Monthly Archives: July 2008

The Post-American World is Flat

“What’s critical now is not how a company compares with its own past (are we doing better than we were before?), but how it compares with the present elsewhere (how are we doing relative to others?). The comparison is no longer along a vertical dimension of time but along a horizontal one of space.”

– Fareed Zakaria, The Post-American World

Zakaria, Newsweek International editor, somehow does a better job of crystalizing in 259 pages the overly complex, sprawling, meandering ideas that Thomas Friedman outlined in The World is Flat (the book definitely did not hold true to the concept of flatness).

Let me see if I can capture it in 2 paragraphs…

We are living in a world where intermingled markets are driving the “rise of the rest”, especially China and India. We have considered them as competitors, but in a 3rd world, 2nd class sort of way since they just hadn’t mastered the strategies and tactics of our game. But their gumption, shifting strategies and standing within the new marketplace and current economic situation makes them very serious competitors now.

So how the US competed and defined the game before does not hold. We have to reconsider the game and our goals in a reconsidered game – how, where and with whom we are competing and what success looks like now and how it needs to evolve.

I actually bought it with the intention of better framing my thoughts about the coming presidential election, which it has helped do. But having encountered the quote at the start of this post towards the end of the book, and some posts I’ve read from the various landed gentry of the marketing blogosphere of late, it became very timely from a business standpoint. Interesting.

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Filed under books, competition, election 08

Old Dogs Continuing to Learn New Tricks?

NBCU is offering what amounts to a quasi ecommerce/social shopping mash up.

Let’s immediately move past the fact that it looks like the Internet circa 1995 as our friends at MediaPost so astutely note. That’s not the point (it could be the downfall of the whole thing, but it’s not the point. Let’s look at this strategically, not tactically).

There has been much discussion about “the store becoming media” with space on digital displays in major retailers being sold, not to mention ad space on retailer websites.

But not since the premature launch of iTV and the thought that you could (gasp!) buy that sweater Rachel was wearing when she broke up with Ross for the 273rd time has there really been a legitimate “the media becoming store” thing.

(As it turned out, though a nifty idea, the infrastructure of commerce from TV wasn’t quite ready…come the digital TV flip of ’09, that’ll not really be the case. More to come on that at some point later, I’m sure.)

What’s more, a media vendor who has built their everything on supporting brand advertisers is talking about the potential for making money off of lead generation (again, whether they can truly carve a place for themselves there remains to be seen, but strategically an interesting move).

As I said previously, it’s not commoditization vs. value proposition of a medium. It’s understanding the role you want the medium to play, the medium being able to deliver on the role, and executing accordingly.

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Filed under digital distribution, future of media, monetizing media, push vs. pull

The Kids are Alright / Young Folks

For those alright kids oblivious to a reference to The Who, the post-slash title is hopefully a more friendly 21st century reference to Peter, Bjorn & John w/ which you can relate.

Not sure how I missed this (thanks freak for catching me up), but back in April, many people w/ “C” in their title leaned from their ivory towers of the revered advertising and media world, people who control a very large chunk of global ad spend, are playing Dr. Phil to each other, saying “Get over it”. (The fact that within the article there was a reference to Cher slapping Nicolas Cage in Moonstruck – a movie that premiered 21 years ago – perhaps sets up nicely what’s about to be said with regards to Young Folks.) This digitization of media thing ain’t going away and if you want to continue in this here industry you need to figure it out. And that starts w/ the aforementioned Young Folks.

This quote from Lee Clow, Chairman & Chief Creative at TBWA/Chiat/Day (or whatever they’re called these days – need a Young Folks memory abilities to keep the industry straight):

“If you want to participate, you’ve got to start hiring young people, and don’t tell them what to do — ask them what to do.”

Click the link and check his picture – this dude is what Young Folks would call “old”. He probably remembers the “secret” acronym for the shoe company on his t-shirt…

Some lyrics from Young Folks for you to ponder when you think about recruiting Young Folks into this industry – let’s assume the narrator is the ad/media industry:

if i told you things i did before
told you how i used to be
would you go along with someone like me
if you knew my story word for word
had all of my history
would you go along with someone like me

Hmm, let’s see, an industry that’s shifting at a grinding pace towards media spaces where Young Folks spend the preponderance of their time, always have and – more importantly – always will. Yeah, maybe we shouldn’t tell them our story word for word, and we should listen a bit more closely.

They ain’t like we Gen X’ers (apologies to any Boomers reading this but I just made you younger and much more indifferent and cool) who had to adapt to this neat-o digital stuff – they were born into it. ‘Member how we thought it was really cool when we got a VCR in the house? Atari or Activision? Those ultra cool, ultra small, ultra mobile Walkmen – and the technological wonder of the Discman? Mobile phones that had their own special bag and made you look like an Army officer on some sort of mission?

Yeah, very few of these kids have known life without a computer in the house, are somewhat averse to the concept of a physical container for their music that isn’t made by Apple, and have slightly different expectations of what a “mobile phone” is and what it can do for them (hint: primarily not being used for placing calls).

Oh, and know how there’s this whole thing going on about the power of tweens, teens and young adults influence over their parents – i.e. Gen X’ers and Boomers? Guess where they’re needing to spend more of their media time to connect w/ the Young Folks? It’s interesting to take a look at the demographic shift of Facebook and MySpace if you haven’t…

Back to the central thought which is the need for ad/media pros to get over it (dammit, I hate how that keeps coming up) and let the kids take the wheel a bit more. From The Who’s The Kids are Alright:

I know if I go things would be a lot better for her
I had things planned, but her folks wouldn’t let her

I really don’t want to be the folks who wouldn’t let her. Check it – get The Kids are Alright ringtone here. Maybe you Young Folks do get it!

