Editor and Publisher Shutting Down

I read the sad news today in Media Post that Editor & Publisher is shutting its doors at the end of the year. The magazine is special to me on a number of levels, I started my career subletting office space from Editor & Publisher for Real Media focused on building value for local news digital sites. I read E&P religiously to stay apprised of what was happening among the print publishers. As an industry there are few remaining independent voices for publishers and I hope that someone can take up the torch and keep running with it.

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Media is reliving the past of Wall Street

I was talking (emailing actually) about yesterday's post with a friend of mine who happens to be a finance wiz. My post on Friction reminded her of the changes that have occurred in stock trading over the last decade. When she started trading stocks they were still quoted in fractions. Then, they went to nickels at some point and by the time she left trading they were in pennies. One of the reasons the technology of rapid, quantitative, algorithmic trading has been growing by leaps and bounds is the loss of these spreads.

Now, so much of the trading is based on computer models and is done electronically. However, as a result, the profit margins have been reduced so greatly that LARGE volume must be done to make it worthwhile for a broker. When my friend was trading on the floor the avg payout on a single share of stock traded was $0.06 or $0.07. Now, this volume is done through programs electronically and the payouts are fractions of a cent.

This technology change has pushed out human brokers who still rely on the old fashioned way of trading out of the biz. Interestingly, she saw Jeff Zucker's comment "Analog dollars to digital pennies" through this lens. Technology provides huge advantages in costs & increasing production, but there are going to be some who are left out in the cold if they don't adapt in time. The benefactors change as tech changes.

I see this all the time when speaking with publishers. They conceptually want to adapt but they are afraid and the the people and organizations need to embrace the changes. A role inside the digital media organization that understands rapid change is Ad Operations this group has seen a massive shift from coding html on a page to serve an ad to now dynamically managing inventory across a frankenstein system of ad servers, order and yield management systems, data providers, rich media vendors, analytics, third-party ad networks and the list goes on. Digital media is looking more like the stock market every day and the trafficker is a lot like the broker of old, we now live in a data economy so the inventory analysts will run the business and those that are still hard coding ads to a page are long gone.

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Friction – is it more evil than even Google?

I had a long meeting with a very senior executive at WPP yesterday and we were talking about the challenges that face brand advertising across the interactive landscape. The single largest thing impeding progress (eg. moving traditional brand spend to the Web) was the friction that has been forced upon the media buying and selling process. We defined friction as anything that is making hard for a buyer to quickly and reliably build a media plan and execute it.

Interestingly technology seems to be biggest culprit slowing the transition of analog to digital dollars. This is due in part to its rapid pace of change and ability to cause disintermediation and fragmentation. Most would expect technology to increase productivity and make media buying simpler but the exact opposite has happened. And given the current economic climate that may be a good thing since in fact, Jeff Zucker (president and CEO, NBC Universal) put it very well – 'We are moving from analog dollars to digital pennies'. Did technology alone cause this, I don't think so but here is a reasonable list of tech oriented challenges that are slowing us down in converting brand dollars to the Web.

- Unlimited number of ad sizes across publishers
- Multiple creative formats (Rich media vendors)
- Publishing platforms making everybody a writer
- Wide range of metric definitions and providers creating confusion
- Many ad serving platforms servicing publishers and advertisers
- Inconsistency in media buying and planning tools among agencies

And the biggest of all
- No single vendor that provides a soup to nuts solution that connects the buyer to seller.

Google, anyone?

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70% of Consumers Could Care Less about Behavioral Targeting

32% of people say that they would be willing to allow their online information to be used anonymously according to a new study from market research firm Synovate. However, 35% said they were not interested in technology to that collected information about them nor did they want advertising modified to match their behavior. 41% of the respondents said they had modified their own behavior and sites they visit to avoid advertising, mostly those with intrusive ads and pop-ups and an astonishing 87% have attempted to avoid advertising on TV by changing channel, turning off TV or using DVRs.

