Paywalls Don’t Determine the Difference Between Good and Bad Media

My understanding of the whole paywall issue isn’t that it’s so much about making subscription money as it is about reasserting the value of proprietary content to advertisers.

It has been widely discussed, here and elsewhere, that content is substantially free. The single copy price of a newspaper doesn’t approach the cost of printing that copy. TV is free if I want it that way, but I choose to pay a cable provider for access to hundreds of channels, most of which don’t share in the subscription proceeds. As for the other channels, I’m paying for them, I suppose, in the same way I’m paying for all the Internet content I get as a consequence of the cost of my connectivity. The market generally regards that content as free, and I agree.  I pay Verizon. Frankly, I don’t know what they do with the money. I assume they keep as much as they can.

Paywalls aren’t going to change that math, overall. So I don’t think Paul Hayes, Managing Director of Commercial operations (effectively, ad sales) at News International, should be as concerned as he was at the Haymarket Brand Media “Big Media Debate” in the U.K. this week, when he said his neck was on the line if internet paywalls fail. According to the story in Media Week, Hayes said “If the [paywall] doesn’t work then I’m in the shit;” adding, “I think if it doesn’t work we face a future of less good media.”

That won’t happen. The paywall experiment may fail, but “good media” won’t fail with it – at least, not because of collapsing paywalls. All the so-called paying-for-content in the world isn’t doing enough to sustain its beneficiaries, anyway, yet we are awash in media, “good” and otherwise. Yes, traditional media business is “in the shit”; but it’s not because subscription prices fell off. It’s because people walked off for greener new media pastures and advertising has gone progressively with them.

Erecting paywalls is about fixing advertising for traditional media players online, which is probably why Paul Hayes is the supposed author of the plan at News International. Paywalls make money by trying to establish the higher advertising value of content for which people will “pay” versus content for which people will not. If paywalls fail, however, I guarantee you “good media” won’t fail with them. Paying for content is not a pre-condition of “good media”.

Ultimately, only the quality of an audience determines what is good or bad media, and while I may be an ungrateful wretch toward what I consider to be “good media”, it’s not my opinion that I pay for any of it. As such, please don’t blame Paul Hayes if paywalls don’t work.

Is the Algorithm the New Media Decision Maker?

 Greg Hills wrote a very thoughtful piece over at AdExchanger titled, “The Algorithm Is the New Decision Maker: Communicating with the New Demand Side.”

Of course, the title makes my skin crawl, as does Greg’s statement that the “relationship driven world of advertising is being replaced by the data driven world of advertising.”

Data has always played a critical role in advertising and the availability of new types of data today – “real-time” or otherwise – makes for exciting advances in the science of our business. But, advertising is still a relationship business, and I don’t mean media sales relationships, which Greg is really describing, I mean brand relationships. Brands are still about relationships.

The underlying question asked by Greg Hills, therefore, and anyone else that would postulate the end of advertising relationships, is the extent to which media sales relationships are important to consumer brand relationships.

Are they?

I think Greg says two things about this. First he says, no, they are not important insofar as the performance of advertising (which could mean anything, of course) can be measured and replicated today by machine algorithm. Sales relationships don’t have to enter into it. Second, he says, it doesn’t matter; there are not enough planning resources to harvest media sales relationships anyway. The value of media sales relationships has drowned under the tidal surge of new media.

As usual, I dispute relying exclusively on sales-by-media-vehicle to make media decisions. On the one hand, media can be 100% accountable for having an audience, but not for how the audience behaves towards advertising. On the other hand, advertising that succeeds can be ruined by products that do not – in which case, keeping customers means replacing smart and experienced ones with dumb and inexperienced ones, or changing the product offer (the escape hatch of all performance-driven advertising). Media algorithms can deliver that sort of media compromise, but media “performance” it is not – at least, not where desirable brand relationships are concerned.

Which is the scary thing about Greg’s second – better – point that media sales relationships have drowned under the tide of new media: there is too much new media and not enough media planning to go around.

Oh woe. It is true. And, yet, not too long ago media was to be the new creative – by definition, bold and imaginative – driven by a desire for deeper relationships between consumers and brands.

Whither that? Now what? Greg Hills proposes a short cut: performance algorithms. It’s cheaper and easier than ferreting out creative media advantages for clients, evaluating by hand the media nuances that are visible to people, but invisible to machines. What sort of nuances? The sort that exist between soaps, or cereals, or airlines, or credit cards. The sort that separates a Sunkist from an orange. They are thin things, but expensive.

