the above video sets the context for a report released last week by Google and the Boston Consultancy Group, which has some rather interesting findings. the report's key findings are that Australia's media industry is healthy, however it is the Internet that is providing the "shot in the arm" to growth.
it turns out that not only do Australians like their 'new' media world, but in said world where our access to, and choice of, media has never been greater, we’re consuming more media than ever before. so much so in fact that - because we export, essentially, more content than we import - we have a trade surplus in our content that's worth $24bn to the economy.
the report also identified that whilst ad revenues are still (and will be for a while) predominantly generated offline (93% in 2011), its online revenues that are driving more than 50% growth in the sector.
the report came in the same week that the sparkily titled Commercial Economic Advisory Service of Australia (CEASA to their friends) released it's retrospective of 2011, reporting that whilst adspend was down, it "wasn't as bad as previous years" (let it not be said that CEASA can't find a silver lining in a set of figures).
a 1.4% overall drop was the result of (in descending order) online up 17.5%, outdoor up 3.4%, radio up 0.7% (congrats to them all), 2.6% drop in total TV, 9.2% drop in newspapers, 8.4% decline in mags, and a 20.8% drop in cinema. so both reports point to online as doing not just well, but supporting both ad revenues and the overall economy.
so far so 'tell me something I didn't know' ... but the reports struck a chord with a conversation I've been having a lot with clients and agency-type people recently. because the reports only tell a truer picture when you ask WHY it is that online is bucking such a downward trend - and I think that the answer is about innovation.
the engine behind online's performance is now only marginally about penetration gains and faster infrastructure, and a lot more about the increased utility and capabilities delivered via the internet. its not the internet that's bucking ad spend trends and fuelling the Australian economy, its what the internet is doing, and more specifically what we can do with the internet that counts.
Facebook and YouTube have now been joined by the likes of Flipboard and Spotify on the Australian media scene, innovations that have come not from the mainstream but from the fringe. and here's where I see the gap. because its not mainstream media or businesses that are driving this innovation, but new entrants. new entrants spotting an opportunity and innovating into it.
when you think about it, many 'online' platforms should have been invented by existing players, yet most weren't:
the music industry should have invented iTunes
the movie business should have invented NetFlix
the radio industry should have invented Spotify
a magazine publisher should have invented Flipboard
a bank should have invented KickStarter
a dating service should have invented Grindr
and for that matter, a media agency should have invented Facebook
the reason none of those organisations invented the new platform is the same reason the American Railroads went into decline:
"The railroads did not stop growing because the need for passenger and freight transportation declined. That grew. The railroads are in trouble today not because that need was filled by others (cars, trucks, airplanes, and even telephones) but because it was not filled by the railroads themselves. They let others take customers away from them because they assumed themselves to be in the railroad business rather than in the transportation business. The reason they defined their industry incorrectly was that they were railroad oriented instead of transportation oriented; they were product oriented instead of customer oriented..."
Levitt's question from 1960 is even more pertinent now than it was then. what business are you in? once you've answered that you can start innovating around that business, and once you're inventing stuff that gets shared and talked about, you can stop paying the expensive price of not innovating: buying media.
established players, it strikes me, are the least likely to bridge the innovation gap in their category - we should all we working on plans to change that.
and for those of us in agency land the question is more pertinent than for most ... what business are we in? anyone who answers 'buying media' or 'making ads' should turn the lights off on their way out.
organised through social media club sydney in conjunction with AMP's AmplifyFestival, Tiffany Shlain's (@tiffanyshlain) film is a narrative on how the internet is fundamentally changing us, interspersed with a personal account of a year in her life. the result is a fascinating polemic on the nature of our interconnectedness as a species.
much was well-trodden territory for this blog ... but there were two aspects I hadn't heard before that I found particularly interesting. I hope that Shlain won't object to me sharing here...
one, Shlain described how in her father's book 'The Alphabet Versus the Goddess: The Conflict Between Word and Image' he made the connection between how the invention of the written / printed word had coincided with the rise of men in social, political and commercial circles. he argued that this was because the written word is processed by the left side of the brain, which is more male.
last century's 'iconic revolution' (Shlain's term) - which saw imagery and images became a more predominant form of communication - coincided with increased predominance of females in society. images are processed by the right side of the brain which is ... more female.
the interesting conclusion is that the internet, with it's heady mix of words and images, is processed more of less equally by both sides of the brain, and is therefore a mass-communication channel that isn't biased towards one gender or the other...
the other aspect I found fascinating is how the brain and our body chemistry is predisposed to both connectedness and the pleasure hit we get from the stream of information on the internet. when we connect, we release oxytocin - which evokes feelings of contentment, reductions in anxiety, and feelings of calmness and security. Wikipedia notes that 'many studies have already shown a correlation of oxytocin with human bonding, increases in trust, and decreases in fear' ... so the more we connect, the less anxious we are, and the internet allows us to feel more connected than ever before...
dopamine is released when we experience something pleasurable, and encourages us to keep performing the action ad-infinitum (as there's no diminishing return from dopamine). Shlain's interesting observation is that - as dopamine is released when we get a 'hit' of new information ... we are becoming addicted to the internet (or more specifically the infinite content that it gives us access to)
if you get a chance to catch the movie I urge you to do so ... it's a fascinating and beautiful experience. and it left me thinking about the role of brands and advertising in Shlain's interconnected and interdependent world. from one perspective advertising and media fuelled the worst of the excessive consumption society that is now placing sustained pressure on our environment...
