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Posts Tagged ‘Consumer Behavior’

Mobile ad exchange Mobclix teams with Nielsen to sharpen ad targeting for 890,000 households

Mobile advertising is one of the hottest fields we report on at VentureBeat. Gartner analysts expect it to be a $7.4 billion market by the end of 2014. Not as big as Google’s $20 billion-ish ad economy, but a viable space for which media planners will design and place ads.

For ad buyers, it’s a big deal that Mobclix will soon be hooked up to Nielsen’s ad targeting data. Nielsen’s PRIZM is built around a database that segments markets by lifestyle and consumer behavior. Nielsen’s ConneXions slots consumers into 53 different demographic categories. Under the terms of this agreement, Mobclix will be able to resell PRIZM and ConneXions to mobile ad networks and publishers.

By hooking Nielsen’s data for reselling within Mobclix’ system, it will be possible to serve different ads to 150 different audience segments of consumers on their phones, or maybe their iPads. In San Francisco, ad buyers will be able to target Mission hipsters and Marina yuppies separately.

“The need to have precise marketing within mobile marketing strategies has become critical for survival,” Mobclix co-founder Subramanian said in a prepared statement. “The enhanced precision enables advertisers and ad networks to produce greater advertising ROI and gives mobile publishers higher CPMs from premium ad buys.”

Here’s the problem: Mobile ad rates have dropped from last fall’s $1.50 – $2.00 CPM (cost per thousand ad impressions served) to as low as 50 cents today. But advertisers long ago demonstrated their willingness to pay higher CPM rates for more targeted ad service.

Moreover, some mobile advertisers want to move beyond basic brand-logo mobile ads. They want to drive sales from people’s smartphones. Dell, for example, buys ads that goad mobile users to stop thinking about it and click now to buy a netbook from their phone for $275.

I got Subramanian on the phone to explain exactly how PRIZM and ConneXions will work with Mobclix. Both, he said, are tools that online ad buyers already use. Nielsen created them after polling hundreds of thousands of people in the real world. PRIZM tracks online consumers with a cookie to determine their interests. All told, Nielsen can now target 890,000 households.

Here’s a sample:

Young Digerati
-Age 25-44
-White,Asian,Hispanic,Mix
-Upscale
-Young Digerati are tech-savvy and live in a fashionable neighborhoods on the urban fringe. Affluent highly educated, and ethnically mixed, Young Digerati communities are typically filled with trendy apartments and condos, fitness clubs, and clothing boutiques, casual restaurants, and all types of bars – from juice to coffee to beer.

ConneXions divides online consumers into more traditional demographic segments by ZIP code and household income. Many ad buyers know exactly which of these they want to hit.

Many ad buyers have used PRIZM and ConneXions already, selecting categories to go with their display (banner) ads and search ads. Now, they’ll be able to punch in Nielsen categories when buying ads on Mobclix.

I’m sure the Mobclix-Nielsen partnership will draw more advertisers into mobile markets. But there’s a huge presumption many technologists make: Advertisers will be compelled to move to online and mobile advertising because it’s so precisely measurable.

No, advertisers will migrate to mobile networks after they’ve been proven to work widely and well at building brand awareness and driving sales. Media planners — including Google’s marketing department — don’t spend millions on Super Bowl ads because they’re stupid. They do it because it works.

Get to know some brand managers who haven’t tagged themselves with the alternaculture “geek” label. These people spend $300 billion a year — ten times the size of the online ad market — on TV, print, radio and billboards because those media are widely understood and have well-known effects on buyers. Nielsen’s hookup to Mobclix isn’t the finish line for mobile advertising. It’s the starting line.

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Looking back at 2009 console sales and ahead to 2010 trends

The final tally for console sales in the US for December was telling, but how did Sony, Microsoft, and Nintendo perform for the entire year? Let’s take a look at how each system did on a month-to-month basis to find out.

Data Source: NPD Group

It’s quite a picture, isn’t it? There were skirmishes every month, and you can certainly see the price drops: check out the PS3 September market share. In fact, Sony’s redesign and $300 price point, along with a little game called Uncharted 2 getting Game of the Year from a good selection of publications, allowed Sony to have quite the end of the year.

The Nintendo DS stayed well above everyone else for the majority of the year, while the Nintendo Wii actually dipped below the PS3 in September. Check out the Christmas sales though, and the “Nintendo is a fad and only kids buy it” argument fails. Yes, you may know someone who doesn’t play their Wii anymore, but keep in mind Microsoft or Sony would kill for the type of consumer behavior we’re seeing in the sales numbers. 

The 360 has been in a tight race with the PS3 all year, and Sony eked ahead in the end. Again, price sells consoles, and a system with a Blu-ray player and some very compelling exclusives for $300 is hard to turn down. Microsoft does great things for its third-party developers, but unfortunately the system may not be as sexy right now as its competitors. Will Natal change that this time next year? We can’t wait to find out.

Finally, let’s take a look at the final sales information for the year. That should show you just how powerful Nintendo’s hold on gaming has become. 

Data Source: NPD Group; data for US only

It doesn’t get any clearer than that. Microsoft and Sony will continue to fight for a distant second place in console sales in 2010, and Nintendo will continue to do what it does best this generation: make an insane amount of money. We’ve already seen Ubisoft all but admit it couldn’t make money on Nintendo hardware, so 2010 will be in interesting case study in what happens when one company changes the game so definitively. Will third-parties double-down on the 360 and PS3, or will they try again to make a dent in the lucrative Wii and DS market?

This year should prove to be a bumpy one for everyone involved.

