A version of this piece was published in Marketing in 2008
See also this later post from 2010 - nothing changes!.
Media folk are hitting the slopes or heading south for the sun right now – the year’s work is done, and it’s time to hand over the reigns to the enforcers, those beleaguered media buyers who will spend the rest of the year chasing media owners and winkling the delivery out of the deals their masters struck in December and January.
The Agency Deal has been a feature of media trading right back to the mid-eighties, when Media Independents wrested control of the budget from full-service agencies.
The theory is, an agency’s advertisers all gain. By lumping their budgets together and trading as one, the argument goes, greater leverage is exercised over media owners – and that translates into better value.
But balancing the books becomes a constant challenge for the agency – particularly as the year-end approaches. If trading has been mismanaged, the agency may have to play catchup – and it could be you that’s funding that shortfall, finding your ads in less appropriate environments.
It’s a prix-fixe menu for media. You know you don’t get the best dishes and the portions are going to be smaller, but you do know what it’s going to cost.
Except of course, you don’t. Because once a deal has been struck over an agency’s entire trading book it becomes very hard to tell who’s getting what, and the agency is often taking a rake off the top as undeclared ‘volume’ discounts.
But all of this relates to traditional media right? Wrong.
The two staples of the agency deal, the ‘volume discount’ and the limited menu are alive and well in digital advertising too.
You might ask why in a world of super-diverse media options, with thousands of websites to choose from and tools that allow management of advertising across hundreds of sites, do agencies use the agency deal model?
Surely, you’d think, it’s a model best applied to media where supply is limited, and share is one of the few levers you’ve got to play with? Surely when a media market is changing constantly, it’s disadvantageous to tie yourself into year-long deals?
You’d be forgetting one important factor.
Aside from the extra income it can generate, an agency deal is cheap for the agency to run. A month or two’s running around, and you can tie up the whole agency’s trading for the year, fixing prices, quality and delivery parameters for the enforcers to work to until next Christmas. Buyers don’t need to buy, and planners don’t need to plan – the menu’s there for them, and the decisions have been made.
Put 80% of your trading into just a few sites, and you’ve got a dealbase that’s easy to administer, and you’ve maximised your leverage against those sites by offering them the bulk of your trading. Using the diversity of the medium to reflect the nuance of a brand’s requirements is subjugated to the prime aim of getting away the media at the lowest administrative cost.
This model has been letting advertisers down for years in traditional media, and it has been enthusiastically imported wholesale into the online advertising business.
The problem as ever, is one of money. All this non-standardisation costs. If you ever asked yourself; how come no matter what my brief says, I always get the same three sites on the media plan, then this is probably the answer.
Digital media gives us accountability. It’s amazingly adaptable and enables us to react quickly – pumping investment into stuff that works, diverting funds away from areas that underperform. Stick an agency deal on the front of that, and you’ve just limited your options. Growth is slower, performance weaker, flexibility hampered.
It’s time for the agency deal to die. And the best way to kill it is to evaluate agencies on the value they bring, rather than how cheap the media is, or how low their fees are.
Thursday, February 28, 2008
Thursday, February 21, 2008
Record companies and their Canute moment
A version of this piece was published in Marketing in 2008
The story famously associated with King Canute is most commonly interpreted as an example of hubris. But Canute was in reality smarter than this, attempting to demonstrate to his fawning courtiers that even he as King could not stop the incoming tide.
It seems though that the music industry has no such self-awareness. Like a bunch of people who’ve never heard of King Canute, its struggle continues to hold back the tide of illegal downloading that continues to rise.
Threatening to take single mums to court for their kids’ downloads, suing file-sharing site Napster, pursuing site after site, the business has fought tooth and nail to halt the growth of piracy and the file-sharing sites that feed it.
Despite all this effort, consumers have been voting with their mice – over ten million people sharing files on Pirate Bay (closed by Swedish police earlier this month), 26 million on Napster before it’s shutdown in 2001. Over a third of web traffic is said to be in the form of torrents (typically video files being shared between users), and the appetite for illegal downloads is seemingly insatiable.
And now they’ve dragged the Department of Culture, Media and Sport into building dykes for them to stick their finger into. A draft copy of the forthcoming Green Paper on the creative industries, quoted in the Times, set out the Government’s intention to force Internet Service Providers to “take action on illegal file-sharing”.
In other words, the idea is that ISPs will have to start to monitor not just what types of files are being shared by users, but the actual content (and presumably copyright status) of those files. Many ISPs already discriminate between file types, usually to ensure quality of service for users – data for a phone call has to be prioritised to avoid the sound breaking up, whilst an email arriving half a second later rarely makes any difference to anyone.
