Archive for January, 2011

All the new digital platforms have created a proliferation of non-journalistic sources of news and information that has forever changed the media landscape. Bloggers, Posters, Reviewers, Tweeters, Video bloggers, Facebook “friends” have all become part of our content consumption menu. This has played havoc in the journalism world, which has struggled mightily with the need to differentiate itself from the new voices who come from a different place.

It’s not that bloggers without journalist training aren’t valuable, they just play by different rules. They may have significant conflicts, for example, like being paid to blog about a product or being employed by the company or industry they are blogging about. And while those are no-no’s in the world of journalism, they can also be seen by the general public as reasons the the blogger may be better informed on something going on with a product, or inside a company. Someone writing about new television sets for BestBuyOn.com clearly works for a business that has an interest in people buying more tv sets. If you are thinking about buying a TV set, and you believe a BestBuy employee may know more about TV’s than most people, that may not bother you.

So while I believe Journalists and the lack of bias will play a role in information dissemination, it’s also true that we have to allow for the fact that our readers are looking for the best information for themselves, and that may not always have to come from an unbiased journalist.

But it also means that the business of journalism must clearly differentiate itself and constantly remind the public of the difference between a journalist and someone who writes with a vested interest. It is particularly important because in the new digital world the content offered by both worlds LOOKS the same. BestBuyOn.com sure LOOKS a lot like CNET. But at least BestBuyOn.com is obviously produced by BestBuy. Joe’s TV blog may not be so obviously sponsored by Reebok if he doesn’t say it.

From ErinAndrews.com, sponsored by Kraft

So it is particularly hard on the industry when those lines are blurred. The latest example is the case of ESPN reporter Erin Andrews who, it turns out, is a paid endorser of Reebok shoes, among other products. While her fans may care more about whether or not she’s wearing Louboutin on the red carpet, her role as a sports sideline reporter is supposed to involve a semblance of journalistic integrity. So it was a few weeks ago when she reported from the Rose Bowl that TCU football players were slipping on the field despite their new NIKE cleats, no one thought much about the comment. A couple weeks later, it’s revealed that she is a spokesperson for Reebok, perhaps Nike’s most visible competitor.

Hmmm. The conflict is at its most dangerous point exactly when the viewer DOESN’T think much about the comment. Believing Nike cleats to be inadequate during that game is an interesting observation for fans, but takes on a a new light when you think about how many coaches and athletic directors from every school in the country — the very people who buy athletic equipment for their programs — might have been watching the Rose Bowl.

Sports journalism has never been at the top of the credibility mountain. Anchors and sports athletes or coaches who have turned into sports commentators have a history of endorsing products or brands. Still, ESPN has reserved the right to grant permission for endorsement deals on a case by case basis. And Erin Andrews, while a sideline reporter, has certainly also established herself as much as an entertainer, particularly with her stint on Dancing with the Stars.

But media companies are putting their reputations at stake in allowing this confusion. Broadcast journalists particularly are paid enough to not have to endorse products, which is a much different situation than a blogger trying to eck out a living. This is a profession, and the definition of professional conduct has included the avoidance of even the appearance of conflict. If that is to remain as one of the cannon’s of our profession, we need to police it.

Clearly struggling to find the “right model” to generate maximum revenues from both subscriptions and advertising, the New York Times appears to be preparing a multi-tiered program for charging it’s most active users for access to Times content on multiple platforms.

According to a story in the The Wall Street Journal (subscription needed), The New York Times is planning to roll out it’s elaborate scheme next month.

Quote sources “familiar with the matter”, WSJ said the Times has considered offering Internet-only access for about $10 and a more expensive package, perhaps double the price, that includes online and IPad App (which is also now free). Print subscribers to the paper will get all digital privileges at no additional cost.

But the newspaper is also planning to allow all readers to get free access to a set number of pages on the NYTimes website before being told that they need to sign up for a subscription in order to see any more Times content.

This controversial concept…allowing free access to infrequent users — many of whom come in from search engines — while charging the papers heaviest and most loyal users, stems from the desire to keep the raw number of unique users who come to the site up as high as possible in order to be able to attract as much advertising revenue as possible. This so-called “metered” approach has been used for some time by The Financial Times. Under this plan, users who come to the site via search engines will also be allowed to do so with no barrier.

The New York Times website, free until now, attracts more than 30 million unique users a month and generates more than $100 million a year in advertising according to sources at the Times.

But only about 15% of those 30 million users qualify as “heavy” users who might ultimately be charged. The concept behind this plan is that it will allow the company to begin to grow significant subscription revenues but still preserve enough overall traffic to allow for substantial advertising revenue.

Sources at the Times have told me that it will take somewhere between half a million and a million paying subscribers to make the Times plan a success.

While there is some concern that it seems counter intuitive to be charging the most loyal customers to the site, while letting less engaged customers get what they want for free, but the argument is that the loyal customers place the most demand on the site and other platforms and get the most out of it.

What is tremendously important is that the Times has done the work needed to build a platform that will allow it to charge once for multiple platforms and therefore to test many different scenarios.

