Tag Archives: digital media

Be Inefficient – It’s Better For Your Business

Representatives of Facebook, Google, and Twitter have been summoned to Capitol Hill to explain what they know about how Russia used their platforms to interfere in the last Presidential election.  Their testimony began yesterday, and there was a recurring theme that I think has implications for any business. It has nothing to do with politics and everything to do with serving your customers.

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(Photo credit: Wikipedia)

You may remember something from a few months back. There was a kerfuffle about Facebook using human editors on the News Feed who had a liberal bias. Whether that’s true or not is immaterial to our discussion. Facebook removed human editors from the “trending topics” feature seen in the news feeds of users. Given the decreased human oversight, gaming Facebook’s algorithm became easier, as demonstrably false news reports spread with increasing speed during the election. As Recode reported:

Sen. Jeff Flake is asking Facebook how it monitors its service — humans or artificial intelligence or both? Stretch (note: Facebook’a lawyer) said both, and explained a bit about how algorithms can detect non-human behavior, like someone creating many accounts in a very short amount of time. But while software can detect some of this stuff, humans often need to make a final decision on whether or not contents should be removed. Twitter and Google confirmed they have similar setups.

Fewer humans means fewer edits, apparently. What caught my attention yesterday was that each of the three platforms testified that putting in human-based solutions are inefficient for their business. What about the people on their platforms? A significant percentage of young people get their news only from Facebook. How can they be expected to understand the issues when the facts that are presented to them may be propaganda and not news or factual at all?

None of us in business can afford to make decisions solely on the basis of what’s good for the business. We need to stay customer and consumer-centric. After all, you wouldn’t want doctors in an ER failing to administer expensive drugs because it’s inefficient for the hospital, right? The restaurant that cuts the quality of their ingredients or service because they need higher margins won’t be around for very long.

Like most of you, I use these three platforms every day. Twitter is a cesspool, in my opinion, filled with trolls, hate-speech, and spam, but it’s also critically important. It’s a shame that they use the “free speech” argument to ignore that crap. There are limits on speech – try yelling “fire” in a theater and see what happens to you – and Twitter needs to clean up its act. All three of these companies need to quit using the profit motive and their responsibility to shareholders as excuses to let the bad actors do their thing. Be a little less efficient and more customer-friendly. Facebook admitted they knew something was going on and did nothing, allowing the “fake news” and propaganda to disseminate. That’s not consumer-friendly, is it?

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Taking One For The Team

When was the last time, other than The Super Bowl, that you actively watched an ad? I suspect that you’re like me and you’re actively doing what you can to avoid seeing ads at all costs. You wear out the buttons on the remote or you record your favorite shows and watch them later. You might even have jumped into the camp of those of us who pay not to see ads. We pay Netflix or Hulu or Amazon or all three to watch the content we love in an uninterrupted way. I pay SiriusXM not to hear my favorite music interrupted by product ads (still can’t seem to avoid those promos, although they’re usually appropriate to the content I’m consuming).

Then there is the web, both computer-based and mobile. It makes a NASCAR vehicle seems as uncluttered and virgin as the newly fallen snow. Pop-ups, pop-unders, hidden ads that spew sound from a minimized window, multiple windows popping in succession, far too fast for the consumer to read but quickly enough to record an ad displayed and a marketer charged. It’s a nightmare.

Let me digress. There is one topic we hit hard here in the screed: customer experience. We’ve covered the customer service rep that screws you over, the faulty products delivered without shame or recourse, and the airline that my friends and I call “Air We Don’t Care” (actually our name is a little different and a lot more obscene). We’ve also covered the other side of that – the customer service rep that goes the extra mile and solves your problem beyond your expectations. All of that relates to what is called the user experience in the digital world.

It’s nice to see that there are finally a number of publishers who recognize that a focus on user experience over driving maximum revenue call pay off in the long run. Digiday ran a piece about it, explaining how some brave publishers are overcoming their fear of losing money in favor of cultivating a more loyal audience. It finally dawned on these publishers that people aren’t coming for the ads.

