The Handwriting on the Wall is Now Shouting

A few headlines and items in the news point to the continuing decline of legacy media, now especially television, and yet nobody is reading the tea leaves properly in terms of what to do. This will only hasten the inevitable end.

First up, Ad Age asks Where Did Everybody Go? TV Première Week Ratings Sag As Young Viewers Vamoose. This doesn’t really require comment except to say I told you so. Yeah, I’m going to be pissy here.

Next, the New York Times reports Fall TV Season Opens Onto a Shifting Ad Landscape.

The current television landscape is a challenging one for advertisers. Ratings are down but the amount of programming is sharply up, along with the number of streaming options available, many of which allow viewers to skip commercials altogether.

Now, as advertisers consider the best ways to spend their money, the excitement that once greeted the beginning of the fall television season has given way to anxiety. Industry analysts and advertising executives said the upfront market — the annual ad sales period that begins in May with lavish presentations by the networks — was unambiguously weak this year.

Then a remarkable (for its lack of focus and leadership) Wall St. Journal interview with the head of the IAB, Randall Rothenberg, on ad blocking, viewability, and click fraud, none of which he deems a really serious problem for digital advertising.

And, finally, the first of a two-part series by industry watchdog promotional group, TVNewsCheck on digital, Digital Turning ‘Broadcast’ Sales Upside Down.

The digital advertising revolution sweeping through the media world has reached local TV, upending the lives of broadcast salespeople, requiring them to do more and learn more, while sometimes earning less.

In markets of every size, stations and station groups are creating and offering a host of new digital products to prospective and long-time clients to keep pace with the invasion of digital and other media on their turf.

The broadcasters are re-emphasizing training, creating new digital-only positions, hiring digital specialists and even establishing whole new units to sell digital products and consulting services that often have little or nothing to do with selling traditional TV time.

Sorry, one more: TVNewsCheck also reports: FCC’s Lake: Time For Exclusivity Rules To Go.

The comments on some of these articles suggest that at least some people within the industry understand what’s going on. The problem is the industry itself can’t and won’t talk about the elephant in the room — culture is advancing horizontally every day in what is now clearly a revolution against the established way of doing things. Unless we accept this, we will continue to flop around like fish on the dock gasping for oxygen when none is there. Death will come sooner than most think, and I will not be happy when it occurs, because it all could have been prevented.

Marketing in the traditional sense is done. Put a fork in it. It truly is the fish out of water, for the rules of marketing all apply to a mass, and that is quickly going the way of downtown shopping. And here’s the important thing: the people formerly known as the audience are REJOICING! This is what media and advertising people simply won’t accept, because it means the end of their money trees. Instead, they’re pleading with Washington for relief. Mr. Rothenberg’s comments to the Wall St. Journal are oozing with denial, including his assurance that the “sky hasn’t fallen.”

There is a real issue. I’m not worried because the marketing and media value chain has shown remarkable resilience. There is a natural human need to have businesses proposition you with goods and services and vice versa. You need to have that communication. I’m really not worried about whether advertising will be able to find its way through digital channels. I am concerned — very, very concerned — that costs of ads will go up and up and up from this unethical obstruction.

“There is a natural human need to have businesses proposition you with goods and services?” This is delusional, and that’s being kind. As Dave Winer wrote last week, “Advertising is unwanted.” It’s especially unwanted when it’s friggin’ everywhere as if it has some special right to be! One-third of prime time is commercials! One. Third. Why do these people think that viewers are ignoring or skipping them? Why do these people think the same users are blocking them online? Mr. Rothenberg (and others) would be well advised to read what Dave his written here and what The Cluetrain Manifesto published 15 years ago.

Times are changing, folks, but that’s a dead horse I’ve been beating for far too long.

Headlines like the above are like fingernails on a chalkboard to me. The industry rejected me and my message, and you’d think I’d find a little joy in watching my prophecies come true. I don’t.

I’m very angry, and I’m very sad.

