Month: August 2009

With all our communication channels, face-to-face is still king

BtoBOnline.com reports on a study from Forbes Insights that executives still strongly prefer in-person meetings over web-meetings or other virtual get-togethers.

I couldn’t find the study myself  and no link was provided, so I’m taking everything that BtoB reports on it as my only source and at face value.

According to the the study out of 760 business executives surveyed in June:

  • 84% prefer in-person contact to virtual;
  • 85% said it helps them build stronger relationships;
  • 77% said it provides a greater opportunity to read another person;
  • Still, 58% said they travel less for business now than in January 2008.

All of which strikes me as obvious.

Face-to-face contact will always be the highest form of human interaction, and nothing replaces it.
The question is NEVER whether it would be better to have a face-to-face meeting. The question is always whether the circumstances justify the cost/inconvenience.

At any given time, a video chat or Webex presentation might accomplish the immediate goal, but don’t ever confuse that with being just as good as a personal meeting.

BPA Worldwide freezes rates, remains arrogant and irrelevant

BPA Worldwide, a leader in providing third-party circulation audits, has announced that it’s freezing membership dues and audit rates at their July 2008 levels — good through June 2010.

If you’re in the business, you know that BPA is especially strong among magazines with controlled circulation. If you’re not in the business, you need to know that third-party circulation audits are how publications validate their readership claims to advertisers.

BPA is facing obsolescence at an astonishing rate. If BPA is a dinosaur, then the killer meteor has already hit the Earth and the toxic cloud of extinction is on its way. Holding rates will make as much difference to the organization’s future as putting on a sweater.

Am I being a little harsh here? Perhaps. But set aside the fact that for the previous 20 years of my career BPA was one of the most sluggish, obstinate, arrogant and regressive entities I had to deal with. Set aside the fact that — even though it was owned by its customers — it always, without exception, acted as though its role was to prevent me from innovating in my job. Set aside that I don’t know anyone in publishing (though I’m sure there are a few) who doesn’t take some quiet pleasure at seeing BPA suffer.

What BPA faces aside from all that is the fact that its member magazines must find ways to radically reduce distribution costs. That’s required to offset declines in two key performance indicators: advertising pages sold, and cost-per-thousand (CPM) paid for an average page of advertising.

In other words, advertisers are reaching readers less often, and every reader they reach is worth less to them today than it used to be. The only thing advertisers care about is how many people take a measurable action as a result of seeing an ad.

And what is BPA’s ultimate value to publishers? Proof of readers reached. There is nothing that it does, or wants to do, to measure the responsiveness of those readers.

In my last year running business-to-business magazines, I withdrew two of them from membership in BPA. Not because I was so frustrated with the deplorable service BPA provided; but because my advertisers no longer cared about BPA audits. They told me they wanted to know how my audience would respond to their advertising; if I could provide better response per thousand readers than my competitors, nobody cared to see the expensive and painstakingly designed BPA audit statement. (To be fair, advertisers had been telling me that with increasing urgency for about eight years; it just reached a watershed last year — probably brought on by the recession.)

Since that time, I’ve heard of about two-dozen magazines that have terminated their BPA membership — something that used to be as acceptable in media circles as, say, passing gas in an elevator. Entire divisions of media companies have simply walked away from BPA because the organization’s work has ceased to be of value.

I suppose that freezing rates is a reasonable first response. But I don’t give BPA enough credit to understand how inadequate that step will prove to be as its irrelevance grows like a toxic cloud.

A new perspective on the media meltdown

I’ve spent a lot of time describing why advertising and traditional media are on a downward curve. To be sure, the curve has been exaggerated this year by the recession. But it was exaggerated by the last recession too and there’s no doubt that traditional sponsor-based media models are like the classic rollercoaster: in between the highs and lows, the ongoing trend is down.

seth-godin-blogIn a recent blog post, marketing guru Seth Godin puts his own take on the trend. The issue in his mind is that there is a sudden attention surplus — too many people spending so much time looking for all kinds of information that marketers don’t know what to do about it. He calls these micromarkets and says the old media models couldn’t serve them; social media marketing does — though he doesn’t use that terminology

Godin and I come at this from different ends of the business, and in the end reach the same conclusions.

