Marketing spending, Press release, Research

Marketers and presenters: spell out your acronyms

The BBC News today has an article that cites a Nielsen/Netrating study with a conclusion that's an oldie but a goodie: Geekspeak still baffles Web users. Particularly notable were the poor showing of technical acronyms:

Acronyms in particular foxed users. 75% of online Britons did not know that VOD stands for video-on-demand, while 68% were unaware that personal video recorders were more commonly referred to as PVRs.

Millions of people keep in touch via instant messaging but some 57% of online Brits said they did not know that the acronym for it was IM.

"The technology industry is perhaps the most guilty of all industries when it comes to love of acronyms," said Mr Burmaster.

"There is a certain level of knowledge snobbery in so far as if you talk in acronyms you sound like you really know what you are talking about and if others don't understand then they are seen in some way as inferior," he said.

And this was a study of online consumers; the effect is even worse in the general population.

There's a moral to the story here for marketers. Use words, not letters, to describe your products. Words will communicate with a wider variety of people and they will be less prone to misunderstandings. And instead of an acronym, try looking for a short word to represent the product instead. The iPod could have been the Apple DMP, but I would argue, that with that name it would have been DOA -- I mean dead on arrival -- instead.

Technorati Tags: Communication, Marketing, acronyms

Apple's professional handling of bad news

Apple’s special committee reported its findings in its stock option investigation this evening. CEO Steve Jobs apparently knew of the options backdating, but hadn't known its accounting implications. His statement was:

I apologize to Apple's shareholders and employees for these problems, which happened on my watch. They are completely out of character for Apple," said Steve Jobs, Apple's CEO. "We will now work to resolve the remaining issues as quickly as possible and to put the proper remedial measures in place to ensure that this never happens again."

From a communications point of view, this is exactly the type of statement you want. It expresses regret, it's clear, and it's forward-looking. Compare that with the comments of HP CEO Mark Hurd regarding HP's pretexting scandal, which I've quoted here from CNET:

"I believe we have now a substantial set of the facts," Hurd said. "I will also say that some of the findings that Morgan Lewis has uncovered are very disturbing to me."
...
"Our investigation is not complete. There is still more work to be done,"
...
"As of today, we still do not have all of the facts," Hurd said. "I also cannot guarantee that we will ever be able to obtain all of the information regarding this investigation. This is due to its complexity, the number of people involved, with many of them outside the company."

Now I have some sympathy for Mark Hurd, who pretty much walked into this mess that had been started long before he arrived. But which company do you think is going to get better press as the results of those communications? And how much better would it have been if Hurd had stepped up and said, "I apologize to HP's shareholders and employees for this situation. Regardless of the circumstances, as CEO, I'm responsible. I commit to making whatever issues HP has been involved in right and ensuring they never happen again."

Moral to CEOs: Take responsibility; that's why they pay you the big bucks. Jobs understands that, since Apple was originally his company. Would that more CEOs did.

Technorati Tags: Apple, Communication, Communications, HP, Mark Hurd, Steve Jobs

Microsoft's "you've got to be kidding" Software Protection Platform

Microsoft today announced version 2.0 of Windows Genuine Advantage, something called the Software Protection Platform.. And the press release account has to be read to be believed:

...In alignment with our anti-piracy policies we have been continually improving the experience for our genuine customers, while restricting access to ongoing Windows capabilities for those who choose to use counterfeit software. Reduced functionality mode has been a part of the initial Windows XP product activation process for retail and OEM (original equipment manufacturer) installations since its launch, and, similarly, Windows Vista will have a reduced functionality mode but one that is enhanced. Reduced functionality mode in Windows Vista will allow the user to use the browser after the reduced functionality mode has begun. Reduced functionality mode can occur as a result of failed product activation or of that copy being identified as counterfeit or non-genuine. In most cases customers will be able to correct this situation quickly with the options provided.

Ignoring the Orwellian language around enhanced reduced functionality mode, this sounds harmless, right? Well, not so much. The "enhanced" reduced functionality mode gives you a black screen, a browser, and an Internet connection. If you use the Web browser for more than 60 minutes, you will be logged out and have to start over. No other OS functions work until you can successfully connect up with Microsoft and validate your configuration is a legally purchased product.

Think about the effect this might have on an executive getting on a plane to prepare for an important meeting with a newly upgraded laptop, and you have a recipe for disaster. No vendor should have a "kill switch" for a product you bought from them, but that's exactly what Microsoft is announcing (despite its denials that this enhanced functionality is a kill switch). And unlike with Windows Genuine Advantage, even corporate licensees will have to deal with Software Protection Platform activations and checking.

In theory, the program should be harmless for everyday users. But Microsoft software has never won any awards for its theoretical purity. Ed Bott at ZDNet analyzed responses regarding validation problems and found that 42% of Window Genuine Advantage problems were from people running Genuine Windows according to the Microsoft's own Genuine Advantage Diagnostic tool. So being a legal, law abiding buyer doesn't protect anyone from this new Windows Vista feature. And we won't go into false positives generated by things like corporate firewalls and anti-virus protection; suffice it to say that even if you have perfectly valid Windows licenses, you will probably have at least one run-in with the Software Protection Platform.

This is a great example of technology driving bad marketing decisions. Because it is technically possible, Microsoft is taking the tack that every user, legal or not, should prove regularly that they are running a legal copy. From a marketing point of view, that's just absurd. It actively reduces the value of the product in the eyes of the consumer. It says loudly and clearly, "You have no rights to use our product unless we say so." It screams that end customer doesn't matter.

