Media mergers and hanging on

I need to step away from book promotion for a minute to make a comment the current state of local media. First, there’s the merger/sale this week between Sinclair Media and Tribune Media that will give Sinclair over 200 local stations in the American TV world. In that world (mass marketing/mass media), the bigger the footprint, the greater the profit, for the core competency of media companies is the ability to produce an audience for marketers. Secondly, an interesting article today in the Columbia Journalism Review about the fiscal health of Gannett and its future headlines this way: “Gannett and the last great local hope.”

Sinclair and Gannett will take their places in the halls of commerce as the last buggy whip makers for the mass media industries of television and newspapers, and while there’s certainly nothing wrong with this, there’s a much bigger problem ahead for local communities, and that is the loss of local advertising. I’ve been harping on this for so many years that I’ve grown weary of the sound of my own voice, and while the prophecies of 15 years ago are now coming to pass, the industry still doesn’t understand what’s really taking place.

The old saw about business disruptions goes like this: “If the railroads had known what business they were really in, they would have owned all the early airline companies.” The railroads were in the transportation business, not “the railroad business,” and that was their Waterloo. In like manner, media companies are in the advertising industry, not the radio, television, or newspaper industries. Follow the disruptions in advertising, and you’ll see the downfalls in local media.

But it’s even worse than you think, for the ascending advertising giants are all digital ad exchanges and ad networks. They have the ability to serve ads to any and every browser anywhere and at any time, so the collection of data about those individual browsers (you don’t need a person’s name) has been the task of anyone wishing to remain relevant in the ad space. Local media companies have simply turned away from this most important task (“It’s not our business model.”).

One of the most significant obstacles that the net overcomes is geography, and so local advertisers – who used to spend their money with all sorts of local media companies – are now spending that money outside their markets with people who can do this browser-level targeting.

Gordon Borrell

Ask Gordon Borrell about how much money – real money – is moving from businesses in your community to advertising companies outside your market. You’ll be shocked, or you won’t believe it. These outside interests pay no taxes, support no community chests, employ no local people, and support no local organizations such as youth sports and so on. The money goes straight out of your community and into their pockets. It doesn’t pass go. It doesn’t collect $200. It just strips your community of a vital part of what makes it a community in the first place.

And yet, there is silence where there ought to be cries for help, because local media companies have badly failed the communities they used to serve by assuming that one can remain an analog mass marketing vehicle in the age of digital competition – not for the content they create (which is all we talk about) – but for the money that supports the production and creation of that content.

And so Sinclair grows and Gannett hangs on, both victims of their own corporate malfeasance. One thing they will never be able to say is that they weren’t warned.

You may now return to your regularly scheduled programming.

Going, going, almost gone

It’s time to update my graph of the Gallup organizations “media trust” measurement. In 1997, Gallup switched from taking this pulse every three to every year, and the graph they produce today only begins in 1997. However, I’ve never felt that was appropriate, for it misses a big part of the story, and so my graph goes back to 1973 and is spaced every three years.

galluptrust2016

2016 is an off-year to include, so I’ve projected this year’s numbers forward. That’s because the drop-off between 2015 and 2016 is significant, and I don’t expect it to rebound. Here’s Gallup:

Americans’ trust and confidence in the mass media “to report the news fully, accurately and fairly” has dropped to its lowest level in Gallup polling history, with 32% saying they have a great deal or fair amount of trust in the media. This is down eight percentage points from last year. (Emphasis mine)

The culprit is the election and more specifically the Donald Trump campaign, which has been very effective at accusing the press as being party to the campaign of Hillary Clinton. Apparently, it doesn’t matter if the accusation is accurate; in politics, perception is truth.

It’s fair to say at this point that the illusion of objectivity in the press is history and that transparency is all that’s left. Americans will never again heed the press as “the voice of God” as we did in the days to which Donald Trump wants us to return. This alone should convince Trumpers to look beyond the slogans, but it probably won’t.

Meanwhile, any media outlet believing it does its work with the public trust is operating daily under a highly fallacious assumption.

Two major online news factors for young people

pew-readersNew Pew Research reveals that young people prefer to READ news online rather than watch it. This is being presented as a revelation (Younger adults prefer to get their news in text, not video, according to new data from Pew Research), but it’s really just another example of news organizations’ history of not paying attention to reality. The new report doesn’t tell the whys, and doesn’t even speculate. Please allow me to give you two important reasons why young people prefer reading news to watching it:

Over fifteen years ago, then J. Walter Thompson CEO Bob Jeffrey said, “Time is the new currency.” Many of us at the time applied the idea to online media, especially after we learned that viewers were using DVRs to avoid commercials, and the not-so-secret reason was that they “didn’t have time” for commercials. Therefore, the first reason young people would rather read news that watch it is you can do the former a whole lot faster. Don’t try to dazzle me with your storytelling genius; just give me the facts, so that I can determine (for myself) if I wish to explore further.

The reason media companies prefer video is the nice ROI on ads. Madison Avenue likes video, and that means media companies do, too. Unfortunately, nobody in either of those two chairs gives a ripple chip about what the audience might think and don’t think twice about irritating those viewers with pre-roll ads. Therefore, the second reason young people prefer reading to viewing is the annoyance and wasted time of advertising that is meant for a different medium.

All of this is doubly significant on mobile, which is THE go-to platform of young people (and beyond).

There are other factors. For example, prime time for news remains the hours at work, and the disruption to the office of someone watching a video is untenable.

Many of us have known for a very long time that news clips with attached (or detached) pre-rolls wouldn’t work to grow revenue, just like we knew that recorded newscasts on demand wouldn’t be a significant revenue source either. This is the Web, people, not TV. We’re not on a stage with a captive audience. We still need to get over ourselves and start honoring those eyeballs that we need so badly. And PLEASE can we stop feeding them ads that were created for TV, not the Web?

One size fits all (or not)

With the dawn of the network age, institutions that used to flourish in the analog communications era (every year since before the network) continue to respond as if nothing has changed. Nowhere is this truer than with broadcasting, where its audience has become atomized in and by the network. But it’s more than that. People now have weapons to actually assist their escape from actual audience seats, which makes ignoring reality even more dangerous. And rather than invest in the very real opportunities of the network – especially at the local level – broadcasting continually works to redefine the disruption as just another obstacle to overcome in routinely trudging the road to its money tree.

Adweek was given a preview this week of Nielsen’s new multiplatform measuring tool, total audience measurement. This is Nielsen’s attempt to take that atomization and shove it back in the bottle from which it came. Here are key takeaways from the Adweek article:

…total audience measurement is real and, given the industry’s growing cries this fall (in the face of more live TV viewership declines) for a tool that will finally allow them to fully measure and monetize viewers, it’s spectacular…

The result is total audience measurement, Nielsen’s single-sourced platform to account for all viewing across linear TV, DVR, VOD, connected TV devices (Roku, Apple TV and Xbox), mobile, PC and tablets…

(Nielsen evp Megan Clarken) “What we’re acutely aware of is our measurement underpins $70 billion worth of advertising,” she added.

Make no mistake, this is entirely about advertising and the potential collapse of the top-down, stage-to-audience hegemony that runs everything. Why else use the word “audience?” With that word, Nielsen is saying, “Hey, everybody, nothing has changed. You needed us to figure out how to crunch these numbers to tell the story of how relevant you’ve stayed through this whole disruption mess. Thank God, right?” With $70 billion at stake, the back pats are deserved.

Or not.

“Audience” is defined as “the assembled spectators or listeners at a public event, such as a play, movie, concert, or meeting.” Mass media requires a mass (an audience) in order to get paid by advertisers who want to reach those audience members in order to advance commerce. Audiences are captive. They sit in seats and pay attention.

Or not.

Everyday people – those who Jay Rosen brilliantly tagged 10 years ago as “The people formerly known as the audience” – are using technology in their war against manipulation by forces that could do whatever they wished in the mass marketing era. Television advertising still works and probably always will, but it’s nowhere near what it used to be. According to the Adweek article, “live” television viewing makes up only 45% of a program’s total “audience.” Those technologies that Nielsen is putting together include those that run without commercials or can be skipped. Moreover, even if people don’t change the channel during commercial breaks, they are on to secondary screens, and their attention is diverted. Not all views are equal in the eyes of increasingly educated advertisers.

$70 billion is a lot to lose, and to a certain extent, defensive strategies like this are to be expected. What’s hard to fathom, however, is that in a competitive environment like the network, it’s fiscal suicide to only play defense. Meanwhile, money continues to flow to those in Silicon Valley (and beyond) that are doing the innovating in playing by the network’s rules.

They should. After all, they invented it.

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 Premiere 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.