Week Seven readings: Online publishing
In a preview report for 2007, Deloitte’s Technology, Media and Telecommunications group anticipates the commercialization of social networks and user-generated content, the rise of real economies in virtual worlds and the need for a more sophisticated approach to “long tail” marketing. “The challenge for media companies in 2007 is to second-guess how the public’s perception of value may change …” the authors write. What do you think? Which online trends are likely to be most profitable for media companies, and what, if anything, have the authors failed to anticipate?
In “The Future of Advertising is Now,” a report from strategy+business magazine, consulting firm Booz Allen Hamilton heralds a new era of consumer-centered marketing to replace outdated print and broadcast advertising models. Even so, the report estimates that major marketers are allocating only 4-10 percent of “measured media spending” to online advertising. As this changes, what opportunities does it create for news web sites large and small? What are the risks?
Please comment on the readings by 12 p.m., Monday, May 19.
May 18th, 2008 at 5:42 pm
temp notes.txt
New media nerves got you down? Try the all new Deloitte report!
It’s better than Prozac!
Don’t worry about anything… that big, bad Internet won’t get you, big media. These changes are all inconsequential. And maybe you can make a buck!
“…could all add to a resurgence of the printed word.” “…little evidence to suggest that the majority of customers have either remarkably eclectic tastes…. Certain types of content will, almost by default, have broader appeal.” “…media companies… user-generated content… exploit its potential value.” “Broadcasters offering play television programming should monitor regulations…” “…penetration of television and radio is almost guaranteed to remain several orders of magnitude higher…” “A public that refuses to pay… online may often be happy to pay for… a newspaper or a book.” “…advertisers are unlikely to be keen to associate their brands with the often questionable contents of unmoderated social networking sites…” “…consumers are quite prepared to wait before they watch.”
Except for terrorism. You should really watch out for terrorism.
“Governments may wish to focus more on identifying any attempts to exploit the mechanisms of virtual economies to undertake criminal activity.”
Gah. What a load. But you don’t make money by making your clients afraid. Instead you offer them easy choices annd soothing solutions. This is laaaaaame.
(If you’re interested, Deloitte published a report for 2008 as well. Though they’re playing the same tune: “For the music industry, one solution to this problem may lie with packaging. The industry should look at various ways of making music more ‘physical’….” Yeah! That’s it! More cardboard! I gotta have more cardboard, baby!)
Next essay!
“Says Apprentice producer Mark Burnett, ‘The new prime time is 9 A . M . to 5 P. M ., because more people have access to a computer then.’”
Ding! Give Mark a cookie!
“There is no excuse for any marketer who fails to take advantage of the opportunities that have evolved since the launch of Netscape Navigator.”
Ding ding! Though I’d quibble with Netscape being the beginnings of the graphical web. Gotta give props to NCSA Mosaic (Be sure to check out the images, they’re great.), out of my alma mater University of Illinois at Urbana-Champaign. Netscape soon followed after the coders graduated.
A much better piece. Your business model is about to crash and burn! Change course!!!
May 18th, 2008 at 8:13 pm
yay being the first one to post
One of the most lucrative trends in the online world right now is undoubtedly synergy. Everywhere we look on the net, there are things we like, things we will buy, things we believe in, etc. And if we support them enough, we can put them in our Facebook and Myspace profiles! It’s free advertising for them, and a representation of who you are.
Along with this, we see ads pop up on every nth video we watch on Youtube. And before we can watch some videos on news web sites, we have to sit through a (albeit usually quick) commercial. Think about how much a company has to pay to take out a full page ad on the MySpace home page. Opportunities like these provide media outlets huge capital.
Going into “The Future of Advertising is Now,” you can look for what we have recently seen on some nightly news casts. Instead of a regular newscast, we receive fewer commercial interruptions, and the show is brought to you by X sponsor.
The news affiliate will undoubtedly have the same sponsor postered all over its Web site as well, providing that sponsor as much exposure to its consumers as it can. While the clear benefit here is being able to produce more news to our consumers, the danger rests in being affiliated with that product or service.
