We need to stop underestimating our audience

Gary Vaynerchuk

Gary Vaynerchuk

I laughed out loud the other day while watching one of those wonderful Gary Vaynerchuk videos. You should already know what I mean by that, but if you don’t, here’s where to find Gary Vee, as he’s known: garyvaynerchuk.com.

The customers’ bullshit radar is better than ever before,” was the line that put a smile on my face.

You know why we have an audience problem in the news business? It’s because we behave as though they’re stupid. We act as though we’re so much better than those with whom we’re sharing information, and it shows. This is at the heart of a massive cultural change in our world, because the people just aren’t as stupid as the elites of the Industrial Age, 20th Century think we are. And we’re getting smarter every day, and the smarter we get, the more disruptive we get. I wrote about this in The Evolving User Paradigm many years ago.

Vaynerchuk is absolutely right, because people have access to information that used to be protected by and for elites. This is not going to end well for the status quo, and journalists especially — who think of our trade as a profession — are incredibly vulnerable in separating ourselves so arrogantly from the people we serve.

I’ve written before of Edward Bernays’ (The “father” of public relations) 1947 essay The Engineering of Consent, in which he wrote:

If we understand the mechanism and motives of the group mind, it is now possible to control and regiment the masses according to our will without their knowing it.”

The point is that the ruling class of the 20th Century is being disrupted by the Internet and its ability to put information in the hands of everyday people. It makes Bernays’ cleverness much more difficult, which prompts observers like Gary Vee to note that “The customers’ bullshit radar is better than ever before.”

In a recent interview with SFGATE, CBS Evening News anchor Scott Pelley tried to explain a recent uptick in ratings for network newscasts.

Because never in human history has so much information been available to so many people, but unfortunately that also means that never in human history has so much bad information been available to so many people.”

We may not get it right all the time, but at least (viewers) know serious journalists and serious editors are trying to get the news right.”

No they don’t, Mr. Pelley, as the Gallup survey of media trust going back to 1973 reveals a serious decline in trust of the press by the American public. Only 1 in 5 believe these kinds of statements. For the others (80% of us) what Mr. Pelley is selling is, well, bullshit.

But it goes far beyond that culturally.

In this simple statement, Mr. Pelley reveals his bias and represents the central argument of colonialism — that people are stupid and need the brilliance and experience of experts in order to survive and thrive. Along the way, these experts make a very fine living as parts of the hierarchical ecosystem that feeds the masses. Every institution of Western Civilization functions on this tenet, which needs to be the functional reality in order for the elites to manage everybody, whether they know it or not. It’s eerily similar to the way things where in 15th Century Europe when Gutenberg challenged the ruling authority of the Roman Church by printing the Bible and subsequently, a common English language version.

TVNewsCheck ran an article recently about WBIR-TV news director Christy Moreno in Knoxville who regularly asks for feedback from viewers on daily decision-making. Notice the response of the Poynter Institute, that bastion of journalistic tradition.

Purists, such as Kelly McBride, Poynter’s expert on journalistic ethics, however, don’t like the idea, saying the average TV watcher doesn’t have the skills it takes to resolve journalistic issues.

Making ethical decisions about journalism is a process,” McBride says. “When you crowd source a decision, you come out with the lowest common denominator. That’s just the math of it.

So easily do these words flow from Ms. McBride’s mouth (and, let’s be honest here, the mouths of “most” professional journalists) that there’s not even the slightest thought that the idea may be insulting to a person with even average intelligence. This delusional gap between journalist and average citizen is at the heart of the people’s mistrust of the press.

I keep running into TV news directors who view their websites as a distribution point for what we call “Finished Product News,” in other words a completed, fully-vetted story filled with every detail and pictures or video that we have (see my 2007 essay “News is a Process, Not a Finished Product”). It’s not; it’s a distribution point for bits and pieces. Our TV newscasts are our “finished products.” This, too, is a failure to recognize a) that people understand the moving, changing, evolving nature of news in the process of development and b) that they don’t need us to assemble everything for them.

Citizen media pioneer Dan Gillmor and author of the seminal “We, The Media,” once wrote “My readers know more than I do.” He was speaking of his readers as a group, and he spoke to them always with respect and humility. We could use a whole lot more of that ourselves as we deal with both the changing nature of news on the Web and the changing cultural roles brought about by the cultural shift to postmodernism.

