Communities Dominate Brands

Punctuated Equilibrium for the Johnston Press

Its sad when you see entire industries under threat - its sad when those industries also have only themselves to blame. Sometimes however they just cant see it coming - Blindsided As Stephen Jay Gould wrote

Structural or mental inferiority did not drive the dinosaurs to extinction. They were doing well, and showing no sign of ceding domination, right until the extraterrestrial debacle unleashed a set of sudden consequences (as yet to be adequately specified, although the 'nuclear winter' scenario of a cold dark world has beem proposed for the same reasons). Some mammals weathered the storm; no dinosaurs did.

I refer to the regional press and the Johnston Press

Johnston Press, the regional newspaper group whose titles include The Scotsman and the Yorkshire Post, resorted to a £212.3m emergency fund raising yesterday that will see the group's founding family lose its place as the largest shareholder for the first time.

and

Under pressure from digital competitors and the slowing economy, the group's £692m debt was proving unsustainable against underlying earnings projections for the year of just £185m

The problem in my humble view is that the Johnston Press failed to innovate at the time it really needed to do so in preparation for the challenges it faces today. Now that may be inevitable - but if you look at the Guardian it has grasped the digital challenge and really investigated the opportunities of social media, digital technology and global audiences.

Perhaps I am wrong. But as we all know - digital is not analogue - display advertising is furniture of the analogue era - we have the opportunity to recreate something very different more valuable and different as a currency to the end user : more valuable information.

Now I also know that we have a very backwards view of how to count media, which is currently undergoing review

Life is local say the Johnston Press and my consulting company SMLXL has been thinking about this space for some time yet that means taking that sentiment seriously. But JP is not taking this seriously.

Yesterday I mused on some of the discussions we had about TV at the conference in Monaco these were :

What is the new business model for TV advertising?

1). Brands have to be everywhere
2). Cross platform assets
3). Brands need to become part of the daily fabric of people’s lives
4). All content should be inspired by brands wishing to meaningfully engage with their audience

Frankly however I could see this working for local news platforms.

Nick Davies in his book Flat Earth News excoriates the owners of newspapers (describing them as Grocers)because their interest is not about being local, its not about community, its not about quality journalism is about one thing and one thing only - MONEY - PROFIT AND SHAREHOLDER RETURN.

And thats all well and good until the quality of the product is so inferior it devalues itself.

This is life in a news factory says Davies whilst writing about one journalists experience of working for a local news paper.

These are corporations that think greatly about commerce and casually about journalism

This is the heart of modern journalism, the rapid repackaging of largely unchecked second-hand material, much of it designed to service the political or commercial interests of those that provide it

In a major piece of research with Cardiff University on journalism and commerce

Professor Franklin found that hundreds of them (local papers) were simply killed off, their town-centre offices often sold for profit. In the ten years after Wapping, according to the Newspaper Society, 403 local titles were closed - 24% of the 1,687 which had been supplying news to their areas and to the nationals. Those tha survived saw their staffing cut to the bone with just over half of the 8,000 journalists working in the provinces losing their jobs between 1986 and 2000; some local newsrooms were replaced by regional hubs, cut off from their communities ; and senior reporters were replaced with low-paid trainees. With rare exceptions, these papers were reduced to mere churnalism of the kind described in the young reporters diary

And

In 2004 Johnston press which had been among the most destructive of the new owners, declared a profit of £177 million, a profit margin of 35%

In the story about Johnston Press what I think is so sad is an inability to be prepared to move from the world of Gutenberg to the world of Google.

What I do know is that JP is selling digital advertising in the same way one sells analogue dispaly advertising. To do so is to be doomed. Today I went and had a look at the advertising inventory of a vertical community site. These are smart people having worked out an entirely different inventory = value for advertisers.

Are the Digital Vikings coming?
ITV Local could in fact cannibalise the entire regional display advertising market. The Future of news is: Grassroots, Mobile, Immediate, Visual, Participatory, Trusted. On top of that it creates an entirely new inventory and services for advertisers, and also gives new value to the JP's readers. Delivered via the internet and mobile.

ITV local has the potential - it could create a richer user experience it - could be more participatory (People embrace what they create) and as a consequence they could truly embrace the concept of "life is local."

We break down the division between community and commerce in a way that is relevant to both parties. This builds commerce and this builds community. It is not rocket science, but it is about looking at the world in a different way.

Markets form around 3 things
1). Commerce
2). Knowledge & information exchange
3). Entertainment

This is the glue of community and social cohesion and ITV local could really leverage this opportunity.

