Evolving Advertising: Geofencing

We are all familiar with advertisements in the form of pop-ups, banners, and posts, but there is a new type of target advertising that many companies are now taking advantage of.

The ads you commonly see on websites and social media come from digital cookies in your computer that track your usage and the sites you visit. This type of targeting is effective, but not nearly as accurate as new forms known as geofencing. According to Data-Dynamix, a company known for their digital marketing expertise, geofencing is “…a location-based digital marketing tool that lets marketers send messages to smartphone users in a defined geographic area.” For example, if you go to shop at the mall, stores within that mall can send you ads and promotions because they know you are there via your location.

“Digital marketers can take the gps capabilities to feed ads to people who are geographically ready to make sales decisions.”

The increase in geofencing’s popularity is directly correlated with the transition to social media usage on mobile devices. Although geofencing is not strictly mobile, because Apple iBeacons are in all of their devices, it is used for the majority.

iBeacons are Apple‘s bluetooth beacon technology, and are extremely accurate as they give off a 10 centimeter radius from your iPhone. Fast Company looks at iBeacons used for advertising, but also its use in social apps and apps for your home: “Innovative developers are applying Apple’s iBeacons to improve our social lives, make our smartphones more intuitive, and save us money on electric bills.”

When looking at what geofencing does for advertisers and companies economically, it has proven to increased their revenues since they implemented it. It is more cost efficient than print ads, and are simultaneously more effective. The Wall Street Journal‘s article “Geofencing: Can Texting Save Stores?” looks at the correlation between mobile device users and its influence on their shopping habits. 15% of consumers check competitors prices while in store, 8% use their phones to “check in” to stores, and 7% use their devices to learn about in store promotions or events. Although the percentages aren’t high, they also accumulated over 3.4 billion mobile coupon uses over the year.

Geofencing is a new wave of personalized and unavoidable advertising. Since its increase in usage, both consumers and companies have seemed to benefit.

 

Sources:

Apple Developer: iBeacon Technology

Data Dynamix

Fast Company: Apple iBeacon

Mass Communication: John Vivian

WSJ: Geofencing

 

Protecting Content: Print Weaker Than Digital?

Source:  http://cdn.screenrant.com/wp-content/uploads/hbo-header.jpg

OK, so maybe this blog post isn’t about movies; but we have all heard about the problem of illegal sharing when movies and music hit the Internet.

Fortunately for the movement from print to digital, “pirates” don’t seem to be widely hunting for articles to release for free; but that may be due to publishers beating them to the punch. According to some easily accessible “how-to” articles, paywalls in front of content from prestigious publishers like The New York Times can be accessed by simply deleting part of the URL (Basu). Even if you’re not tech savvy, many tablets have special priority with publishers that discard the pay wall for no fee (Basu).

So why put pay walls in to begin with?

Well, the answer is complicated as business strategies are constantly shifting and vary from company to company.  Businesses are therefore challenged to be accessible but also exclusive. The online industry is attempting to keep pace as Google continues to work towards refining their search engine to better protect more available content (Wardell). However these shifts make a question: how much money should publisher’s charge for their content? Well, this answer requires publishers to also know how much they should expect from advertising revenue. As a result, we have to note the many restrictions that are being levied on advertisers in an attempt to protect the public (FTC). Because internet can reach audiences and provide access in a way that print cannot, even advertisers have to adjust their strategies, much like publishers.

As we look back to theft however, digital seems to be a safer option than print. By looking at newspaper theft, we see advertisers giving less revenue to newspapers (SPLC). This tax on physical newspapers generates a risk that doesn’t exist online. Therefore, digital theft may be less of a pressing concern than physical theft.

While these observations hold water currently, following the rise of digital media will have ongoing consequences for print media and their accompanying advertisements and revenue structure.

Source: http://wwwcache.wral.com/asset/5oys/smartshopper/2011/07/21/9888275/Theft_of_newspaper_sign-728×435.jpg

Sources:

Basu

FTC

SPLC

Wardell

 

 

How Social Medias Affect Small Businesses

Small businesses constantly rely on social medias to become noticed. Studies show that businesses use social medias for various objectives, such as increasing annual growth. As I mentioned in a previous blog, Twitter, Facebook, and Instagram are three of the most common social medias that are used to advertise. In fact, “67 percent of Twitter users who become followers of a brand are more likely to buy the brand’s products” (Chron). As we see today, many smaller businesses that are looking to make an impact and living in the economy today are using social medias more and more.

