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The Death of Media: Are Direct Online
Marketing Channels Superseding Publishers? |
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14 December 2006 |
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Corporate Web sites may not push out awesome viewership
statistics compared to many media sites, but the data
coming out of recent research is pointing to direct
communications with online audiences providing multiples
more impact on their bottom lines than media-based
advertising. Online media companies are likely to have a
great year in 2007 but the looming question is how much
longer marketers are going to care about Web site
advertising in an era when direct conversations between
sellers and buyers are pushing traditional media to the
sidelines. The media isn't dead yet, but if it can't
shoehorn its way into these conversations more effectively
it better start thinking about it's retirement plan. |
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The environment for online
media is looking pretty robust, these days: forecasts for 2007
online ad revenues are looking great and new forms of
electronic media production are flourishing everywhere. Brand
advertisers are also beginning to embrace the Web more
enthusiastically, shifting more of their spend into online
channels than ever before. Yet for all of the buzz and bubble
over online advertising the greater fact is that media
companies are beginning to face the greatest challenge of all:
disintermediation.
Disintermediation is a word that has challenged publishers
before, but it was a less important threat in the early days of
the Web. Corporations were content at first to put out "brochureware"
Web sites with little meaningful content and user's
interactions were limited to viewing pages and filling out
forms for the most part. But as corporations have learned to
create and to sponsor their own engaging content and Web 2.0
technologies have encouraged users to write about and engage
corporate content, things have changed quite a bit.
Advertising Age brings this together (registration/subscription)
in an article that highlights some interesting statistics
surfacing in recent online ratings data. Consumer goods giant
Procter & Gamble Co., for example, does not have
blockbuster Web sites by media ratings standards - P&G sites
captured about 3.3 percent of ComScore's U.S. October audience
ratings - but by comparison this percentage is more than double
it's percentage share of overall U.S. ad spending and nine
times its percentage of online ad spend share. The AdAge
article also points to McKinsey & Co. research that showed
visitors to one corporate site generating $40 in corporate
profit per visitor on average, compared with $5 for audiences
reached by traditional media. Not only is going through
intermediaries an expensive route through which to acquire
customers, but one which doesn't pay off as well in the end.
While content generated by media companies continues to
engage audeinces it's not clear that advertisers seeking return
on their investment are going to follow suit endlessly with
major brand-building campaigns. If markets are conversations,
as The Cluetrain Manifesto
once intimated, then media companies are having a much harder
time figuring out why anyone should be chatting with them.
User-generated content is held out oftentimes as a way to help
media companies to find a place in the chit-chat between
sellers and buyers, but owning a user-generated media property
is not synonymous with being able to engage in a conversation.
Brand advertising is about seduction: conversations are about
relationships. In the meantime the focus on user-generated
content leaves fewer dollars to spend on traditional media
products - further weakening their potential to appeal to
audiences.
Are we witnessing the death of media? Well, yes, in an
abstract sense. There will always be advertising and there will
always be companies willing to extend their conversations with
their markets through media-based advertising. But if marketing
is better served through more direct and focused communications
with audiences and through multi-channel advertising
wholesalers like Google, then traditional media companies have
nowhere to go but down.
The conversations that drive media spends are shifting
radically and rapidly and will continue to do so over the next
several years. Here are a few ideas as to how media companies
can keep abreast of these changes:
- Polish your conversation skills. In spite of the
influx of user-generated media services being adapted by
media companies most are pretty "hands-off" when it comes to
integrating user content with editorial sources. While
traditional editorial content is still valuable it's lack of
integration with conversations found in user content is going
to compromise its ability to attract premium ad dollars in
the long run. If marketing is moving from a
command-and-control economic model to a networked model then
media needs to adjust its fundamental purpose from being a
medium for advertising to being a gatherer of market
participants exchanging views. It sounds simple enough, but
making a conversational marketing model work in the long run
is going to take a lot more skill than slapping banner ads on
MySpace pages.
- Move beyond your roots. Advertising at the very
dawn of commercial radio was thought of - literally - as a
phone booth in a studio which people would rent for a
limited time to broadcast a message. Today that phone booth
is online and interactive - much to the pleasure of
advertisers, but also to the detriment of publishers who
still struggle with their role. Media companies can continue
to focus on renting out studio phone booths, but it's a
better bet to focus on providing content that marketers can
contextualize as they please in their own "phone booths" and
in contexts defined by their audiences - and to provide
expertise and technology that will allow marketers to extend
those conversations into deeper levels of engagement.
- Rethink aggregation. For the vast majority of
publishers aggregation is about gaining an edge by bringing
together your own content or licensed content into one
"walled garden" or another for advertisers or subscribers.
But search technologies and services such as social
bookmarking, feeds and web mining have make the ideal garden
something that is much closer to the needs of individuals and
institutions than the ambitions of publishers and
aggregators. Marketing value is now maximized when content
flows to the contexts that users desire most as efficiently
as possible - rather than trying to corral them into contexts
not conducive to marketing conversations.
With a near-infinite inventory of content and a finite
inventory of advertisers media companies are in a race with
corporate marketers to come up with the most compelling content
and context that can get a marketing message across to
audiences. In the long run this is a race that most media
companies can only lose. It's time for media companies to shift
permanently to being enablers of effective conversations from
all sources. Today's "media star" is no longer the one with the
least common denominator gazing at them but the one who can get
audiences and marketers looking at one another most
effectively.
-
John Blossom
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