New York Times – A Failed Ad Strategy January 5, 2009Posted by John in Technology.
Tags: NY Times, online advertising, web 2.0
1 comment so far
New York Times is now selling ads on their front page. I have to say that I didn’t even notice. This is the reason why it’s a failed strategy. Trend is away from print to online and that is where the NYTimes should be focused. Not only are web users not clicking on display ads, a new crop of software led by Adblocker Plus is blocking all the ads. Adblocker Plus used on about 10% of all web users is quietly gaining ground as a tool for end users. I wonder if the New York Times will see the impact of the fact that display ads are being blocked.
The New York Times unveiled a display ad on its front page, despite decades of fear that advertising there could contaminate the journalistic product or brand.
|Today’s ad, which promotes CBS, occupies a strip of real estate two and a half inches high at the very bottom of page A1.|
Today’s ad, which promotes CBS, occupies a strip of real estate two and a half inches high at the very bottom of page A1. That makes the unit less noticeable than the boxes available on the front of Rupert Murdoch’s Wall Street Journal, but it’s still a big departure for the Times.
In a statement this morning, the Times pitched the turnabout as win for marketers. “In 2006 we began testing ads on some section fronts and received a very positive response from the advertising community,” said Denise Warren, senior VP-chief advertising officer for the New York Times Media Group.
Taking its situation seriously
But it’s also a clear reflection that the Times is taking its situation seriously, something that was questioned after a recent presentation to investors and analysts. The New York Times Co. finally cut its costly dividend payments last November but drew fire for failing to suspend them altogether. “It just seems the reality is it’s a very, very difficult business right now, newspapers,” a questioner told executives. “And the notion that cash is flowing out of the company to the equity seems — it seems like you may not understand the gravity of the situation.”
In a funny way, the awful business environment may have actually freed the business side to sell the ads without worrying about an outcry from the newsroom.
“While three years ago the notion of the august New York Times serving up front-page ads would have stirred emotions far and wide, today it’s a one-day story,” said Ken Doctor, a newspaper vet turned media analyst for Outsell, a research and advisory firm. “When someone doesn’t have enough to eat, he doesn’t quibble about the source of the food.”
Made their peace
Many other papers have already made their peace with front-page advertising. The Journal began selling front-page units in 2006, carefully milking their potential to get big commitments from the five marketers allowed to buy them each year.
“Every single purchase has with it an annual commitment, an online commitment,” said Michael Rooney, chief revenue officer at Journal parent Dow Jones. “Some are multiyear, and some are global as well.”
With such prominent ad units, of course, it’s easy to wonder how the big articles next to them hurt or enhance their effectiveness. General Motors and Hewlett-Packard ads have bumped up against negative coverage of their own companies.
The front of the Journal’s Marketplace section today, on the other hand, shows an Oracle ad next to an article pegged to the Consumer Electronics Show. That’s an adjacency Oracle might have liked to arrange — which in turn is a possible suspicion that bothers opponents of these ads. Mr. Rooney said the paper never talks about news articles with advertisers. “It’s just not a conversation we would ever have,” he said. “Whether it’s the B section, the A section or anywhere in the paper, we sell our audience.”
Off the table
Last June The Washington Post’s new publisher, Katharine Weymouth, told Ad Age that front-page ads remained off the table. “I’ve had advertisers beg me to put ads on the front page, and we’re not ready to do that,” she said. The same goes for ads on Post-it notes affixed to the paper. “We declined to do that because we thought it cheapened the front page.”
Since then, of course, the economy has worsened dramatically. The Washington Post Co. saw print-ad revenue at its newspapers fall 14% in the third quarter.
This morning Ms. Weymouth confirmed, however, that the Post still doesn’t sell front-page ads. “No,” she e-mailed Ad Age. “The Washington Post does not currently accept front-page ads in our print edition.”
Blogs More Effective In Web 2.0 Advertising October 28, 2008Posted by John in Technology.
Tags: blogging, online advertising
add a comment
I saw this from Caroline McCarthy at Cnet today and agree with this study. In the many years of research in online advertising and web 2.0 it is very clear that one of the roles a blogger plays in their area of coverage is one of newsmaker and analyst.
I did a speech at MIT in 2006 called “The Blogosphere: New Navigators.” – in this speech I predicted that certain blogger would asend to the highest trust level in communities to earn a place of trust. Why? Because to be an effective blogger you have to know about the sector your covering. To capture news, get scoops, provide content value, you need to know what you’re talking about. Bloggers provide a real time service for users. Often bloggers make mistakes, but more importantly to users they provide links to other sources that delivers on the real time alerting or redirection of attention and interest (this is what normal users are looking for). Of course bloggers self correct or get corrected from their audiences. This content cycle is two way and very effective in content development, story development, fact development, and opinion development. This makes them valuable to users. (side datapoint: the best analysts of top firms have become bloggers – why?? ..Point made)
I am shocked to see marketing people pass on sponsorship of the top influencial blogs in their sector. Yet pay 100k for an analyst firm to do some survey. Blog advertising and sponsorship is the best game in town for marketing executives. Here I posted about the Future of Blogging last week.
Of course I’m biased but do see direct results everyday. Tell me if you agree?
Future Ad Model Reveals Itself – Self Service Display – In the darkest hour the future online advertising business model has shown itself October 13, 2008Posted by John in Technology.
Tags: online advertising
Self service advertising is the killer app. Brian Morrissey at Adweek just penned the future of online advertising. I’ll say it here and years I predict I will be referencing this blog post.
I’m calling it – Self Service Display Advertising is the new scalable model for online advertising – the heir apparent to search and keyword marketing. It will range from Podcasting insertions to social networks.