...but on the other I can't help but think that Shlain's hypothesis presents us with a clear opportunity, an opportunity defined by a simple question that I can't shake. in an inter-dependent world where billions of people increasingly connect, communicate and coordinate as communities, why do we continue to so readily seek to engage with individuals?
in an inter-dependent world, the only thing that matters is shared agendas and communities of interest. and more specifically, what matters most is an opportunity for brands to fuel - rather than interrupt - their interconnectedness and interdependence.
its utility, but its more than that ... its potentially brands becoming a key and fundamental part of a dopamine and oxytocin-fuelled revolution in how we live on earth... it's tantalising enough to warrant asking what you would want of the brands with which you work? ... for them to be part of humanity's next giant leap, or reconciled to history as part of the iconic revolution that for a while so influenced our culture and behaviour?
Josh Spear is "from the internet". no really, he is. he put everything owned in the Internet and now has much of his possessions stored in the cloud.
his website, JoshSpear.com emerged in 2004 from the back of a Journalism 1001 class in which he was disappointed with the way academics ignored blogs as an emerging media. Josh describes his home as "a daily source of inspiration for marketers, brand managers, advertising executives, and a wide range of everyday people from around the world who love to stay ahead of the curve"...
which I guess more than qualifies Josh to be talking to us at Circus. his theme was 'the Fringes of the Internet', and the way the internet is affecting people and businesses.
he described how shortly after starting his blog he was approached by businesses who wanted to put ads on his site, this turned out to be a fine way to made money, and led to a conversation with advertisers about how effective the ads on his site were. very effective it turns out ... they were seeing click-through rates of 2%...
two percent? asked Josh. yes, they replied. that's a 98% failure rate, said Josh. yes they replied, impressive isn't it!
Josh guessed then that the internet would have a major impact on businesses, and co-founded Undercurrent, a digital strategy firm that applies "a digital worldview to the challenges and ambitions of complex organizations"
"It's about the human behaviour we're going to talk about not the specific websites"
4chan is bad place on Internet but it's also important. it's anonymous. people respond to photos with photos. [it's a bit like the Abyssal plain of the internet; a deep, unexplored region rich in biodiversity that influences the rest of the ocean in ways that we're only just understanding] ... it's where 'I can haz cheezburger?' began ... the LOL-CAT meme. a meme which now results in tens of thousands of cats created every day. like this one:
the misuse of worlds isn't an accident, it's very deliberate. and globally consistent and understood. it's a language called LOL-Kitteh. the Bible has been translated into LOL-Kitteh.
Rick Rolling began on 4chan. in fact "anything funny that's unexplainable starts on 4chan". to the extent that a Time Magazine poll ranked Moot (4chan's creator) as the web's most influential person. only later was it noticed that the first letters of the ranked online poll spelt out a phrase. an incredibly sophisticated and advanced work of electoral engineering / hacking.
Time Magazine's 2009 online poll results. the first letters of the top 21 names spell out "marblecake also the game". marblecake is the name of the IRC channel where Anonymous started their campaign against Scientology, and "the game" is a reference to "The Game" meme source: Wikipedia
the rabbit-hole, it would seem, goes very deep indeed. "4chan is 'the bottom billion' pageviews on the Internet". Spear points out that two things consistently happen to Moot (who is called Charles) (1) he is forced to dump 4chan's data every 12 hours due to hard drive space and (2) every week he is served a subpoena for the information he holds (before it's dumped).
[this is all pretty mind-boggling I'd have thought for the average brand marketing manager, and you can see how they would be queuing up for the elvish Spear to safely have them gaze down the rabbit hole without falling down.] things used to be simple. then there was digital. which disrupted. everything. this is such a familiar phrase that it's beyond cliche, but Spear asks a very interesting question:
"is there a unit of disruption?' ... and how do you stay on top of the disruption? which happens all around you all of the time and increasingly finds ways to impact on your sensory sphere. much as this blog discussed in a January 2010 post, Spear describes Tweetdeck as one way to control the disruption. he has "become an air traffic controller of my disruption"
we are our social graph. we're made up of our disruptions [connections], a point made wonderfully and elegantly with this map of the world, a map formed by nothing but the connections on Facebook.
What happens to a generation of people growing up in the world as drawn by this map and 4chan? a world populated by cat memes and Rick Rolling? a world in which gifts are given virtually. Spear pointed out that thousands of dollars are spent on things that don't exist. virtual economies are springing up everywhere. Farmville makes $50m a month. when Bear Stearns collapsed, a friend of his at Facebook didn't contemplate the collapse of the further banks but rather was promted to think that Facebook should start a bank.
Virtual economies are being used by brands - for example the number of tweets Uniqlo products received affected their price - a fascinating dance between buzz and value.
Radiohead invited people to pay what they thought their album was worth, an invitation that made more money than all other record sales combined. People's idea of money is changing.
the same goes for people's idea of location... take Foursquare, which introduced game mechanics in the form of mayors and badges. Foursquare also allowed tips to by left inside the check-ins, inside the game. tips linked to location so that they're readily available to those who enter the space. Foursquare allows reviewing in realtime on a geographical basis... Spears asked why people share all this information, and showed a slide outlining three reasons why we share adapted from MIT research and Henry Jenkins:
Strengthen my bond - you are what you share in your social graph
Define collective identity - you are based on the five people you spend most time with
Give me status
Viral = a bad thing, something you catch
Spears notes that 'pass-along' is made not of viral, it's made of people sharing something with more than one of their friends, and so on. reaching people is about tapping into cultural resonance. to test this, Spear's office put an image of a funny(ish) joke about Tiger Woods on the web. the pic got 30,000 views in first 48 hours, created a 'microblip' of cultural resonance ... a map of interest, which could then be observed. so how, in Spear's opinion do you create cultural resonance?
group of people + unique culture = amplify to affect society
it's about tapping into a shared interest online because you can't rely on time and space, as shared interests are a way of creating cultural resonance. connect your brand to this. or don't. these interests are being shared whether brands get involved or not.
but be careful brands - angels fear to tread where P Diddy TV trod with Burger King. the video has long been removed, but fortunately for us Lisa Nova's spoof lives to remind us how it want down (nb Nova is now working in TV comedy - she got noticed because she understood the rules of the internet)
in Spear's opinion the fringe of the internet has a novelty scale:
the fringe's novelty scale, as presented by Spears
Spears says that agencies who want to use things like crowd sourcing or 'the fringe' to do their work need to either be the lowest cost option, or the best. if you're neither, you're stuck in the middle, and the middle is not a great place to be.
