Sips from the Firehose
A blog that seeks to filter the internet into a refreshing, easily-gulped beverage


Apr 08

What is “native advertising” anyway?

Posted: under advertising, Digital Migration.
Tags: , , , , , , , , , ,

The IAB has published their view. I have my own opinion.

One of the biggest problems with “native advertising” is that it is such a new, made-up term of digital art, that it’s taken on an Alice in Wonderland-esque quality, in which the phrase means whatever the speaker thinks it means in that moment, while the listener pretty much has their own interpretation.

 “When I use a word,” Humpty Dumpty said in rather a scornful tone, “it means just what I choose it to mean — neither more nor less.”

Read More

Comments (0)



Jan 19

Predictions for 2015: Ad v. Subscription Journalism Fight Gets Deadly

Posted: under Uncategorized.
Tags: , , , , , , , ,

As the “New” wears off of “New Media,” investors start to expect results

Years ago, I did the first big case study for the NAA, back when newspaper revenues were in free fall, and publishers were desperately flailing around for a revenue stream – any revenue stream – that might provide a lifeline with their news organizations. At the time, paywalls were still a very dirty word with the digerati, as they seemed to reflect the very worst of Old Media Thinking.

Annenberg Media Center converged newsroom

Is the modern newsroom going to turn into something of an ad production studio? Or will there be some other way for it to survive?

Information wants to be free after all, and back then, there were some very prominent failures with trying to get people to pay for content. El Pais, which had been the market leading national newspaper of Spain, put up a paywall in the early 2000s, and then three years later, took it down after it had basically destroyed their standing in the marketplace. El Pais spent millions of dollars trying to win back the audience that had deserted them.

But then along came the crash in 2008, and the bottom fell out of the ad market (again). This time, unlike the dot-com crash of 2001, the revenues did not bottom out in 6 months, and then start climbing back again. No, this time there were insidious new technologies on the rise that have pretty much destroyed the value of the banner ad: the rise of RTB (real-time bidding) or “programmatic ad buying.”

In a nutshell, RTB allows an advertiser to reach an audience, no matter where it is on the web. Say you want to reach housewives under 35 with kids in school, who looked at washing machines in the past year. No problem. Just sign up with a programmatic bidding outlet, and you can buy banner ads across the internet that will deliver you that audience.

Great for advertisers. Disastrous for publishers.

Why? Well, because the supply of space on the web is basically infinite. That means our old friends supply and demand kick in – with a vengeance. The result has been that CPMs for ads are on a race to rock-bottom. Banner advertising is essentially going to be utterly worthless soon, which means that there is going to have to be yet another shift in how premium content publishers support themselves.

And no, we cannot just crank up subscription rates to the point where the readers pay for everything. Even at the mighty New York Times, with its much-lauded paywall, there is a recognition that doubling the subscription rates will pretty much kill the business. Not to mention the fact that putting all good & decent information behind a paywall pretty much ensures that anyone without means – that is, ordinary folks – are going to have to subsist on a diet of cheap&shoddy news. Yep. Find the flaw in that plan.

The situation gets even more dire when we consider the headlong rush to the mobile web. Banner ads are even less effective and valuable there – here, take it from the New York Times again:

The appeal of being able to buy targeted audiences at scale and the simple efficiency of automated advertising makes it a no brainer for most advertisers, and thus most publishers.

Meanwhile, the shift to mobile makes developing effective native ads even more important because, as Levien says, “we have not yet arrived at an effective interruptive format, a banner format, in mobile”.

Social media companies such as Facebook and Twitter are taking the lion’s share of mobile ad revenue in part because their ads come in the same container as the rest of their content, which works better on mobile devices. The thinking is that publishers need to do the same to compete.

…and here at last we arrive at what is shaping up to be the big fight of 2015. Call it “native advertising,” call it “content marketing,” call it what you will. It’s advertising messages that are inextricably mixed into the news content on news sites. You’ve already seen it in your Facebook feed, on Twitter, on blogs, hell, for the longest time, even in the midst of radio shows.

Why is this going to be A Thing? Well, check out what John Oliver has to say about it:

Comments (0)



Aug 18

Why newspapers are losing subscribers: “failure of the last mile”

Posted: under newspaper crisis, Newspapers.
Tags: , , , , , , , , , , , , , , ,

Web-native companies strive to eliminate “transactional friction.” Newspapers? Not so much.

