Media Model Threats: The New York Times vs. Grand Central Terminal

4:15:13 4:36 PM

Recycling Bin, Grand Central Terminal

Digital is hardly the only disruption threatening media business models. So too is…reclycling?

Recently I was privileged to take a behind-the-scenes tour of Grand Central Terminal, which this year is celebrating its centenary. In addition to many rare and privileged experiences (Deep in the basement, New York’s oldest computer dating from 1911! Popping open the VI of the famed Tiffany clock and sticking my head out over Park Avenue!), our scarily knowledgeable guide shared an interesting fact about the threat to print publishing posed by the paper recyling bins installed in the terminal in 1990.

On Day One of the recycling program, the new bins collected an astonishing five tons of (mostly) newspapers discarded by commuters, making it America’s largest recycling plant overnight. However the program had done its homework, and knew six tons of paper waste passed through the station daily. So where was the missing ton of newsprint?

Left on the trains? No, they looked. Thrown out with the regular trash? Not there, either. Closer scrutiny was called for, and the case was soon cracked. Commuters (including many affluent ones sporting mink coats and Armani suits, noted our guide) were fishing papers out of the newly installed recycling bins to “recycle” the papers themselves. The terminal, noting a trend, issued a press release. The story was covered on the evening news.

The next morning, the phones at Grand Central Terminal were ringing off the hook. The New York Times was enraged to learn that terminal’s recycling program was undercutting newsstand sales.

The result? Since 2001, the Times has been paying a pretty penny for a contract that reportedly lasts into perpetuity to maintain the on site recycling bins — bins that are taller and deeper than any commuter could ever hope to snag a discarded paper out of.

Problem Solved?

Perhaps the Times has gained newsstand sales as a result of this measure, but it’s one that calls into question the nature of the newspaper and magazine business. Does the Times want to sell news – or papers? The two are no longer intrinsically bound. Digital-only subscriptions are an increasingly important part of the Grey Lady’s revenue model.

But not important enough. So long as publishing – and ad rates – are dictated by outmoded print circulation numbers, publishers will push papers harder than they will content.

Case in point: After acquiring an iPad, I phoned the New Yorker to request my longstanding subscription be switched to digital only. Heck, I travel too much to even collect the snail mail edition from the mailbox.

Condé Nast was more than happy to comply, a rep informed me. All I had to do to secure a digital-only subscription to the magazine was agree to pay double – double – the annual subscription rate for the print/digital bundle.

Recycling indeed.

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First Media Disruption of the Year: Samsung + AP + Twitter

sponsored samsung tweetsEven when you know what’s coming, you never know exactly what’s coming.

Paid, owned and earned media are converging, sure. As a result, workflow and roles are changing radically. But even when you’ve been watching this space microscopically for many months, the next manifestation to come down the pike is almost always a surprise.

The first surprise of this year is a stunning example of how quickly media convergence is moving, and how rapidly roles and workflow are changing. Last week, during CES, Samsung paid the Associated Press to run sponsored tweets in the AP’s Twitter feed.

And the “media buy” was brokered not by a media buying (advertising/paid media) agency, but by Edelman, Samsung’s PR agency (earned media – or make that paid/earned media?).

[Disclosure: Edelman is a client of my employer, Altimeter Group]

By definition, PR agencies don’t buy media, right? Just a couple of weeks ago I was talking with the New York Times about Ricochet. Many of the initial campaign results are truly impressive, but since the product involves “buying” New York Times content (not just ad units), the market is confused. Media buyers are calling it a PR product. PR is saying if it’s a buy, then it’s a media buy.

Digital silos, a new twist on that classic waiter’s line, “Sorry, but this isn’t my table.”

Disruption Across the Board

A PR agency functioning as media buyer isn’t the only radical shift in this bold experiment. For as long as there’s been publishing, it’s been pretty much the rule that the publisher sells advertising on his own media property. Now, while Twitter can arguably be defined as owned media because AP controls what’s on their feed, with this campaign they are selling sponsorships on Twitter – and Twitter doesn’t get a cut of the revenue.

Precedent? And how. As Carree Syrek of Kinetic-Social put it to Adweek, “What if Target or Walmart want to start charging CPGs like Procter & Gamble for Foursquare ads? Will the social media platforms allow brands to leverage those properties twice without having to [pay]? Will they let them essentially double dip?”

Twitter’s letting this one go, for now, despite the fact it pulls a U-turn around Twitter’s own ad product. All parties were quick to point out the sponsored tweets weren’t automated and otherwise complied with Twitter’s sponsored tweet guidelines.

