Category: advertising

Media As A Service

Much like print and tv are becoming marketing vehicles to drive people online, the domain name for an online media service is becoming sort of an abstract utility or maybe just a brand address for media services rather than the real estate upon which the core activity occurs. The service a media vehicle provides matters more than the vehicle itself.

And this isn’t only happening in the content space. Every aspect of the media business is pointing to a services model. Here’s what the key pieces look like, in my mind:

  1. Data is infinitely distributable. All data…not just editorialized words. The RSS standard opened the doors for vast distribution networks, and services like Yahoo! Pipes and Feedburner figured out how to make the distribution methods meaningful. There’s an endless supply of microchunks flying around the Internet, most of them unattached to any domain or URL except as a handy reference point.
  2. Data can be visualized in meaningful ways. AJAX and the many freely available widget kits and javascript libraries such as YUI are rendering these microchunks in the right place at the right time in the right way for people which, again, is not always on a web site. The Internet user experience is no longer held back by the limitations of HTML and the packaging a site owner predefines for their media.
  3. Media is created by everyone. Whether written in long form by a reporter or researcher, captured as video by a mobile phone owner, or simply clicked by a casual web site visitor, expressions of interest are shared, measured and interpreted in many different ways. This results in a seemingly neverending stream of media flowing in and out of every corner of the digital universe.
  4. Distribution technologies are increasingly efficient and inexpensive. Personal media services like instant messaging, blog tools, podcasting and collaborative media services like Wikipedia, del.icio.us, Flickr, etc. are easy to use and often free. Web services and open source software enable people and companies to scale distribution and production functionality for large audiences or groups of users with negligeable costs. Most importantly, these tools enable people to be influential without ever owning a domain.
  5. The distance between buyer and seller is shrinking. There are more and more ways for buyers to find sellers and sellers to find buyers from search engines to recommendation tools to coupon rss feeds, etc. Distributed ad markets like Right Media are enabling marketers and service providers to negotiate both the methods and the value of a marketing message. Advertising can operate as a service, too.

After re-reading this description myself, it looks like I’ve just echoed much of the whole Web 2.0 thing yet again. That makes me think I didn’t articulate the concept properly, as I believe there’s a very different way to visualize how data get created, packaged, distributed and remixed and how the various parts of a media business can be coupled both within the organization and across the wider network. Maybe that’s Web 2.0. Maybe it’s edge economics. SOA. Whatever.

The important thing is to think of how your media business can create for yourself or leverage how others offer Marketing As A Service, Sales As A Service, Operations As A Service, in addition to your editorial and community building efforts. Here’s a quick chart of how a media business might look that hopefully gets the point across:

Staffing Model Source Data Coopted Data Distribution Services
EDITORIAL Reporters, Community Managers, Assemblers (formerly known as ‘Producers’) Original News, Analysis, Columns News Wires, Paid Data Feeds, Free RSS Feeds, Links, Comments, Votes, Ratings, Clicks RSS Feeds, Content API (Read and Write)
MARKETING Customer Service, Evangelists, Event Organizers SEO, SEM, Paid Inclusion, Sponsorships, Staff Blogs Partner Promotion, Customer Evangelist Blogs Customer Help, Usage Policies, SLAs, Traffic/Referrals to favored partners
SALES Sales Engineers, Business Development Customer Data, On-site Inventory Partner Inventory, OEM Partner Services Ad Service API (Read and Write)

We’ve seen Journalism As A Service evolve with a little more clarity, particularly recently. Mark Glaser provides a step-by-step guide on how to structure a community-driven news organization:

“Reach out to the community for bloggers, muckrakers and go-to experts. Each topic area would require more than just reacting to news. The Topic Chief would be sure to enlist as many experts as possible not only to be sources but to also be contributors, commenters, and word-of-mouth marketers. Anyone who possesses the skills that go beyond basic participation can be hired on as freelancers or even full-time staff.”

