I read an article in Wired that was scary — from the POV of the beleaguered newspaper industry. It explains how Google uses auctions to price advertisements. I understood it not all too well which was the scariest part. They have implemented an auction-based approach to selling and they do it on such a routine basis that it seems unbeatable. The customers essentially sell themselves. I don’t know if it is adaptable to newspapers or online news media. I hope so. It is such a powerful selling advantage to have a mathematical formula assign value — provided there are customers who want to buy the medium.
Kudos to the Progress and Freedom Foundation for assembling a thought-provoking book of Media Metrics (pdf) that argues “we have more media choice, more media competition, and more media diversity than ever before . . . (if) . . . there was ever a ‘golden age’ of media in America, we are living in it today.” In a blog summary, authors Adam Thierer and Grant Eskelsen hope that, guided by this impressive compilation of tables and charts, “future debates on this subject will be be guided by facts instead of fanaticism and by evidence instead of emotion . . . hyperbolic rhetoric (and) shameless fear-mongering.”
Which fortunately leaves me free to heap derision and disdain on this bean-counting analysis that reeks of moral relativism like a chain-smoking French deconstructionist whose underarms have never been dishonored by deodorant.
Let me explain this seemingly bipolar view. I truly appreciate that this libertarian think-tank used its financial support from nouveau corporate media to pull together facts on everything from Internet advertising trends to magazine expansion (see niche breakdowns page 77) to the revelation, at least to me, that more than 3,000 free-circulation local papers have a “combined circulation . . . larger than all the daily newspapers in America.”
That seems impressive until you realize those are “shoppers” as we used to call such advertising-only weeklies when I was a small town businessman in Eureka, California, where the Tri-City Weekly was a fine example of that genre. So when the authors of Media Metrics call this a golden age of media, what they really mean is that this is a golden age of advertising. There has never been a better time for national and international brands to advertise goods and services. And that is not a bad thing until you consider that banks are failing, household debt is high, and “the U.S. is experiencing the worst food inflation in 17 years,” as MSNBC reported in April.
So one might fairly ask whether this more-is-better analysis makes sense when getting more media offer more temptation to buy more things with money we don’t have.
I especially enjoyed chapter six on “the natural decline in media localism” in which the authors make two contradictory arguments. First, they say, the “decline of ‘localism’ is much-lamented but quite natural phenomenon as citizens gain access to news and entertainment sources of broader scale and scope.” Translation – people are more interested in Paris Hilton’s life than in their own.
In the event, however, that our logic rejects this rather specious supposition, the authors offer a contradictory fall back — a 2007 University of Missouri report, “The Community Newspaper Study,” which offers statistics about satisfaction with local news coverage. The 2007 report is compares to a 2005 report to assure us that if we do decide to act locally instead of leer globally that we already have satisfactory local news outlets.
But from what little I know of statistics the Missouri report seems to lies somewhere between extraordinary anecdote-gathering and piss-poor statistical sampling.
For instance the report summary says: “In the 2007 survey, 505 interviews were completed with adults who lived in areas whose total population was 25,000 or less in the United States . . . in 2005, 503 interviews were completed with adults who lived in newspaper markets of less than 100,000 people.”
Even assuming that sub-25,000-person communities are the same as the sub-100,000 variety, how do we know that the communities surveyed in each of the two years are equivalent for statistical purposes, so that we can lump all 500 or so interviews together? And what is the margin of confidence on a sample that small?
We aren’t told, but come to think of it who cares! Paris Hilton’s videos are more engaging than the city council meetings I can watch on my local cable provider’s public access channel. So thank you, Progress and Freedom Foundation, for giving me evidence instead of emotion, and for helping me realize that this is a golden age of media — in fact it is a golden shower raining down on civic-minded Americans from sea to shining sea.