But this is quite different, because it will require ISPs firstly to spy on users, and then to punish them for infringing the law, withdrawing service from them and providing evidence to record companies.
The BPI has been lobbying for ages for this. Chief exec Geoff Taylor is quoted on their website calling for ISPs to partner with the music industry to help grow the creative economy, and accusing them of having “built a business on other people’s music”. Ignoring the fact that ISPs (and the internet) have been built on a fair bit more than just music, his proposed partnership is in reality a bit one-sided. ISPs will act as his police force, and he doesn’t propose to pay them for the job.
ISPs argue that like the Post Office and the phone companies, they’re ‘common carriers’ – having no responsibility for what they convey. That responsibility should remain with the user they say. This seems self-evident, but perhaps Mr. Taylor would contend that Tarmac should be held accountable for the development of the getaway car in robberies.
Whilst it’s disappointing that the Government seem to have been suckered into supporting this dummy, it’s perhaps not surprising of the music industry.
Digital represents a huge threat to their existing business model. It’s a threat that’s not going to go away, and a threat that’s only going to grow. But digital also represents an exciting set of opportunities for content owners.
New businesses will be built, new industries created and new fortunes made, and record companies are in a prime position to capitalise on the potential. Perhaps if the music business spent half the time thinking about how to build, create and make these that it devotes to trying to turn back the tide, it might have a chance of succeeding.
To achieve this, it needs to face forwards not backwards. And having an industry body called the British Phonographic Industry isn’t really much of a sign that they’re ready for that.
The story famously associated with King Canute is most commonly interpreted as an example of hubris. But Canute was in reality smarter than this, attempting to demonstrate to his fawning courtiers that even he as King could not stop the incoming tide.
It seems though that the music industry has no such self-awareness. Like a bunch of people who’ve never heard of King Canute, its struggle continues to hold back the tide of illegal downloading that continues to rise.
Threatening to take single mums to court for their kids’ downloads, suing file-sharing site Napster, pursuing site after site, the business has fought tooth and nail to halt the growth of piracy and the file-sharing sites that feed it.
Despite all this effort, consumers have been voting with their mice – over ten million people sharing files on Pirate Bay (closed by Swedish police earlier this month), 26 million on Napster before it’s shutdown in 2001. Over a third of web traffic is said to be in the form of torrents (typically video files being shared between users), and the appetite for illegal downloads is seemingly insatiable.
And now they’ve dragged the Department of Culture, Media and Sport into building dykes for them to stick their finger into. A draft copy of the forthcoming Green Paper on the creative industries, quoted in the Times, set out the Government’s intention to force Internet Service Providers to “take action on illegal file-sharing”.
In other words, the idea is that ISPs will have to start to monitor not just what types of files are being shared by users, but the actual content (and presumably copyright status) of those files. Many ISPs already discriminate between file types, usually to ensure quality of service for users – data for a phone call has to be prioritised to avoid the sound breaking up, whilst an email arriving half a second later rarely makes any difference to anyone.
But this is quite different, because it will require ISPs firstly to spy on users, and then to punish them for infringing the law, withdrawing service from them and providing evidence to record companies.
The BPI has been lobbying for ages for this. Chief exec Geoff Taylor is quoted on their website calling for ISPs to partner with the music industry to help grow the creative economy, and accusing them of having “built a business on other people’s music”. Ignoring the fact that ISPs (and the internet) have been built on a fair bit more than just music, his proposed partnership is in reality a bit one-sided. ISPs will act as his police force, and he doesn’t propose to pay them for the job.
ISPs argue that like the Post Office and the phone companies, they’re ‘common carriers’ – having no responsibility for what they convey. That responsibility should remain with the user they say. This seems self-evident, but perhaps Mr. Taylor would contend that Tarmac should be held accountable for the development of the getaway car in robberies.
Whilst it’s disappointing that the Government seem to have been suckered into supporting this dummy, it’s perhaps not surprising of the music industry.
Digital represents a huge threat to their existing business model. It’s a threat that’s not going to go away, and a threat that’s only going to grow. But digital also represents an exciting set of opportunities for content owners.
New businesses will be built, new industries created and new fortunes made, and record companies are in a prime position to capitalise on the potential. Perhaps if the music business spent half the time thinking about how to build, create and make these that it devotes to trying to turn back the tide, it might have a chance of succeeding.
To achieve this, it needs to face forwards not backwards. And having an industry body called the British Phonographic Industry isn’t really much of a sign that they’re ready for that.
