Message from Michael -- August 7, 2007

ALL NEWS IS LOCAL

STATISTICS THAT TELL A STORY

TOPS IN BRAND IDENTITY

NOT SO TOPS IN BROADBAND ADOPTION

MEDIA MOGUL OR MEDIA MARAUDER

COCKTAIL CHATTER


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ALL NEWS IS LOCAL: How often have you heard that aphorism? We consultants use it a lot. Two recent set of statistics prove that it is true, and not true, depending on how you interpret the phrase. Research firm Hitwise says its analysis of websites in the category of ‘news and media’ shows that LOCAL websites contributed 90% of all the traffic to this category of site. I’m going to throw some numbers at you, so stay with me. The researchers say that ‘news and media’ websites accounted for 3.47% of ALL Internet traffic. Local websites received 3.13% of all those visits. A very much related study by comScore Networks found that local search services are beating out the more generalized search services. Local search, using such services as Internet Yellow Pages, grew 24% while general search, using such services as Google, Yahoo and MSN, grew 14%. Even better, according to the survey commissioned by TMP Directional Marketing, four out of five people (82%) using local web search sites followed their research up with action – in store visits, phone calls, e-mails and purchases. The group said they were surprised to learn that a third of the respondents said they continue to rely on print Yellow Pages as their main source of local business information. Of course, that means two-thirds choose online services, but the company noted that those searches are divided amongst a variety of sites.

Okay, back to that Hitwise analysis, some more confusing numbers. So, stay with me. Nearly a third (29.59%) of the visits, just to the ‘news and media’ category, went to the top 10 websites and more than half (56.59%) went to the top 100 websites. The average visit duration for the news and media industry category was 6 minutes and 35 seconds.

And remember the point in a previous MfM about Nielsen/ Net Ratings changing its way of measuring website rankings? Hitwise ranks the top 30 websites in three ways. Using number of visits – Yahoo News came in first, followed by The Weather Channel, MSNBC, CNN, and People Magazine. Using page views – Yahoo News again came in first, but People Magazine came in second, followed by The Weather Channel, MSNBC, and CNN. But when measuring by time spent at the site (session duration), the ranking changes dramatically. In first place is RedOrbit.com where visitors spent more than an hour (1:07:28), followed by Entrepreneur.com (1:10:03), NewsNow, which is a U.K. operation (53:37), Startup Journal (41.10), ABC News Discussion (36:38), Apple Daily Online (31:01), and my favorite, Muscular Development Magazine (28:51), just ahead of SouthAsiaNews.com (28.41).

STATISTICS THAT TELL A STORY: But exactly what kind of story, I’m not sure. For example, the top two Presidential candidates’ websites are Barack Obama (with 29.59% of the market share) followed by Hilary Clinton (with 17.35%), according to a Hitwise survey of websites. Okay, that makes sense. But the third highest ranked presidential candidate’s website is – Ron Paul, the Republican Texas congressman and political unknown, with 12.76%. Followed by John Edwards (10.33%), former Alaska senator Mike Gravel (5.86%) (And if you just said Who? – don’t feel bad), who led Massachusetts governor Mitt Romney 3.92%) and Rudy Giuliani (3.83%). At the bottom of the website indexes was Virginia governor Jim Gilmore (for many, another – Who?) with 0.08%.

On a slightly more serious note, Hitwise, did a breakout of the top U.S. broadcast network TV show websites. Not surprisingly, with the movie coming out, The Simpsons led the pack with a fifth (21.90%) of the market share of visits. After that, the numbers drop dramatically with Pirate Master in second place (7.15%), America’s Got Talent (6.88%), American Idol (6.19%), So You Think You Can Dance (5.81%), America’s Most Wanted (4.23%), Deal or No Deal (3.17%), Hell’s Kitchen (2.69%), Grey’s Anatomy (2.21%) and Age of Love (1.85%).

