Google takes control of its content

Between work and writing a new book, I don’t have a lot of time for commentary on current media events, but this one demands attention. Google made a couple of big announcements over the past week, and while the amoeba-like splitting of itself into two new companies is getting the most attention, it’s the announcement that it is separating YouTube from its programmatic ad buying through the DoubleClick Ad Exchange is what’s most important.

YouTube is Google’s big content play, so let’s read between the lines to see what’s going on. By including YouTube in the programmatic inventory that DoubleClick serves, Google has realized that it cheapens not only the value of YouTube advertising but also the content itself. This is a logical conclusion and one that I’ve been harping about for many years. The scourge of paid content is 3rd party ad exchanges, for they purchase inventory based on their own reach-frequency needs, not that of the content providers. Local media companies then sell their inventory to them for several reasons. One, it’s easy. In so doing, media companies go back to the order-taking business they know so well. All you have to do is wait for the phone to ring. Two, it’s what everybody else is doing. Our industry is a copycat industry, and nothing carries weight like what the guy across the street is doing. In this way, we drag our offline business online and feel good about it, because it’s validated by everybody else. Three, we’re able to centralize almost everything, which is cost-effective but foolish, because the flexibility for revenue is at the individual property level. Four, it’s what the advertising industry is telling us to do. Everybody in the offline advertising value chain gets paid with this automated buying and selling, because there’s still a place for clients, agencies, creative, networks, and exchanges. It’s a beautiful thing, isn’t it?

What we give up in all this is critical, because those exchanges set the value of our property. But Google, clearly the 800-pound gorilla of everything web-based, is throwing a huge monkey wrench in all of that by now forcing anybody who wants to advertise with all those videos (and video, my friends, is where it’s at) must now go directly through YouTube. Google, a major player in programmatic through DoubleClick, has looked at all of its numbers and decided that it can make more money by removing its content play from its own ad exchange.

Folks, this ought to be a revelation to those who run media companies. If Google is willing to do that with its video content, why should we do anything less?

In an insightful post from AdWeek, Lauren Johnson spoke with Raju Malhotra, svp of products at Epsilon-owned Conversant:

“More than half of all video ad impressions today are on YouTube, but Google only gets 20 cents of every dollar spent in online video advertising,” Malhotra said. “With features like TrueView that have better consumer experience, it seems Google can monetize this inventory far better if they control this more tightly.”

And here’s another thing. The TrueView ad concept is a stroke of pure genius for advertising, because it puts users in the driver’s seat. The concept is so pure Web that media companies simply can’t bring themselves to copy it. Its ads are skippable and have produced some very clever responses from the ad industry, like this terrific offering from, of course, Geico.

Video advertising is moving to an entirely different form for online content providers. It has to, because here, the users are in charge, and our needs MUST evolve to fit that paradigm. Google is leading the way. Let’s see who has the courage to follow.

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.

The colossal ineptness of at&t

I have been a customer of at&t Uverse for two years. The first year was in an apartment complex where I had no choice. The second has been here at the home I bought in Madison, Alabama in July of last year. I had choices, but, well, not really.

Beginning in the fall of last year, we started having problems with our service. It would simply quit whenever it felt like it. This is a new home in a new subdivision, and I know there can be quirks. However, it got so bad after the first of the year that we began having repair people several times a month. By March, it went out several times a day. We knew how to reboot everything, but even so, we were given new modems time and again. Nothing ever made it go away, and our TV would go out at JUST the wrong time in programs. We twice lost our recorded programs. In March, we were without service for 3 days, and even then, it wasn’t fixed. More outages. More repair guys saying the same thing.

Our problem began advancing up the food chain, and the entire system was swapped out for a “more reliable” system in May. The at&t computers — and there are many that provide various elements — could not fix the problem, so they created a new account and basically started over. That and the new equipment solved our problem.

Or not.

I had complained to higher ups that this nonsense had cost me real money. In order to work, I had to use my Verizon hot spot, which ran up considerable charges. I also didn’t think it was right that I should be charged for service that didn’t really work. They were nice about it and credited my account. I still have a positive balance.

But not according to at&t’s computers. I began receiving dunning notices for $586.17 past due a few weeks ago. I was told not to worry. I received a particularly nasty letter on Saturday and notified my contact via text message. This morning, I woke up to blocked service with the blocked websites and the television pointing me to my account on their website. I followed the link, and, lo and behold, my balance is still zero with a credit! Whiskey, Tango, Foxtrot!

Okay, now what do I do? At 6:30 this morning, I called the at&t customer service line, 800–288-2020. I went through the tech support voice mail hell and ended up with notification that the number had changed to 800–222-0300. Why not put this up front? I dunno. On the notion that this was a billing issue and not tech support, I redialed the number, went through the entire voice mail hell again, and wound up with the same recording notifying me that the number had been changed.