Thursday, February 14, 2008
Ger your free content here!
A version of this piece was published in Marketing in 2008
In November Rupert Murdoch announced that following News Corp’s acquisition of the Wall Street Journal he “…expected to make it free”. I wasn’t at the announcement but I doubt there were many gasps of surprise from the audience.
More interesting though was the recent u-turn on this decision, Murdoch instead opting for a hybrid model. Content that is relatively easy to find elsewhere will be made free but the specialist content, in other words, what most people buy the subscription for, will still be subscription-based.
So what does this mean for marketers? Is the hybrid model the way forward? No doubt Murdoch’s bean counters created innumerable financial models and decided the best way to maximise profits was to drive more traffic by offering content for free, and hence increasing advertising revenue, but at the same time keeping the crown jewels under lock and key for subscribers only. Perhaps not so surprising given subscription revenues are estimated at around fifty million dollars a year.
But before we all run around implementing hybrid models lets stop and have a think about what’s really driving the digital market - customers. What does the internet offer customers? Well many things, but the overriding driver, and what’s changing market economics the most, is one simple word – choice.
Consider Pirate Bay, a peer to peer file sharing ‘solution’. Or in other words a method for people to download paid for content for nothing. Before the authorities got their way Pirate Bay had 10 million customers. The choice these customers made was not to pay for content.
Take the US hit show, “Lost” as an example. The show could be downloaded in the UK shortly after it had aired on the East coast of the USA and before the West coast had even seen it. It was coming to terrestrial TV in the UK, and therefore was going to be free anyway, so the downloaders didn’t really feel like they were doing anything wrong.
This is of course questionable logic, and I’m not advocating illegal downloads. The lesson though is clear. The internet has given consumers much more choice and what people want is what they don’t have to pay for.
So what does the future hold for the subscription model? It isn’t dead, but the prognosis isn’t healthy.
Consider another huge subscriber model business – online dating. Take a look at your teenager daughter’s FaceBook page and you’ll probably see a profile that states she is single and interested in, “meeting men”. Putting aside the obvious alarm bells this rings as a parent it’s also likely ringing bells at match.com and all the other subscription dating sites.
A more direct attack has been mounted by Plentyoffish.com, the owner of which proudly announces on his site that he is the sole employee, runs the site from his Vancouver apartment and that it is 100% free. A real life cupid? Reports of $10 million a year in advertising revenue suggest not.
So maybe Murdoch will need to re-think his hybrid strategy for the Wall Street Journal. But what he’s probably sweating about more is how the pesky internet might interfere with subscription TV.
Take a look at Kangaroo for example, the joint venture between BBC Worldwide, ITV and Channel 4 purporting to offer over 10,000 hours of programming from kick off. Not all of it is planned to be free, but it seems pretty clear that the Kangaroo concept isn’t built around a revenue model that takes much from the consumer’s pocket.
So will consumers continue to stomach paying £40 a month for 100 channels when you can pay nothing for the ever expanding wealth of free shows available online? For now, probably yes, because the choice isn’t there yet. But choice is something the internet offers in ever increasing levels. And while consumers are of course unique, they share one attribute – everyone buys free.
In November Rupert Murdoch announced that following News Corp’s acquisition of the Wall Street Journal he “…expected to make it free”. I wasn’t at the announcement but I doubt there were many gasps of surprise from the audience.
More interesting though was the recent u-turn on this decision, Murdoch instead opting for a hybrid model. Content that is relatively easy to find elsewhere will be made free but the specialist content, in other words, what most people buy the subscription for, will still be subscription-based.
So what does this mean for marketers? Is the hybrid model the way forward? No doubt Murdoch’s bean counters created innumerable financial models and decided the best way to maximise profits was to drive more traffic by offering content for free, and hence increasing advertising revenue, but at the same time keeping the crown jewels under lock and key for subscribers only. Perhaps not so surprising given subscription revenues are estimated at around fifty million dollars a year.
But before we all run around implementing hybrid models lets stop and have a think about what’s really driving the digital market - customers. What does the internet offer customers? Well many things, but the overriding driver, and what’s changing market economics the most, is one simple word – choice.
Consider Pirate Bay, a peer to peer file sharing ‘solution’. Or in other words a method for people to download paid for content for nothing. Before the authorities got their way Pirate Bay had 10 million customers. The choice these customers made was not to pay for content.
Take the US hit show, “Lost” as an example. The show could be downloaded in the UK shortly after it had aired on the East coast of the USA and before the West coast had even seen it. It was coming to terrestrial TV in the UK, and therefore was going to be free anyway, so the downloaders didn’t really feel like they were doing anything wrong.
