Intsagram usage in the U.S. surges 35% in 2013, rivals Twitter for mobile audience

Re-posted from eMarketer

User counts among millennials and Gen Xers are nearly equal on both sites

Just how many people in the US use Instagram, the photo- and video-sharing service Facebook acquired in 2012? According to new figures from eMarketer, Instagram usage in the US has ramped up rapidly and is already maturing, reaching regular usage levels nearly matching Twitter’s, particularly on smartphones and among millennials and Gen Xers.

Nearly 35 million people in the US accessed Instagram at least once per month in 2013, according to eMarketer’s latest forecast—representing double-digit but not spectacular growth over 2012. By the end of this year, almost 25% of US smartphone users will snap a photo, slap on a filter and share their creations with friends on Instagram on a monthly basis (or, at least, sign in and check out what their friends are posting).

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The newsonomics of selling Main Street

Re-posted from the Nieman Journalism Lab

Main Street is finally going digital. With the digitization of smaller business, newspaper companies believe they’ve found that elusive third leg of a business model — a model that could keep them standing, maybe even taller, into the second half of this decade.

We’ve see “marketing services” grow as a business pursuit over the past couple of years. Now — as newspaper publishers have just left the “Key Executives Mega-Conference” in New Orleans, where such services led off the weekend with a three-hour session — we can characterize it as the number one new business pursuit of many U.S. newspaper chains. It’s the new initiative they are most heavily investing in. In fact, in surveying the field, I’m estimating that marketing services revenue could equal at least 10 percent of newspaper company ad revenue — pushing $2 billion — by 2016. Aspirationally, this is the third leg of newspaper revenue — after advertising and circulation revenue — publishers know they need.

The business push goes by several names: marketing services, digital services, “becoming a regional agency.” Those terms all point to the same business, which targets small and medium-sized businesses (SMB). It’s a category of businesses many dailies long ignored — in the good times of 20-percent-plus profits, why focus on pennies, nickels, and dimes when the dollars were busting down the door? When Macy’s, Best Buy, and Safeway were subsidizing ink by the barrel, paying high rates, insertion orders were worth five figures.

I first ran across the bigger-is-better thinking when I became managing editor of the Saint Paul Pioneer Press in the mid 1990s. We had three school-aged kids, and all of them liked visiting the Red Balloon bookstore on Saint Paul’s Grand Avenue. I suggested that the Red Balloon might be able to afford a small ad in our (struggling for ad support) book section. “No,” I was told. “It would cost more than we’d take in to send a sales rep there.” The Red Balloon is 2.6 miles from the Pioneer Press offices.

In the old go-go days, larger metro papers considered only the top 5-10 percent of merchants as their customers. The other 90-plus percent were too small to care about. Even for smaller community papers, well over 50 percent of merchants fell into the “too small” category.

Well, times change. Humility is learned. Price points meet reality. 2.6 miles seems shorter.

Now the target is those much-derided digital dimes, dimes increasingly being spent by about 27 million U.S. SMBs. Almost 20 years after the Yellow Pages companies first started selling digital presences to smaller businesses, Main Street is finally ready to go more fully digital. Figure that Google has had about two million customers for its paid search, lead generation products. Figure that many of these smaller business owners now have their own personal Facebook pages, and some familiarities with Twitter and LinkedIn. Who hasn’t used Google search and seen the paid ads on the pages?

It’s not that these businesses haven’t had a lot of knocks on the door. The Yellow Pages companies, in their own print-to-digital transitions, complicated by bankruptcy and sale, keep on visiting. National companies like ReachLocal and Orange Soda make forays. Groupon, Living Social, and their deal brethren have whetted appetites, if often leaving behind heartburn.

