Dissing Harvey Levin (and entirely missing the point)

October 28th, 2011

Occasionally, the comments posted in response to an online article are more revealing of media that anything in the story itself. Take the case of Paul Farhi’s Washington Post piece, TMZ founder Harvey Levin’s unsolicited advice to mainstream media: Adapt or die.

Mr. Levin addressed the National Press Club with a dire warning for the institution it represents:

Your business model is broken. Your future is in jeopardy. Adapt or die.

It is clinging to this broken business model that’s the problem, Levin said, because media is afraid to mess with it.

Newspapers and magazines should get out of the print business, he added, if they want to survive. And if the upheaval of the Internet over the past decade hasn’t been enough, just wait: The next five years will be even more tumultuous for the hidebound and hoary.

But rather than investigate what Mr. Levin told them, Farhi chose to insert the content of TMZ into his article, which was done with just a hint of snark. Calling him a “gossipmonger” and dismissing him according to his appearance (“pint-sized, tanned and California cool in a blazer, open-necked shirt, jeans and slip-on sneakers”), Farhi shifts the article from what Mr. Levin said to the content of his product, TMZ. The article questions tactics like paying for information and raises the matter that Levin’s TMZ has gotten some things wrong, all designed to invalidate anything offered in the way of advice. After all, cough-cough, we can’t trust, cough-cough, anybody who would do, cough-cough, something like THAT!

This opened the door for comments supportive of Farhi’s distaste. “God help us…sensationalist trype…appeal to the lowest common denominator…Internet version of yellow journalism…character assassination…his “newsroom” of stoner kids…new media for a dumb nation…TMZ is the real life idiocracy…tabloid pornography…you can’t take his news seriously,” and so forth. Some readers noted that the Post should be paying attention, but for the most part, everything that Levin brought in his message was overwhelmed by criticism of the content of his enterprise and how it’s presented. This is the big — and, frankly, pathetic — mistake that most journalists make in analyzing the success of TMZ. This is because, by training, tradition and instincts, journalists believe it is the news content or its subjective “quality” that matters, so the content is what gets the attention. TMZ, however, is so much more than content, and that’s what Levin was trying to say.

TMZ was created of, by and for the Web. It’s TV show grew out of that base and functions in a secondary role. The stories are presented in blog format, with the latest on top. It has never wavered from this, not for a moment. The stories are all unbundled and can be distributed elsewhere. The language is conversational and assumes a live audience. Its franchises and gimmickry all serve a content point (e.g. “What do they look like today?”); it isn’t there simply to be there or to justify hokey marketing. It lives within the continuous stream that is news in the 21st Century. It satisfies a niche that, like it or not, is important in people’s lives. You can’t join the watercooler discussion about the Jackson trial unless you know about it, and that discussion changes throughout the day. Just as ESPN dominates the world of sports (“If it happened today, you’ll see it on ESPN”), so TMZ dominates its niche in the entertaining world of make believe. We can all take a lesson from that.

Levin’s business model is still advertising, but he’s able to emphasize dayparts. He also delivers a very sellable audience for advertisers, while the Big-J types are content with the +55 crowd. What the journalists miss is that its not all about the content of TMZ.com; it’s at least as much about its definition of the story, how that’s presented and distributed, talking with people instead of at them, its ownership of a popular information niche, and the pure passion evident in everything the company does.

Harvey Levin does have an important message for media, and it isn’t simply “gossip sells.” We need to get off our high horses and listen.

Posted in Culture, Media 2.0, Reinventing Local Media | 2 Comments » |

The big, dumb audience

October 26th, 2011

The central tenet of mass marketing is that it “works” by dropping messages into large groups of people. Whether it’s the pulpit, the stage, the stadium or mass media, the best advertising can do is a one-to-many paradigm. It doesn’t matter who or what these groups are; what matters is the size of the gathering, because the more eyeballs, the greater the likelihood of “hitting the target.” It was the wonder of this that drove newspapers from their activist, partisan nests in the late 19th Century and birthed the absurd notion of “objectivity.” The crowd had to be large, diverse and passive, not small, strident and active.

Making money became the fundamental reason for media, and industrial age managers began to see their news customers as a mass instead of people. It is this idea that’s being turned on its head today. People can be smart. Masses, to be effective, are best considered dumb. Whether it’s the audience, the readers, the listeners, the viewers or whatever, what we see is a vast sea of faceless “consumers” held captive by the breathtaking marvel of our content and into which we can drop messages that they neither want nor need. And, of course, people will pay us to deliver those messages.

Along comes the Web and shatters that perfect money machine, because it’s not a one-to-many paradigm. The Web is a 3-way phenomenon — down, up and sideways — and it’s much more suited to direct and content marketing than mass marketing. This is causing a huge conflict for those whose money comes the old fashioned way.

For example, Shawn Riegsecker, the founder and president of big online ad network Centro, told eMarketer last week that “brands increasingly pushing to pinpoint their exact target audience” is a “fool’s errand.” The quote caught my attention, because Centro is THE giant in the non-targeting ad game — the old money machine — a pertinent fact that eMarketer left out of its interview (Wait a minute, Shawn. Isn’t your company the main benefactor of a purely reach-based ad model?). Centro commands big money from ad agencies and dictates which sites in the market get paid based on their reach and often old school, run-of-site CPMs. The company is at the very heart of the Madison Avenue illusion that the Web is just another playing field for mass marketing.

