Paul Wallbank – Brilliant Communications

Category: media

  • Exposure exposed

    Exposure exposed

    A few years back a client of mine was delighted to receive a phone call from a television producer offering exposure for his business on a national TV program.

    The offer was Jeff, who is a builder, would donate his company’s work to a television home improvement show and in return Jeff’s business would get a mention in the credits as well as some coverage in the program.

    Jeff agreed, had new t-shirts for his labourers printed and they did three days work helping celebrity gardeners refurbish a backyard.

    The guys had a ball, the labourers chatted up the presenter and the pretty production assistants and for a day or so Jeff felt like he was in Hollywood.

    A few weeks later the show went to air – there were a couple of glimpses of Jeff’s guys doing stuff and if you were quick with the freeze button you could pick out part of Jeff’s business name and phone number.

    When the show finished, Jeff’s business appeared for a split second which was difficult to read if you were lightning fast with the remote control. Not a great return for several thousand dollars of labour and materials.

    That was an expensive lesson for Jeff.

    Recently I heard of a business that was asked to contribute some of products to a newspaper – they wanted an ongoing commitment that would cost the business quite a bit of money.

    For the newspaper this is a great deal – they tie in a promotion for their readers that costs them nothing. The business is left out of pocket with little upside except for some “exposure” of dubious value.

    We see this repeated every day by dozens of businesses being seduced into offering fat discounts for group buying sites. The salesman’s spiel is that a prominent offer will get exposure on their email that goes out to thousands of people.

    Most of these promises are nonsense; giving away your time or work for free is the most expensive thing a business can do and if it’s going to work it has to be part of a strategic plan.

    It’s been said all publicity is good publicity, but that’s not really true if there’s no return on a substantial effort.

    Blindly giving things away in the hope of getting some free publicity isn’t a good business practice and those who urge you to do so aren’t acting your best interests as Jeff learned.

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  • Why the Microsoft Faithful are wrong about Windows Phone

    Why the Microsoft Faithful are wrong about Windows Phone

    Late last year an event organiser recounted how she’d been told to only approaching Microsoft for event sponsorship if the occasion was related to mobile telephony as “all of our marketing budgets are focused on Windows Phone.”

    So it wasn’t a surprise to read at the beginning of this year that Microsoft were allocating $200 million for marketing Windows Phone in the US alone.*

    The Consumer Electronics Show is the high temple of tech journalism with thousands flying in from around the world to breathlessly report on the latest wide screen gizmo or mobile device

    At the 2010 show, 3D television was going to be the big consumer item while at the 2011 event it was going to be Android based tablets that were going to crush the Apple iPad.

    Despite the millions of words written and spoken about these products, both flopped. So it was no surprise we were going to see plenty of coverage of Microsoft given the budgets available and it being the last time Microsoft’s CEO, Steve Ballmer, would give the CES keynote.

    Microsoft’s CES publicity blitz kicked off with a rather strange profile of Microsoft’s CEO in BusinessWeek which if anything illustrated the isolation and other worldliness of the company’s senior management.

    The PR blitz worked though with Microsoft tying for first place in online mentions during the show according to the analytics company Simply Measured.

    After the show the PR love for Microsoft continues with Business Insider having a gorgeous piece about why Windows Phone will succeed and criticising tech blogger Robert Scoble’s view that the mobile market is all about the number of apps available.

    Scoble replied on his Google+ page explaining why apps do matter and adding that most of the people he meets hate Windows Phones, the latter point not being the most compelling argument.

    The most telling point of Scoble’s though is his quoting Skype’s CEO that they aren’t developing an app for Windows Phone as “the other platforms are more important, so he put his developers on those”.

    Microsoft spent 8.5 billion dollars buying Skype and intends to lay out over $200 million promoting Windows Phone. Surely there’s a few bucks somewhere in those numbers to pay for a few developers to get Skype functionality on the new platform.

    Since writing this, Robert Scoble has issued a correction from the Skype CEO stating a version is being built for the next version of Windows Phone

    The fact Microsoft can’t organise this seems to indicate not all senior executives share the vision for Windows Phone. It’s difficult to image Google or Apple having this sort of public dissent on a key product.

    Management issues aside, Microsoft’s real problem are they are late to the mobile party and don’t have anything to gain attention.

