Tag Archives: Business model

October 15, 2015 · 10:29 am

The Digital Ad Industry Wakes Up

Well, what do you know. Someone woke up the folks at the Internet Advertising Bureau, who seem to have been in a bit of a slumber lately with respect to ad blocking. Just a month or so ago they were holding meetings trying to work out the possibility of suing the ad-blocking companies. Now, it seems as if a light has gone on.

In a release entitled Getting LEAN with Digital Ad UX, the head of the IAB Tech Lab begins this way:

We messed up. As technologists, tasked with delivering content and services to users, we lost track of the user experience.

Exactly! Instead of treating the symptoms, they’ve finally decided to attack the disease. The piece goes on to explain how the commercial internet evolved and how the focus was squarely on technology. The key paragraph comes later, and is instructive for anyone in business:  

Through our pursuit of further automation and maximization of margins during the industrial age of media technology, we built advertising technology to optimize publishers’ yield of marketing budgets that had eroded after the last recession. Looking back now, our scraping of dimes may have cost us dollars in consumer loyalty. The fast, scalable systems of targeting users with ever-heftier advertisements have slowed down the public internet and drained more than a few batteries. We were so clever and so good at it that we over-engineered the capabilities of the plumbing laid down by, well, ourselves. This steamrolled the users, depleted their devices, and tried their patience.

In other words, we took our eyes off the consumer and looked only to our own bottom lines.  This precipitated a consumer-focused solution – ad blocking – that is undermining the entire ecosystem of ad-supported media on the internet.  It’s consumer-friendly and a business killer.  The IAB now wants ads to be L.E.A.N. – Light, Encrypted, Ad choice supported, and Non-invasive.  It’s a great start, but I wonder if it’s too late.  With substantial percentages of users already using ad blocking, I’m not sure we’re going to be able to reverse the trend.  At least, however, the heads are out of the sand, no longer focused on the daily financials, and more focused on the consumer.  I think it’s a good start.  You?

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September 18, 2015 · 10:45 am

The $1,500 Sandwich

I can’t think of anything more appropriate for our Foodie Friday fun this week than the tale of the $1,500 chicken sandwich. Did you hear about this? As reported in Consumerist (and a number of other places):

A DQ Crispy Chicken sandwich

 (Photo credit: Wikipedia)

Andy George of the “How to Make Everything” YouTube channel posted a video about his efforts to make all of the ingredients he’d need for his entirely homemade sandwich, including: growing his own vegetables and pickling his own pickles, making salt from ocean water, milking a cow to make cheese and butter, harvesting wheat and then grinding it to make his own flour, collecting honey and yes, killing a chicken himself. So how was the ultimate homemade sandwich? Eh.

You can watch the entire video here.  I look at this story as the absolute reason we’re in business: to provide value.  After all, chicken sandwiches aren’t typically sold for $1,500, nor do they require you to think ahead six months when you decide to have one.  Instead, there are businesses performing each step – making salt, baking bread, etc. – and adding the values of quality and time so we don’t have to.

That’s really the question each of us needs to answer: how am I providing value to my customer?  How is what I am giving them in return for the money they’re giving me more valuable to them than doing it themselves?  Of course, one wouldn’t expect consumers to, say, build their own cars.  That’s way more complicated than a chicken sandwich, after all.  Then question then becomes how am I providing a better value to my customer than anyone else trying to solve the same problem for them.

We sometimes hear people (generally, unhappy people) muttering “if you want something done right you need to do it yourself” to themselves.  Our job is to convince them that expression is wrong.  When $1,500 chicken sandwiches become an attractive option, we’re all in trouble!

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September 8, 2015 · 10:28 am

It’s Showtime!

Change is hard, and when it’s forced upon you by circumstances beyond your control, it’s even harder. That’s the ongoing situation in the television business, both on the distribution side and on the content provider side (read that as cable/satellite providers and programming services).

English: Logo for Showtime.

Photo credit: Wikipedia)

Showtime recently began offing a streaming-only subscriber service, and, as reported in the piece in Adweek, they’re learning a lot from the experience. More about that in a second, but the fact that the Showtime folks are even doing this at all gets a round of applause from me. Too many of my friends in broadcasting (cable-casting, whatever you might call it) are fixated with the traditional (dying) business model. They seem bound and determined to milk every last cent out of it before changing their ways (reality check = music business).  All this while the 13 largest pay-TV providers in the US, which account for approximately 95% of the market, saw a net loss of 470,855 subscribers in Q2 2015—the worst quarterly drop ever.  Now is the time to be trying new things and finding new ways of doing business, not when the drip of cord cutters becomes a flood.

Here is a quote from the article that got my attention:

Showtime Networks President David Nevins has been receiving detailed, data-fueled reports about its growth and usage each day. Having long been limited to getting monthly reports about subscriber trends for the premium cable network, he now browses detailed updates each morning, learning how many subscriptions were sold and what the service’s usage looks like.

While you might wonder why they weren’t looking at usage reports before, the reality is that there was little incentive to do so.  The network stuck their deals with service providers – the cable distributors were their customers, not “civilians.”  While they are no longer being separated from their users by a middleman, they’re also having to learn a lot about those users, which wasn’t an imperative before.  That transition, by the way, is probably one of the biggest impacts of digital – the disintermediation effect on many businesses.

“You can see on a nightly basis exactly what people are watching, and it’s fascinating.”  Anyone in business needs to know what our customers are consuming, as well as how and why they’re doing so.  Moreover, we need to be open to changing how we do business, better to serve both those customers and our bottom lines.  Showtime has been.  You?

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