How to Save Journalism? An iTunes-Like Subscription Model + a Whole LOT of Bankruptcies!

Comment re: Charlie Warner's article "How to Save Journalism: Part III" on MediaBizBloggers.com.
Charlie, you are SO close to the solution, spelling out all the crucial elements but coming just one step short of what is already about to 'save journalism'! I've blogged about it several times and have commented here about it, but the solution lies in rejecting the commonly held belief (talking heads all nodding sagely in agreement to...) that "...the Internet is not the answer to saving journalism: 'There is no business model or combination of business models that will create a journalistic renaissance on the web.'" AND in rejecting, as you wisely point out, the errors made by the railway barons of old. Let's remember that the iTunes business model was initially rejected by the status quo in the music industry as they went after litigation and government help to save their broken model. A modified (subscription) model will save journalism via 'E-readers' and Apple's new 'iTablet'. In fact, the deals are already in the works, although it will take a few quarters before we begin seeing the effects as the reader devices need to proliferate, first, the way that Smartphones have begun to. The critical insights that have to be recognized by everyone in the business are simple, but very difficult to focus on in the midst of the 'emerging media' tsunami we are faced with:

1. 'Facebook-like' networks are teenage social tools and a way for adults to keep contact with acquaintances (which is what Zuckerman designed it for). Once teens mature and get access to bars and independence from their parents, their use of Facebook changes. Adults experiment with it intensively for a few weeks and move on, checking it only occasionally. It will never become a viable advertising medium -- nothing with the label "social" ever will, social activities are PR platforms, not marketing media.
2. 'Twitter-like' platforms are 'flash in the pan' experiments in terms of their current mis-use as a platforms for individual celebrity ("What I had for breakfast was..."). Its long-term value will be what we're seeing about Haiti -- an instant, global, free news service (with some voyeuristic celebrity content). Like Second Life, its trendy moment will be eclipsed as the early adopters bore with it and move on.
3. The WWW (and CNN) killed the Newspaper Business as surely as the auto killed the Railroad Business. The old model of having geographically based and focused centers is over as there's no demand for local news the way there once was. Sure, I'm interested in the debate over the replacement of our local highway, but most of the news I'll pay for is national or global, so there is ZERO incentive for me to subscribe to any single, local news source. Think about that. It's a big deal. It means there are FAR TOO MANY news sources in the world today. 90% of them could fail and it wouldn't change the quality of the news content I want or need.
4. Connected with the last point, in this age of proliferation of information, no one is going to settle for single sources of news, like a subscription to a single website belonging to a single dinosaur-style city-based newspaper.

Why would I pay even AdAge for online access to only their archives when so many pertinent articles about how advertising is evolving are coming out of Britain or Asia or Australia? Who in their right mind would pay for 100 individual magazine subscriptions when the world is now our oyster? (Instant, universal online translation is almost here, too, which will open up every news source on the planet to every person with Internet access.) My budget will allow me maybe $150 per month for news access, yet most individual sources are currently asking for $39.99 a month. Today I could spend $1,000 in a matter of minutes just for access to a few articles buried in various newspaper's web archives, yet over the long run I just don't trust any single source to be sufficiently all-seeing to feed me exactly the eclectic blend of articles and blogs that I'm interested in, so I'll only have to keep paying more and more far-flung and redundant individual publications for access. Therein lies the solution to quality journalism. Not charity foundations or government bail-outs/subsidies, but a simple subscription-style universal iTunes article-access service that charges me $150 a month (varying rates based on how many articles I access) and pays each news source I access a few cents for each article I read. These services are being created now for the Kindle, 'iTablet' and Sony Reader . Apple charges 99 cents per iTune song, which seems more or less reasonable to consumers, the artists are getting only a fraction of that price, but I will not pay 99 cents per article -- articles are not like songs that I'll replay for the rest of my life, they're too fleeting/timely. I will pay a blanket fee to not have to worry about how much each article is costing me, however. I'd be even happier if it meant that every clever blogger's post I read meant that blogger was getting paid something for her/his thoughts and efforts. What this model will mean, however, is that many, many news sources (and journalists) will fall by the wayside, as they should. Tom DeMarco, in "Slack: Busyness vs. Business", wrote: 

“Change always implies abandonment. What you are abandoning is an old way of doing things. You’re abandoning it because it’s old, because time has made it no longer the best way."