Engagement Marketing with Northwest Airlines in Japan

The book Mobile Advertising by Charma, Herzog & Melfi has tons of good stuff in it. I won't be covering all of it obviously, you have to go read the book. But its always a delight when some of our friends and colleagues find good examples of social networking, user-generated content, interactive media, engagement advertising and other topics dear to our hearts. So we want to celebrate those.

A great example of engagement marketing was in the book. A campaign by Northwest Airlines. At first glace, it seems like a big and splashy billboard campaign on the streets of Tokyo. Giant size 2D Barcodes (ie QR or Quick Response codes) were on billboards inviting passers-by to use their cameraphones to join the game. These were huge billboards, 10 meters high (33 feet). But the beauty was that you could stand on the opposite side of the street, take out your cameraphone, zoom into the 2D Barcode and it would still be recognized by the cameraphone and get you to their website.



Clever bit of gimmickry. Yes we love 2D Barcodes (I want them everywhere, ha-ha), but 83% of the Japanese mobile phone owners already use them a little over 3 years after launch (according to Video Research 2007), so again, this 2D Barcode part is not really the smart part. Now lets see what kind of interactivity we get.

Once you click through the 2D Barcode you end up on Northwest Airlines's campaign page. There you find a quiz written in the style of a Japanese senryu poem. Each quiz features a city that NWA flies to. And the prizes ranged from e-coupons for discounts on air tickets to bonus miles on the WorldPerks programme. The quiz was interactive through the phone so you could participate immediately, using the mobile phone to make a billboard ad interactive. I also like the fact that you can give smaller prizes, not actual trips, in the form of frequent flier miles. Imagine how many of those average travel-interested Japanese customers have never flown NWA (there are two major international Japanese national airlines, Japan Airlines JAL and All Nippon Airlines ANA), so now if you gain some initial miles on NWA, there is stronger incentive next time you travel, to pick NWA on a given route, just because you already had earned some miles on the airline. Pretty clever. And of course participating in the game more, more quizzes taken, more prizes earned..  This is all nice advergaming stuff, very good so far.

Next is the part that I really like, the engagement marketing. Yes, the quiz is specific to the industry of Northwest Airlines and thus easily of interest to its prospective customers - international travel destinations. And as a quiz we get the consumers to become involved with NWA. But of course the right answers can only those cities that are on the NWA routes. That also means that when taking the quiz, the consumers can use the NWA route map to help them guess which city is the right answer. So the consumers had reasons to go to the NWA mobile internet website on their phone, to help figure out which city was in question. And as such, while surfing the NWA mobile web pages on their phone, while waiting for a bus or sitting in a taxicab in Tokyo, they would become involved with learning about the various destinations that NWA flies to.

And there is still more. It was user-generated content too! Finally the game invited participants to submit their own senryu poems about travel to the USA on NWA. These were voted on by other participants and the best poems won further prizes. This again drove more traffic to the NWA site.

A brilliant example of not only interactive advertising using the mobile phone, and advergaming, but also true engagement marketing and user-generated content. Great job NWA. And thanks guys for including it in your book, a great example from Japan of things to come once the advertising industry starts to learn about mobile as the 7th Mass Media channel and they build campaigns using the strengths of mobile.

The future of TV - Monaco

I have meet some interesting people in Monaco.

Thoughts : panel-based audience measurement - and counting for the digital age is madness...

Steam age technology in the digital age

People are still hung up on the furniture (formats) of commercial messaging...

We need new metrics!!!!!!!!!

No-one makes money from broadcast to mobile content.

The future is :

Cross-platform assets and multiple revenue streams - something SMLXL said in 2003

Transform operations to embrace the plethora of new digital content and distribution opportunities.

Delivering integrated, cross-platform advertising programmes tied to their advertising assets

Metrics & Kpi’s
1). Social Marketing Intelligence
2). Recount the audience - Cost Per Relevant Audience
3). Measure degree of engagement
4). Accurate reporting on campaign effectiveness
5). Targeted communications that are Timely - Relevant and Contextual
6). Viral effects of networked campaigns
7). Measure "currency" within target groups
8). Advertising is the content and the content is the advertising

What is the new business model for TV advertising?

1). Brands have to be everywhere
2). Cross platform assets
3). Brands need to become part of the daily fabric of people’s lives
4). All content should be inspired by brands wishing to meaningfully engage with their audience

When your past comes back to haunt you.. Tom Hume blogs about second subscriptions

Tom Hume of Future Platforms is another of our friends and has been a long term fellow traveller on this path to the future of technology, telecoms, mobile and communities. Tom wrote a blog a few days ago about second subscriptions, and had a funny line in it:

About 5 years ago I saw a talk from Tomi Ahonen where he discussed multiple SIM ownership in Finland and mentioned the number of devices he carried with him personally. "Yeah yeah" I thought, filing him mentally under "crazy Finn" and getting back to business. But he was, of course, completely right and it's happened, hasn't it?

