A presentation on the future opportunities in media, turning threats into insights into opportunities.

The presentation future media – no more middle men, is an accumulation of a range of relevant thoughts from this blog, put into system.

It’s built as a master slide set (to pick and sort from), but I tried to ad some structure to it by identifying six major “forces” affecting media, and then a short final chapter summarizing a suggested future mindset.

I’ve also chosen to ad a lot of the explanatory text – not just the headlines – into the slides this time, hopefully this will create more context for the people reading the thing online.

Find individual slides available for download under a CC license on my flickr.com account everything new is dangerous.

Find the presentation below, or on my slideshare account slideshare.net/helgetenno.

Online advertising will change fundamentally during the next year to four years. The reason is more unexpected, and with larger consequences, than anticipated.

I’ve written previously on how both the competition to the online ad product (ie. earned media) and our citizens’ change in online behavior should be forcing online media to innovate its advertising and marketing products. Now it seems these symptoms where only the tip of the iceberg: a change in the fundamental business model of the media industry.

In 2009 media has been failing, and it’s failing fast. All hands are on deck and the ability to think disruptively, not only incrementally, has invited people to rethink the whole structure of their business model. This will affect their income strategies and the companies sponsoring these income strategies.

In other words: online advertising is changing, because the media business model is changing.

This is the case I’m trying to make:
Media has been stuck for some time, but the scalability of the online advertising real estate, and the enormous market has kept the ball rolling. Not sensing that the drive for traffic and the drive for more ad space lessened the editorial product and made the media brands invisible.

As Kristin Skogen Lund, CEO of Aftenposten, one of the biggest newspapers in Norway said at a talk last week:

- ”We’ve been to identical, bought cheap traffic at a cost to our brand for to many years.” - Kristin Skogen Lund, CEO, Aftenposten

Scott Karp, editor of the Publishing 2.0 blog ads another argument:

“most newspaper websites sell SPACE for commodity advertising — display ads and classifieds — and thus are hard pressed to compete with ad networks that specialize in selling commodity ad space by the megaton” – Scott Karp, Publishing 2.0

The result is that the display advertising model works just fine for media buyers, but for brands they are receiving a decreasing amount of effect – and compared with the effect from earned media the investment at times can seem as a complete waste. At the same time media companies have brought a knife to a gunfight, they are competing against the networks, a game they can’t win, and are destroying their most valuable possession – their brand – along the way.

So something has got to change!

An incentive for change:
Two important facts where laid out by Skogen Lund at a conference last week:

- Only 5%
Skogen Lund stated that Aftenposten’s online revenue only represented 5% of their total revenue. Scott Karp confirms this as representative for the whole industry:

“That’s why the newspaper industry is worth about $60 billion offline but only $3 billion online — they only have about 5% of the pricing power that they did when there was only a finite amount of space in for printing ads.” – Scott Karp, Publishing 2.0

Online advertising in it’s current form is not a big revenue model for media companies, which would incentives innovation. If only one believed that online customers where better customers… Are people worse customers online? Hardly, FEED: The Razorfish Digital Brand Experience Report / 2009 states:

“Brands that use digital to drive awareness also drives sales: 64% of consumers report making a first purchase from a brand because of a digital experience” – FEED 09

So there is nothing wrong with the platform, there is nothing wrong with online, it’s how we’ve utilized it for advertising, and as a business model, that has been completely of the mark.

- Advertising decreasing, subscriptions increasing
A second interesting fact presented by Skogen Lund was a graph showing how advertising has represented a sharp decline in revenue, while subscriptions a sharp increase this last year. This at the same time as we are seeing niche newspapers, with strong brands and identifiable products, increasing their subscriptions in contrary to the mainstream newspapers which are declining. This tells us that there is an interest in a strong media product, and people are willing to pay for it.

My conclusion is this:
Media is a product (a membership), has always been a product and will continue to be a product. But somewhere along the way someone found that sponsoring it with advertising was a god idea. (Brilliant video for Norwegian readers to be found here (Thx. Freddy)). Which it was, to some extent. But the consequence was that the drive for traffic became more important than building a strong brand and a unique product.

Today when advertising sponsorship is failing as a business model, media has to start charging for something. But since they are left with a generic product it is impossible to charge for content that can be found for free ten other places.

(which is probably why Murdoch is shutting out Google, and also the argument of Mathias Dophner here. They want to protect it before they create it.)

