Posts tagged ‘advertising’

history repeats itself

History repeats itself
I didn’t learn, I wouldn’t listen
I couldn’t see the books were on the shelf
For my good sense, I never missed ’em

In the early 1800s newspaper production was extremely slow. They received news by post. Some were reports from correspondents, but most stories were copied from other newspapers as part of an exchange system.

In may of 1845, James Gordon Bennett, the editor of the New York Herald predicted with some gloom, that the telegraph would put many newspapers out of business. “In regard to the newspaper press, it will experience to a degree, that must in a vast number of cases be fatal, the effects of the new mode of circulating intelligence.”

While entrepreneurs and commerce at large created the demand for ‘fast news’, prompting Bennet to pay one of his sources $500 for every hour by which he beat other papers in getting news from Europe, he also once declared that “speculators should not have the advantage of earlier news than the public at large.”

Then along comes the telegraph… with its promise of instant information.

The following dreaded scenario was painted among the publishing Technorati of the day…

Raw news and market information arrived first at the telegraph office. Newspapers, along with merchants and everyone else, queued for it. Telegraph firms established a monopoly over news delivery, selling early news access to the highest bidder.

In this environment, papers would be unable to compete. Circulation would decline and advertisers would flee. Benett’s democratisation of news would be undone.

There was hope. Bennett believed that those few papers which provided commentary and analysis would survive. The proverbial ‘value-add’.

The telegraph did reshape newspapers and the outcome was different to the prognostications. It was a simple result of the technology itself. Although the telegraph could deliver news more rapidly than ever across the backbone, they had a “last mile” problem. Messages were point to point – unicast as it were. The telegraph was not a broadcast medium, it could not disseminate news quickly to thousands of ‘subscribers’. Instead  of putting papers out of business, the telegraph actually made them more attractive and increased their sales. The role of newspapers became focused on delivering the latest news.

As the speed of information increased, there were growing concerns that the freshness of news, and its abundance from far away places, was saturating column inches and decreasing it’s relevance to the consumer.

Writing in the Atlantic Monthly in 1891, W.J. Stillman lamented the changes in his profession. “America has in fact transformed journalism from what it once was, the periodical expression of the thought of the time, the opportune record of the questions and answers of contemporary life, into an agency for collecting, condensing and assimilating the trivialities of the entire human existence,” he moaned. “The frantic haste with which we bolt everything we take, seconded by the eager wish of the journalist not to be a day behind his competitor, abolishes deliberation from judgment and sound digestion from our mental constitutions. We have no time to go below surfaces, and as a general thing no disposition.”

Add about 160 years to these dates, replace the names of the characters and technologies; except for the money part, the story and the apprehensions remain the same. But let us be very careful. While we may see the demise of printed media, we will not see the decline of the ‘news business’. We may be simply seeing the transfer of information from ink and pulp to another medium.

Tell me it isn’t so… I’m listening.

February 25, 2010 at 1:00 am 1 comment

eyeballs

Happy Thanksgiving to all of my US readers.

Look into the eyeball my friend
Precious man can’t you understand
Look into the eyeball
Tell me what can you see
What can’t you see
You keep it going on
You keep it going on

It’s all about eyeballs. But not in the way we think.

We have become accustomed to thinking in advertising that more eyeballs equates to more money. That for any given CPM, more ‘M’ = more $. That was, and is true for broadcasting. One could extrapolate the same thinking to the evolving unicast world, and that would be a reasonable assumption except that it doesn’t work that way.

But there is one other really big thing. Distribution costs.

  • RF transmission –  Once you have the transmitter, licenses, business infrastructure in place, the cost of distribution is essentially fixed.
  • Print – Production costs are fixed, as may well be distribution costs for certain types, but essentially, more subscribers = more paper & ink and more delivery/postage. Therefore the cost of distribution is baseline plus cost per subscriber per content delivery instance.
  • Cable & Satellite – Fixed base cost (satellite & cables), but then a smaller cost per subscriber to get the Set Top Box and connection established. Not a recurring charge.
  • Web Pages – Fixed cost per quantum of users for servers and infrastructure, after that the bandwidth paid by the subscriber.
  • Web/Mobile Video – As per web pages, except when they all have the audacity to get ‘what they want, when they want it, where they want it’ and then you have to unicast-stream the bandwidth intense content. At that point, your cost per subscriber goes way up.

