Tag Archive for 'attention'

The Australian cancer that will kill the Internet

grainy girl censored There is a cancer growing in our society. This problem may seem small, isolated and insignificant, but left unchecked, could grow to affect everyone in the world. Because when a small nation validates a disastrous idea, it gives the larger countries evidence to pursue it – and like domino’s, we all fall.

Logging into a Bogota internet cafe last year as I was backpacking around South America, I nearly choked. Australia’s new government had slightly tweaked their election commitment: they no longer wanted to help parents filter the Internet to prevent their children from stumbling on child porn (children don’t watch child porn, and lets not forget the fact that child pornographers have a sophisticated offline network that bypasses technology), but now the government was going to mandate a “clean” feed on everybody. Mandatory censorship on the Internet is not a future I want. It made my blood boil.

It was to be a filtration regime, that the government would censor whatever they thought was deemed censorable. An unaccountable, shady regime using the high moral ground of claiming to look after children, but in subsequent examinations, has proven to be just the start. A recent leak has shown that there has been considerable scope creep. Pornography, gambling, abortion websites – all the good stuff in life that make conservative Christian’s pray for a flood and famine to clean society up – would be part of this black list, despite being perfectly legal for adults. The question isn’t why is the government banning porn and the like; it’s where will the line be drawn and who determines that? We are seeing a moral crusade, cloaking a very real civil rights issue.

Censored face

I wrote an email to every senator of the Australia government several months back, speaking on behalf of the Silicon Beach Australia community (which will give you all the background you need). Fortunately it worked – I not only educated, but I was acknowledged from two important senators that the current administration needed to pass the legislation. It was a temporary win, and thankfully since then the Australian mainstream media have taken an absolutely beating on the government. But very rarely does this get international attention.

More recent announcements suggest the legislation is dead in the water. But let’s not get complacent – we are only as safe as the next election, where the numbers in the Senate shift. This has been an issue for several years being pushed by the parties to win the growing Christian conservative vote. This dangerous policy hasn’t died – it’s just undergoing an evolution.

Why the rest of the world should care…and be scared
One thing that I’ve learned from this experience, is that the Australian government will cling onto the flimsiest of evidence and pathetic moral rhetoric, to position their case. Distorted perspectives, exaggerated linkages – it almost makes me laugh and then cry to see how desperate the government is to sell its case, by citing overseas efforts in an inaccurate way, in order to build their case. It is a propaganda war based on lies that we are getting sick of .

self-censored

If an economically insignificant – but credible nation – like Australia introduces this filteration regime, it means it’s a global precedent. We don’t want a precedent. All it takes is one solid example, and governments around the world can jump out of hiding on this sensitive electoral issue.

The Internet needs to be open, free, and available. It’s going to be the infrastructure of our society that will allow new opportunities for the development of the human race. So when a government starts flirting with the idea of internet censorship – don’t get complacent. Every piece of legislation passed, is a step closer to a control regime we don’t need.

twiter_vanuatu_nocleanfeed

We need to make this issue political suicide around the world. Our public pressure needs to get to the point, where no politician in their right mind, will try to implement this policy. I’m not asking you to suddenly become an activist, but just understand – there is no room for leeway in this. This issue has been under-reported by the media across the world – let’s kill this cancer once and for all. Because unless we exterminate this fake moral crusade, this cancer is going to slowly grow in the background – only for us to realise it’s all over when it’s too late.

It’s not often I will breakout in anger over this, but I think about it everyday (like how my Twitter avatar is in constant protest). No need to chain yourself to a tree – but let’s start making this the bigger deal that it really is.

The broken business model of newspapers

About six weeks ago I took a week off work to catch up on life and do some research and testing of market opportunities. I had several hypotheses I wanted to test and sent content to a closed group of friends and colleagues. My goal was to watch how they reacted to it, to understand how time-poor people consume information…and it was an absolutely fascinating experience.

As part of this excercise, I took the task of reading all the major newspapers every day. It has literally been years since I’ve given that much attention to them – I used to read them daily, but my Gen-Y ways got the better of me, and I moved online. Unfortunately, I still can’t seem to manage my online rituals to efficiently consume information (hence the research I did – turns out other people are struggling as well). Something I realised in the course of my research, is that whilst newspapers are losing circulation due to the Internet – there is a lot they could do to really improve their competitiveness.

Too much detail
I tried reading the main newspapers word for word, and it took me hours. I don’t care how much people whine that they love the newspaper experience – the reality is, the people who read the news also work full-time. They barely have time to take out five minutes in their day; the reason people don’t read newspapers is because of the complexity of life. Personally I work through lunch; and if I don’t work, I am trying to do things in my life so as to make more time for myself after work. The weekend is literally the only time I have a chance to take a time out to read the newspaper – but given I neglect people in my personal life during the week and the myriad of other things I am involved in outside of work, means I don’t even get that chance. I rarely sit down – that’s why I read the news on my phone on the train.

