Paul Wallbank – Brilliant Communications

Tag: advertising

  • Facebook starts driving away brands

    Facebook starts driving away brands

    A few days ago we looked at how giving marketing and communications control to Facebook was a mistake for businesses.

    It seems US entrepreneur Mark Cuban agrees and he’s moving his basketball team, the Dallas Mavericks, and the 70 businesses he’s invested in away from Facebook onto other social media channels like Tumblr or even MySpace.

    The final straw for Cuban was Facebook wanting to charge $3,000 to reach a million of the Maverick’s online fans.

    Facebook’s response that the sponsored post program is not just about the service’s revenue, but also to reduce noise and spam has merit

    Last week tech uber-blogger Robert Scoble complained about the noise on social media and many users agree as they find their social media services and email inbox clogged with messages.

    Reducing irrelevant noise is essential for any online service to succeed. No-one likes to spam or be spammed and many startup social media platforms have failed because they’ve killed their brand by spamming users and their contacts.

    In this respect social media is like journalism – it has to be timely, relevant and useful to its users. If it isn’t the readers will leave and the advertisers will soon follow.

    The worry for Facebook’s investors is that the service could be caught between making no money from its massive user base and getting a reputation for irrelevant spam.

    Could it be that Facebook has more in common with newspapers and other “old media” than we thought?

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  • What business are newspapers in?

    What business are newspapers in?

    The problems of The Guardian and other newspaper groups around the world raises the question of what business they are actually in – news or advertising?

    “Going digital only is not an option” was an agenda item for a meeting of Guardian executives claims the Financial Times.

    Digital only however is the option most of the readers are taking with the Guardian’s online channels attracting 9.5 million UK readers a month compared to a print circulation of 6.5 million. The Guardian’s total global online audience is 65 million, ten times the size of the print edition.

    Making matters worse is the trend, according to the UK Audit Bureau of Circulations (ABC), newspaper sales are declining at 16% per year while online readership is growing 14%.

    As the Guardian readership figures show, the number of readers isn’t the problem and the same is true for the New York Times or the Sydney Morning Herald. More people are reading these publications than ever before, but the advertising has gone elsewhere.

    Essentially a newspaper was an advertising platform, the cover price barely covered the costs of printing and distribution while the classified and display advertising provided the “rivers of gold” that made the business so lucrative through most of the Twentieth Century.

    Most of those rivers have been diverted as dedicated employment, real estate, travel and motoring websites have stolen much of the advertising revenue that sustained newspapers.

    As classified advertising platforms, newspapers have reached their use by date and now they have to build a model that is more focused on online display advertising and getting readers to pay for content.

    Getting readers to pay is difficult when the market has been trained to expect news for free or pennies a day, a problem not helped by some newspapers chasing online eyeballs with low quality content.

    Equally difficult is training sales teams to sell digital advertising, too many sales teams have grown fat and complacent over decades of flogging lucrative and easy real estate print ads.

    The challenge for newspaper managements around the world is figuring out how to get the advertisers onto their online platforms and providing a product which readers value and are prepared to pay for.

    It may well be that The Guardian’s management are right, that print does have a role in the newspaper’s future but first they are going to have to define what their company is and what it does.

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  • Squandering a reprieve

    Squandering a reprieve

    ABC Radio National’s Background Briefing has a terrific story on the struggles of the Fairfax newspaper empire during the early days of the Internet.

    One of the major themes that jumps out is how Fairfax, like many media and retail organisations, squandered the opportunity presented by the tech wreck.

    The tech wreck was an opportunity for incumbents to claim their spaces in the online world, instead they saw the failure of many of the dot com boom’s over-hyped online businesses as vindication of their view the Internet was all hype.

    As former Sydney Morning Herald editor Peter Fray said “In florid moments you could even think this internet webby thing would go away”.

    For Fairfax the profits from the traditional print based business were compelling. According to Greg Hywood the current CEO, for every dollar earned by the company, 70c were profits – a profit margin of 233%.

    The Internet threatened those “rivers of gold” and media companies, understandably, did nothing to jeopardise those returns.

    Another problem for Fairfax was the massive investment in digital printing presses in the 1990s. These behemoths revolutionised the way newspapers were printed as pages could be laid out on computer screens and sent directly from the newsroom to the press itself which printed out pages in glorious colour rather than with smudgy black and white images.