So I anticipate that blood will continue to flow in the Media industry – because there is not enough money to finance all these institutions, and there is not enough strong brands to charge for their product.

Which leaves us with advertising: Advertising online will change because the media business model will change. Media brands seeing that they either don’t need to garbage their stories with competing stories, as Scott Karp says:

“advertising isn’t more valuable when placed next to premium content because display advertising has so LITTLE value to begin with. In fact, display advertising creates so little consumer value that it actually SUBTRACTS value from high quality editorial content when placed next it.”

Or because they find that people reading their publications are there because they get provided a value, and that brands in a lot of instances can co-produce this value. That NEW BRANDS are value creators, and that NEW MARKETING IDEAS are about creating additional value – not a competition between the attention of stories. And that this value, and a relationship built on trust between the media, the brand and the participant, will create a new, valuable, membership based content system.

That brands, as Forrester already has anticipated, will sponsor niche arenas where they can build direct relationships with their participants and members. What these arenas are, how large, small, niche or commercial, content, conversation or context based is completely up to our own imagination and creativity.

Attending a presentation on Bing before the summer, I was quite pleased with the abilities and ideas put into this project set aside the fact that it really doesn’t present anything new. Microsoft seems to have found the perfect argument for this:

“People didn’t ask for a new search engine?”

Now, people didn’t ask for the DVD either, in fact when asked they wanted a VHS with double the rewind speed :o)

I certainly applaud the success of Bing, as I support any competition Google can get, but it would have been nice to see some real innovation. I for once am looking forward to the day when search happens in the background, becomes ubiquitous, what will happen to search advertising business model then? When the whole concept of the search results page becomes superfluous.

Still, I find this charming… :

(via Boing Boing)

Marketing needs to extend the notion of value. In the event of adding smaller initiatives to the marketing mix moving customers one step closer to the till, or exploring social media to recruit participants, recognizing that value is much more than the final “sale” is important.

This might seem over evident, but in my experience, it often isn’t .

Patrick reminded me of this in a comment to my last post. Writing that it needs to be a “win win” situation between the brand and the customer.

Companies tend to view value as monetary, the final “sale”, but money is only the end result after several transactions with the customer, each taking her on step further along the snakes and ladders game board. Moving the customers from start to finish. Each of these transactions require communication, and in the event for them to be measurable and effective we need to define a richer set of success metrics.

The nature of Digital makes this especially important:

- As communication becomes a larger set of smaller ideas spread across a wider range of cooperative platforms, it’s important to recognize that each individual initiative is working on it’s separate goal. It is the totality of these initiatives that is working towards the final “sale”, but to measure for the success of the smaller ideas we need to give them different metrics than the final sale.

- Engaging participants through social media or starting a conversation are all parts of loyalty strategies. Getting people to purchase more than once, but the strategy itself is not focused on sale, it’s all about connecting with participants. There needs to be clearly defined wins along this axis to.

It is important to stay patient, to invest in initiatives that hasn’t got “sale” as its end goal, to be honest and measure correctly for we are building to achieve. If marketers aren’t relying on competitors to drive the category for them, then the marketing strategy is getting people from start to finish. This will mean at least 99 steps to make before customers can reach their final goal.

Understanding collaboration through the lens of Itay Talgam and a collection of the worlds foremost conductors.

The best event I attended last year was the Picnic Conference 08′ in Amsterdam. Filled with interesting people and invaluable insights. Now they finally put the presentations from the main hall up on Vimeo, and I recommend most of them :o) – Thanks to Putting People First for “finding them”.

I’ve picked out Itay Talgam’s presentation on Conducting Creativity as my favorite, not necessarily because it contains a lot of relevant technical stuff or hands out project experiences. It doesn’t, Itay’s focuses on putting great conductors into context under the goal of teaching his listeners about creative collaboration.

This ads to the content on this blog, because.. carrying on the theme from some of the previous posts; in order to see solutions we need to understand humans, and the interaction between them.

This would have to go without saying when we’re trying to figure out the drivers and incentives for collaboration, community and participation. And is essential in order to understand what this would mean to your company and the amount of control one protects or releases to the public.

The talk creates a beautiful and valuable perspective, touching on a range of different features related to collaboration and creativity. And… it was the only presentation I can remember that got an almost never ending standing ovation!

