Another lovely visit to the AT&T store, this time because a member of my family dropped her iPhone into the, err... toilet. "It was in my back pocket and I..." oh whatever. Fine I will get a new iPhone for you. But wait! What is this! I have to pay full price AND sign up for an additional 2 year contract?? Huh??
Apparently the special price is only for NEW lines being activated. But for some reason when you purchase an iPhone as a replacement you not only pay the higher full price for the device but AT&T still insists upon tacking on two more years to your contract commitment.
Surely this is not right! Timothy, the "sales consultant" at the 425 Market AT&T store assures me this is true and insists that it is all Apple's fault. And you know what? I agree with him. It is definitely Apple's fault that in the US I have no choice (if I don't jail break my phone) but to have AT&T as my service provider.
Which reminds me of another beef I have about AT&T -- how is it that I can have five bars of signal strength and the 3G symbol but absolutely no data connectivity? Why is it that from my office, also with five bars of signal strength, no one can hear me talk? Why is it that you guys can't figure out how to give me an iPhone app that lets me alert you to a problem with your network using the GPS coordinates for where I am having trouble? Why can't you become more customer centric? Oh, because you are a monopoly and you don't need to be customer centric. Right, I knew that. Hey Barack!!!
Friday, February 06, 2009
Thursday, January 22, 2009
Business Will Change
As some of you already know, I have been working on a book. So far I have written first drafts of twelve chapters and second or third drafts of a few. The book is the result of reflecting on the fifteen years I have now spent participating in the evolution of the Web, and more specifically is inspired by the consulting work I am currently doing. In this work I am trying to help businesses understand the fundamental shift that is underway right now in the very notion of production, brought about by the rapid adoption of social technologies.
Many people have written about The Power of the Network (David Cushman) or to be more academic, The Wealth of Networks (Yochai Benkler). And marketers have been warned about what happens when there is a Groundswell (Charlene Li and Josh Bernoff) or what to do when Here Comes Everbody (Clay Shirky). And these all have been terrific inspirations for my thinking.
But this book is a little bit different from these others. As I write in the introduction
Embracing the same concepts that I am writing about in the book, I have launched today a website on which I will be publishing drafts of every chapter, open to comment (and hopefully improvement!) by anyone who chooses to stop by. The site is:
http://www.business-will-change.com/
To start with I have posted just three pieces:
Introduction -- How Collective Intelligence Will Change The Way We Do Business
Chapter One -- Adapting to Change: How We are evolving into a new species
Chapter Two -- The Precursors of Change
In a week or so I will load a few more chapters on and so on, hopefully settling into a regularly weekly update cycle. I hope this idea of writing a book in public captures your interest and that you join in and tell me what I am getting right and wrong!
Many people have written about The Power of the Network (David Cushman) or to be more academic, The Wealth of Networks (Yochai Benkler). And marketers have been warned about what happens when there is a Groundswell (Charlene Li and Josh Bernoff) or what to do when Here Comes Everbody (Clay Shirky). And these all have been terrific inspirations for my thinking.
But this book is a little bit different from these others. As I write in the introduction
"I wrote this book for every business person struggling to make sense of the changes that are sweeping through our world today."That is, this is a book that seeks to help explain what is happening in every day language and what to do about it as an individual business person.
Embracing the same concepts that I am writing about in the book, I have launched today a website on which I will be publishing drafts of every chapter, open to comment (and hopefully improvement!) by anyone who chooses to stop by. The site is:
http://www.business-will-change.com/
To start with I have posted just three pieces:
Introduction -- How Collective Intelligence Will Change The Way We Do Business
Chapter One -- Adapting to Change: How We are evolving into a new species
Chapter Two -- The Precursors of Change
In a week or so I will load a few more chapters on and so on, hopefully settling into a regularly weekly update cycle. I hope this idea of writing a book in public captures your interest and that you join in and tell me what I am getting right and wrong!
Wednesday, January 21, 2009
When is Advertising Not Spam
Please step in and disagree with me. But personally I am really starting to feel an emotion when I see advertising that I feel when I see SPAM in my email inbox which is to say -- anger, frustration, and in some cases a sense of befuddlement... why is that brand wasting their money cluttering up my media experience? So I have been trying very hard to come up with a model that explains when advertising "works" and when it doesn't.
In the broadest sense, SPAM email messages are:
But there are certain circumstances in which an advertiser can overcome either the "unwanted" aspect of their message or the "unknown" aspect of themselves as a sender. Here are some of the ways an advertiser can overcome the "unwanted" message problem:
The unknown sender problem is a bit more complex and an understanding of this challenge can emerge from again comparing with email. Think about emails you receive from people and how you would evaluate their appropriateness based on the content of the email and the relationship you have to the person sending the message. Messages might be more beneficial (a party invite) or more costly (a solicitation for money, a request for an introduction) and you will evaluate these in the context of the social strength of the relationship. A message from a "best friend" might always be welcome, even if it contains a quite costly request. Whereas the most beneficial message from a stranger would likely be unwelcome (if not also distrusted).
The same calculation is true of brands -- you might know of a brand, like McDonald's, but hold it in low regard. Thus as solicitation to purchase cheap burgers might seem very unwelcome. But if you really enjoyed eating at McDonald's the same solicitation would perhaps be quite welcome.
An interesting option is presented by Retargeter to which I was recently introduced by Auren Hoffman of Rapleaf (more on Auren's really interesting business in a later post). Mechanically what Retargeter does is tag a visitor to your website so that later on, when that visitor is on a page with advertising on which Retargeter has bought the ad space, an ad for your company can be shown to that visitor. In this way you are showing an ad specifically to people who (by visiting your site) have expressed an interest in your company.
This can of course be taken to an extreme and I have not yet connected to Retargeter to ask how a company can limit the number of ads shown to any one person or the length of time after a site visit during which an ad might be shown. But by showing ads to a person who has proactively visited your site, you are almost certainly connecting in the short run with someone who has a strong interest in your brand.
This may seem counter-intuitive. Shouldn't a company spend money to raise awareness with people who DON'T know the company? Why spend money advertising to someone who has already visited your site? Actually for many kinds of businesses a company needs to build up awareness and be top of mind to ultimately lead a customer from an expression of interest to a purchase decision. Advertising to people who already have some awareness of your business can remind them of an option under consideration and thus shorten a sales cycle or raise your brand over a competitor.
I am very interested to hear of other examples of advertising that is not spam. My inclination right now is to strongly recommend against spending money on advertising and instead for companies to focus on creating meaningful connections with their markets. But I also accept that there are circumstances in which advertising "works." Defining those circumstances will become an important tool for companies to understand how to allocate marketing dollars between this one-way messaging and the more labor intensive (though usually more rewarding) two-way communication.
In the broadest sense, SPAM email messages are:
unwanted messages from unknown senderswhich can also be a good description for advertising. Most of the time advertisements are by definition unwanted -- they are clutter or they are blockades between me and what I want to see or do -- whether in my real (magazine, TV) or virtual (web) environment.
But there are certain circumstances in which an advertiser can overcome either the "unwanted" aspect of their message or the "unknown" aspect of themselves as a sender. Here are some of the ways an advertiser can overcome the "unwanted" message problem:
- INFORMATIONAL - provide (or link to) valuable information -- I may not have realized I wanted the information, but having it makes me feel better.