Tough to accept, but Toronto, for example, will soon no longer need the Globe & Mail, Star, Sun and National Post in addition to local news TV stations. In fact, Canada will not need 3-4 major papers and TV stations in addition to many national sources. It's time for all that redundancy to die off. That proliferation belonged to a different, pre-wireless/e-reader world. Should you own shares in journalism schools, I'd sell now. Clark Kent (and all his unionized co-workers) won't find sufficient work in Metropolis to keep him in blue tights in this brave new world. Sadly, bankruptcy on a massive scale is the only way to effect large-scale change once business models break down.

'Social Marketing's' Decline Begins...

Comment re: Matthew Greene's post "Social Smocial" on MediaBizBloggers today.

Since you asked, Matthew...

As a fellow 'mature marketer,' I agree with your poke at today's young brand managers jumping willy-nilly on the 'social marketing' band wagon. I disagree that they are doing it primarily because they think it's the cheapest media out there (although they're likely using that line with their bosses and CFOs!) -- their primary motive is to be seen as insightful leaders of the pack. Ironically, an 'investment' in social is going to prove them to be lemmings!

So, how to convince these 'marketing mavericks' that anything labeled social will rarely lead to sales? Very simply by pointing out the difference between totally appropriate spending on PR (an attempt to earn goodwill and win 'free' media mentions and inter-consumer buzz at low cost) and spending on marketing efforts.

Anything labelled 'social' is, and always has been, a PR medium. No more, no less. When we spend money on PR, we don't EXPECT ROI, we hope for it. Kind of like Unilever Canada's so-called 'investment' in the "Bridezilla Wigs Out" YouTube video of a few years ago -- an experiment that led to lots of buzz, but zero ROI for Sunsilk.

Today's new 'social media' are no more appropriate for carrying advertising messages (marketing efforts) than the last 'social medium' that came along, the telephone. Once marketing people (not all of whom are all that insightful...) 'get' the distinction, we'll be back to looking for the next great marketing-appropriate wave and 'social' will return to its rightful place in the PR budget.

More:  http://advertisingbusinessmodelredefined.blogspot.com/2009/10/comment-on-mediapost.html

The Future of TV and Addressable Advertising

Interesting conjecture on what the future of TV will look like, and sooner rather than later!  From AdAge.com today:

"It's conceivable—and probably inevitable—that TV/web convergence will lead to us ordering up movies, pizza and even advertising while watching custom-tailored content and interacting with social-network buddies at the same time."

And a related article about my personal favourite topic, addressable advertising, in this case via addressable TV: http://adage.com/digital/article?article_id=140740

Video Advertising Isn't Going Away, It's Just 'Growing Up" Online...

As I've posted before in "TV Ads are Going to Fragment," more evidence from eMarketer, as if we needed it, demonstrating that the creation of video advertising isn't dead, or even in decline -- we were just waiting for the bandwidth and delivery systems to get up to speed.

Online ads with 'rich media' get almost double the 'dwell time' (watching time):

My point is only that the technology is finally sufficiently advanced that agencies can now get really creative (see the Mac vs. PC video display ads) and truly engage websurfers with video that "pulls".

What this suggests is that all those 'digital agencies' and 'experiential agencies' who have been largely executional in what they produce to date are either now going to have to step-up their creativity (AND strategic planning/thinking capabilities) with the type of Creatives the dinosaurs have traditionally employed, or will get stuck with executing what the dinosaurs feed them, as the latter see the opportunity and begin generating rich media ads to play online.