Into this landscape, enter newspaper companies. Among those making a business of smaller business: groups including Hearst, GateHouse, Tribune, and McClatchy, and big independents like The Dallas Morning News, Star Tribune, the Buffalo News, and the Pittsburgh Post-Gazette. The latter two are clients ofGuarantee Digital, which helps newspapers gets its marketing services programs up and going. It is headed by newspaper digital ad veteran Daryl Hively. They sell the basics of what the smaller merchants now understand they need:

  • A better site presence, and, increasingly, a mobile presence. In 2013, many have some kind of site — with the tech support of a nephew or kid next door — but not much of one. Marketing services providers offer professionalization through digital services, in look, feel, and basic information.
  • Findability: Basic search engine optimization (SEO) on Google and Bing and search engine marketing (SEM) to buy leads.
  • Social connections: Primers and services in using Twitter, Facebook, and LinkedIn
  • Reputation management
  • Content marketing
  • Daily deals

The pitch, increasingly, includes showing the merchant how well each of their marketing programs is working in and of itself — and comparatively. It’s a work in progress. One of the most intriguing new products addressing the problem, isTapClicks. COO Jeff Herr, a digital exec with Lee and MediaNews experience, says his company is focused on doing precisely that for marketing services. Earlier testers include MediaNews, Lee, and the Star Tribune. Marketing services companies make a higher profit margin on services they themselves provide, like site building and social setup, than on reselling products like Google AdWords. In all, it’s a business that can produce good margins, with a ramp to real scale.

Let’s look at the newsonomics of selling Main Street:

  • Well over a thousand new dedicated-to-marketing-services salespeople are roaming Main Street. The strategy espoused by Hearst-owned market leader LocalEdge: Hire a sales staff separate from the newspapers’ ad sales group, and use a different brand in the marketplace to differentiate the marketing services offer from that of traditional advertising sales.


    The Star Tribune’s chief revenue officer Jeff Griffing explains why he hires non-ad salespeople — like former 3M salespeople — to sell marketing services: “They are used to walking into businesses and being truly consultative.”

    LocalEdge is a Buffalo-based Yellow Pages company that Hearst bought 10 years ago and has made into the newspaper industry’s marketing services leader; it now syndicates its platform and training. CEO Jeff Folckemer says that there are 1,000-1,200 full-time marketing services salespeople pitching its products. The Star Tribune (Radius) and the Dallas Morning News (508 Digital) have each hired more than two dozen full-time marketing services salespeople for their big 2013 push; both use the LocalEdge platform. Other LocalEdge affiliates include Morris Communications, Wehco Media, Newsday, and the New York Daily News.

  • Price points range from $300 to $3,000 a month, depending on the degree of customization offered. Griffing offers this early snapshot of the Star Tribune’s developing business: “More than 90 clients as we speak, but that number changes daily. Average price point to date is $426 per month. Category learnings so far: 85 percent services, 15 percent retail and restaurants. Services trend so far: home improvement (gutters, roofs, landscaping, plumbing, etc.), professional services, dentists, financial services, tax services, etc.” The Morning News’ 508 Digital has passed the 600 client mark.
  • Custom work fetches higher rates. In Chicago, Tribune’s Bill Adee has built Tribune 435 as a custom marketing services house. Tribune 435 focuses on five-figure engagements to help merchants get their strategies up and running. In Dallas, the Morning News has also invested in a second marketing services business, Speakeasy. Specializing in site building, content marketing, and social, the 12-person startup works a terrain of $1,300-$12,000 a month. The average client pays $3,600 a month, says Speakeasy president Mike Orren.
  • It could add up to a $1.6 billion business within the next three years: My own forecasts of this emerging business look to a newspaper-owned $1.6 billion local marketing services business by 2016. That forecast (a part of a recent report, “The Local Marketing Services Revolution,” I wrote for Outsell) assumes that newspaper companies take about 25 percent of the local marketing services market by then.

It makes sense that newspaper companies are well-positioned to be winners in this emerging market. It’s easy to tick off their advantages:

  • a big brand in the market that is universally known — and associated with commerce
  • both print and digital promotional megaphones
  • the ability to convene events, cheaply, to educate and sell marketing services
  • an ad salesforce that can be appropriately leveraged — after the marketing services sales staff establishes the business

So is this the almost mythical third leg? Newspaper math is increasingly simple (“The newsonomics of zero, and The New York Times”). The upswing in circulation revenue can make up for the loss in ad revenue, but it’s probably not enough to provide much growth. If it can’t, newspaper companies need a third leg to find growth.

