Communities Dominate Brands

The great cashcow in the sky

On march 29 Jay Rosen at PressThink made a post which strikes at the core of our book, and goes deep into one of out themes which is how the Internet, declining readership, bloggers, communities, new insurgents eg. Craigslist etc. are disintermediating the newspaper industry. I would suggest that anyone remotely interested in Journalism or the Future of the Newspaper - read this.

It is a monumental piece. And what is interesting is that the debate is on a number of levels. Firstly the economics: profits are up, but revenues are down - a bad sign that newspapers are perhaps being driven to a profitable demise.

A Harvard professor, Michael E. Porter [has] a last-resort business model for companies undermined by substitute technology. He calls it "harvesting market position." Managers do it by raising prices and reducing quality so they can shell out the money and run. I know of no newspaper companies that are doing this consciously, but the behavior of most points in this direction: smaller newshole, lighter staffing, and reduced community service, leading, of course, to fading readership, declining circulation, and lost advertising. Plot it on a graph, and it looks like a death spiral.

And how many newspapers have shied away from having a full blown digital strategy. But also the moral implications of journalism and what this means in our new digital world.

This from The project for Excellence in Journalism report

If older media sectors focus on profit-taking and stock price, they may do so at the expense of building the new technologies that are vital to the future. There are signs that that may be occurring.

what do we take from the old to combine with the new?

The only way to save journalism is to develop a new model that finds profit in truth, vigilance, and social responsibility," Phil Meyer said.

That dull phrase, "new model," includes stuff that is not dull at all. Like a different kind of company to work for, a better sense of how journalists can create value on the Web, a new and deeper commitment to interactivity with users as a way to do more kick-ass reporting.

We in our research for the book came across OhMyNews in Korea the third largest newspaper in Korea and it is populated by 26,000 Citizen reporters. I wonder if the new model can look like this? As it does engage its audience - literally - it has a sense of authenticity - truth - and a greater sense of "social media" that Mary Meeker expoused in her report for Morgan Stanley The Age of Engagement

And here below is a comment from a reader of The ThinkPress: Laying the Newspaper Gently Down to Die. That demonstrates why the genie is out of the bottle. Deep down you see, it is human nature to engage in one way or another. Its just that previously we did not have the technologies that enabled us to participate, to listen, and respond immediately to one or many - as we do today.

Comment

Conover,

1) The issue isn't bias. It is partisanship. See e.g. Evan Thomas, Michael Barone, et al. This produces a "journalism" which isn't worth saving.

2) The inability (actually an adamant refusal) to acknowledge this reality when discussing the future of newspapers and journalism makes the resulting conversation as irrelevant as the threads on Bush and the White House "decertifying" the press corps were. If one fails to accurately perceive the relationship between Bush and the press, it is rather difficult to reach accurate conclusions on what Bush is doing and why.

3) I don't hate America. That was Michael Moore who said that. The one who was embraced (literally) by the Democratic leadership -- the same politicians that 90% of journalists vote for. Interesting that you would use the expression. In psychology, they call that projection.

4) So where does that leave the future of newspapers and the news business? First, understand why you are losing so many readers. Many of them (like me) love newspapers and have always had a several each day in the house. I have lived with the liberal bias forever. That isn't the problem. I don't bother to read the "news" in the MSM anymore because it is woefully inaccurate. The MSM failed miserably to report reality in Iraq. It failed miserably on the economic issues germane to the last election. For at least 20 years, it has failed to report reality on the environment, the homeless, education, foreign policy ... you name it. Is the sorry job due to bias and partisanship or are there other factors as well? Those of you on the inside should be better able than I to discern that. But you have no chance, if you won't acknowledge reality.

This is a thread on the business of journalism. I am a customer. I am telling you that your product sucks and I am willing to take the time to point out specifics of how and what is wrong with the product. I am joined in this assessment by millions of other customers. We are leaving in droves. Any other business operated by rational people and facing this kind of crisis would be listening to the customer and trying desperately to make an honest assessment of performance failure.

Journalists, in contrast, insist on insulting their customers as "bible-thumping knuckle-draggers" and "morons".

