This is something you just have to see. Richard Watson of Future Exploration Network has created a fabulous article on the future of newspapers titled Delivering Tomorrow’s Newspaper, written from the perspective of 2020.
The article, dated October 18, 2020, appears in Changing Times, an “Initiative of the Indo-China European Union”, in its “Marginally Leftist version”. Click on the image below for the complete article (1MB pdf).
I’ve written before about attention profiling as one of the major trends in the online world. One of significant initiatives in the space is APML (Attention Profiling Markup Language), an open standard for how people’s attention profiles are described. Having this as a standard will, among other things, enable applications to refine how they provide information to users based on their interests, and allow people to publish their profiles so that they are better served by suppliers and information providers.
Bloglines, the top or second placed feed reader, has just announced that it is looking at supporting APML in future releases, while Chris Saad, a founder of APML, says that they expect a number of other similar announcements from major players over coming months. While Bloglines has not yet included APML support in the product, voicing its interest indicates this is very likely, and is no doubt intended to spur other companies to follow suit. There is little value to an open standard unless it is widely adopted.
One of the interesting things about APML is that it operates at a fairly high-level, giving a framework for people’s degree of interest in topics on a scale of +1 to -1 (accurately reflecting that people have negative interest (revulsion?) in some topics). Anyone who uses APML can use whatever means they wish to uncover what people’s attention profiles are. In this case, whichever companies are better at determining attention profiles will win, while the standard for sharing those profiles remains the same.
One of the big debates in PR over the last couple of years in has been whether the press release is in the last throes of death, or still healthy and thriving for years to come. Tom Foremski, formerly of the Financial Times and now publisher of SiliconValleyWatcher, has no doubt on the matter, and wants the press release to be terminated with prejudice, writing a blog post titled Die! Press Release! Die! Die! Die!
However rather than leaving a gaping hole in how organizations communicate to the media, Tom has a specific proposal to succeed the press release. In summary:
The other day I was chatting with a top executive from one of the advertising conglomerates about the current pressing topics in the advertising industry. Executives’ top-of-mind issues center on clients’ perception of value creation by agencies, which has continue to erode over the last years. Specific symptoms include pricing pressures from a procurement mentality, increasing competition from adjacent industries such as the new digital media companies and strategy consulting firms, and a drive to the commoditization of advertising creative within the array of services offered by the advertising and marketing communities.
I recalled that in 2000 I had written an article on the future of advertising for BOSS magazine which discussed all of these issues. It is often instructive to look back at the state of the industry to gain a better understanding of where it is today and where it’s going. Here’s the article, originally published in the July 2000 issue of the Australian Financial Review BOSS magazine. What it covers seems to be just as relevant and topical today as it was seven years ago.
Chasing the Play
If a potential client goes to London advertising agency St. Lukes and asks them to go away and create an advertising campaign, they refuse. Yet last year their billings increased 64%, more than twice as much as any of the other top-20 UK agencies. “We only co-create with our clients,” says St. Lukes chairman Andy Law. St. Lukes as a matter of course works closely with its clients to result in campaigns that have been created by the joint efforts of both parties.
The global advertising industry is in the midst of a dramatic transformation, and St. Lukes is one of the agencies at the vanguard of these deep shifts. Through the 90s traditional advertising agencies were squeezed hard both by new competitors and by clients, who often saw them as providers of commoditised services. Now the dramatic explosion of media and communications driven by digital technology is resulting in massive opportunities for agencies. However only those firms that adopt new ways of working with their clients and develop new skills will be able to take advantage of these opportunities, while the less dynamic firms will struggle at best.
With the New York Times recently dropping all charges for its online content and now Rupert Murdoch openly discussing making the Wall Street Journal Online free, it seems that the days are likely numbered for paid subscriptions to online newspapers.
It is also useful to remember that there are now 169 free daily print newspapers around the world with a total circulation of 27.9 million, according to the World Association of Newspapers. In Spain 51% of print newspaper circulation is free, and in Denmark it’s 32%. The trend to free print newspapers is strong, with new free newspapers springing up all over the globe after the business success evident across Europe.
The trend to free online newspapers has sparked a major debate on whether online content should be free. Most recently an article in the Wall Street Journal itself titled Murdoch’s Choice: Paid or Free for WSJ.com discusses the issue. It includes the following chart to illustrate its key point that growth in online advertising is far from matching print newspaper advertising revenues (see comments on the chart later in this post).
In the Future of Media Report 2007 we published some original research on the ownership of online classifieds in the US, UK, and Australia. One of the biggest industry fractures in the shift to digital media has been the emergence of online classifieds. Classifieds used to be the sole domain of print media. As classifieds have shifted to a medium that is superior in accessibility, searchability, and cost, new entrants have taken part of the pie. It has been possible for incumbent media to leverage their power and position to be successful in online classifieds, but in many cases other players have taken the opportunity and seized prominent positions.
As such we looked at the jobs and real estate online classifieds markets across the three countries, dividing the owners of properties into five groups: Traditional Media, Large New Media (e.g. Yahoo, eBay, Google), Small New Media, Industry (e.g. recruitment or real estate firms), and Other. We used traffic to the sites as a proxy for their prominence. We would also have liked to have compared online classifieds with print classifieds, but it is difficult without financial data. Perhaps a project for our 2008 Report… The analysis is below – click on the charts for full details in the Report.