So I called the new number, which is now “consumer service” and wound up with a nice lady in the Philippines. We’re not customers anymore; we’re “consumers.” She took all my information, beginning with my phone number. I need to mention that at every stop, I was required to give the phone number associated with the account, whether voice mail or in person. The Filipino gal said she needed to transfer me to a different section, and that they would be able to help me. The phone rang, and I was into another round of voice mail hell. When voice mail asked for my phone number, I started to fume again. Here is at&t, one of the biggest phone companies on the planet, and they’re unable to “capture” the number on which I’m calling. I punched in the number for the voice mail and was then asked for my account number. I was seriously angry by that time and just hung up.

I’ve called my contact in Birmingham all day long and am still without Internet or cable. I’m still being directed to my account on their website, the one that shows zero balance and a credit.

At this point, all I can really do is laugh. But here’s the thing. I guarantee you that not a single person on the management committee that created this new “consumer service” system has even once been through it. That’s what is so spectacularly arrogant about a company like this. It makes sense that a technology company would use technology to cut costs, but to come up with a system that serves no one except their bottom line is embarrassing and ineptness gone-to-seed! The disrespect of the people who pay their salaries is so stunningly beyond belief that it is truly remarkable.

And so it goes.

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…

The Referral-Driven Web


The vast majority of online consumers of news and information connect with content through what Google calls “referrals,” and in my experience and study, second place isn’t even close.

This phenomenon has been growing for years, but the rise of social media has accelerated it to the point where it cannot be ignored. In fact, we’re at the place where it’s safe to say — with a great deal of certainty — that for traditional media companies, online distribution is referral-driven. Our online strategies and tactics, therefore, need to be centered around this reality, and that includes making money.

I like to use Google Analytics, because it provides an apples-to-apples comparison with most of the Web, including local businesses. If you’re going to use data to sell your services, you might as well use a reference that your customers understand. There are many other analytics systems available to media companies, but understanding your web usage through Google’s eyes provides standards accepted by our real online competition — the pureplays. We can only gain.

Session Acquisition is a key component of website understanding: how and where do our “eyeballs” come from? Google identifies people who visit a site by rules-based groupings known as “Channels,” which is their way of quantifying sessions. These involve several types of referrals, including social, search, email, and others.

Of the limited sites I’ve studied, around 3/4 of traffic comes via referrals. They tend to view one page and leave via that same page. Contemporary media websites have become mostly mobile, as shown by shrinking numbers of sessions recorded as originating from desktops. This is important, because the vast majority of those sessions are acquired via referrals.

The top referrer I’ve seen is Facebook, and its dominance is enormous. A recent site I studied revealed over half of all traffic (52%) came via Facebook, and most of those (68%) came via mobile.

This strongly suggests that people themselves are showing media companies how they want their content served, and our response is crucial.

Will we force them into an infrastructure built upon our wants and needs, or will we create an experience for users that will encourage them to come back? Remember, this is a world of abundance, not scarcity, and that means it’s entirely a pull medium.

Attraction works better than promotion. People don’t have to tolerate our interruptions anymore, because they can find what they need elsewhere. Oh, there are occasionally “must see” pieces of video, for example, but exclusivity is an advantage only where distribution can be controlled.

People can find them almost anywhere today, even down to just the core scene or scenes. Trying to protect this offline advantage online forces us into relentlessly playing defense at a time when we’d be better off adhering to the new rules being written by the people formerly known as the audience.

For ideas about how to create a favorable pull experience for users, we need to look to new media companies, those who aren’t bound by the concept of competing online as an offline company.

Click on any link from ESPN or Digiday, for example, and you’ll find the piece you’re seeking is at the top of an infinite scroll. I mean, how smart is this? If users are going to view only one page via referrals, why not make that page into something that allows (not forces) them to scroll on beyond a single story? We’re the ones who believe the one-page equals one-story model is what we need. despite the evidence that people don’t like to click, especially via mobile.

The question hounding media companies since the dawn of the Internet and its World Wide Web has been “how can we use this invention to further our business model?” Newspapers created a response that was identical to its offline products and even carried the same language with words like “pages” and the “fold.” TV stations responded initially with the newspaper model, but when we finally got around to video, we brought with us the 30-second spot. Brand extension has always been our goal, for it’s the power of those brands that fueled the business of mass media, a scarcity that only those with a license or a printing press could provide. We had the levers that those with money could pull to grease the wheels of commerce, and it was a heady thing.

As we’ve learned by now, however, the Web is nothing like what we imagined, and evidence is now coming forth that offers a very clear understanding of how users connect with media content. We owe it to ourselves to look at this with a clean whiteboard. Our future depends on it.