The research findings from our book lead us to conclude that it is about Connectivity, Culture, Community and Commerce. You can't seperate these anymore, without failing commercially. Any media that only has one way broadcast as its business model is going to find it harder and harder to survive. And if you don't believe me or what we have to say in our book, then go and read the The Economist Special Report of April2 2005. They use the word "survival" if companies fail to engage.

Blogging here to stay

John Naughton writing in The Observer at the weekend

The 'blogosphere' is unimaginably diverse (there are more than 10 million of them out there) and blogs - like books and newspapers - come in every conceivable shape, type and quality. There are thoughtful blogs, silly blogs, truthful blogs, fanatical blogs, ideological blogs, biased blogs, knowledgeable blogs - just as there are thoughtful, silly, fanatical, ideological, biased and knowledgeable books. Not to mention newspapers and magazines: when was the last time you believed anything you read in the Sunday Sport ?

Sounds emminently sensible to me. John Naughton compares the denial that some of his profession are in to music executives in the late 1990's who did not and would not face the fact that the structural business model of the music industry had changed because of on-line file sharing. And I think from personal recent experience that there are quite a few non-believers out there.

Naughton, without a doubt has got his view and assessment right of what blogging brings to the party:

What's happening is a small but significant change in our media ecology. All journalists worth their salt have always known that out there are readers, listeners or viewers who know more about a story than they do. But until recently, there was no effective way for this erudition or scepticism to find public expression. Letters to the editor rarely attract public attention - or impinge on the consciousness of journalists.

Blogging changes all that. Ignorant, biased or lazy journalism is instantly exposed, dissected and flayed in a medium that has global reach. (If you doubt that, ask Dan Rather and CBS.)

Conversely, good reporting and intelligent commentary is passed from blog to blog and spreads like wildfire beyond the jurisdiction in which it was originally published. This can only be good for journalism in the long run, if only because, as my mother used to say, sunlight is the best disinfectant.

Howard Rheingold believes that the mobile phone amplifys peoples talents for co-operation, I think this is also true of the internet and blogging. A vast interconnected community that ebbs and flows around ideas, content and information.

That has already contributed to the financial success of companies that have constructively used blogs to engage, to listen and to share.

Quote du jour - this from Singapore

I've spent the week in Singapore, presented a workshop for the big "WOW! 3G" conference where all 3 Spore mobile operators talked about their recently launched 3G services. Of course I fit in plenty of communities stories amidst the 3G geeky telecoms stuff. I will post more about the event shortly, but I found out that blogging is very big in Spore. Today's (Saturday May 28) Straits Times ran a full page story about blogging and it had this cool quotation which I submit as our quote for the day:

"To apply media laws on bloggers is like firing a howitzer at a swarm of mosquitoes. You will change the configuration for about half a minute, then it will be like you never fired it at all."
         - Assoc Professor Randolph Kluver, Singapore Internet Research Centre

The thought so perfectly fits in with our book Communities Dominate Brands..

PS Alan, great quote in your posting from City in the Pocket by Kopomaa (see next/previous posting). I would add that Timo Kopomaa also introduced the idea that with mobile phones the users develop a more extempore-type of unplanned lifestyle. Decisions are postponed until the last moment and plans changed along the way.

The Birth of the mobile information society

Never read The City in Your Pocket by Timo Kopomaa?

Then you should if you want to understand mobile:

THE FREEDOM PROVIDED by the mobile phone means that people are always available, even when moving, i.e. they are maximizing their contact potential. The more people have a mobile phone, the more complete this reachability becomes. The "need" behind the use of the mobile phones is not just a need for contacts but for autonomous life management, a need to expand the scope of this management both geographically and temporarily. The mobile phone is used to increase the potential in life and to decrease the feeling of possibly missing something.

Trust: the most precious commodity any brand or business has

From the New York Times

Believe It: The Media's Credibility Headache Gets Worse

The Times says

Almost like clockwork, each new month seems to usher in a new controversy over journalistic competence or integrity - the latest being the retracted May 9 article in Newsweek, about a report that American interrogators flushed a Koran down the toilet, that has been linked by the White House to at least 17 deaths during anti-American protests that followed.