This is of course questionable logic, and I’m not advocating illegal downloads. The lesson though is clear. The internet has given consumers much more choice and what people want is what they don’t have to pay for.
So what does the future hold for the subscription model? It isn’t dead, but the prognosis isn’t healthy.
Consider another huge subscriber model business – online dating. Take a look at your teenager daughter’s FaceBook page and you’ll probably see a profile that states she is single and interested in, “meeting men”. Putting aside the obvious alarm bells this rings as a parent it’s also likely ringing bells at match.com and all the other subscription dating sites.
A more direct attack has been mounted by Plentyoffish.com, the owner of which proudly announces on his site that he is the sole employee, runs the site from his Vancouver apartment and that it is 100% free. A real life cupid? Reports of $10 million a year in advertising revenue suggest not.
So maybe Murdoch will need to re-think his hybrid strategy for the Wall Street Journal. But what he’s probably sweating about more is how the pesky internet might interfere with subscription TV.
Take a look at Kangaroo for example, the joint venture between BBC Worldwide, ITV and Channel 4 purporting to offer over 10,000 hours of programming from kick off. Not all of it is planned to be free, but it seems pretty clear that the Kangaroo concept isn’t built around a revenue model that takes much from the consumer’s pocket.
So will consumers continue to stomach paying £40 a month for 100 channels when you can pay nothing for the ever expanding wealth of free shows available online? For now, probably yes, because the choice isn’t there yet. But choice is something the internet offers in ever increasing levels. And while consumers are of course unique, they share one attribute – everyone buys free.
Thursday, February 7, 2008
Hacktivism, hierarchies and hubris
A version of this piece was published in Marketing in 2008
Incoherent, messianic, slightly bonkers. Even the control-freakiest of Hollywood stars can let their carefully-crafted image slip from time to time. And so it was with Tom Cruise, whose video for the scientologists has been doing the rounds on YouTube for the last few weeks.
Repeated efforts by ‘Church’ lawyers from this famously litigious charity to have it taken down have been met with failure as, like a game of whack-a-mole, every time they hit it, the video pops up again elsewhere.
Whilst ridiculing both Scientology and the rather self-righteous Cruise have been the principal drivers of the YouTube outbreak, a more serious group have emerged to challenge Scientology’s well-funded and highly-resourced operation.
Using techniques developed amongst cyber-terrorists and the hacktivist community, a group called Anonymous has been associated with Denial of Service attacks (overloading a web server with millions of requests for pages) to bring down their website, and using facebook groups and Google maps to share information and organise protest events.
Anonymous publish extensive toolkits for hacktivists and cyber-protesters, allowing them to conceal their identity and cause damage to their targets, together with resources to enable communication between ‘Anons’.
Whereas before, political, social and commercial protesters have operated in small groups, Anonymous adopts a decentralised structure, making use of wikis (websites that can be edited by all their users) to allow the organisation to be collectively driven by all its members, rather than hierarchically driven from the top.
In doing so they have changed the model for internet protest and taken it to another level.
And it’s this combination of the collective (web 2.0) approach with more established hacktivist tools that is likely to set the toolkit for future protests.
Activists have long used the internet to support protests against commercial enterprises as well as political and social ones.
McSpotlight.org claims “McDonald's spends over $2 billion a year broadcasting their glossy image to the world. This is a small space for alternatives to be heard”. The website is primarily an information resource with news on campaigns, issues and links to other protest organizations.
Bhopal.net provides a vast information repository on the Union Carbide disaster at Bhopal and the company’s twenty-year history of avoiding its responsibilities in the aftermath. It makes grim reading, and is the work of the UK Campaign for Justice in Bhopal, providing a resource for the media to counter the company’s PR.
These sites, and hundreds like them, are an effective way of reaching the media and a useful way of coordinating campaigns. But they require dedicated people and substantial work to keep them relevant, up-to-date and useful.
What makes Anonymous significant is that it has taken to user-generated ‘ground-up’ nature of Web2.0 and applied it in the activist space – in doing so, making it many times more powerful.
The campaign can now be a collective effort between people who may be geographically distant – operating across borders and time zones to create and maintain content and organise the campaign.
This is significant because in the past, companies had a innate advantage – better resourced and funded, they could coordinate media coverage more effectively. That advantage has now perhaps been lost.
But this decentralised approach has given them something else. Hierarchical organisations are vulnerable to the key people being targeted, either politically or personally. An organisation without identifiable leaders is very hard to sue.
