AOL’s Army of 3,000 Journalists

The news last week that AOL has grown the number of journalists it employs – inclusive of full and part time, or freelance – to 3,000 from 500 since Tim Armstrong took over this year has stuck with me. I’ve been thinking, “Three thousand journalists? Why?”

I went back online to find the story and what’s clear from all the search results is that the growth in the number of journalists has been going on at AOL all year. TechCrunch was impressed when the number hit 1,500 in July. Since then, according coverage in TechCrunch of the Web 2.0 conference in San Francisco last week, the number has doubled to 3,000. Doubled. Since July.

Tim Armstrong has declared that content will be king in his remake of AOL and I have been rooting for him on that basis. He knows from his Google days that content – ergo, context – has a propitious effect on advertising. But, 3,000 journalists? Why?

Part of it may be driven by Patch, the hyper-local information resource of which Armstrong was an owner and which got sold to AOL after he joined the Company. Fulfilling a hyper-local information mission will rack-up journalists quickly. Part of it is clearly MediaGlow, AOL’s collection of proprietary content web sites that are refugees of the by-gone portal era. But, in reports, Armstrong hints at a tech strategy – a content management strategy – as the driver of AOL’s appetite for journalistic talent.

Hmmm.

The New York Times Company, according to their 2008 annual report, has roughly 9,000 employees. Nearly half of them, 4,000, or so, work for the New York Times Media Group. The New York Times Media Group is inclusive of The New York Times, The International Herald Tribune, NYTimes.com, and the New York Times News Services Division, which – among other things – supplies syndication services to 1,500 newspapers and magazines in the U.S. and 80 countries worldwide. Thus, roughly 4,000 people, not all of whom are journalists, gather and distribute content, globally, preserving the highest levels of quality.

The New York Times Company also owns About.com. The About.com team of 235 people (also per the 2008 Annual Report) supports 770 About.com guides. These are freelancers writing on more than 70,000 topics that have produced over 2 million pieces of original content over the years.

Suddenly, in a side-by-side comparison, I am afraid of what 3,000 AOL journalists are likely to do to the neighborhood. Do we really need another Internet?

Seriously, what incremental value are 3,000 journalists likely to produce for us online and, as importantly, for AOL? Editors at the New York Times would be delighted for more reporting resources. Without them, I’m still overwhelmed by the content they generate on an average day and most certainly on Sunday.

Digital doesn’t require as many trees and won’t accidently strike and kill a dog in the driveway, but, even so, how will 3,000 journalists succeed in adding meaningful value to an online experience in a way we can grasp and explain? A mere 770 guides at About.com manage to inform us on over 70,000 topics and all I can say is, gee, that’s a lot. How’s that working out for them? Would another 2,230 guides able to inform us on an additional 202,727 topics transform About.com from hero to super hero, or – better – catapult its beleaguered parent, the New York Times, into the digital age with the most mojo of any information outlet online? If the answer is yes then - please! - do it, and let the misery end.

It’s a very hard question to answer online: How do you successfully exceed the value of all the parts? It’s a question that, no doubt, has gnawed at AOL for 15 years (almost exactly). Once it was King. Then, the peasants overran the village and sent it into exile. It has as much to be bitter about as every other main stream media player that saw their estates carved up and given over to condos.

Tim Armstrong is committed to restoring AOL’s brand luster which is a good and worthwhile thing that ought to benefit the community – kind of like restoring Grand Central Station in New York. But with 3,000 journalists one senses AOL comes as an army, not as a trading partner. Marching ahead of a horde, pulling a hidden bit of technology, one senses it is back, and it is pissed.

Fixing ad agency compensation

A ray of light at the end of the tunnel: Ad Age reports that ad agencies are finally getting their dander up over compensation. That’s a welcome bit of news to concerned blogs everywhere – like this one – that believe the pendulum has swung too far to the austere side of the ledger in the matter of  providing agencies with a living wage.

Let’s make the marketing departments of clients part of the conversation, as well.

Calling all advocates – Part II

In a side-bar to the piece in Ad Age about Forrester’s proposal to re-make Brand Managers into Brand Advocates (see earlier blog), Rishad Tobaccowala, Denuo CEO, observes that marketing departments are getting smaller at exactly the time they need to be getting bigger. This is about the most important thing to be thinking about in our business today.

The media and marketing world is doing just what it’s supposed to do – and has ever done – in order to keep up with the growing complexities of society: it is getting more complex. The marketing business, however, is still being made to atone for the excesses of the last era, when costs continued going up long past the point of observable returns; when advertising was in its extravagant period of broadcast television and mass circulation newsweeklies.