Some time back I read an article by MediaPost editor Joe Mandese which postulates, and I think correctly, that the current slump in mass media revenues owes not merely to an economic slowdown but to an accelerating shift away from newspapers and broadcast to online. Economists call these secular and cyclical shifts, respectively, and the combination is like a one-two punch that has mass media reeling. Here’s what I fear — that there is no bounce-back from this slowdown. Unlike past recessions, if it’s time to use that word, mass media revenues will not bounce back of their own accord. Advertisers who try the new, more- targeted and presumably lower-cost online options — the search engines and the social networks — are likely to forever decrease mass media budgets.
Mandese’s piece in MediaPost is not quite so pessimistic but there is a dour note in the observations of the story’s central source, TNS Media Intelligence advertising economist Jonathan Swallen. He says the consumers seem to have closed their checkbooks, at least for now:
There are some things that are different about this slowdown . . . it is consumer-led. The last big turndown that we had in 2001, post-9/11 and the dot-com bust wasn’t so much of a consumer-led slowdown. There were other economic factors. This one feels different. What we’re in right now is a period in which consumers are stressed and strained by rising food prices, rising fuel prices, a crunch on credit, and a feeling that things will get worse before they get better. Without a rise in consumer spending, that [disincentivizes] marketers from ramping up consumer ad spending.
The latter statement is so obviously true it inhibits us from asking the what-if question — what if this is a tipping point beyond and consumers can no longer sustain the growing rate of consumption upon which the economy, and thus advertising, depend?
I’ll leave that a pregnant question for now.
Oops. Let me add one more comment by Mandese as a reminder for follow-up research. He writes that:
Other advertising economists are expected to weigh in with their predictions soon, including Interpublic analysts Bob Coen and Brian Wieser. Coen, who has served as the ad industry’s chief source for advertising spending estimates for decades, has historically tracked the industry’s growth relative to the growth of the U.S. gross domestic product.
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Meanwhile, in everyday life, I’m pretty darned certain that my PC has been slammed by a virus or spyware that resists both the downloadable and shrink-wrapped anti-virus software to which I have access. I have some contacts in the security community who, while they don’t make house calls, may take a look at my machine. I got a call last week at the office from a woman who described similar symptoms — the infection first presented as a (false) warning from the PC’s security center “You have been infected . . . go here to download . . .” I did not follow that misdirection. The caller did. Her PC, she says, is “fried.” Not a particularly good diagnostic but I understand that she cannot so much as boot up. I have been trying to work around and/or expunge this thing, but am losing the battle. In fact I am blogging today on a Mac so as to avoid the annoyance.
The Federal Communications Commission seems poised to tighten the rules regarding products that are scripted into television shows as a guerrilla form of advertising. United Press International reports that advertisers put 26,000 “product placement” messages into the top 10 television shows in 2007. FCC Chairman Kevin Martin started talking about the need to revisit the rules last year. The agency can simply open an inquiry and let it go at that or start a process geared toward a rule change. Its current action gives the commission to do both.
Product placements must be identified at the end of a show. Critics want better IDs. Product placements are not allowed in television shows aired on children’s channels. Critics want the rules extended to ban product placements on shows likely to appeal to children. The FCC notice mentions both issues.
Here is a prior blog entry on product placement.
With that pithy quote (see headline) former suburban newspaper publisher Tom Noonan encapsulates his message that serious media blogs need a business plan. And his article, “Cracking the local market” offers sensible tips on how to design an editorial product and sell it to advertisers. Noonan writes:
People advertise for but one reason, to sell something. Whether it’s hard goods or nifty concepts, they want to attract buyers . . . And don’t sell just ads, sell promotions and sponsorships. Craig Dennis, publisher of the Daily Herald in Provo, Utah, recently won a prize from Suburban Newspapers of America for his News Kids feature—a weekly TV style video sponsored by a car dealer. The page features children at local schools reporting on area events. It’s a big traffic builder and the sponsor pays a tidy $500 a week.
Noonan wrote a guest blog for SensibleTalk.com, a new site by Robert Niles, former editor of the now-defunct Online Journalism Review. Niles notes that Noonan is his father-in-law. Niles also recruited Tom Grubisich to survey and rate hyperlocal websites.
This is indeed some SensibleTalk. Good luck to Niles in finding someone to pay for it — ’cause you know what don’t happen till then!
