CBS Interactive steps out of the ad network buffet line

CBS Interactive will reportedly announce that it is dispensing with most ad networks today according to a report in Ad Age. Excellent. If they stick with it, it means another blow struck in favor of selling value online.

The formula used with such success by many ad networks over the last few years has been selling discounted space on the top 100 – 200 web sites, like those owned by CBS Interactive. The sales pretense has been rescuing excess inventory and leveraging data, which is balderdash. For buyers, it’s been about price. The importance of where the advertising runs has existed alongside the importance of who the audience reaches, unabated, and networks have provided plentiful access to those preferred places. If it were otherwise, the tension between networks and large publishers would not exist as, indeed, it does not exist in the mid- and long-tail of the market where ad networks and representative firms succeed in creating value, not discounting it.

For help understanding the not-so-hidden forces at work it will be interesting to see what happens with CBS Interactive’s replacement strategy, which is its internal ad platform, Madison (a very cool name). If the same discounted opportunities continue to exist through Madison then CBS Interactive will start fighting with itself instead of third-party networks. In the final analysis it doesn’t matter who sells it; it matters only what it sells for. So they should proceed carefully, because internal fights are far more destructive to a host than fights with third-parties.

We should expect a surging fourth quarter to embolden others besides CBS Interactive to see the glass half full again. Then what? Whither all the business plans that have been counting on ad network models to pig out at the buffet?

Cory Treffiletti peeks behind the demand-side network curtain

Veteran OnlineSpin(er) Cory Treffiletti proves he is no Internet lap dog with his column today about demand-side networks, asking important questions about the ad network model that is emerging in-house at ad agenices.

I think he’s right of course: it’s about the money, not the media. And, as it’s been said in this space before, who can blame agencies for identifying with a financial formula that has paid huge dividends to some third-party networks while agencies have tried to stay warm, huddled over an ember fire.

Fix agency comp. Preserve media planning transparency.

Carol Bartz is coming to terms with the Internet’s past and future

Carol Bartz is making a pretty quick study of the Internet’s past (and future?). In quotes that appeared in Ad Age and Paid Content, no-nonsense Bartz acknowledged that the Internet had over-sold itself to advertisers at the outset.

Ad Age captured it this way:

Ms. Bartz told analysts the challenge ahead for the iconic web portal is not to compete with Google or Microsoft but to compete for the biggest pot of ad dollars, which is currently in broadcast and cable TV. Ad dollars have not flowed online as audiences have, she said, in part because the promise of online advertising was oversold to marketers at the outset “and did not deliver.”

In Paid Content, Bartz was quoted as follows:

Asked about the disparity between online media usage and internet ad spending at UBS Media Week, Yahoo (NSDQ: YHOO) CEO Carol Bartz said that the gap was in part because internet advertising had initially over-sold itself: “I think internet advertising oversold itself at the beginning, over-promised preciseness.” That, however, she said, was beginning to change. “Things are looking up. We’re seeing marketers engage.”

It is a simple statement that is true. The Internet over-promised “preciseness,” which really means it over-promised what might result from preciseness.

Preciseness surely exists online. It is a world of niches. By itself, however, we’ve demonstrated that preciseness does not equate to one-to-one. One-to-one is a trust thing, not one of our strong suits online. As a result, consumers have not altered how they respond to advertising, or been abundant in praise of its value.

But, Bartz seems to be working on that problem, cleaning up the Yahoo! environment and communicating her respect for the audience. May that sort of leadership continue, and may the medium start to matter as much as the message.

What is the real story behind Nielsen’s latest Three Screen Report regarding video?

There is a story that gets told to would be journalists about the editor that commissions a young reporter to cover a notable wedding taking place in town that weekend. The day after the wedding, the editor is surprised when a story about the wedding fails to appear in the newspaper and he goes looking for the young reporter.

“Where’s the story about the wedding?!” he demands of the reporter.

“There was no wedding,” the reporter stammers back. “The groom never showed.”

The real story, as this lesson prompts us to recognize, can hide in plain sight. Failure to recognize it when it happens is not the problem of journalists alone, however. To miss the point is something that afflicts us all.

In the case of the Internet, missing the point haunts everything to do with online video.

Nielsen has just released its latest A2/M2™ Three Screen Report and this is what it says: consumers spend 99% of their video time with television. In all, consumers are in front of the tube over 4.5 hours a day. In contrast, they are in front of the Internet four hours a week, of which only 22 minutes are devoted to watching videos. On mobile devices consumers spent an average of three minutes per week watching video.

Nic Covey, Director of Cross-Platform Insights at Nielsen, trumpeted “Americans today have an insatiable appetite for not only content, but also choice. Across all age groups, we see consumers adding the Internet and mobile devices to their media diet — consuming media anytime and anywhere possible.”

One suspects that “media” is being used as a euphemism for TV in the context of online video: as in, more and more we see consumers adding the Internet and mobile to their “TV” diet.

I’m not sure about that.

