An iTunes for magazines?

Magazine publishers may now be looking at the iTunes model, which has been so successful at connecting with consumers on a paying basis, for help with the digital future. Thanks to the MediaBistro.com Daily Media News Feed, we are alerted to stories in the New York Observer and The Wrap (which has a nice summary of a few notable paid content initiatives out there right now) about the efforts of former Time Inc-er, John Squires, to rally magazine publishing companies to a new, sustainable, digital model.  iTunes is discussed in both places as the progenitor of what may result from such a collaboration. Whatever evolves, John Squires is quoted as saying in The New York Observer, “With magazines, the form has to change.” It appears he is out to re-design magazines for a digital world.

The iTunes model will not do that for him on its own. iTunes has been wonderfully liberating to consumers not because songs only cost 99 cents, but because once upon a time in order to own a song it cost $14.00 for the CD or album. It wasn’t that consumers were unwilling to pay $14.00 for the one song they craved on an album, it was that it came with so many other songs for which they had no craving at all. CDs took a convenient step forward vs. albums by introducing advanced programmability – specifically, the ability to search for and play a desired song, skipping over the rest without having to get up and move the needle forward or back on a spinning turntable.  iTunes took it to the next level, making it possible to buy songs one at a time, with even more programmability.

This is not a remedy offering much hope to magazines. Fortunately, John Squires may understand that, at least per The Observer piece where he says, “Unlike books and music, I think [for magazines] it involves designing a new product in order for it to be something that consumers really love.”

What do consumers really love about magazines? They love discovery. Magazines delight readers with the unexpected things, which may be why it is so hard to translate the business opportunity into a cost-per-pleasing-new-fact-or-insight. The very thing that makes magazines innately desirable is the thing that is hard to put a price on. It is, in fact, all the “other stuff”, in contrast to what users sought on albums and CDs.

What is the price of this sort of serendipity? How does one bottle it in a digital world where there is so little peripheral vision – where it is all sharp angles and edges, and pointless searches down one rabbit hole after another?

People don’t pay for content. Perhaps this is why: it is not content they are buying. It is experience. It is the pleasing discovery of things they did not know they wanted to know, connected usually to their interests at heart. We will pay for personal enrichment. No wonder it appears the interest-based magazines that come into our house are thriving, but the general-interest based magazines we see elsewhere are not. Where our interests lie, so does our desire to be led (and our willingness to pay).

This means a struggle for all those magazines and – especially – newspapers that would charge for content online. And for magazines, John Squires says, “the form has to change.”

That should be interesting.

Aol.

The new Aol mark featuring lower case “o” and “l” and a dot at the end does a nice job of cracking open the brand for a new look. Watch the teaser spot first and then read the interview with Tim Armstrong at Paid Content.

Rep. Boucher promises to cast a wider net on the issue of consumer privacy

As reported in the Wall Street Journal, we should be encouraged that privacy hearings today in front of the House Subcommittee on Communications, Technology and the Internet will take into account the uses of consumer data not just online, but offline. According to the report by Emily Steel, Subcommittee Chairman, Rep. Rick Boucher (D., VA) has promised a broader inquiry. “A number of parties have suggested it would be appropriate to extend these privacy rights as a consumer protection to the offline side as well,” The Journal quotes him saying.

Hear, hear.

Aside from the fairness issues that get addressed by casting a wider net, it will certainly invite many more voices into the fray that might have been standing back in the shadows half hoping (who are we kidding – fully hoping) that the Internet would get cut-off at the knees. Better competition through regulation. The Internet fell silent on the issue of privacy after the Internet bubble in 2001/2002 and now it struggles to sound credible when it opens its mouth. Some of the other voices that have been using, say, in-store purchase data over the years might help bring much needed weight and perspective to the discussion.

Politics and issue advocacy groups, charitable organizations, and the like, should also be folded into the conversation. I go back to my evening call from Mitt Romney during the Presidential race last year. The need for advocates and candidates to reach voters with their messages is an honest requirement of a free and open society, even if voters don’t want to listen (like me, hanging-up the telephone on poor Mitt). What separates this truth from the commerical interests of marketers, likewise at work in a free and open society? Money? It all runs on money. If privacy counts it ought to count, period.  