We're at the tipping point, the next big change that is about to get figured out is how to monetize the placement of rich media ads to the point where agencies can once again make the big bucks they used to from TV ad placement (15% of the media spend).  I think the winners are going to be the agencies who "get it" and walk away from the old broken commission model, accept less repetition, MUCH lower frequency rates, and MUCH, MUCH lower revenue from media.  These winners will focus on convincing clients to adopt a 'shared risk, shared up-side' model based on a low retainer up-front and a big payout if ROI metrics demonstrate higher sales due to their efforts.

For this to transpire, however, it will take either a combined effort amongst the oligarchs (WPP, Omnicom, Publicis and IPG), which is unlikely, or at least a risk-taking push by one of them to be the leader.  If they don't, the upstarts may just leapfrog past them and their relegation to 'dinosaur status' will be complete.

Wow. Ashton Kutcher et al Might Just Have Done It...

Comment on Fast Company to Ellen McGirt's piece on Ashton Kutcher's Katalyst Media mash-up, a social media effort that is making money.


What needs to be recognized here is the pragmatism that some, very few, actually, of the members of Kutcher's generation possess. What we're seeing ad infinitum is not just what he speaks to in saying "...and they say, 'I'm not worried about monetization yet,' that scares the shit out of me," but that this particular guy has always been about the monetization (via fame/personal brand-building). He's like a Madonna, always chasing the next thing that people are going to pay money for. That stands in direct contrast to the tail-end "Gen X'ers" and fledgling "Millennials" entering the workforce or just now beginning to enter middle-management. Due to the human failings we're all prey to, they were brought up being 'special' to the point where making money isn't anywhere near as important as self-fulfillment, or self-aggrandizement (their tendency to believe everyone, including the C-Suite, are entitled to their worldly opinions). This is a group who is currently touring the world, writing books and speaking to each other at literally THOUSANDS of 'conferences' touting "SOCIAL MARKETING," a discipline that, by its own definition, being 'social,' is not a marketing-appropriate medium any more than telemarketing's intrusion on our personal space via a social medium is. This vast posse of self-back-patting "social media as the second coming" enthusiasts, evangelists and advocates are touting the shift of a VERY significant slice of media mix dollars to a realm that has ZERO demonstrable ROI (not that I'm against experimentation or investing in media that can't prove ROI -- TV never would have survived had demonstrable ROI been demanded of it). The point is that, by experimenting himself and carefully researching and innovating within not just one tactic, but looking for viable ways to provide advertisers like Nestle, Pepsi and Kellogg with real value (not just impressions, but strategically on-brand-message entertaining content). Katalyst is doing what NO ONE, especially not HULU, has done, create a cross-platform mash-up that is actually working to create "Marketing 3.0," much more than the mere evolutionary step that was "Marketing 2.0": the shift from push to pull, from telling to listening and engaging. This is a very big deal. Kudos to a guy who is visionary enough to keep thinking, working and experimenting until he can make everyone money in the process. Banging the Drum on a Single Media Tactic Won't Work post: http://tinyurl.com/yhlllte

The Narrowing of Reach

Comment to Ed Castillo's POV on MediaBizBloggers: "Strategy is Sacrifice"

Ed, succinctly put, although your point of view flies in the face of the status quo 'push marketing' model we all grew up with.

What you're really speaking to, and it is a earth-shaking change for our industry, is that The Death of Frequency has brought about the corresponding narrowing of reach. What I mean is that with less repetition of our messages being demanded by consumers, we need to sacrifice broad reach (increase TOM awareness, trial and loyalty with all women 18-79) for narrow niche targets that a brand 'owns' in a much deeper way than we've attempted to do in the past.

"Pull marketing" requires a very profound, though simple, shift in our strategic approach to marketing efforts.