We’re driving ourselves insane by trying to get to the right audience when close enough is good enough.

Right. Riegsecker is to ad innovation what the New York Times is to new journalism. Everything’s fine. Now just shut up and send us your check.

For sure, Centro offers targeting, but its bread and butter is dumb masses. Notice also that he references sellers as “brands,” another moniker compliments of the mass marketing industry. It’s all about “brands” selling into big, dumb audiences, not products and services being sold to human beings. Ad networks and agencies are the middlemen of this sophisticated big money machine, and the Web finds all middlemen to be inefficient. This, too, is driving people nuts, especially those whose livelihoods depend on status quo maintenance.

He’s partially correct in that a lot of people are trying very hard to find the “perfect” target, but a lot of that is driven by businesses who view the Web more as a lead generator than a brand lift mechanism. There’s nothing wrong with that, but it doesn’t stop the ad industry from playing defense against the direct marketing magic of the Web’s data. There’s simply too much money at stake. As I’ve said here often, however, that money is living on borrowed time, because advertisers are themselves becoming their own forms of media companies, and nobody has any idea where it’s all going. Meanwhile, those with skin in the old game keep fighting to defend their model, and that’s a problem, because every day you play defense is another day you could be playing offense in this age of disruptive innovation.

Gordon Borrell, who studies these trends in online advertising, agrees that “advertisers need to stop fretting over the absolute perfect audience target or metric and get their message out to the best possible target.” He adds, however, that “getting as close to the audience ‘truth’ as possible is more or less a mandate with digital media, and I don’t want to see an end to that quest.”

Borrell noted that digital data is the real problem for traditional media.

We all know how traditional media believe that it’s all about size. They’ve railed against measurements that make them look puny while embracing other measurements that prove their dominance. With the Internet, I suppose it boils down to advertisers wanting to hit that exact target — which seems to be getting smaller and smaller — rather than buying mass. So therein rests the big conflict: a big dumb audience versus a small group of wallet-ready buyers.

So Riegsecker may be right from his perspective, but it’s exactly that perspective that’s being challenged by the data-centric Web. This is why those companies who’ve invested in data — the best examples being Google, Amazon and Facebook — have such a big future leg up on their old school competitors. As ad money continues to move to the Web, it’s going to want specificity, not just big, dumb audiences.

The real conundrum in all of this is that we’re in a slow transition period, so mass marketing is still extremely valuable. The smart companies who’ve long depended on dumb masses, however, are also getting their feet wet in the other, even though it feels uncomfortable and a lot like competing with ourselves. The stakes are simply too high not to diversify our business models, and the people formerly known as the audience are now in charge anyway.

The real fool’s errand, therefore, is acting as though it’s otherwise.

Posted in Advertising, Disruptions, Media 2.0 | 1 Comment » |

Twitter handles should be personal brands

July 27th, 2011

When the BBC’s chief political correspondent jumped ship to work for a competitor last week, she took her 60,000 Twitter followers with her, and that has raised a few eyebrows in media circles. UK blogger Tom Callow made what I believe is an incorrect assumption when he wrote:

On Thursday 21 July, the BBC lost 60,000 Twitter followers when Laura Kuenssberg renamed her @BBCLauraK account to @ITVLauraK.

Callow wrote that the BBC has an ownership claim on that Twitter account, and suggested that those followers were interested in the views of the BBC’s chief political correspondent,” not ITV’s.

Twitter followers aren’t names in an address book. They are more like subscribers to a blog. We must remember that Twitter is precisely that: a microblogging service. Whilst the microblogs of BBC correspondents are running off Twitter’s servers, the BBC is controlling what tweets go out and must be able to stake a claim on the ownership of each official account — not least because they are now promoted so prominently on screen during news bulletins and even shows like Newsnight and Question Time.

Lost Remote’s Cory Bergman advanced the story, and asked the essential question, “Are people following the person — or the content the person represents?” Cory also smartly suggests that, contrary to what Callow thinks, Twitter does function in important ways like an address book.

This is a very important issue for media companies to get right, because in the world of personal media, personal brands are what matters. People follow people, not institutions, and if we try to practice the opposite, we’re likely to end up without any followers at all. This is why I think Callow is misinformed, because he’s viewing Kuenssberg’s (or any reporter’s) use of Twitter from an entirely old school business perspective.

People jumping ship and taking their followers with them is a necessary part of business in the 21st Century. The way to stop it is to make employment with you so attractive that there’s no incentive to switch, but if and when it does happen, the “loss” of those followers is simply a cost of doing business today. I would argue that we don’t really lose anything when that happens anyway, because to think otherwise underestimates both people and the ease with which technology allows them to change, too.

Moreover, we want to actually encourage the growth of personal brands among our employees. Why? Because without it, there’s no incentive for them to use social media 24/7 in the execution of their jobs. If we “own” those accounts, then we must pay people to use them, and that means on company time. Don’t think so? Press the issue and see how far it goes in the courts. No, we’re MUCH smarter to help individuals grow their brands with the quid pro quo being that they will use their brands to the furtherance of our business while our employees. We gain from their brands, which can include all forms of social media, blogging, personal events and appearances, and anything else they do with “their” brands, as long as they are our employees. When that ends, the cross-promotion ends, and that’s the way it should be.