Spears asks what is the Internet good for? advertisers and agencies may answer that it's good for awareness [incremental] and persuasion. but Spear observes that this is not what the Internet is meant for. the internet is meant for sharing, cooperating and collective action. the latter of which is, in Spear's words, "the holy Grail of humans using technology"... at the fringe are the beginnings of these kinds of great examples...
the Copenhagen wheel collects data from your bike. one person doesn't generate enough data to paint a picture of a city, but eveyone's data does ... and allows the aggregation and interrogation of usable data to generate insight and utility.
Ushahidi encouraged free and fair elections in Zimbabwe, and in the aftermath of Haiti and Christchurch interactive maps directed resources in realtime to where help was most needed. the US state dept now relies on this kind of information to coordinate relief efforts. crowd sourcing is used to collect and sort data. organisations no longer ask for money but for a little bit of time and effort. Alive in Egypt transcribes voice messages into tweets, allowing people to deploy messages and information even when access to the internet is being blocked.
So what has 4chan guy got to do with the fringe?! well what if all the people sending cats around every day gathered intelligence instead? they already have, it's called WikiLeaks, and "we can't yet imagine how this will affect the world"
Some challenges for brands:
how do you change from interrupting people into adding utility for people?
How can brand engage with born digital consumers in their language?
If you take a brand into the universe of the internet, ask yourself if you are following the rules of that universe?
Are you surrounding yourself with enough people that speak digital?
the contents of this post [unless in square parenthesis] is the content of a talk given by @JoshSpear at Sydney's Circus in February of 2011, thanks to Josh for his input in writing this post
last week Apple continued their ascendancy with the unveiling of a revamped iPod range, but also with Ping; a social network, housed within iTunes, based - not surprisingly - in and around music. so a small step for iTunes but a giant leap for Apple into the social networking space.
they're not the first. back in July 2008 I wrote a post in response to news that MTV was launching a social networking initiative called House. I expressed concern then, that brands sailing into social waters did so at significant risk... there's simply only so many networks people can and will be part of...
at the time I ranked a very un-statistically robust sample of social network membership and (unsurprisingly) a long tail emerged... whilst a small minority of sites (Facebook, MySpace) account for the vast majority of social networkers, there is the potential for a network to aggregate a strong and viable community around a niche topic or area. but therein lies the rub... if you're stuck in the tail then running a social network could be an expensive way to aggregate and entertain a niche audience.
but back to Ping, and as niche's go, it got to be said that if you're going to go after a vertical then music seems to be a fair vertical to choose; especially when you have one of the biggest and most significant music ecommerce platforms in existence, and MySpace - you're most significant rival with specific music credibility - is struggling to demonstrate a place for itself in the world.
but Ping is a somewhat limited experience. on first use it feels like a twitter engine (you follow and are followed) with a Facebook framework. but that's where the similarity ends and the problems start; the only way to connect with people is to invite them by email, and once you are connected there's no inter-network connectivity. what goes on Ping, stays on Ping.
contrast this with Fabulis, the social network set up for gay men and the friends of gay men set up by Jason Goldberg (below) earlier this year. fabulis.com aims to help gay men and their friends discover where to go, what to do, and who to meet.
fabulis founder Jason Goldberg
two things struck me about fabulis. one is how the site has an explicit 'currency' in the form of bits - points that you earn or win by interacting and engaging with the site and other social networkers. for the record my meager 815 points currently rank me at 4,181st, so I've a bit of engaging to do (but then that's very much the point of points isn't it).
fabulis tackling the onerous task of helping gay men and their friends stay in touch - it's a tough job but some networks got to do it
but the second and most interesting aspect of fabulis is how I never actually joined the social network. I never registered a username or created a password. nor did I upload a profile picture or suggest friends. Facebook Connect did all of that, and moreover, fabulis was more than happy for Facebook to do it. my sign-in, profile, and network were all ported happily and seamlessly across from Facebook. Compare and contrast this with Ping's approach.
the fundamental difference between the networks is that Ping is insular and closed (and that's very much Apple's prerogative and indeed modus operandi) whereas fabulis is not only open in it's approach, but dependent on another network - namely Facebook - for a key element of its infrastructure. if Facebook went down one day (run with this!) then fabulis would go down with it; it's a network built on a network, and its very much the better for it.
all of which makes Jobs' position on why Ping isn't connected into Facebook's (or another social network's) content very revealing... in a post on cnet news, Kara Swisher describes how when she asked Jobs about the lack of connectivity on Ping, "he said Apple had indeed held talks with Facebook about a variety of unspecified partnerships related to Ping, but the discussions had gone nowhere … the reason, according to Jobs: Facebook wanted "onerous terms that we could not agree to""
Ping was a pretty unique opportunity for Apple to open it's doors and integrate part of its product into the wider web in a way that would ultimately have made Ping better for its users. the fact that Jobs didn't says more about Apple than it does about Facebook's apparent 'onerous' terms. it seems that Facebook's terms weren't too onerous for Goldberg, and fabulis is, well, pretty fabulis as a result.
and we're off... Tim Burrowes chairs MySpace's Next Chapter in Social Media
there was only one word of the day last week, when MySpace Australia hosted their Next Chapter in Social Media event in deepest darkest Alexandria. that word was Discovery. MySpace is about discovery, and being discovered. and about discovering stuff. "MySpace will be the best tool for Discovery" was the assertion of the social network's International Co-President Mike Jones, who in his keynote speech highlighted projects from the network that are "allowing people to get Discovered".
