Paul Wallbank – Brilliant Communications

Category: media

Goodbye to the media buyers long lunch
Yesterday Decoding The New Economy posted an interview with Michael Rubenstein of AppNexus about the world of programmatic advertising and being part of a rapidly growing startup.

The whole concept of programmatic advertising is a good example of a business, and a set of jobs, being disrupted.

Media buying has been a cushy job for a generation of well fed advertising executives. David Sarnoff’s invention of the broadcast media model in the 1930s meant salespeople and brokers were needed to fill the constant supply of advertising spots.

Today the rise of the internet has disrupted the once safe world of broadcast media where incumbents were protected by government licenses and now the long lunching media buyers are finding their own jobs are being displaced by algorithms like those of AppNexus.

A thought worth dwelling on though is that media buyers are part of a wider group of white collar roles being disrupted by technology – the same Big Data algorithms driving AppNexus and other services is also being used to write and select news stories and increasingly we’ll see executive decisions being made by computers.

It’s highly likely the biggest casualties of the current data analytics driven wave won’t be truck drivers, shelf pickers or baristas but managers. The promise of a flat organisation may be coming sooner than many middle managers – and salespeople – think.

Similar posts:
- No Related Posts
August 8, 2015
High volume over highbrow media – viral media wins for now
The first industry to face the consequences of an age of data abundance was, not unexpectedly, the news media.

As the web took off, the old model of distributing news through broadcast bulletins and newspapers collapsed along with the advertising model which supported it.

Now the entire news industry is in transition as we look for a modern day David Sarnoff to figure out a business model that works.

Profiting from the transition

In the meantime that transition has opened up a whole range of opportunities for canny and fast moving entrepreneurs with a range of sites looking to profit from cheap or free content.

Most exploitative of these sites are the viral sites who, at best, lightly rewrite someone else’s work before posting it on their own pages. With the rise of Facebook, the social media referrals have boosted the traffic to these sites.

The acquisition of ViralNova by Zealot Media at a hundred million dollar valuation shows the value of those sites at present. Zealot itself is on an acquisition spree as this is the fifteenth acquisition made by the mysterious company this year.

ViralNova and the other viral sites don’t add a great deal to the internet with their glib repackaging of other peoples’ content based around what their algorithms believe will get the maximum traction from Facebook’s systems.

The end of the web

Some even believe this model marks the death of intelligent content on the web with Vice’s Carles Buzz declaring the dream of the highbrow internet is dead as sites like ViralNova and Upworthy come to dominate the web.

Wall Street Journal however sees the opposite in proclaiming the ViralNova move is the highpoint for the content farm business model as the economics and business risks of depending upon Facebook for traffic are ultimately doom these ventures.

Sites like The Awl in the meantime see their future in writing intellectual articles for a small but tightly defined audience. At the moment web advertising economics favour high traffic over highbrow however it may be in the medium term the higher quality will win.

High volume over highbrow

Recent history hasn’t been kind to those backing sites like The Awl however the viral media and content farms have seen their finances become increasingly shaky as online CPM rates decline and Facebook increasingly controls distribution.

The news model does need to be reinvented and someone, somewhere in the world will do it, although the person who cracks the code is as likely to be a smart kid in the Rio barrios or Mumbai slums as some VC backed Stanford graduate in a SOMA loft. For the moment though savvy entrepreneurs like those behind ViralNova will be making a quick buck.

Similar posts:
- No Related Posts
July 11, 2015
Social media and the changing media landscape
“We seek news on Twitter but bump into it on Facebook” points out the Reuters’ 2015 Digital News Report in its analysis of global media consumption.

The broad trends from surveying over 20,000 online news consumers in the US, UK, Ireland, Germany, France, Italy, Spain, Denmark, Finland, Brazil, Japan and Australia are clear – social media is becoming the main way people are finding their news while television is slowly declining.

Probably most concerning for the television networks how younger viewers have turned away from TV with only a quarter of those aged between 18 and 25 tuning in as opposed to two thirds of those aged over 65.

Given the aging of television network audiences it’s not surprising that last week Australia’s Network Ten, part owned by Lachlan Murdoch, found a lifeline from the country’s main cable network as the broadcaster is finding revenues declining.

The question is how long advertisers are going to stick with television as audiences increasingly move online creating a revenue gap estimated by analyst Mary Meeker to be worth around thirty billion dollars a year.

For the moment, the great hope for the online world is Facebook with Reuters finding the service is dominating users’ time. In that light it’s not surprising the company has such a huge market valuation.

The competing social media services are still facing challenges, particularly with Twitter showing a far lower level of penetration with the general public, leading Harvard professor Bill George to speculate the company risked becoming the new BlackBerry.

While the online services struggle for supremacy and television slowly declines, the real pain continues to felt by the newspapers who continue to find their relevance erode and few of their readers prepared to pay for their content.

The Reuters report confirms the trends we already know while giving insights into the unique peculiarities of each market.

Similar posts:
- No Related Posts
June 16, 2015
Business in an age of data abundance
I’m preparing a corporate talk for next week on the changing economy and one theme that sticks out is how the Twentieth Century was defined by cheap energy and physical mobility as mains electricity and the internal combustion engine became ubiquitous and affordable.

The picture accompanying this post illustrates that shift, Sydney’s Circular Quay a hundred years ago was just at the beginning of the automobile era. The previous fifty years had bought trams, the telegraph and reliable shipping but the great strides of the Twentieth Century were still to happen.

At that stage the steam engine and advances in electrical transmission had bought reliable power to the masses, although it was still expensive. What was to come over the next fifty years was that energy was about to become cheap and abundant. That drove the suburbanisation of western societies and the development of industries around the availability of cheap power and a mobile workforce.

At the time though information was still expensive, the control of broadcast networks by a few license holders and print operations by those who could afford the massive costs of producing and distributing magazines or newspapers made data difficult to get and worth paying for.

Today we’re at the start of a similar shift in information; it’s no longer expensive or difficult to obtain.

What that means for the next thirty years is what industries will develop in an economy where information is basically free and ubiquitous. Just as cheap energy created the consumerist economy, we’re going to see a very different environment in an age of cheap data.

Similar posts:
May 31, 2015
Netflix and the global entertainment network
Streaming video service Netflix is looking to launch in China reports Bloomberg Business.

The Chinese joint venture to be run with Wasu, a company backed by Alibaba founder Jack Ma, looks to increase Netflix’s global footprint.

Netflix plans “to be nearly global by the end of 2016,” the article quotes a company spokesperson answering questions about a possible China partnership.

The Netflix model is a major departure from the established broadcast television and movie business where studios and producers would enter distribution agreements with local TV stations and theatre chains.

With Netflix and the streaming model, the licensing of rights to local outlets becomes largely irrelevant with the producers – which increasingly includes Netflix itself – able to cut out the local licensees.

A similar thing is happening in sports, one of the mainstays of broadcast television, where the professional leagues are taking control of their own content and leaving the networks, at best, minor players.

Neflix’s move is part of a shift that’s affecting many industries, including those like broadcast television that thought they were untouchable.

Similar posts:
- No Related Posts
May 18, 2015