The promise of internet advertising was that it could provide much more targeted audiences with far better, precision results.
It turns out the truth is different, with Bloomberg citing Heineken US who did a detailed analysis of their advertising returns to find, as the company’s Brand Director Ron Amram says, “giving money to the mob.”
While that news is bad, although not altogether surprising, for the digital media industry there’s even an even worse revelation from Heineken.
Digital’s return on investment was around 2 to 1, a $2 increase in revenue for every $1 of ad spending, compared with at least 6 to 1 for TV. The most startling finding: Only 20 percent of the campaign’s “ad impressions”—ads that appear on a computer or smartphone screen—were even seen by actual people.
That major brands are television is three times more effective than digital puts online advertisers in a bad position, although social media gurus have long argued companies can’t measure return on investment from their efforts.
Ultimately though the Bloomberg story shows we need a new model, applying broadcast advertising conventions to online services isn’t working. We’re still waiting for a new David Sarnoff to come along.
So after five years about posting about food, travel, tech, fashion or reverse cycle widgets you’ve being listed by Forbes Magazine as one of the most influential voices in the field.
Now every morning in your inbox is another pitch from an agency offering you freebies and access in return for posting about their clients products, some are great while others are strange.
Welcome to the world of Influencer Programs, a strange hybrid bought about by rise of social media and the collapse of printed news. As overwhelmed salaried journalists at established media outlets have less time to deal with hundreds of PR people desperately trying to get their attention, those with decent social media followings start to look attractive.
The influencer theory
A key part of the PRs strategy in engaging with social media outlets are the influencer programs, where the agencies trawl Instagram, Facebook, Twitter and the other services to find those with large followings and then try to induce them into promoting their clients’ products.
These influencer programs are not anything new, while today we associate them with Kim Kardashian and Will.I.Am, in the 18th Century Josiah Wedgwood publicised his sales to the royal courts of Europe to generate sales for his earthenware and a hundred years later Mark Twain endorsed cigars in journals across America.
So congratulations on being the modern Mark Twain, now you have to decide if you want to play with Fat Fee Media and be part of their influencer programs.
The land of the free
Most of the time the initial approach from the nice folks at Fat Fee will try to get you to work for free in exchange for a shiny laptop, a free feed or even an overseas trip to The World Reverse Cycle Widgets conference.
That might work for you, if you have a full time job and the food blog or fashion Instagram feed is a hobby then this exactly what the influencer programs were originally designed around although there might be some quirks there
Should the blog be a business, or you take the distinctly unfashionable attitude that your time as a creative content creator is actually worth something that Fat Fee Media should pay for, then things get messy.
People die of exposure
The first response for payment from the nice folk at Fat Fee Media is that working with their client will be wonderful exposure for you.
In some respects this is probably true, however the reason Fat Fee Media has come to you is because their clients need exposure more than you do. Just the fact you’ve been listed as an ‘influencer’ shows you have credibility on the interwebs.
One of the traps many of us with consulting businesses on the side is the belief that doing a favour for BigCorp will open future paid opportunities. Sadly, the truth is somewhat different.
Pay the writer
“It’s the amateurs who make it tough for the professionals” says Harlen Ellison in his wonderful Pay The Writer rant. “By what logic do you call me and ask me to work for nothing.”
Ellison’s point is well made and those working for free are marked down as amateurs by the large agencies. Be under no illusion, when the paid consulting, speaking or writing gigs become available, the folks giving away stuff for free on the influencer programs won’t be getting them.
While Samsung’s behaviour was extreme, it’s by no means unusual. It’s common in these programs’ agreements to have ‘exclusivity’ or ‘no disparagement’ clauses.
The exclusivity clauses are particularly pernicious because they limit the scope of your writing and could even lock you out of future paid work in the industry you cover.
Controlling the copy
Another weird, but common, part of the PR control freakery in influencer programs is the determination to vet everything so only Nice Things are said about their clients.
This never ends well as the agency and its client spend the next six weeks rewriting your work. Inevitably the results look like something published in the Ministry of Public Works house newsletter.
Even if your blog or Instagram feed is just a hobby resist any request from agencies to pre-vet your copy. If they insist, send them your advertising rate card and tell them to hire a copywriter.
You can’t say bad things
The ‘non-disparagement’ clauses are equally pernicious. One of the curiosities of the social media world is that corporates are horribly risk averse.
As a consequence they don’t want the possibility of bloggers or the Twitterati saying nasty things about them and the non-disparagement clause becomes part of almost any agreement.
These clauses are usually far ranging, not only do they stipulate a blogger can’t say something less than glowing in a post but they also restrict any social media commentary on that business.
A recent agreement I was presented on behalf of one of the world’s biggest banks required me to say I wouldn’t say anything nasty about them. This is a curious way of shutting people up but one can’t blame them if it can be done cheaply for the cost of a meal or conference invite.
Happy shiny people
Ultimately the social media and digital media worlds are about happy and shiny. Given they are largely controlled by large corporations, this isn’t surprising and much of the attitude that you shouldn’t say bad things online comes down to how food, fashion and travel bloggers have regurgitated nice things rather than been genuine critics.
To be fair to the new breed of online writers, the dumbing down of travel and food writing was well underway in the mainstream media before the arrival of the internet. One could argue that mastheads devaluing their brand with puff pieces was one of the reasons alternative online media, particularly in food blogging, became so successful so fast.
A broken model
In truth, the whole social media engagement industry is broken, it depends on poor measurements and old school marketers applying 1960s Mad Men broadcasting methods to an industry that’s diffuse and diverse.
Rubenstein joined AppNexus as employee number 18 in 2009 and has been part of the company’s growth from a small startup to a global technology company with a workforce of 1,000 professionals.
AppNexus is one of the new wave of companies managing and programming online advertising, helping advertisers and publishers target their products better while giving ad tech companies deeper insights and data.
In this interview, Rubenstein discusses some of the forces changing global advertising along with the challenges of dealing with a high growth business.
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.
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.
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.
Ten years after being founded YouTube is facing competition as new sites are being setup or existing video services start aggressively courting creators reports Variety magazine.
YouTube is the poster child of the user generated content movement where it’s largely unpaid contributors who generate the material that people watch on the service.
This model works fine as long as it’s amateur cat videos people are watching but when as it becomes a big business the justification for not paying content creators becomes flimsy.
Google’s management recognised this some time back and started rolling out its own partnerships with creators to add more income than the often tiny advertising revenues most earn.
Now it turns out those popular video bloggers are being tempted over to other sites and for YouTube the cost of premium content is about to get expensive.
For the Silicon Valley businesses is requires a change of culture as they simply don’t like paying creators; in the tech startup view of the world it’s only coders, founders and few lucky support staff who get the rewards while the bulk of people who add value to the product are treated as commodity ingredients.
Quartz magazine is held up as one of the most innovative news websites and one of the models for the future of online publishing however its president Jay Lauf suggested at the Digital Media Strategies conference in London yesterday that web users are increasingly shifting towards social sites to find their content.
This isn’t new, most sites have been dependent upon referrals from the popular social media services and companies like Buzzfeed have built their entire strategies upon traffic from Facebook.
Lauf suggests that sites like Quartz and Buzzfeed are increasingly losing control of their own audiences which raises risks for publishers and readers as they become dependent upon the social media gatekeepers.
Quartz’s traffic from LinkedIn is a good example of how a gatekeeper can control traffic with referrals falling away as the social site pivots into a publishing platform of its own.
It could turn out that control of traffic backfires however as people find those services deliver less value or relevant information.
Ultimately it may be the gatekeepers who suffer from restricting traffic as readers decide they aren’t getting the news they want.