Is the audience really THAT stupid?

June 5th, 2009

Wayne Friedman writes today of the conflict of interest in “sponsored” newscasts. The target is MSNBC’s “Morning Joe,” with Joe Scarborough and Mika Brzezinski. The show is now sponsored by Starbucks, and even though there may not be a conflict of interest, Wayne writes that the appearance of one is just the same. The bind comes in if and when “Morning Joe” has to report about coffee.

Of course, any advertiser involvement in a news operation is a tricky affair. Keeping the lines clear between church and state — editorial and business — has always been an uneasy balancing act between editors and business executives. Local TV news reporters have done in-depth pieces about a less-than-scrupulous’ local automotive dealerships, and newscasts have paid the price with lost local automotive advertising business.

I’ve thought about this a lot over the years, and my view has changed considerably. It’s a conflict of interest, because we say it is. We’ve supposed that the “wall” to which Wayne refers is necessary for us to remain “objective” in covering the news. There’s an honor, of sorts, in not breaching that wall, and so we never consider that the wall itself might be the problem in a news-as-a-profit-center paradigm. Moreover, we think that the (stupid) audience needs us to be pure, because we could easily pull the wool over their eyes.

You all know how I feel about objectivity, but here’s the thing: I don’t believe the audience of “Morning Joe” would sense or suspect a conflict of interest if a negative story about coffee did come up. But let’s take it even further. Let’s assume that the producers of the show felt an affinity to the people paying them, so they stayed away from the negative story about coffee. Think about this before you react, but in today’s world of thousands of news sources, what is really wrong with that? And wouldn’t people feel that the one place they could get the Starbucks’ “side” of the story would be “Morning Joe?”

If you assume that you are the ONLY source for news and that you have to market yourself as such, then the need for such purity is pretty obvious. But if you can bring yourself to accept that you don’t need to be the ONLY source for news, then the fundamentals of purity don’t matter as much. News is ubiquitous today, and that’s different than it was in the past, when the newspaper in the community was truly the only source of news and information for the people.

I fully realize this is heresy, but we need the courage to challenge the basic assumptions of journalism, ‘lest we find ourselves unable to support the practice any longer. Besides, I keep coming back to the reality that the audience just isn’t as stupid as we think they are and that transparency beats artificial objectivity any day of the week.

Posted in Journalism | 3 Comments »

Data is the new “content”

June 3rd, 2009

The role of the ad agency in the Media 2.0 world is evolving, and like media companies themselves, ad agencies face an uncertain future. The problem for agencies is that they exist as middlemen between advertisers and media, and the uncomfortable reality is that the Web tends to route around those who used to make their fortunes by being in the middle.

There is considerable debate about all of this, and of course, agencies aren’t giving up without a fight. At the very core of that fight is the world of data, the Holy Grail of the Web, and whoever or whatever is able to manage data for the benefit of clients in a cost-effective way will likely have a seat at tomorrow’s media table. Even this, however, is uncertain, for one of the big unanswered questions of the day is who owns the data about visitors to a website, the publisher or the advertiser who’s running ads on that site? This is one of the issues in the publisher revolt started last year by ESPN in announcing they would no longer accept ads from 3rd-party ad networks. The networks think the data belongs to them. Publishers think otherwise.

A recent New York Times article (Put Ad on Web. Count Clicks. Revise.) featured the work of an ad agency built on the use of online data.

From the “Mad Men” era until now, advertising has been about a catchy tagline, an arresting image, the Big Idea. But Mr. Herman (Darren Herman, president of Varick Media Management) and his competitors are bringing some Wall Street-like analysis to Madison Avenue, exploiting the huge amounts of data produced by the Internet to adjust strategy almost instantly.

If your site is part of an “ad exchange,” your remnant ad spaces will be grouped together with others of similar demographic and psychographic nature and sold through one of these data-centric agencies. The idea is that the eyeballs that visit your site are more valuable when grouped with other similar eyeballs, and the exchange allows publishers to earn more per ad impression than they would otherwise.

Jarvis Coffin of Burst Media wrote in response to the Times article that this data-centric approach should eventually lead to offline as well. He took the Times to task for missing the real story, which is the use of data in behavioral ad networks.

Indeed, searching for the new heart of Madison Avenue has been the past-time of many people inside and out of the industry for years. Maybe love has finally found a way. Once again, information is power and much of it derives from the sort of relationships that ad agencies have continued to enjoy — albeit in serf fashion — with their clients. Sitting atop copious amounts of campaign data, which they have watched get turned into fortunes by vendors with shifting attachments to the strategic welfare of a client, ad agencies have decided they are - and ought to remain - media planning and buying vendors of first and last resort.

Good for them. Now they just have to figure out how to get paid for it, but the excitement and opportunities increase when they consider how data can begin to play a livelier role given the expansion of digital media technology to all places offline, especially TV.

One of the cornerstones of Media 2.0 is data, and local media companies are facing the dawn of the database age with no idea of its requirements, scope or the tools necessary to compete. This needs to change and change quickly, ‘lest all local media companies find themselves at the wrong end of the online value chain. The making of expensive content is not the best revenue position for tomorrow. That seat belongs to those who manage the data of the local market.

Gordon Borrell has seen this evolve in his own work. One of the characteristics of what he calls “Green Zone” performers — those media properties that do above average online revenue market share — is an incredible thirst for data. He told me in an email that most media companies are still stuck in the past.

