Times are economically hard, there’s no doubt about that but feel for the poor salesman in digital media who is going to get it in the neck worse than most in an unsung revolution that’s taking place.  Digital is leading the  way in the automation of trading platforms (although all media are thinking about it), something started by Google with the inception of Adwords a few years back.  Search has gone completely self service with all engines allowing, in fact forcing, you to use their tools to run your campaigns rather than pick up the phone to them.  Google even went so far as to offer short term incentives (Best Practice Funding) to increase agencies competence in the self service approach and ironically have paved the way for the acceptance of this type of trading in display now as well as search.

For media owners it makes a lot of sense, account managers can handle much larger volumes of transactions, won’t make as many mistakes, admin is cut hugely and the automation is generally founded on some sort of targeting technology making inventory work harder and therefore more valuable.  For good measure the buying model inevitably moves to an auction to achieve optimum pricing for media owners and buyers.

Two sets of media owners on the display side are now moving forward with self service interfaces which are going to change the way things are done on this side of the market.  The big social networks, working out how to monetise their inventory better have both released self service interfaces, initially to appeal to smaller advertisers and monetise the long tail whilst the long awaited media exchanges are starting to make moves over from the US where they already have huge critical mass.

There are two overriding implications for the agencies; the first is macro level in terms of market dynamics.  A small agency will be able to deliver the same pricing as a network agency as, similar to PPC, it’s all auction based.  So then if noone can be bigger, you have to be better.  However on a micro level, each of these new systems requires skilled people to push the buttons and in our experience the larger you are, the longer it takes to adopt new systems.

So, as always happens when new technologies and ways of doing things emerge, there will be gaps to be exploited and before this particular revolution is finished there will be a new set of household names.

The Infectious Digital blog is a really useful way for us to express our opinion on areas of interest and hot topics. We’ve covered a diverse range of subject areas over the past 6 months, since we launched, and we have hundreds of regular visitors and subcribers to our RSS feed (thanks for the interest everyone).

It struck me, this week, that we haven’t spoken enough about Infectious, and the type of work we are doing for our clients, so i thought an update was well overdue.

First and foremost, Infectious is a digital media agency. It’s just that we offer a much broader range of services than your typical digital media agency. Here’s why.

We see 2 huge areas of change in the digital media landscape, and the services we provide are designed to get the most from these 2 areas.

1- ART

The boundaries between Online PR and Online Media continue to blur. Many of the best digital marketing opportunities involve non paid-for content integration. Social media and disruption to the content distribution value chain is driving this. Infectious plan and execute campaigns that fuse the optimal blend of paid for and non paid for activity. Getting the blend right, and understanding how the various components interact and work together is the ART of smart campaign planning.

2 - SCIENCE

Digital media targeting and buying is increasingly data and technology driven. Media exchange platforms offer ultra efficient access to display formats, optimised to business goals (in a similar way to PPC search). Understanding these new platforms and working with our own tools/ systems to optimise across them, and across channels, means we can plan and buy digital media more effectively than ever before. This is what we call the SCIENCE of digital media. Not all digital media buying is suited to these new platforms, but a growing proportion is. Again, we use the mix that is right for your campaign, based on the business objectives at hand.

At Infectious, we beleive it’s the combination of this ART and SCIENCE that provides our clients with the most efficient route to their marketing objectives.

A lot of people have written a lot of stuff on the use of social media in the US presidential election and have hailed Obama as the clear winner in this space.  This has been a seminal election from that perspective, with Obama’s campaign videos garnering almost one billion views, but I thought it would be interesting to look at more traditional digital media and how the candidates made use of it within their media mix (not least because I ‘Linked Obama in’ ages ago and he hasn’t got back to me yet, I don’t buy the fact that he’s too busy).

Over the course of the election Obama spent $8m, with the figures for McCain unreleased.  This sounds like a large number but to give an equivalent figure for the UK based on the relative size of the population this would be a spend of £1m on digital media over the election year.  Figures are sketchy but overall media spend for Obama is estimated at over $250m, meaning that digital is weighing in at 3.2% of spend at most whilst overall digital accounts for 18.2% of spend overall in the US.  Broken down further and $3.5m of this money has gone to Google leaving less than $4m for display advertising when Yahoo and MSN Search are taken into consideration.