While Broadcast & Cable Battle for $, Rome Burns

Comment posted on MediaBizBloggers to Simon Applebaum's update on the revenue battle (fee for carriage) going on in the US:

Great update on the battle, Simon, but I cannot help but feel like we are all watching dinosaurs fighting each other for a slices of a rapidly shrinking pie. Kind of like watching music industry execs committing hundreds of thousands of dollars to suing middle class individuals for file sharing while iTunes continues to drain off most of their revenue.

I've been watching a new generation, my now 14 year old nephew, spend literally his entire weekend's leisure time watching hours and hours of short format videos on YouTube, in addition to watching a movie at the cinema and another on DVD on my flat screen, plus spending about 25% of his time playing video games. And this has been the case FOR TWO YEARS. He spends only about 5-10% of his time watching teen shows or cartoons on broadcast/cable TV. He tells me this is true of all his friends/classmates.

We have already witnessed "The Death of Frequency" (a strategic revolution in advertising that only Apple and Lee Clow have picked up on thus far) and we're now seeing a gradually more rapid shift in where the masses are spending their leisure time, and it is not on watching TV. TV ad prices went up 400% in the past 20 years and continue to rise even as viewership declines.  There's a race on to wring as much as possible out of TV advertising revenue that will inevitably speed up marketers rejection of the medium as they find much more cost-effective and user-appreciated media to buy into.

It's a very strange sensation to be sitting out here watching the battles rage between Spinosaurus and Giganotosaurus while several generations of viewers are busy building a new entertainment platform over them that will sooner, rather than later, consign their dominance to history. Broadcast and cable TV will not vanish anytime soon, but it will fragment as the bulk of the revenue stream evaporates.

In a period measured in months, not years, average young people will be watching content on Bluetooth projection glasses streaming from their smartphone and on their netbook/tablets. The pipeline will be the Internet, whether there's a ad-supported business model for it or not.

Something Devastating's About to Transform Social Media's Credibility

In an AdAge article today "P&G, Walmart, Unilever, General Mills Are Major Marketers on a Mission -- From 'We Save You Money' to 'We Nourish Lives,' Giants Make Some Big Statements", we can see the 'confluence' of some key trends in marketing from the past decade:

• Cause-related core brand missions (ideally strategically appropriate/relevant for each brand). 
• "Web 2.0" listening/sharing/engaging/inclusion tactics that treat consumers as empowered partners in brand-building.  
• The leveraging (although still at an experimental, let's-see-what-we'll-still-be-able-to-use-credibly-one-year-from-now stage) of the newest, emerging 'social media' tactics/technology. 

This is great news!  It's quite a celebratory moment in marketing history!  The industry's most visionary leaders embraced change and are moving the herd in a new direction.  Yet at the same time, something else is going on that stands in direct contrast to these positive movements.

One of the most insidious, but potentially devastating 'movements' we are witnessing is the growing push to alter the nature of the Web 2.0 emerging media "social" universe, changing it from unbiased, un-manipulated user-generated content (blogs, tweets, comments, wall-posts, etc.) to 'compensation for positive brand mentions'.  This new 'paid-for' vs. 'earned' crowd-sourcing model is creeping in via "The Viral Loop" (evaluating the 'value' of each Facebook user's contributions to Facebook's shareholders) and the excited anticipation of a young generation who 'live online' that they're going to get-rich-quick by simply mentioning brands in their daily communication: "The Futurist: Let the Games Begin, by Brian Van Eerden" in which the young author sees a future evolving that will feature:

"The seamless integration of social media and gaming makes it even easier to spend hours hooked into the system. The credits generated from my branded avatar are a welcome supplement, as well as the conversation tracker that pays for each time I make a brand reference with friends. "

Facebook's recent decision:

"To help marketers boost their reach on Facebook, the company has added an option that lets companies advertise to friends of their brand fans on the social network."

