The Self-Media Decade

November 18, 2009 ~ Sebastien Provencher ~ Leave a comment

We’re almost at the end of the first decade of the 21st century (yes, it went by really fast!) and it’s probably time to reflect on what characterized the last ten years. Each decade gets its own descriptive “brand” and this one won’t be different. The seventies were all about “the peak of hippie culture“, social change and related values. The eighties were all about the individual, economic liberalization and some would say money and greed but it also saw the end of the Cold War. The beginning of the 90’s was very nihilistic with the grunge movement but finished on a high note with the start of a long period of economic growth, an amazing era of technology innovation and the dotcom boom.

So, what defined the 2000’s? We obviously could talk about September 11, the dotcom bust and the recent worldwide financial crisis but those are punctual events. They definitely influenced the zeitgeist but they are not the zeitgeist. I believe the decade that’s ending was all about “me” and the extreme democratization of media. I call it “The Self-Media Decade”.

It all started with the reality television phenomenon in 2000. Survivor, the famous TV show, ignited the genre and there’s been no looking back since then. Every time you watch television today, you see “real” people in “real” situations. In parallel to that, blogging and blog platforms arrived on the market (LiveJournal in March 1999 and blogger.com in August 1999). Throughout the decade, millions of people took up blogging. Some blogs became a real alternative to newspapers and magazines, journalists started blogging and the line with mainstream media started blurring. In the newspaper industry also, Craigslist democratized classifieds, allowing anyone to post a classified ad online for free. Their first real expansion out of the San Francisco market happened in 2000.

Another parallel was the arrival of Napster, also in 1999. By enabling downloads of individual songs, Napster was allowing everyone to become their own radio programmer (or CD mixer). Why listen to radio (or buy packaged music CDs) when you can just download your favorite songs and get instant gratification. We all knew at the time that television and movie distribution would be impacted in the coming years. Tivo became a phenomenon in itself and created the personal video recorder product category. No need to sit down at a fixed date and time to watch a television show. Can you guess when Tivo launched? Yup, 1999.

On the shopping side, the birth of Epinions (again in 1999) was the first signal of the important role consumers would play regarding merchant and product recommendations via user reviews. Up until then, directory publishers were pretty much the sole gatekeepers in a very advertiser-focused world.

With the introduction of these new sites and tools, the only thing missing was a solid broadcast ecosystem. Facebook (and later Twitter) created those much needed amplifiers starting mid-decade. By building your social graph, you’re creating your own media network. I quickly clued in to this when I wrote my “Robert Scoble is Media” blog post. We were all becoming media (production and broadcast) including myself.

I’m actually a good case study of the power of social media tools. Up until I started blogging in 2006, I had an excellent professional reputation but in a very small circle of industry colleagues and peers. By blogging extensively since then and by using broadcast mechanisms provided by sites like Facebook, Twitter and LinkedIn, my worldwide reputation has grown tremendously. I now have thousands of monthly industry readers on my blog and I’m often invited to speak at conferences. I’ve become an important influencer in the directory publishing industry and I’m amazed at the speed at which it happened.

So, what did we gain as a society? We now have more transparency, democracy and meritocracy. What did we lose? We lost common “experiences” (traditionally focused by media) and we’re not always sure who we can trust out there. There’s a lot more noise. But clearly, we’ve all become media by participating, with everything good and bad that comes with it and this will continue in the next decade.