- ENTERTAINING - make me laugh, or at least smile, or have a sense of wonder -- I'll likely forgive the intrusion
- CONTEXTUAL - get the context and timing right -- such as an ad in search results -- you guess correctly that I am actually seeking the information
The unknown sender problem is a bit more complex and an understanding of this challenge can emerge from again comparing with email. Think about emails you receive from people and how you would evaluate their appropriateness based on the content of the email and the relationship you have to the person sending the message. Messages might be more beneficial (a party invite) or more costly (a solicitation for money, a request for an introduction) and you will evaluate these in the context of the social strength of the relationship. A message from a "best friend" might always be welcome, even if it contains a quite costly request. Whereas the most beneficial message from a stranger would likely be unwelcome (if not also distrusted).
The same calculation is true of brands -- you might know of a brand, like McDonald's, but hold it in low regard. Thus as solicitation to purchase cheap burgers might seem very unwelcome. But if you really enjoyed eating at McDonald's the same solicitation would perhaps be quite welcome.
An interesting option is presented by Retargeter to which I was recently introduced by Auren Hoffman of Rapleaf (more on Auren's really interesting business in a later post). Mechanically what Retargeter does is tag a visitor to your website so that later on, when that visitor is on a page with advertising on which Retargeter has bought the ad space, an ad for your company can be shown to that visitor. In this way you are showing an ad specifically to people who (by visiting your site) have expressed an interest in your company.
This can of course be taken to an extreme and I have not yet connected to Retargeter to ask how a company can limit the number of ads shown to any one person or the length of time after a site visit during which an ad might be shown. But by showing ads to a person who has proactively visited your site, you are almost certainly connecting in the short run with someone who has a strong interest in your brand.
This may seem counter-intuitive. Shouldn't a company spend money to raise awareness with people who DON'T know the company? Why spend money advertising to someone who has already visited your site? Actually for many kinds of businesses a company needs to build up awareness and be top of mind to ultimately lead a customer from an expression of interest to a purchase decision. Advertising to people who already have some awareness of your business can remind them of an option under consideration and thus shorten a sales cycle or raise your brand over a competitor.
I am very interested to hear of other examples of advertising that is not spam. My inclination right now is to strongly recommend against spending money on advertising and instead for companies to focus on creating meaningful connections with their markets. But I also accept that there are circumstances in which advertising "works." Defining those circumstances will become an important tool for companies to understand how to allocate marketing dollars between this one-way messaging and the more labor intensive (though usually more rewarding) two-way communication.
Sunday, January 18, 2009
No Comment
One might wonder why an organization would choose to use a blog as a communication tool if, as in the case of Federated Media's Blog, the organization doesn't allow comments. To be clear, at the bottom of each post there is a form for submitting comments. But one glance at the home page shows that submitted comments do not move from moderation to publication.
Sure, lots of blogs out there have no comments -- my blog in fact has very few. The number of people who choose to comment after all is relatively small by comparison to the total number of readers, and there has to be something to say. John Battelle was, for example, kind enough to comment on my blog when I published a compliment of his Web 2.0 Summit. But what else would anyone have to say to that post?
On the other hand, if you claim, as John has in his "Change and Opportunity" post about a 10% staff reduction at Federated Media, that your company has
Secondly the post didn't communicate to customers, in this case the sites which Federated represents, what will happen to them. Will it take longer to get a report? Will fewer ads be sold? Will some sites be cut? An important customer, Michael Arrington, claims he read about the changes on their blog. Certainly in both communicating to employees and to customers a blog post does not replace private communications (in which FM was undoubtedly also engaged). But transparent communications can help bridge the communications gap and make sure that the company's point of view is made clear.
And transparency has the additional benefit of speaking to the much larger audience of potential customers and potential employees to tell the company's story and show what the company stands for and believes in, demonstrating how it treats its stakeholders through good times and bad.
But I think Federated Media does have a great opportunity to lead the industry in a fundamental change and that John Battelle could be a great spokesperson for doing marketing in an entirely different way. As Joseph Pine tells us in his latest book, what we really crave is authenticity from the companies with whom we do business. In my view "conversational marketing" is about being transparent and being authentic - having a real, open, interactive conversation with others in the marketplace, treating them as peers.
But if FM is going to be a leader, they will have to start by being a good example themselves.
Sure, lots of blogs out there have no comments -- my blog in fact has very few. The number of people who choose to comment after all is relatively small by comparison to the total number of readers, and there has to be something to say. John Battelle was, for example, kind enough to comment on my blog when I published a compliment of his Web 2.0 Summit. But what else would anyone have to say to that post?
On the other hand, if you claim, as John has in his "Change and Opportunity" post about a 10% staff reduction at Federated Media, that your company has
...completely reinvented the concept of what "marketing" could be.you might expect a few people to want to comment. And if you are going to claim that you
...helped define the practice of what we call "conversational marketing."then you probably owe the market a real conversation. But maybe this blog post shows exactly what is wrong with the definition John has been using for "conversational marketing" -- too much marketing and no conversations.
Totally Transparent Layoffs
Tony Hsieh has certainly set the bar for transparency quite high in his blog post about Zappos layoffs back in November. Crain Communications' Workforce Management magazine wrote about that act of courage, "Social Media Begins Forcing the Totally Transparent Layoff." In this article author Ed Frauenheim quotes Libby Sartain, former head of human resources for Yahoo, saying“People tweet, people blog, people text,” Sartain said. “You are going to have a completely transparent workplace at all times. You can’t really spin it.”The blog post that Tony did has pages of comments from engaged customers, past employees, and industry observers. One past employee writes
Tony Hsieh and Alfred Lin are some of the insightful, kind, and compassionate corporate executives that I have ever had the privileged of working under.Now that is a company people will want to work for, even if it (like all companies) will sometimes have to layoff employees.
The Case for Transparency
Done right, transparency can be a powerful tool for a company to communicate its core values and, even in a difficult time, build a positive impression of the company in the larger marketplace. So what was wrong with John's blog post? Let's start with the title - it wasn't about respecting the people who were being shown the door, it wasn't about telling the marketplace that Federated treats its employees, even in bad times, with honor and respect. It was instead a marketing pitch for Federated. From the title of the post -- "Change and Opportunity" -- and on throughout the post John writes about FM and not about the people who are now without work.Secondly the post didn't communicate to customers, in this case the sites which Federated represents, what will happen to them. Will it take longer to get a report? Will fewer ads be sold? Will some sites be cut? An important customer, Michael Arrington, claims he read about the changes on their blog. Certainly in both communicating to employees and to customers a blog post does not replace private communications (in which FM was undoubtedly also engaged). But transparent communications can help bridge the communications gap and make sure that the company's point of view is made clear.
And transparency has the additional benefit of speaking to the much larger audience of potential customers and potential employees to tell the company's story and show what the company stands for and believes in, demonstrating how it treats its stakeholders through good times and bad.