(http://bit.ly/1OkC2ZI)

Now a days, the average American spends roughly three times more time on social medias than on email. Facebook is the mostly commonly used social media among small businesses. They are able to reach out to many people, especially in their communities where consumers support smaller businesses.  In the United States today, there are roughly 1.3 million small businesses. Not only have small businesses increased over time, but also the number of employees working for them has risen dramatically. LinkedIn plays a huge part in the small business role, promoting unknown businesses to the Internet.

 

How Small Businesses are Using Social Media?

As more and more users of social media are being connected today, this creates more views for advertisements and commercials for smaller businesses, giving them a chance to be seen. Many of the smaller businesses today will often post or tweet very frequently to make sure consumers are staying up to date with new and improved products. Facebook, as of 2010, has dominated paid ads for social medias. 93% of small business owners state that they use Facebook for their companies frequently. Not only do there target certain audiences, but also it allows for all Facebook users to stay engaged and up to date on the businesses.

 

Sources

Small Businesses

Biz Trends

Huffington Post

Vivian: Mass Communication

Can The Movie & Music Industries Survive?

Blog post by Sally Smith

This is an image of Netflix, the most popular streaming service available today (SOURCE:// Tube Filter).

We’ve looked into how the traditional movie and music industries have been rocked by the streaming revolution of film and music. Now, we are left with a major question that is subject to controversy and differing opinions: Can the move and music industries survive the digital age? And if so, how? This is something musicians, music labels, film makers, and movie theater companies have been wrestling with ever since the widespread growth and use of streaming services. According to SelectUSA, The Media & Entertainment (M&E) Industry in the U.S., which are the businesses that produce and distribute films, television programs and commercials, music, radio, games, and publishing, is worth a third of the global industry and is the greatest M&E market worldwide. It is no wonder that this industry effects the economics of our country and therefore, it is a major concern for the traditional film and music companies today. We cannot stop the continuing inevitable use of streaming, as it is an attractive service for people wanting to listen or watch all types of music and movies, at any time, and for a reasonable, monthly price. Netflix, Hulu Plus, Spotify, Pandora, Apple Music: you’ve heard of each of these streaming companies and that’s because they are a part of the daily routines of millions today. Despite the great economic growth of these streaming services, they’ve undoubtedly threatened the potential profits of traditional music and film industries.

Can the Movie Industry Survive in Our Digital Revolution? 

Data has shown that movie theater attendance has fallen dramatically over the past several years due to the rise of the streaming revolution. In order to survive in this  streaming revolution, movie theaters need to stop trying to “buy” customers for convenience but rather “buy” them for experience. If movie theaters can someone re-invent themselves and make movie-going a unique, exhilarating experience, they can potentially gain back a following. Some examples of a more exhilarating experience are already being implemented, while others could add a lot to the experience; this includes 3D Imax, smell-o-vision, kinetic seats, thematic theater designs, private screenings, food and beverage ordering service in-theater, etc. Perhaps movie theaters could implement a “free-to-watch” model and then charge for the perks (like a kinetic seat in the theater, for example)? This model may be able to work. Getting people to come watch a movie for free would not be difficult; the difficult part would be selling them on the perks. But since the movie is free, some people might actually pay for a better seat in the theater or the soundtrack to that movie that they’ll loved.

Dine-in theaters have popped up around the country. This is all part of an initiative for movie theaters to create a special experience for viewers and to gain a more frequent, popular following in this digital age (SOURCE:// AMC Theaters).

Can the Music Industry Survive in Our Digital Revolution? 

