BuzzMachine

The media pundit's pundit. Written by NYC insider Jeff Jarvis, BuzzMachine covers news, media, journalism, and politics.

Tag: wwgd

  • The real media consolidation: Google

    3 comments on The real media consolidation: Google
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    Erick Schonfeld at TechCrunch and Ashkan Karbasfrooshan at HipMojo make critical calculations about Google’s growing advertising hegemony. Bottom line: Google controls nearly 40 percent of online advertising.

    Now pair that news with the folding of TimesSelect. Consumers, as we used to be called, won’t support media and journalism with their money. Advertising will. We will become entirely dependent on advertising. And what happens when Google controls the majority of online ad revenue in this country? They’re headed there, for as a TechCrunch commenter points out, Google’s online ad revenue and share of revenue are growing faster than online advertising as a whole.

    On the one hand, we should be grateful to Google for enabling the support of much new media. On the other hand, we should fear teh vice in which Google holds our privates. That’s where media power is consolidating — not in old conglomerates (some of which now depend for a good bit of revenue on who? — on Google.)

    I’m not blaming Google for getting to this point. Big, old media handed them this opportunity on a platter. Google was the one company that truly understood the economics of the open network. It understood that it could grow much bigger enabling than controlling. We in media should have followed that model. We should have asked WWGD. What would Google do?

    So what do we do now? We need new networks that identify and create new marketplaces for new value — greater value than the coincidence of words on a page, which Google sells. We need to create our own high-value networks (e.g., hyperlocal news). We need open networks that compete with the closed aspects of Google; openness is water to the witch of an opaque network like Google’s.

    TechCrunch’s facts & figures, built on HipMojo’s calculations:

    $3.98 billion (Google’s U.S. revenues in the first half of 2007)/$9.99 billion (IAB’s estimate of total U.S. online ad revenue in 1H07) = 39.8 percent.

    For the first half of 2006 the numbers are: $2.732 billion (Google’s U.S. revenues in 1H06)/ $7.9 billion (IAB’s estimate of U.S. online ad revenues in 1H06) = 34.6 percent.

    Update: As one commenter points out below, this means Google is out-pacing the growth of online advertising by a wide margin. Total online advertising revenues grew 26.5 percent year-over-year, while Google’s ad revenues grew 45.7 percent.

    Now ad in Bob Garfield’s chaos-scenario contention that ad spending as a whole will fall because companies will have more direct relationships with customers around media. I saw some things at Dell that back this up (more on that when my story appears in two weeks or so). Google will get an ever-bigger slice of an ever-smaller pie.

  • Airlines: Imprisonment as a business model

    11 comments on Airlines: Imprisonment as a business model
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    Air travel may be the first industry based on a business model of kidnapping and imprisonment. It is the least open industry possible. You are trapped with the airline that controls your home airport or destination. And now, far worse, you are trapped in their planes for three to five hours. And why? Well, yes, we can blame weather and bad air-traffic control for some of this. But the essential reason is that that don’t want to let you loose and lose your fare. So they hold you captive. Amazingly, they are allowed it. And, of course, this yields just the amount of resentment and seething hatred it deserves. So no one thinks positively of the industry or the brands in it. It’s so bad that it’s making clearly inferior competitors — driving for hours, Amtrak, ferchrissakes, and maybe even soon the bus — look better. That’s bad. The entire industry and its relationship with its entire customer base is broken.

    The attempted solutions so far are all nonsolutions: Attempts to regulate and limit our imprisonment — to still obviously unacceptable levels — have failed. Attempts to sue airlines into civility have not worked. Even the White House finally recognizes the problem but its solutions are aimed at reducing the flights that are already over subscribed; gee, that helps.

    It’s time to turn the thinking around. If, for once, anyone in the industry or the government would think like a customer, the solution would be the reverse of imprisoning us in airplanes until they can take off:

    Jets should not be boarded until they have a take-off — and landing — slot.