Similarly, Doc Searls’ “How To Save Newspapers” post also lays out what needs to happen on the editorial side. Here’s step #5 in his list:

“Start looking toward the best of those bloggers as potential stringers. Or at least as partners in shared job of informing the community about What’s Going On and What Matters Around Here. The blogosphere is thick with obsessives who write (often with more authority than anybody inside the paper) on topics like water quality, politics, road improvement, historical preservation, performing artisty and a zillion other topics. These people, these writers, are potentially huge resources for you. They are not competitors. The whole “bloggers vs. journalism” thing is a red herring, and a rotten one at that. There’s a symbiosis that needs to happen, and it’s barely beginning. Get in front of it, and everybody will benefit.”

There is lots of guidance for the newsroom, but all parts of a media business can become services.

For example, the ultimate in Marketing As A Service is the customer evangelist. It’s not about branded banners, as Valleywag points out,

“When paid-for banner ads lead to another site that’s supported by banner ads, you know that something’s wrong. Anyone who relies on that circular spending is asking for trouble.”

Marketing should be about enabling customer evangelists whether your customer is simply promoting your stuff for you or actually distributing and reselling it. Fred Wilson thinks of this in terms of “Superdistribution“:

“Superdistribution means turning every consumer into a distribution partner. Every person who buys a record, a movie, reads a newspaper, a book, every person who buys a Sonos or a Vespa becomes a retailer of that item. It’s word of mouth marketing, referral marketing, but with one important difference. The consumer is the retailer.”

None of this needs to happen on a single domain. The domain chain in any of these actions probably should be invisible to people, anyhow, except maybe to ground the events in trusted relationships.

Now, there are many domains that can create wonderfully useful and valuable destinations once they reach a certain critical mass. Invoking another over-used dotcom jargon word, this is what happens at the head of the long tail. And there are obviously lots of nice advantages of being in that position.

Most media companies want to be in that position and fight tooth and nail for it even if it just means being at the head of a niche curve. But instead of or maybe in addition to competing for position on the curve, most media companies need to think about how they provide relevant services outside of their domains that do something useful or valuable in meaningful ways across the entire spectrum.

Posting articles on your domain isn’t good enough any more. The constant fight for page views should be positive proof of that. There’s a bigger, deeper, longer term position out there as a critical part of a network. Sun Microsystems’ mantra “The Network is the Computer” is still meaningful in this context. What is your role if “The Network is the Media”?

Similarly, is Marshall Mcluhan’s widely adopted view that “The Medium Is The Message” still true? Or, like many have asked about the IT market, does the medium matter anymore?

If we are moving to an intention economy, then those who best enable and capture intention will win. And that doesn’t have to happen on a domain any more.

A magazine I would love to read

There’s a magazine that I’d love to read if someone published it (yes, the print kind). Of course, it’s about the Internet. It’s about the stack that makes up the Internet, the platform or, as many people are calling it, the Internet Operating System. It’s mostly technology. But it’s a little bit business. And it’s definitely artful.

It’s not Business 2.0 or Red Herring. It’s not The Industry Standard, though I’d be happy to read that again, too. Those were/are too business-focused and often misunderstand the wider impact of many breakthroughs.

It challenges the people in positions to change things to make changes that matter. It exposes the advances in the market that have negative repurcussions to the Internet as a platform for good.

It’s critical and hard-hitting. It’s accurate. And it is therefore trusted and respected.

It isn’t first to report on anything. It might even be last, but it gets the story right.

It dives into services like Pipes, EC2, and Google Apps. It analyzes algorithms, data formats, developer tools, and interactive design. It studies human behaviors, market trends, new business models, leadership strategies and processes.

It’s not about startups, but it may be about why VCs like certain startups. I love the fact that Brad Burnham of Union Square Ventures disclosed the broader motivations for investing in AdaptiveBlue:

“We are particularly excited about the prospect of AdaptiveBlue developing tools that allow users to build the semantic web from the bottom-up to fill in the gaps and correct the top-down approach when necessary.”

This magzine should be printed monthly with lots of possibilities online that may actually be more successful in the long term. (I can imagine the print magazine turning into a sort of marketing vehicle for the web site. )

It includes longer deep-dive articles that have been throughly researched and copyedited. The editors are paid very well because they are experienced and talented. It also includes samples from the blogosphere and insights from contributors and participants who care deeply about the subject. There are intelligent interviews of people who are innovating and actually doing important things. There are insightful case studies of both the methods and results of certain technology breakthroughs. And there are columns that remind us to keep it real.