In a PBS article, the argument of whether streaming services like Spotify and Pandora are hurting musicians is discussed. While musicians, both established and aspiring, have taken both sides of the issue, it’s certain that the new model has had a major impact on the music industry and its revenue. Hari Sreenivasan makes the argument that streaming services are great for exposing young artists’ music to a mass audience. On the other hand, Roseanne Cash, the famous Johnny Cash’s daughter, makes the argument that what if she’s already created a name for herself in the public eye. Clearly, she is concerned about making her deserved profits and she has made it apparent that streaming services like Spotify are not paying her fairly. She stated, “For an 18-month period, I had 600,000 streams, and I was paid $104.” Roseanne Cash and other frustrated artists are essentially getting paid nothing for streaming their music for free. Like the film industry, the music industry ought to craft ways in which they can make their business model offer a convenient, unique service that’ll compete with streaming services.

The Plus Side to Streaming

While there are several apparent advantages to music and film streaming services, another plus is its ability to democratize music and film. Democratization is making something available to all people and thanks to streaming services today, music and film is easily accessible to all. Streaming services have taken away the control from the giant music and film moguls and traditional media outlets. As the public audience, we have the ability to discover, distribute, share, promote, watch, and listen film and music online. The hope is that our accessibility to this immense amount of content will motivate us to decide for ourselves what we like to see and hear, instead of the traditional media moguls deciding what we should want. We, as the audience, get to decide what we like and that agency we receive from streaming services is something we should not take for granted.

Why do we share so publicly? And How It’s Beneficial

According to Danah Boyd in her book, It’s Complicated: The Social Lives of Networked Teen, she tackles the idea of teen’s and their willingness to share so publicly online. It is evident that streaming is our future and that teens are our future as well. Teens’ presence online and their willingness to share their lives, including their music and movies choices, will continue to occur. Boyd states that the sharing and spreading of content willingly on the Internet is a part of teens’ social interactions today. Furthermore, she doesn’t spite them for this, rather she encourages them to continue to be social, to experiment with establishing their online identity’s and to spread their interests in music, movies, and other areas. Sharing content online and connecting through shared interests creates a sense of unity in our diverse world today.

Sources:

Danah Boyd’s It’s Complicated- Chapter 2 on Privacy

Make Use Of

PBS

Select USA

 

The Real Money Behind YouTube

Austin Sprague

In my past two blogs I talked about the great social media platform YouTube. I spoke about various professions in the company and in another blog I specifically talked about how YouTubers make their money on the platform. While the YouTubers have the platform to thank for their careers, many people do not think about how the actual company makes money off of their platform. In this blog want to outline the business and economics of YouTube.

For starters YouTube was created in 2005 by three college grads that wanted to be able to upload, view, and share videos on the web. Like most people they were following the market place model and wanted to turn a profit on their creation. They had a good amount of success because after 1 year of being in the market they had nearly 100 million views a day. As they began to grow the popular company, Google was looking to make a big purchase. In 2006 Google announced that it was going to buy YouTube for over 1 billion dollars. Google wanted to form a conglomerate with YouTube so they were able to offer more.

YouTube Founders

With Google and YouTube working together they were able to conquer more and pull in more people than ever before. Even though this was true YouTube alone only pulled in around 4 billion dollars in 2014. That is not nearly enough money to make a profit. In John Vivian’s book The Media of Mass Communication he speaks about revenue streams. He states that media companies can only make money two ways. The first is advertising and the second is sales to media consumers. That is exactly what YouTube is doing now a days. YouTube allows their viewers to monetize their videos in order to make profits. YouTube benefits off of this because they receive the same money from the advertisers. YouTube is making money on every monetized channel, not just one. The have been able to adapt and make more money on ads due to market pricing and technology improvements.

YouTube and Google advertisment revenue

In addition to advertisements YouTube has created another form of revenue. They are trying to master the form of micropayments and subscriptions. YouTube knows that we all hate ads which is why they have no given us the option to now get rid of them for a small price a month. This is just one feature of YouTube Red which can be yours for one small payment of ten dollars a month. YouTube Red is tapping into vertical integration with all of its new features. YouTube Red is offering new movies and TV shows that are only accessible to YouTube Red users. In addition to this they are offering new music and offline sharing capabilities. YouTube is really trying to tap into the market and bring as many users in to maximize their profits. They are getting very good at turning a profit and not just surviving.

YouTube has turned to Vertical Integration to boost profits

Sources:

CNET 

Wall Street Journal 

Investopedia

The Media of Mass Communication by John Vivian

 

Advertising as a Key Driver to the Economy

We all hate having to watch a 30 second ad before a Youtube video, or a couple ads while streaming shows through Netflix or Hulu, but these advertisements contribute to the $5.8 trillion in overall consumer sales that are attributed to the advertising industry.

