Monthly Archives: September 2010

iPad lures $100k households away from magazines

If velocity is distance over time, the iPad is moving fast. Ipsos Mendelsohn, a research group that studies media habits among affluent Americans, reports that newspaper and magazine use is down 16% from 2009 to 2010 among households earning more than $100,000. (Note: Use means time spent reading, not number of issues delivered to the home.) Mendelsohn’s survey of 13,804 affluent individuals found their Internet use jumped from 22.6 to 25.3 hours a week in the 12-month period. Those $100k households represent one-fifth of the U.S. population, and are one of the sweetest targets for advertisers. With so many eyeballs skipping away from old print, marketers will see declining results if they don’t put mobile and display media in their plans.

Mendelsohn’s president Bob Shullman told ClickZ, “Right now about 98% of the affluents are online — compared with 70% of the rest of the population — and they have lots and lots of digital devices.”

As for the iPad itself, Apple’s tablet is attracting affluent younger users. Nielsen has found those willing to drop $499 on a new technology gadget skew male (65%), younger than age 35 (63%), and relatively affluent (50% of the individuals earn more than $75,000 a year). This contrasts to only 30% of all mobile subscribers making more than $75,000 a year — indicating Apple is locking in the future affluents with its tablet devices.

If you target upscale customers, it’s time to rethink the media plan.

Image: Elsonpro

So this guy put a phone, screen and keyboard in a blender…

Product designer Billy May has created a concept for a next-generation mobile phone that solves the thorniest problem of today’s user interfaces — we all want unwired gadgets that fit in our pockets, but the easiest way for us to communicate is to type on keyboards that don’t fit on small screens. The gadget would combine two projectors and sensors to push web or video images up on a wall, with a light-based keyboard capturing your finger taps on any surrounding flat surface.

Damn, we want one.

The deeper issue is May’s brilliance illuminates how humans just can’t settle down on one communications interface. Isn’t it silly, if you think about it, how many options we have for typing at each other? We remain agog over every slight Apple tablet update, Facebook layout change, or Twitter usability improvement … yet our core means of transferring information remain sight and sound output and voice or touch input. The constant innovation around how people share information across vast distances, and carry around connections, means we haven’t solved the problem yet. We wonder if device interfaces will ever converge into one simple, master interface. If so, May be the closest answer yet.

Via Ben Malbon.

Of magic books and micropublishing

IDEO has mocked up the future of the book, where reading gets three new twists: informational layers (the “Nelson” prototype above), social connectivity (“Coupland”), or narrative interactivity (“Alice”). While it should be no surprise the convergence of words and tablets will open up possibilities, what’s most interesting is the probable impact on the publishing industry — soon to be replaced by micropublishing.

You see, today publishing is hard and risky, with every book an unknown start-up business model, so the boys in Manhattan make money by promising to remove that friction. But what happens when friction disappears? Anyone in the future will be able to write and publish books using almost-free tools such as Apple Pages to whip up layouts and then email, Twitter, text or signal-share it to the masses. Big-city publishing houses that once vetted authors, forced them to shill through their networks to sell the minimum amount of books to get to $100,000 in break-even revenue, will fade as your son learns to publish professional views on the final Hogwarts twist to his friends in 6th grade via $99 iPads. Write. Layout. Send. You’re done.

Information wants to make money

Of course this means clutter, fragmentation, the PDF version of a million Wikipedia pages. Cheaper access will create a groundswell of new content inventory 10,000x more than that on today’s Web. The pressure on publishing will accelerate, because old third-party ad models that paid for some editorial gates (once called “magazines” and “newspapers”) will be small compared to the wordsmith tide. There aren’t enough advertising budgets in the world to fill all that space even at 5-cent CPMs. Advertising will still work, but only in subsets of the content, the Super Bowl/Harry Potter hits of the world that ride the Pareto power laws above the long tail of mass self-proclamation.

The twist is that individual writers, unlikely to scale to Rowlingesque masses in this new sea of content, may start charging more for their own work to the few who are interested. When content/writer/video/photo producers hunger to make money and marketing can’t subsidize the costs, the creators will want a greater slice of publishing pie. Books will still cost money, but perhaps you’ll pay it to the close circle of friends who write what you want.

Micropublishing will arrive because in a world of perfect informational networks, the closest distance between two nodes is a straight line. Tablets, beam away.

Where would mosques fit on this map?

