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"Tell the chef, the beer is on me."
After quietly piloting the concept for months, BuzzFeed officially launched its own native ad network this March. The mechanics of the network are bizarre, yet intriguing: Participating publishers allow BuzzFeed to serve story previews on their sites which, when clicked, bring visitors to sponsored stories on BuzzFeed.com. The network, whose ads resemble real story teases, is brash and a bit risky, but it may just help publishers circumvent the abuses of today's established, banner reliant, ad network ecosystem.
The current ad network model, or indirect sales model, is a mess. It functions based on an oversupply of simple display ads and is rife with inefficiencies, opening the door for middlemen to reap profits while devaluing publisher inventory. BuzzFeed's native ad network, along with others in a similar mold, has the potential to minimize these drawbacks by giving publishers a simple, safe way to make money through indirect sales channels.
The ad networks we know today came about as a result of the poor economics of the banner ad. A little history: In the early days of Internet publishing, the banner ad seemed to make sense. Just as many publishers began figuring out the Internet by taking content produced for print and slapping it on the web, they took the standard print ad format -- selling advertisers designated space on a page -- and brought it online too. Instead of selling these ads by the inch though (a measurement suitable for edition-based print publishing), digital ads were sold by the impression, or view, a better fit for the unceasing nature of online media.
Over time, the acceptance and standardization of the banner ad brought a number of side effects along with it, the most important being an incentive for publishers to pack their pages with as many banners as possible. For publishers, the decision was easy: The more banner ads they placed on a page, the more money they stood to make. So instead of running a more manageable (and more user-friendly) three or four banner ads, publishers cluttered their pages with 10, 15 or even 20 of them.
Placing ads on a page was only half the equation though; publishers still needed to sell them. As they soon found out, selling premium, above-the-fold ads was a lot easier than getting advertisers to pony up for the glut of below-the-fold, low-quality inventory. A significant percentage of ads thus went unsold, and into the void stepped ad networks. Even at a heavy discount, publishers figured, it was better to get some money from remnant inventory via ad networks as opposed to making nothing. This would prove to be a poor calculation.
Rather than question the logic of creating more inventory than it was possible to sell, publishers stuck with the model, growing their audiences along with their inventory and watching the original ad networks evolve into a multibillion-dollar tech industry fed largely on remnant inventory. Soon, publishers found themselves exposed to more drawbacks than they perhaps initially bargained for, and the original premise of making more money with more ads came into question.
As it grew, the indirect ecosystem not only enabled advertisers to buy publisher inventory at cheaper prices, devaluing even premium inventory, it also allowed them to buy premium publisher audiences on non-premium sites, thanks to the third-party cookie. The Atlantic's Alexis Madrigal zoomed in on this problem in a long piece about the tough economics of the online publishing industry.
"Advertisers didn't have to buy The Atlantic," he wrote. "They could buy ads on networks that had dropped a cookie on people visiting The Atlantic. They could snatch our audience right out from underneath us." The indirect system, in other words, commoditized his audience, leaving his impressions as valuable, in some ways, as those on third-rate sites.
Recognizing these and other abuses as endemic to the system, publishers today are starting to fight back. Many are trying to limit their dependency on banner ads either by cutting them out of their business completely or by constricting supply. David Payne, the chief digital officer at Gannett who oversaw a major USA Today redesign which dramatically reduced the site's supply of banners, put it this way when I spoke with him for an article for Digiday: "I think we've all proven over the last 12 years that the strategy we've been following -- to create a lot of inventory and then sell it at 95 percent off to these middlemen every day -- is not a long-term strategy."
Publishers have started looking for alternative forms of revenue to fill the gap and, so far, the hottest alternative is the native ad. Everyone from The Atlantic, to Tumblr, to the Washington Post, to Twitter is giving it a try and BuzzFeed, perhaps the extreme example, is all in. It sells only native ads, no banners.
Which brings us to BuzzFeed's ad network. At this early point, it seems like the network should indeed be free of many of the abuses listed above. Its simple nature, for example, ensures that most of the value won't be siphoned out by a group of tech middlemen and will be largely shared by BuzzFeed, participating publishers and minimally, the ad server. Participating in the network, furthermore, should not devalue publishers' existing inventory since it will not provide advertisers access to the same inventory at cheaper prices.
BuzzFeed also claims its networks steers clear of third-party cookies, the audience-snatching culprit that The Atlantic's Madrigal railed against.
"We believe the ultimate targeting is real human-to-human sharing, digital word of mouth, so we don't do third-party cookie targeting," BuzzFeed advertising executive Eric Harris told me via email. "We're not collecting individually identifiable data and will not sell any data."
The approach should help participating publishers breathe a bit easier -- and they may just want to consider demanding the same from any network they engage with, not just BuzzFeed's.
"It's cleaner; it's more straight up," said Fark.com CEO Drew Curtis of BuzzFeed's network. His site, which is one of the partners participating in the launch, embeds BuzzFeed sponsored story previews on its home page, marking them as sponsored. "I just like the fact that there's no screwing around," Curtis explained in a phone interview, "It's exactly what it appears to be, no more no less." Rates from BuzzFeed's ad network, he added, are significantly higher from other indirect channels. "Advertisers," he said, "are willing to pay for less bulls#*t."
Of course, one question participating publishers might ask themselves is why they are helping BuzzFeed profit from sponsored posts instead of selling them on their own sites. The answer might worry BuzzFeed -- at least until it can get its traffic up to the point of advertiser demand -- but if publishers decide to go that route and withdraw from the network, they may be able to pull themselves away from the bad economics that brought them into the network game in the first place.
Alex Kantrowitz covers the digital marketing side of politics for Forbes.com and PBS MediaShift. His writing has previously appeared in Fortune and the New York Times' Local Blog. Follow Alex on Twitter at @Kantrowitz.
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Radio legend Paul Harvey was such a great storyteller that he could totally enthrall you before you realized you were listening to an ad.
Today, you'd call that sponsored content. The larger term is native advertising -- strategies that mesh branded messages into the media where they appear. They include articles on news sites; funny videos and animated GIFs on humor sites; tweets and Facebook updates, and more. Instead of interrupting the flow like a typical TV commercial, pre-roll, pop-up or print ad, it blends into its surroundings and, in theory at least, offers the reader/viewer/listener something interesting.
Pew Research Center's 2013 State of the News Media Report found that while the amount spent on native advertising in 2012 was comparatively low -- $1.5 billion compared with $8.6 billion for banner ads -- it's rising fast. Spending for sponsored content grew 45 percent in 2011 and almost 39 percent in 2012. That's second only to video ads.
Some fear sponsored content blurs the ethical church-and-state division between advertising and journalism, while others say the revenue keeps reporters employed.
Reuters' Jack Schafer put it strongly in a recent piece, "A Word Against Our Sponsor": "If, as George Orwell once put it, 'The public are swine; advertising is the rattling of a stick inside a swill-bucket,' then sponsored content is the meal so wretched that even pigs will reject unless sugar-frosted," he wrote.
But whether you love or hate native advertising, examining the recent history of the news business, including declining revenues and widespread layoffs, sheds light on why it's growing so quickly.
Mark Jurkowitz, associate director of the Pew Research Center's Project for Excellence in Journalism, told me that tough economic realities and the "anemic" growth of digital ad revenue opened the door.
"The grimmer news is that basically for every $16 that a newspaper is losing in print revenue, they're gaining $1 in digital," he said. "Just as the case with classified ads, which disappeared ... it's very possible that other forms of digital ad revenue are maybe more difficult than previously thought."
Forbes was the first major news site to integrate sponsored content. In 2010, I wrote about how Forbes Media chief product officer Lewis Dvorkin shook up the established formula with AdVoice -- which hosted sponsored articles on Forbes.com.
Forbes Media chief revenue officer Meredith Levien told me it was slow going at first, especially since few companies had the staff or mindset for content creation. But in the last 18 months it's grown dramatically, in part because the publication added a team of writers, editors and graphic designers -- separate from the editorial team -- to help brands produce their articles. "We can't staff it fast enough," she said, adding that BrandVoice was "No. 1 on the list" of factors that made 2012 revenues the best in five years.
Last year, Levien successfully lobbied for the name to be changed to BrandVoice.
"AdVoice conveyed the notion it was part of the advertising mix," she said. "This is really about content and thought leadership."
Levien adds that she was gratified to see the Washington Post adopt a similar model earlier this year. "I don't think we can take credit for it, but we were especially pleased to see the Post get into it," she said.
A recent random look at BrandVoice content showed a piece from Oracle titled "King Richard III: Villain, Hero, or Tragic Victim of Identity Theft?" NetApp offered "3 Steps To Build Your Personal Brand For Tomorrow's Business (Tips From The CIO)." The CapitalOneSpark credit card team offered: "Optimize Your Website To Convert Visitors To Buyers." The "Voice" pages include links to more from the sponsor, which in some cases includes press releases.
In February, Dvorkin blogged that BrandVoice now has 20 partners. While he remains passionately upbeat, others are more cautious.
Digiday recently quoted Businessweek.com editor Janet Paskin saying she's treading lightly: "Our credibly and integrity, for all journalists, is sometimes harder to defend than it should be. We don't want to compromise that or allow for that perception."
