A birthday message for media

Today is my 70th birthday, and while I should be using the occasion to kick back and relax, I’m writing a birthday message to my old media pals.

Screen Shot 2016-07-09 at 7.20.37 AM

The above image is my Google home page for the day. It’s a birthday greeting from Google served only to me and, I suppose, all the other people who have a Google account and were born on this day. The reason this is significant to media companies is it reveals the anachronistic, archaic nature of online mass marketing, which remains the only model that media companies know. They still sell their online “inventory” as if it had value against the purchase of advertising on individual browser screens. It doesn’t. Google not only recognizes my browser as me, but they can follow me virtually anywhere I go on the network. The giant ad exchanges can serve individualized ads to me directly; they don’t need Wanamaker’s “hope” to reach me in a crowd.

The question then becomes, why does an advertiser need your online mass if it can cull out only those it wishes to reach? The advertiser doesn’t, unless you happen to be a part of the ad exchange or network the advertiser is using. Geography is a simple matter when you have access to every browser anywhere. That is what media companies are up against. Media sites, mobile or otherwise, are just dots on somebody else’s detailed map, and it gets worse every single day. The extent to which media companies fight this is truly astonishing, because nothing they can do or offer can slow it down.

Meanwhile, as each day ticks by, another local advertiser wakes up to the realization that this can be done, and the value of your online mass sinks deeper into the abyss. The money drain from your community is far beyond what you realize, and so you’re doubly screwed.

Happy birthday to me.

The expanding sphere of defense

The advertising industry is running into a block that’s going to challenge any new attempt to use technology to “target” people. I call it the expanding sphere of defense. It’s been around for a long time (circle the wagons), but let me show you how expanding spheres work in dealings with human nature.

One day in the mid 1980s, I assumed command of the television fundraising for The 700 Club. I asked Pat Robertson to teach me, so we went to lunch. There was an old joke at the time that the devil didn’t want Billy Graham, Oral Roberts or Pat Robertson in hell, because Billy would get everybody saved, Oral would heal everybody, and Pat would raise the money for air conditioning. Cute at the time and apropos, because the world has known few people who could raise money like Pat.

At lunch, he said, “People give money to ministries for these reasons and in this order:”

How does it help me?
How does it help my family?
How does it help my neighborhood?
How does it help my community?
How does it help my state?
How does it help my country?
Finally, how does it help somebody else?

This is a spherical diagram of self-centeredness, the default position of human beings, at least according to a Judeo-Christian heritage. It’s that old “sinful nature” stuff, and if you can get past the religious references, it’s surprisingly helpful in observing life.

I’ve found this to be especially useful in examining my own assumptions and motives and those of many others. You can use it almost anywhere, and I think the advertising industry would do well to examine it in light of the kinds of technological advances referenced in my previous post. Think about it. If we’re self-centered in drawing things to us, then we’re equally self-centered in keeping things away, even those “targeted bombs” that Madison Avenue so enjoys playing with.

The expanding sphere of defenseIn terms of defending all that’s near and dear, let’s look at the expanding sphere this way:

How do I defend myself?
How do I defend my family?
How do I defend my neighborhood?
How do I defend my community?
How do I defend my state?
How do I defend my country?
How do I defend somebody else?

I make this point to say that targeting the very center of that expanding sphere — with or without an individual’s approval — simply isn’t going to happen. Nobody feels comfortable letting strangers that far inside, where so much destruction can take place, so the number of people who’d approve such a thing is limited. And let me repeat that a small, mobile device is very much deep inside the sphere. It is a highly, highly personal instrument.

Okay, let’s assume that access isn’t granted or “approved” and that Madison Avenue simply finds a way to penetrate to the core. How long do you think that’s going to stay viable? Not very long, because the empowered bottom — the great horizontal — will find a way to spread the word, and nobody’s going to allow that kind of personal invasion. Moreover, this is just another example of business-by-toleration, which is not, frankly, a workable model for business in the 21st Century.

