My client base, let alone my collection of personal interests, is, well, diverse. I work on the media/entertainment/publisher side, the agency side, and the marketer side. To keep up with all of this – and because I love them – I attend a lot of conferences, panels, programs, webinars, etc. And it is quite fascinating to note the differences – not so much in the content of the talks but the culture of the organizations and communities.
Three weeks ago, I attended six days of non-stop social media events. The attendees at each stop on this massive media crawl uniformly carried Apple laptops and at least one Smart Phone – typically iPhone or Droid. They all had blogs and Twitter accounts, and most – it seemed – had Foursquare and/or Gowalla personas.
Fast forward to an event on February 22nd sponsored by Multichannel News and Broadcasting & Cable. The topic, Advanced Television: The Future is Now. Well, when, after checking my coat, I circled back to find out whether I needed a wifi password and whether there was a Twitter hashtag, I realized I wasn’t in Silicon Alley anymore. The answers: no wifi and what is a hash tag? Ok…
I took my seat and booted up my nifty MacBook Air. Around me… a few PC laptops. Gosh they looked heavy – even the portable ones. I checked into Foursquare. One other person within the Roosevelt Hotel was there. I suspect he was not at this event. Ok…
And finally, the attire of those around me – not jeans and sneakers – which I would not wear anyway – but… suits and ties. Well, after all, there were a lot of ad salespeople, business development folks and senior executives, so that’s no surprise.
So, putting aside all these cultural observations, what did I learn in school today. Well, to start, as you would expect, different cable/satellite operators are at different phases in their adoption of advanced technology. The leaders – as far as panelists – Cablevision and DirecTV – though Time Warner Cable’s sizzle reel was far and away the best, highlighting some very nice consumer offerings and interfaces including its highly touted “start over” function and an expansive VOD library. A point of commonality. Digital. 94% of Cablevision’s subscription base has digital cable, and all of DirecTV’s base (by definition of it’s being satellite) is digital. A digital footprint allows you to do cool things.
So, what is Cablevision doing? A number of cool things. Some of it with Seth Haberman’s company Visible World. You may have read about their foray into addressable television over a year ago. It sounds like that, or at least part of that, was for Cablevision itself. Not a bad idea – test it out on yourself. And, also, a good test subject because they knew so much about their subscription base and were able to segment them by product line, e.g., TV only, Triple Play, TV and broadband, etc. Well, it sounds like the testing went well because they are rolling it out to other clients. The key statistic, if I understood it correctly was that consumers who were served targeted ads were 32% (i.e., one-third) less likely to turn away from the ad. Well, that makes sense and is quite a nice stat. Of course, I’m all in favor of relevant advertising. Even magazines get that concept. But, I wander.
So, consumers like this stuff. In a recent Forrester/ANA study, 78% of advertisers said they want to target better. However… only 59% said they were willing to pay a premium for it. Sound familiar? Think behavioral advertising. One explanation came from Seth Haberman. First, he was curious to know who the 22% were who did not want to target better! Secondly, he pointed out that media buyers are trained to say, “I want to spend less.” It’s like a reflexive response. They have no control.
So, Cablevision’s next foray is with Pillsbury (my client!) and Zenith (a wonderful agency to work with – particularly my key points of contact Neil and Colleen). They are creating a dedicated Pillsbury VOD (video-on-demand) channel in the Cablevision footprint. It will be paired with “Power 30s” (I believe Barry Frey said he had copyrighted that phrase), 30 second ads that are tagged to bring people to the VOD channel. But, now we’re getting technical.
So (big fan of the word “so’ today), what were some of the key takeaways:
(1) It’s not their fault. Television is a large, capital intensive, fragmented (albeit a number of big cable & satellite provider fragmented) industry. To accomplish any advanced television initiative, you need a cable, satellite or telco operator; an advertiser and a technology partner at a minimum. There are a lot of different platforms and technologies and ideas and tests and legacy systems out there. It’s not easy to move that ship.
Contrast this with Dennis Crowley’s simple little iPhone app. An iPhone app can be created for as little as a few thousand dollars. Even a $100,000 app is nothing compared to the television industry. Even $1 billion in online video advertising is less than 1.5% of TV ad dollars.
(Forrester estimates $40 billion in broadcast and $30 billion in cable TV ad sales in 2010 – January 15, 2010. Mediabrands’ Magna division estimated that online video advertising will reach $1 billion by 2011 – MediaPost, April 27, 2009)
(2) As a point of comparison – according to Seth Haberman – only 3% of video is consumed online. So, while these numbers are growing astronomically, and while new generations are simply not watching traditional television, it’s still a HUGE market.