While the traditional journalism community remains divided, many edgier news and entertainment sites see no problem at all. Some of BuzzFeed's snappy content is sponsored, as is some of what you'll see on Cheezburger, Gawker, Vice and others.
Onion Labs, the in-house advertising and marketing team of The Onion humor site, works with sponsored content in several ways. It integrates brands into its own video content -- such as 7-Up's placement in its morning show, "Today Now." It creates original content for major brands. It also posts or links to content produced by the brands themselves, like this video for Adobe:
CollegeHumor CEO Paul Greenberg said his site embraced the concept five years ago. At the Native Advertising Summit in February, he said there's such interest that the site's inner workings now resemble a digital ad agency.
"We've really had to turn into a machine to super-serve the clients that come to us and meet the demand that we're seeing in the marketplace," he told me. Listerine, he says, saw a 17 percent jump in sales after its native ad campaign.
Matt McDonagh, vice president for national sales at The Onion, says a Nielsen study shows that humor is the best way to reach a young target audience. Even big names such as Hilton and Coke Zero are dipping their toes into the comedy pool. "Brands are willing to take a few more risks than they were a few years ago because to hit 18- to 24-year-olds -- you're not going to do that on '60 Minutes,'" he said.
It seems that when it comes to entertainment sites, sponsored content has found a comfortable home.
"Those kinds of sites have pretty seamlessly integrated this," Pew's Jurkowitz said. "It's a more controversial choice for traditional legacy news organizations."
In 2010, Gary McCormick, then-chair of the Public Relations Society of America, publicly warned that poorly labeled sponsored content could be confused with objective news, especially because disclaimers can be lost as information is shared. Three years later, he feels media and brands understand the need for authenticity and transparency.
"It may be that it's no longer always the 'buyer beware' -- it's now the 'manufacturer beware' of putting out false claims," McCormick said. "If you come out with something hidden behind the wall it only takes one consumer to spot it ... They're going to dig deep."
When The Atlantic ran a boosterish Church of Scientology native ad, then deleted critical comments, the outcry prompted an apology with the opening line, "We screwed up."
At the Native Advertising Summit, The Atlantic Digital's vice president and general manager, Kimberly Lau, called the Scientology incident a lesson in what not to do. "The whole experience clarified how it is people are going to judge these things," she said.
The Onion did a scathingly hilarious take featuring fake content praising the Taliban.
The Onion's McDonagh notes the parody came from the editorial, rather than sales side, but he feels their pain. "To The Atlantic's credit, they're testing some things out and trying to make themselves a smart digital publisher," he said. The key, he adds, is to understand and stay true to your audience.
The native ad boom is also already creating new business models -- maybe even a whole new advertising sector.
Take, for instance, the success of Sharethrough, which helps increase the reach of sponsored content. For example, if a brand creates a post for one site, Sharethrough carries it to other platforms such as WordPress, Forbes.com, The Awl and Thought Catalog, which direct traffic back to the original post. Videos can be embedded and viewed in a number of blogs and sites.
Although it's only four years old, it's worked with 20 of the top 25 brands of AdAge magazine's Megabrands list. Relationships with many websites and publishers helped it create the Native Advertising Summit. (As a matter of fact, it popularized the term "native advertising," building off the phrase "native monetization" used by venture capitalist Fred Wilson.) Sharethrough has also become a clearinghouse for information about the new industry with tools such as the Native Advertising Leaderboard, which is searchable by brand, publisher, topic and social actions.
"There's a lot of creativity happening in this space right now," said Chris Schreiber, the firm's vice president of Marketing & Communications. One recent project promoted an infographic Pop Secret developed about how people watch movies. "They were delivering value -- something you didn't know and was easily sharable," he says.
When sponsored content -- especially videos -- work, he says, it's great. "It's more about thinking what's valuable for the audience and the consumer rather than what's valuable for the marketer."
Microsoft met its marketing goals while engaging a new audience with its The Browser You Love(d) to Hate campaign for Internet Explorer 9. Roger Capriotti, director of Internet Explorer product marketing, hired producers to create visual content that targeted young people who might otherwise disregard the product. The effort relied on viral shares and news coverage instead of paid posts; the most frequently shared video recalled memories of growing up in the '90s:
As anyone who's tried to make a video go viral knows, 25 million video views -- including 22 million for "Child of the 90s" alone, is nothing to sneeze at, even for Microsoft.
"If we can build good content, we can engage them in a way that we haven't engaged them in the past," Capriotti says. The best part, he says, was reading positive reviews posted by new-found fans.
Jurkowitz, of the Pew Research Center, questions how far the native ad trend will reach.
"Obviously the growth rate is high, but we're talking about a universe of small numbers here," he says. "There's some momentum in this direction, understandably, but it's not by any means a foregone conclusion that this is going to become a dominant form of advertising in mainstream news outlets going forward."
But The Onion's McDonagh clearly sees brands moving away from conventional ad campaigns, and demanding more creativity. "Brands are trying to develop content and trying to act more like publishers, and that's a sea change from where we were three to five years ago."
Sharethrough's Schreiber notes that as soon as new platforms crop up, advertisers jump on them -- as they've done with Twitter's Vine app, which creates short videos. He expects newer platforms will arise specifically for native advertising. "You're going to see new media created with native advertising, knowing that's how they're going to make their money," he says. And brands, he says, will learn what works best for their audience and their message. "They'll find their voice," he concludes.
Usually at this point in a Paul Harvey show, he would knowingly say, "And THAT's ... the rest of the story." But right now, prospects for native advertising are not so clear-cut that any one person or group can claim to have the last word. The only thing that's certain is that they will continue to evolve.
Terri Thornton, a former reporter and TV news producer, owns Thornton Communications, an award-winning PR and social media firm. She is also a freelance editor for Strategic Finance and Management Accounting Quarterly. Follow her on Twitter @TTho
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A new generation of young women has begun to make their mark online, combining entrepreneurial energy with the hardwired digital fluency that typifies the so-called digital natives.
Here are two stories of such women, both 26 years old, who jettisoned their office jobs to create online media outlets designed for young women like them. For these women and others like them, the decision to embark upon these web-based ventures was not revolutionary. To them, the "digital media revolution" has receded and they're simply operating in the only media environment they've ever known.
Kathryn Minshew hadn't been interested in starting a website for young professional women. As an undergraduate at Duke, she had no particular predilection for women's issues, and she didn't belong to any women's groups. So when, last month, Forbes featured Kathryn in its "30 Under 30" article for her leadership of The Daily Muse, the wildly successful career- and lifestyle-focused online magazine, it was an accolade that was unforeseen by her former self.
Kathryn, who's moved her publication (and herself) out to San Francisco to participate in an incubator program, recently told me that her passion for female-oriented career advice developed gradually. "I was surprised when I applied to a position at [management consulting firm] McKinsey, and they had a separate information session for women." After she landed the job, however, she began to observe the complex gender politics amid the corporate environment. She noticed how uncomfortable women were when asking for salary increases, foregoing a bonus check for $10,000 herself simply because it didn't occur to her to ask for it.
She scoured the web for sites that offered professional guidance to young women like her, but her search was fruitless. So she partnered with friends Alex Cavoulacos and Melissa McCreery to create their own. Today, The Daily Muse has a formidable readership, with a staff of five and more than 140 writers contributing content nationwide. The site's articles are syndicated on Forbes and the Huffington Post, and Kathryn's modest ambition of targeting an otherwise underserved demographic has been regarded in media circles as prescient. She herself explains that investors are "shocked to learn that there are no other sites" that are designed and deployed for professional women.
"Kathryn saw a need and filled it," said Rachel Sklar, media entrepreneur and adviser to The Daily Muse. "She recognized that not only was there a huge market of young professional women being pumped out of colleges every year -- but that there was key information that they weren't getting. Fixing those information asymmetries is extremely powerful -- and damn good business. And it's their niche, because they made it."
Phoebe Lapine was bored by her first office job after graduating from Brown. She remembers sitting down at a Thanksgiving dinner when her cousin interrupted her workaday complaints by asking her, point-blank, what she'd rather be doing. She thought about it a moment and then replied, "writing a cookbook."
Knowing, instinctively, that the boundaries between media were becoming increasingly porous, Phoebe called Cara Eisenpress, a cooking friend of hers since high school and, together, they started a cooking blog. They knew that they wanted to focus on young women who, like them, were facing the challenges of limited resources. So they came up with the title, Big Girls, Small Kitchen as an online "guide to quarter-life cooking."
According to Phoebe, they "started off slow, meeting at coffee shops after work or sneaking out to plan recipes on [their] lunch breaks." They didn't get a lot of traffic but were seen by the right people. Before long, a literary agent who had taken notice of the site approached them, and they had their deal for a cookbook. "In the Small Kitchen" was published in May and is currently available on Amazon.
While Phoebe had pretty swiftly accomplished her goal to write the cookbook, she and Cara decided to reinvest a significant portion of their advance into the website, transforming it to a more thorough resource for the community of young chefs that had begun to follow them. Phoebe recounted her literary agent's advice: "A book is something that goes on the shelf. It could be hidden discontinued, and you have much less control. It's more static. The site is something you have more control over. It lives on beyond the book and gives a rich opportunity for interaction with your audience."
