Wednesday, January 28, 2009

IN THIS ISSUE:

ONLINE CPM RATINGS FALLING. WHO KNEW?
WRAL iPHONE APP A HIT WITH iPHONE USERS
GATEHOUSEWINSFRIVOLOUS LINKING SUIT
PROTECTING IMPARTIALITY CAN MAKE FOR STRANGE BEDFELLOWS
OUTSIDE VOICES: TANYA PEREIRA, CITY ECONOMIC DEVELOPER

ONLINE CPM RATINGS FALLING. WHO KNEW? (Terry)
Waving banners is decliningIn a story that shouldn’t surprise anybody who reads this newsletter, AdAge reported this week that online CPM ad prices are falling. It should be cold water in the face of anybody who thinks we can simply transfer our content to the Web and expect it will be supported by the easy money of banner advertising.

Cost-per-thousand ad impressions for online publishers are generally off about 20%, according to several people on both the buying and selling side, and sell-through rates are dropping. And where publishers used to unload 60% of their inventory, some are now able to sell only 30%.

But perhaps indicating more trouble ahead is just how cheap the low end of the market has gotten. An August study from the Interactive Advertising Bureau and Bain Capital found the average CPMs on ad networks ranged from 60 cents to $1.10, only 6% to 11% of the prices publishers could command when they sold inventory directly. And the pricing for networks appears to be getting worse not better.

The Web is not now, nor has it ever been a CPM medium. It’s that simple. That it has been used as one is the result of four related things:

Innovation never comes from the fat cats who feed on the status quo. Things are comfortable. There’s no incentive to change. When your life is based on broadcast and print CPMs, the only ad model you see is, well, CPMs.

The ad industry needs wants a static playing field. The movers and shakers within the ad industry want the creative and the ability to manipulate reach and frequency to be the difference makers in ad campaigns. It’s what they know. This requires an arena that sits still. The Web is a dynamic, moving target.

Web publishing has been driven by a print model since the beginning. Newspapers dragged their advertising concepts with them (and then gave them all away in the name of “bundled” ad packages) without stopping to consider that the Web isn’t conducive to an ad-supported content model. TV stations did the same thing by first copying the print model, then using the display avails to add value to TV ad campaigns or to actually drive those campaigns.

Contemporary advertising demands a helpless, captive mass. I’m always amazed at how little Madison Avenue thinks people know about advertising in particular and hype in general. Whenever Steve and I introduce the idea that people are actually fleeing from the relentless carpet-bombing of unwanted messages, it draws various shoulder shrugs. “You’re kidding me, right?”

Moreover, Madison Avenue has been ignoring the wisdom of web usability guru Jakob Nielsen, who has proven that nobody even sees the bloody CPM-based ads anyway, so this sudden discovery that the CPM model is failing really can’t come as a shock to anybody. They don’t work, and who would know that better than the people who are actually paying for the ads — the advertisers. They’re now routing around the ad industry and becoming content companies that can play in the real world of the Web. Yes, folks, advertising is content in the Media 2.0 world. As money gets sucked away from CPMs and moved to promotions, social networking, and other forms of content, Madison Avenue is left scratching its collective head.

Nobody sees this more clearly than Gordon Borrell.

Banner advertising is overrated so I fully expect to see CPMs to bounce around a little before settling in at a reasonable level. National remnant banners might as well be given away for free. Local banner rates might settle in at $10, which is actually pretty abysmal except for the fact that a) no one ever recalls seeing them and b) click rates a less than 3 in a thousand.…and 2 of them are usually mistakes.

Here’s an email ad from Express. Note the reference to Facebook at the bottom. The company, like so many others, is building a community on Facebook and using email to drive people there. No media companies involved.

Express Ad

The point is that those who live by the online banners and the CPM advertising model will die by it, for online advertising is shifting rapidly, and it’s being driven by the people who have the money to spend — the advertisers themselves. Banners won’t go away entirely, but the smart media company is already exploring other options to enable commerce in the communities it serves.   Link>

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WRAL iPHONE APP A HIT WITH iPHONE USERS (Steve)
There are 229 “iApps” in the iTunes store under the category of “news.” The WRAL.com app, which was released on December 22, is currently number nine. It’s also the only app from a local TV station.

That should give everyone who has a local news site absolute shivers. Terry and I have been advising stations to build iApps and mobile sites because this is where the audience is moving. You will get one chance to be someone’s local news application on their mobile top. This is truly a case of where being there first is absolutely critical.

WRAL’s iApp is free to download and is one of the only from a local news outlet. Again, I have to ask — why? These are not expensive to develop, and they are a must. You can attach advertising to iApps (as is the case with many free applications currently on my phone).

Glenn Dickson at Broadcasting & Cable writes:

“The WRAL app was developed by News Over Wireless, Capitol’s mobile content business… “WRAL’s iPhone application has really taken off, showing the incredible demand for local content with a great design,” said Sam Matheny, News Over Wireless general manager, in a statement. ‘It is striking to see how often the word ‘love’ appears in the App Store’s customer reviews-viewers are very passionate about the app.’ ”

The passionate audience is your best friend. It is the crowd that is going to spread the word about your product. Besides, there’s no option: with the mobile audience swelling, either you can claim the space, or you will lose it to aggregators.

