Tag Archives: Business model

July 21, 2016 · 11:12 am

Mass Markets And Mass Media

I’ve written a number of times over the last few years about the changing patterns of content consumption and how those changes are affecting the media business. I read some statistics last week that make me think we’re almost at the tipping point where we’ll see some irreversible things happening that affect not just media but marketing as well.

First, the statistics. The report is GfK‘s The Home Technology Monitor and while there wasn’t much “new” in it, the acceleration of some trends is interesting:

New findings from GfK show that US TV households are embracing alternatives to cable and satellite reception. Levels of broadcast-only reception and Internet-only video subscriptions have both risen over the past year, with fully one-quarter (25%) of all US TV households now going without cable and satellite reception. TV households with a resident between 18 and 34 years old are much more likely to be opting for alternatives to cable and satellite; 22% of these homes are using broadcast-only reception (versus 17% of all US households), and 13% are only watching an Internet service on their TV sets (versus 6% of all TV homes). Overall, 38% of 18-to-34 households rely on some kind of alternative TV reception or video source, versus 25% of all homes.

Why this is meaningful has to do with the symbiotic relationship between mass marketing and mass media. As Ben Thompson put it in a Stratechery post:

The inescapable reality is that TV advertisers are 20th-century companies: built for mass markets, not niches, for brick-and-mortar retailers, not e-commerce. These companies were built on TV, and TV was built on their advertisements, and while they are propping each other up for now, the decline of one will hasten the decline of the other.

As you can see from the chart, viewing of traditional TV by young people in the first quarter of this year (traditionally a high-viewing quarter as many people stay inside during winter) dropped precipitously. There aren’t many mass markets and there really aren’t mass media. Why, then, are we focused on measuring things that are no longer really relevant? Anyone?

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May 19, 2016 · 10:51 am

Publisher : Cavete

Sometimes I look at what’s going on in publishing as if someone was whispering the Springsteen lyric in management’s ear:

Those romantic young boys, they’re callin’ through the window
Hey, Spanish Johnny, you want to make a little easy money tonight?

The easy money comes from native advertising, particularly the kind that’s plug and play. Just as in the song, however, there isn’t any easy money that comes without strings attached and some research from Penn State found out just what those strings entail.

The research team found that when content was identified as native advertising, readers held a lower opinion of the media outlet it was published in. However, the reputation of the company being promoted was not affected…“We all have the idea that the news media should be objective and neutral…that’s how it works,” Wu said. “But people may see the media and companies working together to deceive us…so they change their perception toward the media more dramatically. On the other hand, people see that the company is just doing what it’s supposed to, promoting itself.”

The speaker in the quote above is the PhD student who conducted the study. While I certainly understand the importance of revenue generation in an increasingly competitive and difficult marketplace, I also understand the value of a publisher’s reputation. That reputation, like all of ours, takes a long time to establish but can be shattered rather quickly. The loss of trust is fatal for any brand and particularly so for an information service.

Maybe it’s called “native content” or maybe it’s actually identified as “sponsored content” or a “promoted post.”  Either way, it’s generally not immediately identifiable as being from a source different from the main news or information the publisher puts out.  I think most of us dislike being enticed to read something under false pretenses, and part of the decision to invest time in reading involves the quality of the content which is predicated on the source.  When we’re deceived, we’re unhappy, and when we’re unhappy, we don’t return.

Publishers need to beware.  There is no easy money to be made unless you’re in it for the short term and are reputation-agnostic.  Are you?

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April 20, 2016 · 11:03 am

Bad Code And Bad Business Thinking

The digital world continues to be abuzz about ad blocking. Many in the digital ad space have expressed everything from frustration to outrage, calling those who use blockers everything from misguided to thieves. They don’t, however, seem to acknowledge the root of the problem: bad code and bad business thinking. Now that mobile ad blocking is on the rise, they are turning up the rhetoric but let’s take a quick look at the problem.

It comes as no shock to anyone who has a mobile device that there are no unlimited data plans anymore. Every byte is counted against a cap, and in a world where images and videos are becoming the currency, those bytes add up pretty quickly. In essence, every screen, whether on a computer or a mobile device has a cost to the user, so it’s in the user’s best interest to be as efficient as possible when loading those pages or screens. More data also means shorter battery life since the device has to work to load and render. With me so far?

Now let’s revisit an analysis done by The NY Times last October. They spent a few days on some prominent sites measuring how much the ad blockers cut down on web page data sizes and improved loading times, and also how much they increased a smartphone’s battery life. The results?

The benefits of ad blockers stood out the most when loading theBoston.com website. With ads, that home page on average measured 19.4 megabytes; with ads removed using Crystal or Purify, it measured four megabytes, and with 1Blocker, it measured 4.5 megabytes. On a 4G network, this translated to the page taking 39 seconds to load with ads and eight seconds to load without ads.

In another example, the home page of The Los Angeles Times measured 5.7 megabytes with ads. After shedding ads, that dropped to 1.6 megabytes with Crystal and 1.9 megabytes with Purify and 1Blocker. On a 4G network, the page took 11 seconds to load with ads and four seconds to load without ads.

I’d encourage you to look at the interactive graphic associated with the article. The cost to the consumer can be anywhere from 2x to 4x when not using a blocker of some sort, and load times are much less when using one as the examples, above, show.

I get the problems these blockers cause, but maybe the bad code and bad business thinking that forces the bad code (lots of external calls for ad serving, user tracking, etc.) need rethinking instead of a lot of whining? What do you think?

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