Privacy is for all. One and all.

An ad agency grown-up weighs-in on changes needed to the procurement process

Good interview with Tara Comonte in Ad Age today. Tara is the COO/CFO of Mediabrands and especially well-qualified, therefore, to talk about changes needed in agency compensation models.

Sober and thought-provoking.

The fight for the future of marketing spills out onto the streets

Further to Ad Age Editor, Jonah Bloom’s, remarks to the ANA last week about the current role of procurement in the marketing industry, the IAB’s CEO, Randall Rothenberg, has published a comprehensive review of how we got here, to the point where as an industry we are convulsed by the question, “Is Marketing a Strategic Resource or a Procured Commodity.”.

Back at Ad Age, Jeff Jones, a partner at ad agency McKinney chimes in on the need for marketing leadership. Says Mr. Jones:

“I’m frustrated by marketing being so misunderstood by so many, and I’m tired of reading articles placing all of the responsibility on the CMO.”

We should regard each of these items as part of the same awakening: marketing cannot be allowed to hit bottom. Within a consumer-driven world, marketing must have purview to engage consumers in a way that builds trust with consumers – which can mean something very different from using marketing for results in the short-term. 

Ad Age Editor, Jonah Bloom, places his hand on the third rail of procurement

You have to respect any editor that wades into a controversy up to his hips in front of an audience that may be hostile. Hats off to Jonah Bloom, Editor of Ad Age, for raising the possibility that the role of procurement has gone too far in grinding down ad agency compensation in front of the Association of National Advertisers’ (ANA) Annual meeting in Phoenix this week (see link below).

Of course, the audience might not be as hostile as one thinks. It is, after all, composed mostly of the Chief Marketing Officers and other marketing executives at the country’s leading brand marketers, and the attrition of trust and resources over the past 20 years has affected them, particularly.

I won’t bother to look it up right now for it is known generally anyway: the average tenure of a CMO today is – well – stupid short. I imagine, in fact, that if the video had panned the audience during Jonah’s remarks, you might have seen many a tough marketing man or woman discreetly dabbing away the tears of emotion and relief.

It’s okay, everybody. Let it out. It’s time.

http://link.brightcove.com/services/link/bcpid1370868150/bctid50051848001

The Rise of the Audience Marketplace

The high-level disconnect in our conversation about online media and advertising – now in its 14th or 15th year – remains the notion that positioning matters to consumer brands but not consumer media.

Eric Picard’s thoughtful piece in iMedia today puts this on display again in his recounting of a panel discussion titled, “The Rise of the Audience Marketplace,” at ad:tech in New York a week ago. During the panel, participant Quentin George, Chief Digital Officer at Mediabrands, reportedly observed:

 ”In a world with such massive overcapacity, the only way for companies to differentiate and capture a disproportionate share of dollars is through building a brand.”

This was a very sensible assertion. Hold that thought.

The panel discussion then veered into talk about media planning and buying online with a great deal said about the rise of new buying solutions such as IPG’s Cadreon and Publicis Groupe’s VivaKi. These fall under the heading of demand-side buying systems, discussed in a recent post to this space.

Demand-side buying systems are energizing media buying companies with a renewed sense of empowerment. There is no harm in this. It represents a transfer of power from certain horizontal networks that have been conducting business this way online for a few years, and keeping the money. Now, the media agencies get to keep the money. The industry needs media agencies (all ad agencies) to feel energized and empowered, so to the extent that certain amounts of planning and buying can be conducted through demand-side agencies, there is no harm in this. Perhaps it will serve as a catalyst to help fix agency comp so that life can continue on a transparent basis ultimately favorable and necessary to marketers.

I digress.

In the midst of the panel’s enthusiasm it sounds like Bill Demas of Turn got up the nerve to suggest that most of the inventory wafting through the demand-side buying systems is non-premium inventory (much as it has always been through the horizontal networks) and that premium inventory is still making it to market thanks to human sales forces and their interactions with human media planners and buyers.

From Eric Picard’s recounting it then sounds like Bill Demas’s observations disappeared quickly under a pile of demand-side enthusiasts. Fellow panelists pointed-out that the idea of premium inventory is a relative concept. Brands care about quality content, but the quality of the audience is not measured by this alone. Basically, quality does not depend upon context.