An article in today’s Australian title Network expects blogging to pay off notes that Allure Media, an Australian blogging network, will next week launch its fourth title, the gaming blog Kotaku. After the initial story being posted by Phil Sim in February, Allure launched Australian versions of the Gawker Media sites Gizmodo and Defamer, with Lifehacker being launched last week. All four blog titles are licensed from Gawker, meaning that blog content is reused or created under the supervision of local editors, and any visitors from Australia to the main Gawker Media sites are redirected to the local sites.
This model provides additional monetization by Gawker of their properties, traffic from the outset for the Australian blogs, and hopefully then scalability of advertising sales to encompass purely local initiatives. I’ve written before about the challenges of creating blog discussions in smaller English-speaking (or Spanish or Chinese-speaking) countries, when conversations usually get drawn back to the dominant country’s population. In addition, it is harder to monetize content in smaller economies. Allure’s approach, depending on the licensing terms with Gawker, can provide a balance between avoiding having to create all the content required, while making that content relevant to a local audience. The remaining issue is whether sufficient advertising can be sold, particularly to Australian corporates and media buyers which in the main still haven’t got their heads around blogging. Certainly the model can be applied in other media markets in adapting local content for media globalization.
Allure is owned 92.5% by web investment firm Netus, which is in turn primarily funded by News Corporation. Netus’s Craig Blair is quoted in the article:
“Our main focus right now is turning Allure Media into the premier blog publishing business in Australia, and that’s by generating interesting content and proving we can monetise (it) through (media) agencies,” MrBlair said.
“For advertisers, this is a really good way of getting niche audiences. We’ll expect a business like Allure Media to break even within 12 months.”
It will be very interesting to see to what degree this enables the development of an advertising-supported blog sector in Australia, by making it perceived as a mainstream media outlet for the first time.
A few months ago I wrote a piece about new business models for content, sparked by a fascinating dream I had. In the post I mused:
My dream sparked off many thoughts about content business models, including the evident one of replicating the model in the dream – getting people to pay to skip ads. If you extend this far enough, you get to a model where you can price advertising by how much people are prepared to pay to skip it. Consumers should be able choose how they pay for content – by payment or attention. Ultimately we should be able to move to dynamic content markets, where there is a different cost depending on whose attention you are capturing, and the context in which it is embedded. Perhaps people will pay a lot of money not to have an ad inserted in the middle of a chase scene in a movie, but they will even be prepared to pay to see the ads during the break in the Super Bowl.
Now the model of ads being presented as content is rapidly gaining prominence. People are not quite yet paying to watch the ads, but they’re certainly choosing to watch them. An article in the New York Times titled Now, the Clicking is to Watch the Ads, Not Skip Them and a piece in AdWeek called Ad Portals: Will Viewers Tune In? lay out some of the current and forthcoming offerings:
VeryFunnyAds.com, an online version of a TBS show, is predicted to have reached 75 million viewers in its first year. The ads are mainly 30 second TV commercials.
Honeyshed, from Publicis and Droga5, will be an online space dedicated to branded entertainment.
Didja.com (as in ‘didja like it?’) is due to be launched in early 2008 by NBC Universal will feature outstanding TV commercials, as well as other branded content.
AdPerk is an advertising network for opt-in viewers who choose to watch ads and branded network (this model pays people with magazines for watching content, but has a similar intent, says Gregg Hano, publisher of Popular Science, which has just launched AdPerk on its site, in a Beet.TV interview )
The naysayers of the dot-com era took particular delight in the demise of Henry Blodget, the Internet analyst at Merrill Lynch (where I used to work in the late 1980s) who was caught out promoting Internet stocks that he apparently privately thought were “a piece of junk” or “a dog”. As part of a subsequent settlement he is now not allowed to work in the securities industry. However Blodget continues to research the Internet industry on his blog Internet Outsider, where he has recently been writing provocatively titled posts such as Dead-tree media deathwatch: RIP Business 2.0, Running the Numbers: Why Newspapers are Screwed, and The Great Advertising Share Shift: Google Sucks Life Out of Old Media.
In this last post, Blodget analyzes the top 19 media companies (with supporting spreadsheets provided), indicating that advertising has shifted to online by 7% over the course of one year. The top-line figures are that US advertising at Google, Yahoo!, AOL, and Microsoft grew by $1.3 billion in the second quarter of 2007, while advertising at the 15 largest other media organizations fell by $280 million in the same period.
Or from another perspective, total advertising increased by 8% to $13.8 billion over the last year, with online increasing from $3 billion to $4.2 billion (23% to 30%), while offline advertising decreased from $9.9 billion to $9.6 billion (77% to 70%). Blodget comments:
In our Future of Media Report 2007, we did an analysis of all media industry transactions of more than US$1 billion from 1993 to mid-year 2007. The transactions are not legible in the image below, so to get full details and analysis on the media industry transactions, click on the image for the complete Report.
Even at a high level of the general trends in activity, two things stand out. The first is the sharp rise in activity in 1999-2000, highlighted by the massive US$166 billion AOL/ Time Warner merger (remember that?), which still dwarfs any other transactions in the media sector, followed by a spectacular slump in activity in the following three years.
The second is how fast activity has risen in the last 18 months. Remember that the 2007 figures in the table are for the first half-year only. In fact if you take out the AOL transaction as an extraordinary one-off, there is a far faster pace of activity today than even in the boom years at the turn of the century. The question is, of course, whether this pace will be maintained or even accelerate, or whether it will again decline. While the answer is significantly related to stockmarket levels, since so much of the activity has been private equity-based, there is the potential for transactions to continue even after a fall in equity prices, as private equity firms snap up opportunities.