Don’t think this is viable? Ask Arianna Huffington.

Individual people can go places that institutions can’t, and if we limit that in the name of protecting “our” assets, we effectively limit the potential that goes with it. We can’t have it both ways, folks.

Media companies, especially television stations, seem to hyper-react whenever somebody leaves. Their bios are immediately removed from websites with no explanation, and on-air goodbyes are often completely missing, depending on the reasons for departure. We do this despite that fact that it’s an affront to our audiences, who’ve gotten to know these people during the years of their service. Social media changes that dynamic, because true fans can follow them wherever they go. This is a good thing, I think, and another reason why my advice to any active or budding news person is to use their own name as their Twitter handle and not associate it with any media outlet.

Media companies who insist that call letters, for example, be included in Twitter accounts miss the point of social media by assuming it’s simply a way to extend their brands. Why we do this is a mystery, for the online world is not the airwaves; there are far more than four or five antennas in the ground here.

Posted in Media 2.0, Twitter | 2 Comments » |

Making money with new media begins with new thinking

July 13th, 2011

I get these funny looks sometimes during meetings and presentations. It’s a sign that I’m somehow making an assumption about audience knowledge that needs explaining instead. I’ve learned to stop and go back, because thought paths I crossed long ago are just becoming apparent to many today. The great curse of downstream thinking is that it’s very hard to explain to those firmly planted on today’s path.

So, in our new series, “Making money in Media 2.0,” we’ll take these steps backwards once in awhile, because things are happening so quickly today that unless our foundational understanding is solid, we’ll make mistakes.

Every day there’s a new article somewhere blaming this thing or that for the demise of legacy media companies, especially newspapers. This is our logical minds trying to figure things out, but our logic is immersed in certain assumptions and beliefs. The Web is a marvel of humankind, on a scale with the Biblical Tower of Babel. It functions in ways completely foreign to those who’ve only understood the life that came before, so it’s quite natural for us to miss what’s actually taking place.

Where we tend to “miss” new media most is in the money-making realm. The best we can see is how the digital world is turning old dollars into new dimes, but that’s because our viewpoint is biased by history, tradition and the limited scope of our knowledge.

In Clayton Christensen’s brilliant books, The Innovator’s Dilemma and The Innovator’s Solution, he describes two different kinds of business innovations. Sustaining innovations are those that bring better products to an existing market. Some sustaining innovations are simple, incremental, year-to-year improvements. Others are dramatic, breakthrough technologies. “The odds overwhelmingly favor the incumbent leaders of the industry in battles of sustaining innovation,” Christensen told Howard Dresner in 2004, “whether they are simple, incremental innovations or breakthroughs.” A disruptive innovation, however,”brings to market a product not as good as the products in the current market, and so it cannot be sold to the mainstream customers. But it is simple and it is more affordable.” Disruptive innovations take root in a small corner of the market but eventually reach the mainstream. “I call that a disruptive innovation,” Christensen said, “not because it’s a breakthrough from a technological sense, but instead of sustaining the trajectory of improvement that has been established in a market, it disrupts it and redefines it by bringing to the market something that is simpler.”

The real problem for media is that the Web is a disruptive innovation while incumbent businesses view it as a sustaining innovation. This is the core issue with making money in the Media 2.0 world, and the more time and energy we spend in the sustaining innovation square peg, the farther we get from the real money in the round marketplace.

How I wish this light would suddenly flash to life in the minds of media company executives.

The primary example of this is a TV station’s website, station.com (or newspaper website). Here, the Web is used to extend the brand of the TV station, provide new services to its viewers, and make it a better television station. There’s money to be made here, for sure, but it is just those dimes (and always will be).

Social media is another example. Local media companies set up accounts on Twitter, Facebook and now Google+ to, again, improve their central products and services, as if these were sustaining innovations. We use Twitter to notify people of our work. We use Facebook to easily interact with our viewers. We use Google+ to put multiple folks on the air at the same time. It’s all so useful in making us better media companies.

There’s a new movement underway called “Social TV,” that combines the interactivity of innovations like Twitter with shared viewing experiences in order to provide the magical marketing term “engagement.” This is fine, but it is a sustaining innovation.

People ask me about these things, and I say they’re great and that we must respond, but they do nothing to help what is essentially a business problem.

So everything we’ve done with new media so far has been to improve old media. I heard an investor say once that media companies were only interested in bolting innovations onto their existing business model, and I think that’s generally true. In doing so, however, we risk everything, because we’re missing the reality that the Web is a disruptive innovation.

This is why Christensen is so adamant that the only workable response to a disruptive innovation is the creation of a separate business unit that is free to compete with the legacy platform, even destroy it. Most companies have indeed set up separate units, but unfortunately, they are behaving as though the Web is a sustaining innovation. Incremental revenue increases can be gained through networking all the websites owned by a company, which also keeps costs down, but this has the effect of creating a specialized ad network, which can work against the best interests of each property.

Local media is a local industry, and that’s where the separation needs to occur. I’m not suggesting it can’t be managed from afar, but the more the new unit is disconnected completely from the old, the greater its likelihood of success. I don’t believe, for example, that brand-extension websites should be operated by this new unit. Unfortunately, that’s the central focus of most digital or interactive divisions of local media companies, and this is exactly what Christensen is talking about.

