You are currently browsing the archives for December, 2006.

How Metafilter's Matt Haughey Beat Google Answers

Anil Dash sums up why Matt Haughey, the lone man behind the curtain at Metafilter and Ask Metafilter beat Google Answers:

“MetaFilter has a long history of being influential online and in the media world at large. Members think highly of themselves and of their peers on the site, often with good reason. Being respected by that group is something to be desired…

“There’s also an existing community of tens of thousands of MetaFilter members which seeded the Ask MetaFilter site — a strong and active base of early adopters. This is in contrast to a point Matt himself made while talking about the site:

‘Google Answers is gone because Google isn’t in the people business, they’re in the computer programming business.’

“With the exception of Orkut and YouTube, Google doesn’t really do community websites. That’s not a criticism — they get a lot of leverage out of having a smart python script do the work of hundreds of humans….

“In short, Google doesn’t have a community to leverage.

Go, Matt!

Barry Briggs Leaving CNET?

When ValleyWag covers FM, they don’t always get 100% of the facts right. But they almost always tap into a kernel of truth, often before their competitors. In that light, I wonder if there’s something to Friday’s rumor that CNET COO Barry Briggs is resigning his post this week (ValleyWag).

UPDATE: Rumors confirmed. More at PaidContent.

Cisco's Human Network Campaign: #2 Result on Google

Last month’s “Welcome to the Human Network” campaign by Cisco continues to illustrate the impact of “author driven” or “conversational marketing” beyond the surface metrics of impressions and click-through rates. Sure, by letting authors lend their names and personal definitions to Cisco ads on their own sites, Cisco’s ads experienced better-than-average click through rates.

But more than that, the campaign introduced a new phrase — “the human network” — to the business / IT lexicon. As proof, the term has made its way to Wikipedia as an entry, with Cisco getting credit for popularizing the phrase. The campaign’s landing page, because it’s a collection of insights and definitions from leading business and tech thought leaders rather than marketing-speak from Cisco, attracted links from sites across the web. Now, as a result, a Google search for “human network” returns the campaign’s landing page in the #2 position — ahead of Cisco’s own site.

cisco-on-google.png

I forget which coach for the Italian national soccer team coined the phrase “total football” for a style of play in which every player played like he was actively, offensively involved in every play, wherever he was on the field; every player firing on all pistons, all the time. This kind of ad campaign ought to be called “total marketing.”

The Economist: Bloggers As Small Business Entrepreneurs

Last month The Economist ran a piece on top blog authors making a living as independent publishers, with a nice mention of FM:

“One big reason why his blog works as a small business, says Mr Malik [of GigaOM], is that an ecosystem of support is appearing. Like Ms Armstrong

[of Dooce], he farms out advertising sales and administration to a firm called FM, launched last year by John Battelle, who once ran magazines such as Wired and the Industry Standard…. Once you have a lot of readers, however, the bandwidth costs become significant, and most medium-sized blogs cannot afford to hire the sales people needed to generate sufficient revenue. So FM‘s 15 sales people negotiate with advertisers on behalf of blogs they represent, keeping 40% of the resulting revenues.”

Buying TV Ads Is Still Easier

And it’s because of that, speculates TNS Media Intelligence President-CEO Steven Fredericks, that the nation’s 50 largest advertisers continue to increase their investment in TV, despite the fact than online advertising is more efficient and less expensive (see Mediapost).

Through the first nine months of 2006, U.S. advertisers spent $7.2 billion on online advertising–over a billion dollars more than the $6.1 billion they spent online during the same period in 2005, according to TNS MI’s figures, which include only display advertising and do not factor in an even higher rate of growth for online search advertising. TNS MI estimates that online display ad budgets are now expanding about 18%, but if the even faster-growing search category–rising at a rate of more than 30% per year–is factored in, the underlying rate of Internet ad spending is growing even more rapidly, said TNS MI President-CEO Steven Fredericks.

This growth, though, is being driven by smaller and mid-sized advertisers as the top 50 national advertisers increased TV as part of their mix from 2005 to 2006.

…while bigger advertisers are boosting their online ad budgets at a lower rate, Fredericks noted that their online buys are going further relative to their traditional media dollars. Yet the cost savings are likely being reinvested in traditional media, not online, he said…’I'm not sure what the reason for that is, but I think it may be that staying with traditional media is just an easier thing for them to do right now.’”

Take the easier solution over the one you know works better and costs less??  Oh my!

Battelle: CPG Media Versus Conversational Media

Battelle at Searchblog draws some interesting conclusions from the perhaps-not-coincidental recent departures of the top interactive execs from Newscorp (Ross Levinsohn), AOL (Jonathan Miller) and CBS (Larry Kramer): Big media has decided it’s time to replace the internet renegades with trusted lieutenants who know how to protect the assets of traditional Big Media operations.

