THURSDAY, AUGUST 23, 2007
YOUTUBE OVERLAY ADS: HYPE OR GREAT STRATEGY? (Terry)
However, that can run against the deep need to grab as much ad money as possible quickly to offset revenue losses elsewhere.
The lower-third supers in a Flash player isn't new, but YouTube's use of the technology is going to spawn a rush of this method of displaying ads over the content that's being played, and frankly, folks, I'm not convinced this is a good idea. There's an old saying I was taught long ago that I've used a lot in my life: just because you can doesn't mean you should. Marketers are going to love this technology, because it's ideal for an unbundled, distributed media play. Why? Because the ads travel with the content wherever the player is embedded. Nice.
The $64,000 question, however, is how is this going to go over with users? You can't stop the thing from playing, so it's as unwanted as those bloody pop-up ads from years ago. And technology being what it is, if you can do it, you can undo it, so we're going to have a cottage industry growing that will try to defeat these ads.
But this ad strategy isn't just being employed online. In this week's MediaPost "Brandtique," David Goetzl introduces us to the latest in cable lower-third insertions:
But that didn't appear in the same scene with product placement—or in that episode's case, an audio mention of the merits of DirecTV's "Sunday Ticket," which was slid into the dialogue earlier. DirecTV opted to give viewers some breathing room between its integrations.
That wasn't the case on the Aug. 7 episode of the occasionally funny "The Bill Engvall Show" on TBS. As a jar of Kraft's Miracle Whip sat on a counter in the background, a bright orange banner emerged corner-to-corner on the bottom of the screen—informing viewers that not only were they watching the comedy, but it was sponsored by the salad dressing/sandwich spread. (The banner appeared again later in a "non-Miracle Whip" scene.)
Kraft wasn't taking any chances that its marketing in the show would be spread too thin. It went for a big dollop all at once.
Are we all being conditioned to recognize that the lower third of a television program is fair game for any kind of razzle-dazzle marketing that the distributor chooses to run, in the hope that we'll just accept that when it comes to the web, too? I don't think so.
The blowback from people-in-the-know has been incredibly unfavorable, and that includes a comment from Brightcove CEO Jeremy Allaire that demand from the advertising community for this concept has been "disappointing." And the kneejerk reaction from YouTube users has been almost unanimously bad.
"No thanks. People - it is time to start looking for a site that will not alter the footage of the videoclips in any way - like the "old" YouTube used to be."
"YouTube has sold out. Time to move on to find a haven where ads aren't messing up the experience. Get lost, Google."
"Wow Google. Thanks for &#@king up youtube. You've already just lost about a thousand people (in a couple days) to other video sites. Thanks alot."
"Please start a premium service, maybe we can pay not to see the ads?"
But YouTube is getting — and will get — tons of ink (I need a new metaphor) over this, prompting Michael Arrington of TechCrunch to declare, "Ok, Ok. All Of You (even YouTube) Invented Video Overlay Ads 'First.'"
From a purely marketing perspective, these kinds of things are pretty cool. The ad travels WITH the video, so it really doesn't matter where the player is embedded. My advice is to explore the technology but take a wait-and-see approach on implementation, because these things are currently viewed by users as extremely irritating. That may change, or it may lead these to go the way of pop-ups.
YouTube is demonstrating that these ads can be easily removed. Every link that writers have used in the past 24 hours to point to a live example of this leads to a video without the ad. At least that's been my experience today.
Who knows? Perhaps it was simply a trial balloon. Google has not gotten where they are by pissing people off, and I just can't imagine that they'll adopt this tactic across all the videos that YouTube serves. <Link>
<<< >>>
THERE IS NO "FOLD" ON THE WEB (Steve)
Count another superstition dead.
So how do we know that's a good strategy?
Because the most clicked on link on TMZ.com is at the bottom of the page. It's the link that says "NEXT PAGE."
Milissa Tarquini is the director of user interface design and information architecture at AOL. (TMZ is an AOL site.) In her blog, Boxes and Arrows, Milissa has an entry called "Blasting the Myth of the Fold." In it, she writes:
Milissa also studied other AOL sites and makes the same conclusion. On the AOL Money & Finance page, she discovered that users found the information for quotes and personalized portfolios in strong numbers even when that information was placed "well beneath the 1024 x 768 fold." ("The Fold" is different depending on the screen resolution of your computer and which browser you're using.)