Now there'll be some who say it doesn't matter because there aren't any other choices. But that view is so 1990s. Apple now makes Intel-based laptops, desktops, and servers that have none of this absurd protection and are more virus-resistant to boot. And for those businesses who want more control, there's always Ubuntu and other Linux systems, which companies like IBM and Dell will be happy to support for you. And programs like WINE allow an awful lot of Windows programs to run unchanged on systems like Linux and Mac OS X. All it will take is for Microsoft to paralyze a Fortune 100 CEO's laptop at a major investment conference for the phones at those vendors to start ringing with corporate migration requests -- and at that point it will be too late for Microsoft to fix this blunder.

There's a reason Microsoft stock has been a losing money investment over the past six years, despite a never-ending chorus of analyst buy recommendations: customers determine the value of both a brand and a company. And no amount of holding the customer ransom by technology is going to change that fact.

Full disclosure: I have no position in Microsoft stock.

Technorati Tags: Marketing, Microsoft, Software Protection Platform, Vista, Windows, Windows Vista

Zune Marketplace pricing: too cute by half

[Apologies for the delay in this posting; my blogging software (ecto) ate the original article I had queued up for this morning in the process of arguing via XML/Atom with Blogger.com, so I had to write it again from scratch. The original was funnier; somehow software bugs eliminate much humor.]

Writing articles about Zune marketing is about as challenging nowadays as writing about Republican political scandals. In the military, it would be called a target-rich environment. That said, here's another one.

Largely unnoticed in the pricing announcement last week was this little tidbit about how consumers might pay for Zune music. CNET had a pretty decent description in their article, where they accurately noted that Microsoft's real play is to get people to buy subscriptions for $14.99 a month. But if pressed, they'll generously allow people to buy individual songs. But you can forget one-click buying; Microsoft has a cuter idea:

There will also be the option of purchasing individual songs through a system called Microsoft Points. The new Microsoft cash system will work by adding money to an account, as with a prepaid phone card. Points will then be deducted from the account with each purchase. A single song will cost 79 points, "the equivalent of 99 cents," according to Microsoft spokeswoman Kyrsa Dixon.

The point system is already used in the Xbox Live Marketplace, and Microsoft plans to host other online stores where Microsoft points can be redeemed, according to Katy Gentes, product marketing manager for Zune. In the United States, points are available in denominations of $5 for 400 points, $15 for 1,200, $25 for 2,000 and $50 for 4,000. That makes $1 worth about 80 points.

Now from a marketing point of view, there are two marketing tricks going on here. First, is the concept of not having 100 points equal a dollar. That would be too simple and easy to understand. Instead, Microsoft sets the song price to 79 points, which most people will perceive as being inexpensive because it is less than 99. Cute, very cute.

The second marketing trick is the use of a new form of currency; yes, Microsoft money has finally arrived, and it has all the charm of an end user licensing agreement -- and just as many tricky parts. Note the denominations offered above and think about this common transaction: buying your average, garden-variety album for $9.99. You'll need probably 799 points to buy that. But notice that there's no 800 point denomination. Microsoft is betting that most consumers won't buy two 400 point packs, but will instead opt for purchasing 1,200 points for $15, and will leave the extra 400 points on account with Microsoft. So consumers end up either 1) doing extra work to pay exactly the right amount (i.e., going to the store, purchasing two 400 point packs, returning to the music purchase and then buying their album), or 2) provide an interest free loan to a company that has $40 billion in the bank. Cute, too cute by half.

Microsoft's seems to take particular glee in making consumers work harder than necessary to buy their products and grabbing every fraction of a penny they can squeeze out of the transaction. If the company spent half as much effort investing in, say, making a truly elegant hardware device (instead of just re-badging someone else's) and making the user experience simple and hassle-free with one-click credit card payment (it worked for Amazon, didn't it?), they'd probably make more money in the end than pinching pennies with tricky pricing and proprietary money schemes.

Someone once said that the lottery is a tax on people who are bad at math. Maybe Microsoft intends Zune Marketplace to be a tax on people who like marketing tricks. It might work, but it's no way to build customer loyalty.

Full disclosure: I do hold shares in Apple Computer.

Technorati Tags: Marketing, Microsoft, Music, Pricing, Zune

Back to blogging again

After a nutty insane week of three different projects and a report to get out, Life here at Blackfriars World Wide Headquarters (also known as BFWWHQ) is starting to return to normal. I believe our new Sizing US Marketing 2006 report is our best report on the state of marketing ever, and has more insights and data than we've ever published in a single report. All that said, I'm glad we only do that particular report once a year; it's many months of work and gigabytes of data condensed down to a 28-page tome, and if we did it more often, our heads would explode. Now on newsstands (or at least major market research distributors) everywhere.

That said, I'm looking forward to returning to blogging regularly again. There is a ton of activity planned for Q4 this year, such as the launches of the Nintendo Wii, the Sony Playstation 3, and the Microsoft Zune. And at the same time, we're seeing companies pulling back on marketing spending and a slowing economy (which, by the way, the marketing spending pullback usually precedes by about three to six months). My prediction? It's going to be a rocky fourth quarter compared to last year -- and last year wasn't exactly a walk in the park.

Technorati Tags: Blackfriars, Market Research