“There are two major forms of media these days. There is Packaged Goods Media, in which “content” is produced and packaged, then sent through traditional distribution channels like cable, newsstand, mail, and even the Internet. Remember when nearly every major media mogul claimed that the Internet was simply one more media distribution channel? They were right, but only in so far as it pertains to Packaged Goods Media. Over the past few decades, massive media conglomerates have built on the deep DNA of Packaged Goods Media.

“The second major form of media, is far newer, and far less established. I’ve come to call it Conversational Media, though I also like to call it Performance Media. This is the kind of media that has been labeled, somewhat hastily and often derisively, as “User Generated Content,” “Social Media,” or “Consumer Content.” And while the major media companies are unparalleled when it comes to running companies that live in the Packaged Goods Media world, running major companies in the Conversational Media field require quite a different set of skills, and consideration of radically different economic and business models – models which, to be perfectly frank, conflict directly with the models which support and protect Packaged Goods Media-based companies.

“It seems clear to me that the folks now charged with running the interactive assets of NBC, Viacom, Time Warner, and Newscorp – four of the largest Packaged Goods media companies in the world – are charged not only with growing their own Conversational Media assets, but also with protecting the Packaged Goods Media assets of their bosses.”

China: Ad-Spending Growth Outpaces US

According to the prediction of Adam Smith, futures director of Group M, WPP Group’s media unit, growth in overall ad spending in China, in gross dollars, will be larger than growth in US ad spending this year (AdAge):

“China’s [incemental] investment in major media in 2006 will rise to $4.2 billion vs. the U.S.’s $4 billion.”

TV spending remains the biggest share of ad investment in both markets, and is also “the predominant source of growth in emerging economies.”

Om Launches Site Covering Online Video, NewTeeVee.com

Om Malik just launched NewTeeVee, the latest expansion of the GigaOM family of sites. According to his write up at GigaOM:

“It is a time of confusion, creation and disruption. Which means it is perfect time for a new blog devoted to what Jeff Jarvis describes as ‘exploding TV.’ A new blog that aspires to make sense of it all, and at the same time has fun doing it. Technologies, companies, people…”

Congrats, Om!

Scott Karp: Content Businesses Don’t Scale Anymore

Excellent post at Publishing 2.0. Scott’s thesis: the long tail as it plays out in the content world — the niche-ification of publishing — means that the content-makers can’t run scalable businesses anymore. It’s worth reading in full. My comment:

“Great post, Scott. But I actually think today’s independent publishers have a better shot at scale than traditional media start-ups because, unlike media start-ups of the past, they can outsource more of the publishing work, namely ad sales, ad serving and collection of accounts receivable.

“At the low end of the effective-CPM scale, there’s Google. I’m at Federated Media, where we’re trying offer independent sites with higher effective CPMs. We do this by working with advertisers directly (human sales people) to build integrated programs and to sell each site’s unique magic. This gives us access to higher CPM brand-advertising budgets rather than the direct-response / CPC budgets that fund most of the campaigns with Google.

“Traditional print magazines and web publishing companies spend 75-85% of their budget on SG&A, the non-editorial stuff. Mike Arrington, Om Malik, the Boingers and 100 other indie publishers offload those costs to FM, while giving away (to FM) only 40% of the ad revenue. For small and mid-sized publishers, Google takes about 49%. FM’s “federation” approach gives us economies of scale that small and mid-sized sites wouldn’t have on their own. In other words, today’s niche publications can collect the premium ad prices previously only available to major media companies with funds for big sales staffs — without the same cost structure. Maybe those higher margins will enable them to publish more content, launch new publications, and reach larger audiences. Perhaps there’s hope for scale!”

Online Display Ads Drive Most Traffic for CPG Corporate Sites

According to AdAge:

“Much of the traffic to the big package-goods marketers’ sites appears to be coming the way originally envisioned in the online advertising model: as a response to online display advertising. Search-heavy Google accounts for a relatively small amount of traffic to the P&G and Unilever sites compared with display-ad-heavy Yahoo, the leading source of traffic for both marketers, according to ComScore.”

The article also cites a McKinsey study that shows profit-per-customer is significantly higher if you can get a customer to visit your corporate website, rather than just touching him or her with traditional advertising messages:

“More traditional mass marketers are coming to understand how profitable their web visitors are, said Norm LeHoullier, who recently retired as managing director of WPP Group’s G2 Interactive. He said a study by McKinsey & Co. for one package-goods brand G2 handled showed that while its website reached only 800,000 consumers annually, they were generating $40 in profit on average [per customer], compared with $5 for consumers reached by traditional media.”