    That leaves us, the passengers, free to walk around in the terminal — and, yes, free to seek competitive means of transport (other airlines, cars, trains) or to go home. In no sane world should we be held in captivity and prevented from that free choice. We would have the services of airports at hand — which, in the long run, would improve because there’d be business to be made there; demand for beers yields supply of beers (the mixed-nut marketplace shifts from the jet to the terminal). The airlines would compete to make us comfortable to keep us at their gates. The jets would not be sitting on runways burning incredible amounts of fuel and producing incredible amounts of carbon for hours on end. Onboard crews would not be stressed dealing with righteously angry customers. People might actually decide to fly more often. Oh, yes, this shifts some of the logistical burden of air travel from taxi and air traffic control to the terminals — fine. It also shifts the pain in this relationship from the powerless customer to the people who are in a position to fix the situation. If the airlines want to imprison us, they still have the tool of the nonrefundable ticket, though the market will in the long-run dictate whether we choose to pay for this discount with the risk of captivity.

    It’s hard to imagine an industry — other than prisons themselves — that is less open to openness. It’s much easier to imagine how media, retail, consumer products, and entertainment can spawn Cluetrain companies. But if you simply turn around and ask how customers would run these companies, you will get an answer like mine, not like the industry’s or the government’s. The problem is that, deregulation aside, it’s not a competitive marketplace. It’s worse today than telecom. So it’s not as if one company can break away from the pack and think like its customers; it’s not in control of its relationship with us, end-to-end. How do we get from here to there?

    The only thing that is new is our empowerment as customers on the internet. We can coalesce and gang up on the airlines. There is also market pressure. The horrid shoddiness of the mainstream airlines is just what has opened up the market for Eos, Silverjet, et al to offer independent, quality competition and take away the big airlines’ most profitable customers, who are all turning their backs and saying nya-nya-nya to their former wardens as they leave the prison gates. But, of course, that marketplace is limited. It’s a much bigger mess than that. And it won’t be cured until the industry starts thinking like its customers, which will only happen when the customers shout so loudly, now that we can, that the industry can’t help but hear.

    In the end, the ability of companies to make a business by telling customers what they cannot do is over. It’s only a question of when and how it is replaced.

    : I should add that when I flew to Austin this week to see Dell, my Continental flights were ontime both ways — though I saw a chart yesterday (can’t find it now) showing Continental as the current leader in passenger imprisonment. I was lucky to get a first-class upgrade both ways, which improves one’s outlook.

  • Cable companies must die

    25 comments on Cable companies must die
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    Bob Garfield goes properly ballistic against Comcast. We all have our horrible stories of waiting for the cable guy but this is a classic and Bob does a good and anally retentive job of chronicling the horror, the horror. The only thing that would have made it better is if he had recorded it — Bob is, after all, a Big Media Guy — and turned it into YouTube hilarity.

    Call me an optimist, but I believe that every company — every industry — that makes its money by screwing its customers is doomed. We, the customers, can now coalesce and gang up on them and show them who’s boss. Yes, I’m thinking Dell Hell and its apparent turnaround. But this works only if the companies live in fear of losing us — that is, if they have competition. And this, of course, is why cable companies, phone companies, insurance companies, power companies, and other monopolies and duopolies — not to mention government — keep thinking they have us by the balls, out of which they can squeeze their money. But I think their day will come. New technologies could kill or at least bring competition into telecommunications. The insurance mess is finally going to get so bad that government will have to step in to fix it. Politicians themselves will have to learn that we can use these new tools to defeat them. The question is how we can speed this process up.

    Well, Bob Garfield is an expert in media — as the cohost of On the Media — and also in advertising — as the critic at Ad Age. So I’ll throw the challenge back to you, Bob: How can we set the agenda on our dear communications ball-squeezers? How can we make their lives a living hell, like they make ours? How can we put pressure on those in power to take the power away from these horrible companies? How can we show their would-be competitors that there’s a great opportunity to come in and displace these fat and venal fools?

    Let’s invent antiadvertising. Or maybe it’s unadvertising. Or customertising. If they can use media and messaging, so can we.

    So, Bob, why don’t you make a commercial — not just a blog post, but a cool and slick ad — telling people why Comcast must die (your words). If it’s good — which, if you make it, it must be — and if it says something people want to hear and say themselves — and we know everyone shares this sentiment — then they will pass it around. Thank you, Google and YouTube. Maybe we can make a contest of it: make commercials against your least favorite companies. Free creative. Free media.