This is the important question of our day: is the quality of an audience shaped by the context of its media environment.

Back to Quentin George who was on the panel. As he did, marketers will insist - with every justification – that brands matter, and the more complex the environment, the more imperative the need for brand. Brands differentiate.

What does that mean? It means context. Context is the differentiating agent. Context determines meaning. It is everything to brands. It says so clearly in the dictionary (from Answers.com):

con-text

 

n.

[Middle English, composition, from Latin contextus, from past participle of contexere, to join together : com-, com- + texere, to weave.]

1. The part of a text or statement that surrounds a particular word or passage and determines its meaning.
2. The circumstances in which an event occurs; a setting.

Brands are about meaning and circumstance. If they are not, then soap is soap. A car need only be black, as Mr. Ford would have had it, and get a traveler from point A to point B.  One smoke would be as good as another. Brands need positioning.

Yes, brands can certainly exist out of context for periods of time, like I can swim under water or a fish can flap on the ground. I use brands all the time unconsciously. But there are no unconscious brand champions and brand loyalists and there are no automated brands. In my house you will get one kind of vodka, which is an otherwise orderless, tasteless, neutral spirit with one purpose that can be met by any run-of-network vodka that will be (fall-down-drunk, for fall-down-drunk) cheaper. Yet, I am loyal to one brand. Go figure. 

Let’s be frank: really, the question is about money. The world is trying to impose cheap on marketing and context is not cheap. Neither are brands. Our world is hung-up on this problem and we know it. It is a dis-connect if ever there were one.

Truthfully, if there were enough great advertising creative in the world brands might be able to survive out of context. If every ad were brilliant, touching, funny, compelling – even simply polite – advertising could, perhaps, live and breath outside of a naturally supportive, media environment. We are not so fortunate. Advertising is hard. Great advertising is really hard. 

As we continue to bang around the miriad opportunities with which the Internet presents us in order to target our best customers let’s remember the obvious one, present from the beginning, the one that aligns us most with consumers, the one that made Google particularly rich: context. I don’t notice anyone else getting as rich as Google (or Google as rich from anything else).

The only thing I notice is the European Union and the FTC getting ready to drop a safe on our head. Then what?

Rupert Murdoch’s serious Internet strategy

It’s not all sour grapes that has Rupert Murdoch suggesting News Corp will eventually pull its content out of Google once it converts users to a paying basis. Listening to the interview with Sky News political editor, David Speers, in which Murdoch laid-out his plan to withdraw News Corp content to within paying boundaries, Murdoch makes clear that it’s all about getting serious online.

Murdoch observes that very few (actually, he says, “no web sites anywhere in the world”) make serious money. Likewise, he observes that “search people” – i.e., visitors to News Corp content that arrive by search engine – are not loyal readers of content. Ergo, they are not serious.

Therein may lay the calculation Murdoch and News Corp are doing in connection with their strategy to get consumers to pay for content and, then, deny access to all the non-paying transient onlookers who come courtesy of Google. The strategy advocates a retreat to defensible, higher value positions. As everyone has freely (no pun) pointed out it means much smaller audiences. But Murdoch’s comments suggest that News Corp has taken this into account and it doesn’t care. What have big audiences and an over-abundance of inventory given to the world but ad networks and lower prices? It’s time to get serious. It’s time to get back to business.

The issue of “serious money” is an important one. It has confounded traditional media companies online since the beginning. Plenty of money flows through plenty of big web sites, but the end results in terms of profitability have been underwhelming, certainly in Murdoch’s view. For many of the Internet’s largest players it has been equally disheartening to ponder a future full of exertions to grow traffic by relying on competitive third-parties, while struggling to raise advertising prices in an ocean of inventory. As Murdoch asserts, there is not enough advertising to go around for any web site to make serious money.

There are two ways to chase after serious money as a publisher, however, and one of them is to be small. Having tried big, Murdoch may be coming to terms with the alternative.

The media world has been addicted to “big” for years. Big has meant serious money thanks to advertising. But, that hasn’t translated online where smaller, independent publishers capable of generating $1 million per year in revenue out of a spare office thrive, while large publishers huffing and puffing to do 50x – 75x that amount feel unfulfilled.