The workplace as epicenter of consumption
The polling firm BIGResearch says advertising to workers on the job is the smartest way to reach consumers most likely to have money, and then spread buzz. A summary of the findings notes that:
With rising pump prices and busy schedules, consumers are highly likely to consolidate shopping trips, making purchases on their drive to or from work, or during their lunch break . . . Stephanie Molnar, CEO of WorkPlace Media, concludes that “The American workplace has become the most lucrative marketing channel for advertisers looking to connect with consumers . . .
I shall forthwith send a note to the boss thanking him for paying me to shop. I will also thank him for putting a wonderful distraction device on my desk so that I can look at goofy videos or read lengthy chain e-mail promising me happiness if I annoy five friends in similar fashion.
Seriously, one of the comeuppances waiting for online media — and I predict the what but not the when — is that employers will gain the tools to lessen the distractions aimed at their workers via the Web. I think this process is already underway at the lower end of the skills ladder, where so-called “dumb terminals” or “thin-client” devices can be designed to limit access to the wider Web and keep the nose to the grindstone. I believe network management tools already exist to allow corporate information managers to shut off access to any web site throughout the company’s internal network. Early examples of this will make news. Negative news. But the real audience will be the bosses who can justifiably say that they don’t pay you to be amused or informed or to bargain shop, and will eventually find the combination of network monitoring tools and personnel practices to enforce a “nose-to-the-grindstone” regime.
Not everywhere. Professionals may be immune because putting them into a pout would more likely exacerbate than curb any under-perform. But I don’t think it will be too long before the bosses recognize that their staffs are being targeted by a persistent marketing engine seeking to distract and divert. And it’s not good business for them to allow such behavior.
So I would suggest that as media target the 9-5 crowd that the whole thrust of the engagement process be designed to getting them back online after hours. How? I dunno. Contests that note the location of the IP address, extrapolate from that the geography and the time zone and then invite the viewer back after hours. Use this opportunity to grab the viewer. But plan to build a lasting relationship that involves the viewer — at minimum — placing value on your content by visiting it on their own time.
Rob Snell wrote the book on starting a Yahoo! store
(Yesterday’s item about the a House subcommittee hearing, “The Impact of Online Advertising on Small Firms,” drew a comment from invited witness Rob Snell, who sent me a link to the prepared testimony he will deliver today about the promise and pitfalls of using search marketing and search engine optimization. I have condensed his message and named the other invited witnesses below.)
As Snell will testify, in 1997 he and his brother were running a family business, Gun Dog Supply, in Starkville, Mississippi, and getting clobbered by a nearby chain store. They tried mail order and lost money, then started a five-page web site that they expanded over time.
For my family, selling on the Internet has literally changed our world. We went from a retail company doing $400,000 a year and struggling to pay the bills to a multi-million dollar retailer in a few short years, he will tell the subcommittee.
Snell noticed that “keywords were important. People were buying the things they were searching for.” He explains how to get higher search rankings by using keywords as well as internal and external links. His firm did well in free search by repurposing its catalog text. Snell talks about when to bid for the paid search ads that appear next to (or inside) the free listings. He urged caution, saying the rising price of words and click fraud are making paid search a tougher game. As he says:
More retailers lose money than make money on pay-per-click ad campaigns (in my experience).
Snell says a Yahoo! lobbyist brought him to the subcommittee’s attention as a potential witness. He was interviewed by Bill Maguire, counsel for technology policy for the Committee on Small Business. Snell was told that, in addition to his how-to testimony, he should:
expect questions about pricing issues and models, the Yahoo/Google deal, fallout from the Yahoo/Microsoft non-deal, click fraud and any other potential concerns of advertisers.
Please refer back to Snell’s original posting for more on the how-to of getting a small business noticed. I did not have any witness names when I wrote my prior item on the hearings (I assume Snell had filter that alerted him to the keywords in my blog). After I published yesterday’s item the subcommittee chaired by Texas Democrat Charlie Gonzalez released the following list of invited witnesses: