Striking value into the hearts of buyers and sellers online: $25 billion more might just do it.

 

Media Post reports that Dave Zinman, VP and GM of Display Advertising at Yahoo!, was talking about “signals” in his presentation to the OMMA Behavioral crowd in San Francisco this week. Dave is a long-time player in the Internet space with plenty of experience to inform his signal calling. With his view of history he postulates that the first $25 billion of Internet ad spending – about where we are now – was driven by search. I’d agree. It’s been essentially $25 billion of clicks and actions thus far.

Dave signals now that the next $25 billion will come from display advertising wherein the value of the impression, not simply the click, will matter most. Yes. For one thing, we can’t be sure there are $25 billion more in clicks and actions available online. The Internet would have to be intergalactic in size, or action rates would have to substantially increase, which is unlikely; consumers are just not that into advertising.

But there is no dispute that the Internet is a staple in the daily media diet of people worldwide. Other media are shrinking, therefore Internet advertising should grow. So if there is $25 billion more in ad spending on its way, how will it be accepted and provided for?

Again, who would welcome $25 billion in additional click and action driven advertising? Under those circumstances, if the Internet were an ocean you would be able to walk across it stepping from one flashing banner ad to the next. You could set the water on fire, which is probably a fair description of the reaction consumers might have to such a polluted environment.

Impression-driven advertising will be the only way to absorb the next $25 billion. Advertising that counts for engagement. Advertising that must, therefore, be creative and compelling (like some of these from this year’s Cannes festival). Advertising that is intended to woo 100% of the audience, not just .5%. Advertising that is efficient. Advertising that can then be bought in units of one thousand impressions at a time. Advertising that can scale without deforesting the landscape, or drying-up all the wells or burning the ocean.

Which must be what Dave Zinman is concerned about from his vantage point at Yahoo!. As he reports, portals got into the advertising network business a few years ago and vacuumed-up all the reach they could get. But impression-based results were never on their mind as part of that initiative. Impression-based results belonged to the people selling Yahoo! homepages and sponsorships. The ad networks were all about clicks and actions and as the market grew and a desire for action rates led to a desire for more action rates even the portals didn’t have the reach to accommodate the results. They needed networks.

Now what? Dave Zinman signals the future: the next $25 billion is going to have to be about the value of impressions. Tim Armstrong may be signaling the same thing at AOL with the dissolution of Platform A and a renewed commitment to selling content and brand.

There has to be something that strikes value into the hearts of buyers and sellers online after all these years and maybe the next $25 billion is that thing.

Yahoo!, Microsoft and Google continue feeling their way around the room.

Many times over recent years as the competition has played out between Microsoft, Yahoo! and Google (and AOL, I suppose) I’ve thought of a line from Henry Kissinger’s book, “The White House Years” describing the duel between the U.S. and Soviet Union during the Cold War. The line goes like this:

“The superpowers often behave like two heavily armed blind men feeling their way around a room, each believing himself in mortal peril from the other, whom he assumes to have perfect vision. Each side should know that frequently uncertainty, compromise, and incoherence are the essence of policymaking. Yet each tends to ascribe to the other a consistency, foresight, and coherence that its own experience belies. Of course, over time, even two armed blind men can do enormous damage to each other, not to speak of the room.”

It’s always seemed such an apt description of the exertions of the “superpowers” online and, especially, their affect on the room. This week’s announcement of the Yahoo! and Microsoft search deal brings it to mind again, though the deal is relatively benign in relation to it’s affect  on the overall Internet advertising market. Search happens on a mountaintop these days. It’s only scary when the companies living at that altitude climb down off the mountain to carouse in the streets of the Internet community swinging their clubs at each other, blindfolded.

Maybe the Yahoo!/Microsoft deal announced this week will keep them all confined to the mountain for a while, which should be fine with the rest of us.