So. Is having lots of eyeballs really more important than having the right eyeballs? Depends upon who you are. As a broadcaster, it just gets cheaper and generally the advertising becomes proportionately more lucrative. If you cannot attract the right ‘CPMs’ (and who does?*) you lose huge economies of scale in a unicast world, and the costs of providing the service far outweighs the advertising revenue that those eyeballs generate. What’s more, not all traffic is equal. For example, surfers who arrive via search are predominantly “one-and-done” visitors, not necessarily the reliable well defined demographic that most content owners seek.

Perhaps Murdoch is right in moving away from Google and leveraging Bing instead. This is akin to moving out of the expensive shopping mall rental when you have a known brand… the theory being that shoppers will follow, they are qualified buyers and you get to keep more of your own money.

“What’s the point of having someone come [to us] occasionally who likes a headline they see in Google?” Mr. Murdoch asked in his recent Sky News interview. “Sure we go out and say ‘We’ve got so many millions of visitors, you had better advertise’ and so on. The fact is, there’s not enough advertising in the world to go around to make all the websites profitable.”

Unique IP distribution is expensive.

Be careful of eyeballs. Yes you need them to validate viability, but too many eyes watching your every move may be bad for business.

Tell me it isn’t so… I’m listening.

*Ad networks incrementally deliver pennies for every thousand more visitors that publishers attract. Most ad networks deliver between 16 cents and $1 for a thousand and have large unsold inventories.

November 26, 2009 at 1:00 am Leave a comment

the seven pillars of media

And I see things
That no one would ever glimpse
As your eyes roll back
And the real party begins
And I feel things
That I’m not supposed to feel
As I reassure myself
That I’m nothing but a jewel upon your crown

This week I discuss a new tool that I have developed in exploring mediums. It enables classification of mediums from both the perspective of consumers as well as that of the business and marketplace. I have called it the 7 pillars, because I am unashamedly trading off T. E. Lawrence’s Seven Pillars of Wisdom, and the themes of change, challenge and sustainability contained therein.

This framework contains seven pillars which support the media business and is weighted to look at things from a consumer perspective. Why? In the end, media is about the consumer, the audiences, demographics and psychometrics to which the consumer belongs, to their purchasing power and their consequent aggregated ability to endorse or demote marketplace media preferences.

Back in April, 2009 in why target, I made reference to the fact that consumers have three things to trade with a media company:

  1. Privacy (P) – by identifying their attributes, consumers add value by enabling the medium to build monetization cases by clearly measuring and demonstrating value to purchasers of advertising and sellers of content.
  2. Money ($) – either directly through paid subscriptions or subsidies, or indirectly through purchasing advertised content, goods and services.
  3. Time (T) – the amount of time that they spend with the medium and thus building equity in the audiences that are subsequently monetized.

Each of these are shown in the table below…

Consumer Dimensions

Business Attributes

I have started mapping these attributes across clusters of similar mediums, and present TV mediums as the first in this series.

The Lounge room TV experience

Clearly displayed is the technical dominance of and consumer potential that IPTV promises as a medium. However, being better does not count too much if you don’t have market share, and this is where the traditional players of cable, satellite and terrestrial TV shine. Note that IPTV encapsulates my thinking on both walled-garden as well as Over The Top, but in all cases, this is the ‘lounge-room’ experience.

Each of these mediums displays a footprint that broadly reflects the ongoing business model viability ‘at present’. It shows comparative capabilities and offers a quick visual to suggest potential areas of competitive improvement.

It is not perfect, but it does provide a very useful discussion tool, a common language for dialog and a real way to connect with the customer who is now driving the business.

I have analyzed all mediums in greater detail, and explained my justification for the scoring. These scores will be updated each quarter with new observations, press coverage and anecdotal information.

Change is certain, but guessing the future is still very precarious – especially in the media business. As stated by Edgar R. Fiedler “He who lives by the crystal ball soon learns to eat ground glass.”

Nonetheless, it is a tool that hopefully you’ll find useful.

Tell me it isn’t so… I’m listening.

October 29, 2009 at 1:00 am Leave a comment

slit their own throats

OOHHH, the first cut is the deepest
Baby I know (baby I know)
The first cut is the deepest
Try to love again…

Recently, in promoting his new movie, Michael Moore made the statement that “These newspapers have slit their own throats,” […] “Good riddance.”

Whether you like him or not, there is some substance to this statement, however headline grabbing it may well be.

Moore said that newspapers, bought up by corporations in the last generation, have pursued profits at the expense of news gathering. By basing their businesses on advertising over circulation, newspaper owners have neglected their true economic base and core constituency. He cited newspapers like those in Baltimore or Detroit, his home town, with firing reporters that cover subjects that affect the community.

When you look at media consolidation over the last decade there is some interesting evidence to support this position.