I think analog media reached the zenith of their youthful beauty a few decades ago, and what we’ve seen since the mid-1980s is an obscene amount of cosmetic surgery and make-up. Newspapers moved from talking about “subscribers” to a much bigger metric called “readers,” figuring that if a newspaper hit the doorstep of a household had 2.5 adults in it, there must be 2.5 readers in it. TV started talking about TV households, figuring that if a household had a TV in it, people must be watching it. And radio invented cume — which is a fancy way of saying that if the radio is left on long enough, a lot of people might actually listen at some point.

The Internet isn’t as lucky. It has things like pageviews, clickthroughs, unique visitors, time spent online, “bounce” rates, and connection speeds. While some of those statistics can be misread or manipulated, there’s a helluva lot more to go on than a mere telephone survey or diary sent to less than one percent of the population.

Borrell added that data has become incredibly important and that he’s witnessing “a great divide” between those who know how to collect and read that data and those who don’t.

Helping advertisers understand just how many people saw their message, how many clicked on it, what times of days produced better responses, and what people did after they clicked — are all wildly powerful pieces of information. The collection, analysis and manipulation of data will continue to be more important in the media landscape, thanks to the application of computing power to advertising. I think information is still power, but the collection of vast amounts of data magnifies the potential.

Add to the equation the reality that some well-informed local advertisers are themselves becoming extremely well versed in data, and you can see the problem for media companies who just sit on their hands in the Media 2.0 world.

We feel strongly that the window is open for smart media companies to move in and seize this space at the local level, becoming, if you will, ad agencies themselves. That window won’t stay open forever, and the sooner we adapt to a data-driven marketplace, the sooner we’ll be able to grow significant revenues online.

(Originally posted in AR&D’s Media 2.0 Intel Newsletter)

Posted in Advertising, Reinventing Local Media | 1 Comment »

No one saw this coming? Right.

June 2nd, 2009

On the problems of local television companies, broadcast vet Tony Cassarra tells Harry Jessell at TVNewsday.com that “a lot of people did a lot of borrowing money and no one foresaw this cliff that we were all going over.”

Bullshit.

From “2005: A Year of Trouble for Broadcasters,” published in December of 2004:

A given is an assumption that is taken for granted. A serious examination of events and trends over the past couple of years reveals there are five important givens that all decision-makers must accept as we look to the new year:

• The audience isn’t coming back.
• Disruptive technologies will continue to empower viewers.
• Our brands mean less with each passing year.
• Reinventing ourselves isn’t a choice.
• There are ways to make money beyond on-air advertising.

Of all the challenges facing broadcasters, none is greater than ignorance born of denial. Locked into old formulas and business models, the industry hasn’t paid enough attention to teaching and training itself and its employees about what’s been happening in the media world around them. The challenges faced by media companies — especially broadcasters — have been bubbling and brewing for years, but few have had the courage to act on them.

I am not the only one who has been relentlessly pounding the realities that we currently face. People like Cory Bergman, Steve Safran, Jeff Jarvis, Doc Searls, and many, many others have been saying the same kinds of things for years.

All I can do is shake my head when media executives play the victim. You could argue that the economy was a surprise, but you’d have to dismiss the work of Umair Haque and others to believe that was a real surprise either. We have entered a new era in Western culture, one that demands ways of thinking beyond simply balancing margins, and media companies face even bigger challenges than that. The disruption in the world of advertising continues unabated, and how this escapes the view of otherwise smart people is beyond me.

Having the content to secure a mass audience does not guarantee you’ll find sponsors willing to pay what you want them (or need them) to pay in the years ahead.

Posted in Broadcasting, Disruptions, Reinventing Local Media | 4 Comments »

AP clarifies copyright threat

June 2nd, 2009

Thanks to Ars Technica for probing AP news editor Ted Bridis on what the cooperative plans to do to stop theft of its copyrights. Technology soon to be deployed will search for entire stories that thieves have lifted and presented without a license.

“The guidelines are coming,” Bridis promised. “AP’s main concern are not the bloggers that excerpt a relevant passage, and then derive some commentary. What happens an awful lot is just wholesale theft. So those are the ones that will find the cease and desist letters arriving.”

OK, we said. How will you define “wholesale theft?” If somebody publishes a paragraph of AP copy with a link to the AP story, will that be theft?

“Not at all,” Bridis replied. “I don’t think AP would have any problem with that.” We didn’t want to give the impression that we were bargaining, but we pressed on as to exactly how one would disturb AP’s comfort zone. Was this about not posting links?

No, Bridis replied. “What I’m talking about, and what has really riled up our internal copyright folks, are the bloggers who take, just paste an entire 800 word story into their blog. They don’t even comment on it. And it happens way more than most people realize.”

Go read the full article. It really does clarify things for everybody.

Posted in Copyright, Associated Press | 1 Comment »

The cart before the horse

June 1st, 2009

Simon Dumenco goes after the selection of Arianna Huffington for the Fred Dressler Lifetime Achievement Award by Syracuse University’s S.I. Newhouse School of Public Communications in a biting AdAge commentary. Dumenco writes that a school that teaches budding journalists “should know better than to honor a woman who thinks journalists should work for free!”

Puh-leeze.

In Mr. Dumenco’s attack on Ms. Huffington (he congratulates her first, of course), he bitterly chides both the Newhouse School and organizers of the awards for what he clearly believes is a blight on the profession of journalism.

