Google moves into print advertising

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The news that Google is moving into print advertising has aroused strong interest and commentary across the web. It is buying full page advertisements in technology publications, and slicing them into smaller pieces to sell to existing advertising clients. This is the first time Google has done anything outside the Internet. However advertising accounts for 99% of its revenue, so it’s equally fair to characterize it as an advertising company as an online search engine. One of the key features of the print ads is that Google supplies its own 800 numbers for people to call in, with calls forwarded to the advertisers. In the first instance, this allows direct measurement of results, in the same way as online advertisting offers. Google clients pay for clicks from online advertisements through to their website. Receiving a phone call as a result of an ad is the offline equivalent of this. Om Malik suggests that the 800 numbers could be part of a Voice over IP play for Google, while Gary Stein of Jupiter Research sees a related move by Microsoft as leading to a “pay per call” advertising model. This relates to FreeConferenceCall‘s business model, that offers (surprise!) free conference calls, and makes money on the traffic carried on its infrastructure.

Internet advertising in 2004 rose 33% to $9.6 billion out of $358 billion of global advertising revenue. Not an enormous proportion, but enough to change how advertisers think about reaching their audiences. Google’s model – and the Internet generally – allows completely tailored targetting of advertising messages. This thinking is beginning to go beyond the online domain. How far will it go? Certainly to interactive television and interactive print. Once combined with location-based technologies, tailored advertising will start to become immersive.

Spam is OK if it’s us

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In a startling development, the Australian Army is considering sending broadcast SMS for recruitment purposes. Presumably they would meet Australia’s strict Privacy Act, however this is not fully clear from the news release. Particularly as SMS marketing is a relatively new medium, people tend to respond negatively unless they have actively opted-in to receiving messages, rather than having forgotten to tick a box somewhere to avoid getting on a generic list that will be sold to all-comers, the Australian Army included. The Australian government has implemented strong ant-spam legislation, so it is rather disappointing that one of its arms is undermining those messages. Legitimate SMS marketing definitely has a role, but if the medium is abused, there will be a backlash.

Online television, video blogging, and Current TV

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The BBC has just announced that its television channels will be available on the internet. “MyBBCplayer” will initially give access to selected programs, then potentially simulcast entire BBC channels. It will also give access to selected television archives. This a significant step towards the internet becoming a true broadcast medium, though that will play out over a quite a few years yet. BBC taking this step will definitely encourage other broadcasters to consider their play in this space.

On another front, video blogging (known as vlogging) is rapidly gaining traction. There aren’t many vlogs yet, however they are growing apace as tools such as Vlog It! become available. What kicked blogs off in the first place were the early tools such as Blogger.com, that meant anyone could create their own personal web presence for free and with no technical expertise. In between the free-format vlogs and online television, you have initiatives such as former Vice President Al Gore’s new cable television network Current TV, which asks for its viewers to submit their own video content, for example on news ignored by mainstream media. The channel still acts as a filter and arbiter, however it gets its content from the community. Perhaps the biggest impact of Current TV, for now, will be to build video production talent in the community. Less than a month after launch, the jury is still out on whether it is, as it claims to be, true community television. Douglas Rushkoff believes it’s a “kind of MTV-News, without the news.”

Seeing behind the media

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Blogs are a tool that can help us to see whether and how mainstream media are distorting the news. Anyone who has ever been interviewed by a journalist knows that what’s reported is rarely quite what was intended, with gross distortions through selective quoting commonplace. These misrepresentations are usually not malicious, often simply attempts by the journalist to make comments more “newsworthy”. However now interviewees have a right to reply. Prof. Roger Pielke Sr., a leading climatologist who resigned from the Bush administration’s advisory team on climate change had problems with how this was reported in the New York Times. He posted a blog on how he felt he’d been misrepresented, resulting in an exchange with the journalist. The end result was Pielke’s viewpoint came through as he wished. Our world is still far from transparent, but today, far more than ever before, mainstream media’s distortions – deliberate or otherwise – are becoming more visible.

What’s up with Google Talk

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When Google Talk was announced yesterday after months of swirling rumors, I decided not to blog about it, as I thought there would already be more than sufficient discussion on the topic. This blog is primarily intended to cover not-so-obvious yet deeply important developments. However a number of people have asked me for my opinion about the announcement, so here’s my take in a nutshell. The main response so far has been “So what?”, as on the face of it the instant messaging and voice capabilities of Google Talk don’t match the competition. However remember that Google’s free email service Gmail has been in Beta for 17 months, requiring a personal invitation to join, and has done well despite this pretty major constraint. Google wasn’t looking to take over the world on day one with free email. Same story with Google Talk. It doesn’t need to be whiz-bang for it to be positioned over time for synergies with other parts of their suite. Which is exactly the point in that Gmail is now open to the public, and having a Gmail account a requirement to use Google Talk. The bigger part of the story is that Google Talk is based on the open-source, open standard Jabber. The refusal of Yahoo, AOL, and MSN to allow interoperability of their instant messaging networks is one of the classic standards battle case studies. Of course, Google adopting an open standard and inviting the other players to interoperate doesn’t change the world. However it’s one of the more powerful single events that is likely to shift the status quo. If Google Talk gets traction, which as it adds features and integration into other Google tools it is very likely to do, the benefits of interoperability may finally shift the IM landscape. As a latecomer to the space, that’s exactly what Google wants.