Jones made the point that 'social' is no longer a USP... every web property has or will soon have social elements as an integral part of their offering. being a network that is social isn't enough. hence 'Discovery', and MySpace's intended positioning as the internet's 'Discovery Engine'. they're nothing if not bold.
Jones discussed a range of MySpace innovations, from allowing realtime commenting on the site to integration with Twitter; and he talked about the site's new AdStream unit, which allows advertisers to "push ads into the stream", the "consumer-activated pop-up" for which delivers "incredible impact".
we have a problem here. well actually we have two.
firstly, the innovations aren't. innovative. my Twitter has been linked to my Facebook for as long as I can remember (which in realtime isn't I admit that long but long enough given the pace of change in social media network evolution). nor is commenting on content in real time revolutionary, to pretend that it is may do more damage than good. ditto MySpace Music's developing an algorithm to recommend music based on what you're listening to. we've been there and we've done that, nothing new is being brought to the table.
the second problem is of more concern because it gives visibility to the mentality behind the direction in which MySpace is going. Jones' comments - that "ads" can be "pushed" and deliver "impact" - is a broadcast mentality, a mentality that has no place as a core proposition within an online social network. while the rest of the comms community discuss engagement, content, utility and ways in which brands can make our lives more intuitive, MySpace find themselves talking about ads that deliver more impact.
there's a disconnect between the MySpace product and the role of brands here... the primary role of brands is not IMHO to fund MySpace. that comes as an important and necessary result of brands engaging with and providing utility for MySpace users. for MySpace themselves not to be leading this intellectual charge should, in the month that saw AOL give up on Bebo, be of concern.
there's a genuine sense that MySpace are playing catch-up. even the acknowledgment by Jones that "sometimes what you Discover on MySpace may not be on MySpace, and we're OK with that" sounds more like the waving of a white flag rather than a confident forging of partnerships to grow, activate and engage the MySpace user-base.
the danger is that 'Discovery' becomes nothing more than an interesting but unownable concept for which product simply doesn't follow through. Jones may assert that "Discovery is the one thing we really have to nail", but the one question that everyone at MySpace should be asking themselves... 'how do we bring utility to how people discover stuff on the internet?' doesn't seem to be being asked, at least in last week's public forum.
I Tweeted at the event #myspaceevent wondering what myspace would have done differently if they could replay the last five years over again?
Tim picked it up and put the question to Jones, who was honest and candid. MySpace couldn't keep pace with its own growth. resources were diverted to infrastructure and sales, rather than product; "for five years they [MySpace] were so busy keeping the site up that they had no visibility on what users were doing". Jones has his work cut out.
wise words from Dan Pankraz of DDB
next up at the event was Dan Pankraz, a Youth Planning Specialist at DDB who gave an overview on Generation C. the content was or should be very familiar to those of us who have been negotiating the future of media and communications for a while, but some solid observations were made:
for the 'connected collective', happiness = being part of the tribe
successful ideas aren't necessarily the biggest but the fastest moving
we need to create stuff for the swarm to pick up and run with
conversations never end
mobiles = social oxygen
82% of young people rely on peer approval for decision making
brand relevance is determined in the moment
online identities are different from our real ones; the online version being the 'wanname'
gen-C are pluralistic with sub-cultures, and avoid perceptions of one-dimensionality
one observation that caused some chatter on the day was a stat from FastCompany claiming that in 9 hours of media consumption, gen-C take in 13 hours of content. personally I thought that sounded conservative - multitasking alone potentially doubles the amount of media a content-hungry gen-C can devour, with their attention span decreasing accordingly of course.
Pankraz shared a plethora of examples of who's out there doing interesting stuff in this space... broadly aligned along three pillars; Collaboration, Purposeful Platforms and Play...
on Collaboration: "agencies talk too much about the tools and not enough about how brands can be more social and what content they have to share" ... "the best brands allow people to morph ideas" ... "do stuff with and for gen-C not at them" ... gen-C are not a destination and can't be targeted, rather they are a partner in production.
Kypski's One Frame of Fame Project encourages all of us to be in their music video, which us updated every hour based on contributions from, well, anyone...
on Purposeful Platforms: Pankraz cited Coke's Expedition 206, for which three ambassadors take a journey to all 206 countries where Coca-Cola is sold, interestingly thats 14 more countries than are represented by the United nations...
on Play: "...a key marketing paradigm to engage audiences", Pankraz described Cabbie-oke, DDB's project for Telstra which see's Cabbie-oke cabs offering free cab rides every weekend; so all you have to do is belt out a tune for your free ride...
he described RedBull as "probably the most playful brand in the world" citing their 'secret halfpipe' project for Shaun White. they do what great brands - in Pankraz's view - should all do: experiment with and create popular culture...
in short, its not what you say, but what you do that counts. Dan blogs here.
