innovation playground Idris Mootee

Revisiting The Question: What's The Impact Of A Soft Economy To Digital Media?

Came across this poster last week. I stopped for a couple of minutes to see what' was that all about but I didn't have time tor read on. I still think the best ad medium is outdoor, if only I can use my cell phone to scan soI can learn more about this once I get home or they can push something to me. That's experiential marketing.

Some thinks that it is safe to assume that as the overall drop in advertising activities would include online ads, but that's not what the data is showing. As the economy softens, advertisers will look even more closely at how well their ad dollars are doing.  Increasingly, marketers are looking to ad networks-vertical, behavioral and otherwise-to buy more targeted advertising.  Before we get into ad networks, here's a piece of interesting data, the North American videogame industry sold $1.7 billion worth of hardware and software in the month of March (a report by NPD Group) This represents a 51% increase from the same period in 2007. If you are in the gaming industry, you'd never know that the U.S. economy was under distress. There are many bright spots in the digital word. Videogame, Adnetworks and Social Media are booming.

That could be a boon to the likes of AOL and Yahoo, which recently scooped up a series of ad networks and exchanges in their bid to become one-stop-shops for marketers. According to Imran Khan, an analyst at JPMorgan Chase that covers this space, said that ad networks "are growing much faster than the general graphical advertising industry." Khan estimates that the top 20 ad networks earned around $2 billion in 2007, which accounts for 14% of the display market.

Why are ad networks thriving? Cheap, targeted advertising. Networks charge much lower CPMs (as low as $4) than giant Web portals like Yahoo and MSN ($40 and up). It's no surprise, then, that ad growth on premium sites has slowed compared to the overall Web economy. Margaret Clerkin, the chief executive of Mindshare Interaction, said it's about efficiency. "While the home pages (of premium sites) are still very effective media buys, the price tags on them have become a little outrageous for many advertisers...there are other ways to amass that type of audience fairly quickly that are more efficient," she said. NY TImes has the full story. As I wrote about this last week, there are still plenty of opportunities to jump into this space, but the entry cost is high.

Outside the ad networks, there are a couple dozens of stealth start-ups that can shape the future. One is 9 months old company with a super team from Google. The company , currently in stealth mode, is called Mechanical Zoo and is working on a social search applications. The privately funded company has raised about $750,000 in convertible debt from angel investors, including ex-colleagues and friends. Two institutional investors have committed another $1.25 million to Mechanical Zoo, but the founders may raise a series A round of funding in lieu of that money. The name Mechanical Zoo is an homage to the mechanical workings of its application, as well as several animal-named products that the company plans to introduce over time.

The interesting thing is these folks left Google because according to them it can be tough inside the search giant to make new, big things happen, as well as to marshal enough talent away from the company's main search and advertising products to build new services.  Yahoo fell because of that reason. That's a universal truth even with no exception to Google.

The End of Advetising Agency (Both Traditional and Interactive) As We Know It?

IKEA has outfitted a train in Kobe (Japan) with sofas and curtains—probably with names like Oompa-loompa, Frida, and Bucarest. Unfortunately, this is only temporary, to mark the opening of a new shop in the city. No reason why we cannot have Starbucks train cars or Muji train cars. This is the future of advertising.

IBM has published a new industry study apocalyptically titled "The End of Advertising as We Know It".. It is based on a survey of more than 2,400 consumers spiced with feedback from eighty senior advertising executives. The study predicts that over the next 5 years some 30% of global ad revenues currently accruing to traditional media companies - amounting to billions of dollars - will migrate to online ad exchanges such as Google and Yahoo. This is overly simplistic verdict and an unlikely scenario.

Here are some predictions from the report:

- As the advertising value chain reconfigures, broadcasters, advertising agencies and media distributors in particular will need to make a number of 'no regret' moves.

- The new technology and rising popularity of user-generated and peer-delivered content, and new ad revenue-sharing models (e.g., YouTube, Crackle, Current TV), now enables amateurs and semiprofessionals to create lower-cost advertising content.