And there are plenty of aggregators. For everyone who complained that their news was swallowed up by Google News, I can point you to RSS readers and news aggregators that will simply take your content from you.

Yes — the browsers on iPhones and Blackberries mean people can see your site. But the experience is hardly rewarding, because it was made for a bigger screen. Instead, the WRAL.com iApp sends you to a new experience, one that looks like this:

WRAL-TV iPhone app

This is a much friendlier environment than trying to zoom in to a page, “push” around it and read it. The WRAL iApp streams video:

WRAL-TV iPhone app

And, it has what is sure to be a killer feature for many — local weather:

WRAL-TV iPhone app

All stations will do this. This is as certain as stations having Websites. It’s simply a matter of when they choose to do so. You can be first in your market and get that tiny share of the palmtop, or you can wait and hope for the best. WRAL rolled out its iApp and made the Top Ten. That’s a place you should be, too.   Link>

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GATEHOUSEWINSFRIVOLOUS LINKING SUIT (Steve)
Gatehouse media logoThe best way to get traffic to your site (especially if you have a small site) is to have links coming to you from a big site. The worst way to build traffic is to tell other sites they can’t engage in this practice. The worst, worst, worst way? Sue the linkers.

That’s what GateHouse Media did when it found out that Boston.com was posting headlines and sentences from its local Boston-area publications. Boston.com (the Website of the Boston Globe, owned by The New York Times) has launched three “Your Town” sites for Boston-area towns. Boston.com automatically uses headlines and leads from a number of sources, including some newspapers owned by GateHouse Media. This standard practice (RSS feeds, anyone?) should have flattered GateHouse. Getting The Globe to send you traffic? Gold. Instead, GateHouse decided it was theft. How, I still don’t know. The links went to the stories in the GateHouse publications.

Boston.comGateHouse filed the suit last month, and a settlement has been reached. The company will set up technical barriers to prevent Boston.com from “scraping” its content, and Boston.com agrees it won’t try to subvert those barriers. However:

“Under the agreement, Boston.com will be able to refer to stories from GateHouse sites, as it has done in the past, and to manually “deep link” to individual articles without presenting the links with headlines or lead sentences.” (emphasis mine.)

Harvard’s Nieman Journalism Lab looked into this interesting case. Zachary Seward spoke with GateHouse President and COO Kirk Davis, who said he was following the Web’s lively discussion of the case:

“In the spare time I had to follow public sentiment about this case,” Davis said, “you’d see comments like, ‘GateHouse is against linking.’ You’ve got to be kidding me. What do you think, we’re stupid? Of course we like linking and of course we support linking.’ ”

As long as it’s manual and not automatic? I don’t like to use words like “stupid,” but I will go with “short-sighted.” GateHouse has a few other problems on its hands. In July, 2007, its stock was trading on the NYSE at $18. Last October, the NYSE delisted the company. Now you can get a share of GateHouse on the OTC for seven cents. Is an automated Website link the company’s biggest problem?

GateHouse must have liked Davis’s move. About three weeks after the lawsuit was filed, the company promoted him from President and COO of the New England division to heading up the whole shooting match.

So, GateHouse will graciously allow Boston.com to link to its stories. It’s just that Boston.com has to do so manually. It can’t automate the process. Explain that one to me. That’s like telling your boss “I appreciate the direct deposit you’ve been sending to my bank, but from now on, I only want as much money as you can count into my right hand in singles.”

How does GateHouse win? They get fewer links, so their “Google Juice” is lower. They’ll get fewer page views. They look out of touch with the reality of the link economy. The sum total of the process is that Boston.com gets to do exactly what it was doing — just manually instead of automatically. And if I were them, I’d give GateHouse exactly what it wants: nothing.   Link>

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PROTECTING IMPARTIALITY CAN MAKE FOR STRANGE BEDFELLOWS (Terry)
The New York Times has published a policy document on the use of social networking sites by its employees, and it reveals the edgy nature of life in the trenches of social networking for people who work in traditional media. It also reveals the real life disconnect that old media feels it must maintain in order to be “impartial,” something that’s seen more and more these days as a problematic dinosaur in a world where trust of friends vastly exceeds trust of institutions.

Assuming impartiality transcends all, there’s a lot of common sense in the document, such as don’t take political positions or “don’t editorialize,” if you work in the news department. The paper also rightly notes that “personal blogs and “tweets” represent you to the outside world just as much as an 800-word article does.” It advises caution when joining groups, because it might suggest partiality to a cause.

Like most traditional media companies, the policy assumes a defensive posture.

