Editor & Publisher magazine closes after 125 years

After 125 years as the “bible” of the newspaper business, Editor & Publisher magazine announced yesterday that it would shut its doors at the end of the year.

One hundred and twenty five years and pffft. E&P goes down with the newspaper ship.

Where will Google be in 125 years? What will Google mean in 125 years to media students and consumers? I heard Google CEO, Eric Schmidt, say once that after careful figuring the company estimates it will take approximately 300 years for them to catalogue all the world’s information, which they aim to do. He had a good chuckle about that along with everyone else in the audience.

What will information even look like in 300 years?  

Truly when you’re young you expect to live forever.

One hundred and twenty five years is a pretty good run. The best thing I can think of saying to everyone at Editor & Publisher is congratulations. It is an extraordinary record of accomplishment, and we salute you.

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.

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.

AOL returns to the green, green grass of home

Time Warner confirmed today that it will spin off AOL as a stand-alone public company at the end of the year. So endeth one of the more notable chapters in the history of the Internet, so far.

What can be said about this AOL/Time Warner experiment? Well, it didn’t work. Could it have worked? Perhaps, but it was sabotaged by arrogance and mistrust on both sides from the beginning. Ambitious combinations such as AOL and Time Warner don’t always fail because the strategic concepts are ill-conceived; they fail because of jealous rivalries and pedestrian concerns at the grassroots – essentially, turf wars. In that regard, I am very interested to see the scything motion that Tim Armstrong has been using since assuming control of AOL. It may imply that he recognizes the first order of business is to cut-out the entrenched positions that have been holding-up the successful integration of AOL acquisitions and, hence, its business. It could also mean that he’s layering in Google’s entrenched positions, which will make for a very complex business environment at AOL, indeed.

But, could AOL and Time Warner have ever worked as a combo if human entanglements did not exist? Recall that at the time the merger took place AOL was still largely a gated content community. In that respect, AOL looked more like Time Warner than it does today. All its life, in fact, AOL - along with most other early Internet players – had probably dreamed of growing-up to be just like Time Warner, though digital. AOL saw in Time Warner all of its ambitions as a child. Time Warner, in return, saw in AOL its legacy and someone to care for it in old age. As media faithful, AOL and Time Warner shared a similar creed when they joined in 2000 and 2001.

If faith in the established media order of the time were to have been rewarded then, yes, perhaps AOL Time Warner might have succeeded in overcoming the usual obstacles of smashing businesses together and, today, represent the standard that currently belongs to Google.  But faith in old media models – gated communities – has not been rewarded, at least to the extent that those models should prevail over others.

AOL, ironically, had nothing to teach Time Warner at the time they merged. It wanted too much to be Time Warner (and no one inside that organization was going to let it). It’s different, today, and AOL probably has very much it could teach Time Warner; but the listening stopped long ago.

It is a good thing for both sides that this experiment has, thus, come to an end, and it may be a good thing for the media world generally to have AOL back grazing on the digital side of the fence, a somewhat older and wiser, senior member of the herd.  The grass is green enough on our side of the fence and, ultimately, as the song goes, there is no place like the green, green grass of home.

Taking ourselves too seriously

In iMedia Connection today Daniel Flamberg shares some interesting thoughts on Google’s aborted dMarc radio experiment that may speak wisely to us all in the Internet business, which, for as long as I’ve been around it, has never been short on hubris and cocksureness. Daniel offers these observations re Google’s excellent radio adventure (below). Try substituting the the word “Internet” for Google to see how it compares. Best line: “Their belief in technology as the universal cure blinded them to the marketplace realities.”

1. Google is a large hungry bureaucracy. With shifting priorities and plenty of cash to burn on not-so-hot executions, they can afford to try and fail where others can’t. They skimped on the due diligence in vetting dMarc’s owners as partners. They didn’t talk to many radio guys at the outset and they didn’t take the time to listen. But in the end flushing $100 million is just a rounding error for Google which allows them to retreat without feeling the pain and probably without absorbing the lessons.

2. Google believes its own press. The bias toward doing it their way, their hubris about how things should be engineered and their complete unwillingness to listen to willing allies, adopt to market norms and nuances or sell the way buyers buy set them up for failure. The radio ad market was a de facto auction long before they showed up, but they refused to see it. This kind of “we know better” attitude is not unique in Silicon Valley or among high tech giants. But it suggests that in some cases they can’t get out of their own mindset or out of their own way.

3. Technology Uber Alles. They built and bought the component parts but they could [sic] get them to work together nor could they measure and report on sell-thru or the impact of the ads. Their belief in technology as the universal cure blinded them to the marketplace realities and deafened them to course corrections that could have produced an alternative outcome. 