What she didn't expect, however, is that the development of a more polished and attractive site actually decreased the amount of user-generated comments and contributions. She and Cara speculate that it may have been difficult for her audience, which was used to a shabby-chic site, to be greeted by something that had a more professional design. Cara observed, "When we did our first redesign, we were so sick of having an ugly old blog that we over-corrected and wound up with a homepage that was beautiful but static, even boring. It took a few months, but we were just able to go into another design phase and play with the elements until they felt vibrant."
Now, as they embark on their new venture, Small Kitchen College, they're applying their learned lessons to create community for the culinarily curious college student. With nearly 40 student contributors, they are harnessing the collective contributions of people with shared interests, much in the way The Daily Muse has done.
These are just two examples of young media-minded entrepreneurs who are noticing barren spots in the media landscape. They understand that people with similar interests to their own are being underserved by the the current catalog of media offerings, and so they're deciding to insert their own voices into this otherwise vacuous lull. As more and more digital natives come of age and instinctively exploit online opportunities in the way that Kathryn and Phoebe have done, the digital media landscape will become more verdant and variegated for it.
Mark Hannah is the director of academic communications at Parsons The New School for Design. Coming out of the public relations world, he has conducted sensitive public affairs campaigns for well-known multinational corporations, major industry organizations and influential non-profits. Mark worked for the Kerry-Edwards presidential campaign as a member of the national advance staff. He's more recently worked as an advance associate for the Obama-Biden campaign and Presidential Inaugural Committee. He serves on the board of directors of the National Association for Media Literacy Education, is a member of the Public Relations Society of America and was a 2008 research fellow at the Society for New Communications Research. He holds a B.A. from the Annenberg School at the University of Pennsylvania and a master's degree from Columbia University. He can be reached at markphannah[at]gmail.com
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There was quite a reaction to my previous column, suggesting editors learn more about, and cooperate with, the business sides of their organizations.
This time, I'd like to talk to people on the business side about how they can cooperate with the editorial side to work effectively to keep a news organization solid while also increasing revenues and ensuring the organization's survival.
First, though, let me respond a bit to the critics. A lot of the comments, on Facebook, Google+, blogs and elsewhere indicated people had read the provocative headline, "Tear Down the Wall Between Business and Editorial," perhaps a subhed or two, but not the piece in full, or even half. Some were nasty, political or ad hominem attacks (one called me Mr. "Bank Oil," the kind of play on my name I hadn't heard since elementary school), others were amusing, and a fair number were supportive and thoughtful.
One careful and considered rebuttal came from the liberal Common Dreams site, which called me "oblivious to the dangers of basing your business model on giving the sponsors what they want."
I'm not. But I have seen multiple news sites struggle to survive, including ones where I've had to cut staff.
Common Dreams asks for donations, and I hope they get enough to support their operation. Most news organizations, though, cannot survive on charity. Many are in deep trouble and have gone out of business or are struggling to survive.
News media executives and entrepreneurs -- including one who praised the previous column -- have told me how pained they were at their inability to financially sustain sites they considered superior editorially.
"With many news publishers, the online brands haven't had the revenue to support the reporting and editorial operations, let alone the rest of the staff and infrastructure that's needed for a modern news organization," Tim Ruder, chief revenue officer of ad optimization company Perfect Market, told me last week.
Ruder has often faced skepticism and even the ire of editors at major news companies when offering his company's technology, which optimizes page layout and links to get more readers in and serve them higher-value ads. The editors, understandably, don't want their pages changed in any way.
But, Ruder continued, "If these type of revenue opportunities can support the newsroom without compromising reporting, that's not to be ignored."
The news is not all glum, either. I have seen entrepreneurs make a business out of news while cultivating their ability to do great work.
Part of the reason is their keen focus on what matters most. Which leads me back to the point of this column: How the business side can intelligently do its work to sustain and enhance the organization over time.
Your product is news. News is nothing without credibility -- and that credibility can be damaged by the wrong kind of ads or sponsorship. I spent a lot of my time at ABC News explaining to the sales side why we couldn't do one thing or another while trying to suss out the advertisers' goals to reach them within the bounds of editorial tenets.
After all, the credibility and association with your site is a good part of the reason advertisers want to be on it. Without that credibility, they'll lose the venue to get the word out about their products.
If something you're proposing calls the reliability of the organization -- its credibility or trustworthiness -- into question, that damage is very hard to recover from.
I've worked with salespeople who seem to see a news page as an array of ads, with the text and pictures simply filling up the space in between.
Even if you think of the business as only a business, not a special public trust, you have to respect the product and not bastardize it in the name of making quick money. Part of your job should be to help sustain the business over the long-term.
You can't really sell the news unless you have a powerful, abiding respect for what it is and can do, the ways it serves, informs, motivates and even impassions a community. You'll be much better able to intelligently sell the advertiser on that community if you understand what motivates the people in that community, in addition to their demographic profile.
Sponsors will sometimes try to push the envelope, or get something they've envisioned that's not on your site. They'll ask if they can put this extra doodad here, get that ad size or flashy thing there.
When it's not possible, any intelligent sponsor or media buyer should be able to tell you something of what the goals are. Maybe you can offer that special something in another way, or achieve their aim with an offering you already have in your arsenal.
Sponsors who are considering your organization are doing so not only because you offer them exposure to a certain user base or group, but also because of the environment they get to be in.
It can be a bit of work, especially when you're dealing with media buyers who are trying to fit you into a spreadsheet model as part of a larger buy. But I've found that more often than not, there's a way to help them understand, then reach an accommodation.
It's very tempting when there's money on the table to say "yes," then run to try to get the request fulfilled. Cultivate and listen to the voice in the back of your head that will tell you when something goes a little, or a lot, too far.
A sponsor may request something you are pretty sure won't fly. First you have to understand why. It's not enough just to know the rules. You have to grasp the reason you can't do something a sponsor is asking.
I give a flat "no" when asked if sponsorship would guarantee news coverage of a given client and am ready with very clear reasons for giving that answer. I also then work to get at the client's underlying goals to find a way to reach them within the strictures. (See the previous point.)
To salespeople, editors can seem like "no" machines. If an editor objects to something you're proposing to offer, he or she may seem obstructionist, but there may be a legitimate reason.
Just as I called on editors to work with the sales side, the sales side has to understand the editorial imperatives and try to work within them. It helps, too, if the business side works with the editorial side to devise the strictures.
Having a strong relationship with editors can beget other benefits. Mike Orren, founder of Pegasus News, a site that serves the Dallas-Fort Worth area, put the newsroom and sales teams in the same room.
"Our ex-newspaper restaurant critic was yelling across the room saying there was a review coming, and the sales team might want to pitch them," he said, noting that the critic didn't say whether the review was good or bad. Either way, the sponsor might want to be there -- if the article is negative, the sponsor may want the opportunity to counter that perception. But "never was she [the critic] going to let somebody tell her how to review a restaurant," Orren said.
The sales team also helped the editorial side. "Sales would tip the editorial team that someone wasn't paying bills and maybe were going to go out of business," Orren told me at the Street Fight Summit earlier this fall. "We got more scoops out of our sales team than probably anywhere else."
For a few decades, news in America had a heyday of nearly unsurpassed profitability brought about by advantages such as high barriers to entry, limited distribution channels, and advertisers with few other ways to reach consumers. Salespeople could literally sit and wait for the phone to ring.
"It's like printing money!" one publisher gleefully exclaimed to me, holding up a classified page on which every column inch represented more dollars.
Those reliable and hefty profits supported all kinds of editorial efforts that, unfortunately, can no longer be sustained in the same way.
As the industry restructures, I have suggested editors learn how the business works and how far they can go to help it without compromising the operation. Sales needs to understand that "money talks" but the people making "the product" are ultimately responsible for whether it's worthwhile for those who consume it.
I want to see news organizations survive and do great work, and I believe that today, the only way to ensure that is to take a more holistic approach to the business of news.
An award-winning former managing editor at ABCNews.com and an MBA (with honors), Dorian Benkoil handles marketing and sales strategies for MediaShift, and is the business columnist for the site. He is SVP at Teeming Media, a strategic media consultancy focused on attracting, engaging, and activating communities through digital media. He tweets at @dbenk and you can Circle him on Google+.
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Trish Ginter is an independent fashion designer who believes in the beauty of handmade garments. In 1994, she co-founded a small boutique, Frock, in Chester, Conn. Like other artists and designers who shun modern technologies in the production of their work, Ginter thought she had little use for the online world. She considered the Internet a "nuisance," and didn't even own a cell phone until a few years ago.
Ginter did buy an iPod, however. One day, while downloading music, she had an epiphany. She thought, "If I can create a marketplace for independent fashion designers like Apple has done for musicians, that could be pretty useful." Shortly thereafter, in February of 2007, she launched SmashingDarling.com to do just that.
Today, SmashingDarling features the garments of more than 750 independent fashion designers, who upload their designs themselves. It's like Etsy if Etsy was dedicated only to independent fashion designers. Ginter and her business partner at Frock manage the site and get an 18 percent commission on all sales. And, of course, they sell their own inventory.
"I've come a long way," she said. "I now have developers on the West Coast and content providers and I've even learned a little HTML coding myself."