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PlaySpan Study Shows Growth In Virtual Goods Marketplace

Virtual goods are booming and there are various startups who are capitalizing on this growth by facilitating the exchange and e-commerce around these goods. PlaySpan, which powers micro-payments across over 1,000 video games and virtual worlds, has virtual goods storefronts on Facebook, MySpace, within games and on its standalone site.

The marketplace lets users sell, exchange and purchase online game items, virtual goods, and game currencies for online games and applications. Today, PlaySpan is releasing a study in conjunction with research firm VGMarket, which reveals interesting statistics about consumer behavior with virtual goods.

The survey collected responses from 2,425 customers across the PlaySpan Marketplace, Spare Change, and Ultimate Game Card (other PlaySpan properties). According to the report, 31% of the total number of respondents said they have sold digital goods and 39% of the remaining 69% of respondents, expressed that they are either interested or very interested in doing so. In-Game Virtual Currency is the most frequently sold digital good from player to player and two out of three sellers sold in-game currency in the last 12 months, earning a median of $22 (U.S.).

Of course, it’s important to note that the cross section of people surveyed are obviously interested in virtual goods, since they are PlaySpan customers. But the fact that a third of digital goods buyers reported that they also sold goods is promising for the virtual goods marketplace space. I’d be interested to see why the individuals who didn’t sell digital goods but were interested in doing so haven’t yet participated on the selling side.

PlaySpan, which recently acquired micro-transaction app developer Spare Change, has processed more than $50 million worth of micro-transactions through its PayByCash and Ultimate Game Card products. PlaySpan also raised $16.8 million in a series B funding last Fall from Easton Capital Group, Menlo Ventures, Novel TMT Ventures, and STIC. The startup was founded by a 12-year-old, Arjun Mehta, but it is actually run by his father, CEO and co-founder Karl Mehta. PlaySpan faces competition from Live Gamer, which we recently wrote about here.

Crunch Network: CrunchBoard because it’s time for you to find a new Job2.0

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Social Networking Use Triples from Only a Year Ago

Obsessed with Facebook? You’re not alone. The hours you spend logging on to update your status, post photos, and make comments on friends’ walls is not simply a “phase” you’re going through which will end sometime soon. It’s a ongoing trend affecting everyone these days and it has serious implications for the online advertising industry.

According to new figures from Nielsen, the amount of time spent surfing social networking and blogging sites had tripled since last year, suggesting “a wholesale change in the way the Internet is used,” says Jon Gibs, VP of media and agency insights at the company’s online division.

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As of August 2009, the time spent on social networking and blogging sites accounts for 17% of the total time spent online, a number up 6% from a year ago. This change reflects a growing desire for people to stay connected with each other, communicate and share, reports Nielsen.

Advertisers Taking Notice

While for consumers, hitting up Facebook for a daily dose of socializing is just par for the course nowadays, this change in consumer behavior has had dramatic impact on the online advertising industry. Where before, advertisers were somewhat wary of social media properties, they’re now spending more than ever for prominent spots on social networking sites. Even as companies decreased their overall ad expenditures, they increased their spend on top social networks and blogs – up 119% from last year. ($108 million in August 2009 up from $49 million in August 2008). And when broken down by category, the increases are even more dramatic. The entertainment industry, for example, has increased spending by 812% year-over-year on social network sites and the travel industry increased spending by 364%.

When it comes to which sites advertisers choose, there’s no doubt that Facebook is currently the king. Ten out of thirteen industries analyzed by Nielsen listed Facebook as advertisers’ number one choice when ranked by display ad impressions. The only industries where MySpace still ruled were Entertainment, Financial Services, and Hardware & Electronics.

Those findings seem to mostly support what a study from earlier this year said about MySpace’s demographics. Namely, MySpace users are more focused on entertainment than those on other networks and have the lowest average income (hence the need for financial services). However, it’s LinkedIn users who are the most interested in gadgets said the study, so the Hardware and Electronic ad spend on MySpace is a bit surprising. We suppose that’s simply because the number of MySpace users dwarfs that of LinkedIn. Well that, and the fact that these days “Entertainment” means TVs, game consoles, and other techie gadgets.

For a full look at the dollars spent by category, check out Nielsen’s full report.

Discuss

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Updating doesn’t help your iPhone app, but price drops do

Filed under: Analysis / Opinion, Gaming, Developer, iPhone, App Store, iPod touch

Here are two different insights from Pocket Gamer about how developers can grow the profile of their iPhone apps. The first comes to us from the wisdom of Peggle, that game that I just can’t stop playing. Apparently, they’ve coined the term “Peggling,” which means lowering the price of your app, and seeing a huge benefit from it. Whenever a game drops its price down to 99 cents, much as Peggle did soon after release, it sees a significant bump in the charts. I’m sure there are many other factors at play here — Peggle was a great game, so you can’t sell more of a crappy game just by selling it for cheaper, and I saw a lot of Twitter and blog attention when the price dropped, so it pays to have people watching the price in the first place. But under the right circumstances, dropping the price can do a lot for a game that’s already selling pretty well.

But an update, apparently, won’t. That’s what the makers of Zen Bound told Pocket Gamer — they say that when they released an update with new levels and new features, it didn’t make a difference in their sale numbers at all. Games like Pocket God have made a reputation for themselves by providing regular and solid updates, and certainly it seems like those updates have at least spurred sales, if not made them blow up, but the Zen Bound guys say that singular updates on major products probably won’t kick sales into gear.

Interesting. We’re at least a few generations into App Store sales at this point, and we’re started to see trends and consumer behavior in better relief; developers are getting better and better ideas every day about how to price and service their apps and customers.

TUAWUpdating doesn’t help your iPhone app, but price drops do originally appeared on The Unofficial Apple Weblog (TUAW) on Thu, 30 Jul 2009 17:00:00 EST. Please see our terms for use of feeds.

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