Marketing services clearly could be that third leg. We’ll have a sense of how much revenue — and profit — it provides, within two years. Newspaper company revenue reports typically have three lines: advertising, circulation, and “other.” If marketing services becomes an actual line, separate from “other,” you’ll know it’s a real third leg.

Groundwork for success is being well laid, based on a lot of painfully bought experience from the last decade. I have no doubt that the needs of local businesses, stores and services alike, will grow. There are few businesses that will be able to prosper without some kind of digital strategy. If newspaper companies can really change their stripes — getting away from selling print and digital space— and really put merchants’ results at the forefront of this new business, they’ve got a real shot at success. That’s why most are hiring new, separate sales staffs; execution and changing at least part of company culture will decide marketing services’ fate.

It’s curious. Marketing services looks like an advertising business. But the Star Tribune’s Jeff Griffing says its not. He associates marketing services with the Star Tribune’s (and daily newspapers’) other big initiative: all-access, print/digital circulation. “It’s an annuity business, if you do it right,” he says.

Like subscribers, merchant buyers of marketing services may provide a recurring revenue stream. Griffing’s notion: Merchants will always need help sorting out a constantly changing stream of marketing opportunities. If his company is truly in the business of providing ongoing consultative help, it can retain its customer long-term.

Marketing services, of course, isn’t going forward in a vacuum. Main Street is experiencing its own disruptions, digital and otherwise. A little company called Amazon believes that it can supplant some share of local goods sellers, with same-day delivery, now moving forward strongly in at least a dozen markets. How local merchants will be affected, and how they will respond, are unknowns. Fear — and opportunity — may both propel marketing services forward.

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The Role of News on Facebook

Re-posted from Pew Research

On Facebook, the largest social media platform, news is a common but incidental experience, according to an initiative of Pew Research Center in collaboration with the John S. and James L. Knight Foundation.

Overall, about half of adult Facebook users, 47%, “ever” get news there. That amounts to 30% of the population.

Most U.S. adults do not go to Facebook seeking news out, the nationally representative online survey of 5,173 adults finds. Instead, the vast majority of Facebook news consumers, 78%, get news when they are on Facebook for other reasons. And just 4% say it is the most important way they get news. As one respondent summed it up, “I believe Facebook is a good way to find out news without actually looking for it.”

However, the survey provides evidence that Facebook exposes some people to news who otherwise might not get it. While only 38% of heavy news followers who get news on Facebook say the site is an important way they get news, that figure rises to 47% among those who follow the news less often. “If it wasn’t for Facebook news,” wrote one respondent, “I’d probably never really know what’s going on in the world because I don’t have time to keep up with the news on a bunch of different locations.”

In particular, younger adults, who as a group are less engaged than their elders are with news on other platforms, are as engaged, if not more so, with news on Facebook. Young people (18- to 29– year-olds) account for about a third, 34%, of Facebook news consumers. That far outpaces the 20% that they account for among Facebook users who do not get news on the site.

What’s more, these 18- to 29-year-olds get news on Facebook across topics at roughly the same levels as older age groups, turn there as often for breaking news and deem the site as important a source of news.

All in all, then, it may be the very incidental nature of the site that ultimately exposes more people to news there. Indeed, the more time one spends on the site, the more likely they are to get news there. Two-thirds (67%) of those who use Facebook for at least an hour a day get news there compared with only 41% of those who spend less than an hour a day on the site.

These are some of the findings of the survey, which is the first in a multi-part research project by the Pew Research Center, in collaboration with the Knight Foundation, examining the role of news on Facebook and other social media platforms. Among other key findings in this report:

  • Facebook news consumers still access other platforms for news to roughly the same degree as the population overall. Four-in-ten (42%) Facebook news consumers often watch local television news, as do 46% of all U.S. adults; 23% often watch cable news (compared with 24% of all U.S. adults). But, just 21% of Facebook news consumers often read print newspapers, compared with 27% of the population overall.
  • News consumption on Facebook does not replace other activities. Those who consume news on Facebook are more active on the site than other users by nearly every measure. Fully 77% are driven to the platform to see what friends are up to (compared with 60% of other Facebook users), 49% go to chat with friends and family (versus 29%) and 26% go to post personal updates (versus 9%). In addition, almost two-thirds (65%) of those who get news on Facebook visit the site several times a day, compared with about three-in-ten (29%) other Facebook users.
  • Roughly half, 49%, of Facebook news consumers report regularly getting news on six or more different topics. The most popular topic is entertainment news, which 73% of Facebook news consumers get regularly on the site. Close behind is news about events in one’s own community (65%). National politics and government rank fourth, reaching 55% of these consumers regularly, just behind sports, which reaches 57% regularly. Still, Facebook has yet to become a platform for learning about news events as they happen. Just 28% of Facebook news consumers have ever turned there for breaking news.
  • Liking or commenting on news stories occurs almost as frequently as clicking on links, though back and forth discussions are less common.  About two-thirds (64%) of Facebook news consumers at least sometimes click on news links (16% do so often). Nearly as many, 60%, at least sometimes “like” or comment on stories (19% do so often). Just under half, 43% post or share links themselves at least sometimes (10% do so often) and about a third, 32%, discuss issues in the news with other people on Facebook (6% do so often).
  • News outlets rank low in the reasons Facebook news consumers click on news links. The biggest single reason people cite for clicking on links to news stories is interest in the topic; 70% name this as a major reason to click on news links. About half say finding the story entertaining (51%) or surprising (50%) is a major reason; 37% say a friend’s recommendation is a major reason. On the other hand, that the link came from a news organization they preferred is cited by just 20% as a major reason for clicking – outpacing only that the story had a lot of “likes” (13%).
  • Facebook news consumers who “like” or follow news organizations or journalists show high levels of news engagement on the site. About a third, 34%, of Facebook news consumers have news organizations or individual journalists in their feeds. Those who do are more likely to see the site as an important way to get news than those who do not have news organizations or journalists in their feed (54% versus 38%). They are also nearly three times as likely to often click on news links (27% versus 10%)and discuss issues in the news with others on Facebook (11% versus 4%). They are twice as likely to often post or share stories (16% versus 7%) and “like” or comment on stories (29% versus 15%).
  • As with U.S. adults overall, only a minority of Facebook news consumers say they prefer news that shares their point of view. Less than a third, 31%, of Facebook news consumers generally prefer news that shares their own point of view, just slightly higher than the 27% of U.S. adults who say the same. And, when asked about things that bother them on Facebook, twice as many Facebook news consumers are bothered when people post political statements (whether related to the news or not) than when people post opinions about something in the news (32% versus 14%). And, 58% have been surprised by a friend’s or family member’s opinion about an event in the news on the site.
  • Among U.S. adults, the desktop/laptop computer is still the primary way most adults access Facebook. Fully 59% of all adult Facebook users and 53% of Facebook news consumers mostly access the site through a desktop or laptop computer rather than a mobile device such as a smartphone or tablet. And while the primarily mobile users tend to check in more frequently, desktop users clock more total time: 37% of mainly desktop/laptop Facebook news consumers spend an hour or more a day on the site, compared with 28% of mainly mobile Facebook news consumers.

About the Survey

This report is based on a Pew Research Center survey conducted Aug. 21-Sept. 2, 2013, among a nationally representative sample of adults 18 years of age or older. The sample comprised 5,173 respondents, 3,268 of whom are Facebook users, of which 1,429 are Facebook news consumers. The survey questionnaire was written by the Pew Research Center and administered by GfK using KnowledgePanel, its nationally representative online research panel.

For questions asked of the full sample of 5,173, the margin of sampling error is plus or minus 1.7 percentage points at the 95% confidence level. For Facebook users, the margin of error is plus or minus 2.2 percentage points; for Facebook news consumers, it is 3.3 percentage points.

Facebook news consumers are defined as those who answered that they “ever get news or news headlines on Facebook.” News is defined as “information about events and issues that involve more than just your friends or family.”

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The Role of News on Facebook

Better Measurement, Metrics Needed for Engagement

This provides more food for thought when thinking about reputation management and promoting dialogue between your advertisers and their consumers.

Re-posted from eMarketer

Nearly nine in 10 say online engagement is a priority, but just 45.8% are actively managing this

Consumers have come to expect brands to interact with them—not simply talk at them. However, November 2013 polling by Google Think Insights and Advertising Age found that marketers were struggling to actually manage online engagement.