What I want from a new magazine about the Internet Operating System is to understand the technology breakthroughs and their meaning in the conext of the history of the Internet. I want to know what we can learn from art and innovation online to understand what lies ahead. The business model breakthroughs matter hugely, but I think they often matter as a result of an innovative technology rather than serve as a driver.

How is the Internet as a platform, operating system, network — whatever you want to call it — evolving? Who and what is influencing change? What are the trends that indicate this progression? How do new online developments impact communication, governments and social organizing principles?

Of course, a lot of this is out on the web in bits and pieces. But I’m too lazy to go through my entire feedreader and follow all the links to all the interesting stories out there. Maybe someone could invent a personalized and distributed Digg that surfaced what mattered to me more efficiently. But even then, I’d still pay a subscription fee and happily browse through endemic advertising for someone to assemble something thoroughly thought through, designed nicely and printed on my favorite portable reading medium — paper (recycled, of course).

And I’d read it in part because I would know everyone in the business would be reading it, too. At least, I suspect I’m not alone in wanting this…?

Do you want my clicks or my attention?

I’ve been a believer for a long time that the magazine business is best-suited amongst the “old” media markets to embrace and extend the online media world successfully. They understand communities. They understand niche content. And they get targeted advertising. They intuitively understand some of the hardest things to get right.

But watching eWeek handle the recent IntelliTXT controversy (more here from Paul Conley and here from Jason Calacanis) reminds me why there are newcomers in every market nearly every day displacing the magazine incumbant in that space.

RollingStone is kicking itself while MySpace displaces everything they once were. It continues to pain ZiffDavis and IDG every day that CNet and Slashdot control more and more of their once-dominant market positions. Everyone who was working at Time Inc. while Yahoo! rose to power is embarrassed every time they check their email.

Instead of embracing the Internet, the magazine businesses, particularly niche publications, choose to hide under their old business models. Then each time a Digg or a BoingBoing or the next new media site screams across the network, the internal fingerpointing and backroom politics escalate. And while everyone plots the next move, key thought leaders inside the company head elsewhere for employment.

There was a collective ‘ouch’ when InfoWorld lost Jon Udell to Microsoft.

I’m surprised that the trade associations are only just now picking up on things like this and the damage they cause. Martha Spizziri of the ASPBE takes a first pass at what IntelliTXT means:

“…at best the IntelliTXT model is annoying–in the same way that even editorial links can be annoying when the text is vague. In both cases, you aren’t really sure what kind of information you’ll get if you click.”

The American Business Media, on the other hand, has chosen not to take a side. In fact, they’ve chosen eWeek as a Neal Award finalist instead. B2B media watchdog Paul Conley explains why that’s a bad idea:

“it’s beyond me why the screening judges at ABM would think that a site that embarrasses the entire world of B2B journalism should be considered a symbol of what is best in B2B journalism.”

And Bill Mickey at Folio faults eWeek for being desperate:

“I’ve written about this before, as has Conley, who this time suggests that pressures stemming from owner Willis Stein’s efforts to sell Ziff Davis have resulted in a revenue-at-all-costs Web site strategy.”

Its obvious to everyone that print is struggling. And the stories of a market in turmoil only get more critical when a leader like eWeek sells out its last asset…the words on its pages.

Look, relevant advertising is great. It works for everyone in the media ecosystem. But when credibility is the elephant in the room, you can’t disrespect your customers. It’s as if your own content is getting in the way of what you want from people.

Do you want my clicks or my attention? If you capture my click, you’ll have a dollar today. If you capture my attention, you’ll have a customer tomorrow.

eWeek doesn’t want me to visit eweek.com

I saw a link to an eWeek story and visited in part because I hadn’t been there in so long.

Ugh. Now I remember why. Here’s a 30 second screencast showing you why I’m not a regular reader.

Link to video: http://video.yahoo.com/video/play?vid=c0467b333753b3d3fd849b14b76c56a4.1605369

First, notice the page load time. Then, once it loads, notice the billboard mania that draws my eye in every location other than the first sentence. I’m gone before I started.

But the killer is the IntelliTxt ad…a fakey inline link that is actually an ad that blocks the text on the page when you rollover the “link”. Notice it conveniently doesn’t block the other ads.