    What if customertising takes over and beats advertising? Then we’d all go seek out customerisements and the ones with the fewest screeds out there must be OK.

    I hate to be so negative about this. But as you can see in Bob’s screedlog, as we all know, the anger and frustration just build up until you have to scream.

    Well, from now on, instead of screaming, expose the fools. Record your entire encounter with the cable company — every phone call, every visit — and use their failures against them. Our day has come. Or is coming.

    : LATER: I missed the obvious name — customercials.

  • Site or network? Own or join?

    6 comments on Site or network? Own or join?
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    I think it’s wonderful that The New York Times did a deal to bring Freakonomics under its wing — hosting it, selling ads on it, promoting it, but not buying it or hiring its creators and not treating it like so much freelance fodder to go through the Times’ editing mill. That’s new. This follows my somewhat similar deal at PrezVid with the Washington Post and another big-media outlet to be named shortly, in which they also leave PrezVid as an independent entity (in this case, we keep our site and URL) but take up some of the content onto their sites.

    What I like about this is that we see big-media services starting to act like members of networks. They are beginning to realize that they can’t — and don’t want to — do everything themselves. They are also recognizing that creators want to keep ownership of their creations and so hiring or buying isn’t always the best option.

    But so long as these services still want to serve content from their own sites, there will be issues. In my deal, the sites pick the posts they want; if they don’t like something, they just don’t take it. But in the Times’ case, all of Freakonomics is now served under the Times umbrella but without the usual Times process. I think that’s a good thing. But some folks didn’t a few days ago when the Freaks started a discussion speculating about the best ways for terrorists to attack America, something that quite a few commenters and bloggers thought was dangerous and just stupid and unbecoming the Times.

    And this leads me to suggest that syndication is still not the best relationship for big services and the new independent players. I’m delighted that there’s marryin’ in the air. But I think the independent guys are better left independent. And the proper relationship, I think, is a network. Imagine, instead, if the Times declared Freakonomics part of its quality blog network. It could sell ads there, telling its advertisers that it had found the best of the blogs just for them. It could direct its readers to lots of great new content. By promoting that content, it also increases its ad value: a virtuous circle. But there remains a distance that defines independence: The blog is free of the worries of what happens under the Times address and brand — though if they go too damned far, they can be dropped. And the Times has a certain deniability — it is clear that this content was not a product of the Times, though, again, if advertisers don’t want to be on that blog, it will be dropped. The further advantage for the big guy is it can grow much bigger much faster by becoming a member and enabler of a much larger network. The Times doesn’t have to create or pay for or host or be responsible for all the best content around. It can find it and help support it and bring that new, larger world to its readers and advertisers.

    Be a network more than a site, that’s my advice.

    This is what Glam has done, creating an ad network across independent sites and growing hugely, bragging that it is the no. 1 women’s site (service, network?) with 19.1 monthly uniques, growing faster than MySpace and larger than iVillage, AOL Living, and all of Conde Nast combined.

    At TechCrunch, Mike Arrington ridicules Glam’s claims, saying: “A minimal amount of research into their business shows that the company is an ad network, not a content site.” With respect, I disagree

    I say that’s what makes Glam so smart. As the web becomes more and more distributed — more widgetized with tchotzkes of content and functionality spread everywhere — the idea of measuring size by just measuring a site becomes obsolete. And here’s the fringe benefit: it’s better and cheaper to take your content to the people rather than marketing to bring them to you. This is the essence of CBS’ audience network strategy.

    This is, dare I say it, the essence of 3.0: join and enable a network instead of trying to buy content and eyeballs on a site.

    WWGD. What would Google do? Google would network.

    There are still issues of quality. As both Arrington and VentureBeat point out, a network can grow too big by including junky traffic; that is why networks have gotten less respect and thus lower value.

    But now let’s return to the Times and Freakonomics. No junk there. It’s quality, albeit sometimes controversial quality. The Times wouldn’t have embraced it otherwise. Its advertisers and readers know that. So there’s a power in the Times and the Post (which also runs a travel blog network) and a major wire service that’s about to launch a network of its own and other of the big guys growing bigger not by hiring and buying and building but by networking.

    And by the way, I’d like to hear the Freakonomics guys explore the power and value of networks vs. closed content systems.