New Column on Business Spectator

Gday. I’ve been reasonably quiet on here for the last few weeks … the reason for this is I’ve begun a weekly commentary around media/digital/advertising etc on Business Spectator. (http://www.businessspectator.com.au)

Alan Kohler approached me with the idea and it was something I couldn’t refuse. Business Spectator is a great site with the best business journalists in the country. Why they want my “media loony” rants is beyond me … but they seem keen on the idea and I couldn’t be happier.

So every Thursday I’ll be running a commentary/column on the site. It’ll be available from the frontpage. For the remainder of the year I’ll be focusing on making these commentaries as tight as possible so my blog output will be pretty slim.

I’ll be linking to these pieces through this blog so email subscribers will still be alerted when something new is posted.

Enjoy and thanks for reading, commenting, abusing.

http://www.businessspectator.com.au

Great article by Optimedia US CEO, Antony Young

Saw this over the weekend and thought it was worth passing on.

Optimedia US CEO Antony Young has written a piece claiming ‘Hulu is an H-Bomb Ready to Destroy the TV Industry’. And he might be right.

No one is questioning that Hulu is a great product, as a user … but commercially it could pose some real problems to those involved reasonably soon.

Young’s article looks at a few key factors that are often used by those who are involved in these ventures.

1/ If we don’t do it, someone else will

2/ Consumers want it, hence we have to give it to them

3/ It will ultimately increase TV audiences

I like his closing quote “As a media buyer, I have no vested interest in whether the broadcaster shareholders support Hulu or not. Our livelihood as an agency relies neither on supporting the status quo of traditional media nor blindly pushing the popular wisdom of digital everything.”

http://www.businessinsider.com/hulu-is-an-h-bomb-that-will-destroy-the-tv-industry-2009-10

One thing that is interesting is the comments are all very dismissive of Young’s view. Which is kind of sad as he makes sense and in a way it shows how far away from commercially competent many involved in digital are. I think many of these comments are a result of those making them not understanding the cost realities of creating content and the revenue performance of broadcast TV.

News and Fairfax should shut their online newspapers?

Cool headline hey?

I thought I’d borrow a tactic from the mainstream press to get your opinion on a hypothetical scenario.

I had breakfast with a friend of mine who is a lot smarter than me yesterday. We were talking about media and the apparent will of some operators to completely ruin what are extremely robust ‘traditional’ businesses to try and make a fraction of that revenue online in what is a much smaller overall category with 10’s if not 100’s more competitors.

Now this guy isn’t another media loony like me, he’s actually remarkably sane.

From my research, the newspaper advertising market is  worth over $4b in Australia. 30% of that is classifieds … the rest is retail or national. That means around $2.5b is non classifieds.

The below newspaper data is sourced from The Newspaper Works, primarily a presentation called ‘The Australian Newspaper Market March 2009′ which is available on their website (signup required, heh)

Metro newspapers account for around $2.3b of that figure. Seeing 70% of revenue is non classifieds, metro newspapers are seeing around $1.6b of revenue come through from brand or retail advertisers.

That’s $1.6b in what we digital people would call DISPLAY revenue.

The total digital display pie in the 12 months to June 30 2009 was $491m. That is the total – across all categories and that includes performance advertising, networks, affiliates etc. This data has been sourced from the most recent IAB PWC Digital Advertising figures (to June 30, 2009)

It would be generally agreed that newspapers offer operators better yield/revenue per reader than digital. So, in essence, a print newspaper reader is worth more than the same reader online.

Given the digital display pie to June 30 2009 was $491m … how much was the revenue proportion going to the online versions of newspapers – primarily News Digital Media and Fairfax Digital ones?

This is a guess, but I’d say around the $80m mark.

$80m versus $1.6b. It’s a big difference. Hell, my estimate could be 25% of the real figures (say the real figure was $320m – which it isn’t) and the diffence would still be massive.

Now – based on $80m being the figure … even if the display market for these publications grew at 15% for the next 10 years the total revenue pie for them would be just over $300m. That’s based off 15% annual growth EVERY YEAR for the next 10 years.