Newspapers contain quality content, there is no doubt about that. However, if you are going to compete in the news business, you need to understand your audience: that’s all they want. If you read any news item in a newspaper, it will be flowered with extra facts, background information, and endless perspectives to colour the central issue. For example, an article about the Central Bank in Australia dropping its cash rate by 1% had several paragraphs talking about the exchange rate. Yes, it’s valid to talk about it – but there were another half dozen articles that did the same thing in the related coverage, and quite frankly, it’s a separate issue. Another article about the impact of the rate change on local business, makes mention that 50 million pizzas get sold through Dominoes Australia. Interesting stuff – but is it relevant to the news?

A newspaper should have a headline, and literally report just on that news. I’m not saying they shouldn’t report on the extra stuff – quite the contrary I love the extra stuff – but they fail to recognise that the problem with reading a newspaper is that it takes so long, and so people can only skim it. Report just the news, and let consumers follow up on the website with extra detail through special links provided.

Newspapers can’t compete in news any more
I was able to get copies of the major newspapers between 11pm and 12.40am – as in, the night before people usually buy it. Those newspapers had been delivered by a truck, after being printed in a factory far away, with thousands of copies being loaded and distributed earlier that evening. Of course, there is a staggered distribution with some newsagents getting them through the night and early morning (about 5am), but it’s still the same newspaper delivered at 12am as at the high profile newsagents.

The timeline for reporting news is a joke. The only hope a newspaper has in reporting news uniquely, is if it breaks it. By breaking news, it has a chance to take its time and frame the flow of information. But is this that common? Most newspapers use shared agencies to pool their resources with stories, like international news. Newspapers are being ignored by consumers, because they get news quicker on the Internet. Why must these media executives continue to ignore the reality that an online news organistaion is much more efficient in distributing breaking news. That’s why newspapers existed in the past, but they no longer fill that role in society – newspapers need to get out of that role (or become “news brand”, but no longer treating print as the prime distribution for that news).

The incentives and structures can’t compete with this new world
Journalists, especially freelancers, get paid by word count.
Readers, especially time poor ones, skim through the newspaper.

See a problem there? It’s called friction. In case you are a mass media executive, let me build on it for you: the economics of information have now changed. When your industry was created several hundred years ago, information was scarce and people had plenty of time. Today, it is people’s time (or “attention”) that is scarce, whereas information is abundant. Tradition through the “art” and skill of journalism seems to drive the industry more than its fundamental economic shifts. As I remarked at the Future of Media Summit several months back after hearing a mass media journalist rant on justifying her existence: “The skill of journalism? It’s just as relevant as the skill of sword makers. It’s nice, but I prefer a gun.”

A business that does not respond to its market, will die one day. The cost structures of the newspaper (and magazine industries) are sustaining a structure that no longer suits the market for which it supposedly caters for. Instead, it relies purely on generational factors of a Luddite population to sustain its circulation, trying to make money on a model that has now been broken.

What’s so exciting about this? The traditional media don’t get it, in the same way a bible-basher won’t accept there is no God despite presenting logic suggesting otherwise. I’ve heard this from friends in the industry, from people I’ve met at conferences, and from observing my own clients who are part of a broader media group.

Denial by a legacy industry can be a beautiful thing for an entrepreneur.

Advertising on the Internet needs innovation

On the weekend, I caught up with Cameron Reilly of the Podcast network , and he was telling me about his views on monetising podcasts. It got me thinking again about those things I like to think about: how content can be monetised. Despite the growth in online advertising which is tipped to be $80 billion, I think we still have a lot more innovation to go with revenue models, especially ones that help content creators.

Advertising is a revenue stream that has traditionally enabled content-creators to monetise their products, in the absence of people paying a fee or subscription. With the Internet, content has undergone a radical changing of what it is – digital, abundant, easily copied – whilst the Internet has offered new opportunities for how advertising is done. However, the Internet has identified the fundamental weaknesses of advertising , as consumers can now control their content consumption, which allows them to ignore embedded advertising altogether. Content on the other hand, still remains in demand, but means of monetising it are slipping into a free economy which is not sustainable. I make that point to illustrate not that professional content creation is a sunset industry – but rather there’s a big market opportunity as this massive industry needs better options.

time mag

"Hey man, there’s this new thing called the Internet. Sounds pretty cool"

One of the biggest innovations in advertising (and enabled by the Internet) is of contextual search advertising. This has been popularised by Google, which now makes 98% of its $17 billion revenue from these units. This advertising dominates online advertising (40% of total) because of its pull nature, whereby key-words stated by a consumer in effect state their intention of what they are interested or would like to purchase. Whilst this is a highly efficient form of advertising, it also has its weaknesses – for example, it is not as effective outside of the search engine environment. Google makes 35% of its revenue from the adSense network , where these contextual ads are placed on peoples personal websites. Evidence from high traffic bloggers suggests they barely make enough money through this type of advertising. Another point to consider is that aspects of the Google network include significant partnership agreements like the one with AOL which accounts for 10% of Googles revenue (this is a 2005 figure which has likely changed, but Google does state in their 2007 report "Our agreements with a few of the largest Google Network members account for a significant portion of revenues derived from our AdSense program. If our relationship with one or more large Google Network members were terminated or renegotiated on terms less favorable to us, our business could be adversely affected.". AOL most recently reported for Q1 2008 half a billion dollars largely from search advertising ).

