Penny-aution site hustles users, makes millions

100.000 Danes visits the penny auction sites ziinga.com a month hoping to make a bargain. Probably the only winner is ziinga.com themselves, making profits of 4 million dkk a month.

I don’t mind gambling. But I do mind hustling. And that is for all I know what ziinga.com is about: a site which systematically plays down the cost, while high-lighting potential winnings.

When I looked into the ziinga.com-business I found the site to conduct some 480 “auctions” a month, generating som 5.7 million dkk in revenue – at least four millions ending up as ziinga.com profits. I also found 131.000 adult Danes to have visited ziinga.com i April 2010 – and 90.000 in May.

The trick of ziinga.com (and most other penny-auction sites for that matter) is that bidding is not free. It cost 5-6 dkk per bid. And each bid only raises the price with 0,08 dkk, resulting in a situation in which any auction requires hundreds or thousands of costly bids before ending.

I also found ziinga.com to deploy a range of mechanism to hide what it’s all really about, among others:
- No mentioning of the cost of bidding – before they’ve had you registered and had their shot at getting you hooked
- No mentioning of shipping costs, which typically cost significantly more than the item you buy
- No mentioning that you actually bid against bidders from several other countries – not only your fellow citizens

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“Øreauktioner – auktion, lotteri og flosset forretningsmoral. Ziinga.com-casen” 19 pages.

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First Danish fullblown online grocery store misses mark

Half a year after opening up it’s online operations, the website of Danish retailer Superbest comes in ten of ten in reach compared to the websites of other Danish retailers, even though Superbest is the only of the competitors to offer full-blown online grocery shopping. This is among the findings in my latest report. I say: lower the prices (convenience alone won’t do it), start building trust through social networking activities and make the services known through advertising.

Largest grocery store retail-websites in Denmark. Adult users (15 years+). Source: FDIM/gemiusAudience, April 2010.

Ten of ten is really not impressing
Superbest.dk reached 90.000 adult danes during april 2010. That’s not a high number. In total 795.500 Danes visited at least one of the top ten Danish grocery store websites. Superbest.dk in this way only had a grab at 11,6 percent of all visitors. A number which is spot on the Superbest market share in the “real” world measured in terms of total sales (11,5 percent in 2009). Only none of the competing websites offered more than at most sales of non-food items from their websites. By that token superbest.dk should have performed better.

Also the visitors to the superbest-website was found only to visit the site some 1,4 times in average during April 2010. A score which once more puts superbest-dk near the bottom of top-ten list. If users really had embraced the online grocery shopping concept, they’d have visited the site several times a week.

Convenience won’t do
The reason why superbest.dk isn’t doing any better is, I think, threefold. First, the declared value proposition of superbest.dk is to make things easier – not cheaper – for the consumer: do the grocery shopping in the night or during the day-time, whenever it suits you best, at work or at home. Manage your own time – and be willing to pay for it: the regular offers from the physical outlets don’t apply online.

Looking at the data, however, there’s nothing to suggest the actual users of superbest.dk feels this way. Those most in need of time – families with two or more kids – are underrepresented at superbest.dk with 13.000 visitors in total in April while those with plenty of time – the singles – are overrepresented, featuring some 25.500 adults living by themselves.

Convenience, it seems, won’t do the trick alone. However much Danes want to save time, they also want to save money! While they might be willing to pay to have the goods delivered to their doorsteps, they don’t like the goods themselves to be overpriced.

(I suspect the fear of cannibalization to be a part of the the reason for adopting the convenience strategy. Fear however has never been a good advisor. And lack of cannibalization not a measure of success in it’s own right.)

Confidence is needed
Several surveys have shown confidence – broadly speaking – to be one of the main obstacles to e-commerce. People want to be sure they get what they’ve ordered, delivered at the right time to the right price with no hidden fees. And online, consumers are always have this nagging fear, that something in the online store, it’s payment or delivery processes may be broken in some way. Or, worse, that someone in the process is deliberately trying to hustle you.

This is particularly true about Superbest, who fights a distrust legacy. In September 2009 – just prior to the launching of the online store – it was revealed how seven Superbest-stores had re-packaged, re-labelled and sold old meat, causing a public scandal and forcing Superbest to fire those responsible for the handling of meat. As a consequence consumer trust in supermarkets dropped, and Superbest suffered a severe loss of credibility.