Even if newspapers declined at 15% YOY for the same period (which is doubtful considering their track record over the last 10 years) their metro revenue exc. classifieds in 2019 would be around $314m

So newspapers now are commercially very viable, with steady readership, sales and advertising dollars. They absolutely dwarf their online cousins in a business sense.

So why do their owners seem so determined to kill them? And why are they offering pretty much all their print content online, for free?

Maybe Murdoch is looking at charging as he’s done similar numbers and seen there is really no upside as it currently stands for migrating his perfectly profitable print readers online. He’s seen he could turn a display ad business that is worth almost $2b into something that could potentially be worth not much more than $600m a year.

With that in mind … should Fairfax and News shut down their current online papers and offer a basic feed service to users through their a national or state based masthead?

Then they can focus on making their newspapers a better product and trying to revitalise them and protect their content and unique offering? One area I think print newspapers nail that online hasn’t is the curation of content. Organising and presenting content in a compelling way that appeals to the mindset and needs of the reader.

I’m not saying they should shut them down, but it’s worth thinking about especially given all the current debate.

And crazy ideas are sometimes good ones … at least to consider.

Can I repeat, I’m not suggesting they shut them down.

Would you pay for this? Murdoch hack redefines lazy …

Ok a few things upfront (stay with me here) …

1/ There’s a lot of debate around paid content, and Rupert Murdoch believes that people should be paying for news content online

2/ The definition of news is so blurry who knows what it is anymore

3/ Murdoch has called aggregators and sharing sites ‘content kleptomaniacs’ … and has warned they will have to pay the price of co-opting News Ltd content

4/ Murdoch is even pushing pay TV operators to pay a broadcast fee for retransmitting his FTA channels in the US

5/ I believe Newscorp is responsible for some of the worlds best TV, movie and written content and find Rupert Murdoch a fascinating character. I’m not a blah blah Murdoch basher – if anything the guy intrigues me.

So we have that straight. Still with me.

Here’s what News Ltd’s Adelaide Now believe is news

http://www.news.com.au/adelaidenow/story/0,1,26229884-5006301,00.html

It’s titled ‘Drunkest man ever tries to buy booze’.

Hilarious! BTW – I’m not sure this guy is drunk … I think another substance is causing the stumbling and general trouble he is in. Whatever trouble he is in, it would be unfair to not feature this as a news piece that is important to the lives of Adelaide’s citizens.

The video was posted on Break.com … then embedded by the Adelaide Now writer/editor (what do they call themselves now – curator??). The incident didn’t happen in Adelaide. It has no connection at all to Adelaide.

Is this what Murdoch means when he talks about his engaging, original content? A sad, drug addled man walking helplessly around a bottle shop … videoed on CC … ripped from break.com and disguised as news?

Maybe it is and I’m the idiot.

Trouble is. News didn’t create this. They didn’t source it. They’re not hosting it. They haven’t paid for its creation or distribution.

However, they are charging advertisers to advertise around it and making revenue as a result. They are profiting from someone else’s work and investment. Personally I think the video is complete sh*t and scraping the very bottom of the barrel, but that’s my opinion … the bigger issue is the hypocrisy.

Now I’m not stupid enough to think Murdoch wrote this story, but I think sometimes when he and his execs are grandstanding that maybe they’re not paying attention to what their own staff are doing. So whilst Rupert is in China crying about the evil Internet making things tough, his journo’s are doing everything he is rallying against.

It’s important to note that News Ltd and its digital properties LOVE embedding YouTube videos in their news articles. Check the hot, but sadly completely irrelevant fake lesbian video action in this must read article about Khloe Kardashian’s (who?) pre-nup with Lakers player Lamar Odom – http://www.dailytelegraph.com.au/entertainment/khloe-kardashians-pre-nuptial-demands-from-nba-star-lamar-odom-finalise-marriage-deal/story-e6frewyr-1225788545014

I might be a cynic but I’m not sure this video has been posted to improve the story – I would guess it is to improve page dwell time.