Ad Agencies should be paying attention to potential opt-in legislation in Washington

Edward Barrera, Editor of Adotas, raises serious concerns that advertising agencies may be dozing through the privacy debate in Washington D.C. that is right now headed towards opt-in requirements for all advertising online. Opt-in means that any time a consumer is presented with an ad, that consumer will be required to accept or reject the cookies associated with that ad, which are there largely to provide the advertiser and their agents with the ability to manage the delivery of the message.

The truth is ad agencies are probably faking it. Their eyes are shut, but their eye-lids are twitching. They are awake and they are listening. As Edward suggests in his column, many are working on the assumption that privacy legislation is going to hurt them a lot less than many ad networks, with the result that they can recapture control over a great deal of media planning and buying online that they lost by treating most of the Internet as throw-away material. A blast at high altitude over the industry is just the thing, they think, to level the playing field.

Yes, perhaps. Agencies have a trump card which is the relationships they enjoy with the clients. In contrast, many purveyors of media space online, including many ad networks, enjoy relationships with advertisers or publishers that are only as deep as their last lunch and which can be easily swept away by the crosswinds of change, including, potentially, regulatory change.

But agencies should focus on what sort of world it might be once the smoke clears. As a consumer, it’s not a world I relish. I don’t even like the reminders Microsoft Windows pops to me each time I want to tinker with a document, let alone the opt-in intrusions that dooms-sayers suggest might attend every ad online. The freedoms that both consumer and advertiser enjoy online could be severely compromised by opt-in legislation that erects check-points every few yards. Doesn’t advertising have enough problems? People don’t like commercial interruptions. Now the potential exists to place an interruption in the way of the interruption?

There are fundamental advertising issues at stake here, the defense of which should be of paramount concern to ad agencies. They have been taunted relentlessly over the years by the digital upstart classes, and who can blame them for imagining a world where the taunters have been muzzled. Still, there is the question of an effective working relationship with consumers, which has been steadily eroding for years. Agencies should have no desire for an Internet experience that says “Kick Me!” every time consumers encounter advertising messages, something opt-in will surely contribute to the ”enjoyment” of an agency’s work each and every time.

That’s the way it is (again).

When I heard that Walter Cronkite had died over the weekend I thought, get ready for all the “That’s the way it was” eulogies that will make inverted use of Cronkite’s famous sign-off from his evening broadcasts, “That’s the way it is,” to point out that the world over which Cronkite presided – truly presided – is gone.

All I can say is, thank goodness we had Walter Cronkite when we did. The retrospective 60 Minutes offered on the anchorman, “That’s the way it was: Remembering Walter Cronkite” took us through an extraordinary time when worlds collided in our country beginning, most dramatically, with the assassination of President Kennedy. I remember watching the broadcast of his funeral on our black and white television in the dining room of our house. (The dining room, because that was the only place to get reception.) Then there was the assassination of President Kennedy’s brother, Senator Robert Kennedy, and Martin Luther King. Then, Vietnam, Woodstock, The Beatles, the Apollo Space program and the landing on the moon. The 1968 Democratic Convention. Watergate. These are all events that still shape our consciousness and conversation as a country.

But we had Walter Cronkite, and other heirs of Edward R. Murrow, who sought a certain sobriety in broadcast journalism that was person-to-person. Had the instincts of broadcast network news been more prone to the sensationalism and slick production values that became essential to the audience ratings game, and that took news out of the living room and put it on a stage – and that made actors out of anchormen - we might still be throwing rocks in the streets.

But, we had Cronkite and in last night’s 60 Minutes retrospective one especially poignant clip showed Cronkite taking a telephone call on-air from Tom Johnson, then press secretary to Lyndon Johnson, with news that the former President had died. The Evening News program was returning from commercial break and there was Walter Cronkite sitting at his desk, on the telephone. He motioned to the audience as you might motion to anyone asking them to be patient. He held up a finger. Then he explained, still holding the receiver, “I’m on the telephone with Tom Johnson, press secretary of Lyndon Johnson…,” etc. etc. I watched and thought, “He’s blogging.”