There is a challenge here - advertisers still believe the Myth of the Fold. It's up to us to educate them and show them that a contextual ad placed next to a story is effective regardless of where it is on a page.
Milissa's conclusion? Free up the top of your site! People do, in fact, scroll. There is plenty of room so let the site breathe. "If your content is compelling enough your users will read it to the end," writes Milissa. <Link>
<<< >>>
LOOKING BEYOND THE USUAL CHANNELS TO FIND EMPLOYEES (Terry)
On a recent client visit, I had the opportunity to participate in an informal discussion with news managers at the station on the broad subject of new media. This client is undergoing a significant internal transformation as their employer attempts to shift its focus to one that is more web-centric. They're experiencing things that other stations will be no doubt be facing in the months and years ahead, if they aren't already.
The most revealing part of the discussion involved young newsroom employees and potential employees. These people possess the knowledge and skills to be multimedia journalists but don't view theses skills as anything other than for personal use. In other words, they can do everything that many mid-career staffers can't — run blogs, upload pictures and videos, participate in social networking sites, interact with others online, use web tools to make their lives easier, search, aggregate, customize, the whole nine yards — but these aren't viewed as tools for their work.
They view the news as a job and use all these other things as tools to help manage their lives. Moreover — and amazingly — these same young people don't watch television news, not even that which is produced by their own employer. To a person, the managers talked about how hard it is to hire young people with a passion for anything other than their paycheck or what the business can do for them.
Now, I can't prove that this is an industrywide phenomenon, but I suspect it's more widespread that we care to admit.
I'm not surprised that young newsroom staffers don't watch the news. If they did, it would run counter to the behavior of their contemporaries. That they don't even watch (or want to watch) the work of their own department, however, is more an indictment of a higher education system that sells high schoolers on the idea that they all can be Katie Couric than anything the station is doing.
We talked a lot about dipping their recruiting nets in different ponds, thereby avoiding the pipeline that feeds our industry. How about interviewing newspaper reporters for jobs and teaching them the video side of the business (tip: many of them already know it) or talking with local bloggers about newsroom jobs? To bloggers, the making of media isn't about a paycheck. Most of the skilled bloggers I know write because they have something to say. They view personal media as a way to make a statement, to make a difference. They bring passion and energy to the table.
And I think this is one of the reasons I like bloggers so much. They remind me of the people I worked with in "the biz" when I first started, people who wanted to be journalists, so that they could make a statement or perhaps make a difference.
We've got big problems — problems that we've all had a role in creating — with the feeder system that our industry uses. I stopped reading the TVSpy message board, because I got tired of reading posts from young reporters who had just landed their "first job" and were looking for advice on how to move to their "second job." This is the way it works with us, and it's unlikely we'll lift a finger to change it.
But wouldn't it be ironic if life itself righted the journalism ship by raising up a new generation armed with the tools of the personal media revolution? The question is will we be smart enough to tap that source or let it go on its own. <Link>
<<< >>>
HOW THE MYFOX DEAL HURTS FOX AFFILIATES (Steve)
The deal, as you probably have read, calls for FIM to roll out the "MyFox" web (model which the Fox O&Os currently use) to every affiliate that wants it. In all, 160 Fox affiliates are in play. At Lost Remote, I wrote about what a terrible idea this is for the affiliates; they are giving away a very valuable asset and access to half their online ad inventory in the process. It's a no-cost solution that will provide little gain.
The best way to make money in business is to invest in yourself. FIM wins - they aggregate all the national advertising. Locals lose - they'll get the scraps with nothing to boost their real business: local advertising sales.
Stations around the country have proven that outsourcing their sites and cutting revenue share deals do not make for the most successful revenue models. Fox usually learns from others mistakes. This time, it's repeating them.
The counterpoints fall into five main components:
#1: It costs too much for stations in small markets to run their own sites.
Yet television stations in small markets run television stations, don't they? I'm sorry - this is a feeble excuse. This isn't an either/or proposition. It's not a matter of "Do we hire an anchor or have a website?" You have both. A web business is a capital investment, not an expense.