Anyway, YouTube and embedded videos across news.com.au, the punch, perthnow, herald sun etc are nothing new and commonly used.

However isn’t this the same YouTube that is a tapeworm and vampire, part of the group which is robbing News Ltd of what is rightfully there’s by reusing their content!! I really hope Rupert and his gang are sending their cheques to the likes of YouTube, Break and their content partners each day for using their content to sell ads against.

Adelaide Now’s sales pitch on the News Digital Media media centre is debateable …

“AdelaideNow is a portal to everything Adelaide – from the latest breaking news and photos to sport, entertainment, gossip and social pics.”

Really? Really? How is this related to Adelaide? I noticed they’ve left off ’sad, exploitative videos of drug addicts’ in the description.

And the interesting thing (and sad too) is, this was the biggest story for the day on Adelaide Now … closely followed by pictures of Ricki-Lee’s Ralph dominatrix photo shoot at number 2 (another piece of content they didn’t have to pay for – Ralph is owned by ACP). Third is an article that is based on a radio interview on ESPN with Charles Barkley. (ESPN is owned by Disney)

Must be tough creating all this original content online.

Alan Kohler is a smart guy – here’s proof

Regular readers will know I have a bit of a bromance for Alan Kohler.

Business Spectator is great and he is easily the best Business presenter on TV, for my tastes anyway. However, the main reason I think the guy is great is because he writes really bloody good articles.

This one is exceptional and timely considering recent events – http://www.businessspectator.com.au/bs.nsf/Article/The-internet-doesnt-exist-pd20091020-WYRBY?opendocument&src=rss

The internet is merely a delivery mechanism for bits of data. It’s equivalent to the paper on which newspapers are printed or the air through which TV and radio signals are transmitted.

We never called newspaper journalism “paper content” or TV journalism “spectrum content” and the fact that it’s now online is, it seems to me, quite irrelevant.

In fact it is a colossal miscalculation to think that consumers distinguish between stuff they read on paper and the stuff they read on a website, and that they have somehow decided they will pay for one and not the other.

Have a read. It’s a great piece of writing and content, dare I say it, worth paying for.

IAB Board Seat nominations are in, voting underway

Voting closes for IAB members for the rotating IAB Board Seat on October 26.

The opening was created when Tim Johnson, formerly of MCN, resigned from MCN to head to Telstra Media.

5 people have nominated.

Wendy Hogan – MD of CBS Interactive
Robert Leach – Head of MCN Connect
Alex Littlejohn – MD of Adconion
Robert Wong – CEO of Catalog Central
Mark Halstead – MD of 3D Interactive

All the bio info on candidates as well as voting requirements etc are here – http://www.aimia.com.au/enews/IAB/Voting%20Process%20&%20Ballot%20Form%202009-2010.pdf

Two candidates really stand out for me.

Rob Leach is definitely one of the best digital thinkers in the industry and his knowledge of interactive TV is second to none within Australia. Speaking to him about the future convergence of Internet and TV and the connected household is exciting. I think he’d be great and would bring another dimension to the board.

Wendy Hogan would be a great candidate as well. CBS Interactive is a great business with premium products and commercially is very smart and nimble. Wendy is an active contributor within the digital industry in terms of supporting events and discussion around key issues related to not only media, but also technology and media convergence - and has been for years – and this is something that could add a lot to the IAB and bring new perspectives to the table that the foundation members may not bring.

Looking forward to seeing who gets the nod as there’s some great candidates. Personally I would love to see Wendy or Rob on that board.

Measuring the frequency of web visits

One question I always have around website traffic is ‘how many of the users’ are regular.

ie – how many can’t live without the content, visit regularly and often, and for how long.

Currently, there’s no audited way to work this out. The closest thing is looking at average visits and page views per user and average time spent per user.

Problem with this is it’s an average figure … it doesn’t take into consideration heavy users, light users or anyone in between.

For digital this is a question we need answering. The consumption of digital media can be incredibly quick … in/out within a minute or less.