Advertising vs. Conversations
For me the most interesting aspect of this story is the one which appears to have been the most mangled in the way in which it was communicated (and reported). Paid Content reported the news with the headline "Federated Media Shifts Away From Display Ads" which is probably not the lede that John was hoping for. According to Chas Edwards, quoted in this article, Federated had over $39 million in revenues in 2008. One would guess that most of this is from "dumb display advertising" as Edwards calls it, hoping perhaps that his dumb advertisers don't notice how dumb he thinks they are for giving him their money.But I think Federated Media does have a great opportunity to lead the industry in a fundamental change and that John Battelle could be a great spokesperson for doing marketing in an entirely different way. As Joseph Pine tells us in his latest book, what we really crave is authenticity from the companies with whom we do business. In my view "conversational marketing" is about being transparent and being authentic - having a real, open, interactive conversation with others in the marketplace, treating them as peers.
But if FM is going to be a leader, they will have to start by being a good example themselves.
Sunday, January 11, 2009
Gaza Solution - just $75 B
Reporting on the Forbes list of the wealthiest people in the world, CBC News (Canada) writes that the 34 "Web Billioniares" have a collective net worth of $109.7 Billion. Overall the total worth of just America's wealthiest is, according to "The Forbes 400," worth approximately $1.57 trillion. And in this time of global economic crises, the governments of the world plan on spending many trillions in the next 12 months to help our industries and citizens.
So when we look at the tragedy in the Middle East of the Palestinian and Israeli confrontation, it is helpful to put into context some simple math. 1.5 million people live in Gaza. If you assume an average family size of 20, that is 75,000 families. What if the wealthiest people on earth offered each of these families a relocation package worth $1 million dollars, for a total investment in world peace of just $75 Billion? Add in a few governmental and non-governmental bodies instead of just making this the work of private individuals, and suddenly we could expand beyond Gaza and institute a global relocation program for politically displaced families.
The plan is not without challenges beyond convincing one (or more) wealthy people and countries to donate the funds. And you would have to find 75,000 places around the world ready to accept a Gaza family (albeit now worth $1 million) or a family from one of the other places we would expand this program to include. And there would be an enormous challenge as the program expanded in trying to determine how to distribute funds to non-Gaza families who would also want to join the program. The struggling citizens of a thousand places would wonder why they too shouldn't be the beneficiaries of such largess.
But there is a good reason to start with Palestine. Is there any other people on the planet that have been displayed by the United Nations establishing a nation state for a different group of people? While many injustices have been done to many people around the globe by individual governments, I can't think of anywhere else where the world governments have come together to displace a people (albeit for a great cause in establishing a Jewish homeland).
Of course one might wonder whether a Gaza family would make the rational economic decision to leave their land and relocate to an unknown place and, having done so, whether that family would use the opportunity to build a new life or to plot revenge upon Israel. A program of this kind would need to include a great deal of social and educational support. And not every family would agree to go so there would be the challenge of a diminishing population in Gaza who would be increasingly a concentrated minority of interests which oppose Israel.
But an offer of this kind would also bring into the sunlight two perversities of the current conflict -- first, that Arab states find that it is more valuable to have this embattled civilian population constantly on the edges of Israel and second that some of those people themselves are more dedicated to the destruction of Israel than they are to the well-being of their own people.
And the math points out a fascinating and frustrating asymmetry to the war on terror. We are willing to spend billions of dollars every month on an unnecessary war in Iraq, but we are unwilling to spend the money required to solve one of the most critical issues contributing to political instability in the middle east (and the world).
So here is a challenge to the economies of the world as we launch trillion dollar "stimulus" programs. What can we do to organize resettlement of the Palestinians? How can we create a program into which individuals and governments will be challenged to contribute large sums of cash on an ongoing basis, and regional governments encouraged to accept the resettled immigrants, so that over the next half-dozen years every family who wishes to leave Gaza may have the opportunity to do so?
First step - Begin a fund for the resettlement of Palestinians and invite individuals and governments to contribute funds for this purpose.
Second Step -- Once some minimum funding level has been achieved ($50 million?) establish the Gaza Sweepstakes. Any family who elects to leave Gaza may receive, for free, a lottery ticket. Each week, a number of families will be transported away from Gaza. The relocations will be covered by the media, the relocated families will receive ongoing attention as they integrate with the new communities into which they have been delivered. The families will receive money and counseling to assist them in integrating into their new community.
Third Step -- having demonstrated the success on a small scale, a global campaign of citizens appealing to their governments will be launched to raise a growing fund to relocate Palestinians, and when that project has been completed it will be expanded to the next most problematic population in the world.
Pierre Omidyar, are you listening?
So when we look at the tragedy in the Middle East of the Palestinian and Israeli confrontation, it is helpful to put into context some simple math. 1.5 million people live in Gaza. If you assume an average family size of 20, that is 75,000 families. What if the wealthiest people on earth offered each of these families a relocation package worth $1 million dollars, for a total investment in world peace of just $75 Billion? Add in a few governmental and non-governmental bodies instead of just making this the work of private individuals, and suddenly we could expand beyond Gaza and institute a global relocation program for politically displaced families.
The plan is not without challenges beyond convincing one (or more) wealthy people and countries to donate the funds. And you would have to find 75,000 places around the world ready to accept a Gaza family (albeit now worth $1 million) or a family from one of the other places we would expand this program to include. And there would be an enormous challenge as the program expanded in trying to determine how to distribute funds to non-Gaza families who would also want to join the program. The struggling citizens of a thousand places would wonder why they too shouldn't be the beneficiaries of such largess.
But there is a good reason to start with Palestine. Is there any other people on the planet that have been displayed by the United Nations establishing a nation state for a different group of people? While many injustices have been done to many people around the globe by individual governments, I can't think of anywhere else where the world governments have come together to displace a people (albeit for a great cause in establishing a Jewish homeland).
Of course one might wonder whether a Gaza family would make the rational economic decision to leave their land and relocate to an unknown place and, having done so, whether that family would use the opportunity to build a new life or to plot revenge upon Israel. A program of this kind would need to include a great deal of social and educational support. And not every family would agree to go so there would be the challenge of a diminishing population in Gaza who would be increasingly a concentrated minority of interests which oppose Israel.
But an offer of this kind would also bring into the sunlight two perversities of the current conflict -- first, that Arab states find that it is more valuable to have this embattled civilian population constantly on the edges of Israel and second that some of those people themselves are more dedicated to the destruction of Israel than they are to the well-being of their own people.
And the math points out a fascinating and frustrating asymmetry to the war on terror. We are willing to spend billions of dollars every month on an unnecessary war in Iraq, but we are unwilling to spend the money required to solve one of the most critical issues contributing to political instability in the middle east (and the world).
So here is a challenge to the economies of the world as we launch trillion dollar "stimulus" programs. What can we do to organize resettlement of the Palestinians? How can we create a program into which individuals and governments will be challenged to contribute large sums of cash on an ongoing basis, and regional governments encouraged to accept the resettled immigrants, so that over the next half-dozen years every family who wishes to leave Gaza may have the opportunity to do so?
First step - Begin a fund for the resettlement of Palestinians and invite individuals and governments to contribute funds for this purpose.
Second Step -- Once some minimum funding level has been achieved ($50 million?) establish the Gaza Sweepstakes. Any family who elects to leave Gaza may receive, for free, a lottery ticket. Each week, a number of families will be transported away from Gaza. The relocations will be covered by the media, the relocated families will receive ongoing attention as they integrate with the new communities into which they have been delivered. The families will receive money and counseling to assist them in integrating into their new community.