I’m coming at it from the perspective of the media business, where decisions are based on the requirements of the paying customer — the advertiser.

I’m not claiming the audience is ignored; I don’t believe that for a second. But the changes that we’re seeing in old-line businesses — magazines rushing to digital-only editions, newspapers trying to figure out how to charge for online content, etc. — are not at all driven by the opinions of audience. They’re driven by the spending desires of advertisers.

Godin’s perspective is consumer based: He’s observing what the audience wants — and notes the challenge for marketers who are on their way toward getting it.

His explanation strikes me as novel, true, and worth sharing: http://sethgodin.typepad.com/seths_blog/2009/08/the-massive-attention-surplus.html.

Facebook’s future: It’s in your shorts

Just yesterday, a friend (that’s a lower-case, analog friend) told me how much he hates Facebook. He can’t believe how much time people spend there, he wishes he had never registered for it, and he resents the amount of attention it tries to demand from him.

With that said, he asked if I thought it would eventually fade away.

Social media is here to stay, I responded. While Facebook and Twitter may not always be the dominant portals, the notion of social networking that they represent will continue to evolve and embed itself into our communication – just as web browsing and e-mail have done.

Then this article, on Facebook’s acquisition of Friendfeed, crossed my desktop and my opinion evolved.

The most insidious aspect of Facebook is how it brings in new members. First, as I explained to my flesh-and-blood friend, every time someone sets up a new Facebook page, they get the opportunity to scour their own address book for potential Friends (digital, capital-F friends). And because Friends are the currency of Facebook — the more you have, the “wealthier” you are — most people accept this initial chance to let the social networking site into their personal data.

So Facebook searches your computer address book for people who are already registered with the site. I don’t know if it just looks for e-mail addresses or follows a more complex algorithm, but within seconds, it will identify every Facebook member you know and offer — with a single click — to ask them to Friend you. (It’s notable that Facebook has already created a legitimate verb in the word “friend”.)

Then Facebook makes a more extraordinary offer: It identifies everyone in your personal address book who isn’t registered at the site and offers — again, with one click — to let them know how much you’d like them to join Facebook with the purpose of becoming your online Friend.

Insidious and ingenious. For the new user, this is simply a shortcut to Facebook-style wealth — lots of Friends. For Facebook, this is the shortest route to ubiquity — which it could be argued has already been achieved.

So now, Facebook has acquired Friendfeed, which “enables you to discover and discuss the interesting stuff your friends find on the web.” This isn’t unique; Digg.com is better known and does essentially the same thing.

But here’s the key: Friendfeed lets you “Read and share however you want — from your email, your phone or even from Facebook. Publish your FriendFeed to your website or blog, or to services you already use, like Twitter.”

This isn’t unique to Friendfeed either. I’ve seen lists of social media sites that have 350 to 400+ sites listed, with new ones being entered daily. Try Googling “list of social media sites”. Most of them make it easy to publish on your blog, Facebook, Twitter and other leading sites.

What’s the point? Facebook is paying $50 million to buy a social media site that, as its primary function, collects more people — not just from the Web, but also from their phones.

This won’t surprise anyone who thinks strategically about social networking. But for anyone who wonders whether Facebook is going to fade away: It’s less likely every day.

Resistance is futile: You WILL buy an e-reader

Amazon’s got the Kindle, now in generation 2.5. Sony just announced that it’s reducing the price of its base-level e-reader to $199 — $100 less than the Kindle — though you can’t download books via wi-fi like you can with Amazon’s unit.

You can also buy e-readers from Panasonic and Samsung, with another coming soon from a startup called Plastic Logic. Microsoft had been rumored to be moving toward the e-reader market, and everyone seems to be waiting for what Apple might come up with.

The Kindle is built around a proprietary platform, as I assume Apple’s would be.

Early this year, Barnes & Noble bought Fictionwise — an e-book vendor — to compete directly with Amazon. (Here’s one article announcing the purchase.)