Much has been made about how the Internet, by allowing users to customize both the production and consumption of content, has a tendency to create niches. Chris Anderson's well known Long Tail theory posits that the unique traits of e-commerce -- fewer distribution challenges, endless catalogue space, etc. -- are shifting the economy away from a relatively small number of mainstream products and markets to more niche products.
While this is certainly occurring in the art and design world (and SmashingDarling is an example), a less discussed phenomenon is how e-commerce sites in this market may have the effect of transforming otherwise niche offerings into mainstream purchases. At least that's the hope of Jen Bekman, who started 20×200.com, a site that sells signed, limited edition original artwork by both emerging and established artists.
Bekman knows that the majority of Americans aren't currently in the market for fine art.
"The real world experience of buying art right now is pretty abysmal and appeals to a very small part of the population," said Bekman, who owns a gallery in the SoHo neighborhood of New York City. "When you walk into a gallery, the ability to educate yourself is very limited ... Something is $2,000 because the dealer says it's two thousand dollars. It's a very high-risk purchase ... People have misgivings and ambivalence to art buying."
Bekman attempts to mitigate this online by explaining the story of the artist, offering descriptions of the work, and offering prints at a reasonable price point. She calls the many $20 prints on her site the "gateway drug to the art world."
While the online model may not necessarily make art-buying addicts of us all, it certainly removes the obstacles -- psychological as well as financial and geographical -- that otherwise prevent fine art from being a mainstream purchase.
Ginter shares this mission, and hopes to use the web to create more of a mass market for independent fashion design. When I asked her about her goals for her site, she said, "We want independent designers to be out there everywhere. All of us need to be out there increasing the size of the market. For me, when I get purchases online, they're always from a different place -- California or Texas or Colorado."
For her business expansion, Ginter credits the web's ability to introduce her brand to -- and allow dialogues with -- customers she's never met. She increasingly gets customers from people Googling "indy fashion" or "independent fashion," which she said suggests that SmashingDarling is serving a growing demand. Ginter hopes to fan the flames of that market growth on the supply side.
So, will the Internet, which has supplanted mainstream journalistic and commercial activity with more niche products and processes, have the effect of elevating niche products in the arts and design marketplace to mainstream standing? Only time will tell.
For now, neither Ginter nor Beckman say these new platforms will make in-person transactions obsolete, or disrupt their boutique or gallery. As opposed to books or CDs, where the big box stores that upended smaller retailers were themselves upended by online retailers (think of Amazon hurting Borders) or iTunes replacing Tower Records), Ginter and Beckman insist people will continue to purchase artwork or fashion designs at physical stores.
Photo of Jen Bekman courtesy of Paul Costello
Mark Hannah is the director of academic communications at Parsons The New School for Design. Coming out of the public relations world, he has conducted sensitive public affairs campaigns for well-known multinational corporations, major industry organizations and influential non-profits. Mark worked for the Kerry-Edwards presidential campaign as a member of the national advance staff. He's more recently worked as an advance associate for the Obama-Biden campaign and Presidential Inaugural Committee. He serves on the board of directors of the National Association for Media Literacy Education, is a member of the Public Relations Society of America and was a 2008 research fellow at the Society for New Communications Research. He holds a BA from the Annenberg School at the University of Pennsylvania and an master's degree from Columbia University. He can be reached at markphannah[at]gmail.com
Business content on MediaShift is sponsored by the weekend MA in Public Communication at American University. Designed for working professionals, the program is suited to career changers and public relations or social marketing professionals seeking career advancement. Learn more here.
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South By Southwest (SXSW) is an annual gathering of interactive, film and music creatives, executives and marketers in Austin. It is the ideal setting to explore multiplatform storytelling, multiscreen experiences and projects that reflect the talents of the collective. After several days of knowledge-filled panels and hyper-networking featuring digital thought-leaders, there were a few notable trends that made an imprint once the conference's closing credits hit the screen.
The two-screen, or so-called companion viewing experience, was recently implemented at the Academy Awards via the Oscars All Access app, which gave viewers multiple camera angles within a paid app. While laptops, smartphones and tablets are all capable of the two-screen implementation -- basically, using a device while watching additional programing -- the ideal form factor is the tablet due to its screen size and ease of interaction. The rapid emergence of tablets such as the iPad have opened up a new opportunity for studios and networks wishing to amp up DVD sales and TV ratings.
SXSW featured the "TRON: Legacy" Lounge, which allowed visitors to experience Disney's Second Screen -- a parallel universe of interactive features on an iPad in sync with the Blu-ray version of the movie (available April 5). The additional content on display included filmmaker annotations, image sliders, progression reels to show effects in a scene and more ways to immerse yourself in the movie's Grid. Learn more about it in this video:
A separate SXSW panel titled "TV + New Media = Formula for Success" featured executives from USA Network highlighted Psych Vision, a two-screen experience to promote the TV show "Psych." The app enabled viewers to check into the show, unlock exclusive video content, earn points and redeem them for show merchandise.
Transmedia, or telling stories across multiple platforms and formats, is in chapter one of its journey to mass adoption. But it has quickly moved from experimental buzzword to a powerful new storytelling genre.
There were several panels focused on transmedia at SXSW, including: "Can Transmedia Save the Entertainment Industry?," "Transmedia Storytelling: Constructing Compelling Characters and Narrative Threads," and "Next Stage: Transmedia: An Interactive Exploration of the History and Future of Production in a Transmedia World."
I attended the "Unexpected Non-Fiction Storytelling" panel, which featured many creative interactive projects, including "Collapsus," this year's SXSW Interactive Award winner in the Film/TV category.
"Collapsus" is a great example of the promise of transmedia. This eco-thriller from director Tommy Pallotta (producer of "A Scanner Darkly") was developed by SubmarineChannel and is based on the documentary "Energy Transition" from Dutch broadcaster VPRO. It is a mix of animation, interactive maps and documentary, presented in three panels and requiring viewers to make informed decisions about energy production:
Collapsus Walkthrough from SubmarineChannel on Vimeo
While a worldwide tour with PowerPoint slides may have been effective in driving awareness on global warming, "Collapsus" presents a compelling new media approach to addressing planetary issues.
The National Film Board of Canada showed several interactive projects, including "Test Tube." It deals with another global crisis -- the exponential growth of the human population (represented by bacteria) within a finite planet of resources (symbolized by the test tube). The site asks visitors what they would do with an extra minute, then environmentalist David Suzuki makes a compelling case on why we're in the final minute of existence. The concept is thought-provoking and the innovation is evident in the various tweets that are dynamically pulled into the site based on your "extra minute" entry.
Out of more than 67,000 entries, the most popular response to the minute question is "sleep" followed by "eat." (Disclosure: I entered "make coffee" for my final minute, which may not have been the best answer to save the world/test tube.)
Star Wars Uncut "The Escape" from Casey Pugh on Vimeo.
SXSW also featured award-winning crowdsourced projects and the premiere of one of the most anticipated crowdsourced video initiatives. Creators of the Emmy-winning "Star Wars Uncut" film, which is featured above, discussed how "the Force" of the crowd helped re-imagine one of the most beloved films in the galaxy. More than 1,200 contributors from 100 countries helped build the final film, elevating scenes into the film based on popularity or likes.
Annelise Pruitt, one of the project designers, called it "the largest user-directed movie" in history. She attributed its dynamic playback capability as the main reason that "Star Wars Uncut" won the 2010 Emmy for interactive media.
Another contemporary classic in the brief history of crowdsourcing is The Johnny Cash Project, a music video for "Ain't No Grave" composed of 1,370 frames built from art submissions worldwide. And there ain't no stopping the success of that project as it received another prize at SXSW, the Interactive Award in the Art category.
The YouTube project "Life in a Day," produced by Ridley Scott (Oscar-winning director of 2000's Best Picture "Gladiator," as well as "Alien" and "Gladiator"), also relied on the submissions of the collective. The project received more than 80,000 video submissions from people in 140 countries who wanted to share their personally documented story on July 24, 2010. The film made its premiere at Sundance earlier this year and was screened at SXSW last week. National Geographic Films picked up rights to the movie and will distribute it in theaters this summer.
For filmmakers looking to develop and distribute full-length features rather than a slice of a larger project, JuntoBox Films is a new collaborative film studio that merges social media with traditional film production. They plan to finance five films in 2011 with a budget range of $200,000 to $5 million each. Filmmakers are encouraged to "get junto'd" after creating a profile on the site and having their project rated by their peers in order to be considered for the film assessment phase.
"Junto" means together in Spanish. The interactive storytelling, the two-screen experiences and the collaborative initiatives showcased at SXSW reveal that projects built together and experiences shared together are worthy of the highest rewards.
Nick Mendoza is the director of digital communications at Zeno Group. He advises consumer, entertainment and Web companies on digital and social media engagement. He dreamstreams and is the film correspondent for MediaShift. Follow him on Twitter @NickMendoza.
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Business content on MediaShift is sponsored by the weekend MA in Public Communication at American University. Designed for working professionals, the program is suited to career changers and public relations or social marketing professionals seeking career advancement. Learn more here.
Content farms. Content mills. Robo-content.