Third Step -- having demonstrated the success on a small scale, a global campaign of citizens appealing to their governments will be launched to raise a growing fund to relocate Palestinians, and when that project has been completed it will be expanded to the next most problematic population in the world.
Pierre Omidyar, are you listening?
Thursday, January 08, 2009
The Future is Already Here...
William Gibson is credited with the wonderful quote, "...the future is already here. It's just not very evenly distributed." I was reminded of this quote twice here in Helsinki this week as I spoke with a variety of companies about the impact of social technologies on their businesses. It is way too easy when you are sitting in the middle of the tornado of change to lose perspective on the winds that rage around you and, more importantly, the seeming calm in the path ahead of the tornado.
Forrester has done a great job of documenting this path, where it has been, where it is now, and where it is heading. The survey data which they have made available through the Social Technographic Profile Tool can give you a snapshot of this progress. Now updated with 2008 data, you can see the differences between the US, where 38% of 18-24 year-olds are now creating content online and Germany, for example, where the number is a much smaller 22%. Or the difference between the 18-24 year-old cohort and 45-54 year-olds in the US where the creator rate is only 16%.
But as Forrester analyst Jeremiah Owyang shows on his Web Strategist blog the trends for every demographic in every region are toward more engagement. Perhaps the most dramatic finding is the change in "inactives" -- people who are paying no attention at all to social media -- from 44% in 2007 to 25% in 2008.
In addition to engaging more people, the other often overlooked impact of social media is in the way that it is changing mainstream media. So even for those people who are not engaging directly, the news and entertainment that they consume is changing. Journalists and entertainers are amongst the most likely to be engaged with these new social technologies and what they report and create is clearly being influenced by this new medium.
As Gibson might say, the future will never be evenly distributed, but the path of this cyclone seems clear to us now -- social media will change every business and will change virtually every aspect of how we develop products, market and sell them, provide service to our customers, organize our work environments... In every industry there will be companies that embrace these new tools and new approaches and those that are torn apart by the fierce winds of change.
Which will your company be?
Forrester has done a great job of documenting this path, where it has been, where it is now, and where it is heading. The survey data which they have made available through the Social Technographic Profile Tool can give you a snapshot of this progress. Now updated with 2008 data, you can see the differences between the US, where 38% of 18-24 year-olds are now creating content online and Germany, for example, where the number is a much smaller 22%. Or the difference between the 18-24 year-old cohort and 45-54 year-olds in the US where the creator rate is only 16%.
But as Forrester analyst Jeremiah Owyang shows on his Web Strategist blog the trends for every demographic in every region are toward more engagement. Perhaps the most dramatic finding is the change in "inactives" -- people who are paying no attention at all to social media -- from 44% in 2007 to 25% in 2008.
In addition to engaging more people, the other often overlooked impact of social media is in the way that it is changing mainstream media. So even for those people who are not engaging directly, the news and entertainment that they consume is changing. Journalists and entertainers are amongst the most likely to be engaged with these new social technologies and what they report and create is clearly being influenced by this new medium.
As Gibson might say, the future will never be evenly distributed, but the path of this cyclone seems clear to us now -- social media will change every business and will change virtually every aspect of how we develop products, market and sell them, provide service to our customers, organize our work environments... In every industry there will be companies that embrace these new tools and new approaches and those that are torn apart by the fierce winds of change.
Which will your company be?
Sunday, January 04, 2009
More News
I love David Byrne's music, but I feel compelled to disagree with his recent blog post in which he opines that the bankruptcy of the Tribune Company is leading to a world in which we will have "No More News." I would, by the way, complain on his blog but he doesn't provide a comments capability. Perhaps as a public figure of his stature it is impractical to allow comments since moderating them would be such a time burden. But lets bookmark this point for a moment, as I think the lack of dialog (and perhaps the lack of understanding of what this dialog brings) contributes to Byrne's misunderstanding of what is happening in the media ecosystem.
The basic point that Byrne makes has certainly been repeated endlessly - the Internet has radically transformed the business of news and the companies which have understood how to make a living collecting and distributing news in the last century are failing to find a new model as the fundamentals of this business change. Byrne also mentions (though without commentary) the fact that the people running these news businesses have been making changes which make them even less relevant. I thought this observation was particularly well stated:
It is undoubtedly true that we are in the midst of an enormous tumultuous period of change for the news business. It is also true that from the perspective of the traditional news business, their model is being eviscerated. But this does not mean that there are no possible models for a news business. In fact, I believe that the future of news is very bright and that as a society we will (and in some cases already are) enjoy more news content not less in the future.
First of all, Byrne ignores the fact that bloggers and "citizen journalists" are already making an enormous impact in challenging entrenched media interests and bringing more facts and more "sunlight" into our political processes. The political campaigns of the past year showed how effectively the non-mainstream media could play a role in debunking lies, providing information which would otherwise not have made it into the limited space of broadcast media, and giving people with specific local information a way to get that information to a national (and international) audience.
The wonderful NPR program "On The Media" recently had a segment on the Japanese Kisha Press Clubs which make transparent a fact which is as surely true with our mainstream media -- that journalists will sometimes become too friendly with the people that they are covering in order to obtain access and that this closeness will then taint the coverage of these people. The Kisha Clubs institutionalized this closeness even going so far as to manage a list of issues which all participating journalists (which is to say, those that got access to representatives of the government) would agree NOT to cover. And this is only coming to light now because of bloggers.
Journalism will change, the business of news will change, but rather than looking at the failure of the traditional news media as being a threat to democracy, as Byrne does, I prefer to look at the strength of our democracy as being the force which will lead to a new journalism and a new business of news. This was certainly the case for the newspaper industry we have today. Newspapers were started by people passionate about the mission of the fourth estate and only later were taken over by accountants.
Al Gore, in his closing keynote speech at this year's Web 2.0 Summit conference, provides an interesting perspective on the broadcast media industry. In brief he observes that the printing press started a process in which knowledge was democratized but that television (and in general the concentration of media ownership) was a "re-feudalizing" force in our society for the past 50 years. Concentrating ownership and control of the media into a small number of corporate interests reduced the number of voices participating in the conversations of our society. While one could certainly point to the tendency of some news vehicles (like Fox) to use this power to promote a particular ideological position, the more frequent result was blandness.
Social creation of the news is removing the blandness and is a force FOR democracy. The future of in-depth reporting, investigative journalism, and foreign news desks, which Byrne worries we will lose, will emerge from this creative power of social production. We are still in the infancy of this new medium and we have a lot to learn still about what forms this NEW fourth estate will take. But I already believe that we are witnessing an explosion of news, not an elimination.
The basic point that Byrne makes has certainly been repeated endlessly - the Internet has radically transformed the business of news and the companies which have understood how to make a living collecting and distributing news in the last century are failing to find a new model as the fundamentals of this business change. Byrne also mentions (though without commentary) the fact that the people running these news businesses have been making changes which make them even less relevant. I thought this observation was particularly well stated:
Likewise, these newspapers have dumped most of their foreign bureaus, food critics, and film critics, and are loathe to assign reporters to stories that will take months to research and write. In doing so, they are eviscerating that which makes newspapers different from online reviews, blogs and websites.But Byrne goes on to complain that there is an enormous threat to our democracy because of the decline of these traditional news businesses and I think this is a mistake.