One-section newspapers, less is more, and other lessons in life

There was an interesting piece in the Wall Street Journal Opinion section yesterday by former Journal publisher, L. Gordon Crovitz called “Making Old Media New Again.” The impetus is a new book by another former Journal personage, Richard Tofel, called “Restless Genius: Barney Kilgore, The Wall Street Journal and the Invention of Modern Journalism” which is about Barney Kilgore, who became Managing Editor of the Wall Street Journal in 1941 and thought deeply about how audiences use media, particularly newspapers. 

[So - if you're keeping track - a piece in the Wall Street Journal by a former Wall Street Journal person, about a book written by a former Wall Street Journal person, about another former Wall Street Journal person. Clearly, this is how mainstream media has remained in control over the years. But, this is not important, right now.]

Barney Kilgore was an early proponent of making newspapers less about what happened and more about  the meaning of what happened. He proposed news analysis, as opposed to simply news. He was driven in his view by an understanding of the impact that technology could have on how readers used newspapers. The Wall Street Journal itself had started life as a paper to report news and stock prices to investors. In time, radio and the ability of other newspapers in other cities to carry the same information undermined the Journal’s unique proposition, and its circulation, and it had to change. News was becoming real time. Newspapers would have to offer additional value. So, Mr. Kilgore launched the punchy, “What’s News”, on the Journal’s cover, then provided insight and outlook deeper into the paper. This (along with other innovations, I’m sure) helped circulation grow.

The need for media to adapt to new technology resonates strongly today. That said, in a world that has known CNN for over 25 years the notion of offering “news analysis” as opposed to simply “news” is wide-spread and well-understood. Unfortunately, it is not doing much to boost the resistance of traditional media in an age when technology has grown more virulent and toxic to it.

But, Barney Kilgore may have offered another prescription worth considering, which is less is more. Asked for help by the New York Herald Tribune, he wrote a memo in 1958 advocating the ”compact model newspaper”. He proposed a one-section paper, with a longer paper on Sundays, arguing that less is more because readers value their time. The Herald Tribune did not take his advice and it went under in 1967.

Oh, that Barney Kilgore was still writing memos today. Less is more is a great unrecognized truth of media. It is perhaps the great unrecognized truth of media. It is still so unrecognized that the history of the Internet – which is recent history - has been dominated by the rise and fall, and uncertain future, of portals and web communities choked by the desire to be more not less. In nearly every case, they are losing that battle versus expectations.

Barney Kilgore died in 1967, but when I arrived in New York City out of college in 1979 the Wall Street Journal was still a one-section newspaper. I’m going to guess that it was a hold-over from the wisdom of Mr. Kilgore’s era. But, gradually, as Mr. Kilgore’s legacy lost its grip on the newspaper, the Journal added sections and features appealing to a broader and broader audience. Today, it’s owned by News Corp, which has been transparent with its intentions to enhance the Journal’s general-interest appeal. The News Corp prescription is about saving the Journal now. It is about making it more of what it has become over 25 years, anyway, and we should accept that News Corp will be better at that job than the previous owners.

But, how would life be different today for the Wall Street Journal if it had remained a one-section financial newspaper? In the global, inter-connected, hedge-fund, financial derivatives market we live in today how might the lessor Wall Street Journal have prospered? Would The Street.com matter to the financial world today? Would Dow Jones have spent $500 million to acquire Marketwatch? Would CNBC be a factor on cable TV? Would a subscription to WSJ.com cost $250 a year, like it or not, chumps need not apply? 

If Barney Kilgore was offering prescriptives today I suspect it would be along the same lines: less is more. Focus on core competencies. Add value to those competancies. He would be warning that technology was not simply capable of altering the roles of media outlets, it was capable of destroying them in the absence of distribution and productions costs. The more you try to become the more you must defend and the more it costs.

The game to watch today for fans of these important questions is Google. What will it become? Big is not at issue. Google is big. Big is very possible when you believe less is more. If you doubt that, point your browser to the Google home page. Whatever else Google may be doing in the world, at home it is still only one thing: fast reliable search. A powerful force protects that core competency and the culture that goes along with it from countless temptations, many of which Google has tossed back in the last several months. But the temptation always remains to do more…To be more…To see oneself not as a fast reliable search company, but as the future of all media.

Old media becomes new media? Only if we can break old habits. We might benefit by having Barney Kilgore still here to comment on it.

Living with the handicappers

One of the most interesting things to have watched and experienced over 14 some years in the Internet space is the education, if you will, of the broader financial community in the media and advertising business. On one level it has been inspiring to watch capital markets swarm to an idea and erect a booming business metropolis where only a short time ago there was nothing. On another, it has been thoroughly disruptive to the orderly migration of the advertising business to its new life in a digital age. Case in point is the fascination that Henry Blodget shared yesterday with Ross Sandler of RBC over the fact that at current growth rates Facebook could surpass Google in total unique visitors by 2011 or 2012. Blodget went so far as to exclaim in the title of his post, “Facebook could kill Google.”