posted on Thursday, plus a raft of similar announcements from various emerging media all looking for ways to monetize their businesses, means that, insidiously, Rupert Murdoch's insistence that the world of professional (and profit-making) journalism is not dead and will find a successful business model online is going to prove to be correct.  Why?  Because there are a number of 'universal human truths' that are coming into play:

1. Greed will push individuals to grab for the brass ring and accept payments for positive brand mentions.
2. Greed for profits and power to control the conversations about their brands will push corporations to offer such payments (if this leads to the death of credibility of crowd-sourcing and the long tail, so much the better for the media industry!).
3. Skepticism and cynicism will drive people to no longer believe anything they read online from so-called unbiased private sources, especially as regulations begin to pressure the majority of user-generated content providers to acknowledge receipt of payments (once a few do, all become suspect).
4. The latter change will, fairly quickly, drive consumers back to professional reviewers/journalists (and prolific bloggers like Scoble, etc.) who at least have a long and easily-tracked record of level-headed product reviews to assess for bias.

"So what?" some might ask, we're merely witnessing the eventual wresting of control back into corporate hands of 'their messages'.  Sadly, yes, but what a wonderful world we had, for a time!  The opportunity for brand-owners to hear, AND BELIEVE!, the willingly and enthusiastically shared thoughts and feelings of honest consumers about their products and marketing efforts FOR FREE.

Don't get me wrong, of course the WWW is always going to allow people to speak freely (I hope...) and it will be possible to track 'brand buzz' better than ever with aggregation tools like Razorfish's "SIM" measure of brand health online, but in turning a free and open forum for consumer conversations back into an arena in which no one can be trusted to be providing an unbiased opinion, marketers are losing, I believe, more than they are gaining.  This is the 'hijacking' of genuine word of mouth on a grand scale.

Sure, these efforts will be met by new sites/services that "ensure our members are offering unbiased, unpaid for opinions" via counter-tracking search algorithms, but the damage is already being done to online credibility.  The challenge was to learn how to effectively leverage 'pull' efforts while gradually abandoning 'push'. You could argue that this is just a manifestation of incrementalism, but it really is all about re-exerting 'push' control on a virginal 'pull' medium.

Call me sentimental, but I think it's a sad thing and I pine for the good old days of 2008 when I could still do a quick Google or Twitter search and feel confident, once having discounted the suspiciously positive posts, that I was getting a fair and balanced overview of some product or service.

So Google is testing whether "push marketing" works?!? Weren't we past this point?

Comment on MediaPost article Google Tests Skippable Ads In YouTube Videos 

Google will begin testing "skippable" pre-roll ads in videos on YouTube Wednesday that could lead toward a new advertising model.  

The goal to move the industry toward more engaging high-quality ads requires a lesson in human behavior. The test that determines if and when people watch the video clips will provide Google with insight into the type of person who may skip an ad, what type of ad they might skip, and what piece of content does better than another.

?  I assume that there are some pretty clever people working on these Google video ad tests. Normally you'd start any testing with some basic premises -- insights into human nature that are universal and allow you to leap ahead, conceptually, and test something new -- not rehash false assumptions from the past (there's a definition of insanity from Albert that's begging to be repeated here...)

The one single thing that human behavior on the Internet, along with remote controls and DVRs, has told us all, loud and clear, is that consumers do not want any more "push" marketing, thus "The Death of Frequency" (link).  The end of endless repetition in advertising means that no one, not now and not ever before, wanted to see the same TV ad, no matter how funny or clever (although of course making every ad funny or clever/informative is job one), more than a couple of times.

Give people the chance to skip it and they will, just as they'll skip over the same episode of Dexter if they just saw it last week. This isn't a problem, exactly, since they will watch an ad that is relevant to them, or REALLY funny/clever, more than once. We just have to produce a lot more ad versions to surprise and engage them. Wouldn't acknowledging this simple fact be an excellent starting point for at least BEGINNING to put "push marketing" to death and reinventing the way we approach advertising strategy on the WWW? Apple and Lee Clow already get this.