It is undoubtedly true that we are in the midst of an enormous tumultuous period of change for the news business. It is also true that from the perspective of the traditional news business, their model is being eviscerated. But this does not mean that there are no possible models for a news business. In fact, I believe that the future of news is very bright and that as a society we will (and in some cases already are) enjoy more news content not less in the future.
First of all, Byrne ignores the fact that bloggers and "citizen journalists" are already making an enormous impact in challenging entrenched media interests and bringing more facts and more "sunlight" into our political processes. The political campaigns of the past year showed how effectively the non-mainstream media could play a role in debunking lies, providing information which would otherwise not have made it into the limited space of broadcast media, and giving people with specific local information a way to get that information to a national (and international) audience.
The wonderful NPR program "On The Media" recently had a segment on the Japanese Kisha Press Clubs which make transparent a fact which is as surely true with our mainstream media -- that journalists will sometimes become too friendly with the people that they are covering in order to obtain access and that this closeness will then taint the coverage of these people. The Kisha Clubs institutionalized this closeness even going so far as to manage a list of issues which all participating journalists (which is to say, those that got access to representatives of the government) would agree NOT to cover. And this is only coming to light now because of bloggers.
Journalism will change, the business of news will change, but rather than looking at the failure of the traditional news media as being a threat to democracy, as Byrne does, I prefer to look at the strength of our democracy as being the force which will lead to a new journalism and a new business of news. This was certainly the case for the newspaper industry we have today. Newspapers were started by people passionate about the mission of the fourth estate and only later were taken over by accountants.
Al Gore, in his closing keynote speech at this year's Web 2.0 Summit conference, provides an interesting perspective on the broadcast media industry. In brief he observes that the printing press started a process in which knowledge was democratized but that television (and in general the concentration of media ownership) was a "re-feudalizing" force in our society for the past 50 years. Concentrating ownership and control of the media into a small number of corporate interests reduced the number of voices participating in the conversations of our society. While one could certainly point to the tendency of some news vehicles (like Fox) to use this power to promote a particular ideological position, the more frequent result was blandness.
Social creation of the news is removing the blandness and is a force FOR democracy. The future of in-depth reporting, investigative journalism, and foreign news desks, which Byrne worries we will lose, will emerge from this creative power of social production. We are still in the infancy of this new medium and we have a lot to learn still about what forms this NEW fourth estate will take. But I already believe that we are witnessing an explosion of news, not an elimination.
Tuesday, December 23, 2008
The Odd Couple: ATT and Apple
I recently went to purchase an iPhone 3G here in lovely San Francisco. Walking toward the Apple store, I remembered that halfway between my office and the beautiful apple store at one stockton street is an AT&T store. I don't really need to go to the Apple store, I thought to myself. So instead I went through the glass doors at the corner of Market and 3rd and into customer hell.
The first thing I noticed was the grouchy sullen customers seated around the room -- perched is probably a better way to describe this as there wasn't really anywhere to sit. So they were leaning against displays, sitting on the ground... The second thing I noticed was the sullen AT&T employee with a clipboard who approached me.
"Hi, can I put you on the waiting list?" he asked.
"Uh... how long is the wait?"
"Only 20-30 minutes."
OK, so here I am, a live customer wanting to give them my money, and they want me to sit on the ground in their store for 20-30 minutes in order to have the privilege of buying something from them!? I said no thank you, turned around and walked right out again. Off to the Apple store a few more blocks down Market.
When I arrived at the Apple store it was buzzing with happy people. A smiling Apple employee was waiting at the front door here as well.
"How can I help you today?" he asked.
"I'd like to buy an iPhone 3G"
"I can bring it right to you - do you know what size and color you want?"
This is a company that actually wants my business. Too bad it is attached to one that doesn't. Like Oscar and Felix, you have to wonder (other than a script writer looking for gags) what makes these two companies able to even stand talking to each other much less trying to offer a joint customer experience.
When I happily walked back to my office, I had to stop at the AT&T store again and wave my new phone at the sullen AT&T employee with the clipboard. In the same amount of time that I would have been sitting on the floor of his horrible shop I had walked to the Apple store, had a great shopping experience, and walked back again.
Memo to AT&T executives -- could you PLEASE learn something from your partner Apple?
The first thing I noticed was the grouchy sullen customers seated around the room -- perched is probably a better way to describe this as there wasn't really anywhere to sit. So they were leaning against displays, sitting on the ground... The second thing I noticed was the sullen AT&T employee with a clipboard who approached me.
"Hi, can I put you on the waiting list?" he asked.
"Uh... how long is the wait?"
"Only 20-30 minutes."
OK, so here I am, a live customer wanting to give them my money, and they want me to sit on the ground in their store for 20-30 minutes in order to have the privilege of buying something from them!? I said no thank you, turned around and walked right out again. Off to the Apple store a few more blocks down Market.
When I arrived at the Apple store it was buzzing with happy people. A smiling Apple employee was waiting at the front door here as well.
"How can I help you today?" he asked.
"I'd like to buy an iPhone 3G"
"I can bring it right to you - do you know what size and color you want?"
This is a company that actually wants my business. Too bad it is attached to one that doesn't. Like Oscar and Felix, you have to wonder (other than a script writer looking for gags) what makes these two companies able to even stand talking to each other much less trying to offer a joint customer experience.
When I happily walked back to my office, I had to stop at the AT&T store again and wave my new phone at the sullen AT&T employee with the clipboard. In the same amount of time that I would have been sitting on the floor of his horrible shop I had walked to the Apple store, had a great shopping experience, and walked back again.
Memo to AT&T executives -- could you PLEASE learn something from your partner Apple?
Monday, November 17, 2008
Web 2.0 Summit is a Success
From October 5 through October 7th in 2004 I was at the Hotel Nikko in California as a paying attendee of the very first O'Reilly Web 2.0 conference. It was a fantastic event and got my attention re-focused on a set of technologies and markets that I continue to focus on to this day. At the time I was an entrepreneur-in-residence for Mohr Davidow Ventures but since then I have been a poor struggling entrepreneur and have chosen to hang out in the lobby instead of paying to attend. This year that changed, and I once again paid to attend the now 5 year old Web 2.0 Summit and I am happy I did.
Yes, it is expensive to attend. But overall, there are few better places to check in with the leading change-makers in technology and business. The topics, people, and format all generated a perfect environment for thinking about the coming year and what we have to get done as business people and citizens to improve our companies and the world.
Whether it was Mary Meeker pushing through 50 slides in 20 minutes of her Technology / Internet Trends Report or Shai Agassi explaining how his company Better Place is transforming the way we will use electric cars or the brilliant closing remarks by Al Gore about the election and how the Internet is transforming democracy... Web 2.0 Summit absolutely delivered on the promise that:
Yes, it is expensive to attend. But overall, there are few better places to check in with the leading change-makers in technology and business. The topics, people, and format all generated a perfect environment for thinking about the coming year and what we have to get done as business people and citizens to improve our companies and the world.