Tom then goes on to explain how he already has now joined this group and carries around him several SIM cards in his phone, the wireless modem to his laptop, etc.

First, thanks Tom, I really do appreciate it, that you blogged about it so honestly, that yes, once you thought an idea of mine was typical "Silly Tomi" kind of thinking, and that now you've noticed it has come true.

I wish all my forecasts would have turned out that way (like anyone making predictions, I've got my fair share of them massively wrong, such as recently the one about MMS picture messaging for example, I often am asked to explain what went wrong with that forecast, ha-ha).

But on the really big picture things - that mobile phone subscriptions would exceed human populations (in over 50 countries already); that SMS text messaging is addictive; that yes, we will carry multiple subscriptions (and often multiple phones), I'm quite happy with my record, more right than wrong, and for any forecaster, that is about the best you can hope for. And thank you Tom for putting it so nicely, that even the "Crazy Finn" thinking might turn out right in the end, ha-ha..

I took a quick look through my second book, M-Profits (as it was one I wrote by myself, I'd have nobody to share the blame with for any wrong forecasts) and thought I should really make a review of the major predictions and forecasts, and report on how the forecast turned out. This could be a fun - and perhaps also painful (ha-ha) blog.. ..Stay tuned.

3rd Annual Future TV show 2008

I am off to speak at the above event - if anyone reads our blog and is in Monaco too - please come and say hello and we can have a conversation.

I was asked to speak at this event after helping to arrange a summit of Nordic commercial broadcasters looking into the future of audio-visual content.

My task to answer the question - What is the new business model for advertising in TV? The answer - How long have you got!

Great new book: Mobile Advertising by Sharma, Herzog and Melfi

I've just finished reading a brand new book by our friend Chetan Sharma, co-authored with Joe Herzog and Victor Melfi. Its entitled Mobile Advertising: Supercharge your brand in the exploding wireless market. (and I'd stay away from those explosive wireless devices, they can be pretty nasty, eh, ha-ha). Seriously, this is a great 404 page hardcover book just published by John Wiley & Sons.

Regular readers of ours will recognize Chetan Sharma's name from his excellent analysis of the American mobile telecoms market and other stats and analysis of the mobile telecoms industry. Several of our friends have also been involved in helping with the research for the book, including Russell Buckley of Admob, Peter Miles of SubTV and Tony Fish of AMF Ventures. In fact the acknowledgements section of the book is almost a list of the who's who of this space, ha-ha.. And yes, Alan and I are quoted several times in the book as well.

So the authors have been on very solid ground in preparing the book. What I really liked about it, was that it was both very up-to-date (they include Blyk for example in the book) as wide-reaching. They discuss very expertly the markets as diverse as those in Finland and Sweden, to China and India, to the USA, to the UK, as well as those in Japan and South Korea. I personally like to think that I know this area of mobile advertising and marketing very well, yet this book kept on adding to my knowledge and giving plenty for me to think about. Naturally I won't agree with quite all of it, but very seriously, these guys know what they're writing about, and they do a terriffic job at describing the full range of issues that are involved. Not sugar-coating it, but honestly, from the good to the bad, and putting the mobile media into context by comparing it to the older six mass media and showing how mobile is now a new media with abilities that are unique to it.

The book also has a good collection of case studies (16 cases including Admob, Enpocket, NTT DoCoMo and Vodafone), and also a good representative set of expert commentaries in their own words, from several industry leaders (13, including Nokia, Yahoo, Microsoft, MTV, Disney and Ogilvy).

I was very impressed with the level of realism in the book, both in terms of the "positive realism" of what is already commercially available for example in Japan and South Korea, but also in the "negative realism" of how incredibly complex the mobile advertising proposition is still today, just about everywhere. Here is a short excerpt of the book and how the authors describe it (from pages 155-156):

"(A mobile campaign) ...quickly gets complicated. Mobile ad reach is either reated or crippled in the ensuing steps of campaign management. Targeting the details of handset models or user interface (UI)types, UI modalities, and user profile selections is hard, but getting campaigns targeted to the next level of application, channel or silo can be difficult. Text messaging targeting is easy and serves as the lowest common denominator. Multimedia messaging (MMS) and Wireless Application Protocol (WAP) are not that easy. Idle screen adn applications, such as Global Positioning System (GPS) navigation or games, are orders of magnitude harder and their reach in campaigns is limited. Although some advertising and content standardization is in place, much more is needed. The complexities of these silos are simply too visible for advertisers. As a result, campaign complexity is too difficult to quickly scale, and reacing across innumerable silos is too hard and time consuming." 

