Archive for the ‘Digital Advertising’ Category

Media Heads Up for 2015: 12 Takeaways

Media visionaries looked to the future at the Gotham Media’s Digital Breakfast at Frankfurt Kurnit Klein & Selz and made some predictions about social, mobile, TV and more for 2015 and beyond. Here are some highlights:

1. Ever-faster change – new things rise higher faster and fall faster.

2. Sensors all around that are passively aware of you. All cell phones have omnipresent computing.

3. Mobile payments. Apple’s entry will determine whether they make a difference. Most are safer than plastic, says John Abell, Senior editor, LinkedIn.

4. Continued migration of devices to mobile – even Facebook and video on mobile. Increasing importance of the second screen, though it’s still primitive. Monitors are losing to individual devices. “When the first screen gets boring, people go to the 2d screen,” reports Paul Berry, RebelMouse Founder and CEO

5. The steady growth of Facebook and mobile pose a challenge of how many pages per person can be sustained on your site.

6. Niche social networks will be big – a space for passionate sharing. (ED: Vertical networks were lumped into discussion of the category.) Niche networks will be combined with the 2d screen in the future – but with more than Twitter’s limited characters, predicts Berry.

7. People talking in a real voice as opposed to the institutional voice of mainstream media so that you hear individuals.

8. Infinite choice in content. “The quality level has been raised,” said Lockhart Steele, Editorial Director of Vox Media. “Now you have to do great stuff to get attention because there’s so much choice. . . The biggest challenge to media is the conversion to mobile. A lot of journalists are still writing in newspaper style.”

9. “Content is still king. It’s entirely defined by great talent,” according to Eric Wattenberg, Co- Head of Alternative Television at CAA.

10.“Traditional ads aren’t working. Only bots click. Millennials don’t even see the ads,” says Berry. At Vox, an in-house creative agency helps advertisers create native advertising. “The agency relationship is broken,” adds Steele. Every company has the opportunity and responsibility to be a media company, continues Berry. You need a product to be worth someone’s obsessing about it. Then put your money behind them. How do you measure social media effectiveness? Do viewers click? Share?

11 “But then we still don’t know how to measure TV,” Abell reminds us. “Yet, I don’t see how anything can supplant anything as unifying as TV.”

12.“The challenge for TV is how to get and keep an audience and grow it. It may be a combination of traditional TV with live elements in other forms of entertainment so that every week you’ll have to tune in and it’ll be fun and exciting to see what happens,” speculates Wattenberg.

Provenance: Gotham Media’s Digital Breakfast at Frankfurt Kurnit Klein & Selz 12.9.14. Alan Sacks, moderator – Counsel, Frankfurt Kurnit Klein I& Selz PC Panelists: John Abell, Sr. Editor, LinkedIn Paul Berry, Founder and CEO, RebelMouse; Lockhart Steele, editorial Director, Vox Media, and Eric Wattenberg, Co-Head of Alternative television, CAA

Whither Online Content?

Sponsored content may not be new, but its role as a replacement for traditional advertising certainly is. So is the new acceptance of the collapse of the long-standing wall that separated content and advertising. What makes this new situation acceptable is transparency about the sponsor and assurance that the editorial content was created independently of the sponsor.

These were among the takeaways of a lively discussion among content and advertising experts about Content and Commerce organized by Gotham Media Strategies and Frankfurt Kurnit at yesterdays digital breakfast. Rick Kurnit, of Frankfurt Kurnit, moderated; Glenn Hall, of TheBlazecom; Eason Jordan, of NowThisNews; Scott Kurnit, of KEEP Holdings; Rob Rasmussen, of Story Worldwide and Rebecca Sanhueza, of Time, inc. were panelists.

However “native ads,” i.e., branded content, is not acceptable when it tries to trick people into believing it’s not advertising. And everyone agrees that advertising sucks when it’s annoying and intrusive. But even overt paid content, i.e., ads, can be great. Three campaigns were cited that have won universal acclaim; Nike’s advertising, which delivers inspirational content that empowers consumers; Dove’s, which establishes a relationship with consumers about beauty and how you see yourself and is more like direct marketing, and AT&T’s It’s Not Complicated series, which uses kids’ imaginations to turn boring brand attributes into pure fun.