SMO joke - Nicole Still gives the advertiser's perspective
the final speaker of the afternoon was the enigmatic J&J's Pacific Digital Director Nicole Still, who gave a candid walk through ten principles she works to at the company:
never, ever, censor... "deleting comments is not an option"
be ready for SMO (Social Media Outbreak); that thing that happens when someone replies or responds to what you've put out there. she encourages J&J marketers to just try [something new], admitting that "for companies like J&J, Social Media is like the dentist; it means well but it causes great anguish"
every brand has a right to be there [in the social space]
develop a parallel brand to deploy into the social media space - for example Neutrogena is building a OLS (one less stress) brand to deploy into the social space
prioritise and define the role of each social media channel
use a combination of paid, earned and free media (Still cited a recent campaign that split investment 75% paid, 20% earned and 5% owned, and suggested that for an investment of c.$1.3m she'd expect to generate c.$3m of total 'media')
harness alpha-influencers on third-party sites
practice on Facebook (who don't charge to have sites) - remember that "people don't take on individuals, they take on corporations" (ie always respond individually)
measure what matters: the number friends you have doesn't. 50% of the people who visit the J&J site 'fan' it. she has five key metrics: sales, reach & freq, awareness, cost effectiveness and engagement
sometimes, its about presence not participation. sometimes, just being there is enough
in the discussion after-wards, Still made some surprising comments about the client / agency relationship. "from J&J's standpoint, its the responsibility of the [digital] agency [to monitor the social space]" ... "at a global [big brand] level, it shouldn't be brought in house" ... and finally, "we take responsibility for training the agency". this last point in particular was interesting, Still admitted taking what is a reasonable and responsible position in ensuring her agencies are delivering what she and her company needs. ultimately "you have to give people ownership in the space to be incredible successes or colossal failures". refreshing indeed.
in the final panel discussion I asked about the elephant. the big grey one. there. in the room. there. behind you... "Australian marketing invests relatively less than equivalent digitally-enabled countries in online. PWC have stated that "traditional media 'owns' the market in Australia for a long time yet to come". so why is Australia lagging behind and what would the panel like to do to help it catch up?"
for Pankraz it was about better learning: Australian clients have had a bad education from agencyland - we need to better educate the market about digital.
Still challenged the question, citing The Best Job in the World as an example of great thinking coming out of Australia, a country which many companies want to be a testbed for innovation and marketing thinking.
only Rebekah Horne tackled my elephant, commenting that because there are no agreed metrics or online currency in Australia, traditional media is seen as less risky; less risky for agencies to recommend, and less risky for marketers to buy...
it was quite the appropriate comment from the Managing Director and Senior Vice President International of MySpace. Horne must know better than anyone the mountain MySpace now have to climb, but its perhaps no different from that which all of us negotiating the future of media and communications have to climb. MySpace may not have the answers to what the Next Chapter of Social Media looks like, but from here it looks like they're the ones who are creating a forum for the asking; and finding the answers is required learning for MySpace and the industry alike.
"the broadcast model isn't broken... yet. how prepared are agencies for when it breaks?" was the question I wanted to put to the Q&A panel at last week's iMedia Agency Summit in Sydney. whilst I didn't get the chance to ask the panel, I did get the opportunity to ask it to Rohan Lund of Yahoo!7, but more of that later.
yes, this week saw the AdTech Summit series hit Sydney, part of which was the iMedia festival which I attended along with around one hundred of my Sydney media counterparts. all in all it was a day of more questions than answers, but that was to be expected I, well, expect. that said, some genuine morsels emerged, which (after a bit of an absence from the blogosphere) I thought I'd share... here then, is what happened at iMedia, at AdTech, at Sydney...
Unilever brands that have utilised the social media space
first up, delivering the keynote welcome, was Unilever's Babs Rangaiah (@babs26) who described how he and others are pioneering in the Social Media space at the company. its necessary stuff in his opinion, pointing out that only 18% of TV campaigns generate positive ROI, and that 24 of the top 25 biggest newspapers are undergoing circulation decline.
his three observations were that Unilever is (1) living the [social media] space, (2) re-framing their thinking re Social media and Applications [ie NOT pre-rolls - thats the broadcast solution applied to the online paradigm], he cited BBH's Axe Wake Up Service app from Japan (above), and (3) rewriting its media manifesto along these lines, as would be written by customers:
be part of the world - Rangaiah pointed out the gap between time spent online and advertising spend online
penetrate our culture - the move from interruption to engagement; is what we create useful, entertaining or interesting? he cited the example of the Dove for Men campaign, which after scooping up a SuperBowl spot proceeded to land its American Football-playing star a seat on Oprah's couch
give us a voice and a role - Best Job In The World anyone?
be authentic - anyone unclear on this one just Google Dell Hell...
listen to us
create more value - "you want us to pay? ... [then] we want you to pay attention"
don't be so corporate
keep it simple - good one this, if you can't explain an idea to a non-marketing friend or partner in ten seconds then its probably to complex to ever get traction
telling friends - WoM is the most powerful form on advertising [Alleluia Babs, Alleluia]
do good
he ended on a topic that would be the subject of some debate for the rest of the day... how the rapid evolution on metrics in the online space has created its own rewards but also problems. from clicks and impressions to unique users to engagement or stickiness and now ROI ... measuring success has never been so possible nor so complex.
next up was the lovely Megan Brownlow, Entertainment and Media Editor for PWC's Outlook, which complies stats on 'where the money is' in the entertainment and media spaces... this is facts given meaning not opinions back up with stats, so worth paying attention to, especially a key observation re consumer spending vs advertiser spending...
PWC's five year view looks a lot like this
PWC revenue predictions as presented at iMedia Summit last week in Sydney
put simply, people are predicted to spend proportionately more on entertainment and media (content) than advertisers will spend on media. good news if your media business model is predicated on creating and distributing stuff that people will want and pay for. bad news if your media business model is taking commission on advertising spend. a problem further compounded by the well documented explosion in inventory, which any economist will tell you will lead to lower yields for media publishers and agencies.