And so forth.. The book is both very practical and realistic. I can warmly recommend Mobile Advertising to anyone who is interested in mobile advertising and would want to learn more about it.

The advertising arms race in social networks

The Stampede For Social Network Dollars Intensifies writes Diane Mermigas

The race to monetize and leverage the power of social networks is turning into a stampede, as evidenced by Microsoft’s recently renewed efforts to acquire Facebook in the wake of its failed bid for Yahoo.Many of the biggest and most intriguing niche social networks are in play as a result of the Microsoft-Yahoo merger battle, which is fundamentally about potentially lucrative but unrealized advertising and e-commerce gains. Both companies have limited exposure to social networking–the most prominent being Microsoft’s 1.6% stake in Facebook, for which it paid $240 million.

And

The mighty Google has brought a new sense of urgency to the social-network mining game by leveraging the iGoogle home page into a convenient aggregation of user-selected links to social sites and friends’ personal pages.

Think about this 25% of all media will be created by us in 2012. So will we have consumer created advertising too?

Consumer-created advertising will have all the appeal of anything crafted by the agencies, and will be ‘co-opted’ by the brands themselves.

Mermigas has a point of view on this

The lessons learned about how to make online social networks more constructive and profitable will have far-reaching ramifications for all digital media’s community-driven business–from the players of “Grand Auto Theft IV” to the kids and families of Walt Disney to the Dow Jones business constituency. Eventually, the economics of most Web sites will be secured by social networking and community elements. If the business minds don’t crack the monetization codes, chances are that tech-empowered consumers will.

Ning, a do-it-yourself social network company already valued at $500 million, has aided the development of more than 100,000 social network sites. That’s the beauty of the digital interactive age: The answers lie within

So what does that mean for traditional media? and this debate hardly touches mobile yet and we did ask whether traditional TV advertising was moving the deck chairs on the Titanic and we did post about the data flow wars because when we leave digital footprints in the digital age, we can recount the audience, we can develop universal profiles and certain companies will transform advertising effectiveness by harnessing a refining digital shadows and that data flows that will reach 988 billion gb's by 2010 from 161 gb's in 2006. Social networks play a key role in this development and this is a battle between the experts and the amateurs?

Americans waking up to mobile data: already average 2 SMS sent per day

I picked this up from a posting at the Silicon Investor discussion board by "Slacker 711" (sorry, Slacker, I would have wanted to post a comment for you there as well, but as the site requires registration, was just too much a hassle for a one-time comment; I enjoyed your discussion there).

Anyway, onto the latest US numbers on SMS. Slacker 711 points out that a new Gartner study says Americans are picking up the SMS text messaging habit. This is good news (and it was about time, I've ranted and raved about SMS to North American audiences since 2000 ha-ha, so now I can finally say "I told you so" ha-ha).

The Garner study is summarized at considerable degree at their website. It reports that for 2007, Gartner estimates 189 billion mobile messages sent by US mobile phone subscribers. Gartner says this includes mobile email (ie Blackberry etc) and mobile IM Instant Messaging, but according to Gartner "but it's very small compared with the uptake of SMS"  So we can safely assume the vast majority of the 189 B messages are SMS text messages in America. This is a healthy level, it averages to about 2 SMS per subsriber per day. That is what Britain did in 2005 and Ireland for example was at 3 SMS per day already in 2004, so the US still lags Europeans, but they are starting to catch up. This is good.

Gartner attributes the rapid adoption of SMS by Americans to the big free buckets of SMS. Obviously still today, that is only arriving to about the world average of 2 SMS per day (Informa said 2.6 SMS per day; this Garner study said 2.1), and the UK today is at 6 SMS per day, Singapore at 12, Philippines at 15 SMS sent per subscriber per day.

But this is very good news for the mobile industry in America. Now Americans are starting to fall in love with SMS. They will learn like the more advanced markets, that SMS is a more appealing service than voice calls, and eventually will come to the same conclusion (as for example the Irish and British did already a year or two ago) that the primary service on a cellphone is no longer voice, it is SMS texting.

The Americans are still years behind the leading countries of the mobile world in the 20 areas, as I explained last week in my extensive review of this topic on the Motorola CEO search blog and its related comparison of US mobile/wireless telecoms market to the rest of the world. But on this one aspect - SMS usage - definitely this is good news. Now Americans can start to discover Reachability, and become addicted to the cellphone, and then - it becomes possible to offer them far more advanced services as wel. A good trend. Thank you Slacker 711 for mentioning the Gartner study.