I spent many years selling media. I know that our customer is really the marketer and their agency. However, in order to attract those customers, we need to have viewers and readers that consume our content – a LOT of our content – and keep coming back for more. Improving the user experience makes that happen even if it might cause a temporary drop in page views, ads displayed, and revenue. Heck, when even the NFL is recognizing that they have to reformat their games to speed them up and make the ads less intrusive (a better user experience!), all other content providers need to take notice.

Is the sales department taking one for the team as the editorial group improves the user experience? Probably in the short term, yes. But in a world where ad-blockers, remote controls, DVR’s, and streaming rule, it’s a smart sacrifice in my eyes. You?

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Filed under Consulting, digital media

The Pivot

Way back when in 1995, I was working at ABC Sports as their VP of Marketing. My job entailed meeting with advertisers and constructing packages of media and on-site benefits. We’d collaboratively design in-program elements, popularly known then as “enhancements”, to capitalize on the marketers’ involvement with a sport or an event. These things all took place on-air or on-site. The other big “on” – online – didn’t exist.

One day the president of ABC Sports walked into my office and asked me if I knew anything about computers. As a user of AOL, Prodigy, Compuserve and other early services, I replied that I did. He informed me that I was in charge and was to attend a meeting. ABC corporate had made a deal with this little start-up of under a million users called America OnLine and I was now to provide sports programming on behalf of ABC.

That was my pivot into digital. I didn’t realize it at the time, but saying “yes” to my boss’ question and being willing to take on some new, different responsibility had changed my life forever. None of us knew at the time that digital was going to disrupt the television business. We certainly didn’t think of it as anything other than an interesting sideline. But we began to see a little money coming in based on what we were doing, and once in a while, I could add some online stuff to the broad package of rights and benefits I was offering in my “real” job. Less than 5 years later, my job had become fully centered on digital, as I was now running a division of the NHL that didn’t even exist when I entered the digital world.

Being willing to pivot is a critical thing. Many businesses would be long gone if they were unwilling to do so. Foursquare, for example, pivoted their business from a consumer product to a B2B product, providing “location intelligence” to marketers. 90% of their revenue comes from that change. YouTube started as a video dating site. Nokia was a paper company. Twitter was a podcasting network. None of those businesses would be as successful, or maybe even exist, if they hadn’t been willing to shift their business paradigm and pivot.

I’d love to tell you that I saw the digital tsunami coming and got out in front of it on purpose but that would be a lie. I was lucky enough to ride the wave once it did show up because in my mind we were just doing what we’d always done – making great content and deriving value from the attention users gave it – albeit through a very different channel. The pivot was allowing my mind to be open enough to make that connection and to take the risk that it would be a rewarding road. Is your mind open to things like that?

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Filed under digital media, Growing up, Reality checks, sports business

You Can’t Be Half Pregnant

It’s nice that more companies are paying attention to what’s going on around them in the digital world. Many more brands are becoming actively engaged in listening and responding to consumers. Unfortunately, just as many brands are paying lip service to doing so, and that’s a real problem. Let me rant about a couple of examples I’ve seen lately and you’ll see what I mean.

First, some research. A recent study by Sprout Social found that:

When we asked how social has driven that accountability, people highlighted the power dynamic between individuals and brands, with 80% saying that social helps uncover instances of businesses treating people unfairly and 65% noting the power of social to amplify issues, not only through posting your own complaints but through sharing others’ posts.

In other words, social media makes consumers feel empowered. They can stand up to the man! They can rain fire and brimstone on brands which they perceive have wronged them in some way. I suspect that isn’t news to you, either personally or professionally. After all, who hasn’t posted a review or commented on a friend’s social post about a customer experience, either good or bad?

So brands have learned to respond. The problem is that the study also found that :

An unhelpful response from brands is sometimes considered worse than no response at all. In fact, 50% of those polled said they would never buy from a brand again if it responded poorly to their complaint. Nearly as many said a bad response via social media increased the possibility that they would share their experience with friends.