When you decide to get into a business, you draw up a business plan. You define your revenue goals over the next several years and you invest accordingly. Only in television is the mindset "this is losing money immediately." Every other business looks at the longer term for growth. The opportunities are there in every small market. If you're the place to go for local news, blog aggregation, sharing and database-driven information you will profit.
I could take out a small business loan myself for the kind of money we're talking here.
#2: Having a template is better than what many of the sites have now.
True. So? Getting a D is better than getting an F, too. Shouldn't we aspire to more? This is a straw man argument. The MyFox deal takes advantage of stations that simply need a little more education about what their markets could bear in advertising if they built web presences and networks that people actually wanted. The network wins by a cynical calculation here that says "It's better to feed them crumbs than to teach them how to bake."
#3: Locals tried spending money on the web in the past and it didn't work.
If I hear about the damn CueCat one more time... There is a difference between dumping a ton of money into a venture that was driven by advertisers and investing money into a proven model that is driven by the audience. Spending money in a failed online venture, whether it was the CueCat or some other product in 1999 does not mean that, from now on, no stations should ever invest in the web again.
Any time you don't want to take a risk, you can point to how something failed in the past. I can point to tons of examples of achievement for those who want to be successful.
#4: Who cares if local sites all look the same?
I sure don't - if the look was any good. Look at something like the relaunch of the Commercial Appeal. If I didn't tell you this was a newspaper's site, you wouldn't know. It has video on the right, text on the left, blogs, local information - it is what a local site should be. It's also ridiculously clean. This kind of look would work in any market, and it's easily customizable.
In looking at one such site for example, I see one story in video, thumbnails for another four just below that, and a very generic weather box with the current temperature. Above that information there is a ticker with nothing but promos in it, a banner ad, and three different navigation bars. Scrolling down, there are a scant few more stories. If there is an RSS feed here, I can't find it.
Total choices of news stories on the front page: 10. Number of stories that are local: 7.
#5: At least this is a place to start. They'll add to it.
If you were to start your own company, would you say "I want to see how everyone else has done this and then do it exactly the same or worse?" Would you say "I will start this company of mine, but I will only do so with the scraps I have lying around and I won't invest a penny until it starts making money?" Would your business plan be "I will take all of the things from my other store and sell them in this store, but I will rewrap them and make them harder to find and more confusing to use?"
If you were launching a site today, wouldn't you at least start with the state-of-the-web tools currently available? There is nothing in the MyFox platform that hasn't been standard practice for three years or more.
There is only one logical conclusion to draw from this - the stations that adopt this model do not want to have a web business. They just want a site. And as long as the stations going in to the agreement know it's not a major business opportunity, they will get what they expect.
Their competitors will be thrilled, too. <Link>
<<< >>>
SUPER MODELS (by Joe Mandese, August 2007 issue of Media Magazine reprinted with permission)
Digital may be more fashionable, but industry economists aren't giving up on the traditional role of media.
Last June, after more than half a century of presenting twice annual estimates for the advertising economy, Universal McCann's director of forecasting Bob Coen did something unusual and, in some ways, very symbolic. For the first time, Coen was joined by a co-presenter, Brian Wieser.
The move was telling for several reasons. For one, Wieser, a bright young economics turk who is director of industry analysis at sister Interpublic unit Magna Global, is known by insiders to be Coen's heir apparent. Not that Coen is showing signs of retiring anytime soon, but the move seemed to be Interpublic's first public acknowledgment that Wieser is at least waiting in the wings to become Madison Avenue's official scorekeeper. More to the point was what Wieser presented: Interpublic's first-ever forecast for "emerging media."
Talk about studies in contrast. Coen, a white-haired, soft-spoken octogenarian gave his assessment - a fairly tepid one at that - for the economic health of the traditional advertising economy, including such media as TV, radio, newspapers, magazines, outdoor and Internet banner ads. Wieser, a 30-something with jet black hair and swarthy good looks, offered his view for the emerging media marketplace, including search, online video, social networking and mobile marketing, which are all growing at healthy double-digit rates, and which many see as the future of the advertising business. But somewhere toward the end of Wieser's presentation, something equally revealing happened. It became apparent that Coen's forecasts have not been capturing many of the newest and most dynamic sources of media - the kind that many people believe are transforming the underlying relationship marketers have with consumers.