Yellow Pages Group Represents 15% of All Online Revenues in Canada

July 30, 2009 ~ Sebastien Provencher ~ 4 Comments

The [praized subtype=”small” pid=”c4d2d76ecb2f9ad3c44c7561da14799dd0″ type=”badge” dynamic=”true”] released this week their report on 2008 Actual Online Advertising Revenue (.pdf). Some highlights:

Online advertising revenues in Canada have more than quadrupled over the past five years, and grew to $1.6 billion (net) in 2008, up 29% from the $1.2 billion $1.241 million reported in 2007
Online is now 11% of all advertising revenue
French language advertising revenues grew by 22% in 2008 to $317 million (net), and accounted for 20% of total Online ad revenues in Canada during 2008
2009 Forecast: Online advertising revenue in Canada will grow to $1.75 billion in 2009 – an estimated 9.2% increase over 2008 actuals
Search advertising continues to lead in terms of share of dollars booked by Online Publishers ($602 million/38%), followed by Display ($490 million/31%) and Classifieds/Directories ($480 million/30%).

The report also explains what are the perceived industry challenges and opportunities going forward. The following have been identified:

Coping with the severity of the economic downturn
Demonstrating Display advertising’s return-on-investment (with or without a click) in response to growing Advertiser emphasis on performance-based (CPC/CPA) pricing models
Training offline media sales forces to effectively integrate Online into cross-media sales proposals
The commoditization of Online media by the growing number and increased market share of Advertising Networks.

What it means: very good growth in online advertising in Canada last year with 29%. An interesting particularity of the Canadian market is the large share of Classifieds/Directory online revenue, almost as big as Display ads. That’s definitely due in a large part to [praized subtype=”small” pid=”7ac08d444f37191c8a97699e6530751c” type=”badge” dynamic=”true”] who reported revenues of $247 million in 2008 (most of them in Classifieds/Directories I suspect). They officially represent more than 15% of all online revenues in Canada. Impressive results.

Yellow Pages Group Releases 2008 Yearly Results, Surprises Market

February 13, 2009 ~ Sebastien Provencher ~ 4 Comments

Yesterday, [praized subtype=”small” pid=”7ac08d444f37191c8a97699e6530751c” type=”badge” dynamic=”true”] (YPG), Canada’s largest directory publisher, presented their Q4 2008 and 2008 yearly results. I think they surprised the market with better-than-expected financial results, especially in their directory operations. Total revenues for the whole company for the whole year were $1,696,713,000 million. Christian Paupe, YPG’s CFO, had three key messages:

1) Strong growth in the Directories category. “We continue to lead the industry both operationally and financially” said Marc Tellier, YPG’s CEO and President. Combined print and online revenues were up 3.5% for the year. For the full year, revenues in Directories reached $1,377 million and EBITDA was $822.8 million. EBITDA margins were 60.1% compared to 59.2% in 2007. An important indicator is print revenue growth/decrease. In Q4, print revenues were down 0.7% (Q3 was also down 0.5%) which gives them flat print revenue growth for the year.

YPG revenues

2) Trader, their Vertical Media business (i.e. classifieds), is definitely challenged by economic environment. Combined print and online revenues were down -1.8% for the year at $320.7 million. 2008 EBITDA was better with $108.2 million (an increase of 6.1%) due to “cost containment efforts”. Trader’s EBITDA margin in 2008 was 33.7% compared to 30.8% in 2007.

3) Their online organic revenue growth was very strong in 2008. Online revenues for Directories and Vertical Media combined increased to $246.8 million in 2008. This represents organic growth of 43.5%. Q4 online revenues in Vertical Media were up +60%.

YPG introduced two new noteworthy online products in 2008. The first is an improved version of their blockbuster Directory Plus product called Enhanced Directory Plus. It now includes Google Adwords. The second one, the Showcase Bundle, is a complete multimedia solution including a quarter column print ad, a bold alpha directory listing, our online video product Profile Plus and all the components of Enhanced Directory Plus. The Profile Plus product allows them to collect key local content like brands offered and hours of operations.

A couple of slightly negative news:

Customer count was down to 405,000 (couldn’t find last year’s numbers). Christian Paupe explained that they had tightened credit checks and taken a firmer stand on denied advertising (40% higher in this environment).
Online traffic measured in unique visitors was down in Q4 ’08 vs. Q4 ’07. Online reach was down from 42% in Q4 ’07 to 38% in Q4 ’08. This was caused by a change in technology platform powering Canada411.ca and by lower traffic on AutoTrader.ca (less people shopping for cars in the current economic climate). Tellier did say YellowPages.ca, their core site, was up 15% for the year though, due to organic traffic growth.