Newspapers respond to the online onslaught

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The media landscape is rapidly shifting. Newspapers and magazines have seen the writing on the wall, with over the last six months US newspaper circulation dropping 1.9% and newsweeklies also slipping fast. Classifieds – which represent almost half of newspapers’ advertising revenue – are being assailed by online alternatives. McKinsey & Co executives recently forecast newspapers will lose 20% of their classifieds revenue by 2007. This is undoubtedly too optimistic. Competition is not just coming from the online recruitment sites such as Monster.com and local city classifieds such as Craigslist. An entrepreneurial unit in eBay has established Kijiji as an independent classifieds site, with local operations around the world, including across many Chinese cities. Newspapers have been responding by buying online properties, notably Washington Post buying Microsoft’s online magazine Slate in January, and New York Times acquiring About.com in March for $410 million.

In the next phase media is focusing on the power of social networking technologies. News Corporation spent $580 million last month to buy Intermix, with the youth networking site MySpace the jewel that merited the price. This gives News Corp access to a whole strata of society who are not prime consumers of traditional media. Its Australian rival Fairfax recently spent $A39 million to acquire online dating site RSVP. Google, which is increasingly moving into media space itself, acquired mobile social networking company Dodgeball earlier this year. The future of news media – and especially its revenue models – is increasingly focused on running the networks within which people interact, rather than simply broadcasting information one-to-many. Watch this space.

The gang of four

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An article yesterday on Bloomberg News (not available on the web) confirmed what a PricewaterhouseCoopers executive told me last week: PwC, Deloitte, and Ernst & Young have all issued instructions to their partners and staff not to denigrate or poach the clients of KPMG. The Bush administration is seeking a settlement on charges related to KPMG’s sale of tax shelters, rather than seeking to press charges. Instead the individual partners are facing criminal charges. It was clear from the start that regulators such as the SEC had no interest in pursuing KPMG in the same way that they hounded Arthur Andersen. Moving from four to three top auditing firms would result in massive reputational damage for the audit profession, forcing clients and regulators to reassess the current cozy oligopoly. So the audit firms are acting extremely differently from when Arthur Andersen was in trouble, when the attitude – and actively encouraged behavior – was kick them when they were down. The question becomes, if neither regulators, clients, nor the Big Four themselves will allow any of them to disappear, what is the moral hazard? I believe the firms understand that they will do the best when their practices are pristine. But knowing you can get away with it is not the best foundation for good behavior.

India benefits from Research Process Outsourcing

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The excellent Knowledge@Wharton site of Wharton Business School has just published an in-depth special edition on What’s Driving India’s Rise as an R&D Hub? (registration required). Motorola, Microsoft and many others are launching R&D programs in India. The real issue is that these are not isolated projects, but integrated elements of global research. The new term for this is Research Process Outsourcing. To do this effectively absolutely requires knowledge-based outsourcing, and harks back to the issues raised by the Harvard Business Review case study I discussed last month. There is no question that the increasing sophistication of the best of the Indian technology companies enables not just participation in global R&D efforts, but also the coordination of international efforts. However despite all the excitement about the potential of the Indian economy, the depth of its lag in education, infrastructure, and health will prove a massive drain on the ambitions of the leading edge of the nation.

The bottom-up collaborative economy

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I’ve just spotted a recent article in BusinessWeek called The Power of Us that provides a great overview of how mass collaboration is driving the economy. It refers to a number of examples I described in detail in Living Networks, such as Eli Lilly’s Innocentive, which enables companies to draw the best innovators globally into their internal R&D programs. As evidenced again by the references in the article, the success of James Suriowecki’s outstanding book The Wisdom of Crowds has played a powerful part in making people realize that collaboration – if correctly designed – is far more powerful than any other approach. The tools and business models that support that will be central to the next phase of the global economy.

Blogging in business

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My book Living Networks, which came out at the end of 2002, opened with the words “Macromedia, the company best known for selling Flash software, is blogging,” and went on to describe what blogs were, and how they were just beginning to be used in business. A few years on, and according to the title of a conference I spoke at in New York earlier this year, we are seeing Blogging Goes Mainstream. The week before the conference BusinessWeek came out with a cover story Blogs Will Change Your Business. Indeed, blogs are far more than a social phenomenon. They are playing an increasingly important role in business.

Now, Bill Ives, who formerly ran Accenture‘s knowledge management and portals practice, and marketing consultant Amanda Watlington have just released a new book Business Blogging: A Practical Guide. Not surprisingly, given Bill’s background, it is an extremely pragmatic guide for businesses looking at the applications of blogging. I strongly recommend it for any organization that is considering implementing blogging, either externally for profile-building or customer relationships, or internally for knowledge management and collaboration. The heart of the book is its 70 case studies of bloggers and their experiences, including individuals, consultants, large companies, and not-for-profit, encompassing an extremely diverse range of objectives and design parameters. Every organization should at least consider how they might apply blogs. For those in this situation this book should be considered on a par on quality and value with the ultra-expense reports from the tech analysts – just with a lot lower sticker-price!