Fortunately, there’s a Greasemonkey script that will disable any IntelliTxt ads from any web site. Funny enough, I found this script on Wikipedia. It works great.

I thought the IntelliTxt issue was dead, but media sites scrapping to maintain profits on the page view model are bottom feeding for clicks with clutter and misleading links. Instead, they should spend their resources courting relationships with readers.

Fun with ads on my blog

There have been 2 really interesting and innovative ad platform services to come out recently from Right Media and Feedburner. I’ve been playing with both on my blog, but I’ve only scratched the surface of the potential here.

First, Right Media’s publisher service is called RXDirect which hopefully will open up to everyone from the closed beta soon. It’s plenty robust enough to serve any small publisher’s needs, and some of its clever capabilities may prove useful to large publishers as well.

You get a simple self-serve ad management system where you can drop in new creative including ad code from your ad networks like YPN or AdSense or even Feedburner. I’ve also loaded in a house ad. It took only a couple of minutes to setup each ad.

Then you get your Right Media ad code to post into your web page templates.

Done.

Immediately, you get to watch nearly real-time reporting on your ads.

Now, here’s where it gets interesting. Right Media is also an ad network platform…not an ad network but rather an ad network platform for other ad networks to create inventory markets.

As a publisher, I can request permission to post ads on my page inventory from any ad network in the system. If the ad network approves me, then the ad network will serve ads to my site and pay me their rate for those impressions. I don’t need sales people on staff. I can just hook into an ad network that makes sense for my market.

I suspect that if they get the ad network platform right, we’ll see mini ad networks popping up everywhere, small telemarketing outfits in niche markets all around the world negotiating niche ad impressions for niche publisher inventory.

Wait, it gets better.

Right Media has opened up their APIs. They tell me they are using their own published APIs for their own tools, along with other internal APIs, I’m sure. And the APIs seem pretty well documented.

That means that market makers can potentially create their own ad networks, self-serve ecosystems, in essence. My mind spins at the possibilities here, but we’ll have to wait and see what happens at this early stage still. The key to this working is maintaining their self-serve approach. If it works, this system could be massive.

Similarly, Feedburner has taken a meta approach to creating niche publisher/advertiser networks. Publishers can create networks of feeds whose inventory can be purchased by advertisers. I setup a network called “Internet Voices” where I thought I might get a bunch of Internet media bloggers who use Feedburner to open up their inventory for advertisers. Feedburner will sell our inventory for us.

Feedburner is so focused on serving publishers you just have to admire them.

They also released a dynamic graphical ad unit generator. It’s basically a badge or widget. You give it a background image, and they burn your feed headlines on top of it.


The dirty little secret is that Feedburner knows that advertisers are quickly becoming publishers. As advertisers learn how to reach customers directly the role of intermediaries (media properties) changes. And an ad unit that publishes dynamic content starts to get at that.

It reminds me a bit of the huge outdoor billboard The Industry Standard had near the San Francisco Bay Bridge that scrolled current headlines we fed to it from the web site.

Anyhow, I took a feed from the FlipBait web site and created an ad unit that now runs in rotation on my blog via my Right Media ad server. I don’t have enough data to see whether the ad performs well, but that’s not important yet. This is the beginning of some new approaches to marketing.

Cool stuff, guys. Can’t wait to see what you do next.

Learning from Kodak’s strategic errors

BusinessWeek ran an interesting story on business model innovation this week called “Mistakes Made On The Road To Innovation“. The article focuses on Kodak which reinvented itself yet can’t get ahead in the new markets.

Among other things, the article talks about how the speed at which new models take over markets is getting harder to manage:

“At its peak, Kodak was an icon of American technology innovation. Now it’s fighting to recover from a tech revolution that is strangling its core business. Kodak was late to recognize the problem, slow to react, and then went down the wrong innovation path.

Over time, all innovation gets commoditized. In this regard, business models are not different than products and services. So business model innovation must be a perpetual quest for renewal.

Look at how Dell, (DELL ) long the PC industry’s heavyweight champ, has suddenly become wobbly in the knees. It revolutionized the PC business by assembling computers to order for customers while eliminating the middleman. Now competitors have caught up with Dell’s efficiencies and are even undercutting its prices.”