Interestingly, online e-commerce businesses like KEEP, are bypassing advertising altogether and simply delivering thousands of products for consumers to buy and share.

So then comes the question can any brand create content? The answer is a flat No. Not all brands have the legitimacy to create content. They need to have both a point of view that carries throughout all the brand’s actions and audience respect for that point of view.

The big question about unbranded content, i.e., pure news, or journalism, is the business model. Originally, this relied on the monopoly of news media, which enabled content scarcity and exclusivity. Gone! Today, we have content abundance and ubiquity. One requirement has never changed: relevance to viewer/user interests and needs. So traditional media, like Time Inc.’s magazines, aim to serve both consumers and advertisers by delivering targeted niche audiences to advertisers and targeted content to those audience segments.

What TheBlaze is attempting carries this one step further, developing special content products appropriate to specific advertiser messages and also relevant to TheBlaze audience.

What’s the future business model for journalism? No one knows. But probably a hybrid of subscription fees and advertising with quite probably some commerce as well!

The Consumer is King – Not Content After All!

By Eleanor Haas

A decade ago, the cry was
“Content is King” as we tried to make sense of digital  technologies that were changing everything
about how we received and used information, did business and related to one
another.

Now technology has not
only enabled new kinds of media unimaginable even ten years ago but has
empowered consumers in ways that enable them to control the information they
receive, once the exclusive province of publishers. Most serious of all, technology has transformed
so much so fast that today’s adults are no longer competent to forecast what
happens next. As Strauss Zelnick,
founder, ZelnickMedia, pointed out at yesterday’s digital breakfast, our media
habits today are those we formed by the time we were 16.  Look to the 16-year-olds for what’s cool and
try to understand how they use and experience media.

Listening to media
business leaders discuss the future of digital entertainment – and digital “entertainment”
now encompasses all digital “content,” another startling convergence – right
after reading Chris Anderson’s piece on “Free!” as the future of business models
throws light across the full spectrum of the media universe and related
business models. The business leaders
spoke at a GothamMediaVentures event sponsored by Frankfurt Kurnit Klein &
Selz. They were Ellie Hirschhorn, Chief
Digital Officer, Simon & Schuster; Andrew Lack, Chairman, Sony BMG Music
Entertainment, and Strauss Zelnick. Richard Hofstetter, a Frankfurt Kurnit partner, drive the discussion
with probing questions.

Digital Business Models

Hofstetter described the
digital platform as a source of new opportunities for monetizing consumer
relationships and for bringing customers to media brands – i.e., supporting the
traditional entertainment business model of advertising, subscription and
pay-per-view or pay-to-use. This is
certainly true. In many ways we are, in Zelnick’s words, moving increasingly
away from a paying economy to an advertising economy. But that is only part of the story.

Anderson takes the story to another level, talking about radical new business models
enabled by low-cost digital distribution, such as free video content online
while theaters make money from concessions and sales of a premium movie-going
experience. Google is free to consumers,
he says – and generates revenue from advertisers who want to reach those
consumers.

“Technology is giving
companies greater flexibility in how broadly they can define their markets,
allowing them more freedom to give away products or services to one set of
customers while selling to another set,” he writes, adding that “anything that
touches digital networks quickly feels the effect of falling costs.” Web technology is all about scale, he
explains, and transistors, which he calls “the atomic units of computation,”
are now close enough to costless that storage, bandwidth and processing power
are being offered free by companies like YouTube and Google, and IT developers
can afford to focus on delighting computer users, not just on running
algorithms efficiently. As a result, we
have increasingly sophisticated user interfaces, new forms of digital
entertainment and a flood of new ways to make “free” part of business models.

The New Economics of “Free”

Attention and reputation
are the new scarcities, not money, writes Anderson,
and it’s to acquire these that “free” exists for the sake of a business
model. It’s a seismic shift in our values
as society.

