IT Wire has just written an article about the press briefing we did earlier this week on the research being released for the Future of Media Summit, titled Social Networking Shows Explosive Growth in Australia. They’ve largely used our press release in the article, so thought I might as well provide that below, even though it was mainly a teaser for what we covered in the briefing. More details of all of this will be available over the next week or two leading into the Summit.

A brief summary of today’s release of research findings (4 July, 2007):

From Nielsen//NetRatings:

How bandwidth affects media usage: Low Internet bandwidth in Australia is playing a major role in the lower time spent online by Australians, and in how their media consumptions habits differ from other countries. Average home user connection speeds in Australia are 21%-43% of the speeds in comparable developed countries.

The rise of social networking online. In the year to May 2007, growth in use of YouTube by Australians was a massive 239%, resulting in 20.6% of online Australians accessing the site each month. That still leaves us far behind our peers, with 30.2% of Americans and US and 25.5% of British accessing YouTube. Australians are behind in the use of blogging platforms, but close to the lead in usage of Wikipedia.

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Today we ran a press briefing on the Future of Media Summit, featuring a sneak preview of some of the research and content that will be included in the Future of Media Report 2007. Last year the Future of Media Report 2006 attracted excellent interest, with now over 70,000 downloads. This year’s report should be even more interesting than last year’s.

The centerpiece will be a number of frameworks that together are useful for thinking about how effective business models for emerging media. Today I’ll share one of those frameworks, with a couple of others coming over the next days before the release of the final report. We’ll also shortly release some of the findings from Nielsen//NetRatings, who as a research partner of the Future of Media Summit has come up with some fabulous global comparative data.

Our framework below shows the differences in business model required for the three major parts of the overall spectrum of media, from the head to the “long tail”.

A few initial comments on the framework.

Audience focus. Mass media only accesses broad audiences, whereas further down the tail highly selective niche audiences, by geography or interest, can be garnered.

Advertising models. At different levels of scale, dedicated, aggregated, or combined advertising sales models are appropriate.

Cost of content creation. Cost of content creation can be taken as a given, requiring a certain audience size or revenue, or considered as a variable to match revenue.

The most important take-away of this framework is that there is no right or wrong place to be on the curve, simply that advertising or other revenue models and content creation mechanisms need to be aligned with the audience. As related frameworks to be included in the Report will show, going for niche audiences can attract stronger revenue relative to costs. A “multi-niche” model which is effectively monetized can be more effective than traditional mass media approaches, by allowing sharing overheads and sales efforts, and gaining more value from highly targeted audiences. Scaling costs and overheads and extracting premium revenue is as viable a strategy as increasing audience size.

Yahoo! has just announced a new product, SmartAds, that enables advertisers to create customized advertisements on-the-fly to be relevant to the individual viewer. As revealed in an article in the New York Times, the advertiser gives the visual and text components of the advertisement to Yahoo, as well as access to its inventory, so the advertisement can promote specific products relevant to the individual that are available from a local outlet, such as a car dealer or branch of a chain store. The targeting is based on Yahoo’s at-times deep information about its audience, which is a critical advantage in these kinds of initiatives. The ads are being launched with three major airlines and several travel aggregators.

While this is being branded “behavioral targeting”, that depends on the richness of the data that Yahoo! has available, and is largely limited to people’s online behaviors. However this initiative illustrates just one element of a powerful and long-term trend towards greater personalization of advertisements. The other day, in discussions with a large national advertising assocation, I talked about how online is changing the role of creatives in agencies. Moving beyond user-created advertising, the next phase will be creatives having to create campaigns that can be customized on-the-fly depending on who is viewing it, when, and it what circumstances. SmartAds is only integrating data into a given advertisement. Certainly what is new here is the breadth of data which is being used, and how this is being pulled together. However personalized advertising has a lot further to go, where the actual advertisement and creative is tweaked for the individual.

Our Future of Media Report 2007 will be released next week, shortly before the Future of Media Summit 2007, held simultaneously in Sydney and San Francisco. In the report we will include some frameworks on models of personalized advertising, drivers of the value of advertising, and how these can be applied in creating new media business models. Keep posted!