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.

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.

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.

Follow the newspapers

Newspapers have been getting a lot of attention in this blog because the arc of their business has traced a path to guide companies in a new media world. The path leads to this: remain relevant at the expense of size. More audience for the sake of audience (for the sake of selling more advertising) eventually undermines the structural integrity of the proposition. Never mind that more audience is expensive.

Newspapers are not guilty of being old. In the brief history of the Internet plenty of new media turks have collapsed under the weight of their own audience ambitions. “Portals” dotted the landscape until most of them keeled over. The ones that remain do not make the living look easy. Now it’s social networks. Also overstuffed. Also red in the face from exertion. The irony of new media is the extent to which it tries to become like old media – simply big - which is a bad plan.

With all this in mind, a colleague refers us to this piece in the Wall Street Journal today: “Investors Bet on Small-Market Papers.” It’s probably not true of this story that investors have had an Ah-Ha! moment and are making bets based on strategic, new media kinds of reasons. It’s simply a flight of capital away from the troubled big-market newspapers that offer very few (none?) investor prospects near-term. But, markets can be perfect even when they are running away, and the rationale for investing in small, relevant media is a good one for the long-term. Of course, the Internet doesn’t feel that kind of fear yet. It’s too young. Big Internet media propositions wobble and fail and people organize to erect new ones.

In the meantime, the Internet is saturated with small, relevant publishers. Which is why it’s hoped that spending time thinking about newspapers can lead us to view the New Media forest amongst the trees.

20,000,000 bloggers can’t be all bad for you

There are almost as many people making a living from blogging these days as there are lawyers, according to a report by E. Kinney Zalesne in the Wall Street Journal today. If your first reaction to that is “Oh my gosh that’s a lot of lawyers,” you probably work in new media. If, instead, you’re surprised and/or somewhat horrified to know there are that many bloggers you may be a columnist for a newspaper (although Ms. Zalesne is more notably a researcher and co-author of the book “Microtrends: Small Forces behind Tomorrow’s Big Changes”).

It’s the surprise and incredulity that always pops off the page at me whenever stories get written about citizen journalists, long tail publishers, or whatever you want to call them. Who are these people and what do they know is the back beat in these stories written by the grown-ups. Here’s an example of what I mean from the article today in the Journal:

“All this fits with the trend toward Opinion TV. Less and less of our information flow is devoted to gathering facts, and more and more is going toward popularizing opinion. Twenty-four-hour news channels have been replaced by 24-hour opinion channels. The chatter is the story.”

I dispute the notion that there are less facts floating about these days than there were before the Internet empowered a new chattering class. Intuitively we must accept that there are many more facts and many more fact-checkers in the world thanks to web publishers and bloggers, even compared to when the Wall Street Journal or New York Times had all their foreign bureaus. No doubt there is proportionally more spurious information as well. But, it’s a small price to pay for access.

Likewise, I’d argue that 24-hour news channels long ago replaced themselves as 24-hour opinion channels without ever leaving the comfort of their studios. And that’s fine. No complaints. The pretense of impartiality within the traditional news media deserved to be exploded, and it was, thanks largely to an incessant and democratic Internet. 

Interestingly enough at the end of her column today Ms. Zalensne wonders what competitive advantage the high incidence of bloggers in the United States will give the country in the global economy. She concludes:

“And with millions of human-hours now going into writing and recording opinion, we have to wonder whether being the blogging capital of the world will help America compete in the global economy. Maybe all this self-criticism will propel us forward by putting us on the right track and helping us choose the right products. Maybe it will create a resurgence in the art of writing and writing courses. Or serve as a safety net for out of work professionals in the crisis. But for how long can nearly 500,000 people who are gradually replacing whole swaths of journalists survive with no worker protections, no enforced ethics codes, limited standards, and, for most , no formal training? Even the “Wild West” eventually became just the “West.”

My answer would be that in an Information Economy, it helps to have a lot of information producers. After all, when it was an Agrarian Economy we had a lot of farmers. When it was an Industrial Economy we had a lot of factories. Now we have a lot of bloggers. And formal training and standards aside, 20,000,000 bloggers can’t be all bad for you under the circumstances.