In Salt Lake City, Christensen protégé Clark Gilbert is running the separate division for Deseret Media. Much has been written about his successes, but even his is a hybrid that functions as both brand-extender and innovator, because he also has editorial oversight. This may be the only way media can function, but it will always be less than it could be.

In referring to Gilbert, Christensen noted his “masterful” research on the Boston market while a student of his at Harvard.

Those ones that set up a separate organization; after they got the funding and everything, as soon as they separated it, they could think, “Now who wants to learn about Boston? Who’s not in Boston? Who would like to advertise (who’s) not advertising in The Globe, and who would like to use this that doesn’t subscribe to The Globe?” All of a sudden, there are all these opportunities they can see, where when they were in the Boston Globe newsroom, they just couldn’t see those things.

Perhaps it’s best to conclude that Media 2.0 is both sustaining AND disruptive innovations. I don’t doubt there’s truth to that, but the money is following the disruption, so that’s where we need to be.

Media 2.0 immersion also makes real the truth about our industry: we’re not in the “news” business; we’re in the advertising business,” something I’ve been preaching for years. In a new post this week (“Why We Need the New News Environment to be Chaotic“), NYU’s Clay Shirky, one of the great thinkers of our age, echoed the thought.

Outside a relative handful of financial publications, there is no such thing as the news business. There is only the advertising business. The remarkable thing about the newspapers’ piece of that business isn’t that they could reliably generate profits without accomplishing much in the way of innovation—that could just as easily describe the local car dealership. The remarkable thing is that over the last couple of generations, those profits supported the fractional bit of those enterprises that covered the news.

But all of that is changing, because the advertising industry itself is in disruption. Content marketing and promotions are two big growth categories for advertisers who behave much more like they themselves are the media today. Where are local legacy media companies in all of this? Nowhere, because we’re still functioning as though Media 2.0 is only a sustaining innovation.

This is serious stuff, folks, because it impacts our bottom lines. The solution is to arrive at the place where we’re free to disconnect making money from making news content, or at least get into the content business that advertisers are flocking to by the thousands.

Posted in Advertising, Disruptions, Media 2.0, Reinventing Local Media | 7 Comments » |

The conversation goes on, with or without us

May 25th, 2011

I got a tweet from Sarah Hill, anchor for KOMU-TV in Columbia, Missouri yesterday that says much about the current state of journalism and how social “media” is impacting the institution. We’d been exchanging direct messages about their coverage of the horrible disaster in Joplin, when she wrote:

The telethon has raised $175K thus far and it doesn’t start til Thursday.

The people of mid-Missouri are coming together to raise money for the relief effort, and Twitter, texting and Facebook have made it easy for people to connect with the cause. This is an excellent use of social media by a TV station in trying to make a difference, but it says even more about their recognition of the reality that is journalism today, that it’s no longer about us. We wish them well on the telethon.

Here’s the thing: fundraising efforts are also taking place beyond what a traditional media company is and can do, as everyday people pick up the cause and pass it along. This is the “Great Horizontal” of which Jay Rosen speaks, that remarkable new empowering of the people with which, sooner or later, those who practice professional journalism must come to grips. The question for the pros is this: do the people really need us anymore, or perhaps it’s better to ask “How can we as pros best fit into this conversation?” There are those who say that the pros should “lead” the conversation, but City University of New York professor and author Jeff Jarvis isn’t one of them.

I think the conversation is happening all around us, with or without the journalists. I teach now that it’s the role of the journalist to add value to that conversation: verification, debunking, facts, reporting, context, platforms, teaching…. The late James Carey defines the role differently. As Jay Rosen explains in the Carey Reader: “The press does not ‘inform’ the public. It is ‘the public’ that ought to inform the press. The true subject matter of journalism is the conversation the public is having with itself.”

But I’m seeing that news organizations think it is their role to lead the conversation (they set the agenda), allow the conversation (you may now comment on our story, now that it’s done), and judge the conversation (see Bill Keller’s sniffing at vox polloi).

…that is the reflex of the journalist: to control the conversation.

In a conversation with Michael Arrington this week (see below), Jarvis clarified the concept:

The conversation goes on without us. We in journalism thought the conversation needed us. That’s not the case anymore. It’s end to end, like the Internet. We can add value to that in all kinds of ways. We can vet and find good people and find nodes and networks, and give perspective to journalism.

This is why the word “curation” must be a part of our everyday language and practice. Here’s a series of images that I use to convey the concept. It begins with the output of a traditional news organization on a 24-hour, horizontal scale. “Real time” is what’s being outputted horizontally. That line moves across the horizontal line as the clock ticks. This is continuous news.

This would be fine if it weren’t for the fact that millions of others are outputting what’s important to them at the same time. So news in real time doesn’t just refer to our horizontal line; it includes everybody’s.

The opportunity, therefore, for “new” journalism is the ability to slice through all of those horizontal lines and makes sense of it all for others. This is what Jeff is talking about, and any attempt to exclude those other streams is not journalism in the 21st Century. Technology will help with the task, but it involves human judgment at some point.

We’ve come a long way since the days of criticizing “citizen journalists” in understanding what’s evolving before our eyes with news in the network. People aren’t stupid and no special group has a license on the practice of journalism. We all want to know what’s going on, and as the events in Missouri confirm, participate in what we can do to fix things that are broken. This may whack the fatted calf of professional journalism, but that’s a small price to pay for a more involved citizenry (and electorate). The more, the merrier, and while it does present challenges (certainly), we’re all better off for it in the long run.