May 19th, 2008 at 1:32 am
It was interesting to read DeLoitte’s predictions for 2007, being that we are now in 2008 and have the ability to see whether or not they had it right. It seems that, for the most part, they were on target with their assessment. Aside from the blatant and annoying overuse of the word “panacea,” I found the DeLoitte report to be pretty interesting and insightful. I agree with the company’s general conclusion that we as a media and business culture need to find ways to embrace and integrate new media trends. I think I’ve said what I’m about to say in a previous post, but I’ll say it again: new media is here for better or worse, and I think the right attitude can determine whether it is the former or the latter. Rather than freaking out and making dramatic assumptions, I think we would benefit from following DeLoitte’s recommendation to find a way to make new media and old media complement one another. I think it can and ultimately will be a win-win situation for everyone involved - or, at least those with a positive approach.
“The relationship between paper and pixels, it seems, may not always
be about one versus the other, but more about a symbiotic,
profitable coexistence. In 2007, the print industry may therefore start making its future more certain by focusing on two areas: understanding and exploiting the unique characteristics of print, which cannot be
replicated via other media, and turning the threat of the Internet
into an opportunity. There may even be scope for the newspaper
sector to reverse some of the declines it has suffered, particularly in
more developed markets.”
This is a quote from the “Paper, pixels and profits” section of the DeLoitte report. I found that chapter to be very forward-thinking and on point. I think we would all do well to see the glass as half-full rather than half-empty.
May 19th, 2008 at 6:55 am
Deloitte’s idea for monetizing social networks is behind the times. They propose charging family and friends for “gigabytes of privacy” in the realm of sharing photos, which of course Flickr has been offering (privacy settings) for several years.
I am also strangely excited to see what new forms advertising is forced to take thanks to the advent of more interactive media, and the undercutting of their ad-revenue due to DVR technology.
May 19th, 2008 at 7:47 am
I agree that Deloitte’s predictions are a little behind but if this were read in late 2006, I think some of the predictions would have been recieved with some skeptism,like the popularity of user generated content. I also agree that the use of the internet to deliver news will not replace print, but offer a complement to readers who prefer online news delivery. I do think the integration of paper and online news delivery is missing an opportunity to drive traffic and readership to websites and back to print.
“The Future of Advertising is Now” is right on point in terms of the direction marketing is headed or at least consistent with what Mediill’s IMC program is teaching. Today’s marketers are challenged to think beyond medium or message and must capture and enhance a consumer’s brand experience, i.e., what do consumer’s need, how do I give it to them and how does my marketing enable a consumer to develop a relationship with a brand. Contact points that are platform agnostic and reach the consumer in ways that are meaningful to them do not necessarily have to be experienced via a mass medium like television. Nike is an excellent example of a marketer that has embraced integrated, experiential marketing practices that use new and traditional media. Their online running clubs, instore tie-ins and partnership with Apple provide “value” to the consumer and enhance the brand.
In terms of branded entertainment and advertising in the gaming space, I think advertisers need to be carefull not to detract from the consumer’s game or entertainment experience. Sponsorships and product placements can easily get out of hand, (think American Idol and Coke) and detract from the content and annoy the consumer.
May 19th, 2008 at 9:17 am
I probably can’t anticipate the next big thing, but I can bet that whatever it is we will embrace it. I have been surprised at how quickly new things become a big part of my life. How much of my keeping-in-touch I now do with facebook, how dependent I am on my google calendar. I only added google reader a few weeks ago and my media consumption has totally changed. I’m addicted to scanning the headlines, but am spending less time at specific websites’ homepages.
The lesson I got from both pieces is that media companies have to be flexible, willing to try to new, varied models, and in tune with what consumers actually want/where they’re actually clicking. As we talked about last week, technology is allowing for better measuring of consumer behavior.
“They [marketers] favor media that can substantiate an ad’s influence on customer preference, purchase, and retention. This means a growing
penchant for online media, especially those that can deliver a reliable indication of customer response.”
This is bad news for TV but of course good news for media available online. As the graphic showing the disconnect between the money spent on car advertising and the influence of said advertising demonstrates, mistakes have been made, money has been wasted, but more monetization opportunities are available online.