Pushback? Some, which is to be expected. Criticism came both from users (a handful) and a few media observers, who worried the move blurred the lines between breaking news and pay-to-play content.

But very much to Samsung’s credit, the sponsored tweets, limited to a very modest two per day for the five-day duration of CES (so 10 tweets in total) were very clearly marked “SPONSORED TWEET.”

Edelman’s EVP/Global Strategy and Insights Steve Rubel has blogged articulately about how his firm reached the bold decision to venture into paid media, where few, if any, PR firms have gone before. The post is worth a read.

Steve and I carried on a conversation (on Twitter, over DM of course) about the campaign. No word from him on the specific goals of the undertaking, the applied metrics or results (in his defense, it was ongoing when I asked).

Like him, I believe this type of campaign is a glimpse into the future in which brands partner with the media companies they formerly ‘just’ advertised with. There are opportunities for native advertising, curation, sponsorship, creation and more.

Is there a revenue model behind this that can sustain media companies, particularly as their traditional ad revenues continue to erode? That’s the question.

In the meantime, it’s important to note Samsung’s sponsored tweets in AP’s Twitter feed very thoroughly satisfied one campaign goal that’s very squarely in Edelman’s wheelhouse: it drove a ton of (earned) media coverage.

This post first published as a column on iMedia

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Why the Future of Mobile Advertising is Native Advertising

reading-mobile-deviceOne reason it’s so hard to pin down mobile advertising is due to the fact that “mobile” is quite possibly the most imprecise term there is when it comes to adverting and media. Tablet? Yes. Phone? Indeed. E-reader? Laptop? Phablet? Sure. Also, that must-have thing that’s coming down the pike next.

The sizes, functions and purposes of a multiplicity of mobile devices vary greatly, meaning there literally cannot be a one-size-fits-all solution to mobile advertising. However is there is one universal truth about mobile, that will hold as true in the future as it does today, it’s that real estate is limited on mobile screens – much more so than on other digital devices. And that’s what’s limiting mobile advertising.

Mary Meeker’s most recent state of the internet presentation proffered the much-cited statistic that ten percent of media consumption now occurs on mobile devices, yet mobile commands a scant one percent of digital revenues. Yes, this is where internet display advertising once languished, back in the day. Eventually things evened out.

Will mobile advertising repeat the pattern? Don’t be so certain that straight display advertising will ever gain the traction on mobile devices that it enjoys on devices connected to monitors and other, larger screens.

Disparate as the world of mobile hardware is, all mobile devices are linked by a common factor: real estate is scarce. Display advertising on mobile screens is proportionately more intrusive, annoying and unwelcome.

The “year of mobile” we’ve been talking about for more than a decade has surely arrived already (heck, an estimated 17.4 million iOS and Android devices were activated this past Christmas day alone). But the year of mobile advertising? It’s still a ways away.

What we’re waiting for is the rapidly growing trend of native advertising to spread more effectively to mobile devices and platforms, and we’re not there yet. Currently, most forms of branded content as advertising occur on publisher sites that help to create them (think Buzzfeed, New York Times, Boston Globe, Gawker Media). Technology from companies such as OneSpot and InPowered that pushes relevant, branded content into ad units are pretty nascent on the internet and don’t yet have mobile strategies. Facebook (as everyone knows) is working on the issue. Some have posited large-scale mobile players such as Samsung and Yahoo may tackle mobile native advertising this year.

In other words, hurry up and wait.

Will 2013 finally be the year of mobile advertising? I don’t think so, but that long-awaited era may be on the horizon. The solution to ads on mobile devices that consumers accept and value (as opposed to the 50 percent of clicks on mobile ads purely attributable to “oops“) will be content, not advertising driven.

 

 

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Pay to Play: Native Advertising Shakes Up Publishing Models

There are a ridiculous number of names for it: native advertising, custom content, sponsored content, branded content, content marketing, collaborative content. Or you can kick it old skool and go with plain, old fashioned “advertorial.”

Whatever you call it, getting brand-generated content onto the pages of “real” publishing properties is becoming a real business, albeit in many guises. It’s all part of rapid convergence of paid, owned and earned media.

New York Times-owned Boston.com is the latest in a fairly long line of publishers to sell sponsored blog posts under the rubric “Insights.” “Our advertisers, and particularly our smaller advertisers, have been creating their own content. They need to get it exposed. As much as 50% of small businesses are blogging. The one thing they want is to have people see their material,” as Boston.com’s executive director-business development explained it to Ad Age.

Boston.com aligns its advertisers’ posts in the appropriate editorial section, e.g. lifestyle or real estate.