Whether it was Mary Meeker pushing through 50 slides in 20 minutes of her Technology / Internet Trends Report or Shai Agassi explaining how his company Better Place is transforming the way we will use electric cars or the brilliant closing remarks by Al Gore about the election and how the Internet is transforming democracy... Web 2.0 Summit absolutely delivered on the promise that:
"...the leaders of the Internet economy are turning their attention to the world outside our industry. And conversely, the best minds of our generation are turning to the Web for solutions. At the fifth annual Web 2.0 Summit, we'll endeavor to bring these groups together."They did and I was glad I was there for the event. I'll be a paying attendee again in 2009.
Saturday, November 15, 2008
Mashup Camp
I think there is still room at Mashup Camp in Mountain View this weekend, you can register here: www.mashupcamp.com/mountain-view-november/
They seem to have a great group of sponsors and also have over $9k in prizes, including:
-Amazon Kindle
-Amex Gift Cards
-Dell 24” flat panel LCD monitor
-Macbook Pro
-cash prizes
Hope I see you there!
They seem to have a great group of sponsors and also have over $9k in prizes, including:
-Amazon Kindle
-Amex Gift Cards
-Dell 24” flat panel LCD monitor
-Macbook Pro
-cash prizes
Hope I see you there!
Wednesday, November 12, 2008
Aer Lingus Bankruptcy
Hello Aer Lingus, are you listening? I doubt it. Today you had an opportunity to make me into a huge fan and instead you turned me into a hater. If you'd like to know how customer service can work to make your business loved by customers, go study Zappos and see how a REAL company treats its customers. You guys? Well, you suck.
Sure, you just lost 20 million euros. Sure your staff is all about to go on strike. But maybe your real problem is that you have really lousy policies that demonstrate that you hate your customers!
I booked a flight from Heathrow to Dublin - a route you fly every hour. I happened to get done in London early and came out to the airport early. So I walked up to your ticket counter to see if there was space on an earlier flight. Why yes, there is! In fact there is lots of space! And not just on one flight, but on three flights prior to mine (I am on the last of the day). BUT your policy is to charge full fare -- an extra 150 pounds sterling -- to change!! That is stupid.
You had the chance to delight me by getting to Dublin early, at no additional cost to you. Instead I am sitting in the Heathrow airport, mad at you, vowing never to book on your airline again.
Sounds like you'll lose more than 20 million euros next year. In fact, I think you'll be BANKRUPT. In a bad economy, the remaining customers have choices and they will choose the best airlines - and that is NOT you.
Or you can change! It would be hard, but give it a try.. oh yeah. You aren't even listening.
Well, for the rest of you that are -- take a look at Aer Lingus, they are a great example of what NOT to do.
Sure, you just lost 20 million euros. Sure your staff is all about to go on strike. But maybe your real problem is that you have really lousy policies that demonstrate that you hate your customers!
I booked a flight from Heathrow to Dublin - a route you fly every hour. I happened to get done in London early and came out to the airport early. So I walked up to your ticket counter to see if there was space on an earlier flight. Why yes, there is! In fact there is lots of space! And not just on one flight, but on three flights prior to mine (I am on the last of the day). BUT your policy is to charge full fare -- an extra 150 pounds sterling -- to change!! That is stupid.
You had the chance to delight me by getting to Dublin early, at no additional cost to you. Instead I am sitting in the Heathrow airport, mad at you, vowing never to book on your airline again.
Sounds like you'll lose more than 20 million euros next year. In fact, I think you'll be BANKRUPT. In a bad economy, the remaining customers have choices and they will choose the best airlines - and that is NOT you.
Or you can change! It would be hard, but give it a try.. oh yeah. You aren't even listening.
Well, for the rest of you that are -- take a look at Aer Lingus, they are a great example of what NOT to do.
Tuesday, November 11, 2008
22 Solid Social Media Examples
Great article by Peter Kim on Mashable "The 22 Step Social Media Marketing Plan." Peter lists these 22 social media tools and gives concrete examples of companies using them:
Definitely worth reading the whole post but also his blog, Being Peter Kim
Here’s a framework of 22 tools to consider with notable brand examples:
1. Blogs (Johnson & Johnson, Delta Air Lines)
2. Bookmarking/Tagging (Adobe, Kodak)
3. Brand monitoring (Dell, MINI)
4. Content aggregation (Alltop, EMC)
5. Crowdsourcing/Voting (Oracle, Starbucks)
6. Discussion boards and forums (IBM, Mountain Dew)
7. Events and meetups (Molson, Pampers)
8. Mashups (Fidelity Investments, Nike)
9. Microblogging (method, Whole Foods)
10. Online video (Eukanuba, Home Depot)
11. Organization and staffing (Ford, Pepsi)
12. Outreach programs (Nokia, Yum Brands)
13. Photosharing (Rubbermaid, UK Government)
14. Podcasting (Ericsson, McDonalds)
15. Presentation sharing (CapGemini, Daimler AG)
16. Public Relations - social media releases (Avon, Intel)
17. Ratings and reviews (Loblaws, TurboTax)
18. Social networks: applications, fan pages, groups, and personalities (British Airways, Saturn)
19. Sponsorships (Coca-Cola, Whirlpool)
20. Virtual worlds (National Geographic, Toyota)
21. Widgets (Southwest Airlines, Target)
22. Wikis (Second Life, T-Mobile Sidekick)
Definitely worth reading the whole post but also his blog, Being Peter Kim
Thursday, November 06, 2008
Obama Already Changing Government
OK its not working right now, but keep trying it -- Obama's transition team has launched a website -- http://www.change.gov/ which invites all of America to start getting engaged in the work of changing government. I am so glad that the terrific team that Obama put together to guide his online work for the campaign is still hard at work and is already making history with the way this government is going to use the Internet to connect citizens with their government!
Wednesday, November 05, 2008
LinkedIn asks that you not use their Apps
Open letter to Reid:
You know I am a huge supporter, have been a LinkedIn member since you were in private Beta. And you know how eagerly I have awaited the launch of your applications platform.
But I have to say, I keep finding myself saying "what the heck??" when I try to use your product.
I'd like to suggest that you open up a collaborative product development process with your customers to get feedback from the people that want you to succeed on how your product needs to evolve to achieve the promise that it so clearly has but has not yet fulfilled.
This kind of message (see attached) tell me in big red bold type - GO AWAY, DON'T USE OUR PRODUCT.
I don't think that is the message you want to send.
best
Ted
You know I am a huge supporter, have been a LinkedIn member since you were in private Beta. And you know how eagerly I have awaited the launch of your applications platform.
But I have to say, I keep finding myself saying "what the heck??" when I try to use your product.
I'd like to suggest that you open up a collaborative product development process with your customers to get feedback from the people that want you to succeed on how your product needs to evolve to achieve the promise that it so clearly has but has not yet fulfilled.
This kind of message (see attached) tell me in big red bold type - GO AWAY, DON'T USE OUR PRODUCT.
I don't think that is the message you want to send.
best
Ted
Tuesday, November 04, 2008
The News Media They are a-Changin'
(With apologies to Bob Dylan) Inspired by the news this last week that the Christian Science Monitor has become the first of the major US newspapers to end print publication -- don't think they'll be the last...
The News Media They Are A-Changin'
Come gather 'round people
Wherever you roam
And admit that sources of news
Around you have grown
And accept it that soon
You'll be digital to the bone.
If your news to you
Is worth savin'
Then you better start webbin'
Or you'll disappear with a moan
For the news media they are a-changin'.