ANA, the Association of National Advertisers, commissioned a report to prove the significance of advertising to the nation’s economy and the projections for its future contributions. The image below reflects their findings:

Findings & Projections

 

As shown, advertising plays a huge role in the US’s economy both directly and indirectly.

The increase in advertising has lead to a promising symbiotic relationship between producers, consumers, and the advertising industry. All parts of the equation benefit from each other’s success.

Advertising Connections

John Vivian, in The Media of Mass Communication, also recognizes the importance of advertising, stating that it is “essential to a prosperous society.”

Advertising is vital in a consumer economy. Without it people would have a hard time even knowing what products and services are available. Advertising, in fact, is essential to a prosperous society. Advertising also is the financial basis of important contemporary mass media.

The most effective media reach, or the size of the audience exposed to an advertisement through a certain medium, has shifted over time. To track this shift, and provide the best media plans for media buyers, organizations like The Audit Bureau of Circulations and companies like Nielson monitor audience response and supply reliable information.

The knowledge of advertising’s benefits, its impact on the economy, and the strategies behind it are important when looking at the economics of media. Advertising has become a major player in the creation and perception of media, and is influential to the consumer as well as the industry.

Like both the ANA and John Vivian agree, advertising has proven to be a key driver and contributor in our economy.

 

Sources:

Association of National Advertisers 

Media of Mass Communication

Photo featured

Magazines, Why Economics Matters

Source: http://media.cagle.com/54/2004/02/12/8781_600.jpg

Magazines, while facing many challenges, may not be in as much peril as shown above. Similarly to their newspaper counterparts, heavy-hitting magazines like Vanity Fair and Vogue are struggling to keep the interest of their audience; yet some brands such as Time have reported growth, even though it is marginal at best(Haughney, 1).

How is this happening?

Well, it may have something to do with the rising number of digital versions of these magazines appearing nearly twice as often in frequency between now and 2012. This is where economics and marketplace acumen become heavy factors in the magazine companies’ success.

Let’s look at Time, the aforementioned winner over its faltering competition. Time, like many other companies, has set out with digital subscription plans; yet it is different in a very big way. Time’s subscription allows users to access both digital and print mediums. Furthermore, readership will have to face a pay wall, manifested in a 3 month delay, if they do not subscribe to Time Magazine(Kafka, 1).

However aside from merely providing a variety of mediums, Time is masterfully getting attention for its content by using the rise of digital devices in the home. Whether you use Android or Apple, Time has already begun working on terms that direct you to their webpage where you can subscribe while you use these platforms(Kafka, 1). However the kicker in this is that due to some maneuvering, their “advertisement” on these devices costs them nothing because payment is made directly to Time, not an intermediary e-store belonging to parties like Samsung or Apple(Kafka, 1).

You may be thinking, “Where are the ads?” It is true of course that ads have began to appear more frequently online (Abu-Fadil, 1). Although some economic models make room for advertisements, health magazine-based website Rodale proves that ads aren’t everything. In fact, their paid readership covers most of the money that ads would have paid to be featured; for readership may expect to not be advertised to during paid subscriptions (Galarneau, 90).

With the development of paid sites, we can now focus on the inevitable issues that paid digital media has: free sharing and ownership rights.

 

Sources:

“Digital Continues Upward Ascent in the American Consumer Magazine Industry” (Galarneau)

“Magazine Newsstand Sales Plummet, but Digital Editions Thrive” (Haughney)

“Time Magazine Rolls Out Print/Digital Subscriptions — And Puts Up Another Web Pay Wall” (Kafka)

“World Magazine Trends 2013/14 Show Online Ad Upsurge”(Abu-Fadil)

Show Me The Money

Austin Sprague

In my last blog I talked about the wonderful life of YouTube professions. Vloggers and other stars push content out onto their channels in hopes that people like and view their content but how do they actually make any money? It is possible on YouTube to have over 100 billion views on all of your videos and not make a penny for doing it. This is because making money on YouTube is not that simple. Views in no way equals money in the bank. Are you shocked? I certainly was when I found out this information for the first time.