Boston.com has joined a growing list of sites offering some form or another of custom content to advertisers, including Forbes, The Atlantic, BuzzFeed and Gawker Media. Gawker is so high on the model that they maintain a list of top-performing sponsored posts to inspire and lure advertisers.

Content that morphs into ad units takes on other forms as well. inPowered (formerly Netshelter) is a new advertising product that turns “expert” content into a ad unit. Say you’re Samsung, and Engadget just ran a rave review of your latest smartphone, for example. inPowered turns that review into an ad that can be run on other publishers’ sites.

Arguably, another model of advertorial are those publishers whose business model makes them increasingly reliant on content contributed by outside experts, rather than their own editorial staff. What was long a trade publishing model is now commonplace on mainstream B2B sites, from content marketing plays such as American Express’ OPEN Forum, web pure-plays such as the Huffington Post, to established editorial brands, most notably Forbes. While arguably this isn’t advertorial because the contributors don’t pay the publisher to contribute (and in some cases are compensated, albeit never handsomely), the reality is this, too, is a form of content marketing. Contributors are selling their companies, professional services, domain expertise and personal brands.

“Native advertising” takes many guises, and an equal number of pricing models. Some publishers charges basic CPM or CPC rates. Others calculate costs based on positioning on the page, maintaining a “featured” position over a predetermined period of time, as well as additional and often premium pricing for adjacent ad units from the brand contributing the content (think brand “surround sound”). Sometimes the publisher will help create the content (think Buzzfeed), more often it’s incumbent on the advertiser or their agency both to conceive of as well as to execute the creative.

The real challenge of this type of advertising is an entire set of new standards and practices publishers must define as the traditionally inviolable wall between editorial and publishing becomes increasingly porous and permeable. It’s not as if sponsored, branded and contributed content shouldn’t happen. It should, but within limits and parameters it’s incumbent on the publisher for setting and enforcing to maintain and defend brand credibility while at the same time exploring new models.

Some publishers are do better at this than others. Before the ad or editorial teams open the doors to contributed or branded copy, publishers must define and commit to these eight critical points.

Set and maintain editorial standards: Every publisher has standards in place. Some, such as the New York Times, employ a public editor (sometimes called an ombudsman) to represent the needs and viewpoints of the reader and to critique editorial. Publications opening themselves up to native advertising and contributed content require someone in a similar role. This person almost certainly does not work in ad sales.

Create a style guide for guest contributors This is a good idea for corporate blogs and publications, too. A style guide sets expectations and streamlines submissions. What are accepted spellings for the publication (email or e-mail?). Do links spawn a new window, or take the reader off the site? How much white space should there be between an image and text? With expectations set, production goes a whole lot faster.

Edit, and don’t forget to copy edit Regardless of how thorough the style guide, contributed copy must always be subject to the publisher’s editing process. If staff contributors are subject to editorial scrutiny, it’s even more critical that non-professionals be fact and spell checked, as well as accountable for attributions, sourcing and veracity. Seems like a no-brainer, yet at least one very venerable brand posts contributed copy as-is. It’s not unwise, though this will vary by publisher, to also subject advertorial content to at least some degree of editing.

Never, ever open the CMS to outsiders A very prominent media brand that publishes a great deal of contributed “expert” columns allows its contributors to post their contributions directly in the CMS. The result? Pretty much what you’d expect. This memo went out to contributors last July:

**Reminder** Using expletives can offend and alienate your readers and hurt your credibility. Please don’t use foul language in your posts and be especially mindful to never use it in your headlines.

Don’t base compensation on link bait ability Many publications don’t compensate expert contributors. Others pay on a per-item basis. One very staid publisher, hoping to build traffic to their site, experimented with a model whereby contributors were paid based on the traffic their columns generated. Result? “National Equirer”-level headlines and content in a business publication.

If it’s paid, disclose that it’s paid Boston.com’s paid posts appear in a sidebar box prominently labeled “Special Advertiser Feature.” Gawker’s paid content runs under the rubric “Sponsored.” Content that SAP and Microsoft pay to publish on Forbes.com are not explicitly designated as advertiser content. Paid content is nothing to be ashamed of. But it is something to designate.

 Vet contributors The five Ws of reporting: “who, what, when, where, why?” are all perfectly legitimate questions to pose to content contributors and content advertisers. Publishers are not only entitled, but obligated, to ensure content running on their sites adheres to standards that will uphold the publisher’s own brand and ensure the value of the publication to readers and advertisers alike over the long term. It’s not only fair to ask these questions, it’s obligatory.