The window for mass media to carve out a profitable role within this new hegemony is still open, but it will be closing slowly as more and more smart people get into the curation act. Traditional media companies still have the local muscle to block such efforts, but we must be smart, and that begins by acknowledging that the news conversation IS going on, with or without us.

Posted in Continuous News, Culture, Disruptions, Journalism, Media 2.0, Reinventing Local Media, Social Media | 5 Comments » |

Media 2.0 101: It’s about money, not content

May 18th, 2011

BBC Home Duty Editor and blogger Neil Henderson posted an apologetic over the weekend about why new media will never replace the old. It’s a fairly common theme from traditional media types and contains the assumption that Media 2.0 is somehow out to “replace” Media 1.0. Jay Rosen referred to Henderson as a replacenik: “A replacenik, @hendopolis, says the salient fact about new media is that it won’t replace the old, neglecting to specify who said it would.”

In fairness, Henderson’s argument is entirely about Twitter.

I think I’m some sort of dinosaur, because I feel that although it’s clear Twitter has many qualities there is no way it’s a replacement for longer forms of financed reporting, in which there’s a proper investment into training, the development of veracity and the cultivation of trust.

…But Twitter is nothing more advanced than a high tech rumour mill. It doesn’t replace sending trained and resourced correspondents to places…It can’t replace the kind of journalism that requires even a modicum of fact checking and investigation.

It’s hard to argue with any of that, but the problem is that nobody is! Henderson is trapped in the belief that new media’s intent is to “replace” the old, and nothing could be further from the truth. New media disrupts old media as it evolves; it doesn’t necessarily take its place; even though it may just shove it aside. Old media’s problem is that it has approached this on the defensive instead of fully embracing the disruption.

I was first shown a portion of the following sequence of images many years ago by Gordon Borrell. I’ve used them for so long and so many times that some people think I made them up. Gordon told me once of a guy in his audience who, when he showed his original (with Harvard Business School’s help) slides, said “that’s a Terry Heaton slide, right?” The sequence perfectly depicts the disruption of Media 2.0 (the green circle) as it encroaches on the Media 1.0 space (the blue circle). Throughout the sequence, the green circle grows, while the blue circle is overcome and surrounded.

Take a look, and then we’ll talk about the gray.

The disruption approaches as it grows, but hasn’t yet impacted Media 1.0.

As the disruption encroaches on the business of legacy media, it responds by embracing whatever it can to sustain its business model. This is the beginning of the gray response.

The disruption grows, yet we still only respond with what matches our business model.

A very few legacy companies realize that they must enter the disruption’s core with a separate organization not encumbered by an old business model, and they are rewarded with the top revenues in the local space.

Finally, the disruption overtakes everything and those who continue to practice only in the gray are destined to reduced — but not necessarily unprofitable — roles in the Media 2.0 hegemony.

In each slide, the gray area represents those elements of the disruption that “work” to extend the brand and the business model of Media 1.0. An old colleague of mine describes that as “bolting the new onto the old.” Unable to see ourselves as anything other than the mass media that we are, we simply continue to exist as an old business model in a sea of new media and miss what the disruption brings to the table. We miss also that we are now competing (for advertising dollars) against an entirely new group of players, because we’re still too busy competing with our old foes. This has tragic consequences for traditional media.

It’s tragic, because the disruption isn’t now nor has it ever been about content; it’s all about revenue. Borrell’s 2010 Benchmarking Study in March of this year illuminated what’s really taking place.

News and information sites do indeed generate revenue, but the Top 5 local online companies derive all their content from their own advertisers. In fact, half of the top 20 are all-advertising sites.

…Looking at the local online landscape from (the) angle (of) who’s making the most money…we get a clear perspective on the type of content is most valuable in the lean-forward medium of the Internet. Leading the pack are companies whose sole purpose is to deliver advertising content.

In 44 of more than 200 markets we track, Groupon or Autotrader.com generates more revenue than the largest local newspaper, TV or radio station online operation in that market. This is a startling revelation considering the fact that Groupon did not have a dime of revenue two years ago. This year, about two dozen of its local operations will generate over $10 million each. Craigslist, meanwhile, generated about $20 million from its site in New York and about $1.6 million each in Phoenix and Houston, and Autotrader.com is bringing in more than $10 million per site in more than two dozen cities.

As legacy media, we continue to believe in the assumption (yes, assumption) that advertising that interrupts or is adjacent to news content is the only kind of advertising that matters, and that’s where we make our mistake. Meanwhile, Madison Avenue itself is being disrupted by those who not only share the risk with advertisers but also bring them real, countable customers. We will see more and more of this.

The smart money these days is on companies who ACT on separating the creation of content with the growing of revenue. I should add that this window is beginning to close, because it’s been letting the pureplay flies in for too long already. We need to be in the advertiser content creation business, and use our weapons to make a difference on behalf of those who pay us. At least we would be in sync with how they’re increasingly spending their money.

Meanwhile, can we please get off this false argument that new media wants to replace the old?