These events come at a time when American confidence in the news media is at an all-time low. Most other major institutions in public life - while dealing with their own credibility issues - are more trusted.

FCC Commissioner Jonathan Adelstein quoted in a recent speech at the Media Institute in Washington, DC. Citing the rising tide of product placement, branded entertainment and even video news releases that pose as genuine newscasts, Adelstein concluded

It is a cardinal right of every American to assume that radio and TV programs that appear to be based on authentic editorial judgments of the stations are in fact just that, unless the public is told otherwise. After all, the most fundamental responsibility of broadcast stations is to serve the public interest, and broadcasters are accountable to their communities. We have a right to know that people who present themselves to be independent, unbiased experts and reporters are not shills hired to promote a corporate - or governmental - agenda.

I want my MP3 (4) and I want it NOW

Online Media Daily today posts Study: Gens X, Y Want Music Via Cell Phone

MOBILE PHONE SERVICE PROVIDERS WOULD be wise to offer users the ability to receive video and audio files, according to a study scheduled to be released today by The Management Network Group , a management, marketing, and technology consultancy. The study, based on a March online survey of 13- to-34-year-olds, found that more than 37 percent of mobile phone users are interested in receiving broadband multimedia content. For young men ages 13-24, that rate increases to 40 percent.

In addition, almost one of four respondents age 18 and older said they might switch to another carrier if their current service provider doesn't offer mobile media services.

Interestingly the report concludes

What's more, consumers favor free, ad-supported content over subscription-supported, ad-free content. Roughly two out of five consumers would be interested in receiving ad-supported multimedia, compared to one out of five who would be willing to pay subscription fees for ad-free content.

I am not so sure about the last point, but that may be my own personal preference. Perhaps the world will divide into those that are happy to get it free with advertisments an those that would prefer an ad free world. That's OK when you are reaching the demographic you want. what happens when you can't reach them through interruptive marketing?

Big business putting the squeeze on Newspapers

Shame on BP. And shame on Morgan Stanley and General Motors and any other advertisers involved in assaults on editorial integrity and independence. By wielding their ad budgets as weapons to beat down newsrooms, these companies threaten the bond that media properties have with their audiences, the very thing that gives media their value to advertisers to begin with.

was the opening salvo from AdAge Editorial

It seems strange in a world where communication flows at lightning speed, that brands like Kryptonite can be destroyed by a community pissed off that they were sold a lie rather than a promise, where Verizon where taken to court in a civil class action - that blue chip brands are looking to ascert themselves in such a fashion.

Because the truth always comes and bites you in the arse - eventually.

What does it mean to us as individuals and as communities, if, what we read in the press becomes under even greater scrutiny, because we wonder if on that day BP or whoever else is running a big editorial and advertising campaign consectuively - that there is spin in the journalism due to pressure from the brand.

Adage says

Trust and credibility The primary reasons for advertisers to invest in any media product should be the bond that product has with its audience and the relevance of that audience as a marketing target. Such relationships are often based on trust and credibility. Tools such as ad-pull policies can damage that credibility. They make clear to editors and publishers that if they don't create an editorial environment friendly to a marketer's message, the money will go elsewhere.

I couldn't agree more. Credibility beats authority any day of the week.

Quote to remember

...we’re living in a world where customers will only become more and more independent and self-reliant. And — even more importantly — that they can often supply themselves. What they supply may be facts about your company and your products. Or it may be new products that render optional (though not unappealing, which is the saving grace) the whole commercial supply side, as we see happening with free software and open source development.

- Doc Searl IT Garage, Relating to Customers

Thanks to the Big Blog Company - I am off to read some more Doc Searls

Connectivity, Culture, Community and Commerce. why it's all happening on the web

Peter Preston writing in yesterday's Observer made a comment which chimes perfectly with our book.

He said

There are times, times of profound upheaval, when one change seems to fit with another - then, suddenly, to change everything. This may be just such a time...

Preston fires off some stats about the difficulties that newspapers are suffering, including: the Baltimore Sun down 11.5% year on year, the Los Angeles Times -6.4%, The Chicago Tribune -6.6%, The Washington Post -2.6% and the San Fransisco Chronicle -7%.