- Advertisers are demanding more individual-specific and involvement-based measurements, putting pressure on the traditional mass-market model. Two-thirds of the advertising experts IBM polled expect 20% of advertising revenue to shift from impression-based to impact-based formats within three years.

- New entrants are making ad space that once was proprietary available through open, efficient exchanges. As a result, more than half of the ad professionals polled expect that open platforms will, within the next five years, take 30% of the revenue currently flowing to proprietary incumbents such as broadcasters.

There is no question that the future of advertising will look radically different from the past. The push for control of attention, creativity, measurements and inventory will reshape the advertising value chain and shift the balance of power. Disruptive start-ups will bring more chaos to this already vulnerable business model which is more than 50 years old.  Let's face it...no body even look at banner ads, press releases are nearly useless, TV commercial are entertaining at most but don't engage viewers, direct mail is a i the business of killing trees...what's left?

I wrote a lot about this on this blog, spoke at international conferences and frequently exchange my views with top agency executives, they are most curious of what I think the different models of agency and what likely scenarios will emerge? Currently there is multiple capability gaps exist in agencies, they are lacking management consultant’s type of business rigor, then the deep insight of product designers and the digital know-now of interactive specialist. 

In this world of cross-capability mastery, what does the agency of the future look like?  Agencies also have tremendous egos and cultural issue to deal, too much emphasis on “the creative idea”, it is such a thing of the 70s.  The quest for scale has reduced many great firms to either a creative factory or procurement shop. There is no room for walls and egos in a digital world.  Future agency success won't be measured in unit’s displayed or gross impressions, but the level of customer engagement.

From the end of advertising agency as we know it to the future of advertising, this week in Montreal I met with Jean-Francois, ceo and co-founder of Sid Lee (picture of their cafeteria above serving lunch for 200 plus) A creative powerhouse founded in six years ago by two students that never worked in an agency. They didn't really reject the traditional agency model, just don't give a damn about it (or know enough about it). The agency has a close relationship with Cirque du Soleil and came to flame with their work with them. I was very impressed with them when he explained to me their dream to build a new form of creative organization: a Commercial Creativity group. He told me his business is about “creativity”. I told him Idea Couture’s business is about “innovation”.  That was the beginning of an interesting conversation.

He gave Scott and I a tour of their offices, there so much creative energy in the place. In the Sid Lee mantra, advertising should be seen as a tool, as opposed to a toolbox. Rather, what Sid Lee calls "commercial creativity" is the toolbox? And it can include a lot more than just advertising, which explains why Sid Lee is now involved in such things as retail architecture, experiential marketing and industrial design. The idea is to be able to develop rich brand experiences in stores.

I think this company is on a mission. There’s a lot in common between our firms, while their core is in “creativity and design” and our core is “strategy and creativity” manifested in innovation.  Our focus is more towards digital. There’s something about the French and Japanese and creativity, although they are very different. I’ve spent a lot of time in Tokyo and Paris for both business and play.  And some of my most creative times and business ideas come around my visits to these places. The French publish utterly different magazines and books from the kind I find anywhere else in the world, and there is something about their perspectives. For Japan, I love to fusion of modernism with the spiritually ancient that expressed in design ethos focus on transience and the constant dynamism of change. There are agencies (for the lack of a better word) like them in London, Amsterdam and Barcelona all with a mission to change the world of marketing communications.  London's Monther is a good example. See picture of their workspace below.

Here's an old presentation which I posted here four months ago. Now is a good time to revisit it. If you know a company who is also on a mission to change the ad world, please share with us. Let's hope it will all happen fast.  Advertising needs a revolution, not repackaging.

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Can A Media Buying Giant Reinvent Itself?

This is a picture of my living room, I realized I have not been in this room for more than 4 weeks. You can imagine what's life is like. When I am at home, I usually spend time in study and then the kitchen and the bed room. I have not been in many parts of the house for a long time. I need a tour this week.  My last post was three days ago, it is not common for me. I try to do at least 5 a week but it is getting difficult. I had only 4 hours sleep the last three days. Anyhow I feel good. May be because spring is here.

I was in Montreal most of this week, met some very exciting people and had some productive meetings..from the top creative minds to VCs and bankers. Scott showed me this place that makes bagel by hand.  This city has so much to offer. I love Monteal, it is one of my favorite city. I used to visit there every week but it's been a while I get to see the city's best side.