Give Adweek credit. While American media commentators have been screaming since Fox News ran scary headlines about a mosque planned on Manhattan’s “hallowed ground,” Adweek posed a simple question: How could ad agencies convince the U.S. public that not all the world’s 1.5 billion Muslims are terrorists? Adweek created a brief to “change the perceptions of ordinary Americans toward Islam and Muslims, and encourage dialog between those who oppose and support the building of the community center.”

The submissions are all persuasive, with New York-based agency Gotham striking the most provocative tone. We all live at Ground Zero, Gotham suggests. So, where would you allow a mosque? Love it or hate it, Gotham brings the argument to its most logical conclusion: if our country embraces xenophobia, there is no room for those who are different anywhere.

ABC’s digital lap dance

Holy double-tasking, Batman. ABC has launched a new iPad app that automatically syncs with your television show by picking up an audio signal, and then dishes up additional content via the tablet in your lap.

The clever app takes advantage of the growing trend of concurrent media usage, where consumers watch multiple screens at the same time (think of a teen with smart phone in hand watching a movie in your basement). Nielsen’s three-screen studies, which use direct observation of consumers in 10-second increments to see what they watch when, have found people are (gasp) extremely likely to look away from TV sets during commercial breaks, instead picking up magazines, cell phones or laptops. The only way to keep those viewers engaged in the marketing messages that fund most televised content is to gain share of another media channel. ABC, way to grab eyeball shelf space.

Vote for me or pay $927.55

Whatever your politics, you have to admire the U.S. Senate campaign for Linda McMahon, which is warning Connecticut voters that they’ll pay $927.55 more each year on utility bills if they don’t vote for her. That’s the allusion, anyway, in a polished direct mail piece cautioning about proposed cap-and-trade legislation. McMahon bases her claims loosely on two studies, one by the conservative Heritage Foundation that suggests braking pollution could cost the typical American family of four $829, and a more optimistic outlook by the Congressional Budget Office which puts the impact at a few hundred dollars per family, with households in the bottom income quintile even saving money.

Truth aside (this is politics so let’s not worry about that), the piece is brilliant. McMahon is tapping our desire for facts with a hard numeric offer that appeals to human psychology. Direct marketers have known for decades that including a “hook” with a number is one way to boost response rates; consumers are more likely to pick up a mail piece to try to puzzle out whether the deal has positive transaction utility (that is, a good value), and then upon reading it are more likely to take action. Numbers give credence to claims, perhaps because as humans we are overloaded with informational stimulation from the outside world, so we instinctively latch on to any data points with hard clarity. Numbers are filters that help us make judgments by limiting our decision pathways. If we said we were brilliant, you might doubt us, sniffing BS. If we said we had an IQ of 133, you’d likely believe it. Like tall tales about emissions costs, the question is, why does any numeric claim seem more likely to be true?

The NY Times’ $240 differential price

Here’s a curious approach to guarding margins. The New York Times is offering readers of its web site a special new way to view the newspaper on computers. “Times Reader” provides an iPad-type layout, with better graphics, intuitive swooping between pages, even an interactive crossword puzzle.

Catch is this costs $240 a year.

This is a classic example of differential pricing — the concept of charging different customers differently. It’s not unfair, rather a clever strategy to maximize revenue and margins. You see the inverse at grocery stores, where check-out clerks hand you coupons as you walk out the door. Some people, pinching pennies, will come back in with the coupon a week later and buy a can of soup for 50 cents off. You, likely in a hurry, won’t bother and will pay 50 cents more for the same chicken noodle broth. Because the “value” of the product varies for two people, the soup company has succeeded in charging two different people two different prices for the same good — maximizing its money while making you both happy. It’s a question germane to most businesses: How can we charge the customers who value us the most more for our service, while keeping everyone happy? By adding some minor differentiation (a la Times Reader) and letting customers self-select into the more costly service, you’ve built a path to higher profits.

There are readers out there who love the Times who might enjoy the slick layout, and if they haven’t sprung $500 for an iPad yet, this is the only way they’ll get it. Of course, at $20 a month, save your money and you can buy an iPad in about two years.

MTV uses app as microcampaign, not channel

Here’s a secret your digital shop won’t tell you: Most iPhone and Droid apps are used only a handful of times before being quickly forgotten. Pinch Media recently studied 30 million app downloads and found that after 24 hours, only 20% of users tapped the app again, and after three months only 1% of users continued to engage. What’s a poor marketer who wants fame on a handset to do?