It is time to move on. More risk-taking in defense of the business. Better compensation. More, not fewer people. These are things marketing needs to be working on in a complex world.

Brands need advocates. Marketing needs advocates, too.

Calling all advocates!

I am waiting for a new report from Forrester Research that Ad Age says is due out this week that will offer insights on how brand marketers should behave in the digital world. According to the Ad Age story, the guts of the report will focus on familiar themes about the need to be faster and more nimble, and the need to be open to new sorts of partnerships, especially with the media, that are less reflective of the long-term ad agency associations that are industry legend. A summary observation in the report is that “Brand Managers” should be re-christened, “Brand Advocates,” which is an interesting point, and the one that most caught my attention.

I remember Stu Upson, the CEO of Dancer Fitzgerald Sample, the ad agency in New York where I first worked after graduating from college, addressing the New York office in a rare all Company meeting to talk about the loss of a major client. I don’t remember all the things he said about the client loss, but I remember what he said about the business of advertising. He said advertising is not about giving consumers the information they need to make an informed decision about products they buy – and he used the word “bunk!” to underscore his objection to that notion. We are advocates, he said, along with our clients, of their brands. We are advocates.

There’s a bit of the “so-what-else-is-new” to me, then, in Forrester’s recommendation that marketers re-brand “Managers” as “Advocates”, but fine; Perhaps what Forrester is sensing about the current state of brand marketing is an urgent need for advocacy given the amount of change that has occurred over the past thirty years, and given that in the violent tumble of new media brands are losing track of their audience and audiences are losing track of brands.

Online we are doing a lot to push the value of brands – media brands, that is – away. We seem to imagine that we can distinguish between the value of media brand relationships and consumer brand relationships. We think competing for brand advertising is desirable, but dependence on media brand relations in order to do so is not. That’s a significant disconnect. It implies that the context of things – and all brands are contextual – matters only part-time. Bunk! If the relationships that consumers have with particular media brands are irrelevant then the relationships they have with all brands are irrelevant. Also bunk, of course. Brand relationships matter. Context matters.

Context has simply improved and multiplied. Call it fragmentation. (Everyone else does.) The media world has fragmented. So what? The consumer products world has fragmented, too. I stood in line at Starbucks this morning. Fortunately, by the time I got to the register I was chatting with my wife on the mobile telephone and had her to walk me through the choices. The coffee business is fragmented. Who would have thought it could happen?

All of which is to say that Forrester may sense the urgent need for Brand Advocates in order to weave back together the fragmented pieces of their brands and brand relations. Happily, the media world is configured to help. It can segment reach against the normal Joes that just want coffee and the other Joes that want Grande Cappuccinos. And, it can do it in the context of those relationships.

A few more media brand advocates to join the consumer brand advocates and we should be good to go.

FTC decides on a double standard for citizen journalists

As widely reported (but mostly slept-through) the FTC issued guidelines on October 5th subjecting bloggers to endorsement and testimonial rules that are different from traditional media. The IAB and it’s CEO, Randall Rothenberg, responded today (see links below).

Rothenberg’s open letter to FTC Chairman on his clog, quotes the FTC report, which says:

…that bloggers may be subject to different disclosure requirements than reviewers in traditional media. In general, under usual circumstances, the Commission does not consider reviews published in traditional media (i.e., where a newspaper, magazine, or television or radio station with independent editorial responsibility assigns an employee to review various products or services as part of his or her official duties, and then publishes those reviews) to be sponsored advertising messages. Accordingly, such reviews are not “endorsements” within the meaning of the Guides…

Never mind the financial pressures that traditional media is under that might tempt them to say a few kinds words about their sponsors. We accept that the Captains of traditional journalistic integrity will go down with the ships without uttering a false endorsement. 

Double standards are just wrong, however, as Rothenberg and the IAB fairly point out.

Twitter your Congressman.

Randall Rothenberg’s Clog

IAB release.

Smaller ad units still punching above their weight

Near as I can figure out the half banner (234 x 60) and the rectangle (180 x 150) are the toughest kids on the block. For the second time in less than two months a reliable source has documented that the half banner and the rectangle yield substantially higher ad results than their peers.

First was Dynamic Logic, which issued a report in August showing the half banner and the rectangle as clear favorites. This week, Eyeblaster weighed-in with a study that showed the same thing.

The explanations and caveats varied in each case. Eyeblaster’s results suggested that for standard (boring) banners, big is simply better. Dynamic Logic emphasized that creative played a leading role in the success of the advertising, and Eyeblaster agreed.

