Archive for the 'Advertising' Category

State of the Mediasphere – Monaco Media Forum

December 10, 2008

Three weeks ago at the Monaco Media Forum Jeffrey Cole (USC Annenberg School for Communication, Director of the Center for the Digital Future) had an worth watching talk at about the state of the mediasphere. He summarized quite well the status quo of the media industry in the digital age and gave a small insight in his research, where he tries to figure out why there is only a small willingness to pay for digital content.
The average American household spent 260 Dollars per month on communication services that didn´t exist a generation ago. He thinks people are not willing to pay more on top of this and sees that as an argument for advertising as the future business model, which enables “feels like free” content. But that´s not the only reason why he sees the future in advertising, but also cause of the high potential of personalized online advertising, that will be more effective than advertising was ever before.

Another worth watching video of the Monaco Media Forum is the panel “The Revolution Will Be Streamed” with Henrique de Castro (Google), Nancy Cruickshank (VideoJug), Dina Kaplan (Blip.tv), Mike Volpi (Joos) and Dan Scheinman (Cisco Media Solution) moderated by Jack Myers. A very interesting discussion about the status quo in the web video industry and the potenial of the online video market especially in the area of advertising.

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TV Industry: We Have Told You!

October 21, 2008

“(…) in the next two to three years the television industry is going to face an advertising crisis more severe than our current financial crisis.”
says TiVo president Tom Rogers.

Rogers, who founded CNBC, suggested at the Association of National Advertisers Conference:
“in retrospect, everyone should have seen the current economic crisis coming but as to the coming ad crisis, you have no excuse. You have sufficient warning about television commercial avoidance and the growing epidemic of fast forwarding thru ads. Look what happened to the music business,” Rogers advised. “Look what is happening to the newspaper business. If you don’t come out of this room acting urgently, what’s going to happen in the television business will probably make that look like kids stuff. If you think this recession is tough to deal with, believe me it is nothing compared to the downturn in your brands that will come if you do nothing while television advertising goes avoided.”

Well two to three years… is maybe a little bit to pessimistic but that “this” day will come… I agree.

Read More on the speech by Tom Rogers an some good suggestions on Jack Myer`s website.

Movie Financing Has Changed

October 19, 2008

In times where we still, well at least in Germany, discuss “illegal product placement” cases, Hollywood does its homework for years now.

Antrep04.com made nice “alternate movieposters” with the “real new stars” of a movie production.

Google Did It In China

August 29, 2008

I would never have believed it, but it finally happened. Google released it`s free legal MP3 music search service. The link only works in china, of course.

A free ad-supported MP3 download service with all the top artists of the country…

When they have nothing left to loose, the labels react. This decision should have an impact on the future business model developement in Europe too… hopefully.

Accenture Content Study – IPTV

July 17, 2008

Just read the new Accenture global content study 2008 ” The Challenge of Change: Perspectives of the Future for Content Providers“.

Well, there is nothing surprisingly new… but here are the key findings:

  • About 63 percent of companies are pursuing a multi-platform distribution strategy.
  • More than one-third of companies expect to see significant revenues from social media and user-generated content within three years.
  • About 84 percent of companies expect mobile rich media to become mass market, representing the largest growth opportunity for media and entertainment firms.
  • About 52 percent of those interviewed see digital advertising eclipsing traditional advertising within five years.

More interesting is an older Accenture article about IPTV – “Infinite possibilities” Television? (2006) – I found accidentally at their website. It has some worthwhile reading thoughts about the potential and possibilities of IPTV.

Newspapers Are Unbundling And Then?

April 9, 2008

What is the future of the newspaper? Big question.

Fact is: Just 36 percent of 18-to-24-year-olds reported reading a daily newspaper in 2006, down from 73 percent in 1970. So newspaper companies are following their readers and advertisers online.

But what happens there? Is a newspaper online still a newspaper?
What about the business model? Bundling in the newspaper business is as crucial as bundling is for the music industry. The music industry made some mistakes, thought bundling is not as important… now the music industry is changing, is trying to establish the subscription model…

Can the newspaper industry learn anything from the music industry?

Nicholas Carr wrote an interesting article about the “Great Unbundling” in the newspaper industry and all the problems that could emerge. First he answers the question: Is a newspaper online still a newspaper?

“The nature of a newspaper, both as a medium for information and as a business, changes when it loses its physical form and shifts to the Internet. It gets read in a different way, and it makes money in a different way. A print newspaper provides an array of content—local stories, national and international reports, news analyses, editorials and opinion columns, photographs, sports scores, stock tables, TV listings, cartoons, and a variety of classified and display advertising—all bundled together into a single product. People subscribe to the bundle, or buy it at a newsstand, and advertisers pay to catch readers’ eyes as they thumb through the pages. The publisher’s goal is to make the entire package as attractive as possible to a broad set of readers and advertisers. The newspaper as a whole is what matters, and as a product it’s worth more than the sum of its parts.

When a newspaper moves online, the bundle falls apart. Readers don’t flip through a mix of stories, advertisements, and other bits of content. They go directly to a particular story that interests them, often ignoring everything else. In many cases, they bypass the newspaper’s “front page” altogether, using search engines, feed readers, or headline aggregators like Google News, Digg, and Daylife to leap directly to an individual story. They may not even be aware of which newspaper’s site they’ve arrived at. For the publisher, the newspaper as a whole becomes far less important. What matters are the parts. Each story becomes a separate product standing naked in the maketplace. It lives or dies on its own economic merits.”

