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Monetizing Context: How Wal-Mart, P&G
and Ford Leverage Captive Content |
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29 March 2004 |
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With Wal-Mart, Proctor & Gamble and Ford providing recent
examples of how it's paying off for companies to provide
their own private contexts for content in print and online,
mass media publishers are finding themselves under the gun
to hang on to desirable shelf space and Web clicks. But
it's not just consumer publications that are feeling the
pressure to compete with today's institutions equipped with
powerful and affordable publishing tools - trade
publications and other professional publishers are feeling
the heat as well. Getting content to do things for readers
that pay off more directly to sponsors is one key element
in providing more value in contextual content. |
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When we at
Shore tell people that today's leading publishers are
individuals and institutions equipped with powerful and
affordable publishing technologies, the cynics will sometimes
reply, "Give me a good example." Well, how about three? In the
past week we've been reading about
Wal-Mart initiating its own magazine in conjunction with Time,
Inc. targeting Wal-Mart consumers. We've also read with
interest about how
Proctor & Gamble has launched healthexpressions.com, a
consumer Web site with articles and data on healthy lifestyles.
In manufacturing the
The New York Times notes that the Ford Motor Company is
underwriting the publication of novels by a noted British
author who changed her heroines' favored autos to Ford Fiestas,
a model targeted at her largely female audience. As Shore
Senior Analyst
Janice McCallum noted in our
weblog and in her
research these kinds of developments point to advertisers
creating their own contexts using content that are relevant to
their clients' demographics, developing deeper relationships
with clients through direct publishing than can be attained
through trying to leverage traditional publishers' content
products with advertising
Private labeling of content in pursuit of
profits is nothing new, of course, but there's something
happening in an era when Web portals are a given and a
necessity for major institutions. In learning how to develop
relationships with their audiences through Web-based content
technologies, it is now more important for these institutions
to extract value from those relationships in their own context
with their own content than to try to compete with others
trying to lure people from other content sources into their own
context. Paying other people to get them into their own context
will always be important to some degree, yet having become
adept at so many aspects of online publishing to support their
online and offline commerce, companies and organizations are
becoming increasingly unwilling to cede their audience
relationships to others based on traditional publishing and
advertising models that don't develop those relationships
effectively, especially as developing relationships requires
an increasingly complex range of products and services.
Be in print or online, maintaining loyalty to encourage
purchases requires getting deeper into the minds and hearts of
a client than ever before, making owning the context more
important than ever and making quality, captive content
increasingly a product rather than a by-product.
Who stands to profit from the movement to
owning content contexts? Here are a few looks at where the
winners and losers are likely to find themselves:
- Mass media publishers get the squeeze. Look at a
magazine rack in any retail outlet and the problem of
publishers becomes all too apparent. With too much copycat
content chasing mass-demographic advertising dollars, there's
very little opportunity for magazine publishers to build up
unique and loyal audiences. Similarly, from a Wal-Mart
perspective, why take up valuable shelf space with dozens of
magazines pushing some products in your store and some that
are not when you can funnel people through one publication
that pushes just what you have - and reinforces the Wal-Mart
relationship, or the Home Depot relationship, and so on. In
an online era in which people have come to accept that good
content is where you find it, expect many major retail
outlets such as Wal-Mart to use private print content to
extend their trusted retail brands, further marginalizing new
mass media titles dependent on retail outlet sales.
- Search engines guide people to contextual content more
than publishing portals. Traditional advertising is a
tool that tells people, "Did you know that you should
want...?" By comparison, online search engines tell people,
"This is what you asked for." Responding to immediate needs
makes content such as P&G's found in searches extremely
contextual and valuable: it builds up a relationship based on
expressed needs rather than imagined needs. Having fulfilled
a person's content needs, the power of the advertising
message is more likely to resonate and be part of the
established relationship. Contextual ads in search results
are the next best thing, telling people "This might be what
you asked for." As search engines and other tools assemble
content to audiences' immediate needs, the power of
publishing-only portals as content destinations will continue
to decrease, while portals that do things for people
will continue to strengthen as content destinations.
- Special interest publishers turn into special interest
groups. The "do" of online content is placing increased
pressure on special interest publications such as trade
magazines to distinguish themselves in an environment where
their ad clients oftentimes have far more interesting and
"doing" Web sites than their own. As clicks tend to follow
the "do" opportunities, this presents a problem for
ad-supported specialty publishers who may not have the funds
or the inclination to develop sophisticated online portals to
create more of an engaging presence and whose content is
becoming increasingly difficult to monetize through premium
aggregation services. At the same time trade
associations generally do a good job at providing community
building in specific market segments via events but many to
little to leverage those communities online. Between these
half-serviced interests lies a common model towards which
trade publishers and associations are likely to gravitate,
one that incorporates the community elements of a trade
association with the content capabilities of a trade
publisher and the functionality that can be afforded by
companies with development funds. Like a novel that
entertains with product placements, it could be that an
online industry directory and networking tool receiving
sponsorship will prove to be a more valuable community
relationship-building tool for that sponsor than a
traditional advert.
None of this is great for publishers, but
most of the bad news is for advertising agencies, which need to
start accepting that they are trying to force their clients
into marketing models that may fit their skills but not their
clients' needs to exploit contextual content. There's a new way
to leverage context to drive profits, and most major
institutions are forging ahead with what works in building
context for their content - with or without publishers and ad
agencies.
-
John Blossom
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