Consider the following figures…

In the US

  • Newspapers – 22 companies represent 70 percent of the daily circulation.
  • Radio – 20 companies operate more than 20 percent of all the radio stations; one, Clear Channel, operates stations in 191 of the 289 Arbitron-rated markets.
  • Television – 10 biggest companies own 30 percent of all television stations reaching 85 percent of all television households. Since 1995, the number of companies owning commercial TV stations has declined by 40 percent.
  • Networks – 10 companies own the top 25 revenue producing networks.  Those same 10 companies own 144 cable network channels, including all top rated networks.
  • Internet – More than half of the 20 most popular news Web sites are owned by one of the 20 biggest media companies.
  • Cable – Comcast and Time Warner serve 40 percent of cable households.  Eight cable companies have 79% of all subscribers.

Internationally

  • Canada – Four companies (CanWest, Bell Canada, Quebecor, Rogers Communications) control most media outlets.
  • Spain – Grupo Prisa controls over 400 radio stations in Spain & Latin America. With Telefónica and Vivendi, Prisa controls Sogecable which services 80% of all television subscribers in Spain. Has stakes or controls media in Mexico, Panama, Chile, Colombia, Costa Rica, Brazil, Venezuela and the United States.
  • Italy – Italy’s first media mogul, Silvio Berlusconi, controls: state television networks and radio stations; three of Italy’s four commercial television networks; two big publishing houses; two national newspapers; fifty magazines; a chunk of Italy’s Internet services. Berlusconi is also trying to purchase the most influential paper in the country. One critic says that half the reporters in Italy work for Berlusconi, and the other half think they might have to.

Throw in a bit of globalization to see that:

  • CNN International can be seen in 212 countries, with a daily audience of 1 billion+ globally.
  • Almost half of Discovery’s 980 million subscriptions are outside the United States. The company has plans to push into France, China, South Korea, and Central and Eastern Europe.

Now. Those of you who follow these kinds of things will see that these are numbers I have presented before… in fact, back in 2005! Are we expecting that this has been diluted over the past five years and trends have mysteriously reversed… I don’t think so.

Perhaps this is best summed up by journalist Michael Martinez:

“I am a former journalist and I can tell you that journalism has suffered greatly in the last few years. […] Time and time again, I saw news organizations fire and layoff employees due to to plunging profits. I have seen reporters fired when they did a story but it offended an advertiser. In the last 10 years, seasoned and trusted reporters were let go due to newspapers and local TV stations needing to pad their profit margins. This has also affected the quality of news reporting. The instant news cycle, twitter and the internet has also caused an erosion of news gathering. Reporters and News organizations are in such a hurry to report a story instantly that they neglect the requirement to verify the stories they report. In many cases, they will report a story–without checking its veracity–of a blogger as fact. Then it causes a ruckus, it is debunked and the new organization has to issues some sort of apology or retraction. This happens almost daily. When I was a reporter the rule was simple…make an error…we will issue a retraction and you will be reprimanded or fired. Today…an erred new story is the lead story. All because the news media decided to cheapen the product i[t] presents to the American people.”

When the line of disctinction between news and advertising blurs too much, we get content without integrity. Perhaps this is what H.G. Wells meant when he said “Advertising is legalized lying.” Perhaps these trends of consolidation and globalization are diluting the very nature of media. Perhaps that is why people (not consumers) trust other people and social networks are burgeoning as they are… and perhaps this is why the business models are breaking.

Tell me it isn’t so… I’m listening.

September 17, 2009 at 1:00 am Leave a comment

financial signs of change?

Sign Sign everywhere a sign
Blocking out the scenery breaking my mind
Do this, don’t do that, can’t you read the sign

A short post this week, not because of anything other than a sobering analysis posted by Neilsen in the last few days. I wanted to share with you a graphic that I think says a lot.

TV is still the dominant medium, and on average has actually not lost as much as the rest.

spendingbymedium-090709

Although it has often been said that reduction of discretionary spending in terms of marketing dollars leads the onset of financial recessions, and a corresponding increase lags financial recovery, we need to remember that the mediums in many cases rely on Ad spend to support (or be) their business models. Why is cable doing fine whereas the rest not so well? Cross-subsidies from subscriptions? I’d like to know.

Media is not dying but existing business models are clearly under stress. The current financial crisis is only amplifying the underlying trend. However, the allocation of monies across mediums is continuining to changing in response to new economic climes – as it has always done.

People are increasingly watching more TV, in addition to their other media-related activities.

Tell me it isn’t so… I’m listening.

September 10, 2009 at 1:00 am Leave a comment

why is identity important?

