Borrell: BIG spike in promotions spending

New data to be released later this week by Borrell Associates reveals a skyrocketing spike in advertiser spending in the “Promotions” category as compared with advertising. Another eight percent increase this year will put promotions spending at $630 billion, over twice that of advertising spending. Borrell’s promotions category has long been a barometer of advertiser spending related to the Web, and this dramatic increase includes the raging hot category of content marketing.

Promotions' spending skyrocketing

To be fair, Borrell’s promotions category is very broad and includes a great deal of different types of spending, including coupons and discounts. Borrell research guru Kip Cassino likes to refer to a discount deal on a can of peas. The money spent to tell people about the discount would be advertising, but the price difference between the can of peas before the discount and after comes from promotions. However, the category also includes efforts by companies to recruit customers online.

Now that business and industry are able to function as media companies themselves, their spending habits are shifting. The Content Marketing Institute reveals the kinds of tactics that businesses are using with consumers. The graph below shows that social media, articles on their websites, eNewsletters, videos and blogs are the top ways businesses are using to reach customers.

CMI tactics 2013

The Borrell report shows a flattening of advertising, which ought to speak to those in the pure advertising business. Advertising is not going away, but the growth is clearly in promotions. Looking ahead to 2017, the report projects that digital promotions will begin to close the gap on digital advertising, growing at a rate of 150% compared to 90% growth in online advertising.

Borrell has always been ahead of everybody else in projecting what’s happening with businesses away from advertising, and this report is no exception. The company hosts its annual Local Online Advertising Conference March 4–5 in New York.

The future of journalism is independent contractors

Dad's new master bedroom

Dad’s new master bedroom

I recently finished a small remodeling project at my house, and I learned something that validates a suspicion I have about the future of work and specifically those who work in journalism.

I turned a bedroom/bathroom combination into a second master bedroom, because my 90-year old father-in-law is coming to live with us. I wanted to give the old guy some privacy, and putting the bathroom “inside” his space did the trick. The guys who built it were independent contractors who were paid by the contractor I hired. Sears delivered dad’s new mattress and box spring, and the deliverymen, while wearing Sears shirts, were independent contractors paid by Sears. Empire Carpets came out and installed hardwood flooring. The two guys who did the work were independent contractors paid by Empire to install carpets, tile and hardwoods.

I spoke with each of these people about working as independent contractors instead of employees, and while they all bemoaned the lack of benefits, they all said that working for themselves had some advantages, especially when it came to taxes.

Clearly the business world is moving in the direction of independent contractors, and I’ve been writing for ten years that this will one day be the model for media companies. In the beginning, it will likely come about as a cost savings, but in the end, I think it’ll also be a part of acknowledging the growth of what J. D. Lasica first termed the “personal media revolution” in his 2005 book “Darknet, Hollywood’s War Against the Digital Generation.”

Right now, in every community in the U.S., there are people practicing a form of journalism who aren’t employed by traditional journalism companies. Athletes, actors, retired journalists and TV people, elected officials, municipalities, police and fire departments, writers, moms, dads, students and many others are self-publishing content worthy of consideration as “news,” and tomorrow’s news organization will aggregate all of it. And if news becomes a matter of aggregating, then it makes sense for those who are currently “employed” to work for themselves and the highest bidder. This could upend the entire local media farm system, which finds young people just passing through small markets on their way to jobs in bigger markets. Smaller markets will be home to those who wish to live there, and I feel that would be quite a good thing for journalism.

Forbes is already practicing a form of this, as is the Huffington Post. Don’t be surprised when local media companies begin to move in this direction.

Brands need to emulate people

Stowe Boyd

Stowe Boyd

The brilliant mind of Stowe Boyd has come up with a concept that really fits something I’ve been struggling with over the last few months. The question is how do businesses function best in the network? Here’s Stowe from a GigaOm piece yesterday called “We’re at the customer support stage of social business:”

I believe that brands will try to look and feel as much like people as possible, online. For example, brands have their own Facebook pages and Tumblr accounts. A winning strategy of the near future might be to get Tumblrers to follow your brand’s Tumblr blog, and to make the posts look and feel as much as possible the way your prospective customers’ posts do. This is what is going to replace ads: following.

This is one of the most profoundly insightful paragraphs that I’ve read in years. Those of you helming media companies, for example, need to begin having blue sky sessions to define your company’s personal brand, and then you need to execute that brand across all forms of social media. Local media companies need to become experts at this, so that they can then lead businesses in the community in doing likewise.