PS - Slacker 711 - the one comment I would have liked to add to your posting, was that Americans actually have the highest monthly fees for their mobile phone services (and that buys them the worst phones on the worst networks in the world). Only the Japanese pay similar rates and have magnificent phones and perfect networks in exchange. The average US consumer pays 50 dollars per month. The average European pays barely half that on far superior networks. So your thought that American cellphone prices are somehow cheap - sorry, think again. Here in Hong Kong for example we get local cellphone rates from any network to any network at one quarter of one US cent per minute (ie 0.0025 dollars, 0.25 cents, four minutes for one US cent). In Finland you can get a monthly contract for a dollar a month. And so forth..  That idea that Americans have lowest cost mobile telecoms is a total myth, it is only "true" on one measure, totally fake accounting. Look at the monthly spend, America is consistently most expensive.. Sorry about that. It only serves to support my main theme, that American wireless telecoms needs to evolve still much more..

How to buy your competitor in the Connected Age: Case Sprint vs T-Mobile

Well, this is an interesting development in the new Connected Age. How to buy your rival who is twice your size? Wait for them to stumble in understanding digital communities, then when their stock price tumbles to half what it was, buy them.. Like we say here with Alan, you gotta understand digital communities to survive. That is what we wrote in the book, and it might well be that the biggest case study of the new era is being created right now, in that very style.

This is now a possibility in America, with T-Mobile (the fourth and clearly smallest of the big 4 remaining nation-wide US mobile operators) and its 29 million subscribers, now looking hungrily at Sprint Nextel which is almost twice its size at 54 million subscribers and the third largest mobile operator in the USA. Combining the two would create America's biggest operator - and judging by the general satisfaction level and above-industry-average growth rates of T-Mobile, vs Sprint Nextel's disasterous year the past 12 months (following their idiotic "Sprint 1,000" marketing fiasco that resulted in the CEO, Chief Marketing Officer and Chief Financial Officer being fired) - you could bet your farm that the new company would be named simply T-Mobile.. Oh, the Sprint Nextel stock price is well under half from its peak, that is why this is suddenly financially feasible. And T-Mobile's parent, Deutsche Telecom is a wealthy German operator, with lots of Euros in its cash reserves, which buy lots of dollars these days..

And then there is the issue of GSM vs CDMA. T-Mobile network is on the GSM standard. Sprint before the Nextel merger was on CDMA and Nextel was on iDEN - all three are incompatible. Sprint Nextel has been migrating customers to CDMA. But the global standard is now GSM, and CDMA is the losing proposition on the technology front, with more than a dozen mobile operators/carriers around the world migrating customers from CDMA to the GSM (and/or WCDMA/UMTS and/or HSDPA) evolution path. This is also being seriously considered at Verizon - in fact they have pondered it for years already, and many suggest it will happen (migration from CDMA to the GSM evolution path at Verizon). AT&T with its iPhone is already on the GSM standard. So what do you think T-Mobile would do?

This would be a quick way to become the biggest carrier/operator in America. T-Mobile would inherit a deeply unsatisfied customer base, but if they played their cards right - this is such a wounded animal, that almost any changes by T-Mobile would be seen as improvements. Lets see how this pans out. I would not be surprised..

Why is managing contacts and friends such a pain, or is it just me

I'm doing a day of catch-up work on email, blogs and also Linked In, Facebook and of course Forum Oxford.

And those darn invitations at Linked In (and even worse, Facebook) are such a PAIN to manage. (I don't mean that you should not connect with me, I do believe in, and want to support these virtual contacts, BUT) I don't want to accept every random connection-hog invitation by someone with 500+ links on Linked In, who sends me a standard invitation and clearly isn't even working in my industry. (Oh, anyone who links in with me and says they read the blog, is an automatic acceptance - of course, ha-ah)

But equally, there are the random contacts from someone who attended one of my workshops, who perhaps does not speak English very well, and is very shy about contacting me, and has perhaps 15 links and kind of is a newcomer to Linked In. Every time I have to click on the invitation, read the invite, then click on the person's page to see who they are and what their company does (and how many links they have, I am very skeptical of all contacts who have 500 or more links)... Oh, and Facebook is even worse. Once I leave the contact invitations page - there is no link back to it (that I've found). So its a hideous hassle to do serious consideration of Facebook link contacts.

Is this just me or is this way too much of a hassle to handle new invitations properly. Maybe I'm getting too old for this industry ha-ha..