It’s one thing for a journalism school to draw attention to itself — to make a naked grab for the sort of heightened “visibility” Ken Lerer values so highly — by creating a self-referential journalism-about-journalism award. And it’s natural for the organizers of the awards ceremony to align themselves with highly visible media people to attempt to heighten that visibility. But it’s quite another thing to give recognition to people who damage the very profession of journalism.

Huffington damages journalism, in Dumenco’s view, by not paying journalists, and this is the essential problem with his argument, for if money existed to pay journalists, we wouldn’t be having this argument (and many others) in the first place. The money is gone, Mr. Dumenco. It’s gone, and it’s not coming back. No amount of nostalgic wishing is going to bring it back, and any argument based on the notion that it is (or worse, that it’s still there) is just chasing the wind. It’s also sloppy thinking, for if Mr. Dumenco had his way, the only outlets for journalism would be those that paid the writers (a living wage), which is silly when there is no money. No money, no journalism? History says otherwise.

It reminds me of Mark Cuban’s whining about Google and YouTube last week at the D: All Things Digital conference in Carlsbad, Calif. Cuban complained about the unfairness of Google subsidizing YouTube, noting that YouTube wouldn’t exist without the subsidy. Cuban wants a world without subsidies or YouTubes, because then the money of the status quo would have all the fun, including Cuban and his (new found) billions. You’re entitled to make money only if you play by certain rules, in Cuban’s view, and anybody who breaks those rules is, well, cheating. Damn those cheaters at Google!

Same with Mr. Dumenco. He thinks Arianna is stealing journalism without paying for it (cheating), when she’s actually creating a model with a different kind of currency: links. She hasn’t asked, but if she did, I would gladly write for Ms. Huffington, because I recognize that the value of journalism isn’t in what I’m being paid but rather in what I’m saying, and if I can’t find a creative way to pay myself with the kinds of traffic I’d get from The Huffington Post, then the problem is with me, not the lack of money to pay me. Simon Dumenco has the cart before the horse.

Meanwhile, the “publication” is revealing interesting ways to combine and display items to make for a smooth user experience, and who’s to judge the HP of tomorrow by the HP of today?

Posted in Journalism, Disruptions, Culture, Economy | No Comments »

Bunnies in the back yard

May 30th, 2009

Karen was mowing her back yard this week and discovered a nest of infant cottontails. There are six of the little guys in a small hole in the ground that the mommy covers with fur after each feeding. She shows up a couple of times after dark, and the babies just sleep and grow during the daytime, warmed by the sun’s rays. We found this wonderful site, rescuedrabbits.org, that gave us all the information we needed to enjoy the little fellows without interfering in their growth. Rabbits are very common in Karen’s Frisco neighborhood, but this kind of thing doesn’t come along every day, so here are a couple of photos and a little clip to show you our bunnies in the back yard.

Posted in Just Plain Fun Stuff | 1 Comment »

The NAA’s secret meeting

May 30th, 2009

Newspaper execs gathered in Chicago this week in a not-so-secret meeting to discuss their mutual problem — a collective southbound bottom line. Staci Kramer has an excellent summary including information from Steve Brill of Journalism Online, the group of former media executives trying to solve the “problem” of how to monetize online content. Brill’s group has a model that they’re trying to sell, and the newspaper people at the meeting were eager to hear all about it. According to The AP, the meeting was called “Models to lawfully monetize content.”

The problem, from my perspective is enormous, because the disruption that’s killing legacy media isn’t about content, it’s about advertising. The assumptions of any content play are that its value is so great that expensive, adjacent advertising will support it and that the mass attractive to advertisers can be created through scarcity. Neither of these assumptions is viable online, and the real problem is that both must be present for significant revenue to be realized.

Advertisers don’t need mass anymore, because the Web efficiently allows them to directly target potential customers in a variety of ways. Gordon Borrell has a great post today (Are We NUTS?) on why legacy media companies don’t believe the size of his revenue projections at the market level.

With the Internet, however, you can’t fathom the universe of companies and individuals selling things like email advertising or search advertising or banners. In a lot of cases, they aren’t even companies, but individuals who don’t have business licenses and thus cannot be tracked at all for their “ad revenue” receipts.

The amount advertisers are spending is truly stunning, and much larger than most people imagine. Those who understand the true breadth of opportunity are more likely (in my humble opinion) to get a larger share than those who underestimate it.

News content online is a ubiquitous and increasingly commodified community, and attempts to restrict access so as to create scarcity will only result in the isolation of those who need most to be a part of the discussion, professional journalists. If you think newspapers will be able to restrict ANY reference to articles they publish, I’ve got some oceanfront property in Arizona that I’d like to sell. And even if they could accomplish such a monumental task, the disruptions in advertising will continue make the model of ad-supported content increasingly problematic.

The newspaper industry is obsessed with an old model, and rather than trying to fit its square peg into the round hole of Media 2.0, it makes much more sense to focus our attention elsewhere. We should nurture our legacy products as best we can, but we simply must separate our ability to make money from our dependence on the content we create.

The key to that is in defining, understanding and developing the Local Web.