What struck me in particular is the notion that business models must iterate the way new technologies iterate. Creativity should not be isolated as a product development or an engineering problem. Creativity must be part of a company’s approach to winning in the market.

If you think about this in terms of online media, it seems rather obvious. The banner innovation enabled the page view model to take off. Content targeting enabled the search market to explode. The success of those business models put parameters around the types of engineering problems to solve and opened lots of product creativity.

But business models beget business models and new revenue streams will continue to replace old ones. It can be frightening when the model you invested in becomes a commodity down the line and the company then has to decide how to redistribute its resources if it wants to grow again.

In the Kodak example, they didn’t catch on to the commoditization of digital cameras fast enough and now sit in a market of margin wars, fighting for positioning on increasingly crowded shelves that provide weaker and weaker yields. Without a deeper relationship with the photographer, Kodak is almost meaningless and the technologies they sell are totally replaceable.

The article adds that Apple’s music business is instructive. In iPod-land the connection between the hardware, software, media and revenue are all intertwined. And the more time and money a consumer invests in any one of those pieces, the harder it is for that person to end their relationship with Apple and all the related services in that market.

Kodak’s focused approach on doing one thing well is actually failing them as more innovative business models squeeze them out of markets.

Similarly, page view inventory is losing its value in the online media market. Ad inventory on the home page at mymediaproperty.com used to command a nice premium because it was unique and captured a targetable demographic. Most advertisers are smart enough to recognize the value of independent media brands to lend credibility to their marketing messages and willingly spend lots of money to support those brands. But, at the same time, most online media brands are struggling to communicate their customers’ marketing messages in meaningful ways.

Many advertisers are instead creating their own online brands rather than waiting for media companies to figure out that page views are an aging marketing platform.

I don’t have the answer to the diminishing returns on page views, but I think I know what the market could look like eventually…

Take the AllCrazyStyle mashup example. This site can tell me where to see music performances in my area that I might like by combining my listening behavior at last.fm and my saved locations at upcoming.org.

Where is the link to purchase tickets to each performance? Where is the link to buy the most recent album for each artist? AllCrazyStyle should be able to pull ad content from an ad network that knows what I’m most likely to click on, just like they can pull my listening behavior and location data.

They should be able to display ad content in whatever way makes the most sense in the user experience. I want those links to be there so that I don’t have to go hunting for them, and I want them intergated into the experience.

And like Apple, the more time and attention I invest into either last.fm or upcoming.org, the harder it is for me to end my relationship with any of them and all of the ancillary businesses associated with them.

Regardless of whether or not this concept works or makes any sense, the idea that innovation is a technical problem is short-sighted. Bad business models (or no model at all) perpetuate incomplete approaches to innovation and weak ideas.

When you’re battling in a commoditized market, you need to step back and steer the ship in another direction. Otherwise, you’re going to get sucked deeper and deeper into protecting assets with weaker values against heavier and heavier competition.

Like Kodak, you’ll fall behind all the innovators taking advantage of all the time you spend in meetings trying to figure out how to be more innovative.

Screencasts mature…now with advertising!

I’m liking some of the innovations coming out of IDG’s InfoWorld these days (my old digs). I’m told the podcast advertising is working really well for them, but I’m particularly interested to see that they have begun screencasting in earnest…and it’s sponsored, to boot.

The InfoWorld home page now has the rotating feature box which yesterday included a link to a series of AJAX instructional screencasts. Among several related pieces, Peter Wayner produced a 7 minute instructional screencast on the Yahoo! user interface javascript libraries.

He begins by pointing out which libraries he likes and then proceeds to build a web page that utilizes the code. You can watch the screencaster type out his code and then demonstrate how it works.

Though raw in quality, the content was exactly right. The viewer is able to watch over the shoulder of someone who is at their computer working. It’s the online equivilent of Jacques Pepin…well, the finished product didn’t look all that tasty, but I learned something nonetheless.

Editor Steve Fox describes how screencasts answer the creative writing mantra ‘Show, don’t tell‘:

“After all, if you’re reading about how something works, you want to see it in action. That’s where the Web’s presentation capabilities open up stunning possibilities.“

Now, here’s the best part of the innovation…it has a video preroll…yes, an ad! A very brief video was baked into the beginning of the episode. Of course, I doubt Microsoft paid for this exposure being that it is so experimental, and they will be unable to measure success through traditional means, as there will be no clicks.