Online, however, nothing is done to address concerns like these. The online grocery store looks fine and professional – and actually works just as you’d expect. But the dialogue is missing. The ability of the site to let consumers raise concerns and ask questions – and to let Superbest answer those question, sorting out misunderstandings or -perceptions whenever they occur – are non-existing. Customer testimonials are non-existing. Likewise, there is no integration to external consumer-sites, who could endorse – or criticize! – the workings of Superbest.dk. No official Facebook group. No Twitter-profile.

Customers are consequently left without any way to find out whether Superbest.dk is or is not worthy of being entrusted with their shopping list.

Tell us about it!
One final factor contributing to explaining the Superbest.dk-lack of success is – advertising. Superbest simply hasn’t been running any ad-campaigns telling customers to get online. And it goes without saying, that as long Superbest themselves tries to keep their online store a secret, nothing much happens.

As mentioned, Superbest may have had other corporate communication priorities for the past half year than to ensure maximum launch of superbest.dk. Namely trying to minimize the consequences of the “old meat scandal”. This also could explain the lack of social networking: when threatened on it’s life, many corporations seek as much control over the situation as possible. Even though a proper use of social media might actually have helped Superbest regain consumer-trust at large.

When (and if) things settle down, Superbest might have a second shot at the online retailing market. When the meat scandals are forgotten they might find a way to go forth and meet the market and the consumers face to face. Embracing criticism, comments and dialogue, and shouting out loud that Denmark has now a first-class online shoppping store.

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“E-handel og dagligvarer på nettet i Danmark. Superbest.dk-casen” 18 pages, 4 illustrations.

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Mobile surfing explodes in Denmark

2010 is the year when the mobile internet finally breaks through. That’s the conclusion you’ll have to draw when looking at how mobiles are increasingly used to surf the web.

These are among my findings in my latest report “2010: Mobile web-surf breakthrough”. In the report I also make it clear that the driving force of the mobile internet is the advent of touchphones. While the use of traditional Nokia and Sony Ericsson phones running Symbian stays largely the same, iPhones have more grown more than 500 per cent since January 2009. And Android-powered phones have really gathered momentum during April 2010, growing almost as fast as iPhones.

Based on available market information I estimate the number of iPhones and Androids to reach some 700.000 this year. And those users will conduct some 5-10 per cent of their total web-surf from their phones. On top of that you’ll have to add app-usage (which is huge) – like eg. Facebooking! (Not to mention emailing and texting). The mobile internet is getting real. Now.

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“2010: Mobile web-surf breakthrough” 13 pages, 2 illustrations.

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Youtube brought to standstill in Denmark

Some two weeks ago, on May 17, 2010, Youtube announced on their blog, that it now “exceeds over two billion views a day” – a doubling in less than a year.

Looking at figures for Denmark however, gives  you quiet a different picture: Youtube has been brought to a near complete standstill. That’s one of the main findings in my latest report “Online video consumption in Denmark – Youtube, DR and JP.dk TV”. Here’s the key graph:

I also looked into to which extend youtube videos are actually viewed outside Youtube.com itself, embedded on thirdparty-sites. From what’s available of data, it looks like only 1/2 a per cent of views are conducted on social media networking sites facebook.com, myspace.com, Hi5.com and orkut.com. A group of sites which should be expected to be among the leading thirdparty-distribution channels.

As for the Danish market, I did find Youtube to be as clear a market leader as anywhere else on the globe, more than 30 times larger than the largest Danish TV broadcaster, the Danish Broadcasting Corporation DR (a station which live-streams its channels on the Internet as well as through cable, satelite etc.).

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“Online video consumption in Denmark – Youtube, DR and JP.dk TV” 14 pages, 7 illustrations.

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The Internet matures – and stops growing

Will the internet – that is: the use of it – keep growing forever? That’s the question I pose – and answer – in my latest report: “The maturation of the Internet: levels of activity”.

Up until now it has seemed so. Evermore users were drawn online, spending ever more time, reading through ever more pages. But now, it seems, it has stopped. At least in Denmark. Activity is stagnating.

The stagnation applies for visits and page-views. And for time. The number of users still grow – but at ever-lower rates.

The report also shows how the (decrease) in growth rates differ between the young and the elder ones.

The report dwells on the burning question of the media-market: will advertising prices continue to drop, arguing that the limitation in the growth in the supply of ad-spots, which automatically follows a stagnation in the number of page views, will stop prices from following further. All other things being equal, that is.