Posted in Media 2.0, Newspapers, Advertising, Disruptions, Reinventing Local Media | 3 Comments »

Bitterness: victimhood gone to seed

May 29th, 2009

So the rapier sharp minds of the American Psychiatric Association have identified a brand spanking new ailment: post traumatic embitterment disorder, PTED. You’re pissed off, it’s a disorder, because, well, we all know that “normal” people aren’t pissed off. The LATimes article quotes the German doctor who “discovered” the malady as saying that a guy who snaps and kills his family may be suffering from this. I can see Jack McCoy rolling his eyes on an episode of Law & Order.

The shrinks are working on a treatment, but I’ll save ‘em a bunch of trouble: forgiveness.

That’ll be 5-cents, please.

Posted in Culture, Just Plain Fun Stuff | 2 Comments »

Be careful what you accept

May 28th, 2009

It was January of 2000, and I was the CEO of an Internet start-up company struggling to raise money in Huntsville, Alabama. We were part of a high-tech business incubator in the community, with access to angel investors and lots of free advice.

This day, we watched live coverage of the merger of AOL with Time Warner, in what was to become the poster child of the bursting bubble that, of course, we hoped would just keep on going. I remember a few things about that day. As a guy running a Web business back then, I was always stunned when businesses that were losing money were rewarded. I just couldn’t do the math, and that included incredible valuations for companies, including AOL. Here was Time Warner, a prosperous film and entertainment empire with a valuation of $120 billion merging with AOL with a valuation north of $160 billion. How could AOL, in just a few short years, be worth more than Time-Warner, I wondered.

I also remember very clearly this statement by then Time Warner CEO Gerald Levin: “The market valuations in the Internet space I accept, because I think something profound is going on in this century.”

Later that week, we had a guy from a venture capital company come to the incubator to answer questions of the various tenants. I asked if he’d seen the press conference announcing the merger. When he said yes, I repeated that statement by Levin and asked him to explain what it meant. The guy said something about the old world giving way to the new, and I just drifted off. One week prior to our first offering, the bubble burst and with it went our hopes of ever getting an outrageous valuation.

I would think that of all the things Mr. Levin ever regretted in his life, it was that one statement of acceptance. Blue smoke and mirrors; that’s what it was. Levin wasn’t alone, however. Greed has a way of blinding even the sharpest of eyes.

The rest, as they say, is history, and I wish the new AOL well. I only hope they don’t destroy the anti-portal strategy of their MediaGlow unit has built in attempts to resuscitate the AOL brand, which in the opinion of this observer, is f-a-i-l spelled sideways.

Posted in Technology, Culture | No Comments »

Paying for the weather? I don’t think so.

May 23rd, 2009

I was browsing my ESPN Blackberry app this morning when something caught my eye. It was an ad for the Weather Channel’s blackberry app. I was impressed, for the ad knew I was on a blackberry. How cool.

I clicked on the ad to download the app only to discover that it costs $12.99 every three months. My other apps are all free. Facebook? Free. Twitter? Free. ESPN? Free. CNN? Free. I have a couple of dozen apps on my blackberry and the only one I pay for is Verizon’s wonderful GPS navigation system (which is amazing, I must say).

The application appears to be pretty cool. It offers the following:

Location Tracker
Interactive Maps with User-Controlled Weather Layers
Home Screen Temperature Indicator
Ability to share weather with address book contacts
Personalizations such as location nicknames
Improved user-interface and navigation

So why does the Weather Channel think people will pay $12.99 every three months (for now) to have its application on their blackberries? This is a good question, because I think the company is making a significant tactical error in charging for the app.

Technology has given the Weather Channel (and other weather systems) the status of disruptor in the quest for ownership of the local weather franchise. Weather coverage is so ubiquitous that it has become commodified, and the Weather Channel has been leading the way. Their radar widget for iGoogle is spectacular.

But the Web is moving to mobile. Mobile IS local, and by putting up a pay wall, the Weather Channel is opening the door for local media companies to reclaim the local weather franchise.

This is a bigger deal than you might think, because Mobile Digital Television is just around the corner. It will be free, and yet cable companies who are accustomed to getting that subscriber cash are putting their programming in paid broadband applications. I think there will be a significant fight over mobile TV in the years ahead, and it will revolve around this issue of subscribers.

Blackberry apps, like iPhone apps, aren’t cheap, but they’re not unaffordable either, especially for smart companies that wish to take on the Weather Channel in this space.

For me, I’ll just keep using the National Weather Service’s animated radar for mobile. It’s just fine.

Posted in Media 2.0, Broadcasting, Technology | 1 Comment »

The Web’s Widening Stream

May 22nd, 2009

Here is the latest in my ongoing series of essays, Local Media in a Postmodern World.

One of the things I try to teach clients is that the metaphor of a Web “site” is misleading, because nobody actually “visits” any thing or any place. The code that comprises the back end of the Web talks to individual browsers on desktops, laptops or mobile devices. So everything about the Web flows TO THE USER, and not the other way around. This is useful in helping people understand that the serving of ads, for example, can be disconnected from the serving of content. But the newest iteration of the Web makes this kind of knowledge critical, for we’re moving from a static, destination-oriented Web to one that is real-time and alive. The new metaphor is “the stream,” and it will demand new strategies and new tactics for anyone wishing a seat at the media table in the future.

The Web’s Widening Stream

Posted in Media 2.0, Disruptions, Technology, Unbundled Media, Social Media, Continuous News | No Comments »

Serve the ads, not the content

May 21st, 2009

A fascinating article by Philadelphia Inquirer TV critic Jonathan Storm on the problems of broadcasters is getting a lot of attention today. And rightly so. The piece fairly examines the realities of what’s taking place in the broadcast world, and I recommend it for readers.