According to the study, 86.2% of US agency and marketing executives said that engagement was a priority for their company, yet around half that number—45.8%—reported actually managing this. About four in 10 believed engagement was a priority but did not manage it, and just 13.8% didn’t believe engagement was important at all.

Poor measurement systems were a big reason for lack of online engagement. Fewer than 42% said their company was able to quantify engagement. Whether they were actively managing engagement, thought it was important but weren’t handling it, or did not believe it was a priority, the majority of respondents agreed that better metrics and measurement would help drive online engagement efforts.

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Social, Search and Direct

Re-posted from Pew Research

How someone gets to a news organization’s website says a lot about the level of engagement and loyalty he or she displays toward the site and its content, according to a new Pew Research Center analysis conducted in collaboration with the John S. and James L. Knight Foundation. In this study of U.S. internet traffic to 26 of the most popular news websites, direct visitors—those who type in the news outlet’s specific address (URL) or have the address bookmarked—spend much more time on that news site, view many more pages of content and come back far more often than visitors who arrive from a search engine or a Facebook referral. The data also suggest that turning social media or search eyeballs into equally dedicated readers is no easy task.

These are among the key findings that detail how 1 million people enrolled in one of the nation’s most popular commercial internet panels have been connecting through their desktop and laptop computers with the most accessed or shared news sites of our time.

An analysis by Pew Research of three months of comScore data finds that among users coming to these news sites through a desktop or laptop computer, direct visitors spend, on average, 4 minutes and 36 seconds per visit. That is roughly three times as long as those who wind up on a news media website through a search engine (1 minute 42 seconds) or from Facebook (1 minute 41 seconds). Direct visitors also view roughly five times as many pages per month (24.8 on average) as those coming via Facebook referrals (4.2 pages) or through search engines (4.9 pages). And they visit a site three times as often (10.9) as Facebook and search visitors.\

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Desktop Search to Decline $1.4 Billion as Google Users Shift to Mobile

Re-posted from eMarketer

eMarketer estimates that desktop search ad spending will drop $1.4 billion this year, a decrease of 9.4% from 2013, while mobile search will increase 82.3% year over year. Mobile search will total $9.02 billion, compared with $13.57 billion for desktop search. Overall, US spending on advertising served to desktops and laptops will decline 2.4% in 2014 to $32.39 billion, down from $33.18 billion in 2013.

Google will have a notable influence on the overall shift from desktop to mobile search spending. In 2013, 76.4% of the company’s search ad revenues came from desktop. However, that share will fall to 66.3% in 2014 due to a $770 million decrease in desktop search ad revenues year over year, eMarketer estimates. At the same time, the company’s mobile search revenues will increase $1.76 billion, totaling approximately one-third of Google’s total search revenues. Key contributors to Google’s mobile search growth include its Enhanced Campaigns and Product Listing Ads (PLAs), both of which contributed to increased click share on mobile throughout 2013 and will continue to do so.

In the scope of Google’s overall ad revenues, mobile search is gaining significant share. Up from 19.4% in 2013, mobile search will comprise an estimated 26.7% of the company’s total ad revenues this year. Desktop search declined to 63.0% of Google’s ad revenues in 2013, having already fallen from 72.7% in 2012.

Advertisers are responding to consumers’ rapidly increasing time spent with mobile phones and tablets. While nonvoice mobile activities accounted for 19.4% of average time spent per day with media by US adults in 2013, only 5.7% of total media ad spending was dedicated to mobile last year, meaning there’s significant room for advertisers to catch up with consumer habits.

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As Newspaper Revenues Decline, Print Media Stocks Ris

Re-posted from Mashable

The long-suffering print media industry continued its decline last year. Print circulations and advertising revenues are both down. Companies rooted in the printing press are surviving, and now profiting, thanks to their erstwhile competitors: the Internet and television.

The advent of internet paywalls and advertising in recent years marks the industry’s first attempt at monetizing online news. In recent months, some traditional print companies have increased their broadcast television presence, buying more local stations.

Print media’s slow transformation may at last be bearing fruit.

The New York Times now has more than 760,000 subscribers to its digital paywall. Times stock rose over 78 percent from February 2013 to the end of last month and it hit a five-year high in December.