What is a digital media company’s “inventory?”

Sorry, but I can’t resist.

In a press release this morning from IB (Internet Broadcasting Systems Inc.) announcing a new deal with the Journal Broadcast Group, IB CEO Elmer Baldwin said, among other things:

We’re helping them to discover new ways to monetize their growing digital inventory.”

This statement represents the group delusion under which legacy media companies operate, that an advertising “slot” on a website is inventory to be sold. The problem is that media companies don’t sell “inventory,” per se; they sell audiences, or more specifically, the eyeballs that might view that “inventory.” Many will accuse me of playing semantics, but it’s actually much more basic to business. The price for which this inventory is sold is based on CPM or “cost per thousand.” Thousand what? Thousand pairs of eyeballs. If, for example, the price the advertiser pays is “$10 per thousand,” then the media company gets 10-bucks when a thousand people view that ad as demonstrated by its logs. But the CPM model was created in the mass marketing days and works well when we’re dealing with significant numbers of eyeballs AT THE SAME TIME! It is a terribly inefficient and ineffective formula when applied to what is really a one-to-one environment as opposed to one-to-many.

I have stated ad nauseum that the only winner in these kinds of scenarios is the software serving the ads, because it captures and uses all of the data gathered while serving the ads. Eyeballs in the network increase in value in direct proportion to the data that’s attached to them. And so media companies play this “digital inventory” game as though it was the same game they play with their legacy properties. It’s understandable, of course, but that doesn’t change the reality.

Moreover, what this deal is primarily about is banner advertising. That’s the “inventory” — availabilities or “open slots” for banner ads on a media company website. The format has been dying for years, but if you’re a media company, it’s what you have, and so you make deals like the above and hope for the best. In addition, there’s the assumption that this “inventory” is growing, and that’s an important concept for mass marketers. We’ve never met a number that we didn’t think we could manage our way into making bigger. This is what leads media thinkers to ignore the invasive user experience in favor of tactics that produce more of that “inventory,” tactics like splitting web documents into multiple documents that challenge even the most patient consumer. The user experience MUST be number one, or the eyeballs that we think we can count on will go elsewhere.

The Web is NOT a mass marketing tool, despite what certain “experts” would lead us to believe. It certainly can mimic the properties of mass media, but the truths of everything important to business models lie hidden within the code that makes up the back end of what we offer. Silicon Valley knows this and is happy to play along with the “digital inventory” game, while picking our pockets at every opportunity.

Twitter’s personal branding value

A note to TV stations (and employees) everywhere…

Buried in the story of Twitter’s deal with the NFL is a VERY important message for local stations (networks, too): a name super that includes a Twitter address has REAL value.

Adding to the irritation is that the NFL restricts how the networks can use Twitter on telecasts. Late last season, the league told networks that they could not feature Twitter’s bird symbol to promote players or announcer Twitter handles during games. The league reasoned that promoting tweets was an in-game sponsorship that is not allowed, sources said.

This will benefit broadcasters during negotiations with talent in an all independent contractor world. People who live in your communities — heck, businesses, too — would die for the exposure reporters and anchors get for their Twitter handles and Facebook pages.

TV, meet Gilmore’s Law

NAB 2013 Show AdThe NAB is underway in Las Vegas in the wake of an all-time revenue record for the broadcast industry last year. The networks are about to launch the annual sale of their inventory known as the upfronts, and all is well. Well, not exactly. There’s declining viewership, the not-so-little disruption known as Aereo, the increasingly viable civil defense, weather warning and Amber alert efforts of the Telcos, the love affair that all media companies have with online banner ads, and mostly, the way broadcasters make all of their online strategic decisions as if the Web wasn’t a horizontally-connected network.

If you strip away the HTML that displays what, for example, a local television station offers online — also known as “the content” — what’s left is the network and how that web document fits within the whole. This document must follow certain realities about life in the network that contradict the view associated with simply watching or reading the content, especially in the area of mass media. In certain instances, we have to go many years back and visit the minds of those who created the network, and here’s a noteworthy truth: they had nothing to do with media.