Posted in Borrell Associates, Disruptions, Media 2.0, Reinventing Local Media | No Comments » |

Media 2.0 101: The niche is what matters

March 30th, 2011

NBC’s coverage of Arnold Palmer’s tournament at Bay Hill last week was presented as “The Golf Channel on NBC,” something that would have been unthinkable just a few years ago. ABC’s sporting events are now billed as ESPN on ABC, another sign that cable brands are where it’s at. These are signs of the obvious decline of the network brands, and it’s both sad and inevitable. Disney (ABC), of course, owns ESPN, as Comcast owns both NBC and The Golf Channel, and the piggybacking isn’t so much to boost the cable brands as it is to use the cable brands to boost the old motherships.

Through roughly three quarters of the 2010-2011 season, the broadcast networks are down double digits in viewing compared to slight growth for cable channels. According to data from Turner Research and Nielsen and reported in Media Daily News, Fox is averaging around 4.6 million adult 18-49 viewers, down 6%; CBS is at 3.9 million, off 10%; ABC is at 3.202 also, losing 10%; and NBC is right behind ABC at 3.198, off 17%.

And there are no signs whatsoever that those lost viewers are ever coming back.

Season-to-date, the big four networks are down 11% in 18-49 viewers (to 13.5 million) and off 16% in the first quarter 2011 (to 13.4 million).

Meanwhile, ad-supported cable is up 3% to a collective 18.5 rating among 18-49 viewers during the period. A year ago — for the season — ad-supported cable was down 1% at a 17.7 combined 18-49 viewer rating versus 2009 for the season.

This is not good news under anybody’s magnifying glass, and it speaks volumes about the entire television industry and where it’s headed. The day of the “all things to everybody” approach to programming is clearly on the wane, and that’s the very essence of “broadcasting.” We’re witnessing the rise of the niche, and that ought to send a clear message to broadcasters who are struggling with trying to find a viable business model for the future.

Niche channels are easy to understand. They promise more of the same, instead of the hit-or-miss randomness of the networks. In my house, Lifetime is a big hit, but even more so the Lifetime Movie Channel. As Lifetime diversifies to try and grow, it becomes more like a network, but the Lifetime Movie Channel provides only one thing: movies for women. That’s what my house wants, and that’s what we get. For me, it’s all about sports, and that’s where I hang out. I also like crime dramas and especially shows like Forensic Files, and those are easy to locate via digital cable as well. My house is fairly typical. We’re into genre, not channel, and we can also find those things through video on demand, the ultimate “watch what I want when I want.”

If I’m a local television company, I’m plenty worried about this for two reasons. One, the ratings declines impact everything I do and support my advertising rates. As those go down, it gets tougher and tougher to sustain any kind of upward growth, and make no mistake, business is about growth. Two, the continued erosion of the broadcast model makes it harder to fight those in Washington who are after our spectrum. This is a bigger threat than most people realize, and I’m waiting for Google or Facebook to come up with a civil defense strategic plan that will put broadcasters further on the defensive. It’s coming. Trust me. And when it does, it’s going to be tough to justify those airwaves for anything other than broadband.

High on my list of strategic questions for local media are these:

• What niches really matter to this community? I’d begin my search with local sports franchises. Do we have a college sports franchise here? Even if I had to purchase an existing franchise, that might be smarter than starting my own, even though I could drive the brand with my legacy media brand. What makes this community unique? What businesses sustain it? What natural attributes draw people here and keep them here?
• What can I create to capture eyeballs and loyalty pertaining to those niches? Make it participatory and don’t forget social media. This is about things near and dear to my neighbors, and I must remember that. I must have a “take no prisoners” approach to owning these niches, because they will determine, in large part, my future in the community.
• Are there television programs I can produce about these niches? The answer, of course, is yes, and these programs could be more important than we think. Instead of simply reinventing news for the 21st Century, perhaps some of that energy should go towards producing niche-oriented programs that tie us to the community.
• What must I do to become THE go-to brand for those niches? Serve the niche well. The essence of ESPN, for example, is if it happened in the sports world today, you’ll see it on ESPN. That’s a big, big mission but one they fulfill every day. We need that kind of commitment — ownership, if you will — if we’re going to be top dog in any niche.

Niche verticals seem like an easy no-brainer for local media, but few people have dedicated the resources necessary to really own a niche. That’s likely because the return on investment requires a longer runway than most people are willing to abide. Meanwhile, however, we run the risk of anybody in the community creating such a service (many already have_, so the window of opportunity here won’t be open forever.

Posted in Disruptions, Media 2.0, Reinventing Local Media | No Comments » |

Data is new media’s heartbeat

March 25th, 2011

There is no subject that terrifies traditional media company executives more than the ubergeeky word, “data.” Who knew, they ask themselves when the lights go out, that math and analytics would become the go-to revenue generator for those in the content business? And yet, that’s exactly what’s happening, and efforts to understand the value of user data will be rewarded downstream. Instead of focusing on making media money the old fashioned way, we need to focus on gathering data and figuring out how to use it for profit.

“Data is the plastic of the 21st century,” said Om Malik at the beginning of GigaOM’s Structure Big Data conference in New York City this week. Local media companies are data-generating machines, and yet we use virtually none of it in advancing our business models. We don’t understand it. We think it’s beyond our grasp. And so we abdicate what could be a strong local data position to those better equipped to handle it. This is a shame, because data is the future of media, assuming advertising is the essence of how we make money.