There is an advertising spectrum that is visible only to the naked eye of a person. Brands are protected by this spectrum. It is their ozone layer. This is where the hard work of media planning needs to depend on media relationships, the outcome being consumer brand relationships. The Internet is a crucial new source of this spectrum, divided into tens of thousands of thin slices in which to carefully pack and ship our brand relationships through advertising.

Ad agencies need more media people to do the job, not fewer. We need capacity for more relationships, not less. To do that we need to fix agency compensation, remembering that thin things wear out, easily.

What’s the Best Thing About the Internet in the last 15 Years? The Onion.

Meeting with PR people this morning (Kel & Partners…great team) someone asked what was the best thing to result from the Internet market over the past 15 years. My answer was paid search, which characterized the opportunity online for what it is now and will be in the future: the chance to feature the right message in precisely the right place at precisely the right time.

Second question, of course: what was the worst thing to result from the Internet over the past 15 years. My answer was the fact that the market was co-opted at the start by technologists and financial opportunists that postured advertising was broken and they were born to fix it, the effect of which over the long-term has been – well – exactly as reported in a piece that Online Media’s “Around the Net” spotted in The Onion today titled, “New Social Networking Site Changing The Way Oh, Christ, Forget It.”

From New York, The Onion’s reporter writes:

NEW YORK—While millions of young, tech-savvy professionals already use services like Facebook and Twitter to keep in constant touch with friends, a new social networking platform called Foursquare has recently taken the oh, fucking hell, can’t some other desperate news outlet cover this crap instead?

Explaining, the reporter adds:

By “checking in,” users can earn tangible, real-world rewards. For instance, the Foursquare user with the most points at any given venue earns the designation of “mayor” and can receive discounts, free food, or other prizes that, quite honestly, we’re thoroughly disgusted with ourselves for having actually researched.

In addition, please, kill us already.

You have to love honest reporting. Likewise, truth in advertising. Maybe the best thing to result from the Internet in the first 15 years is The Onion.

Content, Content Everywhere And Not a Drop to Drink? Yahoo Buys Associated Content.

Yahoo! has bought Associated Content (ADOTAS says for a $90 million, which is information it pulled from Tech Crunch), giving it 350,000 freelance writers that gin-up stories from “neighborhoods” across the country, according to the story in the Wall Street Journal. The move is clearly aimed at Aol.’s content-assembly-line initiative which plans to roll-out stories based on search algorithms.

Polite Internet society would have us regard the content mill phenomenon as democratic: thousands of freelance journalists with keyboards at the ready to do the informational bidding of the masses. Except that if democracy has proven anything over the years it’s that people aren’t that naive. Content milling is about the advertising. People be damned.

The Internet already spill-eth over with the authentic voice of the people. It doesn’t need the help or contempt of a bunch of media industrialists. Nor does advertising which must – must –  in order to bear fruit, be planted in authentic conditions.

Authenticity is food to advertising, and advertising’s roots are starved already by the factory farming and overcrowding of traditional media.

We’ve moved on. It’s not about content factories any more. It’s about small gardens in the yard. Home grown. No fillers.

Read the box.

After Two Weeks With The iPad 3G, It May Be Time for Redecorating. Good-Bye Computer Room.

 

There is room on the second floor of our house that would be great for napping. I love this room. It’s small with floor to ceiling bookshelves on two walls and two windows on another that look out to the backyard. We live in an old New England antique and one of the windows is at floor level. If you had a comfy chair or ottoman, or even a daybed running alongside that window, and if it were raining outside or, in the winter, snowing, the combination would surely make it nap time Sunday afternoons.  

I was thinking these thoughts again this morning standing in the doorway of the room brushing my teeth. Where my daybed should be is the long table with our desktop computer on it. Where the ottoman or comfy chair should be are the shredder and ink jet printer. Cables and cords and surge protectors are everywhere. Instead of books, the bookshelf at one end holds printer paper and user manuals. Nap Room, I’m afraid, is the Computer Room.

But maybe not for long. Right on schedule I took delivery of the new iPad with Wi-Fi and 3G direct from Apple. Two weeks later I’m thinking we don’t need a Computer Room anymore. We have a lap top downstairs that moves around from one surface to another in the kitchen. It matches the color of the cabinets. Our banking is mostly done on that device these days, as is my wife’s email, movie tickets, and other communications with the outside world not requiring a telephone. Really, the upstairs computer is increasingly marginalized. Now, I’m thinking (while brushing), we have an iPad connected to our wireless network that is versatile and highly portable. It can do most of the things the computers can do, even download movies instantly which we can then watch through the television in the Family Room using the handy VGA adapter. Best of all I can read books and magazines on it, falling asleep as I would anyway, while napping.

