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Why Steve Jobs Could Be A Savior For Media Companies | paidContent

Why Steve Jobs Could Be A Savior For Media Companies | paidContent.

Arnon Mishkin is a partner with Mitchell Madison Group, where he consults for media companies on improving legacy businesses as well as making the internet profitable. Prior to MMG, he was a partner at the Boston Consulting Group, where he did some of the firm’s earliest work on the web.

One of the most effective television ads for a media company was one that WINS, an all-news radio station in New York, ran several decades ago. It asked viewers if they knew how to set the [preset] “buttons” on their car radio, and then explained, “You pull out the middle button…tune to 1010 WINS…and then push the button all the way in.” In those days, all car radios had the same mechanical preset system. And since hardly anyone had ever read that part of the auto manual, a large number followed the advice in the ad. They wound up driving with the middle button set to WINS – and WINS won the ratings war.

I remembered that piece of ancient media history when I read the latest rumors about the mythic Apple (NSDQ: AAPL) tablet. The tablet has been rumored for long enough to make it the technological equivalent of The Flying Dutchman, but it seems like the device may finally be arriving in port in early 2010. According to Gizmodo, the way Apple is thinking of partnering with content companies suggests it may, in fact, turn out to be worth the wait. 

On the web, all content gets posted and made available ubiquitously – through search engines, aggregators and the like. While some call this a wonderful ecosystem, the record shows that almost all the value that has been created on the web has gone to organizations that curate and navigate the masses of available content. They are the companies that have created the essential starting points (first Yahoo (NSDQ: YHOO), now Google,and in the future, maybe, Microsoft (NSDQ: MSFT) via Bing) or folks who create real or de facto “walled gardens” (at first AOL (NYSE: TWX), now apparently Facebook, and arguably Hulu).

Why is it so hard for content makers to create value on the web? Because the web has evolved to minimize content makers’ ability to retain users. Thanks to the power of search, users can bounce from one site to another so effortlessly that it’s tremendously difficult for any one site to monetize their visits.

The iPhone and, apparently, the Apple tablet rely on a very different approach to providing content to users: individual apps, of course. When someone downloads an app, that person immediately becomes a true user of it; the physical size of the device, coupled with a user’s desire to minimize the number of pages of apps, create limits to where that user gets information. While users may choose to drop an app or add others, there is a very clear cost (to the user) of switching from one content provider to another.

In other words, apps allow media companies to compete for that “middle button” that 1010 WINS won. And it’s not just the apps and the iPhone that can help media companies achieve that feat. Any successful e-reader and its downloads could have the same impact. Echoing this point, the author of a previous Leading Voices piece on paidContent argued that the unsung virtue of the Kindle was the way it allows readers to “unitask.” 

Unlike the web, the system of apps and downloads (e.g. an e-magazine subscription) provide tools that enable a content developer to build and keep a loyal audience, and you can imagine a variety of workable business models. A business could sell advertising against the customer base or potentially sell things directly to the customer, particularly with the new feature of “in-app purchasing.”

With Apple, the key is that it allows each app developer to “bundle” content – in a sense, just the opposite of what it did with iTunes, where it broke apart the music combo of records and CDs. As companies develop their approaches to apps, they need to figure out:

1. What types of bundles make the most sense – the generic bundles that were the norm in the broadcast television and newspaper industries, or more vertical, branded-identity bundles that were the norm for cable networks
2. How to ensure that they secure as much as possible of the best real estate on users’ iPhones, tablets or other devices
3. How to promote an app, taking advantage of the tools of the web
4. How to move users from their inherently low-margin web sites to different types of e-readers, apps and the like
5. How to make sure they don’t lose the inherent stickiness of apps
As they tackle these questions, content companies can take what they learn in the app and download world and try to make the web more profitable for themselves.

MediaPost Publications Bigger Not Always Better For Ad Engagement 10/13/2009

MediaPost Publications Bigger Not Always Better For Ad Engagement 10/13/2009.
by Gavin O'Malley

In contrast to banner ads, bigger isn't necessarily better when it comes to rich media, according to new research conducted by display ad provider Eyeblaster. Rather, choosing the right video, ad format, flash features and expansion are far more important when it comes to rich media display ads. A breakdown by ad formats across multiple regions suggests that for rich media, half leaderboards -- sized 235x60 -- are the top-performing rich media ad formats, followed by rectangle ad formats, sized 180x150. "Eyeblaster data suggests that physical size of a banner has less to do with performance than creative execution and rich media," said Gal Trifon, CEO and co-founder at Eyeblaster. "This corroborates other published studies that reveal that bigger banners do not equate to better engagement." Eyeblaster analyzed data comprised of more than a quarter of a million of ads worldwide, including all sizes, formats and markets served between the third quarter of 2008 and the second quarter of 2009. To demonstrate that size is not a key performance booster for rich media ads, Eyeblaster analyzed the performance of the most popular ad format -- polite banner -- with and without video, across sizes. Unit sizes were sorted by pixel from high to low and measured in total "dwell time" -- the amount of time a user is exposed and engaged within an ad. Results show that video increases performance significantly by 71%, regardless of size. For standard banners, unit size is one of the major factors to attract users' attention. The analysis indicated that on average, an increase of 50,000 pixels yields an increase of 0.044% in CTR, compared to the overall CTR of standard banners at 0.1%. To increase performance and consumer engagement, Eyeblaster suggests that marketers reevaluate the role of technology in their ad play, and and consider aligning creative with appropriate metrics in the beginning stages of planning a campaign.