Online video discontent — a rant

Eleven years after Microsoft established the standard for pre-roll video advertising at 7–12 seconds, the online video “industry” is still stuck on the idea that broadcast standards should prevail. This is a sickness, my friends, and it’s killing opportunities for legacy media companies who cannot or will not accept that the Web is a different animal entirely. I am so angry about this that I could spit, so I apologize ahead of time for the rant.

My dander is up over a piece on Digiday (great website, BTW) offering quotes from its publishing conference in Miami this week. The issue is pre-roll advertising, and the article is The biggest hurdles publishers face in monetizing digital video:

What’s your biggest challenge in monetizing video? In short, too many agencies are still trying to recycle their 30-second TV ads for the desktop and mobile. There are viewability requirements to be satisfied. What works for the advertiser often results in a bad user experience.

Why, oh why is this still an issue for us?

Let’s review. Legacy media did NOT invent the Web. Microsoft, a tech company, was ahead of the game back in 2004 when MSN created its “Video 2″ ad product and ventured forward in the field of online video. They may not have invented the pre-roll, but they studied it, pioneered it, and found in 2004 that 7–12 seconds was optimal length. Here’s the money quote from an article published in MediaDailyNews back then:

Hadley (Eric Hadley, director of marketing and advertising for MSN) said that ads on MSN Video 2 will appear “somewhat like TV ads,” except that only one 7–12-second video ad will appear for each piece of content. Hadley added that while consumers don’t necessarily need a broadband connection to view MSN video, the video capabilities are limited for narrowband users.

The day after I published my story on this, MediaDailyNews — at Microsoft’s request — altered the text of the article and changed that 7–12 seconds to 15–30 seconds. Why? Because that’s what Madison Avenue would go along with, and they controlled the money that would be spent via MSN Video 2. They wanted nothing to do with 7–12 seconds. I know this, because I investigated and spoke with Mr. Hadley and others, including those at MediaPost.

The point is that Madison Avenue is still calling the shots, while online legacy video companies are sinking fast, because people — as Microsoft knew 11 years ago — won’t sit still for anything beyond 7–12 seconds. Rather than accept reality, we chose to stick our fingers in the eyes of consumers, and now we’re upset because they’ve respond with ad blockers.

Here’s the thing. Corporations don’t have to change. They can do what they damned well please, including acting like fools in the face of compelling evidence of such behavior’s danger. If they do, however, they give up the right to whine — especially to the government — about matters that originate from this unwillingness to change, and that includes anything associated with the money tree they’re trying to protect.

I’ve begged people to open their eyes about this since even before 2004, but the industry would rather die than change, and that’s the truth!

End of rant.

The Nasty Lessons of Ashley Madison

AMThe real story in the Ashley Madison scandal is the crime of the hacking, yet I’ve seen little in the way of follow-up on that and no reports about efforts to remove the database. What and who’s working on finding and punishing the people who did this? While there have been some stories about this, media outlets seem far more interested in exploiting the crime for their own profit. I’m seeing headlines like “Head of Louisiana GOP had Ashley Madison Account” or “Christian YouTube Vlogger Had Paid Ashley Madison Account.” This is journalism? I saw a report this morning on how the stolen database is now searchable. Really, people? Who does that serve if not those who wish to exploit the sordid underbelly of murder by character assassination?

My friends and family know I’ve struggled with issues of addiction my whole life. It’s a very long story — and one that has a happy ending — but before recovery, I lived two lives. Most addicts “live” their mask in order to hide the very deep shame they feel. I, too, had an Ashley Madison account, one that I obtained before addictive behavior in this very private side of life was discovered. I was curious, and what I discovered inside was fascinating but a far cry from what’s advertised. I’m also a cultural observer specializing in the Internet. It’s my life’s work. Nevertheless, I cannot be honest with myself if I were to say that my only motive with Ashley Madison was curiosity or work. We have a saying in AA that “the longer you hang out in a barbershop, the greater the likelihood you’ll get a haircut some day.” That awareness acts as a hedge against what the saying teaches, and besides, my relationship with God is such that I fear very little these days. The point is I never gave AM a dime, and that’s required if you want to make a connection. That doesn’t make me innocent, but it does give me a perspective you may not have.