So the web is now the key battleground for activism from political to commercial. Consumers have been empowered by these technologies, using them to connect to the mainstream media to expose everything from poor customer service to corporate manslaughter.
But now they’re using web2.0 techniques to connect with each other, allowing them more effectively to leverage their scale – and with this, we can only expect to see online activism grow as a force for change, whether for serious purposes or just the sheer pleasure of pricking the hubris of a celebrity.
Incoherent, messianic, slightly bonkers. Even the control-freakiest of Hollywood stars can let their carefully-crafted image slip from time to time. And so it was with Tom Cruise, whose video for the scientologists has been doing the rounds on YouTube for the last few weeks.
Repeated efforts by ‘Church’ lawyers from this famously litigious charity to have it taken down have been met with failure as, like a game of whack-a-mole, every time they hit it, the video pops up again elsewhere.
Whilst ridiculing both Scientology and the rather self-righteous Cruise have been the principal drivers of the YouTube outbreak, a more serious group have emerged to challenge Scientology’s well-funded and highly-resourced operation.
Using techniques developed amongst cyber-terrorists and the hacktivist community, a group called Anonymous has been associated with Denial of Service attacks (overloading a web server with millions of requests for pages) to bring down their website, and using facebook groups and Google maps to share information and organise protest events.
Anonymous publish extensive toolkits for hacktivists and cyber-protesters, allowing them to conceal their identity and cause damage to their targets, together with resources to enable communication between ‘Anons’.
Whereas before, political, social and commercial protesters have operated in small groups, Anonymous adopts a decentralised structure, making use of wikis (websites that can be edited by all their users) to allow the organisation to be collectively driven by all its members, rather than hierarchically driven from the top.
In doing so they have changed the model for internet protest and taken it to another level.
And it’s this combination of the collective (web 2.0) approach with more established hacktivist tools that is likely to set the toolkit for future protests.
Activists have long used the internet to support protests against commercial enterprises as well as political and social ones.
McSpotlight.org claims “McDonald's spends over $2 billion a year broadcasting their glossy image to the world. This is a small space for alternatives to be heard”. The website is primarily an information resource with news on campaigns, issues and links to other protest organizations.
Bhopal.net provides a vast information repository on the Union Carbide disaster at Bhopal and the company’s twenty-year history of avoiding its responsibilities in the aftermath. It makes grim reading, and is the work of the UK Campaign for Justice in Bhopal, providing a resource for the media to counter the company’s PR.
These sites, and hundreds like them, are an effective way of reaching the media and a useful way of coordinating campaigns. But they require dedicated people and substantial work to keep them relevant, up-to-date and useful.
What makes Anonymous significant is that it has taken to user-generated ‘ground-up’ nature of Web2.0 and applied it in the activist space – in doing so, making it many times more powerful.
The campaign can now be a collective effort between people who may be geographically distant – operating across borders and time zones to create and maintain content and organise the campaign.
This is significant because in the past, companies had a innate advantage – better resourced and funded, they could coordinate media coverage more effectively. That advantage has now perhaps been lost.
But this decentralised approach has given them something else. Hierarchical organisations are vulnerable to the key people being targeted, either politically or personally. An organisation without identifiable leaders is very hard to sue.
So the web is now the key battleground for activism from political to commercial. Consumers have been empowered by these technologies, using them to connect to the mainstream media to expose everything from poor customer service to corporate manslaughter.
But now they’re using web2.0 techniques to connect with each other, allowing them more effectively to leverage their scale – and with this, we can only expect to see online activism grow as a force for change, whether for serious purposes or just the sheer pleasure of pricking the hubris of a celebrity.
Thursday, January 31, 2008
No secrets online: your reputation's at stake
A version of this piece was published in Marketing in 2008
We’ve all met them. They’re the no-hopers who nevertheless seem endlessly to rise up the career ladder. By moving jobs every 18 months they avoid any of the consequences of their actions, and by doing so are elevated above the dedicated, the hard workers and the takers of responsibility – moving on again before they’re found out.
And we’d all love to spot them before they join. We all want to find out about other people, especially when we’re about to get involved with them (and sometimes just because we’re nosy) – and the internet’s proving fertile ground for our prurience.
A quick Google of a potential, current or ex-employee can pull up all sorts of interesting data on someone – their MySpace profile complete with photos they might not have chosen to pin to their CV, their Facebook page or a blog.
Argos were reported by The Sun to have sacked an employee for gross misconduct after he set up a Facebook group called “I work at Argos and can’t wait to leave because it’s shit” (one of a number of similarly named groups).