TOPS IN BRAND IDENTITY: You may have seen the story on the world’s top 100 brands, with Coca-Cola in the number one spot. But the analysis by Interbrand had some exclusions. For example, to qualify, a company must get at least a third of its revenue outside its home country, be recognizable outside its home country, and have publicly available marketing and financial data. So, that excludes Wal-Mart and other companies which operate under different names in other countries. And it excludes companies, like Visa, which are privately held. Proving yet again that I need a life, counting the number of brands and their countries of origin, not surprisingly, the U.S. had the highest count with 42 brands making the top 100 list. The number two country was a tight race with Germany (10 brands) narrowly beating France (9), Japan (8) and Britain (6). China didn’t make it with any brands, but tiny Netherlands did with two companies (Phillips and ING). And Bermuda did with consulting firm Accenture (Yeah, I thought that was an American company, too.)

NOT SO TOP IN BROADBAND ADOPTION: Okay, the point about brand identification was the good news for the U.S., now the bad news. In five years (from 2001 to 2006), the U.S. has dropped from 4th in Broadband penetration in the world to 15th. The Organization for Economic Cooperation and Development releases a per capita ranking of broadband adoption rates every six months. The group says the U.S. has 19.6 broadband subscribers per 100 inhabitants. That’s behind Denmark at number one (31.9), Netherlands (31.8), Iceland (29.7), Korea (29.1), Switzerland (28.5), Norway (27.7), Finland (27.2), Sweden (26), Canada (23.8), Belgium (22.5), United Kingdom (21.6), Luxembourg (20.4), France (20.3) and Japan (20.2). We did beat Australia (19.2), Austria (17.3), German (17.1), Spain (15.3) and Italy (14.8).

However, it should be noted that a Pew Internet Project study showed the percentage of Americans with HOME Broadband connections is 47%. That’s double the 24% penetration three years earlier. Researchers at Pew say broadband penetration should pass the half way mark (50%) this year. And to put that in perspective, they note that it took 10 years for CD players to reach 50%, 15 years for cell phones and 18 years for color TV.

MEDIA MOGUL OR MEDIA MARAUDER: And you know who I’m talking about – Rupert Murdoch, of course. With the news that he will purchase Dow Jones and Co., with its flagship Wall Street Journal newspaper, I decided to look at two earlier MfM’s which quoted heavily from Murdoch’s letter to shareholders. In those reports, Murdoch called the print business “the heart” of the News Corp Company. He says it’s too early to declare the death of print media even with surveys showing people finding alternative means of getting the news. He makes it clear that his company will be providing those alternatives, saying, for example, that he “hopes and expects” that in the near future the Internet will be where Cable is today. All because, he says, “the hunger for news and information – for content – is not fading. It is intensifying.”

What stands out in re-reading those MfM’s is the hyperbole that borders somewhere between cocky and confident. For example, he refers to his company as “the most innovative and fearless media company in the world today.” He talks in the letter several times about the need for an “innovative, entrepreneurial spirit.” He talks about the “digital revolution” having the potential of “changing our world as fundamentally as the Agricultural and Industrial Revolutions.” Topping his list of ‘business principles’ is the admonition that one needs to “be willing to ignore or even take on conventional wisdom.”

Considering the $5 Billion price tag he offered for the WSJ which translated into a 50% or more per share price, his other business principles are particularly interesting – invest wisely and early in a new business – be patient as the new effort finds its footing – enjoy the growth and profitability as the business matures but always be thinking about and building the next generation of offerings. Lastly, I offer the thought that Murdoch may have used the word “customer” more in his letter to shareholders than anybody else, but not as a company focus so much as a revenue target.

COCKTAIL CHATTER: The first recorded spam e-mail was in 1978, according to an article in The New Yorker, when a marketer for Digital Equipment Corporation sent out an e-mail to the thousand or so people on Arpanet, the precursor to the Internet, touting the wonders of DEC’s new computer system. The man, Gary Thuerk, was harshly reprimanded by the system administrator but his company sold 20 of the computers at a million dollars apiece. Students headed to college this fall are part of the most wired generation yet, according to a study released by research firm eMarketer and reported in MediaLife Magazine. The percentage grew 2% from last year to this year, so that 95% of college students use the Internet. That translates into 17.1 Million college students who log on to do everything from register for classes to reserving dormitory washing machines.

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