Today's headline from an Ad Age story caught my attention: WPP's MindShare has launched a wholesale restructuring of its business splitting the agency into four distinct units. The idea is to move the shop beyond planning and buying to McKinsey-style business consulting.  According to their CEO Scott Neslund MindShare's restructuring--six months in the making--involved a complete reexamination of "what we were doing with clients,. -

He listed three key client benefits of the new agency framework:

- a more streamlined process of working with agency services

- the weaving of digital resources throughout the entire organization

- stronger, more creative media work.

He believed the company has implemented the "largest sweeping changes in the industry," and that those changes "will energize the next generation of media and marketing specialists." Looks like this media giant is finally waking up to what's going around them. The company was formed as a scale play through the merger of the former media departments of JWT and O&M. MindShare quickly became the largest of the new breed of media-only agencies.  MindShare ranked No. 1 among media agencies in the U.S., with $11.3 billion in billings during 2006. We all know media buying is a commodity business.

Neslund explained that the MindShare restructuring is to strengthen its emphasis on creating branded content, particularly for the new media space but also for TV, out-of-home and radio. But it's not only about creating content. The move is also a clear delineation of just what services are on offer, and a way to eventually get paid for those different functions by establishing the value of each discipline (much as the controversial unbundling of media from creative was a way to get paid for both those disciplines). This puts them in direct competition with Time Warner, Meredith or Redwood custom publishing. So now the agency is competing with the media and want to be paid for higher value services.

Here are my thoughts. Content development and content delivery are very different from marketing services. Although over the years these content providers try to provide branded content for their clients by working with the ad agencies. Now they are likely to do so if the agency is attempting to eat their lunch. I also doubt if they can build the digital capabilities needed given the tight digital talent market. Even the interactive agencies are struggling to fill these gaps, what makes them think a media buying agency can do that?

Their plan is to build a McKinsey type business-planning group that serve in a management-consulting-like capacity, focusing on solving issues most relevant to the CEO, rather than simply developing a media communications plan. I am not sure media and content are the most relevant to the CEO. Nor I think they can attract (or afford) talent of those calibre.

They will create an invention group who's job is to create content that reaches consumers in a way that meshes with a marketer's business goals. The group, which is defined as media neutral, will also handle strategic planning and contact planning. My question is since they have a media buying unit (name Exchange) and media buying is their core revenue stream, not sure how media neutral they can be. I personally think agency should not be in the business of content creation. Branded content does mean custom magazines and websites, the power lies in the innovative integration of branded content into the marketing strategy. The true power is to combine branded content with social media content and apply them across the customer life cycle. The combination can deliver credible, objective editorial content that appeals directly to your customer interests and concerns while building your brand image. It is definitely one of the most effective tool to drive customer engagement.

The only interesting play here is being an arbitrageur. They will be getting into the business of both buying and selling media. They will buy chunks of TV inventory, make it addressable and resell it to marketers. MindShare will seek out similar opportunities where it actually owns media space it can sell to marketers. At the end of the day, they are still a media buying company but instead of media planning and placement services, they are now into wholesale and repackaging business.

Print publishers are not doing well. Many believe that most dollars lost to the Internet will never return to print when the economy improves. The last time the economy went into recession, in 2001, employment classified spending in newspapers fell by about one-third from the previous year to $5.7 billion. While the economy rebounded, employment classified-ad spending has never reached those levels again and dropped to $3.8 billion last year, according to data from the Newspaper Association of America.

Publishers are seeing growth in their online ad revenues, that's unlikely in the near term to make up for what they've lost in print. They will turn to marketing services based on their content to make up for the lost. Even New York Times Co., which has been ahead of the game online, with 11.1% of its total revenue coming from Internet business in the first quarter, didn't see big enough online increases to offset its revenue decline. Goldman's  Appert estimates that industrywide Internet ad revenue eventually will grow enough to generate overall increases, but that won't be 4 or 5 years away. Publisher needs to look for new format. Unfortunately many cannot see beyond the storm.