    There’s nothing wrong about being late to the party – Apple were late to enter the MP3 player, smart phone and tablet markets – but in each case they bought something new that changed the sector and eventually gave them leadership of each sector.

    With Windows Phone, there’s so far little evidence Microsoft are going to deliver anything radically new to the sector. With Apple’s iOS and Android dominating, it’s going to be a tough slog for Microsoft and they are going to have to have to carefully spend every cent of that big marketing budget.

    At least Microsoft’s PR team is doing a great job, the challenge is for the rest of the organisation to sell it as well.

    *As an aside, it’s interesting the author of that article about Microsoft’s marketing budgets boasts how he “been sitting on this information for weeks so that Microsoft can make its big announcement at CES this coming week”. It’s good to know where Paul Thurrott thinks his responsibilities lie – certainly not with his readers.

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  • What’s a Twitterer worth?

    What’s a Twitterer worth?

    $2.50 per month is what Phone Dog think a Twitter follower is worth in their lawsuit against a former employee.

    As nebulous and ambiguous as Phone Dog’s claim seems to be it appears some price is being created on the business value of social media users.

    To date we’ve seen services like Empire Avenue, Klout and Kred try to measure social media users’ real influence on the different web platforms which in turn allows businesses to allocate some sort of value.

    As social media and the web mature, we’ll see businesses spend more time understand where the value lies online.

    Each platform is going to have a different value to a business. Depending on the market, one person may be worth more on Twitter than on Facebook and similarly a business may put more value on members of a specific LinkedIn group or industry forum.

    What we shouldn’t confuse “value” with is how the services themselves make money. For Facebook, the value comes from the marketing opportunities presented by people sharing their lives while for LinkedIn it’s largely coming from employment related advertising and search.

    Other social media platforms are finding other ways to make money and each will have a different attraction to users, businesses and advertisers. All of which will affect their perceived value.

    That perceived value is the most important part of social media. If users don’t think a site adds something to their lives, then that service has no value to anyone.

    It’s tempting to think that people will object to having a “value” placed on their heads as users, but most folk understand the commercial TV and radio that does pretty much the same thing.

    The real question of how much people are prepared to share online will come when they understand the value of the data they are giving the social media platforms. When users start to understand this, they may ask for more service from these companies.

    What a Twitter user is worth right now is probably different to what they will be worth this time next year, but there’s no doubt we’ll all have a better idea.

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  • Lords of the digital manor

    Lords of the digital manor

    There is something fundamentally wrong with AOL’s media business states a Business Insider headline.

    What is fundamentally wrong is quite basic to anyone who has owned or managed a business – money.

    The problems at AOL illustrate the deep flaws in the “digital sharecropper” business model of putting free or cheap content on the web to harvest online advertising.

    Lords of the digital manor

    Sites like Demand Media and Huffington Post can’t make money from content if too many staff expect to get paid. Chris Anderson illustrated this in a rebuttal to Malcolm Gladwell where he examined the economics of his GeekDad blog and the work of its manager, Ken;

    So here’s the calculus:

    • Wired.com makes good money selling ads on GeekDad (it’s very popular with advertisers)
    • Ken gets a nominal retainer, but has also managed to parlay GeekDad into a book deal and a lifelong dream of being a writer
    • The other contributors largely write for free, although if one of their posts becomes insanely popular they’ll get a few bucks. None of them are doing it for the money, but instead for the fun, audience and satisfaction of writing about something they love and getting read by a lot of people.

    It’s almost touching to picture the modern day digital serf touching his flat cap and murmuring “thank you m’lud” on receiving a ha’penny from the lord of the digital manor before scampering back to working on becoming a well read, but unpaid writer.

    We don’t pay writers

    The business model of the Geek Dad blog or the Huffington Post relies upon these unpaid writers donating their work and time –the digital sharecroppers as described by Jeff Attwood.

    Low paid or free labour is essential to the success of these site, when the bulk of advertising income goes straight to the proprietors the digital aristocrats – Lord Chris of Wired or Duchess Arianna – can live well.

    The business model falls apart when management starts taking a cut of the profits; install a highly paid CEO and management team with their squadrons of Executive Vice Presidents or Group General Managers with the Medici-esque perks and entitlements these folk demand and the profits disappear.

    AOL’s problem is it has too many highly paid managers extracting wealth from the company’s cashflow.