New media is getting better all the time.

Dump on Ad Networks Day

It was Dump on Ad Networks Day this week at Digital Hollywood, according to reports in Media Post that were picked-up in the IAB’s subscription to SmartBrief. A panel at the show on branded media marketing reportedly jumped on networks for various value infractions. Panelist Jim Heckman, CEO and Founder of 5to1.com, but formerly of Fox Interactive, said that ad networks trade in remnant inventory which “denigrates the brand.”

Anyone expecting a vigorous defense of ad networks in this space will be disappointed. Burst Media has led an uncomfortable existence as a member of the ad network community working substantially in the Long Tail of the Internet where it can act as a primary, not secondary seller of advertising inventory and keep a promise to offer complete, site-by-site, transparent reporting. This requirement – post-campaign, site-by-site reporting – has kept us largely out of the branded publisher space where lack of site-by-site disclosure is the fail-safe device in the uneasy relationship between ad networks and publishers with a salesforce. Disclosure is as much a rule for publishers as it is for advertisers that wish to work with our legacy Burst Network. Publishers must allow us to disclose our business on their site, pre and post- campaign, which means most of the top 100 comScore web sites, the ones that Adify research has documented account for 84% of the inventory of the 10 biggest ad networks, say no thanks.

So, we don’t get too defensive about the mean things that get said about ad networks on panels and in the receptions areas of ad agencies. To the contrary, as far as we’re concerned, it’s all true.

But don’t blame the ad networks. I don’t believe most of the claims of major publishers that have said they don’t work with networks anymore, but if publishers want to fix their value problems that will be the answer. Stop working with all the networks. Stop dumping off the inventory in every direction. Of course, publishers will still need a remnant solution – all businesses have remnant solutions – and it strikes me that exchanges have a capable answer for that combined with the DSPs that are white-labeling most of the in-house networks for ad agencies. Remnant inventory that finds its way into those pipelines is subject to controls that ought to at least make the sales channel conflicts apparent to the publishers. Alternatively, pick an exclusive remnant ad network provider and make it a partnership. Frankly, the audience duplication that currently exists in the market as a result of ad networks (and DSPs be warned) all piling-on the top 100 comScore sites is scandalous. Brands are being deprived of differentiated media strategies. Which means it’s all up to the creative online. 

Great…whither media as the “new creative?”

The ad network business – such as we choose to complain about it – evolved in response to market needs. Markets are perfect that way. Let’s get over it. Markets are constantly changing and today’s market has decided it’s weary of certain ad networks for probably all the right reasons, beginning with the presence of more advertising dollars, which makes both publishers and ad agencies more confident about their prospects. Supply and demand. Presto, change-O. Let’s get over that too.

Be happy, like Jim Heckman who sees the enduring, value-driven outcome that results from people in the media business at work, “on Madison Ave. With cocktails.”

Adify’s Russ Fradin Reacts to the OPA’s Recent Anti-Ad Network Research

Good comments from Russ Fradin, CEO of Adify, in Ad Age re: the latest study from the OPA trying to bite off the (ad network) hand that feeds it. Per research from Adify that has been mentioned in this space before, 85% of the inventory in the top 20 ad networks comes from the top 100 comScore web sites, which includes many of the OPA’s principal members. The OPA could save a bundle on research if its members would stop selling discounted space to anonymous third-party vendors with whom they then have to compete.  

We align with the thoughts of Russ Fradin and Adify in this case, and are happy to reprint his Ad Age piece as an industry service: 

Posted by Russ Fradin on 05.03.10 @ 04:39 PM

Last week’s study from the Online Publishers Association said ad networks have no positive impact on branding metrics and suggested that ads on premium content sites are better buys for brands. While picking on ad networks isn’t a new practice, what makes this study misleading is that there is no clear and accepted definition for what constitutes “premium” inventory. To take it a step further, is choosing between premium (as the OPA defines it) and ad networks even the right debate to have?

First, the premium distinction in this industry is inconsistent. To us, premium ad inventory is about the quality of the inventory available for a particular brand, not about the top 100 branded site content. In the OPA study, ad networks are defined as “aggregators and sellers of non-premium ad inventory, typically across small- to medium-size third-party sites.” However, there seems to be something hypocritical about that definition. OPA sites — premium content sites — are the largest contributors of inventory to the ad networks. Like we’ve said before, almost 85% of the inventory in the top 20 ad networks comes from the ComScore top 100 (source: Adify Market Maps).