Anderson clusters variations on the theme in six categories:

  • “Freemium” – the subscription model – a free basic version,
         supported by premium versions with more features.
  • Ad-supported – free content, services, software, etc., paid for online by ad banners, text ads, affiliate ads, site sponsorships, search results inclusions, paid listings, lead generation, product placements and paid personal connections on social networks.
  • Cross-subsidies – giving away one product (razor) in order to sell another (blades).
  • Zero marginal cost – a de facto business model: the product becomes free because distribution costs nothing. Example: online music.
  • Labor exchange – the user creates value for the publisher by supplying information and gets free access to Web sites and services.
  • Gift economy – beyond money to altruism and sharing now that zero-cost distribution makes this economically viable – Wikipedia, open source software and UGC, for example.

New Business Models for Digital Music

Looking back, Zelnick
says “we (the record industry) drove people to piracy.” How? By not having the technology to support peer-to-peer sharing except for
free and by so fearing what had happened to the film industry with VCR rentals
– retailers made money but not film studios – that the music industry would not
allow retailers to make money with digital music.

Anderson’s
point about cost-free distribution supports this. Consumers saw what was possible and acted on
it. The record industry lacked the
access software and the strategy to take action.

Now
new business models have emerged that make online music economically viable
with multiple revenue streams, including two of

Anderson

’s
categories: ad-supported and paid
premium subscriptions.

· Entertainment content download sales are booming at both
iTunes and Napster.

· MySpace Music, announced less than a week ago, is a joint
venture of MySpace with the big labels: Sony
BMG Music Entertainment, Universal Music Group and Warner Music Group. For the first time, the most popular digital
music community, My Space, is in partnership with leading music companies for
purposes of marketing music content in a way that legitimizes downloads and
generates multiple revenue streams. This
represents a sea change from iTunes because it helps music titles bubble up in
peer-to-peer interactions as opposed to being pushed down by large companies’
choice of materials. (The success of the
joint venture will depend to some degree on the autonomy granted to partners
who are otherwise competitors.)

· Device manufacturers are taking an “all you can eat”
approach, loading devices with music so that consumers buy the music with the
device.

 

Radiohead
and other alternative bands left their record labels, released new albums on
their own Web sites and invited downloads for free or whatever consumers wanted
to pay. But by then they were already
established and could use tours and other vehicles to generate revenue. (
Anderson’s cross-subsidy model.)

The
value record companies and movie studios deliver is discovering and
establishing new artists, who need nurturing and a company behind them even if
they no longer need the old distribution of traditional media.

Film Business Continues as Before

New
films continue to be distributed and marketed in the traditional manner, and
the studios continue to provide the financing. The business has not yet been disrupted because the Internet pipe isn’t
fat enough for downloading movies.

Book Publishing has Yet to Adapt

Music,
video and social media have been the first three waves of the digital content
revolution, which the book publishing industry has sat out, according to
Hirschhorn. Storytelling is still in
demand, and people still read books. Opportunities
are evolving for e-delivery and integrated e-commerce that can provide a rich
media reading experience, but it’s early days.

Authors
are assets as well as books. Like
musicians, they have fan bases. Opportunities exist for them to connect with consumers, build personal
brands and franchise and have a voice beyond their books.

What’s
different from some digital entertainment businesses is that the book business
is not in the ad sales business, looking to build audiences. Publishers want their authors out there
broadly, leveraging syndication.

How Do Story-Tellers Get Paid?

One
way storytellers get paid is apparently by developing online games.  Zelnick mentioned a new interactive game that
contains eight hours of narrative!

Beyond
this, however, how they get paid seems to be the $64,000 question. Technology business plans are clear. But content companies are under pressure. The middleman/distributor is in competition
with the creative force. TV viewers zap
commercials, and networks now give away content for free at sites like Hulu –
online streaming video on demand, free snippets of programs. Creators are getting into their own
businesses but have to rely on agents and lawyers to fight for the right to do
their own exploitation. Will advertisers
buy this? Yes, says Lack, advertisers
will follow if consumers buy in.

It’s
all about what consumers want. And that,
in turn, is determined by our habits at 16!

New Directions for News.

TV
news has begun cutting news-gathering costs, looking to outside sources. Yesterday, CBS was reported to be in talks
with CNN about outsourcing some of its reporting operations. (Whoever thought the heart of the news
business would ever be outsourced?)

In
addition, citizen journalism has become a reality. CNN introduced ‘iReport” a year ago,
soliciting UGC for consideration by CNN editors. Now ireport.com offers
unvetted online content from users and bloggers. What happens to credibility with citizen
journalism?