Online Ad Networks Needs Innovation - Not Just A Scale Play

Weather is great in Montreal this week. I always love this city, it has many unique things that you cannot find in any other city through out North America. I am staying at the St Paul Hotel which is one of the best boutique hotel in old Montreal.  Lots of meetings here and we have to work some important game plan for the next 6 months.

The business of online ad network came up when I was talking to a many at the airport. He was saying how much money is being spent to acquire these networks and almost everyone needs to have one. Ad network is the most competitive space and the stakes are high because there is big money there.  I think we have about 20 to 200 ad networks out there depending how you define them.

There has also been a lot of deal-making in the ad-network space and lots of money changing hands. More than $2 billion was spent last year to acquire 10 ad networks and exchanges, and venture-capital investment in ad networks reached nearly $300 million, according to media investment bank DeSilva and Phillips. If you include the $649 million that WPP spent for 24/7 Real Media, the $6 billion Microsoft paid for aQuantive, or Google's $3.1 billion purchase of DoubleClick.  You add them up, you are taking about a market valuation of over $7 billion of these networks.

Now Disney announces that it has struck agreements with 45 smaller, separate Web sites that allow it to distribute content on them and, more importantly, sell advertising on their behalf. By doing so, it becomes a player in ad networks. The idea of distributing ads online is a no brainer and it is simply scale driven. It sound like a niche but it is not, it is an industry. The continuous M&A and new players will confuse media buyers as well as advertisers. No doubt there will accelerated consolidation and we should not see more than 3 to 5 networks with 2 dominating 70% of the ad space. The top-20 ad networks that sell display advertising earned more than $2 billion in revenue in 2007, or about 14% of the total graphical-ad market. 

Other than the top 2,  others will have to find a niche in order to survive. Some ad networks will need to specialize in a certain topic area, like health or phama and other financial services etc., while others cut across multiple subject areas. Some ad networks charge advertisers only when a consumer clicks on an ad or makes a purchase. There are still many opportunities for innovation if we stop thinking it as a pure scale play.  If we start looking vertical ad networks focused on specific market segments that aggregate mid-tier publishers, this can keep CPMs and brand integrity on the high side, and allowing publishers to focus on improving content and growing traffic. As these types of networks grow and are able to sell a higher percentage of inventory, the economics will begin to work in publisher’s favor which it currently isn't, relegating the super networks to selling tens of millions of untargeted remnant ads on lower quality sites. They will then come to you and write you a big check for your niches.  When it comes to ad networks, tt is good to be niche.

What Do I Need For My Web 2.0 Start-Up To Become VC Friendly?

I have lots of people asking me the same questions many times last two weeks. So I will put my answer here again. Not all Web 2.O businesses are suitable for VC they are only interested in those with a high up-side, clear exit options and a real market opportunity. An idea that can quickly turn into at least $50m to $100m in revenue. A strong team with both passion and experience. But most of all, what's the fastest way to get them the $50 or $100m. If you are working on a Web 2.O start-up that relies on ad dollars as primary revenue, you need to show them the calculation. Ad revenue is not an easy solution for not figuring the value proposition of your Web 2.0 site.

If you can get $25m in revenue, you are doing OK. But $50m is the number. $100m you're a player. There are a few ways to get to $50m in revenue as an online media business:

1/ Create a Web 2.O property with a very broad audience reach, say getting to the $1 RPM range (including all CPM, CPC, and CPA models). To get to $50m in revenue you would need 50 billion pageviews in a year, or just over 4 billion per month. This is tough.  Not a lot of properties get that.

2/ Create a Web 2,0 property with specific targeting (generally demographics). Let's use a $5 RPM. To get to $50m in revenue you would need 10 billion pageviews in a year, or just over 800 million per month. If you want to hit $100m in revenue, you are talking about 1.6 billion pageviews per month. This is not unrealistic if you do a couple of things right.

3./ Create a Web 2,0 property with fanatic stickiness which usually means association with a hobby. That would become a must advertise property for certain advertisers.  If you have a highly targeted audience (preferably with high income) that is interested in buying a specific product, you can get  double digits RPMS. Lets assume a $16 RPM. To get to $50m in revenue you would need  around 3 billion pageviews in a year, or just 240 million per month. Even to get to $100m you only need 480 million per month. That's a very achievable target.

