November 30, 2010 Leave a comment
November 29, 2010 Leave a comment
Lately, through the thousands of social marketing tools that have entered our world, customers are getting a chance to speak out like never before. Here are a few recent examples of how customers have responded and some questions about what is really going on here.
Which do you prefer? The orange juice on the left or the one on the right? Pepsico soon found out.
November 29, 2010 Leave a comment
Using the New York Times as an example, Scott Karp investigates the “10%” problem and how it seems impossible for the New York Times or other newspapers to begin to value online ads at a premium, the same as they do in print, rather than making online look like a giveaway by comparison.
So for $10,000, you get a 20% share of voice on the homepage for a full month. For the same $10,000, you can also reach about 1 million people in the daily print edition, for ONE day, with a 10 column inch ad (based on open rate of $1,056 per column inch), which is about 1/12 of a page.
With such a disparity in how the New York Times values its print advertising and how it values its online advertising, is it any wonder that it suffers from the 10% problem?
November 26, 2010 Leave a comment
Found via TechCrunch, who did a great summary of the study. I’ve pulled out some of the interesting stats here:
- 49% of consumers did not know exactly which type of device they would purchase when the started the shopping process for a new device.
- As for consumers who did know what type of device they wanted, Google found that 66% of netbook shoppers considered another device; 29% of tablet shoppers consider another device; 20% of laptop shoppers consider another device and 12% of eReader shoppers consider another device.
- Consumers on average spend one month researching the type of device they should buy.
- 85 percent use the internet to research their purchase.
- 64% of e-reader shoppers both bought and researched online
- 37 percent of consumers interested in tablets searched online and bought in-store.
- Store or retailer sites are the most frequented among online sources (65%), followed by search engine sites (61%), brand or manufacturer sites (53%), price comparison sites (44%), review sites (29%), and social networking sites (18%)
Google also released interesting data on demographics of users searching for particular type of device:
- Tablet shoppers skew slightly female (53%), primarily fall into the 25-34 age group; 56% consider more than one brand and the group is most concerned with appearance/style
- e-Reader shoppers skew male (64%), fall into the 45-54 age group, 70% consider more than one brand, and the group are more concerned about reviews more than any other portable PC shopper
- Laptop shoppers skew female (58%), with 50% of shoppers falling into the 18-34 age group, 65% of the group considers 3 brands or more, and 43% want to upgrade from their existing device
- Netbook shoppers skew male (46%), primarily falls within the 35-44 age group, and most shoppers are undecided on brand with 80% considering more than one device.
- Of consumers considering both netbooks and tablets, consumers are leaning towards tablets (37% vs. 25%).
November 26, 2010 Leave a comment
It’s slow and backward
The Daily will be put to bed each night for consumption the next day, just like a newspaper. As David Carr put it in the New York Times, “a button will be pushed and it will be ‘printed’ for the next morning.” That decidedly retro delivery model might sound appealing for Murdoch, a newspaper sentimentalist whose overpaid for the Journal by several billion dollars, but it’s going to seem poky for a generation of Facebook readers who tend to want read yesterday’s news yesterday, not today. As Salon co-founder Scott Rosenberg wrote, “Wonderful! Slower news—and at a higher price.”
The content is unfocused
Like an old-fashioned newspaper, The Daily will try and cover everything. Music writer Sasha Frere-Jones of The New Yorker is on board, as are a handful of veterans of News Corp.-owned papers, like Richard Johnson, Chris Wilson and Justin Rocket Silverman of the Post and Pete Picton of the Sun. Other hires include ex-Politico reporter Avi Zenilman and Hunter Walker, formerly of the entertainment website The Wrap. There will be people writing about politics, crime and society. Quaintly, there will even be an a dedicated opinion section.
That broad scope might be workable for 100 journalists if there were some aggregation going on — some borrowing and sharing work done by others — but the vast majority of The Daily’s content is supposed to be original.