I’m open to all explanations. But the numbers say, simply, that half banners and rectangles are the one-two punch of online ad creative.

Why? I reckon that if someone conducts a series of focus groups asking users to react to different ad size and formats online we’ll get our answer. And if I was the kind to bet on the fights I’d say it was because those units favor the experience of users online.

Good creative. Sensibly sized ad units.

Pow! Right in the kisser.

 

Eyeblaster Global Benchmark Report, 2009

Living in the real world

The Wall Street Journal ran a story yesterday about a certain kind of advertising fraud online wherein rogue publishers will fabricate impressions by launching numerous, invisible web pages in the background of a browser session that consumers will never see but that can translate into inflated costs to advertisers. Burst was mentioned in the story as being one of the ad representative firms giving shelter to one such rogue publisher, MyToursInfo.com. Obviously, we hate it when that happens, on every level. As small consolation we booted the offending publisher back in January about the time, it would appear, that Ben Edelman, the source for the Journal story, tied into them. [Not a coincidence, I was reminded since making this post, as it was Ben, in fact, who brought the MyToursInfo fraud to our attention.]

iMedia Connection picked up the Wall Street Journal story today with the headline “Publishers Duping advertisers with invisible ads”. Not far away was another story titled, “World’s largest click fraud ring shut down,” which met its end thanks to the efforts of the people at Anchor Intelligence, a traffic analytics firm used by companies, including Burst, to combat fraud.

We are reminded every day that the world can be a dangerous place. The advertising world is no exception. As reporter, Emily Steel, points out in the Wall Street Journal story, verification has been a problem for advertisers forever. Online, she notes, the universe of web publishers is so enormous it can be hard to keep track of every ad position in order to authenticate the number of impressions served. Offline, authenticating the size of an audience - print or broadcast - relies on third-party measurement services such as the Audit Bureau of Circulation (ABC) or Neilsen or Arbitron.

I used to explain to people when arguing in support of the increased accountability of the Internet versus traditional media how advertisers must take it on faith that so many trucks left the loading docks of so many printing plants to deliver so many copies of, say, the Wall Street Journal to so many hundreds of thousands of distribution outlets across an entire country by 6:00 a.m. Online, we just count impressions. I’ve made those earlier morning newspaper runs in the past while working at USA Today. It’s an immense proposition, I can tell you, with a mind-boggling number of moving parts. But, the world has lived with it long-enough to know that, on balance, it works. I’d say the same is true about counting impressions.

Except when fraud happens, as it did several years ago when executives at various newspaper companies were caught inflating circulation numbers, with severe consequences for many. Or, as it happened with a dorm-room full of Chinese college students perpetrating $3 million of click fraud. All bad, unhelpful stuff.

I could, perhaps, end this post now with a message to always be cautious and look both ways before crossing the street because the world can be a dangerous place.

But, I can’t. Sorry. The news that Chinese students have “wasted” $3 million, or that other unscrupulous types have launched  up to 40 invisible pages impressions, while a sad reminder of the corruption in the world, leaves me feeling that more needs to get reported. The truth is not entirely out.

The problems in our world do not come down to a room full of Chinese students, and/or others with a talent for writing nefarious Internet code. The problems in the newspaper world do not come down to circulation fraud.

Always there are conditions that lead to the crime. Frankly, verifying what gets delivered has only been a part of our problem, and perhaps the small part. Of greater importance has always been that media - old and new - has never been good at being able to verify who, exactly, is viewing or listening or reading or seeing an ad. Likewise, advertisers have never been especially good at explaining to each other what happened as a result of the advertising.

From this were conditions made ripe over the years for the Internet to lead the entire marketing industry astray with false promises of one-to-one, risk-free advertising – a bit of fiction that won’t go away and that continues to lead advertising, on and offline, in directions that consumers have been told to fear, now, jeopardizes their rights to privacy.

We should despair over every act of corruption and drum-out the perpetrators. In a side-by-side comparison with a dorm-room full of Chinese college students perpetrating click fraud, however, the notion that the advertising business can be one-to-one and risk-free is the greater treachery. The fakes, the common criminals, the joy-riders, the conscientious advertising banner-blocking objectors, are small potatoes to the mantle of denial that drapes over the broader marketing business today. It drives media buying agencies into the very ad network business they are suppose to fear as a way to make a decent buck. It drives CMOs out of office on average every 18 months. It reasons that consumers should “accept” advertising as a necessary evil (as if that will ever be a bargain worth accepting). It wastes billions of dollars in missed opportunities. And it places a premium on counting clicks and actions and other measures that are so easily pilfered.