I’ve been a subscriber to the LA Times for as long as I’ve lived in Los Angeles, and I’ve watched as the big beast evolved from a gray morass of 100-inch stories to the biggest (and most profitable) paper in the U.S. in the late 90s. Which has made the last decade and a half so very hard to watch. Still, I’ve stuck by Gray Lady West through some very tough times, and I have many friends who either work there now, or have in the recent past.

grinder throwing sparks

“Frictionless commerce” is what makes iTunes, Amazon, Google AdSense, Craigslist and so many other web titans so successful. It means that you make it as easy as possible for customers to actually buy something from you. (Image credit: Wikimedia Creative Commons)

As newspapers increasingly set their sights on a “digital first” strategy (despite some notorious recent flameouts), it occurs to me that they are neglecting one of the most crucial, and overlooked departments in the entire organization: circulation. I got unpleasant evidence of this when I attempted to renew my subscription to the Times.


 

First: a lesson in what “failure of the last mile” means: consider what goes into making a successful restaurant. You have to have a prime location. Decorate the exterior. Decorate the interior. Hire a great chef. Hire great kitchen assistant chefs. Come up with an innovative menu, with food that appeals to your core demographic. Procure the freshest ingredients. Ensure that the food prep space is clean and gets an “A” from the city inspectors. Advertise. Market. Give out coupons. Sweet-talk reviewers into coming and writing reviews. Have valet parking. And so much, much more that all leads up to the “last mile” – what the experience is like at the “touch point” where the customer actually engages with the product.

In a nutshell: all this effort in preparation to make a great restaurant counts for nothing if the waiter is snotty to the diners.

I’ve seen this in action again and again with the startups I’ve been involved with. Early on, we faced epic levels of “cart abandonment” when trying to coerce people into making a purchase, because (at the time) people were really, really reticent to type their credit card numbers, expiration dates and security codes into a browser window. Since then, we’ve obviously learned that data theft can pretty much happen anywhere. However, this hurdle was gradually overcome via the efforts of eBay, Amazon, iTunes and PayPal. All of which add layers of security, and money-back guarantees if your card gets hijacked and used to buy pallets of AK-47s in Cote d’Ivoire.

So here’s what trying to buy a subscription from the LA Times looks like. You dial a number. There’s a choppy, slow voicemail hell, with choices that really don’t seem to apply to what you want to do. There is no dedicated 800 number for renewing subscriptions – you just get dumped into the bin with people who want to report their paper getting stolen, or who want to turn it off while they go visit the grandkids. So that’s turnoff #1. Even as a dedicated subscriber, I wanted to hang up and just try the website to see if I could get a better experience. Still, I hung in there to see whether things would improve.

It took 3 steps and 2 minutes to get to a place where I could finally start to accomplish what I came for. Unfortunately, rather than talking with a human – I had to manually enter a credit card number over touch-tone. That’s Strike Two, folks. If you’re going to be giving up that kind of info, consumers kinda want to get rewarded with a human voice, particularly if they have any queries about what they’re buying and how much it costs. Which I did.

So I grimly stuck to it, even after entering my financial information, hoping to get someone on the phone to explain the rather complex choices on payment amounts and term of subscription that came on the paper bill I was mailed. Pressing the “0” button just kicked me back into the main menu. Somewhere along the line, as the frustration increased, I heard that I had to “Press 9 to Speak to a Representative.” Only, that kicked me back to the main menu as well.

Finally, I started doing “button mashing” which usually triggers a kickout script in the automated phone-tree software. Call centers have learned that when they have tortured consumers to the point where we start just randomly pushing buttons and screaming with frustrated rage, maybe it’s time for some human intervention.

Sure enough, there was a silent blip as the call was transferred to a call center. Not in India – the costs for call centers have gone up there. No, this one was to the new lowest-cost call center hub – in the Phillippines. The operator was friendly enough, but the problem started when I asked about the payment terms. Under the subscription plan they now offer, the LA Times gives me unlimited web access (which is mostly how I engage with their news product these days no surprise), and charges me about $12 every two months. But looking at the rate card I was mailed, it seemed as though they were trying to incentivize me to subscribe for 6 months or an entire year by offering price breaks for these longer-term commitments.