These days on-air personalities wear ear plugs, like secret service agents, through which people are constantly talking to them. In “The Situation Room” (pleease) with Wolf Blitzer, he will sometimes pause to say, breathlessly, “We’re just getting word.” But, it’s the media machine talking in the background. Global information robots and satellites. Cronkite was on the telephone, in our living room, talking to us. Cronkite was an anchor, not an actor. You never got the feeling he was selling you something.

Which helps make sense to me all over again why I’m comfortable with what journalism is becoming, even as worlds still collide. Thanks to the testimonies and inputs from citizen journalists around the world - bloggers, opinion-aters, text-ers, web publishers and the like - news lives in the real world again. It features the sort of one-to-one moments when Walter Cronkite was in your living room, holding up a finger, bidding you to wait just a minute while he gets the story. Call it process journalism or citizen journalism, or whatever. It’s news. And that’s the way it is.

Charging for the air we breathe

I checked-in to a Courtyard (owned by Marriott) this week and a sign on the front desk alerted me to the fact that beginning earlier this spring Marriott Corp had discontinued free distribution of USA Today to hotel rooms. The newspaper would still be available to guests free of charge in the lobby. The good news, said the sign, is that Marriott’s carbon footprint would be reduced by 10,350 metric tons per year thanks to the newspaper cut-back.

Newspapers can’t buy a break; not only are fewer people reading them, it appears curbing a newspaper appetite may be good for you.

Marriott did the math and determined demand for newspapers at their hotels had dropped 25% over the years. They were feeling badly about throwing them out at the end of each day. Fortunately, I learned from their press release, Marriott Reward Members can still request automatic delivery of a newspaper, which I will do. I really only read newspapers when I travel, notably USA Today, and I miss that benefit.

The relationship between Marriott and USA Today goes back over 20 years. It helped to define USA Today as a business traveler’s newspaper and then solidify its position as the Nation’s Newspaper. Media planners would occasionally question the validity of the hotel distribution – called, “Blue Chip” by USA Today, and which also included distribution in other chains such as Sheraton – but based on my own experience as a business traveler, with long wait times in office lobbies and airports, no portion of the circulation was ever likely more valuable to advertisers.

That said, there is the niggling fact that guest requests for newspapers went down 25% from where they had been. What displaced them, one must wonder? Business travel conditions did not improve over the years. It is still a long wait in lines and lobbies, which create perfect conditions for the portable, comprehensive and even colorfully dramatic role of newspapers. Is the answer obvious?

Is it digital mobility? Mobile telephones? Blackberry? iPhones? iTunes? In-room, on-demand movies? 24 hour news channels? Wireless laptop technology? Elevator TV. Taxicab TV? Airport TV? All of the above?

It occurs to me that in 1995 when O.J. appeared in court to hear the jury’s verdict in his trial for the murder of Nicole Simpson and Ronald Goldman I was able to listen to the entire proceedings walking from Grand Central Station on 42nd and Lexington to my office at 44th and Third at mid-day in New York City. All the windows and doors of all the stores and taxi cabs were open that day and all the radios and TVs tuned to the same thing. It was surreal. It was surround sound. I heard it all as well as if I was listening through earphones plugged into my real-time streaming Internet connection.

That says the answer to the question for newspapers - and information generally - is probably all of the above. The conditions that existed for that one instant during the O.J. Simpson verdict exist continuously today. We are a super-interested species and news and information is everywhere. It surrounds us. It radiates. We absorb it through the skin.

I’m not sure what that means for carbon footprints, but it can be truly said we live in a news environment. It has to make you wonder, therefore, how anyone thinks they will be successful charging for the air we breathe.

Interpublic separates the forest from the trees.