YPG's UVs and online reach

Additional insights:

Tellier reports that current sales (January 2009) are in-line with their expectations. As expected, large urban markets are more challenging but they’re seeing more online growth there. He mentioned that they didn’t see any change in their very-high customer retention rate (above 90%)
There was some discussions around the re-scoping of the Toronto books (going from two to four books)
From a regional perspective, BC and Alberta are suffering while Quebec, Manitoba, and the Atlantic provinces are doing well
Anecdotally, Tellier said “competitive intensity is down” in all markets.
Tellier also disclosed that substitution from print and online was occuring at Trader but not in their Directories operations
Their Management’s Discussion and Analysis document states that ” During the last six months, we have observed a more cautious behaviour from advertisers due to the adverse economic conditions they are experiencing. We have in the past demonstrated our ability to sustain stable and consistent growth during economic downturns and as a result, our revenues continue to grow despite the protracted economic and market environment highlighting the resilient nature of our national directory platform.”

Highlights from Kelsey’s Drilling Down 2008: The Kelsey Team Intro and the Latimes.com Strategy

May 1, 2008 ~ Sebastien Provencher ~ 2 Comments

Very interesting first half-day yesterday at the Kelsey Group’s Drilling Down on Local ’08. The theme of the conference is “Marketplaces”. It regroups products such as classifieds, auctions and vertical sites. Here are highlights from the first two sessions:

As an introduction, the Kelsey Group’s team provided us with some background information on “Marketplaces”. Neal Polachek first described the local end game as “better search, discovery, and engagement”. He even quoted the Cluetrain Manifesto’s “Markets are conversation”. He also talked about their latest global ad revenue forecast for 2007-2012, stating that the biggest category winner would be Internet and the biggest loser would be newspapers. As I wrote last week, the Kelsey group believes that Verticals will capture a large chunk of online advertising by 2012. Matt Booth then talked about three specific verticals (travel, automotive, home services) that have had a tremendous impact on offline/online business and media spending. For example, Matt showed two juxtaposed graphs showing the decline of newspapers’ automotive revenues vs. Autotrader.com’s revenue increase. Peter Krasilovsky finished the intro by stating that it’s now time to “uncouple” print and online media bundles. As print revenues decline, you need to have online-only ad products to compensate. Peter added that you also want to “verticalize” your offer to expand your revenues.

The second session “Remaking the Los Angeles Times (Online)” starred Rob Barrett, Senior VP of Interactive Media, GM, LATimes.com. He started by mentioning that most of what he’s currently working on is not very visible online now. He spent the first couple of years at the LA Times refocusing the online business. His main focus has been to build the display ad business (as opposed to classifieds). It’s going to generate $25M in revenues this year. Barrett says it’s now “time to finally break the newspaper paradigm online”. The LA Times’ online strategy needs to be local as opposed to national as it will allow them to differentiate their offer versus other “national” newspapers like the New York Times. They’ve realized that local users are key to online revenues as they generate more monthly page views and twice the display revenue per page views. Their product approach is “we want to own Los Angeles”, i.e. be integral to life of Angelinos, be the source of news and information about Los Angeles to the world and be an information retailer by creating, aggregating and curating LA content.