These were engineers of the highest level, including John Gilmore, who, according to Wikipedia, is one of the founders (the fifth employee) of Sun Microsystems, one of the founders of the Electronic Frontier Foundation, the Cypherpunks mailing list, and Cygnus Solutions. He created the alt.* hierarchy in Usenet and is a major contributor to the GNU project. I’ll spare you all the link following by saying that John isn’t likely the kind of guy who’d be running ANY of the companies on display at the NAB this week.

In addition to all his “foundings,” Mr. Gilmore is also the author of the often-cited axiom, Gilmore’s Law:

The net interprets censorship as damage and routes around it.”

Why is this so important for broadcasters especially? Because the parameter that the FCC uses to issue licenses to broadcast companies is geography, and online, geography represents a form of “damage.” Geography is an artificial inefficiency that even China is beginning to see doesn’t work in terms of guarding certain kinds of information from the eyeballs of its citizens. In other words, when Aereo wins its legal battle with broadcasters (it will), the just-announced News Corps’ response to take its stations off-the-air will backfire, because anything that attempts to give station owners a piece of the pie through Internet streaming will eventually have to bend its knee to Gilmore’s Law.

News Corp. Chief Operating Officer Chase Carey told Fox News Entertainment:

This is not an ideal path we look to pursue, but we can’t sit idly by and let an entity steal our signal,” Carey said at the annual gathering of broadcasters, called NAB Show, in Las Vegas. “If we can’t do a fair deal, we could take the whole network to a subscription model.”

News Corp plans to use GPS to determine how its stream will be divvied up via geography, but this is entirely to satisfy the revenue wants and needs of local affiliates. That may seem fair to the stations, but consumers will get doubly hosed — by cable companies, whose fees aren’t about to go down, and by Fox (and others later), via its own subscriber fees. Something will have to give, and consumers will demand one OR the other but not both. And Gilmore’s Law says that if it ends up that streaming is preferred, the owners of the content will ultimately win.

jetplaneWhereas terrestrial broadcasting used to be the most efficient way to distribute video content by dividing the airwaves into geographically-defined markets, that is no longer absolute. What we have here is the railroads, who at one time owned shipping across-the-land, believing they deserve a fee for each jet that races across-the-sky, crossing over their land-based tracks in the process.

There are ways that local media companies can make money and even thrive downstream, but riding the coattails of their network big brothers is going to become a net liability sooner rather than later. The ones who will “win” the most will be those who own the programming that people watch, and this needs to be a part of everybody’s long-term strategic plan.

BONUS LINK: The Verge Nuclear option: would Fox really leave the free airwaves to undercut Aereo?

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.

Why I’m leaving AR&D

AR&D logoMy contract to continue with AR&D isn’t being renewed, and I’ll be unemployed come January 1st. I’m retiring, and the decision is a mutual one for two reasons. One, my body just can’t do what it used to be able to do, which is what happens to most people when we hit a certain age, regardless of how well we take care of ourselves. Two, and this is by far the bigger reason, our clients simply aren’t buying what I’m selling. There are plenty of better qualified people out there to teach media companies how to get the most out of their brands in the network (Alisa Cromer is the best, but there are many others). Anything suggestive of the idea that the Web is a sustaining innovation are functioning in what I call “Media 1.0,” the sandbox of media brand extension.

For the last 14 years, my heart and mind have been elsewhere: creating concepts that will allow local media companies to move beyond that which their brands can sustain. I think we should be using those brands to move beyond the world of advertising, which is what I call Media 2.0. Here, the innovation of the Web is disruptive, not sustaining.  However, this been a really hard sell for the local broadcast industry. 2012, for example, will finish as a record profit year for broadcasters, who see no compelling reason to invest some of that money in the future. Broadcasters made so much money this year that it would overwhelm even a very rich man’s wallet. Millions upon millions upon millions of pure profit. Everybody knows that next year will be brutal, but they press on, because 2014’s election beckons like a reliable point of light on the horizon. The thinking goes that no matter what happens in 2013, all will be well in 2014, because that’s the way it has always been.

Election money is broadcasting’s classifieds, revenue that feels like you can count on it no matter what else happens. I mean, where else could candidates go to actually move the needle when it comes to controlling the political message? Right? TVB boss Steve Lanzano just published a piece declaring that “As Election Day nears, waving off TV would be a strategic mistake of epic proportions.” After election money comes automotive, the “steady-eddie” of broadcast revenue, the number one reliable revenue source for local broadcasters. Where else would auto dealers go to actually sell cars, no matter how the economy is doing? Right? And so it goes.