    This is exactly the same problem print and television media empires have, once the rich rivers of gold allowed them to build up well paid management castes that are now crippling the businesses as revenues can’t support their financial burden.

    Paying for digital media’s future

    Over time, online media revenues are improving. As Morgan Stanley analyst Mary Meeker pointed out in 2010 that U.S. consumers spend 28 percent of their media time online, yet in 2010 only 13 percent of ad spending goes to the Internet. As advertisers follow consumers, publishing on the web will become more profitable.

    The risk for big media organisations is their money will run out before the digital renaissance arrives and when it does, they may have squandered their natural advantages by shedding quality journalists, experienced sub-editors and good editors in an effort to prop up executive bonuses.

    AOL’s management problem is part of a much bigger problem across markets and industries, we can call it managerialism – there are too many highly paid managers getting in the way of the writers, engineers, scientists, artists and tradesman who add real value to their organisations.

    Strangely, it may be Chris Anderson’s “free” model that kills the managerial culture as enterprises that can’t afford to pay product creators certainly won’t pay an Executive Vice President’s entitlements.

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  • The dying Yelp of Sensis

    The dying Yelp of Sensis

    This story originally appeared on Technology Spectator

    Fifteen years ago Sensis, the directories arm of Telstra, was untouchable. A listing in the Yellow and White Pages was essential for every business and Sensis’ monopoly was a true river of gold.

    Sensis’ launch this week of an Australian partnership with the US based review site Yelp is Telstra’s desperate throw of the dice to survive in a market where its directories business has become irrelevant.

    Attempts to stay relevent

    There have been many attempts by Sensis to overcome this erosion of its core maket including purchasing an IT services business and unsuccessful forays into publishing and online search with Trading Post and CitySearch.

    Probably Sensis’ lowest point was the squandered millions of dollars and years of management time wasted in trying to compete against Google after Telstra CEO Sol Trujilo made the sneering comment of “Google Schmoogle”.

    Declining values

    At the time of Trujillo’s comment in 2005 Sensis was valued at $10 billion as a stand alone company. After last week’s disappointing results that saw revenue drop 18 per cent for the year, the value of the division is an optimistic $5 billion.

    Yelp itself is unlikely to help Sensis’ revenue woes. Despite filing for a $100 billion public offering, Yelp has never made a profit in its seven years of operation. Although licensing their service to failing directory companies around the world might prove to be a handy revenue stream.

    That lack of profit – on North American revenues that are tiny compared to Sensis’ Australian cashflow ­– shows the fallacy in the social media business model that many of the popular online services are faced with.

    Users of social media services like Yelp are looking for a community of trustworthy and relevant referrals. The directory sale model is based on displaying the biggest advertisers prominently, which is exactly what social media users don’t want.

    Yelp also comes into a marketplace already crowded with competing, established services like Word Of Mouth Online, Eatability, and the faster moving social media platforms like Foursquare.

    Competitors’ Missed Opportunities

    In many ways Sensis has been lucky in that most of the competition has been from smaller upstarts while their bigger competitors haven’t capitalised on the market opportunities.

    Google Places, the biggest competitor to the world’s Yellow Pages directories, is mired in bureaucracy and isn’t doing a good job in telling business its story while Facebook’s local search function isn’t getting much traction either.

    Of the local Australian incumbents, ninemsn isn’t interested in local business with its international partner Microsoft not offering an Australian product and the local team preferring to deal with big spending advertising agencies, while Fairfax squandered its early advantage and eventually sold the CitySearch service to Sensis.

    News Limited’s True Local is having limited success while it struggles with the transition from print to online. At News’ recent launch of its new digital platform, the company’s executives stated they expected journalists to develop a “digital mind”.

    Lacking a Digital Mindset

    That “digital mindset” is the key to the problem at companies like News Limited, Fairfax and Sensis. In a marketplace where customers, advertising and readers have moved online it requires management, not just the lower workers, to “think digital”.

    Sensis’ key problem is its management structures – and more importantly its sales teams’ commissions and KPIs – which are still based around its traditional business models that will make selling services like Yelp difficult.

    The phone directory business model is a product of the 1920s and in many ways Telstra and the other Yellow Pages franchisees around the world should be grateful it has lasted so long.

    Whether the phone directories that have been so profitable for phone companies can make it to their one hundredth birthday is an open question. One thing is for sure, bolting on an unprofitable and late to market social media service isn’t the answer.

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