…I don’t know, I don’t know.
Stick around, and it may show,
But I don’t know, I don’t know.

Identity management in media has been largely related to implementations of digital rights management, and that has been primarily driven by a need to protect, track or otherwise contain content.

This largely makes sense. In a world where consumers acquired media from distributers, the role of rights was to equate ‘distribution rights’ in its many varied forms with contractual rights and specifically with money. In fact, I have often argued that Digital Asset Management was really a digital manifestation of linking virtual content to metadata, and what really defined ‘Asset’ in this equation was not the concept of bits as the asset, but rather the idea for really treating it (the content) as a financial asset i.e. it had to have rights and usage very carefully built into the system.

But I digress.

As consumers started to acquire content, the need to track rights became ever so much more important. Those in the industry know that many large content producers used to track distribution rights in spreadsheets. Often those sheets were out of sync with the reality of their filed paper contracts. Try doing that with millions of users, instead of scores of distributors… and you see why identity starts getting real important, real fast.

As the IT bods started playing up the importance of identity management for all things security-wise and finance-wise, things like single sign-on became increasingly in vogue. Correspondingly, other uses for identity became quite apparent.

What of all of the media properties and websites where people log-in for access or opt-out for contact?

Think of all the disparate databases…

What if you could aggregate that information and target some ads to the same person regardless of screen?

Identity Management suddenly seems really attractive.

But is it really necessary?

Sorry, but at this juncture, not really. If you’re laying down the infrastructure for a purely digital media experience, then sure, but if you’re trying to put the toothpaste back into your corporate tube – probably too late – unless of course you want to indulge in personally targeted advertising services… but then, who’d buy them?

While it may be the dream of marketers, the science of understanding how to sell personalized ads is yet to be defined, and the scalability is currently beyond comprehension, pricing, measurability and valuation.

At this stage, most media companies still have difficulty in targeting by geographic, by demographic, by psychometric and defining their audience valuations in all but the simplest terms. When the marketing community really needs to sell specific items of garbage to me, at my identity address, then these issues will be solved. Oh wait… what was that latest spam for working from home? You mean its already happening?

Tell me it isn’t so… I’m listening.

September 3, 2009 at 1:00 am Leave a comment

content begets data begets bland

A billion people died on the news tonight
But not so many cried at the terrible sight
Well mama said
It’s just make believe
You can’t believe everything you see
So baby close your eyes to the lullabies
On the news tonight

Many in the business still distinguish between long-form and short form content; between ads, advertorial, editorial and content; and between scheduled, non-linear and live. There are differences. However on a few levels I would suggest that they have become the same, specifically intent and technology.

From a technology perspective, the argument is quite simple, and yet with extremely profound implications. It’s all bits. Simple? Not quite so. The moment that every piece of content becomes a bit, a mysterious transformations occurs… Those bits become data. As such several things emerge:

  • You need data to describe data – metadata. If that is used effectively, then you can automate much of your process and scale incredibly.
  • With that data, you can automate how that content is consumed, and to whom it is directed.
  • Data, if used correctly, can provide information, which, if used correctly, can get you even smarter about how to use your content (data). Recursive.
  • Better get yourself a search engine. Indexed databases are just not enough – there’s a lot of unstructured stuff you need to now catalog.
  • Better connect to other data sources, because you cannot possibly type in all of the stuff you’ll need to manage this content going forward. Data begets data.
  • Content becomes less sensitive to its actual ‘content’, the differentiation between mediums blurs, and not longer matters (read Negroponte’s seminal ‘Being Digital’). The consumer’s client drives presentation.
  • Business and workflows necessarily change – this is not optional. Managing content is different – no discussion. Sorry video guys, face the change.

All of this brings me to my second point. As content becomes data, and data begets more data, it starts to become very abstract, almost ethereal. Add a piece of automation, throw in some analytics and before long you lose intimate knowledge of your content library and the look’n’feel of your medium. Strange things start to happen… content becomes its own entity. Attach some monetization to the process and you risk getting a very ‘corporate’ media complete with formulaic template radio channels, stock cable channels and bland programming. All of a sudden sterile data, drives correspondingly sterile intent. If that intent is just maximizing revenue and optimizing resources for which media computer systems are designed, you get “News is something someone wants suppressed. Everything else is just advertising.” – Alfred Harmsworth (Lord Northcliff), publisher, Times of London.

Ask yourself, what is the intent of your media business? You may be surpised at the answer. The more digital your business becomes, the stranger the answer will become.

Tell me it isn’t so… I’m listening.

August 20, 2009 at 1:00 am Leave a comment

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