Directory company The Number asked Facebook to remove an abusive site about its brand, after an ex-employee set up a site for survivors of 118 118 - it’s still there (7 members), although it’s been joined by the much more popular (158 members) 118118 Appreciation Society.
HR professionals recommend you don’t check out potential employees online, and should judge them purely on the information they’ve supplied to you. But it’s hard to see how most managers could resist the temptation of checking out that apparently ideal candidate – especially with listings like this:
“Attention Golf Courses- do not hire Joe Bloggs (the listing used his real name, which brings it up in Google). He's the 37 year old assistant golf pro in Fort Worth, Texas, that recently turned himself in after security tapes recorded him skimming off deposits and stealing from the register.”
Employees are equally keen to get the inside track on a company they’re thinking of joining. The now defunct (but fantastically named) FuckedCompany.com was the bible of the dotcom boom. Employees anonymously shared information on layoffs, restructuring and other corporate maneuverings, giving the lie to the official line and forming a fascinating resource for investors and recruits alike with confidential internal memos, emails and pronouncements.
A more serious-minded descendent of this seminal site is TheFunded.com – a site where entrepreneurs can share experiences of private equity/venture capital companies (who aren’t allowed to join). These views are divided into public (can be viewed by non-members) and private (much more frank) opinions – and anyone about to embark on a VC path would be well advised to join up, as it helps to know who you’re dealing with.
Ultimately this is the point – and as much as people have applied online knowledge sharing to their business life, they’ve applied it even more enthusiastically to their love life.
After all, web users have been Googling potential dates from day one. But now sites like dontdatehimgirl.com (which last year hit the number 5 spot in Yahoo! Buzz) let girls search for others’ experience of guys they’re considering dating. Almost inevitably, the site was sued – by a lawyer who took exception to his ex’s depiction of him – but it hasn’t stopped a host of copycat sites launching to cater for the seemingly endless demand for inside knowledge.
It’s getting harder and harder to keep a secret these days. In the past, reputations took a long time to build, and were robust enough to weather the barbs thrown at them by disconsolate ex partners. But in the digital age, employees and employers, investors and investees (and all the people they date) are going to have to get used to the fact that their reputation is increasingly (and quickly) impacted by their actions – and that its value is only increasing as the knowledge that underpins it becomes easier to obtain.
Thursday, January 24, 2008
The battle for connected TV
A version of this piece was published in Marketing in 2008
Apple have sold over 3 billion songs on their iTunes website since its launch in 2003, making the company a major force in the global music business – a position Apple is keen to leverage in the TV space. But the launch of Apple TV last year was met with indifference, mainly because the box couldn’t access the iTunes service – sales predictions of 1–1.5m units proved ambitious, as the box barely scraped past the 400,000 mark.
But Apple TV’s back, and the recent launch of version 2 led to a 17% slump in Blockbuster’s share price, as Apple dropped the price, and enabled the box to access iTunes without the need for a computer – at the same time offering a free software upgrade to existing owners to give them the same functionality.
The combination that proved so powerful in music – beautifully designed players with access to a vast online library of content – is what Apple are keen to follow in video, offering downloads to your computer, your mobile or your laptop.
But there is a missing ingredient which could offer the key to Apple replicating the success in TV that they’ve had in music. To make iTunes successful, Apple didn’t insist you had a Mac – you could run it on a PC, a necessary step given the Mac’s small market share.
Apple’s challenge here is getting connected to the TV. With an installed base of just 400,000 Apple TV users, the vast majority of iTunes users are accessing the store through a computer, which whilst they might hook up portable devices, they generally don’t connect to the main TV in the house. But the king of TV-connected entertainment devices is Nintendo’s Wii – seven million sold in the US alone. Releasing a version of iTunes for Wii (and for other platforms like Playstation and Xbox) could jumpstart iTunes into major distribution for TV content.
The battle for space under your TV is well and truly under way.
In the UK, Sky have had a long run free from effective competition. But last year Freeview overtook Sky, boosted by the popularity of digital PVRs, and together with a resurgent cable industry under Virgin’s leadership and the launch of BT Vision, a much tougher fight has emerged for what goes under the TV here.
It isn’t just the usual suspects who are battling for space. Microsoft’s Xbox gaming console already offers movie and video rental in the UK, whilst Wii has the capability to follow and Playstation3 has a Blu-Ray high Def DVD player built in.
Meanwhile, on the internet, Project Kangaroo is set to bring together the BBC, ITV and C4 on one software platform, and if Auntie can avoid the politicking that so badly delayed the iPlayer, it could do for online TV what Freeview did for broadcast – in turn, finally providing a reason to hook up a PC to the telly, and adding another box to the list of contenders.