Advertising must live in the real world. Occasionally, that means dealing with the abuses of the unscrupulous. At some point, it also has to mean dealing with reality.

Demand-side advertising networks: an issue of consideration.

 

Like the Internet needs another catch-phrase or buzzword (and I’m always the last to find out about the new ones) but, now, apparently, we have “Demand-side networks”, the description being applied to the businesses that are cropping-up within ad agencies that are intended to reclaim the buying territory lost to various ad networks.

Michael Zimbalist, of the New York Times Company, offers a thoughtful piece on the trend in Paid Content, holding the demand-side network model up to the light to look at from 360°. Is it a friend or foe to publishers? In Michael’s opinion, the answer depends on the extent to which demand-side networks move beyond the automated practices of performance marketing to champion audience targeting,  i.e., the right message in the right place at the right time.

Audience targeting, says Michael, implies that the media plan means a lot. (“At long last, audience truly becomes the basis for both planning and buying online,” he says). Performance marketing, by extension, means it does not. That’s an excellent distinction worth holding on to. And, in the context of understanding the future of demand-side networks, we must ask how the distinction is resolved inside media buying agencies where the role of demand-side networks might not weigh greatly – for now, or ever – on the importance of media planning.

I suppose the answer we’d get is “results.” Oh right; That. In which case, the value of demand-side networks will be pegged to performance because audience targeting and media planning are messy, cumbersome businesses highly dependent on – well – planning. They are expensive.

Expensive hurts. As Michael Zimbalist observes, agencies have struggled to buy online display profitably because there are too many suppliers. “But,” he notes, “agencies have woken up to the fact that even as they struggle to make online buying profitable, the ad networks are reaping huge operating margins. And they make these margins by doing essentially the same media planning work that agencies are supposed to be doing for their clients!” 

So, are demand-side networks likely to be good for publishers? Not especially, but that’s understandable because ad agencies don’t work for publishers, they work for advertisers.

The larger question is whether demand-side networks are likely to be good for advertisers. To the extent advertisers desire to regard the whole world through the pinhole of performance marketing, yes; demand-side networks – nearly any network – will be good for them. But the temptation, and perhaps danger, will be for agencies to squeeze as much media buying business through that pinhole in order to reap the financial rewards that have flowed to third-parties until now.

The Internet has become a proxy for performance and this is why: performance is cheaper to the advertiser and more lucrative to the buyer. Publishers have been only semi-conscious of the money that never makes it out the door and into their coffers. Agencies, now, are not.

Is it a problem? Only to the extent that the art of media planning will be a necessary instrument of success in a new media world, and that depends on whether the marketing world will continue to regard consideration as a strand in its DNA – consumer consideration; audience consideration; product consideration; finally, brand consideration. For where there is consideration there must also be planning.

The facts are clearly that the media landscape has fractured into countless bits and pieces. Ad Age’s Bob Garfield calls it chaos, but not me. As a consumer, I call it luxury. I call it wonderful and so does everyone I know that uses the Internet, especially my children.

Wonderful has always been at the end of the rainbow for marketers who until now have never tired of seeking those kinds of connections with audiences. Are demand-side networks selling wonderful? No. Like so much in advertising, they don’t believe in searching for pots of gold at the ends of rainbows these days even if their clients keep trying to bottle such notions and sell it to consumers with rainbow fragrance inside. Fanciful notions like that have been kicked-out of agencies by the grown-ups in Procurement. At this point, demand-side networks are about the best thing media agencies can come up with to save themselves. Who is going to blame them?

Fix agency comp and maybe wonderful happens once more. As a consumer, I’d like to see that in advertising again – and so would everybody I know.

Pride goeth before a fall: consumer magazines talk about building an ad network

According to Advertising Age, rival consumer magazine publishers are talking about working together to build an ad network in order to offer competitive reach compared to other ad networks.  Foremost in the minds of the publishers is the price of their inventory, which has been decimated by third-party ad networks, in their joint estimation. Now, they have determined, it’s time to circle the wagons.

Presumably, salespeople at each magazine would be allowed to sell across the ad network. Or, participants could be envisioning a dedicated network team apart from the rest with shared responsibility for sales. Or, they may be thinking of one person per sales force exclusively responsible for network sales. The parties may be looking at the Newspaper National Network (NNN) as a model, which has done reasonably well for its newspaper clients offline – albeit, as a stand-alone business. 