    Moreover these machines were fantastic for printing glossy coloured supplements and the advertising revenue from those high end inserts kept the dollars rolling in.

    When the tech wreck happened, the massive investments in printing presses were vindicated as the rivers of gold continued to flow while the smart Internet kids went broke.

    Fairfax’s management weren’t alone in this hubris – most media companies around the world made the same missteps while retail companies continued to build stores catering for the last echos of the 20th Century consumer boom.

    In 2008, the hubris caught up with the retailers and newspapers. As the great credit boom came to an end, the wheels fell off the established business models and the cost of not experimenting with online models is costing them dearly.

    Value still lies in those mastheads though as more people are reading Fairfax’s publications than ever before.

    Readers still want to read these publications, one loyal reader is quoted in the story that Sydney Morning Herald should aspire to “being a serious international paper.”

    That isn’t going to happen while management is focused on cutting costs to their core business instead of focusing on new revenue streams.

    Somebody will find that model, had the incumbent retail and media organisations explored and invested in online businesses a decade ago they may well have found that secret sauce.

    Now many of them won’t survive with their horse and buggy ways of doing business.

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  • Nightlife Computers: Sockpuppets, trolls and fakes

    Nightlife Computers: Sockpuppets, trolls and fakes

    Paul Wallbank joined Tony Delroy for the 6 September 2012 ABC Nightlife technology spot to discuss sock puppets, what they mean on review sites and what this means for businesses using social media as a marketing tool.

    If you missed the program, you can listen to the podcast from the Tony Delroy’s Nightlife page.

    This week’s sock puppet scandal puts the light on authors’ book reviews on sites like Amazon while other review services like TripAdvisor, Yelp and Urbanspoon continue to struggle with figuring out which reviews are real.

    Businesses also have to worry about what people are posting in light of the recent Advertising Standards and ACCC rulings making businesses more accountable with what’s posted on Facebook.

    Some of the questions we’ll look at include;

    Join us from 10pm, Australian Eastern Time on Thursday September 5 on your local ABC radio station or listen online through their streaming service at www.abc.net.au/nightlife.

    We’d love to hear your views so join the conversation with your on-air questions, ideas or comments; phone in on the night on 1300 800 222 within Australia or +61 2 8333 1000 from outside Australia.

    You can SMS Nightlife’s talkback on 19922702, or through twitter to @paulwallbank using the #abcnightlife hashtag or visit the Nightlife Facebook page.

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  • Reliving the Hong Kong Handover syndrome

    Reliving the Hong Kong Handover syndrome

    After Margaret Thatcher 1984 agreement to hand Hong Kong over the People’s Republic of China, the hoteliers of the British Colony sent out the message “book now, or pay dearly for rooms at the time of the handover.”

    It became perceived wisdom that the territory would be booked out for years in advance and any rooms available would cost a fortune. So people made other plans.

    As a result, Hong Kong’s hotel occupancy rate during the handover was only 45%. The “buy now or you’ll miss out” message backfired as people decided they’d rather miss out.

    In the second week of the London 2012 Olympics the same thing is happening – the regular tourist trade has been scared away and even the locals who haven’t left town are staying home to avoid the transport and other hassles.

    For London, the Olympics have backfired.

    This is what is always missed when cities or governments make bids for big events, they displace existing trade and the benefits, if any, are short lived.

    At least the Olympics do attract millions of visitors and the eyes of the world are on the host city for two weeks.

    Far worst are the pointless heads of government meetings that pop up with monotonous regularity, for a few days of fleeting notoriety a city is locked down and its citizen corralled as Presidents and Prime Ministers meet to discuss something that will be forgotten in weeks.

    The Sydney APEC meeting of 2007 was case in point, nothing was achieved for the weeks of disruption to normal business except for the spectacle of the so called leaders of the Asia Pacific region scuttling between hotels like frightened cockroaches in their armour plated motorcades.

    Governments around the world keep falling for the myth that these major events generate some sort of economic benefits when it’s clear to the population who aren’t invited to the VIP cocktails parties that their money isn’t being well spent.

    For businesses, the lesson is not to make too many “buy now or miss out” claims. If customers take you at your word then you may find your shop is half empty, just as Hong Kong did in 1997.

     

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