Jeff Jonas, an IBM Distinguished Engineer, told the group Tuesday night that as the number of people connected to the web continues to grow, so too does the vast amount of information about those individuals. When you add geolocation, you create “space-time travel” data, because that data feeds other big data analytics “like a super-food.” With roughly 600 billion data transactions from cellular phones on a daily basis, he told the group, adding space and time to traditional data objects can help predict where someone will be on a given day and time with up to 87 percent accuracy. It’s the stuff of marketers’ dreams.

Why would companies want to add the physics of space-time to their data efforts? More context is needed, Jonas says, because the amount of captured data is rising faster than the creation of algorithms to make sense of the data. That’s creating a gap in the understanding of vast information stores and adding space-time adds much more context. Observations are where the sense-making begins but without context, it’s like trying to build a jigsaw puzzle without the picture of the final product.

This is why data is such a big deal for LOCAL media companies. If Web pureplay companies are able to create space-time commerce applications ahead of us, then any advantage we have in terms of community or proximity vanish. Local data is the most valuable form of data, because it can put merchants in touch with potential customers while they’re in the vicinity of the merchant. This concept should belong to us, not outsiders. We employ local people. We pay taxes. We contribute to the community chest.

I encourage clients to take the time to create databases, because those databases will produce new value for our companies downstream. Whether it’s simply gathering email addresses or defining the local Web, the ability to manipulate data equals the ability to make money in the data-centric world of Media 2.0. We can’t mine data we don’t have, so now is the time to emphasize data gathering in all that we do.

Nobody should understand the people who interact with our content like we do. As SiliconAngle’s John Furrier noted at the Big Data conference, “Data is the heartbeat of cloud, social and mobile,” and that means that if we’re not gathering, mining and monetizing the data associated with our efforts here, we’re only playing games around the edges, and that won’t cut it in the 21st Century.

Posted in Advertising, Disruptions, Media 2.0, Reinventing Local Media | 1 Comment » |

Media 2.0 101: The tactical use of beachheads

February 24th, 2011

Lucky attendees at Borrell’s annual local online advertising conference in New York next week will hear Clayton Christensen’s view of where media is heading. I’ll be looking forward to the video, because I’m unable to attend. However, I’ve read and studied Christensen over the years, and I think I have a pretty good idea of what people will hear. I want to write today about one thing in particular: that it’s very hard, if not impossible, to reinvent yourself from within. That IS the innovator’s dilemma and why the field of disruption is open to those not from within. They’re neither bound by the rules and processes of maintaining the status quo nor blocked by adherence to a set of traditions. They are free to create and innovate, and that is a significant problem for any institution of the West in the 21st Century. To paraphrase my dear friend Michael Rosenblum, “You’re all hosed.”

Indeed, and the innovator’s dilemma is why. Very smart, very well-intentioned people with all the reason in the world to innovate simply can’t, because they’ve got to protect the mothership at the same time. It’s driving the car and fixing it at the same time. Mr. Spock, where are you? (“raises eyebrow”)

Case in point: why are companies like Topix, Outside-In, Patch, and Examiner not run by traditional media companies? I’m always reminded of the old “railroad business” saw about how the railroad barons of old would have been running the airlines, if only they’d realized they were in the transportation business and not the railroad business. Same thing here. You can ask virtually any local media manager if the barriers to entry in their business are gone, and they’ll honestly tell you yes, but internal mandates of the legacy product force them into behaving otherwise or, at best, inertia. Clayton Christensen knows why.

There is, I believe, a way to drive the car and fix it at the same time, but it requires managers to step outside their comfort zone and behave more like leaders. The mission is to establish beachheads ahead of everybody else, so that when the vision materializes, they’ll be prepared to monetize it. This is a risk, of course. There’s no spreadsheet, no revenue projections to manage, no best practices, no charts and graphs, because it’s not about seeing who can outsmart, outthink or outspend the next guy; it’s all about anticipating new value and going for it. The risk, however, can be mitigated if the beachheads are based on broad trends.

This can be very tough for certain groups, because we’re so used to being able to hedge bets with facts and processes. Here, we’re leapfrogging processes to intercept a moving target. It’s Wayne Gretzky’s brilliant tactic of “skating to where the puck is going to be,” instead of following its current position.

In our war for future relevance, here are five beachheads we need to establish in order to drive our car and fix it at the same time. Four of them relate to content that, we hope, will be somehow monetized. The fifth deals specifically with enabling commerce via a form of advertising.