News Corp. sucks at the internet
Murdoch’s past online efforts constitute a long series of defeats. News Corp.’s greatest misses include MySpace, bought for $580 million in 2005 before the pioneering social network was surpassed by Facebook, bled money and users, and eventually surrendered its original mission to try and become an online media sharing hub.
There’s the New York Post, home to one of the most persistently terrible websites in the business as well as an extremely short lived spinoff called PageSix.com. Then there’s the recent paywalling of the Times of London, which NYU’s Clay Shirky calculates has brought down web traffic around 97 percent, attracting 40,000 dedicated subscribers at best.
The business model is extremist
On the iPad, no one has proven you can make money selling news, even without 100 seasoned (read: expensive) journalists to feed. In fact, Apple’s top-selling iPad app chart is consistently dominated by games, which made up six of the top ten this past week. News apps that sell well tend to fall quickly back to Earth; Wired‘s iPad debut sold 100,000 copies before falling dramatically to below 30,000, where they have remained. That’s for a magazine with a print circulation of 750,000.
The Daily hopes to attract about 17 times as many iPad buyers as Wired. No wonder: At 99 cents per week, the newspaper will generate only $5.1 million in subscription revenue for every 100,000 subscribers—minus Apple’s cut, typically around 30 percent. Murdoch’s newsroom expenses alone should easily run north of $7 million.
There are certainly examples of successful paid content on the web, including News Corp.’s own WSJ.com. But The Daily isn’t a website; it’s an app, available only to iPad owners who pay for a subscription to it. Which brings us to another problem.
It’s a ghetto
Since The Daily is an iPad app, there will be no inbound links, and reportedly no outbound links to the web, either. And there will be no web version. That isolation instantly kneecaps the paper’s ability to promote itself; the web will convert The Daily’s big scoops into blog summaries, tweets, Facebook rants and even iPad screenshots — but not into traffic for the publication that generated the buzz in the first place.
Being walled off will hurt not only The Daily but its readers, too, who expect, as Rosenberg puts it, “news that you can respond to, link to, share with friends.” As web inventor Tim Berners Lee recently wrote, “walled gardens, no matter how pleasing, can never compete in diversity, richness and innovation with the mad, throbbing Web market outside their gates.”
The alternatives are cheaper and smarter
If you want to read newspaper-like content on your iPad, there are tons of free options available through your web browser: The Washington Post, the Guardian, CNN, the BBC, Slate, HuffPo, take your pick. And if you want your news with a nifty, iPad-native interface, there are plenty of options for that too, including aggregation software like Reeder, Instapaper, Flipboard and Pulse, cheap or free apps that can be stuffed to the gills with an amazing variety of content, gratis, and connected to your social graph in all kinds of interesting ways. As ZDNet’s Sam Diaz wrote, “there’s already original content all over the Internet.”
No tech talent
A winning iPad newspaper, were it to exist, would be more than a bucket of content; it would be an interesting app, too. But all the boldface names around The Daily are media people: Newspaperman Angelo; his college friend Greg Clayman from MTV Networks; and a trio of managing editors from newspapers and TV. Clayman, at least, was on Viacom’s digital side, and one of the managing editors did a stint at AOL News.
But what Murdoch is missing, or not savvy enough to put forward to the media, are top managers with real engineering chops. Someone with, say, Google on his resumé. Or Apple, Twitter, or Facebook—or at least Microsoft or Yahoo.
Instead, all of the news out of The Daily is about the steady stream of journalists being recruited to work there. Print journalists haven’t seen a gravy train/vocational life raft of this scale since Portfolio, an even more hubristic launch ($100 million!). It’s all too easy to imagine The Daily ending up like Si Newhouse’s shuttered business magazine—or like Harvey Weinstein similarly disastrous foray into unfamiliar media.
The Daily looks like a dumb, risky bet — especially if you tune in to the growing chorus of well argued critics. But here’s some fodder for contrarians:
Steve Jobs is on Murdoch’s side
Both the Guardian and blogger John Gruber have reported that Jobs will join Murdoch on stage for The Daily’s launch. We’ve also heard scuttlebutt that Murdoch expects Apple to eventually bundle the publication with iPads. Apple has not previously bundled third-party apps with either the iPad or iPhone, but The Daily gives the tech company an incentive to change that: The app will be among the first to support a new subscription billing option from Apple’s iTunes Store, meaning Jobs & Co. will get a share of subscribers’ recurring fees.