The risk of advertising on news websites is everything we’ve been talking and worrying about. Will the wall between editorial and advertising come down? Will readers be able to differentiate between advertising, news, and entertainment?
The Deloitte predictions underestimate “older” users willingness to try new media, even if only cautiously. Scanning my facebook list of friends, I was surprised to see how many were family or family friends, adults over 40 who were on facebook to keep track of their kids, share photos and get in touch with old friends.
Whenever I visit my grandparents, my grandmother wants me to teach her something new on the computer. Last December I showed her wikipedia and youtube. We searched for JFK’s inaugural address and when we found it she was so excited. Certainly my 80-year-old grandmother does not represent a significant portion of the online audience. But these users are not incapable of becoming part of the online community. And eventually we will be those older users and readers, and our habits will have already been shaped by a lifetime in front of the computer screen.
May 19th, 2008 at 11:21 am
I thought one of the most interesting parts of the Deloitte study was their prediction that, though social networks may be free, they might be profitable if they offer users the opportunity to pay for privacy. This begs the question of how private ANYTHING on the Internet is. There are certain things I take for granted, like when I log into my e-mail, it’s not able to be accessed by everyone else. For the most part, though, it’s probably best to assume that things you put online can be accessed by others.
Social networking sites do have different ways of offering privacy that’s free. Facebook, for example, will let you show photo albums to some friends but not to others, and I think that Flickr has a similar sort of feature. But again, while I might use that to make sure my mother doesn’t see all of my pictures, if someone was well-versed at hacking and really wanted to find them, they’d probably be able to.
I do agree with Deloitte’s bottom line that user-generated content has the potential to offer more of an opportunity than a threat to mainstream media, if the media takes an opportunistic stance towards such content. I think this is something that some more mainstream forms of media are just starting to recognize. What’s that old saying…’If you can’t beat ‘em, join ‘em?’
May 19th, 2008 at 11:22 am
Which media development will be the most profitable? Easy: China by a huge margin. Here is an excerpt from the Time Magazine Article “China’s Me Generation” http://www.time.com/time/magazine/article/0,9171,1647228,00.html:
–By 2015, the number of Chinese adults under 30 is expected to swell 61%, to 500 million, equivalent to the entire population of the European Union. From issues of grave consequence to trivialities, the government has made clear that it will do whatever it takes to keep the swelling middle class happy. In Beijing, for example, newly prosperous residents are snapping up automobiles at a rate of 1,000 a day. The number of vehicles on the capital’s sclerotic roads has doubled in the past five years, to 3 million.
Armed with credit cards and heightened consumerist addictions, companies will dedicate large portions of their biz models to satisfying the Me Generation.
Add to that the incoming “sixth generation” political leaders (6 generations since Mao) which are schooled in subjects other than engineering for a change, have traveled the world and are less isolated in their own social networks, and you have the next dynasty.
Wal Mart is toast.
But for us American journalists that lack Mandarin and Cantonese, where do we fit in? Not to mention the still draconian laws over journalism (not media - that term is used as a catch-all by Deloite)
Do we matter for China?
May 19th, 2008 at 11:24 am
It’s true some of the Deloitte stuff did sound rather common sense to us at this point, and I’m not sure who the intended primary audience of the report was, but if it’s meant for the (likely) older white guys way up the chain of command at Deloitte and other big firms like it, there’s a good chance it still taught them things they weren’t already aware of.
What I appreciated from their report was that it avoided an overly gung-ho approach; they acknowledged repeatedly that each of the new technologies face challenges and limited appeal to many people. In particular, they noted a simple lack of time or interest in spending additional hours per day online…something that perhaps affects older people more than the younger generation, but its a consideration that definitely affects me as a user. I already feel like I spend more time than I want to online, so while I appreciate all the stuff that the web offers and know it would be nice to be better-versed in lots of it, if it means more hours sitting in front of a monitor, I’m not sure from what other part of my day I would be willing/able to take that time. It’s that type of attitude that seemed to temper Deloitte’s piece.
