Month: December 2011

New year might bring rapid change in media universe

The Media Equation
New Rules for the Ways We Watch

For the last year, media pundits like me have been running around screaming our heads off about falling skies and collapsing paradigms, and yet as 2011 comes to an end, the sky is still there.

Yes, competition is storming out of every device and connection, and consumers have choices and leverage they never dreamed of. But network television continues to waltz along, attracting advertisers in big numbers. Cable had a great year, and media octopuses like Time Warner and News Corporation continue to find plenty of profits. Big media companies still rely on huge, well-entrenched assets that include brands, distribution and capital.

But even if the sky is still aloft, there are visible, portentous cracks appearing. The inertia that has kept consumers from bolting from traditional content providers is beginning to erode as a new generation remakes media in its own image. Device companies and search outfits are intent on manufacturing their own content. And the migration of movies, music and video to the cloud could change the weather in a hurry.

Even as some of the old truisms in media still obtain — content wears the crown and strong brands break through clutter — a few new rules are taking shape.

A SCREEN IS A SCREEN Steve Jobs taught us a bunch before he exited, but one of his most current lessons could be the one with the most far-reaching implications. Content has a price tag, which is reassuring, but the old dividing lines between television, radio, Web and print disappear within the four corners of a tablet. That means, for instance, that CNBC and The Wall Street Journal are not in different businesses anymore, and in fact The Journal is adding hours of live video with each passing month. The BBC and Al Jazeera are no longer regional curios, they’re here. Every cable channel with two nickels and more than a few digital enterprises is financing the kind of narrative television that used to be available only at a certain time on a certain network.

NEW NETWORKS EVERY DAY On Christmas Day, a lot of people took the ribbon off a Web-enabled flat-screen television, and now the fight for real estate on all those enhanced television screens will be fast and furious. Cable providers will try to keep people from downloading the products of insurgent Web “broadcasters,” but they can’t stop what’s coming. They will have to win by providing value that trumps the now-infinite channel universe of the Web.

The $27 billion that traditional media just paid to the National Football League is a hedge, not an answer. So-called virtual operators — Netflix, Hulu, Amazon, Google and Apple — have none of the legacy or infrastructure costs. Google has unleashed $100 million to seed new programming on YouTube, and Netflix is financing a series by the director David Fincher. That gaming device your children are playing with? That too is a network in the making. Traditional networks and cable providers have the content, but if they hold on too tight, they will miss out on vast new avenues of distribution and revenue.

THE REMOTE AS BRICK The iPad is a screen on your lap that makes it easy to navigate toward a completely personal experience. That screen on your living room wall is going to have to perform the same way to remain relevant. As it has in many other areas of technology, the smartphone will point the way. Our phones — and now tablets — are always on and poised for action.

When I switched from the first iPad, which took a few seconds to boot, to the iPad2, which stands ready for duty every time I lift its cover, my use more than doubled. I expect that other devices will greet me in similar fashion. Navigating is as easy as a swipe of the finger or, in the case of the new iPhone, a verbal request to Siri.

As for your remote control, well, using it is a little like hitting your television with a stick until it finally delivers what you want. If things go as they should, we will spend less time looking under the couch for the remote and more time telling our television to get us the seventh episode of the second season of “Boardwalk Empire.” (Beginning in December, Xbox 360 owners were already able to search TV shows by voice.) And our media identity is becoming ubiquitous, and transportable: someday, I should be able to walk into a hotel in Kansas, tell the television who I am and find everything I have bought and paid for, there for the consuming.

CELEBRITY AS COMMODITY The multiplatform and infinite-channel universe can manufacture its own celebrities. Is Scott Pelley a more important asset than Kim Kardashian? You may not know who Rebecca Black is, but more than 14 million YouTube users do and have spun her ridiculous music video “Friday” to laugh at or with her. Oprah Winfrey, the celebrity with the golden touch, got clobbered when she started her own network. Anderson Cooper felt compelled to do a daytime show to diversify his bets. Keith Olbermann and Charlie Sheen thought their audiences were a movable feast, but big chunks of their followers stayed put to watch Rachel Maddow and Ashton Kutcher in their slots.

THE FUTURE WILL BE HACKED I happened to be at dinner with Howard Stringer back in June when Sony and its PlayStation network were under attack by hackers. Mr. Stringer, an even-keeled executive who has lived through all kinds of challenges, looked as if he had stumbled onto a beehive. It’s nice that NBC News has a Twitter account for breaking news; but when the hacked version started spitting out alarmist messages about an attack during the run-up to the Sept. 11 anniversary? Not so great. In November, the digital wrenches of Anonymous wreaked similar havoc on Fox News. As more vital content is distributed from the cloud and not cables, security breaches will not be something media companies report about, but something they live through.