The iPad is exploding
iPad sales are estimated to total roughly 15 million by the end of this year and, optimists believe, 40 million in 2011. As a source told the Guardian, “If only 5% of those 40 million subscribe to the Daily, that’s already two million customers.” Fantasy math is fun! It would be even more fun if this iPad newspaper were compatible with the iPhone, which would more than quadrupling the number of compatible devices.
Fox News seemed pointless, too
Now gushing more than half a billion dollars in annual profits, Fox News Channel spent several years in the red after launching in 1996 and before honing its conservative voice. As CJR said, “Murdoch … [has] got the capital to keep a money-losing operation going for quite a while-as Fox News was- …while he waits for the iPad market and all his potential readers to catch up.” Or to leave him further in the dust.
Not all iPad magazines founder
Oprah’s glossy debuted at number six on Apple’s paid apps chart this week. And Wired might have held on to its initial 100,000 iPad readers had its debut offering been stronger. We’re still waiting for any iPad publication to show lasting success, though.
November 24, 2010 Leave a comment
From Digital Ministry full link here. Some interesting comments as well.
CPM has been dragged kicking and screaming across from traditional offline media to online. It’s now our responsibility to put an end to the madness, and admit CPM just doesn’t work online. It’s been almost 15 years since I first experienced the Internet in a small windowless room at high school.
A group of friends and I crowded around a thirteen inch monitor and surfed (which is what you did back then) over to The Simpson’s Archive, somewhat surprised that the monochrome text was available from a distant, mystical land we’d never visited.
The passage of time since means that digital media is now seeing its second and third wave of custodians, and as such we’re fortunate to have the benefit of hindsight. The original band of online media monetisation professionals probably had no idea of the destruction they were going to wreak on this then new medium by dragging offline media metrics into the online world.
And so, with the benefit of that hindsight it’s time that we well realised that online CPM is taken out the back and shot. For some it’s going to be an emotional experience, just like the ending of Old Yeller was, but CPM in the context of the web, has gone rabid.
In fact, no, it’s far worse than that. CPM is evil, and it must die.
As an industry we’re all starting to realise that blogs aren’t newspapers 2.0, MP3s aren’t CD 2.0 and online video isn’t TV 2.0 – but we still focus on a method of monetisation that applies only to offline media. The problem with using the CPM metric online is that it applies to a world where constraints are physical. In a magazine, ad pages are a scarce commodity. Television broadcasters allocate a set number of minutes of advertising to run each hour. The concept of scarcity doesn’t apply online. The Internet is a giant copy machine generating an abundance of everything in digital form.
The obsession with CPM online is dangerous, not only by pushing major media companies into a vicious downward spiral of decreasing yields and profitability but by not delivering anything near an effective result for advertisers. And yet, despite its inherent and obvious evilness, we as an industry continue to openly horse trade impressions. It’s almost like we’re Edward Smith, the captain in command of the Titanic, calling for water pumps to suck water in to the sinking ship after it hit the iceberg – by supporting CPM we’re hastening our demise.
Publishers who should be obsessed with creating customer value and linking a passionate, engaged user base to advertisers is almost single mindedly obsessed with slide-shows, top 10 lists and content aggregation (read stealing someone else’s content, re-packaging a summary and posting it as your own). On the monetisation side, the entire online media industry has become somewhat of a parody of itself, which goes something like this:
In an attempt to pretend the purchase of impressions hasn’t become completely commoditised, media agencies encourage competition between publishers by submitting briefs containing minimal detail, at the last minute (no doubt driven by impulsive requests from their clients) and stating that the most “creative, different” brief response will win the lion’s share of the budget for an upcoming campaign.