But show me an ad anywhere on the Internet that can capture my undivided attention better than this. And tell me how you could find a more targeted viewer than someone wanting to learn how to accomplish a specific task. It’s the best of both worlds – targeting and brand marketing.

What if this video clip was socializable (is that a word?) and caught fire around the web? InfoWorld should offer the embed script with each screencast so that someone can post it to their blog or their favorite video sharing site. And even better than that, the InfoWorld screencaster should actively post his screencasts to every video sharing site he can find and try to get some comment love from the people he’s connected to out there. Each screencast could live a contagious existence as people socialize it in different ways. InfoWorld already baked in the logo into the video stream, so any loss of control in the distribution is automatically mitigated by guaranteed brand exposure.

I’m sure critics will say that video on the Internet and video ads have been around for a long time, and podcasting already acts this way. I’d argue that this is actually really new.

Not only is the screencast format easier to produce than live action video and more compelling than podcasting, but the instructional nature of it gives the viewer and the screencaster a uniquely engaging relationship. As a result, the advertising in this environment can be much more relevant than your typical preroll video ad on news or entertainment content.

Of course, they can be fun to make, too. I’ll bet the editors are much more excited to narrate a screencast they can edit and produce on their own and distribute through the proven web page and RSS methods than they would be to sit in a mock studio with the marketing team telling them how to look good for the camera. It can’t be fun acting like you’re on TV fully aware that your webcast video audience will be a few hundred people at best after the clip gets posted behind an awkward lead capture wall.

Well done, guys. This is the kind of investment that could kick your online growth path well beyond the revenue tipping point.

A swap market concept

I’ve been playing around with a concept for a swap market that started out almost as a joke, but now that I have a prototype working I’m wondering if this could be a new approach to the classifieds market.


Photo: HapaK

My daughter has either outgrown or has lost interest in several of her toys that I’d love to pass on to someone else rather than store in our increasingly muddled basement. I’ve got a perfectly decent baby rocking horse, some slightly chewed books, a bunch of stain-free clothes, an immaculate car seat and a functional though well-worn stroller.

I’m sure I’m not alone with an excess of toys floating about. Actually, I’m fairly confident that there is a ton of kiddie gear in San Francisco that should be recycled through other children rather than relegated to each house’s used stuff cemetary. And I’d much rather trade my stuff than pay for new stuff.

So, I started running architecture scenarios through my head for getting a workable prototype of a web site that my wife and her friends could use to swap their used baby gear. It seemed completely out of my league the more I thought about it.

But as luck would have it I found that Jon Aquino built a Craigslist application for Ning that covers about 80% of what I need. I was able to setup and configure a site that looks and operates nearly identically to Craigslist in concept if not in function, as well. People can post things they want to sell. And shoppers can search and browse through lists of things in reverse chronological order. You can comment on posts and discuss topics, too. I was also able to configure the shopping categories for this particular vertical in just a few minutes.

You can see what I’ve prototyped so far here: http://flipstash.ning.com/. Again, it’s about 80% done, but it’s that the last 20% that’s the most important part of the prototype.

How do I facilitate the swap? How does a person decide that what they are offering is of at least a similar value to what they are getting?

One idea is to approximate 3 tiers of value and have users assign a value tier to their swappable items. Another is for FlipStash to approximate values of things posted and credit the user’s account which they can use to spend on other people’s things. Both these methods seem awkward.

A better way to solve the problem might be to allow you to post a dollar value for each item you post and then credit you with that amount to spend when someone claims your item. You would have to build an eBay-like reputation system to keep people from cheating.

And then there’s the revenue model. It seems this would be a great case for using subscriptions. Say, for example, you could trade items up to $5 in value for free, but if you wanted to buy or sell anything worth more than $5, you would have to pay a monthly fee.

Of course, I could just let people post prices and let them pay each other. But what’s the fun in that? It’s already been done. Much more entertaining to try and shake up the model a bit, eh?