THE CONSUMER WILL DECIDE Yes, consumers are programming their own mediated universe, but they can snap healthy companies in two while they are at it. Last year I wrote a story about Netflix’s deft understanding of consumer preferences, but in September the company decided to split its DVD and streaming options into two services, and that, in addition to a price increase, cost the company almost a million customers. The Daily, an iPad-only newspaper started by The Wall Street Journal, came out to a herald of trumpets and now hears only the sound of crickets. Research in Motion decided people wanted a cheaper tablet. Turns out they wanted one that worked, as well.

MASH-UPS AND HYBRIDS WILL RULE Everything that can be mashed together will be. The Tea Party will do a debate with CNN, and the Showtime series “Homeland” will be a cable series, an on-demand product, an app and a community. That informational crawl at the bottom of your television set? It could come from the broadcaster or it might come from Twitter. Soon the Oscars award show could be accompanied by comments from your wisecracking friends, not on your phone but on the bottom of your flat-screen. Huge world events will first appear on social media platforms and then leap to mainstream media and back again. The books you read to your children will take over when you are tired and read themselves, or they might turn into a game when the joys of unadorned narrative begin to bore.

SOCIAL MEDIA AS ITS OWN FRIEND Facebook wants to be your cultural operating system, providing recommendations and serving as a platform for music, movies and news. Twitter has taken its initial lightweight design and begun to offer more windows of content, hoping to keep you tuned in for more than 140 characters. If these services are capable of fomenting revolutions against repressive regimes, they can do plenty of world-changing right here. Occupy Wall Street drew enough notice with D.I.Y. media to command a national stage and reorder the discussion.

What else will we be watching for in the coming year? The fates of Julian Assange and Rupert Murdoch, two men who changed the world in very different ways and are now both being pursued, will probably be decided. We’ll find out whether the 38 or so Republican debates will give the party’s nominee an advantage against the president. And everyone, especially the people at Apple, knows that the consumer response to its next big thing — iTV anyone? — will be a referendum on whether the company can prosper absent its visionary in chief.


Portals struggle for relevance in a social world

Agencies, marketers, and research data all say the same thing about Facebook’s 2011 ad sales. The social giant left portals Yahoo, AOL, and MSN in the dust, as well as most major publishers.

“It’s definitely a challenge to [Yahoo, AOL, and MSN],” said Scott Symonds, head of media for digital agency AKQA. Symonds said Facebook’s marketing allure lies in not only its 800 million worldwide users, but also how it can offer advertisers routine follow-up pitches in terms of the likers/fans community they build on the social site.

“There’s the whole concept of earned media and talking to influencers around your brand,” he said. “We’ve seen that positive impact in surveys. We’ve seen it in data from Nielsen, etc. I think Yahoo, AOL, and MSN all have great content. They are all trying to find a way to make their content more sharable so they can compete with Facebook, which has a pretty good advantage right now. The portals are not even disputing that. They are trying to socialize their inventory.”

Digital shop Big Spaceship is experiencing the same trend. “Specific to our clients, I’ve seen larger and larger portions of our media agency partners’ display budgets allocated to Facebook,” said Victor Pineiro, a Big Spaceship strategist. “Especially since Facebook released Sponsored Stories, [which is] an ingenious way to leverage fans’ social graphs to propel ads socially and organically.”

Brian Yamada, executive director for Kansas City-based ad agency VML, offered up a more nuanced assessment. He echoed some industry analysts who have concluded that Facebook is nabbing more marketing dollars from traditional platforms like broadcast, print, and billboard than from other digital channels.

“I wouldn’t say an apple going to Facebook means an apple lost for portals,” Yamada said. “But I think the money is definitely following the eyeballs, and people are spending a lot of time on that particular platform now.”

Facebook’s Jump to No. 1 in Display

The anecdotal talk from agencies can be backed up with data from third-party researcher eMarketer. Facebook’s display ad revenues, according to the most recent eMarketer forecast, will total $3.8 billion this year – up 104 percent from 2010.

By comparison, Yahoo, AOL, and MSN’s display ad sales – not including search, to be clear – were modestly up year over year in what has turned out to be an uptick year for numerous display platforms. The fiscal quarters for the trio of aforementioned Facebook competitors, respectively, showed growth typically between 5 percent and 15 percent. In the meantime, according to eMarketer, Facebook has catapulted to No. 1 in display ads market share at 17.7 percent, beating Yahoo (13.1 percent), Google (9.3 percent), AOL (4.9 percent), and MSN (4.2 percent).

At this time last year, Facebook trailed Yahoo and Google. Five weeks ago, Yahoo, AOL, and MSN struck an unprecedented partnership for major display platform competitors, pooling together their unsold inventory in a deal aimed to increase their margins, secure higher prices for remnant ads, and augment the reach available to agencies and advertisers.