Come writers and critics
Who prophesize with your pen
And keep your eyes wide
The chance won't come again
And don't speak too soon
For the web's still developin'
And there's no tellin' who
will be reportin'
For the journalist now
Will be later a citizen
For the news media they are a-changin'.
Come senators, congressmen
Please heed the call
Don't stand in the doorway
Don't block up the hall
For he that gets hurt
Will be he who has stalled
The internet has come
And it is ragin'.
It'll soon shake your Windows
And rattle your walls
For the news media they are a-changin'.
Come mothers and fathers
Throughout the land
And don't criticize
What you can't understand
Your sons and your daughters
Are beyond your command
Your old print forms are
Rapidly agin'.
Please get out of the new one
If you can't lend your hand
For the news media they are a-changin'.
The line it is drawn
The curse it is cast
The slow one now
Will later be fast
As the present now
Will later be past
Print is
Rapidly fadin'.
And the first one now
Will later be last
For the news media they are a-changin'.
The News Media They Are A-Changin'
Come gather 'round people
Wherever you roam
And admit that sources of news
Around you have grown
And accept it that soon
You'll be digital to the bone.
If your news to you
Is worth savin'
Then you better start webbin'
Or you'll disappear with a moan
For the news media they are a-changin'.
Come writers and critics
Who prophesize with your pen
And keep your eyes wide
The chance won't come again
And don't speak too soon
For the web's still developin'
And there's no tellin' who
will be reportin'
For the journalist now
Will be later a citizen
For the news media they are a-changin'.
Come senators, congressmen
Please heed the call
Don't stand in the doorway
Don't block up the hall
For he that gets hurt
Will be he who has stalled
The internet has come
And it is ragin'.
It'll soon shake your Windows
And rattle your walls
For the news media they are a-changin'.
Come mothers and fathers
Throughout the land
And don't criticize
What you can't understand
Your sons and your daughters
Are beyond your command
Your old print forms are
Rapidly agin'.
Please get out of the new one
If you can't lend your hand
For the news media they are a-changin'.
The line it is drawn
The curse it is cast
The slow one now
Will later be fast
As the present now
Will later be past
Print is
Rapidly fadin'.
And the first one now
Will later be last
For the news media they are a-changin'.
Friday, October 31, 2008
02 (UK) Free iPhones... Hello ATT?
Thank you O2 for my free iPhone. Yes, you heard me. For a minimum monthly contract of £ 45 the nice people at O2 in the UK will give you a free iPhone. My bill has been more like £ 80 a month with the amount I have been over there, so I happily collected my free phone. I still don't have one here in the U.S. though. Do I really want to commit to another two years on ATT? Maybe President Obama will actually re institute some oversight of the communications industry and ATT will be forced to become more competitive... I think I'll wait and see.
In the meantime, Apple, why can't I take my US SIM card and slide it into that UK iPhone. Did you really have to lock phone serial numbers to particular carriers? Sigh. So now I have to carry two phones EVEN IF they are both 3G iPhones.
Which brings me to my other complaint - why can't the carriers figure out how to let us have reasonable calling rates from multiple countries? Even if I have to have a contract with multiple carriers, my SIM should be "multi-homed" -- registered with each carrier I have a contract with.
Anyone in the telecommunications industry listening?
In the meantime, Apple, why can't I take my US SIM card and slide it into that UK iPhone. Did you really have to lock phone serial numbers to particular carriers? Sigh. So now I have to carry two phones EVEN IF they are both 3G iPhones.
Which brings me to my other complaint - why can't the carriers figure out how to let us have reasonable calling rates from multiple countries? Even if I have to have a contract with multiple carriers, my SIM should be "multi-homed" -- registered with each carrier I have a contract with.
Anyone in the telecommunications industry listening?
Tuesday, October 28, 2008
The Coming Transformation of the Media Ecosystem
There is a tipping point, as Malcolm Gladwell famously defined it, for the old media world, driven as it has been by advertising dollars. This day of reckoning was coming, no matter what, but now it will be here sooner due to the current economic crises. 2009 could be the first year in a long time with an actual decline in total dollars spent in the US on advertising. And if it is, massive changes will finally take place in the relationship between media, advertising companies, and the public relations business.
Already a memo is circulating claiming that a number of well known print publications are close to failure. Here is a partial list, you'll recognize more than a few: Entertainment Weekly, Kiplinger's Personal Finance, SmartMoney, Men's Vogue, Teen Vogue, Nickelodeon, National Geographic for Kids, Sports Illustrated for Kids.
But the economic pain that publishers are going to experience in the next few quarters is going to bring down quite a few larger publications as well. An analysis of advertising spend as a percentage of GDP over the past 100 years shows that it has fluctuated between 1% and 3% but has been remarkably stable over the past 25 years at around 2% of GDP. This has been over a period when annual GDP has grown from 3.5 trillion to 13.8 trillion dollars (though not as large a growth when inflation is taken into account).
It is clear from the historical record that recessionary periods can put pressure on advertising expenditure both through a decline in the GDP and through a decline in the percentage of GDP spent on advertising. The last time annual Real GDP (which is to say, inflation adjusted GDP) actually declined was the beginning of the 1990s.
As you can see in this graph of historical real GDP by quarter and by year as hard as the early 2000 period was for us in tech, annualized Real GDP didn't drop. In both periods, however, advertising spending declined as a percentage of GDP -- in the early 1990s by .1% and in the early 2000s by .2%. So based on this historical record, media companies should expect a decline in the amount spent on advertising due to the current economic crises, and that decline may be especially severe as Real GDP is likely to fall in 2009.
But something else has clearly been going on in the last few years, even as the economy has been growing, which adds a third threat. From 2004 overall advertising spend as a percentage of GDP has declined by .1% in each year, dropping from 2.4% to 2.0% in 2007. From 2006 to 2007 this meant an inflation adjusted dollar decline in advertising. Arguably this decline is coming as the result of the changing spending habits of corporations within the overall marketing budget. As authors John Deighton and Leora Kornfeld argue in the HBSarticle Unanticipated Consequences
If you take all three factors into consideration, a drop of $50 billion on advertising spend in 2009 is conceivable. The actual drop is likely to be less severe, but could be as much as 10% of total spend (which would be about $30 billion). If so, 2009 will be a watershed year for media.
Look at this from the perspective of the complete ecosystem. Tens of billions of dollars reduced from advertising spend means many fewer jobs at advertising companies and perhaps more than a few that fail. The loss of dollars into media companies will reduce the number of journalists, the number of pages, and probably the number of publications. This will then have an impact on traditional PR as there will be fewer journalists and fewer publications to pitch.
All of this is great news for bringing about a new world of direct company-market communications. It will accelerate the realization by companies that they can talk directly to their customers and prospects -- "more participatory, more sincere, and less directive marketing styles."
Already a memo is circulating claiming that a number of well known print publications are close to failure. Here is a partial list, you'll recognize more than a few: Entertainment Weekly, Kiplinger's Personal Finance, SmartMoney, Men's Vogue, Teen Vogue, Nickelodeon, National Geographic for Kids, Sports Illustrated for Kids.
But the economic pain that publishers are going to experience in the next few quarters is going to bring down quite a few larger publications as well. An analysis of advertising spend as a percentage of GDP over the past 100 years shows that it has fluctuated between 1% and 3% but has been remarkably stable over the past 25 years at around 2% of GDP. This has been over a period when annual GDP has grown from 3.5 trillion to 13.8 trillion dollars (though not as large a growth when inflation is taken into account).