A good marketer doesn’t have to advertise

The real power structures behind the advertising industry appear to be staring at the Internet for the first time. The big agencies, in particular, are wondering how to make money as the vehicles they once relied on lose influence in the market. It was probably people like Warren Buffett who finally convinced them that something actually really scary is happening:


Photo: Thomas Hawk

“The outlook for newspapers is not great. In the TV business, a license from the government was essentially the right to a royalty stream. There were basically three highways to people’s eyeballs, and companies like P&G, Ford, Gillette, and GM would pay a significant amount of money to be get on those highways and advertise their products to a mass audience. But as the ways to get in front of people’s eyeballs increases, the value of those highways goes down.”

What’s a marketer to do? They are desparate for attention. In many cases they even threaten to drop campaigns if they don’t get editorial coverage.

“Almost 50 percent (48.9%) of senior marketing executives reported paying for an editorial or broadcast placement – and almost half of those who haven’t said they would…If 65% of consumers assume that the products, companies or services they read about are there because someone paid for them – and half of marketers have actually paid for media coverage – the press, PR industry and news consumers are all in trouble.” (via Forbes.com)

Buying coverage isn’t how you get people to spread the word about your product. It’s also shortsighted if not suicidal to damage the credibility of the vehicles that you rely on to communicate trusted messages with your customers.

There is another way, however.

I’ve been watching Colin Roche turn his PenAgain invention into a real story with real coverage from big outlets over the past 3 years or so now. I don’t think he has spent a single dollar in marketing, yet media coverage only improves and as a result sales keep soaring.

This stratgegy is not for the weak. Colin keeps a handful of pens in his pocket at all times. He hands one out to everyone he talks to pointing out the latest enhancements such as the new packaging or the new flip cap spring. He makes people feel like they are helping a guy startup a cool little company with him.

He slips it into conversation whenever he gets a chance. He sends his pens to famous people. He sends them to reporters and editors. He chats with store owners who are selling his pen knowing that they are going to help sell it, too.

Everyone is not only a customer in Colin’s eyes, everyone is a potential marketing vehicle for him.

Colin has also refined the “story” of his company. It’s all true. He did in fact dream it up in detention in high school. And the name did come to him after someone woke him up and he said, “I was dreaming about that pen again.” But it’s these anecdotes that make his company feel human and interesting to talk about.

Colin also just started blogging and is now collecting photos of people using the PenAgain on flickr. His flickr photo stream looks like the walls of a New York City diner covered with images of people shaking hands with the owner.

He’s doing all the right things to help people who love his product share his enthusiasm for it.

Contrast his marketing efforts with traditional advertising agencies and you’ll find people stuck with a system that doesn’t work. Agencies get paid more for the expensive print and television campaigns than they ever will for search marketing. They have no incentive to jump into the online space and will continue to sell their clients on the virtues of big expensive branding efforts.

And then you have the media buyers who get paid for allocating a big budget across media vehicles that meet the agency’s campaign goals. But since the goal is usually wide exposure, media buyers have to use vehicles like TV and big circulation magazines to justify their existence. And there’s no incentive to spend less than the budget…quite the contrary. The more they spend, the harder their job is which means they can justify billing for more.

Agencies and buyers are both wrapped up in a dynamic that profits from the waste they create. This worked when there was more friction in the distribution process, as Umair Haque will tell you, but media has taken a lube bath on the Internet and the need for an expensive shoehorn to squeeze expensive campaigns through no longer fits. (yikes…bad mixed metaphor there. sorry.)

“Edge platforms have a number of key features. The most familiar are that they’re often massively distributed, and open-access….they can usually almost completely vaporize the fixed costs of production from most of the resources that are necessary and sufficient to compete in those industries.”

Similarly, Jeff Jarvis sees a tipping point coming for the advertising industry:

“Advertisers can get away with moving slowly – for now – because they are the ones with the money. Funny how that works. But this won’t last for long, as one client and then one agency discovers that the lazy, traditional, one-stop-shopping of TV upfront and the big-media lunch circuit is inefficient, wasteful, untargeted, irrelevant, and ultimately damned irritating to your customers.”

At the end of the day, the product vendor doesn’t want to work as hard as someone like Colin to sell their product. If they did, then they would be inventing their own things and selling them to the world. The moment they hire an agency to take on that work, they have jumped into a spending whirlpool.