Other attempts at creating more efficient advertising which have existed for over a decade, have come in the form of profiling or behavioural tracking. However, these forms of advertising has also highlighted the growing awareness of consumer privacy being eroded, and is under heavy scrutiny by activist groups and government. Facebook is a company that is best posed to deliver new forms of advertising because of the rich profiling data it has, but it itself has faced massive backlash .

My view is that the majority of online advertising for successful individual publishers at least, has largely come from traditional approaches to advertising – a masthead blog with a sales team that uses display advertising. How effective this display advertising is is debateable with widespread banner blindness and consumer control over their content, but it would appear that this is more a case of advertisers seeing this as the least bad on the overall scale of opportunities. The fact it replicates the mass media approach of number of unique consumers viewing the content, and not the types of users, means this isn’t anything new other than being done in a digital environment.

Digital content is in need of a better monetisation system.
Targeted advertising is the most efficient form, yet consumer privacy is a growing force preventing this. What we need, is not a new advertising technology, but a new way of thinking about advertising – in a way that can help the content economy rather than riding on it without giving benefit. Contextual advertising sounds great in theory as it calculates key-word frequency of words on a website, to match it to a key word ad – but it’s proving in practice these ads are not very relevant. Yet trying to think of a smarter way to advertise, may be the wrong question – perhaps half the problem itself is advertising as a concept?

perspective

Are we running down a tunnel, only to find there is nothing there?

Content which comes in the form of news (historical and breaking), analysis, and entertainment can be monetised via a persons attention or through a transaction (ie, subscription, fee, etc). Both this approaches have different barriers.

- Attention: The key driver is increased dollars per unique person, over a period of time. The barriers to this approach is the challenge of identifying the individual in a way that gives advertising that is highly relevant and will result in a conversion. In other words, privacy privacy privacy.

- Alternative payment: Requiring consumers to pay for content is a barrier due to the paid wall. What is more problematic for digital content, is that the ability to replicate it freely makes it not just easy to do for the masses but has created a culture of if it’s not free, it’s not worth purchasing unless its really necessary. There needs to be a strong value proposition for a consumer to purchase content, and in the absense of a brand and marketing, the restriction of what value the content offers is a barrier for consumer demand as they don’t know what they are missing out on.

So as you see above, content creators are in a difficult position. Charging people reduces their opportunity unless they are really established, but even then, due to the digital environment they don’t have any control over subsequent distribution (with rampant piracy). Yet advertising is fraught with being irrelevant and hence not effective (so advertisers go to other forms) and any attempts to make it more relevant, gets held back by the concerns of privacy advocates (and rightly so). Whilst the Internet parades itself as an advertising growth machine, it’s growing in new areas but not the old areas that have traditionally been the medium for advertisers.

This advertising growth is largely being driven through utility computing products that aim to make information retrieval more efficient (ie, search). However, the growth for the content creators, is not happening. As Cam was telling me, in a market like Australia – small content organisations like TPN and Bronwen Clune ‘s Norgs , don’t have access to the big end of town for a sales team. And he didn’t have to tell me, those Google ads for the smaller guys, are not enough to pay the bills. That small to middle end is not being really catered for.

But before you jump on the phone and create some mid-tier advertising network that caters for a niche, think about the real problem: content creators need a better solution to monetise their content. But advertisers also need a better way of selling, other than some slick-talking sales person who can sell ads on pageviews (a broken model with weak alternatives ) They need advertising that is suited for their product, but the market now includes other products media outlets never had to compete with like marketplaces now happening online and utility computing products. Whilst the technology community obsesses about search , let’s also remember we have yet to see a new way to monetise content that is superior to the old world. Contextual advertising of text is the latest new thing area, but that technique is nearly a decade old. As I prove above, outside of the search environment, it is showing to not be that effective.

Where is the innovation going to come from? Not through technology but with a new paradigm shift like how content creators operate . New ways of thinking about the way we ‘sell’ like what the VRM Project is challenging. But perhaps more fundamentally, is an understanding that the holy grail of targeted advertising has got a speed hump called privacy – and that may actually be a sign of not going faster towards better targeting, but changing the vehicle all together.