Anything you post online can and might be publicly disseminated, and can be twisted to be used against you by those who wish you or The Times ill — whether it’s text, photographs, or video. That includes things you recommend on TimesPeople or articles you post to Facebook and Digg, content you share with friends on MySpace, and articles you recommend through TimesPeople. It can also include things posted by outside parties to your Facebook page, so keep an eye on what appears there. Just remember that we are always under scrutiny by magnifying glass and that the possibilities of digital distortion are virtually unlimited, so always ask yourself, could this be deliberately misconstrued or misunderstood by somebody who wants to make me look bad?

This is typical old school journalism, and something with which we can all identify. We’ve never been able to freely march in the parades of controversial causes or picket on behalf of sides in controversial issues (unless, of course, it’s about our employment). But social networking is a very different animal, and one that demands another look at the traditions and canons of the news business. Why? Because as the media disruptions continue, new values are coming into focus — concepts like honesty, transparency and authenticity — that don’t presuppose the artificiality of objectivity. Is the audience, for example, better served by obscuring the biases of the writer or by having them front-and-center? Will it ever be all right to just be yourself in covering the news? These are tough questions with no easy answers, but if we’re going to begin to address them, social networking is a logical place to start.

In a world where connections are everything, The Times policy suggests that “friending” certain people is problematic.

Another problem worth thinking about is how careful to be about Facebook “friends.” Can we write about someone who is a “friend?”

The answer depends on whether a “friend” is really a friend. In general, being a “friend” of someone on Facebook is almost meaningless and does not signify the kind of relationship that could pose a conflict of interest for a reporter or editor writing about that person. But if a “friend” is really a personal friend, it would.

Should we avoid consenting to be Facebook “friends” of people in the news we cover? Mostly no, but the answer can depend on the situation. A useful way to think about this is to imagine whether public disclosure of a “friend” could somehow turn out to be an embarrassment that casts doubt on our impartiality.

It’s okay to be friends with people; it’s the public disclosure of that friendship that is the issue.

The statement that one is impartial is the greatest evidence that one is not, for the best anybody can do is try. Human beings intuitively know this, and so it is that the people formerly known as the audience (TPFKATA) rank trust in the press right there with trust in car salesmen. After all, if you need rules to assert your impartiality, then you’re acknowledging that your employees default to partiality. This is old media’s greatest challenge in the face of disruptions that aren’t bound by these rules.

The ethical behavior of professional journalism in a networked world is something that demands examination, because, despite the efforts of those to the contrary, the network is not a mass. There is no stage where media companies can perform, because the focus of the attention of those in the network is on each other. It is participatory, interactive and tribal by nature. You’re either in or you’re out; there is no fence-sitting. To artificially manipulate your place in the network is fraught with danger, for as easily as you can be “friended,” you can be “defriended.” Truth will out.

But the real rub is this: at some point in the not-too-distant future, we’re all going to approach a fork in the road. One path is the old; the other path is the new. Our world is either networked or it is not, and which will we choose? If our choice is to stay outside in the name of impartiality, our observations will be skewed and we’ll risk not only a greater disconnect with the people we’re trying to serve as journalists but also complete irrelevance. If we enter in, the sacred canons of journalistic ethics — which were designed to protect the institution in a mass marketing world — will have to be modified or left at the door.

The network is the thing. Read on:   Link>

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OUTSIDE VOICES: TANYA PEREIRA, CITY ECONOMIC DEVELOPER
Tanya Pereira, Brewer MaineIn our continued effort to bring in outside voices, we turn this week to Tanya Pereira, the Deputy Director of Economic Development for the City of Brewer, Maine.

With at least four generations currently working side by side in the workforce, navigating social media as a work tool is even more complex. As a Gen Xer working in a field dominated by boomers, I constantly have to check how I interact with all types of people.

But my “Gen X‑ness” gives me an inherent advantage in technology-driven initiatives. I am the ‘go-to girl’ for colleagues when it comes to using social media for work and community endeavors.

I sat in a seminar today for economic developers and listened to presenters try to explain to four generations how to effectively utilize social media for networking, business development, and lead generation. The most striking question was this: “Should I create separate Facebook profiles for business and personal use?”

Why would you?

I am my own brand. By the time my generation hits its 30s, each of us have held an average of 8 jobs. There is no gold watch plan, no pension waiting for me to reward my loyalty. I am not unique — my generation is finding its own way in very uncertain economic times. And others could learn by following suit.

Social media is the new resume.

I don’t want to be separated from who I am. I do my best work by building relationships with the people I meet and creating a dialogue. That dialogue is not exclusive of who I am and what I do 24/7. It is all-encompassing.

For other generations who want to keep their golf weekend separate from their sales calls, I say this: isn’t that cold call a lot easier to make if you have something in common with your target?

My employer hired ME, not my previous work experience. They hired me because of who I am, the skills I have, and my ability to build relationships. Social media is a key component of that. So shun the urge to create separate profiles and hide who you really are.   Link>

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QUOTE OF THE WEEK
“Local ad trends continue to shock us with unimaginable rates of decline.” Bernstein media analyst Michael Nathanson in a research note, quoted in AdAge.