Brownlow described the 'structural change' of this versus other recessions. the recovery will be shallower than any previous one, "a crawl rather than a jump out", but not for everyone. between 2003 and 2009 search revenues have increased from 31% of ad revenues to 50.4% - 90% of which, no one needs reminding, goes to one company.
the big growth is in consumer pay models, where growth is predicted to be 5.5% CAGR ('09-'13). hence media owners and publishers seeking hybrid business models (another hot topic of the day) to monetise content. Brownlow noted research suggesting that, for example, in newspapers people will pay, but only for verticals - a proportion (Finance 97%, Sport 77%) of the hard copy price as long as that same content is not available for free elsewhere. in this context Murdoch's rallying cry to the newspaper industry to declare war on Google makes immaculate sense. her final observation was that even if hybrid pay models work, lost revenues won't be replaced. the annihilation of the old model of newspaper publishing is still an inevitability.
Brownlow's final observation however was a cold shower for any Australians readying themselves for seats of honour in the digital revolution after-show party. compared to the rest of the world, the country is significantly lagging in online adoption, with revenues in the online space in the region of 25%, compared with 31% globally and up to 50% in countries such as south east Asia. "traditional media 'owns' the market in Australia for a long time yet to come". the reasons, infrastructure (and therefore effectively ISP cost) and attitude... the former understandable given the countries geography, the latter frustrating to say the least in a country with such an entrepreneurial culture (my observation not Brownlow's).
three 'game-changers' to end with: (1) the NBM or National Broadcast Network, a government initiative to hardwire the nation by 2017, but which Goldman Sachs predicts will be only 50% complete by then, (2) mobile, yes 2010 IS mobile's year and (3) interactive games, with a 7.5% growth forecast, 2.2bn market and two structural changes to boost the sector in the form of mobile and online gaming. play on.
next up the enigmatic Ed Smith of NDM who started with a topic that was to become one of the themes of the day... that of volume versus value in the online space. he made two observations - one, that (average) click rates were down from 32% to 16%; and two, that 8% of people accounted for 80% of clicks. so just how valuable is a click? how many brands and businesses are so overly obsessed with generating clicks that they're "going out of business as cost effectively as possible"? ...he questioned what the point of [100%] paid-for search was when you're not investing in product or marketing initiatives that 'build the brand'?
this was a phrase that kept on cropping up, bit of a fat phrase (and not in a good street way)... ultimately by 'build the brand' I suspect the speakers were referring to brand associations. and raising the (valid) question of how long the broadcast interruption model can create and sustain brand associations (ie what 'brands' effectively are) if we're all collectively ignoring / avoiding more, clicking less, and paying for content direct.
Smith went on to give the publishers' perspective wrt post-broadcast print... describing some of the emerging platforms he played with at a recent tech conference. I was going to ask him "how he was intending to meet the challenge of defending margins when the cost of producing content is no longer matched by advertising revenues?" ... but we know the answer to this, it's the much talked about hybrid model... of combining (lower) ad revenues with direct payment from people for the content. the 'iPad $ a day' model. Smith's retort to those who question the sustainability of the hybrid model: "People who say 'people won't pay for content' don't know what's possible". to that point, he showed us this:
he observed that the NYT's iPad application launched with three advertisers each paying US$200k for the privilege and challenged the audience with the question "are your digital media choices making your brand bigger or smaller?"
the end of the morning saw Fairfax Digital's CEO Jack Matthews take up some of the themes opened by Smith... "consumer demand for media, in all it's forms, has never been greater", "a new era of online advertising", "direct response get's too big a share of the media mix", "the future of media companies and agencies is to add value" ... there's a clear direction of travel from publishers here; away from trading debates based on the value of a click, towards trading debates predicated on the value of the audience the publisher is providing...
Matthews outlined three change catalysts in the space: (1) three screens (2) building brands on desktops and (3) agency / campaign integration
he made a delightful observation on the three screen model: "if the desktop user is a browser, then a mobile user is a hunter". I have a lot of time for that, it really focuses how you think about adding value to people in the mobile space. he reiterated the belief that "people are willing to pay for content on mobile devices", and pointed out the projected rise of video advertising on the desktop - 48% CAGR in ad revenues to 2014. he also made it quite clear to the audience that Fairfax Digital is in the business of and focusing on "building engaged audiences more than reach".
he ended with a call for integration, observing that "we have no aligned metric for measuring 'brand building' [that phrase again] online", and that there's not enough integration within agencies on aligning on and offline media. he acknowledged that his organisation had to be more prepared to work with other organisations too... an acknowledgment that he described as a "fundamental shift" in Fairfax's position.
after post-lunch sessions by Michael Hendricks, Head of Decision Management, CitibankAsia Pacific ("we're about acquiring the right customers, not the most", "our most valuable customers use all of our channels most of the time") and Corporate Anthropologist (who knew?) Michael Henderson, it was back to the media agenda with Rohan Lund of Yahoo!7...
58% of Yahoo!7's audience media 'mesh' at least several times a week: 95% on email, 63% on social networks, 54% to get more info on a show and 40% to follow-up on an ad they've seen... time spent online watching video is now 13%, and very much social.