I think these figures are all low, really low in fact and all the excitement over social media and its effect on young voters has overshadowed a surprisingly small digital campaign element and a missed opportunity to use digital as a mass medium for communication.  Political campaigns have always been slow to embrace digital, with the UK political parties only just managing websites let alone advertising and there seems to be a distinct fear to move away from the traditional mix of TV and Outdoor almost exclusively by media agencies probably fearful of upsetting a formula that can’t be criticised.

It was disappointing and a little surprising then to see these US figures given all we’d heard about the progressive and digital nature of the Democrat campaign, as Digital media does lend itself to political campaigning in a number of ways:

1.  Fundraising works in digital.  Reported to have delivered $4 for every $1 spent for Obama and helping him towards the huge total he raised for the campaign.

2.  Search can give precise, issue based targeting on those floating voters seeking information on particular issues.  This can now even be targeted regionally and Obama used this medium to effectively dial-up spend in states he needed the votes with the appropriate level of spend relative to the need.

3.  Regional targeting.  Obama employed regional targeting of display and went so far as to tailor creative for each state to increase relevance.

4.  Digital is great at reaching some audiences it’s difficult to find in other media and who have been traditionally incredibly apathetic voters.  Obama trialled in-game advertising in ten key swing states with Massive but for less than $50k.

5.  Digital is a rich, engaging advertising environment.  Video ads are now widespread and the medium offers unrivalled opportunities to engage with the message and find out more.

So, whilst a lot of the right noises came out of the Democrat campaign, the reality was they were reticent to really change the tried and tested political campaign media mix  and digital media was used as little more than a niche targeting mechanism.  To put these numbers into context, TV spend for Obama in October alone was over $100m with his 30 minute advert on Fox costing $6m.

It will take another four years to see the next US election, but the political parties in the UK must now start to think about how they will be using digital media.  If they can break the mould then perhaps they can  seize the huge opportunity digital presents to genuinely influence a wide spectrum of the electorate and not just the youngest generation.

It’s a dirty word alright, but someone’s got to say it.  Recession.

So it feels like the UK is moving into a full blow recession now rather than the more palatable downturn, but what does this mean to me?

Lessons from 2001 gives us some good clues as to the way things might go:

1) Search will be relatively OK.  There’s a lot of talk at the moment about how search is recession proof.  I’m not so sure about this, as a medium advertisers will be loathe to pull back from it but as budgets fall there will be an inevitable hit. One of the biggest spending sectors, finance, is currently experiencing a dramatic decline, and within that sub-prime finance is all but dying.  If you’re looking for another sign of fear in the sector, it’s interesting, and probably not altogether coincidental, timing for Google to drop their stance on not taking gambling advertising in an effort to claw back some of the revenues they are currently losing.  We see search flattening and perhaps dropping slightly in the UK but not declining notably.

2)  Display advertising will take the biggest hit.  The stellar rise of search has always masked a more modest rise in display advertising which was just beginning to pick up pace.  With a smaller ROI and higher proportion of brand money than search, display advertising is going to suffer and there are already whispers from media owners of a large decline in revenues.  Unfortunately, this slump in spend is coupled with expectations and headcounts that were set in more favourable financial conditions and leaves many media owners exposed.  These will be interesting times and companies such as IPC and Bauer (EMAP in those days) will look back to the 2001 slump and be glad they weren’t so exposed now as they were then.  Brave businesses like the Guardian will also breathe a sigh of relief that they invested in the future and now have a more balanced sales proposition.

3)  Agencies - it’s time to see who cuts the mustard.  Back in 2001 I was working at Tribal DDB in the infamous and rather depressing days where the company was reduced from 100 staff to 30 in the space of a very short period.  The agency survived but other notable stars of the time such as DeepEnd and Avenue A’s first venture into Europe didn’t.  Digital businesses are built on much stronger foundations and revenues now, but it will be a time where agencies reduce or at least freeze staff numbers and the dreaded search for good people may become just a little easier.

But this will also mask a positive story.  Digital media is increasing its share of consumption at a steady rate and even though the absolute spend in digital will stagnate, the share of media spend going to digital will continue to increase relentless.

So my point?

Across all these sectors, the winners will be those who adapt to new technologies the fastest.  Business models will change and from this period some great companies will be born.  Will it be Phorm or NebuAd or perhaps the media exchanges will start to come to the fore, whichever it is clear is that media owners will turn to technology solutions to boost their yield as times get harder.  The effect on agencies will be that those which turn as fast as supertankers will struggle to defend an ageing business model whilst those who innovate, can adapt quickly and are willing to take risks will build an advantage for them and their clients.