The Latimes.com web site is slowly transforming itself into a hyperlocal social network. All content pieces are going to be tagged and indexed by category and geography. By targeting on demographics and on geo, the LA Times is hoping to raise their average CPMs and improve ad effectiveness. They are creating the best targeting machine for the LA DNA. Barrett then showed us pilots of various new vertical sections that are very promising:

The Travel section: http://travel.latimes.com
A hyperlocal arts & entertainment guide: http://theguide.latimes.com
Hollywood backlot to show pictures of movies shooting: launching next week
User-generated photo and video content: photos & videos, http://yourscene.latimes.com
The Homicide map: http://www.latimes.com/news/local/crime/homicidemap/

Kelsey Group: Verticals to Emerge as a Key Driver of Online Advertising by 2012

April 25, 2008 ~ Sebastien Provencher ~ 2 Comments

The Kelsey Group just issued a new forecast on online classifieds and verticals advertising:

While online advertising has been propelled primarily by search, banners, e-mail and lead generation, The Kelsey Group expects verticals to emerge as a key driver of online advertising by 2012. Based on trend analysis, the firm forecasts the U.S. interactive classified and vertical share of online advertising will grow from 18 percent in 2007 to 24 percent by 2012. Revenues for interactive classifieds and verticals will grow from US$3.9 billion to US$14.7 billion during the same forecast period, representing a 30.5 percent compound annual growth rate (CAGR).

During the forecast period, U.S. online classifieds will grow from US$3.9 billion to US$9.1 billion (18.6 percent CAGR) and online verticals (such as home services, home and garden, health care, legal and auto repair) will grow from US$100 million to US$5.6 billion (461.4 percent CAGR).

What it means: I’m a strong believer in the verticalization of the Web. So, directionally, I agree with those numbers. The first indication for me that this would be a big business was this article about Meganiches in Wired’s November 2006 issue. I forecast that the next big trend will be the “localization” (i.e. the addition of local content/business listings) of all those vertical sites.

On Atomizing Your Business Model: The Newspaper Industry

February 20, 2008 ~ Sebastien Provencher ~ 4 Comments

Continuing our series on the atomization of content and business models, today I look at the newspaper industry.

First, from the user point of view: online (vs. the print version), it’s much more difficult to find the glue that will make your news container (your URL) stick together. if you have a strong brand (the New York Times, for example), people will navigate directly to your site but readers can now access your content via RSS readers, blog posts and news aggregators like Google News. These have been flourishing, reorganizing newspapers’ articles (the new content atoms), into flexible reading formats. For newspapers, it’s a catch-22. You want to be indexed by news aggregators to drive traffic back to your site but you wonder if you’re losing brand equity at the same time. Efforts at trying to get readers to register to newspapers’ sites (to generate potentially valuable socio-demographics information) have been a major failure. Clearly, the only strategy now is building a strong brand online while allowing readers to access your atomized content via a variety of vehicles but that creates problems from a monetization point of view.

Traditionally, the newspaper business model has been found in these three revenue categories: reader subscriptions, traditional display advertising and classifieds. Except for a few exceptions (the Wall Street Journal comes to mind), experiments in paid online user subscriptions have been failures as digital content is much more difficult to sell as an aggregate than print content. Classified revenues are being nuked by free sites like Craigslist or Kijiji, or aggregators like Oodle. Newspapers have been also forced to offer free classifieds, managing to generate some priority placement /enhanced content revenues but not to the previous print level. Online display advertising is working but it does not monetize as well as print advertising.

To better monetize their destination site, newspapers have been looking at various new solutions. One is in-line text ads (double-underlined sponsored keyword ads appearing directly in the article text) delivered by companies like Vibrant Media but, as I mentioned yesterday, the blurring of the line between editorial and advertising content has created ethical issues within news organizations. Already in 2006, in an article called “Is It News…or Is It an Ad?”, the Wall Street Journal exposed the various issues around the product:

“This type of online advertising within the text of an article, known as in-text advertising, has been around for a while. But it used to be relegated to niche sites like the videogamers’ haven IGN.com and ScienceDaily.com. Now it is appearing on some mainstream journalistic Web sites, like those of News Corp.’s Fox News, Cox Enterprises Inc.’s Atlanta Journal-Constitution and Hearst Corp.’s Popular Mechanics magazine. That marks a departure from a long-observed tradition in the print medium of keeping editorial content separate from advertising. “Journalism ethics counselors decry the trend. “It’s ethically problematic at the least and potentially quite corrosive of journalistic quality and credibility,” says Bob Steele, the senior ethics faculty member at the Poynter Institute, a journalism school in St. Petersburg, Fla.”