My dear friend and employer, Jerry Gumbert, has been a real trooper over the past six years, supporting me and my views completely. He’s even allowed me to verbally beat the crap out of the very industry that pays our salaries, and this has taken a level of courage and leadership that few executives even recognize, much less possess. I’m proud of my contributions to the vision that drives the company, and I’m proud of Jerry. The truth is, though, AR&D will do just fine without me.

Alice and the White RabbitThrough my research and writing many years ago, I came to the conclusion that following three broad trends was a lot more fruitful for predicting the future than chasing every “sure thing” rabbit that came along. If a new innovation advanced one of these trends, it was a lot more meaningful to me, perhaps because it helped keep me focused in a time of unrelenting change. Among the chaotic waves of turbulance that surround me in an advancing storm, I’ve learned to zone in on the horizon instead of the waves.

Here are the three big themes of which I speak:

  • The unbundling of content from infrastructures: In 2004, then FCC Chairman (and currently chief lobbyist for the cable industry) Michael Powell told students that “application separation” was “the most important paradigm shift in the history of communications” and that it would “change things forever.” It has already disrupted major industries like music, print media (esp magazines) and video, and it’s just a baby in terms of its growth and development. This means that any industry that makes its money off an infrastructure that surrounds content that people wish to consume has to face this disruptor sooner or later. It’s why, for example, I favor mobile apps done in HTML5 over those that are closed. Discovery is the key to content distribution downstream, and companies close the door at their own peril. A closed app can be the same thing as a paywall in terms of how it keeps content “inside.”
  • Real time flows and streams of knowledge and information: I interviewed Kevin Kelly a couple of years ago about the seminal “We Are The Web” piece that he wrote for Wired Magazine in 2004. I asked if he’d write anything different these many years later, and his response was that he’d include the shift to real time flows and streams of information. People who walk through their daily lives are apt to miss this subtle but sure shift in the way knowledge and information are being distributed. This seems a managable trend until trend number one is added to the mix, because technology wants and needs that which is detached from infrastructure in order to move this to the next level. For media companies, this speaks to a product unrelated to legacy distribution methods, yet most companies — even those who “get” real time — are reluctant to even flirt with unbundled concepts.
  • The Second Gutenberg moment: This theme is by far the biggest and most disruptive to any hierarchically-based institution, including the media. It’s what Jay Rosen has termed “The Great Horizontal” and J.D. Lasica called “The Personal Media Revolution.” I like the reference to Gutenberg, because history can “see” the scope and breadth of how the printing press changed the culture of Western Europe and led to, among other things, the French Revolution and the Industrial Revolution. We don’t have a clue about this Second Gutenberg moment, but the changes will be just as impactful. The power of knowledge at the fingertips of the masses and the power to disseminate knowledge to the masses have only begun to touch us. Those who stand as “special” in the old world — and I consider those with broadcast towers to be among them — simply aren’t as special anymore (or perhaps it’s better to say they “won’t be special”). It is within this theme that I find it difficult to support practices that serve only to advance this “specialness.”

If you’re unable to find sustainability within those three trends, then your future — regardless of your business proposition, media or otherwise — is suspect, and that’s the truth.

I don’t make portability its own theme, because mobile isn’t so much something new and separate as it is where the whole network is going. Computing, in other words, is going portable, and it can be dangerous to think that “mobile” is its own category. For a similar reason, I don’t view “second screen” or “social TV” as their own themes, because these are simply natural extensions of computing and fall more into what I would see as Media 1.0, or brand extension tactical applications.

I’ve worked very hard to stay on top of things on behalf of clients and beyond, but it has become a full-time job without a demand, so my departure from AR&D is both inevitable and understandable. I’m a little unclear as to exactly what I’m going to do downstream, but writers write, so I’m assuming I’ll continue writing. The Pomo Blog will live on.

The Web — and these three broad trends — are going to accelerate their disruptive nature, and sooner or later, television stations are going to have to respond.

But I’m reminded of the old admonition to not “confuse a clear view with a short distance.” Market timing is everything…

…and so it goes.