This study reinforces how little media technology companies understand the consumer and how they perceive media and technology. In order for the consumer to modify his or her behavior to the benefit of the marketer they need something of real value. Facebook for example is now carried in the pocket of nearly every Facebook user and updated daily because it solved the problem of staying connected, or reconnecting with friends and family. Behavioral advertising solves a problem for the marketers but has yet to show its true value to consumers. Behavioral needs to be leveraged in a way that helps the consumer improve their day to day life and not just put the same old push-type advertisement in front of them. Consumers prefer to pull information, entertainment and even advertising on-demand, Google made this very simple with Search and then syndicated it through Adwords, consumers see value in that and I suspect would find the same in brand advertising.

The study went on to showcase that more than 50% of all respondents said they have never done a search for a brand or advertisement, elected to follow a brand on Twitter or shared an advertisement with a friend. This proves that it is very hard to go viral and consumers don’t see social networking sites as a way to connect with their favorite laundry detergent. The brands that create content or partner with media companies to develop and deliver unique content or information that speaks directly to the consumer and makes their life easier has the best chance at success.

Here are a few good examples I can think of:
- BabyCenter.com’s pregnancy tools
- Tide’s Stain Brain iPhone App
- Nike’s running training center

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Maybe One of the Funniest Simpson's Ever

George Simpson writes a column once a week for Media Post in an attempt to take a lighthearted look at media and advertising. This weeks column titled Now I'm The Grandest Tiger In The Jungle.was regarding Tiger Woods of course and maybe George's funniest yet. His witty article highlights how there was not a single media outlet that could keep their hands off the story. Although, there wasn't really a story there at all, but our friends in the media found a way to make one. Is this sensational strategy working to build audience value?

John Stewart of the Daily Show also couldn't stay away either. He put together a highlights reel that shows just how pathetic the media is.


If this is what traditional news outlets think hard news is then it is obvious why they are struggling to keep audiences, grow their business and turn a profit.

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What does the NBC/Comcast deal mean for the future?

Thursday we expect to see the official announcement of the NBC Universal acquisition by Comcast. There are many that don't understand the acquisition and speculate why Comcast is the lone company bidding on NBC at a time when most other media holding companies are selling assets or splitting them into pieces.

I believe there is a huge opportunity that Comcast is taking advantage of. NBC is a steal at $6 Billion in cash + stock valued at another $7B for a 51% stake and control of the business. Comcast will now have the ability to leverage the vast movie and TV assets across the growing number of distribution platforms. Pushing content to consumers through any channel they want, video-on-demand, streaming, DVD or mobile.

Comcast is going to innovate how content is produced and distributed to consumers dramatically improving the types of interactive content that is available and increase the speed to market for blockbuster movies. The consumer should win in this scenario unless Comcast forgets to put the consumer first.

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Has the Internet Lost its Steam?

I found yesterday's Silicon Alley Chart very interesting. They have compiled some Forrester data that highlights the y/y growth of online retail and this year looks pretty bad. I postulate that this is caused as much as a result of the maturation of online audiences as the poor economy.

The continued fragmentation of media and web sites in general caused by search and social media is keeping consumers from finding their way. Advertising should play a key role in driving consumers to purchase. However, online most purchases are predetermined by the consumer, meaning that they come to the Web with a specific task in mind. The consumer starts with google or goes directly to the store of choice Amazon or eBay, this leaves very little time for brands to build loyalty or change consideration. Even on more casual sites like news or sports the brands have very few opportunities to change the consumer behavior mostly because the creative most widely used is easily ignored.

We need to build better experiences for both the consumer and advertiser to interact in a meaningful way. Some folks would say that Web video will solve all these problems but I don't agree. A tiny 320x240 video will not replicate the engaging experience of Television. Larger format video like Hulu and the network sites may be the first step but they are still not the most appropriate consumer experiences.

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