By Wieser's estimates, those emerging media are still relatively small, totaling less than $12 billion in 2007 advertising budgets. Some might argue with the absolute size of Wieser's estimate, but the reality is that ad spending in emerging media is a mere pittance when compared with the $630 billion marketers will spend this year on the media Coen has historically defined as advertising in his tallies, which are the basis for most official estimates for the advertising economy, including the U.S. government's.
A final significant thing occurred as Coen and Wieser fielded questions from a group of reporters and Wall Street analysts who attended the presentation. They agreed it might be time for the industry to finally revise how advertising is defined to reflect the growth of new media platforms, and new ways that marketers use to communicate their brands, products and service messages to consumers. It was a significant inflection point for the advertising industry and the media world, coming just six months after Coen made a presentation at which he went to great lengths to remind the industry about what is included - and excluded - in Madison Avenue's official advertising pie (Media, March 2007). During that presentation, Coen flashed the cover of a 1942 academic tome - The Economic Effects Of Advertising, by Harvard professor Neil H. Borden - that has served as the gospel defining the advertising business for 65 years.
Contrast that with the presentation Wieser made in June, in which he flashed an image of his own computer-generated avatar from virtual community Second Life to illustrate the kind of new media platforms that have been falling below the radar of Coen and other industry analysts, but which have become an important source of marketing spending and strategy. They may also be part of the reason why the growth of the traditional advertising world has failed to keep pace with the overall economy.
The New Math
Last year, U.S. ad spending fell to 2.13 percent of the gross domestic product, down from 2.25 percent in 2004, according to Coen's estimates. If the kind of newer media platforms tracked by Wieser are factored into the equation, the picture looks a little better, but the reality is that even new media are still small relative to the broader economic effects of established media. To really account for what's happening to the advertising economy, Wieser says, the industry needs to redefine advertising to include other forms of "non-media marketing" such as promotion and customer relationship marketing, that have been taking greater shares of the budgets of many big marketers.
"Change is happening in places where we're not looking," Wieser asserts, adding that the perception that marketers are simply shifting advertising budgets out of traditional media like television to online isn't entirely true. For one thing, TV advertising spending continues to grow, albeit at a slower rate than online and other digital media. The growth in online ad spending, he says, is coming primarily from new advertisers, or e-commerce marketers who are "endemic" to the Internet.
"It's a different group of advertisers that are driving the growth of online ad spending," he says. "The perception that TV is a declining medium is wrong. That's not the case at all." At least not yet.
The reason, Wieser says, is that television advertising continues to work for big marketers, and is still more efficient than emerging media platforms. Not only does TV usage continue to grow, but TV remains the dominant media platform among most consumers.
Comparing TV to online video - currently the rage among Madison Avenue's digerati - Wieser says there's no contest. Although usage of online video grew nearly 40 percent in 2006, it barely registers relative to traditional TV usage. Using what he describes as aggressive assumptions, Wieser predicts traditional TV will remain "90 times more popular" than online video through 2011, the end point in his current forecast. Reasons include the quality of content, the technological and economic hurdles associated with making online video universally accessible, and the fact that TV is simply far more "convenient" for most people to use.
Convenience is the same reason why Wieser doesn't believe traditional marketers will abandon television any time soon. Although online video ad spending - $366 million this year - is growing at a much faster rate - 56 percent for 2007 - than traditional TV advertising budgets, Wieser estimates it is a mere fraction of the more than $60 billion U.S. advertisers will spend on television this year. Most of the growth in online video - like most of the other emerging media platforms Wieser tracks - is coming not from the big, traditional advertisers, but from new advertisers. In effect, he says, the economics of new media - everything from online video to search to social networking - is causing the "advertising pie" itself to grow by attracting new brands, products and services that were not able to establish themselves with traditional media.
In some ways, that's always been true about the advertising economy. Traditional marketers may have been among the first to support cable TV networks during their pioneering days in the 1980s, but the reality is that cable attracts thousands of brands that aren't big enough to buy the major broadcast networks.
To illustrate how these economics have been impacting new media, Wieser divides the world of online banner advertisers into two buckets: traditional advertisers; and those that are either new or endemic to the Internet. The data shows that the top 100 TV advertisers represent only 24 percent of online banner advertising; of that traditional advertiser total, "brand-based advertisers" account for only 20 percent.