Sales personnel at media publishers then scurry to the product and content teams, creatives and everyone else on the way asking them to stop everything they’re doing and start “getting creative” – the agency fully aware that exasperation will reign supreme as the sales team all have targets they’re desperate to hit.
Product teams at online publishers are then subtly forced to drop their pants, not only by diverting scarce resources already allocated to develop their product roadmap (the things that make consumers want to visit in the first place), but by making concessions for one off commercial integrations which have no long lasting value for consumers, advertisers or the publisher itself. These often involve increasingly distracting, non-standardised advertising units whereby, I’m guessing, advertisers hope that their banal messaging will somehow be noticed and adopted if a user is driven to insanity by the incessant push down, roll over, scroll out, blinking mayhem that has become standard practice on the modern web.
An incidental problem here also being some advertisers don’t understand the ineffectiveness of this approach yet seemingly still subscribing to the “reach is everything” theory made popular in the 1950s, and already out of fashion by the time of Don Draper. Those types of advertisers, like the snotty nosed bully in high school, make the mistake of confusing attention for popularity.
But I digress. All of this creativity shopping to publishers by agencies is a charade, because what inevitably happens after publisher responses are submitted is that the media agency opens up the dreaded spreadsheet titled “[Advertiser] Campaign [month] [year]” and enters in two figures: 1) total promised impressions and 2) total cost. All the “creative” integration work goes into a column labelled “value add”. The total cost is then divided by the total number of impressions, itself divided by 1000, and the result is a single, evil and morally bankrupt figure the size of which the media agency and the publisher sales team haggle over – one wanting it to be larger, the other smaller.
This number, as you either know, or have guessed, is CPM.
If any online advertisers out there reading feel like they’ve pulled back the curtain on the Wizard of Oz, well, I completely understand.
For all the palava that goes on trying to pretend otherwise, CPM is unfortunately the ethanol-added, unleaded petrol of the online media industry. And for all the posturing by clients at their wanting “something unique and different”, what they’re really paying for is impressions, make no mistake.
By pandering to CPM’s seductive simplicity, we’re genuinely destroying the Internet. Ask any television broadcaster if they’d run a channel which was composed of a small single line of text in the middle of the screen surrounded by 8 different TVCs and you’d have some idea of how traditional media sees the online media madhouse. Because there are no limits online doesn’t mean we shouldn’t apply some. These days the once annoying 16 minutes of advertising per hour on television seems like a relative yoga retreat to online media’s Times Square on New Year’s Eve.
Most people working in this industry realise this. As an industry, we’re not stupid and what I’m suggesting in this article isn’t anything new. I believe that media planners, creative agencies and publishers themselves fully understand what CPM is doing to the industry as a whole, but the drive for change is at about the same level as the metabolism rate of a three toed South American sloth. There are too many incentives at the moment for everyone who plays in this game to maintain the status quo.
Unfortunately the shift towards “performance” media, once seen by media agencies as a possible solution to this problem, is a shift in the wrong direction, if only because there’s nothing even remotely resembling performance about performance media. I’m not able to stick a Lamborghini badge on a Datsun 180B, so I’m not sure where publishers get away with slapping the word “performance” on CPC models based on remnant inventory.
Every publisher has a skeleton in its closet which involves agreeing to a CPA deal, proposed by an agency keen to expand the number of acronyms it presents in quarterly client reports, which a week from closing is desperately short of its acquisition target. At that point an automated ad server kicks in and starts throwing even more impressions of a campaign users weren’t interested in in the first place at even higher frequency in an attempt to hit an acquisition target which was determined by a Roman style sacrifice to the gods. This all leads to even lower click through rates, and hence more impressions. Rinse and repeat for another 6 days.
At no point does anyone think to sit back and determine the impact on the advertiser brand of throwing multiple impressions of a call to action campaign at a huge audience of people who weren’t really on target in the first place, because as long as the numbers in the “budgeted” and “delivered” columns of “[Advertiser] Campaign [month] [year].xls” add up, everyone has done their job right? With very few exceptions, that’s the end of it. The actual results of all this impression mongering are rarely measured.