The grey lady isn’t alone. Gannett Co., which owns 82 daily newspapers including USA Today, saw a 46 percent stock rise over the same period. E.W. Scripps gained 69 percent over the past year and McClatchy nearly doubled its stock, albeit to $4.79.

“I guess that if you think about the apocalyptic headlines there were about a year ago, that you would be surprised by this, you would just imagine that news companies’ stock prices would continue to fall,” says Emily Bell, Director of Columbia University’s Tow Center for Digital Journalism. “There’s a feeling, I suppose, of speculation about existing brands and companies actually being able to find value in new markets.”

Investors do not seem to be betting on a newspaper revival. The Tribune Company and News Corp are separating their television and print divisions in an effort to bolster share prices, and make the company’s market performance not subject to the decline of its newspapers.

Warren Buffett bought 28 small-city newspapers in 2012, and his company, Berkshire Hathaway, released its 2013 annual report, which announced that readership at the papers dropped 5.6 percent over last year. And Time Warner is spinning off Time Inc., its magazine division, after years of subscription and ad revenue declines. But stock market profits are not going up solely, or even mostly, because of these grim spin-offs.

Despite those dim developments, Wall Street is awarding the print media industry for diversifying. Edward Atorino, an analyst at Benchmark Co. LLC, attributes the stock rallies to the companies’ investments in TV stations. Although they all have some digital presence, companies are profiting from a shift to broadcast news, he says.

“I wouldn’t buy a newspaper company [stock] because it’s a newspaper company,” Atorino says. “They’re really broadcast companies now.”

Mark Jurkowitz, associate director at the Pew Research Center’s Journalism Project, says there is a “bull rush” of print companies buying local television stations. Their motives look towards the 2016 elections, he suggested.

“The flow of political advertising dollars just increased dramatically,” after the 2010 Citizens United Supreme Court Case, Jurkowitz says. “And much of it goes to local television. I think there was $3.1 billion [of political advertising spent] in the 2012 election.”

Gannett completed a $2.2 billion purchase of Belo TV in December, beefing up the number of its television stations from 23 to 40. Scripps bought two TV stations in Buffalo and Detroit in February for $110 million; it now owns 21 stations.

Atorino says these companies are making the push into broadcast because it’s a long-term investment that can return a quick profit, at least quicker than a digital investment. “You really can’t get a big bang for your buck in digital,” he argues.

But Jurkowitz led a Pew study published last year on four newspapers that have found clever ways around that. For example, The Santa Rosa Press Democrat in California opened a digital marketing consulting service for merchants in its area. The service, independent of the newsroom, taught clients how to build websites and video production skills. The Press Democrat said 25% of its digital revenue comes from its marketing service.

Another, the Deseret News in Utah, channeled its focus on “Family and Faith” stories. TheDeseret News, owned by the Mormon Church, just published a series with the Atlantic magazine on the impact of absentee fathers in America. The newspaper’s digital revenue has been growing at over 40% annually, according to the Pew study.

Douglas Arthur, an analyst at Evercore Partners, sees digital, not broadcast, as the profitable future for print media. “They’re all going digital as fast as they can,” Arthur says. “People are excited what that means for the business model going forward,” he said.

The New York Times‘ subscription revenue surpassed its advertising revenue in 2013, the first paper to claim such a business model. Barclays Capital analyst Kannan Venkateshwar titled his February report on the Times “A Good Story Gets Better,” and said the number of digital subscribers exceeded his expectations. But financial experts and media analysts agree the Times “is a different ball game,” as Atorino put it.

Arthur says investors should only go for companies with “an aggressive digital strategy,” while Atorino recommends buying Gannett stock because of its recent TV purchases.

Both analysts say staff reductions contributed to some stock price increases, but that the rises were mainly pushed by broadcast or digital investments. For the papers still in the daily news cycle, one trend is clear: no print media company is counting on its newspapers, the founding product for many, to propel it into the future.

“I think what doesn’t change is the long-term outlook for print and print revenues, which are likely, for most people, to continue to decline,” says Bell, the Columbia professor. “There’s a lot of fragility in the media business, particularly in newspapers and newspapers stocks.”

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