Let me give you a couple of examples. I was recently researching a vacation. The place I had under consideration had many recent reviews, mostly good. The GM of the property has taken the time to read each one because he responded to them. Unfortunately, he seemed to have two canned responses – one for good reviews and one for negative reviews. On occasion, he’d go a little beyond the basic comment but for the most part, there were two responses. Had I received one of those, it wouldn’t have taken me long to notice everyone else got the same response. I would not be happy.

On the other side of the fence is a company (OK, a bank) with which I had an issue. I posted something on social media and got a response within 10 minutes. They asked me to send them an email address and a phone number, and they called within half an hour. We discussed my issue and I received a detailed email resolving the problem later that day.

The first company is half pregnant in social; the latter one is fully engaged. With which one would you rather do business? More importantly, which company are you?

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Filed under Consulting, digital media, Helpful Hints

Tolls

As you might have guessed from the name of my company (Keith Ritter Media), I’ve spent a great deal of time in the media business, both as a marketer and as a publisher. The business model used to be pretty simple. Create something about which people care, make them aware that you’re offering it, get them to read, listen, or watch it, and aggregate those people into a saleable audience. You hired salespeople to meet with the representatives of your real customer – the advertiser. Usually, these representatives were media buyers from an ad agency. You with me so far?

In TV, we’d offer a unit of time at a “gross” price and asked the agency to remit a “net” price, which was usually the gross minus 15%. That commission was the toll we paid to get the revenue. Obviously, how much of that the agency kept was between them and their client but it wasn’t really our concern. We did our budgeting on the expected net revenues we’d get which was pretty much a straight line derivative of the gross monies sold. Other media had similar models but in every case, the dollars received by the publisher were directly and clearly tied to the size and desirability (to marketers) of their audience.

That statement in no longer true for digital publishing and the fact that it isn’t has serious negative implications for other media as they shift to a more programmatic sales model. I have no idea how digital publishers are able to do financial plans since they can’t project revenue from audience size. That’s because they’ve allowed themselves to generate billions of dollars in ad revenue while only capturing somewhere around a third of what is spent. The 15% that used to be paid in tolls is now more like 67% although some estimates are even higher. More importantly, it’s usually impossible to predict the net revenues received from the gross revenues sold. Digital audiences are growing while publisher revenue is declining.

Where is the money going? A sponsor pays $1 for an ad impression. The agency still takes their commission, but added to the toll-takers are trading desks, DSP providers, data providers, supply side platforms, ad serving platforms, verification services (viewability, etc.) and who knows who else. In some cases, it’s the agency double-dipping, but most of the time these are third parties. Most of these ad services have no interest in either the publisher’s or the marketing client’s success. They aren’t about a quality ad environment. They facilitate a transaction. In some cases, a platform that connects both buyers and sellers charges each side a separate fee without disclosing that they’re doing so. In short, publishers, agencies, and marketers have created a system that works for no one but the VC’s that fund these ad tech companies. What happens when programmatic spreads to other media such as TV?

Publishers have many other challenges. Facebook, for example, makes more money off of some publishers’ content than do the publishers themselves without paying the publishers a dime. But the real threat to a healthy media environment is the toll-takers. When you create great content and grow your audiences, you should be the entity that benefits and not some opaque service provider. More eyeballs used to mean more money to the bottom line. Can we make that equation true again?

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Filed under digital media, Huh?

Death By 1,000 Cuts

When I was in the TV business, the most sought-after demographic was always young adults. While they often weren’t the key to the heaviest volume of product sales, it’s when we’re young that we build consumption habits and establish brand loyalty. Let’s keep that in mind as we look at some recent trends in media.

You’re probably not surprised to hear that cord-cutting – consumers ditching their cable or satellite TV subscription in favor of streaming and.or over the air services – has continued to accelerate. As the Techdirt blog reported:

MoffettNathanson analyst Craig Moffett has noted that 2016’s 1.7% decline in traditional cable TV viewers was the biggest cord cutting acceleration on record. SNL Kagan agrees, noting that traditional pay-TV providers lost around 1.9 million traditional cable subscribers. That was notably worse than the 1.1 million net subscriber loss seen last year.