I’ve been researching this notion of a vertical engine for matching affinity data to user context for two years. The results: everything points to self service display. Content is the ad and the complexity that Brian refers to will be handled by the advertisers – sort of vertical engine of advertising – best of contextual and behaviorial targetting rolled into one model.
This is the future model that Facebook will adopt for monetization – everything else that they (Facebook) says is a smoke screen. Even worse if this isn’t on Facebook’s roadmap then they better move fast.
In the darkest hour the future online advertising business model has shown itself (again just like in 2000) . It will be a race to see who can build it first at scale.
Facebook COO Sherly Sandberg Desperately Looking For An Ad Model October 7, 2008Posted by John in Technology.
Tags: facebook, online advertising
Here is an AdAge story about Facebook and their need to find the revenue model.
Rob Hof Editor-in-Chief at Businessweek comments and links to his view (he was there) below that Sheryl Sandberg main point yesterday is not what AdAge was reporting. It seems that Sheryl was saying that the only thing around today is demand gen. Thanks Rob. Rob also points to Mediapost which has a followup. Apparently the real twist in this is that the Advertisers want a solution. This sounds familiar – I feel like I’m in early 2000 again. Search went through this growing pain. Whoever delivers the solution will ‘mop’ up the revenues. THANKS ROB
Over on the metarand blog there is a good post on this by Randal. I like his analysis but would disagree with Randal on the monetization focus and his reference in Jeremy Liew regarding to online advertising growth. Online advertising is a growth sector and will NOT slow down in the medium to long term. Maybe short term yes but long term massive dollars are going that way. If you look at the IAB stats from 1999-2001 there was gloom and doom. Then look at 2002-today. Massive growth. As Diller says no one has the answer yet.
Facebook’s latest attempt to finally get some real ad revenue has shown early signs of promise, Chief Operating Officer Sheryl Sandberg told an audience at the American Magazine Conference in San Francisco yesterday.
“The results were really positive,” Ms. Sandberg said. MTV not only got some attention for its awards show, it learned a little about what viewers wanted to see. It and other networks have subsequently said they want to try using the product earlier, to make the most of that feedback, she said.
“The monetization question on the web is a very big and open one,” she said. …Ms. Sandberg a former Google executive, noted. “What no one’s figured out how to do is demand generation,” she said.
“We need to find a new model and new metrics,” she added.
“Walled gardens don’t work,” she explained.
“People are using our product to protest our product,” she said, noting that a protest group is now the fifth largest on Facebook.
These quotes speak volumes about Facebook’s lack of awareness to how online advertising works. Pesonally I don’t think that they have to produce the monetization answer right now but instead just focus on the product leadership and key business development deals. I have no idea why Sandberg even entertains the monetization question at all.
Here is my favorite line from the Barry Diller interview on online advertising..
On Internet advertising: “You really want to get a headache? Try to understand Internet advertising. Social-networking advertising is being discounted because there is so much inventory [of available ad spots], and because methods have not yet been found to make it very effective. Will that get figured out? I absolutely believe it will. What form will it take? Absolutely unknown.”
Sheryl you have nothing on the ad side yet just admit it and work with advertisers to get the right solution in place.
Hey Online Video is Growing Big – Not a Surprise Online Advertising Video is a Real Market August 14, 2008Posted by John in Technology.
Tags: online advertising, online video
Having founded and ran a media platform (video) startup since 2005 I’m not surprised by the recent reports that online video advertising is growing big time. This shows to some VCs who have been not so bullish on video and advertising that the online video platform business is real and relevant (note my VCs wanted to turn my vision of building a media advertising platform into a production company and PR agency).
The problem is that most VCs and new players to the online video market are having a hard time figuring out the business model. Not sure why – it’s pretty obvious it’s advertising. The problem or better yet said “opportunity” is that the ad unit needed to leverage these new networks, new content types, and syndication/aggregation technology just isn’t here yet. It will be soon. I know a few great companies working on that vision. As soon as the ad unit and enabling infrastructure supports performanced based contextual videos the money will flow.
Liz Gannes over at NewTeeVee has a good post on the recent Lehman numbers that online video is growing (she has other numbers as well from other sources).
Here is the text from Liz’s post:
The investment bank Lehman Brothers, which basically discounted the potential of online video advertising in a recent report on digital entertainment, now puts a number on that market: $1.1 billion in U.S. video ads this year, rising to $2.4 billion by 2010.
Lehman had previously forecast that video-on-demand and iTunes revenues for studios would climb to $2.5 billion in 2015 from $319 million in 2007, so paid content and ad revenues are at least in the same ballpark. Of course, they’re nothing like traditional television numbers.
The report isn’t available online.
The Lehman forecast for online video is pretty middle of the road, even a bit pessimistic compared to those of other firms (though most predictions tend to extend a couple years further out). Parks Associates sees $6.6 billion in 2012 in U.S. online video ads by 2012; Forrester is looking for $7.1 billion by 2012; and eMarketer says $4.3 billion by 2011. And In-Stat said today that it expects $4.5 billion in worldwide revenue from all online video business models by 2012.
In other revenue projection news (which there seems to be a ton of today; see Chris’ report on premium video revenue), eMarketer points to an iSuppli report that projects $3.8 billion in worldwide mobile advertising revenue by 2011, up from $427 million in 2008.
All of these discussions remind me of the early days of the web when then online advertising spend was always compared with traditional advertising spend. I think that it’s safe to say that the ad dollars are shifting online fast. At what pace will determine the magnitude of change of these forecasted numbers.
I’ve been recently bullish on live video as well as downloadable media. The combination of Live and Downloadable is very compelling.