More recently, Tim McGuire from the Walter Cronkite School of Journalism in Arizona wrote about its use in the Arizona Central web site:

Michael Coleman, Vice-President of Digital Media for AzCentral, told me late Friday that the site has been using Vibrant Media for “two or three weeks.” Coleman described the relationship as a test and said this is not a “Gannett roll-out” of the concept even though some Gannet papers are using the system. “We’ve got a pretty non-committal contract with them, Coleman said. “The publisher made the call, and we decided to try it and see what happened.” Coleman said the experimental aspect of the deal explains why nobody has announced this deal.

Business Week wrote about the phenomenon in December:

Many journalists believe that selling the words in a story blurs the line between editorial and ad content. Some worry it creates an incentive to insert ad-linked words or order up certain types of stories. Forbes’ online arm caused a ruckus in 2004 when it rolled out in-text ads. After an outcry among the editorial staff and negative media coverage, Forbes ended the practice. (…)

Publishers are paid by Vibrant and other marketing companies based on how many times readers scroll over a word. Advertisers only pay Vibrant for how many times a reader actually clicks on an ad. In-text ads draw a higher response than traditional Web ads: About 0.2% of Web users click on posterlike ads known as banners; Vibrant CEO Douglas Stevenson says 3% to 10% scroll over and click on in-text ads, depending on the category.

I think the use of in-line text ads might be problematic thus far because newspapers have been using the technology to better monetize their destination site. I would suggest that the better use of this new ad vehicle would be to monetize a smaller atom of content, i.e. the news article, decentralized from the destination site. Embedding in-line text ads within RSS feeds or other distribution mechanisms might be a small price to pay to allow readers to access news article outside of the newspaper’s site. Another option would be to have RSS ads, like the Feedburner Ad Network.

I think the general takeaway here is that newspapers shouldn’t look at the same business models to monetize centralized and atomized content.

Update: The Kelsey Group discusses “Newspaper Next 2.0, a “progress report” by the American Press Institute on the evolution of newspaper companies beyond the print edition.” I took a quick glance at it (it’s a 110-page document) but it does not seem to address many of the business model issues that newspapers are facing. As my friend Peter K. says in the post, “The report has a better fix on consumer-oriented solutions than business solutions. But that’s not surprising for a newspaper industry (i.e. editorial-driven) product. If the Yellow Pages Association commissioned similar research, it would probably be the other way around.”

Obituaries 2.0

September 25, 2007 ~ Sebastien Provencher ~ 2 Comments

Nicholas Carr reports on a Guardian story about a site called YouDeparted.com. According to the article, users of the site “can issue posthumous instructions for everything from their funeral to feeding their pet, cancelling bills and magazine subscriptions, organising their will and other financial matters, sending final letters to friends – and foes – and delivering a valedictory video address summing it all up.”

This new service reminds me of a conversation I had last week at the Kelsey conference with Peter K. and some folks from Quebecor Media. I was discussing my interest in a web site called Find a Grave where you can search and find famous graves from all over the world. I started to wonder about the opportunity in online obituaries classified ads. It must be a good revenue generator for newspapers and I suspect those revenues can only go up.

While researching the subject, I found that many important US newspapers are using the outsourced services of Legacy.com. They describe themselves as “the leading provider of online obituary solutions for the newspaper industry. Legacy.com enhances obituaries with guest books, funeral home information, and florist links, providing a community-oriented, content-rich solution for more than 400 newspapers. Visited by more than 7 million users each month, Legacy.com provides links to obituaries published by the company’s network of newspaper affiliates. Through this network, Legacy.com posts obituaries and Guest Books for one in two people who die in the U.S. each day. ”

Founded in 1998, the company has many investors including Tribune Company. According to this Chicago Sun-Times article, Legacy.com had 50 employees and $10M in revenues in 2005.