On the other hand, endemic online marketers also are once again some of the biggest customers of traditional media. E-commerce, or so-called "dot-com" businesses, have re-emerged as one of the largest advertising categories for traditional media. Coen estimates dot-com brands will spend $4 billion on traditional media to drive traffic to their sites, nearly twice what they spent in 2001, the year following the dot-com crash.
Branching Beyond TV
Some might think Wieser's view - coming from a big traditional advertising organization like Interpublic - might be biased. After all, Interpublic, like the other big agency holding companies, still derives the majority of its revenues from traditional forms of advertising. But they also are investing heavily in digital media startups, as well as in growing their own digital media operations. Interpublic has invested in Facebook and Spot Runner, and has acquired the search firm Reprise Media). WPP Group also invested in Spot Runner and has acquired 24/7 Real Media. Publicis has acquired Digitas.
Those investments are part of a Madison Avenue diversification strategy that acknowledges the traditional view of advertising is evolving into new forms of marketing communications that include a variety of new digital media services.
Something else appears to be changing along with them: the underlying models the ad industry uses to define what it does. Even Coen concedes that Borden's 1942 treatise needs revision. The problem is that, like digital media itself, the definitions and business models governing advertising are beginning to blur across some lines. Not surprisingly, this disruption is becoming most evident within the online advertising world, where some industry leaders have already begun redefining advertising.
Ads of the Future
"The industry is crossing an inflection point, passing from the conventional mass media 'interrupt and repeat' model for advertising to a family of advertising models centered on relevance," asserts Steve Rappaport, director of knowledge solutions at the Advertising Research Foundation, and one of the authors of the recently published Online Advertising Playbook. The playbook, based on knowledge gleaned from the past 10 years of Internet advertising, was intended to serve as a guide for traditional marketers to understand online advertising. It's proving to be a guidebook for new approaches to advertising that could have import well beyond the online world.
The reason: Concurrent with the emergence of new media and new forms of marketing communications, is a sense that the traditional model no longer works in an anywhere, anytime, on-demand world. In fact, one of three new advertising models identified by the playbook has been dubbed the "on-demand model," and is based on a consumer's ability to choose content and interactions with brands.
The other two models identified by the playbook include a "permission-based" or opt-in approach to advertising, and one that has been defined as "advertising as a service to consumers." These new models are still somewhat subject to interpretation, and Rappaport says the lines between them can also blur. He also believes other new models will evolve from them as marketers and agencies begin to understand new ways of interacting with consumers via new platforms. Social networks, for example, provide an entirely new framework for brand marketers, which many believe could transform consumer marketing much the way it is transforming how people socialize.
"Certainly, it's not stopping here," says Rappaport, a Madison Avenue vet who first began writing about how digital media would impact consumer marketing in the late 1970s when he was an executive at Interpublic and such changes were purely theoretical.
"If you look at it over the long view, we have gradually been shifting away from a probabilistic exposure of an advertising model to one that is very deterministic, and on-demand," Rappaport says. "It's been happening slowly over time, but what's happened is that the sudden growth in broadband access is accelerating the process, and now you can see very clearly that this is going to fundamentally change advertising in ways we never thought about."
Interpublic's Wieser agrees with Rappaport's assessment. He just doesn't think it will happen as soon as some online evangelists are saying, because they're not properly accounting for the entrenched organizational cultures that are built around traditional media models.
"At some point, we are going to reach that inflection point, but it's like trying to predict when the stock market is going to crash or when the housing boom is going to come to an end. You know it's going to happen eventually, you just don't know when that will be."
One thing Wieser is pretty confident about, is that when that shift finally does occur, it will be the most profound change ever to impact Madison Avenue: "The longer this goes without correcting, the more significant the change will be when it occurs." <Link>
|
The latest development in all this is news this week that Google's YouTube has begun running lower-third "supers" as ads on highly specific videos. The example on the right is an AT&T ad over a music video. The industry has been waiting for this, because YouTube has been writing the rules for online video distribution, and we've all awaited the day when they would begin the monetization of all those video views. 
In addition to all the fuss, an online spat has now developed between various Flash video application services over who actually came up with this idea — or delivered the concept — in the first place. Brightcove demonstration the technology 18 months ago. VideoEgg has applied for a patent on their technology, and we'll see how that plays out.
Terry pointed out to me how 
Last week, Fox Interactive Media (FIM) 