Here's some ComScore data if you are interested.

For those who use Google Analytics, they just added a col feature, the ability to view benchmarking data across verticals. The idea is to allow you to compare your reporting to that of your industry as a whole or to other industries.  Context is very important to have or your web metrics are just numbers. So you can do competitive benchmarking easily.

Here's a quick how to if you're interested. First you need to enable it in your settings from within Google Analytics. The first page you see after logging in (which shows your profiles) has a link that says “Edit Account and Data Sharing Services”. After clicking that link, check the box that says, “Share My Google Analytics Data… Anonymously with Google products and benchmarking service”. Then click “Save Changes”. I believe it will take 3-4 weeks to take effect. You will know if it shows up by clicking the Visitors Tab from within Google Analytics and then the “Benchmarking (BETA)” tab. Then you can play with benchmarking your site. It is very useful.

Media 2.0 - Ready For The Next Game

I have been talking a number of senior executives of large media corporations and I really think it is an exciting business to be in. Take a look at a chart of EBITDA multiples versus EBITA from a Goldman Sachs research report on the media business growth rates tells us something. Look at the differences between video games and Internet versus newspaper. That tells you why media executives are up at night thinking about how to play the NEXT game.

An example is Hearst Interactive (the digital media investment arm of Hearst Corp) is incubating a Kindle-like e-book reader called FirstPaper. The stealth startup is based in Palo Alto and NYC and is working on a new device based on Linux and will have some variation of Mozilla browser or its underlying technology in it.

Hearst has also invested in E-Ink, the electronic display technology firm, so there might be some synergies involved. E-Ink supplies its technology to Sony Reader, Sony’s critically acclaimed e-book reader. In fact, Lee Shirani, the former head of Sony Reader’s e-book store, is now working as FirstPaper’s SVP.

They are planning to test-market a wireless online newspaper within the next two years, using E-Ink technology. But unlike Kindle’s small, hardback reader, Hearst plans to employ the technology on a flexible screen almost as big as a tabloid paper. The e-paper can be updated by simply touching the screen.  So kind of like a big mousepad that works like a screen in the size of Rolling Stone magazine. Touch screen functions and customizable column are what I predicted. This is an interesting one to watch. Who wants to read from your IPhone if you can have a digital tabloid.

The very nature of media has changed not only in the delivery format or medium; even it’s very nature. Look at what Youtube is doing for media activism turning it into a platform for democratization of media. Using a phrase from Jamais Cascio, this “participatory panopticon” creating the potentials of a world where people can use built-in cameras from their cell phones to tell the world what’s going on in any particular moment in time. I think we can expect more innovative platform as this behavior evolves. Both print and TV media is in a period of dramatic change as the democratization continues and mass audience continues to fragment into ever-smaller niche audiences and communities of interest, and new technologies shift control over the to media consumers.

The big question is how to transform the “passivity” of TV and print into “active engagement” that are capable of capturing and holding the audience’s attention, and effective at generating emotional investment. The single most important concept in this new industrial discourse is that of “audience“ or “reader” engagement”, a term that is now commonly and not properly used.

There's Never A Better Time For Digital Media Start-Ups

I've been talking to my investment banker buddies in NYC quite a bit this week about the subprime crisis and how it will affect the media (digital) M&A activities. There are no questions that there will be some short term impact but many of these deals are not highly leveraged. I've been talking to a couple of start-ups lately and helping them to figure out their business models, they all have potentials and we're exploring if we should incubate one or two of them. The problem is they all see only one part of the total picture, but If they can understand more abut the media 2.0 dynamics, they will have a better view of their business models.

Looking back at 07, the adv market substantially underperformed the general economy delivering just 0.2% growth; Consumer magazines have done well with good growth at 6.3%.  In fact, the consumer magazine sector will likely reach an historic milestone this year, thanks in part to a steady 5 years growth. It will probably overtake newspaper to be the second largest media after TV. Funny it is not impacted by the Internet all all, in fact, the Internet just make their content more valuable.