Following the question of the supply of ad-spots, the report also take a brief look at the long tail. And finds that it might be long, but not fat. Most pages are viewed at sites visited by more than ninety thousand adult Danes. And the proportion is growing.

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“The maturing of the internet: levels of activity” 13 pages, 6 illustrations.

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Arla.dk #1 corporate Danish website

Arla.dk is the largest Danish corporate website. And it attracts a near-ideal group of users. Female, 25-45 and – in charge of the everyday shopping.

These are the remarkable facts I’ve dug up in my latest report: “”Service-driven corporate sites- the case of arla.dk”.

As the chart shows, two thirds of all the arla.dk surfers have the main shopping responsibility – only seven percent rarely or never shops.

In particular the recipe-service of arla.dk is popular. The site also features a kids corner, with a mix of casual games, edutainment and cooking inspiration and a forum, where 6 Arla employees blog and an extensive FAQ is being maintained.

Arla in this way solves a dilemma which many manufacturers and wholesalers face today: Either they communicate directly
with end-customers, risking to endanger their existing sales structures, or they communicate through the retail-chain, risking not to position themselves adequately in the eyes of end-customers. They do this through offering a variety of services, which adresses problems surrounding

This is done by offering af range of services which offers to solve problems encountered by the customers in areas of life related – but not directly tied – to dairy products, which are the main business of Arla. In this way Arla has established a direct communications channel, allowing Arla to present itself according to their corporate branding values, keeping the Arla
brand top of mind, and at the same time supporting the Arla retailers – Danish supermarkets.

The data stems from the Gemius/FDIM panel of 9.000 + adult Danes who’ve agreed to being automatically monitored when they surf the web.

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“Service-driven corporate sites – the case of arla.dk” 14 pages, 6 illustrations.

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Facebook boosts trust for online video game stores

Use of social networking elements on either your own site or on Facebook clearly correlates with customer satisfaction. This is one of the remarkable facts I’ve dug up in my latest report: “E-commerce, trust and social networking – the case of Danish online video game stores” investigating Amazon, Coolshop and Fona among others.

What I’ve done
What I’ve done is first to identify the eight largest online stores selling video games or accessories in Denmark. Then I’ve evaluated their use of social media, either at their own site or at Facebook, and categorized them in groups ranging from “none” to “a lot” integrated social networking. Trust-scores I’ve gathered from Trustpilot.com. And the results are strikingly clear: the more social networking elements employed, the higher the trust-score.

Frequently returning to the store
The findings is even more remarkable since I’m also able to show a clear positive connection between trust-scores and the usage of the online stores: the higher the trust-scores, the more frequently users returns to the store.

Happy customers returns more often online
Thinking about it, It’s hardly surprising that happy customers return more often than unhappy ones. However this probably is more so in an online shopping environment where issues like “what stores are within walking distance?” won’t be able to distract you from following your gut feelings: shop at the stores you like the best.

Spread the good news; dampen the bad
As for the connection between Facebookish behaviour and trust-scores the logic runs as follows: mechanisms whereby customers can express themselves to other customers helps to spread the good news, when customers are actually happy and serves to show the store in question to be responsive, listening to customers complaints, when complaints arises.

The three Facebook-effects

This leads to the following:

• Existing customers are hence reinforced in their positive impressions, to the extend they are positive in the first place. This leads to higher trust-scores.
• If existing customers have negative experiences with the store in question, they might feel relief simply by being allowed to raise their criticism at an officially endorsed site. At best, they’ll eventually forgive mistakes made by the store. This might lead to less negative evaluation and higher trust-scores.
• Users who are not yet customers will be directly influenced by positive endorsements (“this sounds like a good place for me to shop”), while criticism (to the extend, off course, the store’s able to provide adequate explanations for it’s behaviour) creates a feeling of responsiveness and willingness to deal with mistakes when they occur. Both off which will lead to higher trust-scores, when the customers eventually makes his first purchase.

The eight sites dealt with in the report are amazon.com/amazon.co.uk, cdon.dk, coolshop.dk, komplett.dk, elgiganten.dk, fona.dk, gucca.dk and wupti.com.

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“E-commerce, trust and social networking – the case of Danish online video game stores” 15 pages, 6 illustrations, 2 tables.