MediaPost Publications 8% of Internet Users Account for 85% of all Clicks 10/13/2009

MediaPost Publications 8% of Internet Users Account for 85% of all Clicks 10/13/2009.
by Jack Loechner

The results of an update to the comScore highly publicized "Natural Born Clickers" research, conducted two years ago with Starcom USA and Tacoda, indicate that the number of people who click on display ads in a month has fallen from 32% of Internet users in July 2007 to only 16% in March 2009, with an even smaller core of people (representing 8% of the Internet user base) accounting for 85% of all clicks.

Presented by comScore chairman Gian Fulgoni and Kim McCarthy, manager, Research & Analytics at Starcom, at the iMedia Brand Summit in San Diego on September 14, 2009, the original research showed that 32% of Internet users clicked on at least one display ad during the month. These clickers were segmented into Heavy, Moderate and Light Clicking segments based on the group of users (heavy), middle 30% (moderate), and bottom 20% (light).

In 2007, comScore, Starcom and Tacoda found that Heavy clickers, representing 6% of U.S. Internet users, accounted for the top 50% of clicks, Moderate users, 10% of Internet users, accounted for 30% of the clicks, and Light clickers, 20% of users, accounted for 16% of the clicks. By March 2009, those numbers had dropped substantially:

• 4% of Internet users are Heavy clickers
• 4% of users are Moderate clickers
• 8% are Light clickers

Heavy, Moderate, and Light Display Ad Clicker Analysis (Total US Home, Work and University Locations)
	Share of All Internet Users		Share of All Click-Throughs
	July '07	March 09	July '07	March ‘09
Total clickers	32%	16%	100%	100%
Heavy clickers	6	4	50	67
Moderate clickers	10	4	30	18
Light clickers	16	8	20	15
Non clickers	68	84	0	0
Source: comScore, September 2009

Linda Anderson, comScore VP of marketing solutions and author of the study, concludes that "...  marketers who attempt to optimize their advertising campaigns solely around the click are assigning no value to the 84% of Internet users who don't click on an ad... "

The results underscore the notion that, for most display ad campaigns, the click-through is not the most appropriate metric for evaluating campaign performance. Rather, advertisers should consider evaluating campaigns based on their view-through impact, says the report.

Despite the precipitous decline in clicks, says the report,  comScore is advocating looking beyond the click because other comScore research has shown that online display ads generate significant lift in trademark search, online and offline sales, and brand-site visitation across all verticals, among those internet users who were exposed to the online ad campaigns - whether they clicked on the ad or not. These results, compiled in comScore's influential "Whither the Click?" white paper, were reported in the June 2009 issue of the Journal of Advertising Research.

Display Ad Lift (Site Reach Weeks 1-4 After First Exposure)
Vertical	Control	Test	% Lift
Average all	4.5%	6.6%	46%
Automotive	0.9	1.9	114
Finance	1.3	2.3	86
CPG & restaurant	0.6	1.1	77
Retail & apparel	9.1	13.8	52
Media & entertainment	7.0	10.0	42
Electronics & software	5.8	7.2	25
Travel	4.8	5.8	21
Source: comScore, June 2009

John Lowell, Starcom USA SVP/Director, Research & Analytics, notes that "a click earns no revenue and creates no brand equity...  online advertising (is) certainly not to generate clicks... (but) to visit website, seek more information, purchase a product, become a lead, keep brand top of mind... "

For additional information, please visit the SMV Group here.

Half of Newspaper Publishers Believe Online Pay Walls Will Work - MediaBuyerPlanner

Half of Newspaper Publishers Believe Online Pay Walls Will Work - MediaBuyerPlanner.

Published on September 13, 2009 | Email this article

More than half of newspaper publishers believe readers will pay to access online newspaper content, according to a survey conducted by industry consultants Greg Harmon and Greg Swanson for the American Press Institute.

51% of publishers say they believe they can successfully charge for content, while 49% either aren’t sure or believe paying for content will not work, reports Alan Mutter in his Reflections of a Newsosaur blog.