What they should be doing instead is talking about their product every day with everyone they meet and crafting the story that will get other people talking about their product for them. They need infectious enthusiasm for their products, not clever billboards.


Photo: jjjjjjj

Product sales isn’t getting any easier. In fact, it might be getting harder. Since the Colin Roche’s of the world are learning how easy it is to manufacture interesting products, and anyone with a computer can tell their story on the world’s stage, it probably means that selling things is more competitive than ever before.

If marketing industry leaders want to retain the downtown office spaces, nice chairs and designer clothes by riding on cushy vendor marketing budgets, they have to reinvent themselves in ways that make them invisible again. Forget about the Clio awards. You need to get back to work finding ways to get your clients and their customers talking with eachother about eachother.

I recommend starting out by pretending you have no budget before that becomes the reality.

Why (and how) the online ad model needs to change

Somehow I keep expecting some company to break through and solve the problems with the Google AdSense model. As advertisers, buyers and media vehicles get smarter about efficiency, the holes in the system get bigger and bigger.

AdSense revenues help a lot of mid to large-sized web sites, but really more as incremental revenue. By the time you’re big enough for AdSense to support your business there are several other revenue opportunities with larger payouts avaiable to you.

And there’s no doubt that AdSense (and most Internet advertising) is failing to help people find and buy the things that matter to them. How can it be that we have an ad model that is considered wildly successful when a campaign or ad unit gets a click-through rate of 1%? And the reality is that it’s much much worse than that on average.


Photo: DWS

Why are click through rates so low? Because the ads don’t matter to people. They aren’t relevant. They don’t help people identify products or brands that matter to them. They don’t help people locate the right deal at the right time.

Yes, some people get lucky if they’re paying attention. There wouldn’t have been $5B in search ad revenue in the market in 2005 if nobody was clicking on the ads. But the click performance and subsequent conversion rates suggest this kind of ad network is just a spray hose of wasteful bits showering the Internet with clutter.

It doesn’t work for advertisers, either. Advertisers want more control over their ads, where they appear and to whom they are shown. Blanketing text links blindly across the Internet does not necessarily result in paying customers. They know they’re wasting money, but they can’t afford not to be present in the network.

The AdSense model does much more to help Google and the Google shareholders than it does to help any of the customers it is supposed to serve.

I think the Amazon affiliate program is much closer to a more sustainable ad model for the future. When you can track clicks all the way to a sale then everybody wins. The weakest link in the Amazon affiliate chain is the media vehicle which has to work a lot harder to drive clicks that convert to sale. But the buyer and the seller are both happy, and that’s ultimately what matters most.

I’d love to see an ad network that is able to let media vehicles optimize the ad content and display rules for the ads. The look and feel of an ad is not going to crank up the conversion rates. Media vehicles need to help the right ad get to the right person.

For example, when I post on my blog, I should be able to flag a stream of ad content and define the type of algorhythm that makes the most sense for that post and the users who are most likely to read it. This post should probably link to lead generation service providers even though I haven’t explicitly used the term “lead generation” anywhere in the post…uh, well, you get the idea.

Likewise, users should be able to self-identify as buyers. I haven’t yet setup a wifi network in my home, so I’d love for every tech-related web site I visit to show me the latest deals and setup guides and retailers for wifi gear. I’d actually like the content on all those sites to adjust, as well. I want to see what’s new and interesting at these sites, but they should be able to surface content from deep in their archives that is relevant to the things I’m actively pursuing. My intent should edit the home page for me.

I guess I’m saying that somebody needs to build a service that on one side connects directly into an advertiser’s sales conversion or transaction systems and on the other side distributes marketing links and images for media vehicles to take and optimize. The system should track performance across the chain and offer optimization options at all points along that chain.

Pieces of this exist and some of it is very complicated, I know, but I don’t see why efficiencies can’t be improved. And if enough advertisers are able to offer affiliate programs to track impression-to-click-to-sale, then they may even start competing with eachother and offer better incentives to media vehicles that find customers for them.

Users would see ads for things they want to buy. Advertisers would sell more product. And media vehicles would earn more from the revenue share.  Where’s the down-side?