Demand Media and its huge how-to site eHow have been called snarky names for years, largely because they pay low rates for quickly produced content based on popular search queries. So it's no surprise that a search for "how to grill fish" on Google produces this eHow article up near the top of the results.
Last year, MediaShift ran a week-long special report, Beyond Content Farms and one report by Corbin Hiar included a Demand Media writer saying that her haphazard report on "How to Make Gin at Home" could poison someone. Now, eHow execs tell me that they're taking steps to improve quality.
"I know there was so much conversation out on the web about low quality content," said Greg Boudewijn, eHow's senior vice president and general manager, in a recent interview. "We realize we're human and there's going to be pieces of content that slip through that aren't great. Whatever we can do to provide means to continue to improve the processes and the content that exists on our site, that's something we take to heart. We applaud Google for their changes, and applaud any site that focuses on quality."
A recent redesign of eHow created colorful channel pages for Family, Food, Health, Home, Money, and Style. The cleaner look is being augmented with longer form feature stories, a video webisode series about the popularity of food trucks, and a content deal with Rachael Ray in the Food section. More importantly, eHow added new "Helpful?" buttons at the end of each article so people could provide direct feedback on whether articles are useful -- which will lead to more oversight of writers.
Despite a recent change in Google's algorithm to filter out poor quality content, eHow actually benefited from the change, according to both comScore and Sistrix. I spoke to both Boudewijn and Jeremy Reed, the senior vice president of content and editorial at Demand Media, in a wide-ranging interview. While they admitted they weren't on a path to match the New York Times, they were frank about their push into service journalism -- especially with the number one most trafficked home and garden site. Below is an edited transcript, with audio clips, from that phone interview.
What were the main improvements with the redesign of eHow?
Greg Boudewijn: We were looking at this site as the next evolution of our site and user experience. It was a little more than four years since we touched it, it was 2007. Demand Media acquired eHow in 2006, so you can imagine that four years on the web is like 30 in real life. In that time, eHow had grown phenomenally based on our unique content model. It was time to re-architect the back end to handle the scale of innovation and development faster, and we wanted to launch more sites internationally.
We introduced a new eHow logo and color palette to introduce a more consumer brand. We wanted to create more of an emotional connection for them, and the best way we did that was the introduction of six core channels at the top of the header. Each channel has its own color palette and own look and feel. If you look back 10 years to the AOLs and Yahoos of the world, doing portal hubs -- a little bit of an antiquated term -- they had huge amounts of traffic coming through their front doors. And they could funnel that traffic to core verticals like news, finance and entertainment.
Our model is very different. We made each individual content page as an entry point to our site. Over time, we saw audiences growing in certain core verticals and those are the ones we chose to use for our channels. People were coming repeatedly to certain topics so when we created the channel pages, we used them to create new content types. Everything from long-form video webisodes to blogs and posts from experts. We partnered with Rachael Ray for our food category. The experts can be personalities or brands.
In the home channel, we have Home Depot to help users fulfill what they're looking for. It's about simplification. You have the steps to do something and can go out and buy it. The new site is a springboard to expand the media company to cater to more than how-to articles.
You were thinking of every story as an entry point but now you have vertical sections. Why? Because of traffic patterns you saw?
Boudewijn: We still view articles and videos as entry points whether people get there from search or social networks. What we saw was that we were amassing audiences of a scale that was much larger than sites on the web that only focused on that specific topic. That was evident with the home category, where for more than the past year, we've been the number one home and garden site on the web. We felt it was our responsibility to make a front door for that and program it daily with a rich experience.
Tell me more about the new longer form stories and features.
Jeremy Reed: One of the things we've always focused on is the idea of utility. But there's also the opportunity to entertain them or take them to the next step or direct them to another place. We have 15,000 active people in our community [of contributors] throughout the U.S. -- we have filmmakers, copy editors, writers. They were very good at creating this specific kind of content, but they also have experience writing feature content, or filmmakers had experience doing longer form content. We had a talent base in our community, so it made sense on the business side and an opportunity for that community so they could grow their career.
Was the business reason for doing longer stories so that you could improve the time spent on your site?
Reed: When we look at content, we look at many signals. We look at content that could hold its weight next to branded advertisers, and content that people would want to share. In the last month, we had 100,000 articles shared through Facebook. So it's trying to figure out compelling content based on the signals coming to our site.
Boudewijn: It's about completing the user experience. We've done a really good job doing articles of a certain length and type. So what happens now is, because we've created these channels, the content we create in one channel can be fundamentally different than in others. We're providing something with an expert voice, and something they can follow daily. It has more of a personality and engagement factor.
How has pay for writers evolved at eHow, and will you change compensation with this redesign?
Reed: We've always had a range in compensation. We've paid anything from $7.50 for a short-form tip to more than $100 for feature articles. Different ranges for filmmakers. I think the price that we pay has certainly gone up. We pay our writers twice a week, so if they turn in an article on a Sunday, we pay them on Tuesday. If they turn an article in on Wednesday, we pay them on Friday, regardless of the amount paid.
Reed explains how eHow is transparent to writers about how much they'll get paid and let writers of similar content see how much everyone in that subject gets paid:
Does pay vary according to topic or length of story?
Reed: We look at different factors like subject area expertise and how much time it takes to write it and other factors like that.
How is this redesign targeted at advertisers? You mentioned there would be more "touch points" for them in your press release about the redesign.
Boudewijn: We were very good at providing a utility, and there was content programmed on the home page focused on how-to, but not differentiated by category. When we acquired eHow in 2006, branded sales wasn't a big part of our business. We relied primarily on third party relationships with advertising affiliates. Over time, with the hiring of Joanne Bradford [from Yahoo to be chief revenue officer of Demand Media], branded advertising has become a bigger part of our business. Those advertisers want to own the consumer experience. They want to see their placement on the page and see the integration. They want to know the boundaries around where that exists.
So when we did the redesign, we looked at aesthetics of the site but also looked at places where advertisers could come in and buy sponsorships or packages. One thing that's unique about what we do is our content is all intent-driven. We're not an entertainment site or news site where people come to the front door and say, "entertain me." But eHow is intent-driven; people come with a specific mission and we want to help fulfill that. That's a very meaningful experience and a funnel that advertisers want to be a part of.
Plus, we wanted to position experts. Brands want to be associated with the Rachael Rays of the world and expert knowledge that's honest and genuine. That's a great opportunity for advertisers to wrap around eHow Food. And there's also an opportunity for brands as experts. So for the Home Depots of the world ... a user coming to the site recognizes an advertiser that adds value to the experience, and it helps them.
Boudewijn explains how Home Depot will help users as an "advertiser presence" that will help users complete tasks.
You've added this "Helpful?" button to get feedback from readers. How does that work?
Boudewijn: We've been very good at listening to signals out on the web, whether through search or social to understand what content we should create. eHow has a massive audience, and it's one thing to be in the studio evaluating writers on a number of metrics -- their grammar, their quality, their experience. That's an academic way. But we want to know how our content resonates with people who are using it in on an everyday basis. So these buttons are the first step of a curation layer to understand how helpful our content is in the real world.
Right now we let people tell us if it's helpful, and they can "like" it or share it on Facebook and Twitter. If they don't think it's helpful, then we're gathering reasons on why it might not be helpful for them, and funnel that information back to our editorial team to help enrich our content and inform our guidelines on what to produce. That's just our first step, there will be other hooks on the page to solicit feedback in the coming months.
Reed: One of the things we've done from the beginning is make sure we understand the quality of the content by the people who use it. We've let people make comments and ratings on stories, but we wanted to go back to ask the specific question: Was this helpful or not? Like Greg was saying, we can take that information and go back to the writer and decide if we want to give them more work, or are they better in one subject than another. It's a constant, targeted feedback loop from someone who's engaging with that content.
I noticed on Compete.com that the traffic for eHow went down about 7 percent in visits and 4percent in unique visitors for February 2011. Was that related to what happened with Google changing its search algorithm?
Boudewijn: February is naturally a shorter month. Most businesses on the web, going from a 31-day month to a 28-day month, especially with the two holidays for Valentine's Day and President's Day, you have a lot of events that make businesses fluctuate. We're now Top 10 in the U.S., according to comScore. I don't rely heavily on third-party analytics that we don't have direct influence over, so I can't necessarily comment on Compete's numbers.
Google makes algorithm changes all the time, but when they make it public, people seem to gravitate to them. We've seen them make a number of changes, and we see ups and downs. Our business continues to grow and we haven't seen any material effect from [Google's algorithm changes].
(Editor's Note: In a follow-up query to comScore, the research firm also found a slight drop in traffic to eHow in February, but attributed it to the shorter month as well, and noted that the Google-referred percentage of traffic to eHow is actually slightly higher in February than January.)
Are there other things you're doing to improve the quality of content?
Boudewijn: If you look at the way we produced content two years ago, it's fundamentally different than the way we do today. One of the unique things we're doing is creating these channels and aligning writers in Demand Studios with those channels. We're also vetting the talent to make sure they're qualified to write for us. Content quality is such a broad term. You could take the New York Times' content and put it on someone's blog and put 15 AdSense ads around it and show it to 100 people and they'd say it's terrible.
Content quality comes down to the process by which it's created, and we stand behind our editorial process. At eHow, we want to make sure it's a quality experience for users and for brands and advertisers.