68% of publishers said they thought that, even if readers object to paying for content, they would have a difficult time finding that information in other places, while 52% said they thought it would be either very easy or somewhat easy for readers to find replacement content.

More data from the study:

• 58% of publishers said they are considering charging for content, but 49% said they have no timetable in mind for how that will play out. 12% said they plan to charge for content by the end of the year, 18% said they will do so in the first quarter of 2010, and 10% said they would begin charging by the beginning of next summer
• 10% currently charge for some portion of the web content

In terms of how charging for content might play out:

• 38% say they will limit full access to stories to monthly subscribers
• 28% say they will likely offer monthly subscriptions as well as micropayments for individual articles
• 15% expect to offer monthly subscriptions, micropayments, and “day passes”
• 19% expect news articles to remain free but that they will produce content specifically for the website which would be behind a pay wall
• 9% say they may adopt a system which would make visitors pay separately for each story they want to read.

The poll was completed by 118 newspapers of all sizes in all parts of the country.

The American Press Institute (API) has partnered with ITZ Publishing and Belden Interactive, operating as ITZBelden, to monitor media companies’ online revenue initiatives, including pay for content. API is working with ITZBelden to produce surveys of local media enterprises’ ongoing and new revenue initiatives.

These results from the first survey are being presented at API’s Newsmedia Economic Action Plan Conference this week.

Newspaper companies including News Corp. and MediaNews Group are among those that have said they will begin charging for online content. News Corp. chief Rupert Murdoch says the company will charge for all of its news sites, including FoxNews, by the middle of next year.

MediaPost Publications ComScore: Most Clicks Come From 'Natural Born Clickers' 10/02/2009

MediaPost Publications ComScore: Most Clicks Come From 'Natural Born Clickers' 10/02/2009.

It's time for online marketers to forgo click-through rates for a better measure of success, according to new data from comScore in conjunction with media agency Starcom USA and behavioral targeting firm Tacoda.

Indeed, the number of people who click on display ads in a month has fallen, from 32% of Web users in July 2007 to only 16% in March 2009. Worse still, an even smaller core of consumers -- representing just 8% of the Internet user base -- accounts for the vast majority, or 85%, of all clicks.

"Marketers who attempt to optimize their advertising campaigns solely around the click are assigning no value to the 84 percent of Internet users who don't click on an ad," said Linda Anderson, comScore VP of marketing solutions and author of the "Natural Born Clickers" study. "That's precisely the wrong thing to do."

Rather, as comScore research has shown, marketers need to embrace the fact that non-clicked ads can also have a significant impact on consumers.

"Savvy marketers are moving to an evaluation of the impact that all ad impressions -- whether clicked or not -- have on consumer behavior, mirroring the manner in which traditional advertising has been measured for decades using reach and frequency metrics," Anderson added.

The original "Natural Born Clickers" study, conducted using July 2007 comScore data, showed that 32% of Internet users clicked on at least one display ad during the month.

These "clickers" were segmented into heavy, moderate and light clicking segments based on the group of users accounting for the top 50% of clicks (heavy), middle 30% (moderate), and bottom 20% (light).

In 2007, comScore, Starcom and Tacoda found that heavy clickers represented 6% of U.S. Internet users, moderate clickers accounted for 10% and light clickers accounted for 16%.

By March 2009, those numbers had dropped substantially in each case, to 4% of Internet users for heavy clickers, 4% for moderate clickers and 8% for light clickers.

MediaPost Publications Free, Fee, or Flee? 09/29/2009

MediaPost Publications Free, Fee, or Flee? 09/29/2009.
Big or small, how can companies charge for content and services online when a free alternative is often just a click away? Whatever Rupert Murdoch thinks, there's no easy answer.

A new study by Ramon Casadesus-Masanell of Harvard Business School and Feng Zhu of USC's Marshall School of Business takes a look at the problem by examining the business models of over twenty companies divided into four categories: pure fee-based models like iTunes; pure ad-sponsored models like Facebook; mixed models like WSJ.com; and tiered content models such as Match.com.

Of particular note, the study finds that once a free, ad-based competitor enters a market, rivals offering mixed strategies loose their relevance -- something Murdoch and other newspaper publishers seem to just be realizing.

The surest path to success, therefore, is committing entirely to one monetization method: ad-sponsored or fee-sponsored business model. "When there is an ad-sponsored entrant, the incumbent is more likely to prefer to compete through a pure, rather than a mixed, business model because of cannibalization and endogenous vertical differentiation concerns," according to the study.

Free or fee? How are publishers supposed to decide? By making honest appraisals of their own fare, and how it compares to the competition. Rupert Murdoch obviously believes The Wall Street Journal's content is worth a premium, and its successful subscription business backs it up. From Hulu to MySpace, News Corp. will now have to decide on which side of the fence its various properties lie.