1. Real Time Beach — It is absolutely essential that media companies understand that news and information is moving to real time, and that real time streams are what will really matter tomorrow. It’s already happening today, but until somebody makes big money with it, we’ll continue to emphasize that which we CAN make money with, the front-end design of our websites. These streams take place throughout the back end of the Web, and they will make their way to the front end, and soon. There are early signs of advertising in the stream, and we should be experimenting with this, too. This is an unmistakable trend, and if we don’t move and move fast, it’s one I’m afraid we’ll lose.
2. Curation Beach — Examples like Topix above show that curation beach is really already here, although I’d call those types of applications “aggregators.” They’re dumb in that they’re simply mechanical aggregators of that which is — for the most part — being published by others. Curation is more the concept of helping customers make sense out of all the real time streams that are in place. We’re all using the streams of social media, for example, to “broadcast,” but the real value is to pay attention and curate. This is a beachhead ready for the taking.
3. Events Beach — One of the key local niches still left for the taking is the organizing of all events into an application that helps people find and participate. The ultimate user application here will be portable, for it must meet the needs of people already on-the-go. I refer to this beachhead as “event-driven news,” and it is largely created and maintained by the community itself. Since many events dovetail with retail seasons, this is easily low-hanging beachhead fruit.
4. Personal Branding Beach — If everybody is a media company then media is everybody. This is a fundamental reality within which we’re doing business today, and it presents a unique opportunity for us and our employees. The aggregation of personal brands is a winning formula for online media, and we should be exploiting it before somebody else does. Our people are our strongest asset for competing in the everybody’s-a-media-company world, and we have the advantage of a bully pulpit from which to advance their personal brands. This is more important than most people think, because the dynamic local news brands of tomorrow will be associated with the individual brands of the community. The time to begin establishing this beachhead is now.
5. Proximity Advertising Beach — The mobile beachhead is both obvious but obscured, because we’re all waiting for somebody to show us how to do it. This could be a real problem, for we know what happened when we allowed the ad industry itself to commodify banner advertising. Outsiders set the value for our products. The same thing is likely to happen here, unless we stake out territory for ourselves downstream first. There are predictions that mobile CPMs will hold at between $15-$25, and that’s enough to make any mobile content creator smile, but I would argue that the real money hasn’t even been discovered yet, because these CPMs are merely targeted display. Remember that the Mobile Web is the same Web as the one that’s wired, and it behaves the same way. The new value for mobile is proximity, and that’s where we need to be focusing. Let’s do what we can to make money with mobile content, but let’s also establish a beachhead in the proximity marketing arena, too, because that’s where this particular puck is headed.

If we approach these beachheads entirely with the question “where’s the money,” we’re likely to miss the boat. This strategy is to get us ahead of that and let the revenue grow into it. None of these will break the bank, and they’ll position us to move quickly regardless of which direction things move or how fast.

We can’t always keep attacking the market head-on by reacting to its changes. It’s too resource-intense, and we’re fighting an uphill battle against the pureplays, who already own the bulk of the local online advertising marketplace anyway. We might, instead, view the battlefield from a distance and deploy our resources where they’ll run into what amounts to a moving target downstream.

In war, victory doesn’t always go to the biggest and baddest. It also takes a sense of the battlefield itself and where and how to attack.

Posted in Media 2.0, Reinventing Local Media | 3 Comments » |

My quote of the year for 2010

January 5th, 2011

In our weekly newsletter, I publish a quote of the week by some smart person whose eyes are fixed on tomorrow. Today, I’m looking back at those 52 quotes and offering a quote of the year.

So many outstanding things were said by smart people last year that it’s really hard to pick out one that stands above the rest. Seth Godin is a quote machine. Umair Haque delivers the goods every time he opens his mouth. Clay Shirky, Jay Rosen and Jeff Jarvis are likewise great thinkers with a wonderful way with words. So I had to establish some criteria in order to filter everything, and I think the most important filter is the prescience of the statement. How insightful from a predictive perspective is the thinking behind the quote? It also has to apply to the news business, for that’s our business, and the statement must provide something that stands out as truly useful.

And so my quote of the year for 2010 goes to prophet, innovator and new media inventor Dave Winer. On May 18, 2010, in a post about Skype, Winer made this remarkable prediction:

Sooner or later there will be a unifying layer that handles all real-time traffic through an open API that doesn’t rely on central servers any more than the Internet itself does. It’s coming, you can feel it.

The important thing here isn’t that I feel it or that you feel it. It’s that Dave Winer feels it, and if history is our guide, his “feelings” are more valuable than others, because he has the ability to actually bring it about. Dave Winer is the innovator of RSS, aggregation, Podcasting, OPML, many other technical apps, and he was a major player in the development of blogging itself.

Dave had many other gems throughout the year, but this one stands out to me. Dave Winer has a voracious appetite for news and has been at the forefront of developing applications and tools that we all use today in spreading news circa the 21st Century. We need to pay special attention to this statement, because it’s the ultimate unbundler of even the loosest definition of “content” and the source from which it originated.

Think about it for a minute, and you’ll begin to understand why I think this was the most important statement made during the year. One layer for everything and controlled by no one. The ensuing applications would be remarkable from a news consumer perspective, and here’s the challenge for traditional media: do we have the chops to be the innovators here? Can we see far enough downstream to diligently work today on both distribution and aggregation of such?

What Dave is doing is giving us a simple, advanced look at, say, Twitter or even Facebook without the central servers. No downtime. Always real time. In a post this week about the future of Twitter, Winer amplified his prediction.

What rises to replace it (Twitter) will either be an open system built around RSS, or something indistinguishable from RSS. I would stake my reputation as a technologist on this one. I’ve been through so many of these loops, I never hedge my bets, and the bet has never been wrong. It always takes longer than you think it should, but eventually the open formats and protocols replace the systems built on corporate training wheels.

Twitter as training wheels? I believe it.

“Winning” in such an environment would be based on who does it best. For at least the past two decades, smart minds have been thinking and writing about the Semantic Web and the Live Web. We’re a ways away from that, but we’re moving in that direction. It will ultimately require what Dave’s talking about, and if we truly want a seat at tomorrow’s media table, we’ll pay attention.

Posted in Disruptions, Media 2.0 | No Comments » |