At WLEX-TV in Lexington, KY, news director Bruce Carter handles Facebook duties throughout the day. It is experienced newsguy Bruce and his personality that speaks on behalf of his station and his newsroom on LEX18’s most important social media venue. I’ve long thought that this was a terribly smart tactic, because who knows the station’s wants and needs AND the news better than the news director? (Bruce was a client of mine when I worked with AR&D).

I’ve long said that all any business is in the network is a single node, just like everybody else. The network doesn’t “see” any company as bigger than any other node, for all are equal according to the Web. People follow people, or as Stowe is suggesting, people follow brands that appear as people. Here’s more from Stowe:

So the ‘answer’ to the issue of the future of advertising is already starting. Stop trying to advertise on mobile, and instead participate in the streams that people want to use on mobile, and people will follow your brands if you contribute to whatever it is the people are up to. I think this will have profound societal impact. And maybe less billboards.

I really have to applaud Stowe for this wonderful piece of thinking. And to you, dear reader, whether you represent media or any other business, please tune into this vibe. Your future is at stake.

We’re all shilling for something

Here is the latest in my ongoing series of essays, Local Media in a Postmodern World.

We’re All Shilling for Something

This will probably be received as the most controversial essay of the whole series, because I’m proposing that we re-examine the absolute negative assumption of the concept of shilling. My conclusion is that a hierarchical culture — where knowledge exists at the top — demands the policing of claims of truth, but in a horizontal culture — where knowledge is spread sideways — it’s up to the individual to police themselves. This assumes a weakening of the power to manipulate from the top, but that’s a subject for another day.

Me and my Mango Kool-Aid

Mango Kool-Aid

I’m set for a year!

Every once in awhile, things happen in my life that remind me of the incredible wonder of our networked world. In observing and writing about these things, it’s easy to begin to take this new world for granted, and I don’t want ever to do that. So let me tell you the little story of my passion for Mango Kool-Aid.

When I was a boy, my mother would “spike” the Kool-Aid with Canada Dry Ginger Ale, and I’ve carried that on all my adult life. My favorite was the green Kool-Aid, which I used to call, appropriately, “Green Stuff.” A few years ago, I discovered the wonderful flavor of Mango, and began making my concoction with Mango Kool-Aid. Then, the people at Kraft did something totally unexpected; they stopped making Mango Kool-Aid. Oh no! In some stores, you can buy “Peach-Mango,” but who wants that when you’re a Mango purist like me?

I found a store last summer that had a close-out, so I bought all they had, but those ran out last week. I went back to Green Stuff, but, alas, my heart belongs to Mango. I had the thought a few days ago to see if anybody might be selling Mango Kool-Aid via Amazon. Sure enough, there was SweetDeals4U with 4 boxes of 48-count Mango — PURE Mango — Kool-Aid.

I scooped them up, and they arrived today from North Brunswick, New Jersey.

I am a very happy camper. Years from now, this kind of thing will be second nature in the postmodern world of the Great Horizontal, and everybody will take it for granted. Me? Never. It’s a wonder, this thing we have created. Let’s not lose sight of that as we argue, bicker and scream about what’s needed to protect it.

TV numbers add up (to a BIG problem)

According to Advertising Age, the folks at DISH have declared the TV commercial dead. Actually, it’s DISH’s new ad campaign for the Hopper, its ad-skipping DVR. You know, the one the networks are suing to try and stop. The nets feel that if they can at least slow down the technology, their business model will continue to be viable, so there’s a lot at stake.

The problem is that this isn’t about technology; it’s about viewers’ outright disdain for the inanity of 30-second ads and their relentless repetition. Ads on TV crossed the line of viewer disrespect a long time ago. Technology that the networks view as the enemy is viewed by viewers as a friend.

But wait! There’s more!

One weeks worth of viewing for Fox's The FollowingFox released numbers that show a significant increase in viewing for the première episode of The Following, starring Kevin Bacon, when adding delayed viewing. Take a close look at these numbers, because Fox doubled the viewing of this program by adding all the options available to viewers. Doubled! No doubt Fox is selling the 20 million number, but the same number cannot be applied to the advertising for the program, because each of the opportunities for growing the overall program number include the ability to skip the commercials. Nielsen provides “Live plus Same Day” viewing numbers, but they don’t tell us how much is live and how much is same day. God forbid, because same day includes the ability to skip commercials.

The war between Madison Avenue and the networks over commercial ratings is going to get super ugly in the months and years ahead. It has to. Who in their right mind will look at that 20 million viewer number from Fox and buy the spin that the same number of folks watched the commercials?

Ain’t. Gonna. Happen.