I find little things in these articles that say a lot about the bigger picture of what’s happening with media. There’s a gem in here:

“The consumer is way more shut down this time than anything in our memory,” said Chris Rohrs, president of the Television Bureau of Advertising, the local broadcasters’ trade association.

Though the sour economy is the primary force behind local TV woes, stations also are losing money to the interactive digital media of the Internet. The Internet, and all the devices that process it, are exerting the same sort of pressure on television that they do on newspapers.

“The broadcasting and cable business has been strong since the ’50s,” said Rick Feldman, president and chief executive officer of the National Association of Television Program Executives. “Now, because of the technology, which makes it possible to distribute video content in all kinds of ways, the business is losing eyeballs.”

“We’re no longer broadcasters,” said Chris Blackman, NBC10 news vice president. “We’re in the business of content. Traditional TV is only one of our platforms.”

Among those, I find Chris Blackman’s statement that “we’re in the business of content” to be most intriguing. I preach the value of a dual path strategy for local media, one of the paths being the extension of the company’s brand. In that sense, Blackman is dead on the money. However, if that’s all we do, we’re completely hosed, because other factors make such a position problematic.

For one, it assumes that “content” will always be monetizable on a high level, and this is suspect in a world where advertising is content itself. This is why I so strongly recommend local media companies get into the business of enabling commerce in our communities, creating new value for ourselves while meeting the needs of the business market. The idea that advertisers will pay big bucks to be associated with “content” is very much a Media 1.0, mass marketing reality, and that is not sustainable in our increasingly fragmented and unbundled media world.

Two, our “business” is really advertising, so to stake our future on content is risky business. In my presentation to Southern newspaper publishers last weekend, I showed the audience that the items that make up a web document come from multiple databases, including text, images, data, ads, marketing and social elements.

“If you could own just one of these in your market,” I asked the group, “which would it be?”

The answer, of course, is the ads, for that’s where the money really lies. You can serve content until the cows come home, but it’s the ads that make the money. And if you owned the ads in your market, would you care where they were displayed? Not as long as you ran the network of the ads.

This is the business of local media in the future, and that’s why Chris’s comment — while absolutely correct from the Media 1.0 path — isn’t necessarily so on the Media 2.0 side.

Just thought you’d like to know.

Posted in Advertising, Reinventing Local Media | No Comments »

Hubris gone to seed

May 21st, 2009

As Jeff Jarvis is quick to note, the hubris of the press can get in the way of accepting change. The odd thing about hubris (hell, most character defects) is that those so tagged usually don’t think of themselves that way. That leaves it to the rest of us to point out instances that demonstrate the fact.

My favorite is from Walter Lippmann himself. If you’re a regular reader here, you know him as the father of professional journalism, the guy from the early 20th century who, with his cronies on the Creel Committee — including Edward Bernays, the father of professional public relations — sought to manage culture through an elite press. Here’s the money quote from his book The Phantom Public.

“The public must be put in its place, so that it may exercise its own powers, but no less and perhaps even more, so that each of us may live free of the trampling and the roar of a bewildered herd.”

“Each of us?”

Last year, I attended a wonderful conference on the future of media, and NBC anchor Brian Williams offered opening comments via a video. In it, he expressed deep concern as a journalist about the amateur blogosphere (a.k.a. the bewildered herd) and used quotes from a blog about nose hair to prove it. The juxtaposition of professional news with a blog about nose hair was shocking — and entirely self-serving for Williams. I just shook my head in amazement.

And now we have Morely Safer, who told an audience at Quinnipiac University this week that he trusts citizen journalism as much as he would trust citizen surgery. According to the AP, “Safer said good journalism needs structure and responsibility. He considers the blogosphere no alternative, saying it is crammed with the ravings and manipulations of every nut with a keyboard.”

That damned bewildered herd!

Honestly, folks, it’s no bulletin that there are people who are fascinated with nose hair, and what’s wrong with them publishing their thoughts about it? One man’s noise is another’s news, and the First Amendment is honored by such, not trashed. But to look down your nose at it as the “ravings” of a “nut with a keyboard” and then use it to make the point that “my journalism’s better than yours” only clouds the issue. And to compare professional journalists with surgeons? I won’t even go there.

This is not only hubris but a special kind of hubris, one that has gone to seed.

Posted in Journalism, Culture | No Comments »

The economy hurts, but it’s not the real problem

May 20th, 2009

In a published interview this week, MediaNews Group CEO Dean Singleton said media analysts are “mis-covering” what’s happening to newspapers.

They don’t understand the difference between a severe economic downturn, the most severe we’ve seen in my lifetime, and structural change. There are both going on. There’s structural change going on, and it has been for several years, and that will change our business model. But the majority of the revenue declines we’re seeing in 2009 are plain, old economic downturn.

Singleton’s belief implies that things will be brighter when the recession ends, but that’s not what Jack Myers thinks. Myers has published a chilling warning for media companies that believe as Singleton does.

Those media companies that believe a renewed economy will send their rate cards shooting up are in for a shock.”

He went on to say that a lot has changed since the economy went south and that advertisers will not go back to the days of increasing costs. Advertisers, he noted, have made it very clear that they consider media costs too high, and he concludes that: “Media cannot expect to fund enhanced capabilities and services through increased costs.” Advertisers, he wrote, require enhanced services at reduced costs, and this means an operational mandate for media of reducing costs as well.

