April 18, 2012
In the New York Times yesterday, we learn about the new “local” strategy for Pandora, the music streaming service.
Pandora’s pitch to advertisers is that its technology can cater to consumers with far greater precision than radio — it can pinpoint listeners by age and sex, ZIP code or even musical taste — and that as it grows, Pandora will effectively be the top station in many cities.
This year, Pandora has had 400 local advertising campaigns across the country. One new client was Planet Honda in Union, N.J., whose president, William Feinstein, said he gave up on terrestrial radio years ago because he felt it cast too wide and expensive a demographic net.
What it means: as radio gets atomized (i.e. the atom is now the song), the future of this media goes through mass customization (or mass personalization), this ability to listen to the music you like whenever you feel like it. Pandora provides consumers with that experience. In today’s world, that’s probably a better experience for consumers and it puts Pandora directly against local radio stations and ad dollars. Four hundreds local campaigns is still a very small number but it shows the potential. As always, the challenge will be getting these ad dollars through a local sales force. Expect radio companies to eventually start reselling Pandora ads as part of their Internet package.
April 23, 2009
Excerpts from “How Much Ads Cost” – eMarketer.
(…) broadcast TV had the highest cost-per-thousand (CPM) rate of $10.25, with syndicated TV at $8.77. Magazines, cable TV, newspapers, radio and outdoor advertising round out the space. (…)
As for spending in the online sector… it’s a little more complicated. (…)
For display advertising, Credit Suisse estimated that in 2009 the average CPM will be $2.39, down from $2.46 in 2008. (…)
As for paid search, JPMorgan projected that for every 1,000 searches, $75.33 would be generated from ads in 2009. (…)
What it means: always interesting to compare the CPM of various media. It gives you a good benchmark to calculate revenues needed to counter offline to online revenue migration. Again, no Yellow Pages CPM to compare though. I wonder if someone has made the calculation before for the directory publishing industry.
April 9, 2009
“ESPNChicago.com Launches Monday” via Mediabistro.com.
The Chicago-focused online sports destination will feature original content from some of the most familiar names in Chicago sports including former Bears wide receiver Tom Waddle and former Bulls announcer Chuck Swirsky.
ESPN Digital Media is also launching new technology that allows for geo-targeted content and ad insertion in both live audio streaming and downloadable audio. ESPNChicago.com will also make use of existing ABC/ESPN properties in the city including ESPN Radio 1000 and WLS-TV and abc7chicago.com.
Mini what it means: I’m seeing more and more “national” media brands (television, magazines, newspapers) deploying local strategies online. Makes sense. They leverage a powerful and trusted national brand online but they make it locally relevant. It’s something that’s usually very expensive to do offline but is cheaper to do online.
February 18, 2008
A couple of news articles caught my eye last week. Mediapost reported on a TV exec seminar hosted by Havas’ Media Contacts unit. Talking about the online video revolution, Mediapost says “major TV providers are moving aggressively online–and not only to their own online destinations, but in an array of “distributed” online content options to deliver their programming directly to consumers regardless of where they are on the Web.”
In addition, TorrentFreak discussed data from Mininova (one of the largest torrent listing sites) showing that “ 50% of all people using BitTorrent at any given point in time do so to download TV-series, quite an impressive number. In total, over a billion TV-shows are downloaded every year, and this number continues to rise.”
Flickr photo by Marshall Astor
What it means: recently, all savvy media industry strategists have been talking about content atomization and clearly, in the TV industry, TV channels are being atomized by new Web technology. Whereby, in a traditional cableco world, channels used to be the basic content building blocks (think about how your cable TV subscription is structured), TV shows have become the new atomic element.
But there’s a problem.
The content is being atomized but the main TV business model (30-second ads) was built to be part of a larger element, the TV channel. Ads used to fill, i) the “empty spaces” between shows and ii) planned 3-minute interruptions during the show. In the first scenario, those empty spaces don’t really exist anymore as shows become the basic element and BitTorrent is disrupting the second scenario by offering easily accessible ad-less versions of your favorite programs.
Guess what. Someone forgot to atomize the TV business model while they were busy atomizing the content.
So, how do you atomize TV’s business model? Is it all about product placement, sponsorships, pre-roll ads? Do you move to a user-paid subscription model for individual shows? And BTW, is the future cableco the equivalent of a RSS reader for online videos?