Do you get the sense that you’re going to be hearing a lot about e-books in the months and years ahead?

At various times, it was unimaginable that we’d all have our own computers and cell phones. So if you’re insisting right now that the book can’t be improved upon and there’s no reason for an e-book reader to enter your life, it’s just a matter of time before you change your mind.

The price will have to come down; a war will have to be fought and won over platforms and standards, and at some point, some respected company will have to take a leap and make its products available only in e-book format. None of this will take as long as it is for BlueRay to replace DVDs.

Nintendo actually put an e-reader on the market in 2004 — as did Sony and a few others. They flopped; perhaps because the technology wasn’t advanced enough yet, but more likely because the content providers didn’t have enough economic reason to support it. At the time, an e-reader was just another gadget.

That’s changed.

From magazine companies to newspapers to book publishers, nobody’s business model can continue to absorb the high cost of printing and distributing paper. So your resistance is futile; there is just too much corporate desire now to replace paper with something digital.

At some point, there will be a first New York Times bestseller that never actually came out in a printed edition. I’m putting my money on it happening by 2013.

According to the chart below from Forrester Research, more than 4 out of 5 people are familiar with the concept of an e-reader — compared to less than 2 out of 3 last year.  And while ownership of e-readers has more than doubled in the past year, market penetration is still less than 2 percent.

So do the math: Hardware providers are climbing over each other to break into this market; content providers are eager to support them; consumers have very quickly become aware and curious.

It sounds like an obvious post-recession boom to me.

 

A new tipping point in favor of paid content

PaidContent.com reports that the annual media study by media investment banker VSS (Veronis Suhler Stevenson) showed a tipping occurred in 2008: It was the first time people spent more time with media they paid for — such as books and cable TV — than they did with media that is primarily ad-supported. That report raises a few points:

1. Cable TV is not predominantly ad supported? I must be watching the wrong cable stations.

2. It should come as good news to all the ad-supported media that are feverishly looking for ways to monetize their audience. It means people are willing to pay for content if there is enough value in it, and if they are trained over a long-enough period of time that the stuff just won’t come free.

3. By the time that happens, nobody knows how many traditional media will fail — their markets taken over by an upstart that “gets it.” My short answer: plenty.

4. Even those that are succeeding and profiting from paid content will have some struggles. Competition for the audience dollar is only starting to heat up, and over the next few years will become intense and insane. If you, as a consumer, are paying the full cost of content for books, movies, music, etc. and all of sudden you start hearing from newspapers and magazines that you need to pay more for their content too, and what point do you start making hard decisions about which content you really want and need? It’s not safe to assume that everything you’re paying full-ride for right now is necessarily going to be the winner in that evaluation.

The new phone books have arrived and been duly discarded

Two large, orange bags just appeared on my front porch the other day. Each contained several pounds of phone books. There was the Yellow Pages, the White Pages, the Business-to-Business Yellow Pages and the Yellow Pages Supplement. Two complete sets of them.

Without taking them out of the bag, I put them on the curb for recycling.

“Hello, AT&T? It’s Alexander Graham Bell calling and he wants his business model back.”

Seriously, this is just one of at least three sets of phone directories I’ll receive this year. Two other companies produce similar volumes of phone books and surreptitiously drop them at my front door at various times during the year.

It’s been about five years since I’ve even opened a phone book.

In every industry I know, printed directories are disappearing faster than money from the cash-for-clunkers program. For the companies that produce them, printed phone books are like crack; they’re addicted to the revenue, but it’s not doing anyone any good. The effort to keep phone books alive is distracting their publishers from the need to find a more useful business. And you don’t have to be a tree-hugger to cringe at the tremendous waste in resources these unwanted products represent.

OK, I confess that having a residential phone book is a small comfort (though I still don’t remember the last time I used one). But if you’re running a business I wouldn’t spend much on Yellow Pages advertising. No matter how small or local the business might be, your resources would be better spent building an affordable little website and making sure it’s listed on every free online directory you can find.