So here are what I view as the real issues of this scandal.

1. We’re a society of hypocrites (what a shock!), and I’m not talking about those who may have used the site to have an affair. The joyful, self-righteous, and condescending energy behind the “stories” in the wake of the scandal bears the cloying marks of a vindictive form of murder by character destruction. While I have no pity for Josh Duggar, his case reeks of rationalization for the heinous nature of the real crime — the release into the wild of the private database. I honestly wonder how some people can look themselves in the mirror without seeing the enormous mote in their eye, for the exploitation of this leak for the sake of personal or political gain is as much a part of the crime as the leak itself. What have we become? We all need to be careful when stoning our neighbors like this, for the very glass houses we occupy could explode into millions of dangerous shards.

2. This is an early example of the legal system encountering the chaos of the network and attempting to wrestle it to 20th Century ground in service to the hierarchy. For one thing, lawsuits over breach of privacy will bankrupt Ashley Madison’s parent company, so the only people who’ll make any money from this are the lawyers. It’s simply too big a mess, and this is sanctioned and sanctified extortion. Secondly, do we really wish to live in a world where hackers can force this kind of ambulance chasing? If we’re ever going to reach a point where identity is a network requirement, this kind of breach simply cannot be tolerated, for the rules of real life that govern behavior run smack dab into the world of thoughts online. This is why membership in the site does not necessarily indicate intent to act, and why public assumptions to the contrary are such an egregious invasion of privacy and the purest form of “The Scarlet Letter.” My hope is always that we’ll rewrite some laws that will prevent lawsuits in the wake of such actions. There’s little hope for that right now, because our legislatures are filled with the same lawyers who profit from the laws they create. As I’ve written many times, it’s the biggest conflict of interest ever known to humankind. There’s no protection against time and chance.

3. This case reveals the true extent to which modernist hyperbole has replaced fact as a determining element of human understanding. Ashley Madison advertises itself as a place where men and women (can) find each other to have an affair, without strings attached. Hell, there’s even a guarantee and the boast of over a million “satisfied” members! The brand’s photo of a comely woman holding her finger to her lips is provocative and full of meaning. Really, people? Have we forgotten caveat emptor? It’s a business, and businesses are all about money, no matter what’s on the sign out front. These people will do anything and say anything to get a renewable fee from users. And like everything else in the world of adult entertainment (a.k.a. porn), therefore, the promise vastly exceeds the delivery, and it’s hopelessly naïve to think otherwise. Even if their hype is to be believed, for every “satisfied” customer, there are 36 dissatisfied members. What is Ashley Madison to them, if not, at best, a fantasy?

4. There are a staggering number of unhappy people in our world. Rather than slinging stones, we ought to be taking a deep look into the cave that’s home to all of these souls. My Evangelical friends would submit that all they need is Jesus, but you’d be amazed to discover the degree to which many of these people have been utterly rejected by the church. And now, the elbows and winks that accompany our self-righteous judgment of others in the wake of this scandal makes us the ones to be pitied. What is it about modern Christianity that produces such arrogance? The degree of discontent demonstrated in a website alleged to be for cheaters that has 37 million members ought to give us pause that maybe we’re not as perfect as we think we are. What does it say about our institutions? I think it discloses (again) that what we’ve built as a culture isn’t working. Let’s face it; Ashley Madison wouldn’t exist without demand. Shut it down, and that demand will retreat once again to the shadows, but it won’t go away.

Look, if this whole thing inspires discussion about infidelity, that’s a good thing. But during the discussion, let’s also look at the root causes (like the soul sickness of selfishness) and not dismiss it with the oversimplified notion of blaming a symptom instead of the disease.

