An interesting story in today’s Guardian. According to the Media Convergence Survey 2009 conducted by media law firm Olswang, iPhone owners show greater willingness to pay for content than the average Internet user:

The research … adds weight to the growing sense within the media industry that the explosion in popularity of downloadable applications for the Apple device has created a way of monetising digital content. Crucially, it may represent a more lucrative proposition than the current reliance on online advertising.

There is a catch, though, for content owners such as Rupert Murdoch, for whom factual journalism is a major product. Both iPhone owners and other Web users said they would be much happier paying for films, catch-up TV, e-books, travel guides and magazines than for news.

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We recently chatted with Michael La Kier of Coca-Cola about how the company ties social media and mobile marketing into its My Coke Rewards program to drive brand loyalty. From the interview on eMarketer Total Access:

eMarketer: Does the program enable consumers to enter codes via mobile phone?

Mr. La Kier: We offered mobile from day one—it is a big component of My Coke Rewards. People drink our brands on the go and don’t want to carry a bottle cap all day long. They can enter a code via mobile phone and SMS texting. Mobile has always been a pretty big part of our program from a participation standpoint and from a mobile messaging and marketing perspective. We also have a desktop widget so people can enter codes directly from their desktop computer.

We have a variety of ways for people to participate in the program—via SMS, the site and the widget. When they become members, we can look at what brands they’re drinking, which packs they’re buying, promotions they’ve participated in and rewards they’ve redeemed. We look at how people want to interact with us, what information do we want to know, how do we provide value and get value. We invite them to take surveys. We have a lot of information about what consumers are doing and their passions so that we can serve up rewards, offers and sweepstakes based on that information.

eMarketer: How are you using social media platforms to guide strategy on My Coke Rewards?

Mr. La Kier: About 12 to 18 months ago, we created a private social community. We offer the people in this network first looks at new program features and get feedback in the form of discussion boards, activities and interviews.

From a consumer-facing perspective, a lot of the promotion we do on the site has a social element. For example, this summer for Coke Classic we had a design-a-can promotion. People could submit their design, vote and the finalists received prizes.

eMarketer: How have you deployed social media tools to engage My Coke Rewards members?

Mr. La Kier: We already have a base of 13.5 million members. We wanted to provide something fun and unique to highlight the special moments of summer that people share with Coca-Cola. That’s the reason for the collectible can series—to let people interact and create their own summer moments.

Once you created the cans, you could share the designs on Facebook and elsewhere. We created an integrated online and offline program around sharing special moments with Coke in summer. We used social and viral aspects to broaden the likelihood that people would participate in the program. Social media is just another way for us to get the word out and turn our advocates into brand champions.

The full version of this interview is available here, to eMarketer Total Access subscribers only. Every day they have access to new interviews with digital marketing leaders and trendsetting entrepreneurs. We also recently interviewed Coca-Cola’s Carol Kruse about the company’s use of digital media and marketing and the evolution of social media. Those stories are here:

• Coke Weighs in on Earned Media ROI
• Coca-Cola’s Carol Kruse on the Value of Social Media Marketing

In my just published Online Holiday Shopping Preview report (available to eMarketer Total Access subscribers), I forecast that e-commerce holiday season sales will grow 5.4% over last year, reaching $30 billion. Although this is tepid growth compared with the double-digit rates seen for most of this decade, it is a strong improvement over last season’s 5.7% decline. It also compares favorably with retail experts’ predictions of flat holiday store sales.

My online holiday sales forecast incorporates last week’s US Census Bureau report showing that after three consecutive quarters of sales declines retail e-commerce sales turned a corner in Q3 2009 by growing 2.1%. I expect that the recovery will gain momentum in Q4, spurred by holiday spending in November and December.

E-commerce is ideally suited for holiday shopping. The convenience of 24-hour shopping, the ability to compare prices, the opportunity to avoid crowded malls and the ease of finding items that run out of stock in nearby stores are all reasons why holiday shoppers will buy online in greater numbers and shift a bigger share of their total gift spending to the Internet this holiday season.

I am optimistic about the future of e-commerce. Over the next couple of years, unleashed pent-up demand should push e-commerce sales growth back to pre-recession double-digit levels. Mobile commerce, which is on the verge of taking off, will add new vigor to e-commerce. Further on the horizon is the intriguing potential of distributed e-commerce. Retailers will no longer wait for customers to come to their Websites. Instead they will bring their virtual stores to the sites where consumers congregate.

So, will News Corp. take money from Microsoft, confining links to its content — such as FOX News and the Wall Street Journal — to Bing rather than across all search engines (that is, not on Google)?