So sure. Maybe if you let me shave a few bucks off the bill, I’ll pay you the whole amount upfront and let you make some money off the “float” of having my entire wad of subscription money that you can earn interest on. It’s one of the ways that smart companies entice consumers into locking themselves into making a yearlong commitment.

Unfortunately, the call center operator had no earthly idea of the pricing structure for the product she was trying to sell.

After having to verify (for the 3rd time on this now 15-minute call) my phone number, address, name, credit card number, etc., just asking how much I was going to pay flummoxed this person. I was quoted three different prices for the subscription I now have. I corrected the operator a couple of times, and finally after teaching her about the product she was trying to sell, got to the bottom line.

I can pay $12 every two months for the next year. Or I can pay $83 up front to “lock in” the subscription price.

Waitaminute.

Let’s do the math here.

If I pay every two months, that’s six payments a year, right? Simple math: 6 payments x $12 = $72 a year.

And you want me to pay $83 upfront in one lump sum? How does that make financial sense? I’d be paying MORE for a yearlong subscription rather than saving a few bucks.

The operator stammered and then went back to the script of “locking in the subscription price.”  Well, is the price going to go up then? No. I don’t know. Maybe.

By how much? I don’t know. When? I don’t know. But it might. Is there anyone else I can talk to about this? Not right now.

OK, at this point, I hung up. Deconstructing this entire experience, from a webconomics point of view, this is an absolute disaster. The LA Times has made it difficult and frustrating for existing subscribers to attempt to continue to be subscribers. They’ve cut costs in their circ department by outsourcing all the call center jobs to places where ill-trained people stumble over what should be easy points. And finally, their pricing structure makes no sense once you drill down and work the numbers for yourself. And the numbers are completely different on the web, in the mailers, according to the people on the phone. The price just keeps changing!

This makes it impossible for the end-user (i.e. subscriber) to trust the prices that we’re being given. Yeah, it’s only a few bucks, but come on, now. You guys know – or SHOULD KNOW – how consumers react when they start to suspect that someone else is getting a better deal.

I’ve written at length over the years about the migration from an ad-supported revenue model to a subscription-based model (AKA “paywalls”). The jury’s still out on how well this is going to work out for the newspaper industry; yes, the New York Times, Financial Times and Wall Street Journal are often cited as success stories (although detractors point to weaknesses in their underlying dynamics). News organizations across the board are looking to ways that they can support themselves by charging subscriptions to access their material.

This only works when that transaction is quick, easy and painless.

Comments (0)



Apr 06

Institutionalized piracy in Russia – Russia’s Facebook (vKontakte) sued by music labels

Posted: under music.
Tags: , , , , ,

Russian ISPs openly brag about how much pirated content they have – it’s their market differentiator

Years ago, working in Russia, back when the whole “Content Pirates” project was just the mere glimmering of an instinct, I was talking with the local techies about how the web works in Russia. At the time, we were trying to implement an internet-centric business model for a publishing company, and were coming up against massive cultural differences in how to make money off of content.

Pavel Durov's profile on vKontakte

This profile for vKontakte founder Pavel Durov is particularly ironic, since he just bailed out of the company, citing intense pressure from Kremlin-backed investors. The site has 143 million users worldwide, 88 million in Russia. They generate about $170 million a year in revenues, mostly from advertising. And the site is rife with pirated works.

Read More

Comments (0)



Mar 26

If the numbers don’t lie – what shall we put above the fold?

Posted: under Digital Migration, journalism.
Tags: ,

When clicks drive coverage, what happens to hard news stories? Are we doomed to “hamster wheel journalism”?

kitteh sleeping is the end of good journalism

Sleeping kitteh, dying news industry.

Is the future only listicles and kitteh pictures?

Read More

Comments (0)



Oct 07

eBook Publishing Options

Posted: under Digital Migration, journalism.
Tags: , , , , , , , , ,

How journalists can build their own news/publishing business

I was asked by my students if there were ways that they could publish their stories, videos and audios, without having to give up control to media companies that really aren’t all that interested in publishing new & interesting content from unknown authors. Well, not unless it is given to them free, with no obligations to pay any residuals or royalties, and they have exclusive rights to publish and market that content in all media known or unknown, throughout the universe, until the end of time.