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Unemployed Danes excessive web-surfers

Unemployed Danes are engaged in excessive web-surfing. Once online, unemployed and early retireds spends thirty percent more time surfing the web. In particular they surf sites like Facebook, Youtube and gaming-sites. However they do have a problem getting online in the first place. This is among the main findings in my latest report, “The digital divide: who surfs the web in Denmark?”, published today.

In this way I find interesting nuances to “the digital divide”-discussion. The digital divide does not blindly follow existing socio-economic structures in society. Most of labour-market peripherals are perfectly able surfers, with no indications of falling into IT illiteracy. Judged from their surfing abilities, they have the computer skills starting in job the day tomorrow, should a job occur.

However the surfing habits of the unemployed who does surf, is following different patterns than the surfing habits of those in work: they kill time. In terms of time spend, their hugely overrepresented on social networking sites (most prominently Facebook) and gaming. Whereas their significantly underrepresented on news-sites and on the various databases of the internet.

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“The digital divide: who surfs the web in Denmark?” 13 pages, 5 illustrations.

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Hands-on: iPad passes “word processor”-test with flying colors

Few people would be surprised to hear that surfing the web from the iPad is great. Or that it’s perfect for magazines. Or movies on the move. But what about typing longer pieces of text. Using the 10-inch screen and a virtual keyboard? I myself had my doubts.

After having written my first articles in regular laptop-mode, onboard a plane, in waiting halls and on the train and home in the sofa, the conclusion is clear: the iPad sets new standards for writing “out of office”.

And I know what I’m talking about. I’ve written lots of documents sitting in my sofa with the laptop in my – lap. I’ve thought it OK, never really contemplating on what the writing process felt like. I do now.

What Apple has figured out, is that laptop writing is really very different from desktop writing. At the desktop I do ten-finger writing. My hands are by default placed on the home keys: asdf and jkl. I use a lot of keyboard short-cuts: I alt-c to copy, alt-v to paste, alt-f to find – and then I alt-s a lot to save the document I’m working on. And then off course I let my fingers slide over the trackpad to control the cursor.

These habits have followed me to the couch. I’ve been sitting with the laptop in my lap, desperately trying to force my fingers to my default finger position, awkwardly glitching over the trackpad and twisting my shoulders to hit the alt-whatever-keys at regular intervals. And it’s not until now I’ve realized the amounts of stress I’ve put myself through.

The Wii of word-processing
The key-difference between iPad writing and laptop-writing is this: When writing on an iPad the device in your lap is your friend – not an enemy. The only 800 grams-tablet begs you to not only touch and swipe it’s screen, but also to turn the device, tabbing new buttons, constantly switching the position of your body. Because that’s what you want to do, when you’re in the sofa – change position every once in a while. Cross your legs, uncrossed them again. Drag your feet up – pit them down. Shift the weight, while looking at the TV-set to catch a few minutes of a program that suddenly draws your attention. Get up to pour yourself some coffee.
This is what the iPad not only lets you, but encourages you to do. While laptops resists your every attempt to move you body in natural ways. With their 2 kilograms+, their screens, inflexibly fixed to the keyboard, and their desktop-based interface laptops inherently fixates you and forces you into evermore uncomfortable positions.

In this way the iPad is the Wii of word-processing. It lets you write with your body.

The keyboard works
The virtual keyboard featured on the iPad first surfaced on Apples iPhone. Typing on relatively small display of a smartphone is clearly a challenge, especially since you can’t feel the keys, the slight resistance of the “a”, “b” or “c” when hit, and conversely: the assurance from mistyping by accidental strokes.

On the iPad however, the keyboard works. Even without an active screen which could emulate the sense of typing a physical keyboard. Because of the size of the screen, which let’s you easily hit the keys. Because of the excellent auto-correction, which makes the production of text a mutual responsibility between your fingers, the keyboard and the iPad itself. And because correcting spelling and mistyping simply doesn’t distress you on the iPad to the same extend, compared to desktop writing. It blends in as a natural part of the dynamic iPad body-writing experience.

It’s all on the screen
There’s – obviously – no mouse on the iPad. And no trackpad either. Marking a place in the text, scrolling, activating menus (of which there are only the utmost necessary) – all is done by tabbing, pitching and touching the screen. In effect hereof the difference between the keyboard, which is also onscreen, and the mouse evaporates. The screen is all there is. And it’s very active.