Whatever. The reality is this (and it bites): a horizontal consumer magazine ad network is the wrong model. Don’t do it.

Aside from the fact that magazine publishers, much as competitors in any other field group, have never shown themselves to be especially good colleagues and collaborators except when attending awards banquets, the horizontal network model will not protect them from brand erosion, the source of all value. If they propose to compete on reach, for performance, by selling across each other’s properties price will enter into it – and the price will be lower. If charging less on one’s own for one’s self can make one feel better, then we must come to terms with the fact that one is not protecting brand; one is protecting pride.

Pride in something has value. Pride for the sake of pride does not. And, today, in truth, there is altogether too much pride being confused for brand among major media companies.

Time to get over it.

A little competition is the thing to make everyone feel better and to support brand value. If magazines want to compete with ad networks they should, indeed, start their own, but they should be proprietary, vertical networks that sink deep roots under their brand promises and take aim at competitive brand properties, as always.

Horizontal generalizes. Vertical specifies. Brands are a set of specific promises, including media brands. If consumer magazines try to compete on reach they will compete on price, thus giving the market permission, effectively, to plan and buy accordingly. Under those circumstances, third-party horizontal ad networks will win. 

Don’t do it. Compete on brand and drill deeper into the proposition.

How? Build vertical brand networks by inviting independent web publishers to assemble under established media brands and sell down through those networks. Voilà, reach happens. Price will follow reach down, but for independent publishers anything above a $1.00 is a win. Bring them $5.00 cpms and they will slay dragons for the provider. Speak in admiring tones about their work and the admiration will cause them to shine. The shine will cast a glow on the market and, voilà - brand halos.

Right now, it’s apparently in the heads of people at consumer magazines that everyone will be judged better if they keep in the exclusive company of each other. For better or worse, snobs don’t really behave that way. Mostly, they conspire continuously to undermine their neighbors and gain the advantage, and this is how it will be with a consumer magazine network.

The status quo, relying on third-parties that are unaligned and unvested in the brand, is clearly no way forward. Consumer magazines are right to want to seek new partners. They would be wise to pick ones that desire them to be successful in the future and are willing to provide unconditional support.

Who is that going to be? It will be the have-nots, the wanna be’s, the aspiring and the yet-to-be-discovered - the Great Unwashed in the Internet wagon train heading west.

And…if you build it, they will come.

It’s just business. Or, is it?

Advertising Age reports on the game of musical chairs that has been taking place over the past 18 months among the top media buying agencies. According to the report, 10 of the top 14 companies in the space have swapped-out their CEO.

This is what comes of living in the real world. It wasn’t always thus for ad agencies. Before the era of leveraged buy-outs made consolidation possible, ad agencies were private companies owned by partners living in places like Connecticut. Now, they are public companies, most of them, and when times get tough the tough re-arrange the deck chairs.

Whither client relationships in all of this? I liked Phil Cowdell’s reported statement to boss Scott Neslund that he would only take-over Mindshare’s North American operations if he could do so as an “old-fashioned client man.” But what does that mean today? Do relationships matter? Matt Seiler at Universal McCann reportedly thinks it’s more complicated than that.

Maybe so, because the clients themselves, perhaps taking their cue from the itinerant nature of things on the agency side, are as prone to sweep the decks by changing one agency for another in costly account reviews.

Is it the business or is it simply business that has the agency world doing so much deck chair re-arranging? Is it the complex realities of the new media world, or the realities of the world, period? What problem is getting fixed by all these changes? Performance problems? In which case it’s being argued that among the top 14 companies in the media planning and buying industry 70% of the leadership was - well – not right for the times.

Really? Recessions have always taken their toll on the advertising and media business. Technology, on the other hand, while disruptive, has done nothing but help. Radio? Television? Very disruptive, but they helped make multi-millionaires out of the leading agency executives of the time.

Adaptation can be brutal. We are a full fifteen years into this Internet thing, however, and the conversation is still about how to make it work, meaning there is no evidence that adaptation is occurring at a faster rate today versus the past. Indeed, the IAB’s report on Internet spending for the first half of this year issued last week with Price Waterhouse Coopers indicates nearly 90% of media spending still occurs on the top 50 web properties.

How complicated is that? But, maybe, that’s the point of so much change at major buying companies. No more skimming the surface of the new media opportunity and hanging around the shallow end. Time to wade deep and really connect with the possibilities – starting at the top.

It which case, maybe the 70% overhaul leads somewhere. But, only if you believe it’s about the business, and not just about business.