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Filed under future of media, the career

Mastering Basic Economic Concepts 201: Commoditization vs. Value Proposition

Interesting piece on the Daily AdAge video regarding the pros and cons associated with the growth of online ad networks.

Within that discussion, Wenda Harris Millard from Martha/Omnimedia points out that we are potentially in a place where online media is becoming commoditized before the true and full value proposition is understood.

Hmm, that’s an interesting point and very much related to the Supply and Demand post from last week, but I think it’s a bit too simplistic and doesn’t really follow the history of where online media has been – or even take into account phenomenon such as direct response TV. Of course, the context is a short soundbite from a daily video report of the trade news, so I’ll assume the points I’m about to make were subsequently brought to light by Wenda or others…

Online media came out of the box as a commodity, initially a boon to marketers of the direct orientation due to it’s measurability and inherent ability to balance supply and demand. And though returns on such approaches are waning as more and more people come online (another basic economic concept for you – the funnel is getting fuller at the top and people are getting a lot smarter on how to use the web lower in the funnel), it is still an extremely efficient medium for acquisition.

However, now that we are at a point of cable-like penetration (70%+ last I cared to look) and huge swaths of people using the media as a social mechanism, I’d say we are at a state of truly defining the new value proposition that digital media provides.

It’s not CPC, CPA or CPM based, that’s for sure. However, the rate of exchange to negotiate the medium has to live somewhere in there because deriving value from a more social medium involves personally relevant metrics. It doesn’t make sense to expect media companies to define value in a social space in a universally acceptable media unit of exchange.

That means marketers and agencies will have to do more work in cultivating the relevant metrics and insights they want from “the community”, benchmark them, then negotiate front-end costs in such a way that the value derived at the other end is acceptable, and maybe even develop hybrid models that provide incentives for media partners that can best deliver these personal goals/metrics.

It’s not rocket science, folks (it’s pretty much what affiliate marketing already is), but I don’t think it’s commodity vs. value proposition either. It’s understanding the role you want the medium to play, then developing the correct programs to pay it off.

I know some scoff when folks say digital media can be used against practically any objective. Perhaps we should consider broadcast – home of beautiful brand advertising as well as bastion for informercials, HSN and QVC. Pretty broad spectrum of objectives being delivered there, and mostly done with hybrid pricing models that may start with a CPM but end with response.

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Filed under advertising effectiveness, measurement, media on media, monetizing media

I’m (literally) over it

I’m over it itself. The ambiguous, subjective, third-entity noun it. Used in the negative form, “You just don’t get it.” And it’s positive cousin, “You get it.”

Perhaps if we spent a bit more time outlining what the “it” is we want people to get, we’d have fewer people not getting “it.”

Ironic that a blog named after a quote from the father of transcendentalism, a movement that was more or less predicated on effectively defining the “it” on one’s own terms, would be speaking in such a way, don’t you think?

Anyway…

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Mastering Basic Economic Concpets 101: Supply and Demand

The headline’s attempt at being ominous is a bit over done, but it seems the average CPM for online media has dropped for three consecutive months. The economy is blamed (yawn), but here are a couple of other things to consider.

Simply blaming the economic slowdown seems a bit too easy. Outside of granting the fact that this tracking company doesn’t have any benchmark to compare against, I’m a bit surprised there isn’t some analysis on total Internet audience and page view trends considered. We’re talking supply and demand here – pricing going down probably has a bit to do with the number of users and their usage of the web going up and the fact that the CPMs that were negotiated were based on planned traffic levels that were exceeded. Fascinating – a growing medium that becomes more efficient as it grows (vs. a declining medium that becomes less efficient as it declines).

For example, the fact that news sites took a huge hit in terms of price decrease seems to say to me that there were some big stories that drove a lot of traffic (I hear there were some primaries and caucasuses going on and some movie stars having babies and getting divorced and stuff). The inventory that had been sold was based on assumptions of past traffic trends. The stories drove more traffic than predicted, so the advertisers on those pages enjoyed incremental audience, i.e. incremental value, and, thus, ended up paying a lower CPM than negotiated.

Now, as has been stated here before, figuring out how to correctly monetize this dynamic, growing medium is a huge challenge, especially for those who started their property in a “traditional” medium – and especially as pretty much all media moves to digital distribution. Misleading headlines and subsequent stories that don’t explore the real reasons behind decreased pricing don’t do a lot to help solve this problem. More than anything, they seem to allay fears and stall the issue.

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Filed under bad media, media on media, monetizing media

Quote(s) of the Day – Fact vs. Gut

Have been thinking quite a bit lately about the ever increasing analytics involved with marketing. The following quotes are from Merlin Donald, a psychologist who writes extensively (A Mind So Rare, Origins of the Modern Mind) on how human consciousness and the mind develops its powers, then changes and evolves.

Yeah, just a little light reading, but I hope you find the quotes as thought-provoking as I did when considering fact-based decision making vs. gut-based decision making – and the subsequent proof needed in supporting whether something accomplished it’s objective.

“The first step in any new era of theory development is always anti mythic. Things and events must be stripped of their mythic significances before they can be subjected to…objective theoretic analysis. In fact, the meaning of ‘objectivity’ is precisely this: a process of demythilogization.”

“The switch from a predominantly narrative mode of thought to a predominantly analytic or theoretic mode apparently requires a wrenching cultural transformation.”

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Filed under books, measurement