After sounding off in this space recently about the myriad descriptions we have for online advertising (“What the heck is display advertising anyway? And who cares?”) it’s good to note that Interpublic’s Magna business unit is trying to bucket things along more sensible lines. Per the story in Media Post, Interpublic is proposing we regard online advertsing as follows:

1. Total Direct Response-based advertising, which includes search, lead generation and yellow pages.

2. National Digital/Online advertising, which includes rich media, online video, classifieds, emails, display and mobile

3. Local Digital/Online, which includes revenues from local TV, Radio and newspapers.

It’s not clear, but I assume Local Digital/Online is inclusive of all the advertising formats detailed in National Digital/Online. 

The sensible nature of Interpublic’s initiative is the desire to catalogue spending by marketing objective, not creative format, or application. It is to try and see the whole of the online picture, not just the parts. The creative toolbox available to advertisers online is wonderfully diverse versus other media, but it is not the tools that should determine the job for marketers, as in “Should we use widgets? Why aren’t we using widgets? I want to see some widget uses!” So, it is almost impossible to see the big picture in terms of value versus other media by concentrating on what’s in the box. Interpublic’s break-out response to ad spend measurement may help us lift our gaze.

Rupert Murdoch engages in a bit of portal-speak

The Wall Street Journal reports that Rupert Murdoch said MySpace “needs to be refocused as an entertainment portal.” I have mostly stopped reading stories about MySpace, or other social networking companies or initiatives because I just can’t take it anymore. Social networking has been clubbed to death. It needs to stop. We need to let the poor animal escape off the beach and prosper as it might, or might not, in nature.

But Mr. Murdoch’s comments stopped me because I haven’t seen anyone reportedly aspire to build a portal in years. To double-check I went to HULU to see if they use the word portal given that HULU seems to be a well-adjusted, functioning portal.  There is nothing obvious that I could find. The mission statement says:

“Hulu’s mission is to help people find and enjoy the world’s premium video content when, where and how they want it. As we pursue this mission, we aspire to create a service that users, advertisers, and content owners unabashedly love.”

The explicit use of the word “where” in the mission is anti-portal. In the section about distribution, HULU goes further, saying:

“We take a lot of pride in making it easy for Hulu.com users to find and enjoy great video, but we also realize that one website is not enough. It’s just as important to make it simple to find premium videos at millions of other places around the web. Wherever people spend their daily lives on the web, we want hit shows, movies, and clips to be just a mouse-click away.”

HULU may be comfortable as a video portal, therefore, because it has no plans to remain one; it envisions a media world with millions of other places that may matter equally in the eyes of consumers. This is well-adjusted thinking.

According to the Journal, Mr. Murdoch is thinking of MySpace as a place where “people are looking for common interests.” This is portal-speak, and we should pay attention to it. It is really very important in regards to what it says about the challenges we keep having retro-fitting offline media to online media. If a place is about people with common interests, those places, on balance, are going to be small(er). But, this is not likely what Rupert Murdoch is thinking. No, indeed, when media industrialists such as Rupert Murdoch talk about places where people are looking for common interests they are thinking BIG – so big as to equal all common interests.

All common interests describes the Internet. It is a place of near infinite common interests. Given that, a place of common interests inside the Internet is superfluous. It is unnecessary. Hence the history of AOL, the on-going identity crisis at Yahoo!, and the fact that we don’t hear much talk of portals anymore - because they failed the value test.

Offline we talk about “general interest” media, such as general interest magazines, which have been among the biggest players in the traditional media world. No surprise that we should seek to emulate them online. But, we don’t need general interest online. The common interest is so accessible that aggregating enough of what enough people are commonly interested in is - again - unnecessary. 

The Internet is the place for common interests and no other places need apply.

Chewing on media’s next wave – Part II

Further to the post in this space earlier this week (“Chewing on media’s next wave”), is this item from EContentMag.com, by Kinley Levack, suggesting that vertical ad networks are coiled and ready for take-off. There are many thoughtful comments in this piece, courtesy mostly of the people at NetShelter Technology Media which has a network of 150 independent web publishers. Explains co-Founder and CEO, Peyman Nilforoush:

“We have a different kind of media model—our model is really taking that ‘Wisdom of the Crowd’ idea and bringing it to media. In the old media model, you have editors who are well-known and produce influential content, and that’s essentially how expertise and information were distributed.”