Lack
characterized blogging aptly: “Blogging
is part of grassroots bubble up content – some news, a lot of opinion and junk
– a platform trying to find its place.” But, he added, it should not dominate serious news gathering. a lot of
established companies have too much baggage for the digital age, he
continued. The high cost of their
infrastructure is challenged by digital media and will be replaced by some of
these, including blogs.

But
there’s no need to get news from an existing company. Social networks are rapidly becoming an
alternative. Are they being
overvalued? Zelnick’s answer to this is
a good one: “News Corp. paid $580
million for MySpace and got a good buy – even though the valuation is too
high.” Why? Because of the enormous growth potential of
interactive entertainment, based in part on the same model as the traditional
movie business: give consumers what they
want and grow with the demographics.

And the reason for this is what might be termed the new economics of consumer control.  Social networks add a measure of consumer control that has never before existed.  Content bubbles up in peer-to0peer interactions instead of being pushed down by large companies.  Being incontrol transforms the value proposition for consumers.

What’s Next?

 

The next business to be
disrupted will be television, and it will be an ugly transition, predicts Lack,
but this will take longer than we think – as did the battle between videotape
and 35-mm. film, which took decades.

Advertising is dead! Long live advertising!

By Eleanor Haas

As everybody knows, paid media
advertising is declining in effectiveness. Why? Because audiences have too
many options. They have more and more
media to choose among. They are deluged
with messages – to the point of information overload. They have found ways to skip TV ads.  And they are captivated by new kinds of
media, such as You Tube and Facebook.

Three technology-enabled alternatives
to the status quo were discussed this morning by a panel sponsored by the law
firm Frankfurt Kurnit Klein & Selz. The
focus was on who owns creative content and how these ideas are paid for. What the new accepted practices will be will
have to evolve over time. But clearly,
advertising is undergoing a metamorphosis.

The challenge is what it has
always been: how to come up with a
compelling creative concept that will make the cash register ring for a product. Technology has added a new twist. Aren’t ads simply a form of content? Can’t they be interactive games or
songs? How does user-generated content
figure in this as opposed to ads created by professionals?

But once ads become content, the
creative brains behind them take on an importance greater than that of a hired
hand, something comparable to that of a star screen writer or songwriter. That’s when you get into serious questions of intellectual property ownership and compensation.

One new direction comes from
OpenAd.net, which calls itself “the world’s first online marketplace for buying
and selling advertising, marketing and design ideas.” OpenAd wants to democratize the ad businesses
by enabling students, professional free-lancers and ad agencies to compete side
by side. In addition, it wants to give
creatives a chance to benefit financially from really great ideas that work.

Creatives all over the world who
have registered with OpenAd create ads in response to briefs from ad agencies
or advertisers. Buyers who have enrolled
as OpenAd members get access to diverse creative approaches and can license these
ideas as they use them. Creatives are
compensated proportionate to the value the buyer perceives in their ideas – as
expressed in frequency of use – as opposed to the traditional one-time fee
based on time and materials.

Grey Worldwide has been
pioneering another new direction for at least five years: creating ad content as branded
entertainment. It’s also helping brands
get ownership of songs they use as well as using songs as key branding
tools. The agency becomes the brand’s
A&R consultant, proposing artists and songs as well as their interaction
with the brand. In one ad, for example,
Rihanna plugs both her own album and Cover Girl products in a format
reminiscent of MTV. In another the Black
Eyed Peas chant hip hop lyrics owned by Dr. Pepper to promote sales of Dr.
Pepper soft drinks.

GO Film, a production company,
collaborated with McCann Erickson to produce two music videos by Christopher
Guest that pitch Intel processors through original songs that incorporate
technical terms specified by Intel. The
videos, which were posted on various techie and non-techie Web sites, are
designed to deliver pure entertainment value as a basis for an enhanced brand
image. One video tells a story about a
soft-rock singer – representing Intel software – and a hard-rock singer –
representing Intel hardware – and the pleasure they bring their audience of
office workers.

Advertising is still a message
controlled by a sponsor who is identified and who pays for distribution. But the nature of the message is taking on
radical new dimensions, dimensions that at times seem to erase the line between
entertainment and advertising.  The times they are a’changing!