There are a bunch of companies that have sprung up that publish multimedia books – you’ll have to do some research to see which one would offer you the best deal for your project.

1. Vook – they started off just doing ebooks with video embedded. These were interesting as experiments, but really didn’t push the form very far. Now, they’ve started publishing to all the major platforms (rather than trying to establish themselves as an alternative to Amazon, with their own proprietary standards – a losing game, if ever there was one).

The first Vooks were like the first CD-ROMs. They had text on them with cutscenes of dubious quality. Usually made from literature that was in the public domain (i.e. free for some geek to hammer on without having to pay fees to the pesky creative writer-types).

The first Vooks were like the first CD-ROMs. They had text on them with cutscenes of dubious quality. Usually made from literature that was in the public domain (i.e. free for some geek to hammer on without having to pay fees to the pesky creative writer-types).

Read More

Comments (0)



Sep 03

Google’s ‘In-Depth Articles’ Feature: What Journalists Need to Know

Posted: under Digital Migration, journalism.
Tags: , , , , , , , , , , , , , ,

…back from summer vacation, and leaping into the school year. Well, trying to leap, anyway.

I mentioned this development in digital news to my journalism classes at Annenberg, and figured I might want to expand a bit more on it, and provide some links to related articles & research.

(Google Data Center from Wallpaperstart.com)

First, forgive me if this is old news, but I haven’t heard much about this from the usual suspects; for some reason, there isn’t much notice being taken of this by publishers, or professional journalists.

But the PR guys are all over this. Viz: How Google’s ‘In-Depth Articles’ feature could affect PR

Nut grafs:

The feature, which Google calls “In-Depth Articles,” offers up links to a set of three long-form articles, usually at the bottom of the search results page. The articles are usually detailed profiles and exposés on companies and their leadership. Companies and high-profile individuals should take notice of this development and understand that it presents a number of opportunities, as well as some perils. 

No one but Google itself knows exactly how these articles are selected, but the search engine giant has described them as “thoughtful in-depth content” that “remains relevant long after its publication date.” This is a major coup for traditional long-form publications such as Rolling StoneVanity Fair,FortuneThe Atlantic, and The New Yorker, as well as new online-only media such as The Verge,SB Nation, and Slate

The implications for businesses, prominent individuals, and the people in charge of maintaining the reputations thereof, are pretty significant, if not outright terrifying.

Read More

Comments (0)



Jul 09

Lessons from a C47 Pilot: the Core Trait of an Entrepreneur

Posted: under new media.
Tags: , , , , , , , , ,

Filed under: Things I didn’t realize I was internalizing at the time that have stuck with me & shaped my life

As a follow-up to my previous post about the “Secrets of Silicon Valley” post, there was something that Glenn Kelman, the CEO of Redfin said, that stuck with me:

“I get thousands of pitches every month. And all of them suck. They tell me all about these numbers and charts and graphs. But what I really want to know is, ‘Why are you doing this? What makes you want to start this company.’  And then they relax, and they tell me what I really want to know.”

This made me think of an encounter I had with a guy back when the job titles “Entrepreneur” did not have the suffused halo of glory around it that it does now. Looking back, this short conversation was one of the transformative experiences in my life. It’s what has driven me to consistently take the road less traveled in my career.

When you try to imagine the most valuable thing in the world, what does it look like? Does it look like something in a museum, where people come from around the world and pay money just to look at it? Is it a thing that you can own? Or is it something quite else...

When you try to imagine the most valuable thing in the world, what does it look like? Does it look like something in a museum, where people come from around the world and pay money just to look at it? Is it a Special Thing, ancient and mysterious, that you can own? Or is it something quite else…

In 1987, I was a Pulliam Fellow at the Arizona Republic, working as a copy editor. That meant that I had most of the day free – I went in at about 3 p.m. each day, stayed until midnight and pretty much lived like a bat. So during the day, I explored the city of Tempe, where I lived, and tried to cool off by swimming and enjoying the pool (hey – I’d grown up in Wisconsin, where the rare days you got when it was sunny and warm you automatically headed towards bodies of water to enjoy this amazing gift of weather).