And its not only newspapers that are suffering - the FT Monday 23 devotes a half a page to the increasing travails of the UK's ITV as viewer numbers fall and growth is snatched by rivals.

As Emiko Terazono writes in the FT article

Some media buyers and analysts are more concerned about the structural and behavioural changes that wiill affect the company long term. Teenagers are spending less time in front of the television, playing more games on their consuls or on their mobile phones and MP3 players

This is substantiated by the Morgan Stanley report The Age of Engagement which charts the meteoric explosion of digital content on all platforms as the power base of traditional media erodes.

Back to newspapers, the migration Preston says is not to other print rivals, but to the net. Naturally Murdoch gets a look in wiith his recent comments on being a digital immigrant vs. being a digital native

Preston charts the paradigm shift thus

So there's the chain of change, one damned thing after another piling in as the British press settles down to digest the gains and losses of yet another election. There is perceptible movement from print news to digital news. There is a new world of electronic searching and sourcing out there that can't be denied. And if readers head in a fresh direction, advertisers are bound to follow.

One authoritative source - Forrester Research - sees US online advertising rising to $14.7 billion this year, 23 per cent up on 2004. Nearly every ad agency surveyed planned to cut print and direct mail spending to make room for the net. It's a cliff with a jumping platform in place.

However, Preston then goes to use the Guardian as a fine example that has embraced the digital age with great success. And argues that a walled garden approach to historical content is a mistake and some serious headscratching needs to be done to ensure that a digital strategy sits at the very heart of what traditional newspapers do.

Even the BBC is opening up parts of its vast audio-visual archive for private use. Its a great move.

By engaging, allowing two way-flows of information, the Observer will often invite comment on a particular article online in its newsprint edition. It shows a smart, well informed strategy about how to survive in times of change. The guardian Unlimited has a blog too.

And remember Jonathan Schwartz COO of Sun Microsystems said in an interview with Robert Scoble + Shel Israel

The perception of Sun as a faithful and authentic tech company is now very strong. What blogs have done has authenticated the Sun brand more than a billion dollar ad campaign could have done. I care more about the ink you get from developer community than any other coverage. Sun has experienced a sea change in their perception of us and that has come from blogs. Everyone blogging at Sun is verifying that we possess a culture of tenacity and authenticity.

Its one example of many case histories out there that demonstrate growth can be achieved, but one must be prepared to embrace the world of business and marketing in a different way. We describe it as the 4C's - Connectivity, Commerce, Culture and Community. It is about aligning these that gives clues to the future opportunities vs. threats.

One comment is that bloggers do not only get their news from the printed page it can happen the other way around - and this post is a combination of blog sources, online sources and newspapers.

Briefly the 4C's can be described thus, Connectivity provides companies for the very first time the opportunity to generate two-way flows of information, feedback and engagement.

Connectivity, enables us - via the internet and the mobile phone - to identify who are prolific connectors and social networks that could be key distribution points to viral contagion and sharing word of mouth messages. But connectivity alone is not enough, there must be good content (culture) and a population of interest (community). If this can be combined with a genuine business enterprise (Commerce). One is looking at a powerful business and marketing model.

First book review released, is very positive

The Mobile Weblog at has released its review of Communities Dominate Brands. The review by Russell Buckley is very positive starting off with:

It's very hard to summarise a closely-worded 250 page book into a blog post. But if I had to pick the most important conclusion it would be that the days of traditional, advertising-led, interruptive marketing, dominated by big media are over. The ROI from this type of activity is in rapid decline now, with swathes of big business in denial - led by the ad agencies and the big media owners. Pretty soon they'll move on the the anger stage of the grieving process, like we see in the music industry. New marketing is emerging and it's about dialogue, or engagement. Companies need to engage with their customers in an authentic, honest and open manner.

The review is extensive and we recommend you to go and read it if you are considering buying the book. Russell's summarizing comments towards the end of the review are of particularly pleasing to us, as he writes:

I don't think I've ever read a book that has such a contemporary feel to it. Even the case studies feel current and relevant in an environment where even a few months can seem like years.

Thank you Russell for your kind review. Please visit Russell's site for more - his site is also very active in reporting on what is going on with mobile phones and communities.