News Grab Bag: ContactAtOnce!, Bret Taylor and Jim Norris, DexKnows.com, New Headings in Canada

June 21, 2007 ~ Sebastien Provencher ~ Leave a comment

A selection of some of the praized-worthy news in the last few days:

1) ContactAtOnce!, a provider of presence-aware solutions (click-to-call, IM, etc.) just announced that BargainNews.com, one of their customers, improved the conversion rate of its auto classified website by 77% after adding the ContactAtOnce! service (see screenshot below) to their enhanced advertising packages.

2) Bret Taylor and Jim Norris (both seen below), two of the masterminds behind Google Maps and several other Google products, have joined Benchmark Capital as “Entrepreneurs in Residence.” This gives them paid positions to hang out at Benchmark’s offices on Silicon Valley’s Sand Hill Road and think through starting a business. They have a specific idea in mind, but are secretive about it, telling VentureBeat only that it’s a “consumer Internet” company. I’ve had the chance to work closely with Bret when Google launched their Local site in Canada and it was great fun. I wish them both good luck! (via VentureBeat)

3) R.H. Donnelley officially launched DexKnows.com, their new local search web site powered by Local Matters (previously known as Dexonline.com). It now includes comparison shopping, a better mapping experience and some personalization tools.

4) Yellow Pages Group in Canada released their latest heading modifications. It’s always interesting as it gives us a perspective into changes in culture and society. Amongst others, Pilates, Organic Products, Geothermal Energy, Tapas, Brunch, Vegetarian & Vegan Foods are in. Telephone Booths, Shoulder Pads, Chewing Gum and Buttonhole Makers are out.

RealPeopleRealStuff.com: Craigslist Meets YouTube

June 20, 2007 ~ Sebastien Provencher ~ 8 Comments

(via SpringWise)

What do you get when you cross online classified ads with web-based video? Realpeoplerealstuff.com is equal parts Craigslist and YouTube—a whole new way for customers to reach out to one another to sell their used appliances, automobiles, collectibles, concert tickets and countless other goods and services. “Realpeoplerealstuff.com combines the hottest internet trends in one, easy-to-use site: e-commerce, snarky writing, funny videos, everyone’s desire to be a star and video sharing.”

With a few clicks of a mouse, customers can upload their own video commercials, recorded on their camcorders, webcams, digital cameras or cameraphones. Ads are organized by category and location, and users can enter text descriptions, prices, thumbnail photos and tags along with their video clips. For best results, users are encouraged to engage their personality, creativity and sense of humour when filming their commercials. And who knows? One may well turn out to be the next average Joe or Jane launched into internet stardom. The service is entirely free—for now at least, though there may come a day when, like Craigslist, modest charges apply to select portions.

What it means: I really like the concept as I’m very visual. But I wonder about the quantity of energy needed to produce a video vs. taking a simple picture, even if there are many video-capture devices out there. I remember when I started selling stuff on eBay in 2002. There used to be some barrier to entry if you wanted to post a product picture. Then, eBay introduced one of their coolest seller function: the UPC code product finder. When listing a product in some categories (like videogames), you just need to enter the product’s UPC code to instantly get the default image attached to the product, usually a cover shot. By removing friction, eBay got me to post more stuff for sale. I think Realpeoplerealstuff.com will have to think about how they can remove some of that friction.

I also think that classified advertising is all about local. Right now, local seems to be a second thought to the whole site. They need to embrace local much more to eventually be successful. There’s also a chicken & egg problem with local content. You need local content to make your site relevant to local users. I think Realpeoplerealstuff.com should be looking at doing backfill content deals (maybe with Oodle.com) to improve their local content breadth and depth.

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