There at least seven different types of box you can use to access TV on your TV set (excluding offline devices like DVD players and PVRs), dozens of different suppliers of connectivity and thousands of suppliers of content.
The world of TV is set for a revolution, and with it, the way we use it as a means of communicating brand messages. As the distribution of TV shifts from broadcast to addressable, there are wide-ranging implications for how advertising on it is measured, traded and delivered.
So far, the proportion of TV delivered in this way is small. But this isn’t going to be a slow burn medium that grows gradually over several years, because many of the devices already exist in consumers’ homes. All they need is a reason to connect them – and when they do, the marketing on TV is going to change forever.
Apple have sold over 3 billion songs on their iTunes website since its launch in 2003, making the company a major force in the global music business – a position Apple is keen to leverage in the TV space. But the launch of Apple TV last year was met with indifference, mainly because the box couldn’t access the iTunes service – sales predictions of 1–1.5m units proved ambitious, as the box barely scraped past the 400,000 mark.
But Apple TV’s back, and the recent launch of version 2 led to a 17% slump in Blockbuster’s share price, as Apple dropped the price, and enabled the box to access iTunes without the need for a computer – at the same time offering a free software upgrade to existing owners to give them the same functionality.
The combination that proved so powerful in music – beautifully designed players with access to a vast online library of content – is what Apple are keen to follow in video, offering downloads to your computer, your mobile or your laptop.
But there is a missing ingredient which could offer the key to Apple replicating the success in TV that they’ve had in music. To make iTunes successful, Apple didn’t insist you had a Mac – you could run it on a PC, a necessary step given the Mac’s small market share.
Apple’s challenge here is getting connected to the TV. With an installed base of just 400,000 Apple TV users, the vast majority of iTunes users are accessing the store through a computer, which whilst they might hook up portable devices, they generally don’t connect to the main TV in the house. But the king of TV-connected entertainment devices is Nintendo’s Wii – seven million sold in the US alone. Releasing a version of iTunes for Wii (and for other platforms like Playstation and Xbox) could jumpstart iTunes into major distribution for TV content.
The battle for space under your TV is well and truly under way.
In the UK, Sky have had a long run free from effective competition. But last year Freeview overtook Sky, boosted by the popularity of digital PVRs, and together with a resurgent cable industry under Virgin’s leadership and the launch of BT Vision, a much tougher fight has emerged for what goes under the TV here.
It isn’t just the usual suspects who are battling for space. Microsoft’s Xbox gaming console already offers movie and video rental in the UK, whilst Wii has the capability to follow and Playstation3 has a Blu-Ray high Def DVD player built in.
Meanwhile, on the internet, Project Kangaroo is set to bring together the BBC, ITV and C4 on one software platform, and if Auntie can avoid the politicking that so badly delayed the iPlayer, it could do for online TV what Freeview did for broadcast – in turn, finally providing a reason to hook up a PC to the telly, and adding another box to the list of contenders.
There at least seven different types of box you can use to access TV on your TV set (excluding offline devices like DVD players and PVRs), dozens of different suppliers of connectivity and thousands of suppliers of content.
The world of TV is set for a revolution, and with it, the way we use it as a means of communicating brand messages. As the distribution of TV shifts from broadcast to addressable, there are wide-ranging implications for how advertising on it is measured, traded and delivered.
So far, the proportion of TV delivered in this way is small. But this isn’t going to be a slow burn medium that grows gradually over several years, because many of the devices already exist in consumers’ homes. All they need is a reason to connect them – and when they do, the marketing on TV is going to change forever.
Wednesday, January 16, 2008
The art of search
A version of this piece was published in Marketing in 2008
"All men can see these tactics whereby I conquer, but what none can see is the strategy out of which victory is evolved."
Sun Tzu was writing about war in the 4th century BC, but his words continue to resonate today in the world of business and marketing, where confusion still clouds the difference between tactics and strategy. Nowhere more so than in search marketing, where the proximity of search to the end of a consumer journey tends to focus practitioners solely on the tactical.
The General knew that the tactics he employed were just the visible part of his activities. His enemies and friends could see his tactics, and they knew when he won – but Sun Tzu knew that most wouldn’t look beyond the visible, and many wouldn’t even be aware that a strategy existed – let alone understand the decisive role it played in achieving victory.
In search, as in every other part of business, strategy is critical. But most people when asked about their strategy in search will start to talk about their tactics – few really understand what a strategy represents here, and even fewer how to go about creating one.