The Ashley Madison story is one of the biggest of the 21st Century and a harbinger of conflicts yet to come. It has the potential to destroy not only real people but freedom itself, including one that’s most precious to all of us, the freedom of thought.

We all ought to be concerned.

Essay: The Fading Levers of Commerce

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

The Fading Levers of Commerce

Hello, friends. I’m writing a new book, so it’s hard to find time to continue my essay series, but the article referenced in this one so got my goat that I simply couldn’t stand it. Last week, Fortune published a missive critical of Apple for encouraging ad blocking on the Web by building new mechanisms into iOS9 that allow for easier ad blocking software by developers. Why is it critical? Because it’ll do exactly what its promising, and that is intolerable to the ad industry. Sheesh. Give me a friggin’ break! Look in the mirror, ad people. You’ve brought this on yourselves.

Local Advertising Hits A Tipping Point

“(W)e’ve reached the end of the Golden Age of Advertising,” says pioneering media researcher Gordon Borrell in a new report that paints a very realistic picture of the state of local advertising. This report — Local Advertising Hits A Tipping Point — is a 5-year follow-up to a report published in 2010 and tracks the opinions of 7,228 small and mid-size advertisers (SMBs).

While there is a lot of between-the-lines conclusions to be drawn, here are just a few of the report’s findings. Remember, these are advertisers speaking, or it would be more appropriate to call them “the people formerly known as the advertisers.”

  • 82% of SMBs have established their own media channel in the form of a website or social media page.
  • Since 2007, spending has skyrocketed to the point at which businesses last year spent 72% more on marketing services and promotions than they had spent 10 years earlier. Meanwhile, the annual expenditure on local advertising was 22% less than it was a decade ago.
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  • 72% of those are purchasing digital services to support those channels, spending far more on those efforts than on basic advertising.
  • By examining IRS tax records, Borrell concludes that “if businesses were devoting the same percentage of this year’s gross revenues to advertising as they were 10 years ago, the advertising economy would be $56 billion richer.”
  • Online media appeals to the largest percentage of local advertisers and takes the largest share of ad budgets of any other media. This is a pedestal newspapers have occupied for over 300 years! “Over the next 12 months, the gap will almost certainly widen to the point that all traditional advertising channels — print, broadcast, outdoor and mail — begin to look like niche support mechanisms to a local businesses’ digital marketing plan.”Screen Shot 2015-06-10 at 12.33.49 PM
  • Traditional media has devolved into an option, selected by habit or by preference but certainly not by necessity.
  • Online is so strong that by 2020, Borrell projects that all traditional media will scramble to maintain a small set of advertisers who will spend small shares of their budgets with them.
  • Local businesses, on average, get 20% of their sales from online, versus 13% by the old standby, the telephone.
  • These businesses have just begun to become digitally savvy, according to a new metric from Borrell. 85% of SMBs fell short of a line considered “very active” in digital activity. What this means is that they are novices that somebody can teach and that the more savvy they become, the more disruptive they’ll likely be.
  • 82% of respondents maintain a social media page with an average of 2,123 followers, though 61% have fewer than 1,000. The report notes that growing their own audience base equates to real customers for SMBs, which is radically different than buying ads based on somebody else’s reach.
  • Native advertising (a.k.a. Content Marketing) is another area of satisfaction for SMBs, although its use is low. This equates to a growth opportunity for those providing a service.
  • Mobile is another BIG area of interest, although not in any traditional advertising sense. The projected spending categories for mobile relate almost entirely to SMBs own web franchises and include things like Responsive Design (mobile-friendly), search, SMS, proximity, apps and video.

With all Borrell research, it’s useful to take a step back and try to get a 30,000 foot view. What this report doesn’t say directly is that the levers of commerce in our world are shifting to the hands of businesses themselves due to the growth and development of a networked culture. The beauty (or evil, depending on your perspective) of the network is that it is a 3-way communications medium, which allows human beings to by-pass filters that the network deems inefficient and, frankly, now useless. This includes our entire cultural infrastructure of expertise divided into silos, the first of which is how we communicate. There will be others.

