The Blame Game: Civility and the Lousy Economy

September 24, 2012

I read “Frustrated with Poor Mobile Sales, Publishers Blame Ad Agencies.” The main idea is that mobile devices have become the go-to source of information for may people. The article puts the content consumption shift in perspective:

Mobile makes up a fifth of reader traffic for 87 percent of publishers, but only 29 percent of them are seeing the same proportion of revenue come from mobile, according to respondents to a census issued by the UK’s Association of Online Publishers (AOP).

The article includes charts and graphs which point out some of the reasons for the revenue challenge. For example, device fragmentation and expertise are two important factors.

Let’s step back.

There are a number of shifts going on simultaneously. Analysts have to pick one and then try to quantify it or put the shift into perspective. But no one factor is going to fix a problem with revenue shortfall.

Publishers are finding themselves caught like personal computer makers in a situation which is different from the business environment of five years ago. Change is an organization comes slowly. Humans want to learn how to perform a task or tasks smoothly and efficiently. In the last five years, the tension between organizations having systems which keep on ticking while they take a licking have been stressed.

How many people today want to read or can afford a book like this one?

In publishing, the loss of the traditional role as the makers of information has been altered. The publishers have been experimenting, innovating, and developing new products. At the same time, others have been changing, often more quickly and without the friction of cannibalizing revenues from the Old Faithfuls in the product line up. Maybe high value information is for the elite? Money for online content may go to those with the lowest common denominator for value?

The infrastructure which has grown up to support publishing has been chugging along as it has for many years. Hire an ad agency or a marketing firm, and you will hear about “new” methods. But the momentum of an ad agency is to create, place, and evaluate ads. The more money a client has, the more rich the palette of advertising efforts. The last time I met with a group of advertising professionals there was a lot of talk about print and video ads. There was not much talk about radical innovations such as focused social media. Sure, the agencies provided the service, but shooting a video on location was still like catnip to some of the executives.

There are new services available to publishers. These range from the software development shops which helped organizations like News Corp. create an iPad newspaper to search engine optimization experts who help a client place online ads in various Web services or syndicates. The key feature of these new support services is that they look similar to the old print ad sales approach or the much loved location video service. But they are not the same. The old model was predicted on a formula which included getting paid for some creative, getting commissions, and getting follow on work for a success. Now software wizards and SEO professionals want to get paid like consultants.

In the midst of these infrastructure shifts, the people consuming information are now behaving differently. The notion which is popular consists of “good enough” information, machine selected information like an aggregation service, and information provided when a person provides some personal information. I have noticed that more “free” information is similar to the “infotainment” on local television news programs. There’s also quite a bit of information which is speculative or rumor based. Figuring out what item is accurate is difficult and I find impossible. I just finished an analysis of eight companies and each company asserted that its products performed the exact same function as the others. Who knows? Perhaps someone with the time, expertise, and resources can set up an eight way comparison, but I think this is highly unlikely. So determining what’s right is tough. Some marketers count on that.

Little wonder that getting money for content and finding a way to reach a large, discontinuous, fickle universe of mobile device users is tough. Charging more for content is not making life easier. Big consulting firms are struggling to sell their high end studies. For every hit that a Forrester, Gartner, or Booz Allen produces, there are quite a few losers. To make high end content more challenging there are “free” studies. I just downloaded and read an interesting report on open source sponsored by a government entity.

The article makes a good point:

For many readers, mobile news consumption means disaggregated consumption through apps like Flipboard and Pulse. Some publishers are concerned about effectively giving away their ad sales to those apps in this way. The New York Times, for example, has struck a partnership with Flipboard. The fear isn’t stopping publishers from ploughing ahead with mobile content developments. Of AOP census respondents, 91 percent and 85 percent of them said tablets and mobiles, respectively, represent their greatest opportunities for revenue growth in the year ahead, with 62 percent saying they would make the majority of their sites optimised for mobile.

Is there a fix? My view is that a fix is emerging, but the fix is not yet a chunk of boilerplate that can be slapped on an existing organization. With tighter controls on the Internet gaining traction in certain countries, markets for information are going to become more difficult to penetrate.

The comparison which comes to mind is with a Dark Ages view of information. For some, revenue is no problem. A new system feeds companies like Amazon, Apple and Google. How can lesser organizations become like these firms? That’s a tough question. Civility is subjected to significant pressure when multiple powerful forces are directed at business models. Medieval? Similar, yes.

Stephen E Arnold, September 24, 2012

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