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What the Decline of Print Means for Digital

Plenty of sobering news about the print industry has been released over the past week.

Yes, print is in steep decline. So is print advertising. It’s important not only to ponder and understand why print is declining so precipitously now, but also to draw some lines into the future and understand how this trend might impact digital media going forward. The implications are big for advertisers and publishers alike.

The most stunning story is from eMarketer, predicting that online advertising will surpass print ad spend — this year.

The firm estimates digital newspaper ad revenue in the U.S. grew 8.3 percent to $3.3 billion in 2011. Meanwhile, newspaper print ad revenue dropped 9.3 percent to $20.7 billion. Magazines fare only slightly better. In the U.S., print ad revenue is expected to rise a below-anemic 0.5 percent to $15.34 billion this year, up from $15.3 billion last year. Digital magazine ad spending grew 18.8 percent to $2.7 billion last year.

This is due not only to the internet, of course, but to a proliferation of mobile devices that decouple newspapers and magazines from dead-tree publishing. It’s already happened with books; e-reader editions outsell both paperbacks and hardcover books on Amazon, and have for some time.

As e-reader devices conflate with tablets (think: Kindle Fire), readers are inevitably eschewing print in higher numbers still. Among tablet owners, according to a recent International Data Group survey, 72 percent of professionals worldwide say they’re buying less since owning a tablet. Seventy percent buy fewer physical books, and 49 percent buy fewer DVDs. (And naturally, readers who can afford tablets are in a much more desirable demographic to most advertisers than those who cannot.)

Like Facebook adoption a few years ago, tablet adoption is in its hockey-stick phase. There were 64.7 million tablets in the world globally at the end of 2011, according to IHS iSuppli. By the end of 2015, that number will metastasize to 287.2 million.

What can be interpolated from all these trends — a proliferation of tablets, content migrating to digital formats, advertising dollars accelerating their shift to digital from print — is that not only print is changing. The ways that print adopts to digital formats is changing as well in ways that will fundamentally change the use and perception of the written word over the next few years. Writing has always been literally flat and two-dimensional. That’s going to change — and very soon.

Already, there’s a growing market for enhanced ebooks, books created for digital formats that go beyond flat text into video, audio, games, and other multimedia and interactive features. As prices for tablets plummet (the Kindle Fire is priced at just over $100, and you can get a free Nook by signing up for a year of The New York Times), books will become more like apps. In fact, it will soon be hard to delineate where “book” stops and “digital platform” begins.

Before purists get all up in arms, don’t worry. There will always be plain-text versions of the Bible, Shakespeare, “War and Peace,” and other classics of literature. But going forward, publishers will look very closely at how they can enhance the titles in their catalogues, or turn books into a single component of transmedia storytelling.

Marketers, take note. These changes in the written word — how it’s conceived, presented, and experienced — apply to you, too. For a soon to be published research report on content marketing, we recently interviewed 56 marketers, many of them at Fortune 500 companies, about the content channels they’re using. They were asked what’s important now, what channels are diminishing in effectiveness, and where they plan to place more marketing emphasis in both the short and long term future.

Overwhelmingly, these marketers say they’re looking to video in the future (with mobile running a close second). “Visual information” is on the rise overall. What’s on the decline? Articles. Columns. Digital PR. Long-form content. White papers.

Do you see a trend here? I do. The written word is in decline in digital channels. It won’t ever vanish, but it is diminishing and will continue to do so in the foreseeable future. Publishers and marketers alike are compelled to start considering, now, how to add more visual and multimedia material to written pieces to make them stand out, to encourage opt-in and tune-in from target audiences, to deliver appropriate content to mobile platforms, and to make complex information easily and visually digestible — in a hurry. (Infographics are becoming very, very popular with marketers, as are charticles with publishers.)

Now, this is not a call for hysteria (the written word is dead!) or over-reactive fiats (nothing we produce can contain words anymore, ever!). Both those statements are utterly false and nonsensical.

But we are seeing some very real and very fast moving trends here: a shift away from paper and on to digital devices; advertisers following those eyeballs; changing consumer expectations as they consume written content on faster, cheaper, multimedia-capable devices; and marketers’ need to create and deliver messaging that’s experiential, compelling, engaging, and that drives the message home in an easily digestible format.

So, that white paper your department is working on? By all means publish it as a written document. But at the same time, you’d better start concocting ways to deliver its message in interactive, digital, visual, and multimedia environments.

Or risk being the sound of the proverbial dead tree falling in a very dense forest.

Cross-posted from iMediaConnection 

image: http://www.recyclingsupply.com

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