It’s no surprise that content sites selling their own premium ad inventory garner higher awareness, association, favorability and purchase intent for advertisers. After all, the content sites have the first selection of the ad inventory to sell. It’s only after the primary sales teams’ contextually targeted campaigns have reserved the highest quality inventory that the remaining unsold inventory becomes available for portals and ad networks to sell.

Premium sites sell inventory to ad networks every day. Whether or not publishers and advertisers define that inventory as “premium” is up to them. Moreover, that definition almost doesn’t matter. What’s premium to one advertiser might be insignificant to another.

The smartest ad buys marketers can make are when they find the best possible inventory that matches their campaign objectives. It’s about finding them where they’re engaged and the context is relevant. It’s not about whether it can be labeled “premium,” and it’s not even about ad networks. It’s about finding your niche and making it easy for potential customers to find you.

We don’t disagree with everything the OPA study says. For instance, it does prove one important aspect of this debate — site environment matters. Publishers recognize that contextual ad targeting is king, even above audience metrics (demographic, geography, etc.). It’s for this reason that publishers often sell their highly relevant content advertising through a direct sales team at a higher CPM and with better impact and performance.

Pitting content sites and ad networks against one another is not the right fight to pick. What matters is what’s the best inventory for your brand — where your advertising will reach the desired audience when they are passionately engaged with the content — not who sells it to you.

Martin Nisenholtz gives the keynote to Wharton’s Future of Publishing Conference: It’s About Engagement (with the Outside World)

Paid Content carried the keynote speech (“The Importance of Engagement”) given by Martin Nisenholtz, SVP for Digital at The New York Times Company, at the Wharton School of Business’s Future of Publishing conference at the end of last week. At The Times, Nisenholtz has had a wonderful vantage point from which to assess the rise of digital new media, and has shown extraordinary touch offering leadership to one of the vanguards of traditional media.  The Wharton keynote is a speech about building emotional connections with audiences and the “good news,” Nisenholtz says, “is that we’re finally pushing harder in this direction at The New York Times.”

Interestingly, The Times strategy seems to be leaning heavily on Facebook for help with many of those connections. Many companies are. Mark Cuban postulated recently that Facebook is the new Internet, the “portal” (if you will) through which people are engaging with the place and with each other. J. C. Herz (once of The New York Times) averred that notion of engagement in an article for The Industry Standard I read many years ago when she wrote, “The richness and complexity of an online experience, like the richness and complexity of a city, is created by the people who live there as they engage with the place and each other.”  If all your time is spent engaging through Facebook, as it appears Mark Cuban’s is, then certainly the Internet experience will look like Facebook. I’m not so sure it stops there, however.

Whatever, the engagement notion is clearly recognizable to The New York Times which is pushing harder in direction of a people driven-media world. I don’t know if Ms. Herz was thinking about her alma mater, The Times, when she wrote in the same piece for The Industry Standard that “Media companies are locked in a many-to-many world…creating inward facing social structures around their products,” but it sounds like Martin and team are chipping away at that structure.  Says he, in his speech:

“The idea of users helping users is fundamental to the DNA of the web. Tim Berners-Lee wrote the worldwide web protocols, in part, so that scientists could link to one another, communicate with one another and help one another.” 

And he continues:

“I’ve always thought that among our most leverageable assets is our audience…But here, I’m referring to our audience as knowledgeable participants in the life our web site. This creates the essential emotional bond that will lead to real engagement in an interactive setting.”

There is still a hint of a fear in all that of the outside world. Indeed, engagement is “the essential moat around which our defenses are based”, Nisenholtz says at the outset. And there is the matter of pay walls which will go up next year.

We are avowed “network” people here at Burst – not, as in, “ad networks,” which conjure a soulless view of new media; but, as in, “personal networks,” which is the network of me, vs. the network of you. We are in that network business - sharing, engaged and user-driven. Facebook offers a snapshot of that world one user page to the next, but it’s still Facebook and still on the reservation. In the outside world, however, users are building and demolishing personal networks the same way, by engaging with the place and with each other. And of that, perhaps – of the outside world as competition – there is still a hint of fear at The New York Times.

Maybe not for long. Closing out his keynote, Martin Nisenholtz says,

“The fundamental idea behind our APIs is not that we should give away our content for free. But that regardless of whatever business rules we choose to establish, we allow users to adapt our information in this “liquid, public, shared” way.

“This is the essential truth of digital media. As publishers we haven’t fully figured it out yet, but it is another critical element of engagement.  There is a huge multiplier effect in open networks that we still need to capture.”

Next week: what the huge multiplier effect in open networks means to advertisers.