The easy results achieved by search in improving the accountability and effectiveness of advertising have created the marketing phenomenon of the century. But this ease has also led to a casual approach to the long-term value of the medium and a failure to look beyond the obvious when approaching the discipline.
So what do I mean by a strategy in search?
Like any area, we start with an objective. There may be more than one of these, but they need to be prioritised and distilled down to the clearest expression of what we want to achieve.
Once objectives are clear, there are a number of questions that a strategy for search should answer. Four of the most important are:
Competition – how do competitors use search, and what is the competition for our message? If rivals’ brand names aren’t protected from competitive bidding, this can provide real opportunities. If your brand name is a generic that can’t be protected in this way, then other means can be employed to gain prominence in search – for instance producing relevant content that helps promote the brand’s ranking.
Customers – how do people search for my product, and what is their interest? Are people searching for brands or for solutions to problems? How important is my brand in this, and how does natural search key in with delivering brand visibility?
Co-dependence – where does search fit, and how does it relate to other marketing? Can an analysis of the data give us an insight into the searches made two or three steps before the final search that resulted in a sale, and do we have the tools to give us this? The systems and analytical techniques exist to create this understanding, and form an important building block for strategy.
Capability – can I meet my customers’ search needs? We need to understand whether customers are typically in a purchasing or an information-gathering need state, and how their choice of keyword might reveal this – it may be appropriate to direct searchers to different types of content dependent on their need state, and understanding this both informs our site (content) planning and our landing page strategy.
“Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.“
He knew his stuff. Tactics are vital – responding to opportunities and threats as they arise – with speed, awareness and ability to change direction critical success factors here. But a purely tactical approach is an approach that’s designed to fail.
So if you ask what your search strategy is and they start talking about keyword groups, bid strategy or optimisation, then you might start to hear alarm bells ringing. As Sun Tzu would have it, the sound of those bells is the noise before defeat.
"All men can see these tactics whereby I conquer, but what none can see is the strategy out of which victory is evolved."
Sun Tzu was writing about war in the 4th century BC, but his words continue to resonate today in the world of business and marketing, where confusion still clouds the difference between tactics and strategy. Nowhere more so than in search marketing, where the proximity of search to the end of a consumer journey tends to focus practitioners solely on the tactical.
The General knew that the tactics he employed were just the visible part of his activities. His enemies and friends could see his tactics, and they knew when he won – but Sun Tzu knew that most wouldn’t look beyond the visible, and many wouldn’t even be aware that a strategy existed – let alone understand the decisive role it played in achieving victory.
In search, as in every other part of business, strategy is critical. But most people when asked about their strategy in search will start to talk about their tactics – few really understand what a strategy represents here, and even fewer how to go about creating one.
The easy results achieved by search in improving the accountability and effectiveness of advertising have created the marketing phenomenon of the century. But this ease has also led to a casual approach to the long-term value of the medium and a failure to look beyond the obvious when approaching the discipline.
So what do I mean by a strategy in search?
Like any area, we start with an objective. There may be more than one of these, but they need to be prioritised and distilled down to the clearest expression of what we want to achieve.
Once objectives are clear, there are a number of questions that a strategy for search should answer. Four of the most important are:
Competition – how do competitors use search, and what is the competition for our message? If rivals’ brand names aren’t protected from competitive bidding, this can provide real opportunities. If your brand name is a generic that can’t be protected in this way, then other means can be employed to gain prominence in search – for instance producing relevant content that helps promote the brand’s ranking.
Customers – how do people search for my product, and what is their interest? Are people searching for brands or for solutions to problems? How important is my brand in this, and how does natural search key in with delivering brand visibility?
Co-dependence – where does search fit, and how does it relate to other marketing? Can an analysis of the data give us an insight into the searches made two or three steps before the final search that resulted in a sale, and do we have the tools to give us this? The systems and analytical techniques exist to create this understanding, and form an important building block for strategy.
Capability – can I meet my customers’ search needs? We need to understand whether customers are typically in a purchasing or an information-gathering need state, and how their choice of keyword might reveal this – it may be appropriate to direct searchers to different types of content dependent on their need state, and understanding this both informs our site (content) planning and our landing page strategy.
“Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.“
He knew his stuff. Tactics are vital – responding to opportunities and threats as they arise – with speed, awareness and ability to change direction critical success factors here. But a purely tactical approach is an approach that’s designed to fail.
So if you ask what your search strategy is and they start talking about keyword groups, bid strategy or optimisation, then you might start to hear alarm bells ringing. As Sun Tzu would have it, the sound of those bells is the noise before defeat.
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