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.

Not all Internet Inventory is Created Equal.

We have all argued at one point or another that Internet impressions are a bit like airplane seats: any revenue is better than no revenue. When an impression leaves the proverbial gate we want an ad on it. Afterwards, it’s gone for good and the opportunity with it. With the growth of social media (I read somewhere that the rise of social media had tripled – maybe quadrupled –  the number of impressions online) the Internet is awash with impressions and it’s starting to cause a panic that we’ll never be able to monetize them all. Worse, those people that are panicking about unsold impressions are causing other people to panic about the corrosive affect all those unsold impressions are having, generally, on the value of Internet inventory.  Martin Peers wrote about this in the Wall Street Journal yesterday.

The answer to this problem will be in the middle, as always. No one, even airlines, actually ever lets the inventory go for the change in your pocket lest it pull the value of what’s for sale completely under.  For now – especially given the economy -  the perception of the problem looms larger because the dominant advertising constituency online is direct response, or performance advertising. Everybody needs and wants a piece of it, including brand publishers that would consign it to the back of the plane if times were any better. Instead, they have to compete with social network inventory where direct response may comfortably thrive for as little as a nickel per thousand…or less.

But not all inventory is created equal, nor is all advertising.  Despite the existence of a 24 hour programming day, I watch maybe two hours of television a night when I get home, deciding between four channels out of 800. As far as I’m concerned, the world is equally awash with television. But, after a few generations of trial and error one person’s Super Bowl ad is another person’s Ginsu Knife.

Getting Personal on the Web

The Wall Street Journal carried a report today on new technologies that improve the personalization of advertising online. The notion is not new: use technology to keep track of where users go and what  they do online and confront them elsewhere with advertising  matching those observed behaviors. In the case of Overstock.com, for instance, the article says they are providing a company called ChoiceStream with the browsing and purchase history of customers on their site so that ChoiceStream can push the appropriate Overstock ad to those users as they move about the Internet pursuing their other interests. The result, according to Overstock CEO, Patrick Byrne, has been a seven-fold increase in clicks on Overstock advertising and three-fold increase in sales relative to his other display ads.

It’s always a slippery slope when  user data is exploited for advertising purposes as another piece on the same story appearing on eMarketer reminds us. People don’t like the idea they are being followed. In the eMarketer article, ChoiceStream President and CEO Steve Johnson is quoted as saying, “Today’s online consumers understand the value of online advertising and know retailers have information about their shopping behavior that can make their experience more relevant.” But, according to a couple of polls in the story roughly 50%  people are uncomfortable with the idea of marketers using browsing history to customize advertising messages.

We keep hoping this slippery slope will dry up. I have heard the voice of advertising reconciliation offered by the likes of ChoiceStream’s Steve Johnson many times before, to no avail. Why? Well, for one thing - and I say this as someone that has spent nearly 30 years in the advertising business – consumers do not subscribe to the “advertising is good for me,” view of life.  Tons of relevant advertising is still tons of advertising. Tons of advertising is ponderous, especially since most of it is a creative blight upon the land. We amplify this problem online where display advertising is a mosh pit. Scott Portugal referenced this fact yesterday in ADOTAS:  in his article he reports that still, today,  75% of all display dollars are spent with eight media companies. Any of those media companies – which will certainly include heavyweights MSN, Platform-A and Yahoo! - may spray display ads in thin layers across the long tail of the Internet, but the preponderance will go to their own brand platforms.

If you want to understand why tweeking display advertising with targeting features such as those provided by ChoiceStream yield seven-fold lifts in action rates, this will be why: advertising online is a mosh pit. It is squeezed into the first few rows. Consumers can’t even raise their arms above their elbows, let alone click on an ad. A bit of personal space, therefore, (which, by the way, occurs naturally, with abundance online) represented by a bit of relevancy is bound to make a difference to people online. But, don’t let them feel your hand in their pocket.