They also noted that those numbers don’t tell the entire – and much worse – story. Those numbers report those who canceled an existing subscription. When you take into account the youngsters moving out of their parents’ houses or graduating from college and forming their own household for the first time, there are around another million “cord nevers” who are missed sales by the traditional cable and satellite providers. It really doesn’t matter what business you’re in. When you stop attracting younger consumers, you have a problem.

Why is this happening and how can we learn from it in any business? Techcrunch, reporting on a TiVo study, said that:

The majority of consumers in the U.S. and Canada are no longer interested in hefty pay TV packages filled with channels they don’t watch. According to a new study from TiVo out this morning, 77.3 percent now want “a la carte” TV service – meaning, they want to only pay for the channels they actually watch. And they’re not willing to pay too much for this so-called “skinny bundle,” TiVo found. The average price a U.S. consumer will pay for access to the top 20 channels is $28.31 – a figure that’s dropped by 14 percent over the past two quarters.

There is also the matter of convenience and personalization. Netflix, Amazon, and other streaming services do a great job in making recommendations and offering you programming based on your viewing habits. Has your cable operator done that for you lately?

We can learn from this. Cable operators who focus on broadband and “throw in” the TV offerings aren’t doing much better than those who don’t, since the overall out of pocket is sullied by broadband caps and other, often hidden, price increases that help the bottom line but only prolong the inevitable. It also just makes it easier for a lower-priced competitor to enter the market. I know enough about how the TV business works to recognize the issues with skinny bundles (it’s hard to offer channels on an ala carte basis due to contractual restrictions). We’re seeing more and more offerings that bundle channels outside of the traditional providers and that’s going to exacerbate the aforementioned trends as well.

What’s needed is a rethinking of the business model. Getting local governments to preclude more broadband competition isn’t a long-term solution (look at the wireless business!) nor it is the “free and open market” to which most businesspeople pay homage. Listen to your consumers and give them what they want, especially the young ones. Cord cutting isn’t some far off fantasy that naysayers have dreamt up. It’s here, and it’s killing you by 1,000 cuts. The rest of us can learn from this and, hopefully, not make some of the same mistakes. You agree?

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Filed under digital media, Reality checks

Legalized Discrimination

I work with a number of startup companies, as I’ve mentioned before. There are a whole host of issues that these newbies face but one they don’t, if they’re digital, is the same sort of access to their potential audiences as is enjoyed by their much larger, entrenched competition. The reason for this is an underlying principle of the Internet which is that all traffic – those little packets of information that carry data, pictures, sound, etc. – is handled equally, both by the “backbone” companies responsible for transport and by your Internet Service Provider. You know – the folks (or folks, if you have a cable provider that provides internet access and a wireless company) to whom you send a check each month in return for the ability to send cat videos to your friends.

The reason for this post is to call your attention to the increasingly loud noises out of DC about giving those ISPs the ability to discriminate. Three years ago, John Oliver did a fantastic job of explaining why this issue is important and last Friday night, he did so again. Why did he need to? Because rules that were put in place to protect everyone are being changed.

Suppose you watch those cat videos on three different video platforms: YouTube, Vimeo, and a startup called CatVideosRule. You notice that the first two are crystal clear and in full high-def, while the last takes forever to load, buffers a lot, and isn’t very clear. It’s likely that the reason for that isn’t that the startup is using bad technology but that your ISP is prioritizing traffic. Maybe they are getting fees from YouTube and Vimeo. Maybe they don’t like cat videos and are slowing down the startup. The reason doesn’t matter. What does is that it’s discrimination and it’s going to be legal. In my mind, once ISPs get to pick and choose, it’s not a big step for them to begin censoring the content as well. You know: if you want to be on our network at full speed you will not criticize us, etc.

The new head of the FCC is suggesting that we just ask the ISPs to promise they’ll play nice. These are the same ISPs that promised you 50MB speed and deliver 30MB with no fee adjustment or apology. We are already seeing some services become “zero-rated”, which means that using them doesn’t count against any data plan you may have. It’s bad enough that the ISPs are boosting their own services at the expense of others. Legalizing another form of discrimination could be the death knell of one of the things that have fostered the dynamic, disruptive growth of our digital world. Do you agree? Are you following this story?

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Filed under digital media, Huh?