 Just a thought.

A Real Step Towards an ROI Metric for Social & Experiential (& Display, Of Course)

Now I'm no media planning guru, my knowledge of the media segments' nuts and bolts is shallow, but if Universal McCann's Digital Director is excited about this, then it's something to wrap our heads around. He writes this in MediaBizBloggers.com today:

It would appear that (among other things) RealVu has developed a technology that allows them to identify when an online ad is "within the viewable area" of a user's screen, and for what duration. So, for ads that are run on a particular Web site that require a user to scroll "below the fold," their ad never gets requested until the user has scrolled to that part of the page.

Makes sense, right? Pretty innocuous you say? On average, across all placements that they have tracked – fully 50% of online ads are never viewed because they are outside of the user's viewable area. Say what?

Now, keep in mind this is a combination of all properties. Some long tail sites are poorly constructed and they may indeed have questionable motives, but this does include Top 100 properties as well. The number of ads that we are paying for that go unseen floored me.

So as I understand it, this technology, via your browser, tracks what you had visible in your window on any give site and records how much time it was visible. Should work on mobile phones as well. Sounds like a simple thing, right? Kind of like People Meters, but this is WAY more useful as it is more like eye-tracking (cameras recording what exactly you were looking at when watching a screen).

What this technology does is leapfrog over and ahead of any tracking we have today because it tells us precisely what web surfers were looking at and for how long. If combined with the old 'click-through' (which was always a suspect metric tool) this could well turn into a real, solid measurement of what is working, or not, with display and video ads on the Internet.

Simple, but HUGE!  Not because it measures tangible actions, per se, but intangible behavior.

The biggest problem the ad industry has with so-called "social marketing" is that it is 100% 'brand engagement' based.  What that means is that every dollar spent in "social media" is not expected to increase sales, but only to raise awareness about the brand.  Hopes (based upon a lot of evangelistic hype) that somehow this "brand engagement" was tied inextricably to brand loyalty/love have been dashed recently when Razorfish, a digital advertising leader, found in a study that consumer activity in social media is all about coupons and contests, not about developing some mysterious and deep lifelong attachment to the brand.

In other words, to date any 'investment' in 'social media' has been based upon gut-feel and following the flock, NOT on any measure of ROI.  As I've repeatedly said, there is no such thing as "word of mouth advertising", and 'social marketing' is nothing but an attempt to influence what people choose to talk about.  Anything carrying the label "social" is inherently NOT an advertising medium (unless you believe that telemarketing is an appropriate advertising medium).  I'm not saying that all the efforts being made in 'social media' today are ineffective -- splashing brand messages across any new medium gets noticed -- only that the spend is unjustified by any of the normal criteria we hear CMOs, CFOs and media mavens constantly harping about, for example...

Ironically, experiential marketing is not enjoying much of a gain in its slice of the media spending mix because marketers are demanding ROI metrics for it, yet "social," with no expectation of any real ROI (sales increases), is winning a significant budget.  However based upon 'gut feel,' testimonials and observation, we all KNOW that XM is actually the most effective marketing medium ever devised -- it has been around since the invention of human trade, swapping seashells for sabre-tooth tiger teeth.

What RealVu's tracking technology offers us, not today, but soon as we figure out how to cross-track and correlate data, is a methodology for accurately measuring not just display or video ads on websites, but the net effect and inter-relationship of both 'social' and experiential efforts on pushing consumers to websites and on to purchase and loyalty.  What I mean by this is that we'll be able to say we spent $X on an event branded for brand ABC's new flavor at which we had primary interaction with Y quantity of people and put coded coupons in all their hands, Z quantity of people spent N amount of seconds on the promo site in front of an online ad (or blog, or tweet, or....), P% clicked on the link and in that test market we saw a Q% increase in the new flavor. Demonstrable, cross-linked ROI.

No, this won't happen tomorrow, but with RealVu's advancements, the day is coming!