Lund challenged the session - in a context of content, content content - to question what our business models were? access isn't enough. "we [Yahoo!7] make it easier for users to access content that matters to them most", adding that "our businesses are data businesses ... our core business is targeting".
he outlined Yahoo!7's recently launched catch up service, thru which every primetime show is available. he described how the ambition is to get the browser closer to a TV environment, and talked thru the challenges of making TV shows available for different IPTV-ready TV models. interestingly, for non-partner TVs they've introduced open-source development. and he was quite clear that he saw no reason why online video CPMs will never be lower than for TV; in effect a premium for targeting.
back to the question I asked at the start of the post, I put to Lund that "the broadcast model isn't broken... yet. how prepared are agencies
for when it breaks?" ... he believed that agencies are becoming more integrated, and understanding better the balance between on and offline. but acknowledged the elephant in the room; that "no one ever got fired for buying TV", and that people are still "hiding behind TV as a safe solution"...
good to have it out and said, and credit to Lund for doing so... but I think its less about TV being seen as the safe solution, and more the reach and delivery of the broadcast model that's seen as the safe solution. the absurdness of this just gets truer every day. if the iMedia summit made one thing clear its that the figures are now starting to track the theory. viewing fragmenting, click rates decreasing, ad avoidance up... and the solution? a continued clinging to the sinking ship that is broadcast interruption. it's like the Titanic's going down and the industry is scrabbling to get on board...
this was followed by (for me) one the highlights of the day as Sean Finnegan, President and Chief Digital Officer at Starcom MediaVest Group took us thru his vision for his media agency's digital offering.
his logic is crystal: clients are struggling to deliver accountability in rapidly changing markets where its harder to connect with consumers. agencies therefore need restructure and resource to provide a range of new offerings: RealTime consumer insight, actionable insights, and content - all created by what Finnegan describes as 'liquid talent'. how...
business intelligence and hub formations
data exchanges (in the US buying of non-identify-able consumer data is now mainstream)
standardised findings with consumers and the industry (common and consistent measurement)
instant content delivery, real time text and video (eg EA's Tiger Woods video)
strategic alliances, frenemies have never been more important...
he observed that "efficient pricing is no longer a value add", and that "marketers and agencies that focus only on price are leaving value on the table". we've gone "from a linear to a networked comms infrastructure [which] creates a transfer of power to the consumer". he noted that we "need to start understanding the passions and behaviours of individuals [across media platforms]", and observed that this would have inherent problems for publishers.
he also outlined his thoughts on the media agency offering... "because of our proximity to consumers we have to be more adept at design and messaging", but also gave a stark warning to media isolationists: "you need to be confident enough to partner with competitors that are better than you to deliver the best solutions for your clients ... the more we give away, the more we grow".
his view on the future of the Starcom's digital offering is clear: a move away from media people as aggregators towards media people as analysis of data, interpreting, modeling and projecting for clients and brands. his people will be more account managerial and who are less in the business of "killing bad news" and more in the business of "selling the best ideas".
so what to make of it all?
great day and some interesting comment and debate, but you can't help but leave with the impression that there's far more questions than answers. but perhaps that's well and good, it's an easy cliche to say that there's never been a more interesting time to work in media... but its true never the less. for more than three years this blog has set itself the task of negotiating the future of media and communications; a task is no less interesting, gripping and exciting than it was when in November 2006 I wrote my first post on TV (versus) online:
"the internet is television. but it's television on viewers' rather than broadcaster's terms. the issue isn't the demise of TV, but the decline of the broadcast model and of the broadcaster as commissioning editor and content aggregator."
its vaguely how terrifying how little has changed. the debate, the argument and the negotiation continues, and we're all the better for forums like iMedia in which to talk, and for that matter drink, it out...
the Untempered Schism [source] ...the Doctor ran away, The Master went mad, I just keep staring at the Tweets and clicking on the links as they hurtle towards me
I have seen my future - it is TweetDeck on a SmartPhone - and it terrifies me. I fear that my life will not be the same again.
it all started when earlier in the week I got round to downloading TweetDeck to my laptop, and lost the following two hours, and several hours since, jumping to links as they were delivered into my live feed. it got me thinking about how much the way I consume stuff has accelerated over time...
I used to communicate pretty much exclusively asynchronously; if someone called me and I wasn't around they called back later or just didn't call at all. but then things started speeding up, first with email and mobile phones, and then with RSS (which I never really got used to) and now Twitter. at the end of this acceleration phase I now find myself plugged directly into stuff as it happens; I'm living in RealTime, my communications are predominantly synchronous. I'm not alone. in a brilliant post, Jim Stogdill describes a similar experience...
"Email was the first electronic medium to raise my clock speed, and also my first digital distraction problem. After some "ding, you have mail," I turned off the blackberry notification buzz, added rationing to my kit bag of coping strategies, and kept on concentrating. Then RSS came along and it was like memetic crystal meth. The pursuit of novelty in super-concentrated form delivered like the office coffee service ... It was a RUSH to know all this stuff, and know it soonest; but it came like a flood. That un-read counter was HARD to keep to zero and there was always one more blog to add ... From my vantage point today, RSS seems quaint. The good old days. I gave it up for good last year when I finally bought an iPhone and tapped Twitter straight into the vein. Yeah, I went real time."
the problem with staring into the infinity of RealTime is that your attention levels drop through the floor. there's only so much attention to give, and as the density of the communications coming at me has increased my ability to stay focused on any one thing has declined.
Richard of Sydney-based Now and Next calls is Constant Partial Stupidity. in a great post on his trend spotting site, he describes some of the symptoms of CPS...
"...how about your inability to remember multiple passwords, with the result that getting money out of an ATM at weekends has been turned into something resembling the national lottery? Or what about phone numbers? What is your home telephone number? Many people no longer have a clue and it’s not simply because they use a mobile telephone. This is the brave new world of too much information and not enough functioning memory"
my attention is increasingly focused on staring into the infinity of now, with the result that increasing amounts of my attention are being diverted to now, and away from my past and futures.
the history of my life since 19th February 2006 is contained with 5,150 gmails, all search-able in seconds. I don't have to remember anything, so I don't.