From the BusinessWeek perspective, it might be a “flawed deal”.

As the eMarketer quote from that BW article puts it:

To the extent that [News Corp.] finds reduced traffic, it would be reducing their revenue and they would become more dependent on Microsoft. Being dependent on a large giant company for a large share of your revenue is very shortsighted.

But as an article in Advertising Age notes, “Murdoch can afford to leave Google for Bing.”

Or as Mr. Murdoch said recently:

What’s the point of having someone come [to us] occasionally who likes a headline they see in Google?

As traditional media companies scramble to make up for lost advertising dollars, it’s tempting to make deals that give them payback for their online content. Their fear focuses on how online news is increasingly a mere commodity. However, the thinking goes, if the media companies can make their news content exclusive, that would make it more valuable.

One wonders, though, how much Microsoft cares about getting a news exclusive, even it includes the Wall Street Journal. Perhaps, just by undercutting Google even a little bit, Microsoft might see a News Corp. deal as a winning move.

Is that too cynical? Are Rupert Murdoch and Steve Ballmer simply playing some kind of chess game?

This potential deal reminds me of the old joke about how fast do you need to be to outrun a bear in the woods? The answer is: Just a bit faster than your companions.

In this case, is Google the bear?

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UPDATE

As Andrew Leonard describes the intent of the News Corp.-Microsoft alliance in his excellent How The World Works column on Salon.com:

Fundamentally, what Microsoft and all the other newspapers looking to retreat from the free Web are banking on is that they can profit by reducing our access to information. Good luck with that.

Swimming against the tide of the Internet has not often proved profitable.

We recently chatted with author/blogger Lee Eisenberg about his new book, “Shoptimism: Why the American Consumer Will Keep On Buying No Matter What,” which explores shopping behavior from both the consumer and retailer sides, social media, academic and marketing research, and Mr. Eisenberg’s own experiences. Interesting stuff. A clip from the full interview on eMarketer Total Access:

eMarketer: How has the recession changed the way we shop?

Lee Eisenberg: My book’s subtitle is “Why the American Consumer Will Keep On Buying No Matter What.” Now that’s not to say that the American consumer will keep on buying the same way, or the same things in the same stores. But where there’s a will to shop, we will find a way to shop. We’ll never stop shopping and the sales side will never stop selling.

I think the recession has rebalanced our mindset. Most of us are now more mindful about what we buy than we were a couple of years ago. It’s not to say we won’t be spending money on big-ticket things or designer labels and so on. But I do think we’re placing a much bigger premium on value, and by that, I don’t mean absolute price. You read a lot these days about cost per wear, which is to say you take the price and you divide it by the number of times you wear it, or the amount of use you’ll get out of it, and that equals value. Value proposition is far, far more important today than it was a couple of years ago.

…

The other thing is social media. Every survey says 85% of us would trust what the rest of us say about a product or a retailer more than what an advertising agency says about its client. That’s a big change that’s not going to go away as the economy improves. These retailers have to learn that they don’t have the power to regulate or project their brands the way they used to.

eMarketer: How should multichannel retailers approach online versus offline shoppers? Are they one and the same? Is one more valuable?

Mr. Eisenberg: The brand values, voice and principles must be the same whether you’re delivering those in a store or online. That said, I think you’d be hard pressed to find any retailer that won’t tell you that the best customers are the cross-channel ones. It isn’t an “either/or.” It’s an “and/both.” A customer who shops two or three ways is going to spend more than a customer who only shops one, even if that customer is a heavy shopper in that one platform.

The full version of this interview is available here, to eMarketer Total Access subscribers only. Every day they have access to new interviews with digital marketing leaders and trendsetting entrepreneurs. Some other interesting interviews/case studies on retail:

• How Facebook can be a Revenue Source for Retailers
• Best Buy talks Social Commerce on Facebook
• Case Study: Marketing in a Tough Economy
• Retailers Will Focus on Basics This Holiday Season
• How the Davids of the E-Commerce World Can Beat the Goliaths

Google’s planned $750 million acquisition of AdMob has injected an element of excitement into the mobile sector in recent weeks. Perhaps too much excitement: the industry’s informal moratorium on predicting next year to be the year of mobile has been lifted in favor of a return to the hyperbole of yore.

As I’ve discussed here and in the media recently, the AdMob acquisition is a significant event, particularly for advertising companies operating in the mobile space, but after at least a decade of unfulfilled expectations, it’s safe to say that mobile advertising and marketing are not going to “explode” next year or the year after. Rather, mobile will continue to grow incrementally as more brands and agencies fold it into their marketing mix, a trend reflected in eMarketer’s outlook for mobile advertising (full version of the report is available here to eMarketer Total Access subscribers only).