Online there is, in fact, plenty of advertising to go around allowing many, many publishers to feel like they are making serious money. The Internet landscape is dominated by those publishers, and collectively they are changing the rules, agreeing to work for lower prices and agreeing to be positively delighted with sales results that wouldn’t keep News Corp in corporate jet fuel for a week.

At the same time the advertising community is slowly, but surely, shedding its own dependence on big. Ad networks have left one positive impression, which is that it is possible to aggregate many sites online for less and see results that are equal to or better than what $30 CPMs on big sites may have delivered. The taste left by some ad network experiences was bitter, but the implications of a freer, more open, and more targeted market have broken-through.

Most publishers couldn’t survive without Google and other search engines to direct people to their web sites; nor could most Internet users, which should assure the market of free and open access to search engines of one sort or another for many years to come. News Corp, however, has considerable resources of its own to drive traffic to it web properties. It may not be the sort of traffic that earns it a top 10 or even top 20 position among its peers, but perhaps they’ve stopped caring. Perhaps big isn’t quite so important in their calculations anymore. Having experienced the tiresome affects of being big online perhaps Murdoch is getting serious about Internet strategy.

And he may be right. Seriously.

The EU has its finger on the Internet privacy button, which threatens to turn out the lights on European web publishers

In case it has escaped anyone’s attention, the European Union is dangling the online advertising industry outside a window and threatening to drop it on its head over the issue of privacy (ClickZ, 11-06-09; Ad Age, 11-05-09.)

Incited by bad behavior at Phorm and BT, which evidently collaborated on unannounced ad targeting tests relying on the more detailed user data available through BT’s ISP business (not very helpful), the EU is taking legal action against the UK in order to compel it to impose tougher privacy standards. In the meantime, the EU is advancing legislation through its parliament that amounts to an opt-in requirement for all tracking cookies, which are the things that make the world go around for advertisers and publishers online. If the EU succeeds with that legislation the world will end at the English Channel and European web publishers will find it hard to attract the advertising that is important to sustaining their web sites.

That should be a matter of some concern to the EU parliament. Are not the voices of probably hundreds of thousands of European web publishers meaningful to the debate? Not all of those publishers – perhaps very few of them – are in it to make beaucoup amounts of money. But the money doesn’t hurt when there are provider bills to pay, and family objections to overcome that result from many hours at the computer composing thoughtful web sites and blogs. An evening or two out for dinner, a new automobile, a school tuition paid, always help to quell dissent among an artist’s inner circle of dependents and care-givers.

Never mind the taxes and the votes that go missing when commerce is affected. We recognize this is the EU we’re talking about and that taxes and votes might not be the drivers they are in the rest of the Western world. Still, there is the matter of the artistic freedom and the ability of a huge segment of the Internet’s publishing fabric to survive that should be considered. What will happen to all those voices? How will Europe be represented in a post-apocalyptic, post-cookie world of its own making? What of our Global Village, which benefits from so many connections online and seems especially relevant to the very notion of a “European Union” in the world?

Online advertising in the U.S. is targeted to the U.S. and it represents most of the advertising in the world. If the EU goes dark online tomorrow many global marketers will be affected, but in those EU places only. North American web publishers will prosper. Global web providers such as Google and Yahoo! will be inconvenienced, but they can choose over the years whether to pass or play in the EU depending on whether they can make a living.

The fastest growing markets in the world are in the east. So far, China is not proposing to choke web publishers in that part of the world with draconian privacy measures. It has different problems, the solutions to which – involving more publishing freedom – work towards a positive future for marketers and publishers. Not so EU policies, which work against the future of publishers.

It may come to pass, therefore, that web publishers in three-quarters of the world will eventually speak for all of it, including the one quarter left out in Europe. Any government’s instinct to protect its people is understandable and desirable – including on the matter of Internet privacy – but the EU should carefully consider the extent to which such uncompromising privacy legislation will deprive its constituents of a voice in the New Information era by depriving its enablers, the web publishers, the commercial means to make it heard.

Hitting the marketing reset button

It’s a very good sign to see more chatter about the need for senior marketers to re-assert the strategic value of marketing inside organizations, which is the point of Scott Davis’s piece in Ad Age.

It boils down to trust.