Why? Well – search plays a large role for one due to how much traffic it is responsible for across almost websites. Users head to Google with a problem, Google directs them to the page with the info it deems most relevant … and the users generally reads this page and then exits.

Another reason is around the multi-tasking nature of online. Users looking at multiple windows, whilst using tools like Messenger or a Twitter client at the same time.

Lastly, social channels are responsible for increasing amounts of traffic … and like search it’s generally consumed quickly and then the user departs.

One of my views is you can judge the quality of a media brand by the loyalty of its users.

The problem now is EVERYONE claims a loyal userbase. I’ve heard a biz dev pitch for a website that has an average time spent per user of under 2 minutes, which claims it has a highly engaged audience. C’mon …

Now I’m not sure what Nielsen is doing about this. And I don’t know whether Comscore covers it (if anyone from Comscore wants to come in and explain, great) … but Quantcast in the US is doing something cool.

They have a data set that is around ‘Site Frequency’ and they break users into Addicts, Regulars and Passers By.

You can see what % of the total users fit into these 3 groups, and what % of total visits they represent. See below for the info around Hulu.com

As you can see, 50% of the sites users are Passers By … accounting for 8% of visits. 5% addicts account for 57% of visits … and regulars (45%) account for 34% of visits.

As a media person this is interesting data. It helps with planning and it provides some much needed depth to numbers that are generally too big to comprehend (ie 50m users, 5b pageviews etc)

Great info. Really like the look of this Quantcast product.

Why Gawker Media is getting it right

2009 has seen many fumbling around looking to try and nail this online advertising caper.

A lot of talk has been around charging for content. Other talk has been around more impactful ad units. Even more talk has been around video content.

Gawker this year has increased revenue by following its gut instinct and doing what it does well – strong, unique content and interesting and appealing ad units.

http://advertising.gawker.com/

For me, Gawker is a modern magazine business … the kind most magazine businesses wish they were in todays climate. One step ahead, great writers, excellent commercial sense and faster than the competition.

I found this quote from Nick Denton, Gawker owner, from an interview conducted 5 years ago.

“Most good media come out of somebody saying, This should exist, this is something I want to read.”

Sure, it sounds obvious. But it’s a good reality check when you’re looking to push content out either as editorial or branded content. I think for Gawker the above quote also references that Denton and his team know what their audience wants – probably before their audience does.

Locally, Allure Media has some of the Gawker titles and operates a similar model (personally I think at times the Allure titles lack the venom/wit that makes the Gawker titles so addictive) and they are seeing good results in a reasonably tough ad market. Its interesting to note that the major investor in Allure is Netus – which is backed by News Ltd.

So what are 5 things I think Gawker is doing right that we could take note of here

1/ Interesting Advertising Options. The Gawker titles have a flexible platform which means interesting ad options and takeovers aren’t difficult. They are done in a way that is impactful but not overstated. To me they feel like great magazine executions. Commercially they are smart and fast … whilst most were talking about more impactful ad units and debating which sizes and formats would work … Gawker went and did it. Took it to market fast and saw the benefits. Like good magazines http://advertising.gawker.com/capabilities/

2/ Their content is unique. You can’t get the Gawker content and editorial style elsewhere. Unlike many blogs it doesn’t just rip other media’s stories and add some snark … you read the titles because they have a point of view and content you can’t get elsewhere. Like good magazines

3/ Their writers know their subjects and their audience intimately. When reading a Gawker or a Defamer or a Valleywag you know the person writing it is knowledgable, connected and has an opinion. They don’t fall into the trap of employing ‘producers’ as editorial directors … they employ great writers who know how to curate interesting content. Like good magazines.

4/ The company and its titles have a personality. You know what you’re getting and they don’t treat their audience like idiots. It’s not dumbed down … reading it makes you feel like you’re reading something in the know. Like good magazines.

5/ It sets the agenda and doesn’t follow. The beauty of Denton is he doesn’t really give a hoot what others think … that doesn’t mean the titles come across as some sort of arrogant rant collection … far from it … but they are very good at covering topical issues but in a way different to everyone else.