This Borrell report tracks empirically the shifts relating to the way money changes hands in the levers that grease of the skids used by businesses to reach customers and sell their wares. Those businesses are loudly telling us now — along with their customers — exactly how THEY want things done, and clearly that doesn’t include traditional forms of getting the word out. It’s too expensive. It’s too haphazard. It’s out of control in ways that we tend to disregard in the name of profit.

While I certainly respect the crisis that journalism may face in all of this, we’ve been our own worst enemies in the assumption that we could simply shift our model to the Web. It’s too late to effect any significant change in that strategic blunder, but it’s not too late to shift our focus to what we’re being given and away from what we want. That, I’m afraid, is the only logical path for the days, weeks, months and years ahead.

Meanwhile, Gordon Borrell will continue to apply his fascinating research to helping us understanding not only what’s going on today but also where that’s all headed.

Just sayin…

Dear people.

Once upon a time there was a writer who tried to present logical views of tomorrow in a rapidly-changing media universe. His words were rejected, and the reasons given were usually based in the idea that this prophet’s projections were a) not our business model b) too negative or c) my favorite: too out there (in other words, crazy). This was one of them: “Creating Spectrum Within Spectrum,” published in September of 2007.

I’m waiting (but not holding my breath) for an arrangement between all incumbents that allows them to move their competition between each other to a single platform on the Web, to operate as they wish within this specialized platform. Think of it as moving their existing spectrum to cyberspace and operating therein. If you want network television, for example, you go to the network television platform. If you want movies, you go to the movie section, and so forth. This could actually be done — and it would be useful for “consumers” — but it would require individual companies within these industries to work together, and that is very unlikely to happen.

For local media, the same thing could be done. If users wanted access to local news video, they would go to one place, where all local news video was available. This would create a form of spectrum within the whole, where individual players could duke it out just like they do in their own universe today. The problem, again, is that it would require separate companies to work together, and that’s highly problematic. The number one station would tell the others to go to hell, because they think they can a) do just fine on their own and b) it would “cheapen” them by putting their work on the same stage as their competitors.

Would this station prefer their work to stand alone as a blip in the overall spectrum of the Web or be a part of a bigger blip, a piece of spectrum designed specifically to better enable users to find their work? And this same number one station is stratching its head, trying to figure out how it can attract a larger audience.

For the answer to this dilemma, let’s go back downtown, to that piece of closed retail spectrum. As people moved to the suburbs, the retail world understood that it had to be where the people were. It could not expect the people to come to them.

And so the suburban shopping mall was created, and what is a mall but a group of competitors banded together for the convenience of shoppers? Would the number one department store refuse to anchor the mall, because its chief competitor was on the other end? Of course not!

Fast forward to today, where my friend Harry Jessell of TVNewsCheck and NetNewsCheck fame published an article: TV News Groups To Offer Local News App.

“In the ideal world, we aspire for it to be an iconic destination for people who care about local news,” says Louis Gump, the CEO who developed similar news apps for CNN and The Weather Channel.

“You can see multiple stations potentially in the area where you live and you can also get content from other places you care about, either because you are from there or you have friends who live there.”

…The charter station groups insure a large initial footprint for the service. Collectively, they operate 112 news-producing stations in 84 markets, including eight of the Top 10 and 17 of the Top 25. There will be multiple stations in 21 of the markets.

That’s just for starters. NewsON intends to sign on other stations or “affiliates” to stretch the footprint across the entire nation. “I would be ecstatic to see one station out of every market. We would like to serve everybody in the U.S. with content that it relevant to them. That a big audacious goal.

“I’m not assuming that every last station group will participate, but I want them to know that everybody is welcome to participate in some form or fashion.”

And so, once again, the writer rests his case. How do you judge a prophet? If the things he says come to pass.

Just sayin…