Here is a selection of three quotes by Itam, or him quoting others, all found in the presentation:

“It’s not only about personal style, this is a part of it, and I think an interesting part. but it’s about creating a certain set of culture that enables certain modes of collaboration between people”

“Without order nothing can exist, without chaos nothing can grow”

“The worst damage I can do to my organization is to give them a very clear indication. Why? Because that creates a one on one relations between me and the players. Which makes the ignore the ensemble and work directly with me”

Have a look at Picinic’s Vimeopage for more videos from Picnic 08′.

Itay Talgam at PICNIC08: Conducting Creativity from PICNICCrossmediaweek on Vimeo.

According to the panelists Matt Jones of Dopplr and Jonathan MacDonald of Ogilvy at PSFK’s Good Idea Salon London, mobile is all about a patchwork of situated software solving people’s personal and local desires.

Matt Jones spread the concept of Mobile being all about Place, and place is where culture meets location. The future mobile landscape will be a range of small ideas, small applications all working together to create a global mesh - as in contrast to many of today’s developments, where the focus is on solving massive global solutions.

Jonathan MacDonald added that we need to de-silo mobile and start talking of what it does, not what it is. We need to think about what people do in their lives, it’s about every single one of us.

I couldn’t agree more, and found Matt’s additions to the panel remarkably refreshing, putting a lot of stuff into context. Trying to build it into a more commercial articulation I would say that:

1. Mobile is about people, and they stuff they do, where, and how they do it. It’s not about technology, handsets or applications. As I have personally experienced, it is through being inspired by the customers and participants that the really groundbreaking revelations happen. Not through workshopping with clients or reading quantitative analysis.

2. People care about what’s closest to them, this also goes for the situations products and companies want to be a part of. Massive solutions, solving problems on a global scale, will not be as relevant or as interesting as tailored and local stuff.

The patchwork part is also very interesting but probably not from a conscious consumer point of view. The Patchwork implies that it is the combination of intelligence in and sensing by these local applications that the “grand machinery” will be produced. Not by a dumber, global, giant solution.

As a result one can say that Mobile will be about combining people and their ideas (culture) with their location. This doesn’t mean serving me coupons when walking past a Starbucks or sending me an SMS telling me to watch a TV program in the evening because some products will be featured. It’s about understanding my life, the activities I perform, which ones are relevant for your company. And discovering how you can ad value to this based on presence (being accessible when the situation occurs, not on the laptop four hours later), people (person + herd = culture) and place (location + time).

I’ve included this interview with Jonathan MacDonald, by Intruders.TV, for your viewing pleasure. :o)

Tom Himpe gives a rich presentation on how to create remarkable products & services.

“The one thing all of these domains have in common, is that they float in between product development and marketing. They are as much about improving the products as promoting them. And as such, they are eroding the importance of traditional advertising. They are blurring the traditional lines between R&D and marketing.” – Tom Himpe

This is a valuable addition to the ongoing discussion concerning the enrichment of marketing, and brand building outside of the narratives.

Found on Toms’ blog via All I want to be.

View the presentation The Conversation Starts From Within on Slideshare.net.

Google is carefully trying out a bit of paticipatory functionality  on an “opt-in and sign up” part of their page.

As I have talked about previously  (Instant getfication) it seems as if they have to continue to be innovative as both general search trends are getting richer and internal search engines see a stronger demand for a different kind of results than the Google standard can offer.

Some researchers at Phillips have been at it trying to figure out how to better present (higher accuracy) relevant ads to searchers who search for uncommon terms.

An uncommon term is a search term seldom used, the problem with these terms is that the search engine hasn’t created any “rules” for the search query, and therefore there is a great uncertainty to what the searcher really is looking for – and therefore a problem to identify the correct ads to present next to the organic results.

But what the researchers figured out, was that by analyzing a batch of the top (organic) hits one was able to identify and throw out the “problematic” hits and create a “most commom” theme which the searcher was also most likely to be interested in.

For example “fluorocarbon wet snow” had hits in categories ranging from fishing to chemistry and ski wax, but by analyzing the top hits one was able to identify ski wax as the category the searcher was interested in.

Read more

TechCrunch writes it up on the brand new advertising from Ask.com showing an integrated fullservice searchapplication inside the browser. Which means:

- Where Google has texted it’s way into the harts of consumers who don’t know what they should expect from search, Ask shows what “information at your fingertips” really is all about. Maybe it also challenges the content of the portals out there?