Reed: We did make a make a conscious effort to stay within what we could do responsibly within our model, within our community, within our scale. We didn't go after investigative reporting like the New York Times does because we didn't feel in the current equation that we could do it successfully. We went after this very service journalism, the utility kind of content. We started to see the value of subject matter expertise, and an editorial process. We wanted people to come through the door with years of experience, so that it makes sense for them as part of their career.
Our editorial rigor includes plagiarism checks, citing references, going through a copy editor so we felt good about that content. We have a very large taxonomy, so we've tried to cut that up so everyone has subject matter expertise, including the people who write the titles, who edit the copy, who select the photo, all the way down to the people editing it and giving it the final OK.
Boudewijn says they realize there will be some pieces of content that slip through 'that aren't great,' but they're trying to improve:
How do you vet the people that you hire?
Reed: It's on two levels. We qualify people who come in. If you're a writer, you submit a resume and multiple clips and we have an in-house editor who vets that. If you're a copy editor, it's the same process but if you're accepted there's a copy editing test. So if you're going to edit a section on automobiles, you get a test based on that subject. That's one part of our approach. And then on each piece of content, every writer gets edited by a copy editor and has a possible re-write before it's sent through. The copy editor then rates the writer on a 1 to 5 scale on grammar and on subject matter expertise.
We look at every single person and qualify them, and look at every single piece of content.
Do you own all rights to the content or can writers or videographers re-use the material?
Reed: We made the decision that if we would pay up front and pay for that piece of content that we would own it.
Boudewijn: That was one of our learnings over time, that ensures our editorial process and integrity. Early on, in 2006, we did allow people to come directly to eHow.com and submit content. We dropped that program last April because it didn't make sense to put all the time and energy into producing content with a rigorous editorial process, and then have people submit things without any process. So today we stand behind our content because it's completely owned by us.
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What do you think about eHow's redesign and push for higher quality content? Do you use the site regularly or avoid it? Share your thoughts in the comments below.
Mark Glaser is executive editor of MediaShift and Idea Lab. He also writes the bi-weekly OPA Intelligence Report email newsletter for the Online Publishers Association. He lives in San Francisco with his son Julian. You can follow him on Twitter @mediatwit.
Business content on MediaShift is sponsored by the weekend MA in Public Communication at American University. Designed for working professionals, the program is suited to career changers and public relations or social marketing professionals seeking career advancement. Learn more here.
This is a summary. Visit our site for the full post ».
Business content on MediaShift is sponsored by the weekend MA in Public Communication at American University. Designed for working professionals, the program is suited to career changers and public relations or social marketing professionals seeking career advancement. Learn more here.
Fifty million people. One trillion dollars in buying power. Ad spending up 164% since 2001 to $3.88 billion. Hundreds of Spanish-language TV stations across the U.S.
Those eye-catching numbers represent the immense, and largely untapped, scale and wealth of the Hispanic-American media market. Put into greater perspective, if Hispanic-Americans comprised their own country, it would be the fifth-largest, by population, in the European Union. And this demographic is growing -- rapidly.
Despite these figures, one component is still missing in the media industry's quest for greater diversity: Hispanic leadership in the executive suite at media companies.
As a Hispanic-American executive, who also happens to be female, I have seen first-hand the immense growth and impact diversity is having on the American economy and culture. Media executives, marketers, communicators, lawmakers and all of America are hurtling into an era where the business and marketing of diversity -- particularly the Hispanic-American market -- will be at the forefront of the American conscience.
And yet a wide divide still exists between this reality and the promise for greater diversity in the ranks of media, PR, and ad agencies' senior management.
"The future of our nation depends on what happens in [the Hispanic-American] population, a segment of Americans that have not always gotten the opportunities," they deserve, said Manny Ruiz, founder of Hispanic PR Wire and Hispanicize.com, in a recent PRNewser interview.
This lack of opportunity has led to Hispanic-Americans being underrepresented in corporate boardrooms. According to the 2009 Hispanic Association for Corporate Responsibility Corporate Inclusion Index survey, only 4.8 percent of all Fortune 100 executive- and director-level positions are held by Hispanics. Similarly, Hispanics account for only 6 percent of representatives on Fortune 100 boards.
It took my own professional organization, the Public Relations Society of America, 48 years before Luis Morales became its first Hispanic president in 1996. Fifteen years later, I'm the first Latina to serve as chair and CEO.
My question is: Why was there a gap in years for the PRSA to select another Hispanic leader? I also wonder, why aren't there more Hispanic-Americans, whom I know are succeeding in the business world, stepping forward to executive and board positions across the media and PR industries?
Is it an issue of being the "token"? Nearly 20 years ago, I remember looking around the boardroom and finding that, not only was I the only woman in the room, I also looked different from everyone else. Feeling like "the only one" didn't stop me from finding common ground with my colleagues, and it shouldn't be an impediment for greater diversity within media's C-suite.
Is it an issue of language? Many times, people assume that all Hispanic-Americans speak Spanish and prefer Spanish. That is as much a myth as is Spanish fluency for those who do speak Spanish. There are Hispanics, like me, who are just as comfortable communicating in Spanish or English because of our bi-lingual fluency. But, there are just as many who are only truly comfortable in one language -- English.
Is it cultural? Business development and growth is part of the Hispanic-American spirit. Our culture thrives on entrepreneurship. Hispanics aren't fond of sticking to the "way things have always been." We're living proof that change is the only constant; thus we prefer acculturation instead of assimilation.
I'll admit, the level of diversity within public relations has progressed significantly in recent years. For example, 14 percent of PRSA members are self-described "diverse;" that's an increase from 7 percent in 2005.
But we still have quite a ways to go in order to meet the global business community's diverse communications and marketing challenges.
Playing a leading role in conversation development across societal, economic and ethnic variances has always been one of PR's strongest areas of focus. A key factor in continuing a surge in value will be the industry's ability to generate two-way, conversation-themed strategies. And this can only come from the inclusion of non-traditional hires, such as bloggers, social-media influencers and analysts that come from a variety of ethnic and racial backgrounds.
It's quite simple, really: Diversity within PR will be crucial to agencies' success in years to come, as businesses continue seeking a more global perspective to their communications.
That means it is the responsibility of the PR industry -- along with the media companies that use our services -- to place an immediate focus on the business value of diversity and a diverse boardroom. Businesses must be prepared to tap into burgeoning and increasingly diverse markets for new revenue and growth. And having a more diverse executive suite, which reflects the modern ethnic makeup of the U.S., will better prepare the media industry to reap the immense financial rewards of a modern and very diverse America.
In today's stagnant economy, can any media company -- and the PR and marketing firms working within that sector -- afford to go without the diverse leadership that could help it tap into a $1 trillion market? Not likely.
(A tip of the hat to Julian McBride, whose excellent MediaShift post on fixing the tech PR industry's diversity issues inspired this post.)
Rosanna M. Fiske, APR, is chair and chief executive officer of the PRSA. She is also director of the Global Strategic Communications master's program in the School of Journalism and Mass Communication at Florida International University in Miami. With more than 20 years of experience, Fiske began her career as a journalist, and then moved to marketing and corporate communications. She has held senior communications counsel, marketing and management positions in agency and corporate settings.
Business content on MediaShift is sponsored by the weekend MA in Public Communication at American University. Designed for working professionals, the program is suited to career changers and public relations or social marketing professionals seeking career advancement. Learn more here.
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The music industry had a wild ride in 2010. Companies came and went, layoffs hit every sector, rapid growth delivered opportunity, and Spotify still didn't launch in the U.S. This year, 2011, should be no different.
Here are some predictions and thoughts about what 2011 may hold for the music industry.
Despite all the talk about the major label system collapsing at any moment, it doesn't seem likely. However, 2011 may finally see a restructuring of assets and brands. EMI has no shortage of financial issues, and the current discussion points to Terra Firma handing them over to Citigroup in the near future. The big assumption is that EMI will be broken up and sold in pieces to the other three majors (Universal, Sony and Warner Bros). Of particular value is EMI's publishing division, and if the piecemeal sale does happen, there may be a fight for this asset. Of course, the other three majors aren't having the smoothest time with cash-flow either, so it remains unclear exactly who can buy what. At minimum, EMI will not look the same at the end of 2011 as it does now.
All music companies will be focused on streamlining their efforts in 2011. This involves smarter processes, innovative policies, and keeping overhead low. Independent labels typically have had to function with these elements in place from day one; their ability to stay nimble will allow for continued growth opportunity. As business partnerships continue to solidify between content owners and brands, smaller labels will be able to adapt quickly and profit at lower revenue thresholds. This creates a strategic advantage that, if managed properly, will see upward trends on indie label balance sheets.
In 2011, someone will become the Apple of streaming -- perhaps Apple itself. Consumers are getting closer and closer to accepting renting over owning content. Companies such as MOG, Rdio, Spotify, and Rhapsody are poised to capitalize on this. With good timing, savvy marketing, and clear messaging that succinctly communicates the benefits, a streaming music provider can easily take the leading role in this race. The safe money seems to be on Apple (in part thanks to the Lala acquisition), but the other contenders are quite serious and finding the level of funding necessary to compete. This sector is also making major moves into mobile and car audio; these additional distribution avenues only strengthen the push toward widespread adoption.