There are no “alt” or “ctr”-keys either. If you want to select a part of your text you tab a word and drag an area until the portion of text you want to mark is covered. Tabbing the selection then let’s you copy or cut it. Turning the screen in upright position brings you layout menus for making the selected text bold – or eg have it centered.

Inserting pictures is the same: tab the image-button, choose your images – and it goes right on screen complete with lines helping you placing it nice in the text flow. Tab the image once and you can pitch a corner and drag it to resize – or simply move the image around the screen. Place your finger on it and copy-and-delete buttons appear. Tab twice, and you zoom the picture so display only a part of it. And so on.

Maintaining a sufficient overview
Small screens suffer from being small. You simply tend to loose the overview when writing longer pieces. this off course even more so, when close to half the screen is occupied by a keyboard.

Even here, however, Apple has managed to make things work. Tab a button and the keyboard is gone. Turn the iPad in upright position, and you get a full page view. Touch and hold in the edge of the page, and a navigator turns up.

Another curious thing about the iPad is how you save your documents: you don’t! Or rather: the iPad remembers your document by itself. At anytime you can exit your document – eg to look something up on the Internet. You return by opening Pages and voilà – here’s the document exactly as you left it.

Even if you switch off the iPad completely you’ll find your document as you left it when returning back in. Side by side with the other docs you’ve created.

Sharing sucks
This auto-saving on the iPad doesn’t help you much, however, when you want to continue your work at your desk-top computer. And this you want to do. However perfect the sofa-writing experience is on the iPad, you still want a regular computer when you sit at your desk. The more so because the iPad wont let you print in itself. You’ll have to have your document transferred to another computer in order to do so.

And this is where the chain breaks for Apple. Getting your document out of the iPad is done in either by mailing it or by uploading to the internet. And it simply doesn’t work well enough. First, it takes to much time and it’s a cumbersome process. Second, it doesn’t produce you one centrally stored file on which you work. Which is a pain, when you want to edit the same document from both your iPad and your desk-based computer. You’ve really got to do some work on that, Apple!

Passes with flying colors
Apart from this sharing-glitch, the iPad experience is wonderful. The iPad represents a transformative take on computing from the top of your lap, introducing a new paradigm for casual computing, which could fundamentally change the entire laptop-industry. Testing the word-processing capabilities of the iPad is tough. It passes with flying colors.

iPad in “3rd-party cookie”-attack: step back advertisers

Apples new touch-screen tablet-computer, the iPad, accept only “1st party cookies” by default. This is bad news for advertisers and analyst, who rely on “3rd party cookies” to work effectively.

To accept 3rd party cookies, you’ll actively have to go to the settings-section of the iPad and choose to “always” accept cookies.

The “cookies” section of the iPad. Only cookies “from visited” sites – that is: 1st party – are accepted by default.

To the advertising industry this is bad news, since the iPad thereby forces advertisers to show the same ads over and over again to the same iPad-users. 3rd party cookies would have allowed them to keep track across all the sites the advertising campaign in question is booked at. This is a pure waste of money from the advertisers point of view.

Futhermore the iPad move will make the targeting of advertisement to users with a known previous surfing pattern exceedingly difficult. Such as showing car-ads on a general news-site to users who in the past visited the website of eg. Volvo or BMW. More money down the drain.

Apple also deprives analysts and researchers from gaining the same level of detailed insight in the surfing-habits of iPad-users as they’ve had in traditional surfing environments. Finding out whether men or women, young or old, urban or rural users are the ones most prone to surf the web gets exceedingly difficult. Not to mention finding out which sites and clusters of sites different demographic groups tends to be most affiliated to. Developing “clever” e-commerce and media strategies hence becomes more difficult.

The “from visited sites only” approach isn’t new to Apple. In the iPhone and iPod touch-universes they did exactly the same. The difference is, that the iPad with its several times larger screen is a regular surfing device. Therefore the iPads lack of 3rd-party cookie support are deemed to have a much more significant effect – provided that is, that iPad sales takes off.

The advertisers and analysts had it coming, however. A growing anxiety over the privacy of users surfing the web have caused an international political movement to demand sites and advertisers to step back and let users alone while surfing the web. For that very reason the iPad “all sites” cookies denial won’t be the last one either. Advertisers and analyst are therefore best served with a lowering of their targeting ambitions, looking elsewhere to harvest the fruits of digital media.