They are late to the party, but given both Google and Facebook have missed the opportunity to grab the local listings market, Apple just might be the company that gets it.
Tag: advertising
Social media’s fatal attraction
The story of Whisper and the betrayal of its users continues to roll on, but the real problem is the way social media services are desperately trying to recreate the dead business model of print advertising.
Whisper’s problems with The Guardian continue as the company tries to salvage its reputation but the irony for the service is that it was trying to shoehorn its business to fit the print publishing model that the internet started to erode twenty years ago.
It’s not just Whisper; almost every social media business from Facebook to Twitter wants to be an advertiser funded publishing company, just like the newspapers of thirty years ago.
A few weeks ago I wrote about LinkedIn’s pretensions of becoming a publishing platform and this week Forbes tells of Pinterest’s adventures at the Cannes advertising festival as it sells its marketing services.
Every social media service has some sort of angle that harks back to the golden age of newspaper publishing where print advertising was a deep river of gold. Most of them want to become publishers themselves.
It would be hard to think of a service less suited to being a media company than Whisper; but then there’s Yelp whose main business of reviewing eating houses and bars seems to be totally at odds with newspapers of yore.
On the Salesforce PayPal Media panel last week, Yelp! Founder Jeremy Stoppelman was asked if he saw the restaurant review site as being a media company, his response was “sure, it’s a blogging platform.”
So we have new media aping the old media business models where these platforms try to lock users into information silos; in the same way that a London Times reader would never buy the Sun.
The problem with that is the internet broke down the geographic barriers and today a Sun reader in London can just easily find celebrity gossip on TMZ and the broadsheet reader might find more thoughtful analysis in the New York Times.
Certainly someone browsing the web for restaurant reviews might find a better site than Yelp while a bride researching wedding dresses could just as easily find ideas on Facebook as much as Pinterest.
In reality, social media sites have nothing of the stickiness of the old fashioned newspapers in the days before the internet.
Of the social media services it might be that Facebook is the best placed to succeed as an old media publishing service with its advertising smarts pushing messages to its diverse and deep user base but that isn’t certain given the widespread user dissatisfaction with its news feed.
For the social media services much of the problem – -particularly for Facebook – lies in their contradictory aims; they are trying to be identity services, buying platforms, publishing services and advertisers.
For publishers that balance between content and advertising was always a delicate one; and one that shifted over time. For online services that balance is far more complex and the future far less certain.
One thing that is clear Is those contradictory aims aren’t going to be easy to reconcile and the quandary may prove to be insurmountable.
What’s clear though are the advertising models of the future are still waiting for a David Sarnoff moment.
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Ello, Ello to a frustrated social media market
The rapid rise of upstart social media service Ello is a warning to the industry’s incumbents and the marketers using the platforms
Over the last week new social media service Ello has been in the news as the ‘anti-Facebook’ that doesn’t collect user details or push advertising onto feeds.
Certainly Ello has touched the zeitgeist with reports claiming the service is getting 30,000 new signups every hour. It’s clear social media users aren’t happy with the existing services.
Part of this discontent is due to social media’s growing pains as the platforms search for the business models to justify their massive valuations, with the consequence of users finding their streams being polluted with invasive and often irrelevant advertisements.
Social dilemmas
For Facebook in particular this is a problem as they have to balance the service’s relevance to users against the demands of ever desperate advertisers who want to post as many ads as possible into the feeds.
Adding to the discontent is suspicions on how the existing social media services intend to trade users’ information. While many internet mavens may claim ‘privacy is dead’, most people are concerned at how a history of their likes, friends or conversations could hurt future relationships or job prospects.
Which ties into Ello’s manifesto.
Your social network is owned by advertisers.
Every post you share, every friend you make, and every link you follow is tracked, recorded, and converted into data. Advertisers buy your data so they can show you more ads. You are the product that’s bought and sold.
We believe there is a better way. We believe in audacity. We believe in beauty, simplicity, and transparency. We believe that the people who make things and the people who use them should be in partnership.
We believe a social network can be a tool for empowerment. Not a tool to deceive, coerce, and manipulate — but a place to connect, create, and celebrate life.
You are not a product.
While Ello’s founders are right that Facebook, and to a lesser degree, Twitter are advertising platforms at present it may well be that social media’s days as a marketing tool are numbered as the business models mature.
The evolving social media model
Facebook’s announcement that it is going into the payments field is an indication that the businesses are maturing beyond the broadcast advertising model that worked so well for television and radio while Twitter’s struggles to shoehorn the old marketing tools into its business continue.
The most successful social media platform to date is LinkedIn which makes less than a quarter of its revenues from advertising — down from 30% two years ago — with the company building revenues in its corporate talent finding services, something that makes LinkedIn’s ambitions to be a global content publisher somewhat strange.
So it may well be that Ello aims to solve a problem that may not exist in the near future.