It’s all because of this fancy thing called advertising and monetization. According to John Vivian, “advertisers spend 2.4 to 2.9 percent of the gross domestic product to promote their wares.” That is a large sum of money for many companies. Advertising is the way that companies are able to brand their products and make a name for themselves. With one in two people in the United States going on YouTube, it is an amazing way for advertisers to reach large numbers of people and audiences. Even though this is true Advertisers can be tricky. Advertisers have turned to buzz marketing and sponsored content to also help supplement their strategies. Many people nowadays do not know if the videos on youtube are trying to tell them something or just sell them something. Youtubers will get paid to talk about products or drop hits in their videos to get people thinking about certain ideas or brands.

Before a so called YouTuber can make any money on YouTube, they have to make an agreement with YouTube to monetize their channel. Monetization simply means to allow advertisements to be run before a given video plays. Even with the Youtuber’s videos beginning with advertisements they still have the possibility to not make any money at all. See advertisers want results and they want their products or messages to me seen.

The advertisers got creative and decided to push two types of models. The first model is the Cost per Click. The advertiser will only pay the Youtuber if someone physically clicks the advertisement. The second model is cost per view, which simply states that the advertiser will only pay the Youtuber if the viewer watches the advertisement for 30 seconds or half the ad. Both models have their pros and cons but is all based on viewer engagement.

Everything is based on viewer engagement! 

I personally never watch half of an advertisement or click on the advertisements but someone certainly is. The top salaries on YouTube average around 8 million dollars a year on YouTube. Someone of my favorite Youtubers that I watch every day and have around 800,000-1,000,000 views on each videos daily make around $150,000-$500,000 a year.

Sources:

The Media of Mass Communication by John Vivian

Social Blade

Twitter

TV Guide

Video Power

Tobacco Control 

The Streaming Revolution Competing With The Music Industry

Blog post by Sally Smith

Thanks to our digital devices, we are able to easily record and copy live music in order to be played back or shared with others. However, this has presented a major challenge for the music industry to compete with nowadays (SOURCE:// The Verge).

Music is all around us. It’s playing in the background at your local grocery store and in your earbuds at the gym. Sometimes you may not even register that music is playing and that’s because it is very much an integral, routine part of our days. So what is the appeal of music? Our favorite tunes can inspire and unite us. Music can bring out the positive side to us. It’s a form of communication that can peak our curiosity and evoke certain emotions and or thoughts. The first takeaway here is that music is powerful and because people enjoy it so much, they will do whatever it takes to listen to it in the easiest, quickest, and cheapest way possible.

Long gone are the days where CDs were the primary way of listening to music. Even, iPods are not as popular as they once were. And the telegraph, made by genius Thomas Edison, and the record-playing days seem ancient compared to the music-streaming services and digital devices we have today. Chances are you’ve heard of music streaming services such as, Pandora or Spotify. These Internet, music streaming services allow thousands of songs to be played anytime and anywhere there’s Wifi. There is a price to pay if you want commercial-free music and unlimited song skips; however, the small, monthly price is worth every penny for most.

This is a chart comparing Pandora’s versus Spotify’s features and services. So which streaming service is a better deal? (SOURCE:// The Christian Science Monitor).

This chart is illustrating that Pandora earns most of its revenue from advertising, meanwhile Spotify earns most of its revenue from subscription revenue. Overall, Spotify seems to be more robust and therefore, the better service to invest in (SOURCE:// The Street).

In Chapter 5 in John Vivian’s textbook, The Media of Mass Communication, on Sound Media, he discusses the file-swapping scandal that changed everything. Eighteen at the time, Shawn Fanning produced a audio-file swap program, which was dubbed Napster. Eventually, Napster had 25 million users who had access to 80 million songs on their hard drives for free (Vivian 124). No wonder the service was widely popular; who would want to pay $15 for a CD when you can get a plethora of songs for free? Fanning’s Napster greatly threatened the recording industry’s traditional business and economic model. Not surprisingly, the recording industry got word of Napster, sent the case to the court, and took down Fanning’s program on the conclusion that it was violating music copyrights. Then, along came Steve Jobs’ iTunes, which saved the recording industry.