The media market is ripe for big disruptions. We all see this coming and boundaries of media companies have blurred. Give you an example, the number one biggest deal, News Corporation sold its remaining interest in TV Guide, once one of the very  biggest consumer magazines, for $2.8 billion (as recently as 2000, the business was valued at $30  billion).  The new owner, Macrovision Corporation, is NOT a publisher, but a software and digital rights management company.  The value driver from the buyer's perspectives is not the venerable magazine they, but the Gemstar technology and the TV listings IP.  Taken by itself, this single deal crystallizes the transforming power of digital media. The number two deal is also another example of the tendency of media to break out of the conceptual box:  Primedia’s Enthusiast Media group of specialty magazines was acquired by a major newsstand distributor, Source Interlink, whose primary business is magazine distribution and other ancillary activities rather than publishing content itself.

This is spring time for digital media and don't expect this will be affected by any slowdown. Glam Media and Adconion Media Group separately announced today completion of new funding rounds despite concerns of the macro environment could spill over into the digital media market. Glam, a closely held company that has both its own sites and an ad network of partner Web publishers, raised $65 million from investors and an additional $20 million in debt, on top of $30 million in investments it had received to date. The investments -- by parties including Hubert Burda Media, GLG Partners, Duff Ackerman & Goodrich and Hercules Technology Growth Capital -- value Glam at around $500 million as reported in WSJ. London-based Adconion, an online ad network that recently started expanding into North America,  announced today that it has closed an $80 million investment led by Index Ventures and Wellington Partners.
 

Will Social Media Spend Surpase Traditional Media?

If you think yes, media comanies are in big trouble. By 2013, advertisers and marketers will be expect edto spend more money on so-called conversational media (Social Media)--or online media that encompasses things like blogs and podcasts--than on advertising through traditional media (Print and radio etc) , according to a recent study from the Society for New Communications Research (SCCR). A ealier study on Social Media spending by Prospero reported that 88% of businesses expected to increase Social Media Spending in 2008 and further more when asked about social media return on investment (ROI), 35% reported positive ROI and 41% said that ROI was “unknown.” Responses to questions about how web marketers measure ROI reveal that direct sales revenue is not a top measure for determining social media success. Respondents said that total number of site visitors (17%) was the most important criterion for assessing social media performance. Total number of page views and number of subscribes / community members (15%respectively) were next, followed closely by length of visit on the site (14%)."

According to the Prospero study traffic to social media site is the most important determiner of ROI (which suggests investment in Social Media is advertising driven, perhaps more than it should be). On the other hand, brand "engagement" is the main measure of success for Social Media spend. Although there are no common defintintion of what "engagement" is. We do have one that we use with clients at Idea Couture and we have clear definition of each stage of the Customer Engagement Lifecycle as. well measurment framework. Will share more here later.

The SNCR study asked about 260 agencies about their plans to advertise and market in conversational media. Today, a majority of these agencies said that they spend about 2.5% of their total budgets on conversational media, but by 2012, they plan to tip that percentage to MORE than they spend on traditional media as according to the SNCR's study.

Today we are ooking at the about 110 million blogs, with about 120,000 new blogs created every day and about 1.5 million new daily posts, according to Technorati. Of those, a third are English, a third Japanese, and the rest are a mix of all. Although the growth of blogs is slowing, their importance and visibility among traditional media, companies, and entrepreneurs are actually increasing. I don’t even think social media has come close to reaching its true potential yet. Expect to see more innovaiton in this space.

Web 2.O And The 4Cs

Web 2.0 is a loaded term that is unarguably subject to enormous amount of hype but now also a lot of serious corporate interest. Different people define Web 2.0 in different ways, which are often confusing and is understandable (same as branding, strategy and many other words). I have written a lot the last few weeks on Web 2.0 and Media 2.0. However, the very fact that Web 2.0 is touted as being so many things underlines its strategic importance and implications for business. Web 2.0 encapsulates everything Media 2.0, Marketing 2.0 and Brand 2.0, which is best approached by breaking it down into the 4Cs: connectivity, community, conversations and most important of all co-creation.