Yes, the system is broken, and yes, we probably all realise it – but what do we do?
The solution isn’t all that difficult, it’s been used in offline media for decades. We just need to start focussing on what’s important to the advertisers here: business marketing metrics. These are the marketing metrics that are rarely mentioned in online media, such as message recall, brand awareness, purchase intent, likeability and actual sales results. Media metrics, like reach and impressions were invented for efficiency’s sake in trading offline media and a strong correlation between business marketing metrics and media metrics was observable over a long period of time in the offline media world. However, not much work has been done online to determine which types of campaigns have the best effect on business marketing metrics online. That’s where the focus needs to be, and with billions of dollars at stake, this is no crap shoot. Some people are going to get real rich mapping business metric outcomes to online media campaigns in the coming years.
Yes, business marketing metrics are harder to measure than their media metric counterparts at the moment and the momentum required to retool the system is significant, but the trend has begun to shift towards better consumer experiences and more relevant advertising. This means the way we operate today is doomed to fail as it results in terrible user experiences and completely irrelevant advertising. As many publishers, advertisers and everyone else in between are realising, a better, more relevant user experience is just a click away.
So advertisers, to get started, I think the new world begins with you. Start buying and paying for the things that matter to you. If you’re interested in brand lift, purchase an online campaign from your agency which promises just that. For now if we start with that one small step, the rest should follow.
November 23, 2010 Leave a comment
The Guardian talks to Mike Schroepfer, the head of Facebook’s 500 strong engineering and development team.
An insightful read for anyone working in tech environment. I’ve posted some of the bits which I found interesting below:
You’re in charge of a team at a company that famously does things fast. How far out do you plan what projects you’re going to assign people to?
In general our projects are very iterative – often they last one or two months. Facebook Messages was bigger and longer [Mark Zuckerberg said that a team of more than 15 people worked on it more than a year] so we had to make a longer-term commitment. Others are about working on a piece of technology that has a huge effect on [site] performance. So for example there’s Hiphop [which compiles the interpreted scripting language PHP into runtime C++] which took two years to finish.
How do you know if they’re running to plan? The big problem as organisations like Google or Microsoft get larger is keeping what they’re doing synchronised.
Well, intuition is what gives us the ideas for what to do, and data tells us if we’re getting it right. We iterate to find out if a project’s doing it right. Or you might make something live and then you look at whether people are using it frequently, or whether they use it once and don’t come back.
If they don’t come back then we probably didn’t get it right. It’s a constant process of iteration. The longer it gets before you get in data from the outcome, the worse it’s going to be if it’s not right.
How do you decide on the getting the balance between what’s commercially important – what will bring in cash from ads – and what’s just “cool”?
We’re trying to run the company in a growth and investment phase. We can invest in R+D but there do some opportunities where you can show more ads, so how do we balance it. A lot of projects that we are working on focus more on getting more users to the site and have an engaging experience so that they come back and recommend it to their friends.
It’s easier to build a business model on a big site than a small one. So our efforts are aimed at getting more people to come to the site for longer. We’re trying to make sure that we generate enough revenue that we’re never blocked from doing something by commercial considerations.
But for example we’re the largest photo sharing site on the web. So that has some benefits.
November 19, 2010 Leave a comment
If you’ve got the time, I really recommend watching this interview. It’s very recent (yesterday) and covers a wide range of subject matters.
Mark Zuckerberg gets challenged on a lot of Facebook’s recent (and future) actions… but he does well responding to them for the most part. Facebook’s competition with Google, is of course, one of the bigger topics here… but more from a philosophical, strategic point of view rather than just technical.
The bit I like is when John Battelle goes:
“There’s something about Facebook… which I think you’ll agree… it sort of doesn’t ask for permission, it asks for forgiveness…”
Zuckerberg tries to sidestep the point of the question by saying that they do what they do because they felt that their users had pre-validated the need for those actions… instead of really admitting “Yeah… but that’s what innovation and creativity is about… you push the envelopes until you can’t push anymore”.