Nothing in this young industry has been quite as disappointing as mobile advertising to date.  Every year we see reports predicting dizzying billion dollar ad spend on mobile devices, whilst on the flip side as a media planner it’s something that rarely crosses my or my clients minds.  Why is that?  The numbers seem to add up in terms of penetration, usage and potentially rich targeting capabilities.  But between these exciting possibilities and the reality of early internet advertising-esque 3k rotating gif banners on mobile sites which is the here and now reality, I switch off.

That is until I got an iPhone.

It’s a step change in technology and the possibilities it affords as an engaging and useful medium are GENUINELY starting to excite me.  A quick visit to the App Store and the power of the phone becomes apparent.  Trailguru taps the GPS functionality to record my cycle home, map it onto Google Maps and shows me my average speed whilst Around Me (again using GPS data) lists all the bars and restaurants in the area and will link me through to Google Maps
to show me directions from the spot I’m standing on if I’m lost.  This is smart stuff, useful (I like the I-Pint but sadly it is of no use) and importantly designed and built solely for mobile.

It’s that last point that is interesting as the mobile media market develops.  It isn’t the same as the Internet, it’s a tiny screen that you look at on the go, so trying to mimic online media in using banners as the main ad format and driving people to a cheap WAP site seems to be entirely missing the point.  It ignores the fundamentals that useful stuff to people on mobile isn’t necessarily content to be read, right now it’s applications that don’t conform to content based definitions of utility.

So, hold the front page, mobile is going to be MASSIVE.  Anecdotal evidence says data usage on iphone is huge compared to other handsets, I’d be interested to know how much is application driven and how much is browsing the internet in a PC like manner.  I know it’s the former for me and this is a big clue as to how advertising needs to evolve to be a success on mobile.

We’re loving Spotify, the new streaming music service, which launched yesterday. They’ve signed deals with most of the majors, including Universal, Sony BMG, EMI, Warner, Merlin, The Orchard and Bonnier Amigo.

After downloading a very light player (similar to iTunes, but with better functionality) you are free to search, listen and share just about anything you want from an immense library.

There is a free version, which is ad funded, or you can subscribe to an ad free version for £9.99/month. We’re very happy with the free version at the moment, and all ads so far have been well targeted and relatively infrequent (approx every 3 tracks or so).

It seems like a great model, and the interface/ functionality is so well executed and intuitive, it begs the question, why didn’t anyone do this sooner? Could this finally be the future music distribution and monetisation model the industry’s been waiting for?

Spotify is currently on a phased roll-out program, so you’ll need to wait to be invited to join, but if you ask us nicely we might have some of our free invitations left.

All we need now is a Spotify iPhone application, so we can bypass the iTunes store all together, although we doubt that is going to happen anytime soon.

We went over to the Bloomsbury Ballroom on Thursday for the launch of Platform A, the new name for the collective assets of the media-owner-formally-known-as-AOL.

Platform A is a smart idea.

It’s an integrated sell across the AOL portal, Tacoda, Advertising.com, Quigo, Buy.at, Third Screen and at some point Bebo (although Yahoo! are still selling this in the UK) allowing them to answer any brief, although the big area they will still miss out on is search as they use Google for their listings.  All the major digital media owners are moving towards this model so similar integration moves from Yahoo!, MSN and Google will be in the pipelines and it will be interesting to see if they rebrand and re-engineer their sales outfits in the way that this group has.

One really interesting part of this offering from the buy side will be the ability to construct a campaign over all these properties that builds shared data sets on consumers which can be used across all network properties e.g. build a pool of interested consumers on AOL and then re-target them on the Ad.com network.  This is a really interesting direction for the industry and whilst there will be a big learning curve for the sales force of what is possible, there will one of equal size for media buyers.

First to market with this is a great place to be however.

Oliver Luft of the Guardian blogged a nice piece today, summarising comments made by Stefano Maruzzi of CondeNet International at the AOP conference yesterday, in London.

Maruzzi, President of the digital arm of CondeNast, spoke of the challenges of attuning an established international company that publishes glossy magazines to the digital world.