Ello could turn out to be the ‘Facebook killer’ however the odds are stacked against it, what is clear though is the social media marketplace is telling the industry’s leaders that consumers aren’t happy. It’s something the marketers staking their future on social media need to keep in mind.
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The decline of Forbes magazine
A great piece by Michael Wolff in Town and Country describes how the Forbes family struggled with making their magazine work in the digital economy.
For the Forbes family, it was always going to be hard stepping into the shoes of the late Malcolm after he unexpectedly passed away in 1990 and unfortunately for them that happened to coincide with the end of the great era of publishing wealth.
Twenty five years later the family are largely removed from the publication which is a shadow of its former self with its best hope for survival lying with Asian investors who still see some value in the brand.
What’s particularly poignant about Wolff’s story is the Forbes family did nothing wrong — they embraced the new platforms, experimented with digital and tried to find a way to make their business work in the online marketplace.
As it turned out, the old advertising and publishing model was horribly and irredeemably broken.
Forbes Magazine’s decline is an important tale for the whole publishing industry, for both the brash new entrants and for the struggling established players.
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The dreams of social media services
“LinkedIn is the world’s biggest publishing platform,” states Olivier Legrand.
Legrand, LinkedIn’s Head of Marketing Solutions for Asia Pacific & Japan, was speaking at the company’s Connectin Sydney conference where the service was demonstrating its credentials as a marketing and advertising service to Australia’s largest corporations.
The view that LinkedIn is a publishing platform is problematic for content creators — it creates a conflict for those using the service to distribute or publicise their work and again it shows social media services are not your friends.
It’s understandable LinkedIn wants to get corporate advertisers on board seeing the business’ stock currently trades at eighty-four times revenue, however a focus on becoming an advertising driven media company at a time when advertising driven media companies are heading the way of the wooly mammoth seems to be a risky strategy.
Another risk for LinkedIn as a publishing platform is that user generated services can, and will be, gamed resulting in a dramatic decline in quality and value in the site.
Every social media service now sees itself as a media company and it may turn out they are correct, however that future of publishing will be very different from last century’s newspaper and broadcast models they are trying to emulate.
Even if the dreams of social media services do come true, the advertising driven media industry, an the publishing world, will be very different to the world they hope to be part of.
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Fear in the cloud – the loss of trust in online business
Should online businesses, particularly cloud services and social media platforms, begin to worry they’ve lost the trust of the community?
Today I spoke about online safety to the Australian Seniors’ Computer Clubs Association about staying safe online.
Hopefully I’ll have a copy of the presentation up tomorrow but what was notable about the morning was the concern among the audience about security and safety of cloud services.
The ASCCA membership are a computer savvy bunch – anyone who disparages older peoples’ technology nous would be quickly put in their place by these folk – but it was notable just how concerned they are about online privacy. They are not happy.
Another troubling aspect were my answers to the questions, invariably I had to fall back on the lines “only do what you’re comfortable with” and “it all comes down to a question of trust.”
The problem with the latter line is that it’s difficult to trust many online companies, particularly when their business models relies upon trading users’ data.
Resolving this trust issue is going to be difficult and it’s hard to see how some social media platforms and online businesses can survive should users flee or governments enact stringent privacy laws.
It may well be we’re seeing another transition effect happening in the online economy.
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Is digital enough to save magazines and newspapers.
The 2014 PwC Global Media and Entertainment report says newspapers’ revenue decline is over but it’s not all good news.
“Globally the newspaper industry’s revenue decline will end in 2015” declares PwC in their 2104 Global Media and Entertainment report released earlier this week.
While PwC thinks the decline for print – both in newspapers and magazines – is over, however there’s little if any growth on the horizon with the company forecasting 0.1% growth per annum for newspapers and 0.2% for magazines over the next four years.
The reason for the stabilisation in revenues is the move to paid apps and paywalls, which means advertising is less important to the print industry’s revenues.
Circulation revenue will almost match advertising revenue by 2018. In 2013, while circulation revenue rose globally after years of decline, advertising revenue continued to fall. Circulation’s share of total revenue will rise from 47% in 2013 to 49% by 2018, meaning consumers may soon become publishers’ biggest source of revenue.
PwC’s view is consistent with the advertising trends flagged by Mary Meeker in her State Of The Internet report last week and, if the forecasts are correct, it will show the magazine and newspaper industries are making the transition to a new business model.
One of the strange points in the PwC report is the talk of ‘Digital First’.
‘Digital-first’ is becoming the norm for newspaper publishers. For many years, news publishers’ digital output was led by their print products. But increasingly, titles will be reorganised as ‘digital-first’ operations, publishing content that works best on connected devices.
This is true, but newspaper managements have been proclaiming their ‘Digital First’ strategies for close to a decade; any media company that doesn’t put its digital channels first is doomed to extinction anyway.
Which is one of the important points of the PwC survey; it’s about the global industry and while that might be flat-lining, individual outlets will still fail. That’s something which concentrate the minds of those managing some of the more poorly run media empires.