So I was  basking in the pool, when I was addressed by an older guy, who was leaning against the side of the pool, elbows on the fringe, watching the sun set. He looked content, but thoughtful.  He was tanned like a saddle, with piercing blue eyes, and a bemused expression on his face. He asked who I was and what I was doing in Phoenix.

I told him that I was there, fresh out of college, working for this gigantic media company. But that it was a little strange to me, because the company was so big that I felt like just a little cog in a big machine.

Which wasn’t necessarily a bad thing – if I believed in what the Big Machine was doing, and if I actually felt that the Big Machine cared in any way for all the cogs that had to mesh to make it run. Neither of which were true.

He frowned, and nodded his head.

“You’re coming to a point in your life where you’re going to have to make some very important decision,” he said.

I snorted, with the derision that only a 21-year-old recent college grad can muster. “Everyone keeps telling me that. But that just sounds like platitudes. What is that supposed to me to me? Every decision we make is important – we cross the street for breakfast, we get run over – hey, that was a life-changing decision! You look at it that way, hell, every decision you make is life and death.”

To his credit, he laughed. “Well, I guess that’s true. But I was thinking of something a bit different than what you do. It’s more about who you really are.”

And then he launched into the story of his life. Turns out that he was not retired, because he never planned on retiring, because every day he did what he loved. He had been a DC-3 pilot in WWII, flying the supply routes that went “Over the Hump,” or over the Himalaya mountains and into China. These were white-knuckle rides, because depending on how loaded down the old “Goonie Birds” were, you may or may not make it over these 20,000-foot peaks.

Each flight through the treacherous mountain passes was a gamble. As the odds against long-term survival mounted, the pilot I talked to said he just gave up the idea of control — that enemy fighters or sudden blizzards could trump any preparations humans could make. Simultaneously, he paid attention to all the little details that might mean the difference between survival and violent death.

He was terrified for the first few flights, and then he basically gave himself up for dead, and started having the time of his life. Most beautiful landscape in the world, wild adventures on either side of the flight, danger, and the feeling of contributing something meaningful to something really important, something that was bigger than him, something that was forever changing the world.

After the war, he started an airline. It was the wild & woolly days back then, not like today when there are basically highways in the sky, you never get lost, it’s all worked out for you. Back then, you were making it all up as you went along, trying to figure out what planes at what times into what airports would get there on time and make money.

But by his combination of daring (from the recklessness that he pursued life from flying over The Hump), and meticulous planning – because he had checked out every inch of every plane and every flight plan before he took off, which is why he survived and so did his whole crew – that combination made him successful.

He built an airline. Made millions. Had a big house and a pinup girl wife.

Was miserable. Hated running the company. Hated all the problems that come with having a lot of money.

So he divorced his wife. Gave her everything. Started from scratch. With a new woman in his life. He said that he had learned something really crazy about himself. He didn’t like being rich.

Making it back was no sure thing (image from Life magazine archives – click through for more).

 

He liked the struggle, the fight, the ups and downs, the thrills of BECOMING rich.

So he would repeat this pattern. Over and over again. He’d build a company – sometimes airlines, sometimes aeronautical service companies, or plane design firms – build it up until it was huge …

…and then he’d give it away, and start all over from scratch again.

I told this story to my mom, who grew up on a farm in the shadow of the Great Depression, to a father who had twice lost everything he had and worked himself into an early grave trying to provide for 8 kids … and my mom said, “That’s the stupidest thing I’ve ever heard.”

And for a long time, I agreed with her. What kind of a moron builds something only to give it all away? What kind of person can’t see that you earn money through struggle and pain? That every dollar is a treasure, and that you cling to it as hard as you can?

But then I remembered what that tough old pilot said, back when I said something very similar:

“Think about the most valuable thing in the world. Maltese Falcon, huge diamond, priceless painting – whatever. In your head, I want you to imagine having something that, if you had it, every other person you know would envy you. Just green-eyed, jealousy, eating their own heart out. Day and night, everyone wants what you’ve got, this Special Thing. There’s only one. And you have it.

But there’s a catch. Something that nobody else knows, that you’re trying hard not to let them see. The catch is that  hanging onto the Special Thing is killing you. Burning your hands. Feels like fishhooks ripping into your fingers every second you have it in your possession.

But still, everyone passing by says, “OMG! What a lucky guy! Just look at that Special Thing! I sure wish I had that thing!” All the while, it’s just killing you to hang onto it. And you can’t put it down.