Funding of a business, like our nation, can no longer depend solely on increased revenues. Operating costs must be reduced. Salaries must be brought into line. Underperforming employees can no longer be supported. Advertisers, for their own survival, will inevitably cease their funding of those media vehicles that are no longer measurably productive for them. Marketers will not longer support those media that are not effective and efficient. The fragmentation of advertising budgets which escalated throughout the 1980s and 1990s, is reversing itself. While fiber optics, digital compression, interactivity, addressability, satellite distribution and other technologies suggest continued fragmentation of television media, advertisers are no longer willing to fund these advances.

We’d be hard-pressed to find an honest media analyst who would disagree with what Myers is saying here, and it’s why we’ve been preaching that the real disruption is in advertising, not in content. Media companies cannot assume that any multi-platform distribution model will return them to their glory days, because the advertising just won’t be there to support it. Add to what Myers is saying the reality that advertisers are becoming media companies themselves, and you get the picture.

Myers noted that unless media value is increased, advertisers will continue to withdraw support. This is why the old game must be discarded for a new one, one that begins with value propositions that connect in today’s disintermediated, commodified world. Local media especially must awaken to the reality that their most valuable asset is their sales force, not their news department, for sales account execs have their feet on the street and roots planted deeply in the local advertising ecosystem. The only question is how to take advantage of that.

We think that identifying and developing the Local Web is the key to survival downstream. We cannot sit back and wait for the Googles of the world to do it; we must do the grunt work necessary to identify and understand everything about the Web in each of our markets.

We’ve got to get into database advertising, for local businesses will demand it. Enabling commerce is the new mantra of local media, and we simply have to move beyond the ad infrastructure made available through a news-based portal to get there.

Every citizen of the media community — every television and radio program, every magazine, every newspaper section, every billboard, and every website — must operate at a profit. Losses at any level, except in an investment mode, cannot be tolerated.

This is one of the themes of our book, Live. Local. BROKEN News. The book is about television, but the same thing could be said about newspapers or any other form of local media. We cannot — cannot — keep doing the same things we’ve been doing and expect different results.

The relationship between media and advertising has always been symbiotic, and what happens to the host happens to the symbiote, like it or not.The economy has definitely hurt media companies, but it has masked much deeper issues, and those who don’t respond properly won’t be around to celebrate the new economy. Advertising is the new content. That’s where we need to be.

(Originally published in this week’s AR&D Media 2.0 Intel newsletter)

Posted in Advertising, Disruptions, Economy | No Comments »

Borrell: direct mail decline is local media’s opportunity

May 20th, 2009

A new report out today from Borrell Associates offers new online revenue hope for local media companies struggling with the model of banner advertising. Over the next five years, according to the report, direct mail advertising will fall 39 percent, from $49.7 billion in annual ad spending in 2008 to $29.8 billion by the end of 2013. If that occurs, direct mail will fall from the No. 1 placeholder for ad revenue to No. 4, behind the Internet, broadcast TV and newspapers.

There are five key factors contributing to what the report calls a “perfect storm” buffeting this ad category:

1. Fewer catalogues being delivered
2. Tightened credit
3. Shifting trends in coupons
4. Financial woes for the U.S. Postal Service
5. Momentum for do-not-mail legislation

Where will all that money go? Borrell projects the winner will be email.

Most of the growth in e-mail marketing will be local. we’re expecting local e-mail advertising to grow from $848 million in 2008, to $2 billion in 2013, as more small businesses abandon direct mail couponing and promotional offers and turn to a more measurable and less costly medium, e-mail.

This is a significant opportunity for local media, although the report warns that it won’t produce big revenues overnight. Companies such as Constant Contact that provide email marketing solutions for local media report an upswing in business, and it’s a smart ad category to help enable commerce in the communities we serve. But there’s another, perhaps even bigger reason for local media to get into this business.

Looking five years ahead, the need for local media managers to do things differently gets more urgent. A dramatic plunge is in store for display or banner advertising, which today comprises 51 percent of all local online advertising and is the mainstay of most local media companies’ Internet ventures. By 2013, we anticipate that banners will account for just 17 percent of all local online advertising, or about $2.6 billion.

So if your company has bet the ranch on banner advertising for its online future, it’s going to be a rough five years.

One of the constant themes coming from both AR&D and Borrell is the need for local media companies to diversify our portfolios, because the model of expensive, ad-supported content is slipping away. Advertising is content in the Media 2.0 world, and if we wish a seat at tomorrow’s table, we have to get into businesses that exploit the opportunities this new “content” offers. Email marketing is one of the most natural fits for local media, for our reach and reputation is ideal for creating mailing lists that we can mine on behalf of clients.

(Originally published in this week’s AR&D Media 2.0 Intel newsletter)

Posted in Advertising, Disruptions | No Comments »

Dollars and pennies and free, oh my!

May 14th, 2009

There’s (new) trouble in the “have your cake and eat it too” world of the networks and studios. Frank Rose nails it well in a must-read Wired article, Hulu, a Victim of Its Own Success? Rose begins with the decision in January to pull It’s Always Sunny in Philadelphia from the site.