May 19th, 2008 at 11:51 am
The Deloitte report got the big parts right, but I think they were kind of hazy on the details. Charging for online privacy features? Talk about extortion. I think recent privacy snafus by companies like Facebook, and the almost regular online security breaches of some financial institutions in recent years have pushed the importance of the privacy issue into the face of companies that decide to participate in the new media.
I think the point of building synergy between platforms: radio, TV and the Internet is the key, and most media companies understand this now. I think we will eventually see most media companies transition their operations to put the Internet at the center of their focus, producing media for television, radio and print as secondary markets. Look at the Atlanta Journal-Constitution. In the past few years they completely reorganized to put the web site at the center of their business, with the paper and other media properties on the second tier.
And one thing that bothers me about the curling up with a book on the couch versus going cross-eyed, hunched over in front of a computer monitor argument: Five years ago I sat hunched in front of my blurry, bulky computer monitor. I curl up on my couch with my laptop today. Five years from now I’ll have some device that is even more comfortable to use than my laptop. Maybe something like Amazon’s Kindle. Don’t use the limitations of technology as a reason the technology will never succeed because limitations never last long.
May 19th, 2008 at 11:57 am
The Deloitte report got a lot of stuff right and a few things wrong. But I think that they hit the mark on their acceptance of the Internet, user generation and web-based and experiential advertising as the way of the future. Journalists have to embrace that.
Also, the report said that user-generated is not yet refined enough or good enough to compete with professionally generated content. That’s partly true. Some of it isn’t, but a lot of it is really, really awesome.
I feel like a broken record, but whatever. Here it is again: The Internet, citizen journalism and user-generated content are here to stay, and I think that’s a good thing. Holly mentioned her grandmother. I’m going to take it a generation closer to us and write about my mom. I can’t tell you how many times she complained to me and my sisters about popular culture and media culture in the ’90s and early this decade. “Everyone looks the same; everyone sounds the same; they’re all saying the same thing; they’re all doing the same thing. Back when I was a kid, people were individuals. You didn’t have to fit one mold to be popular or great or appreciated.”
She may have been romanticizing the ’70s, but she had the late ’90s spot on. Think about who and what were popular when user participation was at its lowest and media conglomeration was impenetrable. Britney. *NSYNC. Fox News. Everything was hyper-managed and packaged for perfection. Hell, many of the biggest bands in those days were created for the sole purpose of making money - not for making music or doing anything of actual artistic or intellectual value. What we have now may be a bit messy, but it’s finding itself and at least it’s more democratized than all the top-down, for-profit, superficial crap that reigned the airwaves and magazine stands when we were in high school.
Not that there was nothing good out there. But if we’re going to worry ourselves silly about what’s around the corner, let’s at least be honest with ourselves about what we’re leaving behind.
May 19th, 2008 at 12:01 pm
I don’t want to just repeat what people have said before me, but I thought Deloitte’s section on virtual economies and Second Life was interesting.
“Members of some virtual worlds may be able to withdraw cash from their virtual bank-accounts via real-world cash machines. … Governments should be alert to any attempts to exploit the mechanisms of virtual economies to undertake criminal activity. Money launderers may use trade in digital artefacts and virtual currencies as a new means of money laundering.”
Huh. $700 million GDP for 2007. What are people doing to generate this kind of money?
Before I started doing this week’s readings I was thinking about Second Life and what kind of monetization is used within the virtual world, aside from the subscription fees. I don’t have a Second Life account but I’ve been seeing it pop up everywhere lately. Does anyone have any thoughts on how the news media can fit into Second Life?
May 19th, 2008 at 12:02 pm
Though I agree with their assessment that the print world should better recognize the benefits of the internet, I don’t think it works so well the other way around. Their contention that blogs and other online-only media need to look into print in order to increase revenue sounds foolish to me. The reason these media work and are profitable is because they avoid the high cost of printing and distribution. News is moving in one direction by phasing out expensive print. For the time being we will have both, but new technologies and people’s increasing comfort with existing technology means that print’s days are numbered.