The question you have to ask yourself is: would you hold onto that thing?

Would you choose to live in pain, in isolation, in anger, in contempt for everyone you see as lesser than you – would you choose to live that way just so you could conform to some other people’s ideas of how it is that you should feel, and what it is that you should want?

Would you hold on to that thing?

Or would you put it down and say, here. You take it. And while they pick it up and laugh at you – you’re the one that’s laughing at them inside. Because they have to deal with that Special Thing now. And you? You’re free.

And you’re going to build something else now. And building that … whatever it is … building that, is what makes you feel like you have the most valuable thing in the world already.

That was a man with rare courage. He was able to look deeply inside himself and not only see, but accept what it was that made him happy. And then he acted on that knowledge, even when the rest of the world said that he was an idiot. That he had lost his mind.

But he knew what he had to do. Because he literally couldn’t live any other way.

To me, that is the core trait of the entrepreneur.

Comments (0)



Jun 25

Forget an MBA – Watch creativeLIVE’s “Secrets of Silicon Valley”

Posted: under Digital Migration, New Marketing.
Tags: , , , , , , , , , , , , , , , ,

 How many times do you get a chance to ask spectacularly successful tech entrepreneurs anything you want?

Janine & I just completed two days of intense sessions with some of Silicon Valley’s most successful entrepreneurs at creativeLIVE’s “Secrets of Silicon Valley” sessions. And yes, that was really alliterative.  Sorry. Bear with me. Everyone talked in such catchy bullet-point laden phrases that it leaked over into my speech patterns.

dave lafontaine looking at creativeLIVE heatmap

The walls of the creativeLIVE breakroom are festooned with flatscreen monitors showing what’s on their various channels. Most fascinating of all are the real-time “heatmaps” showing who’s watching at any moment, bordered by the latest comments on Twitter and Facebook.  The “Secrets of Silicon Valley” was watched by people in more than 130 countries. In the map, you see clusters of red and white dots representing the audience through my reflection as I took this photo.

If nothing else, these two days were proof that above all else, Silicon Valley entrepreneurs have mastered the talent of giving really beautifully designed and stripped-down PowerPoint presentations.

Seriously folks, if you’ve ever suffered through a “Death By PowerPointless” presentation where you were assaulted with dense bullet-point slides with hundreds of words on them … slide after slide after slide, none of them memorable, that made you fantasize about massive natural disasters, zombie apocalypse or alien invasions … these two days were not that.

Here’s what was so special about the “Secrets of Silicon Valley” speakers, who are entitled to have more than their share of ego and self-satisfaction: they didn’t just brag. Nor did they ramble on in thinly disguised sales brochures for their companies.

The most compelling speakers hardly mentioned their companies. Instead, their focus was on us, the audience. On what we needed to know.

The speakers knew what they were going to say, and they said it with humor, efficiency and – most unexpectedly, from a group of uber-nerds – humanity.

Read More

Comments (0)



Apr 17

The Great Digital Migration: A Long, Featureless Trudge Into … What, Exactly?

Posted: under Digital Migration, newspaper crisis, Newspaper Deathwatch.
Tags: , , , , , , , , ,

27 Print Dollars for $1 Digital; Social News; Papers in Trouble; Kodak v. Fuji

I posted this picture via Twitpic earlier today, and my digital brethren quickly chimed in on how much they felt like this in their daily lives. And I get it. Working in the media industry these days is far, far different from the way it was when the journalists of my generation got into the biz. Looking back at recordings from the early 90s, I am struck by how much free time we all seem to have had back then – these days, you feel like you can’t take your eyes off your Twitter feed for even a second, lest you miss the Next Big Meme and are thus branded as a digital troglodyte who “just doesn’t get it.”

people walk across sand dunes in a vast desert

Strung out and exhausted, journalists are wondering when this migration ends, or even when they might run across a handy signpost telling them which way to go. (click to embiggen)

So yeah, if you feel like you’re lost in the desert and that the only future involves your bones bleaching in the sun next to a steer skull … well, maybe it’s because most newsrooms these days evoke the feeling you get when wandering through any of the weathered ghost towns that dot the arid landscape in Arizona and Nevada, left behind when the seams of gold and silver petered out.

Read More

Comments (0)