He is right. “The analog newspaper bundle and concept” won`t work in the digital world. So he is worried about the future of quality “hard” journalism:

“The most successful articles, in economic terms, are the ones that not only draw a lot of readers but that deal with subjects that attract high-priced ads. And the most successful of all are those that attract a lot of readers who are inclined to click on the high-priced ads. An article about new treatments for depression would, for instance, tend to be especially lucrative, since it would attract expensive drug ads and draw a large number of readers who are interested in new depression treatments and hence likely to click on ads for psychiatric drugs. (…)

On the other hand, a long investigative article on government corruption or the resurgence of malaria in Africa would be much less likely to produce attractive ad revenues. Even if it attracts a lot of readers, a long shot in itself, it doesn’t cover a subject that advertisers want to be associated with or that would produce a lot of valuable clickthroughs. In general, articles on serious and complex subjects, from politics to wars to international affairs, will fail to generate attractive ad revenues. (…)

When bundled into a print edition, hard journalism can add considerably to the overall value of a newspaper. Not least, it can raise the prestige of the paper, making it more attractive to subscribers and advertisers. Online, however, most hard journalism becomes difficult to justify economically.

Speaking before the Online Publishing Association in 2006, the head of the New York Times’s Web operation, Martin Nisenholtz, summed up the dilemma facing newspapers today. He asked the audience a simple question: “How do we create high quality content in a world where advertisers want to pay by the click, and consumers don’t want to pay at all?”

The answer may turn out to be equally simple: We don’t.”

I am not sure, if he is right here. First, I think, if there is attention for an article, there will be a chance to monetize this article, even if it`s a quite “depressing” news. Advertising and targeting is changing online, it can be personalized … there will be a way to optimize this.
Second, why do we think there is just this one direction of unbundling? Isn`t there the chance to make bigger bundles? Isn`t there the chance to use complete new ways of content delivering? Online is a complete new medium. It has much more options than just reading… it has video, it’s interactive, it’s faster … et cetera et cetera…
So, what could happen? Is newspaper content merging with tv content? Promoted and personalized by social networks and widgets? Who knows…

Of course, I don`t have an answer, but I’m sure there is a chance for a “bigger bundle”…. a complete new way of news delivering…
News delivering is a service… we have to create a new “service concept”…

Just a thought…

There Is Something Going On…

February 13, 2008

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I am always a little careful looking at numbers and forecasts like this… but anyway …

New multimedia platforms in the U.S. will capture $12.6 billion in advertising revenue by 2012, according to Parks Associates’ report “New Advertising Platforms and Technologies“.

Well … that’s a lot.

Hard to compete with free and quite good?

January 24, 2008

There are some blogs I am reading cause of my „marketing work life“ and usually they have not much to do with things I am writing here … but sometimes they have …

There is one I highly appreciate: The blog of Russell Davies, former Planner for the ad agency Wieden & Kennedy, right from these crazy „Nike guys“. Now Russell is working as consultant in his own „small“ agency  

His blog is great, really inspiring … read it, if you have anything to do with marketing…

…. check his older posts too,… ok …enough advertising for Russell…

A few days ago he wrote some thoughts about the future of advertising in the media and is wondering, if media/advertising is on an attention peak.

Really interesting is this thought about „free“ user generated content like his own blog:

 “And ‘free and quite good’ is really hard for regular commercial media to deal with.  Murdoch can’t compete with ‘free and quite good’. He can’t compete with wikipedia and Craig’s List. The only way to compete with that is ‘expensive and brilliant’ and a) that’s hard and b) difficult to get people to pay for. So in might work in some niches but it won’t work everywhere.It’s a simple equation – there’s a limited amount of attention in the world, if more of it is going to personal, non-commercial, un-advertised-in media, less of it will go to advertising and advertising will shrink.” 

Fewer of our attention will be “disturbed” by advertising, yes I agree, but advertising becomes much more effective in the future. So prices for ads will rise, and the media companies can stay on the same revenue level.But like Russel wrote, the quality / service / value of the (professional) media content must rise, cause of the “free” alternatives.

YouTube Trys Overlay Advertising

August 23, 2007

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YouTube starts placing overlay advertisements into video clips (see Times Online article).
That´s semi-transparent animated “overlay” ads showing up at the bottom fifth of the video window for a few seconds when a user views a YouTube clip. The initial cost for advertisers will be $20 per 1,000 views and the revenue will be split between YouTube and the content provider.
Wow, what a price! If you see some viewing statistics on You Tube …
But: How will the user react? Preroll advertising and interruption advertising didn´t work in the net.
We will see.
Eileen Naughton, YouTube’s director for media platforms is cited in the Times article: “We are trying to be respectful of the YouTube community, whilst working with marketing partners.” (…) “less than 10 per cent of users choose to close the image overlay as soon as it appears”.
Well, they shouldn`t undervalue the competition on the video services market. When the users get annoyed they will switch.

Music Artists and Industry Goes Sport….

June 28, 2007

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A few years ago musicians with big sponsoring deals were banned, the word: “The Sell Out”.
Now its nearly as common as in the sport business even in the indie scene. The times are over as The White Stripes were praised as heros to refuse a million dollar deal with GAP.
That´s a logical consequence to the impact of the digitalisation on the music industry. In my opinion it´s the most important revenue model for the future.
The problem for the “old music world”: Again, this revenues possibly pass the major record labels.
And more and more consumer products go one step further an even try to break new artists.
Coolfer shows the latest examples.