"Free" has been a highly debated concept. One side states that the awareness and data capture free provides can be converted to sales over time. The opposition feels that free devalues content and sets the wrong precedent. The truth may lie somewhere in the middle, but it is clear that with the volume of free content (legal and otherwise) one has to be giving something away simply to stay competitive. This line of thinking is nothing new, but it has finally permeated the companies and artists at the top. The majors and superstars have relaxed their policies on free (especially when paired with data capture) and that trend will continue. This will happen in parallel with efforts to find techniques to convert free to paying -- a critical element to make this model work.
Digital marketers have an almost endless supply of new technology and techniques to try. However, over the past 18 months, many have faded away or a best-of-breed front-runner has emerged. In 2011 we will see this continue as it becomes more clear which technologies and techniques provide real value. In 2010, it became easy (and essential) to track true performance metrics; marketers now have multiple tools to evaluate effectiveness based on conversion, data capture, sentiment, and engagement. This analysis is helping define where to focus efforts -- and that is helping digital music marketing become a more precise practice.
Companies with momentum in the digital marketing toolkit space include Topspin, Bandcamp, Nimbit, Rockdex, NextBigSound, Rootmusic, SoundCloud, Buzzdeck, Artistdata, Mozes, and the ever-essential Google Analytics. Let's also not forget the mainstays -- Twitter, Facebook, and email-marketing platforms such as ExactTarget, Mailchimp and Constant Contact.
The positions and arguments haven't changed much, but the Net neutrality discussion (particularly at the government level) has accelerated. In late December, the FCC approved rules that enable mobile carriers to regulate application use. Many members of Congress have already stated they will fight this by creating a new law. This debate is still far from over; expect heated discussion all year long.
In many ways 2011 won't look much different than 2010. The music industry is still suffering from steep declines and is still building strategies and systems to counteract this. The key words moving forward are innovation and experimentation; most people have accepted the fact that we cannot force consumers to behave as they did in the past. Instead, we must seek to better understand our audience, foster stronger communication, and be willing to take leaps of faith on a regular basis.
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What predictions do you have for the music industry in 2011? Please share them in the comments.
Jason Feinberg is vice president, direct to consumer marketing for Concord Music Group. He is responsible for digital and physical direct-to-fan solutions for CMG's frontline and catalog including the Rounder, Fantasy and Stax labels. Recent campaigns include Paul Simon, Allison Krauss, Paul McCartney, Elvis Costello, Carole King/James Taylor, and Crowded House. Follow Jason on Twitter @otmg
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For authors and publishers already overwhelmed, last week's news about the Google eBooks store and Amazon's Kindle for web only added to the waterfall of controversy pouring into an already raging river of e-book and publishing hype. The big takeaway from these two announcements, and a recent "Books in Browsers" event that I attended, is that the web browser is an important player in e-books.
Self-publishers can benefit from adding browser-based e-book options to the services they should already be using to sell their books, such as Smashwords, Scribd, and Amazon DTP. This best-of-breed group will get their books in all the dedicated e-book readers, mobile, and multi-use devices, and now, delivered in the browser.
Now here's why browsers are so important, and how to get your books in them.
In the frenzy of formats, platforms, and devices, awareness of the web's importance as a e-publishing platform simply faded into the background. But the Books in Browsers conference in October brought the browser to the attention of many publishing insiders. BIB10 was an astonishingly high-level gathering of 120 people from nine countries, including publishers, librarians, and toolmakers (many of whom were notable and even famous names), for a two-day working meeting. It was hosted by Brewster Kahle, founder of the Internet Archive, who is largely concerned with building a digital library and providing universal access to books, music, movies and, via the WayBackMachine, its billions and billions of archived web pages.
One of the advantages of the web
browser is that it does not constrain text inside a container. With proper formatting, HTML can provide a beautiful reading experience on a 19-inch flat-screen or a three-inch mobile device. The browser even gracefully delivers transmedia books with embedded audio, video, images, and graphics -- something today's e-book readers are hard pressed to do. Even if a book is enclosed in a container (providing discovery, sales, and downloads), the browser delivery system lets book buyers access their downloads from the cloud -- using any device they happen to be near that has an Internet connection, as long as it has an HTML5-compatible browser. It's worth noting that computers and smartphones are able to take advantage of books in browsers, but many dedicated e-readers can't.
With over a billion browser-friendly, web-enabled devices worldwide we are suddenly back to the future with e-book publishing. One has to wonder, why did all the device and e-book publishers feel like they had to create e-book readers?
One answer is because multi-use devices are simply not as light and comfortable as a book. That's going to change, and when it does, your Kobo, Kindle, Nook and Sony Reader will become inconvenient and redundant -- or get smarter and lighter and do more things. Today's versions are pretty dumb and are considered "transitional devices" by people who gaze into tech's crystal ball. For example, Craig Morgan of Publishers Weekly and Kevin Kelly, the co-founder of Wired, talk about this in an interview about Kelly's book, What Technology Wants.
The launch of Google eBooks last week has put books in browsers in the headlines. Hours after the announcement, Amazon announced Kindle for Web, making browsers even more relevant. Kahle saw this coming a long time ago.
"Google's promised Google Editions [rebranded Google eBooks] are going to be available in browsers," he predicted in his Books in Browsers 2010 keynote speech back in October.
Kahle also told us, "Amazon is putting its toe in the books-in-browser world with its recent beta. Then there's Starbucks and LibreDigital's recent announcement that they will make bestsellers readable in browsers while at a Starbucks. Ibis Reader, Book Glutton, rePublish, sBooks, and the Internet Archive BookReader are other emerging technologies for reading in browsers."
Readers can now buy hundreds of thousands of e-books from Google, or download over two million public domain titles for free. They can access their downloaded books on any device with an HTML5-enabled browser from their computers or via apps for iPhones, iPads, and Android-powered smartphones. Buyers can access the books they purchased on any e-reader based on an open platform, like EPUB, which includes the Sony Reader and the B&N Nook. (The Sony Reader Store is the search, purchase, and download engine for Google eBooks.)
If you're self-publishing, you should add Google eBooks to your list of places to sell books. This will get your book into the largest number of e-tailers and devices, not to mention brick-and-mortar bookstores like Books Inc. and Diesel, who are helping their customers buy digital. In order to make this happen, here are your tasks:
• Upload your book to Google eBooks and promote it through their partner program.
• Upload your book to the Amazon store through Amazon DTP. (If you publish your POD book through CreateSpace they'll give you a DTP formatted version.)
• Upload your book to Smashwords for sale in their store. Distribute in their catalogs: Their Premium Catalog aggregates your book to major retailers and their Atom/OPDS Catalog gets your book in major mobile app platforms. They also provide HTML and text formats easily read in browsers.
• Upload your book to Scribd for social media attention, previews, sale, and distribution to the customer's device or for display in their browser-based reader.
If formatting is not your forte, or you just don't have the time, you can throw about $250 at a service like eBook Architects who will do it for you.
The above covers the vast majority of sales outlets, but that doesn't mean that other products, services, and programs aren't also begging for attention. I try them out as they come along, but mostly give up in frustration due to their difficult, buggy, and largely beta interfaces.
This is a profitable marketplace -- self-publishing is seeing three-digit growth! -- so there is lots of activity and the hype is not likely to die down anytime soon. Meantime, best practices for self-publishers include sticking with the above best-of-breed products and services, and focusing on quality. Participate in membership organizations and communities (like the Small Publishers Association of North America) that can help separate hype from truth, and concentrate on getting your book to (virtual) press, which means paying attention to writing, editing, design, and marketing.
Carla King is an author, a publishing and social media strategist, and co-founder of the "Self-Publishing Boot Camp" program providing books, lectures and workshops for prospective self-publishers. She has self-published non-fiction travel and how-to books since 1994 and has worked in multimedia since 1996. Her series of dispatches from motorcycle misadventures around the world are available as print books, e-books and as diaries on her website.
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Magazine editors and publishers are excited about tablet devices like the iPad.
In them, they see a chance to give consumers the best that digital media can offer -- and to be able to charge them for the content.
But does the profit from the apps justify the expense of building and marketing them?
Conde Nast, Meredith, Hearst and other leading magazine publishers have all been experimenting with the iPad. They are touting their successes, while acknowledging it's too soon to tell what the ultimate business will be.
"Our tablet strategy," said John Loughlin, executive vice president and general manager of Hearst Magazines, at the recent Ad:Tech conference in New York, "is to learn by doing." To determine what's sustainable, what's a fad, and what's "a significant new component to our business model."
Conde's Wired magazine in June released a $4.99 iPad app that sold 100,000 copies of that month's issue, more than the 73,000 newsstand copies typically sold at the same price, according to WWD.
Earlier this month Conde's fashion flagship Vogue announced the release of an app as well, adding to a growing stable of magazine apps from the publisher.
It's easy to see why the editors are excited. After watching print subscriptions, newsstand sales and advertising drop sharply, and unable to make up the difference on the web, they now see a way to regain the ability to not only charge consumers but also make advertisers pay a premium to reach them.