At the same time, it’s important not to lose sight of the other side of the equation – consumers. And looking at recent research on consumer usage of mobile and attitudes toward mobile marketing presents something of a mixed outlook.

In terms of mobile adoption and usage, the trend is positive. The NPD Group noted this week that more US consumers have mobile data subscriptions than last year, and the Yankee Group’s “Mobile Commerce for the Holidays” webinar likewise indicated strong consumer demand for multimedia smartphones with data plans. Similarly, the third wave of “Mobile Market View,” BIA/Kelsey Group’s annual mobile consumer study, found significant growth in both mobile Internet usage as well as more “advanced” behaviors such as video viewing, purchasing and sending.

On the other hand, as consumers’ usage of mobile devices has grown more sophisticated, BIGresearch’s “Simultaneous Media Usage” study indicates that their attitudes toward mobile marketing have become more negative. Relative to last year, more consumers now dislike receiving text ads, video ads and text voicemail ads, and more feel that mobile ads constitute an invasion of privacy. Marketers can take heart that the percentage of consumers who feel that mobile ads a) can be helpful in making a purchase, and b) are acceptable as long as users get content in return both dropped by an insignificant 0.3%.

Rather than declaring victory over a single albeit large acquisition in the space, let’s remember there’s still a significant gap between marketers and consumers that must be bridged. Marketers have to stay focused on the work that needs doing today before we reach tomorrow’s oft-promised year of mobile.

P.S. Look for an expanded version of this post in my next monthly column for iMediaConnection, due to be published the week of November 30th.

Rahim Fazal, CEO of social media application company Involver, says that businesses should assign more value to consumer interactions in social media, and measure the impact over the long term, not just during a promotion. Key quote from the full interview on eMarketer Total Access:

Mr. Fazal: It’s really important to recognize that the activities happening on social networks require special attention and a very personal contextualized approach for marketers. It’s unlike the approach that we as a marketing community have taken over the past decade, where we’ve extended the television model of impressions to banner ads for websites.

In social networking sites, the behavior is really dictated by the users, like playing games or sharing photos or videos with friends, or writing comments about a news article. It’s important for us as marketers to think about how we can support that activity.

Rather than trying to figure out how to advertise to our customers, it’s more important to figure out how to provide tools to our fans, so that they can advertise to their friends about us.

eMarketer: I see a lot of marketers on Facebook using a coupon or promotion to drive more people to become fans. But once a brand has accumulated fans, the next step is crucial. What can marketers do to help get to that next step?

Mr. Fazal: Marketers need to think about the bigger potential of Facebook as a customer relationship management opportunity. I think that is where all of these efforts lead to. For example, our client Us Weekly has been around for decades, and they have a very large following. And that following has traditionally been communicated with through direct mail, or more recently, through their Website.

However, as more of their subscriber activity has transitioned over to social networking sites such as Facebook, they’ve found it important to maintain engagement with that community there. And so when they started working with Involver back in April, they had 2,700 fans. Today, they have more than 270,000 fans. So it’s growth of a couple magnitudes mainly driven by various social media applications that met both the objectives of distribution and engagement. Now it’s leading to a broader opportunity, which is developing relationships.

I’ll give you an example. The base of 270,000 fans on Facebook is a very active one, in terms of their engagement metrics. There’s a high level of frequency. And Us Weekly has done a fantastic job in really maintaining the interactions with those fans.

Us Weekly is now translating it to real measurable business value, where they’ll post a couple of examples of cover photos for an upcoming issue and actually have fans comment on them. Or they’ll put various stories or photos or pieces of content that the editorial staff is interested in building a story around, and push it out to the Facebook fan page to gather input. Ultimately that is becoming a meaningful source of information for editorial decision-making.

The full version of this interview is available here, to eMarketer Total Access subscribers only. Every day they have access to new interviews with digital marketing leaders and trendsetting entrepreneurs. Other meaningful of case studies/interviews about brands using social media can be found here.

• Helping Wal-Mart Get Interactive: Kenny Tomlin of Rockfish Interactive chats with us about the company’s work with Wal-Mart and the social media forecast.
• Clorox: Rewiring The Brand Experience With Social Media: Mary O’Connell of Clorox talks about the company’s efforts to make digital and social media part of its brands’ success. O’Connell referred to creating a new vision of digital marketing that is “rewiring and re-imagining our entire brand experience.
• Best Buy Talks Social Commerce on Facebook: We chat with Tracy Benson, the Senior Director of Interactive Marketing & Emerging Media at Best Buy, about the company’s recent launch of social commerce campaigns on Facebook and Twitter.
• Coke Weighs The Value of Social Media: Carol Kruse develops interactive marketing programs and experiences for Coca-Cola’s global brands around the world. Here, Ms. Kruse discusses Coke’s use of digital media and marketing and the evolution of social media.

