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The New Yorker

Media is post-Web, becomes a part of the Stream

by drm on December 1, 2009

Content has to find its way to us, not rely on us to find our way to it. That’s the new way of the world.

It’s no secret that news isn’t dying. Traditional news business models are. As I’ve pointed out before, this matters for two reasons: first, a lot of people care about the independence and integrity of news and information; and second, even more people make their living by producing content. They don’t really care about the big-picture business model stuff: they care about making a living, having a career and doing work that they can feel good about.

In the debate about “information wants to be free,” the emotional crux isn’t whether traditional institutions will continue to survive the revolution of information proliferation. It is whether people who love to create the information that gets consumed will be able to get paid.

Steve Shuler at Compete turned to the analytics to get derive some insight into what the changing pattern of information consumption looks like.

I know that I’m exposed to more information because of social news services. For example, as political debates rage in Washington this fall, I’m often learning about events from my Facebook News Feed. I have a very liberal friend and a very conservative friend that post articles, with dueling points of view, from sources like Forbes or the New Yorker that I never visit on my own.

As people like me migrate to online news sources, what are the trends worth noting? Compete.com has a set of news categories that can help us examine this question.

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So, are newspapers really dying? No doubt media companies must address social factors, like American’s busier lifestyles, and improve their business plans, but the audience for news is not evaporating; we are simply finding other methods to get the same information. The stories are even written by traditional sources, but the delivery methods suit our changing needs bette

The shift is in the way information is moving around, with individuals sharing and commenting in a real-time soup. Does this ultimately benefit an information hegemony or cripple it?

Jeff Jarvis took a break from his Google ruminations to write a very good summary of how “the web site” is a anachronistic concept, and that true media distribution will be a constant stream referencing an archival foundation.

(As an aside, this post is a reminder of how solid and perceptive a thinker Jarvis is.)

If a page (and a site) become anything, it will be a repository, an archive, a collecting pool in which to gather permalinks and Googlejuice: an article plus links plus streams of comments and updates and tweets and collaboration via tools like Wave. Content will insinuate itself into streams and streams will insinuate themselves back into content. The great Mandala…

..So imagine this future without pages and sites, this future that’s all built on process over product. If you’re what used to be a content-creation – if you’re Stephen Fry, post-media – you’re all about insinuating yourself into that stream. If you’re about content curation – formerly known as editing – then you’re all about prioritizing streams for people; that’s how you add value now.

This is a future that we can embrace: a media universe that rewards focus, engagement and expertise. Content flows from multiple sources, through human and machine filters that sift and prioritize in terms of relevance, quality and timeliness. The filtering process enriches the content, creating annotations and enhancements by virtue of the intelligence and perspective of each gating event. Brands can be anchoring elements in this ecosphere, aggregating the financial wherewithal to reward the content creators and curators.

There will be one of three payments made: a payment by a marketer to incorporate their selling message into the media stream; a payment by a consumer to consume parts of the media stream; or a payment by a consumer for applications that facilitate the delivery or organization of the media stream.

As in the old media world, the economic future of the stream will rely on support and investment of marketers.

Just as we’re beginning to conceive of content creators, curators and consumers in the media stream, we’ll need to envision the opportunities for marketers to participate in a way that drives their financial returns.

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The historical record shows advertising during a recession pays off, but that the uncertainty keeps most companies from taking the risk

by drm on April 25, 2009

You hear the truism that it’s important to keep advertising even when business is poor and market conditions are bad, but the instinct for self-preservation and the fear of the unknown often compels companies to cut their marketing spend deeply when times are tough.

picture-57There’s a human reason for this. Marketing and advertising are a variable expense. It’s easy to pull an insertion order. Your people and your infrastructure are fixed expenses. It’s painful to tell someone you don’t have a job for them any more, or to let go of resources that you’ve built up painstakingly over the years.

In the April 20 edition of the New Yorker, financial writer James Surowiecki takes a look at the impact of maintaining your advertising investment during a downturn. The conclusion: advertising isn’t a variable cost. It’s the investment that allows you to provide jobs for people and maintain your infrastructure.

Surowiecki cites the growth of Kellog’s packaged cereals during the Great Depression.

But Kellogg doubled its ad budget, moved aggressively into radio advertising, and heavily pushed its new cereal, Rice Krispies. (Snap, Crackle, and Pop first appeared in the thirties.) By 1933, even as the economy cratered, Kellogg’s profits had risen almost thirty per cent and it had become what it remains today: the industry’s dominant player.

Several studies show the impact of continuing to invest in advertising and marketing during economic downturns. One study shows of the 1981-82 recession ” found that sales at firms that increased advertising or held steady grew precipitously in the next three years, compared with only slight increases at firms that had slashed their budgets.”

Why does this happen?  During a recession there is a scarcity of advertising relative to the abundance during an economic boom.  Fewer advertisers mean that the ones who keep doing business will stand out to  consumers.  Consumers continue to consume, although at a lower rate; they continue to respond to advertising, although at a lower rate.  The company that keeps their message out in front of the consumer, even at the cost of reduced short-term profits, is going to do more business than the company that doesn’t.

Why would companies cut their budgets then, if the reward for maintaining them is so clear cut? It’s the difference between taking an informed risk and doing something uncertain. During a recession, uncertainty dominates the market. You don’t know how consumers are going to respond, you don’t know whether things will go back to the way they were before. Cutting advertising is an easy way to cut expenses. It improves your short-term return. But, it compromises your ability to grow long-term.

Surowiecki frames the parameters of the gamble.

The record is also full of forgotten companies that gambled and failed. The academics Peter Dickson and Joseph Giglierano have argued that companies have to worry about two kinds of failure: “sinking the boat” (wrecking the company by making a bad bet) or “missing the boat” (letting a great opportunity pass). Today, most companies are far more worried about sinking the boat than about missing it. That’s why the opportunity to do what Kellogg did exists. That’s also why it’s so nerve-racking to try it.

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More on the fallibility of experts

March 26, 2009

More on the fallibility of experts.

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