The Times deserves a great deal of credit for testing as many alternative plans as possible. It will take constant testing to find the best mix of attracting readership, subscription revenue and advertising revenue.

About a week ago I wrote about a company called HitViews, which helped traditional brands find a new generation of Web Video Stars to endorse their products on YouTube and other social media outlets.

I referenced a campaign the company did for Ruder & Finn’s client, Mountain Dew’s new product: White Out. Three different video bloggers each posted 2 videos of their own making.

Tobuscus

Today I learned that just one of the bloggers, nick-named Tobuscus, had already received more than a million views in its first week. His video, showing life inside his personal “white out,” was very clever and by midnight last night had been up less than a week.

Even more interesting are these additional facts:

1) By midnight 4217 comments had been written by fans, mostly positive.
2) 72 viewers had actually made response videos to Tobuscus’ “Commercial”.
3) More than 10,000 people voted either “Like” or “Dislike” of the videos, with more than 9,900 voting “Like”.

To be sure, most Web videos receive dozens, not millions of views. But there is a category of video web stars who have mastered the ability to draw mass audiences to their work. And they inspire creative response, the elusive “engagement” advertisers are seeking in a new marketing world that it more “conversation” than broadcast.

While there is concern about Steve Job’s latest medical leave, Apple is as well positioned as any company continue it’s incredible march to domination. Besides the fact that it has multiple, growing product lines, it is sitting on an incredible amount of Cash. Note the attached graph, from Silicon Alley Insider, revealing just how much of a cash warchest the company has: and how it compares to the other tech giants.

--From Silicon Alley Insider

Do you think the pace of technological change is speeding up a bit on you?
This chart from our friends at Silicon Alley Insider, reveals a stunning fact. The IPad business has become almost the same size at the Mac Computer business for Apple. That means the IPad took nine months to reach the same sales level that the Mac computer took 27 years to reach.
Apple sold 14.8 million IPads in 2010, with almost half of that coming in the last quarter, accounting for $4.6 million in revenue in that quarter along. Mac computers, which had their best quarter ever during that same quarter, took in $5.4 billion.
Apple in total took in $26.7 billion in revenue last quarter, a mere 71% increase over the prior year.

From Silicon Valley Insider

The big news this morning comes from emarketer (via Ad Age) and gives us an emerging portrait of Facebook that suggests it has found a place in the digisphere that will allow it to compete favorable with Google (GOOG) as time goes on.

As Facebook continues to build its cash war chest through the Goldman Sachs private auction of shares, it has started to see Google-like growth coming to it from the very audience that helped propel Google into its dominant position over the past few years: the small business advertiser.

But even more important than the similarities between the two companies, are the differences. While Google has served the small business advertiser well over the past few years, it has recently concentrated even more on building the kind of tools that more sophisticated and larger advertisers can use to target large-scale advertising buys on its networks. And, Google offers a targeted advertising buy based on automated tracking of keywords.

From Advertising Age

While Facebook, like Google, has built out a sophisticated sales operations to serve larger clients and agencies, the social network seems to be concentrating more on the small advertiser and giving that advertiser extremely simple tools that allow it to mine the deeper knowledge of information it has on consumer behavior. Of the reported $1.86 billion in revenue Facebook is said to have generated in 2010 (86% more than the prior year), 60%, or $1.2 billion is said to have come from smaller companies more likely to be using Facebook’s self-service buying tools.

Debra Williamson, emarketer’s analyst, told AdAge that “These advertisers are really juicing Facebook’s growth. They buy advertising in bulk. They’ve done it for years on Google and now they’re taking that expertise to Facebook.”

What is very significant is that they may find an even more target-rich environment at Facebook, where more is known about each user. For one thing, Facebook is about content created AND curated by users themselves, whereas Google’s content has been curated by computers and algorithms. It stands to reason that a consumer may know more about himself than a computer can ever know. By tracking consumer behavior AND content creation, Facebook can paint an incredibly deep, informed portrait of that consumer and can use the interaction between consumers to create even more opportunity for advertisers.

While it is important to note that Google does as much business in a month as Facebook did in all of last year, what we are talking about here is momentum and early indications that Facebook could become the next Google. What is starting to emerge is the possibility that Facebook could really become Google on steroids!

Facebook is also attracting larger advertisers, to the tune of $740 million last year, but while both small and large categories are growing, the percentage of Facebook revenues coming from the small advertiser community is up from about 50% in recent years to 2010′s 60%.

One significant difference between Google and Facebook is the latter’s emphasis on the needs of its now nearly 650 million users above those of the marketing and agency partners. While Google has done a great job of building tools for the large players to manage complex buys on their networks, Facebook has allowed an entirely new industry to be created by outside companies that have built services to help advertisers manage larger campaigns on Facebook, something Google does itself.

Ad Age cites startups like Buddy Media and Context Optional which it said “have built a business helping both agencies and brand executives better manage its presences on Facebook by licensing its software to brand managers to more efficiently manage what sometimes amounts to thousands of Facebook pages.”