Gawker now has 20m users in the US across 8 titles. They cover gaming, technology, cars, science fiction, sport, womens lifestyle and even porn. Categories that are generally high yield and generally live and die by their credibility.

And their basic sales deck is absolutely kick ass. Awesome.

Last Tix launches

I first heard about this concept about 12 months ago when I met with MyTickets CEO Christopher Plowman and as an idea it grabbed me immediately.

Over the last year Tony Faure has updated me about the idea and where it’s going, and it’s great to see it has launched.

I always liked My Tickets and as an advertising space it worked well for clients of mine. Commercially they were fantastic to deal with and some of their ad products were (and still are) great and different.

I still wondered how it made money because it was more a directory/listings site than a vendor … and the assumption was you needed to be the company who did the financial transaction to really generate revenue.

With Last Tix they answer that question … and they’re also filling a hole in the market with something that can solve a problem for promoters and also punters.

The group did some media with the SMH and the following quote really stood out

Fifty-seven per cent of tickets to theatre shows, concerts and sporting events go unsold. Just 7 per cent of such events sell out

Right now there’s no facility (that I know of) that allows consumers to buy discount tickets online to shows. What this does is offer that in a centralised way.

The key now for the group is to generate distribution. They have signed a distro deal with Yahoo!7 which is a start. It’s also important these deals are done with minimal upfront cost … ie a shared risk scenario.

They also need promoters on board. Right now the site is slick but the product is minimal. I think an obvious first partnership with with inthemix/fasterlouder/sound alliance – who have great connections with club/music promoters and a real need for a product like this.

The site looks great. The nav is good. It’s simple and easy. Two things that don’t generally align with buying tickets.

Definitely one to watch – really look forward to seeing what the guys can do.

Unique audience – who has one?

The word ‘unique’ is used a lot around digital. Specifically unique browsers … a term that I am sure was invented to confuse clients.

It’s also used to describe sales opportunities and responses – ‘this is a unique opportunity’.

Both are confusing to be honest.

Anyway – there was an article last week running on Fairfax’s websites that focused on charging users for news/content online and contained analysis from Nielsen.

http://www.brisbanetimes.com.au/business/publishers-warned-charge-and-be-damned-20091016-h137.html

Drawing on a panel of 7000 online users in Australia, Nielsen argued yesterday that in contrast to newspaper readers, consumers on the internet did not show enough loyalty to any particular news provider to subscribe to a provider’s coverage. More than 70 per cent of visitors to Fairfax Media’s websites also read those of its main rival, News Ltd, it said.

While in the past people would buy the same newspaper every day, internet users were seeking news coverage from multiple sources, Mark Higginson, Nielsen’s director of analytics, said. ”No one really does own the news consumer any more.”

Would it be fair to say online, no one really owns ANY consumer anymore?

The duplication across sites is staggering and it happens across all categories.

So much that you could basically not spend with 2-3 of the large 5 publishers and it would make NO difference in an audience reach sense.

Now, I’m not recommending doing this … but it must be a concern to a large scale internet play with significant investment and/or debt that really doesn’t have anything unique to offer the market.

Luckily for most, it’s something that plagues everyone and is rarely discussed.

With newspapers generally you either read a News Ltd title or a Fairfax title. With the news on TV the same thing. It’s difficult to watch 2 different TV shows across an hour bracket, let alone 10 or 20.

No other media has the same duplication issues … with online a user could look at 5-10 news/sport/entertainment/business etc sites EVERY day. They could be reading 3 titles at once. And at the same time be on Facebook and Messenger.

As an advertiser which one do you use? And how?

It’s looking more and more likely that spreading digital investment across as many suppliers as many of us are just isn’t feasible. Especially when many are doing the same thing as their competitors.

Right now if you look at large scale AU digital businesses in a consumer facing sense – most are clones. They have the same categories covered. Focus on the same news. Have minimal unique material and rely on the same things to drive their traffic volume.

Does this mean there will be more effort into building a unique audience, or will operators continue to just do what everyone else is doing and chase the same dream?