The transformation of content sourcing, production and editorial functions into an agile, cross platform, trans title resource is a mammoth challenge indeed, but one which CondeNet are tackling head on in a bid to ensure they connect with the ‘iPod generation’

It is mentioned that close to 50% of their operating costs are focussed on content production.  This is reason enough to necessitate that content delievering the highest value return possible. There are now real opportunities for content owners to work their assets much harder, expanding beyond the realms of their own titles, to essentially use their content as advertising.

There is nothing particularly groundbreaking in the concept of ‘taking the mountain to muhammed’, but the fact is that it’s now easier and cheaper than ever to achieve. The level of inter-connectivity and accessibility to free digital distribution channels means you can now pump out tasty snippets of teaser content to thousands of potential new readers, in the places where they hang out online, very quickly and very cheaply.

The winners in this new world will be the content owners that can efficiently pull these readers back into their own domains and monetise through smart ad funding.

Infectious have been appointed by games developer Cybersports, as lead digital agency on the soon to be released Football Superstars MMOG. Football Superstars (currently in Beta test phase) is billed as the world’s first Virtual Football World. It’s essentially a multi-player online game set in a virtual world, featuring thousands of human players who re-create themselves online as footballers.

Players can play their way from three-a-side up to full 11-a-side matches, gaining new attributes and skills in order to specialise in their chosen playing position.

Off the pitch, players can socialise in bars, clubs and restaurants. They can also visit virtual stores where they can buy the latest equipment and designer clothes.

Players can also train in gyms and on training pitches to enhance their skills, or interact with the paparazzi in a bid to boost their fame and status and gain access to the most exclusive clubs and venues.

Andy Cocker, Managing Partner at Infectious said “We heard about the games development, and immediately wanted to be involved. It’s a hugely exciting and innovative project on so many levels, and we are thrilled that Cybersports have chosen Infectious to help launch such a highly anticipated release.”

Martin Kelly, Co-founder and managing partner at Infectious continues - “It’s exciting to be working on such an interesting and diverse brief. We’ll be promoting Football Superstars across the digital media landscape in its broadest sense, using ‘traditional’ digital channels, integrated with a strong social media core, that makes the most of the games fabulous content assets.”

Phil Booker, Sales and Marketing Director, Cybersports Ltd, commented - “Infectious were the obvious choice for us. They stood out from the rest in their understanding and experience of both established and innovative digital marketing techniques. We very much look forward to working with them”

The Football Superstars virtual world is already attracting plenty of attention from advertisers keen to see their brands and products represented in the game. Puma have already signed a deal that will see their Carnaby Street London concept store replicated in the game, where players will be able to buy virtual Puma gear, including the v1.08 Speed Boots, which allow players to run faster. Further high profile deals are expected to follow.

Cocker, commenting on the first few months of business at the agency, said “we’ve been overwhelmed by the interest and support we’ve attracted since launch. The team and business is growing quickly, and we look forward to making further announcements very soon.”

Sometimes it takes something big to take technology to a tipping point. In this instance you can insert the Olympics and online video into that equation. The BBC have released some statistics on their coverage and the numbers are BIG. From 2.5m streams in Athens, the Beijing games saw a 16 fold increase up to 40m streams and still counting (the last time I watched the Olympics online it involved penguin tossing, I’m not sure that counts however). This averages out at 3m streams per day with a peak of 5.5m, a huge number and I’m guessing that demographically this will be a much older audience than your typical You Tube user.

Broadband has made this shift in habit possible and with the content now there, video consumption is growing rapidly. With this comes a new headache for video media owners of what are the best ad formats to use in order to monetize the stuff. The most established and high volume video media owner, YouTube, has been scratching it’s head for some time now over an uninspiring selection of pre-rolls, ad breaks and overlays with no concrete answers coming to the fore as yet as to the way forward. As seems to be a fairly common theme, the closer the answer seems to be in mimicking formats from other media, the further away from the actual answer it is.

Some of the most interesting innovation in the sector seems to be coming from video ad format specialists who free from the headache of content regulation and legality are concentrating on producing formats which have been created with online viewing and more importantly interactivity as a starting point rather than the interruptive and passively viewed TV model. Video Egg are pioneering formats that sit over video and allow users to access other content without leaving the site they are on, whilst Coull are designing formats that allow users to click and find out more information on individual products or characters within that video, the benefit to sectors such as retail is obvious.

So with the eyeballs firmly here, the next challenge for media owners, agencies and brands is going to be how we interact with and engage consumers using advertising in this environment and it’s the online video specialists that are coming up with the most interesting answers so far.