Rather than fight it, we’ve suggested using apps as a new content inventory — a toss-away campaign element that can be followed with future apps, just as TV spots or print ads are rotated out with new creative. MTV is doing just this with an updated app tied to tonight’s 2010 MTV Video Music Awards. Grab the new MTV app and you’ll get an “all-new VMA-exclusive section” with red-carpet and backstage clips. MTV scores two points, one for making its app a microcampaign with a short shelf life, and two for tapping into the concurrent media usage habit of consumers who check other devices while watching TV. If MTV convinces you to play with your smart phone during commercial breaks, you may not change the dial — helping ratings and those silly ads across all the device channels break through your cortex.

On the popularity of game mechanics

Humans are obsessed with scores — the amount of money in your bank, the goals by your soccer team, the number of horsepower in your automobile engine. But one unremarked-upon trend in modern communications is the rising tide of “game mechanics” that play with our perception of numbers, used as both an acquisition and retention device in businesses from to Twitter. Let’s pause and see how your psychological lust for numbers is being played:

Twitter: On Twitter, you likely watch your follower count daily, seeing if you’re close to 1,000 or 10,000 human connections that, upon reaching such threshold, stroke your ego as evidence that you are popular. Services such as allow you to adjust your connections to make sure the numbers are in balance (God forbid you follow more people than follow you back, illustrating you’re the wallflower kid of social media). The numbers are illusory; most people ignore most of your tweets, yet the feedback loop keeps you hooked. Twitter is using the game strategies of achievement, companion gaming (where a game works across multiple platforms such as PC, mobile, Tweetdeck apps), chain schedules (tying rewards to contingencies such as greater participation) and communal discovery.

Online publishers: Web articles are now judged less by the quality of their content as by the number of readers, links or comments. Major publishers such as Bloomberg BusinessWeek (whom we write columns for) list scoring mechanisms at the right of each article, informing readers which pieces have been the most viewed, most discussed, or most emailed. You feel better reading something that is popular, and then you’re likely to click to another popular article, keeping you in the publisher’s walled garden longer boosting the number of ads they can serve you. Publishers are tapping the game mechanics of achievement, behavioral momentum (keeping you doing what you have been doing), envy (you want to read what others say is popular), and ownership (comment fields give you power over the idea in the article).

Foursquare: The obvious example of game mechanics, of course, is Foursquare, a location-based service struggling to solidify its market position as the GPS-social media portal before Facebook blows it away, using “badges” and “mayor” gimmickry to reward you for tapping the service. The badging device provides a zero-cost reward, similar to ranks in the military, spurring loyalty as you work your way to the top of the local coffee shop’s ladder. Foursquare seems aware that many first-time users of any new communication service are likely to bail, so it tags them “Newbies” with an unwritten incentive to get off that lowly title by using the service more. Emerging LBS competitors such as ShopKick mimic Foursquare’s game system.

The best profile we’ve seen on game mechanics is TechCrunch’s recent summary of SCVNGR’s “playdeck,” an actual deck of cards used by the game company for employee training that defines 47 gaming structures. Some are simple — achievement provides points as you earn levels, a la Twitter’s follower counts; many are complex, such as disincentives that punish you for not following the right path. TechCrunch gives the brilliant “disincentive” example of removing all links in its checkout process to funnel the buyer through to the final purchase. The deck is worth a read to see how you could build game rewards into your company’s service model.

Why are game mechanics suddenly popular?

The rise of game psychology is driven by two forces. First, social media is a new online communication platform in which people have to rebuild social graphs from scratch. It doesn’t matter if you were the most popular kid in high school; now you have to reconnect, and you are judged by your connections and what passes through them. Adding fake little badges and points and follower counts gives users immediate rewards, and builds in switching costs, so each social media service has an incentive to tap game devices to lock in market share. If you leave Twitter, you’re ditching thousands of people who “follow” you. The fake gaming currency is not only reward, but also a potential psychological loss.

And second, online or mobile communication networks really lack any other feedback. You can’t get a knuckle-tap from your boss, a hug from your best friend or kiss from your lover through a touchscreen panel. If we want love, we need to believe people are giving us something. For now little game points will have to do, because they have become the currency of ego-needy emotion. Which reminds us: Would you mind following me on Twitter?