Over the past year, time spent per week looking at online video grew 35% to 22 minutes, and mobile video grew 53% to three minutes. TV video remained flat at over 31 hours, not including 31 minutes of DVR. From this data, Nielsen notes that consumers are not replacing one platform for the other; they are adding (their emphasis) platforms to their schedule.

MediaPost covered the story with this happy headline: “Nielsen: TV Continues Going ‘Everywhere’

I’m not sure about that. The evidence suggests, in fact, that TV isn’t going anywhere, which strikes me as the real story.

Why is this important? Because, as usual, the Internet seems uncomfortable with itself; it keeps looking for approval from older media siblings, principally, TV. I think this is because too many of the Internet’s primary care givers are TV people and they want this child to grow up just like the last one. “Why can’t you be more like your sister?” is the sense you get from the time-keeping and yearning over Internet video.

The Internet is not TV. Hulu is not TV. I watch video online for different reasons than I watch TV. For starters, I watch TV to relax and tune-out. Online I’m engaged, video included. Conversely, I can watch 60 seconds of someone do something absurd on YouTube. I could not sit through 30 minutes of Funniest Home Videos.

The real story (and value) of online video gets buried by comparisons to television, beginning with time spent. Online video is new media. What’s that story?

Joseph Pulitzer would be pleased

The Pulitzer Prize Board decided at its November Board meeting to expand again the eligibility for journalism awards making it possible for online reporters and commentators to be recognized. According to a report in MediaBistro’s NY Fishbowl, it sounds like the change means that writers producing original work or commentary can be eligible for consideration regardless of the news publication – print or digital – in which their work appears.

MediaBistro explains:

“Now “entries for journalism awards must be based on material coming from a text-based United States newspaper or news site that publishes at least weekly during the calendar year,” according to the revised Pulitzer rules. This change is a baby step from last year’s eligibility requirements, which read that nominees from online organizations could be considered, but they, like their print counterparts, had to be “primarily dedicated to original news reporting and coverage of ongoing events.”

Considering the varied and sometimes esoteric nature of online publications, the rules for this year consider the writer and their piece over the publication they work for, according to Sig Gissler of the Pulitzer Prize Committee. This is definitely a boon to all those investigative bloggers out there who don’t yet write for pubs like The Huffington Post.”

Joseph Pulitzer should be pleased that the award bearing his name is steadily finding its way into new media. It seems certain that if he were here, he’d be blogging.

Aol plans to go head-to-head with the Internet

Quick …who was quoted recently in the Wall Street Journal saying the following?

“Hopefully, we will spark a revolution of people doing content at a different scale.”

a. Tim Berners-Lee

b. Johannes Gutenberg

c. Tim Armstrong

The answer is C, Tim Armstrong, who was making further reference to Aol.’s emerging strategy to re-make the brand online for advertisers and consumers. Said Tim to the Journal,

“Content is the one area on the Web that hasn’t seen the full potential. Hopefully, we will spark a revolution of people doing content at a different scale.”

I’m sorry, what potential is missing from content online and exactly how much more revolutionary does Aol. expect that content development is going to get? The FTC is holding a workshop in Washington right now to assess the damage to news organizations that has been caused already by the content revolution online. That indicates to me that further spark is not necessary. There appears, in fact, to be an enormous fire raging that is toppling content structures that have stood for 100 years.

Permit me this outburst: If it suddenly dawns on anyone in response to Aol.’s “content revolution” that “Gee that seems like a nifty idea; why hasn’t it been done before?” then I am going to change the title of my book about the history of Internet advertising (which is currently, “What I saw on the way to the content revolution”) to – with apologies to A.A. Milne – “In which Pooh and Piglet go hunting and nearly catch a Woozle,” because Milne’s title conjures a better image of what happens when one walks, head down, following one’s footprints in the snow.

If Aol’s strategy of relying on an army of a few thousand free-lance writers to produce reams of content tied to popular web-searches represents progress in our minds concerning the “full potential” of Internet content, then we must question our roles as stewards of “new” media. The potential has been obvious for years thanks to countless writers and web publishers already working on a shared revenue basis to generate reams of Internet content. The potential is and has been the chance to reach highly targeted audiences at the very moment when they are pre-disposed to what advertisers are trying to sell, such as to the solution to defective baby cribs. It exceeds the potential of all other media, to date, to do the same.

What matters to content’s (i.e., media’s) potential is denial. “Hopefully we will spark a revolution of people doing content at a different scale” is denial. It says that the content revolution that came along and was responsible – in all respects – for lighting the fire that burned down the walls that Steve Case built (and many other walls since) didn’t happen. It insists something else happened, which we are now to believe was a chronic underachievement of content online. The Internet was weak and Aol. – and others – suffered because of it.

We are wasting valuable time here.

Aol. does not need to re-invent the Internet to restore its position. It needs to embrace it – finally, and for all time. Why does this matter? Why get exercised about what Aol. is up to? Because Aol. is a great Internet brand, whether it deserves the mantle or not. Leadership matters, but with this proposal, as reported by the Wall Street Journal, Aol., like the OPA before it, turns its back on the very content revolution that has Rupert Murdoch and others in Washington D.C. this week pleading for mercy.

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.