I plan in the now too... if I wanted a Playstation game (its XBox these days) I used to do my research in magazines and online - my attention was on the future. now if I'm passing a shop I can check the reviews there and then, make the decision not in the past but in the now.
my world is collapsing into RealTime, and as a consequence my attention is being pulled away from my past and possible futures. the implication for brand communications planning is obvious: the past and the future become irrelevant. unless a brand is active in the moment, in RealTime, then they may as well not exist at all.
it was whilst catching up on recent media events that I ended up lying in the Sydney summer sun listening - courtesy of MediaGuardian's Podcast - to London Times Editor James Harding on how he and the newspaper intend to un-write the economics of free on the internet. in short, the title intends to start charging for the valuable content they create but have hereto been giving away for free online. some snippets, as reported in the Guardian:
"We created a culture of free, and we absolutely were party to that ... In the last few years, we have talked with great pride – we believed advertising would sustain us – about unique users ... These people were window shopping down Oxford Street – they were not coming into our shops ...
"From spring of next year we will start charging for the digital edition of the Times. We're working on the exact pricing model, but we'd charge for a day's paper, for a 24-hour sign-up to the Times. We'll also establish a subscription price as well ... You have to be very careful with article-only economics ... you will find yourself writing a lot more about Britney Spears and a lot less about Tamils in northern Sri Lanka."
"We keep investing in journalism, we believe that's what our readers want. We're not dumbing down, we're dumbing up ... We are going to rewrite the economics of the newspaper, newsgathering and delivery business ... We have to do that, we are in the fight of our lives."
what's of particular interest is the call to move away from micro-charging - the economics that sustain Amazon, iTunes and the like, and instead focus on the smaller customer base but higher-per-customer return of a subscription model... of particular interest to Mediation is Harding's comments re home delivery services and the Times+ membership and reward scheme, about which he nodded towards loyalty...
"Historically, newspapers have treated their best customers worst and their worst customers best ... We give the paper away to people who could not care less and we pay little or no attention to people who love it and read it every day."
I've written quite a lot about loyalty on these pages including a essay on the subject and won't reiterate now, but in short, I believe we've come to accept as fact the supposition that the primary role for marketing communications is growth through customer acquisition. and that in doing so we ignore both the existence of current customers and the pivotal role they play in the growth of brands...
I believe that focusing on customer retention is an acquisition strategy. I believe that it is those brands that choose to invest in marketing communications that talk with their existing customers, that are building the most robust marketing structures for the future.
there is much to criticise about hardings plans; people simply will not pay, that the charging structures won't allow let alone facilitate browsing, that the content arguably is overvalued ... but there's the possibility that in the near future we'll talk about The Times as a case study in reinventing markets around customers not consumers. there's the possibility that The Times' efforts become a landmark in enabling us to divest ourselves of the ill-suited model of ad funding for online-distributed content and invest instead in brand-funded collateral: on things that make the world a better, more interesting, more exciting, more educational or more spontaneous place.
its strange to thing that Rupert Murdoch, of all people, could help take us to that place. but much stranger things have happened.
Nick Dickson pointed me in the direction of this lovely little video which tells the story of how Boondoggle brought music to the web for their client Axion. whilst I'll let the video speak for itself, its worth considering for a moment the elegance of the creative solution...
I've talked often and at at times at length on a theme of "we media and advertising people got this amazing thing to play with called the internet but we screwed it royally by applying 20th Century broadcast thinking to what was a two-way engagement platform, etc" ...what the above bit of creative thinking shows is a beautifully crafted way of doing what we should be doing... bringing utility to the web
as I type this I'm listening to some tunes courtesy of the joy that is Spotify, an ad by Diesel has just done a similar thing - I caught a snippet about how they've created a branded radio station on the platform to showcase new music. thats utility too. and its a brilliant thing.
all this reminded me of the Windows Apple banner wars from a while back, and whilst the efforts of Apple were an attempt to creatively use the space that is the banner / sky, its still an ad.
the gig in a banner concept goes a simple but crucial step further... by being there on users' not advertisers' terms, its adding value to my time on the internet - not distracting me from it. it deserves every one of the five Cannes Golden Lions it picked up.
so the latest MediaTalk podcast from the Guardian is up and out, but this week's is a bit special. one because it was recorded live, but two because Mediation was lucky enough to be in the audience for the recording at Guardian Towers. the panel - social media expert JD Lasica, reporter Sarah Lacy, blogger Robert Scoble, BBC technology correspondent Rory Cellan-Jones and of course the wonderful Emily Bell - discussed a range of topics focused in and around the changing ecology of media business.
lots of sense talked (mainly by JD "shooting dinosaurs in a barrel" Lasica and Emily "we didn't listen enough to our audiences" Bell), but there was one question posed to wards the end (44 mins and 33 secs in if you're interested) that wasn't answered. Susan Bratton asked: "there was some conversation about lack of innovation in advertising and sponsorship support, what would you like?". Sarah Lacy said that it was "like porn - I don't know what it is but I'll know it when I see it"...
JD Lasica observed that interruption marketing would be gone in 10 years, and that you've got find "new models to make advertising that's personalised, customisable to me. something that's welcome, useful, that I want on my screen".
it's an observation that often goes unsaid. Mediation has often suggested that the problem with making media business models work in the new ecology isn't advertising. the problem is adverts. controlled and crafted packets of what an advertiser wants you to know work fine (brilliant even) in a broadcast model, but they're pretty pants in a conversation space.
in fact you could argue that - to paraphrase Cluetrain - brands are conversations. in this context the ad format is as dead as a dodo; media business models will kick in again when, and only when, we collectively learn how to monetise advertise without advertising.
you can listen to to the whole podcast here, and read Kevin Anderson's blog post summary of the discussion here.
big thanks to the Guardian having me along. a joy and a pleasure, if a
bit weird seeing my favourite podcast being recorded. awesome stuff.
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