Latest "Next Generation Media" from Aegis. Oddly enough trying to find relevant up to date stats is more difficult than you may think. Makes good reading
Posts Tagged ‘media’
The Times paywall flags up a lot of the challenges facing the publishing industry and its ability to get back on some kind of even keel. There have been lots of stones thrown at The Times for what is seen as some blind, desperate attempt to put the old pay model on the new world, but I believe it represents a major shift.
1. They are doing something
Many businesses and publishers are in fear and denial about what is going on with their business. One thing you can be sure of, the team down at The Times will be onboard with the fact that something advertising alone won't work and thats why they are having to do something. They are starting to address the problem.
I was at an IAB event recently and there were a number of publishes talking about initiatives that were driving large traffic levels, but you knew that traffic volume is not their problem. Its how do you sell the traffic. Innovation with platform, technology, ad format, content strategy, structure is all good but when was the last time you saw someone innovate with their commercial model? (and please don't talk about behavioral - not to be harsh, that wasn't their idea)
2. They are talking about users
Customer, customer, customer. No more talking about the intergalactic figures that no one understands
Publisher:"We have 3.2 million unique users and 129 million impressions, with even more ad impressions and we are far bigger than everyone else, who we know are confused and challenged like us"
Adevrtisers: - "That’s great - can I buy those 3 million people? with an ad"
Publisher: "Don't be daft, you can buy impressions though"
The Times are thinking about people (albeit a small number). They have set up a model that gets the business thinking about users and the revenue they generate. Publishers are going to have to start to take some reader money directly (through subs) or indirectly (through commercial deals) at some point and the sooner everyone (ad sales and editorial) start to talk about their revenue per user the quicker things will start to improve.
I would bet that more people at The Time are getting their calculators out and working out what the ad revenue per user is vs. subscription - that in itself is quantum leap.
There are some great pieces of analysis that are worth a read - Beehivecity has had a good dig round the numbers and really look at what the possibilities are.
99% of publishing businesses have editorial one side and commercial on the other. They don't meet until they report into the CEO. “churches, needing each other, but very different. I believe the journey that The Times has started on is cultural and for once a business has potentially unified the business under a common cause and goal.
So news is out that Publicis may be having problems meeting its spend commitmment with Microsoft. When the original deal went through last year for an estimated $530 million, it was viewed that together with cash and shares there was also a media spend commitment put in place. Publicis (or its media agencies) would agree to move money across to Microsoft's media busines (predominatly display and search) to sweeten the deal.
I imagine the media negotiators were suddenly cock of the pack. The only downside is that trading on big commitents works well with TV, press, radio and some elements to online. The issue comes when direct response comes into play. Probably 75% of display and more or less all of search budget is feeding off direct response cash.
The simplicity of direct response is that it self strategises. What works works and gets more money and what doesn't doesn't and gets cut (this being the reason why Google's could scale beyond any previous model seen - it worked!!).
This being the case Microsoft had to perform if it was to remain on any media schedule - if it didn't the media agencies would be having some fairly awkward conversations with their clients why Microsoft stays on the plan when it isn't washing its face and as such making a commitment with direct response money a fairly high risk business.
A tough one and its really beggars belief looking back that any media commitment was openly admitted.
Now I don't know the whole picture and it may well be that Publicis would have brought a couple of clients into the deal "We use our money and your money and we both share in the upside", now that would be innovative and honest and transparent.
The digital media market. Two things that really affect our perspective.
1. It grows like mad
2. It continues to change shape.
It’s always interesting to see how people react to these 2 factors. I spend a lot of my time trying to help companies relax and adapt to how they approach digital. Interestingly there are those who are intrigued, some in denial, some rip off their clothes and dive straight in and there are those who get a bit redder and angrier and say through gritted teeth “Just tell me the rules”.
I really believe in that old saying “Better a good plan today, than a perfect plan tomorrow” and invariably businesses need to get stuck in, make a few mistakes, learn from it and be conscious that they are learning. 5 year plans don’t work in digital. Rupert Murdoch’s quote still resonates “The world is changing very fast. Big will not beat small anymore. It will be the fast beating the slow.”
Companies that start to crack it are the ones where a whole management team is engaged, willing, excited (perhaps a bit worried) but with their sleeves rolled up and leading from the front. The market is littered with companies who have gone backwards due to hiring a “Director of Digital” – who is given responsibility to solve “the problem”, invariably not given the seniority and usually fairly technical (as execs have already assumed technology know how is the key). The execs waiting outside for the answer
There are so many good business leaders who continue to delegate their future direction to digital technologists and then wonder why things are even more confusing. To be honest it’s a cop out, uninspiring and not necessary.
Come on, take your socks off.
The NY Times announcing that it is moving to a paid for content / subscription model is a bold move and probably about time. Will it work? I have no idea. One thing it will answer is what is the value of their content and if anything start to bottom out the answer of what is the value to written content online. I used to think the old adage of "content is king" had lost its relevancy. The majority of the biggest sites in the UK don't have editors or even create so called content - application was king, relevancy was king, context was king ... content wasn't really up there.
I have changed my view. I recently spoke to a natioinal TV station who gave an insight into the usage of their video-on-demand service (super big), the sell through levels of the advertising (it was all sold) and the yields being achieved (I reckon they must have been getting yields 4 - 5 times that off your common gardenal natioinal newspaper site). The point being they were nailing it. The reason being it was great content. TV shows that people wanted to watch again. The thing that was raised eyebrows was the amount of archive footage that was generating plays and carrying these valaubale ads. From the ARCHIVE.
Janey L Robinson - Chief Executive of Ny Times, was using the iTunes micro payment model as proof that perhaps the market was ready to pay for content. I'll be honest I think this is perhaps a stretch too far. The nature of the contrent is very different, but it made me think of the archive word again.
My thinking is, would the creator of content archive it and would someone then come along and pay for that content. I think that this is the model at the moment, in markets where it works. Music, video, financial even porn. Succesful paid for models. Perhaps they are selling the freshness of the content of the stories - but will people pay for that? Especially with the explosion of free media services, national funded broadcasters and wire services.
The saying of "Good strategy is about sacrifice" stands here. The papers really need to think about the type of content people may pay for and for now I kind of like "The Archive Test". Fingers crossed they need a break.