We will be running a Web 2.0 boot camp for our clients in the next couple of weeks and these are the key themes which I will share each of them here:

• Web 2.0 means many things, but all anchor upon the 4Cs.
• Understanding the Web 2.0 customer value chain
• Introducing the concepts of “social utilities”, “social shopping” and “socialcasting”
• Opportunities and pitfalls of leveraging social networks
• The evolution of ecommerce and the four scenarios
• Transmedia storytelling and the new role of branding

The last one is the most interesting one as I will be showing videos and films that bring out ethnographic insights that illuminate many of our thinking. We have one strong commonality in that we all have our stories to tell, there were barriers to put these stories in a verbal manner and can be stored and shared, not to mention the efforts to find people who are willing to listen. The two most popular ways in the past is 1/go to the pub (old English tradition) and have a few beers and start telling strangers your life stories or 2/ pay $250 an hour for someone whether he/she is a psychiatrist or an escort (a Geisa as in old Japanese tradition) to listen to you talking. The exciting part is with Web 2.0 it is now becoming a rituals in our everyday lives. Exploring new ways to tell them and actually taking the time out to "listen" can bring happiness by recognizing relationships and likenesses on a human level, across continents. Today we have so many new opportunities to using a mix of media to tell, explore, reveal, and aggregate stories in such ways that make us feel connected even if you're alone. The concept of “long tail” makes a lot of sense here.

This whole transmedia digital storytelling are changing the ways our societal behavior too, it is becoming a “social tool”. People have the ability to build interpretive movies very simply and to lay sound tracks around the content and mesh them up. They can easily condition or "sculpture" the context around the content. The serious interplay between context and content is key to what film - and rich media in general - are about. Consumers can now create an emotional scaffolding around a story so that it connects first to the gut and then to the head? That’s why we are seeing this continuous growth in social networks. The question is what is the role of brands here? (Illustrations by John Wall for Idea Couture Inc.)

World-wide visitors to social-networking sites in September, in thousands, and change from a year earlier

	Unique users	% Change
Blogger	142,971	85
Windows Live Spaces	119,838	21
MYSPACE.COM	107,031	37
Yahoo! Geocities	85,994	-8
FACEBOOK.COM	73,521	420
WORDPRESS.COM	62,232	N/A
FLICKR.COM	40,906	98
Six Apart Sites	39,340	47
Lycos Tripod	35,379	-25
HI5.COM	35,064	51
FRIENDSTER.COM	26,504	74
Orkut	24,612	57
Yahoo! Groups	24,389	3
DADA.NET	20,196	32
BEBO.COM	19,722	142

Source: comScore World Metrix 2007

Branding In the Post-Modern Culture When Consumer Transcend The State Of Being The Subject In A Society

Brands are transforming themselves and I would argue they are becoming more and more important. They exist beyond the ads and the products, they are trying to find new ways to get inside your home and be part of your life in the form branded content, branded entertainment, branded utilities and branded space. L’Equipe, the Parisian based daily sports newspaper invented the tour de France only to sell more newspapers, its branded content with a pinch of engagement.

New social forms have emerged from all kinds of new network-based social behavior.  These conversations between customer that are previously unknown to each other to the extent where over 50 million people are able to interact in a single online space, generating billions of web site page impressions every month.  The question is how should brand play a role here. These social webs are exploding everywhere and this can no longer be ignored by any brand. 

The structural nature of consumption of information and content are in a state of flux as we enter a world where content will be increasingly delivered through all kinds of networks that can be personalized and entirely self-scheduled. In that world, the viewer – not the broadcaster – whoever that may be, will decide what is consumed, when, how, when, and with whom you share it with.

We are in a transition from interruption and intrusion to engagement. When distribution is trivial, unlimited, and available to all comers, marketing to a captive audience sitting on a cough in front of a box is the thing of the past and creating "quality" product/service/content is paramount. Content is now a part of any product (and its experiences). Consumers will consume only what‘s relevant and what entertain them most, not what is marketed to you them in a repetitive fashion. By providing branded experiences, brand can extend engagement rather than disrupts it, by doing so it strengthens its contextual involvement and connection with the consumer.