And what does it mean for other media, newspapers for example?
In the case of newspapers, from a content point of view, news articles are the new atoms. This is the way news information travels online. But, in that situation, newspapers’ business model has been blown to bits (no pun intended). Let me explain. Like TV channels, newspapers are inserting ads in the empty spaces around news articles. These spaces don’t really exists anymore, so how do you monetize? News article sponsorships? A-la-carte article user-paid
subscriptions? This one is not easy as journalism ethics (rightfully so!) have kept news article and ads completely separated. How do you bring ads closer to the article without breaking readers’ trust?
What about radio?
For the traditional FM radio industry, individual songs are clearly the basic atom of content. But those are so easy to find online through legal (music streaming services, iTunes) or illegal means (BitTorrent again). As for their business model, radio stations insert ads around songs. Again, these slots don’t exist in an atomized world. Maybe radio stations should invest in original content or better DJs (Wired calls them robo-DJs in “Why things suck”)? Can radio stations move online as trusted brands and become real music aggregators/recommendation engines? It might be too late. So, is FM radio as we know it screwed? Maybe more than people think. That one again is not easy to solve.
And finally, directory publishers?
As for directory publishers, their business model is currently in the ranking of directory listings. But those individual listings might be the new content atoms. And if they are, it means that the ranking structure does not exist anymore. Is it now the merchants’ phone number and a pay-per-call model? Is it pay-per-click to individual merchants? Given that directory content is all about advertising, atomizing content does not impair a directory publisher from atomizing their business model but it just needs to be properly executed. I believe pay-per-call and pay-per-click to individual merchants might definitely be the way to go.
If you’re atomizing your content, don’t forget to atomize your business model! This blog post raises important questions about future traditional media business models. I don’t have all the answers at this point but I meant this post as a wake-up call to stimulate deeper strategic thinking in all traditional media firms.
October 22, 2007
I love that slide coming from Chris Tolles‘ Web 2.0 Summit presentation. Tolles is the CEO of Topix, a well-known hyperlocal news aggregator. It clearly shows why Topix decided to allow user-generated content in their site back in April.
In it, he tries to extrapolate the number of daily local news stories coming out of traditional media outlets (newspapers, radio and local TV) and comes up with a grand total of 22,293. Given that there are about 43,000 zip codes in the US, this means every zip code gets 0.5 stories per day on average. Not much if you’re trying to build zip-code driven news aggregator. Smart move.
Word-of-Mouth the Most Powerful Selling Tool; Traditional Media Advertising Still More Credible than Online Ads
October 11, 2007
Nielsen just released the results of their Nielsen Online Global Consumer Study (found via Eric Baillargeon’s blog). In it, “Nielsen (…) surveyed consumers on their attitudes toward thirteen types of advertising – from conventional newspaper and television ads to branded web sites and consumer-generated content.” Excerpts:
The Nielsen survey (…) found that while new platforms like the Internet are beginning to catch up with older media in terms of ad revenues, traditional advertising channels continue to retain the public’s trust. Ads in newspapers rank second worldwide among all media categories, at 63 percent overall, while television, magazines and radio each ranked above 50 percent. (…)
Although consumer recommendations are the most credible form of advertising among 78 percent of the study’s respondents, Nielsen research found significant national and regional differences regarding this and other mediums. Word of mouth, for example, generates considerable levels of trust across much of Asia Pacific. Seven of the top ten markets that rely most on “recommendations from consumers” are in this region, including Hong Kong (93%), Taiwan (91%) and Indonesia (89%). At the other end of the global spectrum, Europeans, generally, are least likely to trust what they hear from other consumers, particularly in Denmark (62%) and Italy (64%).
The reliability of consumer opinions posted online – which rated third, at 61 percent overall – also varies throughout the world, scoring highest in North America and Asia, at 66 and 62 percent respectively. Among individual markets, web-based opinions such as Blogs are most trusted in South Korea (81%) and Taiwan (76%), while scoring lowest, at 35 percent, in Finland.
What it means: a few weeks ago, I blogged about the fact that word of mouth might actually be the biggest opportunity directory publishers have seen in the last few years given that the Web was becoming a big word of mouth machine. These numbers clearly show that i) traditional word of mouth is still the most trusted source of advertising and ii) online word of mouth is not far behind. It’s also interesting to note the differences in the various geographical areas.