Indeed. Essentially, old media was a smoke stack business. Think of it as factory media. Raw information materials came in from around the world, and content came out in neatly wrapped packages, delivered by truck and channel. New media is agrarian. Think of it as a garden in every back-yard, the produce of which growers throw in the back of the pick-up and bring to the local market every week (the vertical media network). The metaphor surely has legs in the context of our lives today: we could say new media is the equivalent of buying local. We could also say it is the equivalent of sustainable farming.

It’s not clear to me if Peyman Nilforoush is talking about media brands or brand advertisers when he says, “The core of it is, ‘OK, this is a totally new marketplace, so if I don’t harness it, what happens?’ If I’m not getting into this ecosystem and finding a way to integrate my brand, that means that I’m becoming less and less relevant every day because I’m playing it old school while my audience is being influenced by the wisdom of the crowds.” But it doesn’t matter, because his comment applies to both. It is the wise choice of the Food Network Family in our earlier post (see above) to decide to share its brand in order to create a marketplace, and the wise choice of marketers that decide to shop there.

Creative happens: The Cannes Cyber Lions.

This is a little late, but as a public service here is a link to the entries that made it to the Short List in the “Cyber Lions” category of the 2009 Cannes International Advertising Festival that wrapped-up a couple of weeks ago (below).

Rummage around. Is there a creative crisis on the Internet? Perhaps only a crisis of confidence. Spend some time with this year’s entries and you might find your confidence building. Some of the entries are positively brilliant, testifying to the ability of the human imagination to assume any shape and size.

Banners, buttons, boxes, cubes…the Internet is really a very big canvas.

Enjoy.

http://work.canneslions.com/cyber/?award=99

(Please note: it appears that the actual creative execution of most Short List entries that did not medal have been taken down. Too bad. They deserve honorable mention. It is possible to still link to most of the winning examples.)

(Please also note:  that the Banner Concepts campaign that won Gold for Axion Youth Bank and its creative partner Boondoggle in Belgium is sooooo good. Start with this:

And then check out the banner concept:

http://www.bornoncloud9.be/canneslions2009/axion/banner-concerts-cyber/banner-example-01.html

Or, just click http://work.canneslions.com/cyber/?award=99 and find your own way.

…Sooooo good.

(Note to self: Must visit Belgium for Boondoggle.)

Chewing on media’s next wave

Jon Friedman talks about the early going at Food Network Magazine in his Marketwatch Media Web column, and offers that it may be a model for magazine publishing going forward. Friedman ticks off a few other examples – Martha Stewart, obviously, and Rachael Ray and ESPN Magazine. I’m not really sure, however, that launching line extensions is really new or different in the media world, as his own examples document. National Geographic has done pretty well going the other way, from magazine to television. Also, TV Guide. Likewise, the Saturday morning outdoor blocks on television – all the fishing and hunting programs – were largely the initiative of outdoor magazine people, notably George Bell. Accordingly, does Food Network Magazine represent “media’s next wave?”

Probably not, but that doesn’t mean that Jon Friedman is missing the point. Leveraging media brands across platforms is standard trade craft; leveraging media bands to create media networks is where it goes next, which is actually something Food Network has been working on online over the past few years. The “Food Network Family” is inclusive of Healthy Eats, Recipezaar.com, Food2 and others. Food Network is becoming a network in a complete sense of the word, sharing the strength of the brand not just across platforms, but across complimentary properties – properities independent from Food Network’s editors.

Do people call this curating? Curating is maybe media’s next wave. Hearst – which publishes Food Network Magazine – curates magazines. Food Network is curating - by partnership and through acquistions - a food and living lifestyle, which needs no boundaries.