 E-commerce sales in France rose 30% in Q3 2009, relative to the third quarter of 2008, according to the Fédération de l’e-commerce et de la vente à distance (Fevad).

The number of online transactions by French buyers between January and September 2009 was up 34% on the equivalent period in 2008,  said Fevad. Average order value fell 1%, however.

Most of the growth seems due to the more than 15,000 e-tailers that opened their virtual doors for the first time in the previous 12 months—as well as the expanded product and service offerings of older online merchants. François Momboisse, president of Fevad, noted that the number of online buyers had risen only modestly in a year.

The holiday season looks set to bring further cheer to France’s e-commerce sector, especially now that the country has officially emerged from recession. A full 83% of Internet users polled by Médiamétrie said they planned to consult the Web when shopping for gifts, and 70% said they would buy at least some of their holiday items online.

Fevad predicted that online sales in the fourth quarter of 2009 would be 25% higher than in 4Q 2008, and reach €5.4 billion ($7.94 billion). That would take total 2009 online spending by consumers in France to €25.2 billion ($37.0 billion). Fevad anticipates that annual online sales will pass €30 billion ($44.1 billion) in 2010.

A French-language summary of these and other research results is here.

I recently had a chat with Cary Rosenzweig, CEO of the IMVU virtual world. IMVU got a lot of attention in October because it announced that it was on track to generate $25 million in revenue in 2009, and was profitable. It’s rare for a private company to be as open about its finances as IMVU was.

According to Cary, 80% of IMVU’s revenue comes from credits it sells to its users so they can buy virtual goods for their avatar. The rest comes from advertising.

Here’s an excerpt of our interview, which is available on eMarketer Total Access:

eMarketer: How does the virtual goods economy work in IMVU?

Mr. Rosenzweig: There are three elements: IMVU, the customers, and then the developers, which we sometimes call creators. The developers often are users of IMVU, and some of them are successful enough that they’ve quit their day jobs and are making a living creating and selling items within IMVU alone.

The customer gives us money and in exchange we give them credits. We don’t do revenue share with anybody at this point, so from here on out we keep the money and the credits are now in the IMVU system. So the customer goes to the catalog and buys something, and they get a digital good, and the credits move to the developer. So what does the developer or the creator do with their credits? Well, there are many, many, many creators, many of whom don’t sell a lot of items, and so they use the creation of digital goods as a way to earn credits for themselves so that they can buy something from someone else.

But many of them want to sell their credits and get real-world money. So we allow the developers to sell their credits directly to the customer in exchange for money. So the customer is giving us money, and they’re giving the creators money. The process of selling credits to the customer from the developer takes place partially outside of IMVU, meaning the developers create Websites outside of IMVU where they accept credit cards or PayPal or whatever. Once they’ve taken acceptance of the money, then we allow them to send credits to the customer inside IMVU.

Virtual goods have gotten a lot of attention lately and many people think they will be a key revenue driver for social networks, social games and virtual worlds. One report, Inside Virtual Goods, estimated the size of the business at $1 billion in the US alone.

I think that some companies, such as IMVU, might find success with virtual goods, but there will clearly not be room for everyone who wants to jump in.

One of the biggest dilemmas for consumer packaged goods (CPG) companies when it comes to social media is figuring out how it fits with traditional methods of marketing. But I think “fitting in” is the wrong approach. Trying to slot social media into an existing marketing plan is like putting an oversize turkey in a too-small oven. Social media is just too big to squish into a defined space. To make it work, you’ve got to rethink your entire marketing strategy. You need a bigger oven, not a smaller turkey.

In my new report on consumer packaged goods companies and social media (full version available to eMarketer Total Access subscribers), I wrote:

The opportunity for CPG marketers in social media probably does not ultimately lie in paid advertising, or even in building a branded community or fan page on a social network. CPGs can use social media to humanize their brand and create loyalty simply by being available when consumers have a problem, question or compliment.

Buying an ad banner on a social media site won’t help you listen, and giving away coupons on social networks won’t solve your customers’ problems. Social media is about more than collecting friends or fans. After all, the best kind of friend (whether human or brand) is one who listens when you need it most.

What do you think? How can brands be good friends to consumers in social media environments?