With the emergence and convergence of the mobile phone and the internet and location-base-system we suddenly have immediate access to our co-workers, our friends and family members and know where they are at any point of time. We are getting used to living in a connected age where we naturally and increasingly draw on our participation in various networks for information, assistance, information and support.

The language of our post-modern world is not broadcast-branded-content pushed to our TV box that we consume passively. This kind of traditional marketing has become adversarial in the eyes of customers. Customers have changed and adapted to this new always-on, always connected, media fragmented world, where they seek value by searching, where they are not waiting for you to interrupt them with unwanted messaging, where they look to their peers for voices of authority. The behavior of sharing user-generated-videos will evolve and new behavior will emerge.  What we are seeing in YouTube I called it “socialcasting”. Does this signal the end of broadcasting? Consumer will spend more and more time interacting with each other and mashing-up content rather than passively watching low quality content. I think we have yet to see the full impact of this phenomenon. This will determine the new of our post-modern culture which I define as follow:

- Immediacy

- Flexibility

- Portability

- Permeability

- Fluidity

- Interactivity

- Mashability

- Ownerablity

This postmodern culture is characterized by the density, the intensity, and the fragmentation of the instances of communication, by hyperreality that continuously creates fresh vidoes and meanings based on the same signifiers, and by the incredible array of brands and products that impose their own rules and procedures as a way of life. The postmodern consumer thus transcends the state of being the subject positioned in society to satisfy one's individual needs. And everything seems so hyperreal's. Please share your thoughts.

Ad Agency's Disruptive Future? Can The Old Dogs Survive It?

“Password to Marketers' Meeting: Digital” as reported in a headline today by Suznee Vranica of WSJ. Wonder how many marketers have those secret passwords? In this crazy business environment, marketing is ready to be reinvented. No one is sure to who is taking the lead to drive this change. I have some ideas. I am sure you do too.

As all big players gather for an annual conference in Arizona yesterday and today, the topic that dominated in the seminars and dinner parties is easily predictable to be “How marketers adapt to survive/prosper in the new digital world?” and “What are the new tricks required to play this game?”

According to the study by BAH with American Marketers Association which was released during the conference yesterday, "digital marketing still lags the shift in consumer behavior" prompted by the Internet. The findings indicate that while "8 in 10 Americans are now online" and spend as much time on the Web as on TV, most marketers allocate only 5%-10% of their ad budgets to digital media. Its conclusions reinforced perceptions that many marketers are struggling to figure out digital media. Many are looking for help and are not getting them.

Less than 24% of those polled considered their companies "digitally savvy," citing several issues, including "lack of experience in new media" and "dearth of digital talent," the report said. Some industries are further behind than others: Nearly half of the consumer-goods companies that participated in the study spend less than 5% of their marketing budgets on digital, whereas technology, travel and financial services allocated more of their ad dollars to digital media.

Microsoft CEO Steve Ballmer is vocal about his desire to give Microsoft a bigger presence in advertising. "As I look out 4, 5, 6, 10 years from now, advertising will become 15, 20, 25% of Microsoft's business," he said recently during a speech in Paris. Ballmer was speaking today in Arizona and predicted that in 10 years everything you read you will read on a screen. “My parents will never get there” Ballmer asks, rhetorically. “You’re right. But your kids will get there in four years.” It’s very important that as soon as you assume that everything will be delivered digitally; all media, all advertising will have to take that into account. As for what Ballmer calls “personal authoring,” none of it will be separate from the consumption of produced media. All media will have interactivity, community. There will be so many new sources of media. The blogger of today, he predicts, will be, in a sense, just a footnote 5 to 10 years from now.

Other than threats from Microsoft, Google and Facebook, there are good reasons for big agencies to panic.  In the list of ad agencies top 20 agencies in 1980, of those top 20 agencies, 17 are now part of the four major holding companies. The four largest holding companies represent close to 85% of the advertising in the US. and 50% of the advertising in the world. The agencies that they owned benefited from a good financial discipline, low cost of capital and market power as a result of scale. Sir Martin Sorrell did a fantastic job creating a global advertising powerhouse. But the