Instead of carrying every episode of Sunny, a way off-center Danny DeVito comedy that languished on FX until Hulu users made it one of the site’s most popular programs, Hulu limited its offering to the five most recent shows. User reaction to the move was swift and predictable. “Well, off to the torrent sites,” one wrote on Hulu’s Sunny forum. “Hulu blows!” declared another. “Whose retarded idea was that?”

Well, not Hulu’s. The move was taken at the network’s request. Powerful forces are working against free, legal online TV — and the decision to pull Sunny may have made that show the canary in the server farm.

In theory, at least, the availability of such shows on Hulu threatens two of the key financial underpinnings of cable TV: DVD sales and carriage fees. Comcast and its brethren pay the cable networks to carry their programming, and the idea that Internet users can watch the same shows online for free is not popular in places like, well, Philadelphia — or at least that corner of it where Comcast is headquartered. Stock analysts aren’t exactly thrilled with the concept, either.

The user reaction to return to the torrent sites is a bigger deal than you may think. Duncan Riley notes in The Inquisitr that new figures released from anti-piracy group BayTSP show that the United States dropped from 1st to 4th place in 2008 in their annual list of copyright infringements by country. The reason? You guessed it.

…piracy is rapidly heading downwards in the United States. The big question is why? Why is piracy heading down at a time that the act of piracy has never been easier and more accessible?

Could it be that the 42 million videos served by Hulu in March, a number that has for the most part continued to grow over the last 12 months on a month to month basis, has a direct correlation with the decline in piracy rates in the United States?

We know it’s not the RIAA/ MPAA anti-piracy measures, with even the RIAA (mostly) giving up on taking downloaders to court. Even they could see that the strategy doesn’t work.

Instead, we have a response from big media that created supply where there was demand, supply that in part negated the need to download pirated content.

Riley concludes that Hulu is, in fact, the cause for the drop in illegal downloads, and that it has profound ramifications for the media industry. Combating piracy, he notes, involves the “free supply of content,” and this is what’s so bothersome to Hollywood.

It’s a conundrum, isn’t it? And I keep thinking of Jeff Zucker’s famous “trading analog dollars for digital pennies” phrase. The problem with big media is that it isn’t about trading at all; it’s about finding a way to have both the dollars AND the pennies, while technology and user demand keep pushing it in a direction away from either. Hulu is a tremendous asset to the viewing public, and I have to believe that it will become the standard for program distribution down-the-road, both paid and advertiser-supported. A single repository of programs accessible by everyone makes sense from a users’ perspective. It’s not, however, what the networks and the studios need, because the big money comes from the scarcity created by limited distribution. It is a conflict that threatens not only the cable industry, but also broadcasting, and it’s going to get worse. Hulu is a better mousetrap, and we all know what that means ultimately.

These are two excellent articles that provide insight into the world of entertainment distribution today.

Posted in Broadcasting, Disruptions, Culture, Unbundled Media | No Comments »

Court screws former Trib employees

May 14th, 2009

So let me get this straight: the bankruptcy court in the Tribune’s case has approved $13 million in bonuses to be paid to 700 employees, including, one assumes, the people who drove the company into bankruptcy in the first place. However, the court ruled against 60 former employees who were trying to get $2 million in severance pay promised to them when they were laid off.

When you get dumped by a company that’s headed for bankruptcy, your severance becomes a debt, and you must get in line with other creditors hoping to get their money, too. It’s crap, but that’s life in the big city. However, those creditors deserve to get paid more than employees within a bankrupt company deserve their bonuses. At least those employees still have jobs. Isn’t that “bonus” enough?

It’s stuff like this that drives everybody zonkers in the world of contemporary right and wrong.

Posted in Culture | 2 Comments »

“Promotions” to become top online ad category

May 13th, 2009

The world of internet advertising is dominated by two often opposing camps, and this can obscure the view of what’s really taking place and, more importantly, how local media companies should best move to grow business. On one side is Madison Avenue, with its big national players, 3rd-party ad networks and a host of trade publications that tout this trend or that as being “the” truth of advertising online. This camp is deeply entrenched in brand advertising and tradition.

The other group, however, consists of small and medium-sized businesses (SMB), whose core constituencies are local. These people are vastly more interested in actual sales, so leads are their priority. They are also interested in branding, but their advertising needs and tactics can be very different than what we read about in the trades. Consequently, they are often the first to delve deeply into the Web and use it to drive business. Proctor and Gamble may have a Facebook page, but it’s mostly there for show. Aunt Helen’s Hair Salon, on the other hand, will use her page to generate living, breathing customers. Ford will flood the Web with banner ads touting this deal or that, but Uncle Harry’s Ford dealership is selling cars through eBay stores, youTube channels and the relationships built through social networking.

Local media companies that derive most online revenue from 3rd-party ad networks can miss the opportunities presented by this second group, because their eyes are focused on reach and frequency. This needs to change, because there’s considerable evidence that — in the long run — those who are mining the Web for leads and sales will be the dominant advertising force.

Our friends at Borrell Associates have been tracking the advertising category called “promotions” for years, and the latest data reveals that it will surpass all other ad categories, including search, by 2013. Advertisers have always done promotions, but the category is growing so rapidly, because money that used to go to more traditional forms of advertising now goes to the advertisers’ own web activities, including their own websites.

Borrell’s research guru Kip Cassino told me that people often overlook promotions, because they’re not strategic in nature; they’re tactical and often the province of the product or brand manager whose interest is the top line, not the bottom. For this person, it’s all about feet in the door, more sales, more volume.