Loughlin ticked off some encouraging figures: Popular Mechanics sold 54,000 single copies in its first six to seven weeks; there will be eight magazines on the Barnes & Noble Nook e-reader by the end of the month; most titles will also be on the iPhone, PC, Mac and Android devices, which compete with the iPad and iPhone. Users were using Hearst magazine apps "well beyond the issue expiration date," which presumably gives Hearst a way to continue to reach them for more sales and advertising.
Lauren Weiner, who oversees Meredith publications' digital and emerging media business, said at Ad:Tech that the company was working to transform itself "from a print publishing entity into a multimedia powerhouse," and that apps were a part of that strategy.
Loughlin noted how his company was moving beyond simply putting magazines with complementary video and interactivity into apps and was instead gearing experiences for the devices themselves. He mentioned Cosmopolitan magazine's version of the Kama Sutra which was revamped in an app called "Sex Position of the Day" and sold more than 100,000 copies for the iPad. A version has also been released for Android.
Weiner talked of popular for-pay recipe apps that lived separately from the many popular home-oriented titles Meredith publishes such as Family Circle, Better Homes and Gardens, and Ladies Home Journal.
Still, despite the froth, it's difficult to make a case for apps as a savior for the magazine industry.
Weiner noted it can cost $75,000 to $300,000 to produce a paid app worthy of her magazines' brands.
Even assuming a generous 50 percent margin on each app sale, that means a magazine would have to sell 30,000 to 120,000 copies at $4.99 before it breaks even (assuming they aren't selling iPad-specific ads). That doesn't include added costs such as reconfiguring the app for other platforms and marketing it to consumers.
And users can be notoriously fickle in buying single-issue copies. Wired's iPad app sales were reported to have plunged to 31,000 in July and 28,000 in August.
The market for apps is much more limited than for magazines. Consumers with iPads, other tablets and e-readers are a fraction of the media-consuming public, and those who would buy magazine apps are a fraction of those. Even if a subscription model comes to all the devices, revenues in the near- or even medium-term are not likely to match print.
Magazines like Wired and Popular Mechanics have a natural appeal to the technically adept who are using tablet devices. Many magazines, though, sell only in the low thousands for their apps.
"Will the tablet save the magazine industry? No," said noted magazine and digital media designer Roger Black, who is a partner in a new e-reader platform venture called Tree Saver. "Will they get a percentage of the market? Sure."
The paid magazine apps, which tend to range in price from $2.99 to $4.99 for single issues, also compete with free ones, like Conde Nast's Epicurious recipe app and their one for Style.com.
Commenters in the iTunes store, meanwhile, show their ire, complaining about the pricing, and in some cases, the technology. "Boycott full price mags," wrote one, adding, "Digital magazines are fantastic but we should be able to buy a year's subscription for close to the price of a paper subscription." It was a call repeated by many others.
"Would give five stars [as a rating], but paying that much for a magazine is ridiculous," wrote a user ID'd as William Shelton on the Popular Science page, where the app, which had been $2.99, now lists for $4.99. He gave one star.
To justify the cost of producing apps, magazines have to amortize them over time. But "what happens in the year 2012 when Steve Jobs announces that, 'We've upgraded,' and your app suddenly no longer works?" Black asks.
Magazines are also competing on the iPads for attention from social networks like Twitter and Facebook; apps for TV shows; movies and music; mashup applications like Flipboard that combines social networks and media; games and more.
True, development costs are coming down as more programmers learn the tablet programming languages. Plus companies like AppMobi are helping web developers write programs in JavaScript that can then be ported over to mobile devices. HTML5, which allows new kinds of functionality and interactivity in a browser, could also prove to be a solution.
The technology is improving, and there will be economies of scale, as well. As Loughlin noted, this is an experimental period, when magazines are learning what they can offer and how much they can charge. Some apps will be breakout hits. A combination of web, apps, mobile and print sales may bolster magazines and give them new life and sustained profitability.
But the excitement over apps has some difficult realities to confront until that day is reached.
A former managing editor at ABCNews.com and an MBA, Dorian Benkoil has devised and executed marketing and sales strategies for MediaShift. He is SVP at Teeming Media, a strategic media consultancy focused on attracting, engaging, activating communities through digital media. He tweets at @dbenk.
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I've been covering the digital music business for MediaShift for more than 18 months, and in that time I've chronicled new services and examined key trends and news. Below is a look at 10 things that I've come to believe are true about the modern music business.
Although going it on your own was all the rage in 2009, reality has shown that the majority of artists still need a team around them to reach any substantial level of awareness, sales, and revenue. However, this team doesn't necessarily need to resemble the traditional record label department structure. For many artists, surrounding themselves with a few tech-savvy friends and some seed money can generate the momentum necessary to fuel a moderate indie career. To reach far and wide enough to live off of one's art, the task list is simply too long to tackle alone. In reality, DIY can work just fine if you modernize the traditional definition of the term.
Technology has removed many barriers and allowed almost anyone to play the game. It has also removed the need for some of the team members that have always been needed. Recording, mixing and mastering music can be done faster and cheaper than ever before. Distributing the output digitally is near instant and inexpensive. Anyone can create digital tools that collect email addresses, stream music, sell tickets, and engage with fans. Just remember that with technology, "build it and they will come" is pure fantasy.
Even with all the hype, direct-to-fan (D2F) has proven itself as a valuable strategy when implemented correctly. D2F, when viewed as a set of best practices, can supplement list growth, sell high-margin offerings, and give artists a chance to engage their biggest supporters in innovative ways. However, the idea that D2F is simply creating a Topspin account and building a splash page is a myth -- proper D2F involves content and offer curation, a well-planned timeline, some existing reach, and savvy marketing both online and off.
Very little has changed in this area over the past couple years. With a few clear leaders emerging, artists have no problem getting their content to the marketplace. Other than some simple distinguishing features, most digital aggregators provide an identical core service: Get your music on iTunes, Amazon, and many other digital storefronts. Tunecore, CDBaby, IODA, Reverbnation, and a few others have effectively cornered the market.
The emergence of multiple tiers of artists has also allowed products to follow suit. Companies that offer similar products are finding their own market niches by catering to specific classes of artists (hobbyist, middle-class, established, legacy, etc.). The distinction between services is often based on feature sets, and that typically correlates to price. We'll see this trend continue as the tiers further solidify and the realities of what different artists can spend (and need) come to light.
Traditionally, email has been the Holy Grail of communicating with fans, but as social media and SMS adoption grows, Facebook and text messages are giving email serious competition. Many bands are turning to Facebook as their core communication channel; for many types of audiences this makes perfect sense -- Facebook allows for standard communication but also offers sales, research, and data collection opportunities in one location. By owning the entire ecosystem, Facebook makes the call-to-action process much simpler.
I'd argue this has always held true, but most artists in most genres have begun to truly grasp the importance of an official site. Official sites allow levels of control that are unrivaled by any other platform. Artists can have full control over sales, data capture, and fan engagement on their own site, whereas other platforms such as MySpace and Facebook have limitations in these areas. However, some artists are keeping it simple and can implement those core functions on even the most simple of platforms; the benefit here is little to no cost and minimal administration and maintenance. The right strategy is to understand the value of different platforms, and find the right mix based on audience and needs.
The hardest logistical part of running an artist's business is physical fulfillment. This is an area that has always been tough and it's only become marginally easier through new services and technology. There are a number of ways to fulfill physical goods -- do it yourself, find willing partners, use an established fulfillment house, or sign a formal distribution deal. These each have their pros and cons, but ultimately it comes down to the complexity of the offerings and the quantity of business a band is doing. No matter what method, someone must be managing the process at all times; with so many moving parts (manufacturing, delivery, shipping, stock levels, customer service, etc.) fulfillment management can be a full-time job.
The music space in mobile is still somewhat like the Wild West. Their are certain sectors that are entering adulthood -- SMS marketing for example, where Mozes has become the clear leader. However, other areas are far from fully formed. Music apps for mobile phones are plentiful, but they rarely generate acceptable levels of revenue. One thing has become clear -- for almost all artists, charging for a music app is the wrong business model; give it away for free and utilize in-app purchases.
There is no excuse to not know what events and metrics surround an artist or release. There are so many analytics platforms that the challenge is figuring out exactly which data is important to the current state of a project, and then finding the easiest way to aggregate the information. Check out RockDex, Next Big Sound, BandMetrics, Radian6, and BuzzDeck to see the range of platforms and services. Although they cater to different audiences, they are all racing to determine the ultimate set of useful data and develop the most effective ways of interpreting and displaying it. The real challenge is then telling the user what to do next.
*****
What truths have you discovered about the modern music business? Please share them in the comments.
Jason Feinberg is vice president, direct to consumer marketing for Concord Music Group. He is responsible for digital and physical direct-to-fan solutions for CMG's frontline and catalog including the Rounder, Fantasy and Stax labels. Recent campaigns include Paul McCartney, Elvis Costello, Ray Charles, Carole King/James Taylor, and Crowded House. Follow Jason on Twitter @otmg
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"Tell the chef, the beer is on me."
"Basically the price of a night on the town!"
"I'd love to help kickstart continued development! And 0 EUR/month really does make fiscal sense too... maybe I'll even get a shirt?" (there will be limited edition shirts for two and other goodies for each supporter as soon as we sold the 200)