“Facebook has hurt publishers,” said Nichole Goodyear, a strategic adviser specializing in social media for marketing services company Extole. “They’ve hurt CNN, ESPN, and Yahoo – any of the big publishing or portal sites that we used to consume as the entry point of the Internet. They still have a lot of content on those sites. And they still have a lot of traffic on those sites. But what they call the ‘excess inventory’…They have a lot of excess inventory, which affects the price and supply curve. A large portion of that display advertising has shifted to Facebook engagement ads.”

Facebook vs. Google Battle Moves to Mobile

Bloomberg reported that Facebook would unveil mobile ads by the end of March. When it does introduce the commercial mobile feature, Facebook will likely find a burgeoning Google atop that emerging space. On Monday, IDC reported that Google was now leading mobile display in terms of market share, charting at 24 percent. According to IDC, a Boston-based research and consulting firm, ad network Millennial comes in second at 19 percent while Apple trails at 15 percent. Previously, IDC said, Apple had been in the No. 1 slot.

Whenever Facebook joins the mobile advertising fray, Pineiro from Big Spaceship said the move won’t come soon enough. “With more than 40 percent of Facebook users accessing the platform on mobile devices,” he said, “this [has been] an enormous missed opportunity.”

So because Palo Alto, CA-based Facebook has had a break-through year on the display ads front, a question begs: Can it make a similar impact in mobile advertising during 2012? Whatever the case, Symonds from AKQA predicted that social-centric platforms like Facebook and Twitter – as well as the more general digital powerhouse Google – would continue to disrupt the marketing world.

“As we build additional technologies around social media and refine our thinking to more socially focused rather than being reach or broadcast focused,” he said, “there is a potential for social media to not only shift the construct of digital marketing but marketing [as a whole].”

By clickz.com

Email Is The New Social

A recurring theme at this week’s MediaPost Email Insider Summit: social is the new email. There is a frisson of excitement about social media, but email marketers say they have been connecting people effectively for years.

“We call email the original social network because it really is social,” said Tynt CEO Derek Ball in a keynote address. “If you follow the popular media today, you would believe that the world revolves around what they deem social — which means Twitter, Facebook, and other things, which have social components to them.”

Social media is an important marketing platform for sure, he said, but “email is still a very, very critical component and will be for a long time.”

Ball offered data from March 2010 that shows 73% of sharing was happening on email, 25% on Facebook and 2% on Twitter. That has since changed markedly. Now, Facebook represents 69% of sharing and email represents 27%. But Ball said email marketers should not be unnerved.

“This initially sounds ominous,” he said. “This sounds like Facebook is cannibalizing email … [but] sharing as a whole has gone up massively in 18 months … so in fact, sharing via email has gone up a little over 20% in 18 months, so email is continuing to grow. It’s just that Facebook grew faster — much faster.”

Ball said marketers should look for ways to synchronize email and social media. “Recognize the two of them are very important together,” he said.

Tynt is a digital advertising company with clients such as Seventeen and the G4 network.

Also in his keynote, Ball offered five reasons why email maintains an advantage over social. It’s “asynchronous,” meaning time is not necessarily of the essence. A received email waits for the recipient in an in-box.

Email is more personal than, say, Facebook or Twitter. Ball referred to them as “broadcast platforms,” while “most of what comes into your email is very personal and tuned to you.” Email is also very trackable, with data on open rates and other behaviors, while it is “infinitely flexible” — there is no need to build a following or “friend” people or join a group.

And, Ball noted, it is “decentralized.” There is no big brother — no one controlling force. Facebook may change a rule and frustrate millions. Email has no rules.

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What marketers say about working online: McKinsey Global Survey results

Marketing executives agree that digital tools and technologies are valuable—but most of their companies are pursuing just a few opportunities online, and struggle to analyze online
metrics and capture better data.

Digital media and online tools remain a largely untapped resource for companies, according to a recent survey of marketing executives.1 Most respondents agree that their online presence is important and that digital tools provide their companies with a major opportunity, but few are taking the structural steps required to benefit from selling online or engaging consumers through new technologies such as social media. Indeed, most respondents indicate that companies are still trying to figure out how digital media can meaningfully improve their bottom lines. The survey asked marketing executives from around the world about the digital tools and channels their companies use and expect to use, the challenges they face and actions they have taken in response, and the metrics available to assess performance online.

Exhibit 1
Interacting with current customers

The state of play online
Marketing executives overwhelmingly agree that an effective online presence is very or extremely important for staying competitive—81 percent of them say so. And more than half of respondents say that over the past two years, the increasing prevalence of digital media and tools has changed their companies’ ability to interact with and serve new customer (Exhibit 1). Notably, about half as many cite either the ability to reach new customer segments or the emergence of new business models as one of the greatest effects of digital media’s pervasiveness. Overall, these tools seem to be creating little competitive differentiation. Just over half of respondents, for example, say their companies and competitors earn about the same share of revenue from online sales, with almost equal numbers of other respondents estimating shares above and below [..>]

McKinsey Global Survey results | What marketers say about working online