“Promotions has always been a big category,” he said. “It was all very neatly packaged back in the offline, legacy media days. An ad was an ad, and a promotion was something you did for yourself. But nowadays, that big line between promotions and advertising isn’t nearly as clear.”

In survey after survey of advertisers, “my own website” is the top category for increased online spending, and that money is coming from more traditional forms of advertising.

“Websites are promotional in nature,” said Cassino. “The pendulum is swinging to promotional spending in all forms, because you can measure it.”

“Advertising is always that leap of faith,” he added. “It’s an intuition, and it’s not a certainty that it was your ad that put people in the store, because there are so many other potential factors. With promotional spending, though, it’s pretty cut and dried.”

He added that, in five years, online promotional spending will be as big as online advertising is now, if not bigger.

This poses a challenge for media companies, especially at the local level, because the motivation of advertisers is increasingly “I want to be able to prove that what I’m doing is having some effect.” If media companies can’t or won’t participate in that, then those ad dollars will go elsewhere.

Cassino thinks local media companies can play a big, although in some case very different role in helping advertisers with promotions. What can we do to help these people (businesses) do what they want to do?

“Does there need to be advertising to support the promotion, to get someone to realize there’s a site out there doing this and that they should go to it? Is there something I can do in terms of providing mailing lists, research, or any of the mechanics to make this work better for the people I used to call my advertisers? Do they need creative help? Do they need ideas?”

Contests are a great form of promotion for local businesses, because they capture important data for the sponsors through registrations, people who can be approached with email campaigns down-the-road.

However we do it, though, we need to begin to see ourselves less as disconnected participants in the process of commerce and more as business partners with the people formerly known as the advertisers. Those business partners want us to drive traffic to them, and they will pay good money for that. This is much different than simply serving ads.

It’s also a lot more work, but the payoff is significant. And, if the Borrell projections are anywhere near correct, it’s where we have to be in the changing world of enabling commerce in the communities we serve.

(Originally published in this week’s Media 2.0 Intel newsletter)

Posted in Media 2.0, Advertising | No Comments »

Bold steps from MediaNews Group

May 12th, 2009

MediaNews Group, one of the nation’s largest newspaper companies, has taken some very positive steps in an effort to reinvent itself, and we need to talk about them. CEO Dean Singleton and president Jody Lodovic sent a memo to staff on Friday outlining the changes. Romenesko has published it.

…we face three daunting challenges that needed to be addressed. First, we continue to do an injustice to our print subscribers and create perceptions that our content has no value by putting all of our print content online for free…Second, our interactive revenue growth has slowed because it has been too closely tied to our print classified business, which has suffered with the advent of Craigslist and other free online classified opportunities. Finally, we are not significantly extending the reach of our audience, as our online products too closely resemble the newspaper, and thus fail to meaningfully reach the next generation of readers.

These are the three challenges of all newspapers, of course, but the plan on what to do about them is what makes this memo unique. It spells out a three-pronged approach:

We will begin to move away from putting all of our newspaper content online for free. Instead, we will explore a variety of premium offerings that apply real value to our print content. We are not trying to invent new premium products, but instead tell our existing print readers that what they are buying has real value, and to our online audience (who don’t buy the print edition), that if you want access to all online content, you are going to have to register, and/or pay…

We will begin differentiating our sites from the newspaper and focus on strategies designed to reach younger audiences and extend our reach. The websites… will become a different product. This new site…will be a regional news site that is actively managed to present breaking news…

We will build a new local utility site… which is an ecosystem of local information, resources, user content, shopping guides, and marketplaces.

All three are excellent ideas, and a lot of people are going to be watching to see what happens. The devil’s in the details, of course, so we’ll see what happens. As I prepare for my presentation Saturday, I’m increasingly convinced that the second prong is the way to go for all local media. It’s what the audience wants, and it differentiates between the legacy platform and that which is new. In that sense, it’s not just another dragging of the brand online.

And I continue to believe that we can use the Web to drive audience to legacy platforms, although it’s tougher for print than broadcast, because afternoon papers are a thing of the past. Perhaps someone will bring a new late afternoon/early evening print finished product to the table, like a yellow sheet or something similar.

On the third prong, a lot of media companies are experimenting with this, but I believe the infrastructure that needs exploring is the Local Web itself, not any fancy portal therein.

Kudos to MediaNews Group. The copycatting is about to begin.

Posted in Newspapers, Reinventing Local Media | 6 Comments »

Speaking with the newspaper industry

May 11th, 2009

I will be in Atlanta Saturday morning to address the Southern Newspaper Publisher’s Association Audience Development Conference. It’s kind of a big deal for me personally, for while I’ve certainly worked with newspaper people before, this will be the first time I’m formally addressing a gathering of the ink-in-the-blood clan. This is one of those moments that I think Alicia would’ve been especially proud, for we both had tremendous respect for the newspaper people we knew in our lives. That our little vision has caught the attention of the industry, therefore, would make her smile.

So I’ve been thinking a lot about this opportunity, and I want to clearly share that vision without a hint of “told you so.” I’m going to share a couple of mistakes that I think the industry has made, but only for the purpose of suggesting a different way of viewing the Web. I’m going to talk about the Local Web, about how the back end of the Web is more important than the front end, and how we can make money disconnected from “content.”

The conference is all about content, so I should stand out like a sore thumb. What else is new?

Posted in Newspapers | 1 Comment »