It is clear from the historical record that recessionary periods can put pressure on advertising expenditure both through a decline in the GDP and through a decline in the percentage of GDP spent on advertising. The last time annual Real GDP (which is to say, inflation adjusted GDP) actually declined was the beginning of the 1990s.
As you can see in this graph of historical real GDP by quarter and by year as hard as the early 2000 period was for us in tech, annualized Real GDP didn't drop. In both periods, however, advertising spending declined as a percentage of GDP -- in the early 1990s by .1% and in the early 2000s by .2%. So based on this historical record, media companies should expect a decline in the amount spent on advertising due to the current economic crises, and that decline may be especially severe as Real GDP is likely to fall in 2009.
But something else has clearly been going on in the last few years, even as the economy has been growing, which adds a third threat. From 2004 overall advertising spend as a percentage of GDP has declined by .1% in each year, dropping from 2.4% to 2.0% in 2007. From 2006 to 2007 this meant an inflation adjusted dollar decline in advertising. Arguably this decline is coming as the result of the changing spending habits of corporations within the overall marketing budget. As authors John Deighton and Leora Kornfeld argue in the HBSarticle Unanticipated Consequences
"...the shift from broadcasting to interaction within digital communities is moving the locus of control over meanings from marketer to consumer and rewarding more participatory, more sincere, and less directive marketing styles."Marketers who are taking this seriously are shifting dollars away from advertising and into more engaging, more direct connection with markets.
If you take all three factors into consideration, a drop of $50 billion on advertising spend in 2009 is conceivable. The actual drop is likely to be less severe, but could be as much as 10% of total spend (which would be about $30 billion). If so, 2009 will be a watershed year for media.
Look at this from the perspective of the complete ecosystem. Tens of billions of dollars reduced from advertising spend means many fewer jobs at advertising companies and perhaps more than a few that fail. The loss of dollars into media companies will reduce the number of journalists, the number of pages, and probably the number of publications. This will then have an impact on traditional PR as there will be fewer journalists and fewer publications to pitch.
All of this is great news for bringing about a new world of direct company-market communications. It will accelerate the realization by companies that they can talk directly to their customers and prospects -- "more participatory, more sincere, and less directive marketing styles."
Monday, October 27, 2008
PitchCamp Winners and thank you to ALL!
Robert Goldberg and I invested a ton of time and thought into our PitchCamp workshop at Web 2.0 Expo Europe (held in Berlin again this year) but I have to say, it would not have been a huge success (thanks Mike Butcher for saying so!) without the tireless help of numerous others. But before I get into the thank you shout outs I must tell you about the terrific companies that won the arduous pitch process. We had 12 great companies and I think all of them made great progress in their pitches. But here were the judges favorites:
And a tie for third place:
We had an incredible group of judges officiating and I must thank all of them --
Part of what made this so much fun was a terrific group of sponsors who provided prizes and sponsored the PitchParty afterwards -- I have to especially thank Ernst & Young, LinkedIn, iSteps, ContentTeam, Hobnox, SixApart, and VentureBeat.
But let me save the most superlatives for the tremendous, astounding, wonderful David Nöel of Hobnox who did an amazing amount of work to bring everything together on the ground in Berlin so that we had a great party and hundreds of happy pitchcampers. THANKS DAVID!
And a tie for third place:
We had an incredible group of judges officiating and I must thank all of them --
- Mike Butcher – European Editor TechCrunch
- Olivier Creiche – Vice President and General Manager of Europe, Middle East and Africa, Six Apart
- Simon Levene – Partner, Accel Venture Partners
- Patrick Liechti – Business Development Manager – Web 2.0 Startups, Sun Microsystems
- Matt Marshall – Managing Editor and CEO, Venture Beat
- Dr. Maximillian Niederhofer – Atlas Ventures
- Mehrdad Piroozram – Managing Partner, iSteps Widget Ventures
- Jens Redmer – Head of European New Business Development, Google
- Carsten Rudolph – Emerging Business Team, Microsoft
- Rob Schiller – Investor and Entrepreneur
- Reshma Sohoni – CEO, Seedcamp
- Yossi Vardi – Investor and Entrepreneur
Part of what made this so much fun was a terrific group of sponsors who provided prizes and sponsored the PitchParty afterwards -- I have to especially thank Ernst & Young, LinkedIn, iSteps, ContentTeam, Hobnox, SixApart, and VentureBeat.
But let me save the most superlatives for the tremendous, astounding, wonderful David Nöel of Hobnox who did an amazing amount of work to bring everything together on the ground in Berlin so that we had a great party and hundreds of happy pitchcampers. THANKS DAVID!
Stealing the Election
Attention John McCain - take time now to send a memo to all party members. Subject: Don't Steal The Election. Sure, some of us poor losers in blue states think the Republicans have stolen the last two presidential elections. And perhaps Republicans can forgive us for some of these (hilarious) satires of Diebold voting machines in Florida fixed to only record votes for Dub-yah. After all, there were a few inconsistencies. But does the Republican party really think that America is going to stand for this B.S. again? Apparently they do. Reporting on CNN in an article calmly titled "Long Lines, Glitches Reported in Early Voting" CNN's Sean Callebs, Brian Todd and Manav Tanneeru report this frightening comment from a voter in West Virginia:
I certainly would not go as far as Jack Myers who predicts civil unrest and political demonstrations should the outcome of next Tuesday's election be a defeat for Obama. However, I think it is reasonable to point out to the election commissioners of every state that a perception of fraud in this election will significantly damage the faith of Americans and the world in our democracy and undermine our ability to be a positive force for good in the world. As Myers writes:
In West Virginia's Jackson County, there were some reports that voting machines were accidentally recording the wrong vote.Can this really be true? Did 81-year-old Calvin Thomas simply make this up in order to raise the specter of Republican voter fraud? Did CNN report this as yet another example of the "liberal biased media" stoking the flames of unrest against our duly elected representative government?
"I went in there and pushed the Democrat ticket, and it jumped to the Republican ticket for president of the United States," said Calvin Thomas, an 81-year-old West Virginian.
I certainly would not go as far as Jack Myers who predicts civil unrest and political demonstrations should the outcome of next Tuesday's election be a defeat for Obama. However, I think it is reasonable to point out to the election commissioners of every state that a perception of fraud in this election will significantly damage the faith of Americans and the world in our democracy and undermine our ability to be a positive force for good in the world. As Myers writes:
This time you will be uncovered. While some may try to obstruct the votes of Democratic-leaning segments of society, hundreds of thousands of poll watchers are on hand outside polling places. The Democratic National Committee has lawyers standing at the ready in contested states.So am I concerned that the election will be stolen? Am I concerned that John McCain, Patriot and war hero, will allow a result to stand which rests upon voter fraud? Absolutely not. If John McCain is elected President of the United States and if John McCain knows that this election was achieved through subverting the democtratic process of this country, I fully expect him to assure his place in our history as a savior of our democracy by standing on stage and telling the American people and the world exactly how the election was stolen and renouncing the results. Note to McCain -- seems like a much easier way to become a permanent positive part of the history of America than trying to turn around this economy!
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