May 102017
 
Kennedy Nixon Presidential Debate 1960

One of the notable things about the media’s collapsing business model is how television has suffered nowhere near the same downturn in advertising revenues as the other channels.

This has been baffling for many of us pundits so a series of interviews I’m doing with media executives on digital disruption was a good opportunity to discuss why television is holding the line where print has dismally failed.

While the executive has to remain anonymous at the moment, the series is for a private client, their view on why television has so far avoided the advertising abyss is simple – accountability.

We have something, as do my friends at other media companies, that YouTube and Facebook don’t have which is we create quality content. What will differentiate us is we have premium, locally produced content that is one hundred percent brand safe and one hundred percent viewable and, most importantly, is independently measured by third parties.

My view is that advertisers in that environment is a much more powerful experience than advertising in Facebook or YouTube

While many of us may laugh at Australian commercial TV being described as ‘quality’, it does appeal to audiences far bigger than the typical YouTube channel or Facebook Live stream.

The advertising industry’s established systems also, unsurprisingly, work for the television industry in giving the sector accountability that the online services lack in a world where ‘click fraud’ – software tricks to report false web impressions – is rampant.

Even more importantly for the new media giants is the ‘brand safe’ message being pushed by the incumbents. The advertising crisis for Google is real and the established players intend to exploit it.

While the TV executive is pushing their own product, it’s clear the fight for advertising and marketing dollars is far from over.

Jan 052017
 
the web is new neon sign

How do you make money from online publishing? Medium’s Ev Williams shows he is as far away from the answer as the rest of us.

In a blog post yesterday Ev announced his company is firing fifty staff as online advertising revenues fall short.

Online advertising’s disappointing revenues are no surprise to pretty well anyone observing the online publishing industry for the past five years, it seems to have come as a revelation to Ev and the investors who’ve staked an estimated $140 million in the venture.

That money, which most online publishers would gag for, seems to have gone on a bloated headcount given the company can afford to fire fifty people. It’s a shame the company’s investors didn’t appoint a board that checked management’s hiring practices.

Something that should worry other publishers is the organisation’s Promoted Stories division is being shut down as part of the restructure. This underscores how branded content doesn’t scale the same way traditional advertising does and won’t represent a major revenue stream for online publications.

It isn’t the first time Ev Williams has got it wrong, in founding Twitter he and his team turned their back on ordinary users and developers to focus on courting celebrities in the hope big brands would pay large amounts to be associated with them. It didn’t work.

Contrasting Ev’s Twitter and Medium experiences with that of Buzzfeed founder Jonah Peretti is interesting. While Buzzfeed still hasn’t found the formula for profitability, Peretti and his team have gained a deep understanding of what works in online publishing.

To be fair to Ev, we’re all trying to figure out the revenue model that will work for online media, his travails with Twitter and Medium show just how hard it is to find a way for publishers to make money from the web. What is clear though is burning a lot of cash on sales staff is not the answer.

Sep 242016
 

The advertising industry is in trouble, as consumers’ eyeballs move from broadcast mediums to online services, the wildly successful Twentieth Century business model that drove the radio and television industries is dying.

One of the biggest hopes for advertisers, and publishers, was social media would be the salvation of their mass market model. Facebook continues to prove it isn’t the messiah with the Wall Street Journal reporting video viewing figures have been inflated for the past two years.

Coupled with the recently announced shift away from publishers Facebook is increasingly showing any hopes of replicating the broadcast media model on social platforms is doomed.

So it isn’t surprising advertisers are angry at Facebook for mis-stating its figures although a cynic would suggest those inflated statistics helped drive its video service over competitors like YouTube at a critical time.

Whether Facebook’s actions were deliberate or otherwise, the service’s misleading behaviour only underscores how publishers and advertisers are struggling to find ways to translate their business model to an online world.

Jun 302016
 

Two years ago Buzzfeed’s head of global operations visited Sydney and laid out the company’s vision of being the New York Times.

As Scott Lamb explained, an important part of the Buzzfeed model was generating traffic through social media shares — at that time a tactic which Iwas working well.

Since then the gloss has gone off Buzzfeed as the company misses financial targets and traffic plateaus.

Now Facebook has announced further changes to its newsfeed which sees more emphasis on users’ family and friends’ posts than news and brands.

Sites like Buzzfeed are left in a bind as one of their key sources for traffic dries up and, once again, Facebook’s cahnges show how risky it is for publishers and marketers to rely on individual online platforms.

In truth all of the major online services are predators with Facebook, along with Google and Amazon, being at the top of the food chain, just like tigers.

For those riding the internet tigers, the risk of being mauled is real. As Buzzfeed and others are finding.

Jun 232016
 

It seems the Arab Spring has come to the US Congress where Democrat representatives protesting the house’s refusal to vote on gun control legislation have occupied the house.

House speaker Paul Ryan, a Republican, ordered the chamber’s TV cameras to be shut off but the occupying members responded by streaming their own media feeds through Facebook and Periscope.

Once again we’re seeing how new media channels are opening up with the internet. While they aren’t perfect, they do challenge the existing power structures and allow the old rules to be subverted.

Jan 202016
 

Over the last 50 years the relationship between professional sport and television broadcasters has been defined by broadcasting rights. Like most other media business models that relationship is now under threat.

Touring the Australian Open tennis tournament this week, it was striking how the relationship between sports organisations and broadcasters has changed as the internet changes distribution models and data starts to become a valuable asset in itself.

A tour of the data infrastructure behind the tournament as a guest of sponsor and service provider IBM showed how sporting organisations are hoping to use data to improve their fans’ experience and add value for sponsors and competitors.

Last year the Australian Open collected 23 Terabytes of data, a 136 percent increase on 2014, which the organisers distribute on their MatchCenter web platform along with analysis through their Slamtracker system.

Using IBMs Bluemix development platform and the company’s Watson artificial intelligence service, the Australian Open website analyses factors ranging from the audience’s social media sentiment through to predicting competitors’ performance based on historical data.

This wealth of data gives the event organisers a great platform to engage with statistics hungry fans and it was notable when talking to the Australian Open staffers how they now see the television broadcasters as much as their competitors as their partners.

When coupled with the changes to broadcasting rights – like most sports organisations the Australian Open has moved to the model pioneered by Major League Baseball of providing their own video feeds rather than engaging a host broadcaster to record the events and distribute the video – this has put the television and pay-TV networks in a far less powerful position.

For the sports organisations those broadcast rights deals are still by far the most lucrative income stream they have but the days of the host broadcasters holding power over the events are slipping away.

One telling statistic was the shift to mobile platforms. Kim Trengrove, the digital manager for Tennis Australia, pointed out how in 2015 online traffic was split equally between desktop and mobile use while in 2016 it was appearing to be 60% mobile. That change in itself has major ramifications for the market.

In the future as the data becomes more valuable and the video feeds can be distributed across web browsers and even artificial reality headsets, the late Twentieth Century broadcast model becomes even more tenuous.

For the television networks it means their power and income is reduced while those collecting, processing and distributing data become more important. However it may be the software companies managing the information aren’t able to pay the immense sums the broadcasters have been able to offer for the last fifty years.

One thing a tour of the Australian Open did show was how business model of professional sports is dramatically changing. A data driven world is going to be very different to that of the last fifty years.

Sep 252015
 
the web is new neon sign

Click fraud is costing US advertiser 6.4billion dollars a year reports Bloomberg Business.

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.