Ad Age further explained that a large brand advertiser like McDonalds “may have a Facebook page for every franchise with can be difficult to manage with just Facebook’s native features”

But those “native features” are really all a small business or individual needs to do very targeted and efficient message buying. In the long run, many of Facebook’s advertisers are also it’s content creators, which naturally gives the Social Network the potential for a much deeper relationship than a search engine, and could result in far more effective sales and marketing tools.

Seeking Alpha is one of many companies featured in my book C-Scape. They were of particular interest because while they resembled a media company because they were distributing curated content to viewers, they were not a content creator but a marketing platform. THEY believed they were not a media company. Their model was a simple one: They provided an effective platform for financial advisors and others who were able to use that exposure to market themselves to potential customers.

David Jackson, CEO of Seeking Alpha, has succeeded because he is very aware of what his customers want…and he gives it to them. He has two sets of customers. The writers, to whom is is providing a place to market themselves, and the readers, who he is serving at the moment and in the manner in which they want to be served. He speaks of giving them content when they are in a “transactional mind-set,” at the very time they are seeking new information and products.

He provides the perfect platform. He gets quality writing by providing the writers an audience, and gets an audience by providing them with curated writers who offer value.

The decision to pay writers that Seeking Alpha (and Bleacher Report in Sports) announced this week means an expansion of their business model into something closer to a media business. Seeking Alpha began selling advertising a year ago, and in the process created a reasonably good business. The decision to pay for content in exchange for exclusivity will help differentiate themselves from competitors, because payment will be made for exclusivity. That is only fair. Right now they don’t insist on exclusivity from their authors, but by doing so they insure their readers that some of the information they are getting can only come from Seeking Alpha and they make their platform more valuable.

It means they are closing in on the very model the media industry will have to approach from the other side. Seeking Alpha built their audience first and has decided to increase their revenue potential from that audience by enhancing the value AND exclusivity of that content.

Media companies, on the other hand, will have to do what David has already done, understand what their customers want and pay more attention to giving it to them when and how they want it. That will be a combination of original (paid for and exclusive) content and curated content…not very different from what Seeking Alpha gives its audience.

And Seeking Alpha, in order to get better at what it does, will have to learn the media company part of it. While it is a simple proposition to pay writers based on how much they are read, which tracks expenses to revenues nicely (assuming they are selling ads at the right clip), they will need more of a sensitivity to what the best content will be for readers, because often the readers don’t know what they want until they see it. The editorial sensitivity needed to build a strong content business will make a difference to Seeking Alpha, as much as the customer sensitivity will make to media companies that have been historically too isolated from those customers.

Who Owns Facebook?

Posted: January 15, 2011 in Digital Media, Innovation

Celebrity endorsements have been a time-honored marketing strategy for decades. But as the marketplace changes and social media begins to create its own stars, Companies are finding that the advantage of a celebrity endorsement is fading. And, signing a celebrity these days also involves risk that they could do something detrimental to the brand (Michael Vick? Tiger Woods?).

Katers17 in action for Mountain Dew

Enter the Internet and YouTube. And as social media has boomed in our new digital economy, causing people to go to friends and acquaintances for advice instead of traditional spokespeople, advertising and other one-way messaging. (See Katers17 do a Mountain Dew video for Pepsi)

And Enter after that, HitViews, a three-year-old agency that finds and manages internet video talent for use promoting big-brand companies. Instead of scripting commercials, the companies “hire” the stars to do their own thing and somehow involve the product in whatever that “thing” is. Most of these webvideo stars can quickly turn out videos that are seen by their hundreds of thousands of subscribers within a few short days.

Huge clients like Pepsi and Ford are doing it. They are not worried, for now, about how to measure results from the campaigns, though they all say they love the traffic it generates to their sites. It also allows them to appear more hip to potential younger buyers, who they are all trying to attract.

For the Full Story, on MarketWatch, click here.

A central theme of C-Scape is that every company will have to become a media company in order to build the kind of relationships it will need with its constituents. At a panel on owning a sports team in Washington today, Washington Capitals hockey team owner Ted Leonsis and Washington Redskins NFL team owner Dan Snyder enthusiastically agreed with that conclusion, according to a report from the Washington Post’s D.C. Sports Blogger Dan Steinberg.

“The connection between the fan and his or her team is what it’s all about,” said Snyder. Former AOL biggie Leonsis added:

“I’m an extrovert, and I get my energy and my input from fans. I think this new media is like oxygen. Get used to it. I think that there is no more steering wheel in the hand of The Washington Post. I used to live in mortal fear about what you would write. Now, I don’t care.”

“I think it’s something that you need to internalize: that we’re our own media company. I announce things on my blog. I get 40 to 90,000 people coming to my blog, depending on the subject. I have a direct, unfiltered way to reach our audience now, and I think that harnessing that is what you have to do as ownership, because we are media brands. We’re in the subscription business. We call them season-ticket holders. We’re in the sponsorship business. We’re in the same business [as The Post]. When someone goes to find out something about me or a team or a player, and they go to Google and they type that in, I want to learn how to get the highest on the list, and I’ve done that. I don’t want The Washington Post to get the most clicks. I want the most clicks.”