The commenters to Blodget’s post in the Silicon Alley Insider were mostly united in their response, which was ”So what”? Indeed, I agree. But, it is still so interesting to observe the irrepressible urge of people in the financial community to handicap the race, whatever it is. Sadly, it is not a benign sort of behavior as people like Henry Blodget can still cause the market jerk its head around and even tear off in wayward directions. (Sigh.) Perhaps that’s the price one pays for having  benefactors.

Now you can have your cookies and eat them too!

Google announced the beta of its Behavioral Targeting program today which will give consumers the chance to peek behind the curtain to see why a particular ad was furnished to their desktop. Leaving aside the potency of Google’s BT offering, which should be substantial, the consumer transparency provision will be very interesting to watch develop. Privacy regulators and marketers should both pay careful attention.

Regulators may discover that people aren’t that curious to know how the appropriate ad showed-up on their web page. Google should report on how many consumers actually inspect and then make changes to their categorizations. Personally, I’ll be surprised if people opt out, or in, of behavior categories more than once – which they might do initially in the same way we all customize web pages and then never alter – or pay much attention to them – again.

Google’s transparency commitment will mean different insights for marketers, namely how revealing is the behavior data in the first place? Some of that will depend on the duration of Google cookies. Is it 5 days? Is it 90 days? Depending, we may find that the cookie files of consumers reflect a boundless array of interests and opportunities, inviting questions about the significance behavior targeting may represent to advertisers positioned, as it is, further down the value chain of consumer engagement; or we may find that people are rather boring. A travel web site here; a pet care site there. Someone has a new puppy. In which case, behavior’s significance will be reinforced for building reach against a target audience, although, now that’s it’s transparent, advertisers may want to have the opportunity to better establish that it’s the right one.

Google may not have a lot to say about these variables over the next weeks and months, but industry observers will as they eagerly peak behind the curtain of the advertising served to their attention. It will be interesting to see what is revealed.

What Would J. Walter Thompson Do?

I agree with just about everything Jeff Jarvis has to say – and has always had to say – about new media, most notably the power of niches. Small is the new big as long as the power is there to network, which the Internet, of course, provides. However, in several reviews about his new book (which I have not read), “What Would Google Do?”, reference gets made to Jeff’s view that ad agencies are doomed. More accurately, his view that their days as curators of brand messages are doomed. This is because in a networked world consumers can emerge on their own as the true brand owners with the power to shape and articulate brand image and value. Agencies as middlemen become irrelevant. Jeff’s well-documented “Dell Hell”experience on his blog, Buzzmachine, is a classic example of how one person’s experience can connect with the experiences of many other people to change brand behavior in a way that, eventually, rewards the brand. Agencies never enter into it.

That can change if marketers will re-invent how they compensate ad agencies by returning to a media commission standard. After all, that’s what Google does. Google gets paid on commission. It is the same with a lot of networks online that have made plenty sharing media revenues.

The economics of media commission works well in the new, networked economy that Jeff so rightly points out has taken over. The fee structure imposed on agencies over the last 20 years, does not. It’s killing them and it is holding back the ability of brands to adapt to the new media reality, which is open and distributed. Agencies still have possession of the budgets, but they have neither the financial means or incentive to distribute the money efficiently online. Consequently, so-called “brand dollars” get spent within easy reach, on a handful of web sites, while the rest of the money gets carried away by networks, including Google, where its future can be uncertain.

Agencies are starting to catch on. They aren’t choosing to try and re-negotiate how they get paid by marketers, yet, but they are thinking about how to get into the network business themselves and become commissioned media buyers again. They are in possession of the marketing strategy, the marketing data, and the marketing budgets. They just need to be able to share in the media spending in the same way other networks do online in order to take advantage of the available distribution.

If they succeed the outcome will be good for brands, long-term. Brands need advocates. Consumers make the best advocates, but agencies come second. In a competitive world, you need both. In the short-term, however, we need to be concerned about the transparency of agency goals and intentions and the conflicts of interest that may result from directing client business in the interest of profitability instead of client objectives. That may sound harsh and accusing, but it’s not. Agencies need relief, especially online where the future of brand marketers is playing out in places like Jeff Jarvis’s Buzzmachine.

In all of this it may be worth mentioning that J. Walter Thompson started out life as a magazine rep. He got into the business of helping customers and prospects create advertising as a way to facilitate selling more pages.  The rest is history, until now. Suffice to say that Thompson may have been responsible for the media commission model that sustained agencies like his until recent times. Were he here today, he might then be the one telling agencies they’ve got to get back into the media business.