How Artists Are Affected By Music Streaming

In a NY Daily News article from 2014, it was announced that country-pop star, Taylor Swift, has banned one of the music industry’s largest players, Spotify, from streaming any of her music. Swift made it clear that she believes streaming is essentially the same as piracy. Her actions have prompted other major artists to question music streaming services right to playing their music. Jimmy Buffett requested that Spotify pay him more and Radiohead’s Thom Yorke pulled his music from the company out of spite. Spotify openly admitted that “it pays its artists less than a penny per listen, compared to the 7 to 10 cents a singer will get from the purchase of a song for 99 cents on iTunes.” Artists are frustrated that they aren’t making the highest profit possible through these services; they feel as if they are being gypped. Artists aren’t pulling their music to bully the digital music services, rather they simply want to boost album sales and therefore, maximize profit. Who can blame them? Still, music listeners will continue to use music streaming services like Spotify and Pandora because of their attractive, convenient, and affordable models. In the first half of 2014, streaming increased by 42% from the year before, according to Nielsen/SoundScan. Whereas, song sales plummeted by 11% and full album sales were in a 19% free-fall in Fall 2014. Overall, we are continually moving into a streaming economy.

Taylor Swift, one of today’s most popular artists, banned Spotify from playing music from her “1989” album or any of her music, for that matter (SOURCE:// The Verge).

In an article on The Verge, there is discussion of how streaming services like Spotify and Pandora are “unbundling the record labels.” This is something streaming services are certainly interested in, as both the artist and service itself could keep much of the profit. However, record labels still provide a lot of great exposure that streaming services like Spotify could not. First, labels help artists create an image in the music world and get their songs on the terrestrial radio, where a huge amount of listening and music discovery still occurs. Additionally, they pay to make visually creative music videos and promote upcoming albums in every way possible. Still, Ben Popper, the writer of The Verge article, states of the powerful takeover of streaming companies today, “By providing a one-stop shop for distribution, monetization, audience research, marketing, and live event promotions, the streaming services are starting to stake a claim to a large part of what record labels have traditionally done.” Clearly, there is competition between the streaming services, the revolution they have produced, and the traditional music industry.

How Music Socializes

With constant, new developments in technology, there is no telling how we will be listening to music in the years to come. However, no matter the medium in which we listen to music, the final takeaway is that music socializes us and socialization is key in creating a unified society with similar values. Socialization, or learning to fit into society, through music and its messages are crucial to understanding the way in which we are expected to act in society (Vivian 346). We may forget this but music is a form of mass communication. The words in a song are written and recorded for a reason. Take the time to listen to the lyrics and see how they impact you and those around you. Music has the power to bring people together in good and bad times and no matter how we receive artists’ music, it is important to understand its role in our society.

Sources:

NY Daily News

The Verge

Vivian Chapter 5: Sound Media

 

The Economics of Twitter

Purpose of Twitter 

In 2006, Jack Dorsey, Evan Williams, Biz Stone, and Noah Glass had no intentions of creating a $1.22 billion dollar social media page that would potentially connect everyone worldwide. According to co-founder Evan Williams, Twitter is becoming “an information network, a practically priceless exchange for connections, information, and the resulting activity that ensure”.  There are roughly 232 million active users worldwide that have Twitter accounts. News reporting companies such as CNN, NBC, and Fox News all have prominent and influential tweets on news around the world. For example, the Brussels bombing in the airport that happened just recently, was reported all over twitter by each one of these news companies. There was live tweeting regarding the issues and what was happening for example, at other countries like Paris who strengthened their security nationwide.

Big Businesses Impact on Twitter

Certain name brands such as Nike, Coca-Cola, and Oreos all have a certain fan group that allows users to follow them. The people who follow these certain accounts will be able to see when a product is on sale, or if a change in price is made. Also, discounts play a huge part in the role of name brands on Twitter. Through these accounts, their fans are allowed to interact with companies and customers, take suggestions that others may like, and successfully promote their brand name worldwide. Not to mention, every now and then advertisements will appear on Twitter pages that force users to watch them. Twitter today continues to grow daily in revenue and the number of users.

     

 

 

 

Sources

Business Insider

Twitter Economics