(3) “Sight, Sound and Motion.” These are the watchwords of the television community. This is what differentiates them from all other media. The POWER of the sight, sound and motion they can deliver. The web, said Rich Forester, VP of Ad Sales for DirecTV, is our closer, but it’s big video that gets them there.
(4) For some, Advanced TV is more “now” than for others, but all-in-all, it won’t be here for 5 years. Advertisers – and media buyers – are simply overwhelmed. The biggest need, from what I heard, is for EDUCATION. There are too many new technologies, new technology companies and options.
Moreover, advertisers want to know what they will get for their investment in this new, premium, advanced type of advertising. But that’s the problem with being part of the vanguard, we just don’t know. Hence, many brands are waiting it out. There are tests, successful tests. But nothing scalable.
Ultimately, advertisers need something at a national level, and MSOs need to sell the rest of their inventory as well as these special programs. As DirecTV’s Forester said, we’re happy to create these targeted programs, but we have thousands of thirty-second spots that need to be supported. The inference is that you don’t get to do an advanced campaign unless you do a large traditional media buy.
Is that a good place to stop? Does it cover the 3 hours of panels and schmoozing of the afternoon? Well, I think it hits on the highlights. Moreover, it’s time for my regularly scheduled program.
Until next time, good night and good luck.
I woke up this morning to the following news report from Mashable:
“Remember those real-world merit badges based on the virtual achievements you get for checking in to places using Foursquare that we told you about? They’re approved and on sale now.
The 1.5-inch embroidered badges have Velcro on the back for attaching them to your jacket, backpack, or whatever other fabric you want to decorate. Options include Mari Sheibley-designed badges ‘Local,’ ‘Superstar,’ ‘Crunked,’ and ‘Super Mayor’ for $5.99 each.
It’s unclear whether Foursquare is deriving any revenue from this recent development, but it does demonstrate that there is an opportunity for digital media companies to garner revenue from, don’t say it, consumers.
Generally speaking, there are three sources of revenue for media and entertainment providers: (1) advertising & sponsorship (b) consumer and (c) strategic partnerships, revenue share, etc.
In the past ten years, nearly all digital media companies abandoned the subscription model and with it consumer revenue as a viable and substantial source of income. (Not so their cable programmer brethren who, for now at least, have two sources of revenue – advertising and carriage/license fees.) But for digital publishers – and, particularly offline publishers going online, it seemed that Internet users would not pay for content, and advertising could carry the load for high quality and/or highly popular content.
But Foursquare seems to be learning from the missteps of those before it. Albeit, it is also benefiting from the change in mindset created by iTunes and mobile gaming companies who have conditioned mobile (and iTunes) users to make micro-payments – little payments of 99 cents and up that add up to BIG dollars.
Not only is Foursquare inspiring a (non-subscription) consumer-based line of revenue – 3rd party for now, i.e., the physical patches, but they are also developing high profile, high level strategic partnerships and custom programs with big name brands like Bravo, Intel and Zagat – giving it credibility, buzz, and access to the huge consumer bases of these mega-brands.
Foursquare is an especially exciting platform because it takes social media back and forth between the physical and virtual world and directly touches the retail world. The potential value of the information collected by Foursquare about your day to day activities and the ability of retailers and other businesses to influence consumer behavior immediately and at a relevant, targeted level is immense.
A few days ago, I heard Gary Vaynerchuk lambaste Facebook for letting virtual, social gaming organizations like Zynga make billions of dollars on Facebook’s platform. They should have ensured themselves a piece of that, he said. But Facebook, like Google and YouTube had an idea without a business plan – although it certainly (fortuitously?) worked out well for Google in the end. Dennis Crowley and his colleagues at Foursquare seem to be a little more aware of creative monetization options from the start.
Chris Anderson famously talks about the Fremium model – a cute word for an age-old concept that seemed to have been forgotten or abandoned or not viable for the last 10 years – in the digital world. Is that what these badges are? Well, sure. You can earn a virtual badge for free. But for $6, you can get a real one from Nerd Merit Badges. But, you might say, don’t you remember the Twitter and Facebook pillows? Well, no, I don’t – but I just read about them… anyway, what differentiates Foursquare is the gaming element. That’s what makes a physical merit badge more desirable than a Friend Feed Pillow.