We have to reimagine this whole concept of advertising. Hang on; it’s going to be a bouncy and bumpy ride.

We need to get into the ad serving business

Inventory management is an industrial age conceptThere is a 20th Century marketing term being used in 21st Century marketing that doesn’t belong, and if local media companies are ever going to truly comprehend and benefit from digital advertising, we’re going to have to let it go. The term is “inventory,” and it hearkens back to industrial age models of doing business. If you don’t believe we’ve entered into a new age, I feel sorry for you, but that’s a different problem than what’s on my mind today.

I want to review (again) why I feel that not only the term but the concept is holding local media companies back from embracing the digital disruption. Here’s part of what I wrote two years ago:

In introducing the concept of Local Ad Networks to media companies — where we place ads on as many sites in the marketplace that will have us — I’m often met with the following response: “Why would I want to increase the number of sites I’m advertising on when I can’t even sell the inventory I’ve got on my own site?” It’s a logical question given the world we’ve created been handed. The answer is simple, but understanding it means thinking outside the conventional realm of reach-frequency in a display advertising model.

Implied in the question are at least seven assumptions…

  1. The CPM method of selling and accounting is the best way to handle online advertising.
  2. All ad impressions are created equal.
  3. Eyeballs are eyeballs, and inventory is inventory.
  4. Cumulative reach is the same as real time reach.
  5. Banner blindness isn’t a real problem.
  6. The value of online advertising is determined by the advertiser, not the publisher.
  7. Local advertisers are happy with the CPM model.

In the old days of the Web, media companies built static pages, and those pages contained code for advertising. In this context, media companies sold “inventory,” because the weight of the site included a limited number of “avails,” despite the reality that the numbers of views depended on the number of people visiting. We could mathematically calculate a “real” inventory, just like we did with newspapers or local television, but this was always an unknown until after the fact. Eyeballs were determined by audience estimates, and that was often highly obscured, which benefited us.

Today, however, ad “views” are precise and web “pages” are generated dynamically based on a myriad of choices built into templates that come alive when a browser cries (in a hypoinstant) “Lazarus, come forth!” This allows advertisers to target specific browser windows, because in that hypoinstant the browser doing the calling is fully vetted electronically by the ad server for identifying information, such as IP address and cookies. In this sense, the ad server cares less about the ad slot — the inventory — than it does the browser that’s making the request, so “inventory” at the very best is a hole. Fewer people are buying holes these days; they’re increasingly buying specific browsers. This is what “targeting” is all about, so your inventory is only significant if the data available for the user meets specific criteria. It’s not that the holes aren’t important; it’s simply that they’re not the important part that an advertiser is buying. As long as media companies offer only sterile holes, we’ll never get on the side of real money in digital advertising, and this is as true for mobile as it is the desktop.

Today, Gordon Borrell released new revenue projections for newspapers and beyond, and there’s one slide that caught my attention. It projects local digital revenue into the future, by advertising type. Take a look:

Borrell Revenue Projections

The big growth opportunity is with targeted display advertising, and while “targeted” is a big word, the real money is in browser targeting, mobile or otherwise. According to Borrell, advertisers are no longer interested in CPM run-of-site buying, the mainstay of the old world. They’re interested in reaching specific categories of watchers or readers, and the ability of a news website to provide detailed targeting is limited (Wait, we have a pet section!). The 3rd-party ad companies that serve ads on our sites have more detail about our users than we do, which is why they can target via our inventory while we really can’t. My fear is that media companies will get caught up in believing that they actually provide targeting within their infrastructures and will continue to cede the real money to pureplay web companies (and ad networks) that are able to do beyond.

In a very real sense, the actual “inventory” that a media companies provides is its audience, not it’s advertising avails.

The solution is for media companies to build their own local ad networks, but that’s one of those things that media companies simply don’t appear to be interested in exploring.

See “Why I’m leaving AR&D” below.