Adam Penenberg, the author of “Viral Loop: From Facebook to Twitter, How Today’s Smartest Businesses Grow Themselves” – and the Forbes.com guy who broke the “Shattered Glass” story, said recently that instead of consumers spending billions of dollars on virtual items in online games, advertisers should be giving us real items for our online accomplishments. (Hmmm… sounds kind of like loyalty clubs, but now we have the platform to make it truly scalable – you didn’t think I could go a whole entry on this topic without saying scalable, did you? – but I digress) Well, he’s on to something, but Nerd Merit Badges has turned Adam’s idea and currently practices on their heads. What is happening is that a virtual game is crossing over the real world. Real dollars are being spent on real goods that are the physical manifestations of virtual items.
It’s all pretty exciting. I hope that traditional media companies are watching and learning.
p.s. Last night I unlocked the “Gym Rat” merit badge for visiting the Harvard Club 10x in the last 30 days. Unfortunately, the club is not a place I go to work out but rather to eat… so I’m probably not getting the physical fitness benefits Foursquare thinks I am.
Because I wrote a post the other day about hyper local media, I have been contacted by entrepreneurs in this space – which is actually kind of exciting. I have also made an apparent splash by asking a question about the topic at today’s Social Media Week panel at the Time & Life Building
The first communication I received came from the developers of PlacePop, who wrote the following note:
“I enjoyed your reading your recent post about the advent of hyper-local targeting.” Flattery will get you everywhere with me, and reading my blog is flattery on steroids.
“Since you have an interest in location-based services, I thought you would be interested in learning about a new app called PlacePop.
PlacePop is a new entrant into the geo-social networking space. Like Gowalla and Foursquare, PlacePop uses a check-in mechanism to connect people with the places they go to, anywhere in the world. However, PlacePop is designed to offer a much simpler user experience that provides value without such a strong focus on gaming elements. Our app is also designed to work well anywhere in the world, small towns and major cities alike.
As an early adopter yourself, I thought you might be interested in taking the PlacePop app for a test drive. If you have some time to try it out, I would really love to hear your feedback on the product we have so far.
You can find the app (free) here in the iTunes store: http://itunes.com/app/placepop
You can also use PlacePop on the web at http://placepop.com”
Prior to receiving this note, I had had the opportunity to discuss my dislike of Gowalla with Ian Schafer, the CEO of DeepFocus, and he encouraged me to give it another try as he, personally found the gaming element of it – specifically the ability to drop and take things from locations – alluring. (Ian had been a speaker at the opening Press Conference for Social Media Week.)
Having had these two interactions and having heard FourSquare referenced nearly as frequently as Twitter and Facebook during the first two days of Social Media Week, I was convinced that hyper-local social media was indeed the next great thing, and that Four Square is the Facebook and Twitter of the space. As it was with LinkedIn and Facebook when I first joined, I find myself friending people I don’t really know in order to develop some kind of critical mass. And I know that as time goes on, I will become much more particular and possibly even jettison these connections if they prove to be creepy. In fact, I have already found myself ignoring requests from people to whom I see no ostensible connection except that they might perhaps like my photo. The challenge here is that I have not yet found a way to respond to these people to ask whether I actually know them. Is that functionality available?
On the other side of the coin, I have sent friend requests to panelists that I see have checked in at the location of the event – although I follow up by introducing myself live and giving them the heads up.
Near the end of today’s Social Media Week panel about defining the Social Media Editor Role (sponsored by Time Inc. and entitled “Networked News Gatherers”), I posed the following question to the panelists: What do you see as the intersection of hyper-local behavior and social media, and how will this impact you in your role as a social media editor. Rachel Sklar, Rachel Sklar, Business/Project Development, Abrams Research and Writer for Mediaites, answered that while she had been an enthusiastic member of FourSquare for a year (oh, how behind the times I feel), she did not yet see an application for it other than as a way to enhance her relationships with her friends. She did say that somewhere in a basement, a brilliant mind was developing an application that would expand the capabilities and role of the application – in the same way that Twitter evolved.
Cyndi Stivers, Managing Editor, EW.com then added that a key attribute of FourSquare (and, I imagine Gowall), is the gaming element. And this made me realize that hyper-local targeting does not stand alone as the next great trend, but that the intersection of gaming and social media is integral to the development of this space – a la Farmville.
Following the panel, I was approached by Phil Thomas Di Giulio, the founder of the pegshot mobile application – who, by the way, was lucky enough to be trapped in an elevator with Ann Curry at the conclusion of yesterday’s panel about the role of social media in the recent events in Haiti. Phil introduced me to this application and also uploaded photos of me, one of the speakers and himself – among others – to the site.